Commons Sitting of 28 April 1969

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  CIVIL SERVICE

    Civil Service College
    Mr. David Howellasked the Minister for the Civil Service into how many separate units the proposed civil service college will be divided; and where they will be located.
    The Paymaster-General (Mrs. Judith Hart): Three, of which two are to be residential. As my right hon. Friend the Prime Minister announced on 21st November last, one of the latter will be at Sunningdale Park, near Ascot, but I cannot yet make a statement about the other. The third unit will make use of existing non-residential premises in central London.—[Vol. 773, c. 1550–1.]
    Mr. Howell: Can the right hon. Lady tell us when she will be able to make a statement about this and can she also say whether it is true that the other part of the unit may be sited in Scotland and Wales? Does she think that it is wise to break up the bits of the college?
    Mrs. Hart: No decision has so far been made about the third part. We have to take into account a number of factors. There is no certain truth in the suggestion that the hon. Member has made. As he will know, representations have been made from hon. Members on both sides of the House about the possibilities of Scotland and Wales, but no decision is in sight at the moment.
    Mr. Dalyell: Does my right hon. Friend agree that there is a very powerful Scottish case in this connection?
    Mrs. Hart: Yes. In weighing up all the factors we are anxious to take account of the reasonable possibility of the third residential unit being in some part of the country other than London.
    Mr. Sheldonasked the Minister for the Civil Service if he will make a further statement on the Civil Service College.
    Mrs. Hart: I cannot at present add to the Answer which my right hon. Friend the Minister without Portfolio gave to the hon. Gentleman the Member for Honiton (Mr. Emery) on 17th March.
    Mr. Sheldon: I understand that my right hon. Friend wishes to increase employment opportunities in the regions by siting one or more of the colleges there, but will she also accept that there Es a very considerable advantage in having the colleges at least near London if only to make certain that there will be the necessary interchange of ideas between the colleges and the Civil Service itself?
    Mrs. Hart: I think this point is taken full account of in our decision that the residential college shall be near London and the non-residential college in London. I think there is enough room for the third part of the college to be sited outside London without necessarily interfering with the kind of objectives my hon Friend has in mind.

    Fulton Report (Implementation)
    Mr. David Howellasked the Minister for the Civil Service to what extent the pace of implementation of the Fulton Report by his department will be affected by the work of the Constitutional Commission.
    Mrs. Hart: Not at all.
    Mr. Howell: If the Constitutional Commission is a serious undertaking, surely its concern must be closely with matters that are also discussed in the Fulton Report, in particular, the constitutional position of Whitehall, the powers of civil servants and the structure of the Civil Service. I do not see how these things can be separated. Surely they must be taken together?
    Mrs. Hart: The hon. Member appears to be overlooking the fact that the whole purpose of this post-Fulton exercise is to create a Civil Service which is flexible

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    and adaptable. That purpose being achieved, the Civil Service should be quite capable of adapting to whatever proposals may be made by the Constitutional Commission.

    Pensions
    Sir B. Rhys Williamsasked the Minister for Civil Service what estimates he has made of the annual cost of protecting the pension rights of members of public sector schemes who change employment before the normal retiring age by giving full transferability, and of the savings to be made by restricting the degree of protection to preservation only.
    Mrs. Hart: The estimated additional costs of preservation and of transferability of pensions for the country as a whole were given by my hon. Friend the Under-Secretary for Employment and Productivity in reply to a Question by the hon. Member on 24th February. Of these costs it is estimated that about one-half would fall on public sector schemes.—[Vol. 778; c. 1051.]
    Sir B. Rhys Williams: Does the right hon. Lady accept that transferability is the only acceptable target, and that preservation is a very poor alternative?
    Mrs. Hart: No. I think that the hon. Member, quite sincerely, underrates the vast importance of achieving preservation. He will recognise that the decision about this, as was earlier explained in the White Paper, rests on the feasibility of achieving full transferability, but he is mistaken to underrate the immense achievement to be made by preservation.
    Sir B. Rhys Williamsasked the Minister for the Civil Service what is the composition of the committee which has been reviewing the Civil Service pension scheme in the light of the White Paper, National Superannuation and Social Insurance; what recommendations it has made; and if he will make a statement.
    Mrs. Hart: The committee, which is under the chairmanship of an Under-Secretary in the Civil Service Department, consists of 10 Official Side members from Government Departments, and 12 Staff Side members. With permission, I will circulate details in the OFFICIAL
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    REPORT. The committee is undertaking a far-reaching review and its recommendations cannot be expected for some considerable time.
    Sir B. Rhys Williams: Will the Civil Service be contracted out of the new scheme?
    Mrs. Hart: I think that the hon. Member is as much aware as any hon. Member of what is being tackled by the committee, namely, reconstructing the entire superannuation scheme. It is far too early to say what the position will be at the end of the committee's considerations.
    Mr. Boyd-Carpenter: Can the right hon. Lady at least give an assurance that there is no question of reducing the noncontributory pensions which are part of a civil servant's terms of service, in order to adjust to the situation in the light of national superannuation?
    Mrs. Hart: None of those factors comes into the matter. I can certainly assure the right hon. Gentleman about that.
    Following are the names of the members of the committee:
    Official Side

    Officials from the following Departments:

    Civil Service Department

    Ministry of Defence (Army Department)

    Department of Employment and Productivity

    Foreign and Commonwealth Office

    Government Actuary's Department

    Department of Health and Social Security

    Ministry of Housing and Local Government

    Inland Revenue.

    Staff Side

    Mr. T. H. Profitt (Vice-Chairman), National Staff Side.

    Mr. J. Bishop, Joint Co-ordinating Committee for Government Industrial Establishments.

    Mr. E. V. W. Marshall, Union of Post Office Workers.

    Mr. J. Muir, Society of Civil Servants.

    Mr. D. Northrop, First Division Association.

    Mr. S. C. Rosser, Post Office Engineering Union.

    Mr. S. A. R. Seaton, Post Office Management Staffs Association.

    Mr. K. R. Thomas, Civil Service Clerical Association.

    Mr. J. L. Tindall, Ministry of Labour Staff Association.

    Mr. J. O. N. Vickers. Civil Service Union.

    Mr. L. T. Williams, Joint Co-ordinating Committee for Government Industrial Establishments.

    Mr. B. G. Sutherland, National Staff Side.

    Senior Civil Servants (Salaries)
    Mr. Biffenasked the Minister for the Civil Service what proposals he has for revising the salary structure of senior civil servants.
    Mrs. Hart: I would refer the hon. Gentleman to my reply on 1st April to my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis.)—[Vol. 781, c. 81.]
    Mr. Biffen: Does the right hon. Lady acknowledge that the National Board for Prices and Incomes implicitly recognised that the salaries of these people could not be insulated from the consequences of the recent increases in pay by the chairmen of nationalised undertakings—a point reinforced by the latest increase given to Lord Melchett? Is the right hon. Lady seized of the point?
    Mrs. Hart: It is not a question of whether I am seized of it; the question is that the pay of higher civil servants is under review, at its own initiative, by the Standing Advisory Committee. This Committee is expected to report in due course, and no doubt will have borne in mind the report of the N.B.P.I. on top salaries in the private sector.
    Mr. Arthur Lewis: If my right hon. Friend does bear in mind the suggestion made by the hon. Member for Owestry (Mr. Biffen), will she also bear in mind that it would give very much pleasure to hon. Members on this side of the House if she would try to treat nurses on the same basis as the hon. Member has suggested?
    Mrs. Hart: That raises a rather different question.
    Mr. Higgins: The right hon. Lady will be aware that following the statement by her right hon. Friend on salaries of the chairmen of the nationalised industries, some confusion has arisen in regard to the prices and incomes norm. Is it her understanding that the norm is 3½ per cent. in total, or 3½ per cent. going back to the date when the last increase took place?
    Mrs. Hart: On this question we have to await the conclusions of the Standing Advisory Committee which has been looking into the matter. In due time no doubt it may report and take due
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    account of comparability, norms and other questions which arise.

    Civil Servants (Overseas Visits)
    Mr. Ian Lloydasked the Minister for the Civil Service (1) what categories of civil servant travelling abroad on Government business are normally required to finance their official foreign currency requirements from their personal resources, pending subsequent reimbursement; and
    (2) what arrangements are made to provide foreign currency in advance to those categories of civil servant who are not normally required to finance their official foreign currency requirements from their personal resources when travelling abroad on Government business.
    Mrs. Hart: No civil servant is required to meet the official expenses of a visit overseas from his own resources. If he wishes, he can get an accountable advance in sterling from his Department.
    Mr. Lloyd: That is a very interesting reply. If these arrangements are possible for civil servants, why not for Members of Parliament?
    Mrs. Hart: I understand that in fact hon. Members can receive sterling advances, but detailed arrangements are of course a matter for my right hon. Friend the Foreign Secretary. I know that the hon. Member had some difficulty in a recent experience. I hope that it has been sufficiently clarified by the correspondence he has had. If not, no doubt he will raise it further with the Foreign Secretary or me.

    Senior and Chief Executive Officers (Pay)
    Mr. Gresham Cookeasked the Minister for the Civil Service by what percentage the index of earnings has risen during the period from 1st April, 1965, to 31st March, 1969; and what was the percentage increase during this period in the maximum earnings, exclusive of London weighting allowance, of senior and chief executive officers in the Civil Service.
    Mrs. Hart: From March, 1965, to February, 1969, the figures are 25·6 per cent., and 16·8 and 17·3 per cent. respectively.
    Mr. Gresham Cooke: Does this not indicate that the middle ranges of the Civil Service are falling behind people outside in the general rise in wages and salaries? Is it not rather a pity if they are to fall behind, and shall we not have difficulty in attracting the right type of person to the middle ranges of the Civil Service?
    Mrs. Hart: The last detailed comparisons were made on 1st January, 1968, but the period before the next comparisons are made has been agreed between the Official and Staff Sides of the National Whitley Council.

    London Weighting Allowance
    Mr. Gresham Cookeasked the Minister for the Civil Service on what date was the London weighting allowance for civil servants last increased; and whether he will now take steps to increase this allowance further in view of its inadequacy.
    Mrs. Hart: On 1st November, 1967, in accordance with the recommendations of Report No. 44 of the National Board for Prices and Incomes. The Report, which the Government accepted as a whole, recommended that the next review should be effective from 1st November, 1970. There are no new factors to justify departing from this recommendation.
    Mr. Gresham Cooke: Perhaps the right hon. Lady would bear in mind that if she wanted to adjust the salaries to which I referred the London weighting allowance might be the way of doing so?
    Mrs. Hart: This is one of the points that the Staff Side will be discussing in the Whitley Council machinery.

    Members' Letters
    Mr. Arthur Lewisasked the Minister for the Civil Service whether he will institute a system whereby Members' letters are formally acknowledged by Departments within one week of receipt; in cases where a final reply cannot be sent if he will arrange for an interim reply to be sent in three weeks; and where by the fifth week a final reply is still not available if he will arrange for reasons to be given to the hon. Member submitting the original correspondence.
    Mrs. Hart: I would refer my hon. Friend to the reply my right hon. Friend the Prime Minister gave him on 23rd January.—[Vol. 776, c. 172.]
    Mr. Lewis: It was because that was unsatisfactory that I put down this Question, and the Answer to this is also unsatisfactory. Does my right hon. Friend think it fair that hon. Members should be kept waiting five, six and in some instances 10 or 12 weeks for a reply which in some instances the Minister could have obtained within 24 hours? As this is not a good thing from the constituents' point of view, will the Minister do something to speed up replies?
    Mrs. Hart: I agree that if that is the case my hon. Friend has something to complain about, and I hope that he will not hesitate to let me have details of particular instances he has in mind. He will recognise, however, that in some cases delay is inevitable where contact has to be made with local or regional offices. I hope that he will let me know of cases where there is delay.

    Professional Accountant Class
    Mr. Richard Wainwrightasked the Minister for the Civil Service what he has done to implement the recommendations of the Fulton Committee as to greater use of professionally qualified accountants within the Civil Service.
    Mrs. Hart: An interdepartmental working party is following up the recommendations of the Fulton Committee. We hope that progress will not be too much affected by the national shortage of accountants.
    Mr. Wainwright: May we take it from that Answer that the right hon. Lady supports the recommendations of the Fulton Committee in regard to qualified accountants?
    Mrs. Hart: We are now following up those recommendations. It remains to be seen how far we can follow them up with precision.
    Mr. Dalyell: Is consideration being given to the problems of the Inland Revenue, which is losing many accountants to private law and insurance firms?
    Mrs. Hart: One would hope that consideration now being given—discussions,

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    for example, with the institutions involved—will result in the kind of solution that will assist in the staffing departments generally of the Civil Service concerning accountants.
    Mr. Richard Wainwrightasked the Minister for the Civil Service how many persons were in post in each of the grades of the professional accountant

    Date

    Director

    Assistant Director

    Chief Accountant

    Senior Accountant

    Accountant

    1st January, 1967

    …

    Posts

    …

    …

    7

    22

    85

    238

    29

    Numbers in post

    …

    7

    21

    81

    195

    30

    1st January, 1968

    …

    Posts

    …

    …

    5

    18

    83

    259

    25

    Numbers in post

    …

    5

    18

    80

    206

    24

    1st January, 1969

    …

    Posts

    …

    …

    6

    19

    91

    289

    Numbers in post

    …

    5

    19

    82

    234

  FOREIGN AND COMMONWEALTH AFFAIRS

    United Nations (New Admissions)
    Mr. Whitakerasked the Secretary of State for Foreign and Commonwealth Affairs whether, in future, Great Britain will support the admission of new members to the United Nations being decided by a majority vote of United Nations members.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Maurice Foley): Under the Charter, new admissions require a decision of the General Assembly by two-thirds majority, upon the recommendation of the Security Council by affirmative vote of nine members including the concurring votes of the Permanent Members. We see no reason to seek any change in these requirements.
    Mr. Whitaker: Is not the admission of China as important for the United Nations as for the world itself? Is not this question a matter of representation rather than new membership, because China is already a member? When a similar question of representation arose in the case of the Congo, was this not decided by majority vote?
    Mr. Foley: The policy of Her Majesty's Government has been stated many times in this House in relation to China's representation. It is true that there are two authorities who claim to be the Government of China and, therefore the right to have their representative occupy the existing seat. This
    class of the Civil Service in January, 1967, January, 1968 and January, 1969; and how many posts in each grade were unfilled in each of those months.
    Mrs. Hart: With permission I will circulate the figures in the OFFICIAL REPORT.
    Following are the figures:
    is a matter of importance, and for this reason we support the procedure in Article 18, paragraph 2 of the Charter.
    Mr. Ian Lloyd: Is the right hon. Gentleman aware that since a majority vote at the United Nations could possibly represent a tenth of the population of the world and a hundredth of its real income, a simplistic view of the word "majority" is to be avoided at all costs?

    North Atlantic Council (Twentieth Anniversary Meeting)
    Mr. Frank Allaunasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the 20th Anniversary Ministerial Meeting of the North Atlantic Treaty Organisation which he attended in Washington.
    Mr. Bruce-Gardyneasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his visit to the United States in mid-April.
    The Minister of State, Foreign and Commonwealth Office (Mr. Fred Mulley): My right hon. Friends the Secretary of State for Foreign and Commonwealth Affairs and the Secretary of State for Defence attended the Twentieth Anniversary Meeting of the North Atlantic Council in Washington. During his visit my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs had useful talks with other N.A.T.O. Foreign Ministers, and called on the Secretary-General of the United Nations. The unanimous conclusions of

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    the N.A.T.O. Ministerial meeting are set out in the communiqué which I will, with permission, circulate in the OFFICIAL REPORT.
    Mr. Allaun: Why did not the Council proceed with these proposals, which were made as long ago as December, 1967, for mutually balanced troop reductions, as this seems to be something which is in the interests of both sides?
    Mr. Mulley: The Council of Ministers, as my hon. Friend will see from the communiqué, reaffirmed their Governments' intention to continue the search for real progress towards mutually beneficial relations between East and West and to explore all proper means of opening negotiations. I think that, in the light of the events which have happened since, that is an important statement of policy.
    Mr. Bruce-Gardyne: During his visit to Washington the Foreign Secretary was quoted as saying that there was scope for East-West negotiations provided the Russians could confine their aggressive instincts to within their own alliances. May we take it that the right hon. Gentleman subscribes to the Brezhnev doctrine as representing the views of the British electorate?
    Mr. Mulley: The hon. Member should be very careful about drawing very large conclusions from a general observation of the kind to which he has referred. He should not infer any such conclusions.
    Mr. Wood: Has the right hon. Gentleman any comments to make on the three very important proposals made by the President of the United States to the meeting in question?
    Mr. Money: These were considered by the Council as a whole and reflected in the communiqué. As I think the right hon. Gentleman knows, studies will follow by the permanent representatives of N.A.T.O. on the suggestion made by President Nixon.
    Following is the communiqué:
    FINAL COMMUNIQUé

    1. The North Altantic Council met in Ministerial Session in Washington on the 10th and 11th of April, 1969. The Council commemorated the twentieth anniversary of the Treaty creating the Alliance and was addressed by the President of the United States. Ministers expressed their deep satisfaction at the
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    decisive contribution the Alliance had made to the maintenance of peace in Europe and to the security of all its members.

    2. The Alliance was established to safeguard the freedom, common heritage and civilisation of its peoples, founded on the principles of democracy, individual liberty and the rule of law, and in response to a common fear that without an effective security system, another war might erupt in a divided Europe. The Alliance continues as the expression of common purposes and aspirations.

    3. In 1967 the Report on the Future Tasks of the Alliance emphasised the dual task of the latter: the defence of the West and the search for a stable peace with the East. In June 1968 Allied Ministers declared their readiness to seek, with the other States concerned, specific practical measures for disarmament and arms control, including possible measures for mutual and balanced force reductions. Notwithstanding the serious setback to hones for improvement in East-West relations as a result of Soviet intervention in Czechoslovakia, Ministers in November 1968 stated that secure, peaceful and mutually beneficial relations between East and West remained the political goal of the Allies. They reaffirmed at this Session that the intention of their Governments was to continue the search for real progress towards this objective by contacts and to explore all appropriate openings for negotiations.

    4. Bearing especially in mind the situation in Eastern Europe, member governments recall that any lasting improvement in international relations presupposes full respect for the principles of the independence and territorial integrity of States, non-interference in their domestic affairs, the right of each people to shape its own future, and the obligation to refrain from the threat or use of force.

    5. Ministers recalled that one of the essential aims of the Alliance is the establishment of a just and lasting peace in Europe, based on stability, security and mutual confidence. The Allies propose, while remaining in close consultation, to explore with the Soviet Union and the other countries of Eastern Europe which concrete issues best lend themselves to fruitful negotiation and an early resolution. Consequently, they instructed the Council to draft a list of these issues and to study how a useful process of negotiation could best be initiated, in due course, and to draw up a report for the next meeting of Ministers. It is clear that any negotiations must be well prepared in advance, and that all governments whose participation would be necessary to achieve a political settlement in Europe should take part.

    6. The Allies will also pursue their efforts and studies in the field of disarmament and practical arms control, including balanced force reductions and the initiatives already undertaken for the renunciation of the use of force.

    7. The political solidarity of the Alliance constitutes an essential element while approaching a period of expanding East-West contacts and possible negotiations. This solidarity can best be maintained by strict adherence to the principle of full consultation in the Council

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    both before and during any negotiations that might affect the interests of the Alliance or any of its members. On this understanding, the Allied Governments welcome the intention of the United States to engage the U.S.S.R. in discussion of limitations on offensive and defensive strategic arms.

    8. The Allies participating in the N.A.T.O. integrated defence programme agreed that it was extremely important that during an era of negotiation the defence posture of the Alliance should not be relaxed and that premature expectations of solutions to outstanding questions should not be generated. The maintenance of effective defence is a stabilising factor and a necessary condition for effective detente policies.

    9. Accordingly these members of the Alliance reaffirmed their continuing determination to make appropriate contributions to joint efforts for defence and deterrence at all levels both nuclear and conventional. They accepted the continuing need for the current N.A.T.O. strategy based on a forward defence and appropriate response to any aggression, and for a credible conventional and nuclear deterrent including adequate overall and local force levels. The necessary military posture of the Alliance consists of the strategic nuclear deterrent forces, the presence of sufficient substantial and effective North American and European conventional forces as well as supporting tactical nuclear forces in the European area and adequate ready reinforcements.

    10. Defence Ministers will meet on the 28th of May, 1969 and will examine the more specific elements in the defence posture necessary to fulfil the above requirements. They will also examine the possibility of improving the efficiency of the defence effort by intensifying mutual and co-operative approaches to, for example, the problems of arms production and arms standardisation either among all Allied nations or between some of them.

    11. Reviewing the situation in Berlin, the Ministers noted that obstacles have recently been placed on freedom of access to Berlin. Such obstructions cannot be accepted. The Ministers supported the determination of the Three Powers to maintain free access to the city, and recalled the declaration of the North Atlantic Council of 16th of December, 1958, and the responsibilities which each member State assumed with regard to the security and welfare of Berlin.

    12. The Ministers consider that the achievement of a peaceful European settlement presupposes, among other things, progress towards eliminating existing sources of tension in the centre of Europe. They consider that concrete measures aimed at improving the situation in Berlin, safeguaring free access to the city, and removing restrictions which affect traffic and communications between the two parts of Germany would be a substantial contribution toward this objective. They expressed their support for continued efforts by the Three Powers to explore, in the framework of their special responsibilities for Berlin and Germany as a whole, possibilities for ordered and negotiated progress in these important questions.

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    13. A peaceful solution must be found for the German question based on the free decision of the German people and on the interests of European security.

    14. The members of the Alliance are conscious that they share common environmental problems which, unless squarely faced, could imperil the welfare and progress of their societies. The Ministers recognise that important work on these problems is already being carried out within other international organisations. The Minister instructed the Council in Permanent Session to examine how to improve, in every practical way, the exchange of views and experience, among the Allied countries, whether by action in the appropriate international organisations or otherwise, in the task of creating a better environment for their societies.

    15. While concerned with these problems, Ministers are also mindful that the Allied countries are entering an era in which scientific, technical and economic resources should contribute to the peaceful progress and development of all nations.

    16. Apart from regular meetings at Ministerial level, Ministers agreed that the Council in Permanent Session should consider the proposal that high officials of their Foreign Ministries meet periodically for a review of major, long-range problems before the Alliance.

    17. The next Ministerial Session of the North Atlantic Council will be held in Brussels in December, 1969.

    Nigeria and Biafra (Supply of Arms)
    Mr. Barnesasked the Secretary of State for Foreign and Commonwealth Affairs what further soundings he has taken about the feasibility of an international ban on the supply of arms to Nigeria and Biafra.
    Mr. Foley: Our discussions on this question continue to point to the conclusion that progress towards peace cannot be made by seeking an international arms embargo in isolation from a ceasefire and talks between the two sides.
    Mr. Barnes: Does not my hon. Friend agree that the capacity of the Biafrans to offset the loss of Umuahia by retaking Owerri seems to indicate that this war may go on for a very long time? Why is my hon. Friend so negative about the question of an arms ban initiative, or is the truth of the matter that when he and the Prime Minister were in Lagos they agreed to step up arms supplies to Nigeria in exchange for a bombing halt?
    Mr. Foley: I can refute the allegation about the visit of my right hon. Friend and myself to Lagos. Equally, I would not wish to speculate on the military

    927
    significance of Umuahia or Owerri. We have stated firmly and clearly that we believe that this war should be ended by a political settlement. The Federal Government have offered that, providing the acceptance of one Nigeria is implicit in their discussions, all else can follow. It is to this end that we and others ought to be directing our attention.
    Mr. Scott-Hopkins: Can the hon. Gentleman tell the House what is the present situation of the fighting in Biafra?
    Mr. Foley: Other than that it is rather confused, no.

    Mr. Anthony Lee
    Mr. Bruce-Gardyneasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement regarding his department's intentions concerning the future employment of Mr. Tony Lee.
    Mr. Foley: I have nothing to add to what my right hon. Friend said in the House on 14th April.—[Vol. 781, c. 799–801.]
    Mr. Bruce-Gardyne: The right hon. Gentleman did not say very much on that occasion. Can the hon. Gentleman tell us whether Mr. Lee is returning to Anguilla? If he is not, can he take it that the congratulations of my right hon. Friend the Member for Flint, West (Mr. Birch) to the Prime Minister on at last finding an opponent of his own size were, to say the least, somewhat premature?
    Mr. Foley: My right hon. Friend the Foreign Secretary, in making his statement to the House, said that Mr. Lee was coming home for consultations and coming on leave. Mr. Lee arrived on Friday. He will be having discussions with my right hon. Friend this week.
    Mr. Braine: Is it not about time that this matter was cleared up, because the House has been given to understand that Mr. Lee will be returning, yet Mr. Lee himself obviously did not expect to return? Would it not be a good idea to appoint somebody of some standing and some stature to persuade the Anguillans about their future—perhaps even a distinguished West Indian?
    Mr. Foley: I am attempting to clear this up, but the hon. Gentleman is making rather heavy weather of this situation. Mr. Lee is still Her Majesty's Commissioner. Mr. Cumber is the Acting Commissioner and is there at this moment. Mr. Lee is on leave. His future will be discussed with the Secretary of State when they meet later this week.

    Middle East (Four-Power Talks)
    Mr. Shinwellasked the Secretary of State for Foreign and Commonwealth Affairs what decision has been reached by the four-Power conference on their efforts to promote a settlement in the declared war by the Arab States against the State of Israel.
    Mr. Roy Hughesasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the progress at the four-Power talks on the Middle East.
    Mr. Mulley: Representatives of the four Powers have had four meetings since their first meeting in New York on 3rd April. It is clear that all four wish to make a success of the talks, but the House will not expect me to disclose details about their discussions.
    Mr. Shinwell: Is it not clear that the Israeli Government have stated that no settlement is possible unless as a result of negotiations between themselves and the representatives of the Arab States? Further, how is it possible, for example, for the Soviet Union to adopt an objective attitude in view of their sending a large consignment of arms to the Arab States and, moreover, encouraging anti-Semitism in Russia?
    Mr. Mulley: As my right hon. Friend will know, I cannot give answers on behalf of the Soviet Government. However, I think that the talks will serve an extremely important purpose if they succeed in their aim, which is to reach and define agreements on all matters dealt with in the Security Council resolution of November, 1967, which, the House will recall, was promoted by Her Majesty's Government. There is certainly no question, as my right hon. Friend knows, of the four Powers seeking to impose a solution, but if we could get four-Power agreement on these main

    929
    issues arising from the resolution it will be an important step forward.
    Sir A. V. Harvey: Does not the Minister of State agree that perhaps a good way to start this business would be to free the ships of Britain and the other nations which are tied up in the Bitter Lakes? A few weeks ago the Government were very optimistic that something was about to happen. When will it happen, and what is being done?
    Mr. Mulley: Seven nations are in the unfortunate situation of having their ships detained in the Lakes. We have taken a leading part in trying to find a solution. It is a great disappointment that no solution has yet been found. This is one of the issues which would fall for solution if we could, through the four-Power talks, find a solution to the wider problem.
    Mr. Mayhew: Are the four Powers carefully studying the peace proposals of King Hussein, which provided for the acceptance of Israel by the Arab countries and are a good example of the King's courage and good sense? While accepting that a settlement cannot be imposed, is it not clear from Israel's rejection of these proposals and also her rejection in advance of any settlement by the four Powers, that something more than persuasion will be needed if a settlement is to be reached?
    Mr. Mulley: We had better postpone consideration of how best to implement the recommendations until we have the recommendations. I can assure my hon. Friend that the four Powers will be discussing the proposals of King Hussein, because, as I understand them, they are exactly in line and essentially the same as the items in the Security Council resolution.

