Commons Sitting of 26 March 1968

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

PRAYERS
  PRIVATE BUSINESS
  Mr. Speaker: Hon. Members will have observed that the Private Business sheet has been reprinted to include the Second Rea ding of three Bills which were omitted by oversight. If any hon. Member objects to these Second Readings, they will, of course, be postponed.
  PRIVATE BUSINESS
    ROYAL COLLEGE OF ART BILL
    As amended, considered; to be read the Third time.
    SCOTTISH LIFE ASSURANCE [Lords]
    Read a Second time and committed.
    BRIGHTON MARINA BILL (By Order)
    Consideration of Lords Amendments further deferred till Thursday.
    COVENT GARDEN MARKET BILL (By Order)
    Second Reading deferred till Thursday.
ORAL ANSWERS TO QUESTIONS
  LOCAL GOVERNMENT

    Land Commission
    Dr. David Kerrasked the Minister of Housing and Local Government how much land is now in the ownership or
    1132
    under the control of the Land Commission; and what return on the capital value of the land as assessed by the Commission is now being received.
    Mr. Boyd-Carpenterasked the Minister of Housing and Local Government how long the Land Commission has been fully in operation; and how much land it has acquired.
    Sir G. Nabarroasked the Minister of Housing and Local Government how much land has been supplied by the Land Commission to private builders since its inception.
    The Minister of State, Ministry of Housing and Local Government (Mr. Niall MacDermot): The Land Commission came into operation on 6th April, 1967. Since then, it has carried out a valuable survey of land availability. It is at present negotiating for the acquisition of some 1,500 acres, 1,200 of which are for disposal to private housebuilders. None of these has yet reached completion.
    Dr. Kerr: Will my hon. and learned Friend take it that, while we acknowledge the work which the Land Commission is doing, we feel that it could move a little more quickly; and will he tell the House what the nature of the survey to which he referred is likely to be and to what ends it would be devoted?
    Mr. MacDermot: The survey has been concentrated primarily on the pressure areas, and it has tended to confirm that most of the available land in these areas is already in the hands of builders. We are, therefore, proceeding to discuss with the local planning authorities, together with the Commission, a programme for the orderly release of more land for development. I hope that hon. Members will realise that it is in this sort of way that the Land Commission can make a constructive contribution to the bringing forward of land for development, and it should not be judged simply on the acreage of its acquisitions.
    Mr. Boyd-Carpenter: Does not the negligible quantity of land acquired by this large organisation underline that it is no more than a cross between a white elephant and a sacred cow?
    Mr. MacDermot: Certainly not. It is evident that the right hon. Gentleman

    1133
    had prepared his supplementary question before he had heard my Answer.
    Sir G. Nabarro: Has not the Minister noted that Question No. 39 asks him to say how much land has been supplied to private builders by the Land Commission, which he has not answered? As it was supposed to be a primary purpose of the Land Commission to furnish land for development, and it has not so furnished any land throughout its first year, is not my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) perfectly right, and is not the Land Commission a total flop?
    Mr. MacDermot: I had thought that the hon. Gentleman would be able to draw the inference that land could not be disposed of before it had been acquired. He should not jump to hasty conclusions. There is evidence that the Land Commission's interest in lands which previously have been held back has undoubtedly contributed to those lands being brought forward for sale to private developers.
    Mr. Rippon: Is the Minister aware that, since the Land Commission Act was passed, the price of land has risen faster than ever before? Will he agree that, since the passing of the Act, the cost of the land for a 3-bedroomed house has risen, according to the Financial Times, by £200.
    Mr. MacDermot: No, Sir. Again, the right hon. and learned Gentleman's assumption is quite mistaken. The rate at which land prices rose last year was rather slower than in recent years.

    Redevelopment Schemes (Compensation Payments)
    Mr. Murtonasked the Minister of Housing and Local Government when he proposes to introduce legislation to improve the level of compensation available to traders displaced by redevelopment schemes.
    Mr. Tilneyasked the Minister of Housing and Local Government whether he will introduce legislation to compensate the owners of houses detrimentally affected by new developments undertaken by Her Majesty's Government for the benefit of the community.
    Mr. MacDermot: As I said on the Second Reading of the Town and Country Planning Bill on 31st January, my right hon. Friend has received representations about compensation and these are being studied.
    Mr. Murton: Was not that a particularly timid remark of the hon. and learned Gentleman on Second Reading? Would not it have been better if the matter had been dealt with in the Bill? Although the last Conservative Administration improved the compensation terms, is not there still much hardship to small traders and builders who have maintenance work and are displaced?
    Mr. MacDermot: I thought that it was the complaint of hon. Members opposite that the present Government tried to put too much into their Bills. Compensation is a very complex matter, and the memoranda raised some very far-reaching issues. It would be wrong for us to try to bring forward legislation before being able to give proper study and thought to it.
    Mr. Wellbeloved: Is my hon. and learned Friend aware that the question of fair compensation goes much wider than purely compensation for displaced traders? Will he speed up the process whereby legislation can be brought before the House that will bring a new basis of fair compensation for dispossessed owners?
    Mr. MacDermot: I accept that some aspects of the problem are more urgent than others, and we are naturally considering those first.

    Land (Levy)
    Mr. Murtonasked the Minister of Housing and Local Government whether he will give a general direction, under Section 1(3)(b) of the Land Commission Act 1967, to the Land Commission that it should not seek to collect betterment levy twice in respect of the same piece of land.
    Mr. MacDermot: No, Sir. Levy is not chargeable twice on the same development value, but is properly chargeable where additional development value is realised in respect of the same land.
    Mr. Murton: Does the hon. and learned Gentleman realise that there is

    1135
    a problem of interaction between the proposed time limits of the planning permission and of betterment levy, and that there are cases of this? Could the matter be put right?
    Mr. MacDermot: I am not aware of any situation in which levy could be charged twice on the same development value. If the hon. Gentleman knows of any such case, I shall gladly consider it.
    Mr. Boyd-Carpenterasked the Minister of Housing and Local Government how much levy has so far been collected by the Land Commission in the present financial year.
    Mr. Blenkinsopasked the Minister of Housing and Local Government what is the latest figure of the amount of betterment levy assessed by the Land Commission.
    Mr. MacDermot: Up to 15th March, 1968, £1,432,107 had been assessed and £303,054 had been collected.
    Mr. Boyd-Carpenter: Does not the amount collected amount to only £1 for every £12 that the Commission has administered in expenditure? In the circumstances, would it not be better to hand over revenue collection to the Inland Revenue and redeploy the Commission and staff into the export industry?
    Mr. MacDermot: As I have argued with the right hon. Gentleman before in debate, I do not think that transferring the function to another Department will reduce the amount of staff that will be required in order to carry out the work. The reason for these low figures in the initial year is that, under the transition provisions, in practice virtually all stocks of land held by builders on the appointed day proved exempt from the levy.
    Mr. Blenkinsop: I welcome the beginning of this attack upon the profits of land speculation. Can my hon. and learned Friend say whether there is any further action to be taken to speed up this matter, and whether it is causing any delay in bringing land forward for development?
    Mr. MacDermot: It is already coming at an increasing rate, and I expect this pressure to continue as the stocks held at the appointed day are brought forward
    1136
    and that land is replaced by other land transactions.
    Mr. Graham Page: In relation to the amount collected in betterment levy, would the Minister say how much the Land Commission has been able to collect in land speculation by acquiring and reselling land, when it does not have to pay betterment levy but puts the profit into its pocket?
    Mr. MacDermot: I would refer the hon. Gentleman to the Answer I gave to an earlier Question.

    Rate Relief
    Mr. Ridsdaleasked the Minister of Housing and Local Government whether he will make a statement on his proposals for extending rate relief.
    The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Arthur Skeffington): Provision has already been made in the rate support grant arrangements for an increase in the amount of rate relief given to all householders from 5d. in the pound in 1967–68 to 10d. in the pound in 1968–69. For householders with small incomes, the draft order raising the income limits for full rebate with effect from next October will be laid soon after Easter.
    Mr. Ridsdale: Why cannot the whole rate relief on small incomes be borne centrally? Does the hon. Gentleman think it fair that the burden of those who cannot pay should be borne by those who can hardly pay, especially since devaluation?
    Mr. Skeffington: The steps already taken in the arrangements to which I have referred—a considerable increase in support was given in an Order which I had the pleasure of moving before Christmas—go a long way to meeting that charge. The further draft Order will be of great benefit to those who are on very small incomes or have very large families.
    Mr. Hugh D. Brown: What steps has my hon. Friend taken to compare the levels of take-up between one authority and another? In introducing the welcome change in October, will he ask the local authorities to remind applicants that this is a heavy subsidised Government service?
    Mr. Skeffington: My right hon. Friend takes all the steps open to him to make these provisions known and the general overall effect of the central grant is to achieve a very much greater sharing of the burdens throughout the country.
    Mr. Rippon: Will the hon. Gentleman take this opportunity to deny the somewhat disturbing rumours that the Government have in mind reducing the domestic element of the rate support grant in 1968–69?
    Mr. Skeffington: It is always dangerous to try to base positive statements on rumours, but I must say that what the right hon. and learned Gentleman has said is news to me.

    Third London Airport (Inquiry)
    Mr. Bostonasked the Minister of Housing and Local Government what form the inquiry into the third London airport will take; when it will be set up, and when it is likely to start taking evidence.
    Mr. Boston: Can my hon. and learned Friend give any indication when the inquiry will be ready to start taking evidence, how long it is likely to spend doing so, whether its terms of reference will include areas other than the South-East, and whether the member or members of the inquiry will include people other than aeronautical experts?
    Mr. MacDermot: I cannot say how soon it will be ready to start. That may depend to some extent on the form that the inquiry is to take. Nor can I predict how long the inquiry will last. As to its terms of reference, it is certainly our intention that they should be wide enough to cover all the relevant factors, planning, surface transport and defence, as well as aviation matters. As to the composition of the Commission, our objective is to get a balanced and authoritative Commission, whose views would be likely to be generally accepted by the public. I am not sure whether I have covered all of the points raised. I hope so
    Mr. Younger: Can the Minister say, apart from the question of where the air
    1138
    port should be, whether the Commission will be able to investigate the position of those people whose homes will be made uninhabitable through noise if the airport is located in their area?
    Mr. MacDermot: Naturally the effect of noise on the amenity of the areas considered will be one of the primary matters which will have to be taken into account by the Commission. My hon. Friend the Member for Faversham (Mr. Boston) asked whether the inquiry would range outside the south-east area. As has been indicated by my right hon. Friend the President of the Board of Trade, our view is the need for a third London airport is generally accepted, but the timing of that need will be a most relevant factor in the inquiry.
    Mr. Mapp: Will my hon. and learned friend ensure that a census is held in the neighbourhood in respect of traffic and passengers destined for or coming from the industrial areas of Britain, some distance from London?
    Mr. MacDermot: Yes. All the latest information that is available and collected about traffic patterns will be made available to the Commission.
    Sir J. Rodgers: Would the Minister give a categoric assurance that Stansted has not been ruled out of this inquiry?
    Mr. MacDermot: That has been made clear from the start.

    Local Authority Premises (Letting)
    Mr. Martenasked the Minister of Housing and Local Government if he will send a circular to local authorities advising them not to discriminate politically when letting their premises for use by private individuals.
    Mr. Skeffington: I am not aware of a need for such a circular, but if the hon. Member has a particular case in mind I should be grateful if he would write to me.
    Mr. Marten: Is the Minister aware that I have been told that some local authorities have refused to let their premises to the Aldermaston marchers this year? If this is the case, is it because of their behaviour or their political views? If the latter, what are his views about that?
    Mr. Skeffington: I am not aware that some authorities have taken this action, and I should be very glad to have details. Then I can perhaps answer the second part of the question.

    Public Rights of Way (East Riding)
    Mr. Peter M. Jacksonasked the Minister of Housing and Local Government on what date the East Riding County Council complied with his direction to them under Section 37 of the National Parks and Access to the Countryside Act, 1949, to publish a definitive map of public rights of way by 26th December, 1967.
    Mr. Skeffington: The East Riding Council completed the preparation of its definitive map by 26th December, 1967. Notice of the preparation of the definitive map with details of the places where copies may be inspected was published on 22nd March.
    Mr. Jackson: I welcome my hon. Friend's reply, but, first, would he agree that it is not altogether unconnected with the fact that I tabled a Question on this matter, and, secondly, would he urge on the county council the need to commence a review in order that outstanding issues may be determined?
    Mr. Skeffington: The desirability of commencing the review has been brought to the notice of the authority concerned. Preparation of the map has taken a very long time, but there were objections to a very large number of paths and many hearings had to take place. This should be understood when considering the background to this matter.

    Tree Preservation Orders
    Mr. Peter M. Jacksonasked the Minister of Housing and Local Government if he will publish a table setting out the number of tree preservation orders confirmed by his Department in each year over the period 1962 to 1967, broken down in terms of individual counties and county boroughs.
    Mr. Skeffington: As the Answer is in tabular form, I will, with permission, circulate it in the OFFICIAL REPORT.
    It is not possible to break down the annual totals by counties and county
    1140
    boroughs without an unjustifiable amount of extra work.
    Mr. Jackson: I very much regret that my hon. Friend is not in a position to provide me with this information. Would he agree that, if it were provided, it would show that there were still many counties and county boroughs which did not apply for tree preservation orders? What further steps will he take to bring the provisions of the Civic Amenities Act to the attention of such local authorities?
    Mr. Skeffington: I can assure my hon. Friend that there has been a considerable increase in the numbers of orders. They are now running at nearly twice the number of a few years back. There was a slight drop in 1967, but I think that this was due to the fact that temporary orders under the 1967 Act now last for a much longer period. The number of orders for the first part of this year is considerably up. We are taking every opportunity to bring to the notice of some local authorities which have not exercised their powers the vital need for them to do so.
    Sir D. Walker-Smith: Would the hon. Gentleman consider making a tree preservation order for Grosvenor Square?
    Following is the table:

    1962

    426

    1963

    432

    1964

    608

    1965

    642

    1966

    757

    1967

    652

    Planning Permissions (Circular)
    Mr. Costainasked the Minister of Housing and Local Government what advice he has given to local planning authorities regarding the use of conditions attached to the grant of planning permissions; and whether he will make a statement.
    Mr. Skeffington: My right hon. Friend has recently given advice to local planning authorities in a circular on the use of conditions in planning permissions. Copies of the circular—No. 5/68 dated 6th February, 1968—are available in the Library.
    Mr. Costain: Is the hon. Gentleman aware that the circular refers to things

    1141
    which are legally unenforceable? How does he account for the fact that a circular is being sent out by his Department which it is necessary to correct by introducing a new Act? Is not this superseding the work of Parliament?
    Mr. Skeffington: So far as I understood the hon. Gentleman's supplementary question, I do not think that that is the case. But I should be grateful if he would draw my attention to any provisions in the circular which have the effect to which he refers, and I will discuss the matter with him.

  HOUSING

    Applicants for Rehousing
    Dr. David Kerrasked the Minister of Housing and Local Government what assistance he now offers to applicants for rehousing to achieve registration outside the area of their own local housing authority.
    The Joint Parliamentary Secretary to the Ministry of Housing and Loc al Government (Mr. James MacColl): My right hon. Friend has asked authorities, except in Greater London, to abolish or curtail their residential qualifications for the sake of incoming workers.
    Dr. Kerr: That is an unsatisfactory Answer. Will my hon. Friend accept that what is required for the better rehousing of the people of this country, associated with improved mobility of labour, is a greater uniformity in housing requirements among local authorities and the establishment on a simple basis of some sort of central register?
    Mr. MacColl: On the general point my hon. Friend makes, I agree that this is a very important matter. My right hon. Friend is asking the Central Housing Advisory Committee to have another look at it in the light of what has happened since its previous report.
    Mr. Allason: Would the Minister consider setting up a location of homes and jobs bureau, similar to the Location of Offices Bureau, because the two need to go together?
    Mr. MacColl: Before we consider doing that, the best thing is to get local authorities to keep down their residential
    1142
    qualifications to an absolute minimum. My right hon. Friend is very anxious that they should do that.

    Council House Rents
    Mr. Winnickasked the Minister of Housing and Local Government what further action he is taking on the council rent increases referred to the National Board for Prices and Incomes.
    Mr. Conlanasked the Minister of Housing and Local Government if he will take steps to ensure that all proposed increases in the rents of local authority houses should be deferred until after the National Board for Prices and Incomes has reported on this matter.
    Mr. Frank Allaunasked the Minister of Housing and Local Government if he will make a statement on council rent increases, following the reference to the National Board for Prices and Incomes.
    The Minister of Housing and Local Government (Mr. Anthony Greenwood): I have no statement to make at this stage on the reference to the Board, but my hon. Friends will be aware of the Government's intention to introduce legislation to enable Ministers to direct local authorities to moderate or phase increases which the Government regard as unduly high in present circumstances.
    Mr. Winnick: Do I understand from that reply that the very substantial G.L.C. rent increases will not now be allowed regardless of what the Prices and Incomes Board has said? Does my right hon. Friend agree that to allow such increases to be implemented would be wrong and highly provocative at a time of income restraint?
    Mr. Greenwood: The increases are among those which have been referred to the Prices and Incomes Board. It would be quite improper for me to comment on any individual increases at this stage.
    Mr. Allaun: Will my right hon. Friend adopt one effective measure to keep rents down, that is, to stop councils from removing the existing subsidy from the rates which, unfortunately, many councils which have recently come under Conservative control, such as the G.L.C., are now doing?
    Mr. Greenwood: That is a matter within the jurisdiction of every local authority, but it is certainly one of the factors responsible for increasing rents more severely than would otherwise have been necessary, and I appreciate my hon. Friend's point.
    Mr. Rippon: Is the Minister aware that any interference with the statutory responsibilities of local authorities will be bitterly opposed? Will he explain how he reconciles proposals to control local authority rents with the exhortation he delivered to local authorities on 15th December, asking them to keep rate increases to the minimum?
    Mr. Greenwood: Any interference with the rights of local authorities must be a matter for regret, but, I am absolutely certain, more than justified, in the present exceptional circumstances. I have had discussions with local authority associations and I shall continue to have them. The right hon. and learned Gentleman is quite wrong in assuming that this action must mean an increase in rates. It may well mean a contribution from the rate subsidy in some cases, but every case will have to be judged on its merits. There are other ways of meeting increases. Local authorities may well have reserves or be able to make the kind of economies the right hon. and learned Gentleman is always urging on them.
    Mr. Biffenasked the Minister of Housing and Local Government when he expects to receive the report of the National Board for Prices and Incomes on council house rents.
    Mr. Greenwood: I expect to receive the report before the end of April.
    Mr. Biffen: Is it the intention to formulate the legislation before or after receiving the report?
    Mr. Greenwood: The legislation affecting rents will be included in the prices and incomes legislation which my right hon. Friend the Secretary of State for Economic Affairs has in contemplation. But I very much hope that the information from the Board will be available to us in drafting the legislation or at any rate in deciding how we shall use the powers the legislation gives us.
    Dr. Gray: When does my right hon. Friend hope that we shall have a report
    1144
    from the Board on the rent increases made by the County Borough of Yarmouth which he referred to the Board?
    Mr. Greenwood: That was one of over 20 authorities referred to the Board at the same time as being a cross-section of local authorities throughout the country. The period of reference to the Board has been extended by six weeks at the Board's request, and I now hope that the report will be completed by 22nd April.
    Mr. Biffenasked the Minister of Housing and Local Government if he proposes to introduce legislation requiring councils to notify him of proposed increases in council house rents, and enabling him to standstill any proposed increase in rents.
    Mr. Greenwood: The Government have announced their intention to introduce legislation enabling Ministers to direct local authorities to moderate or phase increases which the Government regard as unduly high in present circumstances. Local authorities will also be required to give early warning of proposed rent increases.
    Mr. Biffen: Is the right hon. Gentleman aware that this Question gives him a unique opportunity to clear up the deplorable confusion left by the Secretary of State for Economic Affairs? In particular, can he say whether it is the Government's intention that the proposed legislation shall apply to those many instances where council house rent increases are planned from 1st April and where the rates have been calculated on a budget taking that into account?
    Mr. Greenwood: I do not accept that my right hon. Friend left any confusion. As I have said, we are having discussions with the local authority associations, and exactly how the legislation will apply to the kind of case the hon. Gentleman has mentioned is one of the subjects I am having discussions about.
    Mr. Murray: What view does my right hon. Friend's Ministry intend to take of councils which introduce unfair rent rebate schemes which bear no relationship to the circular sent round by the Ministry on rent rebate guidance?
    Mr. Greenwood: Perhaps we can consider that interesting question in the context of the Report by the Prices and Incomes Board.

    Older Houses (Modernisation and Improvement)
    Mr. John Fraserasked the Minister of Housing and Local Government when he expects to announce further proposals for the modernisation and improvement of older houses.
    Mr. Greenwood: I intend to make known my proposals during the spring.
    Mr. Fraser: Will my right hon. Friend put high on his proposals the problem of multiple occupation, and recognise the great contribution that municipal ownership and owner-occupation can make to improving old houses, as was outlined in Labour's "Plan for Old Houses"?
    Mr. Greenwood: Multiple occupation is one of the subjects we shall consider in the context of the statement I hope to make. I have made a note of the further points my hon. Friend made.

    Housing Programme
    Mr. John Fraserasked the Minister of Housing and Local Government if he will seek to initiate, after consultation with those interested, a rolling programme of construction of houses for sale and to rent other than local authority houses.
    Mr. MacColl: Regular discussions are held with representatives of the builders, building material producers, building societies and local authorities at the Housing Programme Working Party about the future of the housing programme, both public and private. One of the working party's foremost aims is the achievement of a steady and substantial output of private housing.
    Mr. Fraser: Do the Government have a policy of ensuring that there is a regular supply o both land and money to enable houses for owner-occupation to be supplied at a regular rate?
    Mr. MacColl: My right hon. Friend's officials are associated with the Land Commission in discussions with local authorities in the main pressure areas about the supply of land. The building
    1146
    societies have made clear their intention of continuing to lend as much as they can to finance private housing.

    House Sales (Compulsory Surveys)
    Mr. Molloyasked the Minister of Housing and Local Government if he will consider introducing legislation to provide for the compulsory surveying of houses before sales are finalised.
    Mr. MacColl: Those who buy houses built under the National House Builders Registration Council's scheme will have the safeguard of inspections during construction and guarantees backed by insurance. My right hon. Friend hopes to see this scheme cover virtually all new houses before long. I understand that the Law Commission are considering the question of liability on sales of older houses. At this stage my right hon. Friend does not see a need for legislation on the lines suggested.
    Mr. Molloy: Whilst with qualifications I welcome that encouraging reply, may I ask whether my hon. Friend would agree that for the mass of ordinary people the decision to buy a house, whether a new or second-hand one, is of major importance, and will he consider the possibility of perhaps advertising that these facilities exist and reconsider the possibility of introducing legislation?
    Mr. MacColl: I quite agree with my hon. Friend about the importance of new house buying. That is why there is great value in house-buyers using members of the National House Builders Registration Council's scheme.
    Sir Frank Pearson: Is the Minister completely satisfied that there are enough qualified surveyors to back up the sort of scheme he outlined?
    Mr. MacColl: There is always a shortage of skilled professional and technical men amongst surveyors, as in other activities. The evidence is that the Council can get adequate staff, although there are difficulties of recruitment.

    Rent Act, 1965
    Mrs. Renée Shortasked the Minister of Housing and Local Government what proposals he has to improve the working of the Rent Act, 1965.
    Mr. Greenwood: There will be additional publicity with a view to bringing the Rent Act to the notice of those who can most benefit from it; statutory rules of procedure are being prepared for rent assessment committees; and I am having meetings with representatives of the rent officers and the rent panels for an informal discussion of their work.
    As already announced, the Government intend, in the interests of price restraint, to include provision in the prices and incomes legislation to enable sharp increases in private rents to be phased.
    Mrs. Short: Would not my right hon. Friend accept that it is a pity that his concern for publicity about the work of the rent officers and the Rent Act did not come earlier, since then we would not have had to lose some of our rent officers in the Midlands? In this regard, will he reconsider his decision not to allow rent officers to advertise locally in their own areas?
    Mr. Greenwood: I do not accept the suggestion that there was not adequate publicity earlier, although the case for referring rents to rent officers or panels did not seem to have the impact it should have had. But I think that one of the factors in that situation also was that some of my hon. Friends tended to exaggerate the effects of the working of the machinery and thus discouraged a lot of tenants in lower-rated properties from making full use of the Act.
    Mr. Graham Page: Does the right hon. Gentleman recollect the undertaking given by his predecessor to apply the fair rent by regulation procedure to the totally inadequate rents of controlled properties? When will the right hon. Gentleman carry out that undertaking?
    Mr. Greenwood: The Question on the Order Paper referred to proposals for improving the working of the Rent Act. At the moment, the hon. Gentleman's suggestion would not improve it.
    Mr. Blenkinsop: Will my right hon. Friend pay special attention to giving publicity to the very high proportion of low-rated properties where rent reductions are being obtained?
    Mr. Greenwood: We are giving further publicity. It is important to note that decreases were commoner among lower
    1148
    rateable values. On the whole, the Act is working well.
    Mr. Rippon: Does the right hon. Gentleman now repudiate the undertaking given by his predecessor?
    Mr. Greenwood: Certainly not. I never repudiate an undertaking. The Question related to what proposals I have to improve the working of the Act. I said that the suggestion of the hon. Member for Crosby (Mr. Graham Page) did not come within that category.
    Mr. Lubbockasked the Minister of Housing and Local Government how many determinations of fair rent have been made under the Rent Act of 1965 in Greater London, and England and Wales, respectively, up to the latest convenient date; and if, in each case, he will estimate the percentage of all dwellings subject to regulation which these figures represent.
    Mr. MacColl: Up to and including 1st March, 1968, the numbers of applications for registration of fair rents determined by rent officers in Greater London and in England and Wales were 29,881 and 64,981 respectively. These numbers represent, in relation to each area, about 10 per cent. of the estimated number of regulated tenancies.
    Mr. Lubbock: Is this not an absolutely deplorable rate of progress? Does not the hon. Gentleman agree that, unless we can speed matters up, it will take about 25 years before all regulated properties in England and Wales have had their rents registered? When considering amendment of the machinery, will he think of the possibility of amending the Act so as to provide that registration must be effected within a certain time?
    Mr. MacColl: My right hon. Friend's reply to Question No. 11 indicated that we are concerned and anxious to use publicity to bring more cases before the rent officers. On the other hand, I would not agree that, in every case where there is no reference to rent officers, there is necessarily an unsatisfied landlord or tenant.

    Transport Bill
    Mr. G. Campbellasked the Minister of Housing and Local Government what effect he estimates that the proposals

    1149
    in the Transport Bill will have on the time taken to build houses.
    Mr. MacColl: None, Sir.
    Mr. Campbell: Has the hon. Gentleman considered the inflexibility the Bill will produce—for example, through the periods of several weeks required by Clause 67 for certain applications for the carrying by road of building materials?
    Mr. MacColl: There are provisions in the Bill for flexibility in dealing with urgent cases.

    Birmingham (Green Belt)
    Mr. Danceasked the Minister of Housing and Local Government, when he proposes to make a statement about the confirmation of the green belt to the south of Birmingham.
    Mr. MacDermot: I would refer the hon. Member to the reply I gave him on 28th November. 1967.—[Vol. 755, c. 43.]
    Mr. Dance: Is the hon. and learned Gentleman aware that the delay in coming to a decision has gone on for a long time and is causing much confusion, particularly among local authorities when considering planning permission for in-filling?
    Mr. MacDermot: The local authorities have full powers for the control of development in the areas proposed by them as green belt land. It would not be right for the Minister to confirm the green belt before he has received the results of the study being undertaken by the Planning Conference.

    Greater London Council Hostels (Charges)
    Mr. Lubbockasked the Minister of Housing and Local Government if he will refer the increase of an average of £1 a week being charged by the Greater London Council to residents in their hostels to the National Board for Prices and Incomes.
    Mr. MacColl: These charges include the provision of meals and services and I understand involve a substantial loss to the Council. My right hon. Friend does not consider it would be appropriate in present circumstances to refer the charges to the National Board for Prices and Incomes.
    Mr. Lubbock: Is the hon. Gentleman aware that the loss to the Council is £70,000 a year, a small sum in comparison with its total budget? This increase will fall most harshly on a section of the community least able to afford it. Will he at least ask the G.L.C. to amend the rules whereby no rebates can he granted unless the charge exceeds 45 per cent. of the gross income?
    Mr. MacColl: I share the hon. Gentleman's concern that there should not be any unnecessary increases. I have no evidence of hardship caused but if the hon. Gentleman has some and would let me have it, I should be grateful.

    New Towns Commission (Hemel Hempstead)
    Mr. Allasonasked the Minister of Housing and Local Government whether he is aware that the New Towns Commission is granting leases of houses subject to a condition that rental shall be paid to a firm, British Relay Television Limited regardless of whether or not the service is required; and whether he will forbid this practice.
    Mr. MacColl: I understand that the New Towns Commission has arranged for a television relay service by this firm to all the houses on one of its new estates at Hemel Hempstead so that individual aerials are not required. The annual charge is paid by the Commission, and recouped out of the rents of all the houses on the estate. This is a matter of local housing management which is properly left to the Commission to settle.
    Mr. Allason: Is it not quite wrong, in recouping this money, to charge those who do not wish to accept the service? I quite accept that it is all right for those who want the service to pay for it, but why should it be a condition of tenancy that one has to pay £4 a year when one does not require the service?
    Mr. MacColl: I understand that the individual tenants are not obliged to rent a receiver from the particular firm.
    Mr. Wellbeloved: Will the Parliamentary Secretary hold an inquiry into this business of radio relays? Is he aware that in my constituency, at Thamesmead, the Greater London Council has given an exclusive radio relay to Rediffusion, and

    1151
    that this is causing considerable concern, as a lot of people feel that this is the payoff for the substantial contributions that this company has made to Tory Party funds?
    Mr. MacColl: I do not think that aplies to the New Towns Commission. I do not think that it has been contributing to the Tory Party funds.
    Mr. Allasonasked the Minister of Housing and Local Government whether he is aware that those tenants of the New Towns Commission at Hemel Hempstead whose rent is based on no element of subsidy are being charged an increase in rent to contribute a subsidy for council housing; and whether he will draw the attention of the New Towns Commission to the unfairness of this charge.
    Mr. MacColl: I see no unfairness, for the reason given my reply to the hon. Member's previous Question on 20th February. [Vol. 759, c. 49.]
    Mr. Allason: While the whole House no doubt accepts the idea of balancing Commission and council house rents for some purposes, and thereby necessitating a payment from the Commission to the council, surely it is wrong that unsubsidised house tenants, who are paying a far higher rent, should also have to pay an additional subsidy to the Commission and hence to the council?
    Mr. MacColl: This is a reasonable arrangement. Subsidy is paid on all these houses, but what particular rents are charged is a matter for the Commission, under its powers, to decide.

    Crawley New Town (Housing Subsidies)
    Mr. Hordernasked the Minister of Housing and Local Government whether he will now take steps to allow the New Towns Commission for Crawley the same arrangements for subsidies for houses that it builds for letting as are allowed to the Crawley Urban District Council for the same purpose.
    Mr. MacColl: No, Sir. My right hon. Friend does not think that the Commission for the New Towns should build subsidised houses for general purposes. This is the job of the local housing authority. I am sending the hon. Mem
    1152
    ber a copy of a letter that my right hon. Friend recently wrote to the Chairman of the Commission on this point.
    Mr. Hordern: Does not the Minister appreciate that the only effect of this policy of withdrawing subsidies from the New Towns Commission in Crawley has been to increase the level of rents of Commission houses by 17½ per cent. and that a further 17½ per cent. is in the offing? Does this not make a complete nonsense of the Government's prices and incomes policy?
    Mr. MacColl: No, the point is that we would be very happy if these were sold or cost-rented. The Commission, again in the exercise of its discretion, is being pressed very strongly to be allowed to reduce the rents. That is a matter for it to decide, but my right hon. Friend's policy is quite clear.

    Liverpool (Rents and Rates Policy)
    Mr. Ogdenasked the Minister of Housing and Local Government what advice he has given to the City Council of Liverpool regarding a fair rents and rates policy at this time; and what reply has he received.
    Mr. Greenwood: I have not offered the Council any advice on these subjects, other than that contained in circulars addressed to all local authorities. I understand that through the working of the rate support grant introduced by this Government, domestic rates for next year will remain unchanged.
    Mr. Ogden: Was not the circular of my right hon. Friend addressed to the City of Liverpool, and has it not ignored the advice in that circular? Is it not to increase council house rents from 1st April? Would he write to the authority, saying that he proposes to introduce legislation which will be back-dated from the date of the increase?
    Mr. Greenwood: It would be wrong for me to try to threaten local authorities with powers which I do not yet possess. My hon. Friend will be glad to know that the Corporation of the City of Liverpool asked to see me and I shall be meeting it on Thursday.
    Mr. Fortescue: Would not the right hon. Gentleman agree that, in attempting

    1153
    to balance its housing revenue account and in introducing its present rate rebate scheme, the Corporation of the City of Liverpool is acting exactly in accordance with the advice of his Ministry?
    Mr. Greenwood: In fairness to myself, I should say that I have not given any corporation advice that it should completely abolish its rate fund contribution. I would rather not prejudge the discussions which I am to have with the Liverpool Corporation on Thursday.

    Local Authorities (Housing Revenue Accounts)
    Mr. Ogdenasked the Minister of Housing and Local Government if he will now introduce legislation to relieve local authorities of the responsibility of balancing their housing revenue account over a fixed period of time.
    Mr. MacColl: No, Sir. This would increase the eventual rent burden, whereas at present authorities are obliged to make a rate land contribution to offset a deficit on the account in any financial year.
    Mr. Ogden: Is it correct that the Government have no legal powers to intervene in the decision of an authority on rents or rates? Would he assure us that such a provision will be included in the White Paper and that we shall speedily have legislation to make this intervention possible?
    Mr. MacColl: My hon. Friend should wait for the White Paper.
    Mr. Ogden: On a point of order. In view of the completely unsatisfactory nature of that reply, I beg to give notice that I will raise the matter on the Adjournment.

    Houses (Declarations of Unfitness)
    Sir N. Cooper-Keyasked the Minister of Housing and Local Government whether he will seek to amend the law whereby local authorities can, by withholding a formal declaration of unfitness far habitation, prevent a householder from challenging a report by a medical officer of health, which artificially lowers the value of the property causing financial hardship to the owner, and is to the ultimate advantage of a local authority which proceeds with a compulsory purchase order.
    Mr. MacColl: My right hon. Friend has no evidence that authorities unreasonably delay their formal declaration of unfitness. However, he is engaged upon a comprehensive review of the legislation affecting older housing areas and he will make known his proposals during the spring.
    Sir N. Cooper-Key: Is the hon. Gentleman aware that the Act allows a local authority to work a racket on the private householder? Will he pay immediate attention to the case which I have sent to him regarding a property known as the Piece of Cheese, in Hastings?
    Mr. MacColl: That case was a very special case which involved other considerations. In general, there is no evidence that local authorities work a racket.

    LOWER-PAID WORKERS
    Mr. Winnickasked the Prime Minister which Ministers are responsible for improving the wages of the lower-paid workers.
    The Prime Minister (Mr. Harold Wilson): As the House knows, the coordination of the productivity, prices and incomes policy is the responsibility of my right hon. Friend the Secretary of State for Economic Affairs, Sir.
    Mr. Winnick: But is it not a matter of great concern to the Government that so many adult workers take home less than £15 a week—less than many rich people spend on one evening out? How will the new incomes Bill affect these workers, who are so desperately in need of more money?
    The Prime Minister: I have not gone into dining out habits, but certainly the question of the lower-paid workers—and, as my hon. Friend says, there are very many below that figure—has been one of the most important things which my right hon. Friends and I have been discussing with the T.U.C.
    Sir C. Osborne: But did not the Prime Minister yesterday tell the T.U.C. when, with the Chancellor of the Exchequer, he was with that body that unless the incomes policy succeeded there would be 1½ million unemployed?—[HON. MEMBERS: "Two and a half million."]—How

    1155
    can we expect the lower-paid worker to get a higher standard of living if that is a possibility?
    The Prime Minister: From the greater productivity of British industry. I told the T.U.C., as I have said many times publicly recently, that if we do not have a satisfactory and effective prices and incomes policy the only alternative, which sometimes I think has been proposed from the benches opposite, is a resumption of deflation, which could have the sort of effect which the hon. Gentleman has described.

    RACIAL INTEGRATION
    Mrs. Renée Shortasked the Prime Minister what proposals he has to coordinate the work of all Ministers involved in the problems of racial integration; and what additional financial help is to be made available for those towns and cities with a large immigrant population.
    The Prime Minister: My right hon. Friends already work closely together on this as on other matters and both the arrangements for co-ordination and the policy are kept under continuous review. As to assistance, my hon. Friend will know of the provision of Section 11 of the Local Government Act, 1966.
    Mrs. Short: Is my right hon. Friend aware that the help given to local authorities like mine is completely inadequate to deal with the very severe problems which exist? Is he further aware that there are hundreds of families in my constituency living in disgusting old ghettoes and that we have almost 400 children who cannot be found school places? The money which the Government give does not provide the houses and schools which we need. Will my right hon. Friend consider the amount which the Government are prepared to give to towns like these, and appoint one Minister to be responsible for channelling the money to local authorities? [Interruption.] This is a serious matter.
    Mr. Speaker: The hon. Lady must appreciate that other hon. Members have Questions, too.
    The Prime Minister: I am aware of the very serious conditions in the town, part of which my hon. Friend represents. Indeed, in a meeting elsewhere, I have
    1156
    heard her deploy this argument much more fully. I agree that this is a serious matter, but she will be aware of the very generous help being given. Also, I have been discussing with the National Committee for Commonwealth Immigrants what more might be done through the medium of that Committee.
    Mr. Marten: Is not part of the solution of this problem the dispersal of the great concentration of these people? Is it not true that past Governments have not approached this problem really forcefully? As we are the head of a multiracial Commonwealth in which we take great pride, would the right hon. Gentleman look at this aspect of the matter again?
    The Prime Minister: The hon. Gentleman is absolutely right about dispersal, although he will recognise the great difficulties about doing anything effective to redistribute Commonwealth immigrants more evenly over the country. Certainly some cities and towns in the Midlands, and parts of London and Yorkshire and elsewhere, have had a very heavy concentration of them. Anything that we can do to encourage dispersal we shall be glad to do.
    Mr. Molloy: Would my right hon. Friend agree that, while the answer is dispersal, for many boroughs in London, particularly the Ealing Borough which is very near Heathrow Airport, many problems have been created? The council and its officers are responding magnificently in an endeavour to solve them, but they are in urgent need of financial assistance. Would my right hon. Friend be prepared to consider this?
    The Prime Minister: I am aware of the special problems of areas such as the one mentioned by my hon. Friend. But I am sure that he recognises the need for exercising due economy in the provision, which is still rapidly expanding despite the cut-back, for housing, for education, and for matters of that kind. We are trying to see if it can be more fairly distributed.

    GOVERNMENT DEPARTMENTS (CLAIMS TO CROWN PRIVILEGE)
    Sir D. Walker-Smithasked the Prime Minister whether he has given consideration to the decision of the House of

    1157
    Lords in Conway v. Rimmer and another; and whether instructions have been issued to Government Departments regarding claims to Crown privilege in the light of it.
    The Prime Minister: Careful consideration is being given to the implications of this decision. No fresh instructions have yet been issued to Government Departments regarding claims to Crown privilege but this will be done as soon as possible. Should any questions of claiming privilege arise before fresh instructions are issued it will be dealt with on its merits in the light of the House of Lords decision.
    Sir D. Walker-Smith: When the directions come to be made, will the Prime Minister have in mind the desirability, now that this has become a justiciable issue, instead of going on the ipse dixit of an individual Minister, of ensuring that Government Departments keep their claims to Crown privilege to a minimum in the interests of the administration of justice?
    The Prime Minister: Some years ago I sought to make it clear to my right hon. and hon. Friends that these should be kept to an absolute minimum. The right hon. and learned Gentleman will know that the Law Reform Committee had already been examining the law relating to Crown privilege as part of its general examination of the law of evidence in relation to civil proceedings, but that it held up its draft report when it became clear that the Conway v. Rimmer case was going to the House of Lords. As soon as the House of Lords has disposed of the matter—and it has now got the documents in the case—it will be for the Law Reform Committee to give us its advice.

    ATLANTIC FREE TRADE AREA
    Sir D. Walker-Smithasked the Prime Minister whether he will now initiate a study in regard to the feasibility and advantage of British participation in an Atlantic Free Trade Area.
    The Prime Minister: I would refer the right hon. and learned Member to the Answer I gave on 21st March 1968, to Questions by the hon. Member for Banbury (Mr. Marten) and the right hon.
    1158
    Member for Thirsk and Malton (Mr. Turton).—[Vol. 761, c. 596.]
    Sir D. Walker-Smith: Was it not the Prime Minister who said that, in politics, a week is a long time? Has not a week been long enough to show him the inadequacy of his previous answers, and will he not now come to a decision to give serious and sympathetic consideration and research in depth, without commitment, to this project, or are we to take it that his mind is closed to an extension of industrial free trade?
    The Prime Minister: in fact, it is not a week, but five days since I gave these answers, and too rigid an application of that rule in relation to Parliamentary Questions would ensure that our proceedings at Question Time would become highly repetitive, not to say tedious. On the particular issues, I have nothing to add to what I said last week.
    Mr. Brian Parkyn: Will not my right hon. Friend agree that the extraordinary events of 10 days ago have shown the complete interdependence of the dollar and the British £ and, therefore, the need for the country to orientate itself much more, both politically and economically, towards the United States rather than towards Europe?
    The Prime Minister: I do not always hear these sorts of proposals made from behind me. But certainly it is a fact that the events of 10 days ago showed the total interdependence not only of the dollar and sterling but of all countries who are concerned with the operation of the world monetary system, particularly those in Europe, but others as well. I do not think that, of itself, it has any particular lessons for economic or political groupings outside that.
    Mr. Bessell: In view of the United States Administration's acceptance of the latest Kennedy Round proposals, and the fact that it is unlikely that they will accept a further extension of these proposals, would the Prime Minister, therefore, look at this narrower suggestion?
    The Prime Minister: I would have thought that an acceleration of the Kennedy Round was a much better thing to get all the nations concerned to agree to than the much wider and so far undefined proposition contained in this Question. Even so, the announcement of

    1159
    my right hon. Friend the President of the Board of Trade in the House about an acceleration of the Kennedy Round has run into pretty stormy weather in the last 24 hours, so I should not want to raise hopes unduly of pursuing it in that direction.
    Mr. Henig: In view of the fact that my right hon. Friend has made it clear that the Government's policy is still to seek, in the long term, British entry into Europe, is not the time ripe to see whether it would be possible to get an intermediate form of relationship with Europe, perhaps under Article 238 of the Treaty of Rome, as a prelude to full entry?
    The Prime Minister: I do not think that anything that has happened in the last three or four months has affected the validity of the arguments against second-class membership of the Article 238 kind.
    Mr. Turton: Is it not clear that the hold-up over the acceleration of the Kennedy Round is coming again from the Government of France? Would not the Prime Minister, therefore, consider how he is to liberalise trade, either by an industrial free trade area or otherwise, or is he wedded to the idea of a common external tariff?
    The Prime Minister: The right hon. Gentleman's reading of Press reports of yesterday's discussions on this question leads him to conclusions very close to those that I have myself reached in this matter. But I am not sure that that would suggest that we would be more likely to secure agreement on the much wider area contained in the Question that he put down last week. We have very great difficulties in getting the Six to work together on matters such as the Kennedy Round and financial questions before we can consider appropriate action, even in the monetary sphere, on a wider scale.

    PRICES AND INCOMES POLICY
    Mr. Ridleyasked the Prime Minister why he gave an assurance to the Trades Union Congress that the Government would not seek compulsory powers to enforce a prices and incomes policy at the time of devaluation; and if he will make a statement.
    The Prime Minister: As I made clear in the answer I gave on 5th March to a supplementary question by my hon. Friend the Member for Salford, West (Mr. Orme), no such assurance was given.—[Vol. 760, c. 224.]
    Mr. Ridley: Then what was the point of allowing the T.U.C. to go on with the charade of trying to get an agreed voluntary incomes policy if, in any case, the Government meant to legislate to enforce it? Why was it that the trade union leaders thought that the Prime Minister had given such an assurance?
    The Prime Minister: The hon. Gentleman has got it wrong. What has been tried and done is of enormous importance. We have seen a great revolution in industrial affairs. To describe it as a charade was quite unworthy. As for talks with the trade union leaders, as I have made clear in the House, on the night of devaluation I informed Mr. Woodcock, whom I saw, as I did Mr. Davies of the C.B.I., that we were not contemplating further legislation in this matter—[HON. MEMBERS: "Oh."] We were not at that time. I have said this. But, as I have already told the House, when I met the T.U.C. to discuss its voluntary vetting scheme—the one which the hon. Gentleman called a charade—I stated our full position about what might be needed and the dangers that its scheme might break down or might not be fully effective. I said that, if that occurred, there would be increased taxation, restraint on growth and higher unemployment. It would also reopen the question of a tougher incomes policy backed by statutory powers. That statement was made to the T.U.C. Economic Committee on 5th January.
    Mr. Orme: Would my right hon. Friend not agree that the Government's change of policy in relation to introducing legislation is meeting widespread opposition throughout the trade union movement? In the interests of getting the economic growth that he wants, would he not withdraw the legislation and remove one of the main barriers between his Government and the trade union movement?
    The Prime Minister: No, Sir. I recognise, however, the very, very great difficulties this presents for trade unions and

    1161
    their members. That is why, as my hon. Friend knows, I appealed to him recently to use his great influence with so many on the shop floor to bring home to them the fact that he must recognise—the need for an effective incomes policy.
    Mr. Speaker: Mr. Heath.
    Mr. Heath rose—
    An Hon. Member: Welcome back, Ted.
    Mr. Heath: The Secretary of State for Economic Affairs has told the House that, when the Government ask for powers over prices and incomes, they will ask for them in a form which can be easily renewable. Is the Prime Minister aware that we believe that, if the Government want such powers, they ought to try to take them on each occasion by a separate Bill? If the Government are to ask for them to be renewable, will he assure the House that it will be done in a form which will allow a separate debate and vote, and not just be put into the Expiring Laws Continuance Bill?
    The Prime Minister: I take the right hon. Gentleman's point, but the Expiring Laws Continuance Bill allows not only a separate debate, but a form of amendment in that certain parts of an Act can be dropped for all time. If we have what we had before—a simple provision that after a debate and a Division the whole of the scheme either goes on or does not—that gives the House less control over the future of the situation.
    Mr. Alexander W. Lyon: Is my right hon. Friend aware that there are many on this side who do not share the views expressed earlier by one hon. Member? All that is required of this Government is that they should get this country out of an economic mess.
    The Prime Minister: Yes; and one essential part in this is that the Government must succeed where our predecessors failed in getting an incomes policy. They totally failed in their incomes policy because they were not prepared to take action over prices or over dividends or to deal with the various fiscal reforms that were needed. They were not prepared to do any of these things. Their idea of an incomes policy was a very
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    tight and unfair grip over the public sector with no control over profits in the private sector, both combined for short periods at a time with chronic deflation.
    Sir C. Osborne: Does the Prime Miniter really think that he can make compulsory powers work against the bitter opposition of the trade unions?
    The Prime Minister: I do not for a moment under-rate the very great difficulties of making this work. It has never been wholly satisfactorily carried through. I have given the reasons why it failed before 1964, but I do not under-rate the extreme difficulties. That is why we want to rely as far as we can, even now, on the voluntary system for which the T.U.C. were given powers, though it has very grave doubts whether those powers will be allowed to work. We want to supplement them, and we feel they must be supplemented in this way. As we said to the T.U.C. yesterday, when the grim alternatives are fully realised, particularly concerning further industrial growth and unemployment, I think that, bitter and repugnant though this is, a large number of trade unionists will realise how necessary it is.

LESOTHO (PARLIAMENTARY DELEGATION)
Dr. David Kerr: On 25th January this year, the House gave leave of absence to the hon. Member for Tonbridge (Mr. Hornby), myself and the Clerk of the Journals, Mr. Hawtrey, to go to Lesotho, on behalf of this House, to present them with a gift on the occasion of their national independence.
I cannot speak for the entire delegation—it was a small but highly select one—but I should like to pay tribute to the way in which my two colleagues enabled me to get over some bumps on the ground to complete this very pleasant duty on behalf of the House.
This we did on 21st February. It was in a strikingly different situation that we found ourselves when we were invited within the bar of the National Assembly of Lesotho. The doors of an octagonal chamber gave out on to blue skies and bird song, and the air-conditioning was in no way inferior to what we experience here.

1163
The gift that we took consisted of a Clerk's table and three chairs. They were designed by the Ministry of Public Building and Works, and a word of tribute would not be out of place for the imagination and skill devoted to that task. Despite the predominantly sky blue of the chamber in Maseru, the green of the Clerk's table and chairs did not look out of place.
In the course of presenting this gift to the National Assembly, the hon. Member for Tonbridge and I dwelt on the international and, indeed, Commonwealth nature of Parliamentary practice and procedure.
In replying to our offerings, the Speaker, Mr Walter Stanford, said:
"On behalf of this honourable House, I must formally thank you for these magnificent gifts which will so enhance our Chamber—and I would like to echo the words of your Speaker, written to me, that this gift is a symbol of the Parliamentary tradition cherished by the peoples of both Britain and Lesotho. We reciprocate your message of friendship with Members of this Chamber and this gift will always be a reminder of that."
Mr. Stanford asked us particularly to convey to you, Sir, and to this House his appreciation and that of the National Assembly of Lesotho of the gift we took on your behalf.
In delivering this gift, we were allowed to participate in and watch the proceedings of the Lesotho National Assembly. I
1164
confess, with the utmost shame, that I read my speech—a practice which would scarcely commend itself here. I did so for one good reason. In Lesotho, the proceedings are officially conducted in English, but everything is translated into the language of that country—Sesotho—and this has considerable implications for Parliamentary wit and oratory, and not least would present a challenge to our own Select Committee on Procedure.
Following our delivery of this gift, we were enabled to see something of this wild, fierce and barren country and to learn of its difficulties—not least the drought which threatens the livelihood and perhaps the lives of many of its people.
I am confident that, in attempting to live up to the high standards set by this House, in delivering this gift on your behalf, we did a great deal to assure the people of Lesotho of our abiding interest in their welfare and future prosperity.
Mr. Speaker: The House would wish me to congratulate the hon. Members on the way in which they carried out the mission with which we entrusted them.
I should like to add my appreciation of the personal letter from Mr. Stanford, C.B.E., D.F.C.—a distinguished airman—Speaker of the National Assembly, for his kind message to the Speaker of this House.

DESIGN COPYRIGHT
3.38 p.m.
Mrs. Jill Knight: I beg to move,
That leave be given to bring in a Bill to amend the law relating to the copyright of the design of certain manufactured articles, and for connected purposes.
If Picasso draws a circle, he is instantly protected from unscrupulous persons who seek to cash in on his designs. If a British manufacturer produces a unique toy or brooch, any pirate in the world can reproduce it and undercut him clean out of the export market.
Urging the need for copyright reform is becoming an annual exercise in this House. Speeches are made, questions are asked and despairing manufacturers plead—all at intervals as regular as Christmas. But the Board of Trade, while agreeing with the speeches, helpfully tackling the questions and shedding tears of sympathy with the manufacturers, keeps up a stolid front of non-action. It may be that the Minister, whose happy and optimistic nature endears him to us all, thinks that if he sits tight the wretched business will go away. I am bound to disabuse him, because the problem is getting worse.
Plagiarism of design is on the increase for several reasons. One is that it is helped by vastly speedier international transport. Another is that new techniques, such as the lost-wax process, plating processes of forming moulds, and the three-dimensional pantograph make the copying simpler, cheaper and quicker. Another is that skilled design and skilled model-making, like all skilled work today, has become much more costly. Thus, in industries that depend on a continual flow of fresh designs, the cost of originating those designs has risen sharply, while at the same time it has become easier and quicker to take someone else's design instead.
The need for protection has greatly increased. Time and again toy makers, furniture makers, manufacturing jewellers, and the china trade find that an inferior copy of their original article turns up on the market only a matter of weeks after they have launched it, but they can do nothing about it.
Earlier this month a barrister-at-Law, Mr. A. D. Russell-Clarke, produced a
1166
Paper on Design Plagiarism and Copyright Reform, and I should like to quote one sentence from it. He said:
"I can testify from my own experience that large numbers of designs are constantly copied by being sent abroad by air, particularly to Hong Kong, where they are reproduced, the plagiarised copies being flown back to this country in a remarkably short space of time."
The Hong Kong authorities do not, as I understand it, approve of this practice, and would in fact welcome action to stop it.
But the situation calls for something to be done urgently. As Mr. Steier, a constituent of mine who manufactures costume jewellery, puts it:
"I can no longer afford to pay designers to be honorary model-makers for my competitors."
No wonder, as my hon. Friend the Member for Croydon, North-East (Mr. Weatherill) said, when he urged action on this matter last year, the designers are losing heart. As he reminded the House, designs which cost the manufacturer about £16,000 to produce are copied for a mere £500. The situation has worsened since then, because the cost of designing has risen. Not only are orders lost to the copied, and thus cheaper, article, but orders are also lost because the original buyer sees an inferior copy and jumps to the conclusion that the bona fide manufacturer has dropped his quality standards.
Only yesterday a manufacturer contacted me because he had heard that I wished to seek leave to bring in this Bill. He told me that no single measure could help this country's export trade more than action to combat design piracy. I have received the support of the Confederation of British Industry, the British Toy Manufacturers Association Ltd., the British Furniture Manufacturers' Federated Associations, the British National Export Council, and the British Jewellers Association, and the House will recognise what a strong body of support that constitutes. There is all-party support for this measure, and understanding on both sides of the House for its urgency.
There is, perhaps, another reason why something needs to be done to tackle this problem. Understanding and appreciation of good design is, happily, becoming far more widespread, but this desirable trend cannot continue if the present

1167
system of copyright is not reformed. Manufacturers will see no point in employing good designers, and, what is more, being constantly undercut by their competitors, they will not be able to afford to employ them.
There are, of course, Acts on the Statute Book to guard copyrights—the Copyright Act of 1956 is one—but the system is so cumbersome and slow in operation that it has proved a useless protection in today's conditions. Indeed, there are laws about patents—the Designs Acts of 1949 to 1961 for instance—but for reasons which there is no time to go into now, but of which the Minister is well aware, these are incapable of remedying the deficiencies of which I have spoken.
Nevertheless, there is a remedy at hand. It is proffered in the Report of the Johnston Departmental Committee on Industrial Designs, which hon. Members will recall came out in 1962. Whether it lies gathering dust under a pile of more recent Departmental Committee Reports in No. 1 Victoria Street I cannot say, but certain it is that no action has been taken to implement it.
We had a clue as to why that was so in the speech of the Minister last year, when, in reply to my hon. Friend, he said:
"If the 59 recommendations of the Johnston Committee are to be implemented in one piece of legislation, it will be a major Bill…Whether or not such a big Bill could be prepared and introduced in a reasonable period
1168
of time is not a matter for me alone…but it would certainly take time…We have, therefore, been looking at the possibility of introducing what might be called an interim Measure. It would be a shorter Measure which, for the time being, would leave the existing and admittedly imperfect legislation as it is, but would add to it a simpler system of copyright protection."—[OFFICIAL REPORT, 1st February, 1967; Vol. 740, c. 469.]
We can understand the Minister's point, but what has happened to that half a loaf, because not a slice or a crumb has come this way?
Considering the ethics of the problem and its importance to the export trade, and, indeed, considering the other advantages which such legislation could bring us, such as the ability to sign the Hague Agreement, I submit that the situation calls stridently and urgently for, preferably, the implementation of the Johnston recommendations, but if not, at least a Darling contraction of Johnston.
Question put and agreed to.
Bill ordered to be brought in by Mrs. Knight, Mr. Weatherill, Mr. Humphrey Atkins, Mr. Ensor, Mr. Gurden, and Mr. Eyre.

DESIGN COPYRIGHT

  DESIGN COPYRIGHT.
  Bill to amend the law relating to the copyright of the design of certain manufactured articles, and for connected purposes, presented accordingly and read the First time; to be read a Second time upon Friday, 10th May, and to be printed
  d. [Bill 115.]

ORDERS OF THE DAY

  CONSOLIDATED FUND (No. 2) BILL
  Order for Second Reading read.
  Mr. Speaker: Before I call the Financial Secretary to the Treasury to move the Second Reading of the Bill, may I remind the House of the scope of the debate. Any questions of administrative policy may be raised which are implied in such grants of supply, but questions of taxation and legislation cannot be raised.
  3.46 p.m.
  The Financial Secretary to the Treasury (Mr. Harold Lever): I beg to move, That the Bill be now read a Second time.
  As it will be obvious to the House that the Bill is but a pale shadow of its former self, it may be thought right that I should make a statement about its present form.
  The reason for this is that the Bill no longer includes the traditional Clause conferring power on the Treasury to borrow temporarily up to the limit of supply authorised by the Bill. This is due to the enactment on 13th March of the National Loans Act. As hon. Members will be aware, Section 18 of the Act authorises any excess of Consolidated Fund payments over receipts to be met from the National Loans Fund, and Section 12 gives the Treasury a general power to borrow sufficient sums to meet the difference between the authorised payments out of, and the authorised receipts into, that Fund.
  This new power replaces all the existing Treasury borrowing powers under previous legislation, among them the temporary borrowing power conferred by the annual Consolidated Fund and Appropriation Acts. The passage of the National Loans Act makes it unnecessary for the Treasury to continue to seek from time to time temporary powers of borrowing specifically related to the periodic supply grants authorised by Consolidated Fund and Appropriation Acts. In future, therefore, such Acts will make no provision authorising temporary borrowing by the Treasury. The House will be relieved to know, however,
  1170
  that this traditional occasion of regulated insomnia has not been impaired, and that all questions of policy or administration which are implied in the supply grants can be debated as formerly. Thus, the right of the House to use this occasion for a general airing of relevant grievances remains unimpaired.

  SOUTH-WEST ECONOMIC PLANNING COUNCIL (REPORT)
  3.49 p.m.
  Mr. Peter Emery: The debate on the Consolidated Fund Bill is, by tradition, the opportunity for back benchers to air grievances, and I have been particularly fortunate in that the chance of that strange and unpredictable "Lady Luck" has aided me in being the first to speak this afternoon.
  Mr. Speaker: I am sorry to intervene, but it will assist the Chair if hon. Members indicate which debate they wish to take part in, because I shall proceed strictly according to the dictates of fate as decided by the Ballot.
  Mr. Emery: One grievance in my constituency is with the weak, vain and stupid reaction to the possibility of expansion in the South-West, which was outlined so well in the Report, "A Draft Strategy for the South-West". This grievance exists in every part of the region, I believe, The Government's reception and handling of, and their reaction to, the Report of the South-West Economic Planning Council, now known by the name of its Chairman, Professor Ronald Tress, as the Tress Report, is something which no other Report has stimulated in the past.
  I congratulate Professor Tress and the members of his Council on the workmanlike document which they have produced. They have assimilated a large number of facts and have tried to set out moderately and reasonably certain plans for the area. I think that the grievance which I know will be reinforced by many other hon. Members from the South-West.
  After considerable trouble, the Government established the South-West Economic Planning Council and asked it to produce a report on the future of the region. After nearly three years' hard

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  work, the Report was produced. Professor Tress, in the Foreword, said:
  "We have called it a regional strategy, because it sets out the lines along which…the economic and physical planning of the South West should proceed."
  Having received the Report, which was published in July last year, the Government's first reaction was to call a meeting of M.P.s with Professor Tress, and we then saw the start of the political propaganda in the constituencies of the region about how the Labour Party was fulfilling its pledges to the South-West.
  But this was early in the day. The House recessed soon after the publication of the Report and three months elapsed in which discussion took place in many parts of the region. After the Recess, I pressed the Leader of the House for Government time to discuss the Tress Report, but, as Thursday after Thursday slipped by, the answers to my request turned from the mildly assuring, "We will do our best", to, weeks later, the impatient, "Impossible next week."
  So it was obvious that the Government had no general desire for a debate, and we doubted whether they wanted the subject fully considered by the House. Thus, it is the Opposition, through the luck of the Ballot, who have forced the Government to listen to Parliament on the subject of the Tress Report. But this is typical of the shoddy approach of this Government. They deny it, but they do not really care what is said in the House. If they did, why did they not demand this debate before finally, and only two weeks ago, announcing their reactions to the Report?
  These Government reactions have sparked off some of the bitterest comment ever known in the South-West. Basically, the Government have quietly patted the Planning Council on the head but have seen fit to ignore most of the advice and opinions of the very body which they established to help and guide them. The work of Professor Tress and his Committee, considering the Government's action, need never have been done. Indeed, unless Government policy is altered, it would seem to have been almost a waste of time.
  All the help, through new initiatives which the Government intend to give, acting on the Report, seem negligible. The reaction of a member of the Econo-
  1172
  mic Planning Council, who is also Chairman of Devon County Council, and not, incidentally, a Conservative, was:
  "The Government's reply is bitterly disappointing. The door has been shut in our face."
  The Town Clerk of Plymouth, who is not judged a man with any particular party bias, was reported by the Western Morning News as saying, a week ago today:
  "Nothing of substance in the Economic Planning Report seems to have been adopted. The essence of this Government's comment is that they know better than the Regional Economic Planning Council."
  So we seem to be back in the days of the man in Whitehall knowing best.
  The factual background to the Report is that the region extends from Wiltshire, through Gloucestershire, Dorset, Somerset, Devon and Cornwall to the Isles of Scilly. It covers 9,000 square miles and is more than 240 miles across—further, for example, than the distance between Darlington and London or between Birmingham and Edinburgh. The area has a population of 3·6 million people, nearly 7 per cent. of all those living in Great Britain. Nearly three-quarters of a million live in the Bristol-Bath area, and 45 per cent. north of the Mendips. It is terrifying to realise that 64·3 per cent. of all the employed people in this population work in the service or construction industries.
  This problem is not a new one. The proportion of the population living in the South-West has declined from about 12 per cent. in 1821 to as little as 6·8 per cent. in 1964. The structure of the population shows that nearly one-third of the people now living there are 65 or over. It would be wrong to consider that the problems of the South-West are new: they are not. But the Labour Party was elected on specific pledges that it would revitalise regional planning and the life of the regions. The hon. Member for Exeter (Mrs. Gwyneth Dunwoody), in her election address, said:
  "For the first time the Regions have been recognised as areas having special needs and problems, requiring specific Government planning and help."
  Someone connected with her, the hon. Member for Falmouth and Camborne (Dr. John Dunwoody), said:
  "Only Labour's planning for regional development could produce real prosperity."

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  They seem shallow words today.
  The Report is divided into five. It considers the region, its people, its life, its economy and its future. In 560 paragraphs, it sets out fully the specific problems and recommends action. It backs up all of these with a full and lucid statistical analysis and ensures that no aspect of life in the region from agriculture through industry to quarrying, from education through tourism to the Arts, is overlooked. It sets out clearly and distinctly four pages of recommendations.
  First, and above all, it states that the strategy for the region must be centred around the improvement in its communications. It reinforces clearly the need for a major spine road and arterial communications. Some of the strongest words in the Report are used about roads.
  "It is clear "—
  It says—
  "…that the road system over much of the Region is quite unsuited to the needs of the modern economy."
  It goes on:
  "The great bulk of the present trunk road system in the region consists of single two-lane carriageways which, particularly in the south and west, are of sub-standard width and alignment. In general, these roads are carrying volumes of traffic at peak periods much beyond their capacity…"
  The Committee's recommendation about a spine road was:
  "We undertook to seek the settling of a phased programme for the road to be constructed to an adequate standard by 1975."
  Two paragraphs later, in paragraph 493, it says:
  "It has not been demonstrated that there are any physical or technical barriers to the completion of a spine road in the terms which we, as a Council, confirmed to the Joint Committee. We therefore urge the Government to ensure its completion by 1975."
  Other recommendations of major road improvements are made at the same time.
  It is obvious to anyone who knows anything about the South-West that our road system is in need of a major overhaul. If industry is to be encouraged to come to the area, this is the first requirement. The Government have only partially accepted this major recommendation, but they refuse to give a promise of a date of completion other than to stipulate that it may be in the mid-70s.
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  The Report goes on to demand that Plymouth and the adjacent region should be created into a development area. After much consideration, the Government state in their reply:
  "The extension of Plymouth by full development area status would not be justified in the particular circumstances of either Plymouth or the South-West development area as a whole."
  This is another illustration of the Government knowing much better than the experts of the region whom they appointed to assist them. The Committee recommended the implementation of the new West Docks scheme in Bristol. I gather that initially the Government rejected this recommendation and that members of the council had to travel specially to London to get the Government to think again about it.
  The council has demanded adequate recognition of the problems of the grey areas. Like so many aspects of Government action, this matter is still awaiting the report of yet another Committee. In considering these problems, the Confederation of British Industry, dealing with the problems in Bristol, stated:
  "Two factors, however, threaten its continued well-being: unless a major development scheme is approved, its port facilities will prove inadequate to meet future requirements and increased competition…"
  Referring to industrial development certificates, the Confederation stated:
  "…the present I.D.C. system as implemented by the Board of Trade threatens to contain future growth in Bristol too tightly and to repress the natural growth necessary to avoid stagnation."
  The C.B.I. also
  "…urge that areas with high potential for economic growth are equally deserving of special incentives for development as those containing seriously depressed economic or social conditions."
  To concentrate on a surplus of manpower as the only important reason for giving an I.D.C. is an absolute nonsense. The movement of workers to jobs, rather than vice versa, must be a factor in any aspect of economic thinking. Although there is this potential, it is difficult to understand why the area should be thought not to provide an environment to which industry may wish to come and operate profitably. But unless the Government will give some specific assistance, skilled labour, of which the South West is extremely short, will tend to contract and management from outside the

  1175
  region will be discouraged from establishing new plant.
  When considering the question of i.d.cs. and the grey areas, it is worth noting that Exmouth, in my constituency, is an active town with considerable potential, although its unemployment rate is far higher than the national average. It has been described by the local newspaper, the Exmouth Journal, as one of the "greyer than grey areas". The submission of the South-West Economic Planning Council on this matter is:
  "The South-West Region, as a whole, derives little advantage from the operation of national regional policy. The relatively small population of the present south western development area, together with the small manufacturing industry base and heavy dependency on agriculture and tourism, means that the benefits it receives from the financial advantages available to manufacturing establishments in Development areas compare unfavourably with those received by other Development areas."
  It is remarkable to note that the South-West development area receives only about £1·7 million per annum from regional employment payment premiums, this out of a total payment under the scheme of nearly £100 million. It is, therefore, less than 2 per cent. At the same time, national regional policy, both through the operation of i.d.c. control and through public expenditure on infrastructure, has tended to inhibit the potential economic growth of the remainder of the region.
  A number of recommendations were made about agriculture, but the Government's reply to these gives little or no hope for action. At present there is considerable concern in parts of the area about milk production. The Price Review recommended an increase of 1½d. per gallon on milk, but farmers feel that they are unlikely to benefit to any extent from this increase because of the increase in the importation of milk products. Farmers are rightly furious about this.
  Agriculture will also be greatly affected by the Transport Bill. It is expected that the cost of carriage of livestock from the West Country to the centres where they will be sold will increase by between 15 per cent. and 20 per cent. Almost all of this livestock must go by road because British Rail have neither the loading points nor the facilities to handle this
  1176
  livestock, apart from the fact that it does not wish to do so.
  It is equally important to note that 21 per cent. of people taking their holidays in Britain come to the South West, 80 per cent. by car. This underlines the need for the road improvements which have been recommended. It is estimated that in Devon and Cornwall alone, £65 million, apart from travelling costs, is spent by holidaymakers. This is equal to the industrial output of these two counties. Because the South-West is so much concerned with service industries, S.E.T. is a major burden on its growth. There is little doubt that this year's Budget has accentuated this unfortunate position.
  Little has been done to relieve the burden that must be faced by those who employ staff in, for example, hotels and other catering establishments in the region. The same applies to bus operators in the area, particularly following railway closures. It is extremely difficult to provide rural bus transportation in the region. More and more of these services are becoming unremunerative as people increasingly turn to the use of private cars. This exaggerates the difficulty of providing services to those who do not possess automobiles and who live in the rural areas. In the words of the Tress Report, this is a "specialist problem". However, in answer to that, the Government have taken no action and have made no recommendations.
  Many people find it immensely irksome to see the South-West administration emanating purely and solely from Bristol. It is half again as far from Bristol to certain parts of Cornwall as it is from Bristol to London. There is a strong feeling that the administration of the region should be based somewhere further west, in Plymouth or Exeter. Some devolution from Bristol is imperative, particularly as areas in the north of the region are more inclined to associate themselves with Coventry and the Midlands than with Bristol, Exeter and the South-West.
  I should mention, in conclusion, that the Report stresses the need to provide proper air transportation to the South-West. Like so much else, the Government's reply has been to establish yet another committee to look into the problem. I urged the Government months

  1177
  ago to make a decision on the matter, but all that has happened so far is further delay. The Government seem hell bent on ignoring their own advisory body. An editorial in the Western Morning News put the case clearly when it stated:
  "Opinion in the West Country is strongly critical of the Government's rejection of the planning strategy for the region. Even the South-West Economic Planning Council, which is naturally a body outside political controversy, makes dignified protest about the lack of major response from the Government. That planning council is made up of men who give their help freely, and they have many other tasks of major importance. They do their work purely for the good of the region. It must be immensely discouraging to see all their work done to so little avail."
  The Western Morning News asks:
  "What is to be done now that we have been turned down? And no amount of official politeness can conceal that harsh truth."
  We must have lasting political pressure; we must mount a campaign to reverse the Government's decisions. We must ensure that the type of action which has come from some hon. Members from Scotland, Wales and the North-East is evident from Members of Parliament from the South-West. We must ensure that there is condemnation of the decisions taken by the Government which are so short-term and which did not in any way consider the future prospects of the whole region.
  I will make 10 immediate demands for Government action.
  Mr. Speaker: Order. With due courtesy, I must remind the hon. Member that there are 25 other debates ahead of us.
  Mr. Emery: I said that I was coming to my conclusion, and my demands are very small. I hope that because of their smallness I may have co-operation from the Government. The question of the spine road should be immediately dealt with as a crash programme. The completion date should be brought forward to 1973 and not put back to after 1975. There should be immediate granting of development area status to Plymouth. There needs to be immediate overall revision, or abolition, of Selective Employment Tax for specific industries in the area. There needs to be immediate approval of a docks scheme for Bristol. There needs to be a pledge of sympathetic consideration and positive approval by the Board of Trade of i.d.c.s for grey
  1178
  areas to stimulate activity in the smaller towns of the region.
  There needs to be movement of the area headquarters from Bristol, or if not some division of the infrastructure so that administration is spread over the area. We need to have designated Exeter Airport as a regional airport. There should be consideration of problems of milk production in the area. This must be taken up by the Government. There must be consideration of all the aspects of the Transport Bill, which will actively discourage industry to move to Devon and Cornwall.
  Mr. Speaker: Order. The hon. Member cannot propose amendments to the Transport Bill in this debate.
  Mr. Emery: I want it to be scrapped, not amended.
  Mr. Speaker: Nor that it be scrapped.
  Mr. Emery: There must be reconsideration of the Government's reply to the whole of the South-West draft strategy so that this can be reissued with support improvements for the region. Professor Tress said:
  "We have given this Report the title, 'A Region with a future'. We have appropriated this title for the South-West because it best sums up the message of this Report."
  "A Region with a future"? Under the delaying tactics of the Government that future will be a long way off. The immediate future will be dismal. The long term is as indefinite as ever. Increased prosperity or growth for the region has again received a stab, not in the back, but in the chest for all to see. By refusing to act immediately, the Government have slammed the door on any rapid revitalisation of the region. This is a shattering disappointment. It goes to show that, dedicated as indeed Socialists and the Government may be to theoretical planning, when it comes to action or responsibility Socialism is the worst bureaucrat of the lot, weak, vague and stupid.
  The South-West is left frustrated with real hopes dashed, condemned again to waste more time before anything is done. More young people will move from the region creating greater social and economic problems. Expansion will be delayed by the refusal of development status for Plymouth and the inability of the Government to accept the growing

  1179
  problems of certain grey areas. The Government have pigeon-holed the Tress Report. They have damned it by faint action. In dealing with the problems of the South-West the Government have been weak, vague and stupid.
  4.15 p.m.
  Mr. W. A. Wilkins: Mr. Speaker, you and I have listened in the course of the years to a great many speeches of the kind we have just heard. The only thing missing from the speech by the hon. Member for Honiton (Mr. Emery) was a tub, which he could thump. Generally what he said was a condemnation of the Government commensurate with the neglect of three Tory Governments to look after the interests of the South-West. That was the measure of the speech he made.
  We all welcomed the Tress Report. We could be critical of it because its words were not nearly pungent enough about the needs of the South-West. Often in this House I have dubbed the South-West Region "the Cinderella of Britain". I remind the hon. Member that it is all very well for him and for his hon. Friends now to shout the odds about what is needed to improve our region, but they should have thought of these things when they not only had the opportunity but the power to put into operation the things which they are now saying we should have done in a period of little over three years.
  I remember quite well various speeches by the right hon. Member for Wallasey (Mr. Marples) when he was Minister of Transport. What did he ever do, other than to order the original survey on the proposition for the spine road into the South-West? All hon. Members representing constituencies in the South-West agree on this overriding need. We are unanimous about it, but it comes ill from the mouths of hon. Members opposite to accuse the present Government of not having done anything in this connection, although I might be a little critical about it. I doubted many times whether the right hon. Member for Wallasey when he was Minister of Transport even understood that the South-West Region existed. We were battling all the time to try to obtain recognition from him of what we agree to be a major necessity. That was ample indication if we are to induce—
  1180
  induce is the word because it will be difficult—industries to come into that part of the country.
  This may well be the reason why Cornwall now wants home rule. I do not know whether the hon. Member for Cornwall, North (Mr. Pardoe) supports that proposition, but the community there believes that it has been isolated. People believe it and there is a considerable element of truth. I would give them home rule—without any cash.
  The only real contribution that has been made to the industrial, agricultural and rural needs and amenities in this vast but very beautiful countryside has come from a nationalised industry. The only real contribution that has been made towards economic and social progress in the South-West has been made by the South-Western Electricity Board. This is the truth.
  Mr. Peter Bessell: Will the hon. Gentleman allow me to interrupt him?
  Mr. Wilkins: It is rather early to do so.
  Mr. Bessell: I believe that he would agree that there are many companies, including English China Clays, which have made a vast contribution to the South-West.
  Mr. Wilkins: If the hon. Gentleman will be patient, I shall make some observations and, I hope, some worthy suggestions for perhaps improving the industrial facilities in the South-West; but we cannot have industries if we have not got power. This is what I mean when I say that the only real contribution that has been made so far has been that by a nationalised industry, the electricity industry. I want to quote on that major achievement from the Report on the South-Western Electricity Board for 1966–67, paragraph 45 on page 14:
  "During the year the Board connected 3,592 regional premises, 16 per cent. more than the target for the year. Of these, 627 were farms, and by the end of the year the number of farms with a mains electricity supply had reached 29,239, over 92 per cent. of all farms in the Board's area. The proportion of other rural premises connected to the system has risen to about 97 per cent."
  I want to make some reference to the economic costs of this which fell very

