Commons Sitting of 13 June 1968

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

PRIVATE BUSINESS
GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)
Consideration deferred till Tuesday next.
GREATER LONDON COUNCIL (MONEY) BILL (By Order)
Second Reading deferred till Tuesday next.

ORAL ANSWERS TO QUESTIONS
  TELEPHONE SERVICE

    Repair Services
    Mr. Blakerasked the Postmaster-General whether he will take steps to improve the telephone repair services available at weekends.
    The Assistant Postmaster-General (Mr. Joseph Slater): Yes, Sir. My right hon. Friend is considering an extension of the repair service on weekdays which should enable us to give a better service to faults reported up to 1.30 p.m. on Saturdays. An emergency service is available for the rest of the weekend.
    Mr. Blaker: Is not the situation rather pathetic when, in the normal course of events, people whose telephones go wrong just before the weekend have to wait until Monday to get them repaired? Would not the Bell Telephone Coy of North America be ashamed of that situation and put it right immediately?
    Mr. Slater: By reason of what my hon. Friend is endeavouring to do, there will
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    be few repairs carried over from Friday to Saturday, which will give us more time to repair the faults which happen on Saturday.

    Connection Charges
    Mr. Gwilym Robertsasked the Postmaster-General if, in view of the considerable telephone waiting lists and the long delays in some areas, he will allow prospective subscribers who were on these lists before 10th April, 1968, to have their telephones connected up at the old price of £10 and not the new price of £20.
    The Postmaster-General (Mr. Roy Mason): No, Sir. Connection charges have been increased, as recommended by the National Board for Prices and Incomes, to reflect the cost of connecting new lines, and I cannot supply them below cost. The prices quoted by my hon. Friend are maxima; actual charges vary according to the amount of new work which has to be done.
    Mr. Roberts: Is my hon. Friend aware that nearly 3,000 people in the southern half of Bedfordshire are in this position? Would he accept that the Post Office is placing itself in the position of a shopkeeper who says about advertised goods, " I have not got them at the moment, but you can have them in six months' or a year's time, of course at double the price "?
    Mr. Mason: I am sorry that in my hon. Friend's constituency there is a delay, and this is regrettable. In view of the fact that the previous Administration never thought of the explosive demand that there would be for telephones, sufficient orders were not placed for telephone exchange equipment.
    Sir W. Bromley-Davenport: Are not the answers to these three questions yet another proof of a failure of the nationalised industries, which give worse service at increased cost?
    Mr. Mason: The hon. and gallant Gentleman is quite incorrect. He should have recognised that, when the Post Office was examined by the National Board for Prices and Incomes, it came out of the examination extremely well and was praised for its productivity and efficiency.

    Elderly Persons (Emergency Communications)
    Mr. Wingfield Digbyasked the Postmaster-General how soon he expects to receive the results of the research which is being carried out on his behalf at the University of Essex into the communication needs of the elderly.
    Mr. Robert Cookeasked the Postmaster-General whether he will consider the provision of an emergency bell service for old people living alone.
    Mr. Joseph Slater: A Research Fellowship was established at the University of Essex in January, 1968, for a period of two years. The research fellow will report in 1970, but I hope he will have some suggestions to make before then. In addition to this research, we are prepared to consider any practicable scheme in which the Post Office can properly help with this problem.
    Mr. Digby: Will the hon. Gentleman remember the great problems of old people living alone and their need for emergency communications? Will he bear in mind, too, that only the Post Office can help in this matter? Will he give any financial assistance necesssary for this fellowship to pursue the work?
    Mr. Slater: We are always giving consideration to the sort of object the hon. Gentleman has in mind. However, I would remind him that this falls not only on the Post Office. We seek to help, but it is also a matter for local authorities and other interested organisations. Some 40 local authorities and voluntary organisations already provide emergency services, and we readily give our consent to applications which are made.
    Sir S. McAdden: While not wishing to denigrate the necessity of doing something for the elderly in this matter, does not the hon. Gentleman consider that, in view of what happened recently at the University of Essex, there ought to be some investigation into the needs of youth?

    Telephone Directories
    Mr. Tilneyasked the Postmaster-General why the London telephone directory is to be split into 40 small directories; and whether he will place a map in the Library showing the areas each separate directory will cover.
    Mr. Huntasked the Postmaster-General on what grounds it has been decided to discontinue the issue of the four London telephone directories and to restrict each subscriber to a single local directory.
    Mr. Berryasked the Postmaster-General what consultations he had with professional and business people before deciding to split London telephone directories into separate district directories.
    Mr. Worsleyasked the Postmaster-General whether he will reconsider the decision only to issue to subscribers telephone directories covering their immediate neighbourhoods.
    Mr. Wallasked the Postmaster-General if he will make a statement on his proposals for new editions of the London telephone directory.
    Sir J. Langford-Holtasked the Postmaster-General whether he will make a statement on the proposed changes in the London telephone directory.
    Mr. Biggs-Davisonasked the Postmaster-General what are his proposals for London telephone directories; and whether he will give an assurance that subscribers in the London telephone area will continue to receive directories for the area as a whole.
    Mr. Fisherasked the Postmaster-General whether, in view of the inconvenience to subscribers and the cost of the additional use of the directory enquiries service, he will reconsider his decision to issue telephone directories only covering limited nearby areas.
    Mr. Mason: I have nothing further to add to my answer to Questions on 30th May.—[Vol. 765, c. 2123–5.]
    Mr. Tilney: Will the right hon. Gentleman make sure that in each directory there are maps to show the boroughs as well as the postal areas, and which boroughs are outside the area of the directory?
    Mr. Mason: I am aware that the hon. Gentleman has received a briefing from officials of my Department and from myself about this. I am aware of his view and I assure him that his suggestion will be considered.
    Mr. Hunt: Is it not a fact that the Mason master plan for London directories was revealed to the public only

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    by accident? Is this not a serious reflection on the public relations of the Post Office?
    Mr. Mason: Adamantly, no, Sir. In 1965 and again in 1966 the Post Office annual reports made reference to the change. The Press who regard themselves as news hounds failed to get on the right scent, except the Guardian which, in November 1966, published a feature article on the subject and in December of that year published facts about it in its miscellany column.
    Mr. Berry: Is the right hon. Gentleman satisfied that the inclusion of the 5,000 popular names and businesses in each book will not lead to confusion and jealousy between those who are in and those who are out? Will he take care in deciding who should be in or out?
    Mr. Mason: I agree that we will have to be careful, particularly on the commercial plane, to ensure that no jealousies develop.
    Mr. Worsley: Before finally making up his mind about this, will the right hon. Gentleman see that a careful study is made of other metropolitan areas, particularly New York, and about the thickness and type of paper to be used?
    Mr. Mason: There are five, not one, directories covering New York. Those directories contain abbreviated addresses and not the full postal addresses as is our practice. This enables them to have four columns per page instead of three. However, they have a similar problem to that facing us and the problem which confronts them will be greater in future.
    Mr. Wall: While congratulating the right hon. Gentleman on the steps he has taken to repair the gaff made by his Department, may I ask him to make sure that in any similar circumstances in future the general public is consulted before such radical changes are made?
    Mr. Mason: Consulting the general public is a loose term which is easily used. We consulted the London Boroughs' Association, the G.L.C., the London Chamber of Commerce and the Post Office Users' Council. To discuss these matters with the general public before the general public has seen the alternative new borough directory would
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    be difficult. However, I assure the hon. Gentleman that that type of consultation will take place when the new pilot directory is out.
    Mr. Fisher: Is the right hon. Gentleman aware that the activities of businesses and others in our constituencies in Greater London are not confined to one narrow geographical area? Will he take that convenience more into account and rescind this lunatic scheme altogether?
    Mr. Mason: I have no intention of rescinding the scheme. [HON. MEMBERS: " Oh."] Business men in London recently received, for the first time, a London businesses' directory. This has been received with great acclaim. It was the first step in the gradual evolution of the plan.
    Mr. Driberg: When my right hon. Friend says that he has no intention of rescinding the scheme, does he recall that he said recently that no final decision had yet been taken and that there would be further consultation? Will he look at Question No. 49, which is not included in the series of questions being answered, about public telephone kiosks? How is he going to pack them all in?
    Mr. Mason: I meant by my reference to not rescinding the scheme that I would not halt it at the moment. We will have to go on and produce the pilot directory, first for the Borough of Hillingdon, and then see how the telephone user, the customer—especially the residential subscriber—reacts to it. We think that it will be welcomed once the change has been seen.
    To answer my hon. Friend's question about the kiosk problem—I would not be in order in going too far because it is not included in this series of Questions— kiosks will be provided with a directory of the surrounding area in each case— in addition, of course, to the 5,000 popular names allied with it—a West End and City directory and the London businesses' directory. Users of kiosks will, therefore, probably have all the directories that they require. In kiosks at hotels and railway termini, directories will also, of course, be provided and the full set will be available in them.
    Mr. Brooks: Has my right hon. Friend made a serious calculation of the extra

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    cost involved in supplying additional directories to those who apply for them? Will he clarify the position from the point of view of, for example, Merseyside, and would he agree that such a parochial approach should not be attempted there?
    Mr. Mason: If the scheme is successful in London, then we will have to consider schemes for the greater conurbations in the rest of the country; and I would have thought that this was a sensible step to take.
    Mr. Bryan: While appreciating the efforts of the Postmaster-General and his officials to explain the system to hon. Members last Tuesday, is he aware that many of us are sincerely still convinced that not enough use has been made of American experience in this matter?
    Mr. Mason: I would have hoped, from the presentations we have made in documents—including the presentations we made in Committee Rooms upstairs on two occasions—that hon. Members would have seen that my officials purposely had talks with the Americans and made contrasts between what we are doing here and the problems confronting the Americans. There is, however, the difference to which I referred; that our telephone users expect a full postal address system in directories.

    Alarm Calls (Increased Charges)
    Mr. Ian Gilmourasked the Postmaster-General on what financial criteria he increased the charge for alarm calls from 6d. to 2s., which is an increase of 300 per cent,
    Mr. Mason: The charge is being increased to eliminate the current heavy loss on this service. Charges for most alarm calls have been unchanged for 12 years.
    Mr. Gilmour: Is not the increase of 300 per cent, absolutely staggering? Is the Postmaster-General aware that the Report by the Prices, and Incomes Board indicated that the additional yield from these charges will be negligible?
    Mr. Mason: The N.B.P.I. did not dissent from this proposal. We estimate that there are 13½ million calls a year and the extra Is. 6d., if the present number of people used the service, would bring in £937,000. There would
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    obviously be some loss of traffic and we are losing £600,000 at the moment, so probably this would just pay its way.

    Directory Inquiries
    Mr. Barnesasked the Postmaster-General what percentage reduction in directory inquiries he expects to achieve by the proposed restructure of the London telephone directory system.
    Mr. Goodhartasked the Postmaster-General what estimate he has made of the number of extra staff needed for directory inquiries when the London telephone directory is reorganised.
    Mr. Mason: Forty per cent, of directory inquiries in London are for numbers in the directories held by callers. A similar proportion is for a particular group of 5,000 numbers. The new structure should reduce both of these significantly and, by containing the growth in inquiries, minimise the additional staff otherwise required to meet the rapid expansion of the system.
    Mr. Barnes: Is the Postmaster-General aware that the claim that directory inquiries will be reduced by this proposal is the hardest thing of all to believe? Can my right hon. Friend give an assurance that he has no intention whatever of imposing charges for simple directory inquiry calls where adequate information is given?
    Mr. Mason: On the latter point, yes, Sir. On the first point, I should inform my hon. Friend that there are 40 million directory inquiries in London every year and 16 million come from people who have the information already in their books, but the books are voluminous and thick and people are very hesitant to use them. On an analysis we have found that if we provided them with custom-made directories with this information they would use the books rather than directory inquiries.
    Mr. Gresham Cooke: Will the House of Commons figure in the 5,000 most popular numbers?
    Mr. Mason: The number 6240 will be easily recognised.

    Car Radio Phone Services
    Mr. Gresham Cookeasked the Postmaster-General what plans he has for licensing private enterprise firms who

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    want to operate car radio phone services in Great: Britain.
    Mr. Worsleyasked the Postmaster-General what plans he has for extending the car radio phone services operated by the Post Office.
    Mr. Mason: I already license organisations to communicate with their own vehicles by radio. I also license some telephone answering bureaux to relay messages over their systems. We are extending the capacity of the public radiophone service. Work has recently been completed in South Lancashire; a new system in London will be ready next year.
    Mr. Gresham Cooke: The car radio service from the G.P.O. is available only in London and Manchester. Could it not be supplemented by private enterprise firms?
    Mr. Mason: No, Sir, because it would not be long before there would be chaos on the air.
    Mr. Worsley: Will the right hon. Gentleman say what is the size of the waiting list for this service in London?
    Mr. Mason: In London 159 are waiting at the moment, but when the new system is provided next year this should be practically eliminated.

    Kiosks (Vandalism)
    Mr. Wallasked the Postmaster-General if he will make a statement on vandalism in telephone kiosks.
    Mr. Joseph Slater: Wilful damage is still a grave problem which can have serious social consequences. I am glad to say that over the last three years the number of incidents has fallen; the number of offenders caught has increased; the number of kiosks not fully usable has been reduced; and those out of use have been restored more quickly.
    Deterrent and preventive measures, including secret alarms, are still being introduced; and we are grateful for the ready co-operation we have had from the police. We shall continue to minimise the inconvenience to our customers.
    Mr. Wall: What is the approximate cost of repairing kiosks damaged through vandalism? Is the Assistant Postmaster-General aware that he has universal
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    support in combating this dangerous and thoughtless vandalism in telephone kiosks?
    Mr. Slater: I cannot answer about the cost, but the amount of money lost on telephone kiosks within a year is approximately £4½ million.
    Mr. Hooley: I welcome the statement that vandalism generally has declined, but is my hon. Friend aware that in Sheffield recently there has been a sustained campaign to put public kiosks out of action and that this caused a very grave social nuisance? Would it be possible to design a heavy calibre money container which might deter people from trying to burgle the containers?
    Mr. Slater: I have every sympathy with the position of the general public in Sheffield. The whole House has endeavoured to give my Department its support in our effort to safeguard the interests of the general public in this matter. We have taken certain action to try to offset vandalism in kiosks. I do not think that the House would expect me to reveal specific details. A variety of measures has been used, including the strengthening of the boxes and secret alarms.

    Tring
    Mr. Allasonasked the Postmaster-General what is the average estimated waiting time before a telephone can be provided to a subscriber on the Tring exchange; and what was the corresponding time in October, 1964.
    Mr. Joseph Slater: The exchange is now fully loaded and new customers can be connected only to the extent that numbers are freed by people giving up service. I regret it will not be possible to connect most of those now waiting until a mobile relief exchange and additional cables are available in about a year's time. Records of the waiting periods in October, 1964, are no longer available. Since then 984 customers have been connected.
    Mr. Allason: Is the hon. Gentleman satisfied with that performance, with people being asked to wait a year before they are connected? Why cannot he produce the mobile exchange much more quiukly?
    Mr. Slater: We would like to do many of these things, but the growth that we planned for has been exceeded. Manufacturers have doubled their output in about two years. We are still short of exchange equipment. We will endeavour to bring mobile equipment into use wherever we can. This is a big area to cover.

  WIRELESS AND TELEVISION

    National Advisory Council
    Mr. Danceasked the Postmaster-General what plans he has to set up a national advisory council representative of the radio and television industry, consumers, viewers, universities and possibly broadcasting personnel, with terms of reference wide enough for them to report on all matters affecting sound broadcasting and television.
    Mr. Mason: None, Sir.
    Mr. Dance: In view of the recent irresponsible attitude of the B.B.C. in inviting a German professional agitator to appear on television, does the Minister not agree with the wording of this Question, which repeats his own words in 1964?
    Mr. Mason: I notice that the hon. Gentleman has cleverly quoted verbatim from what I said in 1964. Since then, in 1966, a White Paper on broadcasting was issued, which took this into consideration, and is in line with the recommendations of the Pilkington Committee. As the hon. Gentleman knows, M.P.s have many opportunities to question the Postmaster-General himself.
    Mr. Bryan: Does the Postmaster-General's reply mean that he is satisfied with the effectiveness of the advisory committees to bring the weight of public opinion to bear on the broadcasting authorities?
    Mr. Mason: Yes, Sir. Taking into consideration that there are now a national advisory council, four regional advisory councils and 26 functional advisory councils advising the B.B.C, that seems to be adequate.
    Sir Harmar Nicholls: Is the Minister aware that when he used these words in
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    1964 they were not his personal words? He said, " we ", speaking in his capacity as the shadow Minister for his party. Now that he holds office within the area that was covered by the shadow cabinet, ought he not to pay more attention to what he said then?
    Mr. Mason: We examined it in 1966 and we produced a Government statement on the matter.

    National Coverage and Licence Fees
    Sir G. Nabarroasked the Postmaster-General (1) what estimate he has made of the amount of the combined radio and television licence fee required to give ubiquitous cover for radio and for television in colour in the United Kingdom, both for BBC1 and BBC2; and by what date this will be achieved;
    (2) when total television coverage in the United Kingdom will be available, respectively, for BBC1 and BBC2, with and without colour; and what effect these developments will have on prospective increases in licence fees.
    Mr. Mason: The coverages of the national sound radio services and BBC1 on 405 lines in VHF, have already virtually reached their present practical limit. BBC2 and the 625 line duplicate BBC1 in UHF (both with colour) are expected to reach 90 per cent, coverage by 1973, virtually full coverage will be reached around 1980. The estimated cost of the additional transmitters is about £60 million at present day prices, but the licence fees depend as well on other factors, such as the cost of colour programmes and the number of colour licences and I hesitate to forecast the position so far ahead.
    Sir G. Nabarro: In view of the fact that the Postmaster-General has given us for the first time precise figures of the planned progress of universal coverage for television, and in colour, cannot he work out precisely what the television licence needs will be during the commensurate period; that is to say, over the 12 years between 1968 and 1980? That should not be unduly difficult.
    Mr. Mason: No, but I do not think that it is necessary at the moment to undertake it. We have already a three-tier licence system, with £10 for colour,

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    monochrome and sound, £5 for monochrome and sound, and 25s. for sound on its own. I would have thought that that was all right.
    Mr. Bryan: How long will the right hon. Gentleman maintain this system of a dual licence scheme with £10 for colour and £5 for black and white?
    Mr. Mason: It is too early to take all the factors into consideration. In the main, colour will not be available generally until the beginning of 1970, so we have time to consider the question in depth.
    Captain Orr: Will the Postmaster-General publish a list or map showing the areas which will come within the 1973 and the 1980 dates, respectively, and would he be sure to include on that map the South Down area of Northern Ireland?
    Mr. Mason: I am obliged to the hon. and gallant Gentleman for that suggestion. Certainly I will consider it.

    Radio Masts
    Mr. Onslowasked the Postmaster-General (1) how many sites for radio masts forming part of microwave communications systems have been established in areas of outstanding natural beauty; and how many applications for similar sites are now under consideration by his Department;
    (2) whether, in view of his insistence that the heights of radio masts in microwave communications systems should be determined on the assumption that the radio radius of the earth is 0·7 times its true radius, he will take steps to establish a single network of such masts to serve the foreseeable need of all users, so as to reduce the total number of masts required.
    Mr. Mason: Of the 96 Post Office microwave radio-relay stations in the United Kingdom 4 are in national parks and 5 in areas of outstanding natural beauty. Only one site of those at present under consideration is in an area of outstanding natural beauty. There are 174 stations in the private users microwave networks and 16 of these are in designated areas of natural beauty.
    It is unlikely in many cases that other users would require the same routes and
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    terminal points as the Post Office trunk routes, so a simple all-purpose network is impracticable. However, all users, including the Post Office, always consider the mutual sharing of masts, and many individual masts are shared in this way.
    Mr. Onslow: Will the right hon. Gentleman agree that he ought not to encourage the proliferation of these masts or make them any taller than necessary? Can he say on what research, and where it was published, his calculation of the necessary height is based, and will he bear in mind that, if there has to be a 7 per cent, increase in the height of a mast, it adds 21 per cent, to its cost, which may be as much as £70,000?
    Mr. Mason: I am aware of the hon. Gentleman's concern in this matter, and I know that he has a problem about it in his constituency. However, in all fairness, I should say that the 7 per cent, increase in height to which he refers also means that there are fewer of these taller masts in the country.
    Mr. Peter M. Jackson: Will my right hon. Friend undertake consultations with the Countryside and National Parks Commissions when considering the further siting of these masts?
    Mr. Mason: Yes, Sir. I am certain that my hon. Friend is aware that every time any area of outstanding natural beauty is to receive a mast the Council for the Preservation of Rural England and the various other interested bodies are consulted.

    Local Radio Stations
    Mr. Berryasked the Postmaster-General whether he is satisfied with the progress of the experiment of six local radio stations; and if he will make a statement.
    Mr. Huntasked the Postmaster-General whether, in view of the current difficulties of local radio stations, he will now reconsider his refusal to allow the Greater London Council to introduce a commercial radio service for Londoners.
    Mr. Robert Cookeasked the Postmaster-General whether he will make a further statement on the progress in connection with the experiment on local sound broadcasting.
    Mr. Wellbelovedasked the Postmaster-General if he will consider allowing the use of medium wavebands for local radio; and if he will make a statement.
    Mr. Mason: Six stations are already broadcasting. The Leeds station will open on 24th June and the Durham station on 3rd July. I think we should give the stations a fair chance to show what they can do and not prejudge the experiment or extend it to include commercial radio stations. Moreover, successive Governments have taken the view that the conduct of, and responsibility for, broadcasting services should be vested in public corporations operating at the national level. The use of medium wavelengths for a general service of local radio is impracticable. Only a few stations able to operate after nightfall—when interference is much worse—as well as by day, could be accommodated on the wavelengths available to the United Kingdom under international agreement. The use of VHF is not limited in this way.
    Mr. Berry: As regards the six existing stations, can the Postmaster-General say how much of the charges for them fall on the local ratepayers concerned and tell the House how many ratepayers listen to the stations?
    Mr. Mason: Without notice, I cannot give those specific details. But it is a little too early to pressure either the B.B.C. or the local authorities from whence these stations are broadcasting. I think that we ought to give them time to see how they grow and how best they are financed.
    Mr. Hunt: Is it not a fact that the G.L.C. is satisfied that commercial radio is workable in London and would produce a substantial income which could be used to provide concert halls and other amenities? Is not the Government's obvious objection to this project sadly reminiscent of the Labour Party's attitude to commercial television?
    Mr. Mason: The hon. Gentleman is quite wrong. Of course, the G.L.C. would like to go on to 202 metres. If that was agreed upon, at the moment we could only have 10 stations in the United Kingdom. On our present policy, if we wished to expand, we could have at least 100.
    Mr. Wellbeloved: Is my right hon. Friend aware that some advocates of commercial radio have claimed that the medium wave could be used extensively for it? Will he ensure that his statement to the effect that that is not the case is given widest publicity in order to put down the misleading statements which have been made about it?
    Mr. Mason: My hon. Friend is quite right. It is not possible to change the wave-length and go over to what they demand, which is 202 metres. As I have said, if that were done only 10 would be able to operate.
    Mr. Cant: Speaking as an hon. Member for one of the cities privileged to have local radio, might I ask my right hon. Friend if he is aware that we have introduced a highly efficient technical product without a marketing budget? Would he make funds available locally to advertise the services in local newspapers so that we can have an effective take-off?
    Mr. Mason: That would have to be considered at the appropriate time. I think that we have to operate them for 12 months and then look at them in retrospect.
    Mr. Bryan: How much has the B.B.C. so far had to pay out of licensing income towards the running of these stations?
    Mr. Mason: The average payment for each station is £35,000 from the B.B.C. In some of the areas concerned, there may be a shortfall at the moment, but I could not say what the B.B.C. has had to do in total to keep stations going because local revenue has not been forthcoming.
    Mr. Moyle: Is my right hon. Friend aware that if the G.L.C. scheme is approved it will take away advertising from the local Press and thus reduce the number of democratic channels of communication open to Londoners?
    Mr. Mason: My hon. Friend can rest assured that Government policy is not to allow local commercial radio stations.
    Sir E. Bullus: Is it not already apparent that the right hon. Gentleman's predecessor gave the B.B.C. an almost impossible task? Was it not always obvious

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    that the money would not be forthcoming? Would the right hon. Gentleman be more forthcoming on this?
    Mr. Mason: I do not agree. In some instances the revenue is forthcoming locally and, after we have had time to assess them fully, it may be that two or three of them will be able to raise sufficient: finance and make local broadcasting a. viable proposition for the future.
    Mr. Roebuck: Is my right hon. Friend aware that the proposals of the G.L.C. are viewed with great apprehension by the National Union of Journalists and the proprietors of weekly newspapers in the Greater London Area? Is he acquainted with the view that these proposals would result in a reduction in the number of weekly newspapers in the area? What reply, if any, has he sent to any representations which he may have received on this subject?
    Mr. Mason: I am aware of the feelings of the provincial newspapers, and it is fully realised that if local commercial radio began on any scale at all it would knock the provincial newspapers sideways.

    Manchester (B.B.C. Circuits)
    Mr. Tilneyasked the Postmaster General whether he is satisfied that there are sufficient lines for the British Broadcasting Corporation Television in Manchester to take the programmes and interviews required from London; and if he will make a statement.
    Mr. Joseph Slater: The B.B.C. decides how many lines it wants for television programmes and interviews at Manchester and elsewhere. We have provided all the lines asked for by the B.B.C. for Manchester.
    Mr. Tilney: How do these facilities compare with those provided by Independent Television? Is the hon. Gentleman aware that at least one northern hon. Member was recently asked twice to comment on matters of considerable importance to the North and on each occasion no lines were available? Is this a case of further discrimination against the north?
    Mr. Slater: The Question is not concerned with I.T.V., but I will consider
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    what the hon. Gentleman has said and write to him.
    To answer his general query, even at present 18 circuits can be used from Broadcasting House to the Post Office Tower. Two circuits connect the Tower to the Manchester terminal and there are seven circuits from the Manchester P.O. terminal to the B.B.C. Manchester studios. In the reverse direction, 12 circuits connect the Manchester studios to the Manchester P.O. control, there is one video circuit from there to the London P.O. Tower and then 16 circuits from the Tower to Broadcasting House.
    Dr. Winstanley: Is the hon. Gentleman aware that the people of Manchester are not so much concerned with the lines from London to Manchester to bring programmes as with the availability of lines from Manchester to London? Will he do what he can to expedite the building of the new Manchester studios to replace the present wholly inadequate ones?
    Mr. Slater: I have already made it clear that if an additional circuit is required for occasional use the Post Office will arrange for this to be provided on receipt of an order from the B.B.C. on an outside broadcast basis.

    Fourth Television Programme and University of the Air
    Mr. Joplingasked the Postmaster-General whether he has arrived at a decision as to when a fourth television programme will start to operate, and on how such a programme would be financed and administered.
    Mr. Ian Gilmourasked the Postmaster-General what arrangements he has made for allocating a television channel for the purpose of providing a University of the Air.
    Mr. Mason: I have nothing to add to paragraphs 16 to 20 of the White Paper on Broadcasting of December 1966.
    Mr. Jopling: Is the Postmaster-General not aware that—quite apart from the proposal for the University of the Air, which is to be welcomed—there is still a great need for a fourth television channel? Will he make a statement this afternoon that he understands the need for this and will do something about it as soon as possible?
    Mr. Mason: I am sorry to disappoint the hon. Member. I cannot do that this afternoon. The 1966 White Paper said that there would be no allocation of extra frequencies at least for the next three years. A fourth T.V. channel at this time would not be on our high priority list.
    Mr. Gilmour: Since the project was talked about since 1963, is it not time that the Postmaster-General had something definite to say about it?
    Mr. Mason: It was talked about in 1963, probably with the encouragement of the then Government, but it was not encouraged by us. The University of the Air is being encouraged and I hope the service will start by the autumn of 1970 or January, 1971.
    Sir C. Osborne: Will the Postmaster-General confirm that our national economic needs are not for more amusement on T.V., but for a greater willingness to work, and that people should be encouraged to work, not to watch T.V. night and day?
    Mr. Mason: To say work more intelligently would be more appropriate.

    Radio Frequencies (Allocation)
    Mr. Bryanasked the Postmaster-General if he will set up a committee representative of all appropriate interests to review the present system by which radio frequencies are allocated.
    Mr. Mason: My Frequency Advisory Committee and Mobile Radio Committee, which advise me on frequency questions, are widely representative and already provide a forum in which possible changes in procedure could be considered.
    Mr. Bryan: Since the General Post Office and Defence and other Government Departments are among the main users of frequencies, would it not be wiser, and certainly fairer, if allocation of frequencies were put into some independent hands, as is done in the United States of America?
    Mr. Mason: I do not see the reason for that suggestion. The hon. Member's Administration set up two Committees —one in 1954, the Mobile Radio Committee, and one in 1958, the Frequency Advisory Committee—to advise the
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    Postmaster-General of the day on what should be done, but no one has expressed concern so far.

  POST OFFICE

    Giro Service
    Mr. Mawbyasked the Postmaster-General whether he will make a statement on the progress of the Giro service.
    Sir B. Rhys Williamsasked the Postmaster-General when he now expects the Post Office Giro to become fully operative; how many post offices will be able to offer Giro services; and how many transactions daily he expects to handle.
    Mr. Joseph Slater: The arrangements for setting up the national Giro service continue to make progress and I expect the service to begin in the autumn of this year, as planned. All but the very smallest post offices will handle the full range of Giro business which I estimate will produce about a million transactions a day within a year after opening.
    Mr. Mawby: Is the hon. Gentleman still satisfied that he will be able to run this service without making a charge to the customer?
    Mr. Slater: Yes, Sir.
    Sir B. Rhys Williams: Will employers be encouraged to use the Giro for payment of wages? Will it be possible to use the Giro for Income Tax purposes?
    Mr. Slater: Yes, Sir.

    Costing System
    Mr. Mawbyasked the Postmaster-General when the Post Office will be operating a new costing system, in view of the recent Report of the National Board for Prices and Incomes on Post Office charges.
    Mr. Mason: I am setting up a team of experts to study long run marginal costs as recommended by the National Board for Prices and Incomes, and I hope their findings will be available before any further major revision of Post Office tariffs is necessary. The results will complement but not displace the present system.

    Personal Paging Service
    Mr. Joplingasked the Postmaster-General what plans he has for licensing private firms who want to operate a personal paging service in Great Britain.
    Mr. Gresham Cookeasked the Postmaster-General what plans the Post Office has for introducing a personal paging service.
    Mr. Joseph Slater: My right hon. Friend already licenses organisations such as hospitals and businesses to page their employees within their own premises, and these arrangements will continue. We have undertaken market research into the demand for a paging service to be operated by the Post Office and are now evaluating the results.
    Mr. Jopling: Would not the Assistant Postmaster-General agree that a service of this sort would be of the greatest possible use to many people, such as doctors and salesmen and those involved in emergency services? Has not the Post Office enough to do at the moment without trying to do this job as well?
    Mr. Slater: Whenever we can assist the sections of the community to which the hon. Member has referred, we endeavour to do so. We shall give every consideration to such applications.
    Mr. Gresham Cooke: Is the hon. Gentleman aware when I was in Holland about 14 days ago I saw that ordinary people could hire a pocket radio set by which they could be warned by a signal or a musical note when they were expecting an emergency call? This could be be very useful for the general public from time to time. Why should we not have the same advantages as Holland has?
    Mr. Slater: I thought the hon. Member would have referred to America. Then I would have been able to give him an answer about what is happening in America and the type of machine they have there. Probably a simple public service could be introduced in parts of the country in two or three years, but if there were a demand for a general service with distinguishable signals it would take longer, perhaps five years, and the question of the use of national resources for this purpose would have to be considered.
    Mr. English: Above all, when is it proposed to introduce a personal paging service in this House so that we could know when visitors arrived and when there were telephone calls for us instead of being told half an hour later by a man who has to walk around the building?
    Mr. Slater: My hon. Friend should address that question to another Department.

    Post Office Users' Council
    Mr. Winnickasked the Postmaster-General if he will take steps to increase the number of representatives of the general public on the Post Office Users' Council.
    Sir J. Langford-Holtasked the Postmaster-General what are the terms of reference of the Post Office Users' Council; by whom it is appointed; and where its offices are.
    Mr. Mason: To represent at national level the interests of the users of Post Office services; to ensure the existence of adequate consultative arrangements at local level; to receive proposals from the Postmaster General; and to make recommendations to him about the services.
    Twenty-nine of the thirty-three members are nominated for appointment by the organisations named in the Council's constitution: four are appointed by me. All the members of the Council serve in a personal, and not a delegate, capacity. They represent a wide range of consumer interests and are free to speak for the general public. At present the Council's offices are at G.P.O. Headquarters.
    Mr. Winnick: I think that that Answer related mainly to the other Question. Will my right hon. Friend take steps to make the Council rather more broadly representative of the general public? Is not the person who acts as secretary to the Council, and who does a very good job, a full-time employee of the Post Office?
    Mr. Mason: First, very wide consumer interests are now represented on the Council. Secondly, the Council is independent. We established it. I appoint the Chairman. There is a Council meeting today. I have offered the Council independent premises and an independent staff and secretariat.
    Mr. Bryan: Does the right hon. Gentleman consider that when the Post Office becomes a public corporation the scrutiny of this Council will be a sufficient substitute for the scrutiny of Parliament to guard the public interest?
    Mr. Mason: At least it will play a part. It will be recognised by Statute when the Corporation Bill is issued.

    Telex Subscribers
    Mr. Brian Parkynasked the Postmaster-General what was the number of Telex subscribers during each of the last five years.
    Mr. Joseph Slater: I am circulating the full figures in the OFFICIAL REPORT. The numbers have almost doubled in the five years.
    Mr. Parkyn: In view of the tremendous increase in efficiency and the saving in time and money which could be achieved if the out-of-date business of writing letters was completely replaced by Telex, does not my hon. Friend think that an increase of 100 per cent, in five years is derisory and should be reconsidered?
    Mr. Slater: We are always looking at this type of service and doing everything we can to extend it. We shall continue to do this.
    Following are the figures:
    At the 31st March each year there were:

    12,386 in 1964

    14,636 in 1965

    17,204 in 1966

    19,501 in 1967

    22,269 in 1968

    Postal Services (Stamford)
    Mr. Kenneth Lewisasked the Postmaster-General whether he will take steps to improve the postal services in Stamford following the reorganisation of this office.
    Mr. Joseph Slater: We shall continue to do all we can to give a good postal service in Stamford, but if the hon. Gentleman has any particular problem in mind, and he will let me have details, I shall be pleased to look into the matter.
    Mr. Lewis: Is the hon. Gentleman aware that I have been letting him have
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    the details for some months and that I am receiving continuous complaints from my constituents that, since the reorganisation of the Post Office, there has been a reduction in the standard of service following the downgrading of the post office at Stamford and the take-over by Peterborough? The service is getting worse and worse. Will the hon. Gentleman improve it?
    Mr. Slater: I am surprised to hear those observations about the transfer to Peterborough. The change was made for administrative reasons and it did not affect the postal services. The Head Postmaster at Peterborough is just as concerned about Stamford as he is about Peterborough.

  UNITED KINGDOM AND AMERICA (ECONOMIC DISCUSSIONS)
  Ql. Mr. Winnickasked the Prime Minister if he intends to visit President Johnson to discuss economic matters relating to Great Britain and the United States of America.
  The Prime Minister (Mr. Harold Wilson): I have no present plans for a meeting with President Johnson, Sir.
  Mr. Winnick: Are the British Government in contact with the American President over the present negotiations which are apparently going on for an international loan? Are we also discussing with the American President the future position of the sterling balances?
  The Prime Minister: As I am sure my hon. Friend will recognise, my right hon. Friend the Chancellor of the Exchequer is in close touch with his opposite numbers in the United States and in the European countries principally involved.
  Mr. Heath: Can the Prime Minister clarify two points? First, was the recent drawing on the I.M.F. of 1,400 million dollars to replace existing short-term indebtedness to the central banks, and did it completely replace it? Secondly, are the further discussions which are going on in Basle arrangements to replace other existing short-term indebtedness or to be an addition to the short-term indebtedness to cover the withdrawals of the sterling balances where they are being diversified?
  The Prime Minister: I do not think that I should say too much about the Basle discussions while they are still going on, although the right hon. Gentleman will have seen a number of Press stories emanating from Basle linking the discussions with the general future of sterling balances—something which I think has been often raised from all parts of the House in our financial discussions. On the first part of the right hon. Gentleman's question, the drawing from the International Monetary Fund has been used for the purpose to which he referred, namely, for reconstitution loan arrangements of that kind.
  Mr. Heath: Did it completely replace that central bank borrowing, or is there still some outstanding? Secondly, cannot the Prime Minister tell the purpose of the discussions in Basle? I am not asking for the figures, but is the purpose to cover further withdrawals of the sterling balances or to replace existing debt?
  The Prime Minister: On the first question, it is not the practice ever to disclose the extent of short-term swap arrangements, and it has not been so under successive Governments. So perhaps the right hon. Gentleman will leave that question with me. I will see if anything further can be said by the Chancellor or myself, but off the cuff I think that it would be contrary to previous practice.
  With regard to the Basle discussions, as I have said—I thought it better to refer to the not all that inaccurate newspaper reports—their purpose relates to the question of sterling balances over a relatively long period ahead. They are not related to the question of short-term borrowing in relation to our balance of payments problems at any given time. They are related principally to the sterling area.