    European Security
    Mr. Frank Allaunasked the Secretary of State for Foreign and Commonwealth Affairs what was the nature of his reply to the official proposal for discussion of East-West security in Europe made to him on behalf of the Warsaw Pact governments by the Hungarian representative in London at the beginning of April
    Mr. Roy Hughesasked the Secretary of State for Foreign and Commonwealth
    930
    Affairs what response Her Majesty's Government intends making to the recent official proposal by the Warsaw Pact members for a European security conference.
    Mr. Mulley: Diplomatic exchanges with other Governments are of course confidential. As the House will have seen from the communiqué of the recent North Atlantic Treaty Organisation Ministerial meeting at Washington,
    "the Allies propose, while remaining in close consultation, to explore with the Soviet Union and the other countries of Eastern Europe which concrete issues best lend themselves to fruitful negotiation and an early resolution".
    Her Majesty's Government intend to play a full and positive part in this process.
    Mr. Allaun: Why not seize this offer with both hands? If its sincerity is doubted, would not discussion be the best way of testing it?
    Mr. Mulley: It is clear that the resolution of the N.A.T.O. Ministers was to proceed by discussion to see whether it is possible to have fruitful negotiations of a formal character and to identify which subjects can best be dealt with as a priority. As the Government have made clear on many occasions, provided that there is careful preparation, and provided that there is a prospect of success and that the North American members of N.A.T.O. can be included, we welcome the prospect of such a conference.
    Mr. Wood: As the right hon. Gentleman has reminded us, the communiqué spoke about the preparation of this list of concrete issues. When are Ministers likely to meet to discuss the issues a list of which is being prepared?
    Mr. Mulley: The first step has been to try to identify these issues through our permanent representatives in the N.A.T.O. Council which, as the right hon. Gentleman knows, meets weekly and, if necessary, even more frequently. I think that it is too early to talk of a special Ministerial meeting until we know the outcome of this study.
    Mr. Whitaker: Would not all Western democratic organisations be better off disembarrassed of the Greek dictatorship? Therefore, will my right hon.

    931
    Friend deny the report on the front page of The Guardian today?
    Mr. Mulley: This hardly arises from the Question, but if my hon. Friend reads to the end of the same article he will see a formal denial by the Foreign Office of the earlier contents of the article. I should not have thought it necessary to ask for that to be reaffirmed, but I am glad of the opportunity to do so.

    Commonwealth (Membership)
    Mr. Hugh Jenkinsasked the Secretary of State for Foreign and Commonwealth Affairs whether he will propose that the existence of a constitution with full adult franchise shall be a condition of membership of the Commonwealth.
    Mr. Foley: No, Sir. There are no formal conditions for membership of the Commonwealth, and any attempt to introduce these would be inconsistent with the basis of the Commonwealth association.
    Mr. Jenkins: Does my hon. Friend really say that the present condition for membership of the Commonwealth is satisfactory in practice? Is it not the case that the Commonwealth has decided that South Africa is incompatible with membership? What about Guyana? Is not the present Prime Minister of that country gerrymandering for office? Is this a satisfactory condition of membership of the Commonwealth?
    Mr. Foley: Membership of the Commonwealth is a matter for the Commonwealth as a whole. In 1961 South Africa withdrew voluntarily from the Commonwealth; she was not expelled. The constitution of any member of the Commonwealth is a matter for the Government of that member country and her people, and is not suitable for discussion within the framework of the Commonwealth.
    Sir F. Bennett: Leaving aside the unjustifiable slur on the Prime Minister of Guyana, may I ask the hon. Gentleman whether he would not agree that as adult franchise is important, so is the legal existence of a free opposition? If we were to apply that test, the Commonwealth would be very thin on the ground indeed.
    Mr. Foley: I would refer the hon. Gentleman to paragraph 38 of the communiqué
    932
    of the conference of Prime Ministers this year.

    U.S.S.R. and China (Frontier dispute)
    Mr. Brooksasked the Secretary of State for Foreign and Commonwealth Affairs whether he will raise at the Security Council, as a threat to world peace, the present frontier dispute between the Union of Soviet Socialist Republics and China.
    Mr. Foley: No, Sir.
    Mr. Brooks: Would not my hon. Friend agree that in view of all the dark hints which are being dropped by both sides, including yesterday by Lin Piao, that the use of nuclear weapons cannot be ruled out in this serious dispute, the Security Council should be asked to look into this? Does not this indicate the need for the Security Council itself to have represented on it people who can claim to speak for China?
    Mr. Foley: I dealt with the latter part of that question in answer to a supplementary question earlier. Her Majesty's Government are not themselves involved in the Sino-Soviet dispute, and I have no reason to suppose that intervention by us would assist.
    Mr. Shinwell: With the utmost respect to my hon. Friend the Member for Bebington (Mr. Brooks), is there any valid reason why we should prevent these two Communist countries from being at each other's throats?

    Non-Proliferation Treaty
    Mr. Brooksasked the Secretary of State for Foreign and Commonwealth Affairs whether he will propose at the United Nations that sanctions be applied against those member States which refuse to become signatories of the Nuclear Non-Proliferation Treaty.
    Mr. Mulley: No, Sir. Having signed and ratified the Non-Proliferation Treaty, we are doing, and shall do, everything we can to persuade those States which have not yet signed to do so. The threat of sanctions, however, would be quite inappropriate in this context.
    Mr. Brooks: Is it not a waste of time having a nuclear Non-Proliferation Treaty when leading States, such as the

    933
    two leading members of the European Economic Community, apparently find themselves unable to sign?
    Mr. Mulley: I am naturally concerned to bring the treaty into effect with as many members as possible, but the method suggested by my hon. Friend would be totally inappropriate to achieve that. As to the two States he mentioned, France made it clear that she would not sign but would behave as if she had. Being a nuclear Power, she would not be restricted in the way that non-nuclear Powers are restricted. The German Government are, I understand, still considering the position.
    Mr. Bruce-Gardyne: Is it not time that the right hon. Gentleman tried to explain to his hon. Friends and, indeed, to his right hon. Friends that from long experience it is evident that the only effect of the application of sanctions is to expose the fatuity of those who try to apply them?
    Mr. Mulley: No, I do not accept the general proposition put by the hon. Gentleman, but I would agree that this issue that we are discussing would be inappropriate for sanctions.

    Sea Bed (Explanation and Exploitation)
    Mr. Dodds-Parkerasked the Secretary of State for Foreign and Commonwealth Affairs what decision he has come to on proposals for the type of international organisation to control future development of the sea bed.
    Mr. Mulley: We favour the establishment of an international régime governing exploration and exploitation of the deep sea bed as soon as practicable; such a régime should be effective, impartial and not unduly restrictive. Our view was more fully explained in a statement by our representative in the United Nations Sea-Bed Committee on 28th March, a copy of which has been placed in the Library of the House.
    Mr. Dodds-Parker: Will the right hon. Gentleman agree that it is urgent to reach agreement on this before some controversial issue arises?
    Mr. Mulley: Naturally, I should like to give an urgent decision on this question, but I think the hon. Member and
    934
    the House must realise that it will be a very long job to work out a comprehensive agreement covering the areas and the rest of the difficult issues involved in the future exploration of the sea bed. I would not expect an early conclusion.
    Mr. Wood: May we take it that the right hon. Gentleman and the Government would give support to the proposal which has been made that the part of the sea bed beyond national jurisdiction should be safeguarded for peaceful purposes?
    Mr. Mulley: The arms control military aspects of the sea bed are, of course, under discussion now in the 18-nation Disarmament Committee, which is rather separate from the point raised by the hon. Member for Cheltenham (Mr. Dodds-Parker). Certainly we accept and support the principle, and we are doing what we can there to safeguard it, but, as in so many arms control and disarmament issues, the whole crunch is between the principle and the detailed application, and it is the detailed application which we are now studying in Geneva.
    Mr. Dalyell: What reply has the Foreign Office sent to the proposals that it received on sea bed armaments from Senator Claiborne Pell, of Rhode Island?
    Mr. Mulley: I could not say exactly what reply was sent, but my hon. Friend will understand that we cannot enter into negotiations bilaterally with citizens of other countries, no matter how distinguished they are, when at the same time there is a United Nations committee studying the problem. Our observations are made within the context of the United Nations committee where we try to reach agreement first on the principles and later, we hope, on the details of what is a complicated and involved problem.

    Western European Union
    Mr. Eldon Griffithsasked the Secretary of State for Foreign and Commonwealth Affairs what progress he has made in his efforts to bring the French Government back into regular attendance at meetings of the Western European Union.
    Mr. Mulley: As we have made clear on a number of occasions, we regret that France has not been participating in the

    935
    work of Western European Union. We continue to hope that French participation will be resumed since we believe France has a valuable part to play.
    Mr. Griffiths: In view of very recent events in France, will the Government invite the new French Head of State to resume France's righful and necessary part in Western European Union? Will the right hon. Gentleman do so as soon as practicable?
    Mr. Mulley: I am not sure that we need to issue any special invitation, because France has the right—and we have regretted that she has not exercised it—to be present at all meetings of Western European Union. As for recent events, they are still a little too recent for me to comment on them.
    Mr. Mayhew: While it would be rash to forecast the course of French politics, may we be sure that Her Majesty's Government now feel encouraged to persist in the robust attitude that they have taken towards the powers of W.E.U. and towards our membership of E.E.C.?
    Mr. Mulley: I see no reason why we should not continue the policies that we have consistently followed both as regards our application to join the Community and to have discussions and promote European collaboration outside the Community through Western European Union.

    Anguilla
    Mr. Eldon Griffithsasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on the position in Anguilla.
    Mr. Foley: I have nothing to add to what my right hon. Friend told the House in the debate on 23rd April.—[Vol. 782, c. 487–98.]
    Mr. Griffiths: Is that not a very disturbing admission? Does not the hon. Gentleman realise that the other day the Minister said nothing, and that if he cannot add to that he is merely compounding his embarrassment? Surely we ought to be told whether there is shortly to be some form of elections in Anguilla so that the people's will will be made known. Can we also have a clear answer as to whether there is to be a White Paper from the British Government on the arms which it is claimed to have been
    936
    discovered and on the men who are said to be subverting the island?
    Mr. Foley: I can only assume that the hon. Member was not present at the debate the other day. My right hon. Friend promised that he would examine how and in what form he would present additional information to the House on the subjects which were raised during that debate. He is in the process of doing so.
    Mr. Braine: Is the hon. Gentleman aware that this is not a satisfactory answer? Will he recall that last Wednesday the Secretary of State spoke for the first time not merely of intimidation and arson but of murder as a reason for the military intervention? Is the hon. Gentleman not aware that we pressed from this side of the House for the publication of a White Paper? Will he not give an assurance now that this White Paper will be presented at the earliest possible date?
    Mr. Foley: There are Questions on the Order Paper relating to arms which have been discovered and murder there, and the answers will be available later today.

    Rudolf Hess
    Mr. Biggs-Davisonasked the Secretary of State for Foreign and Commonwealth Affairs whether Her Majesty's Government will now propose the transfer from Spandau, or release, of Rudolf Hess.
    Mr. Mulley: Her Majesty's Government are strongly of the opinion that Rudolf Hess should be released and will renew representations to this end at any time there seems a prospect of success. The Soviet Government, whose agreement is necessary, have hitherto rejected all such approaches.
    Mr. Biggs-Davison: Is it not preposterous that this international farce should continue because of the objections of the U.S.S.R., in which country both anti-Semitism and concentration camps are in full sway?
    Mr. Mulley: As the hon. Gentleman knows, and as has been explained many times in the House, this arrangement is part of the Four-Power Agreement, and is would not be right to terminate that agreement on a matter of this kind.
    Sir A. V. Harvey: When was this matter last raised with the Soviet Government? After all these years, ought not this man to be released, for the sake of humanity? At the same time, will the Government turn their attention to the question of Mr. Gerald Brooke, take up both matters with the Soviet Union, and let us know the answer?
    Mr. Mulley: The Foreign Secretary has that last matter very much in play, and he reported recently to the House. The last approach about Rudolf Hess was made early last year, and we have been considering also whether it is possible to have some less harsh form of imprisonment. We have the matter constantly in play, but so far the Soviet Union has not been willing to agree to the release of Hess, as we should wish, for all the reasons which, I thought, were admirably set out in The Times editorial last Saturday.
    Mr. Mayhew: Is my right hon. Friend aware that there are Members on this side who feel that the time has come for new representations to be made to the Soviet Union? The responsibility which we bear for the inhuman incarceration of this man, in poor health both mentally and physically after all these years, is a heavy burden on the feelings of some of us.
    Mr. Mulley: If it will ease my hon. Friend's mind, I can assure him that many determined efforts have been made in recent years and all that can be done by Her Majesty's Government has been done. [Interruption.] With respect, there is absolutely no point in applying every week and receiving just a formal reply. We want to succeed, and that is why we are trying to time the approach at a satisfactory point.

  OVERSEAS DEVELOPMENT

    Inter-African Scholarships Scheme
    Mr. Juddasked the Minister of Overseas Development what is the extent of British Government financial support for the Association of African Universities inter-African scholarships scheme.
    The Parliamentary Secretary to the Ministry of Overseas Development (Mr. Albert E. Oram): We have offered up to
    938
    £12,000 towards the cost of the scheme for the year beginning on 1st July next.
    Mr. Judd: Does my right hon. Friend agree that a scheme of this kind is at least as relevant socially and educationally as further education opportunities in other continents, and will he say whether we shall be able to increase support in the future?
    Mr. Oram: We shall consider that. We have given no undertaking to provide financial assistance on a continuing basis, but I agree that this is a promising scheme, although my hon. Friend should realise that it is in the main, and is understood and intended to be, an American-aided scheme.
    Mr. Scott-Hopkins: How does the right hon. Gentleman know that the funds will be properly administered? What check is there?
    Mr. Oram: That is why we have not committed ourselves to the future. We shall carefully examine the administration of the scheme.

  HOSPITALS

    Consultants
    Mr. Pavittasked the Secretary of State for Social Services what is the number of hours per week that a consultant engaged on a nine-elevenths contract will need to work on the basis that he takes his full allowance of travel time.
    The Secretary of State for Social Services (Mr. Richard Crossman): The hours of work stipulated under the terms of service, after deduction of maximum travelling time allowed between home and main hospital, would be 26½ in a nine-session post and 32½ in a whole-time post.
    Mr. Pavitt: As my right hon. Friend is bringing a fresh look to so many Health Service questions, will he look again at the question of whole-time as compared with part-time consultancy, and will he endeavour to bring it into his new Mark 2 Green Paper?
    Mr. Crossman: I shall look at it, though I doubt that it will go into the Mark 2 Green Paper.

    Mr. Hugh McKinnon
    Mr. Arthur Lewisasked the Secretary of State for Social Services whether he has now received the communication dated 19th April from the hon. Member for West Ham, North, together with enclosures, concerning the case of the late Mr. Hugh McKinnon who died from frostbite as a result of being refused early admission into hospital; whether he will investigate this matter; and if he will make a statement.
    Mr. Crossman: Yes, Sir. I am looking into this case and will write to my hon. Friend when my investigations are complete.
    Mr. Lewis: I thank my right hon. Friend for that reply, but will he also look into the alleged fact that this man tried to get into several hospitals and several hospitals said there was not room? Will he see to it that, if there are urgent cases such as this, some hospital is instructed to take in people who are likely to die or who need serious treatment, as in this case?
    Mr. Crossman: I am grateful to my hon. Friend for bringing this distressing case to my attention. It was not thought at first that it was an acute case, and efforts were made to have Mr. McKinnon admitted into a geriatric hospital. It took several days, by the way, for the general practitioner to get into the man's home at all. I should not like to go further now. I wish to give my hon. Friend a full and accurate report on this distressing and disturbing case.

    Nurses (Pay and Conditions)
    Dame Irene Wardasked the Secretary of State for Social Services whether he will initiate fresh negotiations through the Whitley Council on nurses' conditions of service and instruct the management side to offer new terms to meet the difficulties caused by the last award, which imposed undue financial payments for food and accommodation on the nursing profession;
    (2) whether he will outline his plans for remedying the pay-as-you-eat problem in the nursing profession, in view of the assurances given to the nurses whom he received on 23rd April on the steps of his Ministry at the Elephant and Castle.
    Mr. Crossman: The Nurses and Midwives Whitley Council is already considering the problems which have arisen in the introduction of the new scheme; and I am sending the hon. Member a copy of a letter which has been sent to hospital authorities. The assurance given to the nurses received on 22nd April was that their views would be conveyed to the Council, and this has been done.
    Dame Irene Ward: I thank the right hon. Gentleman for that reply, but may I have an assurance that the instructions from him and his Department to the management side of the Whitley Council will enable the staff side to negotiate proper terms with the management side in order that the grievances of nurses over a wide field may be properly recognised? Is he aware that there is constant talk about the National Whitley Council as though the management side was entirely free to negotiate without instructions from his Department? The position ought to be made perfectly clear.
    Mr. Crossman: I am grateful to the hon. Lady; she has made a fair point. My Department plays its full rôle here and takes its share of responsibility for the agreement which was reached. Nevertheless, it remains true that the agreement was reached and gave increases of between nine and 14 per cent. to nurses, one of the biggest increases they have ever had. The only criticism so far has been on the question of meals, and, as the hon. Lady knows, I am now looking into that. The Council is to meet on 13th May. I assure her that I have gone into the matter very thoroughly, and I shall brief my representatives there to make sure that we reach a satisfactory solution.
    Dr. Summerskill: Will my right hon. Friend bear in mind that, as an obviously bad agreement has been reached, that is all the more reason why it should be rectified? Nurses are not trade union-minded or militant, but that does not detract from the justice of their claims.
    Mr. Crossman: I am not at all convinced that a bad agreement in general was reached on this occasion. No one has criticised most of the agreement; only one part has been criticized, namely, the question of meals. Therefore, I do not assume that the job done by the

    941
    negotiators on behalf of the nurses was a bad one.
    Mr. Maurice Macmillan: Will the right hon. Gentleman accept that the position of student nurses in particular is difficult, not least because a clear decision is required on whether they are employees and should be paid the rate for the job or they are students, in which case they should have time to study within their 42-hour working week? Further, will he accept that he will not get the whole pay structure for nurses right until pay at the top goes up? At present, part of the trouble is that the concertina has been squeezed close and needs to be spread out.
    Mr. Crossman: Those are all important points. Student nurses are paid not a salary but a training allowance. That training allowance was increased by from 9 to 14 per cent., and the revised training allowance for students under 25 ranges from £395 to £480, according to the year of training. All this seems to be worth considering carefully, but I hope that we shall not assume in the House that the whole agreement was unsound. The whole agreement represented a great march forward for nurses as a whole.
    Mr. Molloy: Will my right hon. Friend acknowledge that the recent bitterness caused by the pay award and the requirement that nurses must pay for their meals is only the tip of the serious iceberg which is endangering a vital profession? Is he prepared to consider a special investigation into all aspects of this vital profession?
    Mr. Crossman: No, Sir; I do not consider that the case is made for any special investigation. I think that what the hon. Lady the Member for Tyne-mouth (Dame Irene Ward) says is correct, that the three parties must look carefully again at the agreement, as they are now doing, before the meeting on 13th May next, to see whether it is satisfactory. I do not go further than that.
    Sir J. Vaughan-Morgan: Does the right hon. Gentlemen accept that whatever the merits of the agreement may have been the effects were very bad, and that some of the instructions for implementation which have been sent out to the employing authorities have been far from clear,
    942
    in that some have accepted a latitude in imposing the agreement, and others have already done it?
    Mr. Crossman: I do not agree that the reception of the agreement as a whole was very bad. The only point in it that caused dissatisfaction was the so-called pay-as-you-eat scheme, which I think was aggravated by the fact that the nurses had their increase in March and had to pay for their meals out of that, which was a very bad beginning for the scheme. I agree that there were great variations in the regions where considerable latitude is allowed in fixing these things, and since then I have written to them giving them precise instructions, which they did not have in the first place.
    Mr. William Hamiltonasked the Secretary of State for Social Services whether, in view of the concern of nurses in the National Health Service he will take immediate steps to increase the salary and training allowance payments as laid down in the National Board for Prices and Incomes Report Number 60, Command Paper Number 3585, and accepted by Her Majesty's Government.
    Mr. Crossman: Salaries and training allowances were increased as recently as 1st January, 1969, and the National Board for Prices and Incomes recommended that the present rates should last until the end of March next year. Any claim for an earlier increase would need to be considered by the Nurses and Midwives Whitley Council in the light of incomes policy.
    Mr. Hamilton: Does my right hon. Friend recognise that many hon. Members on both sides of the House accept the soundness of the principle implied in the pay-as-you-eat scheme? But will he give an assurance that if he receives specific examples of nurses, particularly student nurses, being worse off after paying for their meals he will take immediate action with the hospital boards responsible to bring their meal prices down, so that the nurses get the real increase which was intended for them?
    Mr. Crossman: Yes, Sir. The instructions sent last week to the regional hospital boards should achieve what my hon. Friend wants. If they do not in all cases, we shall consider further action at the meeting on 13th May.
    Sir G. Nabarro: Will the right hon. Gentleman bear in mind two recent precedents, in view of the responsibility of his Department on nurses' pay? First, will he see that increases are now retroactive to the date of the last increase, as in the case of Lord Robens? Second, will he bear in mind that a 56¼ per cent. increase is considered appropriate for the chairman of a nationalised board, who does not pay for his daily meals while at work? Why should not these principles apply to the nurses?
    Mr. Crossman: I shall certainly bear in mind what the hon. Gentleman says. These are points that I shall certainly discuss with objectivity and fairness with our representative at the Whitley Council.
    Lord Balniel: Is the right hon. Gentleman aware that we do not share his sense of satisfaction with the way in which the pay agreement was handled, and that there is widespread agreement with those nurses who wrote to The Times to say that the way in which the settlement had been handled could well endanger recruiting for the nursing profession for a number of years ahead?
    Mr. Crossman: I naturally read the letter to The Times with care. I do not think that I expressed complacency about the way in which the matter was handled. I said that the agreement as a whole had not been criticised by the nursing profession, but that only one aspect had been criticised there. I agree that it had been unsatisfactorily handled, and further steps are being taken to put it right.
    Mr. Woodburn: Is my right hon. Friend aware that the main trouble seems to have arisen from the fact that the agreement has had unfortunate results for student nurses who come from other parts of the country and have to live in? This has given rise to some dissatisfaction. It has been an error of omission in consultation rather than an omission in intention from the agreement.
    Mr. Crossman: Of course, it is true that there was no intended omission from the agreement. Nobody has said that the Whitley Council intended student nurses to be treated harshly. But they may well have a hard deal. This partly arises from the considerable variation between the price of meals in different hospitals in different regions. This is perhaps a problem of the relationship
    944
    between myself and the chairmen of the regional hospital boards.

  SCOTLAND

    Salmon and Trout Fishing
    Mr. Dalyellasked the Secretary of State for Scotland (1) if he will seek powers to set up a Scottish anglers' trust, to encompass brown trout, sea-trout, and salmon;
    (2) if he will now take steps to set up area boards for salmon and trout fishing.
    The Secretary of State for Scotland (Mr. William Ross): These are among the main recommendations made in the Report of the Hunter Committee, and I should prefer not to comment on individual recommendations until I have completed my consideration of the Report as a whole.
    Mr. Dalyell: Granted the very real complexities that face my right hon. Friend, will he explain to the tens of thousands of Scottish anglers who are curious to know, why it has taken 3½ years to get a reaction to the Report? Why has the Scottish Office taken so long? There are probably good reasons, and the matter should be explained.
    Mr. Ross: In order to give rights to tens of thousands, one has to remove rights from millions. One does not do that readily and quickly. One must look into all the problems involved.
    Mr. Gordon Campbell: But as the Hunter Committee's Report has been in the hands of the right hon. Gentleman for over three years, will he now separate the difficult long-term decision concerning coastal netting and at least urgently get ahead with announcements concerning that part of the Report which could be helpful to the Scottish tourist industry?
    Mr. Ross: No, Sir. I would rather deal with the Report as a unit than take two or three recommendations piecemeal out of a great many.

  EDUCATION AND SCIENCE

    Planning and Management (Postgraduate Students)
    Mr. Moonmanasked the Secretary of State for Education and Science if he will make available the correspondence exchanged between him and the

    945
    Chairman of the Social Service Research Council on the shortage of places for postgraduate students in planning and management; if he will set out in the OFFICIAL REPORT the names of those bodies who have made representations to him on this subject; and if he will make a statement.
    The Minister of State, Department of Education and Science (Mrs. Shirley Williams): The number of grants for postgraduate students in planning and management is one of a number of questions covered in recent correspondence with the Chairman of the Social Science Research Council about the transfer of responsibility for postgraduate awards from local to central government. I see no reason to publish it. The results of a survey by the Council indicate that a larger number of grants for students in management were made by local education authorities in each of the years 1967–68 and 1968–69 than the number shown in returns made by authorities in 1967–68. Representations have been received from the National Economic Development Office, Town Planning Institute and a number of individuals, in addition to the Social Science Research Council. I am reconsidering the number of awards for the social sciences and hope to reach a decision soon.
    Mr. Moonman: This is a most serious matter. In view of the natural relationship between Government and industrial performance and management training, would my hon. Friend indicate what steps she is prepared to take to stimulate matters so that this situation does not happen again?
    Mrs. Williams: I have no control over the fact that the estimates of local authorities differed from those of universities. These are not matters for my Department directly, but because of the discrepancy my Department is now considering what help can be given as quickly as possible to make more bursaries available.