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  largely on the two industrial conurbations within the region, namely, Bristol and Plymouth, which have rather been under attack by the hon. Gentleman the Member for Honiton. Such progress is only bought at a price and under the present set-up, because of the requirements of the Act, the South-Western Electricity Board, which is essentially a distribution organisation, must pay for its massive extensions—and I use the phraseology of the document—by "a reasonable level of self-financing". This was what I meant when I said such progress is achieved only at truly exorbitant cost to the consumers; because if the distribution industry has to be self-financing then the only source from which to get the money is the consumer. I have disputed this as a matter of policy from time to time in this House because I see no reason at all why we should not achieve our capital developments oat of borrowed money, if we want to borrow it, and spread it over the years.
  I speak feelingly about this because I was the last but one chairman of the Bristol municipal electricity undertaking which was probably one of the finest examples of municipal trading in this country, which provided an extremely cheap electricity supply to the people of Bristol. The moment we took the industry into public ownership and devolved the responsibilities to the regional organisations, the very large conurbations had to pay for it. I have always advocated—and I make no complaint about it now—that we ought to take all the amenities and advantages of electricity to the people in the countryside who spend their days there producing the food that is needed for our economy. I have no grouse about it now, but I ask that we should recognise that this is what we have done.
  We should be appreciative of the sacrifice that we have had to impose on people who had hitherto been able to enjoy cheap electricity in order that people who hon. Gentlemen opposite like to suggest they alone represent, namely, the farming community and people who live in rural areas, might have 92 per cent. of all the farms and farm dwellings connected. I would remind the House again that that was done by the nationalised industry.
  Mr. Emery: The hon. Gentleman has suggested that I was attacking Bristol and Plymouth. All I suggested was that they should have industrial development certificates in those areas for the docks. I do not think that this is an attack.
  Mr. Wilkins: I may have misunderstood the hon. Gentleman. I thought he was suggesting, as has been suggested so many times in this House, that certain things which are now based on Bristol should be deployed to other parts of the region. If I was wrong, I apologise, but I believe from what I can hear that I was right. If that were the end of the financial story it might not prove too serious cost-wise to the consumer. But it was in 1962 that the then Tory Minister of Fuel and Power—and this has to be remembered by people in the South-West—required the South-Western Electricity Board to earn an average gross return of 14 per cent. per annum on net assets employed; and this is really where the root of the trouble starts. We do not hear of this when we get complaints from hon. Gentlemen opposite, when we are challenged on not having done this or that. In almost every sphere one may choose to examine it may be almost impossible to do very much in the first two or three years by reason of the state in which they leave the country, in one way or another.
  Let me give a further quotation, because I believe this is extremely important to consumers in the region and, in particular those in Bristol and Plymouth. I quote from the same report, paragraphs 5 and 6, on page 1:
  "The year 1966–67 marked the end of the five-year period beginning in April, 1962, during which the Board had agreed a financial objective with the Minister of Power requiring the Board to earn an average gross return of 14 per cent. per annum on net assets employed. In the four years ended March, 1966, the Board had achieved a gross return of 13·4 per cent., which represented a shortfall of £1·3 million on a target return of £30·6 million…The shortfall over the five years is attributable partly to a higher level of capital expenditure than was envisaged at the beginning of the quinquennium; and partly to a general increase in costs, including fuel costs."
  The report goes on to explain the reasons why a general increase in tariffs to stabilise the Board's financial position was inevitable—and "inevitable" is the word used here—during 1967–68. I have

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  quoted this at some length because I believe that it is relevant to this debate, in that the electricity supply is probably the most vital element in the future development of industry and agriculture in this forgotten, far-flung and remote region of the country.
  That brings me to the next point, again a very important one, of which I believe all hon. Members from the South-West are particularly conscious—what we call the "grey areas" and/or a development area. I was interested to hear the hon. Member for Honiton say that Plymouth should be a development area. Last week I interrupted the hon. Member for Louth (Sir C. Osborne) in the debate on the Budget Resolutions and said that a Member of the House needs a very long memory. It is without doubt an asset, because it was a Tory Government who, in 1962, dis-established Plymouth, which had been till then a development area.
  Dame Joan Vickers: That action was taken because unemployment went down. When the Local Employment Act was applied, unemployment was 4·9 per cent. In 1962 it fell to below the national average.
  Mr. Wilkins: Immediately that happened the Tories dis-established Plymouth as a development area. Now they ask for it to be redesignated. Why was it disestablished, anyway? I am stating the plain fact that it was a Tory Government who disestablished Plymouth as a development area but the Tories now assert that it should be redesignated.
  The truth of the situation in the South West is that we have to pay, and we are paying, for the remoteness of the area. This is the essential feature which discourages industry from going into the area. It is not often that I pay unsolicited testimonials to the C.B.I., but I have studied with considerable interest the Report of its Working Party on the South West Region. I commend this document to the Minister, if he has not already read it. To be brutally frank, I believe that there is more value in this report than there is in the Tress Report. Although the Tress Report may be written in elegant language, the C.B.I. Report gives the bare bones and the bare facts and sets out the difficulties which confront us and which must be faced if we
  1184
  want to stimulate the economy of the area.
  On 8th June, 1967, the C.B.I. set up a working party to take part in a national study of the regional problem and to consider the evidence that the Confederation was proposing to put before the Hunt Committee. I want to make one or two quotations from this document, because it will be useful to get these observations on the record. I hope that the Government will take cognisance of the implications of the C.B.I.s notion of possible developments, if they can be achieved. The first page of the report says:
  "Understandably, there is no reserve of industrial skills."
  The Committee is explaining that this was and is essentially an agricultural area. It is not rich in skilled crafts or professions. Most of the skilled crafts the region used to have have become dying industries. I continue quoting:
  "This, coupled with the obvious geographical disadvantage of remoteness—a condition seriously aggravated by poor communications"—
  this is where the question of the spine road comes in—
  "has resulted in low infrastructure quality and an almost complete absence of the conditions necessary for spontaneous economic growth…
  Industrial development, therefore, can best be summarised as dangerously slow in the North and stagnant in the rest of the Region: throughout the region there is a severe shortage of skilled labour…a limited amount of unskilled labour exists in the non-industrial area, together with a degree of hidden unemployment, particularly of women."
  I accept that this is a problem of almost insoluble magnitude. If it is to be overcome, drastic remedies—or drastic treatment—is required. Strong arguments, arguments which are difficult to refute, have been advanced for not making Plymouth a development area. This argument is made also in the report of the C.B.I. Committee. Some say that Plymouth's being a development area would have a seriously adverse effect on Cornwall. I can well understand that that may be so. The answer seems to me that the whole area around Plymouth should be declared a growth area. Full use should be made of the Industrial Expansion Bill when enacted. I hope that the Minister will tell us that the Board of Trade will be generous with industrial development

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  certificates, if people can be induced to apply for them. The expansion of existing industries should be encouraged.
  This by itself will not be enough. The Government must devise a scheme designed to offer financial encouragement to industries to expand or to go to the region. In other words, if we are to persuade or encourage industries to come to the far South-West, there must be a carrot. Business exists to make profits. Business wants to make profits economically and it must have good communications and docks, if that pleases the hon. Member for Honiton.
  I come now to the question of good communications. We have heard much in the past and more today about the spine road. I have already said that the Tories' shouting on this point is the measure of and is commensurate with the Tory Government's abject failure to provide this vital need. At long last it is a first priority—or is it? All hon. Members, apart from Bristol Members—so I am going contrary to what I believe to be the view of my colleagues in Bristol—must have been bitterly disappointed when they read in their newspapers last week that the remainder of the M5 to Birmingham is to be completed before the Bristol to Edithmead section is commenced.
  I would not deny that, from a purely parochial and insular point of view, the completion of the M5 to Birmingham would obviously be to the tremendous advantage of Bristol. Bristol would expect that the use of its docks would increase as a result of good road communications from Birmingham. But it is terribly bad news for the people who earn their living there—and I am thinking particularly of those people who cater for the tourist industry in the South-West. Only a few days ago I read that between 4 million and 5 million people went to the South-West for holidays last year. I marvel that they did so. Only to get through the city of Bristol is a task—my goodness it is—during at least nine weeks of the summer months, and I have had an awful lot of trouble about this. Some of my constituents are just driven crazy with the traffic noise caused by this travel, which goes on incessantly not simply by day but right throughout the night. There are many simple ways,
  1186
  from the point of view of the engineering requirements, in which this could be overcome.
  May I repeat something I have said here at least two or three times. There was a time when I used to advocate as vociferously as anyone else our having an arterial road, a spine road, or whatever you may call it, from Bristol to the South-West. I still believe that is a high priority, but I am sure that we could relieve an enormous amount of this traffic congestion immediately at not too great a cost if we were only to think more in terms of getting our traffic through by means of either underpasses or flyovers, or around by means of bypasses, which is the way usually we try to overcome traffic problems within cities. If we were to give this absolutely top priority we could get a far freer flow of traffic from Bristol to the South-West than is possible at the moment.
  I am only suggesting this as a palliative, a temporary expedient. I should like to see the experiment started first of all on the Exeter by-pass. I think the Exeter by-pass is a failure, or not very far from a failure, because all the bottlenecks start at one of the roundabouts. I do not know if the hon. Member for Bodmin (Mr. Bessell) can tell me how many roundabouts there are on the bypass, but every time you approach one you are in another jam.
  Mr. Bessell: Five.
  Mr. Wilkins: There are five, and if we could only have flyovers instead of those roundabouts we should be doing a tremendous amount towards relieving the congestion on the A38.
  Mr. Paul Dean: If the hon. Gentleman will allow me, I just want to be quite clear that I am understanding his argument, which I am following with considerable interest. Is he saying, in fact, that the bypasses and so on should have a higher priority than the spine road? Is he putting these above the spine road in spite of the recommendations of the Tress Report and the C.B.I.?
  Mr. Wilkins: I am saying that this is something that might be tried; I am trying to suggest something that will speed up the traffic. I do not want to impede

  1187
  it. If I thought my suggestion would cause an impediment, I would not make it. The A38 is not too bad until you meet the bottlenecks at Highbridge, Bridgwater, Taunton and Exeter; and this goes on all the way, even at Launceston and Okehampton. This is exactly the point that I am trying to make. If, as a first priority, we had a programme that sought to overcome these bottlenecks in the first instance and let the other part of the proposal for the spine road follow on, I think that would offer a temporary alleviation of the situation.
  Why does the South-West Region always have to wait? This is my last question. I have been trying to discover the answer, and have failed to do so, but the reason it has always been so in the past is that almost invariably it has been represented by Tories, who have not cared a cuss about it. This is so: Until recently, I was the lone member representing the Labour party from Bristol right down to the toe of Cornwall. All in between, all over the years, it has always had Conservative representation, and it is paying the price for that.
  Mr. Dean: I am sorry to interrupt the hon. Gentleman again, but is he not missing the main point—that during the 13 years of Tory Government there was prosperity in this country, and the South-West shared in that? Now, suddenly, through the economic policies of this Government, it has been hit harder than any other area.
  Mr. Wilkins: If the hon. Gentleman believes that, I can only say that it is a pipe dream. That is not the experience of those of us who know the South-West very well. Let me get back to my point after that diversion.
  Why does this region always have to wait? I have been trying to discover what the user per annum of the Forth Bridge is. Unfortunately I have not been able to discover that, but we waited 33 years for the Severn Bridge, and very few Members of this House know that. I have in my hand the Report of a panel of engineers who were charged in 1933 with the responsibility or the duty of putting a bridge across the River Severn which would also be a hydro-electric dam. They produced their Report in 1935 and I was a member of the Committee that con
  1188
  sidered it in 1936 and 1937. Thirty-three years ago we were asking for a bridge across the Severn, but almost every other claim that was put forward in this country was accepted as being of greater priority than the needs of the South-West.
  I beg the Minister to understand that you cannot just dismiss out of hand the intense feeling—whether the people are right or wrong, and I think they are right—in the South-West that it is a deliberately neglected area, and this goes for all the Governments because I am indicting them even from after the First World War. There has never been any progress, whoever has been in power. My indictment is a sweeping one, but the feeling is there, and unless something is done—first of all either to stimulate the expansion of existing industries or to encourage other industries to go there—then that feeling will continue.
  Therefore I conclude with one or two suggestions. The first concerns one of the dying industries in the South-West—in fact, it is almost dead—the fishing industry. I remember when St. Ives was renowned for its fishing harbour. Now all the fishing has gone round to Newlyn. At Brixham there is some progress because there is some sort of co-operative organisation there which helps fishing to keep going. But why not do something to try to revive the fishing industry? Is it not possible to revive it?
  What about the possibility of exploiting the region for coal? I do not know whether the people of the South-West would like it—[HON. MEMBERS: "No."] There we are. They want it all ways. They want to have the beauty of the countryside and they want a sound economy to go with it, but they do not want any exploitation of the mineral resources of the land. I make this suggestion because I agree with something which I heard the late Aneurin Bevan say in the House some years ago, when in opposition—I cannot remember the date. He said that, if he were able to do it, he would give an instruction for test borings and other forms of exploration with a view to exploiting the resources of Cornwall. He believed that there must be untapped mineral resources in Cornwall of enormous value to this country. Today, the report of the C.B.I. makes the point—I paraphrase it—that, if Britain were suddenly to have its tin resources

  1189
  cut off, money would cascade into Cornwall in an effort to discover whether there was still tin there which could be exploited.
  Mr. Bessell: Would not a simple way to deal with the problem be the sort of tax holiday which was advocated by the Prime Minister when in opposition but which he has consistently rejected when in office?
  Mr. Wilkins: I have as much as I can do to answer for my own sins, without answering for the sins of others. I am making a serious point. We have neglected the possibilities of exploiting the resources of the South-West, particularly of Cornwall. The strata there are such as to lead one to believe that there are probably immense mineral resources under the land. If we want industry to develop there, if we want to make Cornwall a prosperous economic unit within the country, there seems no reason why the Government should not offer some sort of encouragement to people who are prepared to try their luck at exploiting the natural and mineral resources of the area.
  I hope that I have not wearied the House, but I felt that this was probably the one opportunity which we should have for quite a long time to impress upon the Government the feeling that the South-West is a neglected area. However, I dare not sit down without mentioning one other matter, the question of the Bristol docks. We seem to have an awful lot of kite-flying nowadays. In our local evening paper last Saturday I saw it said that,
  "Midas may come to the West with a golden touch."
  On reading the article, one soon found that Midas was not coming to the West with a golden touch, and it all seemed to be so much kite-flying.
  The Bristol Port Authority in its initial report forecast the possibility of having the Portbury dock scheme. It was extremely well received. It received the blessing of the National Ports Council, and Bristol was encouraged to go on to produce another massive document in two volumes, at enormous expense, I imagine, setting out the potential attributes of the Portbury scheme. But Port-bury was turned down by the Minister—
  1190
  not without some justification, I am inclined to think. I do not know, but I have a feeling that we might, in the end, have been landed with something which could well have been a white elephant. I am not sure. However, the scheme was to be self-financed within Bristol.
  What I complain about is that, having turned down that scheme, the Minister then invited Bristol to produce an alternative scheme for a west dock. Again, a massive report, which must have cost an enormous amount in time and money, was produced; but now, judging by the straws in the wind, it seems that this is also likely to be turned down.
  The damage done is to the people who work in the industry. They are the ones who suffer. They are frightened that Bristol will not be able to compete, especially with the port which they regard as their biggest rival, namely, Rotterdam, unless they can have their deep-water berth. I know that my hon. Friend will convey to the Minister the tenor of the appeals which we are making, and I want him to impress upon his right hon. Friend that Bristol really believes that it needs this dock if the port is to survive. If he can persuade her to agree that we may have it, he will earn the gratitude not only of the Members of Parliament for Bristol but of all the people they represent—and even of some Conservatives who will, perhaps more grudgingly, approve it and, of course, claim that they are in the van of progress and they are the ones who really spurred the scheme on.
  4.57 p.m.
  Mr. John Pardoe: I am glad to be able to share in the luck of the hon. Member for Honiton (Mr. Emery). We seem to have come top of the Ballot together, though I am not sure whether it was his luck or mine. Last Thursday, I asked the Leader of the House for a debate on the Government's reply to the Tress Report, and I urged that we have it before Easter. He turned my request down forcibly. We had waited to debate the Tress Report for several months, and it was evident that we should have to wait as many months, if not for ever, to debate the Government's reply. It is excellent, therefore, that we have an opportunity to raise the matter on this occasion as a result of our luck in the Ballot.

  1191
  I shall not discuss all the details of the Tress Report. I am concerned primarily with the Government's reply and its inadequacy. When the Tress Council was originally formed, I expressed grave reservations about its membership and about the report which it would be likely to produce. My main reservations have been confirmed by the Government's attitude to the outcome of its endeavours. First, I considered that the Council was unrepresentative and undemocratic and that it would, therefore, have no moral authority to fight for its recommendations. We see now that, because of its unrepresentative character, it cannot really fight for the recommendations it has made.
  The Report itself is a valuable analysis of the problems of the South-West. The Tress Council has presented its case, but it has wasted its effort and the Government's money because no real results will come of it. I have reservations about certain aspects of the Report, particularly its attitude to farming. The Council seemed to believe that bigness was the be-all and end-all of the farming business, and that, so long as one amalgamated several small farms, the whole thing would somehow or other lead to more production and more efficiency.
  I have reservations about the recommendations regard to the A30 and the A38. I have reservations about the whole area which the Report discussed, and they have been confirmed by the setting up of the Severn study, because the Government have shown clearly, as the Council was forced to say, that Bristol turns in its industrial development and commerce primarily towards the Midlands and Severn complex and not to the South-West.
  Nevertheless, the Report made certain recommendations which received widespread support throughout the whole of the West Country from all political parties and from other bodies. It received support from many local authorities, some of which may have had reservations about certain aspects of the Report. But the West Country waited for real Government initiative to put the recommendations into action.
  What we have had is a slap in the face. I am not forecasting who will become Chairman of the Economic Plan
  1192
  ning Council, but I should like to quote a remark that is quite extraordinary in the light of all that has happened in the past two or three weeks. In the Western Daily Press of 20th February last year Professor Victor Wiseman, a member of the Council, said of it:
  "Our advice is being acted on on an increasing number of occasions. We even managed to get some railway closures postponed."
  Bully for him! We must ensure that whoever becomes Chairman of the Council does not suffer self-delusion quite so easily.
  The reaction of the Government has been a bitter disappointment. The hon. Member for Honiton stated some of the Press reactions. My experience in the further west part of the peninsula is that it is a very widespread reaction. The Government are living in cloud cuckoo land. Almost unbelievable complacency is shown in page 5 of their reply. The first paragraph talks of
  "…the benefits of the massive programme of assistance to development areas…"
  What massive programme? I hope that we shall hear from the Minister the exact definition of those words, because I have not seen evidence of the massive programme as yet.
  The Council has made some comments on the Government's reaction. The first is that it welcomes the fact that the Government accepted its general principle. That is very decent and good of the Government. If they had not accepted them the Minister would not even have dared to come into the Chamber today. Certainly, he would not have got out again.
  The first point the Government turned down is the recommendation on the spine road. The Council placed tremendous emphasis on this. In the summary of its conclusions on page 123, paragraph 562 states:
  "In particular, there is urgent need for the early construction of a 'spine road' of adequate standard running from the end of the M5 in Somerset to Plymouth and Penzance."
  In paragraph 563 it is stated:
  "We believe that the economic and social return to be expected from a spine road justifies priority for the allocation of funds for it. We therefore urge the Government to ensure the completion of an adequate spine road by 1975: we are aware of no physical or technical barriers to this."

  1193
  I entirely agree. I can see no physical or technical barriers either.
  Addressing a meeting of local council representatives in Bideford town hall on 3rd January, Professor Tress said that the A38 spine road would be completed to Penzance by 1975. It is only just over two months ago that he issued that forecast and he presumably must have had some indication from the Government to give him confidence that they would bear him out. Now the Government say, on page 2 of their reply:
  "Subject to decisions about the level of the road programme in the early 1970s, this would mean that the spine road as far as Plymouth could be completed, or under construction, by the mid-1970s."
  We are to get only to Plymouth by the time that two months ago Professor Tress said he hoped that we should be in Penzance. Even on the promise of the road's reaching Plymouth there has been no definite announcement, and the Government are hedging their bets on that.
  I believe that it is perhaps natural for economists to settle for the development of the A38, but the A30 is of vital significance to the northern part of the far South West peninsula. I hope that the Minister can give us a date for the Launceston and Okehampton improvement schemes mentioned in the Government's reply to the Tress Report.
  Certain of the Government's reasons for the spine road decision primarily come down to lack of cash for public expenditure and that it is too far ahead. I cannot see anything wrong with being too far ahead. I should have thought that a Government which believe in long-term economic planning would welcome the chance to make decisions for a decade ahead. I realise the strength of the point about public expenditure, but I believe that the spine road requires a very high priority for Government expenditure. Nevertheless, why do not the Government consider doing it by private expenditure instead?
  I could well understand the Government's case if there were genuinely a lack of the physical resources for building the road in the area, but there is no such lack. There is plenty of stone available, particularly in Cornwall, and to my knowledge the necessary plant is lying idle in many road contractors' yards all over Devon and Cornwall and in
  1194
  parts of Somerset. There is plenty of manpower, as the unemployment figures and low activity rates indicate, and the only resource missing is money. Will the Minister tell us that the Government will undertake a feasibility study and how much it will cost to build a limited access dual carriageway road from Edithmead to Penzance?
  The second major point the Government have turned down in the Report is the recommendation that Plymouth should have all the benefits of a development area. I believe that this is absolutely essential to the whole concept of the development of the West Country, which cannot be planned or developed economically without Plymouth as an essential part of it. Plymouth provides the only hope of urban, social and cultural facilities without which we can never attract the young people in particular and keep them in the area.
  The Government's reasons for turning down Plymouth are extraordinary. First they say there is a danger for other parts of the South-West, particularly the development areas. There is the idea that Plymouth would siphon in industry that wanted to move to the South-West and might well go down into Cornwall or North Devon but would stop short in Plymouth. I represent one of the areas that the Government are so solicitous about in their Report and I am convinced that we in Cornwall, particularly North Cornwall, need Plymouth's growth potential to develop a firm industrial and economic base. Do the Government really suppose that the Council would have made that recommendation, based as it is on a whole host of facts and research, without considering that objection? Professor Tress has dismissed the Government's arguments on this as entirely irrelevant and quite wrong.
  The second major reason for the Government's turning down the suggestion of Plymouth's becoming a development area—
  Mr. Bessell: Before my hon. Friend leaves that point, would he agree that the nonsense of the Government's answer is shown by the fact that in the Gunnislake area in my constituency we have the highest rate of unemployment in

  1195
  Comwall—13·1 per cent.? If the labour exchange area in Liskeard, for example, included Gunnislake, Saltash, Torpoint and areas like that, including those of my hon. Friend's constituency, the whole problem of development area status could be overcome, because it is the fact that Plymouth is the labour exchange area that prevents those areas from getting development area status.
  Mr. Pardoe: I entirely agree. One must regard in economic planning for such a region both the conurbation and the rest of the area. Gunnislake and Saltash and other areas around Plymouth would have to be brought into this and I would also include Okehampton, as the Council suggested.
  The second reason which the Government have produced for turning down the Plymouth recommendation is its danger to other areas. They fear that giving Plymouth the sort of priorities we want it to have would syphon off industries from other development areas. But we are concerned with the development area of the South-West, of which Plymouth is an essential part. The Government really cannot say to hon. Members from the South-West that they are not particularly concerned with our problems, because they are interested in the problems of the North-East, the North-West and elsewhere. Plymouth and the rest of the West Country hang together in this sense, and if they do not hang together they will hang separately.
  I do not want to steal the thunder of hon. Members from Plymouth but Plymouth depends largely on the Dockyard and defence contracts for its labour. It has tremendous reserves of skilled manpower and these are available for new industries going to the West Country. We are told that we have to wait for the Report of the Hunt Committee. When are we to get that Report? The Committee was set up in October and it is rumoured that we shall not get the Report until next year.
  The Joint Under-Secretary of State for Economic Affairs (Mr. Alan Williams): In reply to a debate last Monday I made it clear that the Report will be made this autumn.
  Mr. Pardoe: I read the debate and I do not think that any such clear indication had been given.
  Mr. Williams: I even quoted Sir Joseph Hunt. I had spoken to him only a few days before and asked him what his information was. I made it clear to the House.
  Mr. Pardoe: I am glad that at least we now have a date. [HON. MEMBERS: "Be generous."] Very well. I have withdrawn my criticism on that score. I am glad that it has been explained and that we now have a clear and definite date. But I see no reason why Plymouth should have to wait for the Report. Plymouth need not get those industries which are more appropriate to other parts of the region. It would be possible to guide larger industries to Plymouth. Professor Tress has indicated those which would be suitable.
  It is difficult to know what to do with a concern which wants to employ several hundred people and to move to a development area in the West Country. I have recently had an approach from a concern in the London area which wants to employ 800 people in the West Country. It wants to move there lock, stock and barrel. It is difficult to know exactly where in my constituency to direct a company which wishes to employ that number of people. It is difficult to know where to direct it in the whole of the South-West development area.
  But Plymouth is the kind of place which can pick up concerns of this sort, and when it does the branch factories and ancillary trades will begin to develop in the other parts of the area such as Cornwall and North Devon. We look to Plymouth as the catalyst for this kind of industry.
  The Government are willing to grant industrial development certificates for Plymouth but that is a negative attitude because the need is to sell the West Country and induce people to go there. Both this Government and their predecessors have been wrong in defining development area status purely by reference to unemployment. It is much more important now to think in terms of income per head and general prosperity if we are to get our development area philosophy correct.

  1197
  I turn now to the problem of industries already in thearea. The Report made certain recommendations about the development of agriculture, which is the obvious staple industry of the South-West rural areas. I have made it clear that I have reservations about the Government's attitude to this. They cannot have it both ways. They say that they are relying on the Agriculture Act, 1967, to increase the momentum towards the amalgamation of small farms but at the same time, in the next paragraph, they say that there is tremendous scope for intensification of agriculture on small farms. They are trying to have their cake and eat it. Perhaps they will tell farmers, mystified about the general philosophy towards agriculture shown by the Government, whether they want them to accept grants and pensions and get out or intensify and try to get more from every acre.
  What methods of informing the farmers have the Government adopted for the provisions introduced in the 1967 Act? Perhaps we can be told how many farmers in the South-West have taken up the offers under the Act. My experience is that very few have. Indeed, very few of them even know in any detail that the provisions exist. The Government have mentioned horticulture but it is no good relying on the horticultural industry to set up new marketing methods if, at the same time, the Government are ruining its contact with its major markets as a result of their transport policies.
  The same problems emerge with fishing. The effects of the Government's transport policies on fishing in the South-West will be disastrous. On page 9 of the Report, the. Government mention that they will send to the Council a full report on the fishing industry of the South-West. Will that be made available to hon. Members for the area? When will it be ready?
  There has now been some help for tourism generally, particularly in the rural areas, and I welcome it. Many of my constituents welcome it but it is no good the Government placing emphasis on the great advantages which part exemption of elderly people and part-time workers from Selective Employment Tax will bring to the tourist industry. The Government have already imposed the tax and now, in taking it off, say they are doing these people a tremendous favour. Apparently,
  1198
  the idea is that one is doing people a favour by exempting people from a tax one has already imposed. It is not a clever bit of economic planning and the Government should be ashamed to put it in print.
  Tin mining is immensely important to Cornwall and could be far more important if the suggestions made by my hon. Friend the Member for Bodmin (Mr. Bessell) were taken up. There is no doubt that the Prime Minister promised specifically and clearly when in Opposition that a Labour Government would make this tax concession to the mining industry. He has now turned turtle on that promise as with all the others.
  Dr. John Dunwoody: Perhaps the hon. Gentleman will allow me to say something about this, because it is in my constituency that most of the tin mining takes place. Very complex factors have to be taken into consideration. For example, how would the hon. Gentleman solve the difficulty which tin mining is having in attracting workers in an area of high unemployment? At the moment, the industry finds extreme difficulty in attracting sufficient workers for those mines operating today. How would the hon. Gentleman envisage that aspect of the problem being solved?
  Mr. Pardoe: The pay scales offered are low compared with mining wages elsewhere. This is inevitable. I have no doubt that the Prime Minister would have taken this into account when he made the promise to develop tin mining. I am sure that he gave careful consideration to these points, and I hope that the hon. Member will ask him why he made the promise.
  I want to make a brief comment about the development of offices and office employment in the area, a subject raised by the Report, and the reply to it from the Government. This brings into consideration the whole subject of S.E.T. and service industries. The complaint which we have made on this side of the House, along with some hon. Members opposite, about S.E.T. is that it is absolutely useless to try to impose a tax on service industries that will bring people out of them into manufacturing until one has the manufacturing industries for people to enter. This applies to shop-keeping as much as to offices. Since the Council has said that there is scope for

  1199
  extension of office employment in the area, particularly to give young people wider employment opportunities, I hope that the Government will look at the possibilities of making S.E.T. concessions in respect of office work in the area.
  The Location of Offices Bureau should take the South-West into account in its endeavours. It has been successful in a positive sense in encouraging firms to remove from London and in organising that removal. I hope that it will take account of the great advantage which Plymouth and the rest of the South-West offers to firms and Government Departments.
  There are very special difficulties for the South-West as compared with other development areas. We are far from markets and supplies. We have some considerable advantages, mostly social and cultural. We cannot be sold to industry in the Midlands or London, or wherever these firms may be, by blanket advertising over the whole lot of development areas. Whenever I see those advertisements showing the coloured spots on the map in the newspapers and the caption saying: "Move to a Development Area", I am conscious that the South-West is probably very much further removed from the main centres of population, from the areas to which such firms contemplating a removal are likely to go, than any other development area, particularly so when one takes into account the time involved in getting there and not just the distance.
  In an extremely interesting article in Lloyd's Bank Review of January, 1967, Mr. B. J. Loasby made it Quite clear that the initial reaction of any company wanting to move from Birmingham or London was to look at the nearest development area. Unfortunately, very few of these companies find that the South-West is the nearest area. We need special incentives. We need an agency which will sell the South-West to industry. We need men in it who know how to market ideas and we need a survey of the potential market.
  Successive governments have been concentrating on the character of the parts, not very adequately, rather than looking at the other end, from which the industrialists are to move and discovering what motivates them. What is it that makes them decide to move? What are the
  1200
  stimuli that set this process in action? We need a survey of firms, in order to establish those which are likely to move when the economy starts to expand, to identify those which will be in difficulties in expanding in their present location, and those which could use the natural resources of the South-West.
  I think particularly of the china clay industry and the potteries. It may be that the potteries have reached the point where they would prefer to move nearer to their clay and further from the coal, since they no longer use coal in their heating. Some potteries with which I have discussed this recently were not aware of any of the development area incentives offered by the Government. We need this agency working, from the South-West, and of the South-West to go out and survey the market and sell it to these firms.
  In the South-West, we do not have very much confidence that this Government or any Whitehall-based administration will be able to provide the solution. This Report of the Council was headed: "A Region with a Future". I still believe that it is a region with a great future, but we shall undoubtedly have to build it for ourselves, and the message of this document which the Government have thrown at us is "Put not your trust in princes, at least not in those who live in Whitehall".
  5.25 p.m.
  Mr. R. H. F. Dobson: There will be a great deal of agreement in the debate between the two sides of the House, but there will be one chasm which we can never properly get over, and that is the chasm between hon. Gentlemen opposite who always insist that during the Conservative Administration everything that needed to be done was done and those of us on this side of the House who know from personal and practical experience that this is far from the case. I have lived in the area for 15 years, and other people who have lived there for similar periods were conscious that there was a need for Government action and for some thought to be given to the South-West. None of this could happen overnight, not until a Government came along, as did the Labour Government, in 1964, designed specifically to draw attention to the economic problems of the South-West.

  1201
  This is why I welcomed the setting up of the South-West Regional Economic Planning Council and hoped that it would come out with some creditable, factual information which will persuade the Government to take action in this very difficult area. I do not share the views of the hon. Member for Cornwall, North (Mr. Pardoe) or the hon. Member for Honiton (Mr. Emery) when they say that the Tress document is a wasted effort or a waste of time. It is not. It is a very valuable document, which can be talked about and argued about and used by Members of Parliament and members of local authorities to see that the South-West gets its fair share of development, as rapidly as possible. That is the real value of this fine document.
  Of course, I was disappointed at some of the things that the Government said in their Reply. Hon. Members opposite had said as much. The point that I insist on making is that before we had no document about which to argue. Arguments were local and largely sterile, with no opportunity for public ventilation. It is only since this document became available a few months ago that we have had any opportunity of putting forward a collective view about this area.
  Mr. Pardoe: The hon. Gentleman is factually wrong. We had the A.I.C. Report.
  Mr. Dobson: The hon. Gentleman knows that that was not, in the same sense of the word, an economic planning document. This is the first document that any of us can remember of any depth studies and it is now available, for us to talk about the economics of the South-West.
  Dame Joan Vickers: There was a document used just before the election, presented to my right hon. Friend the Member for Barnet (Mr. Maudling), which had precisely the same point in it. It was not such a large document, but there is nothing new in this Report at all.
  Mr. Dobson: The hon. Lady has lived in the area and represented it for a very long time and has great knowledge of it, but she is confirming what I am saying, that there was a great deal of information, well known locally. The object of the
  1202
  exercise was to get a document of depth which could be discussed locally, and this is what the Tress Report represents. I pay tribute to it because it is a very fine Report, which grapples with the three problems about which I want to talk.
  First it said that there was a need for a spine road to the South-West. No one seriously disputes this. What we are talking about is whether the Government have given the O.K. to their priorities in the right way. My hon. Friend on the Front Bench will obviously make this point as well, but it should be known that the area required to be dealt with first, from Bristol to Exeter, will be so dealt with. Exeter to Plymouth will be the next stage of development, followed by Plymouth onwards. This is what the Government propose. This is precisely the priority which the Council asks to be given to the South-West.
  Mr. Simon Wingfield Digby: Does the hon. Gentleman think that Dorset merits no consideration at all under a Labour Government?
  Mr. Dobson: The hon. Gentleman can make his case for Dorset as he wishes. I am talking about the South-West, which I know very well, and the spine road development through the South-West. I know that the A30 is involved in this matter. There are some points mentioned in the Report concerning that road. But I think that the hon. Gentleman would agree that, now that the Honiton bypass has been completed, it is the A30 from Exeter which causes the worst bottlenecks, and not in its more northern aspects.
  The Government have said with some feeling that they accept the need for a spine road through the South-West. I would make a plea that they get ahead with it as quickly as possible, and 1975, as is envisaged, would be adequate for the purposes I am talking about.
  Mr. Emery: Nonsense.
  Mr. Dobson: The hon. Gentleman disagrees. The hon. Members for Honiton and Cornwall, North said that various officers or members of the South-West Economic Planning Council had pointed out how terrible it was that the spine road would not be completed before 1975. I draw their attention to what the

  1203
  Council actually said about the spine road:
  "Nevertheless…in the circumstances of the day, the programme as it now stands—including those additional schemes shortly to be announced as being in the preparation pool—is as much as can be achieved by 1975".
  That comes from the Economic Planning Council Press notice dated 12th March, 1968. The other quotations which the hon. Members made obviously missed the essential point. The Council is convinced that by 1975 the road is possible, but that if we try to bring it forward to 1973, as my hon. Friend the Member for Bristol, South (Mr. Wilkins) suggested, it could not be done with the facilities available.
  Mr. Emery: Would the hon. Gentleman bear two things in mind? First, the Government have said nothing definite even about 1975. They refer to the road being under construction by the mid-1970s. It might even be 1978. Secondly, although I lent my document to an hon. Gentleman, I know it fairly well. If he looks at the front page of it, he will see three points of regret expressed by the Council. It refers to its disappointment that more is not being done about the spine road. That comes before the quotation which the hon. Gentleman has made.
  Mr. Dobson: I listened very carefully to the hon. Gentleman. I have not misquoted him, and I do not wish to do so. His point is absolutely fair. What I am saying is that hon. Members have failed to quote the qualifying statement in paragraph 4 of the Press notice to the effect that the Council recognises that the spine road could be completed by 1975, but not before then, for the reasons set out.
  Mr. Pardoe: No.
  Mr. Dobson: Paragraph 4 on page 2 of the Press notice reads:
  "The Council adhere to their view that the spine road to Penzance should be constructed to an adequate standard by as early a date as possible".
  That is my view. It goes on:
  'Nevertheless, they have concluded that, in the circumstances of the day, the programme as it now stands—including those additional schemes shortly to be announced as being in the preparation pool—is as much as can be achieved by 1975."
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  That is an exact quotation, and I do not think that the hon. Member for Cornwall, North would dispute one word of it. The Press notice also says:
  "What matters for the future is getting more schemes out of the preparation pool, and put out to contract."
  The Council is satisfied that if the road is prepared by 1975—and it has no reason to doubt it—it will meet its requirements.
  The Government have had regard to the priorities requested by the Council in relation to the road complex of the area, including some of the by-pass and improvement schemes in various places—for instance, Bridgwater, and further down at Liskeard and Camborne.
  The second part of the Report which particularly interested those of us from the Bristol area concerns the Bristol dock scheme. The Report says that the Bristol dock scheme is essential to the area. This is generally accepted by hon. Members. It is a little difficult to understand how it will affect some ports in South Cornwall or along the South Dorset coast, but people recognised that there was a need for a growth port in the Bristol area, and Bristol was the only port which could be satisfactorily and adequately developed in the way required.
  There have been many remarks, sometimes stupid remarks, in Bristol about the dock scheme and various dock schemes which have been proposed. It became reasonably obvious some time ago that the Portbury dock scheme was not "on" as an economic unit. Although that was of great regret to many of us, I gave as much support to the Economic Planning Council, I hope, as anybody else in the area. I recognised that there was a need for development of the dock scheme, but the economics were such that it could be said to be a bit of a pie-in-the-sky effort.
  Then we had what was known as the "mini-Portbury scheme", which was of a different character. It was not really a mini-Portbury scheme, but an extension of the present dock complex. It is important that we should recognise that there is a difference between the two schemes, not only in scale, but in the way in which they would affect the area. I was disappointed to learn that the Government have not made a firm decision

  1205
  on the extension or the Bristol west dock scheme, but I was pleased to hear that they were at least thinking about it from the point of view of the possible economics which flow from the Severn-side study. It is imperative that the Severnside study should be taken into account before a final decision is made on this scheme. But I would go even further and say that they should recognise that we cannot have a satisfactory region unless we have a thriving and expanding port in Bristol. This is what the Economic Planning Council says. Certainly the National Ports Council has said it. I do not believe it possible to proceed unless we start from that base.
  I have been concerned about the difference between the Economic Development Council's thinking and the Government's thinking on the Bristol west dock scheme. Towards the middle of this month, I wrote a letter to my hon. Friend which I hope he will deal with tonight. I have had an acknowledgement of it. It asks some important questions about this scheme to which my hon. Friend might be able to reply.
  In the first place, if there was a clash of economic thinking in relation to the scheme between the Government and the Economic Development Council, or the P.B.A., who prepared most of the report, we should be told the area of conflict and the elements of dispute in the figures which are being discussed. Clearly, it is no good the P.B.A. trumpeting that its economics are right if at the same time the Government are trumpeting that theirs are right. No member of the population knows the area of dispute. If, for instance, we are discussing a 1½ per cent. difference in the economic returns, we ought to know about it. On the other hand, if it is a 5 per cent. difference, presumably the scheme is doomed from the word "go". I hope that my hon. Friend will say something about this. The second point is the direct clash in the Bristol area, where members of the public are saying that they are prepared to back the local financing of the scheme if the Government will not do it. The Government feel that they cannot even allow this if it means a poor return on the capital invested. I accept that as being Government thinking and a matter which makes economic sense in
  1206
  the long term. However, the major portion of the cost of the Bristol west dock scheme is in the lock gates and the entrance. They account for roughly two-thirds of the total, and I ask my hon. Friend what there is to stop the Government allowing local private sources to supply the finance for that portion and for the Government to supply the rest.
  This immediately changes the whole complex of the amount of return on the capital employed because, while there may be a low return on the locks and entrance side, there will be a much higher return on the main dock and the engagements carried on inside. I hope that this proposition will be considered against the background of the clear statements of people in Bristol who are prepared to back the west dock scheme.
  Then, could we know when the Severn-side Development Study is to be concluded? Can we be told if the decision of the west dock scheme hinges upon it and by what date we can expect a firm decision? We have to have some dock development in the Bristol area if we are not to stagnate. I know that current thinking indicates that dock development should take place at Liverpool, Glasgow or London, and perhaps even Southampton. But I would plead with my hon. Friend not to concentrate on points which are in themselves congested and which are, in the main, still subjected to locking-in and locking-out and still subjected to extremely difficult approach conditions by road and rail. He ought to be thinking of the new combination of road and rail facilities available to the Bristol area.
  There is one further point in relation to the dock scheme. The charge is made in Bristol that other ports have been given more facilities for enlargement and development than has Bristol. It should be clearly stated that that is not so and that we have had our fair share of development. I have given my hon. Friend notice of these questions in a letter, and I hope that he will be able to answer them when he comes to reply to the debate.
  The third aspect of the Tress Report is the growth point of development in the region. I have no doubt that this is the way in which we should develop our

  1207
  region, but what has horrified me in the past is that we have tended to leave it completely to local initiative to make sure that we get this growth point development. That is why I was dissatisfied with the Government's reply in paragraph 8, where they say again that they wish to have some local initiative.
  I am not for stifling local initiative in that sense, but I know how inadequate it has been in the past when small local authorities have tried to persuade industries to come to their areas. When the Government took office, I hoped that they would do far more in the way of positive steps to get industries into these areas. I know that a great deal has been achieved by means of i.d.c.s and the setting up of development factories in the South-West Region, but I hoped that they would do far more.
  Perhaps I might refer to one matter which bothered me particularly about the South-West. Barnstaple had an opportunity of growth development that would have been within the terms of the Council's reference. However, such pressure was brought to bear by people in the area that finally, to the dismay of people outside it, the decision was taken by a majority of two to one against development in the area. Anyone who has lived there will know that such development was the answer for the area, and some of the surrounding rural districts would have benefited enormously.
  When my hon. Friend talks about initiative by local authorities, he should remember that this has not worked in the past. It has even failed in the fairly recent past. It will only work if we have farsighted local authorities in the South-West, which is not always the case. We could have development if we went about it in the right way. When I say that, I do not mean the type of mining development about which hon. Members throw up their hands in horror. We could have small compact factories which would make an enormous difference to an area's potential.
  I want to make a plea about the Okehampton area. When the Government's reply sets out the reasons for not making Plymouth part of the development area, there are some of the arguments which I accept. Some of the points
  1208
  in paragraph 13 are without dispute, although the hon. Member for Cornwall, North disputes a number of them. However, paragraph 14 says:
  "Many places in them have high rates of unemployment, over-riding and immediate problems of declining industries, large-scale urban decay, and severe outward net migration."
  One thinks immediately of Okehampton. It cannot have easy access to Plymouth, because it is isolated from it by Dartmoor. The only thing to do to help it would be to call it part of the development area and hope to start industry there. I hope that the hon. Member for Torrington (Mr. Peter Mills) will not object to my making that point on behalf of his constituency.
  Mr. Peter Mills: Not at all. I am delighted.
  Mr. Dobson: As the hon. Gentleman knows, I know the area extremely well. I do not claim that Plymouth should go into the development area, but I would ask my hon. Friend to consider making the Okehampton sub-district part of the development area, because that would do a great deal towards achieving growth point developments in the South-West.
  I do not think that we have anything like a region without a future in the South-West. It is a region with a future. It will be made a more prosperous one if we can have more direct Government action than has been taken already, and I am sure that my hon. Friend will do just that as time goes on.
  5.50 p.m.
  Dame Joan Vickers: I am pleased to follow the hon. Gentleman the Member for Bristol, North-East (Mr. Dobson), but the future of the region appears rather dim from what he has been saying.
  I want to deal with the question of the spine road through the region. The Tress Report says:
  "Most of the spine road through the region can be completed or under construction by 1975, but not all, and the finance is not guaranteed."
  The worrying factor is that the finance is not guaranteed.
  I support the hon. Member for Bristol, North-East in his partial interest in the Portbury scheme. I have had an opportunity of seeing it. I have been flown

  1209
  over the territory in a helicopter. It would be a great advantage to the city and if the hon. Gentleman wants any further help in pressing his claims I would support him.
  I want to talk about the city of Plymouth. I want to know why Plymouth has offended the Government, because almost daily it receives another hit. This city was highly blitzed during the war and it has literally risen from the ashes by its own efforts, and now it would seem to be penalised for doing this. This is where I take issue with the Government. It is blitzed now on almost all occasions by the Government.
  To attract industry we have appointed a special officer, and we had an office in New York. This is an officer of the Council who travels round not only this country, but Europe and America to try to attract other industry. So it is not for lack of the Council taking a real interest that we have failed to get the necessary industry.
  When one thinks of the various Ministries which have hit at Plymouth during the last year or so, one can see how badly the city has been treated. For instance, the Chancellor of the Exchequer imposed the Selective Employment Tax. The first time was bad enough, but now that it is to go up by 50 per cent. it will be even worse. It particularly hits Plymouth because the second largest trade is the retail trade which employs 18 per cent. of the population. An increase in the Selective Employment Tax of this size will hit a great many firms.
  Plymouth is also a good tourist centre. We now have on our envelopes a little stamp saying, "Top touring centre—Plymouth—in the West". This goes out all over the country. However, our tourist industry will be interfered with by the new Transport Bill, because we shall be limited in the areas to which we can go by the time allowed to drivers. One company alone has 222 tours arranged and it tells me that it will have to modify a great many. Tours to Penzance, St. Ives and Lands End have to start at 8.30 in the morning and they will have to be back by 7.30 or they may be transgressing the law.
  The Board of Trade's refusal to recognise the need for Plymouth becoming a
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  development area is another instance of a Ministry which has been against Plymouth for some unknown reason. The Ministry of Education has cut our school buildings, and last week the Ministry of Defence cut its expenditure. Plymouth has lived on a Devonport dockyard now for over 300 years and this will be a big additional blow.
  We have been extremely active. I have a document here called "Development Area Studies for Plymouth and District". We set up a special committee, under the auspices of the Chamber of Commerce, with a special office, to take an active interest in what could be done to help ourselves. There have been three major meetings. The Council of Churches also called a meeting which was extremely well attended by over 300 people. A petition was sent to the Government on 12th September, 1967, pointing out the various difficulties to which Plymouth would be subjected if it did not become a development area.
  At page 121, paragraph 533, the Tress Report says:
  "We consider that such effort must start from Plymouth, the one town large enough to stand comparison with urban centres elsewhere which serve as foci for the economic and social life of the communities around them, with inherent potentialities for sound economic growth, and already an attractive location for industry despite its remoteness."
  The Tress Report says that despite its remoteness, about which we have heard several times, it is an attractive area.
  It goes on to say:
  "There should be a clear programme for phasing in new and expanding industries with a phasing out of Plymouth's present dependence on Devonport Dockyard. Some special measures to bring in new workers may be needed initially to stimulate this process, and Plymouth City Council's study of the feasibility of a London overspill scheme would have this objective."
  This has been acted upon. Plymouth has been in touch with the G.L.C. and Birmingham concerning overspill. It is perfectly willing to do this if it can get sufficient backing.
  It also says:
  "We recommend that the Government should investigate the possibility of establishing a Board of Trade sub-regional office in Exeter or Plymouth to facilitate the Board's task of encouraging employers to locate new factories in the far South-West."
  Regrettably nothing of this has happened.

  1211
  Air travel has not been mentioned today. Despite the many surveys, we are still without any form of airport in the South-West. Someone mentioned Exeter as being the regional centre. That is all very well if one happens to live in Honiton, but it is hardly helpful to the far South-West. We feel that we need a real survey to know what is happening concerning this matter as we need an airport or a heliport as soon as possible.
  One of the difficulties in the South-West, particularly in the Plymouth area, is that by 1981 every person working will have to support one extra. In other words, the burden of supporting the retired population will fall heavily on the working population. The wage level for men and women is very low. Manual workers have a level which is about 14 per cent. below the rest of the country and this is an additional reason for bringing further industry. Incomes in Devon and Cornwall, and particularly the area around Plymouth, show considerable differences. The Report states:
  "The differences within the region itself, however, are much more marked than the differences that are marked between the different regions and the national position."
  Taking what is known as the lower activity rates in the far West, an agricultural worker will get 258s. and a manual worker will get 378s. This is 27 per cent. below the national average. The Family Expenditure Survey in regard to women showed at least that they were 14 per cent. below the national average.
  We read in this Press hand-out:
  "The Plymouth area is promised some of the advantages of a Development Area status Immediately, but the decisions on the remainder must wait for the Hunt Committee."
  We are told that the Hunt Committee will be reporting in the autumn, but we have no idea whether it will be favourable. I would put in a special plea not to wait until the autumn for the Hunt Report, particularly as we have had the defence debates and we know there are to be considerable cuts. There will also be considerable cuts in the services in the area. The Tress Report, at page 17, paragraph 58, says:
  "The region contains many H.M. Forces' training areas and airfields particularly in Wiltshire and Dorset, as well as Naval dockyards at Plymouth and Portland. The run
  1212
  down of the armed forces in recent years has considerably reduced their regional importance…".
  This will be another loss to the area, because the Services spend a considerable amount of money there. If there are fewer Servicemen, there will be less money available to be spent on the retail trade.
  Instead of continually giving us a knock, the Government might perhaps give us a pat on the back and say that the city has done well in the past by recovering from the blitz and reinstating itself. The Government should say that the city has done well by appointing a special officer, by having the special committee to which I have referred, and by taking the action which it has. The Government should say that instead of waiting for the Hunt Committee, they will give the city development status now. This would be the biggest lift for the city for many years to come.
  6.0 p.m.
  Mr. John Ellis: It is always a pleasure to follow the hon. Lady the Member for Plymouth, Devonport (Dame Joan Vickers). I want to refer to a question on which she touched, as did the hon. Member for Cornwall, North (Mr. Pardoe), and that is the development status of Plymouth. Looking at the Report and the area that it covers, I think we must realise that in the South-West we are dealing with a region which is totally different from any other. It consists of small towns, long distances between towns, varied industries, and a wide variety of circumstances.
  I challenge the statement made by the hon. Member for Cornwall, North—I hope that he will not mind my doing this—that we in the South-West accept the case for Plymouth to be given development status, and that if we do not hang together we shall all hang separately. I do not think that that is a correct statement, because I am sure that my hon. Friend the Member for Falmouth and Camborne (Dr. John Dunwoody) will agree with me when I say that if development status had been given to Plymouth it would have had a deleterious effect on the development area further to the West.
  I do not accept the view that industries would have established themselves in Plymouth, and that spin-off subsidiary factories would have been set up further

  1213
  west in the Falmouth and Camborne area. It is 80 miles from Plymouth to the furthest part of the region, and I suggest that the Government have made it clear, by the policies they have adopted, that they intend to be liberal in the granting of certificates to Plymouth.
  It is only natural for the Opposition to wallop the Government as hard as they can, but if one wants to move the Front Bench one has to use reasonable and objective arguments, and I do not think that a case has been made out for the granting of development status to Plymouth.
  The South-West has a wide variety of local communities and local industries. It has a variety of geographical problems. I do not think that it is a question of us all hanging together, because I consider that we have a wide variety of needs, and there must therefore be a wide variety of solutions. The further west one goes, the greater the incentives have to be to attract people there. It is not just a question of development status. I consider that lighter or darker shadings of the aid must be made available.
  I expect that my next remark will be rather controversial. I have always believed in the S.E.T.
  Mr. Emery: We on this side of the House did not want to read out and rehearse all the arguments in paragraphs 418 to 425 of the Tress Report which set out in full the reasons why Plymouth should be made a development area. Our criticism is that the Government have rejected these proposals and given no reason for doing so.
  Mr. Ellis: The hon. Gentleman has his point of view, and I take note of what he says. The real point that I am seeking to make is that if we establish Plymouth as a development area, this will have consequential deleterious effects on other areas. This can be argued both ways, but I am saying that, bearing in mind that aid is provided, the instruments available to the Government to provide it are rather blunt, and I should like to see a refinement in techniques.
  The S.E.T. is a valuable aid which should be used in the South-West. It could prove to be a great incentive. I do not propose to get involved in an argument about whether the tax is too high, or too low. All I am saying that in an
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  area such as this, with its vastly different needs, this is precisely the kind of tool that could be used to good effect, and I pay tribute to my hon. Friend the Member for Falmouth and Camborne who has been pressing this view on the Government.
  We are all aware of the recent provisions for helping the hotel industry in the more rural areas of development districts. This is a welcome step, but whether it goes far enough is another matter. I should like to see this kind of judgment being made increasingly to provide the aid that is needed to this area. Okehampton, Bideford, and the other places which have been mentioned during the debate can be fitted into the general context of special needs. I urge hon. Members to accept that in the South-West we have unique problems. As I said earlier, long distances are involved, and there is a great variety of industry. We therefore need a whole armoury of aid to meet our needs.
  Having said that, I move on to paragraph 527 of the Report. Many glowing things have been said about the Report, and I do not want to detract from anything that has been said.
  This is a comprehensive and invaluable Report, but I was disappointed that, in paragraph 527 referring to the Severnside Study, the council was unable to go into the future of the northern sub-region, which includes Bristol, as they did for other areas. It said that the study would operate in the 1970s and asked what would happen in the meanwhile:
  "We doubt whether the development policies of the local authorities concerned will be adequate for expansion of the order we foresee without risk to the amenities of the area."
  I foresee a considerable expansion in the Bristol area, with the Severn project, the M5 extension down to the dock area at Avonmouth, which is nearing completion, and the proposed excellent communications on the M4. Any appraisal of natural growth must await the Severnside Study, and in the meantime we must rely on local authority development policies. Consultations are going on.
  I am concerned about this. Bristol, unlike the industrial areas of Liverpool and the Midlands, escaped the worst excesses of the Industrial Revolution. Even during the height of the depression,

  1215
  it escaped the worst unemployment. Its development was not as fast as elsewhere. It is a beautiful city, in one of our few remaining unspoiled estuaries, and we must be careful about development between now and the publication of the Severnside Study.
  Of course, there will be population moves from South Wales, and this will hinge on the size of the Severnside project. There will also be natural development, and local authorities should find out people's views about whether more expansion of Bristol is desirable, and what number of people the Severnside project should take, as well as whether they would prefer more natural and gradual growth of smaller towns. We should have much more public debate, and local authorities could help here.
  Some references today to Bristol's west docks scheme have not been very helpful. The objections to the scheme are largely financial, relating to the rate of return on the capital. We are trying to convince the Government that an important factor is also development in the whole region. The hon. Member for Cornwall, North (Mr. Pardoe) was not particularly helpful here. He regarded Bristol not as part of the South-West but as part of the industrial Midlands, and in saying that he was hammering another nail into the coffin of this proposal.
  The west docks proposal is desirable for the area, and I am sorry that my hon. Friend the Under-Secretary had to hear that speech by the hon. Member for Cornwall, North. If we are part of the Midlands conurbation, this throws up the question of the docks provision in Liverpool and elsewhere. I assure the hon. Member that it is not the narrow financial grounds which are important but the question of how much this will help the region's development. There is great pressure from Bristol, and I think that we have tried to do what we can to get the scheme through.
  I was saddened, in the middle of important negotiations, to read in my local evening paper for Tuesday, 12th March:
  "The Port of Bristol's maritime trade lifeline with the Continent is to be challenged by a daily container service—by road.
  Bristol shipping agents, James and Hodder, are to send cargoes destined for Europe by
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  road to Ipswich, where they will be shipped in special container ships to Rotterdam…
  The move presents an obvious threat to the traditional traffic of Bristol City Docks—the short-sea haul to Continental ports…
  The container service from Bristol to Rotterdam, via Ipswich, is a joint venture of James and Hodder and Geest Industries, who are major European cargo handlers."
  James and Hodder are a local stevedore firm.
  "James and Hodder said today that they did not feel they were being disloyal to the Port of Bristol by introducing the rival route."
  The newspaper then quoted the company's freight manager as saying:
  "The Port of Bristol's short-sea trade to the Continent must have a time limit on it, purely because of the geographical position on the West Coast, away from the main European ports."
  This is precisely the kind of argument which I and my hon. Friends have been trying to contest to the Minister, and this paper came out during these important negotiations. I hope that some of the shipping and stevedoring interests will realise, if the decision goes against us, that some of their past conduct has not helped.
  The debate has been an opportunity for hon. Members to be seen by their constituents to sound the trumpet of their behalf. It was in a speech in 1774 that a Member for Bristol, Edmund Burke, said:
  "Parliament is not a congress of ambassadors from different and hostile interests…but Parliament is a deliberative assembly of one nation, with one interest."
  The interest here is the wealth of the whole country. When we have these debates on the North-East, the South-West, Scotland or any other region, it is a pity how the House empties, leaving largely hon. Members representing that particular area. That is not in the best interests of Parliament or the country's economic future. We should argue about the good of the whole nation and how the region can fit into that pattern. I believe that this region can fit into that pattern, and I hope that the Minister has taken note of my comments.
  6.20 p.m.
  Mr. Paul Dean: I am glad of this opportunity to speak following the hon. Member for Bristol, North-West (Mr. Ellis) because I agree

  1217
  with much of what he said, particularly about the Severnside area. I also thoroughly approve of his quoting some words of that great Conservative statesman who once represented Bristol, Edmund Burke. However, I was astonished to hear him say, without qualification, "I am in favour of S.E.T.". His memorial in Bristol will be, "Mr. Ellis was the M.P. who favoured S.E.T.". I cannot think of any financial measure introduced by the present Government which has done more damage to the West Country than S.E.T.
  I will be brief because a number of hon. Members still wish to speak in this opening debate and because I do not wish to repeat the arguments that have been adduced. There is little doubt that, when the Government came to power in 1964 and spoke of the importance of regional policies and the need to prevent the less prosperous parts of the country from feeling the harsh effects of deflation, many people in the West Country and elsewhere were prepared to give them a chance and accept their words as a prelude to action. While people were prepared to judge by events, as time has gone on—and above all in view of the disappointingly negative Government reply to the Tress Report—that feeling of hope has turned to disillusionment and anger. That applies not only to Conservatives in the West Country but to people generally.
  One wonders what value there can be in Government-appointed bodies such as economic development councils when, their reports having been produced, the Government take so little notice of them. By their appallingly negative reply to the Tress Report the Government are not only failing to recognise the needs of the South-West but are calling in question their own experiment; namely, the regional development council concept.
  I wish to make only two main points. The first is that in so much of what they do the Government make more difficult the things for which we in the South-West have a natural advantage. We are essentially—and certainly in the foreseeable future will continue to be—an area which depends predominantly on the service industries. Whatever one does, that character of the South-West will not be changed. Tourism, the holiday industry, is a natural because of our climate and
  1218
  environment, and agriculture is a natural because of the richness of the soil and other advantages. However, if one considers S.E.T., the withdrawal of investment allowances from the hotel industry and the inadequate expansion programme allowed for agriculture in the original National Plan produced by the right hon. Member for Belper (Mr. George Brown), one sees that far from the Government assisting by strengthening our natural advantages, they have done the opposite. The last in a long line of blows are the S.E.T. proposals in the Budget.
  The Minister will no doubt say that the Government are now introducing some help for the hotel industry, and that is to be welcomed. But what a pity that the damage was done in the first place and that confidence has been so undermined in the last two or three years. Although some help may be given—and, considering the effects of S.E.T. on the West Country, it is vital that it should be given—it is incredible that the Government allowed this damage to be done at the very time when they were asking people to take their holidays at home and save scarce sterling abroad.
  My second point is that the Government have done little, if anything, to help us to overcome the natural weaknesses which exist in the South-West. Indeed, in many cases those weaknesses have been accentuated. The Government's new transport policy will have a damaging effect on those who, of necessity, must move goods long distances. The unemployment figures provide evidence of whether or not the regional policy for the South-West is working. A glance at the unemployment figures for the last two years, and particularly for last winter, reveals that as the months have gone by the percentage of people unemployed in the South-West has been higher than in any equivalent month of any year since the war. This must be one of the most acid tests of whether the Government's regional policies are working.
  Like virtually every responsible organisation that has studied the problems of the South-West, the Economic Development Council reported that the highest priority should be given to the building of a spine road. While I do not like the word "infrastructure", the South-West

  1219
  development area will not operate effectively unless adequate spine roads, housing and industrial training are provided. Unless these essential elements of infrastructure are provided, any amount of money channelled into the area will be wasted. The C.B.I. summarised the matter clearly in its excellent Report when, dealing with industrial development, it stated:
  "Industrial development can best be summarised as dangerously slow in the north and stagnant in the rest of the region".
  That is a poor prospect after the promise of the Government to give a high priority to regional policies.
  Although it is right that hon. Members should concentrate on the far West, we should not forget the north of the region, which has equal problems. Dealing with the area which is generally called Severnside—the Bristol complex—the C.B.I. stated:
  "Two factors threaten its continued wellbeing: first, unless a major development scheme is approved, its port facilities will prove inadequate to meet future requirements and increased competition; secondly, the present I.D.C. system, as implemented by the Board of Trade, threatens to contain future growth in Bristol too tightly and to repress the natural growth necessary to avoid stagnation."
  Those are two very significant points dealing with the north of the region put forward by the regional C.B.I.
  The Bristol docks scheme has been mentioned on a number of occasions. In delaying this decision the Government are doing damage not only to Bristol docks, but to the economic prospects of a much wider region. If all port development in the country and abroad were to be stopped this would not matter so much. One could then say to the Government, "All right, wait for the Severnside Study before making a final decision on Bristol docks." The galling thing for this area is that other schemes are going ahead at home and, even more important, abroad. The longer that the Government delay with this decision the less chance will there be for their other regional policies to have an effect on some of the problems faced in the South-West.
  There is a danger that under present policies the natural growth potential which the area has as a whole will be too narrowly confined. We could get the problems of congestion which we know so much in the Midlands and in the
  1220
  South-East. I hope that the Government will look carefully at the point made by the C.B.I. in relation to Severnside as a whole. The development which will take place in this area is bound to come sooner or later. It will be an uncomfortable process for many, including some of my constituents. Many of them are wondering what will happen to the value of their properties and to the glorious views that they have. One can understand their fears. I share them because I live very close to where this development will take place, but it is bound to come. What we want more than anything from the Government is encouragement to the natural development which is possible in the area rather than holding it up by lack of decision. These regional policies for the South-West have always been important. They have always been necessary, but they are becoming more so as time goes by. The pull now is eastwards. The pull of Europe, the Common Market and the Seven, is eastwards. With North Sea gas the pull is eastwards. If before the European forces really got under way and if before we discovered North Sea gas the problems of the South-West were great, they are far greater today because the natural pull will be away from the South-West rather than towards it. So it is even more necessary than in earlier years for the Government to pursue policies which deliberately encourage the natural potential of the South-West and recognise the strong economic forces which will tend to take development away from it in relation to all these new factors.
  I hope that in making their decision the Government will bear in mind these new factors, which we in the South-West can do nothing about. It is not our fault that these things have happened. We welcome them because of the prosperity they can bring to the country, but we consider that we are making a reasonable plea when we say that these forces taking development from the South-West can create much greater problems for the future unless the Government make a conscious effort to help us to deal with them and to make the contribution which we can make, given encouragement, to the prosperity of the country as a whole.
  Mr. Speaker: I am grateful to the hon. Member for Somerset, North (Mr. Dean)

  1221
  for making a reasonably brief speech. I must point out again that there are 25 other debates to come and, apart from the last speech, the average length of speeches so far has been 25 minutes.
  6.35 p.m.
  Dr. John Dunwoody: I fully anticipate, Mr. Speaker, that I shall bring that average down very considerably. I hope that my speech will be even briefer than that of the hon. Member for Somerset, North (Mr. Dean).
  I always listen to his contributions on policies for the South-West with interest because he underlines that these problems are quite divorced from party political politics. They rather represent conflicts between different regions, conflicts between the periphery and the centre of Britain.
  I want to concentrate my remarks on the problems of the South-West Development Area in a region which I think is the cinderella of the regions. Included in the South-West Development Area is an area where probably industrial and economic and social problems are more difficult to solve than almost anywhere else in Britain.
  The Report, "A Region with a Future", is a useful document. I do not think any of the suggestions in it are world shattering or surprising, but it is a useful document and many of the suggestions are well worth while. Frankly, the Government reply has been disappointing. In some ways it has been a schizophrenic reply because, while accepting the general strategy put forward, the Government have gone on to reject or to accept only in a half-hearted way the specific proposals made. Unless the Government are prepared to do more than is suggested in their reply we shall not solve the very difficult problems of the area.
  It is an area which is more geographically isolated than any other development area. It has a smaller population and the proportion of the working population in manufacturing industry is much less than elsewhere. It is an area where the emphasis on agriculture and tourism is greater than in other development areas. We want to see these industries thrive and prosper, but there is a declining labour force and it may continue to
  1222
  decline in future. We want to see tourism develop, but it is an inherent disadvantage of that industry that it is a seasonal industry and the greater its development the greater are its seasonal problems. The further west one goes the higher are the unemployment figures. All too often, I am afraid, the unemployment figures are masked by emigration from the area, so the real situation is still worse than the figures suggest.
  The development area suffers from lack of a big centre. This is why I am so disturbed by the negative attitude shown towards development in the reply to the Council's Report. One cannot expect Plymouth to be given all the advantages of a development area overnight. In terms of the South-West one has to consider all the proposals put together. I say to hon. Members who have expressed anxiety about the recommendation for additional assistance to be given to Plymouth that that recommendation has to be taken in conjunction with the other recommendations affecting West Cornwall. The Committee has inquired into the proposal of the Falmouth-Truro-Camborne triangle being extended westwards towards Penzance, which would produce a much wider economic situation for the area as a whole.
  I turn to Selective Employment Tax. We should welcome the Budget proposals, which go further even than the recommendation made by the council in its Report. I am thinking particularly of proposals to alleviate S.E.T. on part-time and elderly workers and proposals to help the hotel industries in certain rural parts of the development areas. But we welcome this not because of the proposal itself, although we think it is helpful, but because a precedent has been created here.
  For the first time we have an indication of Government willingness to consider the particular problems of particular areas as regards the classification of industries into different categories for Selective Employment Tax purposes; and we have here an acceptance of the fact that what might be a perfectly logical classification for S.E.T. in London or the Midlands is not a logical classification in Cornwall, Scotland or Wales. I would like to see us build on this, because one could give many other examples of industries that deserve special consideration with regard to this form of taxation.