  QUEEN'S AWARD TO INDUSTRY (SERVICE INDUSTRIES)
  Captain Orrasked the Prime Minister which service industries paying the full amount of selective employment tax without rebate are eligible for the Queen's Award to Industry.
  The Prime Minister: Generally speaking, service industries are not eligible
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  for the Queen's Award to Industry. But the criteria applied in assessing eligibility are not precisely the same as those which govern Selective Employment Tax rebates and some establishments have, in fact, received the Award while paying Selective Employment Tax in full.
  Captain Orr: Surely this is very strange. Was not the Selective Employment Tax designed to move labour towards productive industry from service industries? Is the Prime Minister aware that I know of one company making films which has received the Queen's Award to Industry but which pays Selective Employment Tax? Does not that make a nonsense either of the Queen's Award to Industry or of the Selective Employment Tax?
  The Prime Minister: The conditions for the Queen's Award were settled, as the hon. and gallant Gentleman will know, a year or two ago by a Committee representative of industry and presided over by His Royal Highness the Duke of Edinburgh. Those conditions will fall to be reviewed against the whole background of the operation of the scheme when it has been going for five years. One of the three companies which in fact is not exempt from S.E.T. but which has received the Award is the one mentioned by the hon. and gallant Gentleman, and I would not have thought that the Selective Employment Tax there has made any difference either to the profitability of the company or to its ability to earn the Award.
  Dr. Dunwoody: In view of the considerable technological advances and the amount of foreign currency earned by the industry, would my right hon. Friend consider making the ship-repair industry eligible for the Award?
  The Prime Minister: As I said, it was agreed with industry at the beginning of the scheme, which has now been running for more than two years, that the whole question of eligibility and coverage should be reviewed at the end of five years' working. No doubt that would provide an appropriate time for considering my hon. Friend's question.

  RHODESIA
  Mr. Molloyasked the Prime Minister if he will make a statement concerning the latest situation in Rhodesia.
  Mr. Sandysasked the Prime Minister what steps he is taking to explore further with Mr. Ian Smith the possibility of a negotiated settlement.
  The Prime Minister: I would refer hon. Members to the Answers I gave to Questions on 11th June.—[Vol. 766, c. 25–29.]
  Mr. Molloy: Will my right hon. Friend give the House an assurance that he will resist those pressures and suggestions which ostensibly seek to find a solution to the Rhodesian problem but in point of fact would mean giving in to the illegal regime? Will he assure the House that he will give the same support to the majority of the Rhodesians as we are giving to the Gibraltarians?
  The Prime Minister: We have always made clear our position with regard to the acceptability of any settlement to the people of Rhodesia as a whole. That was first laid down by the previous Government, and we stand by it. We have also made clear that any settlement which is in full accord with the six principles which the House has accepted would be a basis on which we should go forward, but in view of all that has happened we should certainly need something more than just a signature on a paper to ensure that such a settlement would be honoured.
  Mr. Sandys: In previous answers the Prime Minister stated the conditions which would have to be satisfied before he would be prepared to resume negotiations. May we assume that in his opinion those conditions are not at present satisfied and that he has no immediate plans to resume talks, even of an exploratory nature, with Mr. Smith? Could we be clear on that point?
  The Prime Minister: I am afraid that that is true. The position is that although Mr. Smith changes his ground very considerably from time to time depending on—
  Hon. Members: Oh.
  The Prime Minister: That is something we have not done on this side of the House.
  Mr. Faulds: Hon. Members opposite are a shifty lot.
  The Prime Minister: We have stayed completely faithful to the six principles.
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  It is right hon. and hon. Members opposite who have ratted on what they said when they were the Government.
  Mr. Woodburn: In view of the number of people who advise opening negotiations with Mr. Smith, have any right hon. and hon. Members opposite produced reliable evidence that Mr. Smith and his Government are willing to consider a reliable settlement?
  The Prime Minister: No, Sir, because the position is that Mr. Smith at various times has insisted to me and others on a braking mechanism which the whole House must conclude is incompatible with the principle which requires unimpeded progress to majority rule. He went much further in a recent public statement to a distinguished British journalist—the whole thing was on the record. Mr. Smith repudiated any idea of ultimate majority rule in that statement. When the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) saw Mr. Smith he brought back certain ideas which I know he felt attractive, and these could have been pursued, but they have been repudiated since—
  Mr. Heath
  The Prime Minister: They were repudiated in the interview to which I referred. Of course they were. What the proposals did not do—and this was a matter on which further eludication would have been necessary—was to provide any evidence that there would be the necessary blocking minority. There was no blocking minority in the proposals. That was why they should not of themselves be accepted, but we said that if there is a change of heart there we are prepared to follow it up.
  Mr. Heath: With reference to the Prime Minister's last reply, I ask him to recognise that we do not accept that the proposals brought back by my right hon. Friend have been repudiated by a newspaper interview. But that is not the point on which I wish to question the right hon. Gentleman [Interruption.] We shall have an opportunity of debating this.
  What I want to ask the Prime Minister is when the Government will be setting up their review machinery for passports, particularly in view of the proposals in the Order. As the Government have

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  refused to allow the Ombudsman to look into the existing case, will the Prime Minister recognise that the review procedure must be under an independent tribunal and that a Departmental Committee will not be satisfactory to the House? It must be a tribunal completely independent of the Government.
  The Prime Minister: The right hon. Gentleman may or may not accept what was the position in relation to his right hon. Friend's proposals, but we have all read the interview in the Sunday Telegraph and I do not think that he can produce any evidence to the House that there was a blocking mechanism as is required for the fulfilment of the second principle. I do not think that he can produce any evidence to suggest that. As the right hon. Gentleman says, the House will be debating Rhodesia in the very near future.
  My right hon. Friend the Commonwealth Secretary intends to take the first opportunity after his return from the Commonwealth Conference at Kuala Lumpur to make a statement about the passport review procedure. Without anticipating that, I think that the right hon. Gentleman will find that it is genuinely independent.

  VIETNAM
  Mr. Roseasked the Prime Minister what further action he proposes to take with the co-Chairman of the Geneva Conference to bring an end to the war in Vietnam.
  The Prime Minister: I would refer my hon. Friend to the Answers I gave to Questions on 7th and 28th May, Sir.— [Vol. 764, c. 206–8; Vol. 765, c. 1530–1.]
  Mr. Rose: Will my right hon. Friend keep in the closest possible contact with the negotiating parties in Paris and stand ready to respond to any initiative that may present itself with regard to reconvening the Geneva Conference? Is he aware that while peace negotiations are going on there are more casualties than ever in Vietnam and that the bombing has continued unabated in volume if not in scope and extent?
  The Prime Minister: The bombing has been conducted within the new policy
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  announced by President Johnson in March, but it is certainly true that the casualties have continued and there have been some horrible civilian casualties in South Vietnam as a result of the intensification of the fighting.
  With regard to the position of the co-Chairman, we have always agreed that we stand ready, if the parties request us to do so, either to reconstitute the Geneva Conference or in any other way to take an initiative which would enable substantive discussions to take place. It might not necessarily be the old Geneva Conference. My right hon. Friend the Secretary of State for Foreign Affairs discussed these matters with Mr. Gromyko on his recent visit to the Soviet Union.

  INTERNATIONAL AND EUROPEAN HUMAN RIGHTS CONVENTIONS
  Mr. Roseasked the Prime Minister whether he will make a statement on Her Majesty's Government's policy in respect of International and European Human Rights Conventions.
  The Prime Minister: Our policy is to become party to as many of these instruments as we can, provided that in each case we are satisfied that participation will further the cause of human rights and that we shall be in a position to carry out the obligations which we should assume. We are, of course, already a party to many international human rights instruments, including the European Human Rights Convention. Our participation in other instruments is under active consideration.
  Mr. Rose: But is my right hon. Friend aware that it is quite impossible for this country to sign these conventions in their entirety because of the current situation in Northern Ireland? In view of this, is not it hypocrisy for the Government quite rightly to impose sanctions because of the violation of human rights in Rhodesia and not to deal with this situation in our own backyard?
  The Prime Minister: In the present state of the world and speed of travel, I do not think that one can make a distinction between backyards and areas further afield for which we have a direct responsibility in the House and internationally.

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  As regards Northern Ireland, my hon. Friend will be aware that after the European Human Rights Convention was signed by this country in 1950 a notice of derogation from certain obligations of the Convention was lodged in 1957 in respect of the Special Powers Acts. I dealt with this in answer to a recent supplementary question, when I said that this is a matter we shall need to discuss very carefully with the Northern Ireland Government. I know the concern throughout the House about this, but the House will realise that under the European Convention—[Interruption.]—One wants to be fair to Northern Ireland in this matter, even if the hon. Gentleman does not. Under the Convention, a report on Northern Ireland must be furnished each year to Strasbourg.

  SECRETARY OF STATE FOR THE HOME DEPARTMENT (SPEECH)
  Mr. Speedasked the Prime Minister if the public speech by the Secretary of State for the Home Department at Blackpool on 28th May on incomes policy represents Government policy.
  Mr. Hordernasked the Prime Minister whether the public speech by the Secretary of State for the Home Department on 28th May at Blackpool on incomes policy represents Government policy.
  Sir F. Bennettasked the Prime Minister whether the public speech of the Secretary of State for the Home Department on income restraint, on 28th May at Blackpool, represents the policy of Her Majesty's Government.
  The Prime Minister: I would refer hon. Members to the Answer I gave on 11th June to Questions by my hon. Friends the Members for Fife, West (Mr. William Hamilton) and Kingston-upon-Hull, North (Mr. McNamara).—[Vol. 766, c. 27–28.]
  Mr. Speed: Was the Home Secretary speaking in his capacity as Treasurer of the Labour Party or as a senior member of the Government?
  The Prime Minister: My right hon. Friend did not make such a distinction. He was speaking as himself, having both responsibilities, and addressing a distinguished trade union.
  Mr. Hordern: The Home Secretary said that when the present legislation ran out there would need to be a voluntary policy. Does the Prime Minister agree with that or not?
  The Prime Minister: I have made the position perfectly plain. It is in my speech to which I have just referred and I am prepared to read out the relevant passages if the House so wishes. The position is that we hope that it will be possible, for the three reasons stated in my speech, that it will not be necessary to ask Parliament for a renewal of the powers we are seeking in the current Bill. But, as we have also said, no responsible Government could give an absolute assurance that these powers would not be required. We have, however, given the assurance that any renewal of such powers would not be done under the expiring laws continuance procedure.
  Sir F. Bennett: Will the right hon. Gentleman say whether he accepts the word "expect", used by the Home Secretary, or the word "hope", which he has used? Even the Prime Minister, with his devious mind, cannot match both.
  The Prime Minister: If the hon. Gentleman is interpreting my right hon. Friend's speech as saying that in no circumstances could there be further legislation, I have explained that such interpretation is incorrect.
  Mr. William Hamilton: Is my right hon. Friend aware that many, if not all of us, hope to get back sooner or later to a voluntary policy? Some of us who rather reluctantly supported the incomes policy a few weeks ago would be rather less willing to support it 18 months hence.
  The Prime Minister: I recognise the reluctance with which many hon. Members felt it right and necessary to vote for the Second Reading of the Prices and Incomes Bill, but I remind my hon. Friend that, in the speech to which I have referred, I said that, given the achievement of the required surplus in the balance of payments and all that means, success in the development of the T.U.C.'s voluntary policy, which is of first importance, and also success in the productivity drive launched through her new Department by my right hon. Friend

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  the Secretary of State for Employment and Productivity, we hope that it will not be necessary to have further legislation.
  Mr. Heffer: Is my right hon. Friend aware that it is becoming increasingly difficult to discover any Cabinet Ministers who have ever believed in the Prices and Incomes Bill? Is it not time for a categorical assurance, following the Home Secretary's statement, that, even if the Government continue this unfortunate Bill for the next year, the legislation will not be continued in any circumstances beyond that period?
  The Prime Minister: My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) has on many occasions gone on record in favour of a positive prices and incomes policy. All members of the Government support this very necessary though repugnant legislation because, in present circumstances, it is needed as an essential supplement to the so far embryonic voluntary policy of the T.U.C.
  Mr. Heath: The Home Secretary said that when the powers ran out there would need to be a voluntary incomes policy. He gave an undertaking that there would be no compulsory powers. The Prime Minister said in his own speech to other trade unionists that it would be misleading and irresponsible to give such an undertaking. Why does he keep the Home Secretary in the Government?
  Hon. Members: Answer.
  The Prime Minister: I shall answer that question, but I shall want one day to ask the right hon. Gentleman the Leader of the Opposition to state where all his own Front Bench members stand on this issue. His regular and well-known trends to the Right under pressure from the Right and from every Powellite doctrine show that he has not the guts to resist.
  My right hon. Friend the Home Secretary expressed the hope, as I did, that it would not be necessary. As I have already pointed out, if hon. Members interpret my right hon. Friend's reference to a voluntary policy, and that alone, without statutory powers, as meaning that there can be no question of further
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  legislation, that is not the policy of the Government.
  Mr. Roebuck: Since a week is a long time in politics, is not the important aspect of this matter the fact that the Home Secretary supports the present policy? Would not those who do not wish to see further legislation of this sort do better if they worked hard to make the present policy successful so that we could break out of the dreadful economic troubles which have dogged us for so many years?
  The Prime Minister: Yes, Sir. My right hon. Friend the Home Secretary made clear in terms that he fully supported the legislation. He was talking about what might happen in 18 months' time. The important thing now, particularly with the new drive being given to productivity agreements, is to strengthen the T.U.C.'s voluntary policy and the productivity link with wages.
  As my hon. Friend says, we need to improve substantially the economic situation, remembering that the previous Government never succeeded in getting an incomes policy at all and that only this week the Bank for International Settlements has placed the responsibility for the economic situation unequivocally on the years before 1964.

MR. COHN-BENDIT (ENTRY INTO UNITED KINGDOM)
Mr. William Deedes(by Private Notice)asked the Secretary of State for the Home Department on what grounds Mr. Cohn-Bendit has been given a 14-day extension of his permitted stay in this country.
The Secretary of State for the Home Department (Mr. James Callaghan): Mr. Cohn-Bendit arrived at London Airport on 11th June at the invitation of the B.B.C. He said that his purpose was to take part in a programme to be recorded on the following day, and he accepted that a stay of 24 hours would be sufficient for this purpose.
Last night, his legal representative applied for permission for him to stay on for 14 days to visit student friends and a relative.
Naturally, I looked at this with some care, but in all the circumstances I did

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not think it necessary to refuse the application.
Mr. Deedes: While there may be two views about the value of admitting this student, is the right hon. Gentleman aware that the handling of this matter by the Home Office has really contrived to make it look ineffably silly and that to appear to have been pushed, between Tuesday and Wednesday, from 24 hours to 14 days, in a panic, is a travesty of what the Home Office ought to be, which is an example to all our other institutions at this very difficult time?
Mr. Callaghan: I am aware that when the right hon. Gentleman is not sure on which side to come down he attacks the procedure by which the application has been handled. He might tell us— perhaps I should not ask him, but it would be interesting to know—whether he thinks it was right to admit the man or not.
Mr. Faulds: Will my right hon. Friend continue resolutely to resist the blandishments of the Opposition—the sirens were a load of old women too—when they counsel illiberalities alien to the Bitish way of life?
Mr. Callaghan: This country has a tradition of allowing people of all kinds to express their political opinions provided that they do not break the law, and that tradition is worth preserving. I would add my hope that no one will exaggerate the extent of this young man's importance.
Sir D. Renton: Is the Home Secretary aware that foreigners are admitted to this country as a privilege, not as of right? If this young man abuses that privilege by stirring up trouble here, as he has done elsewhere, will his stay be brought to an end at once?
Mr. Callaghan: His legal representative informed the Home Office that this gentleman does not intend to cause trouble whilst he is here—[Interruption.] We shall see. However, I do not propose to judge the issue until trouble arises.
Mr. Michael Foot: Does the Home Secretary agree, as his action indicates, that the proper way to uphold the principle of free speech, in which we in this
440
country believe, is to enable people to exercise it? Does he also agree that many newspapers, like The Times, spend quite a lot of money properly reporting to the people of this country the views of prominent students in Europe? Does he not think that the B.B.C. deserves every congratulation for its initiative in upholding the best traditions of this country?
Mr. Callaghan: I have no doubt that the soil of this country is less fertile for agitators and that the people of this country are more able to make up their minds about the value of opinions expressed than in a great many other places. I have enough to answer for myself. I do not want to offer any encomium or apologies for the B.B.C.
Mr. van Straubenzee: What weight did the Home Secretary give to the effect that his decision would have upon the vast majority of students in this country who want to pursue their studies seriously and who are dismayed at the admission of a man of this kind?
Mr. Callaghan: I have no evidence that anybody is dismayed, except a small handful of Conservative backbenchers. If hon. Gentlemen do not believe that, they had better read the editorial in the Daily Telegraph this morning which set out views much more liberally than some that are being expressed today. Of course, we should take into account people's views about this matter, but we should also remember that this country has a tradition for admitting foreigners to express their views, provided that they keep within the law. So far, this young man has not broken the law.
Mr. Heath: Is not the Home Secretary doing less than justice to himself in refusing to recognise that this is a matter which causes grave concern to a large number of people in this country? The reason is because of their desire to see free speech preserved and the rights of others to come to this country to exercise it, at the same time knowing the activities in which these students have been engaged in their own universities and the incitement to violence which some of them deliberately make as part of their political philosophy.
While recognising the Home Secretary's determination to see that free speech is

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exercised, what the country wants to know is that, if in any way this is abused, he will immediately take firm action. That is; the assurance that we want from the Home Secretary.
Mr. Callaghan: I have indicated that the Home Office has been given an assurance by the legal representative of Mr. Cohn-Bendit that he does not intend to cause trouble—[AN HON. MEMBER: "What does that mean?"]—by which I understand he means that there will not be any breach of the peace. In those circumstances, I would not think it right to deprive this man of his right to express his views here. It is for people to make up their minds whether they find them acceptable or not. If he breaks the law he will be in breach of the Aliens' Order and will be subject to prosecution. That is where I stand on the matter.
Mr. Alfred Morris: Speaking as one who is concerned for the future of Britain's application to join the Common Market, can my right hon. Friend give an assurance that any restriction on the free movement of our fellow West Europeans will not hurt our prospects as a prospective signatory to the Treaty of Rome?
Mr. Callaghan: I think that my hon. Friend has adopted a most ingenious method of advancing his anti-Common Market attitude. I well understand that it will be more difficult for us to refuse admission in future if we join the Common Market than if we stay out.
Mr. Sharpies: Can the Home Secretary say why, if it was right to restrict this young man's entry to 24 hours in the first place, the decision was later made to extend it to 14 days? Does he not appreciate that the impression given two hours before he was due to depart appeared to be giving way to threats, and that indecision of the Home Office is the worst possible thing?
Mr. Callaghan: No. I think that that is a partisan way of putting it. He agreed to a stay of 24 hours because that was the time taken to record the relevant programme. Then his legal representative came along with a further application, which was granted. I thought that it would be useful for him to do some of the things he wanted to do. I even thought of teaching him the words of
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the Internationale, as he does not seem to be too sure of them. When he expressed a desire to see Buckingham Palace I could think of nothing better for his education.
Mr. Whitaker: Is the Home Secretary aware that the Tories are making complete clowns of themselves by thinking that Great Britain will be threatened by this young man? Is he also aware that most people believe in living in Britain because we have a tradition of allowing minority dissenting viewpoints to be heard, unlike in the Soviet Union or at a Tory Party conference? In view of our tradition for giving this hospitality to de Gaulle, Napoleon and Garibaldi in the past, will the Home Secretary resist the Stalinist blandishments of the Opposition?
Mr. Callaghan: I have no intention of departing from the traditional view that we admit foreigners and that they are free to express their views, provided they keep within the law whilst they are here. I hope that the Leader of the Opposition supports that view.
Mr. Maudling Mr. Maudling rose—
Hon. Members Hon. Members: Hear, hear.
Mr. Speaker: Order. We are talking about free speech. I want to hear what is said.
Mr. Maudling: The Home Secretary has made it clear that if this gentleman should act against the law he will take firm action. What will he do if, short of breaking the law, he should depart from the conditions put forward by his lawyer upon which he was admitted?
Mr. Callaghan: I should consider the circumstances and nature of the breach of the obligation.
Mr. Molloy: Will my right hon. Friend resist falling into the trap of the Opposition which, when it suits their purposes, call students who protest in Eastern counties freedom fighters and, when they protest in other circumstances, say that they are nuisances? Will my right hon. Friend maintain the tradition of this country and allow people to come here and, if they wish to protest, to be allowed to do so, on the understanding that they might also learn something?
Mr. Callaghan: I was hoping that by sticking to the traditional principle I was avoiding the danger of falling into a great many traps. I advise some hon. Members of the Opposition to do the same.
Sir C. Taylor: Did the right hon. Gentleman receive any representations from the French Government and was a dossier on this particular man sent by the French Government? If the Home Secretary received representations, what were they?
Mr. Callaghan: I have had no representations and no dossier. He arrived with a German passport, which he presented. If I do get any representations I will, of course, consider them.
Mr. Raymond Fletcher: Is my right hon. Friend aware that when I was the same age as this young man I held precisely the same views and engaged, with rather less success, in the same form of activities? Is my right hon. Friend also aware that I began to simmer down and grow up—
Mr. Speaker: We must have a question and not an autobiography.
Mr. Fletcher: Does not my right hon. Friend agree that further contact with a democratic Labour movement such as we have in Britain will have the same salutary effect on Mr. Cohn-Bendit as it had on me?
Mr. Callaghan: For many years I have watched over the flowering of my hon. Friend's genius, and perhaps if Mr. Cohn-Bendit stays here for as long as my hon. Friend has he will attain the same level of eminence.
Mr. Frederic Harris: How can the right hon. Gentleman possibly stand by the policy decision in this case, when only a short while ago his Government were responsible for withdrawing the passport of Sir Frederick Crawford?
Mr. Callaghan: That is another question. Sir Frederick Crawford was not denied admission to this country, and, as far as I know, while he was here he freely expressed his opinions, whether they were agreeable or not.
Mr. Winnick: Can my right hon. Friend explain why, although Mr. Cohn-Bendit has been present for more than
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24 hours, as yet we have had no revolution? Is this due to the sunny climate?
Mr. Callaghan: No. Sir. I have no doubt that people in this country will set their own valuation on any sentiments expressed by Mr. Cohn-Bendit—or by anybody else who comes to these shores —whatever he may preach.
Sir W. Bromley-Davenport: At a time when our great ally the French people are fighting for their very existence against Communist revolution, is it not typical of the bad taste of the B.B.C. that it should bring over to this country and offer payment and publicity to one of the archenemies of free speech and law and order?
Mr. Callaghan: That question should be addressed to the Postmaster-General.

BUSINESS OF THE HOUSE
Mr. Heath: May I ask the Leader of the House whether he will state the business of the House for next week?
The Lord Privy Seal and Leader of the House of Commons (Mr. Fred Peart): Yes, Sir. The business for next week will be as follows:
MONDAY, 17TH JUNE—Motions relating to the Southern Rhodesia (United Nations Sanctions) Order, to the Cereals (Guarantee Payments) (Amendment) Order and to the Sunday Cinematograph Entertainments (Borough of Middleton) Order.
TUESDAY, 18TH JUNE—Remaining stages of the Medicines Bill.
WEDNESDAY, 19TH JUNE, and THURSDAY, 20TH JUNE—Consideration on Recommittal of the Finance Bill.
FRIDAY, 21ST JUNE—Motions relating to the Iron and Steel (Restrictive Trading Agreements) Order, the Rate Rebates (Limits of Income) Orders, the Computer Merger Scheme and the Cinematograph Films Regulations.
Lords Amendments to the Maintenance Orders Bill.
MONDAY, 24TH JUNE—Supply [24th Allotted Day]:
Debate on a topic to be announced later.
Mr. Heath: Will the right hon. Gentleman give the House an assurance that there will be an interval of a fortnight between the Recommittal of the Finance Bill and Report?
Secondly, will he give an assurance that the House will be kept informed about the supply of arms to Nigeria in the light of the further talks going on?
Thirdly, will he give an assurance that the Report of the Royal Commission on Trade Unions and Employers' Associations, which is to be published this afternoon, will be debated before the House rises for the Summer Recess?
Mr. Peart: I shall consider the last point. I think that we shall have to wait until Members have read the Report.
I give the right hon. Gentleman the assurance for which he asks in connection with Biafra. I shall make certain that the House is fully informed about that.
With regard to the timetable for the Finance Bill, the right hon. Gentleman probably appreciates that the Business Committee has been sitting this afternoon. I have not as yet heard the result of its deliberations, but I shall keep the right hon. Gentleman informed through the usual channels.
Mr. Heath: The right hon. Gentleman will, I am sure, realise that the seven or eight weeks available before we rise for the Summer Recess ought to be time enough in which to consider the Royal Commission's Report, and that it will be urgent to have a full debate before we rise.
Mr. Peart: I recognise the importance of the Report.
Mr. Murray: As we are falling behind the former Conservative Government on average, can my right hon. Friend say what plans he has for further use of the Guillotine?
Mr. Peart: I hope that my hon. Friend will appreciate that when I put forward a guillotine Motion I did so with reluctance. When I look at the records of past Governments, I find that they did it with enthusiasm.
Sir G. Nabarro: Will the right hon. Gentleman apply himself to Motion No. 266, entitled "Atlantic Tree Trade Area"?
[That this House, taking note of the present state of the negotiations to join the Common Market, believes that Her Majesty's Government should in the meantime begin a feasibility study of an open-ended Atlantic Free Trade Area initially comprising the United Kingdom, the European Free Trade Association, Canada and the United States of America.]
It now has more than 100 signatures appended to it, and includes the names of hon. Members of all parties. Will the right hon. Gentleman confer with the Prime Minister and arrange for appropriate time to be taken next week for a revised policy statement to be made on this critically important matter?
Mr. Peart: I am aware that many hon. Members on both sides—
Sir G. Nabarro: On all sides.
Mr. Peart: —feel that this is an important matter—including hon. Members of the Liberal Party—but I cannot find time next week.
Mr. Swain: Has my right hon. Friend taken note of the changes at the top of the newspaper publishing world? Will he find time to debate Motion No. 278?
[That this House has no confidence in Mr. Cecil King as a member of the Board of a nationalised industry and calls upon the Minister of Power to terminate his office as a part-time Member of the National Coal Board forthwith.]
Alternatively, will he suggest to his right hon. Friend the Minister of Power that he should take the action for which the Motion asks, and dismiss Mr. Cecil King from the National Coal Board.
Mr. Peart: My right hon. Friend is aware of the feelings of hon. Members, but there will not be time for a debate next week.
Mr. Scott-Hopkins: Does the right hon. Gentleman appreciate the shortness of time between the ending of the Committee stage of the Medicines Bill and the Report stage, which is to be on Tuesday next? Does he agree that further time should be given to enable us to hold the necessary consultations on the issues involved? Will he agree to reconsider his decision, and see whether the Report stage can be put back from next week?
Mr. Peart: I think that the matter has been arranged for the convenience of hon. Members on both sides.
Mr. Ted Fletcher: Will my right hon. Friend provide time next week for a short procedure debate on the use of the Guillotine, as today happens to be the 81st anniversary of the first use of the Guillotine, and such a debate will perhaps establish that the Labour Government neither invented it, nor were the first to use it.
Mr. Peart: I accept my hon. Friend's views, but not next week.
Mr. Richard Wainwright: May we have an assurance that before the Recess we shall have the chance of a general debate on the Report of Mr. Speaker's Conference on Electoral Law, which has been in Mr. Speaker's hands for some time now?
Mr. Peart: I know that that is an important matter, but not next week.
Mr. James Johnson: Can my right hon. Friend say when we can expect a statement on the Government's measures for the future of a deep-sea fishing industry?
Mr. Peart: I know that my hon. Friend represents a very important fishing centre at Hull, and that he regards this issue as extremely important. I shall convey his views to my right hon. Friend the Minister of Agriculture, Fisheries and Food, but the debate may not be next week.
Sir Harmar Nicholls: As the words used by the Prime Minister today when answering Question No. Q2 showed conclusively that the Selective Employment Tax is preventing the entertainment industry from earning foreign currency which we greatly need, will the right hon. Gentleman ask the Chancellor of the Exchequer to make a statement next week, taking into account what the Prime Minister said?
Mr. Peart: I do not think that my right hon. Friend the Prime Minister conveyed that view.
Sir Harmar Nicholls: He did to me.
Mr. Peart: I thought that it was to the contrary. Perhaps the hon. Gentle-
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man will read what my right hon. Friend said.
Dame Irene Ward: May I ask the right hon. Gentleman to tell me whether, next week, the Government will announce their new proposals for the granting of passports in Rhodesia? Will he say whether we are to have an explanation of why the right of the Parliamentary Commissioner to discuss Sir Frederick Crawford's position has been denied?
Mr. Peart: I shall convey that view to my right hon. Friend the Commonwealth Secretary. There could be a statement. I note what has been said.
Sir C. Taylor: Has the right hon. Gentleman's attention been drawn to Motion No. 331, which has obviously aroused a great deal of interest on both sides of the House?
[That this House condemns the British Broadcasting Corporation for inviting a well known foreign professional revolutionary agitator, already banned from France, to appear on one of their programmes at the expense of British licence holders and taxpayers.]
Will the right hon. Gentleman find time for a short debate on the Motion?
Mr. Peart: I think that the matter has been reasonably discussed this afternoon by question and answer. I cannot find time for a debate next week.
Mr. Hugh Fraser: Can the leader of the House tell us when there is to be a debate on the Ombudsman becoming a non-Ombudsman? Could he give a date for this before the House goes into Recess?
Mr. Peart: I know what the right hon. Gentleman has said, but not next week.
Mr. Roebuck: Is it not right that the House had an opportunity to discuss the withdrawal of a passport from Sir Frederick Crawford? Will my right hon. Friend strongly resist any attempt to remove from the House these questions to a servant of the House?
The Speaker: Order. That is drifting into merits rather than business.
Mr. James Davidson: Could the Leader of the House say when we may expect the long overdue debate on the Halliday

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Report, particularly in respect of its re-trictive effect on development in Scotland?
Mr. Peart: Not next week.

ROYAL COMMISSION ON TRADE UNIONS AND EMPLOYERS' ASSOCIATIONS (REPORT)
The First Secretary of State and Secretary of State for Employment and Productivity (Mrs. Barbara Castle): With permission, Mr. Speaker, I should like to make a statement.
The Report of the Royal Commission on Trade Unions and Employers' Associations has been published today. I am sure that the House will want me to thank Lord Donovan and his colleagues for this valuable and constructive Report.
I am initiating as a matter of urgency consultations with both sides of industry on the Royal Commission's recommendations, which are detailed and far-reaching and will require careful study by all concerned. In the light of these consultations, I shall present a White Paper setting out the Government's proposals.
Mr. R. Carr: We would, of course, like to associate ourselves with the right hon. Lady's thanks to Lord Donovan and his colleagues and also agree with her that this Report will need careful study. We have, however, had to wait a very long time for this Report and we would like to stress the need now for really quick action.
Therefore, may I ask the right hon. Lady two questions? Could she give a target date for publication of the White Paper? Could she confirm the strong indication given by her predecessor, the present Minister of Power, that the necessary legislation will definitely be introduced next Session?
Mrs. Castle: I would certainly agree with the right hon. Gentleman that we should now try to initiate follow up action with a sense of urgency. This is what I indicated in my statement. I shall lose no time whatever in entering into consultations with both sides of industry. My difficulty in giving the right hon. Gentleman any precise target date either for the White Paper or legislation is that one must await the outcome of those consultations or progress with them,
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before one is able to see either what conclusions will come or when it will be possible to legislate, because one does not know how comprehensive such legislation may be.
Mr. Orme: Is my right hon. Friend aware that this matter is of such importance that many hon. Members want adequate time to consider it and do not want this matter to be rushed? Further, as this Report is dealing with one of the basic democratic institutions within our society we would like consultations to take place not only with just both sides of industry, but with this House and representative bodies within it.
Mrs. Castle: I entirely agree with my hon. Friend that hon. Members and all those concerned will need adequate time to study the Report. It is very detailed and comprehensive and some of the changes proposed are very fundamental. This is why I find it difficult to give a target date for publication of the Government's final conclusions or for legislation.
No doubt, as has been discussed earlier at Business Question time, there will be opportunities in due course for debate to enable the House to make its views known.
Mr. Iain MacLeod: The right hon. Lady has said that the Report is published today. Is it available to hon. Members now in the Vote Office?
Mrs. Castle: Yes, from 3.30.
Mr. Brooks: Would my right hon. Friend say whether, in view of the importance of the arguments contained in paragraph 519, which I have just had an opportunity to study, she can tell us whether the Government have yet had an opportunity to consider the merits of the arguments contained in this very important paragraph?
Mrs. Castle: As the paragraph to which my hon. Friend refers deals with a note of dissent, I think that we will discuss the agreed recommendations before going into the minutiae of dissent.
Mr. Selwyn Lloyd: Could the right hon. Lady say whether the Government intend to have a debate before the White Paper is issued? May I suggest that she takes that course into consideration?
Mrs. Castle: I am sure that the right hon. and learned Gentleman will realise that quesions of debate are matters for the Leader of the House. My right hon. Friend was asked earlier about this and said that he would consider representations very carefully.
Mr. Ellis: Is my right hon. Friend aware that some hon. Members on this side of the House are most concerned that nothing shall be done with too much haste? This is a very important subject and it may be that consultations and considerations that arise along the way would inhibit my right hon. Friend from making any statement about a White Paper or anything else?
Mrs. Castle: I would not quite concur in what seems to be the rather negative approach of my hon. Friend. I agree that there must be consultations, and extensive consultations, before the Government produce any documents setting out their views, or indicate lines of legislation. Equally, I believe that it is important that action is needed in this field. The Report gives valuable indications of the lines along which action ought to be taken, and taken with a sense of urgency, just because of the importance of this whole matter and the importance of its rôle in our economic life.
Sir T. Beamish: The right hon. Lady said that until consultations are completed she does not know if it will be possible to legislate. Those were her exact words. Does she mean that it will not be possible to legislate next Session or to legislate at all?
Mrs. Castle: I was asked to give a date for legislation. Obviously, I could not do so until we make progress with the consultations. I am by no means ruling out legislation altogether.
Mr. Fletcher-Cooke: Would the right hon. Lady take particular note of the request of my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) that before the Government reach a final conclusion, and get committed to a line of action, the best consultation possible is a debate in this House before such a committal? Would she convey to the Prime Minister and the Leader of the House that that is our view?
Mrs. Castle: I can only repeat that the Leader of the House has already responded very sympathetically to points of that kind put to him; and it is, of course, a matter for him and for discussion through the usual channels.
Sir Harmar Nicholls: Will the right hon. Lady bear in mind that some hon. Gentlemen are a little disconcerted over the emphasis she puts on the need for consultation in the way she presented it? The trade unions and the C.B.I. were represented on the Royal Commission and the Report is surely part of the considered views of both bodies; and I would have thought that since that view is on record we should have the view of Parliament to round the circle. I hope that her explanation of wanting further consultation is not only an excuse for not bringing in legislation which, clearly, the nation needs.
Mrs. Castle: I do not believe that the two Gentlemen on the Royal Commission to whom the hon. Gentleman refers would accept his view that they were in any way speaking in a representative capacity for their organisations. They were there as individuals and they have individual varieties of views. I do not think that they would agree that their presence means that it is not necessary for the organisations to which they belong to be consulted. It would be quite intolerable, in a matter of this far-reaching importance, for me not to consult with very great care and firmness the T.U.C., the C.B.I. and others interested.
Mr. Heath: We recognise that the Leader of the House is to consider the question of a debate. What we are asking is that the right hon. Lady should not publish the White Paper until the House has had a debate so that she can take the views of the House into account before doing so.
Mrs. Castle: I appreciated that that was the point being made. The Leader of the House will be consulting through the usual channels.
Mr. John Page: In view of the fact that in paragraph 4 of the addendum by Lord Donovan he draws attention to the continuing and expected continuous growth of unconstitutional and unofficial strikes, would the right hon. Lady arrange for special time to be devoted to a debate on that subject alone?
Mrs. Castle: I think that it would be quite meaningless except in the context of the Report, which, I believe, throws valuable light on some of the causes of unofficial strikes and, therefore, enables us to consider positive remedies.

MR. COHN-BENDIT (ENTRY INTO UNITED KINGDOM)
Mr. Gresham Cooke: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the extension of the entry permit for the visit of Mr. Daniel Cohn-Bendit by 14 days."
This matter is undoubtedly specific. That it is important is shown by the number of hon. Members who rose today to question the Home Secretary.
This man has become a student demagogue and has stirred up strife among university students in Paris, at the Sor-bonne, at Nanterre, at Amsterdam, at Frankfurt, the Saar and Strasbourg. Wherever he has addressed students, grave trouble has followed. He has been refused entry into France and Belgium and he told a British reporter in Paris:
" If we have to use paving stones to fight in order to take power, then we shall do so. The Wilson Government is not doing too well in England. Perhaps we will have a revolutionary movement there soon."
His presence will undoubtedly cause breaches of the peace and possibly student riots.
There are 200,000 university students here in over 40 universities and in 14 days he could get around a number of universities making speeches which, in my opinion, will be pouring oil on an inflammatory situation. This is examination time for students and many parents and university authorities will be extremely concerned if his presence would disrupt the examinations now being taken by about a third of the students.
Lastly, the matter is urgent because by the time we debate it in the ordinary way, the 14 days will be up and the damage may be done. There is great feeling in the country against his extended visit and that feeling itself may lead to breaches of the peace. He has already blackmailed the B.B.C. into granting the 14 days' extension—
Mr. Speaker: Order. The hon. Gentleman must not drift into the merits of the subject which he seeks to debate.
Mr. Gresham Cooke: I will not do that, Mr. Speaker.
Let me say that he has already used his student power to get his extension. The extension of his entry permit by 14 days is sufficient reason for the House to have an emergency debate on this controversial aspect of Government administration.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter which he thinks should have urgent consideration, namely,
" the extension of the entry permit for the visit of Mr. Daniel Cohn-Bendit by 14 days."
The House will remember that, under the revised Standing Order No. 9 agreed on 14th November, 1967, Mr. Speaker is directed to take into account the several factors set out in the Order but to give no reasons for his decision.
In the light of the new conditions, I must rule that the hon. Member's submission does not fall within the provisions of the revised Standing Order, and, therefore, I cannot submit his application to the House.