    Scottish Universities (Students and Careers Advisory Officers)
    Mr. Hector Hughesasked the Secretary of State for Education and Science if he will state the number and sex of students admitted to each of the Scottish universities during each of the last five years and the number and sex of careers advisory officers appointed and now working in those universities.
    Mrs. Shirley Williams: For information about student numbers, I would refer my hon. and learned Friend to the reply I gave him on 24th April. Universities are responsible for their own staff appointments and the information requested in the second part of the Question is not collected centrally.—[Vol. 782, c. 105–6.]
    Mr. Hughes: Is the career guidance sufficient, having regard to the terms and recommendations of the Heyworth Report and the increase in the number of students at Aberdeen University?
    Mrs. Williams: I can only suggest that my hon. and learned Friend approaches Aberdeen University directly, since it is responsible and not me.

    Heyworth Committee Report (Recommendations)
    Mr. Hector Hughesasked the Secretary of State for Education and Science if he will make a statement on the working of the Heyworth Committee 1964 Report recommendations indicating how far each of them has been implemented and also indicating how many careers advisory officers were in consequence appointed in Scottish universities; and whether that number accords with the ratio recommended by that Report.
    Mrs. Shirley Williams: This report was prepared by Nuffield College, Oxford, and published by the University Grants Committee. Its implementation is in the hands of the universities. I understand that they have given it a great deal of attention, but the detailed information sought is not available.
    Mr. Hughes: Will my hon. Friend consider taking steps to increase the number of careers advisers in Aberdeen University, having regard to the phenomenal success of that university, and the numbers of students there?
    Mrs. Williams: I am sure that Aberdeen University will take close note of what my hon. and learned Friend has just said.

  HOME DEPARTMENT

    Abortion Act, 1967
    Mr. Deedesasked the Secretary of State for the Home Department how many prosecutions to date have been brought under the Abortion Act, 1967.
    The Under-Secretary of State for the Home Department (Mr. Merlyn Rees): The only offence under the Abortion Act, 1967, is that created in Section 2(3), relating to contraventions of the requirements of the abortion regulations. There were no prosecutions for this offence during the period 27th April, 1968, when the Act came into force, to 31st December, 1968, the latest date for which statistics are available.
    Mr. Deedes: In view of the figures that have recently been made known about the number of operations which have taken place within and without the National Health Service, does not that reply strike the hon. Gentleman as surprising?
    Mr. Rees: It would strike me as even more surprising if there were actual examples which were brought to the notice of the prosecuting authorities. If the right hon. Gentleman has any knowledge here, perhaps he would let me know.

    Prince of Wales (Security Arrangements)
    Mr. Emrys Hughesasked the Secretary of State for the Home Department if he will obtain from the Chief Constable a report on the strength of the police force in Aberystwyth during the second week in April, 1969, as compared with the similar period in 1968;
    (2) what is the cost to public funds of the security arrangements connected with the Prince of Wales's stay at Aberystwyth; and if he will obtain from the Chief Constable a report as to how many officers were on duty there during the week ended 25th April and what was their weekly pay.
    Mr. Merlyn Rees: There were 19 police officers on duty in Aberystwyth in the week ended 19th April, 1969, compared with 22 in the corresponding week last year. The number on duty during the week of Prince Charles arrival was 121 whose total pay came to £2,650 5s. 10d. This was a temporary measure and the number in succeeding weeks will be substantially reduced.
    Mr. Hughes: Would not my hon. Friend agree that it would have saved public funds if the Prince of Wales had
    948
    been taught Welsh either by tape-recorder or over the telephone or if a tutor had been sent to Buckingham Palace?
    Mr. Rees: It was decided that this should be done practically in Wales and that in any case it would be an excellent thing for the future Monarch to have lived in Wales. In view of that and of the possibility that something foolish might happen—both my hon. Friend and I know Cardiff General Station—my answer shows that the chief constable is aware of his duties.
    Mr. Biggs-Davison: Is it not time that this sort of Question ceased to be asked? Should not this particular undergraduate have a chance to get on with his studies like the rest without all this kind of publicity-seeking intervention from outside?
    Mr. Rees: I agree that it would be an excellent thing if Prince Charles could now have peace and quiet in which to get on with his studies in this excellent Welsh university, but it is not for me to suggest that the House should ever cease from asking Questions.

ABORTIONS (PRIVATE NURSING HOMES AND CLINICS)
The following Written Question stood upon the Order Paper:
Mrs. RENÉE SHORT: To ask the Secretary of State for Social Services what is the total number of private nursing homes and clinics now licensed as being suitable for carrying out terminations of pregnancy; how many of these licences were issued after the Abortion Act became law in April, 1968, and have been renewed in April, 1969; and how many licences were not renewed and for what reasons.
The Secretary of State for Social Services (Mr. Richard Crossman): With permission, Mr. Speaker, I will now answer Written Question No. 14.
Fifty-five out of the fifty-nine homes approved for the termination of pregnancy up to 26th April sought reapproval. Forty-seven have been given reapproval for a further year. I have given reapproval for a period of two months only to seven homes, and have drawn their

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attention to apparent deficiencies in their facilities.
The common feature of these homes—all in the North West Metropolitan area—is the high number of terminations performed there. These homes will be re-inspected by professional officers of my Department before any further approval is given. In addition, reapproval has been withheld in one case and a final decision will be reached in the light of further inquiries. Applications for approval from five homes not previously approved are under consideration.
Mrs. Short: I thank my right hon. Friend for giving this Question an oral answer. What deficiencies did his officers discover in the seven homes which have been given reapproval only for a further two months? Can these deficiencies easily be put right? His Answer is a matter of anxiety to both doctors and patients. In the case of the home for which reapproval has not been granted, how many terminations of pregnancy were carried out there during the past year? Why was the home not reapproved?
Mr. Speaker: Order. The oral Answer of a Written Question does not mean that an hon. Member can ask too long a supplementary.
Mrs. Short: Finally, can my right hon. Friend tell us how long it will take to examine and possibly approve the five homes for which applications for approval are under consideration?
Mr. Crossman: The deficiencies in the homes for which reapproval has been given for a period of two months relate particularly to the operating facilities, which may give rise to the risk of cross-infection, facilities for safe post-operative movement of patients and also arrangements for the provision of blood in emergencies. These relate to the fact that a very large number of abortions take place in these homes.
Sir J. Vaughan-Morgan: Does the right hon. Gentleman think that his powers under the present legislation are adequate to deal with these matters?
Mr. Crossman: My powers are adequate to deal with the matters which the Minister was instructed to deal with.
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These, of course, are the physical conditions in the home. The Minister's job is not to tell the doctor how to do his job, but to see that the job is done in adequate physical conditions. That is as far as I can go in answer now.
Dr. John Dunwoody: I welcome what my right hon. Friend has said about the inspection of the nursing homes. Does not he agree that much of the pressure on private nursing homes is because some consultants at least are failing to make available to patients treatment which was intended to be made available to them by the Act?
Mr. Crossman: That is my view and it has been demonstrated by the statistics, which show that there is now two and a half times the number of therapeutic abortions compared with any previous 12 months before the Act. In the South-West Metropolitan Region 22 per cent. of the women resident in the region were operated on in National Health Service hospitals, while in the Newcastle Region the figure was 96 per cent. The difference is very great. I meant, of course, per thousand.
Mr. Maurice Macmillan: To what extent do the figures quoted by the right hon. Gentleman about approvals and the withholding of approval apply to the London area? To what extent does he estimate that the very high demand in the London area is due to residents coming to London from other areas of this country and also to people coming from abroad?
Mr. Crossman: The patients from abroad are a very small proportion. Evidence seems to show that patients are going to these seven homes from other parts of the country, and no doubt one of the factors is the difficulty in those regions of obtaining abortions.
Mr. Pavitt: Can my right hon. Friend look at whether, in the private nursing sector, it would be possible to allow the patient to have a longer period of rest after termination of pregnancy and thus avoid what is at present a rather factory-like production line?
Mr. Crossman: I am grateful to my hon. Friend for calling attention to this very undesirable factor. In the case of abortions taking place under the National

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Health Service, the number of women who do not stay in hospital for a single night is virtually insignificant whereas the number of women who leave private nursing homes without spending a single night there is very high.
I am thinking of making it a condition that a private home should have sufficient beds to be able to give to any woman who desires or needs to stay accommodation for the night after the operation.
Several Hon. Members rose—
Mr. Speaker: Order. We must get on.

PRESIDENT OF THE ITALIAN REPUBLIC
Mr. Speaker: It might be helpful if I remind right hon. and hon. Members that the President of the Italian Republic is being received in the Royal Gallery at 5 p.m. today and will be addressing Members of both Houses.
Right hon. and hon. Members intending to be present are requested to be seated by 4.45 p.m.

PRIVILEGE
3.39 p.m.
Mr. Speaker: The House will remember that, on Friday morning, 25th April, the hon. Member for Ormskirk (Sir D. Glover) raised a question of privilege affecting a Sub-Committee of the Select Committee on Education and Science. He submitted that the events attending the visit of the Sub-Committee to take evidence at the University of Essex constituted a grave contempt of this House and a breach of privilege.
As the House knows, it is not Mr. Speaker's duty to pronounce on whether the events which took place at Essex University were a breach of privilege. All the Chair has to do is to rule on whether the hon. Gentleman, in his submission, made out a prima facie case of breach of privilege to the extent that the matter may be given priority over the Orders of the Day.
Accordingly, having considered all the circumstances and having studied the precedents, I now have to rule that a prima
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facie case has been established. It is now necessary, in accordance with the practice of the House, for a Motion to be moved and it is then up to the House to decide what course to follow.
The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): In view of your Ruling, Mr. Speaker, I am required, in accordance with precedents, formally to move,
That the matter of the Complaint be referred to the Committee of Privileges.
I should like to add that this is essentially a matter for the wish of the House, and that if there were indications that such a course was not generally welcomed I should be happy to seek leave to withdraw the Motion. As we are to have some important debates this afternoon, there would be advantage in reaching a decision quickly.
3.41 p.m.
Mr. Edward Heath: I find myself in something of a dilemma. I rise to support the Leader of the House. I agree that this matter should be referred to the Committee of Privileges, but I cannot recall any occasion when this Motion has been moved in the terms which the right hon. Gentleman used this afternoon.
We look to the Leader of the House to lead the House in a particular direction and not to endeavour to lead it in two directions at once. I am sorry to differ from him, because this is an important question for the traditions of the House. When the Leader of the House does not honestly think that a matter should be referred to the Committee of Privileges, it is his responsibility to tell the House so quite frankly. He is not required by any tradition of the House to lead it in a direction which he does not honestly believe to be right.
I should like to give my reasons for thinking that this matter should be referred to the Committee of Privileges and I ask for the support of the House. It is the purpose and the duty of the Committee of Privileges to facilitate the business of the House by examining in detail any case which Mr. Speaker rules to be a prima facie case of privilege, by obtaining details of the circumstances which might affect the matter, something which often has to be done in some detail and may not conveniently be done

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by the House as a whole, by eliciting the arguments pro and con the matter, and finally to recommend to the House whether action should be taken. This has in no way ever limited the House in taking action upon a particular matter, but it greatly facilitates the business of the House by doing what is often the considerable preliminary work before a decision is reached.
During recent months, three such cases have been before the Committee of Privileges, which it has handled to the satisfaction of the House. A debate followed one and in two cases, after following the procedure I have described, the Committee came to the conclusion that it was best to advise the House to take no action, and the House did not even ask for the Reports to be debated. This testifies to the fact that the Committee of Privileges has been doing its work in facilitating the business of the House.
I recognise that on the last occasion a matter was referred the hon. Member for Ebbw Vale (Mr. Michael Foot) said that it was the last occasion on which he would support a matter going to the Committee of Privileges, not on its merits, but because he, and no doubt other hon. Members on both sides of the House, believed that the Leader of the House ought to have facilitated a full debate upon the Report of the Committee of Privileges which has now been before the House for some time. In this, I do not differ from the hon. Gentleman one scrap; I think that that Report ought to have been debated.
At the same time, the fact that the Leader of the House has not been able to arrange a debate since the hon. Gentleman raised the matter ought not to preclude us from judging on the merits of this matter whether it should go to the Committee of Privileges, and I hope that, on reflection, the hon. Member for Ebbw Vale will take that view himself.
I now come to this matter. As a member of the Committee of Privileges, I obviously wish to make no judgment upon it now, but it cannot be denied on the evidence so far available to the House that it is an important matter. That could not be contested. Some matters may be so obviously condemned as a breach of privilege, or contempt of the House, that a decision upon them can be reached straight away. During my experience
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in the House, which is limited and less than 20 years, to my knowledge there has not been a case in which the House could immediately come to a decision.
On the other hand, there have been occasions when a matter has been of such triviality that the House has decided that it could not be concerned with it. I can recollect two cases in which this has happened and which the House has rightly dismissed on the spot.
First, I do not believe that this case enters either of those two categories. It is undoubtedly important. A Select Committee or a Sub-Committee of a Select Committee represents the House and if it is prevented from carrying out the work which it decides to do that is undeniably a matter of importance as a public issue.
Secondly, the activities of a Sub-Committee of a Select Committee in putting itself in a position, to use a neutral term, in which this can occur to it is also a matter of great importance to the House. Those of us who have been much concerned with the work of Select Committees, particularly the broadening of their work, which the Secretary of State for Social Services inaugurated when he was Leader of the House, are obviously greatly concerned about the future of Select Committees and their Sub-Committees if such an occurrence is likely to be repeated.
For those two reasons, this is undeniably an important matter and as such, therefore, merits preliminary consideration by the Committee of Privileges before the House itself reaches a conclusion. I therefore hope that the House will agree that this is plainly a matter which should be referred to the Committee of Privileges for examination and recommendation to the House.
In conclusion, I wish to say one word about a matter regarded as important by some hon. Members. If the Select Committee were to recommend, or the House were to decide, that no action should be taken, that would not in any way absolve the university authorities themselves from taking whatever action they deemed, after examination, to be right. Whatever the House may do in no way absolves them from their responsibilities.
I therefore submit that the right course is to refer this matter to the Committee

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of Privileges for recommendation and for the House to decide what action, if any, should be taken.
3.49 p.m.
Mr. Peart: The right hon. Gentleman put the point to me quite fairly. I moved the Motion in the terms I did after listening carefully to the observations on Friday of the hon. Member for Hertfordshire, South-West (Mr. Longden) and the right hon. Member for Birmingham, Handsworth (Sir E. Boyle), who took the view that the matter should not be referred to the Committee of Privileges. I thought it right, therefore, to hear the views of hon. Members, having moved the Motion formally.
The right hon. Gentleman asked what was my advice. My advice is that we should let this matter go to the Committee of Privileges. This is a House of Commons matter and it is, therefore, right to allow the House to decide. I think that it should go to the Committee of Privileges, with but little discussion now. The matter can be further discussed when the House receives the Committee's Report.
3.50 p.m.
Sir Douglas Glover: I thank the Leader of the House for his second intervention, which was very much more worthy of him than his first. I would also like to thank my right hon. Friend the Leader of the Opposition—[Interruption.]
Mr. Speaker: Order. We are on a serious issue. Hon. Members ought to be listened to.
Sir D. Glover: The last thing I want to do is to raise the temparature of the House in dealing with this matter, but there is a very important point that the House has to consider. It would be far better if it were considered by the Committee of Privileges, in the privacy of its own room. We want to do without the emotive forces which have already been too much involved, and which would result from a long debate on the Floor of the House.
I want to submit three reasons why the subject should go to the Committee of Privileges. I am a supporter of our Select Committees which, with the exception of the Public Accounts Committee and the Estimates Committee, are an
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innovation. It seems that we have not quite got the procedure of these Committees right—
Sir G. Nabarro: Or their powers.
Sir D. Glover: —or their powers, if they are to deal with these very controversial questions.
It is undeniably right that the Select Committee on Education and Science had every right to go to Essex University or to the L.S.E. Equally it would have been right, and within the powers of the Football Association, to have held a disciplinary meeting about Malcolm Allison outside Manchester Town Hall on Sunday. I do not think that anyone would have thought that either of those places was the right place to hold those meetings. There is the same criticism in the operation of the Select Committees.
Mr. Speaker: Order. I hope that the hon. Gentleman will not widen the debate too much. What he must argue is whether or not this matter should go to the Committee of Privileges.
Sir D. Glover: It is very relevant for the Committee to examine how Select Committee handle their affairs.
The next point of criticism—and notice that I have not so far mentioned the students—is of the Principal of Essex University. He knew that this Committee was going to the university but had apparently been unable to make arrangements for it to take its evidence with the dignity and in the quietude that one would expect of a Parliamentary Select Committee. The Committee of Privileges ought to find out from the Principal of Essex University why better arrangements were not made for the protection of the Select Committee.
The third matter I would like investigated is whether the students have had made quite clear to them the difference between five Members of Parliament going to a university as a Select Committee, and a Member of Parliament going simply as a politician. People are used to a "barney". We all accept that as party political speakers. But was it made clear that when we go as a Select Committee of this House students were attacking Parliament as such, not the individual Member?

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These are all matters which would be far better investigated by the Committee of Privileges than on the Floor of the House, at great length. Therefore, I hope that the House will allow this matter, which is of some importance, to go to that Committee. I hope that it will not make recommendations, trying to turn us into a sort of prefects' council, but there is an issue here which ought to be investigated, quietly.
Mr. Speaker: Mr. Charles Pannell.
Hon. Members: Oh.
3.55 p.m.
Mr. Charles Pannell: I understand that other hon. Members have an appointment in another place but the business of this House takes priority.
The Report of the Select Committee on Privileges was ordered by this House to be printed on 1st December, 1967, and it is a matter for reproach that the House has not got on with its business. Only last month, when the case of the hon. Member for Wolverhampton, North-East (Mrs. Renée Short) and Alderman Farmer came before the House, the Select Committee reported—and there has been no dissenting voice:
"At the same time, Your Committee wish to emphasise that the task of the Sub-Committee in question is one with which it has been charged by the House and they would take a grave view of any attempt to obstruct any Committee or Sub-Committee of the House or any of their members in the execution of their duty."
The Members who went to Essex University were on a like errand and we cannot pass that sort of Motion one month and run away the next.
It would have been perfectly in order for the Leader of the House to move, as was the custom in the old days, that he did not think the matter was of sufficient importance and that we should get back to the business of the day. This did not involve asking Mr. Speaker to rule that there was a prima facie breach of privilege—that, again, is one of those comparatively new-fangled innovations.
The Leader of the House could have done what I want to suggest now, with respect to the Leader of the Opposition, namely, that the House records that there has been a contempt of Parliament and
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passes on. That is the way to deal with this matter. There is no question at all that this is a breach of privilege.
Since 1733—[HON. MEMBERS: "Oh."] I am sorry, but these are the traditions of this House. Since 1733 it has been held that
"the assaulting, insulting or menacing any Member of this House … is an high infringement of the privilege of this House, a most outrageous and dangerous violation of the rights of Parliament and an high crime and misdemeanour."
Nothing could be plainer than that. I would have thought that all of this matter came into this category.
In our Report of 1967, we go on to say that we think that
"The House should exercise its penal jurisdiction … only when it is essential in order to provide reasonable protection for the House, its Members and Officers …".
I do not know what we will do with this matter if it is sent to the Committee of Privileges. Obviously, we would have to summon the Vice-Chancellor of the University of Essex. I do not know which which other people we would summon. [HON. MEMBERS: "Students."] Some say students. That is a general term. Some of my hon. Friends are students of sorts. There are many people who brawled and rioted and were referred to as "nut cases", and who interfered with a Sub-Committee of this House. What we really need is for the Leader of the House to direct his mind to a means of protecting these Select Committees in future. This is not the sort of situation we had in mind. There is a plain duty resting on the Vice-Chancellor to see that the civil power, the police, ensures that Members are suitably protected.
I could address the House at much greater length, but I defer because of the matter to which you referred earlier, Mr. Speaker. This is not a case—and I do want to get this home to the House—where it is necessary for the hon. Member for Ormskirk (Sir D. Glover) to ask that a prima facie case be established. He could have moved straight away that this matter was a contempt of the House, and the Sunday Press would not have been able to play about with it because we would have passed on.
Having put Mr. Speaker in the position of ruling that a prima facie case has been established, I am anxious not

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to do anything which appears to reflect upon your judgment, Sir. If I may say so with great respect to you, Mr. Speaker all that you have been asked to say is whether there is a prima facie case of breach of privilege. It is no reflection upon you if we refuse to act upon that.
As a member of the Committee of Privileges, I must vote for the Motion, but I would ask the Leader of the House to reconsider this, and to see whether it is not possible for him to accept the Motion that we record that there has been a contempt of Parliament and that we pass on to our next business.
4.0 p.m.
Mr. J. Grimond: The House is obviously in some difficulty, in that there is a great deal to be said on this subject, but this is not a very appropriate time to say it. The House has other business with which it is anxious to proceed and I would, therefore, put forward some brief points, unsupported by arguments of very great length.
I do not entirely share the criticism of the Leader of the House. Those of us who think that back benchers have too little opportunity for making their views known cannot complain if occasionally the Government announce that they will listen to their advice. This is such a rare occasion that I feel more inclined to congratulate the sponsor.
I dissent from his eventual advice on two grounds. First, I do not think that it will facilitate the business of the House to refer the matter to the Committee of Privileges. Secondly, we have been advised by the Chairman of the Sub-Committee that in his view the matter should not go to the Committee. If I am wrong, I know that he will correct me. These are my two arguments for thinking that we should drop the matter.
I fully share the view that the conduct at the university was disgraceful, and I also believe that it may be necessary to examine the position and rights of these new Committees. All this may be true. But I am not convinced that this is a matter for the Committee of Privileges. The Committee may be put into a difficult position if this matter is referred to it. I do not believe that it will welcome the widening of the issue suggested by the
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hon. Member for Ormskirk (Sir D. Glover).
It may be that the University of Essex is badly run. I do not know. It may be that the students do not understand the position of Select Committees of the House of Commons. But I am not very clear that this is a matter which should now be examined at length by the Committee of Privileges. All we are asked is whether or not we should refer this particular case to this particular Committee. Although I fully assent that a prima facie breach of privilege has been established, I personally hope that the House will now drop the matter.
4.2 p.m.
Mr. Kenneth Marks: To take up the point which was raised by the right hon. Gentleman the Leader of the Opposition, that it will facilitate the business of the House if this matter is referred to the Committee of Privileges, I suggest that it would do no such thing. The business of the House in this particular case is the business of the Select Committee. As I see the matter, to refer it to the Committee of Privileges will delay that work.
In my opinion, the Select Committee ought to be asked to make a special report on its visit to Essex University. It has agreed to invite the Vice-Chancellor to give his evidence here next Monday. I suggest that further consideration by the whole House should await a report by the Select Committee.
4.5 p.m.
Mr. Gilbert Longden: When, on Friday morning, I used the word "trivial" to describe these incidents, I may have laid myself open to being misunderstood. I did not, of course, mean that it should be considered trivial by the university authorities. What I meant was that they are comparatively trivial when compared with the many other weighty matters which come before the House.
I make no complaint that my hon. Friend the Member for Ormskirk (Sir D. Glover) should have raised this as a matter of privilege. I did wonder why he had not asked me first. I now fully accept the reason for his not having been able to do so.
I respectfully concur that there is no question—I never thought there was—but

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that the action of the militant students at Essex University constituted a breach of privilege. Their behaviour showed gross contempt of the House. Although my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths) believes, wrongly as I think, that it is a feeling more widely shared, it is, happily, not expressed in this manner elsewhere.
But the House need not feel too deeply aggrieved because, there is nothing that these particular young people do not hold in contempt. To paraphrase,
"They care for nobody, no, not they"—
and so it is hardly surprising that nobody, except possibly their mothers, for whom I cannot answer, cares for them. It is their misfortune that of the two conflicting sentiments which Baudelaire tells us he felt in his youth, the horror of life, on the one hand, and its ecstacy, on the other, they feel only the horror.
Mr. Speaker: Order. The hon. Member is going wide of the subject.
Mr. Longden: On Friday, I ventured to suggest that the House should not invoke the solemn machinery of privilege, but should leave the offenders to be disciplined by the university authorities, whose job it undoubtedly is. [An HON. MEMBER: "They do not do it."] My hon. Friend says that they do not do it. It is true that in many cases they have not done so.
Would it not be possible—I do not know the answer to this—for the House, if it should think fit, to suspend judgment on this Motion until the Sub-Committee has had an opportunity of taking evidence from the authorities—evidence which it was prevented from taking last Thursday, but which it has every intention of doing in the near future? If the matter is referred to the Committee of Privileges, the Sub-Committee will not be able to take such evidence in the near future.
4.7 p.m.
Mr. Michael Foot: First, I should like respectfully to concur with the point made by my right hon. Friend the Member for Leeds, West (Mr. C. Pannell) about the position in which the House is placed, and the position in which you, Mr. Speaker, are placed in being invited to say whether a particular application is one of a prima facie case of a breach of privilege.
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I do not think that it is at all the case that after Mr. Speaker has pronounced that he believes a case to be a prima facie case of breach of privilege the House would in any way be questioning his judgment if it took a view that the matter should not be proceeded with. Mr. Speaker is not pronouncing on whether he thinks that this is a matter with which the House of Commons should deal by referring it to the Committee of Privileges. Mr. Speaker is passing his judgment on the precedents, and he is bound to do so—he has no other option.
But the House of Commons is not in that position. The House is the master of its own procedure. Therefore, the House can at any time, if it wishes, decide that it is better to deal with such matters by referring them to the Committee of Privileges or by not doing so. Therefore, I submit that no one should hesitate if he is opposed to referring the matter to the Committee of Privileges to do so because he feels that it might reflect on the Chair.
Moreover, in reply to what was said by the right hon. Member for Orkney and Shetland (Mr. Grimond), that he was not sure that this was a convenient moment to discuss the matter, I submit that the House has decided that it is par excellence the convenient time for discussing this question. Because the House of Commons on previous occasions has decided that matters of privilege are so important that they should have priority of business, we are following exactly that course.
I cannot think of any better occasion for discussing this matter, even if we have to do so at some length. I myself am not proposing to address the House at any length, but others might be tempted to do so. I certainly cannot think of any better day for discussing such a matter than a Tory Supply day. I hope that nobody will be inhibited on that account. Business has been interrupted on other occasions during recent days without hon. Members losing their temper. I hope that the right hon. Gentleman will not be too hasty. I thought that he put the matter fairly and put very well the dilemma which he said he was in. I wish to put the other side of the case.
I do not complain about the Leader of the House being reluctant. I prefer