  1223
  That is but one of the ways in which I want to see a great deal more selectivity and flexibility brought into the means by which we help development areas.
  The geographical isolation of the far South-West means that it is always at a disadvantage as compared with other development areas, and it is the very success of the Government's policy for development areas that puts the far South-West at a still greater disadvantage; because the greater the incentives are to go to a development area, then the more likely the industrialists in Birmingham are to go to development areas; and the greater the proportion who go to Wales or to those parts of the North of England which are nearer, the greater the contrast will be between the South-West and the remainder of the country.
  I turn to the vitally important point of communications. The general concept of a spine road is accepted, but accepted in a rather grudging way. I do not particularly want to belittle the fact that expenditure of more than £50 million is accepted by the Government in their reply to the council's report. In the economic climate of today that is something we must welcome, but I must say two things about the spine road. A spine road that does not go into the far west of the peninsula is not truly a spine road as I understand it, and it has to get into the far west of Cornwall to provide the real lifeline that West Cornwall, in particular, needs. The other point I question is whether we should not look to a greater extent than we have so far in the Government reply to the possibility of spine road development taking place along the centre of the peninsula rather than being diverted to go through Plymouth. I accept the need for worth-while communications from Plymouth to the rest of the country, but there is considerable anxiety in most of Cornwall about whether it is right that in future all the major transport to the county should go through Plymouth.
  I have spoken of these two particular aspects of the Report because I believe that it is a worth while and viable one. It is fortunate that we have an opportunity to debate it here this afternoon at some length. The South-West has achieved a great deal in the past and has con
  1224
  tributed a great deal to the building up of our country, in industrial terms as well as in many other ways. The South-West now wants to play a worth while part in the development of the economy of Britain. We do not want to remain a depressed area, with high unemployment rates and high emigration rates, and I believe we cannot have a prosperous Britain if we have not got a prosperous South-West because we cannot be a prosperous country if there are to be poverty-stricken areas in it.
  In the same way, we in the South-West cannot have prosperity until the whole economy of the country is soundly based. The Government have accepted the basic strategy. I ask them to look again at the detailed proposals. There is much that is good and worth while in the Report. I ask them not to condemn it to dusty Library shelves but to give it continued consideration. If they do so the South-West can continue to share in the increasing prosperity that I believe will be ours in Britain in years to come.
  6.45 p.m.
  Mr. R. J. Maxwell-Hyslop: The dusty shelves of the Library are just where this Report has been referred to. Not until three minutes before this debate was due to begin were copies available, the Department of Economic Affairs having neglected to get them there before. My copy has "Mr. Lever" written on it at the moment.
  Mr. Alan Williams: There was no discourtesy. Every single hon. Member from the South-West, as I believe they will all agree, was sent a copy of the Report.
  Mr. Maxwell-Hyslop: I am perfectly ready to agree that seven months ago hon. Members there each received a copy but it is usual for Members, when they have a copy, to keep it in their constituencies where they make use of it; and it is normal for Papers of this kind to be made available for debates and it is extremely—[Interruption.]
  Mr. Speaker: Order. I must never prevent either side of the House from attacking the other side but I must protect the Vote Office. The duty of the Vote Office is to keep stocks of Parliamentary Papers published during the last two Sessions. It is willing to obtain other

  1225
  Papers such as this Report if application is made for them.
  Mr. Maxwell-Hyslop: I am not implying any criticism of the Vote Office, but the Vote Office was unable to get hold of copies because, apparently, the Department of Economic Affairs did not think it worth getting any before the debate. It is symptomatic of the importance the Government attach to the Report, that not for one moment in this debate has any Minister from the Board of Trade thought it worth while to appear on the Government Front Bench. This explains why the Government have so completely ignored the recommendations of the Report and makes one wonder how much longer people of considerable ability and public spirit will continue to feel it worth while to serve on bodies of this kind when the recommendations made in their reports are, so totally ignored by the Government and treated with what borders on and what is nothing less than contempt.
  When one looks' at specific recommendations of the Report, which are both negative and positive, one cannot see what is the object of producing a report at all if its recommendations are to be treated with such contempt. The Selective Employment Tax, for instance, gets a caning several times in the course of the Report but what do the Government do? They increase that tax by 50 per cent. in the Budget; and if anyone cares to look at page 19 they will see that, except for London and the South-East, there is no area in the United Kingdom which has a higher percentage of its population—over 55 per cent.—engaged in service industries. Therefore, S.E.T. falls particularly heavily on this area, as the Report points out, and to increase it by 50 per cent. adds terribly to the economic burden on this particular area.
  There is nothing any Government can do about the fact that we are remote from centres of population and large markets. What can be done, however, is to accelerate the spine road programme, as the Tress Report specifically seeks, and keep transport costs to a minimum. The Government have replied that at some unspecified date in the mid1970s—and perhaps the Minister will tell us in winding up what is the latest date he considers compatible with the statement "the mid-1970s"—the programme
  1226
  will be in course of construction. We want to know when it is going to be finished.
  It is also true, of course, that the more fuel costs are put up by taxation the greater is the comparative disadvantage of those areas which are remote from centres of population and large markets. That is another way in which the major contentions of this Report have been vitiated by the action taken by the Government since this Report was published, since it was in their hands, since they have had the specific recommendations of Professor Tress and his Committee. So I must protest at the cavalier manner in which both the Committee and the Council which drew up the Report have been treated, from which the West Country as a whole will suffer very badly.
  Before I sit down, I must mention two other fairly small matters. The hon. Member for Bristol, South (Mr. Wilkins) talked about rural electrification, and I am glad that he did. I have a matter to raise which has a direct bearing on the question of rural electrification. There are certain small hamlets which the electricity board regards as uneconomic propositions for the supply of electricity unless a few more, buildings are put up to make it worth while. One would have thought, in these circumstances, that the Minister of Housing would lean over backwards to allow planning appeals so that these hamlets could be brought up to the minimum economic size in order that the people already living there, in this year of our Lord 1968, could have mains electricity.
  I find it most distressing that such planning appeals originating in my constituency are refused, thereby condemning various hamlets to go without mains electricity for all eternity. It is certain that, as costs rise over the years, the minimum economic size of a hamlet for the supply of electricity will grow larger rather than diminish. I find this profoundly distressing.
  The Government recently announced proposals to prohibit the export of scrap steel from the United Kingdom. The port of Teignmouth in my constituency gives valuable service to the export trade because hundreds of thousands of tons of ball clay go out from that port each year. Teignmouth needs all the trade it

  1227
  can get. We have heard about Bristol's problems, but the prohibition on the export of scrap steel will have a material effect on the port of Teignmouth. I ask that this matter be brought to the attention of the appropriate Ministry, even if it be not the Department of Economic Affairs.
  I have been as brief as I can, realising that other hon. Members wish to speak. Most of the points which I wished to make have already been made by others, with considerable ability.
  6.51 p.m.
  Dr. David Owen: No Member of Parliament representing an area in the South-West can take part in this debate without a sense of disappointment. When the Tress Report came out, it was universally acclaimed—by Members of Parliament, by local authorities in the region, by national newspapers and by economic journals—as offering a sensible strategy for an area which has long had considerable difficulties. It is easy to use words like "cavalier treatment" and "contempt" which the hon. Member for Tiverton (Mr. Maxwell-Hyslop) used. I think that he exaggerates the case. There is no evidence of such treatment. This is a sensible Report. Its major recommendations have not been entirely accepted, but this does not mean that we should then despise and decry the regional planning machinery. It means merely that we live to fight another day. We shall continue as we have done in the past, to a great extent on an all-party basis, to push the case of the South-West.
  We in this House must recognise that the Government have to make up their mind in a national context, and we have to justify our claims according to national priorities. We do our own case a disservice if we exaggerate it or use vitriolic language about the regional planning machinery. I ask hon. Members to consider what the position would have been if, for instance, a local authority on its own were arguing the case for the tourist trade in Cornwall or if the City of Plymouth were arguing its case for development area status prior to the setting up of the Regional Economic Planning Council. It is easy to decry the Council, but its voice is far more powerful in
  1228
  Whitehall than ever the voice of Plymouth City Council alone or a Cornish local authority alone could be. It may not be strong enough. It may not have presented our case so that we can have everything we want. But, over the past few years, we have developed a regional feeling in the South-West, and I for one am profoundly grateful for it.
  For far too long, local authorities, county boroughs and counties have fought one another. It was noteworhty that, when the Tress Report came out, its proposals generated wide acceptance on the part of people who, in the old days, might well have argued in an insular way. For instance, it was remarkable how Cornwall realised that, if Plymouth became a development area, Cornwall itself might gain considerably. Cornish people were prepared to take a much wider view of the possibility of establishing a real growth centre in Plymouth. It was remarkable also, when the other growth areas were discussed, how people in Devon and parts of Somerset appreciated the need to concentrate resources on certain areas, accepting that their own claims might be overridden.
  These are substantial gains which the Regional Economic Planning Council has achieved, and we in this House do the Council's future and its membership a great disservice if we decry the machinery through which it has been working. I wish that it had an elected basis. Moreover, as many of us have said in the past, we wish that it were centred more firmly in the peninsula, right down in the far South-West. But what we have today is something far better than anything we had a few years ago.
  Mr. Maxwell-Hyslop: At no time did I decry the Regional Economic Planning Council. I decried the Government for their persistent ignoring of its recommendations and, worse than that, for going directly contrary to them.
  Dr. Owen: I am well aware of what the hon. Gentleman said. In fact, the Government are not going directly contrary to the recommendations. They have tried as far as possible to take account of the Council's major recommendations. Judging from some of the Press comment in the West Country, one would almost imagine that the Budget had singled out the West Country. In fact, we have some

  1229
  considerable concessions from this Budget, concessions for which many of us on both sides have pressed for some time. For example, at last we have it accepted that the tourist trade has a real contribution to make to the country's economy, and is of particular importance to our own West Country. The rebate of the Regional Employment Premium for rural development areas—
  Mr. Speaker: Order. We cannot debate the Budget on this occasion.
  Dr. Owen: I am sorry, Mr. Speaker. I shall not discuss the measures which, in my view, show some recognition of what has been pressed in the Tress Report. I realise that time is short, so I shall concentrate on my constituency interest.
  It is a great disappointment to many of us in Plymouth that the Department of Economic Affairs has not found itself able to accept the recommendation that Plymouth should become a development area. What is at stake here is something far greater than Plymouth alone. What is at stake is the Government's development area policy and, more particularly, their attitude to growth centres. It is easy, when one comes from a city which has a natural claim to be a growth centre, to think that this must be the basis of development area policy, but, in my view, while embracing wider regions and designating large development areas, one can still isolate within those areas certain growth centres, not completely giving up the old idea of concentrating resources and trying to pinpoint growth centres. Many real criticisms could be made of the previous policy, but it had great advantages, and we should not brush them completely aside. There has been little real discussion about the fundamental issue of growth centres.
  I hope that the Minister will explain why the growth centre concept is so disparaged at present. It has many real advantages. First, a city such as Plymouth, with a population of 250,000 and a firm industrial base founded on a dockyard, can attract complete firms, not just branches, from other areas. This is an important matter because, at times of deflation, it is the branch of a firm which is often most susceptible to closure.
  1230
  This has been shown in a number of studies, notably by Loasby. What development areas badly need is factories which will stay and thrive during periods of deflation. All too often in the past, this has not happened. Such factories have been vulnerable, as has been shown by the number of advance factories which have not been occupied.
  Second, the grouping of firms together in a growth centre is of great value. It increases the industrial efficiency of the complex. There are many historical examples which show how this has happened. Where four or five major industries come together, a nexus of efficiency is built up and from it a good influence can spread. This is an important point which the Ministry would do well to remember.
  The other point is that in setting in motion a cumulative process of expansion also generates around major cities, and in fact new towns, the atmosphere that one is fighting against an adverse trend towards decline, decay and old industries and replacing this with favourable trade expansion. This is particularly the case if one can attract the newer science-based industries, which are often the most mobile—although they are also the most labour-intensive, which is a snag—and, which is more important, can also use female labour, which in development areas is a point of considerable value.
  I also think that those firms which are very marginal about expanding and thinking of moving, refused an i.d.c. in their present area, are likely to be much more open-minded about the prospect of moving if the area they are offered is an attractive one in which they are guaranteed a supply of trained industrial manpower. This is important and we want to know how many firms, having had an i.d.c. rejected in the prosperous Midlands, for instance, and which were open-minded about moving into a development area rejected this because they were not offered an attractive enough area.
  The other problem, which is often mentioned by Members on the opposite side of the House but which is one that we cannot disparage, is that managers themselves are often most reluctant to go to unattractive areas and, whether we like it

  1231
  or not, this too is a major factor in deciding the location of industry and of factories. Again there is a tremendous tendancy for managers, and perhaps particularly their wives, to want to go to a major centre of population with all the facilities it offers.
  Perhaps the last point is that local authorities which are dealing with the problems of a firm transferring into a development area develop a certain expertise. Numerous mistakes are made, it is a difficult enterprise, particularly if they are also bringing in skilled labour, offering them houses, and so on. If this expertise is spread out the experience of local authorities with one or two local factories is often lost. That is a small point perhaps, but it strongly favours growth centres within development areas where there are many local authorities with very little expertise in the problems associated with the attraction of industry.
  These are general points—not points which are just related to Plymouth—but Plymouth offers all these facilities. I have always acknowledged that, purely on the basis of unemployment figures, Plymouth should not be designated a development area. In comparison with the very high unemployment figures in other parts of the country our case would fall if it rested entirely on this. But it rests on the fact that this is a major city of a quarter of a million people totally dependent on one major industry—the Royal Naval Dockyard in Devonport—and for the past three months this city has waited in anticipation of the possibility of the postponement of the refit of H.M.S. "Ark Royal ", with the certain knowledge that the only way that real economies could flow from the cancellation of that refit would be to have a very large, deliberate creation of unemployment in that city involving probably over 2,000 men.
  That would mean putting on to the labour market people with very considerable skills in what is, in effect, heavy industry—skilled shipwrights, boilermakers, and so on—with no possibility whatever of finding another job either in Plymouth or in the surrounding area. This is a very serious problem which this city has lived with and is going to live with for many years. We all look forward to the results of the review of the three South Coast dockyards, and I realise the prob
  1232
  lems connected with that and we want to hear the results. But one cannot expect a city to have its industrial future and whole economic survival so precariously balanced as this, and it is the job of the Government to anticipate this and to make contingency plans. Frankly, it is not enough for them to say, as they are saying at the moment, that they will be generous with i.d.cs.
  Between April, 1960, when the decision was taken to remove Plymouth from the list of development districts under the Local Employment Act, and April, 1966, only one i.d.c. was granted for a new factory in Plymouth, and that was one which was already organised following a visit from one of the city council's officials to America.
  In April, 1966, an i.d.c. was granted to Gleason Works Ltd. and in July, 1966, one was granted for a factory for Barden Corporation (U.K.) Ltd. That is only three i.d.c.s in a period of nearly eight years.
  If we are going to attract enough industry—and often these employ only 150 to 200 men—to provide industrial diversification for this major city, we must start doing it now, if any possible rundown of the dockyard is anticipated even in five years' time. It is no good the Government of the day, be it my own or the Opposition, going to the West Country and saying they are going to make a major change in defence policy which is going to affect H.M. dockyard and they are not going to make it a development area. That will not be sufficient because for three or four years until the industry has been diversified there will be unemployment in the area. The Government must face the necessity for contingency planning and it is fallacious to say that, if one exception is made, others must be made. We concede that on the basis of unemployment figures this is not justified, but, because of the nature of the industry, which is bound to be precarious, the present situation cannot go on.
  It has been argued both by the Confederation of British Industry and the local authorities in the area and has largely been accepted in Cornwall that a prosperous Plymouth will help the surrounding area of Devon and Cornwall and Plymouth City Council has carried out studies which have shown that the amount of sub-contracting work which

  1233
  goes out from industry in Plymouth to the surrounding areas is considerable. These figures were made available to the Department of Economic Affairs before this decision was made.
  We now turn to our only hope—the Hunt Committee—and the possibility that Plymouth will be made an intermediate area. I fervently hope it is and I think that by any criteria which may be decided upon for identifying intermediate areas we shall certainly come in this category. We would certainly have a decline of the area's hitherto dominant industry, which presumably is a major factor, and an environment in which industry has difficulty in operating profitably because of long travel and other geographical factors, but in this city there is an industry base, a college of technology soon to become a polytechnic, very considerable skills vested in the dockyards and naval establishments and a strong tradition of industrial work, and it seems to me to be tragic that this should not be funnelled into newer industries so as to diversify the industrial basis of the city.
  Therefore, I ask the Government to look at this very urgently when the Hunt Committee is sitting and when it makes its proposals, because the problem has to be faced now in order to prevent a disastrous situation. I shudder to think what would have been the results in Plymouth if the "Ark Royal" refit had been cancelled. It is that sort of contingency for which we, as a Government, and this House have a responsibility to plan and it is this sort of anticipation which I believe is a real contribution to regional planning.
  The Department of Economic Affairs deserves great credit for establishing these economic planning councils and for listening, at least, to our case, but what we want now is action. What we want in the West Country is the right to contribute to the economic recovery of this country and to feel that we are no longer contributing to the economy by the emigration of our skilled labour force to other areas. The unemployment figures in the West Country are always masked by the very large and persistent depopulation which goes on all the time. I ask the Minister to look again at the concept of growth centres and to remember some of the things he wrote before he occupied
  1234
  the Front Bench on the question of growth centres and the location of industry policy.
  However, I would not wish to end without paying tribute to the Regional Economic Planning Council which produced this Report and I would say to the members that I hope they will not listen to those siren voices saying they should resign. Very rarely in politics do resignations get one anywhere, and I would ask them to stick it out and continue to fight and put pressure on Whitehall for the West Country.
  7.10 p.m.
  Mr. John Nott: We are very glad that fate in the ballot and my hon. Friend the Member for Honiton (Mr. Emery) have decreed that we should have a debate on the South West this evening. Many of us were hoping that the Government would have provided time to debate the Tress Report. At least we now have an opportunity of doing so tonight.
  I have no desire to score points off the hon. Member for Plymouth, Sutton (Dr. David Owen), except to say that his speech about growth points was the best plaudit that I have heard yet in the House of Conservative Party policy at the last election for regional development. I can remember arguing this very point at the last election. The policy of the Labour Government at the last election was blanket growth areas. It was our policy at the last election to have growth points. Indeed, I am sure that the hon. Gentleman is aware that our policy used to be development districts concentrated at particular growth points, whereas the Government abolished that and introduced global areas.
  I would like to go further than the hon. Gentleman and say that I do not think that there is any object in having growth points within growth areas. This does not meet the case. What we want is to abolish development areas and go back to development districts or growth points, because we cannot have it both ways. As to the South-West and in particular the far West, in a few moments I will come to my proposals for those parts of the country the hon. Gentleman discussed.
  When the Economic Development Council for the South-West was set up, many of us had grave doubts about whether it would succeed, first because it

  1235
  was at Bristol which is, as hon. Members on both sides recognised, a thoroughly unsuitable place for it to be. We had endless debates in which we suggested that the Council should be moved from Bristol, but the Government over three years have taken no notice. Again, we have had debates in the House in which it has been suggested on both sides that the Council in Bristol, if it was to be there at all, should have a decent representation from all parts of the region. However, the Government took no notice of this, and predominantly the membership of the Council has come from the Bristol area.
  I can remember endless debates taking place in the House in which it was suggested that there should be some representatives on the Council of West Country agriculture. There was only one representative of agriculture on the South-West Regional Economic Development Council; and he, I believe, farmed several hundred acres, whereas what we are concerned about in the West country is small farming, mainly milk. There was no one on the Council representing this type of interest. This is clearly the biggest industry in the South-West and will always remain so, whether a Government of whatever party are successful in bringing more industry there or not.
  In this debate on the Tress Report it is regrettable to recall that these very excellent and worthy people having spent nearly three years since the Council was set up producing the Report and having given up their spare time at the request of the Government, the Government have not now taken any action whatsoever requiring any change in policy. They have indicated that there might be a spine road by the mid-1970s to Plymouth. When are we to get a road to my constituency? In the 1980s, perhaps. It is no use hon. Members talking about priorities. Priorities are not much help to my constituents, who are not to get a good road until 1980.
  The second major recommendation of the Tress Report was that Plymouth should become a development area. I think that it is most regrettable that the Government have taken certain complaints from Cornwall, a county part of which I represent, as being a reason for not granting development area status to
  1236
  Plymouth. I have discussed this issue at great length with people in my constituency, and I can say that the majority of thinking people in Cornwall—so long as there was a growth point in the far West in the Redruth /Camborne/ Hayle/ Penzance area which was given priorities comparable to Plymouth—would have been quite happy to have had Plymouth as a growth point as well. The Government cannot back out of Plymouth's claims to be a development point by saying that Cornwall would not have liked it. As the hon. Member for Sutton said, as long as we knew that we would get a full growth point in the far West as well, we should have been perfectly happy to have had a growth point in Plymouth. All we are concerned about is that there should not be an even greater withdrawal of activity, such as it is, out of Cornwall to Plymouth. As long as there was a growth point in the far West as well, we would have been perfectly happy for that recommendation to have been implemented.
  Lastly, the Government have very charitably agreed that this growth point in the far West can be shifted 10 miles to the west. This did not require any action or change of policy on the part of the Government. This was an easy concession for them to make, because it required them to do nothing at all. The whole place is a development area, anyhow.
  I regard the Government's attitude to the Tress Report as being utterly negative. It has not got us forward one iota. The Council was set up in mid-1965. We are now nearly three years on. The result of the whole of this procedure has been to take us no further forward. There have been stalling and delaying tactics throughout.
  The hon. Member for Sutton said that he thought that before the formation of the South-West Economic Development Council, the South-West's problems had not been sufficiently strongly upheld. If asked for my preference, I would abolish the South-West Region Economic Development Council altogether and go back to what we had before, namely a committee of six local authorities in the South-West, because the Committee of Six which was set up by my right hon. Friend the Leader of the Opposition when he was at the Board of Trade did at least have

  1237
  a balanced, fair representation of the elected members of the area.
  Therefore, I do not believe that the Economic Development Council has done as much as the Committee of Six did between 1962 and 1964. It is just not true to say that the Council has had the great successes which are claimed for it. I believe that the Committee of Six would be a far better organisation to promote the development of the South-West.
  The real problem is that the Council is situated in Bristol, which is nearly 200 miles from my constituency. Can anyone conceive of what Dover would have to say if its regional economic development council were at Bristol? Everyone would laugh. In fact, Dover is just as close to Bristol as my constituency. Bristol bears not the slightest resemblance to the economy of Devon and Cornwall. Bristol is an industrial city with no unemployment. Unemployment in part of my constituency rises to 15 per cent. in the winter months. How can a Council which is drawn predominantly from the Bristol area—mainly industrialists—understand an economy whose principal industries are agriculture, seasonal tourism, fishing and tin mining? All along, we have pleaded with the Government to have the Council somewhere near to the centre of the region, but they have always neglected this advice.
  Although the Government have made certain concessions, they have not even restored the position to what it was. I am prepared to admit that the Government have built one or two additional advance factories. I am delighted that they propose to abolish S.E.T. for certain parts of the tourist industry. The hon. Member for Sutton seemed to forget that it was this Government who imposed S.E.T. in the first place. We are delighted now to have some grants for the tourist industry, but these will only in part recompense us for the abolition of investment allowances on the tourist industry by the Government. It is frightfully good of the Government to give these concessions which we heard about in the Budget speech, but in fact they take us only half way back to where we were before 1964.
  Agriculture will always remain our principal industry. It is no use bringing out a Price Review which only reim
  1238
  burses farmers for a proportion of their costs, and then saying that the Budget did a great deal for the South West. Although we want more industry, in the far South West, in Devon and Cornwall, extra industry can only be of marginal importance. We shall never have prosperity until agriculture, tourism, tin-mining and other mineral extraction, and fishing are assisted. Those industries have suffered worst of all since the Labour Party came to power. I can understand this, because the rural areas are predominantly represented by Conservative Members. The fact is that the principal industries of the West Country are those which have suffered worst since the Government came to power, and no amount of R.E.P. will help.
  Many hon. Members wish to speak and, therefore, I shall close by saying concisely how I should like to see regional development policy reorganised. This is relevant to the Report, which made certain recommendations that I think in some respects are wrong. First, I should abolish the South-West Economic Planning Council and return to the Committee of Six. That should be the planning authority for the South-West because all the counties and boroughs have planning officers, and the planning officers of Plymouth City Council, Devon County Council and Cornwall County Council know far more of the problems of the South-West and what the area needs than 20 civil servants sitting in Bristol will ever know. Everyone in the South West recognises this, but not the Government.
  Secondly, I should like to abolish the development areas altogether and return to the growth points policy we had before 1964. I feel that the Government are moving in that direction again, and it would be a big improvement. There has been enough of the business of dribbling subsidies to the private sector to encourage industrialists to bring in small factories employing 100 people here and there. If money is to be made available, it must be to develop the area's infrastructure. Let us have the money and spend it where we in the South-West know it is needed. I do not see what Whitehall or even Bristol can do to help that we cannot do ourselves. Give us the money in Cornwall, Devon and Dorset, and we know how to spend it much better than

  1239
  the Government. We would spend it on a decent road, and if we had any money left over—[Interruption.] I am delighted to see that we have been joined by my hon. Friend the Member for Worcester (Mr. Peter Walker).
  Mr. Speaker: Order. The hon. Gentleman can be delighted only when his hon. Friend is actually in the Chamber.
  Mr. Nott: I am delighted to see that my hon. Friend has now joined us.
  If the Government gave us the money instead of deciding from Westminster how it was to be spent, we should spend it on infrastructure and roads. If necessary, we should have a subsidy which would ensure that our power costs—the cost of electricity, gas and coal—which are some of the basic costs of industry, were not greater than they are in other parts of the country. Industry comes to the South-West and finds that its fuel and electricity costs are far greater than they are elsewhere. If we are to have any subsidies, let us have them so that we can bring our transport costs more into line with those in the rest of the country. The Government have done far more harm to the far South-West by increasing the costs of transportation than they could have dreamt of doing by anything else. I think particularly of the increased costs of petrol and of vehicle and lorry licences. They form our lifeline. We cannot get our tourists in and our goods out if the taxes on transportation are going up and up and up.
  Mr. Speaker: Order. That cannot be amended in this debate.
  Mr. Nott: I shall draw to a close by saying that I very much hope, as my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) is here, that we in the Conservative Party will completely and radically change the existing regional development policies, because the present ones have failed.
  I am delighted that in our debates we have not had a great deal of party controversy on the needs of the South West. Probably hon. Members on both sides of the House representing Cornwall, Devon, Dorset and the far outlying areas all feel that the present regional development policies are not working as they
  1240
  should. They need to be radically changed to make any difference to our part of the country. They may be geared to the declining industrial areas of the North-East, but they are not geared in any way to the South-West. I hope that a change will be made under this Government if possible, but certainly under a Conservative Administration in the future.
  7.25 p.m.
  Mr. Peter Mills: Professor Tress's Report had a fine and bold title, "A Region with a Future". I hope that that will be true. But after reading the Government's reply, one tends to be slightly cynical. I do not think that there is very much future for this type of Council if the Government ignore all its suggestions, as has happened in this case, and it must be a very frustrating business to be on it. There will be a very difficult future for the South-West if the Government do not alter their attitude to the region. Though in a sense that depresses and sickens me, it does not weaken my resolve to go on and redouble our efforts to see that the region has a future. All Members for the South-West must combine to see that that is so. We must go on until we get the results we want.
  The Government talk about the Report as a valuable guide to future planning. That is not enough. Certain problems demand immediate action. I do not need to repeat all that has been said on roads, which are absolutely vital. It is no good talking about planning. We want action now. If all the money spent on planning and so on had been spent on providing a rather better road system, it would have been a help.
  The grey areas must be dealt with. The problem of S.E.T. is very real, and I do not think that the Government realise the damage it has done to the region. That problem must be dealt with now.
  I warmly welcome the suggestions that Plymouth and, in a smaller way, Okehampton, should become growth areas. That is Conservative policy, and it would have a very real effect throughout the region. I know from experience that when a large firm is set up in Plymouth we have smaller servicing firms in Bideford, 30 or 40 miles away. If Plymouth really enlarged and big firms

  1241
  came there, other parts of the region would benefit. But time is running out, and there must be action now.
  The Government must start to deal with the problems. That is why I find their reply so frustrating. I wish that they could have at least said something that they would do immediately. It is true that in the present economic situation they must probably say "No" to many of the things recommended, but at least they could have stated some things on which they could go ahead straight away.
  We have had a long debate and most of the points have been covered. Therefore, I shall say something about agriculture and then sit down. It is the most important industry in the South-West and needs encouragement. I do not believe that present Government policies on agriculture will make the region's agriculture prosperous. Unless we have import controls and so on, we shall get nowhere. Our agriculture is based on dairy farming, which desperately needs control of imports so that the price the farmers get is not diluted time and again. We have many small farms in the South-West. It is true that the need to amalgamate is there, but small farms can be viable and every encouragement must be made to them to become so.
  The family farm is the basis and backbone of our farming enterprises in the South-West. That is why I deplore some of the remarks made by Mr. Beresford, the Chairman of the Agricultural Committee of the Council, that the family farm is out. That is not so. These farms must be encouraged. Indeed, this is the only way to farm in the South-West. Admittedly, they must be brought up to date, encouraged and made viable and large enough to operate. But nevertheless the basis of agriculture in the South-West must be family farms.
  I hope that we shall have on the Council an agricultural representative who reflects the needs of the South-West's agriculture and is in touch with the position, and not a farmer who farms 600 acres in Wiltshire and literally knows nothing of the needs and problems of the South-West. I hope the point will be taken. A modern, intensive and large enough family farm is, I believe, one of the answers to our agricultural problems in the South-West, coupled with a
  1242
  Government policy which will encourage agriculture. I do not see such a policy at present.
  I hope that, once again, the Minister will bear in mind that it is agriculture, tourism and other things which we can do in the South-West and which are the only way to make the region really prosperous.
  7.32 p.m.
  Sir Keith Joseph: The House is grateful to my hon. Friend the Member for Honiton (Mr. Emery) and to the hon. Member for Cornwall, North (Mr. Pardoe) who initiated this debate following their luck in the Ballot. We have been discussing a beautiful part of the country with a great store of character and enterprise and, as many hon. Members have said, totally different problems from those of many of the other regions. But let us count our blessings. If the South-West has its problems it is not overwhelmed by industrial decay, by the urban absolescence which afflicts, for example, the North-West.
  The South-West's principal problem is that, with all its beauty, it is relatively remote. The region, as hon. Members have made plain, and as my hon. Friend the Member for Somerset, North (Mr. Dean) emphasised, has great variety of conditions and needs. I myself have had a number of long discussions in the South-West, although I am a little conscious today that many of them were in Bristol, which does not seem to be applauded as the right centre for discussions, and I have listened to many of the excellent speeches in the debate. I shall not go over any of the arguments arising from the Tress Report or the Government's reply. I want to bring out one or two general factors behind the debate.
  The Government have the job of creating in the country a balance between the different regions and a balance within each region of its different needs. There is a sharp difference between Government and Opposition policies. I spelled out the Conservative policy for the grey areas and the development areas on Monday last week. At the centre of our grey area policy is a return to the growth centre concept.
  The hon. Member for Plymouth, Sutton (Dr. David Owen) made a particularly effective, diplomatic but biting speech.

  1243
  He came out wholeheartedly in favour of the growth centre concept. My hon. Friend the Member for St. Ives (Mr. Nott) made a trenchant restatement of the case for the growth centre. We believe that the best interests of the country, of the development areas and of the grey areas, will be served by a return to growth centres—a concentration on urban renewal and infrastructure and communications—and it is this aspect which differentiates our policy from the Governments indiscriminate global policies, which we believe to be expensive and ineffective.
  The South-West has its own special interests. It is largely a service area. Agriculture is at the heart of it. I may say in passing that if industry in this country had done as well as agriculture, admittedly with help from chemists and engineers, since the war, we would have no balance of payments problem. But the area depends largely on services which have been so disadvantaged by S.E.T., while the Transport Bill, because of the region's relative remoteness, has hit it equally badly.
  The Government with a certain amount of general enthusiasm, created a spokesman for each part of the country in the Regional Economic Planning Councils. Now the reports have begun to come in—and the resignations as well. The chickens are coming home to roost. The Government must recognise their responsibility. They must recognise that their response to the Tress Report has created an explosion of disappointment in the South-West, echoed in the debate. To some extent, this disappointment reflects the perhaps excessive hopes which the Government's own eloquence created during the election campaigns. My hon. Friends the Members for Tiverton (Mr. Maxwell-Hyslop) and Plymouth, Devon-port (Dame Joan Vickers) were just two of the speakers representing different aspects of the disappointment caused by the Government's response to the Report.
  Hon. Members opposite have softened their criticism of the Government by suggesting that the South-West Region was badly treated by the Conservatives during their 13 years of office. I remind them that this view was not supported by local opinion, at least for the first ten
  1244
  years. I have here the regional voting record for the 1951, 1955 and 1959 elections. In each of them, the Conservative representation increased and the Labour representation declined.
  Mr. Pardoe: What happened to the Liberals?
  Sir K. Joseph: I have not looked up the Liberal record.
  It is true that, in the last period of Conservative office, perhaps from 1962 to 1964, there was a growing disappointment. But these were the very years in which Conservative Ministers conceived and set in hand many of the developments—roads, bridges and the like—for which the Government are now taking credit. Every hon. Member can give examples. The fact is that, while the South-West has its needs, only a return of growth and confidence in the whole economy will bring about conditions in which regional development can take place at the sort of pace we all want.
  I have deliberately kept my remarks short. The Department of Economic Affairs is a shaky Department with a shaky Minister. The shaky Minister did not think it necessary to turn up for our debate on grey areas last week, which many of us thought discourteous and disproportionate. He has not turned up today. He is, therefore, putting on his Joint Under-Secretary of State—against whom we have no complaint whatever personally—an added responsibility. The whole House will, therefore, listen with great attention to the hon. Gentleman's reply to what has been one long chorus of complaint.
  7.40 p.m.
  The Joint Under-Secretary of State for Economic Affairs (Mr. Alan Williams): This debate has been rather extended. I see the hon. Member for Peterborough (Sir Harmar Nicholls), waiting with considerable patience to churn forth his complaint against the Government. I also have the pleasure of winding-up in that debate, and I hope that he will not think me rude if I excuse myself for about 20 minutes after he has spoken in order to get some food. I am sure that he appreciates that even Ministers have to eat on occasions.
  We would all join with the hon. Member for Honiton (Mr. Emery), regardless

  1245
  of how we judge the Tress Report, in congratulating the Members of the Council on the work that they have put in and on the project that they have produced. Before dealing with the Government reply and the criticism levelled against it, I will rehearse what seems to be becoming a common dialogue between the right hon. Member for Leeds, North-East (Sir K. Joseph) and myself about the relative merits and demerits of Conservative Party regional policy as opposed to that of the Labour Party. I listened carefully to his points. He said that it was the Government's job to secure balance in regional development. I would again draw his attention to the abysmal failure of the policy followed stubbornly by the Conservative Party when in office.
  If by his own criterion, the objective of regional policy is to get an even balance, then he would be the first, because he is an honest man, to admit that they did not achieve this during their period of office. The range of disparity, as I pointed out last week, was so great that whereas in the development areas there were increases in the working population of only 6 per cent. in the more prosperous areas of the South-East and so on there was expansion at the rate of over 15 per cent. If only they had not persisted in this policy for the 13 years in which they were in power, we would not need a development area policy or a "grey" or "intermediate" area policy.
  I derive no political pleasure in finding that after all this, with the obviousness of the lessons, this is the policy to which he would like us to return. Since he is one of the more reasonable and—I do not mean this in any patronising sense because he has much more Parliamentary experience than I—he is one of the more constructive Members of the party opposite, it horrifies me to think that this is the best that he can come out with.
  We must first of all establish the point that the South-West Economic Planning Council is an advisory body, not a decision-making body. It obviously would not be right. constitutionally for it to be so. Hon. Gentleman would not pretend that during their 13 years of Government they never rejected any ideas put forward by an advisory body. I can remember when the right hon. Gentleman had, in addition to his housing responsibility, a responsibility
  1246
  for Wales, that part of the country which I represent, nothing ever came of a recommendation put to the Government about the reorganisation of local Government in Wales.
  There are many other examples. We all know quite well that no Government can say that they will accept every recommendation that any advisory body puts forward. The gloom which has been quite manifest on the Opposition benches was hardly shared in the Press Notice issued by the South-West Economic Planning Council when it received the Government's reply. Its opening words were:
  "The Government have accepted the general principles of the Council's strategy for the South-West."
  I will gladly let hon. Members have a copy of this later. This has not been a story of absolute rejection of everything that has come forward, nor anything like it. That is the most important element.
  We have approved the spine road development as far as Plymouth. As to Plymouth, we have said that we cannot accept full development area status, but we have said that we want Plymouth to be judged as similar areas will be judged, against the Hunt criteria. As I have pointed out in an interjection, the Hunt Report will be out in the autumn. In the meantime, we are willing to give assistance to the locality under the existing criteria.
  There has been no absolute rejection of the West Dock proposal for Bristol. Although the economic arguments based on return and investment—and I know hon. and right hon. Gentlemen opposite are always keen to see that there is an objective assessment of investment—
  Mr. Robert Cooke: We want to know when we are to get a decision of any kind.
  Mr. Williams: In a few weeks. It is not a matter of months, years or anything of that sort. I can assure the hon. Gentleman that this is not a long, delaying exercise. It will only be a matter of weeks. We wanted to reply to this document before Professor Tress left his chairmanship. Hon. Gentlemen would agree that this was a matter of courtesy which both sides of the House would have observed. We felt that if we could reply without completing our considerations on one issue, it was better to do this rather

  1247
  than allow Professor Tress to fade away from the scene without a response. That is why the one issue was held over.
  As has been pointed out, we have given further thought to the study of the Truro—Camborne—Redruth triangle as a growth area in the South-West and we have accepted the idea put forward by certain local authorities that we should extend the study to include the area to Penzance, and we have asked the appropriate council to co-operate.
  Mr. Nott: I am delighted to hear this. Penzance is the centre of my constituency. Could he explain precisely what this growth triangle will do that the present development area does not? I am not quite clear what the Government are doing.
  Mr. Williams: I am sure that the hon. Gentleman has read the Report, which put forward the concept of certain local points having more rapid expansion than the rest of the region. We were quite happy to accept the basic strategy. We want to examine a little further the feasibility of this locality being such a growth centre. That is the study asked for and we have met the request.
  Mr. Nott: This is a growth point now. It gets a 45 per cent. cash grant. Are the Government considering giving it even more than the development area now has? Could the hon. Gentleman quantify the precise additional help that he will give to this particular geographical area which will mark it out from the rest of Cornwall and the rest of the development areas in the United Kingdom?
  Mr. Williams: If the hon. Gentleman is expecting me to announce a special rate of assistance for this particular triangle, I am sorry to have to disappoint him. My point is that it could be that there will be greater benefits in concentrating, for example, certain infrastructure developments to help encourage more industries in one or two particular points on a growth basis rather than spreading them more thinly throughout the whole sector. We shall not basically disagree on that.
  I come to the point about an airport for South Devon. The hon. Member for Honiton said that he had one particular locality in mind. We have suggested
  1248
  that there should be a study on a choice of sites. The reaction of the hon. Lady the Member for Devonport made it clear that there is not exactly unanimity in the South-West about the siting of a sub-regional airport.
  The Severnside study is continuing. It will be completed next year. The hon. Member for Cornwall, North must recognise that when we have to draw boundaries, as we must with local authorities or regional boundaries, inevitably occasions arise when there is an overlap of interest at the margin. In those cases, it would be silly to treat one's line—and all lines have an element of arbitrariness in them—as a six-foot high wall and say that there can never be any community of interest between the two sides of it. The idea of a Severnside study is to analyse in depth the prospects of growth for a particular strip which falls partially in the Welsh Region and partially in the South-West.
  I come to the question of tourism. One hon. Member made a point about research. A two-year research project on tourism in the South-West is being financed at Exeter University. In addition, to help tourism, there are loans of up to 75 per cent., with a maximum of £25,000, for hotels in rural parts of development areas. We have announced and discussed development grants for hotels—20 per cent. outside development areas and 25 per cent. within development areas. While there was political criticism of the fact that we had taken off the S.E.T., no one suggested that it should be put back. I therefore assume that hon. Members welcome the concessions which have been made which will help the hotel industry. [Interruption.] If the hon. Member for Peterborough wants to make his speech now and to forgo raising the next subject for debate, I shall be only too happy because I can then get some supper.
  I should like to analyse the three issues on which there is considerable dispute. First, we have not precluded some form of assistance for Plymouth. What we have said is that full development area status is not justified, for a range of reasons. Perhaps not one of them in itself would be enough to say that, but all of them taken together are enough. Unemployment there is substantially below the level of unemployment in the development

  1249
  areas. It is sufficiently below to make it very difficult to include this area in an objective comparison with other parts of the development areas.
  My hon. Friend the Member for Bristol, South (Mr. Wilkins) made a quotation which implied that we are not warring factions in the House, but we know very well that a Minister who makes a concession in one area, around which a specific line cannot easily be drawn, soon has to defend it against Members of Parliament representing other areas who want their interests equally regarded. To have made this concession to Plymouth in the present circumstances would inevitably have led to repercussions outside the development areas and to a quite considerable extension of development areas which is, I think, the last thing that hon. Members opposite want. Therefore, I assume that the Opposition are completely with us in this matter. Rather than see an extension of total development areas, I am sure that they would sooner not see Plymouth accorded full development area status.
  Thirdly, in our opinion, damage to the South-West Development Area would result if Plymouth, with its environmental and urban advantages, were to receive full development area status. Our assessment is that this would make it more difficult to bring firms to areas slightly further away. We obviously have a genuine difference of value judgment. This is our value judgment. We stand by it, and we think it right.
  Dr. Owen: My hon. Friend admits that this is a value judgment, but an objective assessment has been made by the Plymouth City Council showing that the effects of a thriving industry in Plymouth reflect on the rest of the South-West. He always talks about this matter in terms of Plymouth. This is a problem of the South-West. It is the only development area with no growth point.
  Mr. Williams: What is not shown is how far the area would lose other types of work. It might get a certain spin-off or certain contracting work. It might get minor off-shoots from Plymouth. But we believe that, with the same incentives, the locality beyond Plymouth would lose many new projects which would otherwise have gone there.
  Mr. Nott rose—
  Mr. Williams: I have given way on many occasions. I have a fair way to go, and I am trying to cover as many points as I can.
  Since the Treasury Report was published, extra incentives have been given to help the development area in the form of the Regional Employment Premium, which was introduced some months after the Tress Report, in respect of which, with S.E.T. premium, an extra 37s. 6d. premium is paid. These incentives will more than offset any losses which may be suffered from not having the so-called spin-off from Plymouth.
  Plymouth has a pilot overspill scheme with the G.L.C. I was interested to hear what the hon. Member for Cornwall, North (Mr. Pardoe) said about a firm of 800 potential employees. Did he say that it was a London firm? If so, if he would like to give me the information about it, I will gladly look into it. At first sight, it would seem to be the type of project which might be covered. If he would drop me a note after the debate, I will gladly examine the matter to see whether we could do anything about it.
  Mr. Pardoe: I may have made a mistake about the Departments, but I gather that the Board of Trade already has the matter in hand.
  Mr. Williams: Therefore, the hon. Gentleman was not making a complaint; he was merely making an observation. That is a relief.
  Instead of according full development area status to Plymouth, we are making more liberal use of industrial development certificates. We are willing to consider issuing certificates to firms particularly suited to the area and its resources. The Government have steered a Land Registry Office to Plymouth which will help to provide work in the town.
  Ultimately, this matter must be considered against the Hunt Committee criteria. We cannot consider interim action simply because this would mean pre-judging the Hunt Report in terms, not only of appropriate action, but of the definition of areas.
  One of my hon. Friends referred to the descheduling of Plymouth. The hon. Lady the Member for Devonport said that we could make it a development

  1251
  area but that after about 12 months we could deschedule it because it would have attracted all the extra work it needed. Against the background of the type of incentive being given in the development area at the moment, where, for example, there is the long-term commitment on R.E.P., and even that does not finish when an area is descheduled, I think that hon. Gentlemen on both sides of the House feel that it would be inappropriate to use such a big economic weapon on what may be only a "topping-up" job in the locality.
  I come to the second of the controversial elements, which is the West Dock at Bristol. Here is a project costing nearly £15 million. As all hon. Gentlemen know, the threshold rate of return on this type of investment—and it is the criterion for all port investment—is 8 per cent. Hon. Gentlemen opposite cannot complain about that because they required various standards of return on investments when they were in office.
  The Ministry of Transport's assessment is that the project would not reach the rate of return of 8 per cent. which would be required from it. The Government's objective must be to achieve the maximum economic use of all resources. Therefore, the ports must be developed not on a piecemeal plan but according to national need. That does not mean that we have rejected the project completely. In our reply, we have indicated that, although it does not measure up to the strict financial criteria, we are willing to consider the position of the port in relation to employment in Bristol, in relation to its impact on the Avon Estuary, and in view of its possible importance to the Severnside development, should that take place.
  Mr. Wilkins: I hope my hon. Friend understands that that view is challenged.
  Mr. Williams: Of course. I have noted all my hon. Friends' points, and I will ensure that they are brought to the attention of the appropriate Ministry.
  Finally, I come to the spine road. My hon. Friend the Member for Bristol, North-East (Mr. Dobson) quoted from the Press notice, and it is worth reminding hon. Members on both sides, before we get the issue out of proportion, of what was said by the Planning Council
  1252
  when it was told that the spine road project was to be accepted as far as Plymouth. It said in paragraph 4:
  "The Council adhere to their view that the spine road to Penzance should be constructed to an adequate standard by as early a date as possible. Nevertheless, they have concluded that in the circumstances of the day, the programme as it now stands—including those additional schemes shortly to be announced as being in the preparation pool—is as much as can be achieved by 1975."
  The Government have accepted the strategic importance of the road and they have agreed to complete it as far as Plymouth. They have agreed to certain selective improvements in Cornwall, including five by-passes. May I say that the Edithmead to Exeter section alone amounts to £50 million of investment.
  In carrying out our programme, we asked the Planning Council to put forward its ideas of the appropriate priorities. Its order of priority was Bristol to Exeter, Exeter to Plymouth, and Plymouth to Penzance. It also stated that it is obviously better to get on with bypasses before considering open stretches of road. There will be further consultation with the Planning Council on the details of the programme as it is developed. Understandably, I have been asked for a firm date for the completion of the work. Unfortunately, I cannot give one for the reason that the road programme preparation pool for the 1970s for the whole country is due to be announced by my right hon. Friend the Minister of Transport in the near future. At that time, I hope that most of the points which have been raised in this respect will be answered.
  We have undertaken improvements on other roads. On the A30 between Exeter and Bodmin, for example, there are to be improvements at Launceston and Okehampton.
  The total cost of the new projects as a result of our analysis of the Report comes to £70 million, which is a very considerable investment of public funds. I think that answers the criticism that there has been no regard for the needs of transport in the area.
  The hon. Member for Cornwall, North, asked what the development area incentives were. Obviously he knows the details of them. The gross sum comes to £250 million—
  Mr. Emery: I am obliged to the hon. Gentleman for his replies, but he has thrown out the figure of £70 million as the investment on new roads. Without extra information, that could be misleading. Over what period will that £70 million be spent, and what proportion against the overall road programme does it represent? It is only when we know those facts that we can make a positive judgment about it.
  Mr. Williams: The £70 million represents the cost of the new projects which were announced in the scheme. The name of schemes and costs will be announced with the preparation pool, and it will be seen at that stage in the context of the national programme. At present, I am not in a position to give that detailed information, but the hon. Gentleman will get it in the near future.
  I was coming on to deal with industrial development in the South-West, again in relation to i.d.c.s issued for the South-West in terms of million square footage since we came into office. Our first full three years as a Government have seen an increase of 33 per cent. in the square footage of factory space over the last full three years of Conservative Government. If we take 1964, which was a split year, and give the whole of that to right hon. and hon. Gentlemen opposite, and take those three years as against the next three years, the increase would still be just over 11 per cent.
  Sir K. Joseph: Do not the present Government include canteens and office space in their measurement of industrial square footage? If those are taken off, is the comparison the same?
  Mr. Williams: I assure the right hon. Gentleman that I have no intention of deceiving him with a statistic of that sort, though, if I may say so, it is one which was found useful by right hon. and hon. Gentlemen opposite, who applied it in the development areas and not to non-development areas, so that they could always show a very high proportion in development areas when they were in office. I have subtracted that already.
  Within the South-Western Development Area itself, we have also approved eight Board of Trade advance factories in the last three years. Four of them have already been completed and are
  1254
  occupied. That compares with one in the period from 1960 to when right hon. and hon. Gentlemen opposite left office. It is clear that, on i.d.c. square footage and in terms of Government factories, this area is doing far better under the Labour Government than it did under the Conservatives.
  I apologise for the length of my reply, but it has been a long debate and a great many points have been raised. I have tried the patience of hon. Members, but I have also tried to answer their points. I have tried, too, to show that the allegation that we have rejected the Tress Report is unfounded, that we have confidence in the area and that we are willing to back it with Government money and Government investment.

  COST OF LIVING
  8.9 p.m.
  Sir Harmar Nicholls: I am delighted to hear that the Joint Under-Secretary of State for Economic Affairs is to reply to this debate, and I hope that he does it in the same detail as he has just answered my hon. Friends, it must have given them a lot of satisfaction.
  It has helped me a great deal to know that the hon. Gentleman proposes to dash away in the middle of it to buy himself some food. If he remembers the prices that he used to pay for food in the Dining Room and Cafeteria when he first came to the House in 1964 and compares them with what he has to pay tonight, that will be a very effective way of appreciating the point that I intend to put to him.
  The Joint Under-Secretary of State for Economic Affairs (Mr. Alan Williams): The hon. Gentleman will recall that at that time we were making a loss which was in excess of £30,000, and perhaps it was not really fair that Members of Parliament should be subsidised to that extent.
  Sir Harmar Nicholls: Perhaps that is a good thing. It means that despite the subsidies, the price structure has seeped through, and he will have to pay a lot more tonight than he did in 1964. It is only what people outside have to pay without any sort of subsidy to help them. I bring that in, because it could be that

  1255
  the hon. Gentleman will take it as a practical illustration of what I shall endeavour to argue now.
  Debates on the Consolidated Fund are Parliamentary democracy at its best. They enable back benchers to bring to the attention of the Government things which are disturbing the country. The debate we have just had on the regional problem is a good example. Now we move to the cost of living which is a national problem. It is a national problem from which can flow consequences which could make the recent riots in Grosvenor Square seem like a day at the seaside. The consequences that can flow from the frustrations and feelings at the cost of living deserve that sort of comment. I believe that the steep and seemingly never-ending rise in prices carries with it the risk that normal agencies for keeping people within the law may break down, or at any rate be severely tested. I hope that the Joint Under-Secretary and his friends on the Treasury Bench will keep the magnitude of what can flow from it well in mind.
  From 1964 on the curve of prices has only been upwards—steeply upwards—and it has now reached a point where it hurts everybody very much, and they will be reacting to it.
  Between October, 1964, and November, 1967—before devaluation—prices went up 11·6 per cent., and the first round of price increases following devaluation brought this up to 12·3 per cent. That was a pretty hefty rise. I know that to talk in percentages, whilst it may fit in with the blue books and statistical records which we have here, does not reflect the position in the language understood by the housewife. In money terms the percentages which I have quoted mean that the £, worth 20s. in 1964, fell to be worth only 17s. 10½d. In terms of the family budget the same percentages mean that purchases of equivalent goods and services compared with 1964 would today cost £2 8s. per week more. That comes out of the family budget.
  The Chancellor's estimate is that the full effects of devaluation will raise prices by about 3 per cent. This means that on top of the figures which I have given, which were up to devaluation, the weekly budget costs will go up another 11s. 8d. That is quite a slice out of the income of the average family.
  1256
  If one examines food prices in particular, we find that they have risen by 11·2 per cent. since October, 1964. The Grocers' Gazette has stated authoritatively that between devaluation and the end of February, 2,643 items of foodstuffs, cleaning materials and toiletries had risen in price. That shows the range of these extra charges that are put on the costs of a normal household.
  As recently as 23rd of this month the Financial Times reported:
  "There was another rise in the cost of living last month. The Index of Retail Prices moved to a fresh high of 122·2 on February 20 from the January 16 record of 121·6 due to 'increases in the price of bread and some other goods and services', announced the Ministry of Labour. The index is based on prices on January 16, 1962 (taken as 100)."
  That means that since the period for which I have quoted these figures, we have had this extra rise even over the last month, as reported by the very authoritative Grocers' Gazette.
  In order that we shall have no doubt about what is meant—because it is easy to talk in percentages and follow these general figures, but it has to be brought home so that it is understood—a typical example of prices since devaluation is as follows: bread has gone up by 1½d. a large loaf; flour 2d. for a 3 lb. bag; marmalade 2d. for a 1 lb. jar; honey 3d. for a 1 lb. jar; soap 2d. on a tablet; sausages 2d. a lb.; instant coffee 3d. on a 4 oz. tin; disinfectants 3d. a quart; toothpaste 2d. a tube; cooked meats 2d. a lb.; tongue 5d. on a 12 oz. tin; cocoa 2d. a lb.; pickles 3½d.; ham 2d. a lb.; beer id. a pint; corned beef 1s. on a 12 oz. tin; and frozen foods 4d. per 13 oz. That is a pretty representative list that I have sorted out, but it is only a list. It does not by any means cover the whole of the area of normal purchases in the normal household.
  If all this had happened as a consequence of rising world prices or things outside our control, one would not wish to attack the Government for it. The Joint Under-Secretary quite rightly anticipated that I was attacking the Government for this. I believe that these increases are mainly as a consequence of Government action or Government ineptitude, and I believe that they have to be the legitimate target for attack upon it. It is not these outside things; it is the Government. It is abundantly clear

  1257
  that it is mainly Government action which has brought all this about if we look at the table of events over recent months and years.
  For example, on 26th October, 1964, a 15 per cent. import surcharge was imposed, breaking all international agreements, and we remember the repercussions from that. The point I am making is not the breaking of agreements—though that was bad enough, because that contributed to these increases in prices by Government action.
  On 11th November, 1964, we had an autumn Budget—6d. a gallon on petrol and 6d. in the £ increase in Income Tax. Those are items which reflected themselves in the increased prices that people had to pay.
  On 23rd November, 1964, the Bank Rate was raised to 7 per cent. Those who run businesses know how the increased Bank Rate finds its way through to the price of products that the businesses have to put on offer.
  On 6th April, 1965, we had another Budget—4d. on cigarettes; 6d. on wine, 1d. on pint of beer, 4s. a bottle on whisky, £2 10s. on car tax, and Corporation and Capital Gains Tax were introduced. All these were imposts which could only increase the price of all the essentials that people have to buy.
  On 17th May, 1965, we had higher postal charges—letters up from 3d. to 4d. We have had that again recently. All these items make their contributions to these extra charges.
  On 1st March, 1966—just before the election—we had the mini-budget, because the election was coming off. The ex-Chancellor of the day said that he foresaw no severe increase in taxation. That was the mini-Budget just prior to the election. The month after the election we had Selective Employment Tax introduced. If any tax has added to the cost of things it is the Selective Employment Tax. It is utter madness that this should have been increased in the recent Budget. We have been told that the only reason it was increased was because it was easy to collect. Not that it was justified, not that it made any worthwhile contribution, but that it was easy to collect. That was the only explanation why this rather stupid tax was increased, but I hark back to the time when it first
  1258
  came in. A month after the election, when we were told that there were not to be any increases, first we had the S.E.T., and then we had Corporation Tax fixed at 40 per cent.
  I move on now to 20th July, 1966, when we had a new crisis Budget. Perhaps I might interject here that over the past three years we have had no fewer than 11 Budgets, the formal ones recognised as Budgets, and the crisis and other Budgets. I am now up to the crisis Budget of 20th July, 1966. Then there was a 10 per cent. increase in Purchase Tax, another 4d. a gallon on petrol, another 1d. on a pint of beer, 3s. 5d. on a bottle of whisky, and 3s. 6d. on a bottle of wine. These were all Government contributions to the staggering increase in costs, which, as I have said, will cause this country trouble unless something is done pretty quickly. Finally, I move to 18th November when we had devaluation and when the Bank Rate was raised to 8 per cent.
  That is the record of the Government's contribution to these increases in prices which are hurting people very much. Following devaluation, I move to the day before the Budget. The day before the Budget, on 18th March, we had the announcement that gas and electricity prices were to rise, and that postal charges were to be increased. All these increases will seep through and affect prices.
  We then had the Budget itself, with all the consequences that will flow from that. The Chancellor said that devaluation would increase the cost of living by 3 per cent. I think that it will be more, but, like the Joint Under-Secretary of State for Economic Affairs in the previous debate, I do not want to gild the lily. A figure of 3 per cent. is bad enough. It means an increase of 11s. 8d. a week on the normal purchases of a normal household. This is pretty hot stuff, but I think that it will be more. I therefore feel justified in saying that we are attacking the Government for increasing the cost of living to the point at which it could produce disastrous consequences for the general democratic processes of this country.
  It would have been some relief it devaluation could have been heralded as the end of the price rise saga, but after the Budget we knew to our cost that

  1259
  devaluation was only the beginning of the steepest climb of all. One sees in tonight's evening papers that the cost of the increase in gas charges is likely to amount to 3s. 3d. a week for the ordinary householder. Added to that, we have the stream of things which will clearly flow from the Budget itself.
  Tax increases always mean prices increases, and last week's Budget, with its annual tax increases which are to rise to £923 million, represents the highest impost ever in peacetime. It is an impost which will make certain that the cost of living will reach its highest mark ever, and make certain that the standard of living of ordinary people will plunge to its lowest level for many years. Indeed, the Chancellor made no secret of the fact that one of the aims of the Budget was to lower living standards. They had to be cut back, he said.
  I find that very disturbing, as I am sure the citizens of this country do, because it was only a month or two ago that we learned that we had fallen to eighth place in the Western world in living standards. For a century or more this nation prided itself on having the highest living standards, or certainly being a very near second to America, but as a consequence of the developments which I have tried to describe, both in money terms and in percentage terms, we were in the position of being eighth even before devaluation and even before the Budget. I tremble to think what our position is likely to be when these price increases really seep through. This is a degrading position for this country to find itself in. The increase in the S.E.T., and the increase in the petrol tax, will seep through to the price structure with speed and with certainty.
  Why did the Chancellor have to take up £923 million by this Budget? We knew about the Letter of Intent. We knew that as a consequence of what I regard as bad government, careless government, we had reached a position when we had to borrow money, and we had to show that we were prepared to tighten the national belt. We expected that, but every economist that I have read, and every journalist who is supposed to be an expert on these matters, puts £700 million as the top figure which it was necessary to take out of the economy
  1260
  to meet our obligations to the people who had loaned us money. Why did the Chancellor take the extra £200 million? What was the necessity for that? By not taking that sum, he could have avoided the increase in the S.E.T., and the increase in petrol tax, increases which I maintain will make a terrific impact on the cost of living.
  From all that it can be seen that the price rises have been followed by a definite and distinct rise on the graph which denotes these things over the last three years. I have followed it through step by step in the dates and Budgets to which I have referred. One would have thought that people would have become used to it. Why, if I am trying to establish that it has gone on for so long, do I now forecast that there will be a specially worrying reaction to it? Is it just that this is the last straw that will break the camel's back? It is a bit of that, because we have had impost on top of impost, but in addition to the last straw explanation there is another one.
  Until now, despite all these increases, the unions have been able to look after their own, and of course the rich can always look after themselves. They do not want anybody to look after them. It is only the poor and the elderly living on fixed incomes who have been the victims. They have been severely dealt with over the last three years, and over the last two years in particular. Those living on fixed incomes have suffered grievously, and they are the people who will be hardest hit. The increase in old-age pensions which was provided with so much trumpeting not long ago will be more than eaten up by the increased costs which will flow from devaluation and the Budget.
  Until now they have been the only ones who have suffered. The wage increases negotiated by assiduous trade unions have ensured that trade unionists have been looked after pretty well. The rich can handle their own affairs. But things are different now, because we are also to have a statutory wage freeze, so the unions will not be allowed to cushion their own, and that segment of the population which will feel the full consequences of bad government and improvident budgeting will be much larger, including the wage earners as well as the

  1261
  old and those with fixed incomes, and it will be much more vocal and active.
  I believe that the women's reaction will change. In the dock strikes and other disruptions of our exports, it is usually the women who have said, "Stop this nonsense and get back to work." A classic example is that of the woman who slapped the face of a strike leader. The women have been on the side of law and order because they are pretty sound, but these extra imposts on the housewife will lose her support and she may join this vocal segment.
  The Government have overdone it. Their price increases are hurting. Not only are they increasing prices: they are also taking away working people's right to extra wages arising from increased productivity. The consequences will make the Grosvenor Square riots look like a picnic. But the worst consequences can be avoided even now if the Government will make efforts to prune their own spending Departments and re-establish their position. They should remember the historical outline which I gave; I beg them to do something, even at this late stage, to put this right.
  8.33 p.m.
  Mr. Julian Ridsdale: I am sure that we are grateful to my hon. Friend the Member for Peterborough (Sir Harmar Nicholls) for raising this subject. Thousands of people now know that the high cost of living is the high cost of Socialism and the increased Government spending which Socialism brings. But I want to consider, as well as the cost of living, means of helping those hardest hit by it, while still being responsible and not spending too much Government money.
  After devaluation, the Prime Minister said that help would go to those who most needed it. Since then, there have been cuts in Government spending and an extremely harsh Budget, which The Times described as Draconian, as well as increases in indirect taxation—and the poorer section of the community are hit hardest. To buy the goods which £5 would have bought in 1965, one now needs an extra 15s., and will probably need an extra £1 shortly.
  How far can the needs of this section of the community be met? The Government have said that supplementary bene
  1262
  fits will be increased in the autumn to help the poorest—the old, the sick and the unemployed—but we have heard nothing about helping those in need outside that section, particularly the retired on small incomes, those over 60 who cannot find employment. In my constituency, in North-East Essex, there is probably the largest number of people drawing rate relief in the country. In March of this year, Clacton's unemployment rate was 6·2 per cent., of which the Minister admitted that many were over 60. Of these older people, 19 per cent. are drawing relief. A rise of even 8d. in the £ greatly affects those who live on fixed incomes. The Minister of Housing and Local Government intends to extend rate relief to help this section of the community, but in doing so he should realise that he is shifting the burden from those who cannot pay to those who can hardly pay.
  Mr. David Winnick: While I am aware of the difficulties being faced by the retired people in the hon. Gentleman's constituency and elsewhere, would not the hon. Gentleman agree that elderly people living on limited incomes are in a better position because of the rate relief legislation passed by the present Government compared with the legislation passed in 1964 by the then Conservative Government?
  Mr. Ridsdale: The hon. Gentleman opposed me in the 1964 election and knows the efforts I made to get the Allen Report available to help these people. The Labour Government's Rate Relief Act followed the Report of the Allen Committee, which was established by the former Conservative Government. Whoever was responsible, I am glad that this section of the community has some relief. I want to know how we can give these people a little more help. The Financial Secretary is a sympathetic man and he will agree that 25 per cent. of this burden of rate relief should be borne not by those who can hardly pay but by a central charge. It would not cost the Treasury much. Was the Chancellor being generous in his Budget in giving help by the age exemption relief? Considering the rise in the cost of living, had he raised the age exemption relief by an extra £14 for a single person and £25 for a married person it would not have

  1263
  cost much but would have been of great help.
  Mr. Deputy Speaker (Mr. Sidney Irving): Order. The hon. Gentleman is going beyond the scope of the Bill we are discussing.
  Mr. Ridsdale: I was drawing attention to the grave burdens that are having to be borne and was suggesting some means whereby the Government could help.
  Mr. Deputy Speaker: That is what makes the hon. Gentleman out of order.
  Mr. Ridsdale: I have made two suggestions and I trust that they will be considered. My hon. Friend the Member for Peterborough has done a service in drawing attention to the difficulties being faced by so many people in the community as a result of the rise in the cost of living and I am glad of this opportunity to support him. My hon. Friend referred to gas bills going up. They will increase by 3s. 3d. in the £, and when one considers the gas and electricity increases that have taken place this year—they have increased by 10 per cent., resulting in an extra £1 million having to be found—we must try to do something to help the hardest hit section of the community. The Government can always go to the taxpayer whom they think has a bottomless purse to pay for the increase in the cost of living, but the country has seen through the policies of the Government. Sooner or later people will realise the failure of the Government to tackle the cost of living.
  8.40 p.m.
  Mr. W. H. K. Baker: I wish to address my remarks to a somewhat more narrow issue than those already covered in this debate. The issue I wish to raise is applicable to the South-West of England as well as to Wales, North-East Scotland and particularly my constituency. I refer to the rise in the cost of living in the remoter rural areas. Those on the Treasury Bench can take it from me, even if they will not admit it, that the rise in the cost of living has been greater in remote rural areas than in urban areas. My hon. Friend the Member for Peterborough (Sir Harmar Nicholls) laid the bais for a considerable attack on the Government. I endorse all
  1264
  that he said. The points he made are as valid in the country as in the towns.
  In the area I have the honour to represent about 18 per cent. of the population live in the country. The rise in the cost of living is bad enough to people in the towns, but it is far worse for those in remote areas because of the ever-increasing imposts the Government have been putting on the country. The two major factors which have led to this increasing cost of living in the country are S.E.T. and the fuel tax. Shortly there is to be a 50 per cent. rise in S.E.T. The Transport Bill will have a very adverse effect.
  The reason why all this serious effect will come about is that people in remote areas rely on the travelling shop. The travelling shop is usually based on a town or a country village store. Its owner has to pay S.E.T. and more in fuel tax. Consequently, when the shop arrives at the farmstead, the croft or a retired person's dwelling, it is found that the price of every commodity sold from it—bread, cigarettes, whisky, wellington boots and everything—has gone up. The price has been going up steadily during the years of this Government. With the extra imposts made under this Budget, the effects of the Transport Bill and all the other things, those costs will go even higher.
  They are made all the more serious in such areas as I represent because already they are suffering from a decline in population. It could be said by theorists that those people can go into the towns and get their food and other necessities more cheaply there, but what on earth is the point of a philosophy such as that? We have to stem the outflow of population from these areas. We have heard about that in the South-West in the earlier debate. If this continues, not only will people go on leaving such areas but it will become increasingly difficult to find labour to staff farms, forestry and distilleries.
  I am sorry that the Financial Secretary to the Treasury has left the Government Front Bench, because I have had considerable correspondence with him on the question of whisky. It is a subject dear to the hearts of many in this House. This commodity is not a luxury, although perhaps it is not a necessity. It is to be found in many of the homesteads to

  1265
  which I have referred. It is almost the water of life to some of these people. If the Government keep increasing these and other costs, more and more of the population will leave areas where it is essential they should stay.
  I suggest two things to the Government. On these travelling shops which provide the key to living in remote areas, S.E.T. should be abolished. If that is not possible, the shopkeepers who keep the travelling vans going should be treated in the same way as forestry, agriculture and fishing are treated and receive a refund. Secondly, they should in some way receive a subsidy on the fuel they utilise in going round these country areas. If this does not happen or if some other measures are not taken by the Government, then quite simply the travelling vans and travelling shops will be forced to close down and will be unable to serve the rural areas. I would sincerely ask the Government to take note of this because it is a very grave problem. The people to whom I am referring are not wealthy. They have not got vast means. They are either small crofters, small farmers or retired people. In many cases they cannot afford motor cars to run in to buy their supplies and they cannot obtain supplies in any other way than from these travelling shops, for the simple reason that there is no public transport available to move goods about. I would, therefore, request the Government to take this very seriously. I hope we can have some reassurance from the Minister when he replies.
  8.46 p.m.
  Mr. Ted LeadbitterI do not intend to say more than a few words. Indeed, I have already indicated to the hon. Member for Peterborough (Sir Harmar Nicholls) that I felt sufficient had been said without any further words from me. But the significance of the comments that have already been made compel me to add at least a word or two on a matter which affects, if not everybody, certainly too many people in this country for us to allow the situation to remain without making some contribution to urge on the Government the need to take care. I am quite satisfied in my own mind that we have to try to balance, as it were, the urgent need to
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  put this country's economy right with the need to avoid hurting too many people in doing so; because, as I have said before, for man there is neither beginning nor an end. But each one of us is here for but a short time and if, in a lifetime, anybody thinks in terms of solving all the world's problems, or all this country's problems, he is just a Walter Mitty and dreaming.
  What is essential, however, when we are thinking in terms of the economy and of the cost of living is that while we have the opportunity we should do what is right and just for the people who need the defence of our political institutions, and particularly of the House of Commons. There is great need for the Government to be watchful on what arises from their Budget because while the best judgments in the world, and some of the worst, cannot assess a situation to the satisfaction of everybody, we must admit that there is possibly an element of overkill in the Budget. Possibly because of that, due to the rightful desire of the Government to solve once and for all the serious basic problem which is not the responsibility of any Government but which, arising out of the nature of things in this 20th century, has faced other Administrations, we may, when we have a determination to solve it, create more problems than we started with.
  Here we have the very important subject of the Selective Employment Tax. When that was introduced I said in the House that it was a half-baked, ill-thought-out tax which could have well done with another year of consultations with industry, commerce, the T.U.C. and other bodies that would be affected by it, and in particular the distributive services. The tax is to be increased by 50 per cent. There is a great danger of the whole of the increase falling upon prices.
  When the tax was first imposed, it was clearly shown that only a limited amount of manpower could be transferred from the distributive trades to manufacture, because the distributive services were already at a high state of efficiency. If the objectives of the tax have been achieved only marginally, and if now the incidence of the 50 per cent. increase will fall upon lower-paid workers, who spend a large proportion of their incomes on food and services, should not the Government watch this issue very carefully?

  1267
  No party political point arises. Our duty is to the people. If there are signs that those on limited social allowances and lower-paid workers will suffer too much, the situation must be remedied somehow. I put on one side the question of benefits such as rate rebates and social allowances. The keynote is caution.
  The Government should bear in mind that the very purpose of the budgetary proposals is to take out of domestic consumer demand a certain amount so as to encourage an export-led economy. The Government are saying, in other words, that it is their intention to lower the standard of life of many people. Special watch should be kept on the plight of the old-age pensioner with an income of about £7 or £8 a week; the young widow with problems and a limited amount of money to meet her overheads; the injured; the sick, and the long-term unemployed. I am not interested in the man who will not work—the type of man to whom the hon. Member for Louth (Sir C. Osborne) rightly drew attention not long ago. I am concerned about the ordinary decent citizen who, by the very nature of the economy and his personal circumstances, has not much money to live on.
  The Government's budgetary and other proposals are designed to put the country's economy right. Both sides of the House are united at least in their concern about the theme raised by the hon. Member for Peterborough. I hope that my hon. Friend the Minister will depart from a prepared brief and talk for a few minutes in human terms so that those about whom we are particularly concerned can feel that the pulse we have touched in the House has been felt by the Government.
  8.55 p.m.
  Sir Cyril Osborne: I am compelled to say a few words in support of my hon. Friend the Member for Peterborough (Sir Harmar Nicholls) on this important subject of the cost of living. I am astonished that in a House of 630 Members there are scarcely a baker's dozen interested enough to be here. We are told in the Press that politicians on all sides have lost the respect of their electors, that the House does not mean today what it meant formerly. The public looking down at these empty
  1268
  benches, may well be justified in taking that cynical point of view.
  To the ordinary industrial worker—and this is not a matter of party politics—the three things that really matter are these. First, is his job safe, for he fears unemployment more than anything else? Secondly, does he get a decent wage, because that is what he works for? Thirdly, will the wage enable his wife to go out and buy the simple groceries which he and his family need? These are the three things that really matter, and it is the cost of living that eats at the wage packet he takes home.
  It is no good talking to industrial workers and saying how much gross they earn. As far as they are concerned, their wage is what they take home: it is the take-home pay that matters, after all the deductions. They are not a bit interested in the gross amount. They ask: "How much do I take home, governor?" And their wives are concerned with how much it will buy in the shops for their children and themselves. That is why the cost of living is of such vital importance to the ordinary people whom we represent.
  This afternoon I took the liberty of asking the Prime Minister if he really thought that he could enforce a wages freeze policy against the will of organised labour; if the trade union leaders were opposed to it, did he really think he could make it succeed? He wobbled and wobbled and in the end had to admit that he could not do that.
  Why will he not succeed? He will not succeed because of the cost of living. I am convinced that if one could say to the industrial workers that if they accepted a wage freeze one would guarantee that prices did not go up, the vast majority would accept a wage freeze. I am certain of that. But if they know in their hearts that the wage freeze is going to be accompanied by an unreasonable increase in the cost of living they feel it is unfair. These are the people who look mostly to hon. Members opposite rather than to us, who put their faith in hon. Members opposite and who are going to be outraged by the continual increase in the cost of living.
  It is said sometimes—it was said last week—across the Floor of the House that it is those of us in private industry mostly who are putting up the cost of

  1269
  living. This is untrue, and I remind the House that last week the Minister of Power came to that Box and said that gas prices would go up by an average of 8·7 per cent. This touches the poorest people in their homes. During the bad weather the one thing the old people want is to be kept warm; that is almost more important to them than being well fed. And the cost of warming even a small house today, with coal, gas or electricity, is getting beyond the means of the ordinary, poor individual. These factors are so important in the cost of living; they affect the poorest people and, above all, the lowest-paid worker, the man who is not in a big union, who has not got a big union to demand that he gets more, who is not well organised and welt represented. He and his family are feeling the pinch. Moreover, it is often those who work for nationalised industries and for the State in certain occupations who are, on the whole, less well paid than the workers whom we employ in private industry.
  The truth is that the rise in the cost of living about which my hon. Friend the Member for Peterborough rightly complains is caused, basically, as the Chancellor of the Exchequer admitted yesterday, by our having spent roughly £540 million more than we had earned. If we do that, the cost of living must go up. This is the basis of our problem. If we as a nation spend more than we earn, the paper money which we use internally must be worth less. The Government are like a fellow who wants a glass of whisky but puts more and more water into it, diluting it so that it is worth less. This is what the Government are doing, and they are selling whisky which is 10 per cent. proof instead of 70 per cent. proof. I am not an expert on these things, but I believe that that is somewhere near the mark.
  This is not a narrow party issue. It is an industrial issue creating a real problem which faces both sides of the House. Either we increase national productivity by that £540 million which we have overspent or we reduce our spending power by that amount. Charles Dickens said it all in his Micawber story a hundred years ago—Income a pound, expenditure 19s. 6d.—heaven; income a pound, expenditure 20s. 6d.—debtors' prison. That is where this country is today, in
  1270
  the international debtors' prison. This is the root cause of the rise in the cost of living.
  I can understand Ministers' difficulties in various Departments. The right hon. Lady the Member for Lanarkshire, North (Miss Herbison), formerly the Minister of Social Security, spoke eloquently last week about what we were doing for the old and the infirm and about how much better a country we were producing as a result. I agree with her—that is all true—but it costs money. If we do not produce the extra wealth to provide our admirable social services, the cost goes tip and our money is worth less.
  Mr. Leadbitter: If the hon. Gentleman has come to that conclusion, will he then go on to measure health in money terms? Would he rather have a state of affairs where we did not have the services about which my right hon. Friend spoke? Would he rather have himself better off and the services less effective?
  Sir C. Osborne: Certainly not. The hon. Gentleman misunderstands me. I do not want to abolish these lovely social services. I was poor once, and I know what it means. I am merely pointing out that we have got to increase the efficiency of our economic machine so that we may provide for all people what we thing they should have. But to promise them that they can have it without working or without making an effort is fraudulent. This is the Government's problem.
  If I may say so—I hope I am not being unfair—the young Minister who, last Thursday, lectured us on economic affairs was the least suitable person whom hon. Members opposite could have found, for he knows nothing about our industrial problems. He has never faced an industrial problem. He has never had the difficulty of meeting a wage claim for 1,000 men week by week and wondering where the money would come from. He knows nothing about it—I do not say that in a disparaging way.
  We all want to keep the cost of living down and give our people a higher standard of living. There is no essential nobility in poverty. There is nothing fine in being poor as such. Only the prophets of the old times who went into the desert were ennobled by their

  1271
  poverty, but they were exceptions. Poverty does not ennoble the ordinary person but tends to degrade. We should not tell our people that we shall make them better by making them poorer. I should like to see a much bigger cake shared out more fairly for the whole country. Only those who have known hunger and hardship know the validity of that argument.
  I was provoked to speak by my hon. Friend, and I have no speech prepared. I am sorry that the Minister has so little support on his Front Bench—I say that with no disrespect to him. If I were in his place I could handle the matter a great deal better, but I should not sit there by myself.
  The cost of living is one of the most important factors affecting the lives of ordinary people. For less than a baker's dozen of us to be bothered to talk about it is an incredible admission of failure by the Parliamentary system to help the ordinary people in their ordinary way of living. I should love to see more fire on the Government benches, whichever party is in power, by men who understand how to make the economic machine work so that we could earn that £550 million more and not have to tell our people that they must have less.
  I have been in the House for 23 years, and I never dreamt that I should see the day when a Labour Government would tell the industrial workers, "You must accept a lower standard of living." That is the situation we face, though not because our people are enjoying too much. I am not saying that. Since the early 1950s, our standard of living has slipped as compared with that of the industrial nations of Europe. Italy and Germany have caught up with us and surpassed us, although we used to be ahead of them. An Englishman used to be proud of his higher standard of living. He thought that he was worth two Frenchmen at any time. Today we are in the third division and likely to slip into the fourth, economically, because we cannot make the economic machine work efficiently.
  We have the equipment and I should say from my experience that on the whole English industrial workers both men and women, are as good as any in the world. All they want is to be
  1272
  organised. They want somebody to lead them and inspire them to better efforts. With an empty Government Front Bench, as there is tonight, there is neither inspiration nor leadership. That is what I complain of. People in the country are saying that in the things that really matter to them we are not measuring up to the challenge of the times.
  While I cast no reflection on the Joint Under-Secretary of State, I think that a senior Minister should have been here to answer on this immensely important subject of the cost of living and to promise our people that, within a reasonable time, the ever-increasing costs will be checked. The Prime Minister promised—and I do not sneer at him because he did so, for he must have meant it—that, with devaluation, the £ in our pockets would not be devalued. I wish that were true. It is what we ought to be fighting for. The House should be full, not empty. Where are all the hon. Members on this vitally important issue?
  Mr. Thomas Oswald: Where are they on the hon. Gentleman's side as well?
  Sir C. Osborne: I agree that it applies to both sides. But things are too important to play party politics all the time. Whichever party is in power, the cost of living is one of the three most important factors affecting working-class families. It is no good paying them an extra 10 per cent. and letting their cost of living go up by 15 per cent. That is a mockery.
  If we could say to our people, "Do as the Prime Minister has asked. Let us have a wage freeze and be content with the paper money we have got. We guarantee that it will buy more and will be worth more", our people would be better off. That is what I should like to see. But it will only be possible if we produce more wealth that we can share out.
  No Government can share out any social benefits with wealth the industrial machine does not produce. Unless our industrial machine produces wealth the social services will be starved and I do not see at the moment the slightest sign on the Government side—and here I am talking party politics—of the urgency there should be to get, in both nationalised and private industries, that urge to

  1273
  greater production at lower prices which is the key to success for the future, and if the hon. Gentleman could promise that tonight then, despite our small number, it would be better than if he were unable to promise it in talking to a crowded House.
  9.13 p.m.
  The Joint Under-Secretary of State for Economic Affairs (Mr. Alan Williams): It is always a pleasure to debate—
  Mr. Speaker: Order. The hon. Gentleman must have leave of the House to speak again. There is only one debate tonight.
  Mr. Williams: I am sorry, Mr. Speaker, but I am not quite sure of the procedure for asking leave to speak again.
  Mr. Speaker: Perhaps I can assist the hon. Gentleman. There is only one debate on the Consolidated Fund Bill and the hon. Gentleman is intervening for the second time. He can do so by leave of the House, which I am sure that it will give.
  Mr. Williams: In that case Mr. Speaker, I ask the House for leave to deal with this subject. I only wish I had had the opportunity to finish after the first one, when I could have enjoyed that meal I promised myself when we were discussing the South-West.
  It is always a pleasure to debate with the hon. Member for Peterborough (Sir Harmar Nicholls). I do not think that anyone in the House can put forward quite such outrageous propositions with such charm as he does. His party has now abandoned its scare story that unemployment this winter would be between 750,000 and 1 million. He has now worked out a new line for it. He is in the process of describing price riots. I trust that these will no more come to fulfilment than the 750,000 to 1 million unemployed predicted by the Opposition.
  I am sure that he would agree that he does not want to see this at all. On this question of prices, we all recognise that no party or Government has really solved this problem. It is one common to the advanced societies, and not just a British problem. Much of the world's problems seem to centre around keeping prices moving in step, so that one does not become uncompetitive, rather than trying
  1274
  to stop prices rising altogether. This is complicated for us by the fact that we have to live as a trading power, and, as far as possible, we have to be conscious of the relationship between price movements in this country and overseas.
  If we were a self-contained unit, we should not have this complication to consider. The second complication—and at this stage I am not attributing responsibility, but I am sure that hon. Gentlemen opposite would not evade partial responsibility—is that we are limited because we have, as a nation, a large deficit and we have somehow to shift resources out of the domestic market into production for overseas consumption. Because we are a trading power, our present system is complicated by the fact that we import nearly half of our foodstuffs and virtually all our raw materials. We therefore have a situation where many of the contributory costs which may not be within the control of the manufacturer are also outside the control of the Government. This complicates the task of any Government trying to solve the cost-of-living problem.
  The policy of the Government has been to try to establish a relationship between prices and incomes and productivity. Each of these variables are influenced by different factors. At the same time, one has an influence on the other. The aim which we have to set ourselves in relation to prices is simply to try to ensure that price increases only take place if they are fully justified. This is the objective which the Government have set themselves and it is the objective of their prices and incomes productivity policies. To achieve this we have established certain machinery.
  First of all, nearly half the goods that appear in the Retail Price Index, and many items that enter into industrial costs, are covered by a perfectly voluntary early warning system. Under this, firms give advance details of price increases to the Departments. They give details not only of the extent of the increase but reasons why they are to take place. In addition, outside this sector, because so much food is imported and because there are seasonal fluctuations in prices and one could not really work such a system when prices are changing from day to day, particularly in relation to perishable products, we have a system of a constant watch by the

  1275
  Ministry of Agriculture, which is continually reviewing prices.
  With regard to raw material imports, where prices are not always within our control, the trends in manufacturers' prices are also reviewed to establish that those prices do not do anything more than reflect the increases which have occurred. Where it would appear that any price movement does not conform to this, the issue is referred to the National Board for Prices and Incomes for an even more detailed analysis. What we proposed in the Budget was to extend the delaying powers from 7 to 12 months, with the power to reduce prices which the Board recommends should be reduced—prices which, after an objective analysis, it is felt do not measure up to the criteria established.
  There are many misconceptions about prices, and the hon. Member for Peterborough—who has indicated to me that he had to leave at this stage and intends no discourtesy—referred to the problem of the number of prices which have increased over a period of time. There has been considerable publicity about this in recent months as the result of information published in the journal called The Grocer.
  On 11th March, my hon. Friend the Joint Parliamentary Secretary to the Ministry of Agriculture indicated how misleading it can be just to consider the numbers of price increases. He took two particularly good examples. The hon. Member for Peterborough referred to one of them—pickles. My hon. Friend referred to one firm which produced five flavours of pickles in seven different sizes. So when this firm found its costs had increased, according to the index 35 prices had increased. My hon. Friend quoted two firms who imported Continental cheeses, who found that they had to increase their prices on commodities which had very little general impact and did not make a considerable contribution to the cost of living index. In this case, 118 price increases were recorded.
  The Report of the Prices and Incomes Board on distributors' margins indicated that as a result of a spot check on groceries which the Board had carried out, it discovered that the recommended prices, which are the prices to which The Grocer refers, are normally
  1276
  undercut in 94 per cent. of the cases. The Grocer publishes the recommended manufacturer's price, but according to the Board 94 per cent. of the grocery prices which it checked fell below the recommended price. Therefore, to take gross figures of movements of prices can give a completely distorted view of what is happening.
  The second popular, or unpopular, misconception is that, whereas prices increase, incomes do not. Again, statistics do not bear out this thesis. In 1965, prices rose 4·6 per cent. Virtually half of that increase was accounted for by measures which we took as soon as we came to office to deal with the balance of payments deficit. During that year, average weekly earnings went up by 8·5 per cent., nearly twice as much. In 1966, prices went up 3·8 per cent., but weekly earnings went up by 4·2 per cent. Last year, the cost of living increase was 2·1 per cent.—incidentally, just half of the increase in the cost of living during the last 12 months in which hon. Members opposite were in office—and average weekly earnings increased by 5·8 per cent.
  Sir C. Osborne: If the hon. Gentleman is trying to demonstrate that the cost of living has increased by only half as much as weekly wages, how does he account for the fact that the trade unions are dissatisfied with their present position?
  Mr. Williams: It is the trade unions' job to be dissatisfied with their present position. Their purpose is to improve the position of their workers.
  Mr. Leadbitter: The figures which my hon. Friend has given are obviously correct. They are significant and measure the Government's achievement. But would he not agree that the average weekly figures he is quoting reflect the problem to which I referred, namely those below the average income?
  Mr. Williams: I accept that completely. I will come to that point.
  I have demonstrated that, during the three years to which I have referred, weekly earnings increased by nearly twice as much as prices.
  My hon. Friend the Member for The Hartlepools (Mr. Leadbitter) rightly asked about the position of the low-paid worker. One has to recognise that the overall

  1277
  percentage increases in price movements have more significance for someone who is on a low rate of pay or a pension than on people like ourselves who happen to be on the salaries of Members of Parliament.
  Even during this period of restraint on incomes, given extra productivity, we have included low-paid workers in our criteria for pay increases. Even in the next phase, where my right hon. Friend has announced that the ceiling will have to be 3½ per cent. subject to the one possible exception of productivity agreements, it is possible for a low-paid worker to enter into such a productivity agreement, and there is also the opportunity for him to earn overtime in the pick-up of output that we anticipate during the next 12 months.
  The low-paid worker is very difficult to define. Neither side of the House has defined exactly what we mean. We know that there are certain types of people who cannot be judged by a gross figure of pay but who have difficulties over and above those facing the rest of the community. If one takes families with two children. 4 per cent. or one in 25 of them live below the supplementary benefit standards. When one comes to families with six children, 21 per cent., or one in five of them do. It was for that reason that we gave what we know is an unpopular social supplement in the form of the family allowance. We argue that it is a supplement to the low-paid worker, because we shall take most of it back from someone with a higher income in the form of Income Tax.
  For someone with two children on £14 a week, the increase in family allowances alone will give him the equivalent of a 3½ per cent. pay rise this year. If he has three children, he will get the equivalent of a 7 per cent. pay rise over and above what he is able to negotiate as a pay rise in his work as a result of a productivity agreement. For this reason, we believe that, within the inhibitions imposed by a Budget which had to take so much money out of circulation, we are trying to cater for those with a special need.
  In the same way, the hon. Member for Louth (Sir C. Osborne) and my hon. Friend both referred to the problems of people like old-age pensioners. Since
  1278
  we came into office, the cost of living has gone up by 11 per cent. The single old-age pensioner received an initial increase of 18½ per cent. and, with the March increase, during a period in which prices have gone up by 11 per cent., he will have had an increase in pension of 33 per cent. This is in addition to other benefits which he may get if, for example, he is a ratepayer in the form of rate rebate.
  There has been an attempt to tailor the general economic strategy to the known social needs of particular groups within our society. Since there are so few hon. Members present, I will not at this stage deal with the problem of rents, because it was touched on by my right hon. Friend the Secretary of State last week. I had intended to deal with it, but I know that the hon. Member for Poole (Mr. Murton) is eager to get his debate started.
  Mr. Oscar Murton: It is on rents.
  Mr. Williams: In that case, it is even better that I do not deal with the matter at this stage.
  Several hon. Members referred to S.E.T., and. unless I am mistaken, they did not all show the greatest affection for this form of tax. However, as my right hon. Friend the Chancellor of the Exchequer pointed out last week, people regard very few taxes with affection.
  So far, S.E.T. is the only method that we have found of taxing services. One has to face this alternative. If we do not have Selective Employment Tax on services and we are to withdraw the same amount of money we either have to increase Purchase Tax—
  Mr. Speaker: Order. Even the Government Front Bench cannot discuss new legislation on the Consolidated Fund Bill.
  Mr. Williams: I think I have established the point that one, would have to resort to a different form of fiscal arrangement if one did not use this particular device. In any case, as was pointed out, it happens to be a cheap tax to collect, though no one is pretending that is the major criterion on which we decided that it should be introduced. Even after its introduction, the on-cost of labour to the service industries is substantially lower

  1279 than any of our Common Market competitors. The Chancellor gave these figures during his Budget speech.
  Mr. Baker: Does the hon. Gentleman realise that that sort of argument about on-cost being lower than in the Common Market countries cuts no ice in Banffshire and other remote areas?
  Mr. Williams: I appreciate the point does the hon. Gentleman equally realise that the alternative of putting up the tax on motor cars does not cut much ice in the Midlands either? Eventually it is a matter of some ice having to be cut somewhere, and someone will be unhappy about it. However, the Government still have to remove from circulation the money which they judge it necessary to remove.
  Mr. Speaker: We have had the Budget debate. We are on the Consolidated Fund Bill Second Reading.
  Mr. Williams: I am afraid that prior to the stage when you, Mr. Speaker, returned to the Chamber there was considerable discussion about the merits and demerits of Selective Employment Tax. As hon. Gentlemen opposite will know, I had no wish to avoid debating the issue of S.E.T. in relation to current circumstances.
  I was about to say that no country has really solved this problem. The hon. Member for Louth said that the Government were not making the machine work. In the last resort this is a political as well as a Parliamentary debate, and I must establish the point that while the Conservative Party were in office, far from showing any understanding of the problem of prices, during their 13 years the cost of living went up by over 50 per cent. The more alarming feature was that in the last 12 months of their Administration—a time when, if they were ever to learn anything about controlling prices, one would have thought they would have learned by it then—prices went up by more than the average rate—by 4·2 per cent.
  Sir Harmar Nicholls: I am sure the hon. Gentleman would like to have on record that it was an average rise of 2½ per cent. and if the present Administration could have kept down to that we would have been in a much happier position than we are.
  Mr. Williams: I wish I could congratulate the hon. Member for Peterborough as much on his arithmetic as I did on his speech. Some of his allegations in his speech were a little wild, but his arithmetic is somewhat wilder. If he works out the implications of the 50 per cent., I am sure that he will realise this.
  The hon. Member for Louth rightly referred to the impact of such things as heating and housing on old people and people in need. Towards the end of the period in which hon. Gentlemen opposite were in office, the figures are somewhat disturbing. The housing element in the cost-of-living index between 1957 and 1964 went up by 50 per cent. and rates were still going up at 9½ per cent. a year and they did nothing about it. One can legitimately counter allegations that the price policy of this Government has not been absolutely effective by saying that at least in the last 12 months we have done twice as well as hon. Gentlemen opposite did in their last 12 months. I am sure that the hon. Member for Peterborough will recognise that on this subject his attack has been ill-directed.