BILL PRESENTED
  OVERSEAS AID
  Bill to enable effect to be given to international arrangements for the making of contributions and other payments to the International Development Association and for the making of contributions to any international financial institution established for promoting the economic development of any region of the world; to enable Her Majesty's Government to implement undertakings, given under an international agreement with respect to the Asian Development Bank, to be responsbile for the obligations of certain members of the Bank; and to make further provision with respect to the Overseas Service Pensions Scheme; presented by Mr. Reginald Prentice; supported by Mr. Stewart, Mr. Dick Taverne, Mr. William Whitlock, and Mr. Oram; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 173.]
ORDERS OF THE DAY

  GAS AND ELECTRICITY BILL
  Considered in Committee.
  [Sir ERIC FLETCHER in the Chair]

  GAS AND ELECTRICITY BILL

    Clause 1
    EXTENSION OF BORROWING POWERS OF GAS COUNCIL AND AREA GAS BOARDS
    4.17 p.m.
    The Chairman: Before I call Amendment No. 1, perhaps I should indicate that, as a result of representations made to me, I think that it would be convenient if we discussed with Amendment No. 1 Amendments Nos. 2, 3 and 5, with a view, after a general debate on all four, to there being Divisions, if required, on Amendments Nos. 1, 2 and 3.
    Sir Gerald Nabarro: I beg to move Amendment No. 1, in page 1, line 11, leave out'£1,600' and insert'£1,400'.
    I welcome your suggestion, Sir Eric, of the amalgamation of the debate on this Amendment with that on Amendments No. 2, in page 1, line 11, leave out from'million' to end of line 12; No. 3, in page 1, line 12, leave out'£2,400' and insert'£1,800'; and No. 5, in page 1, line 16, after 'House', insert:
    'and no such draft shall be so laid before 1st January, 1971'.
    I welcome it because the arguments to be adduced, which are largely financial, are in many respects similar on the first Amendment and many subsequent ones.
    We are concerned primarily in Amendment No. 1 with the large-scale discovery of natural gas beneath the North Sea and the capital moneys required for adequate and economic development of this metallurgical phenomenon as early as possible. It was Sir Henry Jones, the Chairman of the Gas Council, who alluded to the find a few months ago as being "on a Texan scale". I prefer the terminology of my hon. Friend the Member for Yeovil (Mr. Peyton) a few days after, "It is the best bit of luck which we have had in Britain this century".
    Indeed it is, but my purpose is to try to bring to our consideration of the
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    massive issues concerned rationality in regard to the voting of sums for orderly and expeditious development of the find.
    The trouble with the Labour Party is that it believes as a matter of philosophical dedication, that all investment by a public board is good investment. Thus, any attempt by a Conservative Member, in recent years on Opposition benches, to qualify or to circumscribe or to rationalise investment by public boards or, indeed, to bring a closer scrutiny to the financial affairs of public boards is regarded as an act hostile to Socialism. This, of course, is quite wrong. We on this side have proclaimed at the last four General Elections that we will not seek the denationalisation of the coal, gas or electricity industries, for various reasons which I will not go into today.
    Having accepted that these public services should remain in State ownership, it is, of course, the responsibility of my right hon. and hon. Friends and myself to ensure that they are voted adequate sums for the capital investment programme sanctioned from time to time by this House after due regard to two fundamental considerations—first, that the maximum sum in capital investment for each Board should be derived from its own resources, which would come mostly, for the gas industry, from its depreciation funds; and, second, that they conform to the requirements of the White Paper on the financial objectives of nationalised industries and return, taking year with year, the proper surplus or profit on the net assets employed in the industry.
    Those are the two disciplinary requirements to which I hope both sides subscribe and which both will support this afternoon. It is idle to suggest in current circumstances that it is the very magnitude of the sums of money delineated in the Bill which terrify many of my hon. Friends and myself. The first Amendment on the Notice Paper seeks to reduce the sum of money voted in Clause 1 of the Bill from £1,600 million to £1,400 million. The effect would be that the House would vote money for the gas industry for a less lengthy period forward on capital account than would be the case if the terms of the Bill as it stands were implemented.
    None can deny that these are huge sums of money, and I make a passing

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    reference, as analogy only, to a tiny sum of money when put beside the sums we are discussing which has caused in the party opposite the biggest political upheaval since 1951, namely, the proposal to reimpose prescription charges. All the Government will get out of that is £25 million, after all the exemptions that were discussed on the day before the House rose for the Whitsuntide Recess.
    Here we are proposing, in the words of the Minister, three consecutive tranches, from £1,200 million, the present limit of borrowing for the gas industry, up to £1,600 million, being the first tranche; from £1,600 million up to £2,000 million being the second tranche; and from £2,000 million up to £2,400 million, being the third tranche, all to be occupied within a period which the Minister does not know—he has no crystal ball and neither have I—all to be occupied and taken up within a period of three to four years.
    These huge sums of money are expected to go through the House without dissent. The Minister was the person who suggested that there should be no dissent on Second Reading. In the peroration of his speech he appealed to my hon. Friend the Member for Finchley (Mrs. Thatcher) not to have a vote on Second Reading. I interjected, lucidly and pointedly, "Not a hope, not while I am around",—even if I had to carry my hon. Friend the Member for Finchley into the Lobby with me! That would be a very desirable thing to do; much better than for her to carry me into the Lobby. It is the very magnitude of the sum of money entailed, the habits and the records of nationalised industries in the expenditure of funds and the utter wastage of which they are so often guilty that cause my hon. Friends and myself to have considerable trepidations as to how this sum of money is to be spent.
    I seek to reduce the sum of money. Instead of letting it run on to £1,600 million in the first tranche, I would have it go only to £1,400 million because of the nation's economic circumstances. The effect would be not to curtail the expenditure month by month, or the commitments of the gas industry, but to cause the industry to come back to the House for a further authorisation and sanction about 12 months from now instead of
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    about 18 months from now. So the effect of the Amendment is to bring the industry, through the Minister, back to the House six months earlier than would otherwise be the case.
    I have a very good reason for saying all this. It would be a thousand pities if the new incumbent to the office of Minister of Power gave the impression that he wished to set down one policy for nationalised industries and another policy for private industry in the present difficult economic and financial circumstances of the nation. He should apply the same financial desiderata to capital investment by the State boards which are within his paternal control as Minister that we as business men would apply to private commercial profit-earning enterprises.
    Lieut-Colonel Sir Walter Bromley-Davenport: As my hon. Friend is on this point, the great trouble is that the nationalised industries are not run by anybody who has any business experience whatsoever. They cannot be turned off the board by irate shareholders. They could not care less whether they make a loss or a profit. Is not that the great trouble?
    Sir G. Nabarro: That is one of the troubles. The Tory Government over 13 years had very great difficulty in trying to turn the State enterprises into commercial concerns. I doubt whether we shall ever be able to do it, since if they make a big loss, at the end of the road they are always in a position to come to Parliament and write it off.
    My hon. Friend is correct in what he says. He will recall that in 1965 the former incumbent of the office of Minister of Power, one of seven during the last seven years, wrote off £415 million of accumulated losses of the National Coal Board. It is no good the hon. Gentleman on the Front Bench opposite vigorously nodding dissent. It is all on the record and is a matter of history; £415 million of accumulated losses was written off.
    I have talked about financial desiderata in judging the wisdom or otherwise of this investment by the Gas Board. I give the House the desirable considerations for this investment this afternoon. The first is that, by making this important and large investment how

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    much will be saved in terms of imports? It is no good the right hon. Gentleman side-stepping this issue. The case for development of North Sea gas is simply that it is indigenous fuel being developed by British capital, money subscribed by the British taxpayer, and it is intended to save money on imports.
    How much will be saved? I want this quantified, nothing less. If the right hon. Gentleman comes to the House and says that he wants the limit of borrowing by the Gas Board to be put up from £1,200 million to £1,600 million, an increase of £400 million, I say to the right hon. Gentleman, how much will he save in the aggregation on imported fuel by making this capital investment of £400 million? If he cannot answer me, I shall vote against him.
    Mr. Eric Lubbock: The hon. Member will find a good deal of information on this point in the evidence given by Sir Henry Jones to Sub-Committee B of the Select Committee on Nationalised Industries, where it will be seen that over this period the quantity of Algerian gas to be imported remains constant, because it is a long-term contract, but the amount of oil declines from 4·7 million tons in the period 1967–68 to 2·5 million tons in the period 1972–73, which represents a very substantial saving in foreign exchange.
    Sir G. Nabarro: That is not relevant to my argument. I am asking the Minister to provide me with figures. Why should I do his work for him? He has several thousand bureaucrats to work it out for him; let them do the work on their slide rules and provide the answer which I ask for this afternoon. How much will he save in imports by the first tranche of £400 million in capital investment?
    Second, by this investment on the part of the Gas Board, what increase in productivity in manufacturing industry in Britain does he expect to attract during the period of five years following the investment? That was part of the Prime Minister's statement on 16th January last. The purport of that statement was that all public expenditure would in future be viewed hypercritically in order to ensure two things: first, that the investment brought about a saving in im-
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    ports; and second, that it led to an increase in productivity. Let us have the figures today from the Minister in the context of this investment.
    Third, will this investment contribute to devaluation of sterling being made to work? I want Ministerial assurances on that. After all, we in the Tory Party did not devalue sterling. We were not responsible for it. That calamity was brought about by the crass and gross financial squandermania of the present Government. If there is not to be a second devaluation of sterling, it is important that these huge sums of money which we are being asked to vote today for additional investment in nationalised industry should conform to the financial desiderata of the Prime Minister's statement on 16th January and that ample assurances should be given by the Minister today that they will halt the drift towards a second devaluation of sterling.
    The fourth and last is a very important matter. I am sorry that my hon. Friend the Member for Horsham (Mr. Hordern) is not in his place. I felt sorry for the Minister of Power on Second Reading. He had occupied his office for only a few days, and he does not know much about fuel policy economics. He had not started to move the furniture round in his Ministry—
    4.30 p.m.
    The Minister of Power (Mr. R. J. Gunter): I still have not moved any.
    Sir G. Nabarro: I am sorry if the right hon. Gentleman has not moved any of the furniture round in his Ministry. Such action is badly needed. The Ministry is very slack and slow on the ball. I commend to the right hon. Gentleman today that he should have the most careful regard to what my hon. Friend wrote in The Times yesterday. The article is headed:
    "Peter Hordern, M.P., argues that Britain's fuel policy is misguided. Instead of cutting costs by gearing to new and economic power sources—as our competitors do—we continue to bolster coal".
    Mr. Lubbock: That is exactly what we are doing in the Bill.
    Sir G. Nabarro: Does the hon. Member for Orpington (Mr. Lubbock) wish to intervene?
    Mr. Lubbock: I said that that is what we are doing in the Bill. The whole purpose of it is so that we can convert to cheaper sources of power. One has only to look at the figures of coal consumption.
    Mr. David Webster: On a point of order, Mr. Deputy Speaker. We cannot quite hear this private conversation.
    The Chairman: Order. It would help if hon. Members would address their remarks to the Chair.
    Sir G. Nabarro: Sir Eric, I was about to ask your permission to be allowed to intervene in the disputation going on below me. If the hon. Member for Orpington will allow me to continue, I may be able to dispel his fears by quoting from this most apposite contribution from my hon. Friend the Member for Horsham about the importance of natural gas and the capital investment required for it, which is what we are discussing today.
    I want to draw the opening passage to the attention of the Minister, if he has not already read it, because he ought to give: us his comments on it. My hon. Friend wrote:
    "The Government's plan for power (Cmd. 3438) has still to be debated in the House."
    Mr. Edward M. Taylor: Shame.
    Sir G. Nabarro: I concur.
    My hon. Friend continues:
    "It is a well-constructed plan and a sophisticated document. The sums all add up, but it is wrong. This is because its assumptions are wrong, either because of ignorance of what is happening in other countries, or because the political consequences of providing cheap power are unacceptable to the Government—or perhaps both. In essence the problem is that discovery of natural gas in the North Sea, the development of nuclear energy and the continuing supply of cheap oil have together transformed the prospects of providing cheap energy. But they have also transformed the prospects for the coal industry in an adverse direction. The Government has therefore attempted to reach a compromise between what it considers to be a practical or acceptable level of run-down in the coal industry and its duty to provide the cheapest possible energy. It has had to lay heavy burdens on the electricity industry and penalise the oil industry to get more coal burned so that there are not too many
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    redundant miners. But it has taken its pattern for the run-down of the coal industry from the existing trend. It has failed to grasp that what is required is the provision of Government Retraining Centres on an unprecedented scale. … The Government rightly claim that the national considerations that need to be taken into account include security of supply, the efficient use of resources, the balance of payments, and the economic, social and human consequences of changes in the supply pattern. … But it really is impossible to justify a policy of keeping one-quarter of the available supply of natural gas under the sea in 1970 in order that the coal industry should be allowed to sell more coal to the C.E.G.B. Yet this is the Government's policy."
    That is a very grave allegation. It amounts to the Ministry being accused of deliberately retarding the development of natural gas from the North Sea so as to keep obsolescent coal mines open longer than is commercially justified. That is the charge against the right hon. Gentleman. I hope that he will answer it, because I shall not vote for his Bill until he does.
    Mr. Gunter: The hon. Gentleman would not vote for it in any case.
    Sir G. Nabarro: The right hon. Gentleman does me a great injustice. I might trim it, but I would not vote against it.
    As my hon. Friend the Member for Yeovil has said, natural gas is the greatest bit of luck that we have had this century, and I am all for developing it as rapidly as possible. However, I want these four financial desiderata to be obeyed.
    The symposium for the Minister is, first, how much is the economy in imports by this huge investment? Second, how much do we increase productivity in manufacturing industry by making this huge investment in the Bill? Third, will this huge investment in the Bill make progress towards preventing a second devaluation of sterling and, therefore, contributing to national solvency? Fourth, will it contribute to cheap fuel policies, which I regard as indispensible to the future success of our economy?
    With those few short words, I commend the Amendment to the Committee. I hope that the Minister will sit throughout this debate and not absent himself as he did on Second Reading. I hope, too, that he will answer the four points that I have put to him specifically and in

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    terms which we are all capable of understanding and applying to the huge financial sums set down in the Bill.
    Mrs. Margaret Thatcher: I wish to support my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) and others of my right hon. and hon. Friends who have put down similar Amendments to this Clause.
    Perhaps I might put the arguments in this way, and I deal first with the general economic arguments to which my hon. Friend addressed a number of his comments.
    Whatever we said on Second Reading on this Measure about reducing the amount of borrowing available has been more than abundantly justified by subsequest events. The very day after the debate in which we proposed to reduce the borrowing powers, we learned of a new squeeze in the private sector. It was a squeeze which will not affect the public sector, but which will affect the whole of private sector investment and may affect exports as well. In future, credit for exports has to be within the ceiling on the new squeeze. If we allow the Clause to go through unamended, it means that export and private sector finance will have to take second and third places to nationalised industry finance.
    Following that sequence we learned in the first week of June of yet other economic difficulties. There was another £600 million drawn from the International Monetary Fund on top of the £600 million we already owed. All of that had to be repaid by 1971. It is purely a coincidence that we have borrowed precisely the amount which this Bill proposes to spend. I cannot put it more strongly than saying that we are now proposing in this Bill to spend money which we have not got, so there are very strong economic circumstances for looking critically at the amount spent in the nationalised sector and for cutting it down as far as possible.
    My second point is that I want to ask the Minister about the arrangement of the investment programme. During his Second Reading speech he pointed out that the programme could be held up at any time; "checked" was the word
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    he used. Having looked carefully at the investment progamme, it appears to me to be planned on the basis that the Gas Council assumes the full amount will be forthcoming, and it has not planned it in independent stages each of which could be checked at a definite time. It looks from the programme as if it will be coming back later and saying, "Unless you give us the extra amount, we have planned the programme in such a way that the earlier expenditure will be abortive."
    A programme can be planned in two different ways, either in five independent terms each of which stands on its own or in one move and each year is an instalment in attaining the objective. We are entitled to ask for an assurance that this programme has been planned in independent stages and could be held up at any year without detriment to the amount of investment which has already been made. If that is not so, the Minister's argument that this programme could be checked falls to the ground.
    Obviously, the Gas Council would ask for as much investment as possible. It is the Minister's job to see that all contingencies are planned for. I am familiar with the fact that no one seems to worry very much when the amount of expenditure is increased.
    My third point is: has the Minister gone further with deciding the target return from the gas industry after this year? My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) pointed out that as the targets return is not known, the price is not known and the consumption cannot be forecast with accuracy, we are, therefore, planning very much in the dark. The price factor will largely influence the demand.
    My fourth point is that the Minister, in the White Paper on Fuel Policy and in the Bill, has said that gas should be introduced as rapidly as possible into the economy. This could be done without risking a penny of the taxpayers' money. I noted in an article in the annual review of the Financial Times of 3rd July last year, that Sir Henry Jones pointed out that in addition to the home demand there is a likelihood of new consumption in industry and commerce which could mean that well over half the natural gas available will be sold there.

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    According to that, well over half the natural gas could go straight to industry and commerce without the extensive conversion of domestic appliances and it could be got to industry by other means than through the Gas Council. All the Minister would need to do would be to give his consent under Section 9(2) of the Continental Shelf Act for exploring companies to sell to industry. Then, not a penny of taxpayers' money would be at risk. In fact, the gas could be introduced into the economy comparatively rapidly, and, also, there would not need to be any change in legislation.
    My fifth point is the rate at which this amount of investment would mean using up the amount of gas in the North Sea. It is alleged that it will last for 25 to 30 years. The first 15 of that 30 years will be taken up by writing off modern plant which is being adjudged prematurely obsolete. We are, therefore, in a position of having a 30-year programme, at the end of which time it will be used up. There is not much incentive for additional exploration at the moment.
    During the next 15 years it will used up, and at the end of the time what will be the use of this tremendous amount of investment we are making? Either we go back to town gas or buy Algerian or gas with foreign exchange, so as to use the investment the Minister is proposing. So we go back to nuclear power or coal. We are indulging in colossal expenditure for 15 years, and during the second 15 years we shall be making further capital expenditure to use a different kind of fuel or planning to import.
    4.45 p.m.
    My sixth point is a general economic one. As part of our argument is that the nationalised industry sector must be carefully scrutinised, is the Minister planning to cut down nationalised industry expenditure by an amount equivalent to the rate at which this is increasing?
    My final point is the one about scrutiny of the amount of money actually agreed to be spent in any one year. The Parliamentary Secretary and other hon. Members adduced during Second Reading the argument that this is only an order for borrowing powers, and that at any time we could debate the specific amount of expenditure in any one year by debating
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    the National Loans Fund. That is not true. Under this very Bill, in the next Clauses, the Minister is proposing to give powers to borrow in foreign currency.
    Such borrowing could be within a limit, but such borrowings would never be debated in the House of Commons under the Minister's own Bill. Money borrowed in foreign currency does not enter into the National Loans Fund Account. Whatever limit we allow for the borrowing we have no further Parliamentary control over it. The whole lot could be raised overseas. It would have to have Treasury approval, but that does not have to come before the House. There are good reasons connected with issues why it should not.
    The entire amount could be used for a single company going through the National Loans Fund and without our having an opportunity to look at the investment programme on which it is based. This is a new change. I ask the Minister for certain assurances. We feel strongly that in the present economic situation we should in fact commit only the smaller amount and even with that permission I want a definite assurance that the investment programme is arranged in independent stages.
    Mr. Lubbock: The hon. Lady knows my view on this question—I expressed it on Second Reading—which is that the Floor of the House of Commons is not the best place to debate in detail any nationalised industry, and the gas industry, in particular.
    Having re-read the Second Reading debate, I am even more reinforced in my conclusion. No one said a thing about the details of the investment plan of the gas industry, or whether the £1,200 million proposed was the right kind of figure, or what information should be appropriate to enable the House to come to a better judgment on this question, so I would suggest that the hon. Lady ought to have considered whether it would not be better for us, as Members of the House of Commons, to press for more work to be done in the Select Committee on Nationalised Industries and to read some of their Reports.
    I say to the hon. Gentleman the Member for South Worcestershire (Sir G. Nabarro) that he did not appear, to have

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    done his homework as carefully as he normally does. When he was asking the Minister questions about the possible savings in balance of payments as a result of the introduction of natural gas in particular and the investment programme in general he did not appear to have any knowledge of Table II, on page 22 of Minutes of Evidence, where Sir Henry Jones gave figures of the consumption of various kinds of fuel.
    I did not have time in an intervention to ask the hon. Gentleman to imagine what would have happened if we had not discovered natural gas in the North Sea. It is obvious that we would have converted from solid fuel to oil energy in the next 10 years, until the rundown was practically complete in 1973, with the result that nothing but oil was being used for the manufacture of gas because of the substantial difference in cost between the two sources.
    The saving is, therefore, larger than appears from the figures I gave in my intervention. They show a halving in the consumption of oil between 1967–68 and 1972–73 because not only would oil have had to be used for this element of production, but one must take into account the coal displaced by natural gas over this period. I would have thought, therefore, that the saving in terms of balance of payments, which must be substantial, should not be difficult to calculate if the hon. Gentleman makes certain assumptions about what will happen to the price of oil over this period.
    Sir G. Nabarro: I am not prepared to make assumptions in a matter of this kind, which is highly technical. Neither am I prepared to base my calculations on methane derived from Algeria, which is an entirely different matter and which is not to be confused or compared with North Sea natural gas. There is no comparison or analogy between the two.
    In any event, there is a fundamental Parliamentary principle involved and I commend to the hon. Gentleman that it is the Minister of the Crown responsible, the Minister of Power, who will do my calculations for me, if he wishes to satisfy me, using his several thousand bureaucrats for the purpose, and will make his pronunciamento publicly in this House in response to my questions.
    Mr. Lubbock: The hon. Gentleman tempts me to say that the Minister of Power does not have enough bureaucrats dealing with gas in his Department because frequently, when one makes inquiries of him about natural gas and other matters connected with the Gas Council, the right hon. Gentleman refers one to the Chairman of the Gas Council. He does the same when one questions him on matters concerning the N.C.B. and the C.E.G.B. Constantly one is referred to the chairmen of those organisations.
    One is left to suspect—I will not go into the matter further because it is not germane to the topic under discussion— that the Minister does not have adequate resources in his Department to evaluate the recommendations made to him by Sir Henry Jones or the leaders of the other nationalised industries about their capital expenditure programmes. We must, therefore, look at the figures which were provided by Sir Henry Jones to the Select Committee on Nationalised Industries. I would be surprised if the Minister said at the end of this discussion that Sir Henry's figures were wrong
    Sir G. Nabarro: He had better.
    Mr. Lubbock: Not only would we not have had this halving of the consumption of oil over the six-year period to which I referred if it had not been for the introduction of natural gas, but oil consumption would have increased until the whole of the gas produced, from 13·8 million tons of coal in 1967–68, was manufactured from oil sources.
    The hon. Member for Worcestershire, South went on to say that I must make a distinction between Algerian gas and the gas which we are getting from the North Sea. I agree that, from the point of view of our balance of payments, this is an important factor, but there is absolutely nothing that we can do about it. He will appreciate that we have entered into long-term contracts with the Algerians for the supply of 373 million therms during the period while this Measure will be effective. Thus, much as one might regret having made these long-term arrange' ments, they have been made—and they were made at a time when these enormous resources available in the North Sea were hidden from us.

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    There are, however, certain advantages. One is that Algerian gas is imported in liquid form and, for this reason, we have constructed large storage tanks which enable us to keep a reserve supply of gas to cover fluctuations in demand. This would probably have been necessary in any event. I understand that we are now to build in Scotland a plant for the liquification of natural gas and that it will be taken there via a trunk pipeline.
    This plant and the storage facilities associated with it will mean that a day's supply for the whole of Scotland will be available to cushion fluctuations in demand. Natural gas must be liquefied to be stored. The advantage of Algerian gas is that it is imported in liquid form.
    Mrs. Thatcher: Has the hon. Gentleman made his own calculation of the foreign exchange cost of natural gas, bearing in mind the amount of overseas capital needed and the royalties which must be paid on each cubic foot delivered?
    Mr. Lubbock: I have not made those calculations.
    Sir G. Nabarro: The hon. Gentleman should.
    Mr. Lubbock: I do not think that they can be made until we know the price which will be paid for the rest of the supply from the North Sea. We have been given so far only the price for Philips, which is only a small element in the total amount discovered so far.
    The hon. Member for Worcestershire, South then asked what improvements in productivity one could expect from the £1,200 million investment. The hon. Gentleman should study the memorandum given by Sir Henry Jones to the Select Committee on Nationalised Industries. In the evidence which Sir Henry subsequently gave, he said, in answer to, for example, question 180, that there would be a rundown in manpower over the next six years from 124,000 people to 114,000 —this at a time when the production of gas by the Gas Council is increasing at a very rapid rate.
    Here we have probably one of the most outstanding examples of improved productivity in industry in the United Kingdom, an example even more spectacular than the improvement in the coal industry, to which the hon. Gentleman and I
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    often refer in debates on that subject. The industry is to be congratulated for giving such a magnificent example to the rest of industry.
    The hon. Gentleman then wanted to know about the effects of the Gas Council's policies on the changeover to cheaper sources of power. He referred to an article by the hon. Member for Horsham (Mr. Hordern), in The Times, in which he stated that since the discovery of natural gas and the advent of nuclear power the situation had been transformed and that the figures in the White Paper on energy policy needed to be revised.
    I do not know whether the hon. Gentleman thinks that by 1975 gas could account for more than 15 per cent, of the total energy used in this country. If he does, then he is demanding an investment larger than £2,400 million and I am surprised, if that is his view, that he has not tabled Amendments designed to alter the investment figure.
    I doubt whether our economy is able to absorb natural gas at a more rapid rate and the trunk pipeline system has been installed with this capacity in mind. The conversion of domestic gas consumption appliances has been decided on by the Gas Council with the 15 per cent, figure in mind—the White Paper figure —and the discussions now proceeding with big private industrial users takes the figure of 15 per cent, as a starting point.
    The hon. Lady the Member for Finchley (Mrs. Thatcher) said on Second Reading that she did not think that the total figure of natural gas that had been given would be available and that Sir Henry Jones had said that there would be only 3,000 m.c.f.d. and not 4,000 m.c.f.d., which will be equivalent to 15 per cent, of our total energy resources by 1975. I do not agree with the hon. Lady.
    5.0 p.m.
    Mrs. Thatcher: I quoted from page 20 of the very Report which the hon. Gentleman admonished my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) for not having read.
    Mr. Lubbock: If the hon. Lady quotes one part of the Report, perhaps she will read on. She will find that Sir Henry said that, if the final total available from the North Sea was only the same as the assured resources that are there at present —that is, 3,000 million cubic foot a day—

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    it would be a most unusual field geologically. I am not quoting exactly, but that was the sense of Sir Henry's observations. Experience elsewhere in the world where natural gas has been discovered —in the Middle East, in Nigeria, in the Mexican Gulf—does not lead to the conclusion that once a certain point has been reached that is all that the resources are and no more will be discovered.
    This applies even if, as some suspect, the exploration of the North Sea gas is conducted at a much less intensive rate in the future than it has been over the past few years. I do not think there is any doubt that this 4,000 million cubic feet a day will be available by 1975. If one is to advocate an even faster introduction, that might be taking a risk. I am pointing out that the hon. Member for Worcestershire, South and the hon. Lady the Member for Finchley seem to be of different minds on this subject.
    There are two detailed questions that I want the Minister to deal with. First, although we know what the target figures are for the introduction of natural gas from Sir Henry Jones's memorandum, we do not know how this is divided up. Can the Minister tell us how much Shell/Esso gas will be introduced into the system in the year 1968–69? I understand that the installation is ready and that the Shell/Esso gas will be coming ashore in the next few weeks, although the price has not been settled yet.
    It seems a little unsatisfactory that the gas from the Shell/Esso well will be used in our system at a time when the discussions on price are still proceeding. I do not know what the company thinks about this. Is not this rather blackmailing the company, in the sense that the gas will already have been consumed and the company may be forced to take a price which it does not think is fair? Some people in the oil industry to whom I have spoken think that the company is in a very difficult bargaining position, having made this investment, with the gas now coming ashore, and with no finality in these negotiations.
    I am not saying that I would agree entirely with that view, because I do not know what considerations have been in the minds of the bargainers. It appears that Phillips has reached what
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    it considers to be a reasonable conclusion at the figure of 2·87d. per therm, and I am surprised that the Shell/Esso contract, which involves a much greater quantity of gas, which gas was discovered considerably before the Phillips' strike, still has not reached finality.
    Next, how much does the Minister think will have to be paid to the area gas boards this year in respect of coal which they use instead of some alternative source of fuel? This could affect the amount which has to be borrowed, because, if the Minister does not make a payment which covers the whole of the difference in cost arising from the use of coal instead of the most economic source, that would increase the deficit of the area gas boards—the gas industry as a whole—and it would, therefore, mean that it would have to borrow more money, to cover the difference.
    As an aside, it is rather odd that under Section 6 of the Coal Industry Act, 1967 the payments in respect of coal used as an alternative to a more economic source of fuel have to be made to the area gas boards and not to the Gas Council. I am not sure how the Minister intends to deal with this matter. I realise that we cannot discuss it on this Amendment. I would like to know whether the figure of 8·6 million tons of coal for 1968-69, given in Sir Henry Jones's evidence to the Select Committee on Nationalised Industries, still stands, or whether, as a result of discussions between the Gas Council and the National Coal Board, it has now been decided to use some other figure; and, if so, how the negotiations are proceeding between the Ministry, the N.C.B. and the Gas Council on what recompense there should be to the industry for the additional solid fuel it intends to use.
    I shall not support the Amendment, because, as I said at the beginning of my speech, I consider that this is the wrong place to argue it. I want the answers to these detailed questions and many others besides, with which I will not weary the Committee. The Minister know that I have been writing to his Department —in fact, I have been pestering it—for some months on many of these and other questions which seem to me to be of some importance. I do not think that we can pursue this across the Floor of the Chamber and expect to arrive at a proper conclusion which will be beneficial

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    to the gas industry, to consumers, both industrial and domestic, and to the economy at large.
    Mr. John Peyton: I do not share the view which the hon. Member for Orpington (Mr. Lubbock) expressed towards the end of his speech. I believe that these matters should be aired in the House of Commons. The fact that not as many Members as one would wish take an interest in them is not the fault of the forum. It is the fault of individual Members. As I have often remarked, I do not think that the Government benches ever look nicer than when they are completely naked, as they are at the moment, save for the Treasury Bench, which is never good-looking, anyway.
    I am obliged to my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), who referred to some words I used some time ago—namely, that the North Sea strike was the greatest bit of luck Britain had had for some time. I do not want to use too strong words this afternoon. I want on a personal note to remind the Committee that I have been in the Ministry of Power and I have a great regard for the work done by that Ministry. I also know a little of the Gas Council I know Sir Henry Jones personally. No one has a greater regard than I do for the immense work that he has done for the gas industry and, indeed, for Britain's economy. I hope that anything that I say will be understood in that context.
    I am obliged to go back over the years to 1964 when the prospects of there being gas under the North Sea first became worthy of serious consideration. I recall that the Conservative Government, who were at that time very much on their last legs in point of time, pushed through a licensing procedure which was both fair and quick. A subsequent Administration, despite the rather silly remarks made by the right hon. Member for Belper (Mr. George Brown), saw fit to sustain the arrangements we had made.
    I believe that Ministers tend to take personal credit for things for which they are not always personally responsible. The effort made on that occasion in the national interest was very largely to the credit of Sir Matthew Stevenson, who has now left the Department. His real determination 1:0 get this thing moving was
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    impressive. The fact that all the licensees or would-be licensees made very similar complaints afterwards was adequate proof that nobody had been treated unfairly— in fact, rather the contrary.
    Let us come up to date and look at the present position in the North Sea. Whereas a year ago there were 13 mobile rigs engaged on exploration, there are now only five. The Minister must give his own reasons for this. I shall give mine. No price has been fixed so no one knows what return will come from the investment. When I say that no price has been fixed, I exclude the temporary arrangement made with B.P. for a limited quantity and the arrangement with Philips, but I have no knowledge of Philips' intentions. Are they continuing to drill in the North Sea, or have they had their lot?
    Were Philips told by the Gas Council that if they agreed to that price no one would get a better one, despite the fact that Philips were nearer the shore than anyone else? I suspect that the Minister will not be able to answer off the cuff, but I should like him to look into the matter. Even oil companies are entitled to fair treatment. I hold no brief for any of them. I have not sought their advice and certainly have not been instructed by them in any way. I visited a rig in the North Sea at the beginning of this week. I am expressing my own opinions and saying what I believe is fair and right in the interests of the country as a whole.
    Every day that passes increases the dependence of the gas industry on North Sea gas. The best prospects have been already worked over. It is an absolute certainty that as work progresses from now on there will be more dry holes, and therefore higher costs. It stands to reason that oil companies will always go to the best prospects first, so from now on there will be more dry holes and very much higher costs as drilling conditions become more difficult. It is fairly clear that next winter the Gas Council will already be making substantial use of gas from the North Sea. It is clear that they, incidentally, will be taking gas from the Le Mans field, from Shell-Esso, gas for which as yet no price has been fixed.
    Consider the position of the companies. They could not say, "We will hold the country to ransom and turn off

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    the taps because they have not fixed a price." The Gas Council is making the most of this, but others are learning the lesson. A very large number of American companies have no obligation to invest in the British side of the North Sea. They can do it in any of the seven seas and there is the Dutch side as an easy and ready alternative. That is precisely what they will do. I remind the Minister that last year there were 13 mobile rigs in the North Sea and this year there are only five. The business of exploration has dramatically slowed down.
    When dealing with this new national asset and seeing this dragging of feet, on one aspect of the matter one is bound to ask who is responsible. I yield to no one in my regard for Sir Henry Jones, but I think that in this matter he and the Gas Council have been pursuing a most ill-judged policy. They are probably to be excused on the ground that they have been subjected to heavy Government pressure. If that is not so, I should like it to be denied.
    5.15 p.m.
    I turn from Sir Henry Jones to the former Minister of Power who is now Minister of Transport. I say without qualification that, although all Ministers have their faults, he was an excellent Minister of Power. He showed great intelligence and courage. His one failure was not to stand up to some of the more noisy and undesirable elements in his party who objected to a fair deal being done which would have encouraged this vital exploration effort. It would be very unfair to extend that to the present Minister, who has only just come into a new and difficult Department, but I ask him to use all his undoubted influence in the Government to see that this matter is settled fairly and with speed. If he said that that is his purpose, I should be content, but it is being very commonly and widely said that the decisive influence here has been not in his Department but in the Prime Minister's office and a great deal of influence has flowed from Dr. Balogh.
    Sir G. Nabarro: Lord Balogh.
    Mr. Peyton: I do not wish to remind either myself or the Committee of that. My charge today—I want to be quite
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    specific—is that there is something which amounts to a dereliction of duty which springs from shallow prejudice. If the Minister thinks that this charge is wrong, of course I shall listen with care to his denial, but I say that the Gas Council has been pursuing a wrong policy and the Government, in particular the Prime Minister—if he has been advised as I have suggested, both he and Dr. Balogh —have been responsible for a grossly mistaken policy.
    If this goes on we shall be left at the end of the day, I fear, in the humiliating position of having started the exploration effort in the North Sea but having faltered and failed. Then we shall find that the Dutch, who started years after we did, will be supplying us, supplying us moreover at their price, a price dictated largely by our necessity. We must remember that the Gas Council is not now erecting ordinary production plants. There is obviously a limit to the imports which can be had from Algeria. We shall be in the very humiliating position of having to buy from Dutch sources gas which we could well have had from our own doorstep and having also had the benefit of capital investment in the meantime.
    I hope that I have not spoken too strongly. I believe that with this faltering—I should like to think it is only faltering and not a cowardly yielding to political pressure of the silliest kind— these monkeys of the Tribune have been having an influence totally disproportionate to their importance. I hope very much that the new Minister in the next few weeks will use all his influence to make sure that before all effort falls away in exploring the deeps of the North Sea a sensible and fair price is fixed in order that this very vital effort can go forward unimpeded by shallow prejudice and ignorance.
    I know the right hon. Gentleman is in some difficulty because many of his supporters take a jaundiced view. One has only to see one of those rigs in the North Sea and the magnificent effort made there to come to the conclusion that the Government are the more culpable in their dithering and not having had the guts to make sure that a sensible and fair arrangement was made so that, as a nation, we could be certain that, whatever the extent of the asset under the