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him in his reluctant moods to when he is dynamic and aggressive. I think that we should agree, whatever dispute we have about this matter, to settle it in a proper frame of mind in discussing an important question. If anybody will assist me, I propose to oppose the Motion if it is pressed to a vote because I think that it would be foolish for the House to proceed with the course which has now been supported from both Front Benches.
My first ground for objecting is that to which the right hon. Gentleman has referred. I said on a previous occasion that if it was further proposed on future occasions that matters should be referred to the Committee of Privileges, I would oppose all such proposals. I hereby renew that undertaking. I shall oppose all such proposals until the question of privilege has been examined properly and the House has dealt with it.
Reform of the procedures of the House has been most exhaustively examined. The House received a Report from the Committee of Privileges in December, 1967. I do not put all the blame on the shoulders of the Leader of the House, because he has shown some sympathy in this matter. I think that he wishes to introduce the general reforms. But he must understand, and the rest of the House must understand, that until we have solved the problem, the Committee of Privileges is in no way fitted to deal with these matters.
The law and practice of privilege has got into such confusion—it is impossible to discriminate between serious and trivial cases, or to discover how it applies to such cases as the one we are concerned with—that we should not submit any further cases to the Committee of Privileges until that Committee has been reformed. That is my first point. It is a substantial one.
Mr. Peart: I agree entirely with my hon. Friend. I believe that the House must discuss the Report one day. I have given a promise. Naturally, there must be a collective view on this matter, but I take the view that there must be a debate. However, until we have a debate, and until the House of Commons decides to change the procedure, I am bound to take the course of action which I have taken today.
Mr. Foot: I concede that, in some degree, my right hon. Friend is placed in a difficulty and that, to some extent, he shares Mr. Speaker's difficulty, namely, that he is manacled by the precedents. But the rest of us are not, because the House of Commons is master of its own procedures. If the House comes to the conclusion—and those who have read the Report of the Committee of Privileges will, I believe, come to the conclusion—that the Committee is unfitted, in its present state, to discharge its duties, the deduction which must be made is that we should refer no more cases to the Committee of Privileges until the elementary reforms of that Committee are carried out.
The second major reason why I oppose the Motion is that it touches a question which previous Committees of Privileges have not been able to examine properly, and that is the status, rights, duties and protection for Select Committees and, in particular, travelling Select Committees. I am not a great enthusiast for Select Committees, but if they are to be appointed it is absolutely right that they should travel up and down the country and take evidence in the way that they have been doing.
It is excellent that representatives of the House should travel to the universities to obtain first-hand evidence. But the idea that we can solve the problems of the rights and protections of such Committees by referring this matter to the Committee of Privileges is a fallacy. It goes much wider, or much narrower, whichever way one likes to put it. It does not fit in that slot.
The Committee of Privileges is, to some extent, bound by precedents until we decide to change them. That is why the Committee of Privileges, in its unreformed state, is not qualified to decide awkward questions concerning Select Committees. Only a Committee of Privileges reformed, at any rate partly, along the lines which some of us have suggested would be qualified to deal with these matters. That is my second ground for saying that it would be wrong for the House to refer this matter to the Committee of Privileges.
My third ground is practical. There will be a terrible mess if this matter is referred to the Committee of Privileges. I do not envy those who will have to

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carry out these duties. Nobody knows who is to be summoned. The Committee has the right to decide who is to be summoned. But in a matter such as this there will be great difficulties. There is always the difficulty before the Committee about whether people charged with supposed crimes or breaches of privilege should be represented. What about the students who are to be charged, if they are to be charged? What about those who may be accused of breaches of privilege? Are they to be represented?
If the House were to pass the Motion, now supported by the two Front Benches, we could have a distraction for weeks and months in which students, not merely from Essex, but from the London School of Economics, might be involved. I understand that students at the London School of Economics do not need any encouragement to engage in expressions of opinion about Parliamentary democracy. I can imagine no more stupid course for the House to take than to elevate the misdemeanours, or alleged misdemeanours, at Essex University into a matter for presentation to the Committee of Privileges. If it does, there will be marches from Essex, London School of Economics and all the other universities, with students saying, "If Essex is to have this privilege, why should not we all join in the fun?"
The House will make a fool of itself if it persists with this proposal. I mean to save the House from that embarrassment. It is very difficult to deal with student revolt and student protest. I object strongly to their apparent hatred of or opposition to the ideals of free speech. I rigorously oppose them on such matters. But, to deal with this phenomenon of student revolt, I can think of no more foolish instrument to use than the lugubrious paraphernalia of Parliamentary privilege. Therefore, if the House is not to make a fool of itself, I plead for the back benchers to join together, not for the first time in this Parliament, and instil a little common sense into the two Front Benches.
4.17 p.m.
Mr. John Boyd-Carpenter: It is an utterly unacceptable argument that, because the Leader of the House has not, as he should have done, provided time to discuss the Report of the Select Committee on Parliamentary
966
Privileges, the House should completely abdicate its duty to defend its privileges and decline even to consider—and this I understand was the argument of the hon. Member for Ebbw Vale (Mr. Michael Foot)—the reference of any case, however flagrant, to the Committee of Privileges so that the existing machinery may operate. This is an argument which the House cannot accept without abandoning its rights and duties.
The great argument for committing this matter to the Committee of Privileges is that it would enable the House to decide it on the basis of the facts. If I may say as a member of the Select Committee of Privileges, the strength of that Committee is that it proceeds on the evidence. With due respect to my hon. Friend the Member for Ormskirk (Sir D. Glover), we do not have the full facts. We are not able to judge or prejudge a case without ascertaining the full facts, who has been involved and what the circumstances were. The fact that this debate has shown that this is a controversial matter in the House surely makes it desirable that the House should consider it when the facts have been obtained and the evidence has been sifted. A decision could then be taken.
The only other point which I wish to make is this. As a member of the Committee of Privileges, I must not even appear to prejudge the matter, but I think that it is a reason why we should investigate it in the light of your Ruling, Mr. Speaker. I am one of those who think that the House has been far too free during recent years in suggesting that its privileges were involved, sometimes involving silly and irresponsible charges by silly and irresponsible people. But the subject matter of this complaint is wholly different.
I do not know whether it will be proved, but the allegation is that the work of a Select Committee of this House was, first, hindered and, secondly, stopped. If there is anything which justifies Parliamentary privilege, it is the right to protect our proceedings, including those of our Select Committees. This is surely what parliamentary privilege is for. It is not designed as protection simply because our feelings are hurt or because somebody has been rude or insulting to us. It is so that we can do the job of work which we have been sent here to do.

967
I do not pronounce whether the. Select Committee was wise or unwise to 'go on this particular occasion to this particular place, but, it went in its own judgment of its responsibilities to carry out what it regarded as its duty. For this House to say that an allegation that its work has been impeded and stopped by other people and its Members manhandled is not worth even consideration by the Committee of Privileges would be a hopeless abdication of the rights and duties of this House.
4.21 p.m.
Mr. A. Woodburn: I wish to raise a slightly different point. I agree with a great deal that has been said by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) and also by those who have argued the course which the House must take to protect its interests.
We have here, however, a case of two Select Committees of the House. There is already a Select Committee whose work has been impeded, and that Select Committee, we are told, is at present investigating what has happened to its own Sub-Committee. It would seem to me wrong that we should now appoint the Committee of Privileges to examine the Select Committee and what has happened to it. It would seem to me to be more appropriate that we should defer discussion of the Motion until such time as the Select Committee which was involved reports to the House and gives us authentic information as to the facts and what it considers to be the circumstances in which this offence or alleged offence took place.
I wonder, therefore, Mr. Speaker, whether it might not solve the problems both of my hon. Friends who want this matter to be considered in slightly different circumstances and those who see the difficulty of examining it while a Select Committee is already in process of doing so, if we could postpone discussion of the Motion until such time as we have had a report from the Select Committee and at that time the Motion could be moved or not, as the case might be.
I wonder whether it would be in order to suggest that the moving of the Motion be postponed until such time as we have
968
a report from the Select Committee which is itself dealing with this matter.
4.23 p.m.
Sir Harry Legge-Bourke: I shall not delay the House for one minute longer than is necessary. I had hoped not to intervene at all, but that the whole matter would have been cleared up after the speeches from the Front Benches and from the two hon. Members of the sub-Committee who witnessed what happened when they visited the University of Essex. As matters stand, however, I feel that the issue has not been resolved and that we are rapidly getting into a position where, unless we are careful, we will do something which the House will live bitterly to regret.
It seems to me that those of us who serve on Select Committees and particularly those of us who serve on Select Committees of which Sub-Committees have to carry out the job of the whole Committee and travel around the country, are now in a very difficult position. It has been made even worse by the threat, subsequent to the events at Essex University, that the London School of Economics students will not be prepared to give evidence before the Select Committee unless it virtually becomes a public meeting. If these sort of things happen, the whole work of our Select Committees will break down.
Although, with the greatest respect to my hon. Friend the Member for Hertfordshire, South-West (Mr. Longden) and the hon. Member for Manchester, Gorton (Mr. Marks), who are members of the Sub-Committee concerned in this case, I would say that the privileges of the House have prima facie been abused, I submit to the House that this matter goes beyond the scope of that Sub-Committee. It is for this reason, and this reason only, that I feel that the House would be wise to accept the advice which it has received from the two Front Benches.
4.24 p.m.
Mr. Frederick Willey: I want to emphasis the point made by the hon. Member for Hertfordshire, South-West (Mr. Longden), because a real difficulty faces us. The incident in question is part of the evidence which has been given to the Sub-Committee, and the House is asking the Committee of

969
Privileges contemporaneously to consider a matter which is in evidence before the Select Committee. Again, the sub-Committee was enjoying the hospitality of the university which, according to the evidence which has been given to us, is responsible for maintaining order on the campus. These are both matters which affect the inquiry that the Select Committee is carrying out.
I should have hoped that the House could devise a way of suspending consideration of this issue by the Committee of Privileges until the Sub-Committee has had its opportunity of considering the matter and reporting to the House. There is a grave disadvantage in having two inquiries which are concerned about different aspects of something which is very relevant to the inquiry by the Committee of Privileges.
Mr. Heath: Is the right hon. Member aware that the Committee of Privileges faced a rather similar situation with a case directly affecting a Member of the House, the hon. Member for West Lothian (Mr. Dalyell)? It lies within the power of the Committee of Privileges to arrange the timing of the evidence which it takes. Obviously, in the case to which I have referred, it took cognisance of the fact that the Specialist Committee on Science and Technology was involved and had to consider the matter, and then presented its evidence to the Chairman through the Committee of Privileges.
4.27 p.m.
Mr. David Crouch: The House is facing a serious problem. It is not a question of interfering with the activities of a Select Committee examining education, but of the position of the House and its Members.
Members of the House act outside this Chamber on many occasions in Select Committee, where they are representatives of the House and of the people. If we, as Members of the House, are to be denied an opportunity of proper investigation of problems which are brought before us, we are not sufficient Members elected under our democratic system.
We are not seeking to stand on privilege in a pompous attitude. Surely, that is not the question which is before the House. The question before the House is that we should stand on our position of being able to do our duty. That is
970
what we are seeking to debate and further examine. I feel that there is a case here for examination by the Committee of Privileges. It is not that we are so concerned that the Select Committee in question has been inhibited in its opportunity of examining the problem, but that members of that Committee have been denied an opportunity of performing the task for which they are elected.
I submit that this is something much more important than the hon. Member for Ebbw Vale (Mr. Michael Foot) has suggested. He has suggested that we are acting from a feeling of pomposity. That is not the case. This is a serious question, and I hope that the House will agree that it is one which we should decide should be referred to the Committee of Privileges.
4.30 p.m.
Mr. R. T. Paget: The point I want to make is very short indeed. I do not think that the House should rely on the procedure of privilege when the criminal law provides an alternative. From what we have heard from the Sub-Committee, here we have a case of assault and riot. Let the criminal laws deal with it, let a summons be taken out, for the law has effective sanctions and we have not. If we take up a position where we have no effective sanction with which to enforce it we merely make ourselves look ridiculous.
What is the point of putting ourselves into the position where all we can do is to summon to the House a young man who will glory in the publicity which we give him? That is a very silly thing to do. Let the criminal courts deal with this matter.
Several Hon. Members rose—
Mr. Speaker: Order. I am wondering whether the House might hasten to a decision.
4.31 p.m.
Sir Gerald Nabarro: I want to be very brief in supporting my right hon. Friend the Leader of the Opposition in saying that this matter should go to the Committee of Privileges.
It seems to me that the speech made by the hon. Member for Ebbw Vale (Mr. Michael Foot), in the words of the unruly

971
student at the University of Essex, was "bloody irrelevant". I quote the words used at the university when a table used by members of the Select Committee was overturned on them.
The critical matter here, surely, is the powers which are enjoyed, or the lack of powers, by these itinerant Select Committees or Sub-Committees. It is difficult enough to establish what are the powers enjoyed inside this House by Select Committees, for permanent officials cock snooks at Select Committees and refuse to reply. Many people outside this House cock snooks at Select Committees and refuse to reply. Yet Erskine May states pompously, because it has never been revised and brought up to date, that a Select Committee has powers to send for persons and for documents.
What is the position of a Select Committee operating outside this House, one of the itinerant Select Committees, if it sends for persons who are not Members of this House and those persons cock a snook at members of the Committee and refuse to reply? What is the position if they refuse to produce documents? The fact is that Select Committees have no powers whatever to compel them. The most that Mr. Speaker of the House of Commons could do would be to report the matter to the police and ask for a person to be arrested.
Does any Member of this House really believe that any Speaker of the House of Commons would call on a member of the general public to be arrested on a charge of a contempt of Parliament simply because that person refused, in the terms of Erskine May, to produce his body or documents for examination?
I say that the reason, as supported by my right hon. Friend, why this case ought to go to the Committee of Privileges is that an effort should be made to determine what are truly the powers of a Select Committee. That seems to me to be the critical issue. If, as the hon. Member for Ebbw Vale feels, the Committee of Privileges is not the place to deal with things of this sort, still let the Committee of Privileges, in the instance of the University of Essex, say that a gross contempt of Parliament has been established; its report will then be brought back to this House to debate; the House
972
will then have to decide upon the punishment to be accorded to these unruly students.
Does any hon. Member really believe that those unruly students will, as in the case of Mr. John Junor, some years ago, be summoned to the Bar of the House for contempt of Parliament? As the hon. and learned Gentleman the Member for Northampton (Mr. Paget) has just observed, those students would revel in the publicity achieved, but in any event would cock a snook at Parliament and say, "You are all bloody irrelevant, anyway"—in the words of the student at Essex University.
It is, therefore, my wish that the Committee of Privileges should examine this case while the Select Committee goes on with its work, and report that there has been a gross contempt of Parliament, which there certainly has been, and then, perhaps, the House of Commons can bring Erskine May up-to-date and decide for in the future what punishment is to be accorded to people who are not Members of this House who indulge in gross contempt of Parliament itself.
Mr. William Molloy: Is the hon. Member seriously suggesting that we should summon a portion of the population, namely, these students, and use them as guinea pigs? I cannot imagine anything more appropriate to bring the House into great disrepute.
Sir G. Nabarro: I am not suggesting anybody should be a guinea pig. I am suggesting that the Committee of Privileges should rule, as it will rule, undoubtedly, that a gross contempt of Parliament has occurred, and then let the House of Commons decide what kind of punishment it will accord.
I believe that there will be no punishment at all. It will then be seen that the whole system of broadened and itinerant Select Committees is absolutely futile and serves no purpose in its present form at all. There may be another form of machinery which can be evolved for them, but at present the Select Committees, which are supposed to have powers, enjoy no powers whatever.
4.35 p.m.
Mr. Christopher Price: The speech of the hon.

973
Member for Worcestershire, South (Sir G. Nabarro) has raised in me all the worst fears that I have about what the results of referring this matter to the Committee of Privileges might be. I would agree with him that we are here in an area of great uncertainty and great innovation.
I believe that I was the first person to chair a Sub-Committee of this Select Committee outside the House and sitting in public—at Guildford College of Art. It was suggested from various quarters that the sort of trouble which occurred at Essex University might occur there, at Guildford, and that we might be involved in difficulties. Indeed, the whole question whether the Committee, sitting outside this House, was privileged or not, was raised at our first sitting by someone from the body of the hall who was not a witness.
I ruled, upon the advice of the Clerk, that the Committee was absolutely protected by privilege. I would agree with that, and I would agree, in the light of this, that obviously a prima facie breach of privilege has been made out.
However, where I differ is on the question whether the appropriate body to deal with this is the Committee of Privileges. The Select Committee on Education and Science is right in the middle of an investigation, and one of the areas being investigated is probably the most delicate area of investigation in this country—indeed, in the world generally. My suggestion is that the Committee itself should be allowed to resolve this particular matter and that if the House wants to judge the desirability of Select Committees travelling around the country it should at least let this particular investigation be completed, see the results of it, and see the thing as a whole, before it comes to the conclusion of shoving it to the Committee of Privileges.
We have heard from the hon. Member for Worcestershire, South of the sort of attitude which many people have. They would like to fold up all the innovations we have, and with special Select Committees going round the country, and to come right back to square one. My great fear is that, if we hand this matter over to the Select Committee of Privileges, all the pioneering work of parliamentary reform, and the establishment
974
of these Special Select Committees which my right hon. Friend the Member for Coventry, East (Mr. Crossman) introduced, will be lost, and that the whole movement for parliamentary reform will suffer a very severe setback indeed.
So I would plead very strongly indeed that we admit that there has been a grave breach of privilege, but, as my right hon. Friend the Member for Leeds, West (Mr. C. Pannell) said, pass on, and not go through the paraphernalia and pomposity of referring it now, at this critical stage, to the Committee of Privileges.
Mr. C. Pannell: On a point of order. Would you, Mr. Deputy Speaker, accept a manuscript Amendment—I know that there is a precedent for this—"That this House records that the matter of the students of Essex University is a contempt of Parliament" and that we forthwith pass on to the business of the day?
Mr. Deputy Speaker (Mr. Harry Gourlay): It would be in the interest of the House if the House would come to a decision on the Motion before it. I am not disposed to accept the right hon. Member's Amendment.
Mr. Pannell: With great respect, Mr. Deputy Speaker, I bow to your Ruling, but I was asking whether at any point the Motion which I put before you is in order. I think that it is.
Mr. E. Shinwell: Further to that point of order. How is it possible for us to determine that a contempt of the House has occurred without having some evidence before us? I have never listened to such nonsense as we have heard this afternoon in all my experience of the House. I am baffled by the stupidity embodied in some statements which have been made.
How can we determine that there has been contempt with no evidence before us? I am being asked to vote one way or the other, but all I have before me is a statement by Mr. Speaker that there is a prima facie case, that is all, and a proposal by the Leader of the House that this matter should be referred to the Committee of Privileges. Do we require to debate this further?
4.42 p.m.
Mr. Stephen Hastings: I am sorry that the short debate

975
to which we have been listening strikes the right hon. Member for Easington (Mr. Shinwell) as nonsense, as to some of us it is a fairly important matter.
I rise to ask the House two questions. First, if the work of a Select Committee had been hindered and stopped, to use the words of my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), by any body that one can reasonably imagine other than a university, should we be in the dilemma in which we consider ourselves to be? Suppose, for instance, a trade union had refused to listen to a Select Committee and stopped it in its work, as happened at Essex University, or suppose that a company or management—
Sir Arthur Vere Harvey: —or Colin Jordan.
Mr. Hastings: —or Colin Jordan, or any other body that one can reasonably envisaged, had maltreated a Select Committee of the House in that way, should we this afternoon be hesitating for one moment in referring the matter to the Committee of Privileges? In my view, no.
Moreover, far from being exempt, universities should be the very opposite; they should be among the first to be called into account on any matter of this kind, if we are to remain responsible for the prestige and position of Parliament. A university is the last institution which should escape. My second question—
Mr. Longden: Before my hon. Friend goes on to his second question, may I say that there is no question of the universities escaping. The difference between a student body and any other body which my hon. Friend has named is that a student body is already subject to a disciplinary body which can take action, whereas the other bodies which he mentioned are not.
Mr. Hastings: I am grateful to my hon. Friend for leading me straight into the second of the two questions which I wish to put to the House. I listened carefully and with sympathy to his intervention and to others, which seemed to suggest that the matter could be left to the university authorities, and he has repeated more or less the same thing.
976
My second question is this. Is there any right hon. or hon. Member of this House who, if he searches his experience, his memory and his heart, seriously thinks that in the light of what we have experienced in this country in recent years this or for that matter any other university is likely to pay attention to this in the terms of which my hon. Friend has suggested? I doubt it. The hon. and learned Member for Northampton (Mr. Paget), who is always to be listened to with deep attention on matters such as this, suggested that the matter should perhaps be left to the criminal law. I would be inclined to go along with him if I could see how this would come about. But who is to bring the charge? Who is to bring the summons? Unless that can be made clear to me, I am quite sure that we have no other sensible course than to refer this matter to the Committee of Privileges.
Mr. Deputy Speaker: In view of the important occasion about to take place in the Royal Gallery, would it be the wish of the House to reach a conclusion on the Question?
Mr. John Biggs-Davison: A number of hon. Members wish to speak. I am not making any fuss about it, but is the debate to be brought to an end in the absence of the Leader of the House and without him having heard some of the arguments?
Mr. Deputy Speaker: I am in the hands of the House. As long as hon. Members wish to speak, I am bound to call them.
4.45 p.m.
The Parliamentary Secretary to the Treasury and Deputy Leader of the House of Commons (Mr. John Silkin): I must apologise to the House for the absence of my right hon. Friend the Leader of the House, who is detained in the Royal Gallery on an invitation which I think the House would have wished him to accept. I hope that the House will forgive me if, in his place, I briefly endeavour to wind up.
The House is in a very real difficulty. All the points that have been made on both sides of the argument have been made with sincerity and with feeling, but, broadly, it comes to this, that every hon.

977
Member accepts that a Sub-Committee of a Select Committee of this House has been very badly treated, and has had its work interfered with by a group of irresponsible students; there is no doubt about that.
It seems to me that the real question boils down to one small matter, and that is whether the House, in following the mandated advice of the Chair and referring the matter to the Committee of Privileges, is using a steam hammer to crack a nut case, in the words of the Chairman of the Sub-Committee, and whether it should not go so far. I must support the view of my right hon. Friend, but this is essentially a matter for the House and, for that reason, I recommend hon. Members to follow their own convictions and their own opinions entirely upon this. I shall be voting for the Motion.
Mr. Donald Chapman: Before my right hon. Friend sits down, will he assure those of us who take the view which he has half-expressed that this is going too far, that the protection of Sub-Committees will be looked into and, secondly, and equally important, that before long there will be a reformed Committee of Privileges to which we would be happier to send an issue such as this?
Mr. Silkin: The first point of my hon. Friend is an important one, although it is not directly related to the Motion. It is important that whenever a Select Committee or a Sub-Committee of a Select Committee of this House goes about its official duties, it should be protected, and I know that my right hon. Friend will look into this matter with the Services Committee as speedily as possible. This is something which should be done as a matter of urgency.
I can give my hon. Friend no assurance on his second point, but I will convey the matter to my right hon. Friend, and we will consider it in due course.
Mr. John Biggs-Davison: I do not wish to make a speech. I wish to ask the Deputy Leader of the House one question, the answer to which would be helpful to some of us in making up our minds on this issue. It is a question about which the Leader of the House was in two minds.
978
Has either Mr. Speaker or the Leader of the House received any communication from the authorities of the University of Essex expressing regret or an intention to take any course of action regarding this incident or any possible recurrence of such an incident? This seems to be relevant, especially as some hon. Members have said that there should be some delay by the House in proceeding until more is known about what is happening in the university.
Mr. Silkin: As far as I am aware, my right hon. Friend has not received such a communication. Perhaps that is not surprising. It was common knowledge that the House would be debating this matter this afternoon.
Mr. Longden: I have received from the Vice-Chancellor a letter expressing regret and also stating that he intends taking disciplinary proceedings, but that he cannot do anything until he knows the decision of the House. I should like to correct the Deputy Leader of the House in one respect. The advice that he said I gave Mr. Speaker was not mandated.
Hon. Members: Divide.
Mr. William Molloy rose—
Hon. Members: Divide.
Mr. Deputy Speaker: Order. The House must hear the hon. Member.
Mr. Molloy: Some hon. Members seem to be behaving worse than the students they are attacking.
It might well have been that the issue which has prompted this debate was an extremely serious one—a question of ordinary people being denied certain democratic rights. We would be in a position of not knowing how to deal with the matter. I echo the sentiments expressed by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), that the House is in a difficult situation and that the only way to resolve it is not to pick on this issue and make it a guinea pig case but, as quickly as possible, to decide how to resolve this issue and debate the main issue of the Committee of Privileges and how it should operate.
Question put:—
The House divided: Ayes, 197, Noes 110.

Division No. 169.]

AYES

[4.50 p.m.

Albu, Austen

Harrison, Col. Sir Harwood (Eye)

Oakes, Gordon

Alison, Michael (Barkston Ash)

Harrison, Walter (Wakefield)

Onslow, Cranley

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

Harvey, Sir Arthur Vere

Orbach, Maurice

Baker, Kenneth (Acton)

Hastings, Stephen

Orr, Capt. L. P. S.

Balniel, Lord

Heath, Rt. Hn. Edward

Osborn, John (Hallam)

Barber, Rt. Hn. Anthony

Higgins, Terence L.

Page, Graham (Crosby)

Bell, Ronald

Hiley, Joseph

Page, John (Harrow, W.)

Bence, Cyril

Hirst, Geoffrey

Pearson, Sir Frank (Clitheroe)

Bennett, Sir Frederic (Torquay)

Hobden, Dennis

Peel, John

Bennett, Dr. Reginald (Gos. & Fhm)

Hogg, Rt. Hn. Quintin

Percival, Ian

Biffen, John

Holland, Philip

Perry, Ernest G. (Battersea, S.)

Biggs-Davison, John

Hooley, Frank

Powell, Rt. Hn. J. Enoch

Binns, John

Hordern, Peter

Price, David (Eastleigh)

Blackburn, F.

Howell, David (Guildford)

Prior, J. M. L.

Bottomley, Rt. Hn. Arthur

Hoy, James

Pym, Francis

Boyd-Carpenter, Rt. Hn. John

Hunt, John

Rhys Williams Sir Brandon

Braine, Bernard

Iremonger, T. L.

Ridley, Hn. Nicholas

Brooks, Edwin

Irvine, Bryant Godman (Rye)

Ridsdale, Julian

Broughton, Dr. A. D. D.

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

Roberts, Albert (Normanton)

Brown, Sir Edward (Bath)

Jeger, George (Goole)

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

Buchanan-smith, Alick (Angus, N & M)

Jenkin, Patrick (Woodford)

Rodgers, Sir John (Sevenoaks)

Buck, Antony (Colchester)

Jones, Arthur (Northants, S.)

Ross, Rt. Hn. William

Bullus, Sir Eric

Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

Rossi, Hugh (Hornsey)

Cant, R. B.