  INTEREST RATES
  9.35 p.m.
  Mr. Oscar Murton: I wish to discuss very shortly the problem of high interest rates, and I should like to make three points upon the continuing disastrous effect of the high Bank Rate, which in its turn affects all other interest rates. I should like to discuss the effect of the high Bank Rate on local authority borrowings, on the building industry generally, and, thirdly, upon building society loans.
  Until last week, this country had had to face some months of a Bank Rate at the astronomical level of 8 per cent., but in the last two or three days this has been reduced to 7½ per cent. While this is welcome, it does not really take the steam out of my argument, because by any consideration a 7½ per cent. Bank Rate is still inordinately high. I think that we have to consider this figure in the light of the effect the imposition of a 1 per cent. increase in a Bank Rate can have on the economy generally.
  I accept that local government borrowing rates are not necessarily linked automatically to the Bank Rate, but if all

  1281
  interest rates were to rise by 1 per cent., the gross cost to local authorities in the first year of such an imposition would average £200 million a month. I accept that this would be met to some extent by increased subsidies and grants, but naturally it would only be to some extent, and the fact remains that since the act of devaluation, and with the Bank Rate running at 8 per cent., all local authorities have in recent times been at or very near their wits end to balance their budgets in the light of the adverse changed circumstances.
  Many carefully prepared schemes made by newly Conservative-controlled councils to improve management procedures, and to recast their finances after a long period of what I might say is Labour extravagance in the case of certain councils, have had to be shelved, reserves have had to be raided, and indeed drawings have had to be made on balances in hand to stabilise the rate fund, and many important capital projects have had to be shelved.
  It is truly ironic that at a time when local government of this country, by the wish of the electorate, has been entrusted in great measure to the Conservative Party, its effects have been stultified by what I can only call the bungling ineptitude of central Government. There is only one answer to that in the case of central Government. The remedy lies in getting rid of the present Labour central Government, in the same way as we have succeeded in doing largely in local government.
  I think that the point is really brought home when one considers the Ministry of Housing and Local Government's circular 84/67—this is better known as the Minister's personal message—of the 15th December to all local authorities, which I suggest set the seal on the great anxiety, and I might almost say the near panic, which reigned in Government circles regarding the runaway spending which was taking place in the whole of the public sector. Unfortunately, when one deals with the question of over-expenditure in the public sector, it is inevitably the local authorities which are the first to feel the effects of what the Government consider to be the necessary remedial measures. I believe that the last time that a Minister had to appeal to local authorities in these terms was
  1282
  in 1951, just before the fall of that Labour Government: history seems to be repeating itself.
  In the meantime, our great cities are in a difficult position. The City Council of Newcastle-upon-Tyne, basing its estimates on an assumed fall in Bank Rate from 8 to 7 per cent.—it showed a certain prescience—considered that it would have to face an addition of £350,000 for the 15-month period from December last year. This is made up of £100,000 additional interest rate payable in 1967–68 and about £250,000 on interest charges in 1968–69—and this takes no account of extra loan charges. Each 1 per cent. increase in the interest rate costs the Greater London Council an extra £1 million a year, and the increase in Bank Rate from 5 per cent. to 8 per cent. which accompanied devaluation severely affected London's finances.
  The same pattern has emerged in county boroughs, county councils and county districts. This is disturbing and difficult for local authorities, which have had anything but an easy time for the last three years and especially the last three months. Probably the most serious factor is the growing tendency for Ministers to interfere in local government—for example, over the sale of council houses and secondary education, as well as the threat of interfering with passenger transport—
  Mr. Speaker: Order. The hon. Member chose this subject. He is bound by his own rules of order at the moment.
  Mr. Murton: I will come to order very quickly, Mr. Speaker. I wanted to move on to rent increases. The Minister of Housing announced on 21st March that the Government proposed to introduce legislation to allow the Minister to restrain council house rent increases. As my right hon. and learned Friend the Member for Hexham (Mr. Rippon) has said, this is an unprecedented interference with the statutory powers of local housing authorities in peace time. The Minister will be interposing himself between local authorities and the responsibilities which the law obliges them to fulfil.
  In other words, the Government are arrogating to themselves certain powers without accepting the inherent responsibility, which totally conflicts with the

  1283
  Minister's policy for rates during 1968–69. If essential rent increases are to be controlled—
  The Financial Secretary to the Treasury (Mr. Harold Lever): As I have to reply, do I understand that the hon. Member will relate rent increases to high interest rates? Otherwise, I am unprepared to answer. Does he wish merely to make declarations in the knowledge that he will hear no argument in reply? If he talks of rent increases, of which I have had no notice, he must not expect a reply.
  Mr. Murton: I am prepared to accept any reply from the Financial Secretary. If the hon. Gentleman cannot reply, I will have to suffer his silence.
  If rent increases are to be controlled, how can increases in rates be held to the minimum? The last sentence in the Minister's letter to local authorities on 15th December, 1967, said:
  "If essential rent increases"—
  Mr. Speaker: Order. The hon. Member must link what he is saying with the subject which he has decided to raise tonight. He, and nobody else, chose that subject.
  Mr. Murton: I wrote to the Minister advising him that I intended to raise this type of problem. However, if you feel that I am going beyond the bounds of order, I will move on to further paths.
  Mr. Speaker: The last thing that I would want to do would be to spoil the hon. Member's speech. He indicated to me, and he won a place in the Ballot, that he intended to discuss the problem of high interest rates. He must, therefore, link what he is saying with that subject; in other words, he must link rent increases with high interest rates. I am sure that he is able to do it. Indeed, in his position I think I could do it. [Laughter.]
  Mr. Murton: I am sure that that is so, Mr. Speaker, and I have said enough to make my point in this respect.
  I come to the question of the building industry. A Bank Rate of 8 per cent. means that, generally speaking, a builder must borrow at 10 per cent. A fractional
  1284
  drop to, say, 7½ per cent. will mean that he is still borrowing to finance his business at a costly rate. The effect of this is reflected in the price of his product. He will probably be a fortunate builder if he can borrow at 10 per cent. Indeed, he may not even be granted loan facilities. I understand that there is an extraordinary hiatus here, because builders are suspended in something of a policy vacuum by the Government in that they neither have priority for credit borrowing, nor, apparently, will the Government accept that they are denied it.
  Devaluation has played an important part, as have high interest rates and S.E.T. All this has resulted in higher house prices. Building materials this year have become more expensive and there has been a 4 per cent. increase in building costs. Devaluation has raised the price of a house by £30 to £40. I understand that taxation has raised the cost by another £100. If one adds the effect of interest charges to the cost of devaluation, the result in the long-term is likely to be about £100 for that effect alone. The probable forecast of the national average rise in the cost of a three-bedroomed house in 1968 is suggested to be £350 at the very least.
  Is it any wonder that the general level of interest rates, coupled with the inevitable effects of restrictive Socialist legislation over the past three years, has depressed the private sector of the building industry from 218,000 completed houses in 1964 to about 18,000 less in 1967? In the light of this, there has today been a discussion between the Minister of Public Building and Works and the construction industry on these questions. The Press hand-out which I have with me states:
  "As far as private housing was concerned the Minister of Housing and Local Government would no doubt wish to discuss the implications of the Budget with the industry as soon as possible. The important factors in this area would clearly include the availability of mortgage funds and the resulting effects of high rates of interest which remain to be evaluated."
  That from a Minister of the Crown bears out what I have been saying.
  Then there is the effect on the building societies. During the past 20 months they have had a most difficult time. The country is reliant upon them for providing mortgage finance. Each successive

  1285
  Government, of whatever party, has high regard for them and for the work they do. Indeed, the Government could not work without them. Bank Rate governs levels of building finance. High Bank Rate draws money away from building society investments so that people do not invest in building societies with the same facility as they do at other times and building societies inevitably have less to lend.
  The mortgage interest rate under those conditions must go up. It went up to 7⅛ per cent. for new borrowers in June, 1966, and for all borrowers in January, 1967. Incidentally, a 7⅛ per cent. mortgage interest rate means that repayment on a £3,000 mortgage for 25 years costs about 10s. a week more for the same loan as it would at the 6 per cent. rate which prevailed in 1964 under a Conservative Government.
  I draw attention to something which I find very worrying, the report in the Daily Telegraph yesterday that interest rates in respect of building societies may well rise. There has been a suggestion that they may have to go up in the autumn to 7½ per cent., because societies have to find more money to meet higher costs. Although some building society chiefs have suggested that the reduction in Bank Rate might make it possible to hold interest rates for the time being, there are other factors which would require them to find additional income. We can only hope that they can ride out the storm.
  Whatever happens, I earnestly hope that before long this constantly high interest rate problem may be resolved and the Government will see their way to reducing it to a more reasonable level as soon as possible for the sake of the country, for the future of our country.
  9.53 p.m.
  Mr. R. B. Cant rose—
  Mr. Speaker: Order. Does the hon. Member wish to speak on this topic?
  Mr. Cant: Yes, Mr. Speaker.
  Mr. Speaker: He has not informed Mr. Speaker that he wished to do so. I asked some hours ago that if any hon. Member wished to speak on any topic he should let me know because I
  1286
  must preserve the order of topics as they have been recorded by ballot. Does the hon. Member wish to speak on this subject?
  Mr. Cant: I do, Mr. Speaker. In my defence I say that although I have been present during most of the debates I did not hear what you said earlier. Also in defence, I did call specially at your office this morning and I was told that I was not required to put my name down in respect of this subject.
  Mr. Speaker: Order. This is no criticism of the hon. Member, but I must protect the subjects in the order in which they appear. Mr. Cant.
  Mr. Cant: When I noticed that the hon. Member for Poole (Mr. Murton) had put down the subject of high interest rates, it attracted me. I wondered on precisely what topic I should speak, but, as I am now serving in my 16th year as a member of a local authority, I was tempted to discuss my high interest rates in relation to local authorities' problems. I was about to say that I was glad that I did not choose that subject because I might not have survived your rebukes as successfully as did the hon. Member for Poole, but I have got myself into other trouble instead.
  I shall not be too long in making my point. This is an extremely important topic. I see from the National Debt return for 1966–67 that the cost of servicing the National Debt is now running at something over £1,200 million, and, in anybody's money—even that of my right hon. Friend the Chancellor of the Exchequer—this is a considerable sum. I should like to discuss this from the point of view of the external aspect of this problem because I feel that in some ways the Government are being rather too cautious.
  In any case, I believe that the policy the Government are pursuing in respect of high interest rates—and I am not in this sense accusing this Government only but all past governments, too—is leading to a situation in which they are limiting the effectiveness of monetary policy by increasing the liquidity of the banking system. Without discussing any details, I believe the consequence of this is, quite simply, that we are throwing an enormous burden on fiscal policy and are finding ourselves encumbered with an incomes

  1287
  policy of which I am afraid I cannot approve.
  I should like to discuss this in more practical terms in the sense that if we have a Bank Rate which determines other interest rates, as the hon. Gentleman the Member for Poole has said, one important aspect of such a Bank Rate is quite obviously its effect on our balance of payments, on the capital account and on the current account; and my proposition to the Financial Secretary—who is drawing some delightful faces on his pad at the moment, presumably having set aside his prepared brief—is that this cost, in direct terms, is something that should be evaluated as the cause of this.
  It may be that by having that high Bank Rate we in effect substantially strengthen our capital account in that we get funds flowing into London and so on. However, the other effect of a high Bank Rate and therefore a high interest rate—and I must keep repeating that phrase—is that we throw considerable burdens on our current account. I feel that not enough attention is given to this. I was very impressed by an article written by an economist, Mr. Opie, of Oxford, in which he analysed the effect of high Bank Rate in the years 1965 and 1966. He came to the very remarkable conclusion that the deficit in both these years was due almost wholly to the higher outgoings on foreign-owned balances which resulted from the Bank Rate which was in operation; and, of course, the problem is quite simple. It is that the effective Bank Rate is not only marginal. We may use a high interest rate to attract funds from abroad but unfortunately that high interest rate applies not only to the mobile balances but to the old balances as well. When we consider that in those two years we must have had a deficit—I cannot remember the figure exactly—of something like £180 million we see that the higher interest rates we were using to attract money from abroad were imposing this kind of additional balance on our balance of payments. I suggest to my right hon. Friend the Financial Secretary that that is food for thought.
  We have not only to consider the direct cost of consequences to the balance of payments of a high Bank Rate. I believe that in more general cost-benefit analysis terms there are considerations to which
  1288
  attention should be given. I know that my hon. Friend the Financial Secretary will tell me, as my right hon. Friend the President of the Board of Trade told me, that I understand very little about these issues and should tread with caution. That may well be true. Even if it is conceded that we must have our reserve currency balances and must keep balances in respect of the trading and invoicing function of the £, the high interest rates which have been perpetuated in terms of Bank Rate have, as we all know, attracted from time to time substantial hot money balances and it is these to which we should direct our attention.
  Those of our outstanding sterling liabilities which are not in Government stocks and are not Treasury Bills, but which are balances with our banks on very short term, balances with the discount market, and direct loans to local authorities and to hire-purchase corporations, may, on the reckoning of the Economist, be about 20 per cent. up to 25 per cent. of our outstanding obligations. If there is even a 10 per cent. switch of these balances because of some interest arbitrage, there is a movement of about £100 million out of or into London.
  I contend that this is a very significant aspect of the high interest rate structure which we are maintaining. The information given in the Economist and the Financial Times, and the various patterns of interest rates existing at any moment, makes it obvious that, when in the very short term market relating to Eurodollars and local authority finance we get interest rates of 8½ per cent. to 8¾ per cent., this is something worthy of consideration.
  I go back sometimes to the statement made by my right hon. Friend the Prime Minister in December, 1966. I am sorry that I have not my right hon. Friend's memory, otherwise I could tell the House which day and which hour. He said on that day that Bank Rate movements are not an appropriate subject for the House of Commons to discuss. This is a quite incredible doctrine. It is incredible because I think—I hope that I say this with my hand on my heart, backing Britain, and so forth—that Britain has a more direct responsibility for the period of high interest rates into which we have moved than any other country.

  1289
  I hope that one of the many things that my right hon. Friend the Chancellor will do in the course of time is to get off this Bank Rate hook. I may be told that this cannot be done, that too much is at stake, that the whole question of the £ sterling is too sensitive to be dealt with in this rather cavalier fashion. But many idols have fallen in the financial world in the last three months. We have devalued the Z. We have even dared to question the price of gold.
  I think that the time has come to ask whether we could not move more rapidly to a reduction of the high interest rate structure in Britain through a reduction in Bank Rate. I do not suggest that we should follow our Victorian forebears in their Bank Rate policy, but, although the United States federal interest rate is rising slowly, there are many straws in the wind to suggest that we might give some impetus to what looks like being a downward trend in interest rates.
  I will not go into this because my time is running out, but I hope that this country, which has played its part in raising interest rates, will take the lead in trying to reduce them. I do not think that a country such as Britain, with all its international responsibilities, should in fact make its economy so vulnerable to volatile hot money. I do not think that we should indirectly finance the building of council houses or hire-purchase arrangements for television sets on the basis of fortuitous additions to our reserves because of our relatively high interest rates, and above all I do not think that we should repay our debts with the use of hot money.
  This may be a revolution but, in conclusion, I would say to the Financial Secretary that he might remind my right hon. Friend the Chancellor of the Exchequer that he is an historian. He might get him to read the very interesting book published by Mr. Chalmers on the gilt-edged market, in which he gives us a bit of the perspective of interest rates and tells us not to become too fixed in our mind that we are living indefinitely in a period of high interest rates; that people were borrowing and lending money at 5 per cent. centuries ago and a decade ago, and they may well be doing this again.
  Finally—the Financial Secretary looks as if he is anxious to get up—
  Mr. Harold Lever: I was curious to know whether this was to be the final "finally".
  Mr. Cant: I am sorry that mental curiosity makes the Financial Secretary so restless physically.
  I would just like to go back to that great Socialist Chancellor, Dr. Dalton, who, in Volume 2 of his memoirs, tells us how he got a cheap money policy into operation; how, after fighting a 3 per cent. war, he was determined to wage a war of peace on a 2½ per cent. basis and not the 8 per cent. of today. The secret of that—and, for the consolation of the Financial Secretary, this is definitely my final point—
  Mr. Harold Lever: Not at all: I have enjoyed it enormously.
  Mr. Cant:—is that he just decided to put this policy into operation and he did not tell his Cabinet colleagues.
  Mr. John Smith: Would the hon. Gentleman not agree that part of the trouble is caused by the need to have two different rates, an external and an internal rate, that it is very seldom that the rate which this country requires for external purposes is the same as the rate we should like for internal purposes, but that they both have to be controlled by the Bank Rate? The consequence is that this takes us into—
  Mr. Speaker: Order. The hon. Gentleman may desire to speak twice in this evening's debate but he must choose his moment. Interventions must be brief.
  Mr. Cant: I would go further than this. I might even have a dual rate for external purposes. I am sensitive to the need to maintain sterling balances, which relate to our trading and reserve functions, but, in relation to hot money, if we cannot have a zero rate for anything up to 30-day deposits, then at least we should have a reduced rate.
  10.10 p.m.
  Mr. Michael Alison: My hon. Friend the Member for Poole (Mr. Murton) and the hon. Member for Stoke-on-Trent, Central (Mr. Cant) have

  1291
  focussed attention, by referring to the internal and external repercussions and effects of high interest rates, on a topic of crucial importance to the country today. I shall spend a few minutes discussing the specially hazardous repercussions, as I see them, of the high interest rate which we now have, even at 7½ per cent., on the flow of short-term funds into London. These funds are sometimes called euphemistically "interest-sensitive" balances. The hon. Member for Stoke-on-Trent, Central gave them their more popular name of "hot" money. We must draw the Financial Secretary's attention to the Government's own responsibility and their exposed position in the present state of confidence in sterling and the repercussions for our external affairs of the present high level of Bank Rate.
  As I understand it, the interest-sensitive balances, the hot money about which the hon. Member for Stoke-on-Trent, Central spoke, owe their presence in London to two special factors. The first is the differential, the arbitrage, between London and the various other centres, notably New York, which, in order to attract funds to London, has to be high enough not only to be attractive in itself but also to cover the cost of using the forward exchange rate in London, as a guarantee of the funds which come here.
  Second, it depends upon it being official policy—I take it that this official policy still subsists—to support the foreign exchange market. When we have these two circumstances—a high enough rate in London to cover the extra cost of buying forward to reinsure oneself and official Government policy to support the forward exchange market—we see the explanation of why London is the centre certainly of the Euro-dollar market and the various uses to which it is put. Euro-dollars, in the phrase now familiar in the House, really amount to foreign-owned sterling with a foreign exchange guarantee. In effect, this is what happens. Dollars come to London, they are changed into sterling because they can be safeguarded against devaluation by the forward market, and they thus have an exchange guarantee, in effect. They are, surely, the most volatile
  1292
  of all short-term funds to come here. Of all funds these must be the ones which give the Financial Secretary more grey hairs than any other. I am glad to see that he has not many yet, but, no doubt, more will come. These foreign-owned sterling balances, switched into sterling in London, reinsured on the forward market and, in effect, underwritten by the Government, must be the most worrying and most volatile foreign currency which we have here.
  The special piquancy, so to speak, of this terrible burden of uncertainty and volatility which the Government have to bear in relation to the short-term funds about which the hon. Gentleman spoke so lucidly is that it is the public authorities generally, and local authorities in particular, which are the main users of, in effect, these specially volatile foreign-own sterling funds. It is worth reminding the House of some of the figures given in the latest issue of the Bank of England Quarterly Bulletin in regard to the scale of hot money, interest-sensitive funds, coming to London attracted by the high interest rate and by the possibility of guarantee in the forward market. On the latest score, as far as one can see, at December, 1967, according to the February issue of the Quarterly Bulletin, local authorities were borrowing no less than £797 million foreign-owned sterling from overseas banks and acceptance houses.
  They were in addition borrowing directly from overseas, not through the acceptance houses or banks, about another £150 million. Therefore, close on £1,000 million of short-term hot money was attracted to this country and used to service and help the public authorities, preeminently the local authorities, in their domestic financing arrangements. A large part of that massive sum of volatile foreign funds must be looked on as liable to depart, either in response to the sort of differential changes in the interest rates to which the hon. Member referred, such as the lifting of the New York rate, or, perhaps more worrying, the recent attraction of gold.
  If there are a great deal of foreign-owned sterling balances in London and there is a run on gold they are no doubt switched back into dollars pretty quickly

  1293
  on their way into gold. To give an idea of the scale involved, the figure I gave for local authority borrowing from overseas banks and acceptance houses of £797 million in December, 1967, represented a rise of about 50 per cent. simply between the end of 1966 and the end of 1967. I shudder to think how much of that substantial increase must have been switched back into dollars on the way into gold in the early months of this year.
  One could perhaps trace the need for the building societies to raise their rates to the need of the local authorities to come out of overseas borrowing because of the departure of funds and go into domestic borrowing, taking some of the funds which the building societies used to attract. It is a terrifying prospect for the Financial Secretary to have the possibility of foreign-owned sterling funds going at the wave of a wand or the drop of a hat, wiping out all the Treasury's surplus calculations of £500 million at one stroke. That is the extraordinarily exposed position the Government are in because of the very high rate of interest which is maintained and must be maintained—it is difficult to know which comes first, the chicken or the egg—to keep at home those volatile foreign-owned sterling funds.
  We must ask the Financial Secretary to reflect very long and hard on the implications of some of the measures which his right hon. Friend has just introduced in regard to the net borrowing requirement of the central Government. They have been much publicised as a great triumph for the Chancellor in reducing the amount the Government borrow from the public at this high rate of interest, making an alleged drop from about £1,000 million to between £300 million and £400 million in the central Government's net borrowing. But the borrowing of the local authorities has been scheduled to go up appreciably this year. They are to spend a good deal more on capital account.
  If the central Government have deliberately closed the door on the local authorities because they want to reduce their central borrowing requirements, the net effect of budgeting for the local authorities to spend more is to force them to raise more of this in extra-Governmental sources. We find in the
  1294
  Financial Statement this year that that is precisely what has happened. The local authorities are now being forced to borrow 75 per cent. more of the money they need from non-Government sources. The Budget Estimates for 1967–68 show a local authority borrowing requirement of £388 million from outside Government sources. It has gone up to about £650 million from outside Government sources. Where will all this extra money come from? The local authorities are being forced by the Government to fish in the hot money market, in the volatile, uncertain, ebbing waters of foreign-held sterling which comes to London, attracted by the very high interest rate.
  The Government are therefore reinforcing the danger to which they have exposed themselves. They are forcing one sector of the public authorities—the local authorities—to increase borrowing in foreign-held sterling funds which come to London in response to a 7½ per cent. or higher Bank Rate. Thereby, they are making it more essential that these funds stay here and are forced to keep this very high rate of magnetic attraction to London.
  Cannot the hon. Gentleman do something about this by making some administrative change within the mechanics of his Department in order to take the pressure of borrowing by the local authorities at any rate off these foreign-owned sterling funds? For example, if he could put in hand a genuine transfer in the building effort, so that more was given to the private builders and less to the public authorities, we might well find—since the private builders do not borrow, or usually do not have the security to borrow, from overseas banks in foreign sterling funds—that there would be a real possibility of dropping the need for local authorities to fish in these uncertain external waters, thereby making it possible to bring down Bank Rate without the flight of these volatile funds.
  The Budget, in its emphasis on reducing central Government expenditure, has had a reflex effect in forcing local authorities to borrow more in the external currency market. The hon. Gentleman should look at another serious effect of the Budget combined with high

  1295
  rates of interest. This is on costs generally, particularly industrial costs. My hon. Friend the Member for Poole laid great stress on the costs likely to hit the building industry. I want to draw the spectrum slightly wider and remind the Financial Secretary that increases in the Selective Employment Tax—
  Mr. Speaker: Order. The hon. Gentleman has finally tempted himself into another Budget debate. The Budget debate, however, is over.
  Mr. Alison: I take the point, Mr. Speaker. I therefore refer to the funds upon which manufacturers are now going to have to pay a very high rate of interest—an increased rate of interest—leading to a substantially increased debt burden in respect of shunted money which is raised gross and then, in large measure, handed back to them in respect of this special tax payment.
  Mr. Speaker: Order. The hon. Gentleman is singularly unresponsive to the guidance which the Chair gives him from time to time. He must keep to the debate.
  Mr. Alison: Am I allowed, Mr. Speaker, to refer to the weight of bank interest payments on the moneys which the private sector, under statutory obligation, advances to the Government for short periods and on which they have to pay a rate of interest and which therefore represents—
  Mr. Speaker: Order. If the hon. Gentleman had been here at the beginning of the debate, he would have heard the classic rules of debate on the Second Reading of the Consolidated Fund Bill. He can raise any matter which affects administration. He cannot discuss problems of taxation or legislation.
  Mr. Alison: I take your Ruling, Mr. Speaker. I come now to the administrative point. Will the Financial Secretary consider, in respect of funds which will come to the Treasury temporarily and which he then recovers, and upon which loan charges have to be charged, the possibility of coming to some formation through which, on payments which are due to go back after three months, he could issue three-month
  1296
  Treasury bills, which could be rediscounted?
  Mr. Harold Lever: That would require statutory action, and it is no good the hon. Gentleman raising points which I would be out of order in answering.
  Mr. Alison: The point has been registered, at any rate. I hope that the hon. Gentleman will give us at least some encouragement on the possibility of Bank Rate, by administrative and not by legislative action, being substantially reduced, and that the dependence of public authorities in particular of sterling funds which come to London will be reduced.
  10.25 p.m.
  The Financial Secretary to the Treasury (Mr. Harold Lever): In the course of the debate, I have been accused of drawing monstrous faces and of showing extreme restlessness. I beg my hon. Friend to believe that I was far from restless. He was on one of my favourite subjects and the only reason why I was constantly jumping up was because I took him at his word when he said he was about to conclude, and I was anxious that the House should not be kept waiting for my speech.
  Mr. Speaker: Order. Would the hon. Gentleman address the Chair? The reporters will then be able to hear.
  Mr. Lever: I can assure hon. Gentlemen who have spoken that I have listened with great interest to their speeches on the subject of high interest rates, especially when they were in order. It is rather frustrating to hear an argument to which in my impeccable response to the debate, under your guidance, Mr. Speaker, it would be inevitable that I could make no reply. Thus, it is quite hopeless to raise questions of rent increases and the like, because I cannot deal with them in this debate. I cannot deal with suggestions for improvements of the tax mechanism whereby we pay interest to the taxpayers in respect of money paid to us, while they are waiting to get it back.
  Unhappily, I must begin by telling the House that there is a well-established practice that all Ministers, in all governments, never give an indication

  1297
  of future movement in Bank Rate or interest rates with any kind of proximateness. This is obviously inevitable, because this affects Government policy on interest rate, it affects the capital value in the markets, and were I to disclose anything related to the immediate future, while it might give calm and reassurance to hon. Members, it would tomorrow be responsible for unseemly speculation in the market. It must be clearly understood that what I am saying must be in the nature of a general philosophy in relation to interest rates that may not have any impact in one, two or three years.
  I hope that the House will realise that it is inevitable that I should speak on the philosophy of interest rates, and not on the particular application of interest rates in the future. I can discuss the past, and this is rather handy because the writ of dogma does not run too clearly on this question of interest rates. There are so many philosophies of interest rates that a simpleton like myself in these matters is completely bewildered.
  Mr. Speaker: Order. I am distressed at having to interrupt the hon. Member, but I do not think that he has asked for leave of the House to speak again. This is his second speech in the debate.
  Mr. Lever: I beg your pardon, Mr. Speaker, and that of the House. I hope that I may have the leave of the House to speak again.
  As you will recall, I made a speech earlier in the debate. Innumerable reasons have been advanced why interest rates are very high or low, and innumerable reasons have been advanced by all the experts as to what governs these fluctuations. There is a most impressive array of experts on the subject, and the only unhappy matter in connection with it is that they all disagree as to the reasons why we have interest rates high at one moment and low at another.
  I have been forced to conclude, most irreverently, after studying these matters over a long period of time, that the claims made for high interest rates—that they select with efficiency the direction of capital investment, that they cure inflation, and various other virtuous attributes—are not made out. I remain, and I can say that the Government re-
  1298
  main, in principle, committed to the concept of low interest rates. The Conservative Party spokesmen have now become exponents of the cause of low interest rates. Unhappily their record, after the Labour Government of 1950, was one of steadily rising interest rates. The hon. Member for Poole (Mr. Murton) was not in the House in those days, and is probably suffering from the illusion that high interest rates and financial crises prevail only under a Labour Government. He is entirely mistaken. It was a Conservative Government that in 1957 and 1961 put on crisis rates, admittedly not as high—they were 7 per cent. They were very damaging in their consequences to industry.
  Mr. John Smith: Since the hon. Gentleman, whom I greately admire on this subject, has unfortunately abandoned philosophy for politics, would he not agree that it was not so much high interest rates which the Conservative Party went in for, but the use of interest rates, and that to make interest rates function it had to get away from the artificially low rates it found when it came into office?
  Mr. Lever: I would not have objected to a certain modest increase in interest rates compared with the lowest achieved by Dr. Dalton, but the Conservative Party, unhappily, when in Government was also under the same difficulty we are. We all like to believe it is due to generalisations such as incompetence and bungling and extravagance and the like, but unhappily, these financial crises which beset us spring from far deeper roots than are covered by such shallow and superficial comment, and they have arisen over the whole sterling area over a long period of years.
  I take the point of my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant). It is very difficult to apportion blame about who started it. He thinks this country is very responsible in this regard. If he is right, of course it was the Conservative Government, our predecessors. We have continued, let me say immediately, whenever a crisis arose, to reach for the high interest rate. I think that is true of all Governments, and it is not unnatural they should do so, because in the moment of emergency

  1299
  one is most anxious to preserve the capital position of the country.
  There is another point which has to be faced by hon. Members, and it is this. Again I am in difficulty as I am speaking on a sensitive subject. I cannot go into the illustrations which are directly relevant to current events. But if a country runs into a heavy deficit on its balance of payments it has got to be financed somehow, and it may pay a country better to borrow money abroad, even at a high interest rate, to cover the deficit for the time being, than to follow more unpleasant and destructive courses open to the country to get its balance of payments covered. I am sure my hon. Friend the Member for Stoke-on-Trent, Central would rather borrow £500 million abroad even at a high interest rate than attempt rapidly to cure the imbalance by deflationary measures which might cost a great deal more wealth than is involved in the payment of interest.
  I am not making party points. I attacked the Conservative Party only to bring the whole matter into perspective. All Governments have wrestled with this chronic problem for the last two decades. They have resorted at times of crises to high interest rates, but I affirm on behalf of the Government, the conviction that over the long term high interest rates are not desirable things in themselves, though they may be useful at a particular point of emergency such as a devaluation. I am leaving aside, as we are not debating that, the need to devalue, or who is responsible for that and the like, but the fact is we are facing a devaluation. The hon. Member says, it was not the Conservatives. If I were free to discuss it I should like to see a long historical appraisal of the whole situation, not in a partisan spirit, but with a deep, earnest seeking after truth.
  Devaluation occurred in November. High interest rates were inevitable at that period, but I can tell hon. Members that we recognised that the points which have been made against high interest rates are in themselves absolutely valid. They do add to industrial costs, as the hon. Gentlemain said. They do add to balance of payments costs, as my hon. Friend the Member for Stoke-on-Trent, Central has said. They make difficulties
  1300
  for builders and others, as the hon. Member for Poole said. I accept all that. The only trouble is that we must rank high interest rates in moments of crisis as one of the insurmountable distresses of humanity when we get into difficulties.
  If we want lower interest rates and a more self-conscious control of our financial affairs that go with low interest rates, we should pledge ourselves to get rid of our balance of payments deficit and put the country on an economically more secure foundation than it has been in recent years.
  Mr. Peter Hordern: It is clear that an 8 per cent. rate is not attracting funds from abroad and that the clearing banks cannot lend more than a specified amount because they are limited by the Government in the amount that they can lend. What is the point of reducing Bank Rate by only a half per cent., when it is not acting as the magnet which is desired?
  Mr. Lever: I hate to retreat behind the shield of the statement that I made earlier. I would be involved in areas of comment which would not be regarded as generally desirable if I were specifically to defend the given rate at the given time. I would be involved in predicting the future movements of Bank Rate up or down, and it would not be desirable, especially if it proved wrong. In fact, I do not know which would be worse: if people speculated on what I said and lost because it was wrong, or gained because I was incautiously proved right.
  We start from the inevitability of a high Bank Rate after a devaluation crisis. I am glad to see that the Chancellor felt able to bring it down to 7½ per cent. I still regard it as a very high rate and not one that it is in our interests to sustain for longer than necessary.
  If one drops to party polemic and debating point scoring, everyone knows that, if we want low interest rates, and I do, and if we think that low interest rates lead to a reduction in industrial costs, an easement on house borrowers, a cheapening of building costs, a lessening of the expense of borrowing money abroad on the reserve balances, and the rest of it, we can only reliably hope to have them if we put our balance of payments in order.

  1301
  Taking the longer term view, the best guarantee of permanently lower interest rates coming within the possibility of a British Government is to be seen in the Government's effort in the Budget and the Finance Bill which will follow to get our balance of payments right. A balance of payments in order gives a Government far greater room to manoeuvre on these questions of interest rates. Those who want low interest rates should support the measures, however Draconian, which are necessary to put our balance of payments in order. I am confident that the Government will succeed as a result of the Budget and the other measures taken to put the balance of payments into order. We can then look forward to a vastly lower rate of interest than those prevailing at present.
  Mr. Alison: The hon. Gentleman is talking about getting the balance of payments right. Would he consider that the Chancellor's figure of a surplus of £500 million in a year, say, 1968 or 1969, is self-sufficient to cover a balance of payments in which there may be a component of over £1,000 million short-term funds which could disappear?
  Mr. Lever: The hon. Gentleman is mistaken in supposing that short-term funds are a component of the balance of payments. He will be delighted to know that, when we compile the balance of payments statistics, short-dated funds of less than a year do not figure in them. The hon Gentleman need not have too many worries on that score. The borrowings longer-term than a year which appear in them are specifically visible. When we talk of a balance of payments figure running at the rate of more than £200 million by the end of this year and at £500 million per annum in 1969 and 1970, we do not believe that what we have in mind is the attraction of either short or long-term funds to produce a paper surplus. We have in mind a trade improvement in our visible exports, a reduction in our visible imports, and an increase in our invisible exports to bring about a genuine surplus of £500 million a year from 1969 onwards. It is certain that if we achieve those targets the high interest rates that are now prevailing could be reduced, and I am confident that they will be reduced.
  1302
  I should clear up one or two small points. It is not the Government who have driven local authorities into the Euro-dollar market. They are free to borrow anywhere. It is not a very helpful suggestion that we should hand local authority building to private builders, thereby avoiding local authority borrowing from abroad. If we think that the local authorities should not borrow from abroad, we can stop them. At the moment they are free to borrow short term where they will. But it seems an unnecessary and undesirable effort that we should immediately bring to an end local authority building because we do not want them to borrow from abroad. Contrary to the fears which have been expressed about local authorities borrowing heavily from abroad, the covered rate of interest from abroad is not such as to attract funds to the local authorities on short term. Therefore, there is no need to worry about a vast flood of Euro-dollars coming in in the interesting way that has been described.
  I have been asked to acknowledge that the high interest rate has an effect on costs. I do so acknowledge.
  My hon. Friend the Member for Stoke-on-Trent, Central talked about having a dual rate for external balances. I am not sure what he means by that. Does he mean that we should select some external balances and pay them at one rate and others at another? They may not be willing so to be paid. He suggests that we should have a zero rate for 30-day balances. I do not know all the effects of that, but one thing is certain: if one has a zero rate for 30-day balances one will have a zero amount on the 30-day balances which will match the rate with a precision which would surprise my hon. Friend. Therefore, I cannot wed myself to the concept of a number of rates of interest from abroad, though I entirely—
  Mr. Cant: I went into this in response to a question. But it is not inconceivable to me that one might have a reduced rate for hot money which is deposited, say, for periods of less than 28 days.
  Mr. Lever: I took a careful note of what my hon. Friend said. He said a zero rate for 30-day balances. If he has a reduced rate, it will depend on what alternative competition there is for this money from abroad. If the reduced

  1303
  rate is enough to attract them, there is no point in paying anything higher. But if one wants money, especially from the Euro-dollar market, one of the harsh facts of life is that one has to pay the going rate. If a man does not want to pay that rate, he has to find some other way of carrying on his affairs so that he can manage without the money.
  My hon. Friend and others must not believe that there is a quixotic desire on the part of the Government to overpay foreign lenders to attract their money. At the present time the covered rate on short money would not make it profitable to lend money in London.
  I have done my best to cover the points which have been raised. Concerning local authorities, my personal view is that we should move to a situation where they get all their funds from the central government. This hotchpotch of local authority borrowing, which was largely introduced by the Conservative Government after 1951, should be brought to an end. We are steadily bringing the matter back into order. Again, this is not a party political point, because I know that many hon. Gentlemen opposite share the view that public borrowing should be centralised and run in a sensible and central manner. Local authorities should not be haggling in the market place with advertisements for different rates of interest on different amounts in different localities competing with each other to push up the rate of interest. I should like to see all public borrowing centralised under Government auspices and supervised by the Government in lending it out.
  I think that I have dealt with the points which were made, other than those which were out of order, or innocent party debating points to show the disreputable and incompetent character of the Government. I understand that the debates on this Bill, among other things, have as their object the provision of a suitable and genial forum for such suggestions, and hon. Members will not think it discourteous of me if I do not attempt to respond in kind, because this is private Members' day, and they are right to castigate the Government, of any political complexion, with as much ferocity as they can sum up on this occasion.

  COAL (PRICES)
  10.46 p.m.
  Mr. John H. Osborn: It has been fascinating listening to an expert on the Consolidated Fund Bill, albeit he is now a poacher turned gamekeeper, drawing his views to our attention in such a pleasant manner, although he is on the Front Bench.
  I want to raise a different question, namely, coal pricing policy in so far as it is affected by the cost of coal produced in the pits, in so far as it affects industries using coal, and in so far as it is concerned with recent offers of cheap coal to selected industries, and particularly the aluminium smelting industry.
  I am glad that the Parliamentary Secretary is here, because he will remember the debates on the Coal Industry Bill, now the 1967 Act, which deals entirely with various elements of subsidy, including the subsidy in Section 6 which reimburses all additional costs involved in using coal for generating electricity or for producing gas. If I stray into the effect of coal pricing policy on electricity and power to the industrial user and consumer. I assure my hon. Friend the Member for Horsham (Mr. Hordern), who is not here, that I do not wish to stray all the way into fuel policy, which is to be the subject of a debate later tonight.
  My thinking on these subjects, following not only the debates on the Bill, but reports of the Labour Party conference at Scarborough that proposals were being considered to develop aluminium smelting, has developed on a number of lines, and during the last three months I have put down Questions relating directly and indirectly to these points.
  My main lines of thought have been twofold. The first problem, which might be considered to be somewhat unrelated to the main one, is that of the grey areas, and concerns the South Yorkshire area, particularly in the vicinity of Sheffield. This area is faced with the closure of a number of pits, and the contraction of the traditional industries in Sheffield. It is an area which needs fresh industries.
  I am disappointed that I did not advise the hon. Member for Derbyshire, North-East (Mr. Swain) who is the Chairman of the 44 Group, of the scope of this

  1305
  debate, but it so happens that local authorities have come together with Sheffield to form what is known as the 44 Group to look into the future of this area. In the past this area has boasted cheap electricity and cheap gas, and in fact cheap power, for its main industry, steel. Sheffield has pioneered electric melting by the electric are furnace, and the high frequency furnace.
  The 1947 Act had two results. First, over the last 20 years or so there has been an averaging of coal prices. This has meant that within the coal industry there has been no incentive to exploit the cheap production, high productivity pits at the expense of less efficient ones. To put it another way, even under the Conservative Government, who had to operate the Act, social considerations were given a high priority.
  I make this comment with one qualification. There is no doubt that the National Coal Board has sunk new pits, and it has not held back closures, but it has also mechanised pits. The charts in the last Annual Report issued by the Board in relation to output per man shift and mechanisation show an upward trend, and are indeed encouraging.
  But the result, not only of the Coal Act, but of the Electricity Act, was that the 1945–51 Labour Governments brought about a much greater averaging of electricity prices. Transmission costs have become a national responsibility and have been shared by all the area generating boards. This led to a practical compromise which has been developed over the years. General overheads in the nationalised coal and electricity industries have been spread, resulting in an averaging of prices.
  This raises a number of issues and prompted my Question to the Minister of Power on 25th January:
  "… if he will take steps to ensure that in grey areas, such as South Yorkshire, industrial tariffs for the use of electricity based on indigenous fuels, namely coal in East Yorkshire, and natural gas from the North Sea, are realistically low and do not carry transmission charges to other parts of the country."
  The Parliamentary Secretary said that the bulk supply tariff had been
  "… referred for examination by the National Board for Prices and Incomes."—[OFFICIAL REPORT, 25th January, 1968; Vol. 757, c. 182.]
  We have had Report No. 59, Cmnd. 3575, from the Board, which did not
  1306
  deal with the averaging, and the Parliamentary Secretary will have noticed that his point has not been covered.
  Assuming that the price of coal is being averaged, it is being averaged to different electricity undertakings and coal-fired thermal power stations. The average energy costs of coal, oil and nuclear power are obviously pooled into the cost structure generating system and there is a strong national averaging element, which has resulted in an essentially uniform price structure.
  To return to the constituency point, Yorkshire and Sheffield and the region covered by the 44 Group has a close proximity to natural gas, to some of the most modern and efficient collieries, which enjoy cheap production costs and high output per man shift, and to the most modern coal-fired power stations. Only the other day, I passed Drax, Cot-torn and High Marnham, the performance of all of which is of great interest. But to what extent is Yorkshire and Humberside, and particularly South Yorkshire, subsidising coal and, indirectly, electricity and other sources of energy to other parts of the country? I have posed this question and we are still waiting for a satisfactory answer.
  The next problem following the announcement and which has been going on concurrently with the Scarborough Conference, is the decision to set up an aluminium smelter, amplified, in a D.E.A. Press release on 4th October. My hon. Friend the Member for Louth (Sir C. Osborne) subsequently asked whether or not there would be an element of subsidy. The Prime Minister said categorically that there would not be, but the outcome is still awaited. We are still waiting for the Ministerial statement which we were promised. We know that the assessment has been done by the Industrial Reorganisation Corporation and that its report has been in the hands of the appropriate Ministers for some time.
  At one time Rio Tinto Zinc, using nuclear power, and British Aluminium were considered the favourites. Then Alcan came into the picture. The exact terms of the offer for the sale of coal to Alcan are not known. Various guesses have been made—of 3·5d. and 3·25d. per therm. Suggestions have also been made

  1307
  about the time limit involved. Some have suggested 20 years, others 25 years. In any event, if coal is sold in this one instance at this price, it surely means that it should be sold to other industries at comparable prices. And if coal is sold at this price, does it still mean that the Coal Board and the collieries concerned are meeting their obligations outlined in the White Paper on fuel, "The Nationalised Industries. A review of economic and financial incentives?" In that document it was clearly stated what was required if the Coal Board was to break even, after interest and depreciation, including the £10 million per year. Is the objective of the White Paper going to be met? When this and other questions were asked in January, a number of useful articles appeared in the Press. Christopher Tugendhat, writing about what he described as the "real reason" why Alcan had chosen coal, wrote in the Financial Times:
  "If oil were untaxed Alcan would probably have wanted to build an oil-fired power station."
  He added:
  "In the context of these negotiations two points must be remembered about the position of the electricity authorities. First, because of the Nationalisation Acts it is almost impossible for them to act as normal commercial concerns since they are forbidden to pursue a preferential pricing policy. Secondly, the condition of the grid is such that it would be impossible to guarantee uninterrupted supplies unless the power station was built beside a smelter or unless the smelter was linked to the grid in three separate places—which would be very expensive."
  Alcan decided to build its own power station, as that article indicated, and it suggested:
  " … the delivered cost of the coal will he rather higher than the 3d. a therm, which has been generally reported. This probably means that it is about 3·25d. a therm …".
  At about the same time Don Perry pointed out in an article in the Sunday Express that:
  "Steel chiefs to ask for cut-price coal."
  Immediately, the offer to Alcan began to interest other industries. The Sheffield Telegraph pointed out:
  "Britain's steel producers—particularly those in Sheffield—are hoping to get cheaper electric power in line with the supplies being proposed for aluminium smelting firms."
  1308
  Shortly after that I asked the Minister of Power what steps he had in mind for large consumers of electricity and
  "… what steps he proposes to take to make available cheap electric power on realistic bulk tariff rates to the steel industry of Sheffield melting steel by means of the electric are, high frequency and other modern processes.…" [OFFICIAL REPORT, 26th. Jan., 1968; Vol. 757, c. 200.]
  We learned from the Answer that no applications had been received from steel melters in Sheffield for special terms. That is not true today. Industry is now interested in the fact that special terms for electricity and coal have been offered to the aluminium industry, and this immediately brings us to the question of the pricing policy of the nationalised industries.
  In December I asked the Minister of Power, in connection with the fuel White Paper, to
  "… publish the average cost per ton at the pithead and cost per therm of the coal mined from the best 50 pits in the country.…" [OFFICIAL REPORT, 19th Dec., 1967; Vol. 756, c. 364.]
  In his reply, the Parliamentary Secretary said that 14 collieries were producing coal at a cost per ton of 56s. 4d.; 107 at 79s. 5d.; and 81 at 94s. 1d. The hon. Gentleman circulated in the OFFICIAL REPORT a useful table giving this information.
  The equivalent cost per therm in the region of 2·6d., 3·67d. and 4·3d. is well below the price available to selected users.
  At the same time we came to the question of the best way of generating electricity. In reply to a Question the Minister of Power pointed out that at Hinkley Point construction cost £71/kW. and generating cost 0·52d. kWh. Drax is £52/kW. and the generating cost 0·6d. kWh. After that a series of Questions was asked, to some of which the Minister or the Parliamentary Secretary replied and to others they did not reply. I was told on 30th January that if the average pithead cost per ton of coal was 56s. 4d. that a modern coal-fired power station would generate electricity at 0·52d. per unit, or per kilowatt hour. Therefore coal-fired power stations are at present able to produce at a comparable price to that of nuclear power.

  1309
  Only as recently as 12th March, I asked the Minister of Power, based on revised estimates of coal demand and as a result of the proposed reorganisation of the coal mining industry in mechanised cheap production collieries, at what price range per ton and per therm pithead he estimated coal would be available to the C.E.G.B. and industrial users requiring deliveries in bulk with a view to implementing a cheap energy policy. We had in mind a time cycle of the 1971–75 period. We learned from the Minister that he was in consultation with the National Coal Board about its price structure. That is as far as we have got. Of course, price structure entirely controls the amount of any one fuel used. Unless the price structure is established, predictions of demand and supply in the 1970s are essentially hazy.
  I have also asked a number of Parliamentary Questions which have resulted in correspondence with the Chairman of the Coal Board. He reaffirmed some of the Answers given by the Parliamentary Secretary. I understand that I may quote from a reply the Chairman gave. He said:
  "I have now had an opportunity of reading your letter to the Minister… You have. of course, put your finger on the real issue: it is, and must be, the aim of the Board to maximise production of coal at the lowest cost pits and eliminate the high cost output by pit closures. Only the vast social upheaval involved prevents us from closing pits at a greater pace and indeed the Government have already felt it necessary to defer the closure of some heavy losers. Parliament has provided for this in the Coal Industry Act to which you refer and the cost of the deferment falls upon the public purse. We are, however, carrying on our own revenue account a substantial quantity of high cost coal which is masking the cheaply-produced coal within the average price to the C.E.G.B.
  I think I can help you far better in the assessment you want to make by giving you the breakdown of our output by costs of production for the financial year 1966–67, the latest period for which figures are available."
  He then gives the following figures:
  " Under 3d. a therm 11 m. tons.
  Between 3d. and 4d. a therm 51 m. tons.
  Between 4d. and 4½d. a therm 35 m. tons.
  Between 4½d. and 5d. a therm 25 m. tons.
  Between 5d. and 6d. a therm 27 m. tons.
  Over 6d. a therm 9 m. tons."
  Finally, he says:
  "You will note that we are already producing 122 million tons at under 5d. a therm.
  1310
  As productivity is rising rapidly, we can see this coming down in cost very considerably—say, to under 3½d. a therm—by the 1970s. The 36 million tons now being produced at over 5d. a therm will be eliminated by closures and made good partly from new or reconstructed pits, building up to full output, and partly from the remaining pits at higher rates of productivity."
  He then gives an assurance that he will send further information.
  In a letter to me dated 12th March, Lord Robens tells me about the pithead prices of coal sent to the C.E.G.B. He says:
  "There is no general answer; everything would depend on the location of the customers and location and costs of production of the supplying collieries."
  In regard to the supply of coal to selected users near cheap coal pits, he says:
  "In certain circumstances we can offer coal for new business on long-term contracts at prices related to the costs of production at designated pits without in any way affecting the price of coal to other customers. Indeed, it is quite likely that if we failed to win the new business the coal would not be required elsewhere anyway.
  "I would like to make it clear that the average pithead price of coal supplied to the C.E.G.B. hides a considerable tonnage of cheap coal. The breakdown for the calendar year 1967 is as follows:

  Pithead prices of C.E.G.B. coats

  Over 5d. a therm

  8 million tons

  Between 5d. and 4d. a therm

  20 million tons

  Between 4d. and 3½d. a therm

  20 million tons

  Under 3½d. a therm

  12 million tons

  That provides an interesting contrast with the proposals for the 1970s. He goes on to say:
  "On average the 60 million tons were sup-lied at a little over 4d. a therm."
  I give those matters in full because I have the authority of the Chairman of the Coal Board to quote directly, not paraphrasing, because he does not wish to be misunderstood.
  I have been in touch with the Electricity Council as well. I have not the authority of the deputy secretary to publish this letter, but I am certain that I shall be in order in quoting certain passages. This is what was said by the Electricity Council:
  "You will appreciate that Boards are not in a position to divulge confidential information relating to their commercial relationships with individual consumers. However, you might find it useful to know that the twenty-five largest consumers of the Area Boards in England and Wales are nearly all in the chemical or iron and steel industries, and in the Midlands or North or the country."
  In view of the other matters which I have mentioned, that is interesting news.
  "Their annual consumption ranges from 225 to 1,000 million kWh and the average price per unit paid varies according to the load characteristics of each supply, and is particularly affected by the proportion of load taken outside periods of high system demand. Broadly, the average price varies from around ¾d. per unit to over 1d. per unit."
  In the last paragraph of the letter, the Electricity Council says:
  "Of course, what the electricity industry is worried about is being denied access to this cheap coal and having to take dearer coal for the stations that exist and are under construction; thus preventing a reduction in the cost of producing electricity."
  It is clear from these letters that, if the Coal Board makes cheap coal available to one or two users, this is likely to raise the cost of coal to the Central Electricity Generating Board. Much of our electricity will for some time come from coal-fired thermal power stations, not nuclear stations. The pricing policy of coal is all important.
  To conclude, we have had the White Paper on the Nationalised Industries, which gives us a review of the objectives. How does this affect the Coal Board? We have had the White Paper on Fuel Policy, which will be discussed later this evening. We have had the pricing policy within the nationalised industries to which I have referred. This has obviously been the subject of discussion in the Select Committee on Nationalised Industries and I understand that one of the witnesses this evening was Mr. Aubrey Jones. I should be out of order to refer to that now. But the Coal Board's pricing policy and pricing structure is, according to an answer from the Ministry of Power, the "subject of consultation".
  Which are the area boards producing the cheapest coal and at what average price are they producing that coal? I am certain, as my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) has pointed out, that they are the East Midlands and the Yorkshire areas. Which are the specific collieries producing this cheap coal? I have asked a number of questions of the Parliamentary Secretary to find out which they are, but this information is not available.
  To what extent do the industries which are closest to collieries producing the
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  cheapest coal benefit by it? Not only does the electricity industry have the chance of benefiting from it, but so do the users of electricity.
  The price of coal and the extent to which it is available to a modern power station is obviously going to affect the price structure of the electricity industry in the future. Are electricity users obtaining electricity at sufficiently generous prices or are they subsidising domestic and other users? To what extent will the sale of cheap coal to selected industrial users increase the cost of coal to other users?
  I know that this is bringing us into fuel policy, but we must bear in mind that if selected industries are given cheap coal for their own power stations or nearby power stations this will distort the tariff structure of other area boards and other industrial users.
  I introduced this debate because I believe that the ground rules for the pricing policy of coal need careful reappraisal. We understand that they are being reappraised. The Parliamentary Secretary should take the opportunity tonight, because so much money is being invested in the coal industry and in other nationalised industries, to lift that veil so that we may know what is going on between the Minister of Power and the nationalised industries at this time.
  11.13 p.m.
  Mr. David Lane: This is a welcome debate because coal pricing policy is a highly topical and important subject. I am glad to be able to support my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn).
  What we are doing this evening is trying to probe that mysterious thing known as the Government's mind. The Parliamentary Secretary seemed to be in a benevolent mood earlier today and I hope that he will be more frank tonight than he has been on some recent occasions when we have questioned him on this and related subjects. Then he has been the reverse of forthcoming.
  Before I put certain questions I should like to make three general observations. In the aftermath of the most burdensome Budget in peace time there is great public anxiety about rising public expenditure. I hope that the Government will not underrate this anxiety. We have to be doubly

  1313
  careful that the nationalised industries do not rush into policies which will add still further to the burdens of the taxpayers.
  Secondly, industry, particularly private and exporting industry, has taken on its back yet another instalment of cost burdens. Industrialists are like travellers across a desert thirsting for any lower costs, particularly lower costs of electricity.
  Thirdly, I believe that as a nation we need still more knowledge of both the private and public sectors of industry in taking our economic decisions and making our judgments. There is a very healthy trend in the private sector at this moment, as the floodlight of publicity and public understanding is playing more and more widely on the activities of companies. This should be at least matched in the public sector. Yet the field of policy we are discussing is still shrouded in mist or, as my hon. Friend said, concealed behind a veil.
  In putting questions to the hon. Gentleman, I am in no way knocking the coal industry or any other nationalised industry. On the contrary, I want to see the coal industry and other nationalised industries concentrated and efficient, prosperous and profitable. In particular, I want to see the coal industry aggressive in its marketing policy. But aggression is one thing and rashness is another. There are some disquieting signs today of the coal industry going over the border-line into rashness. I was delighted when we were told two weeks ago that the Minister of Power is in consultation with the Board on its price structure.
  My first question echoes what my hon. Friend has already said about the smelter decision, which we hope soon to hear about from the President of the Board of Trade. The Prime Minister said last November, in reply to a Question by my hon. Friend the Member for Louth (Sir C. Osborne):
  "The arrangements now being discussed between interested companies and the generating boards would neither involve an Exchequer subvention nor an increase in the cost of electricity to other users,…—[OFFICIAL REPORT, 14th November, 1967; Vol. 754, c. 213.]
  Do the Government still stand squarely by that undertaking? If so, can they explain how, at the sort of figures so far reported for any offer of coal for smelting it will be possible for the
  1314
  National Coal Board to avoid a still bigger deficit?
  Second, do the Government share the optimistic view of the Chairman of the Board about the future trend of coal costs? We are always hearing publicly from Lord Robens about that. I applaud his aggressive spirit and optimism, because I am a natural optimist myself, but we must be a little careful. My hon. Friend mentioned the optimism in the correspondence the noble Lord has been having with him. Another example, the latest as far as I know, appeared in the Financial Times yesterday. Lord Robens wrote:
  "With the productivity curve set sharply upwards and costs progressively tumbling down, coal's competitiveness as a fuel for electricity is being strengthened all the time, and all of us in the coal industry are eager to see our most substantial customer sharing in the accumulating benefits."
  I am sure that the electricity industry will say "Hear, hear" to that. I understand that there was the same optimism in the evidence Lord Robens gave to the Select Committee on Science and Technology last year.
  We must have in mind past experience in the matter of coal costs. It does not seem to me to be all as plain and easy sailing in the years ahead as Lord Robens is now telling us. The Government's White Paper on Fuel Policy said at paragraph 62:
  "The average cost of coal per ton (before interest) rose by 4·6 per cent. between 1964–65 and 1965–66, and by 6·4 per cent. between 1965–66 and 1966–67, notwithstanding increases in productivity of 3·7 per cent. and 1·4 per cent. in these years. This indicates the magnitude of the task facing the Board if they are to achieve their declared aim of reducing costs in the coming years, so as to improve their competitive position."
  This is borne out on page 1 of the Board's Report for 1966–67 where we read:
  "The effects"—
  of price increases—
  "were, moreover, partly offset by rising costs: revision of wage and salary agreements cost £13 million; other expenditure—including the costs of materials and stores, power supplies, local rates and National Insurance charges—"—
  and I stress the next words—
  "—almost entirely outside the Board's direct control, increased by £8 million during the year."
  In view of this past experience would we not be wiser to take the optimism

  1315
  of the Chairman of the National Coal Board with a large grain of salt?
  Thirdly, how do the Government view the duty laid on the National Coal Board not to discriminate? We are all familiar with the words in the Coal Industry Nationalisation Act, 1946, that the duty of the Board is to make
  "supplies of coal available, … in such quantities and at such prices, as may seem to them best calculated to further the public interest in all respects, including the avoidance of any undue or unreasonable preference or advantage".
  How does the Parliamentary Secretary interpret that duty in the present situation? We got on to this at Question Time two weeks ago, when the Minister of Power, in answer to my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), said:
  "It is not really for me to say. The Act lays this responsibility on the Board."
  This is not good enough from the Minister in this situation, and we are entitled to more explanation today.
  My fourth question really leads on from that. Granted that thus far we have only read about the aluminium smelter in leaks to the Press, what consequences do the Government see from offers of that kind by the National Coal Board?
  Let us be clear about the magnitude of the sums we are discussing. Take the figure given by my hon. Friend, a reasonable guess, of the offer to Alcan. Whether or not this is finally accepted, it is an indication of what is in the Coal Board's mind, and this price is for coal at around a delivered price of 3¼d. per therm. We can compare that with the average delivered price of coal to the Central Electricity Generating Board last year of 5d. per therm. The gap between 3¼d. and 5d. per therm is large by any reckoning.
  If the Coal Board is going to offer coal at as low a price as that to one comparatively small user, must it not be ready to lower its prices to other, much bigger users, and beyond that, to brace itself for some reduction in its present protected position in the British market?
  Lord Robens made another remark, in the Financial Times yesterday, where he said:
  "Let us match price for price."
  1316
  I can hear the electricity industry saying "Hear, Hear" to that. Looking at two of the big groups of users, the Electricity Board is restricted in its use of oil which is already heavily taxed, and the steel companies have for many years been forbidden to import any low-cost coking coal, which they would have liked to have imported from overseas.
  In this situation, in the Answers given two weeks ago, the Minister said:
  "I assure him"—
  my hon. Friend the Member for Cirencester and Tewkesbury—
  "that I have received no complaints about unfair advantage being given by the National Coal Board."—[OFFICIAL REPORT, 12th March, 1968; Vol. 760, c. 1154.]
  Surely it cannot be that the Minister has heard nothing from other users, and if he has, the House is entitled to some explanation.
  My fifth and last question is, will the Minister and the Parliamentary Secretary undertake to urge the National Coal Board and other publicly-owned industries for which they are responsible to be more open in the information they give to the public year by year about operations and policies? Looking through the National Coal Board's Report for 1966–67, I can find very few references, and those superficial, to the vital question of pricing policy. Will the hon. Gentleman use his influence to get the Board, and others, to be more forthcoming in future?
  We have a dilemma. If the Coal Board goes through with the contract for the smelter or any other similar contract at the sort of low price we have heard about, it can either be at the cost of raising the price to other big users, contrary to what they would expect and what should happen in the national interest, or at the cost of a still greater deficit. Mr. Michael Shanks, who held a responsible position in the Department of Economic Affairs in its palmier days, wrote this relevant passage in The Times on 19th February:
  "If the Government wishes to use the nationalised industries as weapons in its overall industrial strategy, it needs to think much more carefully about the kind of ground-rules against which they should operate and the degree and latitude to bargain with individual customers which they should enjoy. In particular, it should re-examine the present tendency

  1317
  to subsidise the domestic consumer at the expense of the industrial consumer—a practice which the smelter debate makes more anomalous than ever."
  I admire the Government for the courage shown in the recent White Paper on Fuel Policy. I ask them to show similar courage now, first, in recognising that there have in the past been serious miscalculations and over-optimism about the coal industry and, secondly, in urging the Board, and particularly the Chairman, to be bold but also realistic and to avoid the sort of commercial rashness which will be ultimately damaging and not beneficial to the national economy.
  11.27 p.m.
  Mr. Nicholas Ridley: My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) did a service to the House in raising this question of coal pricing policy. His speech was full of facts and was well-informed about a situation which is causing concern to those who are customers or spectators. My hon. Friend the Member for Cambridge (Mr. Lane) clearly put basic points of public policy which arise from the situation. I want to summarise some of the arguments and reinforce the request to the Parliamentary Secretary for answers to these questions, because they are not merely matters for the private commercial judgment of the National Coal Board but are of public concern, for these are publicly-owned industries, responsible to the public and it is therefore justifiable that they should be publicly accountable.
  So far as we know, there have been three tenders by the Board at below average costs—the tender for the Longannet power station, in Fife, the tender for Seaton Carew and the tender for Alcan at Invergordon. Although it has never been confirmed, rumour has it that the price has been around 3¼d. a therm for each of these three major power installations. Is that figure correct?
  Assuming for the moment that it is, it appears that the average cost of mining coal in this country is 4.6d. This figure was given by the Minister in answer to a Parliamentary Question and has been confirmed by Lord Robens in his letter to my hon. Friend the Member for Hallam. As far as I can make out it is the case that the average cost is about 4½d.
  Mr. J. D. Concannon: To talk in averages is misleading. To say that there have only been three contracts at under average prices is misleading also because contracts are being made every day to sell coal to the C.E.G.B. at a far lower price than 5d. a therm.
  Mr. Ridley: I will come to the discussion on averages and variations. These are exceptionally low offers. I may be wrong, but to my knowledge these are the only three offers which have been made at prices so greatly below the average cost of production. They represent tenders of approximately 75 per cent. of the average, which means that there is a very big element of price cutting here.
  We also do not know for how long these tenders are current and the arrangements for "break" clauses. My hon. Friend the Member for Cambridge argued cogently that in the past, price increases due to wages or taxes or factors beyond the Coal Board's control have always falsified its costs estimates. It seems odd that it should have such confidence in making long forecasts of the prices at which it can stabilise coal.
  We have a right to expect the Board at least to make public the prices at which it is offering this coal. This has been countered by the argument from the Front Bench opposite that ordinary commercial concerns do not necessarily make public the prices they tender for supplying goods. With respect to that argument, there is a totally different situation as between a publicly-owned industry and a private industry. We, the shareholders, the taxpayers, have every right to know what offers have been made by a publicly-owned monopoly such as the Coal Board.
  It would be intolerable to find that one's competitors were getting coal at a cheaper price than oneself. The whole idea of publicly-owned monopolies serving the whole country makes it imperative that prices should be quoted in public and available for all to study. I do not say that they should all be the same, but they should be publicly quoted. The Iron and Steel Act, 1967, which is the only analagous Act, because steel and coal are the only two commodities in