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    North Sea is, it will be discovered in the shortest possible time, whereas Government policy seems to be achieving the opposite result.
    Mr. Webster:
    "We are only at the start of the development of the North Sea gas fields and the uncertainties are too great for it yet to be possible to settle the long-term strategy on gas absorption."
    That is a direct quotation from the White Paper on Fuel Policy.
    My hon. Friend the Member for Yeovil (Mr. Peyton) spoke of one major uncertainty which makes us very anxious. I pay tribute to him for the considerable part he played as Parliamentary Secretary in the Department in laying the foundation of what might well have been a very successful fuel policy to obtain the benefits we could have had from this indigenous fuel. I was horrified to hear of the reduction in the number of drilling rigs in the North Sea. This is very dangerous and should be brought to the attention of the House immediately.
    Two other causes of acute uncertainty about the whole of the industry are mentioned in paragraph 14 of the White Paper. I shall not weary the Committee by reading it because hon. Members can do so perfectly well themselves. In view of these uncertainties this seems a fine time to come to the House for a mere £1,200 million. We need to watch the situation very closely.
    I am a member of the Select Committee on Nationalised Industries. The hon. Member for Orpington (Mr. Lubbock) has quoted at great length various sections of the evidence given to it. I should not like to quote them, as I do not think that they should be quoted at length until the Committee has reported and reached its conclusions. I hope that for a change it will have a little time devoted to it on the Floor of the House. That is another reason why we should not leap into giving all this money at this time, and why all four Amendments should be accepted.
    I hope that the Minister, as a reasonable man, will go some way towards accepting them. This is no time to ask for £1,200 million borrowing over the next few years, particularly in view of what the Chancellor of the Exchequer
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    has recently said about the need to cut down in the private sector and the need for acute scrutiny of public investments, and his statements to the I.M.F. about limiting the borrowing for each year to £1,000 million.
    Mr. Lubbock: I hope that the hon. Gentleman was not suggesting that the House should not be able to use the figures given to the Select Committee. I thought that the whole point of publishing the minutes of evidence and the memoranda submitted by the witnesses was that we could get all that information much earlier instead of waiting for the final Report to be produced.
    Mr. Webster: But it is still good, if we are to have Select Committees at all, to hear their conclusions and then debate them. This is another reason why perhaps some of the money should be given now but the bulk of it withheld until the Committee has reported. Otherwise, what is the purpose of setting up all the Select Committees?
    Like my hon. Friend the Member for Worcester (Mr. Peter Walker), I spent a good deal of time on the Standing Committee considering the Transport Bill and I spent a good deal of time on the Select Committee and it was very rare for me to be allowed on the Floor of the House. No doubt my colleagues are delighted, but one likes to know that one's labour is not in vain.
    There is much speculation about what the length of life of natural gas will be. As a former rapporteur to the Council of Europe, I used to go to Holland, and I tried to find out their estimate of the life of natural gas. There is not only the question of its absorption rate into industry and private consumption but the question of the time when it will be overtaken by another form of fuel, when the fast breeder reactors bring the price per therm to a competitive rate and atomic energy will take the main base load of the major fuel-using industries.
    If we are to have a wholesale expansion of natural gas into every regional board and into the premium as well as the industrial sector, one wonders whether it is right to compel people to go in for this type of modernisation when we must have a tremendous write-off for premature obsolescence of existing

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    plant, and before long the possible write-off of the new plant because of obsolescence through nuclear power. One wonders whether it might be better to concentrate on industries in regions nearer Bacton and the North-East.
    Surely, private industry would have a pilot scheme? There should be pilot schemes, and then we could consider a proper Borrowing Powers Bill on the evidence obtained from their progress.
    In 1965 the existing borrowing power was £600 million, with the right to increase it to £650 million. It has been raised to £900 million with a maximum of £1,200 million, and now this is to be doubled.
    We are aware of the very exciting possibilities which, as my hon. Friend the Member for Yeovil said, might be thrown away. But I also know, having taken an interest in the industry, that there has frequently been mis-estimating of fuel programmes, and I have always admired my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) when he has talked about this. It is very difficult to estimate, and one cannot but sympathise with those who have to do it, but I do not think that we need put all our eggs in one basket, because we have so much evidence of the mistakes that can be made. Caution is sensible at this time.
    The money can be raised through the National Loans Fund. The Government were not particularly keen to go for genuine loans for the national industries. It can also be raised by inflation or taxation. Those are the three main possibilities, and my reckoning is that it will be done by taxation.
    This brings me to a point which we should take most seriously as Members of the House of Commons. In the constitutional development of the country the House has taken to itself complete control of finance. The hon. Member for Orpington said that he did not think that this was the place to talk about the detail of the finance.
    "The finance of the country is ultimately associated with the liberty of the country. It is a powerful leverage by which English liberty has been gradually acquired … If the House of Commons by any possibility lose the power of the control of the grants of public money, depend upon it, your very liberty will be worth very little in comparison. That
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    powerful leverage has been what is commonly known as the power of the purse—the control of the House of Commons over public expenditure."
    That was said in 1891 by William Ewart Gladstone.
    Mr. Lubbock: Who was the Chairman of the Gas Council in those days?
    Mr. Webster: When the hon. Gentleman has something serious to contribute I shall try to answer him.
    Since 1911, when the House got to itself complete control of the Parliamentary granting of money, we have been more lax about our Estimates. We never thoroughly debate the Estimates that are voted. The hon. Member for Yeovil has felt very strongly on this subject. We have this year, for the first time since Ramsay MacDonald, sent a Finance Bill to a Standing Committee, a shameful thing
    Mr Peyton: The point is that this is the first time since Ramsay MacDonald that a Finance Bill has been guillotined. Never before has it been sent upstairs.
    The Temporary Chairman (Mr. Arthur Probert): Order. I hope that the hon. Member and others will not pursue the question of the Finance Bill being taken upstairs in Committee.
    Mr. Webster: No, Mr. Probert, but we are talking about citizens' money in the context of the House of Commons being too lax in the granting of money and in debating estimates and, on the floor of the House, the granting of taxation of citizens. Our case is that we are being too lax in this case as well in granting hundreds of millions of £s without there being a proper pilot scheme. There are very strong reasons why the Amendment should be accepted.
    5.30 p.m.
    Colonel C. G. Lancaster: I draw attention once again to the difficulty in which the Select Committee on Nationalised Industries, of which I am Chairman, finds itself. I listened with interest to what the hon. Member for Orpington (Mr. Lubbock) said. He paid us the compliment of having read the evidence of the Gas Council to the Committee, but it was only one of the witnesses and we cannot at this stage give any information about what the National

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    Coal Board, the Electricity Council or the steel industry had to say.
    We eventually have to come to a conclusion as to what is wise in regard to investment and the general degree in which the North Sea gas field should be exploited and until we have come to that conclusion I question whether the Ministry is altogether justified, or justified at all, in asking for these very large sums of money.
    My hon. Friend the Member for Weston-super-Mare (Mr. Webster) has gone over the position emphatically and fairly. He said that we should withhold the amount being asked for because, if for no other reasons—of which there are plenty—the Select Committee has not yet come to a conclusion. It is, indeed, a very valid reason for asking the Minister to think about the matter again and to recognise that the Amendments are, in the circumstances, fair and just.
    We are not justified in giving these very large sums of money, although they may in due course be merited, until the position has been more formalised than it is. The right hon. Gentleman has said that he is a newcomer to his office and has not had time to consider these matters in great detail. Yet he has been burdened by the Government with a situation in which he must come to the House with not an unsupported case but one which has by no means been proved and ask for very large sums of money. If for no other reason I hope that he will wait until the autumn, when the Select Committee will have reported to the House. He may then find himself abundantly justified in asking for all he needs, but until then he would be wise to accept the Amendments.
    These are not wrecking Amendments. They have not been put down because we do not want to see exploitation of North Sea gas at the earliest moment and the benefits of cheap power to the country. But we must prove to ourselves that, in all cases, it will be cheap power, particularly in the bulk supply market. This is one of the most intricate and difficult of the decisions we have to come to. But we have had our hands tied behind our backs and are being asked to do something now which I think is not justified in the present circumstances. In these circumstances, I ask the right hon. Gentleman to accept the Amendment.
    Mr. Nigel Birch: I want to say something about an aspect touched upon by my hon. Friend the Member for Weston-super-Mare (Mr. Webster). This Bill represents a great enlargement of the public sector. There was an interesting article in The Times Business News by Peter Jay. He is very nice—a good young man—but, if a Yiddish word is permissible, he is a schlemeil if ever there was one, which means a not altogether wise man.
    The point that was missed under nationalisation was the difficulty of financing. It was simply assumed that the nationalised industries or the Government—in fact the Government do the borrowing for the nationalised industries—could sell such stock as they wanted to the public and that the public would buy almost unlimited quantities of gilt-edged securities.
    We know rather better now. When nationalisation started War Loan was 108; now it is 47½ or rather less and sinking. People will not buy this stock. Therefore, when the Government are doing this sort of thing, they must realise the immense burden they are putting on the people by enlarging the public sector because, if people will not buy the stock, the money has to be raised by taxation or inflation. Indeed, for a number of years it has been done by both.
    Therefore, the Government should be doubly careful about committing themselves to raising colossal sums of money without being absolutely certain that they are right when they know that the only way by which inflation can be avoided is by increasing taxation to meet the bills.
    This is a point which has not been hoisted in on the benches opposite. Look at the nonsense about further nationalisation in transport and the proposals for the docks! I do not think that the Secretary of State for Employment and Productivity has hoisted the point in. She is a girl who likes to screech in the morning and to go on screeching throughout the day, but she has not an intellectual grasp of the situation. As the years go by, now that the bond market has been effectively destroyed by the Government, the burden on the taxpayer for these things will be increasingly insufferable and intolerable.
    Mr. David Lane: I wish to speak mainly to Amendments No. 2 and No. 3. Having re-read the Second Reading debate, I hope that the Minister and the Parliamentary Secretary will take the Committee more into their confidence than they did then. The right hon. Gentleman was clear on the mechanics but less informative on the underlying prospects of the industry, and the hon. Gentleman was even less informative. I am sorry that the hon. Gentleman has gone out for a moment.
    Sir G. Nabarro: Do not worry about him. He is insignificant.
    Mr. Lane: That may help to put into perspective what the Parliamentary Secretary said in replying on Second Reading. He said something which many of us resented, in criticising us for an unreasonable attitude towards the Gas Council. He referred to carping criticism. I hope he will accept that I, like my hon. Friends, am full of admiration for what has been done and the speed with which both the Gas Council and the exploring companies have taken advantage of this bit of British luck. But that does not disqualify us from questioning what the Government are proposing. We are justified in pressing for a much earlier opportunity of a thorough discussion of the prospects of the gas industry than the Bill would provide. We ask this because of the number of unanswered questions still before us.
    I want to support what has been said about the Select Committee on Nationalised Industries. We all want to know what it will say about gas prospects, so we should have the first possible opportunity thereafter of debating the matter thoroughly. We should get this opportunity with this Amendment. We should not get it if the Bill goes through unamended.
    There is also the question of the market for gas. We heard little about it from the Government on Second Reading. It is relevant again to the question of the granting of large sums for further investment. What is to be the balance, on the latest judgment, between the industrial and the domestic market?
    Just before Whitsun we had an announcement by the President of the Board of Trade about the new plans for a smelter on the North-East Coast. I hope that we shall be told this afternoon a little more about the power implications involved. We
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    pressed the Government about this on earlier occasions and got nowhere. But there are plain implications in this smelter project for the question of coal pricing, for the electricity industry's policy in its future fuelling of power stations, and for the extent to which the electricity industry now wants to take natural gas. I hope that we shall hear more about that this afternoon.
    Linked with that unanswered question is the question of the speed with which gas selling prices to consumers may be reduced. We know what the White Paper said about cheap fuel, rather cautiously. On Tuesday, 11th June, 1968, my own constituency's evening paper had a banner headline,
    "Board pledge 1d. therm reduction on natural gas."
    It stated:
    "Gas consumers in Cambridge and the county will get a reduction of 1d. a therm when they start using natural gas, the chairman of the Eastern Gas Board announced last night."
    Yesterday in The Times, there was also this full-page advertisement by the Gas Council:
    "High Speed Tortoise! … Following so soon after recent price increases (largely because of exceptional factors wholly outside our control), any claims that they are going to be lowered may seem difficult to understand. But the industry aims to more than triple sales by the mid 1970s and this cannot be done unless our prices, already competitive, become even more so.
    This cold economic fact alone should give our customers a warm assurance of our determination to get our prices down."
    That is all very fine. The Minister was rightly more cautious about price prospects in his Second Reading speech. I hope that he can tell us this afternoon something about his present assessment of price trends.
    I now want to mention two points of detail. One concerns storage. We are asked to provide for possibly as much as £546 million in four years for expenditure by the Gas Council on transmission and storage. The booklet issued recently by the Council mentions its plans for storage. I will quote from this booklet in asking another question of the Minister.
    "Four frozen ground storage units for liquid natural gas are being provided at the Canvey Island terminal and above ground storage is being provided at Ambergate. Plans are also

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    being considered for additional storage at strategic points in the country."
    Can the Minister tell us any more about this today? These are not only costly projects, but they are of great local interest in many parts of the country.
    There is another point of detail concerning the transmission system. I happened to be at Bacton for a short time during the recess. I noticed that already one and a half masts are erected for radio control of the gas being brought from the North Sea to the shore. We know from announcements that have been made that the Gas Council has chosen radio control rather than land line for the inward distribution system. I should like to be assured this afternoon, or at least in correspondence, because there has been some doubt about it, whether the G.P.O. is in agreement with the Gas Council about the use of microwave systems for this purpose.
    The main unanswered question that we come back to is the financial one and the method of raising the money which will be required. Little was said in the Gas Council booklet, and still less by the Minister in his speech on Second Reading, about the degree of self-financing that the Gas Council expects. As has been said, there is also great uncertainty about the future financial target for the Gas Council. A target has not yet been set. Until we know what it is we are wrong to agree with the total sum asked for by the Minister today. In view of this and many other unanswered questions, it would be wrong to grant the Government more than the minimum, limited extra borrowing power.
    One of the great lessons of the last few years in many fields of expenditure has been the need for much tighter year-by-year control of public expenditure. I know what was said on Second Reading about the careful scrutiny that goes on in the Minister's Department with regard to the gas industry and many other industries. We come back to the question of Parliamentary scrutiny. It is no good the Minister saying that we will have another Order in a couple of years and another one a year after that. This is an inadequate opportunity for the House to consider these large sums of money.
    Here I will quote what Mr. Peter Jay said this morning in an article entitled,
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    "Can Jenkins galvanise the planners?" I hope the Minister has seen this article. Mr. Jay ends up by discussing the need for more careful and more expert assessment of public expenditure plans:
    "The only hope of making these choices both rational and democratic—even in the parliamentary sense—is for Parliament to participate in them at roughly the same level of sophistication as they are handled in Whitehall."
    For these and many other reasons I warmly support the Amendment.
    5.45 p.m.
    Mr. Gunter: First, I thank the hon. Member for Yeovil (Mr. Peyton) for the tribute he paid—which I thought corrected the unfortunate phraseology of the hon. Member for Worcestershire, South (Sir G. Nabarro)—to the Chairman of the Gas Council and also to the civil servants at the Ministry of Power. It is easy to spit out the word "bureaucrats" and to talk about thousands of them. As the hon. Member for Finchley (Mrs. Thatcher) knows, we have not got thousands at the Ministry of Power-only just over one thousand. Therefore, there is no need to talk in those terms. I repeat, I am grateful for the tributes that were paid by the hon. Member for Yeovil.
    Turning to the general theme before coming to the specific questions which have been asked, the hon. Member for Worcestershire, South said that he was terrified by the large amounts of money that were involved. I know circumstances are different and that the sums of money involved are large by any standards, but I would remind the Opposition that these sums are not unprecedented in nationalised industries. Under the Conservative Administration's Electricity and Gas Act of 1963, the borrowing powers of the Electricity Council were raised from £2,300 million to £4,400 million with an interim limit of £3,300 million. Therefore, we should get the matter in perspective, whatever be our views about the uncertainties.
    Stressed throughout the debate, and legitimately so, have been the uncertainties about future development, marketing and many other aspects. I share those uncertainties, but I thought that I had recognised them by the decision to fix an interim limit at a comparatively low figure which will ensure that the industry's

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    affairs and future borrowings come before the House in less than two years' hence, instead of the customary two and a half to three years. Therefore, within two years at least we shall again be discussing these matters.
    I entirely agree about the necessity for control by this House of large sums of public money. I agree with the right hon. Member for Flint, West (Mr. Birch) that perhaps over the years control by this House has slipped. We should have more control. I am not disputing that we want more control. I would go anywhere with anybody in pursuing economy in the use of large sums of public money for nationalised industries, and for their use in the most efficient way. I suggest that it is not efficiency, and it is not economy, to fail to make available the resources which are required for the speedy utilisation of a valuable natural resource which we all know can make a great saving in the energy costs of British industry and in foreign exchange.
    I have noticed a difference of opinion among certain hon. Gentlemen opposite. The hon. Member for Yeovil stressed the urgency of getting on with the job. He stressed the urgency of maintaining the exploration. He maintained that we should get on with the settling of prices on which so much depends.
    Mr. Peyton: The exploration is being carried out at no cost to the Gas Council. Secondly, I am not in any way arguing against these Amendments. If they are carried, they will give the Minister another opportunity to assure me that the anxieties which I have expressed today are unfounded, and he will be able to come back in a few months' time and say that instead of five mobile rigs there are 10, and we shall be pleased.
    Mr. Gunter: That is a different matter. The tenor of the hon. Gentleman's remarks was that there was an urgency about the exercise. I therefore could not understand the hon. and gallant Member for South Fylde (Colonel Lancaster) suggesting that we should wait until the autumn comes and then make a decision on some aspects of the proposals. I am not suggesting that there is a difference of opinion between those two hon. Members, but I suggest that there is a difference of approach.
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    The House has many opportunities of informing itself of what is going on in the gas industry. I am sure that the hon. Member for Worcestershire, South is a most diligent reader of the Gas Council's Annual Report, the reports from the area gas boards, the reports of the Select Committee, and all other documents relating to the industry. There is sufficient scope for hon. Members to probe various aspects of the industry's policy.
    I propose, now, to deal with a matter mentioned by the hon. Member for Weston-super-Mare (Mr. Webster) and by the right hon. Member for Flint, West. One of the problems of managing nationalised industries is that they are often inhibited by the amount of public scrutiny to which they are subjected. This is far more true of them than it is of the Chairman of I.C.I, who, on many occasions, is kept away from the public gaze. We accept the need for this scrutiny of nationalised industries, and I do not want anybody to withdraw his request that this process should continue, but let us not forget that it may well be an inhibiting factor in attracting the best men to these industries.
    It has twice been said today that dealing with the matter by Order is a perfunctory method of tackling the problem. I ask the House to remember that, somehow or other, we managed to debate the 1967 Gas (Borrowing Powers) Order for about six hours. That is not a perfunctory way of dealing with an Order. I have more faith than apparently some hon. Gentlemen have in their end of the usual channels. I feel sure that they will have no difficulty in ensuring that a Gas Borrowing Order, an Electricity Borrowing Order, or any other Order is properly considered by the House.
    In putting forward a Bill dealing with borrowing powers over a five-year period in respect of what everybody agrees is one of the most exciting adventures into which the country can enter, the Government are following the practice of the Conservative Administration who quite rightly recognised that there was a need for nationalised industries to consider themselves as major commercial undertakings, and to do what normal commercial undertakings do, namely, plan ahead for at least this length of time.

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    During the Second Reading debate reference was made to the amount entered for contingencies, but the issue has not: been raised today. I think that management specialists today accept the view that forward estimates must always be regarded as subject to a reasonable margin of error. As I understand it, that is how modern industry conducts itself. In fact, the other day in "Studies in Management, No. 2", published by Allen and Unwin, I read the comments of a gentleman about corporate planning. He said that "all forecasts were inaccurate to a greater or lesser extent and that one thing which was certain was that a person responsible for corporate planning in industry must never claim that his forecasts are accurate— he should know better."
    We thought, and so did the Gas Council, that it was desirable to have an element of contingency planning. That did not imply for one moment that the money had automatically to be used. The inclusion of an amount for contingency planning is not imprudent. It conforms with modern thinking in industry. It does not mean that there is anything automatic about it. When the Minister asks for approval for the draft Statutory Order which seeks to raise the interim amount, he will justify whatever figure he introduces, making due allowance for uncertainties. He will put forward the figure which he considers necessary for the next three years. If it amounts to less than £800 million, a smaller amount will be proposed. In 1966 the Electricity (Borrowing Powers) Order raised the figure to £4,100 million even though the Conservative Administration had laid down that the maximum could be £4,400 million.
    I insisted on this low interim figure because, by doing so, the matter will have to come before the House in less than two years, when the whole issue can be scrutinised. Therefore, notwithstanding the admitted uncertainties of the gas industry, the amount of North Sea gas which will eventually become available, the markets obtainable at the beach price which the Gas Council will have to pay, the way in which peak loads will be met, and so on, there is at least something to be said for the fact that certain crucial decisions have been taken.
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    It is already clear that 3,000 million cubic feet a day of natural gas is available, and that remunerative markets for at least that quantity can be developed. I am glad that the hon. Member for Yeovil agrees with me. It has been decided that the greatest gain to the economy will be obtained by a policy of rapid absorption into industry, with most of the gas going to the premium market, with bulk sales being resorted to as necessary. It has also been decided that despite the cost of converting consumers' appliances, it is more economic to supply the natural gas direct to the consumer than to convert it to the present town gas.
    The oil companies are going ahead with their part of the operation. I am sure that at this stage, when delicate negotiations are taking place, nobody would expect me to speculate about why there are now five rigs instead of 15. It was understood that there would be a diminishing number. It means perhaps that exploration is drying up a little, but I hope it will not. Nevertheless, the oil companies are laying their pipelines and building their shore installations necessary to bring gas to the Council's pipelines.
    6.0 p.m.
    Mr. Peyton: Does not the right hon. Gentleman really accept that there is danger here in that the oil companies are, as they are obliged to, building their installations and laying pipelines but they are increasingly at the mercy of a Government and a Gas Council which seems to be cashing in on the position without any scruple whatsoever? If no fair price is reached in the near future the Minister can take it that others all over the world will not come here.
    Mr. Gunter: I take the point the hon. Gentleman is making, but I would be reluctant to believe that the oil companies of the world are at the mercy of anybody. I would rather say that at the state of play at the present time they can drive as hard a bargain as anybody else.
    Sir G. Nabarro Sir G. Nabarro rose—
    Mr. Gunter: If the hon. Gentleman will wait a moment.
    Sir G. Nabarro: We are in Committee, Mr. Probert. The right hon. Gentleman went right through a Second Reading speech refusing to give way. Would

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    he now relate what he has just said to the fact that price agreement has only been reached in respect of less than 10 per cent, of the 4,000 million cubic feet per diem which is the optimum we need five years from now? And as price negotiation has been going on for three years, when does the Minister hope, first, to stop blaming his predecessors and, second, to achieve some finality in more than what is a derisory area of price agreement —I repeat less than 10 per cent,?
    Mr. Gunter: It is a great pity the hon. Gentleman is so rude. Had he let me finish the sentence I was going to sit down.
    Sir G. Nabarro: It was a very long sentence.
    Mr. Gunter: The hon. Gentleman did not know. He did not wait for me to finish. I do not understand him. I was prepared to give way. I knew we were in Committee. And when have I blamed my predecessors?
    Sir G. Nabarro: All day.
    Mr. Gunter: I have not spoken for very long, so how could I blame them all day? Negotiations have been going on, perhaps for too long, but they are continuing. The arguments are still raging and I can only say that I hope a satisfactory conclusion will be reached ere long. There are many opinions as to whether the figure of 2·87 pence was right or whether it was too high, but that was the agreement come to, and all I can say, particularly to the hon. Member for Yeovil (Mr. Peyton), is that I hope they will be concluded as soon as possible.
    The Gas Council's borrowings average undoubtedly will have exceeded £1,600 million by early 1970–71 and will almost certainly have exceeded £1,800 million by early 1971–72; and further expenditure and borrowing will be needed if the gas already discovered is to be made available to consumers in the early 1970s. Unless it is intended not to take up the gas available and not to use it in the most economic fashion and at the most economic rate, it will merely lead to waste of Parliamentary time to reduce the final borrowing limit to the sums mentioned in these Amendments. I do urge the House to consider that very carefully.
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    Having dealt with what I thought was the general theme, apart from the usual remarks of the the hon. Member for Worcestershire, South (Sir G. Nabarro) about the House being dedicated to the proposition that all investment in nationalised industry is good—and I do not think he said very much else except to ask a more pertinent question: what did we hope to get?—I will move on. The argument is that the total benefit of conversion to natural gas at a present value of £1,400 million will average something over £100 million a year for 30 years, which is, of course, a substantial saving.
    Sir G. Nabarro: The right hon. Gentleman really must not laugh these things off. The amount of £100 million a year over 30 years is the value of the natural gas. That is not the question I have asked him. I pointed out to him carefully, and I repeated it, that the gravamen of the Prime Minister's statement on 16th January last was that revised Government policy rested most largely on import sav- ing. My first question was: what import saving will be created by this massive investment? Is he answering, £100 million of import saving per annum for 30 years? Is that his answer?
    Mr. Gunter Mr. Gunter rose—
    Sir G. Nabarro: Hurry up with the Civil Service!
    Mr. Gunter: It is not the Civil Service. That is just where the hon. Gentleman is wrong. I was referring not to the Civil Service but to "Gas Goes Natural", on page 15 of which the hon. Gentleman will find the figures I gave.
    Perhaps I may say a few words to the hon. Member for Finchley on one point which emerged in which I myself have always been interested: if at the end of 30 years, perchance, the natural gas has been exhausted, have we not wasted all this money on trunk pipelines? As a transport man I do not believe that in any case.
    I believe the finest asset this country could have, whether for natural gas or anything else, would be a system of underground pipelines. I am sure the hon. Lady will know that in America and elsewhere they are widely used for moving coal, grain, cereals and other things, so that it is not a wasted asset in that sense. But in any case, I want to tell her when

    493
    she speaks about the year by year, stage by stage development, on which I am not quite sure I followed her, that one simply could not have an uncontrolled programme. It is a rolling programme. At the end of each year the assessment is made and if further major considerations have to be made we can alter our programme. But it is quite impossible for me to tell her that there would be this compartmentalised 12-month by 12-month approach. As I have said, it is a rolling programme.
    Mrs. Thatcher: I am not quite sure whether the phrase "rolling programme" really helps. Having looked at the programme, I suspect it has been arranged so that if the fourth and fifth years of the programme are not carried out, that is to say if the Minister does not get the extra borrowing powers that will render the expenditure in the first, second and third years largely abortive. There would have been another way of doing this; rather than putting pipelines everywhere across the country, these could have been introduced separately into certain areas, not introducing them into every area at the same time. The hon. Gentleman said that the programme could be checked. I would refer him to the OFFICIAL REPORT of the 22nd May, 1968, at column 545. What did he mean?
    Mr. Gunter: The programme can always be checked year by year. There is the assessment every year, and of course gas is flowing into the grid and the marketing projections in the various areas of a country will be considered in relation to whether or not and how fast they are to be developed. That is the check about which I was thinking.
    I was asked by the hon. Member for Orpington (Mr. Lubbock) about the present position on the various gas banks. The actual gas discovered is over 3,000 million cubic feet daily or the equivalent of 36 million tons of coal a year. Of this, up to 250 million cubic feet comes from West Sole, where B.P. is operating, 600 million cubic feet will eventually come from the Hewett field (Phillips-Arpet), 1,600 million to 1,800 million cubic feet from Leman Bank (Shell-Esso) and. the Indefatigible field will give the remainder. There have also been to other discoveries on the Continental shelf—
    Mr. Lubbock: What is the figure for the Yorkshire field?
    Mr. Gunter: I could not give it offhand, but I will certainly see that the hon. Member gets it. The gas paid for already, that is, from B.P., is on a three-year price of 5d. per therm for the first 100 m.c.f.d. At Hewett, Phillips have a half share on a 25-year contract at 2·87d. per therm and Arpet are likely to accept the same terms.
    The hon. Member for Yeovil—I am sorry that he is absent—raised the question of licences, and rightly said that it was an act of faith and good conduct when the Conservative Administration issued those licences and we in 1965 renewed them. We held to the terms and conditions and the exploration's success was very good to the spring of 1967, although it has not been so good since. It has been a little disappointing, which accounts for the difference between the 13 and the 5 rigs. Those are the facts for which the hon. Member asked.
    The questions which remained unanswered are detailed, because we are in an area of uncertainty. I still say that, with the safeguards embodied in the Bill, within two years, possibly within 18 months, there must be a further debate upon progress when we have had the Report of the Select Committee and further information on prices. It is right and proper that we should allow the Gas Council to develop its plans over five years, but at the same time we must ensure that the checks are laid upon it in the manner which I have described.
    Mr. Lubbock: Would the right hon. Gentleman be so kind as to deal with my question about the consumption of coal by the area gas boards in the current financial year? The figure given is 8·6 million tons, in Sir Henry Jones' minutes of evidence. Does that still apply? How are the negotiations going on for the payment to be made by the Minister to the Gas Council under the Coal Industry Act, 1967, for the difference in cost between coal and the alternative sources of fuel?
    Mr. Gunter: I have not a quantitative figure in my hand, nor do I know the precise state of negotiations, but I will let the hon. Gentleman know.
    Sir G. Nabarro: Before the Minister sits down, will he—[Interruption.] It is no good his wearily rubbing his eyes. He has given me an answer which is totally misleading and is seeking to purport to represent that it is an answer to a specific question which I put to him.
    I will repeat the question. If we make the massive investment for which he is calling in the Bill, what will be the benefit to our national economy in import saving—I repeat, in import saving? I hope that he understands those simple words. Good, the Civil Service have now provided him with an answer. He supinely referred me to a document called "Gas Goes Natural", which I have here, and to page 15, and he quoted me these figures:
    "This gives a total benefit at present value of £1,400 million which is equivalent to an average annual saving of £120 million for 30 years."
    What he actually said was £100 million annually for 30 years. That is the calculated saving in operational and capital costs in the United Kingdom of the gas industry. It is not the economy in imports: it is not an import saving.
    I now give the right hon. Gentleman a further opportunity to answer my straightforward and unequivocal question, arising from the Prime Minister's statement on 16th January. If we are voting the massive investment for which he is asking—
    The Temporary Chairman: Order. The hon. Gentleman is making a speech and not an intervention.
    6.15 p.m.
    Sir G. Nabarro: Yes, Mr. Probert, but we are in Committee—
    The Temporary Chairman: Order. I was not aware that I had called the hon. Gentleman to make a speech.
    Sir G. Nabarro: I prefixed my remarks with the words, "before the Minister sits down", but I will wind up with just one sentence. What will be the import saving if we vote the massive sums in the Bill? I hope that I shall now get a reply as unequivocal as the question which I put.
    Mr. Gunter: I will not imitate the hon. Gentleman in rudeness. I did not
    496
    sit down wearily. I had something in my eye, and that is why I wiped my eye. I do not know why the hon. Member is in this place: he would make a fortune at the Palladium, I am sure.
    I will now give the answer. I will be short and precise, and I have no intention of answering it again—
    Sir G. Nabarro: The right hon. Gentleman is arrogant.
    Mr. Gunter: No, you are: that is the trouble.
    Sir G. Nabarro: On a point of order. The Minister has just called you arrogant, Mr. Irving. Would you ask him to withdraw at once?
    Mr. Gunter: No, I referred to the hon. Member for Worcestershire, South (Sir G. Nabarro) as arrogant.
    The import savings were expected to be £50 million—
    Sir G. Nabarro: Ah.
    Mr. Gunter: For God's sake wait a minute. —£50 million in 1970, and will rise to £100 million in 1975 on the best assumptions. The precise figure depends on the assumptions made, but £100 million a year is a good guide in the period after the build-up. That is supplied by the Civil Service, and I am grateful for it.
    Mr. Peter Emery: I should like to bring the Committee back to the Amendments, which, it is clear, contain three different types. One is to reduce the immediate borrowing power of the Gas Council, the second is to limit the amount over the five years and the third is to limit the amount or scale of the borrowing power over these periods. I will try to deal particularly with these three elements.
    I must begin with one fair comment. That is that I am more than surprised, as I am sure is the Minister himself, that there has been not one speech from the Government's back benches on this matter. No interest has been shown there—although some of them are present now—when we are discussing the spending of £1,200 million. I think that that is a disgraceful state of affairs—
    Mr. Webster: I am a connoisseur of borrowing powers Bills and attend

    497
    regularly on these occasions. One of the reasons that I like them is that no members of the Government ever attend the debates or take part.
    Mr. Arthur Palmer: I hope the hon. Gentleman will not overlook the fact that I spoke at considerable length on Second Reading.
    Mr. Emery: I know only too well the interest of the hon. Gentleman in fuel matters, and my remarks were not directed at him. That is the last thing that I would want to do. This does go some way to explain to me the argument of the Minister that it is not necessary to exercise Parliamentary control on the expenditure of vast sums of money other than by Statutory Instrument. This is the difference between this side of the House and the Government. The Government believe that Parliamentary control will be exercised on the increased borrowing of £800 million if it is done by Statutory Instrument. Everybody knows that this will amount to a 90 minute debate and nothing more. This is inadequate, and that is why basically our Amendments are in the right sense. We are seeking to ensure that there will be greater Parliamentary control of Government expenditure, especially on vast capital sums.
    My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) made it quite clear that hon. Members, whilst criticising the expenditure, were not suggesting that we were against a cheap fuel policy. This was reinforced by my hon. Friend the Member for Yeovil (Mr. Peyton) who wanted greater speed in the exploitation of natural gas. The price paid by the Government to the companies should give them a fair return for ensuring continued exploration in the North Sea, and also provide a reasonable price to both the large-scale consumer and the ordinary housewife. Too often the housewife and the smaller consumer are forgotten. I must, as I have done before, declare an interest in these matters, which I hope allows me to speak with some authority.
    The hon. Member for Orpington (Mr. Lubbock) seemed not to care that the House was the right place for discussing financial matters. My hon. Friend the Member for Weston-super-Mare (Mr. Webster) dealt more than adequately with this point. It is a terrifying situation for
    498
    the Whip of the Liberal Party in a speech on borrowing powers to suggest that it would be much better if the investigation of the expenditure of these vast sums of money was not dealt with on the Floor of the House. This would be untraditional and would neither benefit Parliament or democracy.
    My hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) gave a very good, limited speech, and his words should be reckoned with, since he was the Chairman of the Committee dealing with this matter. He suggested that it would be more in the interests of efficiency and economy if the Amendments were accepted for the time being until the views of the other power industries had been properly considered and adjudicated on and the report of the Select Committee is available.
    I do not know whether the basis of what I am saying is true or not, but it is being suggested by many opponents of gas that this borrowing powers Bill is being thrust through the House as early as possible, as the longer it is delayed the stronger will be the arguments for spending money in other industries in the nationalised sector of fuel and power. The argument of my hon. Friend the Member for North Fylde is relevant to this. When the report from the Select Committee is available we could come to a judgment, and our Amendments would allow the Government to deal with that point quite fairly.
    My right hon. Friend the Member for Flint, West (Mr. Birch) raised the point, which has been dealt with on Second Reading but not during this debate, that this money will be raised by taxation. Questions have been asked of the Government as to how they intended to do it. There is no doubt in my mind, and no doubt in the mind of the right hon. Member for Flint, West, that this money will be raised by taxation. The British public might pay a little more attention if they realised that this sum would be added to the spending power of the Government, and that they were to be called upon to provide the sum of £1,200 million over the next five years.
    I am concerned by the arguments that have been put forward both on Second Reading and today. First, they are based on a very doubtful and false piece

    499
    of logic and, second, we do not yet have full information. The arguments are based on the suggestion that the fuel oil tax will remain at 2·2d. per gallon. If that were altered, all the prognostications and statistics outlined for forward planning in the White Paper fall to the ground. I cannot say whether we on this side necessarily agree with that, but if that tax were reduced the economies of scale and the cost factors for the fuel industry would be altered. I know that the hon. Gentleman would not wish to mislead the House, but to be quite so certain in the presentation of the statistics of forward estimating is misleading, since at all times it has to be put in parenthesis that these statistics are subject to the fuel tax remaining at its present level.
    We are asked to make this judgment when we still do not know what total cost factors will be involved. We have one price, but until we have the price for all the fuels there will still be this enigma and question mark. It is reasonable and proper that the expansion should not be delayed, but it should go forward as a rolling programme that could be checked. These are not my words; they are the words of the Minister. I agree with him, but we want the check to come from the Floor of the House and for the industry to have, as in the case of most large industries, only the first bite to start with.
    I am also concerned that in the judgments which are being made the Government adopt an entirely different approach on spending and investment programmes for public industry and for private industry. I believe that there should be a single standard, and that it should be the one applied to private industry.
    If the right hon. Gentleman gave his wife £1,200 million, she would spend money much more rapidly than she does now. If we approve this vast sum for Gas Council borrowing in one single Bill, I believe that it will result in a greater freedom of spending than would be the case if the Council had to come back to this House more frequently. There would be more economy of spending if the amounts in the rolling programme were given only every two years or so. That is why, basically, it is wrong to approve a Borrowing Powers Bill such as this.
    500
    In our Amendments, we seek to reduce the overall amount from £2,400 million to £1,800 million, but that will not stop the industry going forward. We do not say, "You will limit your programme and stop your expansion." We say, "You must have your programme so prepared that you realise that you have not got final spending approval for the latter part of it." There is nothing unusual about that in small businesses or in industry generally, and that is the sort of financial stringency which we ask the Government to apply to the nationalised gas industry.
    The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson): If the hon. Gentleman and his right hon. and hon. Friends feel so strongly about this, perhaps he will tell the House why in the Electricity and Gas Act, 1963, they sought powers which resulted in roughly twice the level of borrowing for the Electricity Council as that proposed in this Bill for the Gas Council. The figures were £2,300 million being raised to £4,400 million.
    Mr. Emery: The hon. Gentleman's mathematics are obviously not good. Let me give him a lesson in adding two and two together. If one increases £1,200 million to £2,400 million, that is an increase of 100 per cent,—
    Mr. Freeson: What is this, then?
    Mr. Emery: We propose a 50 per cent, increase. If the hon. Gentleman does not know the difference between 50 per cent, and 100 per cent,, it is about time that he returned to the back benches.
    Sir G. Nabarro: As I was present during the debates in 1963, moving restrictive measures from the Government benches, would not my hon. Friend point out to the Parliament Secretary that in those days our economy was highly expansive, utterly solvent and we were paying our way, and there were no restrictions on finance at home or abroad. Today, on the other hand, we are living in a siege economy, and such squander-mania on the part of nationalised industry is neither propitious nor justified.
    Mr. Emery: I think that we have dealt with that point long and far enough to have made it clear that the Government's argument falls to the ground. However, it allows me to underline the fact

    501
    that we are allowing an increase of one-third in the overall borrowing powers and a total increase of 100 per cent,, unless the Bill is amended. We feel that that is too much. Whatever may have been done in the past, even if it were right then, is not right in the present economic situation.
    How many people realise that the amount involved in the Bill is something over £20 a head for every man, woman, child, and old age pensioner in the country? That is the situation which this House has to present to the country to make people realise how much is involved.
    When one considers the overall factors, I would remind the House of these words. On 26th March, 1966, it was said that, as a condition of solving our economic problems.
    "… public expenditure, equally with private expenditure, shall not be allowed to exceed the resources that we can make available from our expanding production."
    I only wish that those words were being put into effect. But it is typical of the Government to say one thing and do another. Those words are taken from a speech by the Prime Minister.
    If in this Bill we were suggesting that the present level of production and productivity was allowing this sort of investment, it would mean that very little would be left for other investment either in the public sector or the private sector of industry, and that is known only too well.
    No private firm would approve of an investment programme of this character without much more information. We have only some very rough figures. They are £1,221 million in fixed assets, £276 million in conversions, £44 million in loans, and £53 million in the financing of expanding turnover. No board of directors or finance sub-committee would approve the type of expenditure that the Government and the Gas Council expect us to make on those overall round figures.
    The one achievement resulting from this debate may be that when nationalised industries ask for more borrowing powers we may have more information about the way in which tens upon tens of millions of £s are proposed to be spent. The figures exist. They could easily be incorporated in a memorandum to a Borrowing Powers Bill. That would allow Parliament to inspect the figures to a much greater degree than we are able at the moment.
    We would like to see a reduction in the total level granted, because we believe that, in the present economic circumstances, there ought to be greater economy from the Government. That is not evident at the moment, and I would urge my hon. Friends to support me in the Division Lobby on this matter.
    Question put, That the Amendment be made: —
    The Committee divided: Ayes 105, Noes 141.