Jones, J. Idwal (Wrexham)

Royle, Anthony

Carlisle, Mark

Jopling, Michael

Russell, Sir Ronald

Clegg, Walter

Joseph, Rt. Hn. Sir Keith

Ryan, John

Cordle, John

Kerby, Capt. Henry

St. John-Stevas, Norman

Costain, A. P.

Kershaw, Anthony

Scott-Hopkins, James

Craddock, Sir Beresford (Spelthome)

Kimball, Marcus

Sharples, Richard

Crouch, David

King, Evelyn (Dorset, S.)

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

Cunningham, Sir Knox

Kitson, Timothy

Shinwell, Rt. Hn. E.

Currie, G. B. H.

Lancaster, Col. C. G.

Silkin, Rt. Hn. John (Deptford)

Dance, James

Lane, David

Sinclair, Sir George

d'Avigdor-Goldsmid, Sir Henry

Langford-Holt, Sir John

Skeffington, Arthur

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

Leadbitter, Ted

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

Dempsey, James

Ledger, Ron

Stainton, Keith

Diamond, Rt. Hn. John

Legge-Bourke, Sir Harry

Stewart, Rt. Hn. Michael

Digby, Simon Wingfield

Lever, Harold (Cheetham)

Stoddart-Scott, Col. Sir M.

Dodds-Parker, Douglas

Lewis, Arthur (W. Ham, N.)

Summerskill, Hn. Dr. Shirley

Doughty, Charles

Lewis, Kenneth (Rutland)

Taylor, Sir Charles (Eastbourne)

Drayson, G. B.

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

Taylor, Edward M. (G'gow, Cathcart)

Dunn, James A.

McBride, Neil

Temple, John M.

Edelman, Maurice

McCann, John

Thatcher, Mrs. Margaret

Eden, Sir John

McKay, Mrs. Margaret

Tilney, John

Elliot, Capt. Walter (Carshalton)

Macleod, Rt. Hn. Iain

Tomney, Frank

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

McMaster, Stanley

Vaughan-Morgan, Rt. Hn. Sir John

English, Michael

MacMillan, Malcolm (Western Isles)

Vickers, Dame Joan

Ensor, David

Macmillan, Maurice (Farnham)

Waddington, David

Eyre, Reginald

MacPherson, Malcolm

Walden, Brian (All Saints)

Fortescue, Tim

Maddan, Martin

Walker, Harold (Doncaster)

Galpern, Sir Myer

Maginnis, John E.

Walker, Peter (Worcester)

Ginsburg, David

Marten, Neil

Ward, Dame Irene

Glover, Sir Douglas

Maude, Angus

Watkins, David (Consett)

Glyn, Sir Richard

Mawby, Ray

Weatherill, Bernard

Godber, Rt. Hn. J. B.

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

Wellbeloved, James

Goodhew, Victor

Mills, Peter (Torrington)

Wells, John (Maidstone)

Gower, Raymond

Monro, Hector

Whitelaw, Rt. Hn. William

Grant-Ferris, R.

Montgomery, Fergus

Wilkins, W. A.

Greenwood, Rt. Hn. Anthony

More, Jasper

Willey, Rt. Hn. Frederick

Cresham Cooke, R.

Morris, Alfred (Wythenshawe)

Williams, Alan Lee (Hornchurch)

Grey, Charles (Durham)

Morris, Charles R. (Openshaw)

Wilson, Geoffrey (Truro)

Griffiths, David (Rother Valley)

Morris, John (Aberavon)

Woodburn, Rt. Hn. A.

Griffiths, Eddie (Brightside)

Mott-Radciyffe, Sir Charles

Worsley, Marcus

Griffiths, Eldon (Bury St. Edmunds)

Munro-Lucas-Tooth, Sir Hugh

Hall, John (Wycombe)

Nabarro, Sir Gerald

TELLERS FOR THE AYES:

Harris, Frederic (Croydon, N. W.)

Neave, Airey

Mr. Alan Fitch and

Harrison, Brian (Maldon)

Noel-Baker, Rt. Hn. Philip (Derby, S.)

Mr. Joseph Harper.

NOES

Allaun, Frank (Salford, E.)

Blenkinsop, Arthur

Chapman, Donald

Ashton, Joe (Bassetlaw)

Booth, Albert

Conlan, Bernard

Atkins, Ronald (Preston, N.)

Boston, Terence

Crawshaw, Richard

Atkinson, Norman (Tottenham)

Boyden, James

Dalyell, Tam

Awdry, Daniel

Bradley, Tom

Darling, Rt. Hn. George

Bagier, Gordon A. T.

Brown, Rt. Hn. George (Belper)

Davies, Dr. Ernest (Stretford)

Barnett, Joel

Brown, R. W. (Shoreditch & F'bury)

Dickens, James

Bidwell, Sydney

Carm chael, Neil

Driberg, Tom

Dunwoody, Mrs. Gwyneth (Exeter)

Lestor, Miss Joan

Perry, George (Nottingham, S.)

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

Lipton, Marcus

Price, Christopher (Perry Barr)

Ellis, John

Longden, Gilbert

Probert, Arthur

Evans, Fred (Caerphilly)

Luard, Evan

Rankin, John

Finch, Harold

Lubbock, Eric

Rees, Merlyn

Fletcher, Rt. Hn. Sir Eric (Islington, E.)

Lyon, Alexander W. (York)

Roberts, Gwilym (Bedfordshire, S.)

Fletcher, Raymond (Ilkeston)

MacDermot, Niall

Rodgers, William (Stockton)

Fletcher, Ted (Darlington)

Macdonald, A. H.

Roebuck, Roy

Forrester, John

Mackenzie, Gregor (Rutherglen)

Scott, Nicholas

Gardner, Tony

McMillan, Tom (Glasgow, C.)

Shaw, Arnold (Ilford, S.)

Garrett, W. E.

McNamara, J. Kevin

Sheldon, Robert

Gray, Dr. Hugh (Yarmouth)

Mallalieu, E. L. (Brigg)

Short, Mrs. Renée (W'hampton, N. E.)

Gregory, Arnold

Manuel, Archie

Silverman, Julius

Griffiths, Rt. Hn. James (Llanelly)

Mapp, Charles

Silvester, Frederick

Griffiths, Wilt (Exchange)

Marks, Kenneth

Slater, Joseph

Grimond, Rt. Hn. J.

Marquand, David

Spriggs, Leslie

Hamilton, James (Bothwell)

Mendelson, John

Strauss, Rt. Hn. G. R.

Hamilton, William (Fife, W.)

Mikardo, Ian

Thomas, Rt. Hn. George

Hamling, William

Millan, Bruce

Tinn, James

Hazell, Bert

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

Wainwright, Richard (Colne Valley)

Hornby, Richard

Molloy, William

Wallace, George

Horner, John

Murray, Albert

White, Mrs. Eirene

Houghton, Rt. Hn. Douglas

Newens, Stan

Williams, Alan (Swansea, W.)

Howie, W.

Ogden, Eric

Winstanley, Dr. M. P.

Huckfield, Leslie

Orme, Stanley

Wolrige-Gordon, Patrick

Jennings, J. C. (Burton)

Owen, Will (Morpeth)

Woof, Robert

Judd, Frank

Paget, R. T.

Kelley, Richard

Pannell, Rt. Hn. Charles

TELLERS FOR THE NOES:

Kerr, Russell (Feltham)

Park, Trevor

Mr. Emrys Hughes and

Lee, John (Reading)

Pentland, Norman

Mr. Michael Foot.

Resolved,
That the matter of the Complaint be referred to the Committee of Privileges.

BUSINESS OF THE HOUSE (SUPPLY)
Ordered,
That this day Business other than the Business of Supply may be taken before Ten o'clock.—[Mr. Diamond.]

ORDERS OF THE DAY
  SUPPLY
  [18TH ALLOTTED DAY],—considered.

  LOCAL AUTHORITY FINANCES (INTEREST RATES)
  5.1 p.m.
  Mr. Peter Walker: I beg to move,
  That this House regrets the serious effect of high interest rates on local authority finances.
  In view of the late start to this debate, I shall endeavour to make my remarks short. I am sure that the winding up speeches will be equally brief, thus enabling hon. Members on both sides of the House to make their contributions to this very important debate. The size of this problem is indeed vast. Something like £13,000 million is currently being borrowed by local authorities. This means that for every family of four something like £1,000 local government borrowings are taking place and every time there is an increase in the rate of local government borrowing of 1 per cent., a burden of something like 4s. a week is added to the expenses of every family of four.
  The importance of this topic was reflected before the General Election in which Labour came to power, by the very high priority given to it by the Prime Minister himself. I shall quote from a letter written to the Prime Minister by Mr. Eric Sewell, Parliamentary Correspondent of the Daily Mail, following a luncheon that took place in the Press Gallery of the House of Commons not long after the Prime Minister took on the leadership of the Labour Party. I think this letter is of some importance because it shows the great priority which the party opposite placed on this topic when hon. Members opposite were in Opposition.
  The letter starts:
  "Dear Mr. Wilson, I think you have now made it clear just what kind of image of leadership you want to project to the nation."
  It went on:
  "In place of the glassy glare at the cameras, there was the offbeat crack, the mild tongue in cheek, the occasional burst of indignant sincerity.
  Rates was a good peg on which to hang your party's aims. You know that everyone
  984
  in the country is conscious just now of the council's hand hovering menacingly over his pocket."
  The letter went on to say:
  "Cashing in on the current rates controversy, you outlined the plans obviously aimed at countering the Tories' efforts to turn you into a nationalisation bogy-man."
  The interesting thing about this speech was that it was the first speech by the Prime Minister to the Parliamentary Press Gallery and he made six points by which a Labour Government would reduce rates. Three of them are particularly appropriate to our debate. The first was that he would
  "Restore the local authorities' right to raise capital through the Public Works Loan Board."
  The second was that he would
  "Make interest rates reasonable."
  The third was that he would
  "Stop profiteering in urban land, so reducing the cost of local authority expenditure on housing and amenities."
  Those were the three major proposals by the Prime Minister in a major speech prior to the General Election.
  Examine what has happened to those three suggestions in practice. First, let us look at the Public Works Loan Board. When the Prime Minister made that speech the average rate of borrowing from the Public Works Loan Board was between 5 and 6 per cent. Today it is between 8¾ and 9⅜ per cent. As to the operation of the Public Works Loan Board, in the year 1963–64 when the Prime Minister made that speech there was one change in the rate. In the year 1968–69 there have been no fewer than 12 changes in the rate, all increases.
  The second point suggested by the Prime Minister was that he would "make interest rates reasonable." When he made that speech Bank Rate was 4 per cent.; today it is 8 per cent. The third point was that he would
  "Stop profiteering in urban land, so reducing the cost of local authority expenditure on housing and amenities."
  The Financial Secretary to the Treasury (Mr. Harold Lever): I do not want to deprive the hon. Member any amusement, but we are debating high interest rates and unless somehow he relates this to high interest rates—[Interruption.] I am addressing myself to the hon. Member

  985
  through the Chair. I am not complaining that this is out of order, but he will be making assertions on this point and I am not prepared to deal with it.
  Mr. Walker: I have never heard such an absurd remark from the Government Front Bench. I am sure that the Minister will not want to deal with it, but if he is suggesting that interest charges by the Public Works Loan Board and Bank Rate have nothing to do with it and the cost of loans has nothing to do with the debate, he cannot understand the Motion.
  Mr. Lever: I am referring only to the third point about the cost of urban land. I have had no notice of this and have not come prepared to give any reply on this. I have come, of course, prepared to deal with the two other points the hon. Member has raised.
  Mr. Walker: I should have thought the Minister would fully understand these matters and the twofold effect of higher capital costs and higher interest rates which have a dramatic effect on local authority finances. To illustrate the adverse effects of these interest rates, one has to show the higher capital costs which this Government have created. One can recognise the Government reluctance face that issue.
  As to increased capital requirements which have to be serviced by this high interest rate, a whole series of Government policies have added to them. First there is their policy of saying that items should result in an increase in rents which are capitalised. The particular rate of interest operating today will in itself have a very adverse effect on local authority finances. The constant spate of circulars from one Ministry after another urging local authorities to go in for new capital expenditure adds to the burden, and the Government's refusal to relieve capital costs of some local authorities by allowing them to sell houses is another factor in this case.
  The Government themselves have added considerably to the cost of capital projects by such measures as S.E.T., the import surcharge, devaluation, National Insurance contributions and petrol and transport costs. The Government, through the cost of borrowing, have increased the capital requirements of local authorities,
  986
  and the major factor is the interest rate itself.
  Looking at the Public Works Loan Board, I hope the Minister will give some explanation of the violent speed of changes in its rates in the last 12 months. I will give details of the medium-term charge on the lower rate in the last 12 months. On 28th September it was 7⅝ per cent., on 9th November, 7¾ per cent., 23rd November, 8 per cent., 21st December, 8⅛ per cent., 11th January, 8¼ per cent., 1st February, 8½ per cent., 8th March, 8¾ per cent., 22nd March, 8⅞ per cent. How can any local authority plan expenditure when the Government fluctuate the basic rate of interest to the Public Works Loan Board in the manner in which this Government have done in the past twelve months? I hope that the Government recognise the very real burden involved for the local authorities concerned.
  In Birmingham the increase in interest rates is costing something like an extra £1,750,000, or a general rate equivalent of 8d. in the £. In Leeds, in the rate notice sent out to the ratepayers, the local authority, quite rightly, lists the main causes of higher expenditure in 1969–70. The increased cost to that local authority of higher interest rates on loan debt is no less than £1,391,000. Last year it cost the Greater London Council an extra £1,200,000, and if Bank Rate continues at its present level this year, it will cost an extra £2 million in purely additional interest rates. This is the extent of the enormous burden being placed on the major authorities.
  There is also an enormous burden being placed upon some smaller authorities. As part of their housing policy—and it is remarkable that there is no one here from the Ministry of Housing and Local Government, such is the complete lack of interest by that Minister—
  Mr. Harold Lever: The hon. Member must know that my right hon. Friend was here. He was informed that this Motion was to be withdrawn and he was released. Happily, I stayed on, although I was so informed, too.
  Mr. Walker: The right hon. Gentleman concerned was in this House the moment before we were ready to go ahead with the debate. It is remarkable, if he then discovered that it was to go

  987
  on, that he should decide to absent himself from it and that no members of that Ministry are here. It is absolutely remarkable, and I suggest to the hon. Gentleman that he should inform the Minister that the debate is now taking place and that someone should come here.
  I want to mention how very hard hit are certain areas which have taken on major housing projects. The effect of this high interest charge will particularly affect those local authorities which have agreed to tackle overspill housing projects. A whole host of local authorities have been persuaded to accept major expansion programmes to deal with the overspill problems of the major cities.
  My hon. Friend the Member for Bromsgrove (Mr. Dance) is particularly affected in his constituency, and the town of Droitwich in my constituency is also affected in that it agreed to accept, under some pressure, overspill from Birmingham, and to enlarge the town. Those particular local authorities are more hard hit because they have to put in major sewerage schemes, they have to provide amenities, as new, and they have an enormous capital grogramme. What is now being found is that local authorities which were originally told that there would be no great burden upon their ratepayers are having steep increases in their rates because of the changes which are taking place in the borrowing rates for these local authorities. I hope that this matter will receive the urgent attention of the Government.
  In this context there is little need for me to make out a case to this House on the appalling burden being placed upon local authorities. It will result either in a substantial reduction of basic services or a very big increase in rates for the coming year. When hon. Members opposite talk of the adverse effects of higher council house rents, I hope they will recognise the degree to which council house rents are directly affected by the high rates of borrowing. I will give an illustration, brought to my attention today, of a typical small northern local authority which possesses just over 3,000 council houses. The cost to that authority of borrowing money for those council houses, in the housing fund in 1966–67, was £82 per house. For the coming year, the
  988
  cost is estimated, if Bank Rate continues at its present level, as being something like £117 per house.
  Take into account the whole of the increase in the Exchequer grant in that period, and we find that the amount left for the local authority to pay is £90 11s. compared with £62 in 1966–67. If it were to meet this from council house rents alone, it would have to put them up by something like 11s. per week, just to meet the cost of extra interest charges which have not been met by Government grants. I hope that when the Minister so gleefully pushes the burden of increased housing costs on to ratepayers instead of council house tenants, he will recognise that it is the fault of his own Government that there is such a desperate need for the rents of these council houses to be increased.
  Likewise on the question of roads and highways, and here the Treasury Ministers know full well that a 15 per cent. reduction of expenditure on secondary roads by local authorities in the coming year has been ordered. That was bad enough, one could argue perhaps foolish enough, but on top of that, out of the fund for highway improvement, authorities have to meet the enormously increased borrowing costs, which are particularly adverse to that sector where capital costs are so high. As a result of the Government's interest rate policy to local authorities, housing rates and highways—basic services—will be adversely affected. Alas, the Government have no policy to this end at all.
  I want to express a real and deep disappointment on the part of local authorities that the Government have made no move to assist them with their borrowing problems. Indeed, by the Budget, which will be debated later, we see that local authority borrowing has been discriminated against by this Govment, with very severe adverse effects. It would be out of order for me to discuss the proposals for the gilt-edged market put forward in the Finance Bill, but it will be in order for me to point out the very considerable decline which has taken place in corporation stocks as a result of no action being taken to assist them.
  At present London County Council 5½ per cent. 1982–84 stocks are on a redemption yield of £9 18s. 6d. per cent.

  989
  Any Government should be ashamed that they have so mismanaged our nation's financial affairs that the major local authority in this country has to raise money on a redemption yield of virtually 10 per cent.
  At Bristol a similar rate applies, and one can look through the whole of these corporation stocks and realise that any new local authority coming to the market will have to pay something like 10 per cent. to borrow money for major projects.
  In 1963, shortly after he became Leader of the Labour Party, the Prime Minister decided that rates of interest charges to local authorities was a matter which affected the electorate almost more than any other single feature. It is my hope that when it comes to the next election the electorate will agree with his decision and judge this Government on their abominable failure to provide rates of finance which are tolerable and decent.
  Mr. J. M. L. Prior: On a point of order, Mr. Deputy Speaker. This debate is primarily concerned with the Ministry of Housing and Local Government and the interest rates charged to local authorities. How can the House debate this Motion adequately when there is not a single representative present from the Ministry of Housing and Local Government? There may be many questions put by my hon. Friends on subjects concerned with local authorities, interest rates and the operation of housing subsidies, which are concerned with interest rates, but there is no one here to answer them. Is it not a grave injustice to the House, and also very disrespectful towards it, that there should be no representative from the Ministry of Housing here? Are there not four Ministers in the Ministry, and is it not shameful that not one of them can turn up for an important debate like this? What can we do to protect our own interests and the interests of our constituents?
  Mr. Deputy Speaker (Mr. Harry Gourlay): I have listened with interest to the hon. Member's submission, but which Minister is on the Front Bench is not a matter for the Chair.
  Mr. R. W. Brown: Further to that point of order, Mr. Deputy Speaker. I submit that this
  990
  matter ought to be cleared up a little further, because nothing that the hon. Member for Worcester (Mr. Peter Walker) has said yet involves the Ministry of Housing and Local Government.
  Mr. Deputy Speaker: Order. I have ruled on the point of order.
  5.21 p.m.
  Mr. R. T. Paget: I have always been an opponent of the kind of economy which seeks to stabilise itself by high interest rates, but when I hear the Conservative Party, which has been the apostle of that sort of finance and that sort of policy, complaining of it, I think that it is demagogy at its worst. This is precisely the position of local authority borrowing, once one launches out upon the slippery slope of balancing an economy and deflating by increasing interest. That is the policy which was started by the Conservatives and, to my personal intense regret, was continued by the Labour Party.
  I come from a banking family and I have been brought up on the basis of certain principles. Among those are these: first, one must recognise that every bank is always insolvent. It is its job to be insolvent. It is its job to lend money that it cannot repay if all the depositors ask for it at once. That is a business which can only be carried on so long as the depositors are totally confident that the reserves are adequate to meet their demands as and when they are required. The moment one gets away from that situation, the moment one begins to have to pay risk rates to one's depositors, one is out of banking and into money lending. Then one gets into all the problems which ensue from that situation.
  That is precisely the trouble that we have got into. In effect, by making sterling convertible we made ourselves bankers. We opened our doors to do a banking business and allowed other people to use our currency. That was business so long as sterling commanded total faith. The moment it began to command less than total faith, we found ourselves in a position in which we had to pay risk rates of interest in order to attract the deposits which we needed to support sterling.
  The dollar itself began to get shaky, and so the dollar rates went up. We

  991
  reach a situation in which one is approaching 10 per cent. money and, having to pay this kind of rate to support sterling, we then find that we have to make that the rate internally, because one cannot pay one rate to the foreign depositor and a lesser rate internally. One is then faced with a situation in which the tribute being demanded by those who have 8 per cent. or 10 per cent. is plainly intolerable to the rest of the community unless one writes off the debts on which the huge rate of interest has to be paid.
  So one finds that instead of high interest rates absorbing inflation, they in fact impose it. So long as we have this kind of rate of interest, nobody can believe in money because nobody can believe that the non-possessors will tolerate that rate of tribute unless the debt is written off by inflation. With that inflation one gets the kind of absurd situation with which we are faced today.
  The other day a civil servant came to me and said, "I am ceasing to be established because I want a lump sum to pay off the mortgage on my house. I cannot afford 81 per cent." I said, "You are absolutely crazy. You are not paying 81 per cent. Half of your mortgage is written off by deflation. The capital is being written off by at least 4 per cent. per annum. That reduces your mortgage interest by nearly half; and the whole of your mortgage interest is deducted from your Income Tax, and you are on the full rate. So what you are really paying is something under 1 per cent. Invest in the unit trusts and take 10 per cent. capital appreciation."
  That is wonderful business, and if anybody will lend me money at anything like 10 per cent. I will take it. It is wonderful business, if one is on a high rate of taxation, to borrow and it is crazy to lend. Thus we reach a situation where the sources of lending are dried up.
  While it is an enormous advantage to the borrowing taxpayer, local authorities do not enjoy a similar advantage. Since local authority rates are substantially settled by the rates of interest, and since the rates of interest have to be paid in effect by rent from people who generally are not paying Income Tax at the full rate, the relief on high interest rates is
  992
  nothing like what it is to the rich person. So, in effect, we have a situation in which the rich are getting richer faster than they have ever done in history, and for less effort.
  One can put up the taxation on income to any level one likes, because the very act of putting up that taxation on income boosts the capital value of the shares, and the capital accretions outstep any additions to taxation which may occur. It is really a lamentable state of affairs, but for the Tory Party, which has been the author of this whole system, to complain of the results of what it has wished on to a Labour Government seems to me to be a most hypocritical and demagogic thing to do.
  I utterly condemn my Government for having accepted Conservative financing which has landed them where they are now, but right hon. and hon. Members opposite are in no position to make that condemnation.
  5.30 p.m.
  Mr. Arthur Jones: I followed with interest the speech of the hon. and learned Member for Northampton (Mr. Paget), and I noted his condemnation of the Government's policy. Although he tried to establish a similar criticism against this side of the House, he failed to do so because he did not take into account the differing levels of interest which applied when we were responsible for affairs as compared with those ruling today. That is the clearest possible evidence of the failure, which the hon. and learned Gentleman tried to explain away—
  Mr. Paget: I am obliged to the hon. Gentleman for giving way so soon. The point is difficult to explain, and I am sure that it was my fault. The whole theme of my speech was that, once one tries to balance one's economy and maintain one's currency by increasing interest rates, that process goes on and on and up and up. It climbed under the Tories. It has climbed since.
  Mr. Jones: With respect, the fallacy in the hon. and learned Gentleman's argument stems from his failure to appreciate that it did not climb repeatedly under a Conservative Administration. The rates varied substantially during our 13 years, both up and down. The present level

  993
  of interest rates is the clearest possible indication of the difficulties which the Labour Government brought on themselves. The Conservative Government, on the other hand, were able to handle the financial side of our economy with success during their 13 years.
  I entirely agree, however, with the hon. and learned Gentleman in his devastating argument against the financial policy of his own Government and his indictment of the circumstances which their policy has brought about, circumstances due essentially to the high level of public expenditure and the running of great external indebtedness, stemming mainly from the policies which they have followed, but initially from the regrettable attitude of the present Prime Minister in destroying confidence in sterling way back in 1964. Confidence has not been restored or regained since that time, and I predict that it will not be under the present Government. The Government are demanding a high level of expenditure on local authority services without finding the means to meet the financial commitment involved.
  I am sure that I speak for all my right hon. and hon. Friends when I say how pleased we are that the Minister of Housing and Local Government has now joined the debate. I thought it a little unfair that his hon. Friend the Financial Secretary to the Treasury should have been left to carry a somewhat awkward burden for the remainder of the debate.
  It is strange to see the extent to which the Government have not sufficiently recognised the incidence of the high level of interest rates and their effect on local government budgeting. There was only one reference to this point in the Minister's Report on the Rate Support Grant Order of 1968. I quote from paragraph 15, page 6 of the Report, in which it was said:
  "It takes into account the increase in loan charges …"
  the reference there being to expanded expenditure on education.
  In contradiction to that, however, the Department of Economic Affairs in its Progress Report of March this year, referring to local government expenditure on page 4, said:
  "Debt interest is excluded because it is a function of other expenditure, largely in the
  994
  past, and is not subject to independent control as a programme,"
  There seems to be a clear contradiction there in the Government's attitude towards the level of interest rates in local government expenditure.
  To emphasise the point which I made in reply to the hon. and learned Member for Northamption, I refer to the level of interest on seven-day money in recent years. At 31st December, 1963, the rate to local authorities for seven-day money was 4·3 per cent. In December the following year, 1964, it has risen to 8 per cent., an indication of the effect of the Government's policy and the Prime Minister's statements during the short period in 1964 when the Labour Government were in office. By December, 1968, there had been a slight fall to 7·6 per cent.
  Now, I quote from Housing Statistics No. 12, for February, 1969, issued by the Ministry of Housing and Local Government seven-day money on 17th April this year was at 8·4 per cent., with three-month money at 8·6 per cent., a clear indication of the view of the market on the movement of interest rates immediately ahead.
  It is at their pooled rate that most local authorities charge their loans to the various departments. In December, 1966, according to the Institute of Municipal Treasurers and Accountants, the average pooled rate was 5·14 per cent. The high interest rate period which we are now experiencing, with a high level of borrowing, must put up the pooled rate substantially for many years ahead. What does the future hold for local authority borrowing?
  A Bank Rate of 7 per cent. used to be considered an emergency rate, but the present 8 per cent. seems to be regarded as normal under the Government's policy. Interest rates are rising throughout the world, and one would be bold to predict that by the end of the year the general level for borrowing will be less than 10 per cent. Indeed, as my hon. Friend the Member for Worcester (Mr. Peter Walker) pointed out, the move in the past few days since the Budget Statement leads one to think that the interest rate will be at 10 per cent.
  The extent of the commitment of local authorities in the capital market is indicated by the following figures of annual