  1319
  public ownership, as opposed to services such as electricity or lines, says in Section 5:
  "The Corporation shall from time to time publish, in such manner as appears to them best adapted for informing the persons affected, and in such form as appears to them appropriate, notices containing prices which they propose should normally be charged in the United Kingdom by them and publicly-owned companies for iron and steel products. …"
  So there is a statutory duty upon the Steel Corporation to publish its prices. We the representatives of the public, have a right to demand that the Coal Board's prices should be made public and that public tenders should be put in for any contracts for which the Coal Board wish to tender. We have a very distinct interest in stopping the Board from drifting into a further deficit, and unless we know the prices at which it is tendering, it is impossible for us to assess this.
  It seems that my hon. Friend the Member for Cambridge was quite right when he said that the Board had a statutory duty, rightly or wrongly, not to discriminate. He quoted the relevant passage from the 1947 Act. That phrase,
  "including the avoidance of undue or unreasonable preference or advantage …"
  clearly means that the Board has a duty to offer the same prices, broadly speaking, to similar customers. This duty was recognised by Lord Robens when he came before the Select Committee on Nationalised Industries on 21st December, 1965. He said in column 41:
  "Now the Act under which we operate does not permit us to give any undue discrimination to any buyer no matter what the quantity is, and it also prevents us from a commercial point of view from selecting our best and cheapest pits and supplying that cheap coal to that power station at the proper economic and commercial price."
  I have no less a witness in support of my contention that the Board has a statutory duty not to do what it is doing than the Chairman of the Board. I should like to know what has happened between 21st December, 1965, and now which makes Lord Robens think that he can do this, when two years ago he was of the opinion that he was prevented from doing so. To leave this matter to Lord Robens's conscience is not quite good enough. This House has a duty to make sure that Ministers and chairmen of nationalised boards obey the
  1320
  law, just as the humblest and most menial citizen has to do.
  The fact that the Minister does not intend to intervene seems to me very wrong of him. If the law is being broken in this respect it is surely the Minister's duty to do something about it. There is certainly nobody else who can do anything about it. I am not going to sue the noble Lord because he has broken a statutory requirement on him; this is clearly not a matter for ordinary individuals. Therefore, I suggest that this apparent discrepancy between his statutory duty and what is happening needs a little more investigation and clearing up than the Minister has so far been prepared to afford.
  I now come to the question whether this is the right policy for the Coal Board to pursue. We hear a lot nowadays about long-run marginal costing. That is the current catch phrase for what nationalised industries should do with their pricing. The White Paper Cmnd. 3437 contains the phrase
  "The aim of pricing policy should be that the consumer should pay the true costs of providing the goods and services he consumes …".
  It then deals with a very abstruse set of examples covering almost any conceivable price that one would want to charge in almost any conceivable set of circumstances.
  But if we are going to use the argument of long-run marginal costing in relation to the Coal Board, the argument must surely run like this: The Coal Board is declining in output. It has these different pits producing at different costs, and as its output declines it attempts to close down the most expensive pits in order to concentrate production in the cheapest pits. If in the long run and at the margin it lands extra business, the effect of this on the Coal Board's pricing structure must surely be to cause it to keep open pits which it would otherwise have closed. Nobody will suggest that what the Coal Board would do would be to go on closing pits which were producing at something over the average, and sink new shafts and invest vast capital expenditure in order to produce coal from new cheap pits.
  Undoubtedly, the effect of applying long-run marginal costing criteria to the Coal Board's activities would be that

  1321
  each extra million tons of production that it can acquire in the future it will acquire with more expensive coal. So, if we are going to use the long-run marginal cost argument, the argument works against making these low tenders. It would be better to rely on covering costs and on averages.
  The two policies which are open to the Government are quite clear. Either they can say that they will cause the Coal Board to quote an average cost and supply coal at the average price to all corners; or they will allow some high-cost coal and some low-cost coal to be sold. But this is immediately going to cause the Coal Board to find markets for its high-cost coal.
  I remember the uproar when the Coal Board decided to charge more for expensively-mined Scottish coal. There was a good deal to be said for and against that idea, but at least it had the effect of requiring the expensive coal to find its own markets, and therefore to justify the continued existence of the pits which produced it. But simply to find markets for the low-priced coal—the cheap coal—is bound to cause the Board difficulty in selling the high-cost coal which it admits that it is still producing.
  I think I am right in saying that there are still about 36 million tons being produced at over 5d. a therm, so there is plenty of this high-priced coal about, and before we can sell the cheap coal we must find markets for that.
  The problem is acute, because of discrimination. There is discrimination against the steel industry, as has been mentioned by my hon. Friend the Member for Hallam—and he of all people should know—and my hon. Friend the Member for Cambridge was right to stress this. Again, why should the electricity industry, which is by far the biggest customer of coal, sit back and pay 5d. a therm while it hears tales of tenders for 3¼d. a therm? Why should it not switch to oil if it is not to have the benefit of this cheap coal?
  The Minister naively replied to a Question of mine to the effect that he had heard no official complaints about unfair advantage being given to the National Coal Board. If he has not he is fortunate, because I have. I have had a great number of complaints about this
  1322
  matter, and I know many people who would be happy to accept coal at 3¼d. a therm—and the C.E.G.B. is one of them. The Minister owes it to us to tell us what he is going to do about this.
  At the moment the Prime Minister's pledge that there would not be a subsidy from the taxpayers or consumers of electricity if the Alcan deal went through does not sound convincing. We want from the Parliamentary Secretary a clear statement of the pricing policy for the Coal Board and what the discussions and consultations that he has been having with the Board have produced. The fact that he had held them makes it clear that he is worried, and that the door against which we are pushing has certainly been partially opened. But I want to open it fully and throw a little light on this dingy area of public enterprise, which is not entirely satisfying to those who follow these matters with care.
  Would not this be a suitable subject to be referred to the Prices and Incomes Board? With a flourish of trumpets we have been told that all the nationalised industry price increases will be referred to the Jones Board. Would not this be just the sort of area where the clearheaded, free market, economic skill of Mr. Aubrey Jones would clear away some of the cobwebs and small anomalies and uncommercial activities which have been going on? Would not this be a first-class subject for the Prices and Incomes Board to reveal the truth about?
  I do not know what prices have been offered, and what lengths of contract have been tendered for. The House has not been informed about this matter. But I suggest that the Consolidated Fund Bill debate is an ideal opportunity for the Parliamentary Secretary to tell us what is going on in this field, and I hope—because we all have the future of the coal industry very much in mind—that he can make it clear that none of these fears and worries are justified, and can reassure the public that there is no danger of something which we would not like to happen going on.
  11.45 p.m.
  The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson): I will endeavour to answer most, if not all, the points which have been put. I shall do so as concisely as

  1323
  I can, as I am sure the House would wish at this time of the night.
  I must confess I found some difficulty, not for the first time, in following the speech of the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn). I always find it a little easier to read his speeches afterwards, and cogitate on what he was saying, for he tends to overload them with a long series of statistics, so that it is a little difficult to see the argument—for the trees, if I may put it that way. However, as far as I was able to make out, he seemed to be making some rather contradictory pleas. He was advocating at one stage, it seemed to me, that cheap coal should go to particular areas such as the vicinity of his constituency, and to industries other than aluminium smelting, which has come into the debate so much. At the same time he suggested, I gathered, that this was in conflict with the White Paper on the financial objectives of the nationalised industries. I gathered that in the opening stages of his speech he was complaining about high averaging of coal prices to the Central Electricity Generating Board. However, the letters from the National Coal Board, which he quoted quite correctly in full, contradict this general complaint to a large extent. I shall, perhaps, come to that again a little later.
  Mr. J. H Osborn: The Minister mentioned that there was a conflict between the target in the White Paper and making cheap coal available. There should be no conflict. If there is a conflict between one user and another, and if, overall, the industry does not meet its yardsticks, there is a need to question the basis of pricing policy in the future.
  Mr. Freeson: I thank the hon. Member for that, because that was precisely the answer I was going to give to his query. I am not saying there was a conflict. I was quoting the hon. Member, who suggested that there was a conflict, I gathered, by the way he was putting his point. I would have given him the reply which he has now given himself. So that is one complaint or query which, I trust, has been stilled.
  He also complained, I gathered, about failure to supply cheap power to firms, not aluminium firms, and quoted a letter from the Electricity Council, which
  1324
  showed that cheap power was being supplied to other firms, apart from aluminium smelters. Those were the two or three main points the hon. Member was seeking to make—I think I have got them correctly, through the statistics—which I found, I think justifiably, to be contradictory. It may be that the constituency points which he was quite rightly seeking to make did not gell with the general point he was seeking to make. I am not quite sure why this should have been so.
  I had a number of questions put to me by the hon. Member for Cambridge (Mr. Lane), and I will go through them as specifically as I can. He asked do we still stand by the undertaking which the Prime Minister and the Minister of Power have given that there is no subvention or subsidy involved in the contract or offer which has been reported in regard to Alcan and the N.C.B.? The answer is, Yes. It has been given on more than one occasion. The same answer still stands: there is no subsidy involved. The price is low. I must resist the pleas made tonight and say I am not prepared to discuss on the Floor of the House details of a commercial offer by the N.C.B. in this case or similar cases elsewhere. Perhaps we can come back on this in a few moments.
  This led to the subsidiary question, if there is no subsidy, how do we explain the avoidance of a contribution towards a possible deficit? If that was the effect of the question, it was rather hypothetical. To a large extent, it has been answered by the hon. Gentleman's intervention, which was ahead of me in giving the same answer.
  When we talk about the annual returns, we are concerned with the whole industry. This does not prevent an area of commercial freedom to negotiate special contracts, to which I hope to return in a moment. In other words, one cannot single out the issue of Alcan, for example, and say that if long-run costs are to be negotiated without a subsidy, this surely must help produce a deficit. One has to look at the operations of the industry as a whole, and not consider merely one offer which has been the subject of recent discussion.
  The second main question asked if we stood by the N.C.B. in its broad estimates

  1325
  about future trends in coal pricing as a result of changes in the industry. I should have thought that that was an unnecessary question, because the White Paper slates the position. We stand by the broad trend estimates of the N.C.B., subject to the achievements already in hand inside the industry which have been discussed in the House on more than one occasion in the last twelve months.
  The third main question was how the policy represented by the Alcan offer tallied with the statutory responsibility of the N.C.B. to avoid undue preference. Since, understandably, this was a point to which hon. Members came back to several times in their remarks, it will be as well to deal with it at some length so as to have the issue clearly stated on the record.
  The N.C.B. has a clear statutory responsibility in the matter. It is not the responsibility of the Department as such. Under the 1946 Act which nationalised the industry, there is a statutory duty on the Board to supply coal
  '… in such quantities and at such prices as may seem to them best calculated to further the public interest in all aspects, including the avoidance of any undue or unreasonable preference or advantage."
  The Board's policy must be directed to securing that
  "… the revenues of the Board shall not be less than sufficient for meeting all their outgoings properly chargeable to revenue account on an average of good and bad years."
  Mr. Ridley: Would the hon. Gentleman assure the House that these offers do not contain any undue or unreasonable advantage or preference?
  Mr. Freeson: If the Government thought that there was undue preference or unreasonable advantage, they would take the appropriate steps. We do not believe that to be the position. I think that we have made our views on this clear in a previous debate.
  Mr. Ridley: Then would the hon. Gentleman publish the figures, so that we, too, can be satisfied?
  Mr. Freeson: I have answered that question on more than one occasion. It will not vary, and the hon. Gentleman will weary himself and not me by asking the same question, because he will get the same answer.
  1326
  To continue with this statement about the position concerning the N.C.B.'s pricing duties, the Board aims to sell coal at prices which will cover costs, provide for the replacement of fixed assets at current prices, make such further contribution towards the financing of capital investment as may be agreed between the Board and the Government, and make the best use of its assets.
  Concerning the undue preference aspect, as with other nationalised industries—and it would not be wrong to apply the same point to other large privately owned industries—the formal price structure for coal is a guide, not the sole determinant. The Board operates in a competitive market and it should have commercial freedom in negotiating contracts. Prices may vary according to the source of supply, and any special factors, such as the length of contract, size of market, stock surpluses and transport economies must also be taken into account or are likely to be taken into account in particular negotiations.
  One of the difficulties of coal pricing is determining what criteria should be used to define "public interest" and "undue or unreasonable preference or advantage". The Board is statutorily responsible for this, not the Government. But clearly we must be aware of the criteria. It was for this reason, after a good many years since the industry was first nationalised and the framework laid down, that the Minister indicated recently in Parliament that consultation was to be initiated with the Board on the principles involved in its pricing structure. This is inevitably a complex matter and it will take some time to produce the results.
  The future general level of prices has been referred to by hon. Members. These will depend upon the success of the N.C.B. in dealing with costs. This issue has been discussed frequently in the House and elsewhere. As I indicated earlier, we go along with the Board in believing that it will achieve success in this matter.
  Mr. Ridley: As the Board's Chairman does not believe it is legal to do what it is doing, how can the hon. Gentleman be so complacent and smug about the whole situation?
  Mr. Freeson: I assure the hon. Gentleman that I am not complacent. I will no doubt get hold of the report to which the hon. Gentleman referred and I will read it with great interest in its full context. No doubt the hon. Gentleman will return to the subject on a future occasion.
  I fear that one of the troubles here is that the hon. Member for Cirencester and Tewkesbury does not do sufficient homework. What is more, he is not listening with sufficient care to some of the facts which have been adequately dealt with by other hon. Gentlemen behind him.
  The hon. Member for Cirencester and Tewkesbury referred to Longannet, Invergordon and Seaton Carew as the only cases where offers below the average cost price had been made by the N.C.B. I do not think I am doing him an injustice in putting it like that. He asked why. The answer is that it is an ill-founded question, because it is not correct. The information quoted by the hon. Member for Hallam showed this. I have a copy of the letter from which he was quoting. To be specific, he quoted a letter from the Chairman of the N.C.B. which said that there were 12 million tons of coal on sale to the C.E.G.B. at under 3½d. a therm. That is one example. I could give others, but I do not intend to repeat the details of the correspondence. The hon. Gentleman must listen very carefully to his hon. Friends.
  Mr. J. H. Osborn: I apologise for jamming too many statistics into my speech. The hon. Gentleman explained earlier that he had difficulty in absorbing the lot, so I hope that he will forgive my hon. Friend.
  Mr. Freeson: An admirable defence.
  The hon. Member for Cirencester and Tewkesbury said that this was the only industry which was not required to publish all its special prices. He has said this on previous occasions. He quoted steel as an example, and referred to the nationalisation Act. The steel industry is not required to publish all specially negotiated prices, and rightly so. As he knows, there has been an inheritance of specially negotiated prices, and no doubt, as one would expect in an undertaking of this kind, they will continue to be
  1328
  negotiated. The same is true of other nationalised industries and private companies.
  Mr. J. H. Osborn: I raised this in connection with electricity, and referred to a letter, but there are a number of large industrial users. The N.C.B. has a large number of industrial users. The ground rules are known, even if the specific prices are not. Will the hon. Gentleman reconsider this and give some indication of the basis on which commercial contracts are reached, without necessarily divulging the detail of each contract?
  Mr. Freeson: Having said that we are in consultation with the industry, I do not think that it would be right at this stage to go further than to refer to the Act and also to the White Paper on financial objectives which lay down, if not specific ground rules, certain guide lines and principles on which pricing policy decisions should be based. For the rest, we must await the outcome of the consultations. I cannot go into that tonight.
  Mr. J. H. Osborn: The hon. Gentleman is lifting the veil and giving some indication of what is going on. What form is the consultation taking? We do not know very much about it. Will the hon. Gentleman elaborate on that?
  Mr. Freeson: I have not announced anything new tonight. On a previous occasion my right hon. Friend said that consultations are going on. When these are complete, the results will be considered by the Department. I cannot go into these now, and I have said that I am not going to.
  The hon. Gentleman made some play of long run marginal costs. Having said that this was the policy, and having quoted from the White Paper, he then asserted that the operation of prices on this basis meant that expensive coal would be used, and that there would be a slowing down in the reorganisation of the industry. Assertion is not an argument. I did not follow the hon. Gentleman's reasoning. It struck me as being a non-sequitur. I could quote examples of not basing prices on long-run marginal costs. We might seek to ensure a long-term market related to future estimated average prices. This is one factor which might be taken into account.

  1329
  I think that I have dealt as fairly and as reasonably as I can with all the questions and points which have been put to me.
  Mr. Lane: Will the hon. Gentleman say something about a point which was raised earlier, particularly as he has wrapped around himself this veil of commercial secrecy. I am referring to the Board's offer to Alcan. Will he assure us that when the Board next publishes its annual report it will give a full account of the reasoning underlying its pricing policy?
  Mr. Freeson: I am not sure about the term "reasoning". The principles on which the Board operates, subject to the consultations which we have discussed, are laid down in the Act, and in the White Paper on "Nationalised Industries—A Review of Economic and Financial Objectives". I have said more than once that we do not intend to state on the Floor of the House the details of these commercial contracts. This is not a new policy. It would be no more right to give those details in respect of the N.C.B., or any other nationalised industry, than it would be to expect this kind of publication by large-scale, or indeed small-scale, private enterprise. I do not see—[Interruption.]—I know what the hon. Gentleman has in mind. I do not see why there should be such great advocacy of this for the N.C.B. and not for the oil industry, for example. The hon. Member is thinking of public accountability. But no industry in this country is publicly debated and examined to the extent that the nationalised industries are. There is no cause for complaint about this against the background of our whole economy.
  Mr. Lane: The hon. Gentleman is slightly beside the point. I am riot urging him to give details of the Alcan contract tonight. We understand that until he has made a decision he cannot do this. But in view of the importance of the pricing policy over the whole of the Coal Board's activities, we have been told far too little in its past Reports about it. We are asking that it should be more forthcoming in future Reports. I am sure that much more is known about the oil industry's general pricing policies than the Coal Board has up to now published about its own.
  Mr. Freeson: I have nothing to add to the answer I have given more than once to this question tonight and on a previous occasion.

  CRIME, SCOTLAND (POLICE POWERS)
  12.2 a.m.
  Mr. Esmond Wright: I regret that so many of my hon. Friends should have been kept here so late to listen to me, and also that the Under-Secretary has to stay, although he can no doubt derive comfort from the fact that he will be returning at two-hourly intervals throughout this long night's journey into the next day.
  This is a serious subject, which one cannot discuss without long and deep concern. It is simply that law and order in Scotland is gravely imperilled. I will divide my speech into four main parts—the reasons for the concern, the factors behind the violence not only in Scotland but in the United Kingdom as a whole, the fact that the Government have been slow in a whole series of ways, and some positive proposals of my own. It is said that it is the task of Governments to govern, but there is occasionally value in suggestions from the Opposition about how they could govern better.
  First, the facts. Last year, 1967, was the worst year in recorded history for crime in Scotland, especially for crimes of violence. This was particularly so in the last six months, and, if the trend continues, the incidence of murder and violence will soar to unprecedented heights. I am sure that I do not need to remind the Under-Secretary of the murders committed last year and of the rate of increase—12 in 1957, 15 in 1960. 16 in 1963, 27 in 1964, 32 in 1965, 30 in 1966, 41 in 1967. Also, he will notice that, in 1956, before the death penalty for all murders was abolished, one person stood trial for murder.
  In 1964, the year before the complete abolition of hanging, 13 persons stood trial for murder. In 1965, the first year of complete abolition, 33 stood trial for murder, 28 of them in Glasgow. In 1966, 50 stood trial, 35 in Glasgow, and in 1967, 43 stool trial, 25 in Glasgow. This might appear a slight fall, but we must bear in mind that in the last six months

  1331
  of last year, 30 persons were indicited in 25 trials, and that in the last 15 months there have been 71 murders.
  Mr. David Steel: While I agree that these are sombre figures, is the hon. Gentleman aware that an analysis of the murders committed since the abolition of capital punishment shows that the increase in the number of murders has occurred among murders which would have been non-capital?
  Mr. Wright: I am simply showing that it is hard on this evidence to justify a continuation of the total ban on the use of capital punishment over the whole sphere of criminal activity in both Scotland and England. I will return to this subject later.
  I am establishing, first, the scale of murder in Scotland and now I shall establish the extent of criminal offences in Scotland. The figures are again daunting. They rose in 1966 to 182,831, of which 34,731 were committed by young people—on the whole, by young men—between the ages of 17 and 21; in other words, 19·1 per cent. of all criminal offences were committed by people within that age range. Crimes of violence reported to the police have doubled in the last five years. In 1962 there were 1,829 such crimes. In 1967 the number had risen to 3,536. In Glasgow, the number of crimes of violence in 1967 was 1,465, which constituted over 40 per cent. of all crimes of violence in Scotland. I emphasise the meaning of this; that nearly half the crimes of violence committed in Scotland took place within 10 miles of Sauchiehall Street. We must find a new way of describing this "green place" of the 13th century—the "no mean city" or "the second city" of a later incarnation. In 1967 it was a city of 15 murders, 24 attempted murders, nine culpable homicides and 1,282 assaults. We must face the fact that these are some of the most frightening figures in recent history in the United Kingdom.
  I wish to probe the characteristics of this violence because patently it is not a motivation which can be described simply as being due to a quest for money, although occasionally it includes robbery. Sex is not the motivation—perhaps it would be more glamorous if it
  1332
  were. It is hard to say how far it is motivated by drink. The disturbing thing is that there is evidence of sheer brutality for the sake of brutality, of violence without meaning. How else does one explain the murder, only a fortnight ago in Cardonald, of two old-age pensioners in their own homes? How else does one explain savage attacks on tiny children in prams in the street or attacks on 57-year-old and 77-year-old widows?
  There is a new note in the violence which worries us all. What are the Government doing about it, or not doing about it, and what can be done? In the last two or two-and-a-half years we have had three or four promises from the Government. One was the setting up of a Scottish regional crime squad. What has happened to that? We were promised that there would be five schemes of amalgamation of police forces. These were proposed by the Secretary of State in July, 1966. Only two are operational at the moment. I would be trespassing beyond the bounds of this debate if I probed the reasons why the Government are being cautious and indifferent to the whole issue of giving the police powers of search, but I quote from a reply by the Secretary of State to a Question put by me on 31st January.
  Quite apart from evasion of the issue of giving the police powers of search, to which no doubt my hon. Friend the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) will wish to return, the right hon. Gentleman said that a meeting between the Joint Under-Secretary of State and representatives of Glasgow Corporation on 8th December,
  "went on to a fruitful discussion on other possible action to reduce crime and disorderly behaviour, particularly by young people. The Corporation welcomed a proposal by my hon. Friend that the police, in co-operation with the Scottish Information Office, should undertake a police publicity campaign this year."
  I concede that a dome containing some curious objects exists as testimony to this publicity in George Square, Glasgow—an exhibition which was opened on 15th March. The reply went on to say:
  "The meeting also discussed the provision of community facilities and the development of community activities in the new housing areas and agreed to set up a working party of Corporation and Departmental officials to examine how progress might be made in this field."—[OFFICIAL REPORT, 31st January, 1968; Vol. 757, c. 304.]

  1333
  These are simply evasive phrases and words. The same sort of evasion crept into a reply to the hon. Member for Glasgow, Govan (Mr. Rankin) in a reference to social measures. What sort of social measures are the Government taking to preserve law and order on the streets of Glasgow and other cities of Scotland? I will not press the point about powers of search, but they are important in themselves. They are a token indication by the Government of concern with the basic security of life. As to w hat should be done I want to make some constructive suggestions because this is a fundamental and important subject. I make 10 suggestions. The police should have powers of search of people who they believe are carrying offensive weapons.
  Mr. Deputy Speaker (Mr. Sydney Irving): If the hon. Member is inviting the House to consider legislation, he cannot do that on this Bill.
  Mr. Wright: I will leave that point. Secondly, police numbers must be increased immediately. There are 984 short in Scotland and 460 short in Glasgow. There seems no alternative to giving police better pay. They are asking for an all-round increase of £5 a week. An increase in police pay is overwhelmingly important, more important than the claims of any other group of people in the country.
  Thirdly, on a scale far greater than is done at present, they should be replaced by traffic wardens and by civilian clerks in their offices. Far too many are brought off the beat, brought back from leave or from holiday to give evidence in trials, often merely corroborative evidence which is a waste of their time and talents. And urgent attention should be paid to the pensions of police. There should be far more evidence in Scotland of what is now taking place in England, that is, recruitment of graduates into the police as a profession.
  We are not making the progress we ought to make with the unit beat system. The Civil Estimates published today show the curious contrast between a sum of £83,000 allotted in Scotland for the unit beat policing system in the year 1967–68 and only £1,000 allotted for the year 1968–69. It seems that the £83,000 was in respect of repayment for vehicles
  1334
  and equipment purchased centrally for unit beat policing. Is one to assume that no more equipment is being bought or provided? Are there the radio controls and contacts and the cars available on which police and public can rely in a crisis?
  I should like further to see an extension of the experiments being made in Liverpool, for instance, with police officers working as liaison officers with young people. Thus far, we have totally ignored this development in the West of Scotland.
  I said at the outset that one problem here was the nature of violence itself. We do not know what motivates people between 17 and 21 to behave as they do. We have some evidence from Professor Radzinowicz of the Institute of Criminology at Cambridge of work being done in England which is beginning to probe the characteristics of violence itself, and I know that this is a subject in which the Under-Secretary himself takes a considerable interest. We need a matching study of the characteristics of Scottish violence. Why does it happen among young people? Is it drink and drugs? Is it "perpendicular" drinking? Is it the frustration and dullness of life? What is it that produces this wave of violence which is now, I believe, the most serious problem facing the country?
  There are other proposals which can usefully be made. I am much concerned about the situation in young offenders institutions. We have three, set up under the plans made in 1959. This is far too few, and two of the three, in Edinburgh and Barlinnie, are inside prisons. They are in no sense reformative institutions. I have here several reports—I shall not weary the House by quoting from them—which are highly critical of the situation in those three young offenders institutions. In passing, I mention only the Scots Law Times of 26th January this year. Investigations carried out by Mrs. Baird Smith of Glasgow show that conditions in Barlinnie are quite horrifying. It is not just that we need more of these institutions. We need them in a setting which is utterly distinct from the normal prison in which adults are housed.
  One way in which we make plain to people that they have committed a crime is by asking them to pay damages for the harm and violence they have done.

  1335
  Those convicted should pay damages for their crimes. There should be much more active work on roads and in forestry in the Highlands and Islands than is remotely considered at present; and this work if carried out by young people would give them a self-respect which they will never get in Barlinnie, Dumfries or Edinburgh.
  I go further. As I implied at the outset, whatever may be one's views on capital punishment it seems quite clear that we owe it as a matter of simple security to the prison service, to the police, and through them, to ourselves, to restore the death penalty for the murder of policemen and prison officers and for second murders.
  Mr. Deputy Speaker: Order. The hon. Member is now out of order. He is asking for legislation.
  Mr. Wright: I have only one further point to make. It seems that a life sentence of 15 years, which in practice is often only 12 years, is quite inadequate, bearing in mind that some people serving the sentence have committed not only one murder, but two. I wish to draw the attention of the Under-Secretary to the curious work of the Criminal Injuries Compensation Board which was set up in 1964 and which last year paid out £191,000 in Scotland. That means that one-fifth of its total United Kingdom expenditure was in Scotland and one-tenth of its total United Kingdom expenditure was in Glasgow.
  There is no doubt that this is a commendable Board. But, as things are working out, a number of payments are made to criminals who have been attacked by other criminals. There is one notorious family in Glasgow, which has been engaged in a number of criminal attacks, which last year got £1,400 from the Board. It should be noted that there are few awards over £400. One man who was slashed and will be scarred for life got the noble sum of £515. My point is that the Board has been abused and it is not adequate. But I notice from the Civil Estimates published this afternoon that the money to be dispensed by it next year is four times the amount spent in the past.
  1336
  I have raised a subject that is depressing but alarming. A measure of responsibility rests firmly with the Government. We ought to investigate the causes of crime and the causes of violence, but there are steps which can be taken in the meantime. The basis of law and order in our society is a reliance on justice and a reliance that the justice will be firm, clear, understood and quick. It is in this spirit that I raise this subject tonight.
  12.23 a.m.
  Mr. Alick Buchanan-Smith: I would like to start by congratulating my hon. Friend on the way lie initiated the debate, not only on the clear way in which he has spelled out the problems, but on the constructive ideas which he has put forward. I am sure that they are worthy of the attention of the Under-Secretary who is interested in the problem.
  The problem extends far beyond the statistics which my hon. Friend has quoted. The concern among the public is something which the Government so far have not fully recognised. All hon. Members have read statements by judges in the Scottish courts. We have read statements by doctors, for example, in Glasgow about the burdens laid on hospital casualty departments at the weekends in terms of the demand for blood. These demands are laid on the hospital service as a result of the increase in crimes of violence. Therefore, the whole problem extends much wider than the Government have shown they recognise.
  The problem is not peculiar to Glasgow, though my hon. Friend naturally used figures chiefly referring to that city. Crime extends to the other areas of Scotland, and unfortunately it is common on a rising scale to every major city in Scotland at present. In 1965 there were 48 assaults in Edinburgh, and last year there were 111. I had a discussion with police officers in Dundee, who are desperately concerned about the increase in crimes of violence there. Aberdeen—and I am glad to see the hon. Member for Aberdeen, South (Mr. Dewar) present—has had the biggest proportional increase in crimes of violence of any city in Scotland. Whilst the problem is not so great in absolute terms in Edinburgh, Dundee and Aberdeen as it is in Glasgow, the proportional increase in crimes

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  of violence in recent years has been even greater than that in Glasgow. Therefore, we have the germ of the problem there, and unless we can tackle it we may see repeated in other cities of Scotland many of the problems my hon. Friend mentioned. That is particularly true of areas in the west around Glasgow. The hon. Member for Coatbridge and Airdrie (Mr. Dempsey) has drawn attention to it in the House many times in recent months.
  Last year Dunbartonshire was one of the counties in Scotland which showed a decrease in the total number of crimes, which is unusual, yet the number of crimes against the person increased from 171 in 1965 to 255 in 1967. The problem extends to the country areas. There has been an increase recently in attacks on lonely farmhouses and isolated cottages. There is concern in the country areas at the growth of that type of offence.
  The other problem which I have discussed with chief constables from rural areas is that of parties coming by bus from industrial areas in the west and descending on a village dance hall, for example, and creating trouble. In my discussions with the Chief Constables' Association I have been interested to learn that concern about the problem is not confined to the chief constables in our cities and the police forces in the urban areas but is shared by those in the rural areas suffering from the problem in a different way.
  I appreciate the need for the long-term solution my hon. Friend mentioned, and there are many lines of thought in that direction, but we must look at the short-term solutions as well. In relation to the longer-term, I welcome the Social Work (Scotland) Bill, which I hope will strike at some of the roots of the problem. There is also great scope for improvements in schools to deal with the roots of character. If we can solve the teacher shortage problem and reduce the size of classes, so that the teacher can also educate the children in a wider sense and have much more human contact with them that can do nothing but good and help to strike at the roots of this gave social problem.
  It is significant that it is in Glasgow that the teacher shortage is most acute, where children are on part-time educa
  1338
  tion. In social terms, this is one of the best and most radical ways in which this situation can be tackled.
  Another way it can be tackled is through more Government help for the voluntary youth organisations in Scotland. I have been directly involved in youth work in Scotland for 14 years, and I know the tremendous amount of voluntary work which is done weekly by people giving up their free time. This is of enormous assistance in trying to deal with crime problems.
  I welcome the assistance which the Government give by capital grants to youth organisations, but a lot more can be done through local authorities and the appointment of Youth Service officers to assist the voluntary organisations to work more efficiently and to help the many thousands who work in these organisations to make their work more effective.
  My hon. Friend mentioned the work of the police south of the Border, through juvenile liaison officers. I would commend the work done in Stirlingshire by Chief Constable Gray by the co-operation of his officers with youth workers. This is valuable and we would wish to see it extended to other parts of Scotland.
  I know that the Under-Secretary has the long-term problems in mind, but we should not become obsessed with the long-term solution but should also be concerned with the short-term. We have had the Canute-like attitude of the Secretary of State for Scotland in face of the rising tide of crime in Scotland. It is the responsibility of the Government to maintain the law, and many of us have gained the impression that the Government are more concerned about the welfare of the criminal than about the safety of the public.
  Hon. Members: Nonsense.
  Mr. Buchanan-Smith: That is the impression the Government are giving.
  Mr. Donald Dewar rose—
  Mr. Buchanan-Smith: Will the hon. Gentleman wait a moment? I said that I appreciate the Government's concern with the long-term solution, but this is the impression being given.
  Mr. Dewar: Will the hon. Gentleman not agree that if this impression is abroad it is because people have been reading speeches like the one to which we are now listening?
  Mr. Buchanan-Smith: If the hon. Gentleman were more in touch with opinion in North-East Scotland he would know. I have been impressed by the views and by the letters which I have had. If the hon. Member were more in touch he would not have made that remark.
  The Government have to recognise and to do something about the difficulty of the job of the policeman and particularly of the job of the ordinary policeman on the beat. It is their job to back the police, as it is ours as politicians and Members of this House. I should like to ask the Under-Secretary to make an examination of these problems, not just to find out what is going on, but to take action as a result. I would like him to look more closely, not just at the background, but to analyse precisely why there has been this increase in these crimes of violence.
  I suggest four main problems which deserve investigation. The first is the problem of the police in relation to the extremely wide range of offensive weapons. Like many hon. Members, I have seen some of these weapons. They range from what I would call the old fashioned bayonet and knuckleduster to more sophisticated weapons. One of those I saw was what looked like a biro pen. But a police officer who examined it found that it was actually a cover for a six-inch steel needle sharpened to razor point.
  The second problem concerns the number of people, particularly young people, carrying weapons. It is a frightening number. Undoubtedly, however, a certain number of people carry them for self-defence. An increase in crimes of violence leads to an increase in the number of those carrying weapons to use in the event of attacks upon themselves. Another contributory factor is prestige. Particularly among young people, there is great temptation, when they are in groups, to carry weapons if others are carrying them.
  The third problem is the great increase in the number of assaults which seem
  1340
  unpremeditated and without motive. This is shown in some of the recent murder cases, where there has been no previous connection between the victim and the person committing the assault. Indeed, it seems to have been sufficient to be jostled in a crowd for a weapon to be produced, very often with fatal and horrible results. Worth investigation more than anything else is why there should be this increase. There have been cases in Dundee of people slashed on a bus with no provocation.
  The fourth problem which is particularly difficult for the police is when a weapon is slipped from one person to another. This situation has been quoted in Glasgow several times, and I have heard it in Dundee as well. The police arrive at a scene where there has been trouble and try to apprehend those causing it, only to find that the weapons have been slipped to girl friends or others who were apparently only bystanders. It is extremely difficult for the police to act in this situation.
  In all these types of situation, the police operate under extreme difficulty. A young and inexperienced policeman finds it hard to know how to deal with a situation like that. The objective of Government policy in all this must be, above all, to break the habit of carrying offensive weapons, since this causes many more serious crimes, very often with fatal results. If the police were given the powers of search for which they are asking, they would be able to act earlier and more effectively in events which could lead to crime.
  Such powers have been given in relation to many other offences, such as the carrying of firearms and drug-taking. The Metropolitan Police have had such powers for many years and only a year ago the House gave them in relation to the protection of birds. If it was thought necessary to give these powers in relation to these other offences, I cannot see the objection of the Secretary of State and the Under-Secretary to giving them in respect of carrying offensive weapons. I accept that there are powers of arrest, but in the circumstances that I have described I do not believe that these alone are adequate. What I believe is that given the powers of search, the police—
  Mr. Deputy Speaker (Sir Eric Fletcher): The hon. Member will appreciate that he cannot advocate legislation.
  Mr. Buchanan-Smith: I appreciate that and leave the point, remarking that if the Secretary of State will act along the lines that I have suggested it will be a means by which we can not only prevent more serious crimes being committed, but it would also be a means of deterring potential criminals from carrying offensive weapons. It is time that the Government took a stand on this and declared on which side they are. I certainly feel that they are bending over backwards with sympathy for the criminal. I appreciate their desire to help the criminal and rehabilitate him, but at the same time they are not looking after the safety of the public, nor are they supporting the police.
  The Under-Secretary of State for Scotland (Mr. Norman Buchan): Incredible!
  Mr. Buchanan-Smith: If the Under-Secretary does not believe that he should get around and talk to policemen in the country. They do not feel that they are getting the support from the Government which they deserve.
  Mr. Buchan: The reason why I ejaculated "incredible" was because of the contrast between this public statement from the hon. Member and the private statements he gave me when he assured me how conscious he was of our concern in this respect.
  Mr. Buchanan-Smith: I am extremely conscious of the hon. Gentleman's concern, but merely because of that I am not prevented from expressing my criticism of what is happening and what the police are feeling. I believe that he is out of touch with what the police are feeling and thinking. Unless the Secretary of State acts and unless the Under-Secretary shows more concern there is a great risk, not only of a loss of confidence among the public but also of doing a great disservice to police morale.
  12.48 a.m.
  Mr. Donald Dewar: May I congratulate the hon. Member for Glasgow, Pollok (Mr. Wright) for the very reasonable and moderate way in which he introduced this important subject. It makes quite a difference to some
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  of the debates to which we have listened in the House and at Question Time in recent months. I hope that no one will take it amiss when I say that the high standard set has fallen away in the last few minutes. It is unfortunate and regrettable that the suggestion should be made that Scottish Ministers and the Government generally are not wholeheartedly behind the police in their efforts to fight crime, or that they are too keen on helping the criminal and not keen enough in enforcing the law.
  Crime is always news. The harsh facts and the Parliamentary agitation founded upon them make good copy which no newspaper can resist. I am not denying that there is a very real problem here. The statistics were well rehearsed by the hon. Member for Pollok. The danger now is not complacency. This has been well and truly swept away. Any lingering complacency has been obliterated by the figures. The real danger now is panic, the idea that something must be done—anything, irrespective of whether it is useful or whether it helps and represents a real break-through. There is now a danger that rational arguments will be so distorted that the need for a sense of proportion will ultimately be forgotten.
  We should not forget when listening to these highly coloured accounts that we get about crime in the streets—and I acknowledge again that it is a real problem—that Scotland is still an extremely safe country in which to live. This has been drawn vividly to my attention through a recent visit that I paid to the United States. In New York, any kind of innocent abroad is routinely reminded by his hostess that he should not walk home through central New York because it is too dangerous. We are a long way from that kind of unpleasant and unfortunate situation.
  Crime in the streets of New York is one of the most dominating issues and has become so despite the very real and dramatic escalation in police technique and powers over the last few years. Have these helped? It is extremely difficult to quantify or evaluate, in statistical terms the results of any such moves or measures. Would the crime increase have been faster if the New York police had taken a less tough line, or is it possible

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  to argue that they have driven the marginal cases into open rebellion against the law? It is difficult to make up one's mind.
  I am prepared to concede that there has been a real rise in crime in Scotland, but I suggest that one should be careful about merely using the crude criteria of unanalysed figures and taking them as absolute proof of what is happening. To use a brief analogy, divorce figures in this country have been rising for a long time now. If the Divorce Reform Bill, which is before the House, had been on the Statute Book four or five years ago, people would say "See what happens. If you take a soft line, you open the floodgates." In fact, the availability of legal aid is a much more important factor in this connection. Reform and "do good-ism" is always a useful scapegoat. In 1948 we abolished corporal punishment. The only crimes for which corporal punishment had been an allowable penalty before 1948 was one specific category of crimes of violence. This very type of crime declined after 1948, and it was not until well into the 1950s that such crimes reached their 1948 level. That of course does not prove anything, but it does point to the danger of taking figures as gospel truth without analysis. Crimes are recorded more efficiently nowadays. People are more conscious of crimes. There are all sorts of distorting factors which begin to creep into the analysis.
  The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) very properly redressed the balance when he spoke of the rest of Scotland and got away from the problems of Glasgow. He was right to do so. In a Written Answer on 6th March the Secretary of State told me that between 1963 and 1967 crimes made known to the police had increased in Glasgow by 5·7 per cent. In Aberdeen they went up by 48·8 per cent. If I had the will, I could take a large number of statistics like that and make a hair-raising speech about the problem in Aberdeen, but it would not necessarily be true. One must consider the base on which one is working. One has to consider the social environment and compare the present circumstances with circumstances in the past before one can make a mature judgment.
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  In passing, I might add that in view of what the hon. Member for Pollok, said about the importance of social analysis, it is interesting that there should be this dramatic rise in crime in Aberdeen, which is not associated with bad housing conditions or any of the social mores among juveniles which are pointed to too easily as the root cause of the crime wave.
  Mr. Wright: Speaking from memory, the total number of crimes in Aberdeen were 6,500 whereas in Glasgow the number was 45,000. Am I not right?
  Mr. Dewar: I believe the hon. Member is right to within a few hundred.
  The point I am trying to emphasise is that it is easy to play with figures to prove that the situation is much worse than it really is. I accept that there is a serious position and one with which we must all be concerned. The important question which arises is how we should tackle it. The hon. Member for North Angus and Mearns talked about the distinction between long-term and short-term solutions, and that is a valid distinction to make. A number of suggestions have been made about technical changes in the law and juggling with police powers, which have been represented as helpful moves. What worries me is not the merit of these suggestions but the way in which they have been put forward. It seems to me that hon. Members to some extent, the Press certainly, and the public—with this encouragement—almost certainly, have got this matter out of all proportion and are attaching disproportionate importance to what may be minor technical reforms.
  The basic trouble is that people like me, who might have been converted to the cause and might have agreed, ultimately, that there were reasonable alterations, are alienated by the sound and fury of the campaign and are finally forced to take up a position opposite to that which they might otherwise have adopted. The General Election campaign run in the West of Scotland by Conservative candidates when in the middle of the campaign, they made the question of capital punishment and the crime figures a major issue, did enormous harm to the cause of penal reform. People like myself were so—and I use the word in cold blood—disgusted by this determined effort to capitalise on

  1345
  public fear that ever since we have approached with suspicion any recommendations from those sources. That is sad but true.
  There is currently the same sort of campaign in the case of the Prevention of Crime Act, 1953, when we constantly have the feeling that we are being put in the dock. If we do not support this proposal we are condemned as complacent, soft-hearted, fuzzy-minded do-gooders and as friends of the criminal. The public gets the impression that the Scottish Office is not interested and that its back bench supporters are lackeys laying down and paying no attention to the problem.
  Mr. Buchanan-Smith: Will the hon. Member bear in mind that it was as long ago as last September since the Glasgow magistrates first made an approach to the Secretary of State? Many of us have been anxious to keep this matter in its proper proportion, but the successive months that have gone by without any proper action having been taken has made us despair of anything being done by this Government.
  Mr. Dewar: The issue was first raised in December, I think. But in any case it is a highly technical matter, and should be discussed dispassionately. If we get into a great deal of ferment and excitement, and if we whip up public interest on this small, localised matter, our actions are counter-productive and we produce a kind of self-generating public alarm which is far from helpful in its effect.
  I wish to congratulate the Scottish Office not on its withholding of support in this matter—because I hope that it is still under active consideration—but on its determination not to be rushed into an ill-considered judgment and decision merely because it would be popular to do so. I do not think that this matter should be elevated in the way the hon. Member has elevated it, by trying to make the touchstone of the Government's conscience in this matter the evidence and token of their concern.
  If we try to solve these problems by considering the police powers we get bogged down quickly in minor technicalities and abstruse generalisations concerning the powers of arrest and what constitutes an arrest, and what is the common law right o search between the time of
  1346
  arrest and the time of charging. In the Tea Room I took a poll of some legal Members whose opinions I respect, and the answer I got was that these things had never been defined and that they were technical points and theoretical points that never arose in a court of law.
  If we are considering these technical adjustments the only proper question to ask is what will the effect be, and will a continuing and useful power be added to the armoury of the police when they try to enforce the law? Would it be helpful to encourage the police to carry through the reform and to allow searches in the street for offensive weapons? Would it not be fairer to argue that if we are to allow public frisking we are putting ourselves into a position of conflict, in which we are creating the possibility of further violence and so jeopardising public order and the position of the police?
  Mr. Ian MacArthur: The hon. Member is dealing with a most important point. I am not aware of any responsible body or person having suggested that the police should have powers of random search.
  Mr. Dewar: I think that possibly the hon. Member would agree that we are in difficulty here because we cannot now go into this in any great detail because of the rules of order of the House. If we consider the present law on this point of offensive weapons, and the proposals from various quarters, I think the only practical result of them would be a development in the law and practise as I have described. I would argue that this would not be a helpful change and it might involve considerable dangers, and infringement of the rights of the individual. I would not like to see such infringements resulting from the search for a quick answer to this specific problem. It is all very well for the hon. Member for North Angus and Mearns to talk about firearms, but they are a very distinct category of objects, which an "offensive weapon" certainly is not. I would be very unwilling to see the general rule breached that a citizen cannot be detained without being formally arrested; I would hate to see that jettisoned in any way lightly.
  It seems to me that the only answer must be patient and long investigation

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  on the lines which the hon. Member for Pollok was discussing earlier. He is absolutely right, we ought to be involved in terms of police recruiting, in terms of police conditions and pay, in terms of a detailed psychological survey, to ensure that our penal system is measuring up to the demands put upon it, to make sure that our prison and borstal systems are adequate and give the kind of flexible training towards rehabilitation which I am sure we all would like to see and would demand.
  The tragedy of what has been happening is that the genuine and very proper public interest in the matter has been harnessed to and, if I may say so, distorted by being concentrated on small specific areas which have been exaggerated out of all proportion, and so it has not been turned to those broader issues which, in the cooler, perhaps more rational, mood of 1 o'clock in the morning, we have been discussing. If only half the energy, only half the real commitment which we have seen in the last few months, a commitment which has on occasion shaded into indignation indeed, and has even on occasion plunged into real fury, had been turned to the broader issues, diverted into getting through to the public a sense of the psychological difficulties and of the important policy decisions which have to be made, this would have been a very much better contribution to solving the problem. It is on this kind of field on which the Scottish Office has been rightly concentrating.
  I would remind hon. Members that in this, as in almost everything else, money is important. The House will remember the series of Parliamentary Questions on public expenditure per head North and South of the Border, now the A B C of Scottish politics, which show that in almost every field of Government expenditure Scotland comes out rather better than England. There are one or two exceptions to the trend, and one is perhaps significant—namely the police. We spend on police services £4 16s. 6d. a head in England against £4 4s. 6d. in Scotland. This is a matter of real disquiet, and this is one of the facts which I should like to see stressed, and which I should like to see flung in the face of
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  Ministers rather than the kind of generalised charges on specific but minor points of which we have heard so often in recent months.
  1.4 a.m.
  Mr. Hector Monro: I should like to congratulate my hon. Friends the Members for Glasgow, Pollok (Mr. Wright) and North Angus and Mearns (Mr. Buchanan-Smith) upon initiating this most important debate, even at this early hour of the morning. It is an advantage that this important subject can be discussed free of a particular time limit, for that gives us a valuable opportunity for it, and I am glad so many Scottish Members are here, and taking the chance to participate.
  I do not want to follow the hon. Member for Aberdeen, South (Mr. Dewar) in detail, but I will touch on some of his points in the course of my speech. The House must have been impressed by his first-hand knowledge of the law and with his point about the interpretation of the present law relating to search and arrest. It is a very valid point, and any clarification which the Under-Secretary of State can give will be of benefit to the whole country, including members of our police forces who are none too certain about it. It is a matter which the Government have not made clear in recent months when there has been so much pressure from the public for action to be taken.
  My hon. Friends have made out a case that there is a serious situation, and that crime has increased. I will not repeat the figures in detail. To overcome the position, we have to bring into greater co-operation in a complementary sense not only the police and the law from the point of view of administration, but also the leadership of the country and the position of the Government represented by the Secretary of State. These four different authorities are all fighting on the same front, but obviously not in the same direction. That is where we must look for the long-term solution, as my hon. Friend the Member for North Angus and Mearns brought out so clearly.
  During out debate on the Report of the Estimates Committee on the Police almost a year ago, I made a speech to which the Under-Secretary of State replied. I am interested to know what

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  progress there has been in the 12 months since then on some of the points which I raised and to which he gave a favourable commendation, saying that he would look at these matters and do something about them.
  A matter in which I know that my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) will be interested is recruitment, establishment, and the amount of overtime which the police have to work to perform their duties. Has the situation deteriorated in the past 12 months? He will also want to know about the resignations from our police forces, as brought out in H.M.I.'s Report. The reasons for the resignations appear to boil down to dissatisfaction with pay and pensions and some of the anomalies which arise from the pension regulations.
  The subject of resignations takes in compulsory retirements. The Under-Secretary of State told me a year ago when I asked him about the position in Fife that he was taking the matter extremely seriously and that he hoped at an early date to discuss it with the Fife authority. What has he done? Police officers have been forced to retire after 30 years' service, often in the prime of their police experience.
  As it is so important in the long term in relation to fighting crime, can he say what progress has been made about the Scott Report on Police Cadets? This contentious Report has not been accepted by many police forces in Scotland. What progress has been made towards finding a solution which will be acceptable to the majority of forces? The attraction of first-class police cadets is the long-term basis for having the best police officers in our forces.
  What progress has been made recently over the Regional Crime Squad? In answer to a Parliamentary Question earlier this month we were given to understand that this was before the Chief Constable:, at the moment and that, when all agreed, the regional crime squad would be put into operation. I should like to know whether we have complete agreement, whether the force will be in operation within the next few weeks, what is the strength of it and what will it cost? We want value for
  1350
  money and cost effectiveness in the regional crime squad. We do not want a name for a name's sake.
  What progress has been made in the past year in the provision of equipment for officers on the beat? What progress has been made regarding pocket radios and, as my hon. Friend the Member for North Angus and Mearns mentioned, the provision of motor transport? The days of the bicycle are out. We want to see every police officer in rural districts equipped with motor transport and in radio communication with his base.
  What progress has been made with the introduction of civilians into the police force for administrative tasks? It seems a tremendous waste of a trained police officer's time to have him sit for a long period of time typing out long reports when he is not a particularly skilled typist. The introduction of civilians into the force for this sort of work is a valuable saving of a skilled man's time.
  What progress is being made regarding promotion and the memorandum which has been put before the Police Advisory Board? Many of us accept that to get young, able leaders in the police force, they must gain experience quickly, and there must be a form of accelerated promotion. This is the basis for the memorandum. The objective is to find the minimum time that an officer must serve on the beat before promotion. This will be accepted if it is explained carefully and persuasively to the police officers of Scotland.
  Since I spoke a year ago on this subject, the Secretary of State has made more frequent appearances at meetings of the Police Advisory Board. This is an essential link between the police forces and the central Government. It is of prime importance that either the Secretary of State or his representative, the Under-Secretary, should be present at the meetings of the Police Advisory Board.
  I said that I would not go over the figures which have been given, but they prove conclusively the unfortunate trend in crimes of violence and murder. I have stated that I was always in favour of retaining the deterrent of the death penalty for certain types of murder. Unfortunately this is no longer an issue until the minimum time for review, which will be another year or two.

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  We have, within the limits of order, touched on the powers of the police. This is the most important question of the day amongst senior police officers in Scotland. I hope that the Under-Secretary will say something tonight not only about the police directly, but also whether it is felt that the courts are being severe enough in their penalties. I appreciate that this is something in which the Secretary of State cannot interfere, but we are entitled to express an opinion. Are the facilities for sentencing adequate? Is this one of the difficulties which handicaps the courts? Is there sufficient prison accommodation?
  My hon. Friend the Member for Pollok touched on the question of a young offenders' institution. I know that more places are being made available, but will these be enough? Are there enough places at borstal institutions? These considerations must be at the back of the minds of those who have to make their decisions in the courts.
  This summer we shall be considering the position of the probation officer when we deal with the Social Work (Scotland) Bill, but, as the hon. Member for Aberdeen, South said, many of the problems are affected by the availability of money. In a way, government is the art of priorities, and the art of spending the money that is available in the right place at the right time. If we want more police, we have to give them more pay, just as if we want more teachers we must pay them more. I support these priorities just as strongly as I oppose money being provided for the purposes of the Transport Bill or the Land Commission. We must get our priorities right, and spend the money where it is most required. Whenever there is a financial crisis, cuts are made right across the board. I think that we must be severe where the need is less urgent, and use the money that we have where it is most needed.
  I think that in relation to the spending of money on the police and on crime prevention generally we have to support the Government in paying their share of the money which has to be found by the police committee, or the joint police committees as the case may be, because it is essential that all the costs of dealing with this unhappy situation should not fall progressively on the ratepayers
  1352
  who at the moment have to bear a very heavy burden on the rates to pay for this type of service.
  I think that at the moment the balance is reasonably fair between what the Government pay and what the local authorities pay, but it may be that as more crimes are committed by criminals to whom money is no object we shall have to provide more money to fight this kind of crime by the provision of even better and more expensive equipment. I think that the Government may have to help local authorities by providing more money for expensive equipment such as motor cars, teleprinters, and so on, which are so important in dealing with crime.
  I said at the beginning of my speech that leadership was as important as strengthening the police and strengthening the courts. It can be shown by the sheriffs, by chief constables, by officers on the beat, by teachers, and most important of all, by parents. But the Government, too, must provide leadership, and not just by means of the bureaucratic machine. Leadership must be shown by our elected leaders, by the Secretary of State, by the Under-Secretary of State to improve still more the relationship between the police and the public. The criminal must be brought into perspective, because, as my hon. Friend the Member for North Angus and Mearns said, at the moment he seems to hold almost a position of esteem in our national life. We should hammer him into the ground in every possible way.
  Those points make up a form of anti-crime policy. It is for the Government to provide the necessary leadership. At the moment it is far from positive enough.
  1.20 a.m.
  Mr. David Steel: I, too, congratulate the hon. Member for Glasgow, Pollok (Mr. Wright) on raising this subject and on the manner in which he did so. My only regret is that such an important matter should have to be raised at this hour. It is a general criticism of our Scottish procedures that it could not be discussed in the normal course of business. However, to discuss the benefits of a legislature in Edinburgh in this connection would be out of order. [Interruption.] I am sorry that hon. Gentlemen groan, since I would

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  have thought that they accepted that this subject is of importance to Scotland and that the thin attendance at this early hour does not do it justice.
  Some time ago, I asked the Scottish Office about the amount spent on research on criminology and the reply was not heartening. Our centres for such research in the universities are both few and small, and since this is a growing problem, the Government should see how they can increase the scope. Conditions in the institutions for young offenders should be a high priority, I agree, and we should recognise that criminals are made in some of these institutions, and that some first offenders can easily be turned into hardened criminals by the care and rehabilitation which we provide.
  When in Hong Kong about two years ago I visited some of their institutions for young offenders. They are bedevilled by the problems of drugs and bad social conditions, but I was impressed by their claim of a 70 per cent. success rate with young offenders—that is, that that proportion does not come back reconvicted. They were proud of that and scornful of our Home Office, and therefore, presumably, of the Scottish Office, because of our success rate of only 45 per cent., which means that more than half the young offenders do come back. We fail at this crucial point, when the young offenders first come into the hands of authority.
  One reason that they gave for their success was their closely integrated system of what we would call probation care. They blend after-care with visits during sentence, and it is useful that the same person does both: we might learn from this. I was struck by the fact that the hon. Member for Pollok deduced from his statistics that half the crimes of violence in Scotland took place in a ten-mile radius of the centre of Glasgow. But almost half the police shortage in Scotland is centred in precisely the same area, so there seems to be some correlation between the two facts. Certainly there is a case for improving the pay and conditions of the police force, particularly their pensions.
  I will put one particular point about the police to the Under-Secretary of State. It is curious that different constabularies have different qualifications
  1354
  for entry. A number of young Scots who have found it impossible, under the age and other qualifications required, to enter the police service in Scotland, have been able to enter police forces in England. I can supply the Minister with examples of this.
  Although the police are often criticised, we in this country are extremely fortunate in that the public respect for, and the reputation of, the police is second to none in the world. Like every hon. Member, occasionally I must deal with complaints by constituents against the police. But in the three years that I have been an hon. Member, I have had to deal with only half a dozen of these cases. Considering that I represent 53,000 people, that small number of complaints represents a good record of police public relationship. The constabulary of Roxburgh. Selkirk and Peebles also has an outstanding detection rate record which, if it were equalled in other parts of Scotland, would make this debate unnecessary.
  The hon. Member for Glasgow, Pollock spoilt an otherwise good speech by drawing some false conclusions about capital punishment. He seemed to think that we had made a mistake in abolishing hanging. I intervened to point out that the main increase in murders had occurred in what had been the non-capital category. But if the increase in crimes of violence and murder is concentrated on a part of Scotland, that cannot be blamed on the abolition of capital punishment. We must look more closely at the reason for this growth in violence. Is it caused by bad social conditions, a bad teacher-pupil ratio in the schools in that part of Scotland, family relationships and so on?
  In a speech a year or two ago, the then Shadow Home Secretary, Peter Thorneycroft, pointed out that in some senses the word "neighbour" no longer had any meaning in our new communities; that there were no neighbours any more. That is true in some new housing estates. We have created the right physical conditions in which people can improve their standard of living—washing machines, refrigerators and so on—but we have removed the community feeling which existed in the old communities. When I consider the increased rate of

  1355
  crime in some large cities. I wonder why it is not reflected in the same marked terms in places like Hawick and Galashiels.
  Mr. Dewar: Would the hon. Gentleman correlate that with the remarks of the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) and what I said about the rate of increase in industrial areas and smaller towns?
  Mr. Steel: I hesitate to comment in terms of selective statistics. The serious increases have occured in the major industrial centres of Scotland.
  Mr. Dewar indicated dissent.
  Mr. Steel: While I agree that there has been an increase in, say, my constituency, in some of the smaller communities the increase in the crime rate has been caused by bus parties from other areas. This is true in my constituency. Why does this happen? We should examine very carefully why in certain areas there is this attitude of violence which seems to be becoming more widespread. What is it that causes a youngster to slash the face of a baby in its pram? It seems an extraordinary phenomenon which requires more careful investigation.
  The hon. Member for Pollok made a valid point when he said there should be a connection between the sentence which a criminal serves and the restitution he makes to the victim of his crime. If we could establish a correlation and make the prisoner realise that in some way he is paying damages for the crime he committed, it would be useful to introduce that into our penal system.
  I am suspicious of the pleas put forward for extending police powers. I am prepared on an objective view to say that that may be necessary and we may have to fall back on it, but I would accept that as a defeat and not in itself desirable. There is a grave risk that as we increase the powers of the police in an arbitrary way we may threaten to destroy the happy relationship existing between the police and the public.
  It is quite ridiculous to say of any Government, of whatever party, that they are more interested in the criminal than in the victim. That was not true of the
  1356
  Conservative Government, nor is it true of the present Labour Government, but I am not satisfied that long-term difficulties in the problem of increases of violence are being tackled. We must spend more money on this and be suspicious of short-term solutions. I have a great admiration for the Under-Secretary and his qualities, but it is not fair to ask any Minister of the Crown to undertake responsibility for law and order in Scotland while at the same time he is responsible for looking after agriculture, law reform, the fire service and all the other matters which are his responsibility. This matter requires the whole-time attention of a Minister responsible for the whole subject.
  1.33 a.m.
  Mr. Edward M. Taylor: I am grateful to my hon. Friend the Member for Glasgow, Pollok (Mr. Wright) and my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) for raising this subject and dealing with it so firmly and effectively. The subject is important and urgent.
  As the hon. Member for Aberdeen, South (Mr. Dewar) said, we have discussed this subject before in this House at unreasonable hours. From time to time it has been suggested that this urgent and serious problem has been exaggerated by hon. Members and people outside. This was amplified by the hon. Member for Aberdeen, South, who said that some people were capitalising on the problem and this should not be done. I say to him in all seriousness that the main reason why this subject is raised tonight is that it is deeply felt by a large number of people, many of whom are living in fear and terror. It is an urgent problem, an emergency. If my hon. Friend the Member for Pollok can succeed in getting the Government to show an appropriate sense of the urgency and obtain from them a promise of early action, the debate will have been worth while.
  I do not think the hon. Member need fear that the problem may be exaggerated. When I questioned the Under-Secretary a few days ago, I was told that in 1957 crimes of violence numbered 1,116 and last year they numbered 3,536. That was an increase of more than 200

  1357
  per cent. in 10 years. In the last four years, the number of murders has more than doubled.
  It would be wrong if we gave the impression that there is an easy answer to the problem. With all his other tasks as Under-Secretary of State, the hon. Gentleman must find it very difficult to give time and attention to the matter and search for an appropriate answer. But the message which should go from the House tonight is that we appreciate that the situation is now one of emergency and that urgents steps will be taken to deal with it.
  What can be done? An easy way, and one which could give immediate results in a dramatic reduction in the figures—we cannot wait until the hon. Member for Aberdeen, South reassesses his social conscience—would be by having effective deterrents against crimes of violence. This has been proved. We have the example of the effective steps which Lord Carmont took to deal with razor slashing crimes in Glasgow. There was a dramatic reduction in such crimes.
  We have a duty to the police and prison officers who have to deal with such criminals. What about the prison officer in Barlinnie or elsewhere who has the job of looking after a man in on a life sentence and who has, in effect, nothing to lose?
  Mr. Dewar: Hon. Members opposite have often complained that a life sentence is not a sentence for life. A man in that position who committed a further crime in prison would have a good deal to lose because his sentence would be materially lengthened.
  Mr. Taylor: The question of a life sentence is a matter for discretion, and it may be relatively long or short. But it is true that such prisoners have virtually nothing to lose. It is unreasonable to say to a prison officer that he must safeguard the security of such prisoners.
  Next, the question of making criminals pay. My hon. Friend the Member for Pollok referred to the Criminal Injuries Compensation Board. In 1966–67, we paid out £939,000 in Great Britain as a whole, and in Scotland, with one-tenth of the population, we paid out one-fifth of the total, that is, £191,338. It is alarming to see that in the first eleven months of
  1358
  last year we paid out £217,000, a substantial increase.
  Many people in Scotland fear that there is a danger of this very satisfactory fund being used as a welfare fund for those who participate in violent crime. I want the Under-Secretary of State to consider further the sums paid by the criminals. In the Third Report of the Criminal Injuries Compensation Board, we are told that although £939,000 had been paid out, the amount of repayment of compensation recovered by the victims from offenders was only £367. I understand that the initiative depends on the victim. But is there not some way by which the Government could initiate such action and make sure that criminals pay for the damage which they inflict? It might not need legislation. Can we not make sure that money is recovered from those who perpetrate these crimes?
  I was extremely alarmed to receive an answer from the Secretary of State recently in which he said that of the £217,000 paid out between 1st April, 1967, and 29th February, 1968, there were no repayments to the Board from recipients in respect of reparation recovered from offenders. Is there any way in which we can tighten this up and make sure that those who participate in crimes of violence make some payment? Could consideration be given to the request made by the Lord Provost of Dundee for a conference of civic leaders to discuss ways of tackling the problem? When such an initiative is taken by an esteemed civic leader a favourable answer should be given.
  I turn briefly to the question of the police. I declare an interest as I have recently been appointed consultant and adviser to the Scottish Police Federation. The Under-Secretary said that there had been a marginal improvement in recruiting last year. Some 747 men were recruited but the number who retired, resigned or left for other reasons was 711. That is a net increase in male manpower of only 36. It is worth looking at the reasons given for resigning. More than half the men who left said that they were moving to more remunerative employment or emigrating. This is a serious problem. The obvious answer, as my hon. Friend the Member for Dumfries (Mr. Monro) said, is to prevent large numbers of policemen leaving to obtain

  1359
  more remunerative employment or to emigrate to better jobs. Unless we are prepared to pay the rate for the job we will not overcome the problem.
  There is a shortage of almost 1,000, but what is more alarming is the type of men who are leaving. This was mentioned in the report of Her Majesty's Chief Inspector of Constabulary for Scotland. In paragraph 9 he said:
  "It is disturbing that there were so many resignations among probationers, but more so that there should be such an increase in the number who left the service after completion of their probationary period and before qualifying for a pension. Forces can ill afford such a loss of experienced personnel."
  This is the root of the problem, and the answer must be to have a better salary and career structure.
  Some of the gap can be made good by civilianisation. It has been stated by the Secretary of State that there will not be, as in England, a restriction on the recruitment of police officers. This is something which we welcome. It was indicated that the restriction could be applied to the employment of civilians by police forces. Could the Under-Secretary give any indication of the extent to which the prevention of increases in civilianisation will occur this year? We have seen a dramatic increase in the number of traffic wardens. At the beginning of January, 1966, there were 142. This was up to 282 by the following year and 419 at the beginning of January this year. I hope that we can have a clear assurance that there will be no cutting down on the increase in civilianisation which reduces the pressure on the forces.
  We accept that the career structure in the police is important. Obviously there will be better opportunities arising from amalgamations. Has the Secretary of State considered establishing a national police force in Scotland'? This has been considered in the past. It is accepted in many parts of Scotland that it merits more careful consideration. I hope that any change in this direction or progress on further agreements will not be held up by the reorganisation of local government, that it will be considered separately on its merits, and that progress can be made.
  Working conditions are very important in their effect on recruitment. I recently
  1360
  had the pleasure of visiting a new canteen in the Southern Division of Glasgow Police. I saw the progress there in introducing machines which could provide hot meals to the police officers coming off duty at all times of day and night. More attention should be given to this, bearing in mind the problems of being on the beat at all hours in inclement weather.
  Police building as a whole is even more important. The Report of H.M. Chief Inspector of Constabulary for Scotland referred to the serious problem of the buildings in police establishments. It said:
  "Many police stations are out-of-date and quite inadequate for present day needs and there is still a great deal to be done by way of improvement and replacement."
  There is considerable concern among some forces that the cuts in Government spending may mean that essential work of this kind will be held up. I hope that the Minister can give us an assurance on this. Similarly, I hope that work on prison establishments will not be held up by cuts in spending.
  We have had unfortunate experiences in the past in pay freezes. It seems that we are moving to another period in which wages will be severely restrained. It is very difficult, and almost impractical, to restrain wages effectively in the private sector. I hope that those in the public sector will not suffer unduly, and that we shall have precautions from the Government against that.
  I hope that what has been said in the debate will convince the Government that this is a serious and urgent problem. It is an emergency. We have been accused—and the Under-Secretary himself has done this—of exploiting and exaggerating the problem. But every hon. Member who has spoken from this side of the House has put forward constructive suggestions for ameliorating the situation. The hon. Member for Aberdeen, South made an interesting speech, but it was noteworthy that we did not make one effective suggestion about what could be done to meet the urgent situation.
  The people of Scotland are looking for urgent action, because the Government's responsibility is to maintain law and order. That means that we must have the police force fully manned, and effective deterrents reintroduced which will

  1361
  ensure that the numbers of crimes will decrease. If the Government are thinking only in terms of long-term solutions they should remember that there has been a dramatic escalation in recent years in the numbers of crimes of violence. An increase of over 200 per cent. in 10 years calls for emergency action. We look for that sense of urgency and a promise of urgent action, and hope that we can have it from the Government tonight.
  1.49 a.m.
  Mr. William Hannan: The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) has the faculty of making it appear that he and his hon. Friends are the only people interested in these matters and have a monopoly of concern about the interests and welfare of the people of Scotland, particularly over the increase in crime, a tendency about which all of us are seriously perturbed.
  The hon. Gentleman was selective in the figures he used to justify his case. If one wanted to be equally selective one could take the figures for five years ago, when his party was in power, and say that they had doubled as compared with a selected figure. One could do the same for the year before in turn.
  The hon. Gentleman spoke about recruitment into the police. I recall suggesting to the then Government when we were in opposition that an increase in salaries would solve the problem, and we then talked of the police officer being a £1,000-a-year man, which would help to solve the problem. To their credit, the Government of the day increased the salaries, but I am much afraid that the result lies in the figures we have today and that crime is still increasing. I venture to suggest that to go on increasing salaries for constables is not the cure for the present circumstances. I take another view altogether. I believe that much of our trouble lies in the incitement to possessiveness which the instrument of advertising on television and the attractive advertisements in cinemas give to young people to possess this or that. These inculcate into young people the desire to possess some of the more attractive things of life, dressed up, and incites them to actions from which they should he restrained in their homes.
  1362
  I turn to police recruitment—
  Mr. MacArthur: Is the hon. Member seriously suggesting that advertisements on television and in the Press incite people to commit crimes of violence which is the main problem we are considering?
  Mr. Hannan: No, I am not. The House knows that what I am suggesting is that young people in their most impressionable years, as they leave school at 15, come out ill-equipped to withstand the attractions forced on them. This is one of the means of misleading them to possess things illegally and of inciting them to acquire things illicitly. In that way, one thing leads to another.
  The hon. Member for Cathcart referred to the recruitment to police forces. I think that one answer lies in increasing our police forces and in increasing all the equipment to assist in the detection of crime. The Secretary of State, in a reply to a Question, recently indicated that they were willing to do this by the introduction of more flexible systems of policing, by the use of modern equipment, by the provision of better higher training facilities, by making earlier promotion possible, and by giving more publicity to the need for closer liaison between citizens and the police and strengthening the role of the police in civic life.
  Some of us will yield to nobody in our admiration of the police in the present situation. They know that we are only too anxious to assist them in their dangerous and important job, but I have yet to be convinced that increasing their powers will alone solve the problem. My right hon. Friend the Secretary of State, in his reply to me on 9th February, said that he had given an undertaking to police authorities in Scotland in September last that he was
  "… prepared to authorise additional expenditure in the current financial year on equipment for new systems of policing. Most forces have sufficient local resources available to meet this expenditure but in some cases I have undertaken to reimburse them the cost of this additional equipment against repayment by the police authorities as early as possible in the next financial year."—[OFFICIAL REPORT, 9th February, 1968; Vol. 758, c. 240.]
  In this way my right hon. Friend is doing as much as he can in present

  1363
  circumstances. I know that this situation is giving my hon. Friend the Under-Secretary of State great concern, as it does most of us, even those who do not think it necessary to increase police powers at this moment. I want to draw one or two analogies. There are mothers and fathers who are anxious about their sons and daughters out late at night on Saturday or at weekends and who are not content until they are safely at home and the door locked behind them.
  It is being argued, with some force, that the breathalyser is acting as a deterrent to drunken motorists. There is another analogy in the Fire Arms Act. We have given the police certain powers to search for fire arms. There is similar power in relation to drugs. If we are to believe the figures, the breathalyser has resulted in a decrease in drunken driving. Could it not be that by giving the police this extra power prevention of the use of offensive weapons would result? Can my hon. Friend add to what has been said about this? Is he still convinced that the status quo should prevail and that to give the police these extra powers—
  Mr. Deputy Speaker: Order. The hon. Gentleman is embarking on a subject involving legislation and is getting out of order.
  Mr. Hannan: I will leave it at that. I want to refer to an article by a gentleman who most Scottish Members know—Mr. Noel Stevenson—in the Glasgow Herald of 9th December, 1967. His theme was that violence and crime pay. He said that there were far more "theft-worthy" goods about now than in the past and too few police to ensure arrest and conviction, while violence makes intimidation easy and difficult for the police to get information on which to arrest and secure a conviction. He went on to argue that we had amateurs and professionals housed together in prison. Part of the problems could be solved through separating these groups. We should take the profit out of crime, reimburse the victim for his loss and suffering and try to do some good for the criminal and the country.
  I favour some measures whereby those who have committed some crime against society should be made to make restitution instead of society as a whole. We
  1364
  should hit the pocket, and I hope that my hon. Friend will consider some of the proposals made along these lines. These proposals will help to restore the confidence of the community in Parliament, showing that we are concerned about what is happening in our cities.
  2.0 a.m.
  Mr. Ian MacArthur: I join with other hon. Gentlemen who have congratulated my hon. Friend the Member for Glasgow, Pollock (Mr. Wright) and my hon. Friend the Member for North Angus and Meatus (Mr. Buchanan-Smith) by initiating what has been a helpful and constructive debate. I sympathise with other hon. Members that we should have had the debate at such a late hour, but this is simply the luck of the draw. My hon. Friends were fifth on the list; they might have been first. But the hon. Member for Perth and East Perthshire (Mr. MacArthur) is 27th. That is hard luck. It is not right to regard this luck of the draw as an insult to Scotland, or a mark of this Houses' inefficiency, as the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) tended to do.
  Mr. David Steel: I hope that the hon. Gentleman will not think that I am saying anything of the kind. He will surely accept that a topic of this importance should not be dependent on the luck of the draw in a raffle for discussion in a Parliamentary context.
  Mr. MacArthur: I do not dispute that, but we have a curious procedure which we follow very rarely, and it is right that Scottish Members should seek to have their fair share of the time available. I hope that we shall have a further debate at a more civilised hour, but this is in the hands of the Government.
  Many figures have been given, demonstrating the size of the problem facing us in attempting to understand the nature of crime and to deal intelligently with it. Crime is so much on the increase that one may well ask whether it is the new profession. The hon. Member for Aberdeen, South (Mr. Dewar) recognised the extreme seriousness of the Scottish crime level. He commented on unanalysed figures and misleading statistics. While I do not dispute what he said, I am sure that he would be the

  1365
  last person to use that sort of argument to gloss over the serious position. The hon. Member for Glasgow, Maryhill (Mr. Hannan) and my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) drew attention to the fears of people in Scotland. But if the hon. Member for Aberdeen, South has a certain suspicion of statistics and the like, I will tell him something which is no theory, and that is the fact that 147,749 crimes—not offences, but crimes—were made known to the police in Scotland in 1966. That indicates the massive problem which we are debating.
  My hon. Friend the Member for Cathcart spoke of the need for effective deterrents, and I agree with almost all that he said. I suggest that the best deterrent to crime is the probability of detection. It is when we consider this aspect of the problem that we come across another worrying fact which has not been referred to in the debate—and I apologise in advance to the hon. Member for Aberdeen, South for referring to a statistic, although I am sure he will agree that it is one which is by no means misleading. It is this. Despite a welcome but small increase in the detection rate, only 37 per cent. of crimes are, in fact, cleared up. In other words, for every 37 criminals caught, 63 get off scot free. So long as we tolerate that position, I do not believe that we can seriously expect the crime level to fall. If there is only one chance in three of being caught, the temptation to take up this new "profession" must be very great indeed.
  Clearly a higher detection rate, which is what we must seek, requires a stronger police force—stronger in numbers and in organisation and equipment. If that is so—and I think my conclusion is acceptable—it is very disturbing to discover that the police force in Scotland is nearly 1,000 men short of its establishment of 11,000. In other words, for every 10 policemen, there is one man missing. The shortage is not evenly spread, and I am sure the Minister shares the concern which has been expressed during the debate that the shortage is severest where the crime rate is particularly high in Glasgow. There, the police are 460 men short of their establishment of 3,000. At least, those were the figures a year ago. In other words, for every 10 policeman in Glasgow, there are two missing. Yet
  1366
  nearly half the crimes of violence in Scotland take place in Glasgow, and my hon. Friend the Member for Pollok gave us quite terrifying figures showing the incidence of crime in that city.
  That brings me to the next point which we should consider, namely, how to overcome this shortage. That must be achieved clearly by stepping up recruitment and by diverting to other people some of the tasks carried out by the police. I was interested to hear what my hon. Friend the Member for Cathcart had to say about the increase in the number of traffic wardens. When we first discussed the matter of traffic wardens in Scotland we all expressed the conviction that relations between the traffic wardens and the public would be satisfactory. Indeed. I think the House will agree that that is the case. My own experience in Perth is that a harmonious relationship has been built up.
  I hope that the transfer of traffic duties and other responsibilities from the police to traffic wardens will continue and increase. It is disturbing, however, that when we face this urgent need to come nearer to the establishment and, indeed, to reach it, we should find that in the last year the net increase in the police strength was only 36, if the figures given by my hon. Friend the Member for Cathcart are correct, as I am sure they are. That is a tiny increase when the shortage is nearly 1,000 and I hope that the hon. Member will comment on the questions and constructive suggestions made by my hon. Friend the Member for Dumfries (Mr. Monro) and my hon. Friend the Member for Cathcart.
  I have said something about the need also to increase the strength of the organisation. Several hon. Members, including my hon. Friend the Member for Dumfries, have referred to the importance, in this respect, of the regional crime squad. Earlier this month the Secretary of State told us that a scheme for a regional crime squad had been prepared and approved by the Police Advisory Board. He said that the scheme would be sent to all Scottish chief constables by the end of this month. That is now only a few days away, and I hope that the hon. Gentleman will be able to tell us if the scheme has been approved by all the chief constables in Scotland, and when the regional crime

  1367
  squad will be put into effect. I hope that he will also tell us something about the equipment of the squad, its operation and its organisation.
  Here I must be careful what I say, in view of your very wise Ruling, Mr. Deputy Speaker. The hon. Member is considering recommendations made by the chief constables and Glasgow magistrates about the powers of search of the police, and I say no more than that I cannot conceive that it is right not to act on these recommendations, in view of the alarming increase in crimes of violence. As the hon. Member for Glasgow, Maryhill rightly pointed out, what we need to do is to stop the weapon from being used, and not to leave police action until the damage has been done.
  Mr. Dewar: In an intervention earlier when I was speaking the hon. Gentleman suggested that no one would suggest that there should be random frisking in the streets. That being ruled out, will the hon. Gentleman explain how the proposal made will increase, in practical terms, the powers at present available to the police?
  Mr. MacArthur: I am not at all sure whether I can reply to that question in detail, Mr. Deputy Speaker.
  Mr. Deputy Speaker: I can assure the hon. Member that it is not in order at all.
  Mr. MacArthur: I am obliged, Mr. Deputy Speaker. Perhaps I can remain in order by making just one point to the hon. Member for Aberdeen, South because it answers his question. I turn to the question of birds' eggs. Last year Parliament gave police powers in this respect. Section 11 of the Protection of Birds Act reads:
  "Where a constable has reasonable grounds for suspecting that any person has, in contravention of section 1 of the principal Act, taken or destroyed an egg of a bird included in Schedule 1 to that Act and that evidence of the commission of the offence is to be found on that person or in any vehicle, boat or animal which that person may be using, the constable may without warrant stop and search that person and any such vehicle, boat or animal …"
  I leave that point simply by asking the Under-Secretary to reflect on the difference between a bird's egg and a flick knife.
  1368
  My hon. Friend the Member for Pollok and other hon. Members have raised the fundamental question, why has this frightening increase taken place? What accounts for this enormous rise in the rate of crime, and particularly in what, on the surface, appear to be senseless crimes of violence? If we can discover why these things happen, then we shall be much better equipped to know how to deal with them and how to prevent them from happening again. Is this a symptom of poor housing and bad environment? To some extent, I am sure it is. To what extent does the rise in crime reflect lack of parental control over and interest in the child? No doubt this has some bearing on the matter, too. Is it the lack of parental care for the child that can encourage a child to drift from naughtiness into wickedness later on? Is this a consequence of the growing permissiveness in our society? Is it a consequence of the disruption and loosening of the old disciplines of the family, the school, and the Church? And there are many other questions one could pose.
  I believe we do not give enough consideration to fundamental questions of this kind. Sometimes we begin to strive to find an answer, I suggest, almost by accident. I was most interested in the Kilbrandon Report. I cannot refer, without straying out of order, to the legislation which follows it, but I was particularly attracted by one aspect of that Report, which put forward proposals which could perhaps help to nip the potential criminal in the bud, and we shall be debating that on another occasion. I am convinced, however, that there is need for more research into all these questions. There is need for more action by the Government.
  If we can follow some of the recommendations put forward tonight and encourage the Government to take steps which will increase the rate of detection of crime I hope we shall remember that an increased rate of detection puts an added strain on the prison service, another body of men to whom it would be right for the House to pay tribute tonight. The prison service works in very difficult conditions. Prisons are overcrowded, and here again, I do not think we give enough consideration or

  1369
  imaginative thought to another fundamental question, which is, for what purpose do we send a man to prison? That, too, is something we should think more about. Do we give enough thought to the social problems facing a prisoner approaching release, and the discharged prisoner, so that they can be helped to take art honest place in society?
  Here again I return to the question of research. I believe that research into the nature of crime will surely establish facts about the background and the behaviour of the criminal and so help to produce a new knowledge about the origin of crime. Of course, research and study will not remove or lessen the need for all the other measures which have been referred to during this debate, but research and study may in the end help us to tackle this grave and growing problem at its source.
  2.19 a.m.
  The Under-Secretary of State for Scotland (Mr. Norman Buchan): I have been slightly disturbed during the debate, slightly puzzled, too, having heard Member after Member congratulating the hon. Member for Glasgow, Pollok (Mr. Wright) on the manner of his speech. I am not puzzled or disturbed because of their congratulating him on raising the debate: I approve entirely this debate having been raised. But he has been congratulated on the manner in which he delivered his speech. I have been puzzled, and I have been worrying about what was worrying me about his speech. It was a strange mixture. Throughout it, we were reminded of the hon. Gentleman's academic background, and I was pleased to hear it. Recently, I have come under frequent attack when I have stressed the need for research, and I was glad to have his support. However, mixed up with so many of his valuable and interesting points, there was what might be called academic Alf Garnettry, and it disturbed me to hear it coming from a real academic. Some of his point could have provided us with a great deal of useful material, for discussion.
  Clearly it has been difficult for most hon. Members to discuss this subject and, to a great extent, their obvious intention was to deal with the problem which has given rise to much public discussion over the last few months, and it is especially
  1370
  difficult for me in that I cannot explore some of the aspects which arise.
  The problem involved in the forbidden subject of search is not an easy one. Above all, I should say to those hon. Members who have thought of it as being the panacea that that is not a view which is shared by most workers in this area of activity. At best, they say that it might help. The big question which we have to face is whether it would help, or whether it would create more difficulties than it would solve.
  I cannot specifically go into the analogy between firearms and birds' eggs, much as I would have liked to, because it would have made the point even more clear. However, perhaps one or two matters should be kept in mind. The first is the comparative rarity of firearms being carried. To have reason to believe that a man carries a gun one must have been prompted by a very specific factor. The second is the ease of a definition of "firearm", unlike "offensive weapon".
  The liberty of the subject is involved in both those points, but what arises from it is the danger of this tending in the direction suggested by my hon. Friend the Member for Aberdeen, South (Mr. Dewar), and of search itself leading to the very kind of violence and the provocation of violence which this step was seen as being designed to avoid. I am sorry that I cannot be more specific because of the ruling from the Chair, but I hope that I have at any rate recognised that the problem is a real one, and that there is no delay or dragging of feet in examining it.
  I would have thought that increasing the police force in Glasgow to its full establishment would be an even greater deterrent, yet that subject does not arouse the same passions. In other words, the point raised by the hon. Member for Glasgow, Pollok was truer than he thought when he said that he regarded this as a token of our intent. I was disturbed to hear that from an academic, because it would be dangerous to use this which is a specific proposal for dealing with a given crime as a symbol, and then set it against the grossest kinds of crime. He referred to the Cardonald murder in terms which shook me, and I hope that we do not have cause to regret what he said about a matter which is not yet clear.