    Division No. 212.]

    AYES

    [6.28 p.m.

    Alison, Michael (Barkston Ash)

    Elliott,R W.(N'c'tle-upon-Tyne,N.)

    Lancaster, Col. C. G.

    Allason, James (Hemel Hempstead)

    Emery, Peter

    Lane, David

    Astor, John

    Errington, Sir Eric

    Langford-Holt, Sir John

    Atkins, Humphrey (M't'n & M'd'n)

    Eyre, Reginald

    Lloyd, Ian (P'tsm'th, Langstone)

    Baker, Kenneth (Acton)

    Foster, Sir John

    Lloyd, Rt. Hn. Selwyn (Wirral)

    Beamish, Col. Sir Tufton

    Gilmour, Ian (Norfolk C.)

    Longden, Gilbert

    Bell, Ronald

    Goodhart, Philip

    McAdden, Sir Stephen

    Bennett, Sir Frederic (Torquay)

    Goodhew, Victor

    McMaster, Stanley

    Birch, Rt. Hn. Nigel

    Grant, Anthony

    Maddan, Martin

    Black, Sir Cyril

    Gresham Cooke, R.

    Maude, Angus

    Boardman, Tom (Leicester, S.W.)

    Grieve, Percy

    Mawby, Ray

    Body, Richard

    Griffiths, Eldon (Bury St. Edmunds)

    Maydon, Lt.-Cmdr. S. L. C.

    Boyle, Rt. Hn. Sir Edward

    Gurden, Harold

    Mills, Peter (Torrington)

    Brinton, Sir Tatton

    Hall-Davis, A. G. F.

    More, Jasper

    Bromley-Davenport,Lt.-Col.SirWalter

    Harris, Frederic (Croydon, N.W.)

    Mott-Radclyffe, Sir Charles

    Brown, Sir Edward (Bath)

    Harvey, Sir Arthur Vere

    Munro-Lucas-Toorh, Sir Hugh

    Bullus, Sir Eric

    Head, Rt. Hn. Sir Lionel

    Nabarro, Sir Gerald

    Burden, F. A.

    Hirst, Geoffrey

    Nott, John

    Carr, Rt. Hn. Robert

    Hogg, Rt. Hn. Quintin

    Page, Graham (Crosby)

    Crouch, David

    Howell, David (Guildford)

    Page, John (Harrow, W.)

    Dean, Paul (Somerset, N.)

    Iremonger, T. L.

    Pearson, Sir Frank (Clitheroe)

    Deedes, Rt. Hn. W. F. (Ashford)

    Irvine, Bryant Godman (Rye)

    Peyton, John

    Dodds-Parker, Douglas

    Jopling, Michael

    Pounder, Rafton

    Douglas-Home, Rt. Hn. Sir Alec

    King, Evelyn (Dorset, S.)

    Prior, J. M. L.

    Drayson, G. B.

    Kirk, Peter

    Pym, Francis

    Elliot, Capt. Walter (Carshalton)

    Knight, Mrs. Jill

    Ramsden, Rt. Hn. James

    Rees-Davies, W. R.

    Smith, Dudley (W'wick & L'mington)

    Walters, Dennis

    Renton, Rt. Hn. Sir David

    Speed, Keith

    Ward, Dame Irene

    Rhys Williams, Sir Brandon

    Stodart, Anthony

    Webster, David

    Ridley, Hn. Nicholas

    Tapsell, Peter

    Whitelaw, Rt. Hn. William

    Royle, Anthony

    Taylor, Sir Charles (Eastbourne)

    Williams, Donald (Dudley)

    Russell, Sir Ronald

    Taylor, Frank (Moss Side)

    Wilson, Geoffrey (Truro)

    Scott, Nicholas

    Thatcher, Mrs. Margaret

    Wolrige-Gordon, Patrick

    Sharples, Richard

    Turton, Rt. Hn. R. H.

    Shaw, Michael (Sc'b'gh & Whitby)

    Van Straubenzee, W. R

    TELLFRS FOR THE AYES:

    Silvester, Frederick

    Walker, Peter (Worcester)

    Mr. Hector Monro and

    Mr. Bernard Weatherill.

    NOES

    Alldritt, Walter

    Harrison, Walter (Wakefield)

    Paget, R. T.

    Anderson, Donald

    Haseldine, Norman

    Palmer, Arthur

    Archer, Peter

    Hattersley, Roy

    Pannell, Rt. Hn. Charles

    Bacon, Rt. Hn. Alice

    Hazell, Bert

    Parker, John (Dagermam)

    Bagier, Gordon A. T.

    Heffer, Eric S.

    Parkyn, Brian (Bedford)

    Bennett, James (G'gow, Bridgeton)

    Hobden, Dennis (Brighton, K'town)

    Pavitt, Laurence

    Bidwell, Sydney

    Hooson, Emlyn

    Pentland, Norman

    Binns, John

    Howarth, Harry (Wellingborough)

    Perry, Ernest G. (Battersea, S.)

    Bishop, E. S.

    Howarth, Robert (Bolton, E.)

    Perry, George H. (Nottingham, S.)

    Blenkinsop, Arthur

    Hughes, Hector (Aberdeen, N.)

    Price, William (Rugby)

    Boston, Terence

    Jackson, Colin (B'h'se & Spenb'gh)

    Rees, Merlyn

    Bottomley, Rt. Hn. Arthur

    Jackson, Peter M. (High Peak)

    Richard, Ivor

    Braddock, Mrs. E. M.

    Jeger, Mrs. Lena (H'b'n&St.P'cras, S.)

    Roberts, Gwilym (Bedfordshire, S.)

    Brooks, Edwin

    Johnston, Russell (Inverness)

    Robinson, Rt. Hn. Kenneth(St.P'c'as)

    Buchan, Norman

    Jones, T. Alec (Rhondda, West)

    Robinson, W. O. J. (Walth'stow, E.)

    Butler, Herbert (Hackney, C.)

    Kelley, Richard

    Roebuck, Roy

    Carmichael, Neil

    Kenyon, Clifford

    Rogers, George (Kensington, N.)

    Castle, Rt. Hn. Barbara

    Kerr, Dr. David (W'worth, Central)

    Rose, Paul

    Chapman, Donald

    Lawson, George

    ROSS, Rt. Hn. William

    Coleman, Donald

    Ledger, Ron

    Rowlands, E. (Cardiff, N.)

    Concannon, J. D.

    Lee, Rt. Hn. Frederick (Newton)

    Ryan, John

    Davidson,James(Aberdeenshlre,W.)

    Lestor, Miss Joan

    Shaw, Arnold (llford, S.)

    Davies, G. Elfed (Rhondda, E.)

    Lipton, Marcus

    Shore, Rt. Hn. Peter (Stepney)

    Dewar, Donald

    Lomas, Kenneth

    Short, Mrs. Renée (W'hampton.N.E.)

    Diamond, Rt. Hn. John

    Loughin, Charles

    Slater, Joseph

    Dickens, James

    Lubbock, Eric

    Small, William

    Driberg, Tom

    Lyon, Alexander W. (York)

    Thornton, Ernest

    Dunwoody, Dr. John (F'th & C'b'e)

    McBride, Neil

    Tinn, James

    Edwards, Robert (Bilston)

    McCann, John

    Tomney, Frank

    Ellis, John

    MacDermot, Niall

    Urwin, T. W.

    Ennals, David

    Macdonald, A. H.

    Varley, Eric G.

    Ensor, David

    McKay, Mrs. Margaret

    Wainwright, Edwin (Dearne Valley)

    Evans, Albert (Islington, S.W.)

    Mackenzie, Alasdair(Ross&Crom'ty)

    Walker, Harold (Doncaster)

    Faulds, Andrew

    Mackie, John

    Wallace, George

    Fletcher, Raymond (Ilkeston)

    Mackintosh, John P.

    Watkins, David (Consett)

    Fletcher, Ted (Darlington)

    Marks, Kenneth

    Watkins, Tudor (Brecon & Radnor)

    Foot, Michael (Ebbw Vale)

    Mason, Rt. Hn. Roy

    Wellbeloved, James

    Fowler, Gerry

    Mikardo, Ian

    Wells, William (Waisa1l, N.)

    Fraser, John (Norwood)

    Millan, Bruce

    Whitaker, Ben

    Freeson, Reginald

    Mitchell, R. C. (S'th'pton, Test)

    Willey, Rt. Hn. Frederick

    Galpern, Sir Myer

    Molloy, William

    Williams, Clifford (Abertillery)

    Gardner, Tony

    Morgan, Elystan (Cardiganshire)

    Williams, W. T. (Warrington)

    Gray, Dr. Hugh (Yarmouth)

    Morris, Alfred (Wythenshawe)

    Winstanley, Dr. M. P.

    Grey, Charles (Durham)

    Murray, Albert

    Woof, Robert

    Griffiths. David (Rother Valley)

    Ogden, Eric

    Gunter, Rt. Hn. R. J.

    O'Malley, Brian

    TELLERS FOR THE NOES:

    Hamilton, James (Bothwell)

    Oram, Albert E.

    Mr. Harry Gourlay and

    Hamling, William

    Orme, Stanley

    Mr. Alan Fitch.

    Harper, Joseph

    Oswald, Thomas

    Amendment proposed: No. 2, in page 1, line 11, leave out from "million" to end of line 12.—[Mrs. Thatcher.]
    Question put, That the Amendment be made:—
    The Committee divided: Ayes 105, Noes 141.

    Division No. 213.]

    AYES

    [6.47 p.m.

    Alison, Michael (Barkston Ash)

    Black, Sir Cyril

    Carr, Rt. Mn. Robert

    Allason, James (Hemel Hempstead)

    Boardman, Tom (Leicester, S.W.)

    Crouch, David

    Astor, John

    Body, Richard

    Dean, Paul (Somerset, N.)

    Atkins, Humphrey (M't'n & M'd'n)

    Boyle, Rt. Hn. Sir Edward

    Deedes, Rt. Hn. W. F. (Ashford)

    Baker, Kenneth (Acton)

    Brinton, Sir Tatton

    Dodds-Parker, Douglas

    Beamish, Col. Sir Tufton

    Bromley-Davenport, Lt.-Col.SirWalter

    Douglas-Home, Rt. Hn. Sir Alec

    Bell, Ronald

    Brown, Sir Edward (Bath)

    Drayson, G. B.

    Bennett, Sir Frederic (Torquay)

    Bullus, Sir Eric

    Elliot, Capt. Walter (Carshalton)

    Birch, Rt. Hn. Nigel

    Burden, F. A.

    Elliott, R.W. (N'c'tle-upon-Tyne.N.)

    Emery, Peter

    Lloyd, Ian (P'tsm'th, Langs tone)

    Royle, Anthony

    Errington, Siir Eric

    Lloyd Rt. Hn. Selwyn (Wirral)

    Russell, Sir Ronald

    Eyre, Reginald

    Longden, Gilbert

    Scott, Nicholas

    Foster, Sir John

    McAdden, Sir Stephen

    Sharpies, Richard

    Gilmour, Ian (Norfolk, C.)

    McMaster, Stanley

    Shaw, Michael (Sc'b'gh & Whitby)

    Goodhart, Philip

    Maddan, Martin

    Silvester, Frederick

    Goodhew, Victor

    Maude, Angus

    Smith, Dudley (W'wick&L'mington)

    Gresham Cooke, R.

    Mawby, Ray

    Speed, Keith

    Grieve, Percy

    Maydon, Lt.-Cmdr. S. L. C.

    Stodart, Anthony

    Griffiths, Eldon (Bury St. Edmunds)

    Mills, Peter (Torrington)

    Tapsell, Peter

    Gurden, Harold

    Monro, Hector

    Taylor, Sir Charles (Eastbourne)

    Hall-Davis, A. G. F.

    Mott-Radclyffe, Sir Charles

    Taylor, Frank (Moss Side)

    Harris, Frederic (Croydon, N.W.)

    Munro-Lucas-Tooth, Sir Hugh

    Thatcher, Mrs. Margaret

    Harvey, Sir Arthur Vere

    Nabarro, Sir Gerald

    Turton, Rt. Hn. R. H.

    Heald, Rt. Hn. Sir Lionel

    Nott, John

    van Straubenzee, W. R.

    Hirst, Geoffrey

    Page, Graham (Crosby)

    Walker, Peter (Worcester)

    Hogg, Rt. Hn. Quintin

    Page, John (Harrow, W.)

    Walters, Dennis

    Howell, David (Guildford)

    Pearson, Sir Frank (Clitheroe)

    Ward, Dame Irene

    Iremonger, T. L.

    Peyton, John

    Weatherill, Bernard

    Irvine, Bryant Godman (Rye)

    Pounder, Rafton

    Webster, David

    Jopling, Michael

    Prior, J. M. L.

    Whitelaw, Rt. Hn. William

    King, Evelyn (Dorset, S.)

    Pym, Francis

    Williams, Donald (Dudley)

    Kirk, Peter

    Ramsden, Rt. Hn. James

    Wilson, Ceoffrey (Truro)

    Knight, Mrs Jill

    Rees-Davies, W. R.

    Wolrige-Gordon, Patrick

    Lancaster, Col. C. G.

    Renton, Rt. Hn. Sir David

    mt

    Lane, David

    Rhys Williams, Sir Brandon

    TELLERS FOR THE AYES:

    Langford-Holt, Sir John

    Ridley, Hn. Nicholas

    Mr. Jasper More and

    Mr. Anthony Graot.

    NOES

    Alldritt, Walter

    Harrison, Walter (Wakefield)

    Oswald, Thomas

    Anderson, Donald

    Haseldine, Norman

    Paget, R. T.

    Archer, Peter

    Hattersley, Roy

    Palmer, Arthur

    Bacon, Rt. Hn. Alice

    Hazell, Bert

    Psnnell, Rt. Hn. Charles

    Bagier, Gordon A. T.

    Heffer, Eric S.

    Parker, John (Dagenham)

    Bennett, James (G'gow,Bridgeton)

    Hobden, Dennis (Brighton, K'town)

    Parkyn, Brian (Bedford)

    Binns, John

    Hooson, Emlyn

    Pavitt, Laurence

    Bishop, E. S.

    Howarth, Harry (Wellingborough)

    Pentland, Norman

    Blenhinsop, Arthur

    Howarth, Robert (Bolton, E.)

    Perry, Ernest G. (Battersea,S.)

    Boston, Terence

    Hughes, Hector (Aberdeen, N.)

    Perry, George H. (Nottingham, S.)

    Bottomley, Rt. Hn. Arthur

    Jackson, Colin (B'h'se & Spenb'gh)

    Price, William (Rugby)

    Braddock, Mrs. E. M.

    Jackson, Peter M. (High Peak)

    Rees, Merlyn

    Brooks, Edwin

    Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)

    Richard, Ivor

    Buchan, Norrnan

    Johnston, Russell (Inverness)

    Roberts, Gwilym (Bedfordshire, S.)

    Butler, Herbert (Hackney, C.)

    Jones, T. Alec (Rhondda, West)

    Robinson,Rt.Hn.Kenneth(St.P'c'as)

    Carmichael, Neil

    Keliey, Richard

    Robinson, W. O. J. (Walth'stow,E.)

    Castle, Rt. Hn. Barbara

    Kenyon, Clifford

    Roebuck, Roy

    Chapman, Donald

    Kerr, Dr. David (W'worth, Central)

    Rogers, George (Kensington, N.)

    Coteman, Donald

    Lawson, Ceorge

    Rose, Paul

    Concannon, J. D.

    Laadbitter, Ted

    Ross, Rt. Hn. William

    Davidson,James(Aberdeen*htre,W.)

    Ledger, Ron

    Rowlands, E. (Cardiff, N.)

    Davies, G. Elfed (Rhondda, E.)

    Lee, Rt. Hn. Frederick (Newton)

    Ryan, John

    Dewar, Donatd

    Lestor, Miss Joan

    Shaw, Arnold (llford, S.)

    Diamond, Rt. Hn. John

    Lipton, Marcus

    Shore, Rt. Hn. Peter (Stepney)

    Dickens, James

    Lomas, Kenneth

    Short, Mrs. Rente (W'hampton.N.E.)

    Driberg, Tom

    Loughlin, Charles

    Slater, Joseph

    Dunwoody, Dr. John (F'th & C'b'e)

    Lubbock, Eric

    Small, William

    Edwards, Robert (Bilston)

    Lyon, Alexander W. (York)

    Symonds, J. B.

    Ellis, John

    McBride, Neil

    Thornton, Ernest

    Ennals, David

    McCann, John

    Tinn, James

    Ensor, David

    MacDermot, Niall

    Tomney, Frank

    Evans, Albert (Islington, S.W.)

    Macdonald, A. H.

    Urwin, T. W.

    Faulds, Andrew

    McKay, Mrs. Margaret

    Varley. Eric G.

    Fletcher, Raymond (Ilkeston)

    Mackenzie,Alasdair(Ross&Crom'ry)

    Walker, Harold (Doncatter)

    Fletcher, Ted (Darlington)

    Mackintosh, John P.

    Wallace, Ceorge

    Foot, Michael (Ebbw Vale)

    Marks, Kenneth

    Watkins, David (Consett)

    Fowler, Gerry

    Mason, Rt. Hn. Roy

    Watkins, Tudor (Brecon & Radnor)

    Fraser, John (Norwood)

    Mikardo, Ian

    Wellbeloved, James

    Freeson, Reginald

    Millan, Bruce

    Wells, William (Walsall, N.)

    Galpern, Sir Myer

    Mitchell, R. C. (S'th'pton, Test)

    Whltaker, Ben

    Gardner, Tony

    Molloy, William

    Willey, Rt. Hn. Frederick

    Gray, Dr. Hugh (Yarmouth)

    Morgan, Elystan (Cardiganshire)

    Williams, Clifford (Abertillery)

    Grey, Charles (Durham)

    Morris, Alfred (Wythenshawe)

    Williams, W. T. (Warrington)

    Griffiths, David (Rother Valley)

    Murray, Albert

    Winstanley, Dr. M. P.

    Gunter, Rt. Hn. R. J.

    Ogden, Eric

    Woof, Robert

    Hamilton, James (Bothwell)

    O'Malley, Brian

    Hamling, William

    Cram, Albert E.

    TELLERS FOR THE NOES:

    Harper, Joseph

    Orme, Stanley

    Mr. Harry Gourlay and

    Mr. Alan Fitch.

    Amendment proposed: No. 3, in page 1, line 12, leave out'£2,400' and insert'£1,800'.—[Sir G. Nabarro.]
    Question put, That the Amendment be made:—
    The Committee divided: Ayes 105, Noes 142.

    Division No. 214.]

    AYES

    [6.56 p.m.

    Alison, Michael (Barkston Ash)

    Gurden, Harold

    Pounder, Rafton

    Allason, James (Hemel Hempstead)

    Hall-Davis, A. C. F.

    Prior, J. M. L.

    Astor, John

    Harris, Frederic (Croydon, N.W.)

    Pym, Francis

    Atkins, Humphrey (M't'n & M'd'n)

    Harvey, Sir Arthur Vere

    Ramsden, Rt. Hn. James

    Baker, Kenneth (Acton)

    Heald, Rt. Hn. Sir Lionel

    Rees-Davies, W. R.

    Beamish, Col. Sir Tufton

    Hirst, Geoffrey

    Renton, Rt. Hn. Sir David

    Bell, Ronald

    Hogg, Rt. Hn. Quintin

    Rhys Williams, Sir Brandon

    Bennett, Sir Frederic (Torquay)

    Howell, David (Guildford)

    Ridley, Hn. Nicholas

    Birch, Rt. Hn. Nigel

    Iremonger, T. L.

    Rossi, Hugh (Homsey)

    Black, Sir Cyril

    Irvine, Bryant Godman (Rye)

    Royle, Anthony

    Boardman, Tom (Leicester, S.W.)

    Jopling, Michael

    Russell, Sir Ronald

    Body, Richard

    King, Evelyn (Dorset, S.)

    Scott, Nicholas

    Boyle, Rt. Hn. Sir Edward

    Kirk, Peter

    Sharpies, Richard

    Brinton, Sir Tatton

    Knight, Mrs. Jill

    Shaw, Michael (Sc'b'gh & Whitby)

    Bromley-Davenport,Lt.-Col.SirWalter

    Lancaster, Col. C. G.

    Silvester, Frederick

    Brown, Sir Edward (Bath)

    Lane, David

    SmIth Dudley (W'wick&L'mington)

    Bullus, Sir EriIc

    Langford-Holt, Sir John

    Speed, Keith

    Burden, F. A.

    Lloyd, Ian (P'tsm'th, Langstohe)

    Stodart, Anthony

    Carr, Rt. Hn. Robert

    Lloyd Rt. Hn. Selwyn (Wirral)

    Tapsell, Peter

    Crouch, David

    Longden, Gilbert

    Taylor, Sir Charles (Eastbourne)

    Dean, Paul (Somerset, N.)

    McAdden, Sir Stephen

    Taylor, Frank (Moss Side)

    Deedes, Rt. Hn. W. F. (Ashford)

    McMaster, Stanley

    Thatcher, Mrs. Margare

    Dodds-Parker, Douglas

    Maddan, Martin

    Turton, Rt. Hn. R. H.

    Drayson, G. B.

    Maude, Angus

    van Straubenzee, W. R.

    Elliot, Capt. Walter (Carshalton)

    Mawby, Ray

    Walker, Peter (Worcester)

    Elliott,R.W.(N'c'tie-upon-Tyne,N.)

    Maydon, Lt.-Cmdr. S. L. C.

    Walters, Dennis

    Emery, Peter

    Mills, Peter (Torrington)

    Ward, Dame Irene

    Errington, Sir Eric

    Monro, Hector

    Weatherill, Bernard

    Eyre, Reginald

    Mott-Radclyffe, Sir Charles

    Webster, David

    Foster, Sir John

    Munro-Lucas-Tooth, Sir Hugh

    Whitelaw, Rt. Hn. William

    Gilmour, Ian (Norfolk, C.)

    Nabarro, Sir Gerald

    Williams, Donald (Dudley)

    Goodhart, Philip

    NOTT, John

    Wilson, Geoffrey (Truro)

    Goodhew Victor

    Page, Graham (Crosby)

    Wolrige-Gordon, Patrick

    Gresham Cooke, R.

    Page, John (Harrow, W.)

    Grieve, Percy

    Pearson, Sir Frank (Clitheroe)

    TELLERS FOR THE AYES:

    Griffiths, Eldon (Bury St. Edmunds)

    Peyton, John

    Mr..Jasper More and

    Mr. Anthony Grant.

    NOES

    Alldritt, Walter

    Foot, Michael (Ebbw Vale)

    Leadbitter, Ted

    Anderson, Donald

    Fowler, Gerry

    Ledger, Ron

    Archer, Peter

    Fraser, John (Norwood)

    Lee, Rt. Hn. Frederick (Newton)

    Bacon, Rt. Hn. Alice

    Freeson, Reginald

    Lestor, Miss Joan

    Bagier, Gordon A. T.

    Galpern, Sir Myer

    Lipton, Marcus

    Bennett, James (G'gow, Bridgeton)

    Gardner, Tony

    Lomas, Kenneth

    Bidwell, Sydney

    Cray, Dr. Hugh (Yarmouth)

    Loughlin, Charles

    Binns, John

    Grey, Charles (Durham)

    Lubbock, Eric

    Blenkinsop, Arthur

    Griffiths, David (Rother Valley)

    Lyon, Alexander W. (York)

    Boston, Terence

    Grimond, Rt. Hn. J.

    McBride, Neil

    Bottomley, Rt. Hn. Arthur

    Gunter, Rt. Hn. R. J.

    McCann, John

    Braddock, Mrs. E. M.

    Hamilton, James (Bothwell)

    MacDermot, Niall

    Brooks, Edwin

    Harming, William

    Macdonald, A. H.

    Butler, Herbert (Hackney, C.)

    Harper, Joseph

    McKay, Mrs. Margaret

    Carmichael, Neil

    Harrison, Walter (Wakefield)

    Mackenzie,Alasdair-(Ross&Crom'ty)

    Castle, Rt. Hn. Barbara

    Haseldine, Norman

    Mackintosh, John P.

    Chapman, Donald

    Hattersley, Roy

    Marks, Kenneth

    Coleman, Donald

    Hazell, Bert

    Mason, Rt. Hn. Roy

    Concannon, J. D.

    Heifer, Eric S.

    Mikardo, Ian

    Davidson,James(Aberdeenshire,W.)

    Hobden, Dennis (Brighton, K'town)

    Millan, Bruce

    Davies, G. Elfed (Rhondda, E.)

    Hooley, Frank

    Mitchell, R. C. (S'th'pton, Test)

    Dewar, Donald

    Hooson, Emlyn

    Molloy, William

    Diamond, Rt. Hn. John

    Howarth, Harry (Wellingborough)

    Morgan, Elystan (Cardiganshire)

    Dickens, James

    Howarth, Robert (Bolton, E.)

    Morris, Alfred (Wythenshawe)

    Driberg, Tom

    Hughes, Hector (Aberdeen, N.)

    Murray, Albert

    Dunwoody, Dr. John (F'th & C'b'e)

    Jackson, Colin (B'h'se & Spenb'gh)

    Ogden, Eric

    Edwards, Robert (Bilston)

    Jackson, Peter M. (High Peak)

    O'Malley, Brian

    Ellis, John

    Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)

    Oram, Albert E.

    Ennals, David

    Johnston, Russell (Inverness)

    Orme, Stanley

    Ensor, David

    Jones, T. Alec (Rhondda, West)

    Oswald, Thomas

    Evans, Albert (Islington, S.W.)

    Kelley, Richard

    Paget, R. T.

    Faulds, Andrew

    Kenyon, Clifford

    Palmer, Arthur

    Fletcher, Raymond (Ilkeston)

    Kerr, Dr. David (W'worth, Central)

    Pannell, Rt. Hn. Charles

    Fletcher, Ted (Darlington)

    Lawson, George

    Parker, John (Dagenham)

    Parkyn, Brian (Bedford)

    Rowlands, E. (Cardiff, N.)

    Watkins, David (Consett)

    Pavitt, Laurence

    Ryan, John

    Watkins, Tudor (Brecon & Radnor)

    Penuand, Norman

    Shaw, Arnold (llford, S.)

    Wellbeloved, James

    Perry, Ernest C. (Battersea, s.)

    Short, Mrs. Renée (W'hampton.N.E.)

    Wells, William (Walsall, N.)

    Perry, George H. (Nottingham, S.)

    Silkin, Rt. Hn. John (Deptford)

    Whitaker, Ben

    Price, William (Rugby)

    Slater, Joseph

    Willey, Rt. Hn. Frederick

    Rees, Merlyn

    Small, William

    Williams, Clifford (Abertillery)

    Richard, Ivor

    Symonde, J. B.

    Willliams, W. T. (Warrington)

    Roberts, Cwilym (Bedfordshire, S.)

    Thornton, Ernest

    Winstanley, Dr. M. P.

    Robinson,Rt.Hn.Kenneth(St.P'c'as)

    Tinn, James

    Woof, Robert

    Robinson, W. O. J. (Walth'stow.E.)

    Tomney, Frank

    Roebuck, Hoy

    Urwin, T. W.

    TELLERS FOR THE NOES:

    Rogers, George (Kensington, N.)

    Varley, Eric G.

    Mr. Harry Gourlay and

    Rose, Paul

    Walker, Harold (Doncaster)

    Mr. Alan Fitch.

    Ross, Rt. Hn. William

    Wallace, George

    Clause ordered to stand part of the Bill.

Clause 2

  POWER OF ELECTRICITY COUNCIL TO BORROW FOREIGN CURRENCY BY ISSUE OF SECURITIES
  Mr. Nicholas Ridley: I beg to move Amendment No. 6, in page 2, line 14, after'currency' insert
  'not exceeding ten times the Council's average annual earnings of foreign currency over the three years immediately prior to the borrowing'.
  The Deputy Chairman (Mr. Sydney Irving): With this Amendment we can discuss Amendment No. 13, in Clause 4, page 3, line 35, after' currency', insert
  'not exceeding ten times the Council's average annual earnings of foreign currency over the three years immediately prior to the borrowing'.
  Mr. Ridley: I make clear that we intend this Amendment to apply to all the borrowings of foreign currency under the Bill. We have not put down Amendments referring to the North and South of Scotland Hydro-Electricity Boards, but it is our intention to apply the same criteria there. We apply this criterion to the earnings of the nationalised industries concerned in foreign exchange as some sort of control of the amount of borrowing undertaken under this Clause. The capital of nationalised industries is capital provided by the State. The fact that the separate stock issues were withdrawn 13 years ago and all consolidated in Treasury issues proves that this is the verity of the matter.
  The present Government have not changed that position. In the White Paper, Cmnd. 3437, they said:
  510
  "Alternative public sector borrowing arrangements will be kept under review, but nothing would be gained by going back to separate stock issues for the nationalised industries. These would involve serious problems of market management and would not create any additional savings."
  I believe that to be so. One can go so far as to say that capital of State industries is a fairly meaningless concept. It is money spent by the State on assets which will last longer than others. The idea that we are operating normal commercial concerns and can draw a meaningful distinction between capital and revenue makes very little sense in relation to nationalised industries.
  The Government have from time to time tried to pretend that capital is of a different nature and we have had talk about below the line, national loan funds, and Government investing. The result of this wrong thinking has been a complete run-away in capital expenditure by nationalised industries. The Government's whole capital investment, as they call it, has trebled in the last four years. This colossal increase is due, in small part, to the different terms accorded to capital expenditure from those accorded to revenue expenditure. What has obviously encouraged the Government to allow these two nationalised industries to borrow in the foreign currency market is the fact that B.O.A.C. has borrowed some dollars to build hotels in America, and it seems to the Government to be a convenient way of raising some foreign cash.
  I do not want to discuss the B.O.A.C. matter. It would be out of order to do so. We on this side are against B.O.A.C. running hotels, because that is not the purpose for which the Corporation was set up. However, that is another matter. The question here is: should the Corporation or, indeed, any other nationalised industry be allowed to borrow money; and, if so, on what criteria and how much?