  995
  capital expenditure, which include a figure of about 10 per cent. from revenue and resources. Local government loan indebtedness has risen from £4,615 million in 1957 to £9,280 million in 1966. The current total is in the region of £10,000 million, of which just over half is for housing. These figures emphasise the borrowing problem which local authorities face.
  It is noteworthy that it is county councils which have a rapid expansion of population to deal with which are meeting the greater proportion of their expenditure from capital rather than from resources. For example, Warwickshire, Surrey and Buckinghamshire are meeting only 9 per cent. from revenue and funds, leaving 91 per cent. to be raised in the money market. It is clear that heavy penalties are being incurred for a substantial number of years ahead by loan financing in times of high interest rates such as we have now.
  The Public Works Loan Board, which has special arrangements for the development areas, is prepared to meet one-third of local authority funding, but the present rate on quota is no less than 9 per cent. The figures, therefore, clearly demonstrate greater and greater borrowing at steeply rising rates of interest, to which must be added the increased costs arising from devaluation, rising excise duties and an almost perpetual state of financial crisis—a nightmare situation for local authority treasurers.
  The new Housing Bill, upon which so much hope rests for the conversion and improvement of properties, may well flounder in circumstances in which local authorities and private owners, on whom the success or failure of the scheme depend, could well find the present interest rates penal to the proposals which the right hon. Gentleman and his colleague advocate. We have yet to see the full impact of the recent substantial rise in interest rates upon housing subsidies Under the 1961 Act they cost the Exchequer about £17½ million a year. Under the most recent Act, in 1967, the cost is already £26 million. It will be interesting to have the Government's idea of the extent to which they think housing subsidies will rise under the recent Act.
  Statutory Instrument No. 1184 of 1968 indicates that the representative rate of
  996
  interest for dwellings completed for 1968–69, which is fixed annually, was fixed last July at 7·07 per cent. What is that rate to be for the current year when it is fixed in July? We could well see a rate of about 9 per cent. What effect will that have on the level of housing subsidies under the housing programme? It will be a fantastic housing subsidy; I think that in a year or two the level of annual subsidy will be equal to the whole of the previous housing subsidy level. With the Government's failure to require selectivity in housing rents, this is a completely unnecessary burden of expense on the Exchequer.
  The Government have a clear inability to take appropriate decisions across the full spectrum of our economic affairs. Is it for good reasons or mere partisanship that they have not? They have handled issues piecemeal, setting off one pressure against the next, as time and circumstances seem opportune, a disastrous policy for which the country is now paying a heavy price. High interest rates, which we are discussing today, form only one piece of evidence of an overall financial failure for which the Government stand condemned.
  5.42 p.m.
  Mr. R. B. Cant: In the early stages of this debate I thought that it was likely to generate just as much heat as the earlier episode on student power, but the temperature seems to have fallen considerably.
  As one who has been a member of a county borough finance committee for a number of years, I cannot welcome the high interest rates that have emerged in the recent past any more than anyone else can. We have had some horrifying details of their impact. I wonder how Stoke-on-Trent County Borough managed to maintain its rate at the same level this year as last year and the year before. Of course, we have some very remarkable people on our council. Some of them may shortly be losing their seats, though I hope not.
  What I suspect as I listen to this debate, or financial seminar, is that a little humbug is creeping in. I am not at all impressed by the strange dichotomy that has been introduced in dealing, for example, with local authority housing as distinct from private housing. This is an important point. Local government is

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  subject to the general inflationary pressure in the country—and not only here, but elsewhere in the world. It would be very remarkable if housing costs, which might stem from the capital cost of land or building or interest rates, could be held down dramatically or allowed to rise only slowly in the public sector whilst in the private sector prices, mortgage repayments, and so on, were going up. Therefore, in a sense, what is happening in local government is happening elsewhere in the economy, though I concede that we should not welcome it just because everybody is sharing it.
  What distresses me a little is that the particular pressures that are building up are undoubtedly doing some of the things that the Opposition have implored the Government to do more than once. Having been a member of a local authority, I would be the first to concede that nothing seems to have had a bigger growth rate in the economy than local authority expenditure. It is very nice to be on the receiving end of a 10 per cent. per annum increase in the amount of money one spends. If hon. Members opposite argue that public expenditure, of which local government expenditure is a part, is one of the main reasons for the generation of current inflationary pressures about which we hear so much, they should applaud anything the Government will do that will depress this rate of growth in what they regard as a particular evil.
  Even more serious in our discussion of of the question of interest rates and local authorities is that we have been exhorted by hon. Members opposite to pay far more attention to the management of our economy to what it is now fashionable to call money supply. What I think we are seeing in effect, although I have not yet interpreted the more esoteric passages of the Budget speech of my right hon. Friend the Chancellor of the Exchequer, is not a rate of interest that has risen because the Government want to use it as an instrument of policy.
  What we see is something which is emerging as a residual of the implementation of a type of monetary policy which I thought all hon. Members opposite greatly applauded. Where the humbug comes in is that they cannot have it both ways. If they argue that our economic salvation is utterly dependent on the use
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  of this new type of policy, they should be reasonable enough to accept the consequences, even though they might have implications for a particular type of government—local government—which is much dearer to my heart, and which I find much more interesting, than central government.
  It may be that we have reached a stage where we must accept this strand of demand management policy as the only weapon remaining to us to control the situation emerging in the Western world. We are becoming increasingly conscious that all the policies we have used to date are budgetary policies. Dare I mention the phrase "our incomes policies"? Our conventional monetary policies are incapable of restraining the growth of inflationary pressures. They are tantamount to a slap on the wrist when what is really needed for these dynamic economies, in monetary terms, is a crack on the head.
  I should like to extend this argument a little, because we often do not like the consequences of policies, and have tended—even hon. Members opposite—to put all the blame on the Americans. We have said, in effect, that high interest rates are a consequence of American policy, and that we are the victim of this. That is perfectly right, but the Americans are doing in a rather drastic and formidable way precisely what hon. Members opposite think should be done in this sort of situation.
  That terrible man, the President of the United States, is clamping down most firmly on the American economy, and the consequence is that interest rates are rising and the good financial capitalists, to whom my hon. and learned Friend the Member for Northampton (Mr. Paget) referred, are taking evasive action. They always do. They are raiding the Eurodollar markets, and although I think that the operations of the Euro-dollar markets are much more complicated than many people appreciate, this is having the effect of increasing the pressures towards higher interest rates.
  I do not want to pursue these matters much further, but would merely say that we are in a historical phase. I think that it was Keynes who talked confidently about his doctrine producing the euthanasia of the rentier class. Now we have a situation in which that class is not dying

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  a victim of cheap money but, rather paradoxically, refuses to flourish on the basis of dear money. We must not extend that to the gilt-edged market, but I think that we should bear it in mind, and I appeal to hon. Members opposite to do so, because they are all reasonable men. We are going through a phase of financial history in which the United States is dictating a certain policy. This is being supported by the Germans, because the German Bundesbank will no longer support the German bond market.
  In this situation, not only for external reasons, but also for internal reasons, we are having to apply policies which inevitably produce levels of interest rates that nobody likes. It may be, and we can only hope, to whatever part of the House we belong, that the application of these policies will for once be successful in reducing the inflationary pressures within the economy, so that when we talk about a rate of interest net of tax, net of inflation, it will be a realistic and acceptable rate which will be a useful basis for local authority operations as well as operations in the private sector.
  5.53 p.m.
  Mr. Michael Alison: I very much enjoyed the speech of the hon. Member for Stoke-on-Trent, Central (Mr. Cant), but I am a little disappointed that he did not introduce the name which I consider to be the key name in the Government's present policy, namely, the individual some people call Mr. Marty Feldman and whom the cognoscenti know to be Milton Friedman. It is a name to which we should pay more attention and I propose later to invite the attention of the Financial Secretary to it.
  We should pause to reflect on what I can only describe as the perverseness of the policies of the Labour Government. Whichever way one looks, the only consistent theme to be found in their policies is the perverseness of the ways in which they react. Let me give some examples before coming to their current policy on rates of interest. I take, first, the deployment of manpower and the famous shake-out which was meant to strengthen industry. Where was the shake-out most fruitful? It was a shake-in to the public administration which we all know to be an absolute standard-bearer in the export
  1000
  drive! So much for the famous shakeout.
  Next we have the doctrine of investment grants discriminating against service in order to strengthen manufacturing industry; but the boom in investments is in supermarkets, in retail distribution. Consumer expenditure became the focus of a concentrated attack by the Chancellor of the Exchequer in the 1968 Budget. It was found that, like trying to push a rubber ball into a swimming bath—it pops up twice as high the moment one takes one's hand from it—this was the perverse outcome of Socialist policies to restrain consumer expenditure. Prices and incomes policy speaks for itself. It tries to screw down a safety valve on a boiler and the resulting explosion obviously sends both prices and incomes twice as high as they would have been if left alone.
  We come to the latest and in some ways the most damaging example of perverseness. I have only to draw attention to the extraordinary irony that, on the day that the Chancellor introduced a Budget which had the over-riding aim by means of taxation and by means—and I pause to emphasise this aspect—of reversing the conventional and in some ways traditional policy of borrowing, namely, by introducing a policy of disborrowing by the Government or of debt repayment, to stabilise or at least control consumer expenditure and at least reduce or perhaps only stabilise the money supply—this was part of the Chancellor's aim in trying to cover part of his expenditure by fiscal means accompanied by debt repayment—the Minister for Planning and Land solemnly recommended to the Greater London Council that the greater amount of its capital expenditure on housing
  "should instead be charged to loan."—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 980.]
  At the very moment that the Chancellor was recommending that the Government reduce their borrowing requirement, one of his colleagues was suggesting that one of the biggest, if not the biggest, housing authorities should switch from seeking to increase its financial resources by rent or rate increases to borrowing. Could anything be more absolutely contrary to the whole strategy of the Budget and more utterly perverse in its effect?

  1001
  It is custom-built, particularly in relation to the housing operations of the Greater London Council, to run plumb counter not only to the Friedman doctrine, which is alleged now to have found a nesting place in the Treasury, but the whole strategy of the Budget.
  I do not know whether the Minister of Housing and Local Government, or the House, can appreciate what is involved in encouraging local authorities to borrow, but I am certain that the Financial Secretary—and perhaps this is why he has been asked to wind up the debate—is only too well aware of what is involved in encouraging local authorities to borrow to cover their financial requirements rather than to do it by rate or rent increases.
  I will bore the House a minute by referring to one of one of those dreadful tables in the almost horrendous publication "Financial Statistics", which I know the Financial Secretary, if nobody else, studies and assimilates. The hon. Gentleman will recall, if he has looked at that dreadful publication recently, that Table 25 shows how much local authorities borrowed in 1967–68, the latest year for which figures are available. My reading of the table suggests that in that year local authorities borrowed about £1,000 million. The key point in this respect is, not the total of £1,000 million, but the fact that far and away the largest bite of what was borrowed—nearly £500 million—in the latest year for which financial statistics are available was borrowed via the banking system—that is, from what "Financial Statistics" rather coyly describe as "banks and other financial institutions". That is much more than was borrowed from the Public Works Loan Board.
  The fact here is only underlined and compounded as to the felony when one considers how much short-term local authority borrowing is outstanding at present. This is given in Table 26. Over half of about £1,870 million short-term borrowing outstanding at present is accounted for by overdrafts and other short loans—that is, seven-day money, three-month money or 12-month money at the banks and other financial institutions.
  I come to a point made most cogently by my hon. Friend the Member for Worcester
  1002
  (Mr. Peter Walker). It is not surprising that local authorities are tending to go to banks and other financial institutions and borrow at the shortest possible length, because, with very high interest rates, who wants to borrow for five years or more and who wants to get tangled up with the immensely fluctuating interest rates applied by the Public Works Loan Board? The great ambition of local authorities must be to borrow as short as possible so as to cash in on any reductions. Therefore, it is not surprising that there is immense emphasis on short-term borrowing by local authorities via the banking system and other financial institutions.
  I come to the real burden of my charge of perversity against the Government. Against a background of immense emphasis in local authority borrowing on short-term money via the banking and financial system, the Government actually now deliberately encourage such an increase in borrowing, although the effect is, as is well known in the Treasury and certainly in the City of London and the banking system generally, that nowadays short-term local authority money at seven days or three months is regarded by the banking system as the equivalent of Treasury bills: it is a highly liquid, totally gift-edged form of investment, and it has come so to be accepted.
  I am sure that the Financial Secretary will be only too glad to confirm this—as part of the paper that a bank can hold in its portfolio constituting and comprising that part of its holdings of liquid assets.
  Mr. Harold Lever indicated dissent.
  Mr. Alison: I beg to differ from the Financial Secretary, whom I see shaking his head. I advise him to ask people in the City of London and further afield how they regard short-term local authority money falling in with the regularity that it does. It constitutes for all practical purposes part of the 28 per cent. liquidity ratio which they need to maintain their volume of lending.
  Mr. Harold Lever indicated dissent.
  Mr. Alison: It is no good the Financial Secretary shaking his head. This money falls into too easily and too readily, and it comes to be regarded for

  1003
  all practical purposes as part of the basic assets banks need to hold to increase their credit extension and deposit creation. This is a fact. The Financial Secretary cannot get away with it by shaking his head. The short-term local authority money with a virtual Government guarantee is part of the liquid assets base of the banking system.
  Mr. Cant: Is it so, then, that the Bank of England will readily discount these quasi-bills?
  Mr. Alison: The Bank of England may not discount first-class local authority bills, at least formally. In the same way that the banking system can get round any shortage of Treasury bills at any particular moment by letting those that they have fall in and thereby getting the cash they need to maintain the general level of their liquidity, so a very high holding of local authority money on very short term gives the banks that total security which they need to elaborate and expand on their other deposit creating activities with this huge volume falling in. It has an immensely lubricating rôle in the whole system of credit creation.
  The Government at this very moment in time are deliberately increasing, for banking and financial institutions, that part of their assets base comprising the most liquid and secure form of asset.
  The important question I want to ask the Financial Secretary in this debate is this, and it arises from the Chancellor's basic Budget strategy. Almost the concluding words of the Chancellor in the Budget debate were that he hoped this year to be able to pay back debts as the result of his huge revenue surplus—I think that the Financial Secretary will confirm this figure—of something approaching £800 million. I think that the Chancellor said £807 million.
  Can the Financial Secretary tell us which sector will have this debt repaid to it? If the sector which is to have this debt repaid to it is that of the ordinary public—the members of the public such as ourselves outside the banking system—this will have no effect at all on the money supply, as the hon. Member for Stoke-on-Trent, Central will agree. If the Government hand back from the
  1004
  taxpayer to some erstwhile lenders some of the money they have lent to the Government, those erstwhile lenders will merely use that money to lend to others to pay their taxes; so the taxpayer pays his taxes with the money that the Government have paid back to the lender.
  We cannot believe that this is what the Chancellor will do. The debt the Chancellor will more probably repay will be short-term—paying off Treasury bills in order to try to reduce the credit-creating base of the banking system. If at one moment the Chancellor is paying off Treasury bills and at the next moment giving the banking institutions this highly liquid instrument in the shape of short-term local government money, he is being totally perverse. Only since he will not be able to give them quite as much money as he pays off in the way of Treasury bills, the effect will be further to increase interest rates.
  By this very process of the Government's trying to pay off debt, on the one hand, and at the same time to encourage public authorities to raise further loans, on the other, they are almost entirely cancelling out any good they want to do and at the same time probably giving a stimulous to interest rates. It is an example of the hopelessly blind-eyed perversity of the Government; and the sooner they scrap all these policies and get to the country like the General did, the happier we shall be.
  6.8 p.m.
  Mr. R. W. Brown: I am sure that the hon. Member for Barkston Ash (Mr. Alison) will forgive me if I do not follow him too closely into the ramblings to which he treated us at the end of his speech. The House will not be slow to understand that it is not by accident that we are discussing local authority interest rates tonight. It is more than a coincidence that in two weeks' time elections are to take place. It was predictable that as soon as the hon. Member for Worcester (Mr. Peter Walker) assumed the post of a shadow Minister he would try to find a gimmick. This is a typical example.
  The hypocrisy of the Tories has already been referred to. It is more than evident tonight. The quandary they are in, however, is that when they sought to take over the local authorities three years ago they made the most extravagant promises

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  as to what they would do. Those of us who have been in local authority work for many years have faced Conservative opposition over the years in being told what to do and how to do it. Now, when some of them have the chance to do things, we see clearly that they are utterly incompetent. They do not have a clue.
  They are being controlled severely by the Conservative Central Office. That is why I have said before that local government bodies are no longer free associations of local authorities, but are clearly the political machine of the Conservative Central Office. Therefore, anything which they say must be taken in the sense in which it is said—that is, that the idea is to get the Government down and that if anything is expendable, the truth certainly is. We should have that clear in our minds when discussing high interest rates.
  I agree with my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) in regretting high interest rates. The difference between hon. Members opposite and myself is that I objected to them a long time ago. That was when a Tory Minister of Housing told me that it did not really matter.
  When I listen to all this long harangue about local authorities being told to borrow on seven-day money, that is precisely what the spokesman of the party opposite said to me in 1952 and 1953 and right through till 1960. They were still saying it in May, 1964. I was one of those who insisted on building homes, but the Conservatives in those days did not want too many homes built. They put every impediment they could in the way of local authorities who wanted to do it. [Interruption.] I am prepared to give the hon. Member for Worcester a catalogue of events to show how it happened. I can show him legendary blocks of flats that were built.
  When we built them, we did so in spite of the then Tory Minister. To try to make it easier for the party opposite to have their way and stop us building homes for the people, the then Minister—now Lord Brooke—said, "Of course, you will have to borrow on seven-day money. You will have to play the money market". We were asking for access to the Public Works Loan Board. The Minister told us that we could have only our quota and that after that we must play the money market. My authority
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  at that time played the money market. We had about £3½ million on short-term money. [Interruption.] The trouble with the hon. Member for Worcester is that he never sees the argument through. He begins and ends at a convenient point, but he never understands it.
  When we had to borrow short-term money all the way through, the Minister had the effrontery to tell us that that was scandalous. He said, "You now have more than 20 per cent. of your capital debt on short-term money". I replied, "But, Minister, you told us to do it". He said, "But I have changed my mind now". He thought that he could change in midstream. That is why the hon. Member for Worcester gave figures of outstanding debts. It is because many of us were forced by the Conservative Government to do those things. The rate on Public Works Loan Board money was 7⅛ per cent. even in those days, but the rate for money abroad was much less. The hon. Member for Worcester has not brought out that the rate for money abroad is now much higher.
  The hon. Member should have made it clear that to help local government face the problem, an enormous amount of help is now being given right the way through, from rate support grant equivalent to about a 1s. 3d. rate, and that a whole series of other measures are being applied to help local authorities. Consequently, we now have it on authority today that the argument that we have not kept our promise is no longer true. The Conservative Party say that we ought to be spending more on housing, whereas formerly they argued that we had not been doing so. The argument is that we have not kept our promise of 500,000 homes a year.
  Today, the argument of the party opposite is very different. They say that we are building all these homes and, consequently, local government has to spend more money. There is, for example, the increase in rates of the Greater London Council. The G.L.C. is proving itself to be the most incompetent local government group we have ever seen. I hope that next year, when the electors of London at last get their chance, they will throw this lot out lock, stock and barrel, although, of course, a very good attempt was made in the London Government Act, 1963, so to gerrymander

  1007
  and fiddle the boundaries that it cannot be done. I have no doubt, however, that the voters of London will decide to turn out the Conservatives and put back a competent administration.
  The selling of council houses, as suggested by the hon. Member for Worcester, is not the answer. I would be more satisfied if the Conservative-controlled G.L.C. could make better use of its property. In my constituency, people are living in three- and four-bedroom accommodation when all they want is one bedroom, but the incompetent administration in County Hall cannot help them. The G.L.C. goes one stage further, however, and places on those people an enormous rent increase for a three- or four-bedroom property which they do not want and will not allow them to move to a smaller property where they would not have to pay so much.
  It has been deliberate policy by the Conservatives over the years in local government to force people to borrow money. This is one of the things I objected to when I was chairman of a finance committee. The problem facing local government is to know how much to borrow short and how much to borrow on long term.
  In the days of the Conservative Government, many of us were forced into a position of doing nothing. That was what the party opposite wanted. At the same time as they were pressing local government in these ways, they brought in the Rent Act, 1957. They wanted it to work in their interests more than anything else, with the result that we had the Milner Holland Report, which the Minister of the day knew all about long before that Report was ever published, because those of us who gave evidence to that Committee gave the same evidence to the Minister years before. The object of the Conservatives was to get the Rent Act working in order to get market forces operating and to make people pay far more for their rented property.
  No case has been made tonight that the Government are not seized of the importance of the effects of high interest rates. The Opposition have shown themselves particularly vulnerable in the sense that they can only look back to their own history and see that they began the whole process and created the problems
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  for local authorities. My right hon. Friend the Minister has to some extent been forced along the same path. In his defence, however, it must be said that he has given far more help to local government than any other Minister of Housing and Local Government we have ever had.
  Therefore, whilst a case can be made that there are higher interest rates, it cannot be challenged that my right hon. Friend has done his best to ensure that the interests of the people can be taken care of if local authorities have competent administrations. Unfortunately, at the moment, many local authorities are being run incompetently by the Conservatives. The sooner we get them out, the better.
  6.19 p.m.
  Mr. David Lane: I look forward to talking again to the hon. Member for Shoreditch and Finsbury (Mr. R. W. Brown) after the occasion, in about 10 days' time, to which he referred earlier. I wonder whether he will then be saying the same thing about the views of the average voter.
  This is a timely debate for two other reasons than the reason mentioned by the hon. Member. One is that we have spent many days recently in the Budget debates looking at the national scene, and it is suitable now to turn, even in this short and curtailed debate, to the local scene.
  The other reason why I welcome this debate now is that the report of the Royal Commission on Local Government will shortly be published and it is well that we should remind ourselves how much local authorities are at the mercy of decisions taken remotely in Whitehall.
  For local government this has been a cold and joyless spring. In many parts of the country there were high hopes of improvements in the quality of life both for families and for the community. These hopes have now turned sour. Families, far from finding the situation any better, are' feeling the tide of costs and prices rising inexorably against them. We all know in our own communities how many desirable projects are having to be referred.
  In today's debate we are considering the effect of interest rates on local authority finances. But if one translates that

  1009
  into human terms, what we are really discussing is one aspect of the effects of Labour's mismanagement on the lives of the citizens whom we represent. Other hon. Members have spoken about the controversial issues of national finance, the reasons that interest rates are so high, and the perversity of Government policy, a matter which was dealt with by my hon. Friend the Member for Barkston Ash (Mr. Alison).
  I wish to concentrate upon experiences in my own constituency and the effects of the conjunction of circumstances on everyday life at the receiving end. My experience involves a city of about 100,000 inhabitants, not, unfortunately, a county borough, but a large municipal borough which carries out many of its own services. In one sense my constituency has suffered more than other places. In another sense, more relevant to the narrow issue of interest rates which is being discussed today, it has suffered less, but it has still suffered substantially.
  As a result of the general financial stringency of the last few years, several capital projects are having to wait. They include an important car park, a sports hall and, perhaps most disturbing in terms of everyday living, schemes for badly needed central area redevelopment. These schemes may be delayed because the city council is already feeling in its purchasing policy the pinch of financial tightness. This may lead to a general slowing down in the improvement of the environment.
  The only consolation for the holding up of these capital projects is that it has to some extent shielded my constituents from the effects of higher interest rates, for the reason that there are fewer loans than there otherwise would be to service. But the effect of higher interest rates has been bad enough.
  I should like to give three examples of how this has hit my constituency. First of all, there is the problem of council house rents. Two years ago, in the early months of 1967, a rise of 25 per cent. in council house rents became unavoidable. A major cause was the level of interest even at that time which had to be paid on housing loans. Only a few months ago, in January, a further 10 per cent. rise was necessary just to keep the housing revenue account in balance, and the higher interest rates were again a main
  1010
  factor in that decision. No local authority likes to be forced to make rises of this sort, particularly at this time, even when it is able to some exetent to cushion their effect by a good rebate scheme.
  The second example is in regard to loans made by the council for mortgages for prospective house purchasers. This is particularly relevant because only last week my council was obliged to raise its figure to the record level of 8½ per cent. for these loans. Four or five years ago there was virtually no restriction on local authorities making loans of this sort.
  In my own constituency the local authority was able to help at least 50 families a year and, if necessary, could have helped more. But since that time, for a variety of reasons, the cost of buying a house in my constituency has risen by something over 30 per cent. and the loan rate for prospective purchasers has gone up to 8½ per cent.; and I would emphasise particularly that the amount of money available for 1969–70 has been reduced to no more than £28,000. If we compare the situation today with that four or five years ago in this fairly typical, medium-sized city, at that time the council was able to help 50 or more families a year. This year the council will be lucky if it is able to help 10 families.
  Mr. R. W. Brown: The hon. Member is seeking to establish a case which is not always as he has put it. The Greater London Council in the four years from 1964 to 1968 loaned £193 million, whereas during seven years under the Conservative Government they loaned only £32 million. This does not tie in with what he is now saying.
  Mr. Lane: I would like very much to debate with the hon. Member another time the various policies of the present Greater London Council as compared with its predecssors. However, I will not be distracted on that matter today. I am now talking about something of which I have more direct knowledge.
  A third example is the effect of the total burden of interest which the city council has to bear as it touches individual ratepayers and other citizens who may not pay rates. Again, I wish to compare the situation a few years ago with that which exists today. In the early