  1371
  A number of hon. Members have put forward specific points about police manpower. I have some figures here which might be useful from a factual point of view. I am pleased to have had approval for spending some time in developing research. I agree however that we are also dealing with a short term measure, and in that the availability of police manpower is enormously significant. I pay tribute here to the police with whom I have been working over the past year. If the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith), in his very unhelpful speech, really thinks this is the attitude of the police he should speak to the man most concerned in the discussions with me to see he shares this view about my caring more for the aggressor than the victim. I have had most discussions with the Chief Constable of Glasgow. He should ask him. The hon. Member for North Angus and Mearns should try to discover these things before making provocative and ill-informed statements. The police have been doing a difficult job well in difficult circumstances. I accept the figures which have been given about the increase in the crime rate.
  In 1966 the police strength was 10,194. By December, 1967, that figure had crept up—not nearly enough—to 10,247. In the last two months it has increased again by 63 up to 10,310. Therefore, there has been a measurable, but still not sufficient, increase. We have, however, been helped by recruitment in other directions—traffic wardens and civilianisation, of which hon. Members have approved. The total manpower, therefore, at December, 1966, was 11,758; in December, 1967, the total manpower was 12,284; and in February of this year it was 12,445. That includes police cadets, traffic wardens and whole-time civilians. The available manpower in the last six years has gone up from 10,817 to 12,445. I agree that this is not sufficient. This is one reason why I promoted the campaign that we are currently running in Glasgow. The hon. Member for Glasgow, Pollok should not say that it is an evasive answer because it did not deal with the specific point which he regarded as a token. There was nothing evasive about the meeting that I held and the proposals which arose out of it. They were practical and sen-
  1372
  sible suggestions, including the campaign that we are running in Glasgow. I know of the very great interest it has aroused. In the ten days up to 3.30 this afternoon, 70,400 have attended. This is a great tribute to the officials of the Scottish Office and Glasgow police who organised and publicised the campaign.
  The question of prison buildings was also raised. On this point I am taken aback by hon. Members opposite. Of all things with which to charge this Government, the state of our Scottish prison buildings is the last. We are spending about ten times as much per annum as was spent ten years ago. If anyone has the right to complain about the state of prison buildings in Scotland, it is I, because I inherited this problem from hon. Gentlemen opposite. Recently we had a discussion about the siting of a temporary prison when the opposition to it was led by a prominent Member of the party opposite. This is the kind of problem that we have to face, and I hope that we will receive the hon. Gentleman the Member for Cathcart's support when we need to establish a temporary prison in an area.
  It was suggested that the number of re-convictions shows the need for heavier penalties to be imposed. I do not know whether stiffer penalties will prevent the return of criminals to prison. This inference cannot be drawn from any research that I have studied. One of the difficulties is that research into the careers of those who commit crimes of violence suggests that on average most people who commit crimes of violence do not persist in their crimes. The only deduction that can be made from the figures is that more people who are criminals commit crimes of violence, but this is almost tautologous.
  Reference has been made to the abuse of compensation paid to victims of crimes of violence. I take the point put forward by the hon. Member for Cathcart, and the hon. Member for Pollok. I am sure that they will forgive me if I do not follow them at length into this question. A subcommittee at the Home Office is looking into this. It is part of the Advisory Committee on the Penal System with which we are associated, and it is considering the various aspects of this problem. I think that we had better await its report.

  1373
  I was asked whether we had done some of the things that we said we were going to do. The establishment of the Scottish Crime Squad was one of these. I hope that the squad will soon be established. A collaboration scheme relating to its establishment is being circulated to chief constables with a view to obtaining the consent of the police authorities to the scheme. The Scottish Office, my right hon. Friend, and I have been accused of delay, but one of the difficulties is that this is a matter over which we have no control. It is largely a matter of convincing the police authorities of the need for this, and we need time to achieve this.
  The hon. Member for Dumfries (Mr. Monro) asked about Fife. This matter has led to some discussions between myself and the police authorities, but I prefer not to use a bludgeon. I want a settlement to be reached by agreement. I am aware of the point made by the hon. Gentleman, and I made my views clear to all the constituent bodies of the police authorities. Two of the three police authorities have agreed to my proposals, and I shall be addressing a full meeting of the third authority a week on Friday. Modifications have been made to the proposal. They came half way to meet me, but I am not content with that. I agree that the position must be followed through, and I hope to have the matter clarified at the meeting to which I have referred. I may, of course, be convinced the other way, and perhaps I should not express too strong a view about what I think may come out of the meeting.
  Mr. Michael Noble: I have been listening to almost every word of this debate. The hon. Gentleman is telling the House what worries him. What worries me at the moment is that I am not sure whether the hon. Gentleman really understands the urgency of the situation. He keeps saying that things are not entirely in his hands. I accept that, but I cannot accept that the police forces in Scotland do not support the principle of leadership, provided it is of the right kind.
  Mr. Buchan: That is an extraordinary statement. I have not said any such thing. I was talking about our relationship with the police authorities, and defining the existing situation. The right hon. Gentleman was at one time the
  1374
  Secretary of State for Scotland. He knows the powers which exist between us and the police authorities. Leadership is best achieved by collaboration, rather than by any of the alternatives suggested by the right hon. Gentleman, and we get collaboration from the police. It is not a question of making excuses. I am not excusing anything. I regret that we have not recruited more people to the police force, but what does the right hon. Gentleman think I am apologising for? It might help if he could enlighten me on that.
  Mr. Noble: The hon. Gentleman has said that he needs more time for research, and he said just now that the establishment of the crime squad depended on getting the police authorities to come with him, and that it was not within his power to force it. Of course I know that but, surely, when crime is increasing at this rate, leadership would get the police authorities behind him?
  Mr. Buchan: At present, the collaboration agreement is being circulated to chief constables, so the right hon. Gentleman should wait to see whether or not they reject our leadership. I am in favour of any search for positive action, but we are deluding ourselves if we think that there is any quick solution. The worst difficulty is that everyone knows the answer to crime, but they all know different answers. We have all suffered from this: I have myself. I used to think that the clue was poverty and that if we abolished poverty we would abolish crime, but that was not right. Nor is affluence the reason, the fact that youngsters have more money in their pockets. We do not see this happening in Denmark and Italy, for example, but it does in other countries.
  That is why I agree that we need this kind of research, and I am encouraging it. I have been pleased with my relationships with people working in this field over the last few months. However, it is an immediate problem which requires immediate measures—and not necessarily those which hon. Members would have suggested had they been in order in so doing.
  The subject was raised of equipment and new systems of policing as they relate to the estimates. There is an explanation for that. In September, we asked the chief constables to review the operational

  1375
  methods and disposition of their forces with a view to making the greatest possible use of cars, in conjunction with personal radios, in the development of unit beat patrols, and we said that we were prepared to assist in the speedy provision of these cars and the necessary new equipment. The reason for the small amount in next year's provisions is that we slotted it forward to September. It was because of greater and not less urgency.
  I am extremely interested in the unit beat police method and hopeful for it. It is interesting—and, I think, useful—that the debate has swung around to the subject of the police. As to whether we are going to cut back the number of civilian employees, we are nowhere near having to restrain recruitment for the police force and recruitment of civilians should also continue where it will release policemen from duties which do not require their qualifications, training and powers. We will, however, have to keep our eye on the recruitment of the additional civilians to see that we are getting this kind of input-output equation.
  I have to some extent answered the questions about civilianisation and equipment, although I do not know whether the hon. Member for Dumfries (Mr. Monro) was satisfied with that. But there has been an increase. Between 1966 and February of this year, the number of whole-time civilians rose from 1,092 to 1,371, which is a fairly useful increase. Similarly with equipment.
  The other question raised was that of deterrents. It has been suggested that hon. Members have put forward numerous solutions to this problem, but is that really so? I suggest that the real solution came in the remarks of the hon. Member for Perth and East Perthshire (Mr. MacArthur) when he referred to the real deterrent as being fear of detection.
  I would like to make the position clear following the remarks about offensive weapons and stabbings, and I cannot emphasise this point too strongly. Whereas in my younger days in Glasgow the offensive weapon slashed and marked, the danger now is that it stabs; and the effect of this, as we have seen, can be serious. This is partially the reason for the increase in the number of murders. As the hon. Member for Roxburgh,
  1376
  Selkirk and Peebles (Mr. David Steel) pointed out, we must treat this increased rate with care, particularly in view of the changed judicial procedure. I accept that there has been an increase in the murder rate, but this has arisen out of the rise in violence, since some violence will end in murder.
  From that point, however, hon. Members are in difficulty in suggesting that the death penalty would provide the necessary deterrent, for unless they are prepared to say that the death penalty should be introduced for all crimes of violence, it will not act as a deterrent to that form of violence which gives rise to murder.
  I accept what the hon. Member for Cathcart said about heavy sentences acting as a deterrent. There is no doubt that the courts also appreciate this. Reference was made to Lord Carmont, and to Lord Cameron but he was referring in the case to which reference has been made to a serious type of crime, and not the type of crime that could be dealt with by the powers of search. He was concerned with the violent intimidation of witnesses. It is in this connection that it is rather pointless to talk about extending police powers. The maximum penalty of life imprisonment can be imposed for intimidating witnesses, so the powers of the police in this matter really cannot be extended. We must be careful when discussing matters of this sort. Lord Cameron warned—and I go along with his warning—that it should be made clear to everyone that the punishment would be severe for those who interfered with witnesses. He said:
  "… conduct of that kind, if … punished with light sentences, could strike at the very roots of justice."
  He demonstrated—and that demonstration has been repeated by others—that the courts are fully alive to their responsibilities. For example, from September to December, 1967, in four cases, four years' imprisonment was the penalty imposed for the crime of assault. In eight cases the courts imposed five years' imprisonment; in 14 cases, six years' imprisonment; in two cases, seven years; in two cases, eight years; and in two cases, 10 years. They were heavy sentences for crimes of assault. The courts are, therefore, alive to this problem.

  1377
  While we must realise that it is not possible in many cases to extend these powers, there is the important question, into which I am looking closely, of the relationship between the public and the police. In the long run, this is the way forward. This relationship is improving and I am seeking to improve it. This is an important aspect of the campaign which I am running in Glasgow and the west of Scotland. If it is possible for a message to go out from the House at nearly Three o'clock in the morning, it is that parents, teachers, the public in Glasgow in general and particularly the young people may be assured that those who carry offensive weapons are liable to arrest. The offence, under the law, is the carrying of such weapons; and if people are suspected of carrying them and if it is suspected that they may be used, they are liable to be arrested without warrant. They can rest assured that Glasgow's police will use their powers, as I have explained.
  Secondly, to parents and others: Ensure that the young people leave anything behind which might be interpreted or misused as a weapon. In this way with the combination of a repressive rôle and also of the more positive rôle outlined in that part of the hon. Member's speech of which I approved, there is no reason for panic. There is no reason for complacency either, but we must not encourage the feeling and sense of insecurity which I recognise at present.

  300 GeV ACCELERATOR
  2.45 a.m.
  Sir Harry Legge-Bourke: At 2.45 in the morning it is only right that one should try to accelerate business. The subject I shall raise is acceleration, not acceleration in a misapplied manner as is apparently occurring in Scotland, but acceleration of nuclear energy. It is sad that this matter has to come up at this late hour. I want to refer to Cmd. Paper 3503, which is the Proposed 300 GeV Accelerator, and this Report is probably one of the most distinguished ever laid before Parliament. I think the Secretary of State for Education and Science would certainly agree. I am grateful that the hon. Lady the Minister of State, is here to reply to this debate.
  If I had to sum up what I have to say tonight, I could do it in two words—
  1378
  "Matter matters." We are dealing with the smallest known particles of matter. We are at the very far fringes of knowledge. We are probing into the future. We are now confronted with a situation in which an exercise in which we have been proud to participate through C.E.R.N. is in danger of being severely interrupted unless a far more powerful accelerator than C.E.R.N. yet possesses, or any nation possesses, is provided, and it will take a number of years to build it. Therefore a decision has to be taken.
  Seldom have we been better equipped with knowledge of the most expert kind we could possibly wish for than in the evidence in this Report. Their Lordships have already had a very important debate on this matter on 28th February this year in which what I might describe as the Olympians uttered. A number of them suggested that this is not the sort of expenditure we should contemplate at a time like this, yet others still believe that the search for the knowledge of structure of matter is essential and that we should go on probing as we have done. After all, man has been at this game since the fifth century B.C. and the acceleration of it has been increasing as knowledge in this field has been accelerating quite extraordinarily fast.
  We have already discovered a third natural force, in addition to gravity and electro-magnetism, in the shape of nuclear force. We may be on the brink of finding yet a fourth. Who knows? They certainly do not. I was interested to see in the fifth paragraph of the Report reference to the work of Lavoisier, Faraday and Rutherford in the 18th, 19th and 20th centuries and:
  "The discovereies of these workers led nonetheless to the development of major industries around 50 years later."
  There is a delightful story about Faraday in about 1800. He was visited by a Minister of the Crown and asked what he was up to. He replied, "I do not know, but I strongly suspect that your successors will levy a tax on it before long".
  We may well find that the knowledge which we are using today, especially in microbiology and so forth, already owes something to knowledge acquired at C.E.R.N. We must be very careful before we say, or encourage the contributing nations of C.E.R.N. to say, "Let us

  1379
  pause". The Soviet Union will continue this work. So will the United States. The case is made unassailably in the Report that we cannot expect to keep in the field as we ought in the United Kingdom by relying on what the Americans or the Soviet Union are doing. This is undisputed.
  But it is clear from the Report also that, while the distinguished scientists reporting to us believe that the exercise ought to go on, they believe that it ought to go on only if we can persuade enough countries to co-operate in it and if there are certain important safeguards. One of the most important safeguards, which everyone wants, is that, if the exercise is to continue, other disciplines must not suffer. There is an important minority Report submitted by Professor Sir Ewart Jones and a colleague. I had the opportunity at Oxford a week or so ago to have a conversation with him on the matter. Sir Ewart Jones is a distinguished chemist, and I can well understand chemists and other scientists feeling that nuclear physics is already getting more than its fair share of public expenditure. At more than 40 per cent. today, it is a very big share.
  There are two ways of solving that problem. One would be to reduce the amount devoted to nuclear physics. But there is another way. If there is—as there must be—a limit to Government expenditure, let us switch some of the expenditure on the technology front to the basic science front, thus keeping the share of nuclear physics at roughly the same figure as today but making it a smaller proportion of a larger total.
  My purpose in raising this matter tonight is to beg the Government, before they come to a final decision, seriously to reconsider whether, important though the application of technology in industry is, they are already in danger of starving some of the basic research which is essential to our long-term future. In much that we do today we are living on the future indebtedness of our children and grandchildren. I have no doubt that we shall not see the full benefit of the work which I am now discussing, but it will be of the greatest importance to them.
  This is man's old thirst for knowledge—Who? Why? When? and Where?—
  1380
  the important questions which the children first ask. These questions will continue to be asked. We may be, as I have said, on the brink of discovering yet a fourth natural force in the world. Ought we now to stop? I believe not. But at least, before we or C.E.R.N. were to decide not to proceed with this project, all the contributing members of C.E.R.N. ought to ask themselves whether they ought to stop. Can we stop? If we in Europe stop, what will be our position if the United States and the Soviet Union carry on? Can we catch up again and get the advantages that we might get?
  So much for the general, international scene. There is only one other question I want to raise, namely, where should the new accelerator be if it is decided to proceed with it? The United Kingdom has put forward a site in Norfolk which I know well. I have had the advantage of seeing the proposals put forward by the Government to C.E.R.N. and I am grateful to the Secretary of State's predecessor for the opportunity of doing so. The proposals were revised as late as December 1966. I have seen that a great deal of trouble has been taken to answer the questions that C.E.R.N. asked.
  The case is made in the Report for saying that if one becomes the host country for an exercise of this sort it militates to one's advantage economically. On the other hand, there is the special report from the economists in this document in which the economists do not quite agree. But then I have always thought that if all the economists were put together end to end they would never come to a conclusion. I have always felt that as fast as one economist says "this" another says "that". But the scientific advice and the experience of C.E.R.N. shows that the host country gets some advantage.
  I want to refer back to a Question I put to the Ministry of Technology on 11th April, 1967, when we were concerned about the number of orders which British firms have obtained from C.E.R.N. It is rather shocking to know that only 4·5 per cent. of C.E.R.N.'s contracts have been placed with British firms, whereas the British contribution to C.E.R.N. is 23 per cent. I strongly suspect that this is a case of reluctance on the part of British firms, which one notices wherever one goes, to do what

  1381
  they call a "one-off" exercise. There is always the suspicion that it will be an expensive exercise for which they will not be fully recouped. It being a Government contract or a quasi-Government contract it may be rescinded in the middle, and they feel that it is not worth a candle.
  If the decision of C.E.R.N. is to go ahead with this—and I hope that it will he—-I hope that we have a fair chance of becoming the host country. It will be to our economic advantage and I believe that we will be able to revise the figures which I have quoted and see British firms taking a bigger interest in this matter.
  I will end as I started: matter matters very much. Our knowledge of the structure and behaviour of the smallest particles and the enormous need for increased energy through this accelerator to penetrate into these minutest particles is a desirable thing in itself regardless of its immediate economic return. The economic return cannot be foreseen at this stage, but I am sure that Britain, which has shone in this field over the centuries, ought to be playing a part.
  Naturally we cannot afford to do it alone. Therefore I hope that Her Majesty's Government will put all the pressure they can on C.E.R.N. to come to an early decision to go ahead, and I hope that it will be sited in the United Kingdom.
  3 a.m.
  Mr. Eric Lubbock: I am sorry to have to disagree with the hon. Member for Isle of Ely (Sir H. Legge-Bourke), because generally speaking we think very much alike on scientific subjects. But I at least heartily endorse his statement that we have the advice of the Council for Scientific Policy in a very complete and detailed form, such as we have never had on a major decision affecting the future of science policy in this country.
  I only wish that the same willingness to publish could be extended to other parts of Government. I see that the Joint Parliamentary Secretary to the Ministry of Technology is present. There is a marked contrast between the White Paper, which gives us all the facts on which to base the decision on the 300 GeV accelerator, and the total re-
  1382
  fusal of the Ministry of Technology to publish any of the data on which the decision to reduce expenditure on Culham was based. The hon. Member for Abingdon (Mr. Neave) is to speak on that later, and I should have liked very much also to be able to take part in that debate.
  I disagree with the hon. Member for Isle of Ely largely on the financial aspects of the proposal, which he did not refer to in great detail. It is worth looking at some of the figures for the expenditure by C.E.R.N., now and in contemplation, on the 28 GeV accelerator already in operation and see how they compare with the estimates made some time ago. In the table of figures on page 13 of the White Paper, we find the cost increased from 174·9 million Swiss francs in 1967 progressively to 226·4 million Swiss francs in 1970, represent-in £21·8 million at the present exchange rate. Those figures do not include the so-called intersecting storage rings which I now understand it is agreed by the parties to C.E.R.N. will come into operation some time during the early 1970s.
  The Council for Scientific Policy has some very interesting things to say in commenting on those figures. It points out that
  "… the capital expenditure of the laboratory continued after the machine came into operation, in December, 1959 (partly because of improvements found possible after the initial operation and partly because this item includes capital items of experimental equipments) at a level comparable with that reached during the construction phase. Secondly, the operation and personnel costs continued to rise thereafter."
  When the machine was first proposed in 1955 the total running cost was estimated at £720,000 a year, whereas the actual figure is about 30 times as large. The increase can he accounted for partly by the experimental equipment added on after the construction of the accelerator had been completed, such as the bubble chambers which had not even been thought of in 1953. Even now, I understand that the European Committee for Future Accelerators is asking for a 200-ton liquid hydrogen chamber which would come into operation in about 1977, the cost of which can be judged from the experience of a pilot model one-tenth the size, which costs £8 million. Then there are the intersecting storage rings I have mentioned on which expenditure is

  1383
  expected to rise to about 80 million Swiss francs annually. I understand that the United Kingdom has already agreed to allow this to go ahead.
  Mr. Tam Dalyell: Is the hon. Gentleman sure that in giving these figures he is comparing like with like?
  Mr. Lubbock: No, I am not entirely comparing like with like. What I imagine that the hon. Gentleman means is that when the project was first put forward in 1953 a machine as large as 28 GeV was not envisaged. It was not as closely defined as that. An increase in costs to about 30 times the original figure is still worthy of mention because we do not know the final design of the 300 GeV project and that it will not be altered in such a way as to make it vastly more expensive. Therefore, this historical experience is relevant and should be considered most carefully when we are looking at the estimated cost of the 300 GeV machine.
  Paragraph 15 of the Council's Report says:
  "It is quite possible that new major experimental tools will be invented during the construction period of the 300 GeV machine and for this and other reasons we consider that escalation in the costs of experiments with this machine is the most serious factor."
  We see that cost estimates show that the British share would be about £37 million, even before the accelerator begins to operate in 1977, and without taking into account the effects of devaluation, and before making any allowance for the type of additional equipment which might be found desirable later.
  The Secretary of State, in his introduction to Cmd. 3503, says that the cost in sterling would not rise by the whole amount of devaluation since our share would be reassessed in due course, presumably in accordance with the Gross National Product of the member nations of C.E.R.N. I would like the Minister of State to say what estimate she has made, now that devaluation has been with us for some months of the final total which will replace the £37 million figure as our share of the production costs before the accelerator comes into operation.
  The other factor which could make a big difference to the British share is the
  1384
  attitude of other nations like West Germany which has been lukewarm towards the project and may decide not to participate at all. I understand that the West Germans had suggested postponing a decision until it is possible to assess more fully the opportunities provided by the recent agreement between C.E.R.N. and the Soviet Union about collaboration on the 70 GeV Serpukhov machine. If Germany dropped out, our share of the project would have to be increased accordingly, and it would be much more than the 25 per cent. indicated in the Report.
  It is perfectly true, as the Council for Scientific Policy says, that the accelerator is not like a new aircraft project, where errors in forward estimating are sometimes 100 per cent. Our experience on Nina and Nimrod, built in this country, shows that escalation—to use a word I do not like, but which is used all through the Report—is something of the order of 25 per cent. in real terms; but there is no room at all for an increase, let alone for an additional facility, such as the intersecting storage rings, for which provision is already made in the 300 GeV Accelerator project, for acquiring additional land over and above what is required for the accelerator itself.
  The Member for the Isle of Ely said that he was concerned that this project should not have an effect on the rest of the science budget. If the S.R.C. Vote is allowed to grow by 9 per cent. per annum up to 1973–74, and 8 per cent. thereafter, the project can just be accommodated within the estimates made. The question must arise as to whether these rates of growth can be accommodated almost indefinitely, bearing in mind that the competing claims on science Vote expenditure will have to be accommodated, and the certainty that the figures mean an ever-increasing share of national resources going to the S.R.C. in general and to nuclear physics in particular. If one takes it to the extreme, if Gross National Product grows by 3 per cent. and the S.R.C. Vote by 9 per cent., by the end of the century the whole nation would have to be engaged on research and development, and half the population would have to be nuclear physicists. Obviously, there must be some adjustment in the figures before we get to that stage. If there is any increase

  1385
  in the estimates for the 300 GeV accelerator the position is even worse.
  The Council points out that if there were only a 20 per cent. rise in costs it would put up our share by £1·2 million a year, an amount comparable with the whole of the budget devoted by the Council to chemistry at the moment. No wonder the Council only recommends going ahead with certain qualifications. It wants an assurance that the science votes as a whole will go up by 9 per cent. a year for the next ten years. If this did happen, it would bring the amount up to no less than £2,270 million in 1977–78, if my arithmetic is correct.
  I doubt whether this kind of undertaking could be expected from any Secretary of State. How can we say that the growth in our national produce and in the amount we are prepared to devote to science over the next ten years will be sufficient to justify guaranteeing the Council an increase in its annual budget of 9 per cent. a year? It is a growth rate that many workers would dearly like to ask their employers for, but it is not one which it is reasonable to expect the Secretary of State to guarantee. He could not guarantee a figure of this magnitude.
  Then, the Council wants limitation of the construction and operation costs of the machines and ancillary equipment by prior international agreement. Whatever may be put in writing beforehand, experience shows that once one reaches the point of no return beyond which one has already spent so much money that it is too late to back out it will be the decision to go ahead, even though if one had seen expenditure of this magnitude coming in the first place one would not have made the decision.
  As the noble lord, Lord Mitchison, said in another place, it is like the story of the man who knew enough Italian to tell the gondolier to sing but not enough to tell him to stop. It is interesting to note that in the debate in another place nine of the noble Lords taking part, including such eminent scientists as Lord Jackson, Lord Bowden, Lord Ritchie-Calder and Lord Kings Norton, were against the 300 GeV accelerator, that foul or five expressed no opinion at all, the Bishop of Leicester and Lord Caldecote were in favour. The weight
  1386
  of opinion in another place was not in favour of proceeding with the project.
  Sir H. Legge-Bourke: The hon. Gentleman will also accept that Lord Wynne-Jones made it clear that they were arguing on the wrong point.
  Mr. Speaker: When referring to right hon. and hon. Members in another place we can refer only to Ministers making statements of Government policy.
  Sir H. Legge-Bourke: On a point of order, Mr. Speaker. With great respect, I always understood that what one must not do was to quote.
  Mr. Speaker: If the hon. Gentleman reads his Erskine May—and he is a Chairman—he will see that what Mr. Speaker has said is correct.
  Mr. Lubbock: I think I have said enough to show that, judging by the debate in another place, it is clear that the scientific community as a whole may not approve the advice given by the Council for Scientific Policy and that many scientists in other disciplines are desparately anxious about the effect that the 300 GeV accelerator might have on their own budgets. In its second Report, the Council says of science policy:
  "In this sense the rest of science is at a disadvantage, in that it does not yet need facilities on this scale and no way has been found to plan so far ahead on programmes composed of smaller projects."
  There is the difficulty that we can see fairly clearly how much it would cost us to go ahead with the accelerator but cannot tell how much will be required by all the other disciplines as far ahead as 1981, to which the figures in the Report extend. Nevertheless, the Council foresees a rapid growth in other sectors, notably oceanography, many aspects of biology and the synthesising of complex organic substances. Is it not paradoxical therefore, for the Council to accept a significant increase in the proportion of resources going to nuclear physics during the early years of rapid growth in construction costs of the 300 GeV machine?
  The next proviso made by the Council is that the commitment upon operations and equipment costs should be deferred until construction costs are clearly defined. This is an impossibility. According to Nature of 23rd March, the United Kingdom delegates at the 37th meeting

  1387
  of the Council of C.E.R.N. held the week before last:
  "… expressed itself completely satisfied with the answers given on design, cost, management and collaboration and said that there was no reason why these issues should be reopened."
  The same article then went on to say that countries would have to commit themselves to the project before they knew where it was to be built. Yet C.E.R.N. has advised that the costs could vary by 5 per cent. or more, due to variations in the civil engineering costs, according to the site selected.
  This brings me to the question of whether the accelerator should be located in the United Kingdom, if it is to be built. If the site offered at Mundford in the United Kingdom is chosen it would be a mixed blessing. Although our balance of payments would be improved, we would be responsible as host nation for the site and infrastructure costs, including houses, roads, hospitals, schools and 300 megawatts of electrical power and so on, to repeat the words of the Report. None of these costs are included in the figures that I have quoted, and it is not clear how they would be financed if we succeeded in our bid to have the accelerator on United Kingdom soil. Bearing this in mind, it is difficult to see how that particular condition of the Council could be fulfilled.
  Its last condition was that any increase in costs during construction should be met by corresponding economies in the nuclear physics budget as a whole, by cutting out something else. This condition indicates a lack of confidence by the Council in the estimates put forward, which is probably only too well founded. Secondly, it would be easy enough for the Secretary of State or the Nuclear Physics Board to agree with the best of intentions that they would allow these cuts, so as to keep the nuclear physics budget within an agreed percentage of the total S.R.C. Votes, and then, when the time comes, to find that there are perfectly good reasons for maintaining the whole of the nuclear physics sector in the style to which it has become accustomed.
  When we examine the advantages of this project—and the hon. Gentleman has had little to say on this except that we could not afford to remain out of an
  1388
  advancing area of knowledge with such exciting implications—we find that the arguments in favour of it are extremely flimsy. The Report spoke of the:
  "… extreme scientific interest and importance of the results and the influence on other branches of physics."
  When one looks at this in practical detail one finds that a very small number of Ph.D. graduates who have been engaged on the 28 GeV accelerator ever go into industry. It is something like three or four a year. We find that the benefit from the experience of the 500 professional staff who work at C.E.R.N. never comes back to the industry again. Only six a year on average go from C.E.R.N. to the whole of European industry. The hon. Member said there had been practically no work for British industry in the construction of ancillary equipment of the GeV accelerator.
  As the Report says:
  "Unfortunately, British industries have been remarkably unsuccessful in securing C.E.R.N. contracts. Thus, in 1966, only £0·23 million worth of contracts were secured, although the C.E.R.N. contribution was £3·16 million. The proportion has been falling in recent years."
  Then there are the intangibles and general political benefits of participating in a European project. These ought to be calculated to appeal to me as a convinced European, if I felt that there would be any political fall-out from going ahead with them. I cannot really say that I do. I do not believe that our entry into Europe or the warmth with which we are received by the Germans, French or Italians is conditional upon our approval of this idea. It is not pretended in the Report that any direct commercial pay-off will be obtained for a long time, indeed if at all. It is remotely possible that the machine will confirm the existence of the hypothetical particles known as quarks, which would interact with one another through forces immensely stronger than those which hold the nucleus of an atom together, and enable us to tap a super-nuclear power at some time in the distant future. But if there is going to be some such development, it is at least a generation away, if it can be accomplished at all.
  Lastly, I come to some alternatives. The first is to opt out altogether from this field. I know the hon. Member for West Lothian (Mr. Dalyell) will accuse me of sacrilege when I say this,

  1389
  but I doubt whether the living standards of anybody in this country who is alive today would suffer one iota if we made that decision. Secondly, we could pursue the idea of a world machine as the next stage beyond the 70 GeV machine at Serpukhov and the 200 GeV machine at Weston, Illinois. According to the Nuclear Physics Board of the S.R.C., it was only after international discussions had made it clear that proposals for a possible world machine of 1,000 GeV were premature that the Americans decided to go ahead with their very large national project. Professor Swann's group itself said that if we ever decide to build a larger machine than the 300 GeV, it would have to be done on a much wider base than collaboration within Europe alone. The question is: Why not do it now?
  The third possibility is to spend much smaller sums of money on a programme aimed at cheaper accelerators. In a footnote to the Working Group's report, the idea of less orthodox designs based on superconducting magnets is dismissed because the magnet development programme "would involve undue delays". Yet such a programme could have very attractive commercial applications in electricity generation, whereas the technology of conventional accelerators yields practically no commercial fall-out whatsoever.
  The fourth suggestion is that we should wait till there has been time to evaluate the potential of collective ion accelerators, which, according to a symposium at Berkeley University in February, hold out the prospect of achieving very high energies at a much lower cost.
  Finally, why not wait till we can benefit from the experience of the United States and the Soviet Union of building and operating very large accelerators, benefiting from this experience in the sense that we could construct our own more cheaply? This is what I think the Germans would like Europe to do.
  I hope the Government will consider all these points carefully before arriving at a final decision, and that they will not commit the nation at this stage to a huge and uncontrollable project of this nature. If we are going to earn our living in the world, this colossal white elephant
  1390
  can no more be afforded than such status symbols as the TSR 2 which we have recently cut back. When everybody in Britain is having to tighten his belt, now is the time for the Government to set an example.
  Mr. Speaker: I would remind the House that we are in the midst of the sixth of 25 debates which will take place during the night, most of which will not be heard by hon. Members now present. Reasonably brief speeches will help.
  3.24 a.m.
  Mr. Tam Dalyell: I was very surprised to hear the hon. Member for Orpington (Mr. Lubbock) dismiss the project that we are discussing as a colossal white elephant. I suppose it depends how one looks at this, but surely particle physics is one of the central disciplines of the next 10 or 20 years, and, although the hon. Member made an intelligent and well-argued speech in which he stated his point of view, I do not think he can dismiss this as a colossal white elephant.
  I wish to take up the hon. Member for Orpington briefly on one or two points. Does he have any evidence—or can the Minister produce any evidence—that the West Germans are thinking of dropping out? I do not think that there is any evidence of this. Again, these projection figures seem to be a little dubious. One could make this sort of statement about any advanced technology.
  I find the hon. Member's speech astonishing for one who has frequently spoken to the House about the need to keep aircraft teams on this side of the Atlantic, and the need to keep in being the B.A.C. design team at Walton. One of the issues is the whole future of European science. If we were to opt out—or if we were to postpone, and wait and dilly-dally on this—surely the scientists in this field would truly brain-drain across the Atlantic. To discuss this matter without bringing in the question of the brain drain is rather unrealistic.
  I am conscious of your request that we should be extremely short in our speeches, Mr. Speaker, and I will therefore confine myself to an examination of the crucial issue of the Minority Report of Sir

  1391
  Ronald Nyholm and Mr. E. R. H. Jones. They start by saying:
  "We recognise that a good case on purely scientific grounds has been made for proceeding with this project."
  In a sense this takes care of many of the arguments put forward by the hon. Member for Orpington. They then go on to say that they are acutely aware
  "that there are other scientific fields which, cultivated and nurtured as nuclear physics has been in recent years, would yield still richer harvests."
  This assumes that comparison is to be made within the scientific budget and the S.R.C. budget. I do not see why we should bring this kind of comparison into the argument. We can compare all sorts of other matters. Why not compare it with some segment of defence expenditure. I am not going into that argument this evening, but it is just as legitimate to compare a segment of defence expenditure with the cost of the project in terms of policy, or to compare it with possible expenditure on molecular biology or any other favourite field.
  Mr. E. R. H. Jones and Sir Ronald Nyholm say that:
  "for the next ten years the Scientific Research Council expenditure on a single branch of physics will continue to consume more than 40 per cent. of the funds which seem likely to be available."
  Are we quite certain that we are arguing in terms of a fixed area? If we are to go ahead with this, does it necessarily exclude other fields in which the Council is interested—or is this a rather misleading innuendo? I am not saying that it is done on purpose, but is this a misleading innuendo by the authors of the Minority Report? This is a crucial question.
  They ask:
  "Can we expect them calmly to accept a slowing down of their activities whilst we go ahead with a huge project which will directly benefit only two or three hundred academic physicists?"
  Surely the advantages of fundamental research of this kind are not limited to the interests of two or three hundred academic physicists? I have been to C.E.R.N. I have spent three days there. Although this in no sense makes me an expert, surely I am entitled to say that innuendos to the fact that it benefits only a small, highly-élite number of
  1392
  nuclear physicists are a little wide of the mark.
  I would not end my speech without thanking the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) for raising this important subject, and for praising the Government as he did for the way in which they have at least given us the facts. Whatever else may be said, I think this kind of document is perhaps a model for any future highly technical decision of this kind. I would in particular draw attention to paragraph 8 of the document, which states:
  "Rarely can a project of this kind have been so thoroughly and expertly examined. For this reason and the intrinsic interest of the subject we readily agree with the Scientific Council that the studies should be published."
  I think that that is all extremely praiseworthy.
  Finally, I think that, yes, we should discuss the possibilities of a worked machine. When I was in Russia it certainly seemed that the Russians who were working on this kind of project were extremely interested in any realistic proposition which the West would put forward. To dismiss this kind of project—in terms of finance as being rather friendless and of benefit to only a small number of esoteric physicists seems to me to be wide of the mark. As my hon. Friend knows, I have written to both the Secretary of State for Education and Science and also to the Chancellor on this, and I hope the Government will give it sympathetic consideration.
  3.32 a.m.
  The Minister of State, Department of Education and Science (Mrs. Shirley Williams): May I also thank the hon. Gentleman the Member for the Isle of Ely (Sir H. Legge-Bourke) for raising this subject, and for the kind words he expressed about the publication of the Report of the C.S.P. and the S.R.C. I am sure my right hon. Friend will take note of the praise of Members of this House, and I trust that we shall continue to give the fullest information we can in a field in which informed debate is crucial.
  I shall endeavour to answer the questions raised and also to deal with the present situation with regard to the 300 GeV accelerator project. I think the first point to make is that the estimated cost of the project following devaluation is now set at £175 million for the cost of

  1393
  construction, with recurrent cost estimated at £30 million per annum. So the estimated cost at present of Britain's contribution would be something like £44 million over the period of eight to nine years which the construction period is expected to take.
  Having said that, I think one must then qualify it by saying that C.E.R.N. contributions are based on estimates of gross national product. An estimate of Britain's gross national product as affected by devaluation, in general a reduction of one-sixth, will only be taken into account in the post-1967 period in about four or five years' time. So, with the best will in the world, I cannot be very helpful to the hon. Member for Orpington (Mr. Lubbock) there. However, I would make the point that the effect of devaluation on the gross national product would be balanced out to some extent by any improvement in G.N.P. following devaluation. So it is fair to say that one could perhaps estimate 20 per cent. to 25 per cent. still at the end of the period of construction about which we are speaking.
  As the hon. Member for the Isle of Ely said, this would be, as it stands, the largest single project of its kind in the world. There is room, of course, for the American project to grow from the 200 GeV, the present estimated design and energy, to a 400 GeV, which would be its full capacity as at present designed. But, on the immediate basis of that and the Russian project which has been completed, there is no doubt that the European project would be the largest single one by the time at which construction had been completed. Apart from the costs, there will be a fairly heavy manpower requirement of approximately 2,500 in the first instance, rising to a steady level of about 4,000, as far as we know.
  No one would question the desirability of the project, all other things being equal, since, as the hon. Member for Isle of Ely said and as my hon. Friend the Member for West Lothian (Mr. Dalyell) repeated, there are possibilities in nuclear physics of a kind that one can only begin to see over the distant horizons and which may well produce eventually a source of energy, the level of which we cannot begin to imagine.
  1394
  Having said that, in a few moments I will deal with some of the points made by the hon. Member for Orpington in respect of the development of other sciences, the competition that this project will be to other sciences, and the effect on the science budgets of trying to take in this project. However, before that, I want briefly to sum up the present state of the negotiations.
  On the original timetable, December was to be the Council meeting at which all those countries who wished to participate and who were members of C.E.R.N. would declare their positions. But, as the hon. Member for Isle of Ely will know, by the December meeting only Austria, Belgium and France, of whom France only has a substantial share of the C.E.R.N. budget, had committed themselves to participation. The other countries had not and, in particular, both West Germany and Britain had reserved their positions.
  Several matters came up at this point. As the hon. Member for Orpington pointed out, there were suggestions for a further examination of the design of the project. There were suggestions that the sites should be more closely looked into and, if possible, alternative costs of those sites should be estimated. Although it has not been done in detail, the competition is extremely severe and, although the British project is in the running, it is true to say that there are at least seven other sites, and it would be impossible for me to say that there was a strong chance of the British site being chosen. I wish it were otherwise, 'but it is only fair to say that it is very much in the balance and that our site is only one of a number being considered by C.E.R.N.
  There is then the question of escalation of costs, to which both the Council for Scientific Policy and the Science Research Council paid a good deal of attention in their advice to the Secretary of State. As the hon. Member for Orpington said, in the case of the Council for Scientific Policy, an attempt was made to link any acceptance of the project to what can only be described as very stringent conditions in respect of possible escalation. The Council recognised that possible escalation in a project of this kind which is moving into the advanced areas of science was almost incalculable

  1395
  and might mean that the ultimate costs of both construction and running were very much higher than the present estimates available to us. Nevertheless, as hon. Members have pointed out, the Council finally advised, on balance rather than indisputably, in favour of this country going ahead with its share of the project. It did so on the basis of the maintenance of a 9 per cent. average rate of increase for 10 years in the science budget.
  The nearest that I can get in answer to my hon. Friend the Member for West Lothian is that, in 1967–68, the increase in the science budget was 11 per cent. In 1968–69, following various economies, it was 7½ per cent. In 1969–70, which is the latest year for which allocations have so far been made, the estimated figure is 7·8 per cent.
  Although it is possible that there may be at least a levelling out or even an improvement in the budget, at the moment the 9 per cent. rate is not being maintained, and it is difficult to commit oneself clearly to saying that it will be able to be maintained for 10 years, as a rate of increase in scientific expenditure in absolute terms. It is impossible to say exactly what the figure will be for the S.R.C., for the straightforward reason that the Council for Scientific Policy has not yet indicated its allocations. Within the provisional allocations for 1969–70, which is the last year for which allocations have been made, whereas the overall increase in the science budget is 7·8 per cent., the specific increase in the science budget for the Science Research Council, under which nuclear physics comes, is only 5·6 per cent., so it is well below the 9 per cent. to which the C.S.P. referred. Within this total in the present year nuclear physics amounts to 43 per cent. So the note of reservation of the minority report by the two chemists to the S.R.Cs. recommendations is not far off the mark in suggesting that something of the order of 40 per cent. would be likely to be required for one branch of nuclear physics over the period of ten years about which we are concerned.
  Sir H. Legge-Bourke: Does the hon. Lady realise, in saying that, that the minority report was drawn up on the assumption that the S.R.C. vote was not
  1396
  likely to be increased in the foreseeable future?
  Mrs. Williams: I fully accept that. I think that all that we can talk about is the present year and the next year for which allocations have been made. These are the only figures which are absolutely firm and definite. It is within the scope of those figures that I am speaking. I do not think that 40 per cent. is far off the mark on a projection of present figures. That is as far as I wish to go on that point.
  Reference has been made to competing areas of science. Unquestionably the 300 GeV project would maintain and possibly increase the European, and more specifically the British, position in high energy nuclear physics. This cannot be denied. But there is a considerable British lead at least in Europe—and some would say internationally—in other spheres of science. Molecular biology is one which was mentioned by the hon. Member for Orpington (Mr. Lubbock). There are others, such as plasma physics, where it may be said that the British position is very strong.
  The difficult question—difficult for the Council to advise upon and difficult for my right hon. Friend to decide—is precisely what the scientific and perhaps technological returns on any given investment in scientific research are likely to be. It may be that a large investment in nuclear physics will prove to have been well made. But there is some feeling in the scientific community that the share that has gone to nuclear physics over the last ten years is rather high as against the requirements of other sciences.
  Two other points were raised. The hon. and gallant Gentleman the Member for the Isle of Ely fairly said that the present commercial returns from C.E.R.N. have not been great, and he gave some figures. I should like to mention other figures. In 1966 our contribution to C.E.R.N. came to £3·16 million and our total contracts from C.E.R.N. came to £230,000. This is not the fault entirely of C.E.R.N. It is the case that perhaps because it is in Geneva there is a certain remoteness about industry taking up such contracts.
  Mr. Dalyell: Surely the hon. Lady is presenting an argument for European science, as such, having a

  1397
  system of swings and roundabouts, whereby the British may lose on one project and gain on another out of proportion to input. For example, we could have a package deal gaining on the Dragon project at Winfrith what we lose at Geneva.
  Mrs. Williams: That would be a fair proposition. But, as the right hon. Gentleman the Member for St. Marylebone (Mr. Hogg) pointed out about six months ago, by and large Britain has not had as large a share of European contracts in the scientific sphere as her contribution would suggest she would have. This is not all the fault of industry but it shows that there is a good deal that British industry might learn about the rate of growth in these areas of scientific endeavour.
  Finally, as the hon. Member for Orpington pointed out, there are major questions about whether technological breakthroughs are involved in the 300 GeV project. As matters stand the breakthroughs look as though they will be scientific rather than technological. It has been said, I think by the West Germans, that it is worth considering the possibility of whether there might be more advanced technology if one were to consider, for example, the American and Russian projects in slightly more detail. In other words, some people might think that there was some case for a little delay on this.
  There has been a question of whether there might be some exchange of research projects between the Serpukhov accelerator, and later the Weston one, and the project for Intersecting Storage Rings in C.E.R.N. The hon. Gentleman will be interested to know that this has been put forward specifically. It has our support, and we would like to see forms of co-operation of this kind.
  I think that my concluding words to the House must be that no decision has yet been made. There are still a number of outstanding matters to be considered carefully, notably some of the queries which have been raised by other member countries of C.E.R.N. We hope that a decision will be made before long, and I shall ask my right hon. Friend to bear in mind the comments made by hon. Members during this very interesting debate.

  FUEL AND POWER POLICY
  3.46 a.m.
  Mr. Peter Hordern: In my view there should have been a debate on the Government's White Paper on Fuel Policy several months ago, and, furthermore, it should have taken place on a Government Motion. However, I consider myself very fortunate in being able to raise this topic, even at this late hour, for it is of cardinal importance both for the economic and the social future of this country.
  I do not for a moment quarrel with the way in which the Government's calculations in the White Paper are presented, but I quarrel with their conclusions. The reason I do so lies not so much in the findings of the White Paper, but in the seeming failure of the Government to co-ordinate the activities of different Ministries. In short, the calculations in the White Paper are based primarily on the number of men the Government think can be retrained and redeployed from the coal industry.
  The calculations that are supplied are that there will be room for 17,000 trained men in Government retraining centres by the end of this year, and that this capacity will be extended to 20,500 men by the early 'seventies. I regard this figure as simply ludicrous. In France the figure will be 74,500 by the same date, and I recently visited the Ministry of Social Affairs in France to study at first hand the operation of the National Employment Fund, and in particular to inquire whether there was any good reason why our retraining centres should not be expanded to retrain 70,000 men in 1970, or roughly three and a half times the number at present proposed. There is none. What is more, there is no reason why the number being retrained should not be 100,000 in the early 'seventies. It is vital that there should be this capacity in Government retraining centres, otherwise it will not be possible to allow the coal industry to be run down faster than the rate envisaged in the White Paper. This capacity both can, and should, be created now.
  There are many hon. Members whose aim it is to improve the lives of miners. I hope that they will forgive me, though I doubt whether they will, if I say that

  1399
  the best way that this can be accomplished is to make it possible for more men to leave the mining industry. For many years the miners have lived and worked in conditions that are dangerous both to health and to life itself, and now, at last, through the discovery of North Sea gas, and through the development of nuclear energy, it is possible to reduce the number of men affected by these conditions. The folly of the White Paper is that it is a shabby compromise which fails to make the most of a cheap energy policy, and it fails to deal with the security and retraining of miners.
  The Government claim that national considerations need to be taken into account, including the security of supply, the fullest use of resources, the balance of payments, and the economic, social and human consequences of changes in the supply pattern. But there is another major consideration. Power is a primary factor in the cost of production. Its price lies largely in the Government's control and it is essential therefore that power should be provided to industry at least as cheaply as it is to our competitors abroad, but this is not being done. The cost of electricity is markedly cheaper for our industrial competitors in the United States and Canada and the wholesale price of our coal rose by 20 per cent. between 1959 and 1965, by 10 per cent. in West Germany, and actually fell, by about 4 per cent., in the United States.
  The increase in the price of coal is a continuous trend and we know that increases in some prices of other fuels are to come. It should be the Government's duty to provide energy to industry at a cheaper rate than it is available to our competitors, but this criterion has not been seriously considered.
  Further, if one considers the relative size of the coal industries of France and West Germany with our own, one finds that the internal level of demand for coal was 116 million tons in West Germany in 1966, and only 84 million tons in France, the Netherlands and Belgium combined, and this compares with 177 million tons for the United Kingdom in the same year.
  The Government's fuel policy is such that, even by 1975, internal demand for coal, at 118 million tons, will still be larger than West German demand now
  1400
  and much larger than that for France, Holland and Belgium combined. If, as seems likely, there will be even greater advantages in cost for fuels other than coal by the mid-seventies, it is imperative that we should be able to benefit from them. What is more, the huge capital investment in nuclear energy by the Conservative Government in the 1950s, which put Britain first in the field, is too vital to be whittled away, because the coal industry needs special protection.
  The present plans for nuclear energy are to provide 8,000 megawatts between 1970 and 1975 as the second nuclear programme. The first programme will provide 5,000 megawatts when completed by 1969, making 13,000 megawatts in all by 1975. In the United States, installed nuclear capacity will be 12,900 megawatts by 1970, but is expected to grow to 72,000 mekawatts by 1975. Nuclear plants with a capacity of 12,500 megawatts were ordered in the first six months of 1967, yet coal in the United States costs less than half the pithead price in the United Kingdom.
  We shall never be able to match this sort of progression in nuclear power, but it would be madness not to proceed with our own fast breeder programme, where we have a clear lead, as rapidly as possible.
  Alcan has caused something of a stir by ordering a coal-fired power station at Invergordon for its new aluminium smelter. No details of price have been given, but it must be cheaper than anything offered to the C.E.G.B. In any case, as the White Paper pointed out:
  "Even if extra coal could be supplied to the C.E.G.B. at or below the break-even price, this cheaper coal should be considered to be available to dispense with a corresponding quantity of the coal being burned in existing stations, for which higher prices were being paid. It is thus the higher price coal that must be considered as being displaced by nuclear power."
  As for the future of nuclear power, the White Paper considers it a reasonable assumption that, by about 1980, A.G.R. generating costs should be down to a level of at least 20 per cent. below those of the A.G.R. stations now under construction.
  There are firm grounds for thinking that our energy is not being provided at competitive levels, compared with some of our overseas competitors, and that this

  1401
  relative position is likely to deteriorate because of the large sector of the energy market which is now provided by coal.
  I turn now to the advantages given to our coal industry. The N.C.B. had £415 million written off its capital debt in 1965, yet, despite an increase in the price of coal in the spring of 1966, the Board was unable to afford to meet the difference between depreciation of assets at historic and replacement cost, for which its target is £10 million a year. It finished the year with a small surplus of £300,000. No coal is imported, yet our competitors in the E.E.C. import both American and East European coal. The Government's projections not only allow no coal to be imported until 1975, but will not even allow coal-fired power stations to be converted to oil. Coal is further protected by the tax of 2·2d. a gallon on fuel oil.
  As for natural gas, the Government were surely right to authorise the construction of a nation-wide transmission system for natural gas by 1970. It was unfortunate that the Gas Council did not fix the rate with the producers before devaluation, as it is now certain to be more expensive. However, it is impossible to justify a policy of keeping one-quarter of the available supply of natural gas under the sea in 1970 so that the coal industry may be allowed to sell more coal to the C.E.G.B. Nevertheless, this is the Government's policy. The Parliamentary Secretary will see this set out in chapter and verse in the White Paper.
  Thus, coal is being protected at great cost to our economy and to our competitive position. By 1970 the level of coal production will be held to 155 million tons, which includes 3 million tons of exports. Even with a continuance of the 2·2d. a gallon fuel tax and the present intention to use coal in power stations, inland demand should not be above 146 million tons in that year.
  As it is, the C.E.G.B. and the Gas Council will have to use an extra 6 million tons of coal per annum up to 1970, which will cost the taxpayer about £45 million. Now the C.E.G.B.'s requirement of coal for power stations is expected to be 70 million tons in 1970, against 15 million tons coal equivalent of oil. As it takes five years to get a power station on stream, it is of cardinal importance to decide now what the level
  1402
  of coal protection, and of production, should be if we really mean to get a cheap fuel policy in the 1970s.
  The Government have decided that the fuel tax of 2·2d a gallon should remain until 1975. I believe this to be an indefensible decision. It is based on the social problem of having to deal with a planned outflow of 35,000 men a year, caused primarily by improved productivity. Yet this should not be a problem. It should be regarded as an opportunity to get our miners out of the dark, dangerous and degrading circumstances in which they have laboured for generations.
  I suggest that the fuel tax of 2·2d. a gallon should be removed altogether in 1971. The consequences would appear to be these. First, costs would be drastically reduced. Of all coal produced in 1966–67, only about 100 million tons was competitive with oil in price ex-refinery and pithead. Of this total, about 60 million tons was required for coke making, gas carbonisation and domestic use, and this amount can be expected to run down more slowly as price is not the most important factor. But run down it will. Only about 50 million tons of our coal production appears to be really competitive on a straight comparison of costs with oil before special uses and existing circumstance are taken into account.
  If we then assume that coal production were to be 100 million tons in 1975—instead of 120 million tons—could the oil industry fill the gap? There seems no doubt that it could. In 1967 oil demand was 120 m.t.c.e., so that a growth rate of 4 per cent. would be required to reach 165 m.t.c.e., much lower than past rates. Refining capacity is already being increased from 86 million tons of oil to 135 million tons by 1972, and should be sufficient to cover any reasonable increase in demand by 1975.
  What of the effect on the balance of payments? Before devaluation, the net delivered cost of oil was about £300 million to our balance of payments. That was in 1965. Even if it were £500 million to £600 million in the 1970s, one should offset the considerable price advantage given to our exports which are largely fuel-intensive. One should also take into account the use of oil as a chemical feedstock which can often be substituted

  1403
  for more expensive natural imports such as textiles and rubber.
  Then there are the strategic risks, but at present United Kingdom oil demand is less than 5 per cent. of the world total. Massive stocks can be built up. Whatever their political differences, there is a strong mutual interest between suppliers and users, besides the oil companies' flexibility, which was well demonstrated last year.
  The Coal Board's problems are plain enough not to have to resort to speculation. There are 28 million tons stockpiled, and the industry has been run down for many years, and so it should be. On average, 30,000 men a year have left during the last decade. During the last three years the run-down has been 28,000, 41,000 and 26,500, but the level of unemployment has not risen by more than 1·3 per cent. within the industry. During the same period inland demand for coal has fallen from 188 million tons to 165 million tons last year.
  The average cost of coal rose by 4·6 per cent. between 1964–65 and 1965–66 and by 6·4 per cent. between 1965–66 and 1966–67, despite increases in productivity of 3·4 per cent. and 1·4 per cent. in those years. We are told that, without any further fall in the level of coal demand, the expected improvement of productivity will lead to a reduction of about 105,000 in the number of miners by 1970–71—about 26,000 a year. Let us accept that figure. With the number of places available in Government retraining centres—17,000 at the end of 1967—it is impracticable to consider the run-down of coal production below 5 million tons this year and next. The N.C.B. is working on the assumption that 35,000 men will be released this year.
  If however, a really substantial effort were made to build retraining centres so that 70,000 men in 1970 could be retrained compared with the proposed 20,500, it should be possible in that year to release 50,000 men and thus to resume the normal rate of run-down of some 10 million tons a year and more thereafter. The level of coal production in 1970, therefore, should be 145 million tons, which matches the Government's own expectation of inland demand of 146 million tons. After 1970 it should
  1404
  be possible to increase the number of retraining centres to about 100,000 men a year. In that event, and if 2·2d. a gallon fuel tax were removed, the maximum level of coal demand would be 100 million tons in 1975 against the Government's plan for 118 million tons. With industry absorbing 25,000 men a year, and the retraining centres a further 25,000 at least, the figure that so shocked Lord Robens of coal production at 80 million tons and a labour force of 64,500 men by 1980 should be manageable by 1975 if resolute action were taken now. It is impossible to say with any certainty what the level of coal demand will be in 1975, but I am convinced that it should be allowed to find its own economic level, and that level cannot be above 100 million tons by that date.
  Is it desirable that the coal industry should be run down so rapidly? In terms of cheap fuel, certainly. In human terms, which is by far the most important factor, abundantly so. I am sorry that the White Paper has not seized this opportunity.
  Several Hon. Members rose—
  Mr. Speaker: Order. I would remind hon. Members that this is the seventh of 26 debates which will take place during the night, during which time most hon. Members who are here now will not be present.
  4.5 a.m.
  Mr. Michael McGuire: I note your warning, Mr. Speaker, about this debate and the number of subjects still to come. I do not think that hon. Members interested in the present discussion can be held responsible for our being only at the seventh subject. This is a most important subject, and I am grateful to the hon. Member for Horsham (Mr. Hordern) for raising it, although I disagree with a lot he said and I intend to show that some of his arguments are false.
  Because of devaluation, the Fuel Policy White Paper is out of date. It was largely based on assumptions about the future price of oil, and the hon. Gentleman did not pay enough attention to the rise in the cost of oil as a result of devaluation, which will have growing repercussions for some time to come. The forecasts in the White Paper about the price of oil were

  1405
  rash enough in 1967. In paragraph 72 it set out the assumptions on which the Government's policy is based, one of them being that
  "Oil will continue to be available at a price competitive with coal".
  That was a bold forecast. For the first time now, the Organisation of Petroleum Exporting Countries, which represents the Governments of those countries which we used to call under-developed—but which we now euphemistically call developing countries, because we must not hurt their feelings—is undertaking concerted action to raise the price of crude oil. This development, together with the continuing problem of the closure of the Suez Canal, brings into question the wisdom of the Government's attitude to oil. Devaluation has dealt a severe blow to their forecasts as well. The costs of oil-fired power stations have risen by about 9 per cent. So much for price stability.
  Speaking on television on the day the White Paper was published, my right hon. Friend the Minister of Power said that demand for oil was what the economists describe as inelastic. I presume he meant by that that, if we import more and more crude oil to be refined here into petrol, aviation spirit and non-fuel products, we must find a market for the residual fuel oil. This always used to be so, but I understand that, with modern refining practice, it is possible to minimise the proportion of fuel oil produced. Indeed, I believe that there are refineries in the United States which make no fuel oil at all. They crack the crude down and there is no residual fuel oil such as we have at our refineries.
  If my right hon. Friend based his remark on television on information given to him by his oil experts, I suggest that he looks at the advice which he was given in the preparation of the White Paper. Clearly, his advisers are well behind the times. If the growth in oil consumption envisaged in the Fuel Policy White Paper is based on the theory of inelasticity of demand, it should be reconsidered.
  Paragraph 44 of the White Paper stresses the contribution which the United Kingdom oil industry makes to the economy, particularly to technologically progressive industries such as petrochemicals, by supplying a range of products
  1406
  for non-fuel uses—synthetic fibres, pesticides, fertilisers, lubricants and road-making bitumen. No reference is made in the White Paper to the specific contribution which non-fuel uses of coal and coal-based chemicals make to the technologically progressive industries. The value in 1966 is shown as £39,500,000. The value of intermediate and end products derived from these chemicals is much higher, but detailed information is not given. No account is taken of the value of gas produced from coal. During 1966 the value of exports of chemicals derived from coal was £3,750,000.
  Devaluation increased the price of North Sea gas, so much so that the Minister of Power, when he announced in the House the negotiated figure of 2·87d., declined to answer my question. I asked what amount had devaluation put on the agreed price. I am not being unkind to him because we on these benches are used to non-answers. He gave the usual, "waffly", cotton wool-type of answer shrouded in a veil of secrecy. The answer was that as there were further negotiations with other companies he could not divulge the amount because it affected different companies in different ways. Of course it does. The more non-British capital in the company the greater the increase would be. I wanted to know what had been the amount included in the agreement with Phillips and I did not get an answer. I hope I will not be thought unkind if I suggest that if it had not been very much the answer would have come tumbling out. The Minister would not have been able to get up quick enough to give it.
  It is to be hoped that the forecasts made about natural gas will come true. All hon. Members agree that hope is one of the commodities which has not yet been ruinously devalued. But we should probe the matter a little deeper and ask whether the gas industry will succeed in its aim to double the sales of gas in the next three years. This is a tremendous marketing problem and it will not be made any easier by the present proposals for big increase in the price of gas. The Minister has committed himself to saying that natural gas should be brought rapidly into use.
  Will the Minister give an assurance that, if the market does not take as much gas as he hopes, he will not seek to achieve his forecasts by pushing gas

  1407
  under power station boilers at the expense of coal? Will he promise, if the need arises, to use gas instead of oil thus ensuring that the balance of payments benefits? The coal industry has already lost a big power station market because of the Magnox nuclear stations for which there was no economic justification.
  Mr. Arthur Palmer: Is my hon. Friend aware that it is likely to cost the country £400 million to convert domestic gas appliances to use natural gas?
  Mr. McGuire: I am grateful to my hon. Friend for anticipating what I was going to say. The figure of £400 million is optimistic, based on the experiment of converting the appliances on Canvey Island. I doubt, too, whether we have the fitters. I do not want to be accused of being derogatory, but I do not think that it takes terribly skilled men to do the conversions, yet I doubt whether they will be available. That is one of the reasons why we should probe a little deeper into the rosy forecasts about natural gas. Before the price was agreed my right hon. Friend told the House in answer to a Question that in order to be competitive it would have to be delivered at power stations at 2½d. a therm. We now know that that landed price will be 2·87d., and therefore the rosy forecasts before devaluation must have had a bit of a knock.
  I turn to the question of nuclear power. In the past some of my hon. Friends and I have expressed our doubts about carrying on with the planned programme for the second generation of nuclear power stations. We are often accused of being flat-earthers or Luddites, but my hon. Friends and I welcome nuclear power. We have said so here and elsewhere. We think that it is necessary for a nation as technologically advanced as Britain to keep in the forefront of this new development of energy generation. But we must remember that forecasts have been made in the past by people I call rosy-dawners, who always promised the rosy dawn with the new nuclear power, but whose forecasts have never come true. I know that forecasting in anything is very difficult, but if these people had to make their living tipping winners in the newspapers
  1408
  they would not be sacked but would be shot by the punters, because the results have been so outrageously outside what they said would happen.
  We—the miners' M.P.s—questioned some of the figures based on experience. As a famous countryman of mine said, experience is the name we give to our past mistakes. In 1955 the rosy-dawners said, "Here is a new way of generating energy. Fossil fuels are out. This will produce electricity at 0·6d. per unit as against the best conventional method at between 0·6d. and 0·7d." Those forecasts have never come anywhere near being true. Therefore, should not we ask my hon. Friend to admit that it is necessary to recast the nuclear programme, not merely in view of devaluation but because of the very optimistic forecasts which week by week are being proved wrong?
  The White Paper is being made more out of date every time a Parliamentary Question is asked about the cost per unit sent out from the A.G.R. stations. The White Paper could do nothing about Magnox. That is water under the bridge. The last of those will be in commission in 12 months, and we cannot do anything about it.
  The Minister says to miners' representatives, "These stations are already built, lads. It costs £500 million more than a conventional power station would have done, but we have to use them. It would be the height of folly not to, and we did say that fuel costs would be much less."
  We say, "If you carry on with five planned A.G.R. stations, it will be small consolation to the miners to be proved right in 1980 when we could have corrected it by 1968 or 1969."
  When the Minister says that he is bolstering up the coal industry by the figure of 6 million tons, of coal burnt, more than would have been, we recognise it, but 20 million tons will have been displaced by the eight committed Magnox stations which are in production and which produce not one unit with coal. We are acknowledging the aid the Minister is giving to the industry in the interim period, but we ask, can he seriously justify this when, week after week, we get these figures knocked cockeyed by his own answers. Can he justify carrying on with the five planned stations?