  511
  The second thing which is obviously in the Government's mind is their orders to private industry to borrow abroad for the maximum amount of investment abroad. The Government obviously think that this can be to some extent reproduced in the nationalised industries by requiring them to borrow abroad for some of their investment. I do not believe that investment in this sense is the same in a public industry as it is in a private concern. Therefore, we are left with the argument that this is some way of saving foreign exchange.
  Therefore, looking at this from a foreign exchange—a balance of payments —point of view, the immediate short term result, when the nationalised industry gets its foreign exchange, will be a profit to the balance of payments: it will receive money which will come across the exchanges and put us into credit. In the long term, it clearly will not be so. The nationalised industry will presumably invest this money in plant and facilities in Britain and it will have to pay interest across the exchanges every year. It will, in addition, at some time have to repay the principal, or it may repay the principal year to year, or it may have to renew the principal. Long term, this will be adverse to the balance of payments.
  The confusion here is between borrowing abroad for investment abroad and borrowing abroad for investment at home. It is much easier to make out a case for borrowing abroad for investment abroad than it ever could be for borrowing abroad for investment at home. Although the B.O.A.C. case may be justifiable, it quite clearly is less justifiable in the case of the Gas Council and the Electricity Council, which will not be making profitable investments abroad. If I were wrong on this, I would retract this argument; but I am certain that nobody will say that the intention is for the Gas Council and the Electricity Council to start building power stations or gas works in foreign countries as a means of earning foreign exchange.
  Indeed, the bodies concerned are practically not earners of foreign exchange at present. The only source of foreign exchange from the operations of the bodies concerned will be payments under the Channel link to the Electricity Coun-
  512
  cil for electricity sold for France, though I would concede that there may be indirect exports due to other bodies benefiting from these activities.
  We have the peculiar position that the Government seek powers for these industries to borrow abroad for investment, presumably at home, which in the long term is counter to the balance of payments and which apparently has no economic justification. This is an additional way in which the Government can borrow foreign exchange. I come back to where I started: it appears that the Government, dressed up as the Electricity Council or the Gas Council, will now try to borrow more money from abroad.
  7.15 p.m.
  This is not something that we on this side smile upon. If the Government want to borrow more money from abroad, it would probably be more advisable for them to do it themselves and not to pretend that it is one of these nationalised industries doing it.
  Mr. Palmer: I hope that the hon. Gentleman has not overlooked the fact that professor Sir Ronald Edwards, the Chairman of the Electricity Council, has advocated this course quite independently on his own account for quite a period. It is wrong for the hon. Gentleman to suppose that the incentive necessarily comes from Government.
  Mr. Ridley: I do not know whose idea this first was. I am merely commenting on the proposal which is being made by the Government. If Sir Ronald has advocated this for some time and it has not been adopted till now, it may well be that there are very good reasons why it has not been adopted earlier. I am trying to enumerate argumemts against this proposal. I would not be so dogmatic as to say that this is utterly and completely wrong. I am simply pointing out the disadvantages in the proposal put forward by the Government. I must conclude that it amounts to a further means for the Government to borrow money abroad, which is not a thing that I would say that they should not do. However, on the whole, it seems to have very little to do with the power industries, which may well be why the Chief Secretary is to answer this debate, because this is a financial matter and it

  513
  has nothing to do with the power industries.
  We believe that the justification for borrowing abroad would be there only if this money were to be invested abroad and were to produce foreign earnings. The Amendment would link the amount of borrowing to the amount of foreign earnings. As we cannot predict what future foreign earnings will be, we have had to link it to past foreign earnings. The principle is right, although we have had great difficulty in framing an Amendment which would make sense in this respect. The principle is right that the point of this borrowing in relation to a nationalised industry should be only to allow it to maximise its earnings of foreign exchange. As clearly neither the Gas Council nor the Electricity Council will benefit from this, it amounts to a disapproval of the proposition.
  I hops that the Chief Secretary will tell us what the earnings of the Gas Council and the Electricity Council have been, either pluses or minuses. I am sure that he will tell us what the effects of these investments would be on our balance of payments. We also want to know how much borrowing he envisages there will be, whether there are distinct proposal;; or whether it is just a reserve power, and how much he believes will be borrowed at any specific time.
  Subject to the right hon. Gentleman's answers to these questions, I must say that the proposal seems at first sight to be a concealed method by which the Government can borrow further foreign exchange and does not seem to be remotely connected to the ability of the Councils concerned to earn foreign exchange. That is what we would like to see them doing.
  Sir G. Nabarro: When I first read the Bill I was shocked to see that a Socialist Government, responsible for the nationalisation of the coal, gas and electricity industries, should be suggesting that these industries would, in future, in part measure, be financed with foreign money. Surely one of the arguments for nationalisation was that the Government should have absolute control over the policies and activities of these industries. Now for the first time nationalised industries are to be made subject to a degree of control in the event of loans being negotiated from oversea.
  514
  It cannot mean anything else. I do not accept that there is any analogy between these industries and the minute foreign borrowings of B.O.A.C. or a corporation of that kind to create assets abroad. As my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said, we would quarrel with the principle that B.O.A.C. should be allowed to run hotels, anyway, but under this Government I suppose it could be given a writ to run anything. If that happens, I suppose that they must raise a certain amount of money abroad, but the industries we are discussing now—gas and electricity—are concerned entirely with indigenous products. They export nothing and import nothing, so far as I am aware—
  Mr. Lubbock: Yes, they do.
  Sir G. Nabarro: The hon. Gentleman should not get touchy yet. They import nothing save only raw materials they propose to convert to more sophisticated products, as in the case of methane from North Africa. I expect that that will stop quite shortly—
  Mr. Lubbock: No.
  Sir G. Nabarro: When the contract expires. I wish that the hon. Gentleman would let me make my speech without sitting behind me yapping. I will give way if he wishes now, in order to quiet him.
  Mr. Lnbbock: I do not know what the hon. Gentleman means by "shortly". The importation of natural gas from Algeria will continue throughout the period during which the Bill will be in effect when it becomes an Act.
  Sir G. Nabarro: I repeat "shortly" —that is, relatively a very short term compared with the North Sea gas element in the Bill, which is the major consideration so far as the gas industry is concerned.
  Borrowing money abroad is an entirely novel departure. No money could be borrowed abroad without a Treasury guarantee. I am glad that the Chief Secretary immediately nods assent. Therefore, it is really the British Government borrowing abroad. The right hon. Gentleman nods dissent now. It is the British Government borrowing abroad. If a nationalised corporation negotiates

  515
  a debt in the form of a loan in a foreign country, whatever the terms, no money would be available without a guarantee from the British Government. That is manifest, because the British Government own the assets in these industries. Therefore, it amounts to a British Government loan being negotiated abroad.
  The fault with a system of this kind is that it abrogates absolutely my principles and conception of what proper capital formation should rest on in the case of entirely indigenous industries that are not concerned, in their normal course of business, with importing or exporting, save only the exception I quoted a moment or two ago. All sound capital formation should rest on savings, but today it does not, because the British people have not enough confidence in the present Government to furnish a sufficient flow of savings to add in the aggregation to the capital formation needed for public corporations and similar ventures.
  I do not believe that the measures proposed in the Bill are desirable or necessary. I do not believe that they will ever be used. Perhaps Sir Ronald Edwards recommended them. He is leaving his post shortly. I shall not comment on many of his recommendations; I have no high regard for them. Before the hon. Member for Bristol, Central (Mr. Palmer) cackles, for we are old adversaries in this field, I remind him that more than 10 years ago Sir Edwin Herbert, in the Herbert Report on the electricity generation industry, strongly recommended that the Electricity Council should raised a substantial part of its capital on the open money market here in Britain. The Tory Government never implemented that recommendation, nor have the Labour Government. Neither could implement it, because the money could not be raised in sufficient sums without a Treasury guarantee or, in effect, an underwriting by the British Government.
  I do not believe that we are ever likely to use the provisions in Clauses (2), (3) and (4). For that reason, as a simple expedient to ventilate my objections to these arrangements, I am supporting the Amendment.
  516
  Are we so bankrupt that we are incapable of finding our own capital for our own nationally-owned industries within our own country without going begging cap in hand to a foreigner to put part of those industries in pawn? That is what it amounts to. It is morally defeatist to do so because these are British industries. It is financially improvident to do so because, as my hon. Friend the Member for Cirencester and Tewkesbury said, it represents throughout the term of the loan, both in respect of repayment and the interest, a drain on our balance of payments. In my judgment it is economically unsound.
  For all those reasons, I object to the proposals. I consider them unnecessary and hope that they will never be used. I believe that this view is held by the whole of my party.
  Mr. Palmer: The hon. Member for Worcestershire, South (Sir G. Nabarro) used to make speeches in the past as he does now. I have rather a better memory of his speeches than he appears to have. I can remember when he often used to argue that the nationalised industries should be the subject to the disciplines of the market. He suggested in those days that they should raise capital on the market if they could. He did not always think that they could, but he felt that they should do so ideally.
  Therefore, I was rather startled to hear him making the speech he has just made. I am surprised even more that the Conservative Party should be arguing in this way. Right hon. and hon. Members opposite have often advocated that the nationalised industries should be publicly-owned commercial undertakings. If that is so, surely they should be able to raise loans from time to time, if they are in a strong enough commercial position, on their own credit? True, that credit is Government-guaranteed, for they are publicly-owned industries, but if it suits them from their financial point of view, perhaps to tide them over a temporary difficulty, such as paying interest on loans for investment not yet remunerative why should they not do so?
  The hon. Gentleman has been expounding a curious economic nationalism. I cannot understand the suggestion that because an undertaking happens to be publicly-owned it should not raise money

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  on its credit and that of the Government in a favourable market even if the market is overseas. It is a commercial transaction like so many others and should be seen as such.
  There is bound to be a limit on such borrowing, but, as I argued on Second Reading, if the Electricity Council could have raised some money abroad a year or so ago, this would have helped it to pay the interest on its long-term capital which is not yet remunerative because it was forced by the National Plan to look perhaps too far ahead. In that case it is possible that electricity prices need not have been raised as they were.
  When I referred to what Sir Ronald Edwards said, I was speaking from my memory of his speech or lecture. As I recall it, he was advocating overseas borrowing from a limited point of view in a commercial context not as an alternative to major Treasury lending.
  7.30 p.m.
  Mr. Ridley: Since the hon. Gentleman has admitted that the Electricity Council over-invested, is it not rather a miracle that it did not manage to borrow any more money in order to over-invest that as well? Surely this is why nationalised industries are not commercial undertakings.
  Mr. Palmer: I have been frank enough to say that the fault has been largely that of the Government in that they encouraged the electricity industry to invest too far ahead on the assumption that productivity levels in the country would be higher than they have turned out to be. The electricity industry was obliged, so to speak, to over-estimate on its load forecasting and its advance arrangements for new plant. That plant at the moment is not entirely remunerative but it will be. The load will catch it up.
  I am not a financial expert. I am merely an engineer. But, unlike other experts, financial experts are often as wrong as right. I look at this proposal from ordinary common logic which is rarely wrong. The Electricity Council was anxious to borrow abroad to tide it over a temporary difficulty. It would have been sound common logic if the Government earlier on had given it permission to do what it wanted to do.
  The arguments put forward by the hon. Member for Cirencester and Tewkesbury
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  (Mr. Ridley) and by the hon. Member for Worcestershire, South were a little forced, I thought. I am doubtful whether they really believe in them. It seems to me that they are simply looking around for something to say on this matter because they feel that they must say something on this part of the Bill.
  I suspect that if, some years ago, Conservative Ministers had been approached by the Electricity Council with this kind of request, they would have acceded to it in the way that my right hon. Friend has sensibly acceded to it. The request has not come from the Treasury and probably the Treasury is still doubtful about it though my right hon. Friend's presence reassures me. But because the Treasury may be doubtful does not necessarily mean that the proposal is a bad one. I believe that the initiative has come from the industries concerned and I am glad the Government have acceded to it.
  Mrs. Thatcher: Did I clearly understand the hon. Gentleman to say that it would have been a good thing if the electricity industry had borrowed overseas a year ago?
  Mr. Palmer Mr. Palmer indicated assent.
  Mrs. Thatcher: Then supposing the industry had borrowed one thousand million Eurodollars a year ago, it would have to repay in principle 17 per cent, more than what it borrowed, which would have been a good argument for not borrowing it a year ago.
  Mr. Palmer: These are problems which arise from devaluation and from the general financial position of the country and I do not think that they would bear more heavily on the electricity industry than on industry generally. The hon. Lady has put a much broader argument. I am keeping the case to the narrower one of the interest of electricity supply and of gas if necessary. If the nationalised industries are to be efficient, they must have reasonable freedom in matters of this kind. I am genuinely puzzled that the Opposition, who so often talk about financial judgment and running the nationalised industries on commercial lines, should be opposed to this reasonable proposal.
  Mr. Lubbock: The speech of the hon. Member for Bristol, Central (Mr. Palmer)

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  was full of sound common sense. I agree that we should try to make the nationalised industries behave more and more as commercial enterprises. I thought that was the view of the Opposition as well until I listened to the speech of the hon. Member for Finchley (Mrs. Thatcher) on Second Reading and to the speeches of the hon. Members for Worcestershire, South (Sir G. Nabarro) and Cirencester and Tewkesbury (Mr. Ridley) this evening. They seemed to take an opposite attitude.
  I am unable to follow their reasoning. In any case it is inconsistent because the hon. Lady said on Second Reading that the Minister should not introduce this power in the Bill, enabling foreign currency to be borrowed, because at the same time he was encouraging investment by foreign companies in the North Sea and part of the earnings from those operations would go overseas. She is saying, in effect, that the whole of the prospecting industry in the North Sea should be nationalised so that none of the profits from the operations go overseas. That is the logic of her contention.
  Mrs. Thatcher: Will the hon. Gentleman quote me directly on this point? The main reason that one should be wary about letting nationalised industries borrow in overseas currency—that is the only thing we are talking about—is that they have no money to repay in the coin in which they have borrowed. If they borrow dollars, they have none coming in with which to repay what they have borrowed. Perhaps the Chief Secretary to the Treasury will tell us whether the Exchange Control Department of the Bank of England would give permission to an ordinary commercial enterprise with no overseas currency earnings to borrow in overseas currency for investment in this country, because that is the only acid comparison with what the hon. Gentleman is saying.
  Mr. Lubbock: That was a long and intellectual argument and I am happy to be generous and quote the hon. Lady's Second Reading speech. She said, referring to the Minister's argument:
  "That is already partly modified by the fact that a lot of the capital which has gone into developing North Sea gas has been foreign, and that foreign capital has to be serviced, which means a lot of money going out annu-
  520
  ally."—[OFFICIAL REPORT, 22nd May, 1968; Vol. 765, c. 564.]
  So she is suggesting that no foreign operators should be allowed into the North Sea and that the operations should be undertaken entirely by nationalised industries. I do not agree with her.
  Mrs. Thatcher: The hon. Gentleman is not on the right point.
  Mr. Lubbock: I do no believe in nationalisation. I am much happier for there to be a number of different companies prospecting in the North Sea, some of which, admittedly, are in public ownership, and I have supported that case in arguments about it before. The quicker the resources are developed and the more agents prospecting in the North Sea the better it will be for our economy.
  I dislike the chauvinistic argument of the hon. Member for Worcestershire, South about participation of foreign investors in the operations of nationalised industries. I cannot see anything wrong with such participation. It is not, as he put it, going begging cap in hand to the foreigners, putting part of those industries in pawn. Local authorities borrow from overseas financiers and I do not think he says that, because they have access to this money, they have pawned the town hall of South Worcestershire, if there is one. There probably is not one. It is probably too insignificant a place to have one. [Interruption.] That is his contention. He has put forward a chauvinistic argument and I am entitled to reply to him in my own way. Because local authorities have access to sources of foreign currency does not mean that they are going begging cap in hand to foreigners, putting part of their assets in pawn. I had thought better of the hon. Gentleman. I have often listened with great pleasure and approval to his speeches in energy industry debates. But he has sunk pretty low on this occasion.
  Sir G. Nabarro: Since I am such a low creature I had better explain to the hon. Gentleman that, of course, there is not a town hall in South Worcestershire. Only boroughs have town halls. South Worcestershire is an administrative centre. But I remind him that Evesham is where Parliament began. We are talking about the gas and electricity industries. Gaz de France and Electricité de France are nationalised corporations. But we would

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  not see a Frenchman borrowing sterling to pay for capital investment in France— not on your life. General de Gaulle is too fly for that.
  Mr. Lubbock: I am not sure that the nationalised industries in France do not have equivalent powers to those given to our gas and electricity industries in this Bill.
  Sir G. Nabarro: But I am sure.
  Mr. Lubbock: Perhaps the Chief Secretary to the Treasury can enlighten us. I shall be delighted to have a conversation with the hon. Member for Worcestershire, South afterwards about it. As I said on Second Reading, I am glad that we do not have to debate the borrowing powers of Gaz de France and Electricite de France or of E.N.I, and I.R.I. The hon. Gentleman said that he imagined the theory was that the Government should have absolute control over the policies and activities of these industries and that that was the whole point of nationalisation. To me it is not. There could be nothing less likely to lead to a profitable and healthy operation of these industries than to have detailed interference on a day-to-day basis by Ministers. I am not criticising these Ministers, but I do not think that a Minister of the Crown is the right person to operate these industries.
  Following on the argument of the hon. Member for Bristol, Central, if we want these industries to behave more like ordinary public companies, we have to allow them a degree of commercial freedom which might include the ability to borrow overseas. If a public company has this power, I cannot see why the gas and electricity industries should not have it, too. There is a precedent for it. B.E.A. and B.O.A.C.—
  Mrs. Thatcher: They make foreign exchange earnings.
  Mr. Lubbock:—can already raise loans overseas, as the hon. Member for Finchley knows. What has not been made clear to the hon. Member for Cirencester and Tewkesbury, who implied that he did not know where these proposals originated, is that they came as a direct request from the industries concerned. If he had read the Memorandum on the Gas and Electricity Bill, which was submitted to us at the time the Bill was presented, he would have found in paragraph 9
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  "… it is the desire of the industry concerned …"
  Indeed, the Parliamentary Secretary made it clear on Second Reading that the two industries had made this request to him. It was not an idea which originated with the Government. The hon. Gentleman also pointed out—and this is relevant to the discussion—that it may happen on occasion that opportunities arise of borrowing more advantageously overseas than from the National Loans Fund. If, therefore, a lower rate of interest is being paid on borrowings from overseas, it means that the gas and electricity industries will be able to make a larger profit. Thus, the consumer of gas and electricity in this country will derive some benefit.
  The only argument remaining with which we have to deal is that, because the gas and electricity industries do not engage in operations overseas, as do B.O.A.C. and B..E.A., they are in a substantially different position. B.E.A. and B.O.A.C. might wish to develop hotels in foreign countries as a means of attracting more passengers. Although there may be arguments whether it is legitimate for airlines to enter into these operations, they have been approved by Parliament. Therefore, it might be convenient for them to borrow foreign currency for the purpose of constructing these hotels.
  Is it beyond the bounds of possibility that, during the period covered by the Bill, capital expenditure will need to be undertaken overseas by the gas industry? The Gas Council has an investment in a company called British Methane, Ltd., which operates ships bringing liquified natural gas from Algeria. Is it beyond the bounds of possibility that British Methane, Ltd., might wish to develop terminal facilities in Algeria for use in association with these ships and that it might be able to do it more efficiently than our Algerian partners?
  The Parliamentary Secretary on Second Reading said that there were no concrete plans for the use of foreign money, but, if we are looking at the position of the industry over five years, we must envisage possibilities of the kind that I have mentioned. If, as the hon. Member for Worcestershire, South says, the powers will never be used, why are we bothering to argue about the Clauses? However, if there is a chance that it

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  might be extremely convenient for the gas industry to have this power legitimately for operations directly relevant to the importation of natural gas, it would be sensible for the House to allow these Clauses to go through.
  7.45 p.m.
  The Chief Secretary to the Treasury (Mr. John Diamond): I think that we must welcome these Amendments in the sense that they are probing Amendments and give one an opportunity for explaining new development, because new development is certainly taking place and it is right that the Government should explain it and seek the approval of the House. If the Amendments are not probing Amendments they will not get my approval, because they will result in the amount borrowed abroad being reduced to zero, which is not a very—
  Mrs. Thatcher: They were meant to do that.
  Mr. Diamond: If they were meant to do that they were meant to be wrecking Amendments.
  I now turn to the more constructive side, namely why these powers are introduced and why we hope the House, including the Conservative Party, will come up to date and have regard to what is happening in the world around, and perhaps even go so far as to forget their economic nationalism and permit nationalised industries to be as commercial in their outlook as they would wish them to be and as the Government would wish them to be.
  Broadly, the situation is that in recent years an entirely new market has developed—a getting together of those with capital available—which is fortunately to the advantage of this country, and particularly to the advantage of the City where the expertise is unexcelled anywhere in Europe. A market has developed as a result of which foreign savings can be tapped as well as domestic savings. That is sensible. Those who say they are in favour of savings should add, "wherever they come from".
  What has happened in the commercial world, as the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) knows full well, is that advantage has
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  been taken from time to time by a number of organisations of borrowing in this internationally created finance market, sometimes called the international bond market and sometimes more narrowly referred to as the Euro-bond market. What is proposed, and what the Amendments seek to deny completely, is that nationalised industries should have power to borrow in this market under conditions which seem to the Minister sensible having regard to the needs of the industry, and which seem to the Treasury right and proper having regard to the economic and financial position of the country. That seems a sensible thing to encourage.
  To answer the hon. Member for Worcestershire, South (Sir G. Nabarro), it is something upon which other Governments look favourably. I do not know whether he or the distinguished President to whom he referred was the more fly, but it is a fact that the French railways, electricity and telecommunications industries have made an issue of Euro-bonds. Each issue was for under £10 million, each stock carried a maturity of around 15 years and carried a yield redemption of rather over 6½ per cent,—
  Sir G. Nabarro Sir G. Nabarro rose—
  Mr. Diamond:—and each stock was guaranteed by the French Government.
  Sir G. Nabarro: The right hon. Gentleman knows perfectly well that these were issued in utterly different circumstances. They were issued within the Common Market to overcome the exchange control manipulations and difficulties that there might be, for example, between the Deutsche-mark, on the one hand, and the French franc, on the other. There is an economic and financial wall round the Common Market today. We are entirely separate from it. Our exchange control assures us of that. Therefore, there is no analogy in what the right hon. Gentleman is now quoting for Euro-bonds.
  Mr. Diamond: I will not embarrass the hon. Gentleman by inviting him to consider what he said first and what he is saying now. That is his own affair. I am concerned to tell the House the facts of the situation and to make it clear that there has been a development of this kind of market which is widely

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  used for commercial purposes and by foreign Governments and foreign nationalised industries for borrowing for domestic purposes of their own. It is against that background that we concern ourselves with these proposals.
  As my hon. Friend the Member for Bristol, Central (Mr. Palmer) and the hon. Member for Orpington (Mr. Lubbock) said, these proposals stem from the initiative of the industries concerned. There is no question of the Government having approached these industries and said, "We insist on your borrowing on the Euro-dollar market". The initiative came from them, and the question which we have to ask is, as a market of this kind has developed and is developing, and as nationalised industries need funds from time to time for their investment, and as they have asked about the possibility of borrowing on the Euro-dollar market because there are times when it might conceivably be more economical to do so—and surely we are all in favour of nationalised industries being as economical as they can be in their activities—is it right for us to refuse this power? I should have thought that there was no argument for refusing it. The power cannot be acted on except in consultation with my right hon. Friend the Minister and the Treasury.
  Mr. Palmer: This is a return to the old tradition for the electricity supply industry, because before, when it was a regulated utility, it did from time to time borrow abroad.
  Mr. Diamond: I am saying that it is a sensible and natural development that nationalised industries should, on the terms and conditions laid down, and with the consultation to which I have referred, exercise the right to borrow abroad, but before they can exercise that right the House must afford it. What we are considering is the affording of the right.
  My right hon. Friend has made it clear that there are no specific proposals before the House. There are no proposals which the Government have in mind. As the Bill is intended in any event to give these institutions the power to borrow, the opportunity is being taken to give them power to borrow abroad. In the same way, when local authorities who ask for this power bring legislation before
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  the House, the opportunity will be taken on those occasions to give them that additional facility, again in consultation with the Treasury to make sure that, in a sense, the borrowing does not act against the general interest.
  I turn, now, to deal with the arguments which have been addressed to me about why these powers should not be granted. The hon. Member for Cirencester and Tewkesbury says that there will be a short-term advantage to the balance of payments, but a long-term disadvantage. He knows that the situation which his Government left to this Government was one in which this country had to a large extent borrowed short and lent long. All that happens if someone borrows long is that more stability is created, and there is more balance in the borrowings and lendings than previously. Instead of having to match long lendings with short borrowings, one can to some extent match long lendings with long borrowings, and that is what any sensible financier seeks to do. It is not what the previous Government achieved. It is not what they sought to do, but that is the sensible way to plan borrowings and lendings. As the hon. Gentleman said, it is of short-term advantage to the balance of payments, and of long term advantage, also, in the sense that there is greater balance in the borrowings and lendings in the financial situation with regard to overseas borrowings and lendings.
  The hon. Gentleman went on to say that there was no economic advantage. That is not so. The borrowing power will not be used unless there is an economic advantage in the sense that the nationalised industry, after paying the going rate for borrowing on the Eurodollar market, and after paying the costs of borrowing—which do not apply to borrowing from the Government—will be borrowing at a slightly cheaper rate than borrowing from the National Loans Fund. When such circumstances, if ever, arise, there will be an economic advantage if the nationalised industry avails itself of that opportunity.
  I was asked whether there were any distinct proposals. We have none in mind. These are reserve powers which are being taken on this occasion.
  I have answered the point raised by the hon. Member for Worcestershire, South

  527
  about what France does. He thought that the Government's philosophy was to have control over the policies of nationalised industries. There is no diminution of control over the policies of nationalised industries by giving them the power to borrow. This power to borrow on terms which are satisfactory to the Minister, and in consultation with the Treasury, does not affect their investment.
  I dissent totally from the attitude of the hon. Gentleman who regards this as begging cap in hand from a foreigner. I hope that even he may be brought up to date and realise what is going on in the world, and will wish our nationalised industries to conduct themselves with good sense and with good commercial modern practice.
  Having regard to the fact that these are sensible powers, that they are used by commerce and by nationalised industries abroad, that this is a growing market, that there might be some economic advantage, and that there is certainly a balance of payments advantage, and, finally, that the Amendments are wholly wrecking, I hope that they will not be pursued.
  Mrs. Thatcher: The right hon. Gentleman used the phrase, "these powers are used by commerce". He deliberately did not answer the specific point which I put to him. Will he please answer it now? If a commercial enterprise which had no foreign exchange earnings applied for a loan in foreign currency to invest here, would he authorise that loan?
  Mr. Diamond: I thank the hon. Lady for reminding me of the fact that I omitted to answer her. I apologise for any discourtesy. It was certainly not intended. I am grateful for the opportunity of bringing her, as well as her colleagues, up to date.
  There is no reason why an appropriate borrowing by a commercial firm on the Euro-dollar market for investment domestically should be refused exchange control on the ground that it has no foreign income. The investment would be subject to control, but it would be approved if it were a proper investment, and it would not be a condition of the approval that there had to be correspond-
  528
  ing foreign income. I have not compared that with the B.O.A.C. or B.E.A. who have foreign income, because it is an irrelevant issue, not because it does not add strength to my case. It is not a requirement that there should be foreign income.
  Mrs. Thatcher: It may not be a requirement, but how many times has it happened recently? Obviously the right hon. Gentleman cannot give an example, otherwise he would have done so. Perhaps I shall put down a Question asking how many times applications have been made under those circumstances, and how many times they have been granted. I suspect that the right hon. Gentleman is using a kind of double negative. There is no reason why they should be refused, but somehow or other they are not very often granted.
  We are in great trouble with dollar loans already, and the right hon. Gentleman knows that. A fortnight ago he had 1,500 million dollars outstanding to the I.M.F., repayable by 1970. He had other short-term loans outstanding. He could not repay that loan because he did not have the dollar currency. With 1,500 million dollars already outstanding, he had to trot off to the I.M.F. for another 1,500 million dollars. He is already in difficulty. By 1971 he has got to repay 3,000 million dollars and he has not a dollar to do it. He has not a hope of repaying that money, and just at this time he proposes to give enormous powers to borrow more and more dollars.
  8.0 p.m.
  The right hon. Gentleman used a false equation. He said, "Yes, if you borrow long perhaps it balances long lending." I do not know of any equivalent long lending by the Government of this country which would balance the liability which they have to the I.M.F., and he knows that there is not any. He is in difficulty, and as long as he goes on borrowing and borrowing and borrowing with no hope of repayment so long will this country be in financial and economic difficulty. I very much deprecate his attitude. This is the way banks have gone bust, and this is the way this Government will make this country go bust.
  Sir G. Nabarro: May I ask the right hon. Gentleman one question before we

  529
  part with this Amendment? He inferred —I believe he actually said—that the House of Commons would be fully apprised of any approvals given by the Treasury to borrow abroad. In what form would the House be apprised of those approvals?
  Mr. Diamond: I did not say anything about it.
  Sir G. Nabarro: Then I must press the right hon. Gentleman. Are we to be bereft of any information as to approvals given to these Boards to borrow abroad? Are we to have no knowledge of it? Is there no official publication which would give Members of the House of Commons particulars of sanctions given by the Treasury to these nationalised boards to go abroad and borrow?
  I wish the right hon. Gentleman would perhaps reconsider what he said earlier and reconsider his last reply, that the House of Commons is not to be informed. Well, in what form then may the House of Commons be informed?
  Mr. Diamond: I am listening very carefully to the hon. Gentleman—
  Sir G. Nabarro: I realise that.
  Mr. Diamond: —and I would hope to afford any information which is appropriate and reasonable. I was only pointing out that with regard to this topic I did not say that it would or that it would not. I made no reference to this topic. Now I am listening to what the hon. Gentleman has to say.
  Sir G. Nabarro: Is the right hon. Gentleman suggesting that if members of the Opposition, for example, require information of approvals given by the Treasury to these boards to borrow abroad they can obtain that information only by Parliamentary Question?
  Mr. Diamond: The hon. Gentleman seems so concerned to put words into my mouth. I did not say anything on the issue at all. If he is asking now what are the methods, then I am bound to say that I am not fully informed at the moment, but I am most anxious that information should be given, and certainly there would be the method of the Parliamentary Question, because any approval given by the Treasury or by a Minister is approval given by a Minister responsible to the House of Commons, and of course there
  530
  would be an answer to a Parliamentary Question.
  I imagine—but I am not absolutely sure about this—that these matters would be included in the annual reports of the nationalised industries concerned. Certainly it is the case that Treasury guarantees are notified to the House wherever liability—I think I am right in saying this, but I am speaking off the cuff— wherever liability is entered into which is not shown in the form of a Vote and would not necessarily go before the House otherwise, but is entered into in the form of a guarantee. It is the practice for a note to be laid by the Treasury. Therefore, whenever any of these loans took the form of a Treasury guarantee—and this, it is anticipated, would almost be universally the case—in every single case, the fact of the Treasury guarantee would be before the House. Let me assure the hon. Gentleman that there is nothing here which one would want to hide. One would be anxious to give the House full information about it.
  Sir G. Nabarro: The right hon. Gentleman has given me exactly the answer I was seeking. He has just used the term "practice of the Treasury". It is the statutory requirement upon the Treasury that I am suggesting. For example, with the Scottish Electricity Boards statutory requirements in regard to all Treasury guaranteed loans to the Boards is dictated in Section 14(5) of the Act of 1943 thus:
  "The Treasury shall, so long as any such guarantees "—
  that is, guarantees in relation to loans—
  "are in force, lay before both Houses of Parliament in every year within one month after the thirty-first day of March a statement of the guarantees (if any) given during the year ended on that date, and an account of the sums (if any) which during the year ended on that date have been either issued out of the Consolidated Fund under this section or paid in or towards repayment of any money so issued."
  That is the statutory requirement with the Scottish Electricity Boards for Treasury approvals in relation to loans.
  Why is there no similar undertaking now being given by the Treasury of a statutory requirement in relation to loans by English electricity boards or English gas boards in Clause 2 of this Bill in relation to borrowing abroad? Perhaps the right hon. Gentleman would now consider why there is this inequality, this

  531
  incongruity, between the Scottish Boards' statutory requirements and the lack of such statutory requirements here in England.
  I am coming back to the Amendment, Sir Beresford. That was only a passing reference to the Act. The right hon. Gentleman said that it would no doubt be the practice of the Treasury to furnish Members of Parliament with full information of the habits of the Treasury. It should be a statutory requirement in Clause 4 of the Bill, as there is for the Scottish boards. I should be out of order in arguing about that now and I will deal with it when we reach Clause 4. As there is this requirement in relation to the Scottish Boards will the right hon. Gentleman now undertake to introduce in another place similar requirements for the English boards, so that Members of Parliament may year by year be fully apprised of and acquainted in retrospection with all loan approvals—that is, for loans overseas—under this Clause, and which have been given during the year before by the Treasury?
  Mr. Diamond: We are all grateful to you, Sir Beresford, for allowing this discussion—
  The Temporary Chairman (Sir Beresford Craddock): I do not like to interrupt the right hon. Gentleman, but we are getting a wee bit wide, and so perhaps we can get back to the Amendment.
  Mr. Diamond: I hope that in the circumstances you will permit me, although the discussion has gone a bit wide, to reply to the question raised by the hon. Gentleman, Sir Beresford.
  In reply to the hon. Gentleman, the Government would not propose to introduce such legislation, as it is totally unnecessary. The legislation already exists. I have previously explained to the hon. Gentleman what I knew to be the practice because I have practised it. I am now informed and happy to tell the hon. Gentleman—and I am grateful to him for having asked me about it so that one may clear it up now—that guarantees by the Treasury have by Statute to be notified to Parliament for all loans to nationalised industries, which would include borrowing abroad. I have the Gas Act, 1948—which I have very
  532
  good reason to remember—and Section 45(3) reads:
  "Immediately after a guarantee is given under this section, the Treasury shall lay a statement of the guarantee before each House of Parliament."
  I am grateful for the opportunity to be able to allay the anxieties of the hon. Gentleman. One is always anxious to allay the hon. Gentleman's anxieties. Perhaps now, therefore, the hon. Gentleman who moved the Amendment would feel the matter to have been adequately discussed and seek leave to withdraw it.
  Amendment negatived.
  The Temporary Chairman: The next Amendment is No. 7, with which we shall be able to consider Amendment No. 9, in page 2, line 18, leave out' securities' and insert' stock or bonds', No. 14, in Clause 4, page 3, line 36, leave out'or other securities', No. 16, in line 39, leave out' securities' and insert' stock or bonds'.
  Mr. Ridley: I beg to move, Amendment No. 7, in page 2, line 15, to leave out'or other securities'.
  This group of Amendments is proposed to delete the word "securities" whenever it occurs and to confine the foreign borrowings of these nationalised industries to stocks or bonds. I admit there may be some explanation for the use of the word "securities" which has not occurred to any of my hon. Friends and I, but we understand that it can mean any form of capital share at all. We are reinforced in this by the definition of the word "securities" given in the Gas Act, 1948:
  Securities', in relation to a body corporate means any shares, stock, debentures and debenture stock of the body corporate."
  That is in relation to a body corporate and therefore to a privately-owned concern, not a nationalised industry. Clearly, this wording means anything, through the whole spectrum of the different types of share—equity, debenture, preference or loan. So we have here the curious proposal that shares which could conceivably be ownership shares or debenture shares could be sold by the Electricity Council or the Gas Council to foreign owners. It is a little galling for Conservatives who have resisted the nationalisation of gas and electricity to find that it is now proposed by a Socialist

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  Government to "flog it to the wogs". If that is really the meaning of this Clause I do feel that we are owed at least an explanation.
  Equity would easily be created by selling shares which gave the right to vote the directors and the policy of the concern; and under this Clause it would be perfectly possible for the Government to create enough equity shares to constitute control, and to sell them to persons abroad in exchange for foreign currency. It may be they could use it to create debenture shares and could sell abroad to foreign persons debenture shares which gave foreign persons the ownership of gas works, power stations and assets of these councils in this country. Quite simply, we do not see the point of doing that. There is a great deal to be said for selling equity or debenture shares but at least they should be sold to the British people. If that is to be done, if industries are to be denationalised, let us have first crack of the whip and let our investors have the first opportunity to buy these concerns. But I cannot believe that that is what the Government mean.
  I can only assume that the two debates —this and the last one—should perhaps have been taken together; because clearly the Government are using nationalised industries as a stalking horse for borrowing more. My hon. Friend the Member for Finchley (Mrs. Thatcher) is absolutely right. We have borrowed enough during the currency of this Government and £3,000 million should do. To approach foreign investors to borrow more through these boards may well have necessitated that these conditions be put in, providing that some share of ownership goes with the loans. It may be that the gnomes of Zurich say, "We will give you a little more money but we would like to have charge of the assets or a share of the ownership ". That may well lie behind it. We do not know.
  We believe that the Government should be more careful than to put into Bills words which could be interpreted in that way. But I had better not let my fancy run too far until the Chief Secretary has told us what "securities" means in. this context, and perhaps we can then consider the matter again.
  Mr. Diamond: Fortunately, I know the hon. Gentleman's international views far too well to be put off by his refer-
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  ences to wogs and the gnomes of Zurich. Of course he was right to ask for an explanation of the words used here and I will be only too glad to give it to him. As I explained in a previous debate, and in view of what he has said may I repeat, the Government have no specific proposals in mind, nor are the Government taking the initiative in this matter. The initiative stems entirely from the nationalised industries. It follows, therefore, as there is no specific proposal, that one cannot define in a narrow way what form the borrowing might take. One has to define it in a broad way lest a proposal should emerge which it would be the desire of the nationalised industry to undertake, which would seem right to my right hon. Friend the Minister and would have the approval of the Treasury and yet would be impossible of achievement because of a too narrow definition having been used in the empowering section. It is proposed, therefore, to use words which are admittedly somewhat broad.
  8.15 p.m.
  I can assure the hon. Gentleman that we have no intention of issuing debentures carrying charges on these stocks. We have no intention of issuing equity shares. The hon. Gentleman knows that the capital of certain of the nationalised industries has been remodelled somewhat, but there is certainly no intention of doing any of those things. It is merely a question of the need to use a broad definition when powers are being sought and when a specific proposal is not in mind. If it was a specific proposal one could deal with the matter more narrowly. The definition which the hon. Gentleman quoted from the Gas Act does not apply to the current Bill so what he envisaged there has no authorities in that particular Act.
  I recognise that the term is a broad one, but I am advised that there are methods for unsecured borrowing, non-participating borrowing, which nevertheless might not be covered by words such as "stocks" and "bonds" only. There is, for example, a promissory note, which would not be covered by such a term. In order not to deny the opportunities of the kind of borrowing which a nationalised industry would wish to undertake and which would be approved by my right hon. Friend and the Treasury, it

  535
  has been thought wise to define the matter somewhat broadly.
  Mr. Ridley: I must say we are a little surprised that such a large sledgehammer has to be taken to crack the nut of a promissory note; but in view of the right hon. Gentleman's kind response to what I have said and in view of his well-known predilection against selling equity shares in public enterprise, we can all, I suppose, let the matter rest there. I beg leave to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mrs. Thatcher: I beg to move Amendment No. 10, in page 2, line 25, to leave out from' 1957' to end of line 28.
  The Temporary Chairman: Amendment No. 17 can be taken with this Amendment.
  Mrs. Thatcher: This is a small probing Amendment seeking to delete the latter part of subsection (2). I wonder if the Chief Secretary can tell us if this section means what I believe it is intended to mean? I should have thought it was intended as a kind of bridging section, because while one loan is being raised with which to repay another the limit will be temporarily exceeded while the second loan is being raised. What bothers me is this: if these powers had been in existence and operated a year ago, and exercised in terms of raising a dollar loan, how would that equivalent have entered into the borrowing limit? Presumably, it would have entered into that limit as its sterling equivalent at the time the borrowing was made so that when the loan came to be repaid it would have required 17 per cent, more in its sterling equivalent to repay it. That would not have made this subsection merely a bridging subsection. It would have taken its powers right over the limit permitted by Parliament. Is that correct?
  Mr. Diamond: The hon. Lady is quite right to say that the purpose of these words is to provide a bridging operation for that limited amount and that limited period and it is an essential provision to protect the first lender. Otherwise, there might be claimed to be an invalidity at the point of repayment because the borrowing power would have been exceeded. Fortunately, we do not have to
  536
  consider the somewhat theoretical and academic situation which the hon. Lady described and which I would have to consider carefully to see to what extent it was affected by these words. Suffice it to say that she is right on this occasion, as on most others.
  Mrs. Thatcher: Can the right hon. Gentleman say how, when a loan is borrowed in foreign currency, it is calculated in terms of sterling for the purposes of the borrowing limit? If a loan is borrowed in foreign currency the amount borrowed enters into the total limit and presumably it does so as its sterling equivalent at the time of borrowing.
  Mr. Diamond Mr. Diamond indicated assent.
  Mrs. Thatcher: Then, my other conclusions must follow, but on this occasion I am happy to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Clause ordered to stand part of the Bill.
  Clauses 3 to 5 ordered to stand part of the Bill.