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  1960s the council on its entire capital debt was paying an average rate of interest of 4 per cent. Today, its average rate of interest is about 6 per cent. The annual interest payments have gone up by at least £300,000 a year. On my calculation this means that purely on account of higher interest rates, leaving aside all other factors which have forced up local authority costs, the average family in my constituency is now having to pay £10 a year more for the services provided by the local authority than was the situation a few years ago.
  I said earlier that other areas have no doubt been worse hit than mine. I know, for example, that in the development areas, where there has not been this restriction on loan sanction which has applied in my constituency, but where priority has rightly been given for slum clearance projects and for big urban road schemes and for other capital projects of that sort, the increased cost of servicing these additional loans will be that much greater; but it is bad enough even in the particular circumstances of the constituency which I represent.
  What lessons do we draw?
  Miss Margaret Herbison: The hon. Member has given figures which the average family now has to pay extra because of the increases in interest rates. I do not know what determines an "average" family. But is he aware that, under the present Government, after the first child, for each child in an average family, or any other family, the family gets £26 a year more in family allowances?
  Mr. Lane: One can bring in all sorts of considerations, and averages necessarily are unsatisfactory. I should be prepared to talk to any family, average or otherwise, about these matters and hear from them the various rises in taxes and in prices. However, I would rather not get further distracted at the moment.
  I draw two conclusions from this situation. Whatever will be the future structure of local government after the Maud Report, it is highly desirable that local authorities should enjoy more direct financial control over a wider area of their own activities. I hope that this will be one of the messages which comes over loudest and clearest from the Maud Report.
  1012
  Secondly, I conclude that, leaving aside the structure of local government, it is difficult to see any real improvement in the situation of local authorities, my own local authority as well as others, until competent management in city halls and town halls is matched by competent management in Whitehall. For frustrated citizens throughout the country, every month brings nearer the day when the direction of our national as well as our local affairs will again pass to the Conservative Party. That day cannot come too soon.
  Mr. Alexander W. Lyon: The hon. Gentlman says that the situation is entirely the fault of incompetent Socialist administration. What about the effect on local authority financing of the fact that there is now a subsidy which reduces the amount which the home-owner must pay in rates by about 1s. 3d. in the £? How does that affect the general liability of the average family in meeting the cost of local government?
  Mr. Lane: I am well aware of that, but that is more than counterbalanced by the much higher level of interest rates which have existed for four years or more because of the perpetual lack of confidence in this Government.
  6.31 p.m.
  Mr. Terence L. Higgins: The debate, although somewhat curtailed, has been extremely interesting and very relevant. Perhaps one of the more interesting aspects is that when we are debating a Motion
  That this House regrets the serious effect of high interest rates on local authority finances
  the Government have not felt it necessary to move an Amendment but apparently propose to vote against it outright. We can only deduce from this that the Government are delighted at the serious effect of high interest rates on local authority finances. I shall return to that matter.
  The point of my hon. Friend the Member for Cambridge (Mr. Lane) about the effect of high interest rates on the burden of the payment of local rates is absolutely crucial. The hon. and learned Member for Northampton (Mr. Paget) made an interesting speech. He said a number of things with which I would not wholly agree. It is true that the

  1013
  effect of inflation has had an impact on some aspects of house purchase. But that is no consolation to the rate-payer who may be paying rates for some house purchase project in which he is not involved.
  We had a rather partisan reaction from the hon. Member for Shoreditch and Finsbury (Mr. R. W. Brown) who, I think, misquoted a figure. He deplored the fact that in 1964 the Conservative Government had urged his local council to go in for long-term rather than short-term borrowing. I should have thought that he would be immensely grateful for that. If it delayed until the Labour Party came to power, his local authority would be paying a far higher rate on the debts which it had at that time than if it had taken the advice of the Conservative Government.
  There is no doubt that the country as a whole, and local authorities in particular, may have been misled by the Government's statements in the period just before the 1964 election. The Chief Secretary to the Treasury said in his election manifesto:
  "More houses at less cost—by halting the rise in the price of land and lowering interest charges on mortgages. The Tories have had their ups and downs. Here are some of the things that have gone up: mortgage payments—because of the Tory Government's arrangement of high interest rates."
  The fact is that under this Government interest rates are higher than ever before, and they have been higher for longer than ever before. That should not be disregarded.
  The picture had perhaps changed a little by 1966, when the Chancellor of the Exchequer said in his election address:
  "Now we want your support to go ahead with a reduced cost mortgage and homeownership plan".
  It is true that the mortgage option scheme was later introduced, but very few people have taken it up partly because of the way in which it was invalidated by last year's Finance Bill. Only 9 per cent. of the people who might have taken it up have done so. Also, the increase in interest rates has adversely affected the scheme.
  I wish to consider the overall effect of higher interest rates on local government. We must do so against a background in which the rate support grant has been
  1014
  limited to projects held at a figure of 3 per cent. for 1969–70 in real terms and at a figure of 5 per cent. for 1970–71 and in which local rates are a heavy burden at a time of general inflation and a form of taxation which is extremely regressive.
  The hon. Member for Stoke-on-Trent, Central (Mr. Cant) said that we could not have it both ways concerning the relationship between monetary and fiscal policy. But that is precisely what we have had. It is arguable that we used monetary policy as an alternative to fiscal policy. What we have had under this Government has been, not only an ever-higher tax burden, but ever-higher interest rates at the same time.
  That brings me to the interesting question which arises in the context of this Motion, namely, why the Government have a policy of high interest rates. There are a number of possible conclusions. It may simply be a consequence of the failure of the Government's economic policy that interest rates have increased. What is relevant is the real rate of interest rather than the money rate of interest. With a rate of inflation of 6·2 per cent., as we had last year, interest rates have inevitably risen. It may not be in the Government's policy to have a higher interest rate; it may simply be a consequence of their other actions.
  Another possible view is that it is a deliberate act of policy to use a more higher interest rate approach, in harmony with a more active monetary policy. We must view this with some doubt because the Chancellor of the Exchequer, in his Budget statement, said:
  "The reason I attach the greatest importance to monetary policy is not my sudden conversion to some obscure foreign cult."—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 1007.]
  The right hon. Gentleman went on to say that he did not propose to follow any obscure foreign cult. None the less it appears the Government are being much tougher on monetary policy. Perhaps this is at the back of their increase in interest rates.
  We should not accept without grave reservations the kind of argument which we have heard recently from the Treasury Bench, namely, that the situation is the fault of the Americans and that the Government cannot adopt a more lenient interest rates policy because they must

  1015
  maintain a high differential between the American rate and our domestic Bank Rate. We must consider why that should be so. It would appear to be a matter of confidence. The Chancellor of the Exchequer sought to rebut this argument by referring to differentials between the United Kingdom and United States rates which existed under Conservative Governments. But at that time it was fashionable to use Bank Rate fairly actively, although never at the level at which it is now.
  The Government at that time felt that interest rates were an alternative to higher taxation. We were going through a period when taxation was consistently reduced. But we cannot accept that that is the present reason why interest rates are high because taxation is increasing. It is much more likely that it is a deliberate act of policy by the Government. Or it may be that the I.M.F. is taking a strong attitude and insisting that the Government adopt a high interest rate approach to our economic problems.
  Interest rates, and particularly those charged by the Public Works Loan Board, have never been higher. I should like to quote some figures for the edification of the hon. Member for Shoreditch and Finsbury. The increase in the lowest short-run rate of the Public Works Loan Board from August, 1964, or October, 1964, to the present time was 3⅛ per cent. There is an increase of 3¼ per cent. in the higher rate on the short-term. Even on the long-term lower rate there is a full 3 per cent. increase, and on the long-term higher rate a 2⅞ per cent. increase. This is a high rate of increase.
  Mr. R. W. Brown: Will the hon. Gentleman give the comparable figures for 1951 to 1964?
  Mr. Higgins: I will gladly give them to the hon. Gentleman afterwards, but I do not have them with me at the moment.
  Mr. R. W. Brown: I think it will be found that they went up by the same amount, 2 per cent. and 3 per cent.
  Mr. Higgins: Not at all. I categorically deny that. I do not have the specific figures, but I do not accept that they went up by the same amount in that period. I can perhaps help the hon.
  1016
  Gentleman by quoting some figures from the earlier period, although I am anxious not to delay the House for too long as I am under considerable pressure of time. The 1951 period was a period when rates had been brought down.
  Mr. R. W. Brown: Three per cent.
  Mr. Higgins: Rates had been brought down to 2·5 per cent. in 1951, and, of course, a subsequent increase took place when Bank rate for short periods went up to 7 per cent. I give the hon. Gentleman that point, but the rate at that time clearly could not be sustained and, in the event, was not sustained. This, of course, was a period of British monetary policy—
  Mr. R. W. Brown: The way in which the Conservative Government were able to do it was by stopping local authorities borrowing from the Public Works Loan Board.
  Mr. Higgins: Not at all. The hon. Gentleman will appreciate I am under severe presure of time, otherwise I would like to take this further.
  My second point is that the instability of interest rates has been very great in recent years, and this makes it difficult for local authorities to plan ahead. As my hon. Friend the Member for Worcester (Mr. Peter Walker) said in his opening remarks, we have had no fewer than 12 changes in a year or so, and this must have an adverse effect on local authority planning.
  In addition, we must take account of the joint effect on S.E.T. and the rate of interest. Local authorities pay S.E.T. on their construction work and also make a forced loan to the Government through the S.E.T. mechanism. Every increase in the rate of interest, therefore, necessarily raises the burden of S.E.T. on local authorities.
  The total borrowing of the Greater London Council is approximately £70 million. A 1 per cent. on that is £70,000 lent to the Government free of interest for two months, which is a burden of about £10,000 for the G.L.C. The same pattern runs right across the board throughout the United Kingdom.
  I would like to know what precisely is the Government's attitude on borrowing abroad by local authorities. There has been a significant change in the attitude

  1017
  of the Government towards borrowing abroad by nationalised industries. I have grave doubts about this. A point arose recently in Question Time about the possibility of borrowing in Germany by nationalised industries and what would happen if there were a subsequent revaluation of the Deutschemark. None the less there is a case for having a consistent attitude towards private industries, nationalised industries and local authorities. There is doubt whether local authorities are empowered to borrow abroad, and I should be grateful if the Financial Secretary will tell us precisely what the position is.
  The effect of interest rates has been felt by local authorities in three main areas: first, housing, where about 50 per cent. of the total finance is carried on local loan capital; secondly, on the education programme where about 15 per cent. is on loan capital; thirdly, on roads, where about 10 per cent. is on loan capital, and of course on welfare services.
  The overall impact of the Government's policies has been to make house purchase more difficult. It has been estimated that the number of people able to buy houses on mortgage has, since 1964, been halved because of the effect of increases in interest rates. If this is so, it necessarily puts a much bigger burden on local authorities who have to meet an increased demand for local authority houses despite ever-increasing interest charges.
  In education, where interest rates are involving local authorities in ever-higher expenditure, in road programmes and welfare services the rate of interest now being charged by the Government, whether by a deliberate act of policy or because of the failure of their economic policy, is imposing a burden on local authorities which we believe is very severe. I am surprised that any hon. Member should do other than regret the effect of high interest rates on local authority finance, and I hope that everyone will support the Motion.
  6.45 p.m.
  The Financial Secretary to the Treasury (Mr. Harold Lever): The hon. Member for Worthing (Mr. Higgins) was rather less than his usual sincere self in implying that if we vote against the Motion it is because we do not regret,
  1018
  in the terms of the Motion, the effect of high interest rates on local authority finance. Had the debate stuck to the terms and the letter of the Motion, and had it been presented as a dispassionate examination in the national interest of the problems of local authority finance, we should have welcomed and felt able to endorse the Motion. But when the Motion is presented to the House with an encyclopaedic range of demagogic and destructive criticism ranging through S.E.T., the increase in petrol tax and all the rest, I cannot advise my hon. Friends to give countenance to this demagogic presentation by voting for the Motion.
  In spite of the fact that hon. Members have wandered somewhat from the subject—one of my hon. Friends said that they were all reasonable men—I am prepared to accept with more sincerity than that that they are all honourable men, and I am sure that they all regret, as everybody here regrets, the effect of high interest rates on local authorities, but they have unfortunately prejudiced the possibility of our joining them in the Lobby by the presentation to which they have treated us.
  The hon. Member for Worcester (Mr. Peter Walker), in opening the debate, must have suggested to more than one hon. Member the rebuke of Dr. Johnson when he once said of a lady:
  "Nay, madam, when you are declaiming, declaim; and when you are calculating calculate."
  If the hon. Gentleman had applied that rule to himself, his declamation would not have been impaired but his calculation might have been improved.
  For example, I do not think that the hon. Member would have said to the House, as he did, that the local authority debt is £13,000 million and, therefore, a 1 per cent. change in the rate costs 4s. per week per family. He cannot want the House to believe that. The implication is that a 1 per cent. increase in interest rate has that effect; but nothing could be further from the truth. It would be true if the £13,000 million were all unfunded currently fluctuating debt where every interest rate change may produce an interest rate change on the whole debt, but of the total debt approximately £2,000 million is the unfunded debt which fluctuates in this manner, and, of course, the calculation per week per family is

  1019
  somewhat different if one deals with the debt where the interest rate fluctuates and separates it from the total.
  Mr. Peter Walker: I did say 1 per cent., but I take the Financial Secretary's point. I did not specify 1 per cent. on the average rate paid by local authorities. The average rate paid by local authorities since this Government came to power has gone up by 1½ per cent.
  Mr. Lever: That may be so with the average rate, but the hon. Gentleman was implying by his statement that every 1 per cent. change in the rate made the difference he alleged, whereas the 1 per cent. rate on £13,000 million never occurs except over a period of years, and certainly does not bear the implication suggested by the hon. Member. Hon. Members on both sides who have spoken know perfectly well the truth of what my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant) and my hon. and learned Friend the Member for Northampton (Mr. Paget) have said, that world interest rates are responsible for the increase in interest rates in this way. That is the first point which ought not to be disguised from our contemplation if we wish to contemplate this matter seriously. My hon. and learned Friend the member for Northampton regretted the fact that we had allowed the world interest rates to, as it were, affect our rates. My hon. Friend the Member for Stoke-on-Trent, Central was more realistic in believing it was not possible to isolate this country from the impact of world interest rates.
  Of course, the prime nonsense behind the Opposition's argument today is "Interest rates have risen in this country; therefore this is due to the incompetence of the Government and their policies", the implication being that there is a gearing between interest rates and Government competence. I invite hon. Gentlemen who subscribe to so naive a notion to survey their own record after 1951, when they will see there was the most dramatic increase in interest rates. Without arguing whether it was desirable or not, I would say it goes against the theory of a correlation between competence and a low interest rate, because if there is this correlation the late Dr. Hugh Dalton must have been the most competent
  1020
  Chancellor of the Exchequer of the century.—[Laughter.] He may well have been. I have no doubt that he was.
  In a sentence, because I do not want to go too long on this matter of world interest rates, although I will come to detailed policies—I am dealing only with world interest rates at the moment—world interest rates have risen, and only the most naive of people think we can isolate ourselves from world interest rates or that we ourselves have a decisive effect upon world interest rates. Neither of these two propositions makes any sense.
  World interest rates have risen not because of any form of correlation between Government competence with interest rates but for a whole complex of reasons, one of which is that there is at present a tremendous sucking in of dollars from Europe by the American banking system and by reason of the loudly applauded and for years recommended measures which the American Government are now taking.
  Of course, last year when I spoke to the financial mandarins of Europe they were all telling me that the Americans were ruining Europe and the monetary system by pouring out a flood of dollars into Europe. Now as I travel around, the same mandarins are asking me to tell the Chancellor of the Exchequer when he goes to America to ask the Americans to release back into Europe some of the millions of dollars they have been taking out.
  We could have the most intriguing debate on this matter if there were more time available, but it is enough to say that it is a complex of world factors resulting from a world situation which has put up interest rates. I do not see how one can have the competence-interest rate in correlation made to deal with the effect of Eurobond rates, which were, for example, 6 per cent. in September, and 7½ per cent. in December, and now 8½ per cent., if one is lucky.
  Mr. Peter Hordern: Would the hon. Gentleman now address himself to the circumstances of the local authorities and say why the Government have found it necessary to discriminate against local authorities in their raising of money from the market in the sense that they cannot offer exemption from Capital

  1021
  Gains Tax, and in the fact that they are not allowed to raise money from markets outside the United Kingdom?
  Mr. Lever: As for the Capital Gains Tax point, I should be out of order if I were to pursue it. I do not say that pedantically. I will take it up in debate on the Finance Bill. To discuss it now would be to anticipate debate on the Finance Bill.
  As for the point about borrowing abroad, and the point has been made by the hon. Member for Worthing, the Government, far from preventing, have been encouraging the local authorities to use this form of borrowing. In so far as there is any difficulty, it lies in the lack of technical power statutorily in some local authorities, and I think that when we come to the Finance Bill the hon. Gentleman will be gratified to see that we are removing that difficulty, too. So we do not prevent local authorities from borrowing abroad, and we do not limit their borrowing in any way detrimental to their interests.
  I hope that the House can dispose of this harmless but rather juvenile bunkum about the rise in interest rates which has taken place in the last 12 months as being due to any decline in the competence of the Government. This is something which relates to every country and to all the financial markets of the world.
  As to the argument about Government policy not to try to help people affected by these rates, this Government have done more to shelter the local authorities from the damaging, fluctuating effects of interest rates than any other Government. The hon. Gentleman complains that there has been fluctuation in the rate of lending which the Government charge when there is relending through the P.W.L.B. Of course, that is a statutory obligation which the Act places upon the Government. They are not allowed to on-lend to the P.W.L.B. except at their cost. That was in the Act. Hon. Members opposite welcomed that, they voted for it, they approved of it, but they do not approve our implementing this obligation because it results in changes in the rates.
  But that is exactly what the law obliges us to do. So hon. Gentlemen give us an obligation, the duty to on-lend at Government cost, but when we do it they
  1022
  raise objections. They are rather like the character in one of H. G. Wells's novels whose aunt gave him a trumpet on condition that he undertook never to blow it. I think that hon. Gentlemen opposite who voted for this obligation did so on condition that we disobeyed our statutory duty.
  As for the Government's policies to help with interest rates, these have been more than fulfilled having regard to the circumstances of the time. The Government brought in the Housing Subsidies Act, 1967, and the result is that the effective interest rate for local authorities for new housing is kept at 4 per cent. whatever the market rate may be, the difference being made up by the Government.
  The hon. Member for Worthing was a little less than just to accuse me of flippancy in my election address in 1964. The Government have made good the promise to do everything in their power to help local authorities with interest rates, but neither the Government nor I were promising to hold back the tide of world interest rates. I do not think the hon. Member could have thought so. I hope, incidentally, that neither the hon. Member nor any other hon. Member will mistake an occasional intervention of a lighthearted character by me as being due to lack of serious purpose, because not every hon. Member is guaranteed to address the House with the relentless earnestness which some hon. Members seem to prefer.
  I should like the hon. Member for Worthing to bear in mind that the interest rate in modern times has been kept down to 4 per cent. by the Housing Subsidies Act, 1967, but we have not done that to the prejudice of owner-occupiers who want to own their own houses. Indeed, the percentage of owner-occupied houses has gone up during the period of this Government, and that is because of the greatly increased prosperity which, in spite of our difficulties, has resulted in the people of this country enjoying a higher standard of life than ever before in their history, and the best public services in their history.
  We never hear the Opposition, despite all their demagogic and opportunist points, pressing for those public services, but all the time they are lecturing the Government on the need to cut down

  1023
  public expenditure. Moreover, the Government give help to local authorities through the rate support grant, which covers 56 per cent. of the relevant expenditure.
  I do not want at this late hour to go into the details of the speech of the hon. Member for Worcester about new housing and involving authorities in it. Contrary to what the House may have been led to suppose, interest for new local authority housing is stabilised at an effective rate of 4 per cent. Of other public expenditure by local authorities, 56 per cent. is covered by the rate support grant, and therefore the burden of any interest rate increase is to a considerable degree removed from the local authorities.
  About half the local authorities' borrowing is for new housing, where they are not affected by interest rate increases, and over 56 per cent. of the other half is met by the Government. So the present Government have done more to deal with this problem. We are affected by world interest rates, and shall continue to protect the public sector from undue increases in interest rates as much as we can at the crucial points.
  I am obliged to say that on these occasions whether we discuss S.E.T., a crisis
  for currency or rising interest rates, the Opposition always seem to offer us a hackneyed restatement of our problems in a complacent manner as if they were propounding solutions. They should have learnt by now that describing problems and offering honest, well-documented solutions are two different things. It is very obvious to me that the Opposition's skill lies only in the first area. That is very appropriate for an Opposition. Until they bring a more constructive, serious approach to our problems, we can only regard them as qualifying by practice for an even longer period in opposition.
  I therefore close by saying to my hon. Friends that, of course, we all regret the difficulties caused by rising rates of interest. They cannot be escaped, but they can be mitigated at crucial points, as we have done to the best of our ability. I would readily advise my hon. Friends to vote in support of the Motion but for all the humbug, and I would not involve them in anything that looked like an endorsement of the hypocritical pretences of the Opposition.
  Question put:—
  The House divided: Ayes 232, Noes, 286.

  Division No. 170.]

  AYES

  [7.3 p.m.

  Alison, Michael (Barkston Ash)

  Campbell, Gordon (Moray & Nairn)

  Galbraith, Hn. T. G.

  Allason, James (Hemet Hempstead)

  Carlisle, Mark

  Glover, Sir Douglas

  Amery, Rt. Hn. Julian

  Carr, Rt. Hn. Robert

  Glyn, Sir Richard

  Astor, John

  Channon, H. P. G.

  Godber, Rt. Hn. J. B.

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

  Clark, Henry

  Goodhart, Philip

  Awdry, Daniel

  Clegg, Walter

  Goodhew, Victor

  Baker, Kenneth (Acton)

  Cordle, John

  Gower, Raymond

  Baker, W. H. K. (Banff)

  Costain, A. P.

  Grant, Anthony

  Balniel, Lord

  Craddock, Sir Beresford (Spelthorne)

  Grant-Ferris, R.

  Barber, Rt. Hn. Anthony

  Crouch, David

  Gresham Cooke, R.

  Batsford, Brian

  Crowder, F. P.

  Grieve, Percy

  Beamish, Col. Sir Tufton

  Cunningham, Sir Knox

  Griffiths, Eldon (Bury St. Edmunds)

  Bell, Ronald

  Currie, G. B. H.

  Grimond, Rt. Hn. J.

  Bennett, Sir Frederic (Torquay)

  Dalkeith, Earl of

  Gurden, Harold

  Bennett, Dr. Reginald (Gos. & Fhm)

  Dance, James

  Hall, John (Wycombe)

  Berry, Hn. Anthony

  d'Avigdor-Goldsmid, Sir Henry

  Hall-Davis, A. G. F.

  Biffen, John

  Dean, Paul

  Hamilton, Lord (Fermanagh)

  Biggs-Davison, John

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

  Hamilton, Michael (Salisbury)

  Birch, Rt. Hn. Nigel

  Digby, Simon Wingfield

  Harris, Frederic (Croydon, N. W.)

  Black, Sir Cyril

  Dodds-Parker, Douglas

  Harris, Reader (Heston)

  Blaker, Peter

  Donnelly, Desmond

  Harrison, Brian (Maldon)

  Boardman, Tom (Leicester, S. W.)

  Doughty, Charles

  Harrison, Col. Sir Harwood (Eye)

  Boyd-Carpenter, Rt. Hn. John

  Douglas-Home, Rt. Hn. Sir Alec

  Harvey, Sir Arthur Vere

  Boyle, Rt. Hn. Sir Edward

  Drayson, G. B.

  Hastings, Stephen

  Braine, Bernard

  du Cann, Rt. Hn. Edward

  Hawkins, Paul

  Bromley-Davenport, Lt.-Col. Sir Walter

  Eden, Sir John

  Hay, John

  Brown, Sir Edward (Bath)

  Elliot, Capt. Walter (Carshalton)

  Heald, Rt. Hn. Sir Lionel

  Bruce-Gardyne, J.

  Errington, Sir Eric

  Heseltine, Michael

  Bryan, Paul

  Eyre, Reginald

  Higgins, Terence L.

  Buchanan-Smith, Alick (Angua, N & M)

  Farr, John

  Hiley, Joseph

  Buck, Antony (Colchester)

  Fisher, Nigel

  Hill, J. E. B.

  Bullus, Sir Eric

  Fortescue, Tim

  Hirst, Geoffrey

  Burden, F. A.

  Foster, Sir John

  Hogg, Rt. Hn. Quintin

  Campbell, B. (Oldham, W.)

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Holland, Philip

  Horden, Peter

  Mitchell, David (Basingstoke)

  Scott-Hopkins, James

  Hornby, Richard

  Monro, Hector

  Sharples, Richard

  Howell, David (Guildford)

  Montgomery, Fergus

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

  Hunt, John

  Morgan, Geraint (Denbigh)

  Silvester, Frederick

  Iremonger, T. L.

  Morgan-Giles, Rear-Adm.

  Sinclair, Sir George

  Irvine, Bryant Godman (Rye)

  Morrison, Charles (Devizes)

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

  Jenkin Patrick (Woodford)

  Mott-Radclyffe, Sir Charles

  Smith, John (London & W'minster)

  Jennings, J. C. (Burton)

  Munro-Lucas-Tooth, Sir Hugh

  Speed, Keith

  Jones, Arthur (Northants, S.)

  Murton, Oscar

  Stainton, Keith

  Jopling, Michael

  Nabarro, Sir Gerald

  Stodart, Anthony

  Joseph, Rt. Hn. Sir Keith

  Neave, Airey

  Stoddart-Scott, Col. Sir M.

  Kaberry, Sir Donald

  Nicholls, Sir Harmar

  Summers, Sir Spencer

  Kerby, Capt. Henry

  Noble, Rt. Hn. Michael

  Tapsell, Peter

  Kershaw, Anthony

  Nott, John

  Taylor, Sir Charles (Eastbourne)

  Kimball, Marcus

  Onslow, Cranley

  Taylor, Edward M. (G'gow, Cathcart)

  King, Evelyn (Dorset, S.)

  Orr, Capt. L. P. S.

  Taylor, Frank (Moss Side)

  Kitson, Timothy

  Osborn, John (Hallam)

  Temple, John M.

  Lambton, Viscount

  Osborne, Sir Cyril (Louth)

  Thatcher, Mrs. Margaret

  Lancaster, Col. C. G.

  Page, Graham (Crosby)

  Tilney, John

  Lane, David

  Page, John (Harrow, W.)

  Turton, Rt. Hn. R. H.

  Langford-Holt, Sir John

  Pearson, Sir Frank (Clitheroe)

  van Straubenzee, W. R.

  Legge-Bourke, Sir Harry

  Peel, John

  Vaughan-Morgan, Rt. Hn. Sir John

  Lewis, Kenneth (Rutland)

  Percival, Ian

  Vickers, Dame Joan

  Lloyd, Rt. Hn. Geoffrey (Sut'n C'd'field)

  Pike, Miss Mervyn

  Waddington, David

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

  Pink, R. Bonner

  Wainwright, Richard (Colne Valley)

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Pounder, Rafton

  Walker, Peter (Worcester)

  Longden, Gilbert

  Powell, Rt. Hn. J. Enoch

  Walker-Smith, Rt. Hn. Sir Derek

  Lubbock, Eric

  Price, David (Eastleigh)

  Ward, Dame Irene

  MacArthur, Ian

  Prior, J. M. L.

  Weatherill, Bernard

  Macleod, Rt. Hn. Iain

  Pym, Francis

  Wells, John (Maidstone)

  McMaster, Stanley

  Quennell, Miss J. M.