  1409
  The coal industry knows, if its main customers run away from it, that it should be planning beyond the mid-1970's, and not take it from the Minister that it will have what he once said would be a rosy future. When I mentioned that on 18th July, he said that it was merely a good future. But how can the industry have a future with the C.E.G.B. whose needs will give us nothing like the demand we need in the mid-1970's? The coal industry wants a shot of confidence—that, if the industry can match its competitiveness within the targets generally laid down between 3d. and 4d. a therm delivered to the C.E.G.B, it is in the market for new power stations. But I ask the Minister how there can be a future without a conventional station planned beyond 1971. Drax is the last conventionally planned coal-fired station.
  Yet, when on 5th March I asked the Minister to set out which coal-fired power station he estimated would produce the cheapest electricity in the years 1968 to 1971, and
  "what will be the cost per unit sent out; and if he will give similar information about the cheapest nuclear power in those years."—[OFFICIAL REPORT, 5th March, 1968; Vol. 760, c. 53.]
  my hon. Friend replied that Ratcliffe-onSoar, a coal-fired station now in commission, whose costs for coal purposes are anyway unlikely to increase, will be sending out electricity at a cost per unit of 0·54d. up to 1971. Even the much vaunted Dungerness B will not be doing anything like that. Its cost per unit will be 0·57d. per unit, which does not include a royalty of 0·014d. It will not be competitive and this is in the new generation of A.G.R.s, the second planned nuclear power programme.
  Even up to 1972, despite forecasts to the contrary as recent as 1965, coal will still be the best fuel for power stations. It will still be competitive on a cost per unit basis. The nuclear-power station sites are still to go on stream and the way costs are increasing makes one doubt whether the forecast of 0·57d. will prove correct. I should not be surprised to see an increase.
  Mr. Speaker: Order. I appeal to the hon. Gentleman. This is the seventh debate—I repeat, the seventh debate—tonight of 26 debates. Other hon. Mem-
  1410
  bers wish to speak in this debate. Even if this one lasted only an hour, it would mean that the whole debate on the Consolidated Fund Bill would last 26 hours. I hope that the hon. Gentleman will respond to the appeal that I am making.
  Mr. McGuire: I will, Mr. Speaker. But, as I said when you referred to this before calling me, one may ask why we are only at the seventh debate. I may have been speaking for half an hour but some hon. Members earlier must have been making long speeches or middling speeches. I do not think that we can be accused of delaying the proceedings, although I take note of what you say and will wind up perhaps a little earlier than I should. But we are always on the night shift when debating the coal industry. I do not know why this is but our appetite for debating the Fuel Policy White Paper is not helped by the fact that we are always on the night turn, and one assumes that we are not delaying many hon. Members because, with 26 debates on the board. I doubt whether the optimism among hon. Members who have debates after No. 12 will be justified. I will wind up on this point.
  In a debate on 18th July, again on the night shift, when we were discussing the coal industry and the forecast of its future, I recalled that Thomas Jefferson said that he did not like engaging in what he called the "morbid rage of debates", because he did not think any good came of it. He believed that people were more likely to be influenced in the quietness of their own homes by reading what had been said, presumably with some logic and sincerity. It is in this sense that I hope to influence my right hon. Friend.
  I know that my hon. Friends for Bristol, Central (Mr. Palmer) and Midlothian (Mr. Eadie) will want to draw out further features of the White Paper. The nuclear power programme was planned in 1955, when there was a shortage of coal and the possibility that it would continue for some time. The second programme has been planned largely on the assumption that nuclear power will be more competitive than coal, because it assumed the stability of nuclear power forecasts and the instability of coal costs.
  If the C.E.G.B. is the biggest customer then is this the rationale in deciding not to build, or not to go ahead and build

  1411
  conventional stations? I would point out that of the 60-odd million tons taken by the C.E.G.B., about one-third has not increased in price for the last seven years, one-third has increased once in that period, and it is the final third which causes the trouble. The Coal Board, on its own initiative, was taking steps to trim off this expensive one-third and concentrate competition in the better two-thirds. If the Board achieves cost competitiveness within the guide lines laid down where will the coal be burned in the future? I will end there and I hope, Mr. Speaker, that you will agree that I have not taken up too much time.
  4.32 a.m.
  Mr. Alex Eadie: I too always feel that I am on the night shift when we debate coal in this House. Nevertheless it is important that we try to draw out some important features of the White Paper. I am grateful to the hon. Member for Horsham (Mr. Hordern) for initiating the debate, although I will probably clash with him over it. I want to challenge some of the concepts of the White Paper. We do not accept that there will be the inevitable run-down in the mining industry, which is the sort of philosophy permeating the whole of the White Paper.
  The industry is now 21 years of age this year, since nationalisation. Nationalisation is sometimes looked upon as a bogey which has adversely affected the industry, but no miner would accept this and the facts do not support it.
  In 1947 output of deep-mined coal was 186·6 million tons and in 1966–67 it was 165·9 million tons. For opencast mining, the figures were, 1947, 10·2 million tons, 1966–67, 7·1 million tons. In 1947 there were 1,000 collieries—in 1966–67 there were 410. In 1947 we had 708,900 mineworkers. In December, 1967, there were 419,700. Output per man per year was 262 tons in 1947, but in 1966–67 it was 390·4 tons. The output per man-shift in 1947 was 21·5 cwt. and in 1966–67 it was 36·6 cwt. Indeed, the output per man-shift has increased since 1967.
  Another point to consider when we analyse the White Paper is whether the miners have been Luddites or whether they have responded to the cause of scientific and technological advance. The
  1412
  figures in respect of mechanised mining are: in 1947 3 per cent., and in 1966–67 85·7 per cent. The annual turnover in 1947 was £371 million, and in 1966–67 it was £890·2 million. The most significant figures are those relating to productivity, output per man shift, and the whole question of mechanisation.
  The miners have a genuine grouse about some of the implications in the White Paper. When the mines were taken over, one of the calculations made related to unforeseen profits. Many of the mines were closed because they were unprofitable. Yet the unforeseen profits were paid to the mineowners. We must remember that the unforeseen profits are at present borne on the backs of the miners. At Rothes colliery, in the area where I reside, when the sod was cut the Coal Board sank the mine according to the plans and never produced a penny profit. Millions of Pounds were spent there. Yet the Fife Coal Company received Payment based on the unforeseen profits.
  Therefore, one has to be fair when talking about costing. I do not want to keep the House up all night on this subject, though I could speak on it for hours. However, it is despicable that we should have a debate on costing in relation to the mining industry. Up to 1955 both parties in the House accepted the philosophy that the mining industry should be treated as a service industry and that the question of profitability did not matter. I was working at the coal face, and I remember the miners being told "Produce it as long as it is black. The nation needs it. Profitability does not matter." We were selling coal to industrialists at £2 below the cost of production, and no voices were raised on the question of profitability. We were a service industry. We have calculated that if we had then applied the dictum of fixing the price according to the market, there would be a sum of about £2,000 million on the balance sheet of the Coal Board at the present time. The question of the Coal Board being in the red or in the black would never have arisen.
  Looking at other aspects of the balance sheet, hon. Members will remember that in about 1949 to 1955 we were importing American coal. We had the ridiculous situation that the Coal Board had to pay

  1413
  for the loss—about £80 million. Indeed, that is really what it cost the miners. Imagine what would have happened if the agriculture industry had been treated on the same basis, or if the car industry had been treated like this, with the Government deciding to bring in something. The milers had to pay and the Coal Board had to pay. The country has forgotten these facts and it is time that people were reminded of them.
  What is the basic philosophy of the White Paper? Here I join with the hon. Member. The philosophy is not to do the miners a favour. My hon. and right hon. Friend have advanced the argument that mining coal is a dirty and dangerous job, and that miners should be given nice new jobs on the surface. But that is not what will happen, because the rate of run-down predicted means that it is not a question of the miners coming from below and going into nice new jobs; it is a question of thousands of miners being placed on the dole.
  If the miners can be put into types of employment more civilised and more relevant to the mid-twentieth century the miners and I will accept it.
  Mr. Hordern: That was the point that I was trying to make—that the Government's actions in reference to retraining centres and in providing further employment are entirely inadequate. I agree with the hon. Member.
  Mr. Eadie: I wish that the hon. Member's party had done more in relation to retraining. If it had we might not have been confronted with this problem.
  I want to put the matter into proper perspective. The argument is that coal is too dear. I do not accept that. I do not accept the philosophy behind the White Paper, which was withdrawn because of pressure from the miners' group. The argument was put forward in that document that because of devaluation certain changes would have to be made. But the White Paper is now a shambles, on the basis of costs. I do not know how my hon. Friend will defend it. What worries me is that my right hon. and hon. Friend can stump the country trying to defend it. There has been a call to debate the White Paper in the House, but I do not know what could be debated, because the White Paper requires to be
  1414
  scrapped. In a previous debate my hon. Friend and I said that the time had come to make a funeral pyre of the material in the White Paper.
  I know that this is pretty strong language. It reminds me of the old Chinese proverb, "Do not remove the fly from your friend's forehead with a hatchet."
  My hon. Friend and I have made no secret tonight that we want to attack the whole philosophy behind the White Paper. I do not like speaking in this way in this debate, but I cannot speak impersonally. I am speaking about people that I have worked with all my life—about people that I shall meet this weekend. Statistics about 105,000 men a year do not mean anything to me. I am talking about my friends at Michael Colliery. I have negotiated many times on their behalf. My own family work there. As for unemployment, my own brother-in-law is at present on the dole. Why is he on the dole? There is plenty of coal there. The miners there are some of the finest in the world. But the Coal Board, whether in conjunction with the Government or not, I do not know, says that the colliery is not a commercial proposition.
  One of our arguments with the Government is that we believe the Government can influence market trends. We do not believe the commercial argument about coal. If they want to do it, the Government can reopen the Michael Colliery; they can do it with the Coal Board; and the Government can influence market trends. This is one of the pleas I make this evening.
  The White Paper is an inconclusive document. It is full of guesses about oil, gas and coal. We have time after time advanced the argument that if this country relies too much on non-indigenous fuel, and allows it in in great abundance, then at a time of international crisis industry in this country can come to a standstill. We know the impact which the Suez crisis had in 1956. Although the impact of the last Middle East conflict was not so heavy on us, it is the sort of impact which could happen again. No one can predict with any certainty that oil supplies from the outside world will always reach this country safely. Therefore, the thinking behind the White Paper is all wrong,

  1415
  because the only thing it seems to be certain about is oil supplies.
  Let us consider the penetration of oil into the United Kingdom's economy. In 1956 coal consumption amounted to 217½ million tons; in 1964, 197·2 tons. The coal equivalent of oil consumption in 1957 was 36·7 million tons, and equal to 15 per cent. of total fuel consumed. It rose to 111·4 million tons in 1966, or 37½ per cent. of total fuel consumption. 'That year 70 million tons of coal equivalent was from the Middle East, 17 million tons from Libya, 12 million tons from Nigeria, and 20½ million tons coal equivalent from the rest of the world.
  I managed to get some figures of costs out in time for the debate. Between January, 1967, and January, 1968, the monthly cost of imported crude oil to Britain rose by £41·3 million to £47·5 million. The cost of importing residual fuel oil rose from £8 million in January, 1967, to £10·8 million in January, 1968. In October, 1967, a month before the White Paper, and before devaluation, residual fuel cost Britain £8·5 million. Yet the increase in the amount of residual fuel oil imported was only 186,000 tons. To get an extra 186,000 tons cost the country £2·3 million. The White Paper is a shambles, the costings are an absolute shambles.
  Because my hon. Friend has already dealt with it, I shall skim over some of the aspects of nuclear power, but there is one point I want to make and which he did not make. I agree with everything my hon. Friend said. We do not want a Luddite approach to this, we do not want to be Luddites about nuclear power. Our quarrel with it is that it is too large and too chancy, and that we must not commit the error that we made in relation to the Magnox programme.
  The argument is advanced that nuclear power is an indigenous fuel, but it is not. As I pointed out in the debate in November, taking the A.G.R. programme of 8,000 megawatts—which, incidentally, is about 20 million tons of coal equivalent—at that time it would have added about £10 million to our import charges because of the foreign exchange costs of uranium. That was the cost before devaluation, and there has been an increase since then.
  1416
  My hon. Friend spoke about the Magnox nuclear power station programme. He did not mention the figures involved, but they were £525 million more than the cost of the equivalent coal-fired power station. If one works it out, that blunder cost 28,000 miners their jobs. That is why I raise the question of costs, because it is argued in the White Paper that coal is too dear. Yet here is a nation in the middle of an economic crisis, spending money like a man with no arms. It has been argued that the Magnox programme was necessary if we were to hold our place in the technological world, but it was a failure and, to some extent, a misappropriation of public funds.
  Mr. McGuire: Before my hon. Friend leaves his point about uranium costs, is he aware of the article in yesterday's Guardian expressing the concern being felt in America and other countries which have nuclear power programmes about the forecast shortage of uranium? Has he considered the fantastic lengths to which we shall have to go, with a tidal barrage to extract a certain amount of low-grade uranium from heavy sea water, at a very big cost? Is he aware of that?
  Mr. Eadie: I am well aware of it, and I have done some study of what is happening to those who mine uranium. The incidence of lung cancer in those mines is tremendously high. I must agree with what my hon. Friend has said.
  The nuclear energy programme is too big, and we cannot understand why my hon. Friend and his right hon. Friend the Minister should give such dusty Answers at times. Indeed, they give some of the worst Answers provided by Ministers in this House. We have called time and again for an independent investigation into fuel and power, and the Select Committee has asked for it. Yet, at a time when the White Paper is falling about my right hon. Friend's ears, for some reason he resists this.
  The Minister and his hon. Friend have been stumping the country saying that if we have another nuclear power station, it will not come into operation until the mid-1970s. But in the Ministry of Power there is no cohesive plan of what is to happen in the 1970s, by which time it will be very important. This argument about not doing something for 1972–73

  1417
  is not good enough. They should try to address themselves to the problem.
  I turn now to gas, about which the argument is well known. We hear so much about the bonanza of North Sea gas, but, if ever consumers were taken for a ride, they have been about gas. "Go o'er to gas", they are told. "Gas will be cheaper". But that is downright deceit, as many people who have converted to gas know only too well. They honestly believed that a bonanza had been struck and that North Sea gas was on the way. But we know that we are talking about 25 million tons of coal equivalent—a fleabite so far as the country is concerned. Yet consumers were enticed—directed to some extent—to go over to gas in the hope that it would be cheaper.
  I have dug out some figures for this debate. My hon. Friend the Member for Ince spoke about this earlier. The Prices and Incomes Board recommended an increase in gas tariffs averaging 8·7 per cent. The report pointed out that the feedstock costs have been increased by just under a penny a therm because of the Middle East situation and devaluation.
  The report added:
  "We have considered whether the resulting new tariffs might prove to be to far out of line with the price of gas when natural gas is more fully used. While we cannot be sure until the price of North Sea gas is fully determined, we judge that this is not likely to be the case in the short term when account is taken of the increased costs of distribution and of the costs of changing equipment associated with the greater use of North Sea gas."
  It is not £400 million. I have a document from the Gas Consumer Council in which the estimated cost of conversion in new pipelines will be £2,000 million. Yet people have the audacity to talk about coal being out because it is too expensive.
  I want to deal now with the important question of by-products. The House and the country should be aware of what we are doing. I have time and again raised questions about by-products and derivatives from coal. I have tried to produce information. I sent on information about new techniques in America relating to coal derivatives: for example, schemes for making oil and cheap petrol from coal. I even challenged the philo-
  1418
  sophy of the Wilson Report. Every time one asks questions one is told about the Wilson Report. We are told that a week or a fortnight in science or technology is a long time. The Wilson Report was produced 8 years ago. Yet there does not seem to be any indication that the Ministry intends to carry out an examination on the issue of derivatives from coal. I am sure that any fair minded man will agree that a report made eight years ago is surely the basis of a challenge.
  Let us be clear what we are doing when we run down the coal industry. I have here a tree which gives all the byproducts that we can and are using from coal. This illustrates the problems which can beset us if we run down the coal industry. There is sulphuric acid in relation to batteries; galvanising; tar products; wool scouring; sulphate of ammonia; soap; detergents; explosives; aspirin; weed killer; adhesives; tanning; sheepdip; cresols; napthalene oil; plastics; road tar; rust preventative; roofing; briquettes; creosote oil; light oils; brake linings; perfume; aviation fuel; printing ink; timber preservative. All these things are by-products of coal and we intend to run down the coal industry.
  My hon. Friend has said that the Wilson Report made a decision and therefore we cannot subject it to any re-examination.
  I have been very critical of the Government. I intended to be critical, because their whole policy is a scandal in the light of the present situation of the nation. Sometimes the Government have been less than frank with the House. I hope that my hon. Friend will be frank with the House and confess that the cost recommendations in the fuel White Paper and the Government's whole philosophy are out of date.
  We accept that, in the Coal Industry Bill, in conjunction with the White Paper, the Government's philosophy for dealing with the over-55s was very generous. They introduced a new concept, but when they decided to give the over-55s 90 per cent. of their wages for three years, plus £1 a week when they retired, that was a depressing philosophy indeed. I regard men of 55, and over that age, as wealth having a vital part to play in the economy of this country. The provision will assist

  1419
  to the extent that it will help to tide the coal industry over a difficult period, but it is a depressing philosophy.
  I hope that my hon. Friend will consider some of the points which have been raised during the debate. Only two miners' Members are present, but we are echoing quite a lot of discontent among not only the miners' group of Members, but among the miners themselves, and unless my hon. Friend takes cognisance of some of the things that we have been trying to say, some of the consequences, even the political consequencies, will be very serious for the Government.
  5.1 a.m.
  Mr. Arthur Palmer: I want to respond to Mr. Speaker's appeal to keep speeches short, and as I am anxious to intervene in another debate which is shortly to take place, I have no wish to stand in my own light.
  Mr. Deputy Speaker (Mr. Sydney Irving): Order. For his guidance perhaps I might tell the hon. Member that he will have exhausted his right to speak when he has made his present speech.
  Mr. Palmer: Mr. Deputy Speaker, would it be in order for me to withdraw my remarks?
  Mr. Deputy Speaker: That is not possible.
  Mr. Palmer: Then I must continue with my speech.
  The hon. Member for Horsham (Mr. Hordern) was right to draw attention to the importance of nuclear power to the economy of this country, and to the economy of any advanced industrial country, but I cannot follow the logic of his argument that for that reason the coal industry should fade almost into extinction. In the United States, where nuclear power has been strongly developed, 60 per cent. of the orders for new power stations are for nuclear-fired stations but the coal industry is still flourishing. There is no reason why a similar situation cannot exist here. To my mind there is no contradiction in advocating a strong nuclear programme, and at the same time recognising that there is room for a healthy and viable coal industry.
  1420
  I agree with my hon. Friends who have protested at what I regard as the somewhat devious—I hope that that is not too strong a word to use—approach of my right hon. Friend the Minister of Power to his own White Paper on Fuel Policy. We waited a long time for this document. Great hopes were held out that it would be the fuel White Paper to end all fuel White Papers. We were promised a debate, but that hope vanished amid the mists of our procedure in this place. When pressed, my right hon. Friend, who had brought it in with a great fanfare of trumpets, said after devaluation that he would withdraw it for the price figures to be reconsidered, which seemed sensible. Most of us expected it to come back revised, when it could be debated.
  This is why I say that my right hon. Friend's approach has been curiously devious; without the new figures, or any regard to what he has previously said, he now speaks and behaves as if the original White Paper had not been touched. As a result the chairmen of the nationalised fuel industries, from Lord Robens downwards, are developing their own individual fuel policies. After experience of many fuel debates in this House, I have never known a time when the overall fuel and power situation was so confused and confounded.
  I asked the Minister a fortnight ago whether the White Paper still represented the policy of the Government: he said that it did and seemed rather surprised at the question. This is not the way to treat the House. It is not taking seriously all the hopes which were once held out. I look forward to a whole day's debate on fuel policy, in the full light of day, on the "day shift". I hope that my hon. Friend when he replies will avoid the obscurantist tactics which have been hitherto practised by the Government Front Bench. I hope he will tell us that he is anxious for all aspects of fuel policy to be fully debated.
  Those of us who, as Members of the Select Committee on Science and Technology, examined the methods of relative fuel costing in the Ministry were not satisfied that it has the staff or resources for accurate work. We therefore suggested—though I do not want to anticipate any debate on the Select Committee's

  1421
  Report—an independent assessment outside the Ministry of fuel costs right across the board. This is badly needed. Few of us are satisfied, on recent performance, that the Ministry can do it accurately or objectively.
  An adequate energy policy is basic to the needs of the economy and I agree with the hon. Member for Horsham (Mr. Hordern) that the continuing need of this country is for an abundant supply of cheap energy.
  Mr. McGuire: I hope that my hon. Friend will not fall too much in love with the remarks of the hon. Member for Horsham because our present energy arrangements are adding no more than 1¼ per cent. at the very most to our exports. Generally speaking, energy prices in this country are, for the majority of industries, low, representing only about 2 per cent. of total costs.
  Mr. Palmer: That is true, but it is elually true that if British industry is to flourishing and competitive it must be based on abundant supplies of cheap energy. Given the right opportunities, I believe that it is possible to have a mixed fuel economy which is efficient and viable; although the main advance is bound to be towards nuclear energy, which is the fuel technology of the future. But there is still plenty of room for coal and oil on a proper competitive basis for a long time to come. But to achieve this we must have for the first time, a more accurate estimate of true costs.
  5.12 a.m.
  The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Free-son): By the leave of the House, I will comment on some of the matters that have been raised.
  It is unfortunate that so much of the public discussion which followed the publication of the Fuel Policy White Paper was directed to the decline in coal, instead of to the techonologically exciting fuel economy of the 1970s and what this could mean for our industries and urban living conditions in the future. I stress—I do so not for the first time—that coal has an important part to play. These are not chosen words but what the Ministry and the Government believe to be the case.
  1422
  However, we should be looking at the positive side of a technologically advanced, highly mechanised industry, employing highly skilled technicians. The introduction of new and pioneering techniques of coal mining and of the reorganisation of the coal industry have led to a 50 per cent. rise in productivity in 10 years. The rise is still going on and there is considerable scope for further dramatic increases. Technologically, the British coal industry is among the most advanced in the world and we have plenty of visitors coming here, from East and West, to study our methods.
  Increasing mechanisation in the coal industry means that fewer miners are required for any given level of coal production. Even if the present level were to be maintained in the years ahead there would be a major reduction in the industry's manpower. But in the two years preceding the White Paper, coal demand had fallen at more than 10 million tons a year. On the basis of the Government's policy as outlined in the White Paper the fall will now be only at 'an average of 5½ million tons a year between 1967, the year of the White Paper, and 1975.
  Nor is the forecast average annual fall in mining manpower of 35,000 up to March, 1971, much in excess of the average of 30,000 a year in the past 10 years. Allowing for natural wastage and the movement from closing collieries to those with a future, the number of redundancies will, as in the past, be a small part of the total manpower reduction. This is a point to bear very much in mind when talking about retraining facilities and redeployment into other industries. Some of the figures and points made by the hon. Member for Horsham (Mr. Hordern) were irrelevant to the net situation which will arise.
  Mr. Hordern: No.
  Mr. Freeson: Saying "No" is no argument. The observation I am making is based on experience in the industry.
  Mr. Eadie: My hon. Friend obviously does not understand the position. Would he not agree that we have gone through this question of contraction all along the line? The question of absorption into other collieries cannot arise. We are confronted with unemployment, not absorption.
  Mr. Freeson: I am afraid that my hon. Friend has misunderstood my point. I did not refer to redeployment into other collieries but into other industries and into retraining facilities. I wish to make this point clear. At one stage 50,000 was a number quoted as being in need of redeployment into other industries of which, it was suggested, 50 per cent. would be required to go into retraining facilities. The net figures would not require anywhere near that kind of provision.
  Mr. Hordern rose—
  Mr. Freeson: I do not intend to give way. The figures quoted by the hon. Member will be seen on reflection to be quite inaccurate and irrelevant. Some of the remarks of the hon. Member were quite absurd. He filled his speech at quick-fire length with a lot of unsupported clichés and unsupported statements.
  Mr. Hordern: On a point of order, Mr. Deputy Speaker. I do not know whether it is permissible for an hon. Member opposite to make an attack like that and not to give way. Is it considered in order, or within the normal bounds of courtesy of this House?
  Mr. Deputy Speaker: It is for the hon. Gentleman to decide whether to give way or not.
  Mr. Freeson: We had a series of foolish statements by the hon. Member in his opening speech. I do not believe that he reflected very closely on the White Paper. He made a number of statements—
  Mr. Hordern: Will the hon. Member give way?
  Mr. Freeson: No, I do not intend to give way at the moment. I will give way at my choice.
  Mr. Hordern: I am not staying here to hear any more of this.
  Mr. Freeson: I return to the points I was about to make. I was saying that the number of net redundancies will be a small part of the total manpower reduction—this is not to be complacent, but a small part when we speak about 35,000 men on average having to leave the industry.
  I make these comparisons simply to keep things in perspective and not by
  1424
  any means in a spirit of complacency. No one concerning himself with the industry can be complacent. Indeed, the measures taken by the Ministry of Power and more particularly by other Departments to help the older redundant miner, to help the industry itself with its social costs and to give special help to the areas specially hard hit by colliery closures, demonstrate our concern to reshape the industry in a civilised and economically sensible manner.
  Oil as a fuel is cheap and convenient, but 40 per cent. of its use is for purposes such as transport for which there is no practical substitute at present. Yet in this country we are less dependent on it than Continental countries where it represents 50 per cent. of total energy use, or in Japan, where it represents 60 per cent.—and those countries are expecting oil's share in their total energy use to increase as compared with our predictions in the White Paper. Here, together with the advent of nuclear and natural gas, we expect oil to remain fairly stable. Our anxiety to keep down direct balance of payments costs and the security disadvantages of oil must not lead us into so adding to the costs of our energy that we jeopardise our competitive standing vis-à-vis other countries. There is also the generally important point that, in growing into a major source of energy, the oil industry has contributed greatly to technological progress and has become the basis of quite new and extremely important industries, for example, petrochemicals.
  Natural gas will undoubtedly produce great resource savings for this country, particularly with the introduction of natural gas into the premium markets, those markets which the industry already supplies or into which it could readily expand over the years, and where its introduction will displace oil rather than coal. There will be some bulk sales to industrial users to assist rapid absorption of what is available from the North Sea and for load balancing.
  The ultimate scale and pattern of use of natural gas cannot be settled until we have more knowledge of what the North Sea holds and more experience about how we can encroach into different markets.
  Mr. McGuire: As much as a four-fold increase is forecast. There is a conflict

  1425
  in logic between what my hon. Friend is now saying and the three-fold increase, perhaps, four-fold increase, forecast in the White Paper.
  Mr. Freeson: Not quite in those terms. It is over several years. We expect to see available to the country in the early 1970s 2,000 million cu. ft. a day, which is about double the total use of gas in this country today. Later on, this can build up, but how the trebling or quadrupling of absorption will follow through in years after the early 1970s will depend on how rapidly or how well the available gas can be absorbed into the economy. It is not something which will happen in the next three or four years. The estimates are of what will become available if it can be absorbed in the economy.
  There is no doubt about the advantages which the low energy costs of this industry will have for the economy and the importance these will have for raising standards, both living standards and working standards in industry, in the years to come. Undoubtedly, as has been said, it will involve substantial capital expenditure, certainly £300 to £400 million on conversion, in the period of establishing the new national grid which is now under construction. But it will also bring cost savings in increased capacity of mains and storage because of the higher calorific value of the gas, and because new gas making plant will not be needed after conversion. The Gas Council estimates that over a period of 30 years the present values of savings from the conversion to natural gas will be no less than £1,400 million. This is not a figure to be set aside lightly.
  Nuclear power presents another case where, on account of the major capital costs involved in nuclear stations, careful cost studies have been made to assess the likely balance of advantage or disadvantage entailed by the investment. It could not be otherwise with these huge expenditures. We are dealing here with stations which will come into commission from about 1974 onwards. There are bound to be uncertainties, looking so far ahead, as in other aspects of fuel policy; but, without undue optimism or undue caution, and remembering that the stations coming into service in the early 1970s are expected to produce cheaper
  1426
  electricity than even the most favourably sited conventional stations, there are grounds for confidence that the stations in the middle and later 1970s will have even lower costs. Cost estimates by the Ministry for that part of the second nuclear power programme which is still uncommitted suggest that the internal rate of return on extra investment involved will be about 13 per cent.; but these are not something done once and for all.
  There is a constant watch kept on this because, inevitably, there are changes which come forward from time to time and will do so in the years ahead. The evidence available to us points towards greater economy with the introduction of power from this source. The Government envisage the completion of the second programme of 8,000 megawatts of nuclear plant coming into service between 1970 and 1975. This does not, however, prejudge the choice of fuel for individual power station projects coming forward as new capacity is required. Each will be considered on its merits. This applies to the C.E.G.B.'s proposal for a new nuclear station at Hartlepool which has again been referred to in the debate.
  What the White Paper did was to settle the principles for making and dealing with new power station proposals such as this. It established first that the electricity generating boards should base their choice of fuel for power stations on an economic assessment of the method of generation which would enable them to supply electricity at the lowest system cost. It would, however, be for the Government, in deciding whether to give consent for new stations, to take into account wider economic considerations such as were set out in the White Paper and dealt with in questions and answers and debates since the White Paper was published.
  Meanwhile, the electricity industry has many new coal-fired stations in existence or under construction. As the White Paper shows, no less than three-quarters of the capacity is coal fired and 25,000 megawatts out of a total of 35,000 megawatts of new capacity under construction is coal-fired. One has to get the right all-round balance on the basis of the soundest possible study of the industries in relation to each other and in relation

  1427
  to the prospective demand for energy. This the White Paper achieves.
  Mr. Palmer: My hon. Friend is making an interesting speech, but a great deal of this we have heard before. It is available in every kind of publication. Does he propose to reply to the debate?
  Mr. Freeson: I do not have to have rude questions like that put to me. A lot of what has been said in the debate has been raised before. I am dealing with the points raised and I have no doubt that we will have to deal with them again in the future.
  We are dealing with market forces. The Coal Industry Act, passed last year, provides for over £130 million of extra help to coal, which is a sizeable sum by any standards and particularly at a time of general economic restraint. This is plain and sound economic sense and social justice. We are going to make the most, in terms of cheap, adequate and secure supplies of energy, of all the fuel resources available to us. This means that the newer fuels—natural gas and nuclear power—will take their proper places in addition to coal and oil.
  Although I mention the last point briefly I consider it to be vitally important. We will continue inside the Department to develop the new study techniques in this field which were initiated during the 18 months' work leading up to the publication of the White Paper. This is as vital for sound economic planning as the White Paper itself. As is implicit in the White Paper, this will continue. The White Paper is not a once-and-for-all exercise. We will continue to study what changes can be considered from time to time.

  NURSERY SCHOOLS
  5.28 a.m.
  Mr. Norman Miscampbell: There are two good reasons why I am pleased to see the Minister of State in her place. First, I know that she is here at some inconvenience, and secondly, because the matter we are about to discuss is important to young families.
  The problem we are looking at has been with all Governments for 25 years, perhaps longer, and certainly since Section 8 of Lord Butler's Act of 1944 was
  1428
  passed promising the introduction of nursery schools. There have been since a series of circulars, reports, debates, and the Plowden Report. We have come to the position where all Governments have found grave difficulties in the way of providing nursery school education.
  Just 24 years ago, when the then L.C.C. considered the 1944 Act it thought that if it provided for about half of those children aged between three and five who possibly could go to nursery schools it would satisfy the local demand. One has only to contrast that with what we have achieved over the years to see how great our failure has been. In maintained schools alone in 1964 there were only 110,000 places for children from a possible total of just over 2 million.
  One realises the depth of the problem when one considers the demand and what the opportunities for children of that age can be. I did not really understand it until I set about having a family of my own, perhaps a little later in life than some have done. I was faced with the prospect of a three-year-old running about the house and, as the family grew larger, other two- and three-year-olds running about the home. I freely acknowledge that in that context of this country's families I do it from a background of privilege, with large rooms and gardens. The children have room to play and give expression to all the youthful exuberances which must prove so troublesome in the small flat or the under-privileged home. Yet our society continues to build town flats, because it must in order to provide its people with homes. Children must live in those flats, some of which are 10, 15 and even, in London, 20 storeys high. Some have very good facilities, but the problems for a mother bringing up her children in those conditions are great.
  There are problems of the only child, inadequate homes and bad housing which are exactly those that can be helped by the child being taken to a nursery school and given an early opportunity in life. The nursery school can also help the mother who must go out to work and needs somewhere for her child to go, and the mother who simply wants to work and who can thus contribute to the country's welfare. The Government said last week that day nurseries would be provided for mothers

  1429
  who work. But, laudable though that may be, it has nothing to do with providing nursery education, which is what we are considering.
  For the mother who wants to go out to work because she can help the country, nursery school education helps itself, as it were, because if an authority can show that by taking in the children of school teachers it can get more mothers to return to work it is allowed to help open up further nursery schools. If that is so for mothers who teach, why should not it be so for mothers who could practise medicine, or nurse, and for so many others who can help and whose help is needed?
  I give the Government credit for caring about the under-privileged. At least they protest that they do, which moves many hon. Members on all sides of the House, and this I would have thought was one of the ways in which they would have said priority must be given. Who has the opportunity of going to one of these schools? We are faced with a society of high flats, a society where the television is becoming all too prevalent for the younger child, where grim basements are familiar features of children's lives and a society where tired mothers try to cope with small families.
  We are also faced with an affluent society which is becoming a bookless society. A number of children can be taken from this environment and introduced to all the methods of stimulation, education and play which can do so much to build a firm foundation for children: water to play with, climbing frames on which to work out their inhibitions; books which they have probably never seen or been introduced to at home—and not just in the poor home, but the affluent home as well—pets whom they are shown how to love and care for; and dressing up clothes.
  They are made alive and receptive to the world in a way which is not possible at home, even with the most helpful parent. If they get the privilege to start at that age, it builds into children a foundation on which all the rest of their educational life can be built.
  We provide at present over 100,000 places, and London is slightly better in its provision than the rest of the country. The most recent figures I could get make
  1430
  it look as it places are available for 5 per cent. of children all over the country and for 7 per cent. in London. But if one takes Westminster, the No. 2 area of London, one maintained nursery school is provided by the G.L.C. for Westminster, St. Marylebone, Paddington and half of Hampstead.
  When one sees how little is being done, one realises how much there is to do. This is one area of education where inevitably the State does much better than the private educational authority or school. With few exceptions, the State nursery school, with appropriate facilities, highly qualified teachers and all the advantages of money behind it, provides a better school than the smaller play group, the child minder, the factory creche or private nursery schools which are growing up.
  There are exceptions, but on the whole the State does a good job which compares most favourably with that done by the private sector which is growing rapidly. We have legislation controlling those looking after children, but that is perhaps more a matter for the Ministry of Health than for the Home Office.
  The demand is there. Those parents who can afford it are purchasing the privilege for their children. There is not much doubt, when one reads in the Sunday Press, as I did with some astonishment last weekend, that we now have our first take-over bid for a nursery school in the south of London, that there is pressure of demand for this sort of education.
  Why is it so important? The period between the ages of three and five is the most important in a child's life. Almost all the studies here and in America show this to be true. If a child is given a real start at this time, its educational progress throughout the rest of its life is noticeably better than that of the child who starts later and comes from a more difficult background. This fact is borne out by every study and by everyone who has looked at the matter. It is fundametal, because if the proper basis is not built upon, what is the use of changing the school-leaving age, of changing opportunities at the top?
  I saw the Secretary of State for Education and Science looking rather sad and lugubrious about the Government cuts. He spoke of the hard and cruel decisions

  1431
  which had to be made and one realised that he was being forced to agree to postponement of the higher school leaving age. I felt like saying then that it was all very well to talk about this hard decision but that the Government were ignoring the much harder and important decision in that they were simply not providing a proper foundation in the early years which, if it were there, would mean that many children would stay on voluntarily at the end of their school life because they had been introduced early enough to the techniques of learning, the opportunity of meeting books and the stimulus of good teaching.
  I believe that the two years between the ages of three and five almost certainly are more important than an opportunity to stay on for an extra year at the end of school life. If children do not get that help and stimulation early in life, they probably will find that they never have been stimulated and have never understood what is coming to them through their education and will voluntarily wish to leave earlier.
  I appreciate that at this time one is asking for a great deal. Nursery school education is one of the most expensive items we have to face. I understand that it costs about £150 a place to provide maintained nursery schools. Nevertheless, I believe that the time has come when the Government should take a clear decision to change the position and do what was promised so many years ago, and what everyone who has looked at the problem since recognises as absolutely vital, and that is to extend the part-time school.
  This is important. One can double up. This does not provide for the mother who simply wants to leave her child when she is at work, but it provides an excellent educational background. Some children can go in the morning and others in the afternoon. Nursery schools can be run in cheaper buildings than we have often thought of in the past. That is never a step I want to see in education, but if it helped to provide education I would agree to it.
  We ought to take over from the Ministry of Health the inspection and control and the provision of teaching facilities in so many of the groups run by the Ministry of Health. I want more money from the
  1432
  Government. I recognise the difficulties in this at the moment, but the priorities should simply be changed within education so that more money in a given total is spent at the lower end rather than in an extension of the school-leaving age.
  Lastly, although I do it with reluctance, if it would help to get greater facilities, I would not be opposed to allowing parents to pay a contribution towards the schools helped by the State. I do not view this with any great pleasure, but if it was money which would help then it is something we should face. I recognise that my plea tonight is one of a number that have been made by others. If we can move things only a small way it is better than not moving at all. We have to understand the problems here and realise how important it is to give to children a stimulus which will build a real foundation to their educational life. If we can do this then such a small contribution will not have been wasted.
  5.47 a.m.
  The Minister of State, Department of Education and Science (Miss Alice Bacon): I would like to thank the hon. Member for the way in which he has put forward his plea and say that the extension of his remarks to the raising of the school leaving age was the only thing with which I did not agree. It is one thing to point out the need for something, as he has done, and another to find the necessary wherewithal and the teachers in order to put it into operation. He has completely ignored the desperate shortage of teachers in our primary schools.
  My Department is responsible for nursery education. That is the education in our special nursery schools or classes of children between the ages of three and five. The day nurseries for children under the age of three and the whole of child-minding is the responsibility of my right hon. Friend the Minister of Health. I recognise that the hon. Gentleman's point is one of substantial importance, and I do not disagree with what he has said about the value of nursery education. He mentioned the only child. I am an only child and I took myself to school at the age of two. The school was on our doorstep and I went to school by walking into the nursery class in that school.
  I must say that I am a little surprised at the plea being put forward from the

  1433
  benches opposite. The hon. Gentleman said that this problem had been with Governments for the last few years and no Government had felt able to make a very great expansion in nursery school education. The Plowden Report reminded us of the value of nursery school education and made proposals for a very large expansion of the service. Although much of what it provided in the way of evidence and thinking was new, the desirability of more nursery education has not been in question for many years. There is no evidence that the right hon. Gentlemen who held office when the party opposite was in power made any substantial development in this direction, but the hon. Gentleman will recognise that no Government can make rapid advances in this direction. I am not blaming anybody for this, because the reasons have been partly economic in terms of expenditure, but mainly—and I stress this because it was ignored by the hon. Gentleman—the need to conserve teachers for infant schools.
  Circular 8/60 was issued in 1960 and started by saying:
  "There is no change in the circumstances which have made it impossible to undertake any expansion in the provision of nursery education."
  During the last 20 years there has been a very large growth in the number of pupils in primary and secondary schools—in fact, from 5 million to 7·3 million, or an increase of 46 per cent. During this period, the number of full-time teachers has grown from 186,700 to 297,000—an increase of 59 per cent—but, in spite of the fact that the output from the colleges of education is still growing and in spite of the very large expansion in the number of students, we have not yet got to the position where we can be satisfied that our primary schools are adequately staffed. There are still classes of over 40 pupils, and I for one would not quarrel with the Plowden Committee's conclusion that 40 is too big for a class in a primary school.
  Broadly speaking, therefore, it seems to me right and inevitable that the decisions on whether there should be any general expansion of nurseries have had to await a time when the increasing flow of teachers will begin to enable some to be freed without serious results to the primary schools and especially infant
  1434
  schools. I assure the hon. Gentleman, who talked about the children at one end and the children at the other end in our secondary schools, that this is not the case. If we did have any rapid expansion of nursery education it would be the children in our primary schools who would suffer from the fact that the teachers would go to the nursery schools from the primary schools.
  In many parts of the country local education authorities are still having great difficulty in finding room for the 5 year olds, and, while we have a great many rising 5 year olds—that is, those under 5 years of age—in many schools, there are other areas where it is impossible to take a child until the end of the term in which the child is 5.
  The other important factor—I dislike saying this, but the hon. Gentleman did recognise it—which will certainly be crucial for the next year or two has been the question of cost. In an educational service, the cost of which is expanding as rapidly as ours is, there is no escaping the question of priorities and the need for considering at any given point of time which sector of the service is the one which should have first call on any extra resources which may prove to be available. It has, howover, been possible in the last few years to allow some nursery expansion without conflicting with the principle of conserving the supply of teachers.
  Under an addendum issued in 1964, to the Circular which I have mentioned local education authorities were told that they could start new nursery classes where they could identify a number of qualified women teachers who, if they could send their children to the nursey, would be free to teach in a maintained school. This has meant more teachers for our primary schools in particular.
  Following further consideration, a second addendum to this Circular was issued in December, 1965, which again encouraged a further controlled expansion of nursery facilities where this would increase the return to the education service of married women teachers or enable married woman graduates to be recruited as teachers who had not taught before. Under both these addenda it was thought that in general local authorities wanting to establish new nursery classes would

  1435
  have spare accommodation for the purpose, and they were allowed to use their minor works allocation for any necessary adaptations.
  The results so far have been encouraging. By 1st January, 1967, fifty authorities had established a total of 93 new nursery classes, and during the following 12 months ending in January of this year the number of authorities had risen to at least 60 and the number of classes to 139. Returns are not yet complete. Where these classes are established for women teachers who are going back to schools the classes are filled by children of other parents in the area, so these classes are not exclusively for married women teachers. Quite a substantial number of children have benefited, with a net gain to the teaching force.
  Naturally, I do not regard this as anything but an interim plan. I shall welcome the time when more nursery provision can be made, especially in what the Plowden Report called the "educational priority areas". But let me examine for a moment the Plowden proposals and particularly the cost. In general, the Plowden Committee recommended that nursery education should be made available mainly on a part-time basis to all children over the age of 3 whose parents wanted them to attend, and that a start should be made in the educational priority areas.
  These proposals raised questions which are not themselves entirely uncontroversial with regard to part-time, and so on, but in terms of cost the total bill on the estimates prepared by the Council was very large. It was estimated that altogether the full-time equivalent of about 750,000 places would be needed overall, and that the capital cost would amount to about £158 million, of which £19 million would be in respect of the educational priority areas. It was also estimated that the annual running cost of the system, once established, excluding the cost of training, which would amount to about £9 million or more a year, would reach nearly £50 million.
  As all hon. Members know, the Government concluded earlier this year that it was essential to take a number of decisions that they would rather not have taken, especially with regard to the post
  1436
  ponement of the raising of the school-leaving age. The hon. Member implied that he would rather has seen a postponement of the raising of the school-leaving age and more nursery education. I would remind him that it was his right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle), when Secretary of State for Education, who quite deliberately—and I agreed with him—took the decision that the important thing was to raise the school-leaving age. He placed that as a priority over the general expansion of nursery education.
  We have had to announce the postponement of the raising of the school-leaving age to save over £70 million in the next two years in capital provision. It would be unthinkable to say that we could now take on a capital cost of £158 million plus a running cost of £50 million a year in the present economic circumstances. Therefore, I do not see how there can be any question of regarding the development of nursery education at this time as taking priority over everything else.
  Nevertheless, let me end on a slightly more hopeful note. First of all, both the Government and the Opposition, in a debate which took place in this House just over a year ago on the Plowden Report, gave a warm welcome in principle to the recommendations which dealt with educational priority areas. This welcome has been followed up by the Government, and my right hon. Friend will next week be announcing a programme of £16 million worth of building projects for the educational priority areas. Those are the socially deprived urban areas. I think that the fact that this programme was retained in spite of the economic problems of the country shows the importance which the Government attach to giving such help as we can to this type of area, and I want to assure the House—and this is important—that when the time comes when resources can be made available for nursery expansion I feel sure that the right course will be, as Plowden suggested, that a start should be made in the educational priority areas, even though it would, perhaps, be only a modest one.
  I can assure the hon. Gentleman that we are well aware of the need for nursery education. I regard it as desirable in

  1437
  itself, and not merely as a means whereby we can enable married women to go back to work. I agree that nursery education is very valuable indeed, but it would be foolish of me to suggest that in the present economic position, and with the present shortage of teachers in our primary schools, we could engage at the present time on this general expansion. But I do promise that as soon as ever we can see our way clear we shall make a start on nursery education in the educational priority areas.

  CULHAM LABORATORY
  6.2 a.m.
  Mr. Airey Neave: This short debate arises out of the—in my view, unsatisfactory—decision of the Minister of Technology in July, 1967, to reduce the work of the Culham Laboratory of the Atomic Energy Authority at Culham. I should explain that Culham Laboratory is in the constituency of my hon. Friend the Member for Henley (Mr. Hay), but the large majority of the staff employed there by the Authority reside in my constituency, and I want to raise mainly staff questions tonight.
  Since 1962 this laboratory has been internationally famous for fusion research and its main object is a nuclear fusion power reactor. This involves important experiments with plasmas, and also studies of possible fusion power stations and their costs. It seems possible, from present experience, that such a station would be competitive with future fast fission reactors, over, perhaps, a fairly long period of time, though the latter are now at the prototype stage.
  Fusion reactors have many advantages. They do not produce plutonium, and there is a negligible problem of radioactive waste. I do not want to go into the wider question of fusion power tonight, but there are great possibilities in this field.
  For this reason it was an unpleasant shock to the staff and to many scientists in other branches when the Minister announced that a working party of the Atomic Energy Authority had advised him to reduce the programme over the next five years by 10 per cent. per annum. He has so far obstinately refused to publish the working party's report. The
  1438
  result is that no one outside the working party and those connected with the Authority and the Minister's Department knows what the scientific or budgetary reasons were for this decision. This seems to be extremely wrong, because the issues involved are major ones. The result would be that the £4 million or so spent at present each year on this laboratory will be cut by 50 per cent. in five years' time.
  I should also mention that the Select Committee on Science and Technology, under the chairmanship of the hon. Member for Bristol, Central (Mr. Palmer), went to the laboratory yesterday and is making certain studies in connection with its future. No doubt it will report to the House on it. For that reason, I will not raise the major matters of policy which it may have to consider. Instead, I shall stick to the point of my concern, which is the position of the staff who are leaving at the moment at the rate of about 10 per cent. per annum.
  This is a matter about which the Institute of Professional Civil Servants gave evidence to the Select Committee in June, 1967. After the Minister made his announcement in July, I wrote to him asking what plans he possessed for the redeployment of the staff and what was being done about the resources which were being released as a result of this run-down of the laboratory. The Minister replied on 20th September, saying:
  "These are matters which will be worked out between the Authority and my Ministry."
  That was not a helpful reply to a detailed series of questions about what was to happen to the staff.
  I want to put one or two points to the Minister about the redeployment of the staff. First of all, it does not appear that the decision about Culham was part of any general plan for the redeployment of the staff of the Atomic Energy Authority. I do not know why the decision was made in isolation. It is very unsatisfactory that it has been made in isolation, because, as members of the Select Committee saw yesterday, Culham has a very wide range of skills in such matters as astro-physics, computers, plasma physics, and so on. and those skills could be exploited in activities outside that of fusion research. Are there plans for dealing with this point?

  1439
  My next question relates to the interchange of staff between the laboratory, industry and the universities. This will be very important, because of the high quality of staff which has been working at Culham, and it would not be possible to bring it about without completely new salary scales and, above all, a settlement of the burning question of transferability of pensions. I have raised this matter several times in the House with the former Minister, Mr. Frank Cousins, and with the present Minister. Progress in the matter must be made if there is to be a satisfactory redeployment of staff into perhaps more productive fields of activity, assuming that that is the Government's intention.
  Speaking as a director of a company which is engaged in the nuclear power programme, I know the necessity of keeping a good research team together, and it is essential that the very high quality of the Culham staff should be maintained. The position is not at all satisfactory at the moment. At present, Culham has 245 professional scientists and engineers and 188 scientific and technical auxiliaries, out of a total staff of 782. The apparent intention of the Minister is to run down the professional staff to 132 by 1972.
  I repeat that I do not know the reasons for this decision. It is a very important national decision. I have a large number of constituents involved, and many of them are scientists of international repute. They do not know why this has been done. I think that this is a case where there should be far more public discussion of the reasons which have caused the Government to make this decision. I quite understand that any staff matters must be of a confidential nature, but surely it is possible to arrange for some kind of publication of the scientific reasons.
  I do not like the decision, because it is completely negative. It does not seem to be part of any organised plan for the future of the Atomic Energy Authority staff as a whole. Speaking for myself, in the presence of the Chairman of the Select Committee, I hope that the Committee will inquire into the question of publication of the Report.
  It is not as though we were spending an exceptional amount of fusion com
  1440
  pared with other countries. We are responsible for 10 per cent. of world effort on nuclear fusion at the present time, the Soviet Union 40 per cent., the United States 30 per cent., West Germany 10 per cent. and 8 per cent. in France. For reasons which the Minister refuses to publish, we are proposing to reduce our total contribution to world effort to 5 per cent. We cannot maintain a leading rôle in fusion research if this is done. One of the more remarkable things that the Minister said in July when he made his statement was that the Authority had assured him that we would be able to maintain a leading rôle in fusion research. I do not see how this can be done if we reduce proportionately the amount we contribute to world effort while at the same time Russia, France, Japan and America are increasing their contribution to this possible new source of power.
  I have not been able to go into the broader question which the Select Committee will no doubt wish to consider. It is not right that I should at this time.
  The staff were not consulted about this decision. The working party, according to the Minister, went there for only one day, and there was no consultation with the staff side. If the working party spent only one day there, it is in no better position than the Select Committee which spent a whole day there yesterday and went round the establishment. I do not feel that the matter has been handled satisfactorily, and I am worried that no alternative plan seems to have been prepared for the future of the staff.
  Mr. Arthur Palmer: The hon. Gentleman will recall that the Select Committee did see the staff.
  Mr. Neave: The Select Committee did see the staff. It saw the trade union side and the staff side. This does not appear to have been done by the working party which was making a major decision about the future of 50 per cent. of the staff. This is a remarkably unsatisfactory incident.
  What worries me is that no alternative plan seems to have been prepared to make use of the resources of Culham outside the fusion range. Plenty of skills abound there. It is a place of great international reputation. The Government should reconsider their decision.
  6.13 a.m.
  The Joint Parliamentary Secretary to the Ministry of Technology (Dr. Jeremy Bray): In 1966 the Atomic Energy Authority set up this internal working party to look at the future programme of plasma physics and fusion research centered at Culham. The working party consisted of a highly competent body of experts. It examined the problems of providing cheap power by means of fusion and concluded that these problems were more difficult than was thought when the Culham Laboratory was set up in 1960.
  The United Kingdom has spent about £40 million on plasma physics and research. Even so, we are not in sight of a fusion reactor capable of providing cheap electricity. Given the prospect of cheap electricity promised by other kinds of nuclear reactor—the fast breeder and the A.G.R. programme—it was logical to conclude that a substantial reduction should be made in the programme of research on plasma and fusion. One day fusion may come into its own, but for the time being it is right to limit our efforts on it. The United States, too, has recognised that the perspectives have lengthened, and it has rephased its objectives to emphasise the scientific nature of its fusion programme.
  After considering the report of the working party the Atomic Energy Authority advised the Minister that its effort on this research should be reduced by about 50 per cent. over the next five years. I may say that there is a powerful body of opinion that the work should have been closed down altogether. This conclusion that the work should be run down to 50 per cent. was endorsed by the Minister, and a statement was made in both Houses on 26th July, 1967.
  Mr. Neave: Will the Minister identify this powerful body of opinion which thinks that Culham should be closed?
  Dr. Bray: I do not think that I can go beyond what I have said. The hon. Gentleman said that the report should be published. This is always a difficult matter. If a corporation—in this case the Atomic Energy Authority—appoints an internal working party to examine exhaustively and thoroughly an internal problem, the conditions on which that working party works and reports are those
  1442
  of confidentiality. If, at a later stage, it is argued that the report should be published, that puts an altogether different light on the work of that working party.
  One must decide in advance whether a report is to be published. This then determines the way in which the working party goes about its work, and the way in which the report is written up and published. The hon. Gentleman must appreciate that there is a difference between what can be said in a published document, and what can be said in an internal working document of a public authority.
  Mr. Neave: That may be true, but what is the reason for the Minister not saying why this decision was taken? He has not explained to anyone outside the immediate area of his Department and the Authority what the scientific reasons were.
  Dr. Bray: The Minister has answered all the questions put to him on the scientific reasons. If the hon. Gentleman cares to ask questions about the estimated costs, the estimated time, and what the particular technical problems are, my right hon. Friend or I will be pleased to answer them.
  Mr. Neave: The Minister made a statement in the House.
  Dr. Bray: I am not sure what the hon. Gentleman is asking for. If he is asking for a disquisition on the technical problems of plasma physics, he can read this in the literature. If he wants cost estimates—
  Mr. Deputy Speaker: Order. I must announce the suspension of the Sitting for 15 minutes.
  Sitting suspended at 6.17 a.m. and resumed at 6.32 a.m.
  Dr. Bray: The House will be concerned about the health of your honourable colleague, Mr. Deputy Speaker, and trust that he will not be indisposed for long.
  Before we suspended the Sitting, I was referring to the fact that my right hon. Friend the Minister of Technology made a statement regarding the run-down of work at Culham on 26th July, 1967. Since that date nothing has changed and no evidence has come to light to justify

  1443
  reconsideration of the conclusion reached. As for the run-down of staff, I appreciate the hon. Member's wholly legitimate and most important concern for the staff and for his constituents, many of whom work at Culham. The position at the end of February was that the professional staff at Culham working on fusion was 245, which represented a reduction of 15 from last July. This is just about the planned rate of run-down.
  The rate of staff turnover has increased in the past eight months. There was bound to be some reaction of this sort to the very difficult decision which had to be made last summer, but there will continue to be a substantial and challenging programme, particularly on closed systems, plasma production, computing and technological studies, providing a wide interest for those involved. The vitality of the establishment is being renewed and readers of the technical Press will have seen the figures regarding efforts which are being maintained to get the high-quality young staff to Culham working in this area. The parts of the programme which are being reduced are on open-ended systems, diagnostic techniques and basic physics.
  As for future work at Culham, the development of fusion power is recognised world wide as a long-term programme. The reduced effort at Culham will still enable us to keep in touch with international effort in this field and provide a basis for expansion later if changed circumstances make that desirable. The volume of the work will be quite sufficient to provide that base for development whenever it is found to be needed.
  One of the functions of the Ministry of Technology is to foster major technological developments and to supply advanced technical information and research services for British industry. It sometimes happens that the required expertise and facilities for a particular project are available only in an Authority establishment, perhaps Culham, Harwell or elsewhere. Under Section 4 of the Science and Technology Act, 1965, my right hon. Friend is able to require the Authority to undertake scientific research in the non-nuclear field. Under this Section, work has already been directed to Culham, including some work on the large astronomical satellite for the European Space Research Organisation. The
  1444
  hon. Gentleman mentioned work being transferred to the Science Research Council. This is work on solar and stellar ultraviolet spectroscopy. It involves about 30 professional staff, and it will show a further reduction in the number of staff working on plasma physics at the laboratory when the transfer has taken effect.
  There is also the development of the COTAN computing system, which is used with KDF9 computers, a number of which are installed in universities in a configuration similar to that at Culham. This work is being paid for by the Computer Board. It is a very good example of the way practical skills developed at Culham are being transferred into areas where they can be effectively used in the universities. It is a small-scale effort, but it is being done economically and efficiently, as it should be and as one expects from the Authority. It is none the less an extremely useful piece of work.
  Although Section 4 work will continue to be authorised where appropriate. it must be made abundantly clear that such work will prove to be of real economic benefit to the nation, and there can be no question of authorising Section 4 work simply to absorb surplus staff. There can, therefore, be a question for the staff as to what they themselves wish to do. It is possible to arrange secondments to industry or to universities. Indeed, the Authority is anxious to take whatever means are possible to spread knowledge of the work which it has done to appropriate users.
  Mr. Neave: Will the hon. Gentleman deal with the question of transferability of pensions? It is a matter of major importance, and something ought to be done.
  Dr. Bray: I have examined this matter closely. I asked for the actual pension scheme of the Atomic Energy Authority, and it is a question to which I have given a great deal of thought. I do not know whether the hon. Gentleman has examined rule 23 on the transferability of pensions. I have gone into it not only in the case of the Atomic Energy Authority but in the case of other industrial schemes, and I have found that the provisions for transferability in the Authority's scheme are a very great deal better than those available in practically all industrial schemes.

  1445
  It has been made clear to the staff that for scientific staff over the age of 30 there will be no difficulty about preserving their pension rights, where that is appropriate, about transferring their pensions rights, about single premium annuity schemes, or whatever is the choice of the individual concerned. Whether the pension rights can be put into an industrial scheme depends on how that industrial scheme is drafted. It is not a matter for the Atomic Energy Authority but the industry. If an Atomic Energy Authority scientist goes into a firm which does not offer this facility then his pension rights with the Authority can be preserved and when he reaches retirement age he will receive the value he has earned in the Atomic Energy Authority's pension scheme in addition to any pension he may have later earned in his new job.
  I should be happy to look at any particular cases and particular kinds of career services on which problems may arise. If there are difficulties let us look at them. I think that the provisions here are highly favourable by comparison with those available virtually anywhere else. They are a great deal more favourable than those available anywhere else in the public service, and in the Civil Service in particular.
  With this background of valuable work at Culham to keep people there and undoubtedly the ready demand for their work in employment elsewhere, I do not think that it can be said that there is any major problem of redeployment at Culham. If the Select Committee has observations to make on this matter, clearly they will be a matter of great interest to the Minister and we look forward to receiving them.
  Meanwhile, of course, the work on the future of the nuclear engineering industry goes ahead. The hon. Member asked whether the redeployment at Culham was part of a larger pattern in the Authority as a whole. As the hon. Member knows, there are discussions under way about the future of nuclear engineering and the contribution that the Authority can make. This is a matter which has to be settled as part of the planning of the future work of the Authority, with Culham fitting into the pattern.

  FALKLAND ISLANDS
  6.44 a.m.
  Mr. Michael Clark Hutchison: I would like to add my good wishes for the speedy recovery of Mr. Deputy Speaker, the hon. Member for Dartford (Mr. Sydney Irving), and express my gratitude to you, Mr. Deputy Speaker, for taking over so quickly at this unexpected hour.
  I wish to raise the question of the future of the Falkland Islands and the Falkland Island Dependencies. I am grateful to the Foreign Secretary and the Minister of State for Commonwealth Relations for being here. I am concerned about this matter because of answers received in this House and in another place in recent weeks. These answers have been unsatisfactory. There are two Motions on the Order Paper. One is No. 203 in my name and the other is No. 206 in the name of the right hon. Gentleman the Member for Bassetlaw (Mr. Bellenger).
  Hon. Members will know that for some time there have been negotiations going on between Britain and Argentina about the Falklands as a result of Resolution 2065/20 in the United Nations General Assembly on 16th December, 1965. I doubt whether the resolution was legal, as the question of sovereignty is involved. It seems to be contrary to Article 2(7) the U.N. Charter.
  However, many other factors are involved. The first landing in the Falklands was in 1690 by Captain Strong, who gave the islands their name after Viscount Falkland, Treasurer of the Navy. A settlement was established in the West Island in 1766, but in 1774 the British Government withdrew it on grounds of economy. Our claim to sovereignty was maintained and a leaden plaque was left declaring the Falklands to be the sole right and property of King George III. Since 1832 the islands have been under British control, continuous, open and effective. Although protests from Argentina have been received from time to time, they have been somewhat intermittent. There is no doubt in my mind that in international law the Islands are British. There is a de facto right by virtue of occupation, and then by virtue

  1447
  of time and the law it was clearly de jure. Nearly all the countries in the world recognise this, including the United States.
  It is particularly significant that in 1947 the British Government offered to submit the dispute to the International Court of Justice. A similar move was made in 1955, but both Argentina and Chile declined to submit their case. The reason is that it is very poor. It is also worth noting that in the Special Committee of the United Nations, which sat in 1965, little or no reference was made to the principle of self-determination or the wishes of the people of the Falklands. There is no question that the people of the islands do not desire a change, and they wish to strengthen their relations with Britain. Anybody who doubts that would do well to read the petitions of the elected members of the Falkland Islands, the chairman of Stanley Town Council, the General Secretary of the Falklands Labour Federation, and many other individual petitions to the United Nations. It is very odd that all those petitions were neglected, and it says little for the wisdom and judgment of the U.N. Committee of 24 on Colonial Questions.
  In 1965 Lord Caradon said at the United Nations that the people of the Falklands would not be betrayed or bartered. Their wishes and interests were paramount and we should do our duty to protect them. That was a very admirable statement, but what is the position today? Doubt has been cast on the matter because of two events. First, several hon. Members, including myself, have received a letter dated 27th February, 1968, from the unofficial members of the Falklands Executive Council. The letter expresses grave anxiety about the negotiations and reiterates the wish of the Falklands to remain British and keep their connection with us. On receipt of this letter, an unusual one in my political experience and my colonial service experience, I questioned the Minister of State about the negotiations. That will be found in the OFFICIAL REPORT of 18th March, 1968. The Minister of State replied:
  "The negotiations are continuing and are confidential. In these negotiations, Her Majesty's Government are being guided by strong regard for the interests of the people of the Falkland Islands, and in any event
  1448
  will see that there is the fullest consultation with them."—[OFFICIAL REPORT, 18th March, 1968; Vol. 760, c. 14.]
  That is not very satisfactory and is far from the strong and proper words of Lord Caradon. Further oral questioning on 18th March elicited nothing definite and the Minister of State was evasive about "consultation" and "consent", when the transfer of sovereignty was raised. He would not say that the consent of the local people to any transfer would be required. I cannot understand the Government's attitude on this matter, or why they are not more specific and frank to the House. International law is on their side, the wishes of the people are clear. They are of Scottish or English descent, some even to the sixth generation. Most of the 2,100 inhabitants were born there. In their country, their is no crime, no debt and no unemployment. They contributed handsomely to Britain in the last world war.
  I ask the Government to cease this shilly-shallying and to state three things definitely. First, will they say that there will be no transfer of sovereignty or sharing of sovereignty without consultation and consent, clearly expressed by the islanders and originating with them? Secondly, will they say that there are no secret deals involving either meat or shipping waters, and thirdly, will the Government report to the United Nations that they are not prepared to entertain any further negotiations on the Falkland Islands, or their future, with the Argentine or any other country? Will they undertake to give complete protection, physical if necessary, to the islands and their inhabitants?
  6.52 a.m.
  Mr. Clifford Kenyon: I hope the hon. Member for Edinburgh, South (Mr. Clark Hutchison) will excuse me if I do not follow him in dealing with the historical role of the Falkland Islands. I want to deal with two major points.
  It is not fair for these islands to be continually in a state of apprehension as to their future. This has been their condition over the last two or three years, because they have been very uncertain, and still are, as to what will occur. This arises mainly from two causes. First is the desire of the United Nations that Britain and the Argentine should have discussions about the future of these

  1449
  islands. These discussions are confidential. No one outside knows what is taking place. When such discusisons take place, all kinds of rumours arise which are neither denied or confirmed. It is said in many quarters that the Government are negotiating a transfer of the Islands to the Argentine. This is firmly in the minds of the islanders, and I would like my right hon. Friend to give an assurance that will satisfy them once and for all that they are going to remain under the British flag.
  Another reason for their apprehension is that, in 1966, a plane was hi-jacked and landed on the Falkland Islands. The islanders were totally unaware of its coming until it was landed by its very skilful pilot on the bumpy race course. His skill avoided what could have been a major disaster. It was a remarkable landing. Islanders went up to see what had happened, assuming that the aircraft had landed because of some fault or shortage of fuel, for example. Two Falkland Islands officials were approaching the aircraft when out of it came armed men, who took them prisoner. One cart understand the apprehensions of the people at such an incident. The officials were held prisoner for two or three days.
  Finally, the men on the plane—about 20 of them—had to give themselves up and they were taken by a priest to the Roman Catholic school and kept there until the Argentine authorities came for them. All of these men were armed. The people of the islands should be guarded against this sort of thing, and that is why I feel that the Government, taking these two points I have mentioned into consideration, should make a definite statement that the islands will remain under the British Crown.
  The U.N. Charter affirms that every nation shall have the right of self-determination, and every British Colony which has been granted independence has had that right. If they desired, they could vote on it. Every British Colony has had the ability to state its desires and have them made public. The Islanders desire nothing more than what has been granted to every other Colony, the right to express their feelings, wishes and desires on this matter.
  1450
  As this is a principle of the United Nations they have the right to the support of that body. It is no use carrying on any longer in this uncertain way. Over the last two years these rumours have disturbed the islanders very much, I and the hon. Member for Louth (Sir C. Osborne) visited the islands twelve months ago, and we found that where-ever we went this was the prominent topic. Everyone asked us what the British Government intended to do, whether in Port Stanley, Port Darwin, East Island or West Island, and even on the farm camps right out on the moors. The uncertainty is worrying them. When their whole living is concerned, one can understand their feelings, and it is time the British Government gave a definite assurance that will satisfy the islanders that their future will be secure.
  7.3 a.m.
  Mr. John Biggs-Davison: The House has listened to the hon. Member for Chorley (Mr. Kenyon) with great interest and respect, because he speaks with the authority of an hon. Member who has just recently visited the Falkland Islands, with my hon. Friend the Member for Louth (Sir C. Osborne). He dwelt on the apprehensions of the people there, particularly since the extraordinary incident he has described. I would like to ask whether the Government here are satisfied that the Islands and their dependencies are being adequately safeguarded.
  I understand that H.M.S. "Protector" is no longer in the area. What vessel or what arrangements are replacing her? I am sure that the Royal Marine detachment is more than adequate, but would it be desirable to reinforce it? These thoughts will be in the minds of right hon. Gentlemen. I hope and feel with some confidence that the training of the local population to defend themselves, their homes and their farms is going well.
  The House is very grateful to my hon. Friend the Member for Edinburgh, South (Mr. Clark Hutchison) for initiating this debate. No one who has sought to catch your eye, Mr. Speaker, has a direct interest in the Falkland Islands, but every hon. Member has an interest in the safety and welfare of our fellow subjects, wherever they may be.

  1451
  I also feel confident that this debate is being conducted in a spirit of good will towards the Argentine with whom we have so many ties of history and honourable obligation, but it would be false to conceal the clear fact, which was brought out so well by my hon. Friend the Member for Edinburgh, South, that no other state has any valid title to the Falkland Islands. I do not wish to put ideas into the head of General de Gaulle, but the French might well say that they have a prior claim to that of the Spaniards which the Argentine claims to inherit, because de Bougainville landed on what the French called Les Malouines in 1764, and that was before any Spanish presence in the Falkland Islands. But if the Argentine claims the Falkland Islands as a successor to the Spanish empire, if Spanish imperialism is so legitimate, so is that of Great Britain. The important fact—at least, to someone like myself who is not learned in the law—is that Britain has been in effective occupation since 1833.
  Mention has been made of these confidential negotiations that we understand are going on. From another place we received no clear impression whether sovereignty has been discussed. I should like to know whether sovereignty has been discussed.
  We are all glad to see the right hon. Gentleman with us this morning as Foreign Secretary, and we wish him well in all that he does in the public interest. In his previous incarnation at the Foreign Office the righ thon. Gentleman said on 14th January, 1966 that Britain did not recognise Argentine sovereignty in the South Atlantic archipelago. That speech was made in Buenos Aires.
  My hon. Friend the Member for Edinburgh, South, quoted the fine words of Lord Caradon, and it is a pleasure for me to be able to compliment Lord Cara-don on something that he has said at the United Nations. I am not going to repeat the words which have been quoted by my hon. Friend, but I should like to add to what has been placed on the record one other sentence from Lord Caradon's speech on 1st December, 1965 at the General Assembly of the United Nations. He said:
  "There can be no question of negotiating the issue of sovereignty and signing away the destinies of whole peoples over their heads."
  1452
  When the right hon. Gentleman comes to reply he may say "This is all much ado about nothing. Why is such a fuss being made? After all, you do not know that anything untoward is afoot." But, as the hon. Member for Chorley pointed out, the Falkland Islanders have every reason for concern, and so have we. It is significant when The Times in a leader of 15th March refers to
  "… a Government contemplating a wholly pointless abandonment of people who belong to them and who have trusted them."
  The Governor of the Falkland Islands—who is deeply respected by the people there—has been unable, after visits to London, to reassure the people, and Her Majesty's Government have so far been quite unable to reassure the House and the country. I do not like the sound of such words as "delicate, confidential negotiations", and when the words "twin principles of consultation and consent" are used, I ask the right hon. Gentleman what consultation there has been with anyone in the Falkland Islands before these confidential talks began.
  I do not wish to delay the House any further. Here are 2,000 islanders, perhaps four-fifths of them British and many of them British of settler descent. They are as much a British community as are the people whom I represent in Essex. They live in harmony. There are no racial or religious conflicts in the Falkland Islands. They have achieved high standards of life and welfare—and at no cost to the British taxpayer. Would that that might be said of some other territories. Indeed, they have made contributions to the Exchequer and, what is more important—as my hon. Friend the Member for Edinburgh, South remarked—they have given devoted service to Britain and the Commonwealth in war. One might say that the Falkland Islands are a credit to the British Commonwealth.
  Is all this to be undermined, and even thrown away? The United Nations has been brought in. I do not expect that the Foreign Secretary will agree, but I fully endorse what my hon. Friend has said about Paragraph 7 of Article 2 precluding the intervention of the United Nations. I know that that position has been eroded, and I shall not argue that point for the moment, but I shall argue the case of the Falkland Islands people

  1453
  for self-determination. Are they to be denied self-determination? Are they to be treated like the people of Dutch West New Guinea who, to the shame of the United Nations and the major powers, were handed to a new colonial master?
  While the present Government have been in office many of our friends in distant parts of the world have been abandoned and betrayed, but I do not believe that even Her Majesty's present advisers can let the Falkland Islands down. Let the Queen's Ministers do their duty by the Queen's subjects.
  7.13 a.m.
  Mr. John Smith: I have no direct interest in the Falkland Islands and my constituency is probably more unlike the Falkland Islands than any other part of this country. Westminster represents the centre of the Commonwealth and the Falkland Islands represent its furthest edge. But the mere possibility that these islanders, should be bartered away to gratify another Government fills me with indignation and shame and I have sat here until a quarter past Seven this morning in order to say so.
  We have always had good relations with Argentina, and many people from this country have helped in the making of the Argentine nation. Our connections and friendship with the Argentine have been and should be of the strongest, but they cannot be based on dishonourable action. To be more practical, it is true that we hope to do substantial trade with Argentina, and we have substantial investments there; but if people see that we are base enough to compromise our honour in the hope of saving our money they will have less compunction in taking our money as well, and we shall end up by losing both.
  Surely there comes a point where we must stop letting people down. Surely, in the hope of gain to make these islands a new, unwilling colony of Argentina—which has no claim to them and with which they have nothing in common—whether of law, language, custom, culture or trade, is too much for any Government of this country. I hope that the Minister will give a clear undertaking that the United Nations principle of self-determination will be applied to these Islands, and that if they then wish
  1454
  to remain under our protection we will protect them permanently.
  7.15 a.m.
  Mr. Bernard Braine: My hon. Friend the Member for Edinburgh, South (Mr. Clark Hutchison) has performed a great service tonight in bringing this matter before the House, and he has been supported by unusually strong speeches from both sides. There has, of course, been acute anxiety—I think the Minister is well aware of this—both in this House and in the country ever since the information was wrung out of the Government that they were engaged in secret negotiations with the Argentine Government over the future of the Falkland Islands. There has been anxiety here, and there has been anxiety in the islands themselves.
  At the beginning of March, in company with my hon. Friend, I received a letter from the four unofficial members of the Falkland Islands Executive Council, asking me if I was aware that
  "negotiations are now proceeding between the British and Argentine Governments which may result at any moment in the handing over of the Falkland Islands to the Argentine".
  I was asked to take note that the inhabitants of the islands have never yet been consulted regarding their future; that they do not want to become Argentines; that
  "they are as British as you are";
  and that they are
  "mostly of English and Scottish ancestry, even to the sixth generation".
  That was the first news that I had that any such negotiations were afoot.
  A few days after that I received information from the Falklands confirming the existence of the rumours to which the hon. Member for Chorley (Mr. Kenyon) made reference, and suggesting that the British Government had been putting a subtle and indirect pressure upon the islanders to accept transfer of sovereignty to the Argentine. As this letter names certain residents in the islands and certain visitors to the islands, some of them British, some of them non-British, I shall not read it to the House; we are dealing here with a small community. However, I would ask the Foreign Secretary to accept from me that the letter left me in no doubt as to the feeling of deep anxiety in the islands,

  1455
  and a sense of bewilderment and even of anger that any British Government should be treating them in this way.
  It may be that when the Foreign Secretary replies to the debate he will say that there is no real substance in all this, but in a situation of this kind it is not always the facts that matter: it is what people believe the facts to be. There can be no doubt, after what has been said in this House tonight, and from the communications we have received from the Islands, that people believe that grounds for anxiety exist.
  Indeed, when the matter was raised in another place on 13th March the evasive answers of the noble Lord, Lord Chalfont served only to heighten the anxiety already felt. We were told then that nothing could be said about confidential talks proceeding between the British and Argentine Governments, but that whatever was decided the principles of consultation and consent would be applied. Since we know that the Falkland Islanders are British, since we know that they wish to remain British, and since we know that they have publicly declared to the United Nations itself their wish to remain British, what are these confidential talks about? If sovereignty is not being discussed, what is? If, on the other hand, sovereignty is being discussed, why have the people and their representatives not been consulted? Why has the Governor's Executive Council been kept in the dark?
  One member of the Council told hon. Members of this House early last night:
  "We have been kept in complete ignorance as to what is going on."
  Yet these are the people who are responsible to their own folk in the Islands. These are the Governor's advisers. The Council is the representative body of the islands. He added very firmly:
  "We are British, and we intend to remain so."
  If the Government are not preparing to sell our fellow Britons down the river, why then were their leaders not reassured? Why was the Governor not empowered to inform his Executive Council and to speak to this small community and allay their anxieties? Would it not have strengthened our negotiators if they had been able to say to our Argentine friends that the Falkland
  1456
  Islanders do not wish to become Argentines?
  If, as I understand it, the negotiations are taking place in pursuance of Resolution 2065 of the United Nations General Assembly, which called upon the two Governments to find a peaceful solution to the problem, in what way would the openly expressed views of the inhabitants of the Falkland Islands be in conflict with that Resolution? That is what puzzles the House, and it is what puzzles the Falkland Islanders. Does not Article 73 of the Charter of the United Nations make it plain that the interests of the people of a colonial territory are paramount and that their political aspirations must be respected? We know the political aspirations of the Falkland Islanders. They have made them quite plain.
  Yet they have not been consulted about this. I hope that we shall hear some good news from the Foreign Secretary. I take heart from his presence. We all respect him. The attendance of a senior minister is a somewhat unusual step in these debates and, if I may say so, a mark of the importance of the subject. I must say to him, however, that it is really unforgiveable for the British Government to indulge in secret talks about the future of these wholly British people without their knowledge and approval.
  The impression seems to be widespread in the Argentine that we shall capitulate. I understand that leading newspapers there have said that sovereignty is indeed the nub of the secret talks and that acceptance of this is a victory for Argentine diplomacy. There was a letter in Monday's Times from the distinguished naturalist Mr. Peter Scott, who returned from the Falkland Islands recently, passing through Buenos Aires on the way. He wrote:
  '… in Buenos Aires I found a general impression that any minute now the Islas Malvinas, as they call them, would be a part of Argentina."
  So we are dealing not solely with the doubts, fears and anxieties in the Falkland Islands, but with the hopes, aspirations and beliefs of the Argentines themselves.
  Who has given them that impression? Who has led them up the garden? I choose my words carefully at this point

  1457
  I am a Commonwealth man and so are all those who have spoken in this debate. If this is a case of the Foreign Office overruling the Commonwealth Office, heaven help our Commonwealth interests when the merger of the two Departments takes place.
  One can understand the desire of Her Majesty's Government to have good relations with the Argentine. As one of my hon. Friends said, there is a long tradition of friendship between our two countries. I would be the last to wish that friendship to be sundered.
  Even so, if we learn anything from history it is that we do not earn respect by flabbiness, by weakness, or by pretending that the other side have a case when we know that they have not. The Argentines argue that their claim is based on the fact that Spain owned the Falkland Islands some 200 years ago. As The Times said recently, if the Spanish Imperium was legitimate, then so is the British Imperium that succeeded it. They claim that the islands are theirs on the grounds of proximity. They are 250 miles away. 'The claim has no basis in truth or in fact.
  But all this is to completely miss the point. We are not talking of a group of barren rocks off the mainland of South America or even of a desirable property. We are concerned with a small people of British stock whose forefathers colonised empty land. They did not drive anybody out. They came there, they worked hard, and they have never cost this country a penny. I remember meeting a handful of then- during the war. They came across the 8,000 miles of ocean, the grandsons and great grandsons of men who had gone out there, because their Motherland was in danger. I remember these things. Those of us who are Commonwealth men will always remember them. We are concerned here with a small people who are British through and through. It is people we are talking about—people of our own blood and bone, whose feelings and aspirations should be just as much the concern of this House as those of the people of the Outer Hebrides or of the Isle of Wight.
  The hon. Gentleman the Member for Chorley speaks with great authority, because he has recently been in the islands, but what all of us are saying is that the Falkland Islanders are not to be betrayed.
  1458
  The Government must understand that and must act accordingly. The uncertainty over their future, which has been caused by the Government's evasiveness, must be ended. I trust that when the Foreign Secretary replies he will be able to tell us that in clear and unmistakable terms.
  There are two things which we must know. First, that there will be no transfer of sovereignty under any circumstances without the openly expressed wish of the people of the islands, and, secondly, that the islands will be protected against any threat to their security, from whatever quarter it may come.
  7.28 a.m.
  The Secretary of State for Foreign Affairs (Mr. Michael Stewart): The hon. Member for Essex, South-East (Mr. Braine) was right in saying that I thought it right to take part in the debate in view of the importance of the subject and the interest that it has aroused. In general, I am a firm believer in the principle of making junior Ministers do a good deal of work, particularly in the small hours of the morning. However, I thought it proper to depart from that principle on this occasion.
  Hon. Members on both sides of the House who have taken part in the debate have asked me a number of questions. In view of the demand that the position should be made quite plain, I shall seek to answer all those questions definitely and, I hope—though I cannot be certain of this—to the satisfaction of hon. Members.
  I begin with the question about why there are talks between the Argentine and ourselves on this issue. There is more than one reason. The first is the Resolution passed in the General Assembly of the United Nations in December 1965. I cannot accept—but I do not think that this is a major point—the proposition that that Resolution was in some ways ultra vires. If Paragraph 7 of Article 2 of the Charter were interpreted in the way that it was sought to be interpreted here, the range of questions left that the United Nations could discuss would be extremely limited.
  There are plenty of instances of arguments about sovereignty, or about possible transfers of territory, being regarded as proper to be discussed in the United

  1459
  Nations. But proper to be discussed is one thing. Agreeing with what has been said in the discussions is another. The United Kingdom did not vote for the Resolution, but it has always been the policy of the Government, and I think rightly, that even when we have not been able to agree with the United Nations we should not treat Resolutions passed in the General Assembly simply with silence, still less with contempt. In the kind of world in which we live it is of great importance to maintain this principle, because, if it can be done, the building up of the authority of the United Nations is of enormous importance both to us and to mankind.
  That was one reason, but there was a further reason, and I want to stress this one particularly having in mind the interesting and helpful speech of my hon. Friend the Member for Chorley (Mr. Kenyon). It is concerned with the position of the islanders themselves. There is only one point on which I think I disagree with my hon. Friend, in that he seemed to trace the uncertainty or the uneasiness in the islands solely to the events of the last two years, but I think he will know that for some considerable time Argentina has advanced her claim, and there has been repeated argument in many different forms about this.
  Further, more recently communication between the islands and the mainland has been cut off. This is a source, to say the least, of vexation and inconvenience to the islanders. Some of them have children in this country for various reasons. From time to time they want to make visits to this country, and the cutting off of direct communication between them and the nearest mainland available to them is, to say the least, a vexation and an inconvenience.
  I want the House to notice this further point. In the kind of world in which we live, in which the physical possibilities of travel are always improving, in which, particularly to the younger generation, the possibility of taking part in a wider world is always there, for a small community like this to be seriously at variance with a large continental neighbour could be an increasing source of vexation and uncertainty to the islands.
  It would therefore be wrong to behave as though this aspect of the matter was
  1460
  of no importance, and one reason for being willing to enter into talks with Argentina was that it was not desirable to have a situation in which there was already this degree of inconvenience and vexation imposed, and to leave simply to fester a situation in which the smaller community was at variance with its nearest mainland neighbour, and a neighbour which, as we all know, is a country of great and growing importance in the world.
  I was glad to notice that those hon. Members who raised this matter were anxious to make it clear that they did not do so in any spirit of hostility to Argentina. I think we had to notice that not only Argentina, but Latin America as a whole, is a part of the world that is going to be of increasing importance in trade, and in the United Nations, to which, whatever may be the views of hon. Gentlemen opposite, those nations certainly attach a great deal of importance, and in which they have votes and influence. This seems to be a second reason for entering talks, that it was desirable, if it could be done, to get a permanently satisfactory relationship between the islanders and Argentina. For that reason, I reject any criticisms of the Government's action in holding the talks at all. It was right to do so, and it would have been short-sighted not to do so. I must therefore answer, "No," to one of the questions of the hon. Member for Edinburgh, South: I would not be prepared to say that there will be no further talks on this issue. It was right to begin them and right that they should continue.
  The talks have been at both Ministerial and official level. It is not true to say that they have been conducted—as it has been put—"over the heads" or "behind the backs" of the islanders. There have been consultations with the Governor of the islands, who had authority to acquaint his Executive Council with what Her Majesty's Government were doing—
  Mr. Braine: The right hon. Gentleman has made a statement completely at variance with the letter sent to hon. Members by the four unofficial members of the Executive Council and with what one of them, at present in this country, has told us. This must be cleared up: we

  1461
  understand that there has been no consultation, that the Governor has not been able to explain what is going on, and it is this which is causing the House such deep anxiety. Is the right hon. Gentleman saying that there has been consultation?
  Mr. Stewart: I repeat what I said: first, there has been consultation with the Governor; second, he had authority to tell his Executive Council, under the condition of secrecy, which binds it in a way comparable to that of the Privy Council in this country, what we were doing. That is a fact, and I cannot be responsible for statements made by others.
  As a further example, there have also been consultations between Mr. Barton, who has been over here, with my noble Friend the Minister of State for Commonwealth Affairs. These consultations will continue in such manner and through such channels as seem most useful and appropriate. But it would be wrong to suggest—and I reject the suggestion—that we have done this over the heads or behind the backs of the islanders. As to the nature of the talks themselves—
  Mr. Clark Hutchison: I agree with the right hon. Gentleman that the Governor and some members of the Executive Council do not know and have some sort of consultation, but the islanders did not know and, because of the secrecy of the talks, could not know.
  Mr. Stewart: That does not conflict with what I have said. Rather, it reaffirms what I have said, in contradiction of what the hon. Member for Essex, South (Mr. Braine) quoted. The consultation which has already gone on is not the end of the matter. It will continue in such form and through such channels as seems most likely to be appropriate and helpful.
  It is the normal practice for talks like this to be confidential, but there are some things which it would be appropriate to say about them now. Our object in conducting these talks is to secure a lasting and satisfactory modus vivendi between these islands and Argentina, because we believe this to be a necessary long-term aim of policy. In this way, we are carrying out what Lord Caradon said in the United Nations:
  1462
  "There are two basic principles we cannot betray; the principle that the interest of the people must be paramount and, second, that the people have the right freely to express their own wishes as to their future."
  To answer other questions that have been asked, I endorse and confirm what Lord Caradon said on that occasion. And since we are speaking of the interests of the people, I would like whole heartedly to join in the many tributes that have been paid to this small and valiant community—these valiant, hard-working, law-abiding good friends of this country and good members of the whole human community. Our object in these talks has been to secure that there is a satisfactory arrangement between them and Argentina.
  We have thought it right, in pursuance of this objective, that the question of sovereignty should be discussed in these talks. Since there has been a good deal of stress placed on this aspect, I will explain why we have taken this view. The hon. Member for Chigwell (Mr. Biggs-Davison) particularly stressed the desirability of good relations with Argentina. I fully accept the proposition that one cannot buy good relations by giving away things that one should not give away. However, it is also true that if one is genuine in saying that one wants good relations, one cannot refuse to discuss a subject even if one's views and the views of the other party are completely at variance and even if one cannot see, at the beginning of the talks, how those differences are to be reconciled.
  The House will accept that there was here a genuine problem to be resolved; our undoubted duties and obligations to our fellow subjects in the islands and our duty also—again, in their interest—to get a satisfactory agreement, if it could be obtained, and the fact that it would not have been prudent, farsighted and in the interest of the islanders for us to preclude any possibility of discussion by saying that we would not even discuss this question of sovereignty.
  As has been pointed out, Governments of both complexions in this country have been prepared to put this question to the International Court. I do not believe, therefore, that there is any valid ground for criticism of what the Government have done, simply on the ground—and I make no secret of this—that this question has formed part of the talks.