  Clause 6
  POWER TO APPOINT FURTHER ADDITIONAL MEMBERS OF GAS COUNCIL
  Question proposed, That the Clause stand part of the Bill.
  Sir G. Nabarro: The short title of the Clause is, "Power to appoint further additional members of the Gas Council," and I want to know, primarily, what for? The Gas Council is already a large and somewhat unwieldly body. Reference to its Annual Report and Accounts for 1966–67 shows that it has sixteen members, of whom twelve are members of the area board, two are full-time members of the Gas Council, one is the Deputy Chairman and the other is the Chairman, Sir Henry Jones. Why do we want the Council to have more than sixteen members?
  The Council is largely a functional body. The Chairman of each area board reports the activities of his organisation and there are four men at the centre. It is well known that the bosses of

  537
  nationalised industries are very difficult to find. There is a shortage of talent. Men and women seem reluctant to serve on the boards of nationalised industries, not only because they do not pay commercial rates, but also because the freedom and the enterprise manifest in non-state undertakings, that is, in the private sector of industry, trade and commerce, is, to genuine businessmen, infinitely preferable to a quasi-bureaucratic function on a State board.
  There was recently the extraordinary spectacle of a Deputy Chairman of the Railways Board being appointed at a salary of £500 per annum more than that paid to the Chairman. This is a passing reference, but it has a great bearing on the Clause, which would recruit two additional members to the Gas Council.
  Where will they be obtained? What will their quality be? What are they to be paid? Will the Minister confide in the House, first, about why he wants these additional men, since the Gas Council has no added burden of responsibility so far as I know; second, where he hopes to recruit the men in appropriate quality; and, third, what he intends to pay them? We would not like the mistake repeated which was made with the British Railways Board.
  The Minister, who is listening to me intently, of course, will know that there is a great deal of derangement in the salaries of the chairmen and deputy chairmen of nationalised boards. I will not go through the whole gamut, but they include the salary of Lord Robens and of the Chairman of the Electricity Council, the Chairman of the Gas Council, the Chairman of the British Steel Corporation, the Chairman of B.O.A.C. and the Chairman of B.E.A., and there is no uniformity or relationship between these salaries.
  Therefore, every time it is built into a Bill that a nationalised board is to be enlarged, as in this case, it is pertinent and propitious for hon. Members to make some inquiries about the kind of recruits, where they are to come from, the salaries they are to receive and, above all, why they arc necessary. There are sixteen members on the Gas Council at the moment, and I doubt whether it will be a better organisation for having eighteen.
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  I hope that I shall have explicit answers, particularly on the important matter of salaries.
  Mr. Gunter: I had never expected that we should be involved in a wide-ranging debate, on this Clause, about the salaries paid in nationalised industries and I do not propose to participate in one. We are all aware, of course, of the anomolies and the hon. Member for Worcestershire, South (Sir G. Nabarro) is quite right that there is some difficulty in recruiting what one might regard as the right men for the salaries being offered in nationalised industries. This is very much a matter of consideration by the Government at the present time.
  I do not propose to enter into any discussion on the salaries that are to be paid. As I said in the Second Reading debate, there is need to strengthen the Gas Council, which will be required, in the period that lies ahead, to bear even greater responsibilities. We are passing from a period of the manufacture of town gas, diversified all over the country, to a period when there is one common supply. The Government think, and so do the Gas Council, that in the area of marketing and financial control it would be advantageous to strengthen what in essence, leaving aside for the moment the 12 area board chairmen, is a small Board. That is why we have suggested that there should be two additional members of the Gas Council.
  8.30 p.m.
  The hon. Member will recall that in my Second Reading speech I stated that we were giving consideration—and I hope this will be in the next Session of Parliament—to bringing forward suggestions on how the structure of the industry might be adapted to meet the requirements imposed by the introduction of North Sea gas. As the first step, with the introduction of natural gas, it was necessary to strengthen the Board, particularly in the area of financial control. I hope that the hon. Gentleman will forgive me if we do not make this the opportunity for a general debate on salaries in nationalised industries.
  Sir G. Nabarro: I see no reason for a general debate, but I wish the right hon. Gentleman would answer my explicit question. What is he proposing to pay the two additional members of the Board?

  539
  If the hon. Gentleman comes to the House and asks for permission to recruit two additional members to the Board, he must tell the House what he will pay them. Why not?
  Mr. Gunter: I will certainly inform the House at the appropriate time what the pay will be, "but not tonight, Mary ".
  Sir G. Nabarro: I refuse to be called "Mary" by the right hon. Gentleman. Why not tonight? This is the Committee stage of the Bill. The right hon. Gentleman will not get along very well with me in the future if he behaves in this rather arrogant and overbearing fashion. The right hon. Gentleman has been asked a perfectly simple and reasonable question. He is proposing two additional members for the Board. How much will he pay them? Why is this not a propitious occasion on which to tell the House of Commons? They are being paid out of public money. Why is the right hon. Gentleman such a retiring and reticent creature this evening in this important matter?
  Mr. Gunter: I cannot indict the hon. Gentleman of those two things anyway!
  Sir G. Nabarro: I do not wish to be indicted of anything. I merely wish the right hon. Gentleman to perform his Ministerial duty, which is to tell the House of Commons, as he appoints the two additional members of the Board, how much he proposes to pay them on first appointment. If not tonight, when
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  does he propose to tell the House the salaries he intends to pay and whether they are more or less than those of the existing Chairman and Deputy Chairman? It is no good his replying that of course he will not pay them more than the Chairman or the Deputy Chairman, when a member of his Government has just appointed a Deputy Chairman to the British Railways Board at a salary higher than that of the Chairman of the British Railways Board. It is that kind of anomaly that I am seeking to obviate by my penetrating questioning this evening. It will not do the right hon. Gentleman's public reputation any good if he runs away from answering the questions I put to him on this important matter. I give the right hon. Gentleman a final opportunity to do the proper thing and reply to my questions.
  Mr. Gunter: I have replied to the hon. Gentleman's question. I will inform the House at the appropriate moment.
  Question put and agreed to.
  Clause ordered to stand part of the Bill.
  Clauses 7 and 8 ordered to stand part of the Bill.
  Bill reported, without Amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 55 (Third Reading) and agreed to.
  Bill accordingly read the Third time, and passed.

  AGRICULTURE (MISCELLANEOUS PROVISIONS) BILL
  Lords Amendments considered.

  Clause 10
  PROVISIONS SUPPLEMENTARY TO S. 9 IN ENGLAND AND WALES
  Lords Amendment: No. 1, in page 7, line 13, leave out "states" and insert "contains a statement".
  8.35 p.m.
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie): I beg to move, That this House doth agree with the Lords in the said Amendment.
  I would suggest, Mr. Deputy Speaker, that we also discuss Lords Amendments Nos. 2, 3, 4, 5, 8, 9, 11, 13, 34 and 35.
  Mr. Deputy Speaker (Sir Eric Fletcher): If the House agrees, so be it.
  Mr. Mackie: The Amendments to Clauses 10, 11 and 17 pave the way for introduction of new Schedules introduced to meet a point raised by the hon. Member for Edinburgh, West (Mr. Stodart) during earlier debates. We are grateful to him for raising the matter. The new Schedules are a rather more elaborate affair than the Amendment he proposed himself at one stage, but I hope that he will agree that they do what is needed, and deal fairly with both landlords and tenants.
  The purpose of the new Schedules is purely to provide for the transitional problem which may arise where a landlord has served a notice to quit shortly after the Bill was introduced into Parliament, when he could not reasonably be expected to have known its detailed provisions as to the form of notice that would entitle him to claim exemption from liability for the payment. The effect of the relevant provisions of the Bill before amendment was that the new sum for which Clause 9 provides would be payable where notice to quit was served at any time after the introduction of the Bill, and did not take effect before the Bill had become law. The landlord would not be liable for the payment, however, if the notice stated that it was
  542
  given on one or more of the accepted agricultural grounds or hardship listed in Clauses 10 and 11.
  As the hon. Member for Edinburgh, West pointed out, a landlord who served notice to quit soon after the introduction of the Bill might well have failed to appreciate the effect of these Clauses, and might have served what is known as a plain notice to quit—that is, a notice which does not specify the grounds on which it is given—for a straightforward agricultural purpose without realising that the notice was not in a form that would allow him to escape liability for the payment. The Schedules give him a second chance.
  This is a purely transitional problem, and the Schedules apply only to notices to quit served between the introduction of the Bill and the date when it becomes law.
  Schedule A relates to England and Wales. Paragraph 1 allows the landlord to import into such a notice to quit a statement of the grounds on which it was given. Paragraphs 2, 3 and 4 give the tenant an equivalent right of reference to the Agricultural Land Tribunal if he doubts whether these grounds do in fact justify the landlord in claiming exemption from payment under Clause 10. His rights under these paragraphs are relevant only to the question of whether or not the landlord is liable for the new payment: they do not give the tenant any rights to contest the effectiveness of the notice to quit in other respects.
  It is a matter requiring some legal expertise to set out the rights and counter-rights of the two parties in a way which will cover the various circumstances in which they are likely to find themselves. The wording of the Schedule is somewhat intricate; but its effect is as I have described.
  The purpose of the Scottish Schedule B is the same, except for provisions contained in paragraphs 2 and 3 to deal with types of case which can arise only in Scotland.
  Mr. Anthony Stodart: When I suggested that there was a gap in what was intended, which I believe, in the light of what the hon. Gentleman has said, was a good one, I did not anticipate that quite so much writing would be required. I am grateful to the hon. Gentlemen for what he has said.

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  Initially I thought of the problem in a Scottish context in view of the number of removals that there tend to be in Scotland at the Martinmas term, and it was on the Scottish Qause in the Committee that I raised the point that an injustice might be done, and the Under-Secretary of State admitted at the time that it was an interesting point and one worth looking into. At a subsequent stage I mentioned that the problem might arise in England as well. I suppose therefore that it is inevitable that one feels a certain amount of satisfaction that one has been responsible for bringing to the notice of the Government something that has not previously been thought of. The Government have responded well to this and I am most grateful to them.
  Question put and agreed to.
  Subsequent Lords Amendments agreed to.

  Clause 11
  PROVISIONS SUPPLEMENTARY TO S. 9 IN ENGLAND AND WALES
  Lorts Amendment: No. 6, in page 9, line 30, after "(iii)" insert:
  "or the matter mentioned in paragraph (c),".
  The Under-Secretary of State for Scotland (Mr. Norman Buchan): I beg to move, That this House doth agree with the Lords in the said Amendment.
  Mr. Deputy Speaker: I suggest that it would be convenient to discuss at the same time the following Amendments: Nos. 7, 17, 18, 19 and 20.
  Mr. Buchan: During the Committee stage in another place the Government said that we were in agreement in principle with an Amendment which had been tabled and which would have had the effect of allowing a landlord to seek the consent of the Land Court to dispossess a successor who was a near relative and therefore could not be dispossessed under the Act of 1958, but who already had another agricultural holding capable of providing employment for two men. There were, however, a number of objections to the Amendment as tabled and the Government undertook in another place to put down an Amendment at a sub-
  544
  sequent stage which, while meeting the principle of the original Amendment, would also meet the objections to the original proposal—the question of the two holdings. These Amendments we are now discussing were introduced at the next stage of the Bill. The main Amendment is No. 17 and the others are consequential on it. The effect is to add a further type of case in which the Land Court are required to consent to the operation of a notice to quit given to a near realtive. They will have to consent if they are satisfied that the successor is the occupier—whether as owner or tenant—of other land capable of providing full-time employment for the occupier and at least one other man.
  There are two provisos. First, the new provision will apply only where the tenant is already in occupation of the other land before he inherits the holding to which the notice to quit relates. This means that the provision will not apply where a successor has inherited two holdings simultaneously. Otherwise, it would have been necessary to place on the Land Court the difficult task of considering which of the two holdings the successor should be allowed to retain. This situation can only arise where the successor has inherited two holdings simultaneously which were both already in possession of the deceased tenant. If we did not exclude this case therefore we would have allowed the breaking up of land which has already been in the occupation of one individual. The Amendment also includes the case where the other land occupied by the successor forms a single agricultural unit with the holding which he has inherited. If we had not made this exclusion, which was strongly pressed by the Scottish National Farmers' Union, it would have involved breaking up an existing agricultural unit which would have been at variance with our general farm structure policy. I think the House will agree that this Amendment is satisfactory. It allows a landlord to repossess a holding which has fallen to a successor who already occupies another sizeable holding; but does not allow him to do so where it would involve breaking up an existing agricultural unit.
  8.45 p.m.
  Mr. Stodart: It was my hon. Friend the Member for Fife, East (Sir J. Gilmour) who, in Committee, first planted the seed

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  which has resulted in this change. He tried to meet the point simply, perhaps over simply since he attempted to say that a farm should pass to a near relative so long as that near relative was not the owner or tenant of another agricultural holding. When one considered the matter further one realised that that sort of drafting would have included occupation of a non-viable holding. I have no doubt that the Minister is pleased to move the Amendment because in Committee he remarked that he could hold out no hope of a change in this direction.
  A more elaborate attempt to make this change was made in another place, but that was rejected because it would have allowed the landlord to escape the restrictions placed on him by this legislation in the case of a near relative of a former tenant who owned a farm, even if he did not have working possession of it.
  The Government said in another place that they would do their best to move in the direction of the change which has been proposed. While I do not wish to seem grudging about it, my general reaction to the principle behind these provisions has not changed and I do not think that the Minister would have expected such a change. However, this is a welcome condition and I am obliged to the Government for having made this proposal. They have made the Clause at least that much less objectionable than it previously was.
  Question put and agreed to.
  Subsequent Lords Amendments agreed to.

  Clause 14.
  PROVISIONS SUPPLEMENTARY TO SECTION 12 IN SCOTLAND.
  Lords Amendment: No. 12, in page 13, line 25, leave out from "section" to second "the" and insert:
  "7 of the New Town (Scotland) Act 1968".
  Mr. Buchan: I beg to move, That this House doth agree with the Lords in the said Amendment.
  This is a drafting Amendment in that it takes account of the fact that since the Bill was first introduced the New Towns (Scotland) Act, 1968, has been passed.
  Question put and agreed to.

  New Clause
  LANDLORD'S POWER IN CERTAIN CASES TO REQUIRE TENANT TO PURCHASE HOLDING
  Lords Amendment: No. 21, after Clause 19, in page 19, line 3, at end insert new Clause "A": —
  "A. In any case in which, in pursuance of the foregoing provisions of this Part of this Act, a landlord is precluded from giving an incontestable notice to quit to a tenant who has acquired right to the lease of an agricultural holding, the landlord may give notice to the tenant requiring him to purchase the holding and in any such case the tenant shall purchase the holding at such price as may be agreed between the parties or, in the case of dispute, as may be fixed by the Scottish Land Court who shall fix the said price on the basis of what price the holding would realise if offered for sale in the open market with vacant possession."
  The Secretary of State for Scotland (Mr. William Ross): I beg to move, That this House doth disagree with the Lords in the said Amendment.
  I hope hon. Members will bear with me for a few minutes to allow me to explain why we do not agree with this Amendment. This House has not had any previous discussion on the proposal embodied in the new Clause. The proposed new Clause would be at variance with the principles of Part III of the Bill. Part III is designed to give security of tenure as a tenant to a successor to an agricultural holding who is a near relative of the deceased tenant. The effect of the new Clause would be that in cases where under Clause 18 a landlord loses his present right to give a successor an incontestable notice to quit, he would have a right to require the tenant to purchase the holding at an agreed price, or failing agreement, at a price fixed by the Scottish Land Court on the basis of the open market value with vacant possession.
  Whatever the merits of the proposal, the new Clause as it stands would not do. It does not say what is to happen if the tenant does not purchase. Presumably the intention is that the landlord would then be able to serve an incontestable notice to quit, but it does not say so. To that extent the Clause is not satisfactorily drafted.
  There are much more serious objections. If the landlord is given the right to insist on the tenant purchasing the

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  holding at open market value, it seems likely that this power would be exercised at least as often as the old power to dispossess under Section 6(3), of the 1958 Act. I suspect that it may be argued that the tenant should be able to raise the money to purchase it on the security of the holding. We all know that it is not always possible at all times to raise money when it is wanted. Acceptance of this new Clause would perpetuate that sense of insecurity which it is our purpose under Clause 18 to remove. A tenant would be just as uncertain as he is today about the fate of his farm when he dies. If this new Clause were accepted we are sure that it would be likely to create as much hardship as that which we have been trying to remove.
  It may be argued that the inclusion of the new Clause would afford a fairer deal for the landlord by allowing him to realise his farm. We have looked at Clause 18 a great deal from the landlord's point of view and have introduced Amendments to add to the circumstances in which the landlord may disposses even a near relative. There are likely to be many occasions in which a landlord will be able to realise the value of his farm if he so wishes, but we could not possibly accept this new Clause. It is at variance with the principle of this part of the Bill.
  A letter which we received at the Scottish Office from the National Farmers' Union of Scotland may be of inerest to the House. It says:
  "I am writing to affirm that the Union strongly object to the provisions contained in Clause 20 of the Bill as amended on Report in the House of Lords, and would urge the Government to take the necessary steps to have this Clause removed…. One of the main objections is that, while the tenant's successor may be perfectly capable of financing the running of a tenanted farm he may not be in a position to raise the necessary capital to actually purchase the holding. This could lead to the type of hardship which is the very thing the Government are trying to minimise by the new proposals on succession to farm tenancies."
  In view of all this, I hope that the House will conclude that the Government are right in advising that the proposed new Clause should be rejected.
  Mr. Stodart: I hope that I can say that my attitude, and the views that I have expressed, during the several hours
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  of debate that we have had on this part of the Bill has been based solely upon what I believe will be the effects of the Government's proposals on the efficiency of the agricultural industry. It is perfectly apparent that my views are not shared by others. Despite that, we can still no doubt speak to one another amicably.
  Since the main debates took place in Committee and the tumult and the shouting died down, it is interesting to observe the reaction which is now taking place in Scottish agricultural circles. It is not surprising that the representatives of those who own land, namely, the Scottish Landowners' Federation, continue not to be pleased. Despite the views the Secretary of State just read, sent to him by the Scottish National Farmers' Union, it must surely be mortifying to him to have his hand, if not bitten, at least snapped at by those whom he has sought to feed, because many branches of the N.F.U.—if he reads the agricultural Press, as I am sure he does, he must have noticed these reports—have been making a point of saying that they did not ask for this legislation as it has been presented to the House but only for the rights of what they describe as a competent son; not the near relative as it is defined in the Bill.
  Under the present position in Scotland —or, perhaps I should say, the position up to this present legislation—certain members of a family could inherit the remainder of a lease. At the end of that lease the landlord could, if he wished to do so get possession. Under the proposed legislation, which is now in its final stages, a farm can be passed to a near relative, admittedly under certain restrictions, for perpetuity.
  The proposed Clause would permit a landlord, faced with such a succession, to insist upon the new tenant purchasing at vacant possession value on the open market. The right hon. Gentleman asked a very pertinent question which had struck me: what happens if he does not? In Committee we moved several Amendments. Two of our suggested improvements feature in the Bill—those about the successors having to be qualified, although here again it did not go quite as far as we should have liked, and the one which has just been dealt with about the successor not working another farm.

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  There are other Amendments that I should like to see, and I do not doubt that in due course we shall see them. But it would be less than honest of me if I said that I approve of the proposed new Clause. I do not think that it in any way meets the situation. I hope that I am continuing the approach which I have adopted throughout when I say that I do not think that this is the right way TO tackle a problem which has for long proved intractable, but which I believe— and being a farmer I am a perpetual optimist—is capable of solution if the two sides involved are prepared to talk together, and when doing so to indulge in a certain amount of normal give and take.
  Therefore, I do not propose to resist the Government's intentions on the Amendment, though I can, of course, only advise my hon. Friends.
  9 p.m.
  Sir Frank Pearson: As a mere English Member I hesitate to intervene on what is essentially a matter concerning the Scottish landlord. But although the intricacies of the tenancy law in Scotland may not be altogether a subject for an English Member to speak on, there is an underlying principle of equal importance to England, and it is on that principle that I should like to say a few words.
  Those of us present who went through the Committee stage will remember the circumstances in which Clause 19 was introduced. The reasons for its introduction were never really justified to the Committee. The Minister had a bright idea that it should be introduced at a late stage, but those of us who knew anything about the background knew that political pressures had been exerted over one or two cases of genuine hardship, pressures to which the Minister gave way, probably against his better judgment. In giving way and legislating for a hard case the Minister has made bad law.
  The principle underlying the Clause is thoroughly bad. Although the other place may not have drafted its new Clause in the best possible way—and I accept that certain criticisms can be made of it—the other place was trying to achieve something with which I have the greatest sympathy.
  Under Clause 19, near-relatives are to be given nearly permanent security of
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  tenure. A daughter, who may marry anyone—may not marry a farmer but a dentist or a writer to the signet—as long as she has reasonable knowledge of agriculture is to be given security of tenure. It will be similarly the case with widows. But the practical result will be that the landlord will not be able to get vacant possession of his land.
  In these cases, we are not dealing only with large landlords. Very often we shall be dealing with people who own a couple of hundred acres or so and to whom the value of their holdings will be of intense interest and meaning. In depriving owners of vacant possession when tenants die we shall be robbing them, on a 200-acre farm, for example, of £20,000 at £100 an acre—the difference between the value of vacant possession and the value of possession under tenure. That is the extent to which the owners are likely to be robbed by this provision.
  I believe that the introduction of the Clause is totally retrograde and a further step towards undermining the efficacy of the landlord-tenant system. I do not know what the Government attitude towards that system is. I do not know whether they regard it as good or not. I do not really care very much. But I do say that, if the tenant farmers are to be asked to carry the capital value of the land which has been carried by the landlords up to date—because that is what will happen if the landlord-tenant system breaks down—agriculture will find it very difficult to raise the capital to carry on. By this provision, we shall be forcing very often the small landlord to hold his farm under tenancy or to sell it at a very substantial loss, and when the Minister talks about hardship it would be as well to weigh up just where the hardship lies.
  Mr. Buchan: But that is precisely what we propose. We have written into the rest of the Bill, to which the hon. Gentleman is not referring, the question of relative hardship between landlord and tenant. The situation he envisages is taken care of in the rest of the Bill.
  Sir Frank Pearson: Does the hon. Gentleman say that the question of hardship from the landlord's point of view will be taken care of when these cases arise? Will he confirm that?
  Mr. Buchan: Yes. It is already confirmed in the Bill and in the Agricultural Holdings (Scotland) Act.
  Sir Frank Pearson: I am glad to hear the hon. Gentleman say that. Where we get a small landlord owning a relatively small acreage, and where the operation of this Clause would lead to the loss of at least £100 an acre, I hope the tribunals which will deal with these matters will take account of the hon. Gentleman's words. If he gives me that assurance I shall be very much more satisfied than I have been on this matter. I do not want to detain the House much longer.
  Mr. Buchan: Hear hear.
  Sir Frank Pearson: I have made a valid point. I hope that, when the Minister of Agriculture considers the situation in England, he will bear in mind the fact that the landlord-tenant system has served agriculture well. If the Minister undermines it unduly, the agricultural industry will suffer. It is all very well to talk about hardship. One may get hardship in certain cases, but consider the hardship on both sides and consider the contribution to agriculture that landowners have made in the past and are making today.
  We accept that the Clause has certain flaws in it, but we would not wish to divide upon it. However, I hope that I have made clear to the House that the feeling and philosophy behind Clause 19 is totally irregular. I reject it and have every sympathy with the new Clause passed by their Lordships which, for various technical reasons, we are unable to accept.
  Mr. Robert Maclennan: The hon. Member for Clitheroe (Sir Frank Pearson) has gone far to eliminate the impression given by his hon. Friend the Member for Edinburgh, West (Mr. Stodart) that the opposition to this important addition to the Bill was somewhat more muted and that now the light of reason has been cast upon our councils here.
  It comes as no surprise that the hon. Member for Clitheroe should find underlying the new Clause proposed in another place certain thoughts with which he is in sympathy, because he has never made
  552
  any secret of the fact that he considers the landlord a more efficient farmer than the tenant. This has been the drift of all his contributions to the discussion on this important matter.
  It has been hard for hon. Members on this side to understand the logic behind the hostility of the Opposition to this new Clause which was attached to the Bill at an earlier stage. I speak with considerable satisfaction having, prior to the Government's intervention in the matter, brought forward a Bill to secure the very purposes which this Clause has now secured. Whatever may be the views of the scattered branches of the National Farmers' Union, to which the hon. Member for Edinburgh, West referred, at least the Caithness branch of the N.F.U. has been categoric in its support for the Government. At my last meeting with that branch two weeks ago it echoed the words of the letter of which the Secretary of State has spoken tonight. Some concern was expressed at the possibility that the Government might countenance the quite unworkable proposals put forward in another place which would strike at the principle underlying the new Clause guaranteeing to the near relatives of deceased tenant farmers security of tenure.
  I welcome the assurances which we have had tonight from my right hon. Friend and from the Opposition that they will accept the view of the Government on this matter. I congratulate my right hon. Friend on the Measure which he has introduced. It will give much satisfaction to the fanning community throughout Scotland. This new Clause is one of the frequent examples of the benefits which are derived for Scotland from being able to attach to a United Kingdom Bill a provision of purely Scottish content.
  9.15 p.m.
  Mr. Alasdair Mackenzie: The question of security of tenure was debated at considerable length both in Committee and on Third Reading, and I had hoped that we had heard the last of it, because it is a piece of legislation which is welcomed throughout Scotland, and Scotland only is concerned with it. I am disappointed that the matter is causing so much heart burning on the southern side of the border,

  553
  because it does not affect that area at all.
  It seems to me that the Opposition are unduly concerned about the effects of this Measure, because anyone with any experiencs of agriculture must realise that security of tenure is essential in the long-term interests of farming because it is a long-term business. For that reason I am disappointed to learn that many landowners are so concerned about this legislation.
  It is important to note that the N.F.U. has supported this measure from the outset and that it has expressed its opposition to this new Clause. It must be clear to anyone that if we accept the Clause now it will make nonsense of all that we passed at earlier stages. I therefore think that we on this bench should be consistent and support the Government in refusing to accept the Clause.
  I do not follow the argument about hardship to the landlord, because the opportunity will be there to apply at regular intervals for an increase in rent, and if there is any dispute about who will fix it, the Land Court will step in. I do not think that any Government body, certainly not in Scotland, enjoys the confidence of the people whom it serves in the same: way as the Scottish Land Court does. It has always been regarded as a most impartial body from the day it was set up, and in my opinion its status under the present chairman and members has never been higher, and that is saying a great deal. I am sure that if a case is referred to the Court, if it approves of the successor to the tenancy, it will fix a fair rent and ensure that the proprietor receives justice in every respect.
  I support the Government in rejecting the Clause.
  Mr. J. B. Godber: I have taken careful note of what was said by the hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie), that this matter affects only those North of the Border, and therefore I do not wish to intervene for more than a few moments. I do so only to make clear our position on this matter. In Committee upstairs we opposed the introduction of this part of the Bill. We felt that it was wrong, and that its repercussions could be bad. We believe that it could harm the landlord— tenant system, but if the Government pro-
  554
  pose to go through with it in relation to Scotland, that is a matter for them, and they have taken their decision.
  This is not the best way of dealing with the matter. We would have liked to have seen the total rejection of this part of the Bill. We think that that is the only effective way to represent our views. I hope that the Minister of Agriculture, Fisheries and Food will not become infected with the unfortunate attitude of the Secretary of State for Scotland which I believe is doing harm north of the Border. So long as it is kept north of the Border, it is not for me to intervene. If, however, it were suggested we should do anything on these lines south of the Border I would be very greatly concerned indeed. I believe that it would do grave harm to the health of British agriculture, and I wish to say that publicy and clearly.
  Mr. Russell Johnston: I was wondering whether the right hon. Gentleman would agree that, oddly enough, the English and Scottish N.F.U.s are at variance in much the same way as he is with the Government on this, and that we do have a real division among experts?
  Mr. Godber: If I may, by leave, respond to that question, I would accept that that is so. We do not, on either side of the House, always agree with the N.F.U. in either country. We have our own views. Sometimes we agree. Sometimes hon. Gentlemen opposite agree. I just wanted to make clear that we do not want penetrating south of the Border any Scottish ideas on this matter.
  Mr. Ross: By leave of the House, I would say that I think this attitude to the N.F.U.s is very interesting indeed, and the views of the N.F.U.s and how they change. I would say to the hon. Member for Clitheroe (Sir Frank Pearson) that this was not a sudden thought of the Government or of the Scottish N.F.U. In fact, we have had discussions with the landowners and with the N.F.U. over quite a long time to see whether or not there could be some amicable arrangement about this, and it was obvious there was not, and that the Governmen would have to take action.
  It has been supported by the National Farmers' Union of Scotland, and it has been applauded by the tenant farmers of Scotland. We from Scotland in this House are sometimes accused of not

  555
  being able to take the right action at the right time in respect of something which is purely Scottish. I would have thought that every Member in the House would have been proclaiming that here is an opportunity when the House of Commons can respond, and respond quickly, by means of a United Kingdom Bill, to something which Scotland wants. This shows just exactly how this House can do it.
  Is it right? I started to wonder whether the hon. Member for Edinburgh, West (Mr. Stoddart) was opposed to the principle or not, because at one time he seemed to imply that his views on Clause 18 were well known—that he was ag'in it—and then later on he talked about an intractable problem, appearing to say there was no way of solving it, of improving the position of the tenant farmers without undermining altogether the position of the landlords. He knows quite well that this is the point. We tried to get them to solve it, and they did not, and we must come down on one side or the other. Hon. Gentlemen opposite from Scotland came down on the side of the landowners. We on this side, with the help of the Liberal Party, came down on the side of the tenant farmers. Let that be clear.
  I, too, read the agricultural Press in Scotland, and I also read the letters which come to me, and not a single letter has come to us from any branch of the N.F.U. complaining of what we have done.
  Mr. James Davidson: The right hon. Gentleman says that in particular the Liberals came to the aid of the Government in favour of the Government's view. May I make it quite clear, as a member of fairly long standing of the Scottish N.F.U. in the Aberdeen and Kincardine area, that owner-occupiers in Scotland, certainly in the north-east, would be every bit as much in favour of the Government's view as would the tenant farmers?
  Mr. Ross: I am very glad to hear that, because there have been some cases where landowners who are also fanners actually resigned from the N.F.U. because of the support it has given the Government on this.
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  One other point which was mentioned, I think by the hon. Member for the Member for Clitheroe, was the question of the small owner. In this respect, the rights where there is hardship are also written into the parent Act, the 1949 Act, as amended by the 1958 Act. There might be some differences as to what is a small owner, a small landlord, and when an hon. Gentleman starts talking, for example, of 200 acres which, at £100 an acre is, according to my arithmetic, £20,000, I can ony say there are parts of Scotland where that owner would not be regarded as a small landowner. I want to assure him that my concern is for Scotland. My concern is to be able to meet the needs of Scottish agriculture and I am very glad that we have the majority support in the House in respect of this and that the right hon. Gentleman has not a single Scottish Tory Member behind him on this occasion. There is not one here, though he has one on the sidelines.
  I am perfectly sure that we have in this the fairly full support of everyone and I want to think my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan). There should not have been any fear about the attitude of the Government towards this Clause put in in another place. As the hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) nas rightly said, if there are certain points to be decided by the Scottish Land Court, that court has a status which I believe is quite unique in the annals of Scottish law, in the confidence that is placed in it by those who deal there.
  Mr, Hector Monro: I am here.
  Mr. Ross: Just in time. There may be heartburning south of the Border about what we are doing but it is heart warming and cheering north of the Border and in this matter that is what is wanted.
  Question put, and agreed to.

  Clause 28
  TRANSITIONAL PROVISIONS FOR GENERAL DRAINAGE CHARGES
  Lords Amendment: No. 22, in page 24, line 8, to leave out from "for" to "and" in line 12 and insert:
  "any of the years ending with 31st March, 1969, 31st March, 1970, or 31st March, 1971, in

  557
  respect of which the authority have not already made a determination under this subsection,".
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Hoy): I beg to move, That this House doth agree with the Lords in the said Amendment.
  This will extend the transitional provisions for drainage charges to include the financial year 1968–69 as well as the years 1969–70 and 1970–71. This is required to meet a. local problem in the Gwynedd River Authority area in north-west Wales. In 1967–68 the amount of the general drainage charge was very much higher in this area than in any other river authority area. Moreover, if the authority had raised a general charge for the year 1968–69 under the 1961 Act as it stands, the amount would have been further increased because there has been an increase in the precept on local authorities.
  The high rate of charge in this area is due largely to the method of calculating the charge prescribed in Section 2 of the 1961 Act. The Bill provides a new method of calculation which makes the charge more closely equivalent to the contribution which the general ratepayer makes to the river authority precept. If the Gwynedd River Authority were able, as it would like, to use this new method of calculation for 1968–69 the charge would be reduced from 1s. 6½d. to 11½d. in the £. This relief would be most welcome to farmers in the area.
  The Amendment would make it possible by enabling the Gwynedd River Authority to make determinations for the year 1968-69 under subsections (2) and (3) of Clause 28 so that it can raise the general charge on a Schedule A basis but use the new method of calculating the amount of the charge under the provisions of Clause 28(3) of the Bill. I hope, therefore, that the House will approve this Amendment.
  Mr. Godber: I am grateful to the hon. Gentleman for the very clear way in which he has explained this Amendment. We on this side and certainly any hon. Members who know anything about the problems of the Gwynedd River Board will be only too glad to assist it in any way. The Board has had many problems over the years. I remember them in the past and if this Amendment will help I am very glad. The Board is in a unique situation in regard to the problems it has had to face and I am glad to know that special action
  558
  has been taken to help in this area. I greatly welcome and commend this Amendment.
  Question put and agreed to.

  Clause 35
  REGISTERS OF DRAINAGE HEREDITAMENTS
  Lords Amendment: No. 23, in page 31, line 7, leave out
  "and maintain in the prescribed form" and insert "in the prescribed form and within the prescribed period or such longer period as the Minister may allow in any particular case,"
  9.30 p.m.
  Mr. Hoy: I beg to move, That this House doth agree with the Lords in the said Amendment.
  Mr. Speaker: I suggest that we discuss at the same time Lords Amendments No. 24, in page 31, line 11, at end insert:
  "( ) to maintain the register and map prepared by them in pursuance of paragraph (a) above and to alter the register or map in such circumstances and in such manner and within such periods as may be prescribed;"
  and No. 25, in page 31, line 14, leave out 'by' and insert "at prescribed places by members of".
  Mr. Hoy: These three Amendments provide for additional matters which the Minister may need to prescribe in Regulations for the register and map of drainage hereditaments which each drainage board will be required to prepare and maintain for public inspection. The register will show the valuation of hereditaments for drainage rating purposes, and, in conjunction with the map, will provide the only means by which drainage ratepayers can ascertain whether they are fairly assessed in comparison with their neighbours.
  The first Amendment will enable the Minister to prescribe a period within which the preparation of the register and the map must be completed. Any delay in making these documents available for inspection might inhibit ratepayers from exercising their new rights under Clauses 30 and 31 to request the drainage board to determine a revised valuation or to appeal against determinations made by the drainage board. It is necessary, therefore, to see that the registers and maps are available as soon as possible.

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  Flexibility, however, is necessary in applying time limits for the preparation of these documents and the Amendments will make this possible.
  The other Amendments will enable the Minister to prescribe matters which are, possibly, equally important for ensuring that the purpose of the register and the map will be fully achieved. For instance, he will be able to prescribe the way in which any necessary alterations should be made and the place at which the register and the map should be kept for inspection by the public. I therefore hope that the House will approve these Amendments.
  Mr. Godber: Again, I welcome these Amendments. They meet points and fears which I expressed in Committee, when I was worried because the initiative, in many cases, had to rest with the drainage ratepayer. He must have the information, therefore, if he is to be able to lodge his protest. To that extent, these Amendments go a long way to meet those worries and I am glad that they have been made. They will not be a burden on the drainage boards.
  Question put and agreed to.
  Subsequent Lords Amendments agreed to.

  Clause 36
  SUPPLEMENTAL PROVISIONS— DRAINAGE RATES
  Lords Amendment No. 26, in page 31, line 22, leave out "32" and insert "33".
  Mr. Hoy: I beg to move, That this House doth agree with the Lords in the said Amendment.
  This is a purely technical Amendment, to correct a printing error.
  Question put and agreed to.

  Clause 41
  GRANTS TOWARDS COST OF WATER SUPPLY TO AGRICULTURAL BUILDINGS
  Lords Amendment No. 27, in page 36, line 25, leave out "situated on or".
  Mr. Hoy: I beg to move, That this House doth agree with the Lords in the said Amendment.
  This is a drafting Amendment to remove superfluous words. The Clause
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  refers to buildings situated on agricultural land, but the courts have understood "agricultural land" to exclude the site of any building, so it is impossible for any buildings to be "situated on" agricultural land as defined in the Land Drainage Acts. Clause 41 will remove doubts about the vires of the payment of grant on the supply of water to the farm buildings. We are satisfied that the amending words will cover those cases in which grant has hitherto been paid.
  Question put and agreed to.

  New Clause B
  COMPENSATION IN CONNECTION WITH COMPULSORY ACQUISITION ETC. OF AGRICULTURAL HOLDINGS
  Lords Amendment: No. 28, after Clause 41, in page 36, line 33, at end insert new Clause B—
  "B.—(1) Subject to the following provisions of this section, where in pursuance of any enactment providing for the acquisition or taking of possession of land compulsorily an acquiring authority acquire the interest in an agricultural holding or any part of it of the tenant of the holding or take possession of such a holding or any part of it, the compensation payable by the authority to the tenant in connection with the acquisition or taking of possession shall be assessed without regard to the tenant's prospects, if any, of remaining in possession of the holding after the relevant date.
  (2) In subsection (1) of this section "the relevant date" means the earliest date on which, apart from the acquisition or taking of possession, the landlord "could obtain possession of the holding in pursuance of such a notice to quit as is mentioned in paragraph (c) below if—

  (a) the tenant exercised any tenant's option to extend or renew the tenancy in any case where, apart from this section, he would benefit from doing so; and

  (b) the landlord disregarded any provision in the contract of tenancy or lease enabling him to resume possession of the holding or to determine the tenancy by notice before the date fixed for the expiration of its term or before the termination of the stipulated endurance of the lease; and

  (c) the landlord served a valid notice to quit on the tenant in respect of the holding on the date of service of notice to treat in respect of the acquisition or the date of the taking of possession, as the case may be, or as soon thereafter as he became entitled to serve such a notice to quit; and

  (d) the provisions of section 24 of the principal Act or section 25 of the principal Scottish Act (which restrict the operation

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  of notices to quit) did not apply to the said notice to quit;

  and for the purposes of this subsection any such notice as is mentioned in section 3(1) of the principal Act (which refers to notices of intention to terminate the tenancy of an agricultural holding granted for a term of two years or upwards) shall be deemed to be a notice to quit.