  1463
  We have no doubt whatever that the sovereignty is now legally ours. I need not go over all the legal and historical arguments that have been advanced. Since it is in our sovereignty, we have a clear duty, as we have towards any other place in our sovereignty, to defend it. I need not say more on this aspect, except to make it quite clear that while some of the detailed questions on defence that have been put to me in the debate are perhaps more matters for my right hon. Friend, we have no doubt that these Islands are in our sovereignty and that we therefore have, as we have for other places in our sovereignty, a duty to provide for their defence.
  Having said that, I turn to something which I must say and of which I hope to persuade the House, even if, at first sight, hon. Members may find it a little difficult. If we mean what we say about desiring good relations with the Argentinians, we must at least be prepared to admit that while we are firmly convinced of our legal sovereignty over these islands they are equally firmly convinced of their claim. You get nowhere at all if you start by assuming that the person with whom you are discussing is not even sincere. We have to recognise, therefore, that here there is a problem between two nations who desire to be friendly, who take different views as to what their rights are. It is in the interests of both of them and of the Islands that if possible that dispute shall be resolved. Can it be done? I hope it can. I think it is of great importance for the islanders. If possible it should be done. The House will see from the way I have defined the problem that it will not be easy to do it. Let me at once dispel any fears which I think the hon. Member expressed. Apart from anything else I say, the idea that at any moment there is going to be a transfer of sovereignty has no relation to the facts at all. There is no justification for that in the Islands or as a hope or expectation in Argentina.
  I come to what I think the House will regard as really the heart of the matter. At what possible time, or in what possible event or circumstances, could a transfer of sovereignty be made? If we take the view that in order to get a proper modus vivendi this country must at any rate be prepared to discuss time
  1464
  and circumstances in which, if certain conditions were fulfilled, it would agree to cession of sovereignty, the vital question is, in what time, in what circumstances, under what conditions? I think the House will agree that this is really the heart of the matter, and it is to that I now want to address myself. I hope that the House will not feel that I have detained it for too long in describing the matters which have led up to this, because it is extremely important.
  We do not want to be at odds with a friendly nation. We do not want to betray people who have a claim on us. This is not a matter which can be quickly dismissed or quickly resolved. I say, in what event or in what time could a transfer of sovereignty be considered? To that my answer would be, first, only as part of an agreement which would secure a permanently satisfactory relationship between the islands and Argentina, in which there would be no harassing, no vexation, no inconveniences, and an arrangement also in which if there were a transfer of sovereignty there would be the fullest safeguards for the special rights of the islanders, the fact of their descent, their language and so on.
  That is one condition, that the cession of sovereignty could be considered only as part of an agreement of that nature, but further—notice this—the right to agree to such a cession lies with Her Majesty's Government here. That, of course, is a simple point of law, that the actual power to decide over a transfer of sovereignty lies with Her Majesty's Government here. But I say this quite clearly, Her Majesty's Government would agree to such a cession only, first on the condition I have mentioned that it must be part of an agreement fully satisfactory in other respects, and secondly, only if it were clear to us, to the Government in the United Kingdom, that the islanders themselves regarded such an agreement as satisfactory to their interests. That, I think, is the matter to which the House has attached the greatest importance, and I hope that what I have said will be carefully noted and weighed.
  The Government are entitled to ask for the support and understanding of both sides of the House in this matter, since

  1465
  it was not one which could be dismissed quickly merely by repeating a slogan or by historical reference. It is part of the changing world in which we live, and in which we have, as I say, to perform our duty to the islanders, a duty which, in my judgment, is performed by the last condition which I have clearly stated, while at the same time seeking a satisfactory relationship both for them and for us with Argentina.
  I think that I can claim to have answered clearly the questions which were put to me, and I hope that I have answered them to the satisfaction of the House.
  Mr. Clark Hutchison: The right hon. Gentleman has said, "If the inhabitants of the islands regarded the arrangements as satisfactory". Those are vague words. I asked that there should be no transfer of sovereignty without the consent of the inhabitants, and originated by them.
  Mr. Stewart: I could not answer "Yes" to the last phrase, "originated by them'', because the subject has already been originated and it is a matter of discussion between them and us.
  The hon. Gentleman is not right in saying that the words I used were vague. It must be clear to us that the islanders themselves regard the arrangements as satisfactory. If they regarded the arrangements as satisfactory, they would be consenting to them. If they did not regard them as satisfactory, they would not be consenting to them. I think, therefore, that the meaning of the phrase—
  Mr. Clark Hutchison indicated dissent.
  Mr. Stewart: I do not understand why the hon. Gentleman claims to see a difficulty there. Surely, what I have said is plain English. It is exactly what I mean, and the meaning is plain.
  Mr. Braine: The right hon. Gentleman made plain at the end of his speech that the Government will have full regard for the wishes of the inhabitants of the Falkland Islands. As I understand it, their full and openly expressed consent would be necessary before there could be any change in sovereignty. If that is what the right hon. Gentleman means, I am prepared to accept it. I think that that is satisfactory. But he has still not answered one question. If this has been in the Government's mind all the time,
  1466
  why was there so much secrecy? Why were not the representative institutions on the island told what the negotiations were about? Mr. Barton has said that the Executive Council has been kept in ignorance. Why has this little community been kept in the dark? Why could they not have been told, since it is now clear that the Government are tender for their interests?
  Mr. Stewart: First, may I say that the facts about who has been told are exactly as I stated them. Second, to have conducted the whole thing in the light of day, before the whole Island, would have meant, in effect, conducting it before the whole world, with the discussions taking place virtually in public. The hon. Gentleman said that he was a Commonwealth man. But he is used to the processes of diplomacy. He must accept that if one wants agreement there are occasions when one is more likely to get it if there is a degree of privacy about the consultations. It may be a pity that this is so. It may be a pity that human beings are so constructed that one cannot always reach wise decisions by completely public discussions. I think that we were right, in view of the many misinterpretations which may have been put on every sentence said by a diplomat or Minister who took part in the talks, to conduct them as such talks are usually conducted, in private and in confidence, but with the measures we took to see that the Governor was informed and that he had the authority to inform the Executive Council. This was the right balance between taking everyone into our confidence and conducting the talks in a way which gave them some chance of success.
  Mr. John Smith: How long does the right hon. Gentleman think that the period of uncertainty will last? How long will it be before we get a bit of certainty about the future?
  Mr. Stewart: I do not think that it would be wise for me to try to guess the answer to that question. We have made considerable progress in these talks and I hope that they may reach a satisfactory conclusion. I do not think that it would be sensible to prophesy a date.
  Mr. Kenyon: I do not know whether hon. Members know that the Governor was here in February and would have

  1467
  been informed of the circumstances by the Foreign Secretary. But Mr. Barton had left the island when the Governor got back and, therefore, he would not know what the Governor had learnt. I know that Mr. Barton went to Germany.
  Mr. Stewart: I think I ought to stick to what I know to be fact about the way the Governor has behaved.

  RATE REBATE SCHEME
  7.57 a.m.
  Mr. A. H. Macdonald: After the significant speech which we have just heard I hope that it is not too disagreeable if I come back to domestic affairs. I should like to address some remarks to the operation of the rate rebate scheme.
  This scheme has been well received and I am sure that I am not the only hon. Member who can testify that constituents have found it of material assistance to them in the conduct of their financial affairs. In some respects the publicity for the scheme has been deficient. Not everybody who qualifies for a rebate is aware of the facilities. The scheme has been quite well advertised, but I am a little sceptical about the merits of advertising in this kind of situation. Advertisements are effective when the audiences are prepared beforehand to realise that the advertisements refer to them and can mean direct benefit to them. I am not sure that the people who have read the advertisements realise that the scheme applies to them and that it was something for which they could apply.
  In the case of owner-occupiers I am satisfied that there has been no difficulty. A leaflet was circulated with the rate demand on the first occasion after the introduction of the scheme. At the time a rate demand is received the desire of the ratepayer to reduce the rate demand is at its height and therefore the impact of the leaflet is very great. There was a little initial difficulty in getting across to council tenants that they too may qualify for the rate rebate because they pay an inclusive rent. I believe that most local authorities have taken satisfactory steps to make their tenants aware of the facilities available, but I should like to know
  1468
  if the Ministry has satisfied itself that local authorities have done the necessary work in this connection.
  In the main, I am satisfied that people in those two categories who might qualify know about the position. I assume that there will be further publicity, because we are about to extend the scheme. My right hon. Friend the Prime Minister said on 16th January:
  "… we intend to raise the income limits for the Rate Rebate Scheme in the coming autumn. The qualifying limit for the full rebate will be raised for single persons from £8 per week to £9 per week, and from £10 to £11 for married couples;…"—[OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1586.]
  Because there are new limits, new people will be included, and therefore new publicity is desirable.
  The third category of people who may qualify for the scheme are private tenants. I am not satisfied that all who may qualify for rate rebate facilities know that they may do so. How can they know? By the very nature of their circumstances they receive no rate demand. Therefore, I suggest that information about the operation of the scheme be included in the rent book that private tenants must have. I am advised that no legislation is necessary, because powers exist to make regulations in this connection. The Government already by regulation insist that certain information must appear in the rent books of tenants, and I presume that what has been done in one connection may be done in another.
  I take it for granted that my hon. Friend the Joint Parliamentary Secretary is very familiar with what appears in a rent book. I am not quite so familiar with it, and therefore I have refreshed my memory. In the sample form of rent book I have here I was interested to see that in addition to information about the rent there is a section to display the owner's name and address, a section summarising extracts from the Housing Act, 1957, and a section setting out regulations applying to a regulated tenancy. In the book that I have here there is also a little section with something about pigeons, but I take it that that is a requirement of the particular landlord and is nothing statutory. If there may be all those things in the tenant's rent book, surely it should be possible to include a little section dealing with the rate rebate scheme?

  1469
  I have been in correspondence with my hon. Friend from time to time over a considerable period. In a letter to me dated 30th May, 1967, he said:
  "… it is one thing to require landlords in their rent books to provide information about tenants' rights in relation to their tenancies and another thing to compel them to give information about tenants' rights in relation to the local authority."
  I take that point, but on the front of the specimen rent book to which I have already referred, not tucked away inside, and incidentally in heavy type, there is this:
  "Attention is called to the fact that as the Landlord acts as Collector of Rates, which the Tenant would otherwise have to pay direct to the Rates Office, any increase in the rates may involve an increase in the Rent ".
  Therefore, I say that there is already reference to rates in the information which appears on the rent book.
  In September last year, I returned to the charge and again entered into correspondence with my hon. Friend. In a letter dated 16th October, he said:
  "Most rent books last for a long period and unless it could be got over to the landlords that there had been a change in the statutory requirements and the landlords could be persuaded to bring current rent books up to date we should not begin to reach our goal."
  My hon. Friend has been helpful and courteous, but I felt disconsolate when I read that reply, because if that argument were followed it would be equally valid against tie proposal to put anything at all in the tenant's rent book. But we have insisted that some things should appear and I do not see why this argument should be an argument against putting anything in about the rate rebate scheme. I beg him to think again about this. In the first place, we are about to increase the limits of the scheme and it is necessary to consider how publicity can best be obtained.
  Secondly, there can be a need to inquire whether landlords generally are complying with existing law about the information which must appear in the rent book. I have already referred to the fact that that information, for example, about the rent officer, must appear in tenant's rent books. We have made regulations to this effect and in the model rent book from which I have quoted this information appears. I should like to know whether it appears
  1470
  in all rent books, and what action my hon. Friend can usefully take to see that existing statutory requirements are fulfilled.
  I quote again from his letter of 16th October:
  "Let me say at once that our essential problem I believe, relates only to the small landlord, who may own only one or two properties, or may even only let off part of his house. He or she may well be no better informed about the law than the tenant. The bigger landlords who are well-informed about the law … are already co-operating with us…"
  Precisely. This is the exact point I want to make. I am satisfied that local authorities and large landlords are co-operating and making tenants properly aware of the facilities available to them. But I am anxious about the tenants of small landlords who, I suspect, are not so happily placed. My hon. Friend can hardly have it both ways. If we can now require by regulation that certain information should appear in rent books, I should like to be fully satisfied that this requirement is enforced. If it can be enforced, I see no objection to further information being included. If there be practical difficulties, how comes it that we already require certain information to appear, if we are not in a position to see that that requirement is carried out?
  I hope that my hon. Friend will give careful thought to the need to ensure that everyone knows about this excellent scheme. I have considered all the other methods of publicity which might be available. I thought of the Ministry of Social Security, which, in my constituency at any rate, is very helpful to people who consult it, and if they apply for supplementary benefit the officials consider whether it might not be more advantageous to them to apply under the rate rebate scheme instead. But those who qualify for supplementary benefit are not necessarily the same as those who qualify for rate rebate, so the Ministry of Social Security cannot be the only answer. It is obviously no good relying entirely upon the good will of landlords, because there is nothing in it for them and, therefore, although many of them are helpful, we cannot be sure they all will be.
  I do not believe it practical to rely entirely on the local authorities. They may suspect the extent of the problem in their areas but I do not see how they can

  1471
  know the particular people who will qualify. Nor am I satisfied that advertisements reach the people, particularly the elderly, who would be most likely to benefit. I conclude that the suggestion of including this information in the rent book is the most practical method of getting the details of the scheme across.
  8.11 a.m.
  The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): I start by agreeing with what my hon. Friend has said. I think that the rate rebate scheme has been remarkably successful. It has proved a great benefit to those who know about it and I agree with my hon. Friend when he says that it is a worry that more tenants, whether private or council, do not take advantage of it.
  From the numbers of people who claim the rebate, it is clear that many people are still not getting it who should get it. I share my hon. Friend's scepticism about the merits of advertising. It is one of our concerns to know how best to get this information across to those who most need it. My hon. Friend put his finger on one of the difficulties when he said that people do not think that this means them. But that would apply also to information in the rent book, because many people with rent books do not qualify for rate rebates and if the information was merely stuck in among other particulars there would be the danger that it would be simply part of routine information which the holders of rent books would not think particularly concerned them. I am sceptical about whether this is the best solution.
  Of course we have not been indifferent to the problem. A year ago, we prepared a leaflet which was distributed through Post Offices to all holders of family allowance and pension books. These are people who are not necessarily on supplementary benefit—it is not the people on supplementary benefit we want to reach—and are the sort of people who might be helped in this way.
  We have had advertisements in the national Press this year which have emphasised in particular the eligibility of tenants. My right hon. Friend issued a personal message, about which a Press notice was released, in which he drew
  1472
  attention to the position of tenants under the scheme. In my humble way, whenever I make a Ministerial or political speech, I try to get round to the point about tenants and rub in to local authorities and members of the Labour Party and other public spirited people the great importance of seeing that the tenants know what can be done.
  Since then we have also been trying to get directly to the tenants by getting rent officers to inform those who go to see them. The officers are able to tell them about the scheme and so this is another channel of help. We have sent a special note to the voluntary, social and welfare organisations, like the councils of social service, old people's welfare councils and community councils, so that they know about the scheme and can explain it. I agree with all my hon. Friend said about rating authorities playing an active part. We recently sent out a questionnaire asking about the effect of what had happened in the last financial year over rebates. That included a question about the methods used locally to bring this scheme to the notice of potential beneficiaries.
  That will not only be a jolt to the authorities, but it will also help us to see the most effective ways of getting results. New limits will be coming into force in October and we shall have to launch another publicity campaign. We have explored other ways of doing this which are effective.
  To deal with the point of the rent book. I make no point about not having the legal power to do this. My hon. Friend was probably right that it could be done under the Rent Act, 1962. It is of course open for someone to challenge the legality of an order of this sort, because it is not dealing specifically with a tenancy, but is a matter of local government finance. I am only thinking aloud here, because difficulties may arise.
  It is a continual battle to get rent books kept up to date with adequate information and it is most important that local authorities should enforce the very strong provisions about what should go in rent books. In 1966 my right hon. Friend the then Minister sent out a special circular asking local authorities to consider what additional steps they could conveniently take to bring the Act to the attention of the public, because there might have been

  1473
  some reluctance to institute proceedings in the past. There is no risk of the landlord taking action against the tenant. The tenant's position is now strengthened as a result of the previous Rent Act.
  My hon. Friend is right to be concerned about rate rebates, and rent books being kept up to date. It is important to keep them up to date in the limited period for which we have the regulations. It is important to have them conforming to the law and this is a matter upon which I entirely share the views of my hon. Friend.
  Mr. Macdonald: I was delighted to hear my hon. Friend referring to this circular asking particular questions. Have replies been received, containing suggestions, or if not what replies are expected?
  Mr. MacColl: The information about the current financial year was revised and will be coming in towards the end of the year. I will certainly be very interested to see what results we get. Whatever he may think, I can assure my hon. Friend that my heart is in the right place. I am anxious to see some development in the use of rate rebates and firm control over what goes into the rent book.

  MIDDLE EAST
  8.20 a.m.
  Mr. Raymond Fletcher: I suppose I should apologise to the House for detaining it at this hour of the morning, but I do not feel inclined to make any apology whatever for raising the question of the Middle East, even at this hour.
  What I want to say resolves itself into a couple of questions which will be directed to my hon. Friend the Minister of State for Foreign Affairs who is to reply, but I think it is necessary for me to preface the questions with a fairly brief statement of my own attitude towards the recent events in the Middle East.
  When we look at the Middle East we are confronted with a situation in which we see the only democracy in the Middle East surrounded by hostile states. I would go even further than that in terms that I hope will commend themselves to my hon. Friend. It is the only social democracy in the Middle East surround-
  1474
  ded by hostile States. Therefore, I find it quite impossible to adopt a position of neutrality as between Israel and the Arab states which encircle and threaten it.
  We are entitled in this House to make qualitative judgments about the internal and external policies of other countries, and I make this qualitative judgment about the State of Israel. It is a democracy. It is a social democracy, and it is threatened by something which we in this House have always found repellent and repugnant. I use those terms because when we consider the propaganda which emanates from the Arab states and when we consider what emanates almost daily from Cairo Radio, we find in that propaganda the kind of stuff that we used to hear from Berlin in the days of the late Dr. Goebbels. This entitles me, and I think the whole House, to make a distinction between the Arab states and Israel.
  As everybody is aware, in Nazi Germany what gave a peculiar horror to what was perpetrated by the Nazis was the fact that every act committed by the Nazis was inspired by Dr. Goebbels and the racialist propaganda that is associated with his name. There is no need for me to quote examples of the kind of racialist propaganda which has emanated from the radio stations of various Arab states. There is no need for me to remind the House that whatever may have been said since the six days' war, at the outset of that war the outspoken aims of the Arab armies as stated by the radio stations of the Arab States was nothing less than genocide. Those of us who know the Middle East know quite well that had the Arab armies reached Tel Aviv and then the Israeli-controlled part of Jerusalem, discipline would have broken down and there would have been a repetition of the kind of thing that we associate with the names of Auschwitz, Belsen and Dachau.
  Arab propagandists—many of them not Arab but German—made it quite clear that their war aim in June was not only the annihilation of the Israeli State but the liquidation of the Israelis. I mention this to emphasise that I cannot be neutral in any kind of conflict between the State of Israel—which is a democracy, and a social democracy—and the Arab States, which seem to me, having listened to and analysed so much of their

  1475
  propaganda, to have taken upon their shoulders the mantle of the late Dr. Goebbels.
  I speak not as an objective observer but as a partisan. I believe that the State of Israel has the right not only to exist but, considering the type of enemy which confronts it, has the right to defend itself. It is in this context that I place the recent events.
  First—since I may be to some extent in conflict with the Foreign Office on this question—I want to give one quotation which may settle once for all where British people should stand in relation to the State of Israel. It is a quotation from a book by the late Sir Lewis Namier, the eminent historian. He quotes from a talk he had—and he took shorthand notes of it—with a very celebrated figure in British history. This celebrated figure had this to say:
  "The problem of Zionism is the problem of the third generation"—
  this was said in 1930—
  "It is the grandsons of your immigrants who will make it succeed or fail, but the odds are so much in its favour that the experiment is worth backing; and I back it not because of the Jews, but because a regenerated Palestine is going to raise the whole moral and material status of its Middle East neighbours."
  That quotation comes from Lawrence of Arabia, who can be said to be one of the fathers of Arab nationalism. I take it as the text for my whole attitude towards the State of Israel, towards Zionism and towards the relationship between the State of Israel and its Arab neighbours.
  I have said that the State of Israel has the right not only to exist but to defend itself, and I am firmly convinced that the recent actions were conducted in pursuance of that right to defend itself. We have seen in the Press—notably in The Times—all kinds of justification for the existence of terrorist organisations on the west bank of the Jordan. We have seen a lengthy apologia by the Ambassador of the Kingdom of Jordan, in The Times only two days ago, for the existence of these terrorist groups, which he describes as resistance groups.
  Anything which emanates from the Arab States at this moment may be taken with the same pinch of salt with which we took the statements that came
  1476
  from both Jordan and Egypt at the time of the six days' war, to the effect that British aircraft were engaged in hostile activities against the Arab States. What I am saying in a roundabout way is that I just do not believe many of the statements which come from the Arab States. I do not care how eminent the people may be who make those statements, I just do not believe them. One of the awful facts of the present situation is the tendency of the Governments of the Arab States—and it is transmitted to the peoples of the Arab States—to believe in a kind of propaganda which gives them a kind of self-justification.
  This brings me to my first question. I would ask my hon. Friend to make it very clear that the Government do not condone terrorist activities of any kind. If we give the impression that these activities are legitimate, that these activities are in some way justified, far from expressing support for legitimate Arab interests, by fostering Arab illusions we are helping the present Governments of the Arab States to drive their own people towards ultimate destruction. Therefore, I think it is very necessary, in the interests of the Arab peoples themselves that there be clear condemnation of terrorist activities. We in this House have never sanctioned terrorism anywhere. If we gave the slightest sanction today, by regarding it, even indirectly, as legitimate resistance, we would be deluding the Governments of the Arab States, we would be deluding the citizens of the Arab States, we would be encouraging those Arab States to pursue what can only be a disastrous collision course.
  For the one thing which is clear and unmistakeable about the Middle East is that Israel is there to stay, that Israel is militarily powerful, and that no combination of Arab States in any way, shape or form can destroy the State of Israel. If anything emanates from this House to encourage Arab leaders in the delusion that at some future time Israel will disappear or just wither away, or become so weak and divided that it can be destroyed by military activity, if that illusion is fostered from this House, it can only mean disaster for the Arab peoples themselves. So I would ask my hon. Friend to make it very clear that, whatever the views of the Government

  1477
  on the Middle East situation as a whole—and I am not here to quarrel with the Government on this point—there is at no point any kind of support for the terrorism which is now being freely indulged on the west bank of the Jordan and freely condoned by the rather weak King of Jordan, who at one time condemned A1 Fateh but, when he realised that it had more popular support than he, condoned it. It is very necessary, therefore, for this House to make a clear and precise condemnation of that kind of activity. If we believe in peaceful settlements, as we all do, then that kind of terrorism, which we in this country have met in different forms in different parts of the world, cannot be condoned.
  The second point is this. We do have to understand, without completely supporting, the attitude of the Government of Israel. The Government of Israel are asked by the United Nations, the world authority, to conform with certain resolutions 'passed by the United Nations. I am sure that every hon. Member would hope that the Government of Israel would so conform and that every other State in the Middle East would, too. But we are justified in looking at the historical record, in the light of Israel's experience.
  There have been occasions when Israel has bowed to world opinion. There was a case in 1951, when Israel agreed that the island of Tiran should be cleared and occupied by Egypt, and that Israel had no objection to that occupation, provided that the Egyptians did not blockade the Israeli port. However, though Israel bowed to world opinion, Egypt did not.
  We come to 1957, when again Israel bowed to world opinion. She was persuaded to allow Sharm-el-Sheik to become, in a sense, a ward of the United Nations Emergency Force. We all know what happened to the U.N.E.F. Whatever else one may say about the United Nations Organisation, no one can disagree that Israel was very badly let down in the event—
  Mr. Speaker: Order. With respect, we cannot debate the whole of the history of Israel. The hon. Gentleman must confine himself to actions which he thinks that the Government might take now.
  Mr. Fletcher: I apologise, Mr. Speaker. I was carried away, as I am frequently. I wish merely to emphasise the fact that Israel has bowed to world opinion on two conspicuous occasions. Her Majesty's Government, quite correctly, also bow to world opinion and express their attitude towards the Middle East through the United Nations Organisation.
  I ask my hon. Friend to recall that the Israel experience of the United Nations Organisation has been a rather bitter one, and that the United Nations Organisation, fully supported by Her Majesty's Government, has not been able to play the rôle in the Middle East that most of us would wish to see.
  It is in that connection that I pose my second question. It is very important that Dr. Jarring's Mission should succeed, for reasons which I will not develop now. The Mission has the fullest support of Her Majesty's Government, but it is on the rocks. It has reached a difficult period in its existence. In spite of that, I would like a clear affirmation from my hon. Friend that it is still this Government's policy to give full support to the Mission and secure a peace settlement in the Middle East which, directly or indirectly, either by great Power agreement or through the United Nations Organisation, is underwritten by the rest of the Powers of the world.
  I emphasise that although we have in U.N. Resolutions the blueprint for a settlement—and I am as firmly convinced as anybody on the Government Front Bench that this is the only possible blueprint for a settlement—nevertheless, there is nothing in U.N. Resolutions and nothing in the statements of policy emanating from Her Majesty's Government which in any way reduces the importance at this time of the Arab States and Israel meeting face to face. This is not a situation that can be resolved by abstract formulae, whether produced from this House or from the United Nations Organisation. As I have said, the outlines for a settlement are already there, but they are not the settlement itself.
  There is a third question, which perhaps it would not be advisable to have answered at this moment. I would like confirmation of what I regard as an essential fact. At some point, in whatever negotiations arise from the blueprint produced by the United Nations, there must

  1479
  be a face to face confrontation. There must be face to face talks between the Arab States and Israel. It is impossible for Israel to continue to face the Arab States so long as the Arab States are bound by the Resolutions of the Khartum Summit Conference which implied no negotiations, no peace settlement, no peace at all. Peace requires a face to face confrontation.
  Finally, it is tragic—and I speak with some feeling—that this part of the world, which is the centre of the religions which inspire the majority of the human race, should be an arena of bloodshed and strife. It is terribly tragic that that should be so. But this is a part of the world in which the United Nations Organisation, if it is to work at all, if it is to be the skeleton framework of a future world government, has to be made to work. It is a part of the world where the United Nations Organisation can be made to work with the full support of Her Majesty's Government. But it is not sufficient that the United Nations shall move in and bring peace to a turbulent area. It is important that Her Majesty's Government should be rather more specific about what is happening in the Middle East.
  My third question, after all, is the—
  Mr. Speaker: Order. I would remind the hon. Member that during the last 17 hours I have frequently appealed for reasonably brief speeches.
  Mr. Fletcher: The last point is that I believe that the Government should emphasise that, whatever the outlines for the settlement, there must be a face to face negotiation between Israel and the Arab States. I ask the Government to use all their considerable powers and influence to bring this about.
  8.44 a.m.
  The Minister of State for Foreign Affairs (Mr. Goronwy Roberts): Like other hon. Members, I always listen with great interest and respect to my hon. Friend the Member for Ilkeston (Mr. Raymond Fletcher). Today he has spoken frankly as a partisan, but I am sure that he is equally capable of approaching this very difficult and dangerous problem with impartiality and objective analysis.
  I think that on reflection my hon. Friend will agree that it would not be
  1480
  productive to delve into the complex past history of the Arab-Israel problem to try to establish where the blame for the present situation principally lies. For the last 20 years the peoples of the Middle East have lived through a succession of crises, including three full-scale Arab-Israeli wars, which have brought untold harm and suffering to all the peoples concerned, and have in addition posed a threat to the peace of the whole world. It follows from this that the central aim of the Government in the present situation is to help to achieve a lasting peace in the area in which all the peoples of the region may be able to develop the full potentialities of their countries to the benefit of all, and in which our own considerable commercial and economic interests can flourish.
  I hope my hon. Friend will agree that in a situation such as this, where passions are bitterly inflamed, and where each side is convinced, not without some justice, that right is on its side, no other outside country will be able to help very much towards resolving the present conflict if it is considered to be the partisan of one side or the other. To be a partisan would in any case mean ignoring facets of the truth, since in this dispute we are faced with a conflict of two rights, for both of which there is much to be said. In these circumstances I hope the House will agree that a policy of impartiality, of not taking sides, is the only possible course for a responsible Government truly concerned to secure lasting peace in the area.
  I turn, now, to the more immediate situation as it has existed since the six-day war in June, 1967. Her Majesty's Government have maintained a balanced policy covering both the necessity for Israel to withdraw from occupied territories, and for the Arab countries to end the state of war with Israel and to acknowledge the right of Israel to live in peace within secure and recognised boundaries. This was set out by my right hon. Friend the former Foreign Secretary in his speeches of 21st June and 26th September at the United Nations, and also in statements to the House. It is in this way, I suggest, that we have been able to make a substantial contribution to the search for a peaceful settlement.
  We of course recognise that our ability to influence the situation acting on our

  1481
  own is necessarily limited, and that if an end is to be found to this destructive enmity which has bedeviled the area for the last 20 years it can only be achieved by the international community acting together in the interests of peace, and here I join my hon. Friend who emphasised the rôle of the United Nations in this matter. It is for this reason that the Government have, since the six-day war, laid so much stress on working through the United Nations.
  There may be those who question the efficacy of the United Nations in achieving constructive results, and I listened to what my hon. Friend said about Israeli doubts on this, based on what they consider to be their experience of the past. There have often been grounds for disappointment, not only in this matter, but in others. This could be inimical, but all the encouraging initiatives and all the hopes for progress towards an Arab-Israeli settlement have arisen out of the activity of the United Nations, and in that activity this country and this Government have played an honourable and effective part.
  In the immediate aftermath of the six-day war our efforts through the United Nations were necessarily concentrated on the achievement of a cease-fire and in trying to make it effective. There have, regrettably, been many breaches, on both sides, of the cease-fire, but it did at least confine the dangers of full-scale open war, with all the risks that this involved of escalation and extension. Later it was the policy of Her Majesty's Government to work through the United Nations for a Resolution dealing more directly with the substance of the Arab-Israeli situation and providing for the appointment of a representative of the Secretary General to go to the Middle East to discuss with the parties concerned and to try to bring them to accept a settlement based on the principles set out in the Resolution.
  The unanimous adoption by the Security Council of the British draft Resolution of 22nd November set the scene for the conciliatory Mission of
  1482
  the distinguished ambassador, Mr. Jarring, who is continuing, despite last week's clashes. My hon. Friend asked me to confirm that it is our policy fully to support the Jarring Mission. Of course, having been one of the principals concerned in making the Mission possible, we are indeed 100 per cent. in support of the Mission and deeply anxious that it should continue to full success.
  The Government believe that in this situation it is even more important that Mr. Jarring's Mission should be kept in being not only by all countries but by all countries in the Middle East. I welcome my hon. Friend's support in this. We hope that the unanimous Resolution adopted on 24th March by the Security Council condemning the Israeli incursion into the east bank of the Jordan on 21st March and deploring other violent incidents in violation of the cease fire, will have contributed to bringing home to both Arabs and Israelis the folly of allowing fresh escalation of violence.
  We all deplore all violence, whether by raid or reprisal in this highly dangerous situation, and our Permanent Representative at the United Nations made our attitude clear in the Session on 21st March. Obviously, if Mr. Jarring is to have any prospect of success, concessions will be required by both Israelis and arabs, which will mean their abandoning or modifying attitudes and positions to some of which they are deeply attached, but we are convinced that this is the only way to prevent the situation from getting worse.
  If there is no progress towards a settlement, passions will be further inflamed, there will be no slackening of the armed tensions of the past 20 years, and this cannot but be to the detriment of all the peoples of the Middle East and a constant threat to world peace. I am grateful for what my hon. Friend has said in support of the Government's firm policy of working through the United Nations and his appreciative references to our initiatives, and I hope that he will write and speak in future in support of those principles.

  AGRICULTURE (SUPPORT SYSTEM)
  8.54 a.m.
  Mr. Michael Jopling: This is a strange hour to discuss the need for a change in the agricultural support system. I am disconcerted that no one representing the Ministry of Agriculture is present, since I spoke to them yesterday afternoon about the situation of this subject on the list. It is No. 22 on the list, and I had grave doubts throughout the night about whether it would be reached. I think that my doubt was shared by officials of the Department. Certainly, I cannot understand why no one has come here this morning. I cannot understand why the Minister is not here. I was present during the debate on the Falkland Islands and have been ready to raise this subject.
  Mr. Ioan L. Evans (Comptroller of Her Majesty's Household): The Minister is on his way. We anticipated that some of the hon. Gentleman's colleagues would raise other topics, but his hon. Friends have not appeared. The hon. Gentleman is, therefore, raising this topic somewhat earlier than we had expected. However, I assure him that the Minister will be in his place shortly.
  Mr. Jopling: I am obliged for that information. Perhaps the hon. Gentleman might have added that some of his colleagues have withdrawn their names from the list of subjects which were to have been raised. For example, the hon. Member for Ealing, North (Mr. Molloy)—
  Mr. Speaker: Order. The hon. Member might now come to the topic which he wishes to raise.
  Mr. Jopling: You will appreciate my problem, Mr. Speaker, since I wished to address certain remarks to the Minister. He will be unable to reply adequately if he is not present—
  Mr. Speaker: Order. Mr. Speaker has been here all night. The hon. Member must now come to the topic he wishes to raise.
  Mr. Jopling: I can now do so, since the right hon. Gentleman the Minister is in his place. I am grateful to him for coming here personally He might like
  1484
  to know that I had not begun to discuss the matter I wish to raise—
  Mr. Speaker: Order. Now that the Minister is in his place, the hon. Member must certainly come to the topic he wishes to discuss.
  Mr. Jopling: Immediately, Mr. Speaker.
  Many hon. Members on both sides of the House feel that our system of agricultural support needs to be changed. Britain's great agriculture industry has been progressing well in the last 20 or more years under the general umbrella of the safeguards provided by the 1947 and 1957 Agriculture Acts. In general, those Acts have served the industry well. Agriculture has prospered, has expanded and has grown more efficient because of the advantages which those Measures have given to the industry. Until recently the agriculture policies of both parties were based on that umbrella and it is under the provisions of those Acts that our agricultural support system operates.
  Under the system there has been a spectacular growth in output. This year's Price Review White Paper, taking the years 1954–55 and 1956–57 as a base 100, puts the estimated production for 1967–68 at 144. That is a considerable increase, although it does not reflect the comparable increase in production achieved before 1954. There has also been an immense growth in productivity. When he spoke at the annual dinner of the N.F.U. at the Hilton Hotel, the Prime Minister made some glowing references to the increased productivity of the industry and added that if all other industries in Britain had shown the same growth, we should not be in the present financial dilemma.
  This great productivity and increase of production has continued with many fewer agricultural workers. From 1946, when there were 976,000 employed on the land, the number shrank to about half—485,000, in 1967. The position now, after 20 years working of the 1947 and the 1957 Acts, is that our agricultural industry, probably the most efficient in the world and certainly the most technologically able in the world and the best educated, is not going flat out. More seriously, farmers' incomes and the profitability of agriculture has been rising too slowly over recent years. I do not think many hon. Members would dispute the

  1485
  statement that farmers' incomes have been rising too slowly. I do not say that this trend was not present when my party was in power. It has been going on for the last eight years or so.
  Two or three years ago the government set targets in the National Plan which were supposed to show the way forward within the scope of the 1947 and the 1957 Acts. The trouble with the National Plan targets is that they give to home agriculture only a share of the growing demand for food over the years up to 1970. The suggestion is that agricultural production should increase by £200 million by 1970. I regard that as a poor target, which ought to be scrapped.
  In the Price Review White Paper there was very little reference to the National Plan. The Select Committee on Agriculture, which is now sitting, has heard recent evidence that the targets of the National Plan are the maximum permissible under present international agreements. If we are to expand production from our own farms, we shall have to change many of our international agreements. Our industry is tied down by many of these agreements. The industry is also tied down by the side-effects of the present support system. That is the impact which the Treasury and the Chancellor of the Exchequer have every year on the Price Review.
  In the Select Committee we are finding it very difficult indeed to get any acknowledgement from the Minister's officials that Treasury considerations are an inhibiting factor in the Price Review negotiations. I believe that all hon. Members are aware of this. I think it is the Treasury consideration and the need to conserve the liability of the taxpayer which is the biggest inhibiting factor in increasing farm production.
  When devaluation was announced in November, the Prime Minister talked at great length about the need to increase agricultural production. He said:
  "Farm production would be stimulated. We shall be able to do more to replace food imported from abroad."
  I am delighted that he thought fit to say that. Many of us, for a long time before devaluation, have urged that that should happen. But the right hon. Gentleman was quite right to say that, since
  1486
  devaluation, the need has become much more apparent.
  In the first paragraph of this year's White Paper, we read:
  "The Government have made clear the continuing importance which they attach to the import saving role of agriculture under the selective expansion programme."
  It is clear, therefore, that everyone wants to save imports by increasing home agricultural production. What is being done about it? Not enough. Once again, one comes up against the old Treasury barrier. It is there in this year's Price Review. Never has there been a time when everyone talked more volubly about the need for agriculture to play a greater import saving rôle than this year, but in paragraph 8 we have the same old dreary statement:
  "Nevertheless, the present economic situation requires tight control on public expenditure; and agriculture, like other industries, must absorb a reasonable part of its rising costs in accordance with the prices and incomes policy."
  The message is clear. Everyone wants greater agricultural production. The Prime Minister said so. Everyone agrees that our agriculture is very efficient and is poised to do it. The Prime Minister said that, too. Why does it not happen? In fact, the system makes it too expensive for the Treasury. The White Paper estimates that in the next financial year 1968–69 we shall have to spend £286 million on our agricultural support system. There is no doubt that we could increase production a great deal if we set out to do it.
  The inescapable conclusion from the facts of the situation is that the system must be changed. It has been the policy of my party since 1965 to scrap the present system of agricultural support. We believe that, although it has served us well, it is now out-dated.
  Mr. Speaker: Order. Will the hon. Gentleman help me? It is my impression that the present system of financial support could not be scrapped save by legislation.
  Mr. Jopling: That is so, Sir.
  Mr. Speaker: Then that matter must not be discussed this morning.
  Mr. Jopling: I am a little confused, Mr. Speaker.
  Mr. Speaker: If the hon. Gentleman has been here during the past 18 hours, he will have heard Mr. Speaker say from time to time that in debates on the Second Reading of the Consolidated Fund Bill matters of administration may be discussed, but matters involving legislation and taxation may not.
  Mr. Jopling: I understand, Mr. Speaker. I have pointed to the need to change our support system. I have shown that the present system is not satisfactory. May I now demonstrate some of the shortcomings in the system and where changes ought to be made?
  Mr. Speaker: Order. I am very patient and I want to help the hon. Gentleman. He may suggest changes in administration by the Ministry of Agriculture as it affects the problems of agriculture, but he may not suggest changes which would involve legislation.
  Mr. Jopling: May I put it in this way? Certain commodities are produced in this country which are subject to administration and oversight by the Ministry. The Ministry is doing it in certain ways. I wonder if I may suggest how it would be better for the country if we could increase production in certain parts of the industry and why it would be in the national interest to grow a bigger proportion of certain crops at home. I am sure that this would be in order.
  It is essential to renegotiate some of the international agreements which have been shown to be inhibiting. It seems ridiculous that so many of the countries from which we buy vast quantities of food have an appalling adverse balance of payments with us. Argentina is one example. We have discussed Argentina a great deal in recent months in another context. I do not want to pick on Argentina and I hope I will not be accused of doing so, but we have an enormous adverse balance of payments with that country. That goes for many other countries from which we buy vast quantities of food.
  It would not be unreasonable to pay less attention to the need to buy food from these countries so that we can sell a relatively small number of motor cars and other manufactured goods. I hope that the Minister will recognise the need to renegotiate many of these agreements.
  1488
  The situation cannot be allowed to continue.
  The Minister will agree that we must produce a great deal more beef. This was made clear in the Price Review White Paper. This means, because so much beef comes from the dairy herd, a vast increase in milk production. Many of us believe that we can use an extra 200 million gallons of milk in manufacturing industries. This is the sort of increased production which could be used and which the industry should be given the opportunity of producing. The industry should be encouraged to produce more hard wheat which we now import in such vast quantities.
  Many of us believe that when the bacon sharing agreement comes up for re-negotiation this year farmers should be given the opportunity of increasing their share. The Minister may say that the British bacon producers have not filled their quota in recent years. This is probably due to the poor rate which could well be taken up by a levy.
  It is time to try to find ways of changing the system. The National Farmers' Union is certainly well prepared to do this. I am sure that the Minister has read the speech that the President of the N.F.U. made last week. He said:
  "If rather more of the guaranteed price could come from the market and rather less from deficiency payments, it would be simpler for the Government to pay more regard to the need for improving the industry's financial position than is possible under our present system, where the limits are set by fear of the potential rise in Exchequer cost."
  That is exactly the point I have been trying to make. The Government are already working on this. We are told in the White Paper that they are already seeking to negotiate an increase in the minimum import price for cereals. This demands no legislation but an agreement between Governments. We believe that that is the wrong way to do it. We believe that if we are to jack up the price of imported cereals it should be done through the levy system instead of giving all the increased revenue to the countries that supply us.
  The agricultural Press is wild with rumours of the negotiations that the Minister is supposed to have started with the unions. I hope that he will take this opportunity of telling us what is happen

  1489
  ing and what he intends to do to change our outmoded system of agricultural support.
  9.15 a.m.
  Mr. John Brewis: I do not wish to detain the House for more than a few minutes. but having heard the speech of my hon. Friend the Member for Westmorland (Mr. Jopling), and knowing what an expert he is on the subject. I want to add my plea to what he said.
  The present situation regarding Argentina is very trenchant. I do not wish to speak about foot-and-mouth disease, but there must be considerable scope for import-saving, of which the Prime Minister has spoken so often. I acquit the Minister of Agriculture, Fisheries and Food of not having done more in this regard. One of the great difficulties is the Board of Trade, whose main object in life seems to be to maximise exports and pay very little attention to the saving of imports.
  A small example is early potatoes, which are grown in many districts in Britain, including many remote districts like Cornwall, Pembroke, Wigtownshire and the Ayrshire coast. At the same time we import them from at least 10 Mediterranean countries, including Egypt under President Nasser, which must be one of the stupidest things to do in view of his conduct in the past. Acreages of early potatoes have decreased over the years while imports have gone up and up. There needs to be urgent administrative action to see that more of our early potatoes are grown in this country.
  Eggs are another example. So often the extra 2 per cent. imported have completely broken the market, with the result that there have been much higher guarantees payable to the Egg Board. I am particularly interested to see the Board continue, because it seems to me to be one of the best ways in which producers in the remoter areas, such as farmers in the Orkneys, get a fair crack of the whip when selling their eggs.
  Lastly, there is the question of milk. It is not often realised that about 60 per cent. of the dairy products we consume is imported. We continually see the price of milk to the farmer being reduced by the need for so much milk
  1490
  to go to the manufacturer at a lower price. A quite small levy on imported butter, cheese and so on would have a tremendous effect on the return the farmer receives for his milk.
  Agriculture should get a greater part of its revenue from the market and very much less from the taxpayer. This would be much more satisfactory in the long run both to agriculture and the Treasury.
  9.20 a.m.
  Sir John Gilmour: My hon. Friend has drawn attention to the great need for a change in the method of help for our largest industry. At a time when we have a lot of extra taxes levied on us, the fact that agricultural support costs us £300 million is bound to spur people to make certain that we get value for our money. The fact that the expansion of agriculture adds to this bill makes it difficult for the Minister of Agriculture, Fisheries and Food to say to his Cabinet colleagues, "I can save you and the country millions of pounds if you allow the industry for which I am responsible to expand more and produce more for the home market." The Chancellor of the Exchequer will say, "This is all very well, but what will it cost?".
  I went yesterday to a grocer's shop and bought a tin of Argentine corned beef for which I paid 3s. 6d. It was a ½1b. tin, so I was paying 7s. per lb. for what I thought was inferior quality meat. I went to a butcher's shop in the same street and saw price tags at anything from 6s. 6d. per 1b. to 10s. for fresh, home-grown and killed beef. This is at a time when there is, or should be, no subsidy paid to the beef producers because the market price for beef is now above the guaranteed price. This leads me to think we are in a position in which the agriculture industry is not being given enough encouragement to produce all it can. It is not having the opportunity to substitute home-grown food in the markets in the way that it should. This should be happening in the national interest, because with the rising population, and, one hopes, the rising standard of living, there is no doubt that we shall have to spend millions every year in importing foodstuffs that we cannot grow ourselves.
  The size of our food importing bill will increase all the time, and if this is

  1491
  so, there is real need that we should produce much more of the food we can grow in this country. It is only by a change in the method of agricultural support that we can give the farming industry help to enlarge its production in the interests of the country as a whole, and of the countryside. This would arrest depopulation and bring more industries into the country. This is in the general national interest, and I hope that the Minister will be able to show the House that he is convinced of the need to encourage agricultural production in this country, and that the best way of doing this is by a change in the method of agricultural support.
  9.24 a.m.
  The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): I apologise for not having been immediately present when the hon. Member for Westmorland (Mr. Jopling) rose. However, I heard all his main arguments and I have heard him on previous occasions. He feels strongly about the industry, and this is right. He has a genuine desire to expand the industry, and even though there may be a different approach, we can say that this Government shares his wish that the industry should improve production and productivity.
  The hon. Member for Fife, East (Sir John Gilmour) wished me to say that I seek to increase agricultural production, and he believes that the way is to change the system. I say that even under the present system, despite all the difficulties and criticisms, there has been tremendous progress. This also applies to some points raised by the hon. Member for Galloway (Mr. J. Brewis). I have listened carefully to what has been said and I realise that there has been considerable discussion about this. The hon. Member for Westmorland is quite right. It is right that the farming world should discuss this. It will be discussed by politicians too.
  In the Press there has been controversy. Various newspapers have joined battle. Editorials have been published on the subject. This was highlighted by their attitude to my Review determinations. In the debate, it has been suggested that we should try to ensure that farmers get a larger proportion of their total return from the market. I know that hon. Mem
  1492
  bers opposite think that we should have an import levy system. I cannot debate that because you, Mr. Speaker, would call me to order, as you called the hon. Gentleman to order. But I do not take a rigid or dogmatic view on this matter. My aim is to achieve the objectives of the Agriculture Act, 1947. What are those objectives? They are a stable and efficient agriculture, with satisfactory living standards for farmers and workers and an adequate return on the capital invested in the industry. Hon. Members opposite do not disagree with those objectives. Indeed, they are really pressing me to fulfil them. They have never been fundamentally modified by previous Governments, including the Conservative administration. Despite what is being said about new policies by hon. Members opposite, their Government sought to fulfil these objectives.
  If we could attain these objectives more easily by adopting a new system or changing the existing one, I am ready to consider suggestions. But the system we have is very flexible. For instance, at the last Annual Review, we abolished the standard quantity arrangements for wheat, introduced about four years ago, because of the increasing urgency to save imports. Furthermore, I recognise that if we enter the E.E.C. we shall need to adopt its system of support. But I cannot argue that point because it, too, would be out of order.
  There are obvious advantages in the present system. I ask hon. Members not to be too critical of it until they have had an objective analysis of how it works. I am against a blind rush from the present system before we have considered carefully the merits and difficulties of the other systems it is suggested we should adopt.
  Over the past 20 years, there has been a new agricultural revolution. We have achieved so much in this country. Our agriculture has become the admiration of the world, and we sometimes forget that. The foundations, I am proud to say, were laid by my Labour predecessor, the late Tom Williams. Let us not denigrate the progress made in the countryside. If it is claimed that the system does not work, I reply that the facts show that we have achieved tremendous and dramatic progress. In the 40 years between 1858, when we began to take

  1493
  an agricultural census, and 1908, agricultural output increased by one fifth. In the next 30 years up to the outbreak of the Second World War, it again increased by one fifth. In the last 30 years, has doubled. A large part of the credit must go to the scientists, technicians and advisers but, above all, it must go to the farmers and farm workers.
  It is hard to doubt that our system of support provided under the Acts of 1947 and 1957 has also had a great deal to do with the creation of one of the world's most efficient agricultural industries. Wherever I go abroad, I am always very proud to extol what we have achieved in agriculture. I know that each year Ministers from other countries come here anxious to see what we have achieved. This year at the Royal Show we shall have visitors from all over the world, paying tribute to our achievements. When we talk about our system we ought never to forget the results which are to be seen.
  As compared with alternative systems, our system provides much greater security for the farmer in the case of commodities where we are largely self-supporting. Eggs are an obvious example. The danger to the farmer's security in such cases stems from the danger of over-production at home. The benefits of import regulation in such cases are limited. Our industry has greatly benefited from our ability to influence home production through changes in the guaranteed prices.
  The advantages are obtained at a certain cost to the Exchequer. The hon. Member said that the Exchequer inhibited decisions at Review time, but the Exchequer must be brought in, whatever system we adopt. The hon. Member would be living in cloud cuckoo land if he thought that no Conservative administration would allow the Treasury to have any influence. It always has had an influence, much more so under previous régimes than under mine. One has only to look at the positive side in my period as Minister, as compared with my predecessors. We have pumped more into the industry than any Conservative administration. The Treasury did inhibit them, but it does not inhibit a progressive Labour Government in the same way.
  Mr. Brewis: What about rising costs?
  Mr. Peart: This Review takes note of them. Costs cannot be completely recouped and I have said this in my Review. This has very sensibly been accepted. The farmers have not opposed my Review.
  Mr. Jopling rose—
  Mr. Peart: My Review—
  Mr. Jopling: Please give way.
  Mr. Speaker: Order. Interventions after 17 hours of debate are a little much.
  Mr. Peart: Advantages are obtained at a certain cost to the Exchequer. But the cost has remained remarkably stable over many years. The expected cost of agricultural support in 1967–68 at £270 million is almost no change in money terms from what it was eight years ago, but it is much lower in real terms. The outcome of the 1968 Review will increase Exchequer costs; next year's estimate at present is £317 million. That does not alter the fact that total Exchequer cost has been generally very stable despite occasional fluctuations from one year to another. Some of the guaranteed prices, those for wheat, eggs and pigs, are now actually lower than in 1951. The industry has been expanding because of its outstanding performance in improving productivity.
  The consumer is very important. No one questions that the present system is a great benefit to the consumer. Hon. Members may have seen some interesting figures published in The Times recently giving some specimen retail prices for November, 1967, compared with November, 1962. There have been increases, but food increases have risen only moderately. This is evident with eggs and milk. Sugar has not changed at all in price over five years. The objects of the 1947 and 1957 Acts are to create an efficient agricultural industry, develop competition and at the same time to bear in mind the needs of the community. In that sense the policy has worked.
  In my notes I have some careful arguments about the levy system, but it would be wrong of me to discuss it. Quite rightly, Mr. Speaker, under your guidance Members and Ministers must keep in order, and therefore I cannot give my arguments in connection with this matter. This is a pity in a sense, but we must recognise the procedure of the House.

  1495
  The hon. Gentleman has laid great stress on international agreements, on our import policy, on our controls, and on how we are involved in this question. I would only say that these agreements exist. I inherited them. There is the Bacon Market Sharing Understanding which the hon. Gentleman mentioned. There are other agreements. Also we have traditional suppliers like New Zealand. We have to bear their interests in mind, though we must certainly also give priority to the home producer.
  The hon. Gentleman seemed to write off the selective expansion programme. In the first paragraph of my White Paper, which he quoted against me, I emphasised the selective expansion programme. The hon. Gentleman should remember that that programme envisaged that by 1970–71 we will have need for an increased agricultural production of £200 million and that the greater part of it will be met by the home producer. But because we are a trading nation, we inevitably have obligations to other countries. There is nothing wrong about this. I am sure that the hon. Member for Westmorland is not an opponent of New Zealand and that he would not say to our New Zealand friends, "We shall cut you out of our markets. We will not take New Zealand butter and lamb." I would like to know whether that is what he means.
  Hon. Members have mentioned Argentina. But we must be consistent here. Are we going to say that Denmark shall not send any bacon to this country? That would be strange doctrine from a party which is wedded to going into Europe. They say that we should protect a vast market with a levy system, but within the market we would have to face competition from France and Western Germany. I do not say we should not do this; that would be logical if we accept that policy. But the danger of imports is always there. I should like to have discussions with the unions on this. Indeed, we are going to do so.
  There are problems concerning the minimum import prices for cereals. But the Board of Trade, which was criticised by the hon. Member for Galloway (Mr. Brewis), recently announced an agreement on eggs. Our suppliers from abroad supply only a small percentage, and in
  1496
  addition they are going to enter an informal agreement whereby they will exercise a measure of restraint.
  We have our quota system for butter. Are we going to end that? Have we to smash all these agreements because we are doctrinal? Of course not. No Tory administration would do that. If they would do it, I hope their leaders will say so, but so far I have not heard a peep, or a cheep or a cry from them on this matter. They must be honest with our Commonwealth friends and our friends in Europe, such as Denmark, and say to them, "We are going to cut off completely all your trade", if that is what they intend. But then people say "We want more exports into your countries." Is this the way to get those exports?
  I hope our agricultural industry will become so strong that we shall be able to export more of our products. We have indeed been doing this, barley being one classic example. There are tremendous possibilities here. If our industry only continues as it is, developing technologically and leading the world in many ways, we shall increase our exports greatly.
  I was asked about discussions with the unions. I am about to hold these discussions to explore more precisely what they had in mind during the Annual Price Review discussions. I cannot forecast the outcome, and I emphasise that these are not discussions designed to lead to a sweeping immediate change in all our present arrangements. The House may be sure that the Government have no intention of rushing into changes in our agricultural support policy—a policy which, produced by Tom Williams, has brought immense benefits to farmers and to the public.
  Even if we concluded that some changes were necessary—and I have an open mind on this—there would be many problems to be solved before we could make a change. In the meantime, I am satisfied that we are pursuing an agricultural policy well suited to the needs of the industry and the country. If changes are needed we will make them, if they are right. But we shall not be doctrinaire, for party reasons or any other reasons. We shall do what we think is right for the community and the nation.
  The Parliamentary Secretary to the Treasury (Mr. John Silkin) rose in his place, and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question put accordingly and agreed to.
  Bill accordingly read a Second time and committed to a Committee of the whole House.
  Committee this day.

  INDUSTRY (SELF-EMPLOYED PERSONS)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ioan L. Evans.]
  9.42 a.m.
  Mr. E. S. Bishop: After over nineteen hours sitting in the House I am still glad to have the opportunity of raising the subject of the abuses of self-employment in industry. In recent months the gnomes of Zurich have been rightly blamed for their ignominious activities, but here in Britain equally damaging activities have been taking place without much publicity. I refer to those aspects of self-employment in industry where workers have found a way of hiring themselves direct to an employer or through an agent, and through what is really a fiddle increasing their income by evading much of the legislation passed by Parliament for the protection of society in the last half century.
  I believe that if this practice grows—and it has been increasing—we may find workers in many industries and in commerce becoming "self-employed". There is little to stop workers giving their notice to their boss and then working at the same job, in the same place, but with higher pay, for when one is not an employee the network of legislation such as that concerning hours of work, conditions affecting health and safety, training, payment during sickness, compensation, redundancy and the need for trade union representation no longer applies, and the employer no longer has to pay S.E.T., so that with the higher
  1498
  rates of S.E.T. this will be a greater temptation.
  The practice, which is at present widespread in design and drawing offices, could spread to clerks, shop workers, tradesmen, engineers and many other grades of workers, for already some building workers, designers, inspectors, technicians and professional workers are among the "self-employed". I will briefly define the various classes of employment. There is the employee, who works for an employer and who is protected by legislation regarding the hours he works, the conditions under which he is employed, and by trade union agreements, and who is covered by many Acts of Parliament regarding contracts of employment, redundancy, sickness benefit and much else.
  There is the draughtsman or designer or technician who works for a contract office which employs workers and hires them out to work in drawing offices of firms for an agreed rate; they are continuously employed, their employer paying their National Insurance contribution, and statutory provisions apply. They are covered by national and local agreements.
  Contract designers or draughtsmen are used by firms when they have an urgent need for extra staff whom they may not wish to employ permanently, although some contract men are employed for long periods in firms. Many are trade unionists.
  On 17th July, 1956, Sub-Committee E of the Select Committee on Estimates asked the views of the then Ministry of Supply on a paper submitted by the then Association of Engineering and Shipbuilding Draughtsmen—now the Draughtsmen's and Allied Technicians' Association. The paper concerned the trade union view regarding the use of draughting agencies and contract workers in engineering. The Ministry view was that it concerned the main employer of such labour, and in the absence of evidence of abuse, or that excessive additions to the cost of Government contracts was being incurred, it would not interfere in the exercise by a firm of its own discretion.
  Trade unions accept that consulting firms employ workers who have a specialist knowledge of a particular aspect of engineering, and that such employees are

  1499
  employed on normal staff conditions. Some contract firms employ staff in their own offices, and that is considered by trade unions to be better than sending employees out to work for the firms to which their employer is contracting, and there are trade union agreements for many such contract technical workers.
  But with self-employed workers the position is very different, and it is thought that the great majority of self-employed draughtsmen and technicians are not really self-employed but are, in effect, bogus. Apart from supply of their own drawing instruments, they work in an office provided by an employer, using the employer's drawingboard and other equipment, and being subject to office conditions which have been provided as the result of trade union activity over the years; but they are not eligible to become trade unionists because technically they are their own employers. They work for an hourly rate of pay, and their discretion in what they do for their employer is not unlike that of any other employee with whom they work.
  What are the anomalies? Some employers, being short of technical workers, or wishing to evade the obligations they should, socially and morally, accept, avoid the consequences of statutory legislation which Parliament has seen fit to pass during half a century. Self-employed men are not paid for sickness or holidays, and get no superannuation. They are not covered by Acts affecting contracts of employment, or the Redundancy Payments Act, or the Industrial Training Act. They can work unlimited hours, and in conditions not controlled by the Act, and they can undermine the work of trade unions by avoiding the obligations of collective bargaining and the regulation of salaries. S.E.T. apparently does not affect their real employer, and it also appears that the prices and incomes legislation does not affect them, as they are not employed in the usual way by an employer. Self-employed workers can get Income Tax rebates, sometimes claiming allowances for travelling, for the services of a member of the family who, it is claimed. acts as a secretary, for a domestic telephone, and for the use of their home as an office which they classify as business premises.
  There are, of course, genuinely self-employed people, including doctors and
  1500
  authors, and others who may work from their homes, and, of course, there are consultants who are also self-employed.
  But possibly most seriously such people working as so-called self-employed technicians within an office where other workers are organised can cause tensions and the disruption of normal working arrangements. Employers are sometimes willing to pay 30s. an hour or more to self-employed men because it does not commit them to pay more to other staff, and, of course, the employers are not loaded with the social and industrial obligations they bear to employees.
  Self-employment is a threat to the trade union movement, without whose assistance industry could not function efficiently, or make progress. It is incompatible with the objectives which Parliament has for working within industry. It leads to a lowering of technical standards, self-employed workers owing no allegiance to their employer. And, of course, bad feeling is created with other workers. In 1966 there was the strike caused at the English Electric Company's factories at Whetstone and Rugby, which was finally settled with the firm accepting an agreement to use only contract firms whose conditions of employment were confirmed as acceptable to D.A.T.A. and the unions.
  Self-employed persons are not eligible for trade union membership. There are agreements or understandings with a number of firms including Rolls Royce, Marconi, British Oxygen and other firms, but in the last year there were estimated to be 90 firms in London and the South-East area using self-employed men. The practice is also applicable in South Wales, Lancashire, the Midlands, and the North.
  Since my election to Parliament in 1964, I have been seeking to eliminate this kind of abuse. I am aware that the Phelps Brown Committee is looking into other aspects of self-employment which is particularly applicable to the building industry.
  Early in 1966, I was told in reply to a Parliamentary Question to the Minister of Labour that he would deprecate any attempt to deprive employees of rights against their will, but claimed that the question of whether or not a person was self-employed could only be finally decided by an industrial tribunal or court

  1501
  of law when a claim arose. But trade unions are reluctant to act as informers.
  I have tabled more Questions on the subject from time to time, and on 8th March, 1966, I led a deputation to the Minister of Labour to express, with members of other trade unions who are in the House, our concern at the growth of self-employment. In February of last year, I sought the opportunity to lead another deputation to the Minister, but was told that D.A.T.A. was also seeking an interview on the subject, and in fact such a meeting was held with the union and the union's views were received sympathetically.
  I have also urged Ministers in charge of Government Departments employing self-employed labour to stop the practice. I have been told that it is not Government policy to encourage abuses, but I have good reason to think that the practice continues.
  I am sure that the Minister is sympathetic to the case that I have outlined. However, we seek not only sympathy but action to remove the abuses. I know that the Parliamentary Secretary cannot look into the aspect of tax evasion, or give guarantees that no Government Departments will employ, directly or indirectly, bogus workers of the category that I have outlined, and that Departments like the Ministry of Defence and the Ministry of Public Building and Works will not employ them or give contracts to their suppliers, which permit their employment.
  However, I hope that the Minister will urge his right hon. Friend to make it clear that he feels strongly that the abuse of self-employment is so deplorable and such a menace to good industrial relations and the good order of industry that he will urge his Government colleagues to get their brooms ready to sweep the practice away. I hope, too, that he will consider how the statutory legislation for which he is responsible can be reviewed in its operation so as to end self-employment which is not genuine, and ensure that the S.E.T. and prices and incomes legislation which allows evasion will be checked for loopholes.
  I warn the Minister that this is a menace which is growing and can cause great harm to our industrial society,
  1502
  whose workers and whose trade unions and managements are anxious to foster the harmony essential to progress and productivity.
  9.56 a.m.
  The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Roy Hattersley): Not for the first time, my hon. Friend has done the House a service by drawing its attention to the effects and abuses of self-employment in industry.
  I want to begin by putting in perspective the range and nature of the problem. According to the findings of the 1966 Census of Population, there are in Great Britain about 1½ million self-employed people, half a million of whom are themselves employers of labour. It is right to say that the abuses which go on are principally to be found amongst the million or so self-employed people who employ no other workers.
  In 1951, this group represented about 5 per cent. of the working population. By 1961, the proportion had fallen to nearer 4 per cent. Between 1961 and 1966, it appears to have remained static at about 4 per cent. Evidence obtained from the National Insurance returns suggests that, since 1966, there may have been some increases, particularly in the construction industry. Overall, however, the increase has been slight.
  It is important to bear in mind that, in some activities, self-employment is certainly legitimate and probably a desirable system. My hon. Friend referred to doctors and others, and the use of agencies to meet peak demands in a factory which, throughout the year, has an uneven workload.
  However, my hon. Friend went on to draw a distinction between this and what he rightly described as bogus self-employment, and he called attention to the abuses involved in that system. He was in fact referring to attempts to evade social liabilities by changing the status of the employment without changing the nature and character of the work. He was rightly referring to those occasions when a man goes on doing the same job that he has always done, or takes a job which has previously been performed by an employee, yet by describing his task as self-employment obtains real or imaginary benefits for himself and for the company in which he works.

  1503
  It would be wrong for me to pretend that some of the advantages so obtained are not very real indeed, especially from a short-term point of view. But despite these financial advantages, it is important to bear in mind that there is, in general, no evidence of a massive shift towards self-employment. I believe that massive shift has not taken place for three reasons. The first is that a majority of employers are anxious to meet their social obligations. The second is that trade unions are determined that they should do so. The third is that the benefits, obtained through avoiding the payments associated with the direct employment of labour, are not as great for the individual company as they may first appear and for the individual employee they may be non-existent.
  Let me list the financial advantages which might, and indeed do, accrue by such a transfer. They appear substantial. For a man earning £20 a week, in some industries the transfer of status may mean for his company and for himself a combined saving of between £3 or £4–15 to 20 per cent. of his total wage.
  For the individual it may make some difference to the amount of Income Tax he is liable to pay, and Schedule D taxes are certainly more difficult to collect than P.A.Y.E. His National Insurance contribution as a self-employed person will be less by 28s. than the total of what he and his firm would have to pay if he were employed directly. In terms of Selective Employment Tax liability, the difference for the firm, if it is not eligible for refund, may now be 25s. It will soon be 37s. 6d. as a result of the increase in rate announced in the Budget. The Industrial Training Board Levy, which in engineering may be 2½ per cent. of the wage bill, is avoided. The company also avoids the contingent liability of its share of payments under the Redundancy Payments Act and payments in lieu of notice under the Contracts of Employment Act. It may also avoid payment of wage rates and fringe benefits which have been determined by the normal negotiating machinery in the industry.
  But it is important to balance against these apparent advantages the disadvantages of self-employment. The first and most obvious is the loss of benefit that a man who chooses self-employment will undoubtedly suffer. He loses his unemployment benefit. He loses his
  1504
  industrial injury benefit. He loses his redundancy payment. He loses the security offered by the Contract of Employment Act. He loses the earnings related supplement to sickness benefit and the graduated portion of the National Insurance retirement pension. He will lose the protection of a union and the security of a steady job. The company loses the stability that flows from properly negotiated wage agreements.
  My hon. Friend has naturally, because of his personal associations, referred to problems of self-employed draughtsmen. It is important to remember that for draughtsmen, on most occasions, one of these financial advantages will not be offered to a company which chooses self, rather than direct, employment. Most draughtsmen are in manufacturing and there is, therefore, no question of saving Selective Employment Tax. Indeed, since the House of Lords decision on the Reliant Tool Company, contract drawing offices doing work for manufacturing companies are equally entitled to the refund.
  But it can be, and indeed is, argued that such financial advantages are to be obtained in the construction industry. It is because of the general need to examine this aspect of employment in that industry, as well as the more general issues, such as the casual nature of construction employment, that my right hon. Friends set up a year ago the Phelps Brown Committee to inquire into the use and engagement of labour in construction with particular reference to labour-only sub-contracting. Its report is expected this summer.
  My hon. Friend's union urged that the inquiry might be extended to examine self-employment outside the building industry. While such an extension was not possible, we were able to assure that union that evidence from it would be taken by the Committee. We also promised the union that we would ensure that the present regulations governing the position of the self-employed would be enforced. I ought to make it clear that no company or individual can obtain for its workpeople, or for himself, self-employed status simply by a declaration that an employee, or he, has become self-employed.
  There is a legal distinction between a contract of service, and a contract for

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  services. The criteria which determine under which of these headings work-people should be classified are concerned with the degree of detailed control the management has over its employee, and the nature of the relationship between an employee and an employer. A self-employed person must be working virtually on his own initiative, and under his own supervision.
  When an employee is not genuinely self-employed by these rigorous criteria, he is not entitled to the advantages associated with that status. The Inland Revenue has drawn the attention of its tax inspectors to the need to examine claims of self-employment with special care. The Ministry of Social Security, through the recent enactment of the Public Expenditure and Receipts Act, has strengthened the power of its inspectors in obtaining information from labour agencies, and has, in the recent past, mounted major surveys at construction sites to check the level of compliance with National Insurance registration.
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  In short, the Government's attitude is clear. Where self-employment is genuine and beneficial, we insist on its right to continue, but where it is bogus and intended simply as a method of evading responsibility, we are determined that unjustified benefits should not accrue. The opportunities for this sort of thing obviously vary according to the employment practices of different industries. The construction industry, in which there is so much casual employment is clearly open to it, and in this industry self-employment seems to be increasing markedly. We are awaiting the report of our inquiry to know what remedies we must apply to this potentially dangerous situation. For the time being we can see the potential dangers. When the report is at our disposal, I think my hon. Friend will see that we will act with dispatch and determination to end what I reiterate is a potentially dangerous industrial situation.
  Question put and agreed to.
  Adjourned accordingly at two minutes past Ten o'clock a.m.