  (3) Sutisection (1) of this section shall not apply to such an acquisition or taking of possession as is there mentioned—

  (a) in the case of such an acquisition, unless the date on which notice to treat in respect of the interest to be acquired is served or treated as served on the tenant by the acquiring authority is after the date of the passing of this Act;

  (b) where in the case of such a taking of possession prior notice of the taking of possession is by virtue of any enactment required to be served on the tenant by the acquiring authority, unless the date on which the notice is so served is after the date of the passing of this Act.

  (4) Section 17 of this Act shall have effect as if any reference to Part II of this Act, other than the reference in subsection (4), included a reference to the foregoing provisions of this section.
  (5) Nothing in this section shall be construed as prejudicing the provisions of any other enactment under which, apart from this section, compensation in respect of any such compulsory acquisition or taking of possession as is mentioned in subsection (1) of this section falls to be assessed without regard to the prospects there mentioned."
  The Minister of Agriculture, Fisheries and Food (Mr. Cledwyn Hughes): I beg to move, That this House doth agree with the Lords in the said Amendment.
  Mr. Speaker: I think that it would be convenient to discuss at the same time Lords Amendments No. 33, in Clause 52, page 42, line 7, after "in" insert
  "section (Modification of Restrictive Trade Practices Act 1956 in relation to agricultural marketing boards) of this Act or in"
  and No. 39, in the Title, in line 15, after "buildings;" insert
  "to make further provision with respect to the compensation of tenants of agricultural holdings whose land is acquired or taken possession of compulsorily;"
  Mr. Hughes: I am obliged, Mr. Speaker. Hon. Members will recall that Part II of the Bill had its origin in the Government's appreciation of the hardship that tenant farmers may suffer when they are dispossessed for non-agricultural purposes of the land which they farm. The Bill provides for such tenants to receive a payment, amounting to four
  562
  times the annual rent of the land taken, to help them in the reorganisation of their affairs.
  One of the factors which the Government had very much in mind in introducing this provision was the fact that in cases of compulsory dispossession the tenant is compensated on the basis of the unexpired term of his tenancy, and that for an agricultural tenant on a year-to-year tenancy this can be very short. Within the last year, however, there has been a Lands Tribunal decision which, if it is correct, would upset this basis of compensation as it was understood at the time when the new payment was conceded to agricultural tenants. In this case—Pettitt v. Ministry of Transport— the Tribunal's decision related compensation, in effect, not to the period between dispossession and the earliest date of expiration of the tenancy, but to the length of time for which the Tribunal considered the tenant would be likely to remain in occupation, taking into account all the relevant circumstances, including security of tenure, which the Agricultural Holdings Acts confer upon tenant farmers.
  Now, obviously, if an agricultural tenant were to receive compensation on the Pettitt basis and also the special payment under this Bill, he would be benefiting twice over. The decision in Pettitt's case is at present under appeal. It is becoming evident that there is every prospect that this Bill will become law before the result is known. The introduction of a provision to restore the status quo is, therefore, unavoidable, and this is all that the new Clause does. It restores the basis of compensation for agricultural tenants to that on which we always thought it stood. It takes away nothing from the tenant's compensation which he had before. It introduces no new elements into the principles on which compensation has been customarily assessed in the past, and it does not in any way cut across the Government's desire to relieve hardship. I should perhaps add that it will not affect the decision on any compensation paid to Mr. Pettitt.
  Consequentially, it has been necessary to amend Clause 52 to exclude application of the new Clause to Northern Ireland, which has its own legislation,

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  and to amend the long title to bring the new Clause within the scope of the Bill.
  Mr. Godber: We are grateful to the Minister for the explanation that he has given to us. The case of Pettitt v. Ministry of Transport cropped up a good deal in another place, and from my reading of it, I rather expected that we might have heard the result of the appeal by the time the Bill came back, but we have not done so. I understand the difficulty in which the Government are placed. None of us wants to see a condition in which there is confusion or in which there could be double compensation, but I am somewhat unhappy.
  The noble Lord, Lord Beswick in another place on Third Reading said that he thought the matter was all right, but that if it was not they would be able to put it right in another Session, since discussions were going on with regard to further legislation. He also said that the N.F.U. and the C.L.A., as well as professional bodies, would be consulted to see if they could find a way to overcome the difficulties. It would seem to be extremely untidy if we cannot have clarification. We are told now that the position will be safeguarded in the way that it will be looked at in the future.
  I must register regret that the matter has to be left in this rather uncertain state. None of us wants to make provision for double compensation. This would be unfair to the taxpayer and unnecessary. I would have thought that it would have been possible for the Ministry, in their discussions with the N.F.U., to have clarified whether any of the cases which were worrying the N.F.U. would be upset by the wording that is proposed. However, this is the last stage at which the matter can be considered, and certainly I do not want to hold up the passing of this legislation. I only record the view that it is unfortunate that we have not been able to get the position clarified, quite apart from the appeal, in which I recognise that the Government has no part. In the circumstances, I think that we must allow the legislation to proceed but, in the preparation of the future legislation to which the noble Lord, Lord Beswick, referred, I hope that we shall be sure that any Amendment required will be brought
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  forward then and that the matter will be tidied up in that way.
  The Minister of State, Ministry of Housing and Local Government (Mr. Niall MacDermot): Perhaps I might reply to the right hon. Gentleman's remarks, as my Department has a general oversight over the compensation code.
  I do not think that there is any confusion about the way in which these provision will work. I think that the matters to which my noble Friend, Lord Beswick, was referring were some rather peripheral ones which came up in the debate in the other place and raised more general issues under the compensation code as it affects agricultural tenants.
  These matters can be considered in the proper place, but this Bill would not be the proper place in which to deal with them. As was made clear in the debates in the other place, we are not satisfied that the matters raised have anything more than a theoretical significance and we have invited the bodies concerned to let us have instances of the sort of problem that they suggest might arise.
  Question put and agreed to.
  Mr. Speaker: As the House is willing to waive its privileges, I will see that an entry to that effect is made in the Journal.

  Clause 42
  AMENDMENTS OF PLANT VARIETIES AND SEEDS ACT, 1964
  Lords Amendment: No. 29, in page 37, line 4, at end insert:
  "( ) Subsection (1) of this section shall not apply to a person who reasonably believes that the material is to be exported from Great Britain."
  Mr. Hoy: I beg to move, That this House doth agree with the Lords in the said Amendment.
  The effect of the Amendment is to exempt from the scope of the Clause sales, or offers for sale, of plant material of a protected variety which take place in this country but where the material which is the subject of the sale is to be delivered abroad.
  The Amendment refers to Great Britain because the 1964 Act applies to

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  Great Britain and is extended to Northern Ireland under Section 39 of that Act. The extension of Clause 42 as a whole is provided in subsection (3) of the Clause.
  The Clause as it originally stood did not, of course, prescribe what name should be used once reproductive material had been exported. That would be a matter for the legislation of the importing country. But there was an omission which might unintentionally have impeded the export of reproductive material of protected varieties. In relating to specific transactions the amendment follows the structure of Section 21 (2) of the Plant Varieties and Seeds Act, 1964, which already exempts exports of seeds from the provisions relating to the Index of Names of Plant Varieties.
  Mr. Godber: This is a matter which is fairly complicated and on which we had a very long discussion in Committee. The naming of roses became a matter of burning concern to all members of the Standing Committee at that time.
  As I understand it, this Amendment is intended to go some way towards meeting the anxieties of certain noted rose producers who had sent us a lot of material in relation to this matter. It was made clear in another place that this Amendment, however, was not welcomed with great enthusiasm by Mr. McGredy, who was one of the ringleaders among the rose producers who sought to explain to us their anxieties in the matter.
  There are a number of different bodies concerned in this. But our only desire at that stage was to ensure that British rose producers were at no disadvantage compared with their Continental competitors. I do not think that the Parliamentary Secretary made it clear whether this Amendment will help them in ensuring that they will be at least on all fours with their European competitors in regard to the effects of this Clause. Initially, they had felt that the Clause as drafted was so tightly drawn that it would inhibit them in their overseas sales. I am not suggesting that the export of new varieties of roses is going to put right our balance of payments overnight, but however small it may appear in relation to some of our larger financial problems, to those concerned it is a matter of importance, and I hope the
  566
  Parliamentary Secretary can assure us that this Amendment is one which will help in some respect to allay the anxieties of those particular rose growers whose problems we discussed at great length upstairs.
  9.45 p.m.
  Mr. Hoy: I think it is going to be helpful. If it were not helpful, I would not be moving the Amendment which is the purpose for accepting it in another place. I will not go into the whole question. We debated it upstairs for a considerable length of time. The hon. Gentleman described it as "The War of the Roses". I would not go quite as far as that, but it did cause considerable discussion and in another place we have gone this length to help meet the needs of our own growers.
  Question put and agreed to.

  New Clause C
  MODIFICATION OF RESTRICTIVE TRADE PRACTICES ACT 1956 IN RELATION TO AGRICULTURAL MARKETING BOARDS
  Lords Amendment No. 30: After Clause 43, in page 38, line 39, at end insert new Clause "C":
  "C.—(1) For the purposes of the Restrictive Trade Practices Act 1956, the definition of "trade association" in section 6(8) of that Act shall not include, and shall be deemed never to have included, a board within the meaning of this section.
  (2) Where a board enter into an agreement on or after the commencement date in the exercise only of such powers as are mentioned in subsection (1) of section 20 of the Agricultural Marketing Act 1958 (which section provides, amongst other things, that certain of a board's powers with respect to products must be exercised in accordance with any directions given by the Minister for the purpose of safeguarding the public interest) or of such powers as are mentioned in section 36 of that Act (under which a board are empowered, subject to the directions of the Minister, to provide artificial insemination services), Part I of the said Act of 1956 shall not apply to the agreement if—

  (a) the board have served notice of the terms of the agreement on the Minister before entering into it; and

  (b) either the period of twenty-eight days beginning with the date of service of the board's notice on the Minister has expired and the Minister has not during that period served notice on the board that he objects to those terms for the purposes of this subsection or the Minister has served on the board during that period notice that he does not so object; and

  567

  (c) the board have furnished a copy of the agreement to the Minister within the period of twenty-eight days beginning with the date on which they entered into it or within such longer period as the Minister may allow in any particular case.

  (3)Where a board have entered into an agreement before the commencement date wholly or partly in the exercise of any of the powers mentioned in subsection (2) of this section and either the board served on the Minister, before they entered into the agreement, notice of its terms in pursuance of a requirement to do so contained in a scheme administered by them or the board furnish a copy of the agreement to the Minister within the eriod of three months beginning with the commencement date, Part I of the said Act of 1956 shall not apply to the agreement—

  (a) subject to paragraph (c) below, as respects the period of fifteen months beginning with the commencement date;

  (b) if during the said period of fifteen months or that period as previously extended under this paragraph the Minister serves notice on the board extending or further extending that period in relation to the agreement, then, subject to paragraph

  (c) below, as respects the extended period;

  (c) if during the said period or extended period the Minister serves notice on the board that he objects to the agreement for the purposes of this subsection, only as respects the period beginning with the commencement date and ending with the date of service of the notice;

  (d) if during the said period or extended period the Minister serves notice on the board that he does not so object, as respects any period after the commencement date;

  and the said Part I shall, as respects any period before the commencement date, be deemed not to have applied to an agreement to which it does not apply by virtue of this subsection as respects a subsequent period.

  (4)Subsections (2) and (3) of this section shall have effect in relation to a Northern Ireland board as if for any reference to the powers mentioned in subsection (2) of this section there were substituted a reference to the powers mentioned in subsection (1) of section 14 of the Agricultural Marketing Act (Northern Ireland) 1964 (which section corresponds to the said section 20).
  (5)Where by virtue of any of the provisions of subsections (2) to (4) of this section Part I of the said Act of 1956 does not apply, or does not apply or is deemed not to have applied as respects any period, to an agreement made between a board and a trade association within the meaning of section 6 of that Act, being an agreement as to the terms for other agreements between the board and persons who are members of the association or are represented thereon by such members, the said Part I shall not apply or, as the case may be, shall not apply or shall be deemed not to have applied as respects that period—

  (a) to any such other agreement containing only terms contemplated by the agreement made between the board and the association;

  568

  (b) to any agreement made between two or more of those persons of which the purpose is confined to promoting the agreements mentioned in paragraph (a) of this subsection or any of them.

  (6)Nothing in this section shall be construed as derogating from the powers of the Minister to give directions at any time under the provisions of the said Acts of 1958 and 1964 which are mentioned in subsections (2) and (4) of this section.
  (7)In this section—
  "agreement " means an agreement within the meaning of Part I of the Restrictive Trade Practices Act 1956 to which, apart from this section, the said Part I applies;
  " board " means a board constituted by a scheme made or having effect as if made under the Agricultural Marketing Act 1958 and includes a Northern Ireland board;
  " the commencement'date " means the date of the passing of this Act;
  "the Minister", except in relation to a Northern Ireland board, has the same meaning as in the said Act of 1958 and, in relation to a Northern Ireland board, has the same meaning as in the Agricultural Marketing Act (Northern Ireland) 1964; and
  " Northern Ireland board " means a board constituted by a scheme made or having effect as if made under the said Act of 1964;
  and for the purposes of subsection (2) of this section an agreement shall be treated as entered into by a board in the exercise only of the powers mentioned in that subsection, or that subsection as modified by subsection (4) of this section, notwithstanding that the agreement contains provisions entered into by the board in the exercise of other powers if the Minister is of opinion that those provisions are incidental provisions only."
  Mr. Cledwyn Hughes: I beg to move, That this House doth agree with the Lords in the said Amendment.
  Mr. Speaker: I suggest that it would be convenient if we also took Amendments Nos. 31, 33 and 34.
  Mr. Hughes: As my noble Friend explained in another place, the purpose of this new clause is to clarify the position of agricultural marketing boards in relation to the Restrictive Trade Practices Act, 1956. Section 8(1) of that Act provides that any agreement " expressly authorised " by statute shall be exempt. Marketing boards have of course been set up under schemes approved by Parliament and provided with certain powers, including powers to make agreements, and it had therefore been thought that they were by virtue of that section, very largely at least, exempt. But it appears that this may not be so, because legal advice is

  569
  that the word "expressly " must be interpreted in a rather narrow way.
  Moreover, it appears that they may be held to be " trade associations" as defined in the Restrictive Trade Practices Act. This interpretation could make their life very difficult, because they have many agreements between themselves and individual producers, and if they are held to be trade associations each of these agreements (in so far as they contain restrictive terms) might be held to be registrable.
  These, then, are the two problems which this clause is designed to deal with. It was essential to introduce it at this time because of the new Restrictive Trade Practices Bill, which had its second reading on 30th April. Clause 7 of that Bill makes unlawful the operation of any agreement which should have been registered but which has not been. Persons damaged by the operation of such an agreement will be able to seek civil remedies. The marketing boards must therefore know where they stand.
  Subsection (1) provides that marketing boards shall be deemed not to be, nor ever to have been, trade associations for the purposes of the Restrictive Trade Practices Act.
  The remainder of the clause deals with those agreements relating to the products regulated under the various marketing schemes which will not be exempted either by this new provision or else by the existing provisions of the Restrictive Trade Practices Act. Essentially these subsections provide the mechanism whereby boards will be able to come to the Minister with such agreements, so that he can consider them in the light of the provisions contained in the Agricultural Marketing Act for safeguarding the public interest and say whether he is prepared to exempt them or not. There is provision for dealing with new agreements made after this Bill becomes law, and also with existing agreements.
  The Clause, together with the existing provisions of the Restrictive Trade Practices Act, should suffice to put the position of marketing boards beyond doubt. This is what we want to do. It will avoid the obvious difficulties which would arise if the activities of the marketing boards, which are already subject to the jurisdiction of the Minister under the Agricultural Marketing Act, were, in addition, subject to the jurisdiction of
  570
  the Restrictive Trade Practices Court. It is, therefore, with complete confidence that I commend the new Clause to the House.
  Mr. Godber: We are relieved to know that the Minister commends the new Clause with complete confidence. I wish that I could say with complete confidence that I understand every word of it. It is extremely complicated and while the right hon. Gentleman sought to explain it succinctly, it is still a difficult matter to grasp in relation to the problems that affect us.
  I am sure that the right hon. Gentleman's intentions are honourable in this respect. I appreciate that in the past, even under existing legislation, the marketing boards have been acutely worried, to put it no higher, about some of the effects of the Restrictive Trade Practices Act on certain of their activities. There have been a number of cases about which they have felt that the perfectly legitimate purposes for which they were set up have in some respects been jeopardised by some of the legislation that has been passed.
  If it is true that this Measure will tighten up the position still further, I agree that it is essential that the position should be clarified. The right hon. Gentleman assures us that the wording of the new Clause clarifies the position in a way which should satisfy the boards, and presumably they have had ample opportunity of considering the provision. As this was introduced in another place some weeks ago and as I have had no intimation or reason to believe that they are not so satisfied with it, my hon. Friends and I see no reason to disagree with the purposes which the Minister put forward.
  Question put and agreed to.
  Remaining Lords Amendments agreed to.—[Special Entries.]
  Committee appointed to draw up a Reason to be assigned to the Lords for disagreeing to one of their Amendments to the Bill: Mr. Buchan, Mr. Godber, Mr. Cledwyn Hughes, Mr. Ross, and Mr. Stodart: Three to be the quorum.—[Mr. Ross.]
  To withdraw immediately.
  Reason for disagreeing to one of the-Lords Amendments reported, and agreed to; To be communicated to the Lords.

  CHINA (DETAINED BRITISH SUBJECTS)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. McBride.]
  9.55 p.m.
  Mr. Stanley R. McMaster: Mr. Speaker, I thank you for this opportunity of raising the case of George Watt and others and of drawing the attention of the House to the plight of this gentleman and at least 12 other British citizens and some of their families who have been detained by the Chinese. Mr. Watt is an engineer who was employed by Vickers-Zimmer, a British company which has been engaged since 1966 in the erection of a polypropylene plant in Lanchow in China. The plant was commissioned by Techimport, a Chinese trading organisation. Mr. Watt, a Belfast man, was employed by the company as an engineer and along with one or two other engineers was at the site in Lanchow supervising the construction of this plant.
  His wife joined him in China in July last year and they spent two months together there. She left in September and shortly after leaving Peking she was searched on her way through Shanghai and some family photographs were taken from her luggage. She was fully searched, she told me. The photographs were ordinary family ones, all of which had been taken in China in the presence of the Chinese interpreter who accompanied them, and none of which were in any way of a nature that might have infringed security or military secrecy.
  However, following the searching of Mrs. Watt, Mr. Watt was placed under house arrest in his hotel in Peking. Later, I believe, he was taken back to the hotel in Lanchow where he had stayed when he was working with Vickers-Zimmer and kept under arrest in his room in that hotel. I am told by members of the company that none of his colleagues or friends in the company were permitted to see him or speak to him. The only communication they received was when he sent bills for his food to the company asking that they should be paid by the company and when he asked that his effects should
  572
  be sent back to Britain. Except for those notes, no other communication was received and none of his friends in Lanchow working for Vickers-Zimmer or other British companies there were allowed to see or to talk to him, nor was he able to write to his wife or family in this country.
  The British Mission in Peking, which was informed of the situation, made attempts to get in touch with him but it also was unsuccessful. The Chinese authorities did not allow any access to Mr. Watt between the middle of September, when he was placed under arrest, and March this year when the world was informed by the New China News Agency that he had been charged and tried for espionage convicted and sentenced to three years imprisonment. No other information about the trial was given to the British Mission in spite of the representations it made to the Chinese. No British consular official was able to attend the trial. No note of the evidence against Mr. Watt was forwarded to the British Mission in Peking. Neither Mr. Watt's friends in the company nor the British Foreign Office know anything about the proceedings at the trial. All that we know—
  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. McBride.]
  10.0 p.m.
  Mr. McMaster: All that we know is that there were two releases from the New China News Agency, one on 12th March of this year which reported Mr. Watt's address and the later one which reported his trial. This is all the information which anyone has had about Mr. Watt since September last. Since his trial and his reported conviction by the New China News Agency, no diplomatic access has been granted to him. So far as we know, no letters from his wife have reached him. His wife tells me that she has written to him but that the letters have been returned through the firm. None has been received by Mr. Watt. No letters from Mr. Watt have reached his wife or his family. They are in complete ignorance as to his state

  573
  of health. They arc unable to send him any food parcels or find out anything about him.
  These circumstances merit the attention of the House. The company has made strenuous efforts to contact Mr. Watt and to secure his release. The managing director of the company, Mr. David Cockburn, visited Peking at the invitation of Tech. Import in March to discuss the case of Mr. Watt and the contract. In spite of several meetings with the Chinese authorities, Mr. Cockburn was unable to make any progress. He was unable to meet Mr. Watt or find out any of the facts of the case. His own return to Britain was delayed by the Chinese in circumstances that caused him grave apprehension.
  The company has done all that can reasonably be expected of it to contact Mr. Watt. This places ordinary business relations with the Chinese under considerable strain. The erection of the plant in Lanchow was interrupted by the Cultural Revolution last year. I believe that most of the plant has now been finished. Nevertheless, the affair of George Watt remains a case which calls for the most strenous efforts on the part of the Foreign Office to ensure that he is released as soon as possible and return to his family.
  The charges which the Chinese have made against Mr. Watt are of the flimsiest possible nature. The Press release from the New China News Agency says, among other things, that he took a large number of prohibited photographs and that he
  "stole by means of spying important intelligence ".
  It refers to
  " China's … political and economic affairs and the great proletarian cultural revolution."
  It says:
  " In this way, he has committed grave crimes seriously endangering the security and undermining the Socialist construction of China "—
  whatever that may mean.
  This is an unusually serious case for Britain. According to the definition of that news release, anyone who brought back any type of information of a cultural nature might be accused of espionage.
  In these circumstances, the attention not only of the House but of the British
  574
  public should be drawn to the case of George Watt. He is not alone. In a Written Answer on 29th May the Undersecretary of State listed 10 British subjects detained by the Chinese. In addition, the list mentions the families of two, Mr. Eric Gordon and Mr. David Crook. The list includes the master of a British ship, the " Fortune Wind", a Captain Pope, and two journalists, a Mr. Grey and a Mr. Barrymaine.
  What are the Government doing about the case of Mr. Watt? The actions of the Chinese in the affair are completely beyond the bounds of ordinary international protocol. They seem to neglect the terms of the Vienna Convention, which allows ordinary diplomatic access to persons charged with offences in another country. The fact that Mr. Watt's wife and mother, who is still living in my constituency and with whom I have been in touch, are unable to hear anything of him is more than discourteous. It is positively uncivilised. The Government should consider what retaliation is appropriate to bring the Chinese to their senses and make them realise that they cannot behave in this way towards British citizens.
  What freedom of movement is now allowed to members of the Chinese Mission in London? Are members of our Mission still being restricted in Peking, or do they have equal freedom of movement in China? What steps are the Government taking to inform any other companies thinking of erecting a plant in China of the risks involved both to them and their personnel?
  How do the actions of the Chinese compare with those which are normal under ordinary diplomatic practice and custom? What would the Minister normally expect from any other country, particularly as regards the right of access to a British citizen who has been accused of an offence in that country, the right of the British consul on the spot to see that he is properly represented and to attend the trial, and the right of communication between such a person and his family?
  What representations are the Government making to the Chinese that they should show leniency? Mr. Watt is not a spy, has never been a spy and has not attempted to spy. It is totally wrong that he should be imprisoned for three years by the Chinese in this way. Are the

  575
  Government taking steps to show that they would welcome any form of clemency which would lead to a reduction in his sentence and his early release so that he may be returned to his wife and family?
  Cannot something be done along the lines of the release of Philip Dobson, who received a longer sentence for apparently a more serious offence? I was very pleased to read of the Foreign Secretary's success in securing his release and his return today to this country. Cannot something like that also be done by the Foreign Office in this case?
  10.10 p.m.
  Mr.Anthony Royle: I congratulate my hon. Friend the Member for Belfast, East (Mr. McMaster) on introducing a debate on a subject of great importance which has had insufficient airing in the House over the past year—the ever-increasing number of British subjects being detained by the People's Republic of China. He has mentioned Mr. Watt in particular and other British subjects detained at the moment. My hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths) hopes to catch your eye, Mr. Speaker, briefly to mention some of those other people detained.
  I want to mention the case of Mr. Anthony Grey, Reuter's correspondent in Peking, which the hon. Gentleman knows I have raised on countless occasions over the past 12 months. Mr. Grey was originally detained on 21st July, 1967, and for nearly 12 months this young man has been isolated on his own in his house in Peking. He is not even allowed freedom of movement around the whole house. He is restricted to one or two rooms. During this period, on only one occasion, and that in the last couple of months, has access been gained to him by one of our consular representatives. He has received cables and letters but that one recent visit has been the only break which this young Englishman has had all this time sitting in his house in Peking.
  What has Mr. Grey done? Has he been spying? Has he shot at Mao Tse-Tung? Has he done anything dreadful? Not at all. No charges have been preferred. Mr. Grey was Reuter's correspondent in Peking and no reason for his detention has been given. The
  576
  time has come when this miserable and inhuman story should be brought to an end and Mr. Grey allowed to come home.
  I know the difficulties that the hon. Gentleman and the Foreign Office have faced over his case and some of the other cases. I recognise that retaliation at an earlier stage might not have been very effective and might not be effective now. But it should be reconsidered.
  I recognise, too, that, at various times over the past few months, it has been thought unwise perhaps to publicise this case too much in order to avoid the risk of damage being done to Mr. Grey's position by too much publicity. But I confess that, when my hon. Friend the Member for Belfast, East, mentions the strenuous efforts made by Vickers-Zimmer to try to get Mr. Watt out, I should like to feel that Reuter's has made similar efforts to get Mr. Grey out. After all, Reuter's is a worldwide news service and yet there seems to me to have been little effort over the last 11 months by this organisation to help its employee obtain his release from incarceration in Peking. It may be that it has received advice from the hon. Gentleman that it should not do this. I do not know the reasons for it but it seems sad that Mr. Grey, after 11 months, is still incarcerated in one or two rooms in his house in Peking.
  I recognise the hon. Gentleman's difficulties and the troubles he faces. I recognise the difficulties of retaliation against a country whose diplomatic manners are different from our own. But I beg him to give some hope tonight to this young man who is still, after 11 months, incarcerated by himself in Peking.
  10.14 p.m.
  Mr. Eldon Griffiths: I do not wish to take up the Under-Secretary of State's time and I put to him four very brief points. The problem we face is what to do about these cruel and senseless acts which the Chinese have perpetrated on British subjects. First, can the hon. Gentleman say in what way we can help the individuals concerned? If our own Mission is not able to gain access—and one understands its difficulties—what steps are we taking to ask other missions, particularly those of Australia and Canada and possibly Pakistan, to act on our behalf?

  577
  We have protested. The Foreign Secretary has done his utmost, but protests in the case of China seem to make very little difference. My second question therefore is whether it is possible for us somehow to arrange for those nations which trade and have relations with China to make a common demarche to the Chinese Government to indicate to them what damage they are doing to their reputation in the world. I think that collective action may make some sense here.
  Thirdly, retaliation. This is very difficult but easy for people to suggest. It is terribly difficult for any responsible Government to take retaliatory action. But, for all that, there are in this country a number of Chinese, particularly at the China News Agency. I ask the Minister to consider whether it is right that our correspondents, businessmen and seamen in Peking should be put into this difficult situation and Chinese nationals here suffer no difficulty whatever.
  Fourthly, could the Minister give some indication—I am sure that he will if he is able—about the up-to-date picture concerning seamen? We, as a great shipping nation interested in export, must, above all, resist the seizing of our seamen and masters from their vessels in Chinese ports.
  10.16 p.m.
  The Undcr-Secretary of State for Foreign Affairs (Mr. William Rodgers): During the last year hon. Members on both sides of the House have been deeply concerned about the detention of British subjects in China. There have been Questions at frequent intervals, as the hon. Member for Richmond, Surrey (Mr. A. Royle) said, and we had a brief opportunity to look more closely at the matter on the Consular Relations Bill. In addition I have tried personally to keep informed those Members particularly affected in their constituency capacity.
  This evening the hon. Gentleman the Member for Belfast, East (Mr. McMaster) has provided a further occasion on which to express our continuing anger and distress at the detentions. May I say how much I appreciate the thoughtful and constructive way in which he has raised the issue? I think that our short discussion has been marked both by com-
  578
  passion and by a shrewd awareness of reality.
  On 29th May, in answer to the hon. Gentleman the Member for Bury St. Edmunds (Mr. Eldon Griffiths), I gave the most reliable information then available on British subjects detained in China. The only information we have had since then has come from the Crook family in this country, who have told us that they have received letters recently from Mrs. Crook and the children which indicate that they are well, but do not mention Mr. Crook himself.
  All these British citizens are in one way or another victims of the Cultural Revolution. I cannot on this occasion— though I wish it were otherwise—discuss the fascinating course of the Cultural Revolution or reflect upon its consequences. Hon. Members will, however, recall that it began in the latter part of 1966 and reached its height in the summer of last year. It led to divisions in the Chinese leadership with consequences for public order in many parts of the country. It seems, too—and this is particularly relevant to our present discussion—to have brought about a hardening of Chinese attitudes towards foreigners—all foreigners, not only towards the British—and a general mood of militancy. For us, its overspill into Hong Kong created special problems.
  Throughout May and June, 1967, there were disturbances in Hong Kong which were handled with firmness and discretion by the Governor and his staff, who justifiably earned widespread praise.
  Then on 20th August the Chinese delivered an ultimatum in Peking concerning events in Hong Kong, particularly measures taken against the Communist Press. There followed demonstrations on two successive days against our Mission, and on the 22nd August a mob sacked the office—setting it on fire—and also the Residence of the Chargé d'Affaires. Members of the staff were roughly treated, although there were fortunately no serious injuries. We immediately imposed certain restrictions on the movements of staff of the Chinese Mission in London, in particular to prevent them leaving the country without an exit permit. Our staff in Peking were even more narrowly restricted, being unable to leave the compound in which they live.

  579
  Although the restrictions on movements both in London and Peking were later modified, the Chinese continued, with very few exceptions, to make difficulties over the departure of our staff from Peking. May I take this opportunity—I am sure it is the wish of the House I should do so—to pay a special tribute to our people in Peking. We are aware of the harshness of their experience and know that they have throughout behaved admirably under the most trying circumstances.
  Since 5th April of this year, however, when I informed the Chinese Charge d'Affaires in London of the final lifting of all the restrictions placed on his staff, things have been a little better. The Chinese have given exit visas from Peking for six junior members of the British staff, and have given a number of entry visas for other staff to go to Peking. One member of the senior staff has also been informed that he may leave. Nevertheless, we continue to regard the situation, as surely we must, as far from satisfactory. I have told the Chinese Chargé d'Affaires that we expect full reciprocity in the lifting of restrictions and the rapid issue of outstanding visas for our staff to leave China.
  I have said this about the position of our Mission both because I think it is of interest to the House and as a background to the rest of the story. I now turn specifically to those who have been detained—or we believe to have been detained—in custody.
  First, there is Mr. Anthony Grey, the Reuter's correspondent in Peking. Even before our Mission was attacked he was called, on 21st July, to the Foreign Ministry, and then put under house arrest. He has remained there since and as the hon. Member for Richmond said, had no contact with the outside world until the 23rd April of this year, when Sir Donald Hopson and another member of the Mission were allowed to visit him. It is not for me to speak for Reuter's, but I think it is only fair to say that they have kept in the closest touch with us, and I know that they are deeply concerned about the plight of this unfortunate young man, wholly innocent as of course he is.
  Then there is a group of British subjects who have been detained in the
  580
  period since February, but about whom we have received no information concerning charges, if any. These are Mr. Norman Barrymaine, a journalist, Mr. D. V. Jones, Mr. P. D. Crouch and Captain Pope.
  There is a third distinct group about whom we also know little. They include Mr. Eric Gordon and his family, Mrs. Epstein, Mr. Michael Shapiro and Mr. David Crook and his family, whom I have already mentioned. All these have been employed at one time or another by the Chinese authorities. The majority of them lived together in the Friendship Hostel and had little contact with our Mission. In fact there were reports last year that some of them had demonstrated outside it shortly before it was destroyed.
  I have left to the end and put in a separate category Mr. George Watt, about whom the hon. Member for Belfast, East has been principally concerned tonight. The facts as far as we know them have been described. Mr. Watt, an engineer employed by Vickers-Zimmer, was detained in Lanchow on 26th September of last year, and we are told that on 15th March he was sentenced to three years' imprisonment for alleged spying. There has been no contact with him since his arrest, and the Chinese authorities have refused to allow Consular access, saying that this was not "appropriate" in his case.
  We have made frequent representations on behalf of all these British subjects. As I explained to the House in the debate on the Consular Relations Bill on 28th March, we have in the past generally found it better to communicate with the Chinese authorities through our Mission in Peking, despite the difficulties with which it has had to contend. Representations have been made on behalf of one or all of the British subjects detained on a great many separate occasions. For example, in the period since 1st March alone, our Mission has made at least 20 formal approaches to the Chinese authorities, and has followed these up with numerous reminders by telephone.
  I have also thought it right to see the Chinese Chargé d'Affaires in London. I first saw him on 21st July last year, the date of Mr. Grey's detention, about the detention of Mr. Grey. This meeting ended on a stormy note due to the total unwillingness of the Charge to accept the

  581
  representations and his insistence on conducting nauseating propaganda related principally to Hong Kong. I have since seen him on 5th April and 24th May and gone right through the list of all British subjects detained, especially making clear the intolerable situation of Mr. Watt. The interviews took place in a more temperate atmosphere, but I greatly regret that the Charge was unable to supply me with the information for which I asked.
  What is the position then as it now stands? First, in the case of the Mission we are making some slow progress though not at a rate that can be regarded as satisfactory. Second, in the case of Anthony Grey, we have had one consular visit. We hope to obtain others—but progress remains slow. Third, on the three ships' officers and Mr. Norman Barrymaine, we are still awaiting information. The position is very unsatisfactory indeed, and I cannot forecast the outcome. Fourth, on those British subjects formerly employed by the Chinese authorities, we are seeking to discover their whereabouts though there is no evidence that charges are being brought against them. Fifth, in the case of Mr. Watt, we have received no further information and there appears no present prospect of personal contact with him. We shall continue to press very hard indeed for, at the very least, access and, much better, as the hon. Gentleman himself said, clemency and release, and return to this country. But again it would be misleading to assume early success.
  I have been asked how we can help, and the question of retaliation has been raised. We have, of course, considered frequently and with the very greatest care whether there were measures we might take which would bring effective pressure to bear on the Chinese authorities. We have discussed fully a number of suggestions which have been made in the House. The question of trade relations, for example, has clearly been in our minds. I hope, however, that hon. Gentlemen will not press me on our precise conclusions. We are prepared, however, to take any measure which we believe will really help those detained in China, while remaining wary of striking attitudes which, frankly would yield no results. We must remember that China today is a unique case where none of the normal rules appear to apply. Comparisons with
  582
  other countries—and what it is possible to do for British subjects held elsewhere— simply do not make sense. Meanwhile I am sure—and I think this answers another point the hon. Gentleman made—that those who trade with China, either carrying out industrial contracts or visiting her ports, will have noted the events we are now discussing and taken them fully into account.
  I agree entirely with the hon. Gentleman when he says the Chinese are guilty of actions completely beyond the bounds of international protocol. That is absolutely true.
  It is a continuing disgrace that British subjects should be held in this way. We deplore such uncivilised behaviour, especially when we in Britain—and I know this applies to the hon. Gentleman, who has made his views quite plain— are anxious to restore normal relations with China and are prepared at all times to discuss genuine issues of common concern. We shall continue to make our views known to the Chinese authorities, directly or indirectly, if this proves possible and likely to produce results, and to speak firmly and clearly on behalf of those whose own voices are silenced. We must hope that in due course the Chinese will come to see the folly of their present shameful attitudes and will take steps to release those that they now so wrongly hold.
  Mr. Eldon Griffiths: As there is a moment or two left, will the hon. Gentleman try to answer a point about some collective demarche to China and what steps might be taken by the Canadian and Australian Missions?
  Mr. Rodgers: I thought I had in passing touched on this point. I thought I said that a number of countries are affected by the present attitude of the Chinese authorities. We have reason to believe that people of other nationalities are held, but I think that probably we are placed in a somewhat more difficult position, particularly, of course, because of Hong Kong and the particular importance which the Chinese attach to it. Certainly, if collective action were possible and would produce results we would be prepared to take an initiative, though, of course, it would succeed only if others saw fit to work in the same way and it

  583
  is not only what they might be willing to do but are able to do. Everybody knows that conditions in Peking are extremely difficult. We are anxious about taking further steps which might—
  The Question having been proposed at Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at half-past Ten o'clock.