  Whitelaw, Rt. Hn. William

  Macmillan, Maurice (Farnham)

  Ramsden, Rt. Hn. James

  Wiggin, A. W.

  McNair-Wilson M. (Walthamstow, E.)

  Rawlinson, Rt. Hn. Sir Peter

  Williams, Donald (Dudley)

  McNair-Wilson, Patrick (New Forest)

  Rees-Davies, W. R.

  Wilson, Geoffrey (Truro)

  Maddan, Martin

  Renton, Rt. Hn. Sir David

  Winstanley, Dr. M. P.

  Maginnis, John E.

  Rhys Williams, Sir Brandon

  Wolrige-Gordon, Patrick

  Marples, Rt. Hn. Ernest

  Ridley, Hn. Nicholas

  Wood, Rt. Hn. Richard

  Marten, Neil

  Ridsdale, Julian

  Woodnutt, Mark

  Maude, Angus

  Rippon, Rt. Hn. Geoffrey

  Worsley, Marcus

  Mawby, Ray

  Rodgers, Sir John (Sevenoaks)

  Wylie, N. R.

  Maxwell-Hyslop, R. J.

  Rossi, Hugh (Hornsey)

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

  Royle, Anthony

  TELLERS FOR THE AYES:

  Mills, Peter (Torrington)

  Russell, Sir Ronald

  Mr. R. W. Elliott and

  Mills, Stratton (Belfast, N.)

  St. John-Stevas, Norman

  Mr. Jasper More.

  Miscampbell, Norman

  Sandys, Rt. Hn. D.

  NOES

  Albu, Austen

  Butler, Mrs. Joyce (Wood Green)

  Ellis, John

  Allaun Frank (Salford, E.)

  Callaghan, Rt. Hn. James

  English, Michael

  Alldritt, Walter

  Cant, R. B.

  Ensor, David

  Anderson, Donald

  Carmichael, Neil

  Evans, Albert (Islington, S. W.)

  Archer, Peter

  Carter-Jones, Lewis

  Evans, Fred (Caerphilly)

  Ashley, Jack

  Castle, Rt. Hn. Barbara

  Finch, Harold

  Ashton, Joe (Bassetlaw)

  Chapman, Donald

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Atkins, Ronald (Preston, N.)

  Coe, Denis

  Fletcher, Raymond (Ilkeston)

  Atkinson, Norman (Tottenham)

  Coleman, Donald

  Fletcher, Ted (Darlington)

  Bacon, Rt. Hn. Alice

  Concannon, J. D.

  Foley, Maurice

  Bagier, Gordon A. T.

  Conlan, Bernard

  Foot, Rt. Hn. Sir Dingle (Ipswich)

  Barnes, Michael

  Corbet, Mrs. Freda

  Foot, Michael (Ebbw Vale)

  Barnett, Joel

  Crawshaw, Richard

  Ford, Ben

  Baxter, William

  Cronin, John

  Forrester, John

  Bence, Cyril

  Crosland, Rt. Hn. Anthony

  Fowler, Gerry

  Benn, Rt. Hn. Anthony Wedgwood

  Crossman, Rt. Hn. Richard

  Fraser, John (Norwood)

  Bennett, James (G'gow, Bridgeton)

  Cullen, Mrs. Alice

  Freeson, Reginald

  Bidwell, Sydney

  Dalyell, Tam

  Galpern, Sir Myer

  Binns, John

  Darling, Rt. Hn. George

  Gardner, Tony

  Bishop, E. S.

  Davidson, Arthur (Accrington)

  Garrett, W. E.

  Blackburn, F.

  Davies, G. Elfed (Rhondda, E.)

  Ginsburg, David

  Blenkinsop, Arthur

  Davies, Dr. Ernest (Stretford)

  Gray, Dr. Hugh (Yarmouth)

  Booth, Albert

  Davies, Rt. Hn. Harold (Leek)

  Greenwood, Rt. Hn. Anthony

  Boston, Terence

  Davies, Ifor (Gower)

  Gregory, Arnold

  Bottomley, Rt. Hn. Arthur

  Delargy, Hugh

  Grey, Charles (Durham)

  Boyden, James

  Dempsey, James

  Griffiths, David (Rother Valley)

  Bradley, Tom

  Dewar, Donald

  Griffiths, Eddie (Brightside)

  Bray, Dr. Jeremy

  Diamond, Rt. Hn. John

  Griffiths, Rt. Hn. James (Llanelly)

  Brooks, Edwin

  Dickens, James

  Griffiths, Will (Exchange)

  Broughton, Dr. A. D. D.

  Dobson, Ray

  Gunter, Rt. Hn. R. J.

  Brown, Rt. Hn. George (Belper)

  Driberg, Tom

  Hamilton, James (Bothwell)

  Brown, Bob (N'c'tle-upon-Tyne. W.)

  Dunn, James A.

  Hamilton, William (Fife, W.)

  Brown, R. W. (Shoreditch & F'bury)

  Dunwoody, Mrs. Gwyneth (Exeter)

  Hamling, William

  Buchan, Norman

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

  Harper, Joseph

  Buchanan, Richard (G'gow, Sp'burn)

  Edelman, Maurice

  Harrison, Walter (Wakefield)

  Butler, Herbert (Hackney, C.)

  Edwards, William (Merioneth)

  Hart, Rt. Hn. Judith

  1026

  1027

  Haseldine, Norman

  Mackintosh, John P.

  Reynolds, Rt. Hn. G. W.

  Hattersley, Roy

  Maclennan, Robert

  Richard, Ivor

  Hazell, Bert

  Macmillan, Malcolm (Western Isles)

  Roberts, Albert (Normanton)

  Healey, Rt. Hn. Denis

  McMillan, Tom (Glasgow, C.)

  Roberts, Rt. Hn. Goronwy

  Henig, Stanley

  McNamara, J. Kevin

  Roberts, Gwilym (Bedfordshire, S.)

  Herbison Rt. Hn. Margaret

  MacPherson, Malcolm

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

  Hilton, W. S.

  Mahon, Peter (Preston, S.)

  Rodgers, William (Stockton)

  Hobden, Dennis

  Mallalieu E. L. (Brigg)

  Roebuck, Roy

  Hooley, Frank

  Mallalieu, J. P. W. (Huddersfield, E.)

  Rogers, George (Kensington, N.)

  Horner, John

  Manuel, Archie

  Rose, Paul

  Houghton, Rt. Hn. Douglas

  Mapp, Charles

  Rowlands, E.

  Howarth, Robert (Bolton, E.

  Marks, Kenneth

  Ryan, John

  Howell, Denis (Small Heath)

  Marquand, David

  Shaw, Arnold (Ilford, S.)

  Howie, W.

  Marsh, Rt. Hn. Richard

  Sheldon, Robert

  Hoy, James

  Mason, Rt. Hn. Roy

  Shinwell, Rt. Hn. E.

  Huckfield, Leslie

  Mayhew, Christopher

  Shore, Rt. Hn. Peter (Stepney)

  Hughes, Emrys (Ayrshire, S.)

  Mellish, Rt. Hn. Robert

  Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

  Hughes, Hector (Aberdeen, N.)

  Mendelson, John

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

  Hughes, Roy (Newport)

  Mikardo, Ian

  Silkin, Rt. Hn. John (Deptford)

  Hunter, Adam

  Millan, Bruce

  Silkin, Hn. s. C. (Dulwich)

  Hynd, John

  Miller, Dr. M. S.

  Silverman, Julius

  Irvine, Sir Arthur (Edge Hill)

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

  Skeffington, Arthur

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

  Molloy, William

  Slater, Joseph

  Janner, Sir Barnett

  Moonman, Eric

  Small, William

  Jay, Rt. Hn. Douglas

  Morris, Alfred (Wythenshawe)

  Spriggs, Leslie

  Jeger, George (Goole)

  Morris, Charles R. (Openshaw)

  Storehouse, Rt. Hn. John

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

  Morris, John (Aberavon)

  Strauss, Rt. Hn. G. R.

  Jenkins, Hugh (Putney)

  Moyle, Roland

  Summerskill, Hn. Dr. Shirley

  Jones, Dan (Burnley)

  Mulley, Rt. Hn. Frederick

  Taverne, Dick

  Jones, Rt. Hn. Sir Elwyn (W. Ham S.)

  Murray, Albert

  Thomas, Rt. Hn. George

  Jones, J. Idwal (Wrexham)

  Newens, Stan

  Thomson, Rt. Hn. George

  Jones, T. Alec (Rhondda, West)

  Judd, Frank

  Noel-Baker, Rt. Hn. Philip (Derby, S.)

  Tinn, James

  Kelley, Richard

  Oakes, Gordon

  Tomney, Frank

  Kerr, Dr. David (W'worth Central)

  Ogden, Eric

  Tuck, Raphael

  Kerr, Russell (Feltham)

  O'Mailey, Brian

  Urwin, T. W.

  Leadbitter, Ted

  Oram, Albert E.

  Walden, Brian (All Saints)

  Ledger, Ron

  Orbach, Maurice

  Walker, Harold (Doncaster)

  Lee, Rt. Hn. Frederick (Newton)

  Orme, Stanley

  Wallace, George

  Lee, Rt. Hn. Jennie (Cannock)

  Oswald, Thomas

  Watkins, David (Consett)

  Lee, John (Reading)

  Owen, Dr. David (Plymouth, S'tn)

  Watkins, Tudor (Brecon & Radnor)

  Lestor, Mrs. Joan

  Owen, Will (Morpeth)

  Weeitzman, David

  Lever, Harold (Cheetham)

  Paget, R. T.

  Wellbeloved, James

  Lever, L. M. (Ardwick)

  Palmer, Arthur

  Wells, William (Walsall, N.)

  Lewis, Arthur (W. Ham, N.)

  Pannell, Rt. Hn. Charles

  Whitaker, Ben

  Lewis, Ron (Carlisle)

  Park, Trevor

  White, Mrs. Eirene

  Lipton, Marcus

  Parker, John (Dagenham)

  Whitlock, William

  Lomas, Kenneth

  Parkin, Ben (Paddington, N.)

  Wilkins, W. A.

  Luard, Evan

  Parkyn, Brian (Bedford)

  Willey, Rt. Hn. Frederick

  Lyon, Alexander W. (York)

  Pavitt, Laurence

  Williams, Alan (Swansea, W.)

  Lyons, Edward (Bradford, E.)

  Pearson, Arthur (Pontypridd)

  Williams, Alan Lee (Hornchurch)

  Mabon, Dr. J. Dickson

  Peart, Rt. Hn. Fred

  Williams, Mrs. Shirley (Hitchin)

  McBride, Neil

  Pentland, Norman

  Williams, W. T. (Warrington)

  McCann, John

  Perry, Ernest G. (Battersea, S.)

  Willis, Rt. Hn. George

  MacColl, James

  Perry, George H. (Nottingham, S.)

  Wilson, William (Coventry, S.)

  MacDermot, Niall

  Prentice, Rt. Hn. R. E.

  Woodburn, Rt. Hn. A.

  Macdonald, A. H.

  Price, William (Rugby)

  Woof, Robert

  McGuire, Michael

  Probert, Arthur

  Wyatt, Woodrow

  McKay, Mrs. Margaret

  Pursey, Cmdr. Harry

  Mackenzie, Gregor (Rutherglen)

  Rankin, John

  TELLERS FOR THE NOES:

  Mackie, John

  Rees, Merlyn

  Mr. Ioan L. Evans and

  Mr. Alan Fitch.

  BETTERMENT LEVY
  7.15 p.m.
  Mr. Graham Page: I beg to move,
  That this House regrets that hardship has been caused to many people who have paid or have become liable to pay the betterment levy because of the failure of Her Majesty's Government to take the appropriate action.
  In speaking to this Motion I do not propose to refer to any pending legislation or to any future use of the legislative powers of Parliament, except those delegated powers which Parliament has given to the Minister, which I shall seek to show he has lamentably failed to exercise.
  Hardship caused by demands for betterment levy has become proverbial. In years to come, it will be legendary—a political legend of how best a Government can become hated, feared, scorned and ridiculed. This cannot be passed off just as the public's hatred for paying a tax; emotions on this matter go very much deeper.
  This betterment levy—an invention of the Labour Government—has caused, and has been plainly seen to cause, injustice and suffering. To what end? For all the hardship that it has caused it has not made land one penny cheaper or one square inch more abundant in supply. On the contrary, prospective sellers, having seen how harshly actual sellers have been treated by the betterment levy demands, have either put up the price as an insurance against further hardship being imposed on them or have withdrawn from the market altogether.
  Despite this the Government have taken only the most minimal and inadequate action to relieve hardship caused by the levy. Having got themselves into this ghastly mess and muddle, what appropriate action could the Government have taken to drag themselves out of the mess, other than presenting another Land Commission Bill—and heaven forbid that any Government should do that? After the Act had been in operation for 12 months and again after it had been in operation for 15 months the Government announced two minor extra-statutory concessions—to deal with two out of about a dozen categories of hardship which had then already become obvious.
  Those concessions related to purchases between September, 1965, and April,
  1030
  1967, and the need for them arose from the efforts of the Government to govern by White Paper. It is a conceited form of government to assume that the public read statements of the Government's intentions and act upon them, and this almost invariably causes injustice.
  We warned the Government against this time and time again in the course of the proceedings on the Land Commission Bill.
  In fact, we were much more specific in our warnings in connection with those concessions which have now been made. On 28th July, 1966—nine months before the Act came into operation—my hon. Friend the Member for North Fylde (Mr. Clegg) moved an Amendment exactly on the point of one of these concessions and on the same day I divided the Committee on an Amendment dealing with the other of those concessions. It took the Government 21 months in one case and two years in the other to realise that we were right. I am justified in saying, "We told you so."
  One thing that I will go out of my way to do in this connection is to congratulate the Government upon the fact that in those two cases they made the relief retrospective. The concessions dated back to the commencement of the Act. Let them bear that in mind as a precedent.
  In those two instances this extra-statutory device was adopted, but there is power in the Act itself for the Minister to act by Order. It is in Section 63, which reads:
  "The Ministers may by order direct that no levy shall be charged in such circumstances falling within any of Cases A to F as may be specified in the order."
  Cases A to F are all the cases.
  The Section also says:
  "No order shall be made under this section unless a draft of the order has been laid before the Commons House of Parliament and approved by a resolution of that House.
  Any exemption conferred by virtue of this section shall be without prejudice to the operation of sections 56 to 62 of this Act."
  I understand that to mean that they are not to take away the exemptions already given by the Act, but, certainly, further exemptions could be given.
  This is the appropriate action which the Minister ought to have taken to relieve hardship as soon as the cases started pouring in. As soon as he saw

  1031
  that the warnings we had given throughout the passage of this Bill were coming true, in clear fact and stark reality, he should have come to the House with an order under Section 63 of the Act. He did nothing except to make those two minor concessions which I have mentioned.
  One major category of hardship in which the Minister ought to have acted at once and used his powers of exemption at a very early stage was in cases of small transactions. The position must have been quite clear from the day-to-day operations of the Land Commission. Last year, the levy cost £2 million to collect. Half the Land Commission's cases were sales at not more than £1,500. That half brought in only one-tenth of the total of £8·3 million collected. If we work that out in figures, we see that for small transactions—half the Commission's work—it cost 24s. to collect every 20s. of levy. That is hardship enough on the taxpayer, but it is not quite that sort of hardship about which this debate is concerned. We are concerned with the way in which the person of modest means has been harassed by the fear of demands for payment of terrifyingly large amounts of levy on small sales.
  As long ago as November last, Sir Henry Wells, the Chairman of the Commission, said that the development value in a plot of land for one house averages over the country between £500 and £1,000. That means a betterment levy, if one is selling just a single plot, of something between £200 and £400. The Minister ought there and then, if not earlier upon the information he must have received from the chairman much earlier than when the chairman made public disclosure of these figures, to have brought an exemption Order to the House. I think that he could safely have exempted transactions up to £5,000 at that time.
  I hope that the House will also bear in mind when judging at what time the Minister could have acted, that, even if he had acted last November on small transactions to exempt them immediately Sir Henry Wells made that public disclosure, the crippling effect of the levy on the sale of a single plot might still be hanging over the heads of hundreds whose transactions took place before
  1032
  November last, because the levy is assessed on transactions in the past. That is what makes this levy so loathed—its lingering effect. If one sold a year ago one may still be waiting for the axe to fall. For some the axe has fallen and they have paid the levy.
  On one construction of Section 63 it is thought that the Order cannot be retrospective. I hope that is not right. If it be right, that is all the more reason that the Minister should have acted retrospectively when the warnings we had given him were coming true. Those warnings were given loud and clear. I mention one which was given on 9th August, 1966. Again, it was given by my hon. Friend the Member for North Fylde when he moved a new Clause to exempt small transactions. The Government obstinately resisted it. We divided the Committee and the Government won. So we have had two years of hardship upon the parties to small transactions. Again, I must say, "We told you so."
  Again, I say that the Minister should have taken the appropriate action to reimburse those who had suffered. But the Minister has always set his face against an Order which would so far admit that the Government were wrong from the first as to refund any levy already paid. The Government have failed to act even in those simple cases about costs and expenses being allowed as a deduction from the amount assessed for levy. This was something which could have been amended easily by Order, cases where valuers' fees are deductible but not estate agent's commission or legal costs. It is ridiculous to charge levy on money which has been expended.
  I have a letter written by the Minister for Planning and Land as late as last Thursday to my hon. Friend the Member for Bromsgrove (Mr. Dance), in which he referred to this matter of an allowance, in the calculation of betterment levy, for legal and other costs. He says, in explanation:
  "It is proposed that in future costs incurred on the disposal of land liable to levy should be allowed in the assessment of levy, but Mrs. Westwood"—
  My hon. Friend's constituent—
  "will not benefit since, as is customary with changes in taxation, the provision is not retrospective."

  1033
  We were told all through the stages of the Bill that this was not taxation, but something quite different. I suppose that the Minister would have applied the same principle even if he had taken action in the past to relieve the most serious case or category of hardship, that of the owner-occupier who sells his home. Would he have applied the same rule—no refund however wrong it was from the start to take the money from that person?
  I like the phrase which I noticed in an article in the Sun last Thursday, under the heading, "Stonewall Robinson". It said:
  "Nobody can pretend that an injustice is not an injustice because it happened before April 5, 1969."
  Injustice has been done to many an owner-occupier who sold his home during the last two years. With the precedent of the exemption of such a transaction from Capital Gains Tax, a person's home should have been made exempt by order as soon as the hardship cases arose.
  What would happen was fully forecast by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), when he moved a new Clause on Report, on 26th October, 1966, to exempt owner-occupiers from the levy. The Minister and the Government as a whole cannot say that they were not warned. In that debate the Minister had an array of all the talents in front of him telling him how foolish he was to insist on imposing the levy on the homes of the people.
  Not only was there my right hon. Friend the Member for Kingston-upon-Thames, but my hon. and learned Friend the Member for Northwich (Sir J. Foster), my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), my hon. Friend the Member for Ormskirk (Sir D. Glover) and my hon. Friend the Member for Folkestone and Hythe (Mr. Costain). Even the Liberals joined in support of my right hon. Friend's new Clause.
  The prophecies quickly came true, as right hon. and hon. Members know from their postbags every day over the past few months. The answer of the Minister of State at the time was that it was a common experience of all of us that the great majority of owner-occupiers will
  1034
  not be affected by the levy. I am sure that the right hon. Member for Sunderland, North (Mr. Willey), who said that, was thoroughly sincere and believed what he said. He refused, however, to support that statement with figures. In fact, he was proved wholly wrong, because the Government have now admitted that the common experience is that when
  "the sale price contains only a small amount of development value"
  it has "given rise to difficulty". What a complacent understatement.
  A very high proportion of pre-war houses have been found to have development value—not just small development value, but quite substantial development value—and the proceeds of sale have been assessed to levy. The hardship from that arises in this way. Suppose that a family is obliged to move. Perhaps the head of the family has had a change of job and has to go to another town. The proceeds of sale of his old home have to be invested in his new home. He has to clear off the mortgage of his old home, pay the costs of sale and the costs of purchase, and he is lucky if he does not have to find further capital to get into his new home.
  Then, on top of that, suppose that, as in many cases, there is an assessment to development value, sometimes of £1,000. A betterment levy of £400 would then be payable. He will probably have to resort to a second mortgage to buy his new home; a second mortgage, at interest rates under the present Government of about 15 per cent. to 20 per cent. on second mortgages—a millstone round that family's neck for years. This is the sort of real practical hardship which is coming from the betterment levy. That is the position for those who cannot choose whether they move.
  For those who can choose, many have stayed and have not taken the risk of incurring that sort of hardship. I was interested to read a report in The Times today of a statement by the Minister for Planning and Land in which he forecast
  "an acute housing shortage in the immediate future in the seven counties round London because the population of the Outer Metropolitan Area is growing at an unprecedented rate."
  I do not quite understand that. I do not think that people become of the age to require houses all of a sudden. I should

  1035
  have thought that it was possible to judge how the population requiring houses was increasing over a period. But let us pass over that one.
  The Minister said that there would be required 31,000 acres over the next seven years and to meet that
  "Surrey County Council will be asked tomorrow to approve a report that adequate land to meet the target shall be made available in the county, partly by redevelopment of old property and of smaller infilling plots, rather than wholly by development of virgin land."
  To explain what that means, the report says, later:
  "pulling down Victorian houses, taking in gardens and allotments, and using odd plots".
  This is to be done—or it is hoped that this is to be done—to solve
  "an acute housing shortage … in the seven counties round London".
  This is just what the betterment levy has been killing. This is just what people have been stopped from doing—bringing forward the one plot, the fill-in plot, the area in the garden, and so on—because it is just in these cases where they have suffered penalties from the betterment levy. When those who sell their houses or land are so harshly treated by demands for levy, others will not volunteer for similar treatment.
  May I again quote the Sun, even in the absence of the hon. Member for Buckingham (Mr. Maxwell). An article in the Sun, only last Thursday, said:
  "Thousands of people are saddled with bills they would never have had to pay if the Act had been drafted properly in the first place. It is the Government's duty to put this right."
  It can be put right without legislation, merely by an order of the Minister.
  "The Act was not intended to penalise small householders. It was aimed at the unearned profits of big land speculators."
  Nor was it intended to penalise those who have had their property taken away from them compulsorily and have then been called upon to pay betterment levy out of the miserable amount of compensation which they received. This is perhaps the unkindest cut of all and I think it has caused more bitterness than anything else in this connection—for someone to have his property taken away compulsorily and then to be charged a levy on the compensation.
  Another article in the Sun on the same day, headed,
  1036
  "Now repay these land tax victims"
  had a sub-title "Legal Muddle", The article said:
  "This is grossly unfair. The Act was never intended to penalise small home-owners … The debts of the 10,000 victims of this legal muddle should be wiped out. Payments they have made should be reimbursed. People like struggling young couples, widows, and even in some cases pensioners, should not have to pay simply because it took so long to improve this ill-drafted Act."
  There is still time for the Government to retrieve themselves from allegations of injustice of that sort which are now being hurled at them by the victims of the levy. Everyone agrees that those victims have suffered grievous hardship. To remedy this I do not mind whether the appropriate action is an extra-statutory direction, a Statutory Instrument, Maundy money or luncheon vouchers, but give 'em their money back.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Harry Gourlay): Mr. Willey.
  Mr. Peter Walker (Worcester): On a point of order. I hope that, if this debate is to be at all possible, there will now be a statement of the Government's position. This is an Opposition Supply day, exploring a very important and vital subject. Unless the Minister speaks now, back benchers on both sides will be deprived of the opportunity of commenting on the Government's policy and nobody from the Opposition Front Bench will have an opportunity of doing so. I therefore urge the Minister for Planning and Land to make a statement now.
  Mr. Deputy Speaker: The Minister has no doubt heard the hon. Gentleman's statement, but it is not a matter for the Chair.
  Mr. Eric Lubbock: Further to that point of order. This debate will be a nonsense if the request made by the hon. Member for Worcester (Mr. Peter Walker) is not complied with. If hon. Gentlemen who have cases to raise and who wish to know whether they are covered by the White Paper—"Modifications in Betterment Levy"—which runs to only one and a half pages and which tells the House little, are not to hear what the Government's policy is before the debate proper begins, speeches will be much longer than they need otherwise be. It would be for the convenience

  1037
  of the House as a whole if the Minister could make an explanation at the beginning.
  The Minister for Planning and Land (Mr. Kenneth Robinson): Further to that point of order. I think that the House is aware that there has frequently been criticism of too many Front Bench speeches in short debates. In those circumstances, as I am the only spokesman for the Government, I propose to wind up the debate, having listened to what the Opposition, and, indeed, the whole House, have had to say. The Government's policy is set out clearly in Cmnd. 4001.
  Mr. Peter Walker: Further to that point of order. It is outrageous for a Minister to say that he will not explain the Government's policy to the House because there has been criticism of too many Front Bench speeches. Everybody now present wants to hear what the Minister has to say. I ask him to make a statement now.
  7.38 p.m.
  Mr. Frederick Wiley: At the outset of my speech may I say how delighted I am to see the hon. Member for Hornsey (Mr. Rossi) gracing the Opposition Front Bench. The hon. Gentleman played a prominent part in our discussions on the Land Commission Bill, and on at least one occasion he helped us to improve the Bill. I have been a catalytic agent to the Opposition, but tonight I part company with them. It would be ungracious not to recognise that the Government have, even if it be late, taken some effective action; and, as previously, I welcome the White Paper and the action they have taken. We cannot discuss the details. We shall have an opportunity to debate them on the Finance Bill. I realise that if I were to endeavour to do that now I should be out of order.
  May I say, however, that I recognise that one of the difficulties which circumscribe anything that the Government might do is the necessity to take effective steps to prevent widespread evasion. The Motion refers to the cases where the levy has already been paid, and I want to say a few words about those cases. I said in the debate on the Budget that I should like the Government to reconsider making the provisions retrospective. Like the hon. Member for Crosby (Mr. Graham
  1038
  Page), for this purpose I accept the various steps which the Government might take to make the provisions retrospective. I take the hon. Gentleman's point, which is very germane to the present discussion; namely that the Government have already taken action with regard to the interim period.
  Mr. James Dance: I am obliged to the right hon. Gentleman for giving way. My hon. Friend the Member for Crosby (Mr. Graham Page) mentioned the case of a constituent of mine. Does not the right hon. Gentleman agree that in a case like that, where expenses have been incurred in the selling of the property, there should also be repayment?
  Mr. Deputy Speaker (Mr. Harry Gourlay): Order. To regularise the debate, may I say that it would be out of order to discuss the question of retrospection.
  Mr. Willey: I am discussing it within the same terms as the hon. Member for Crosby did—within the terms of the provisions of which my right hon. Friend might take advantage.
  Mr. W. R. van Straubenzee: On a point of order, Mr. Deputy Speaker. May I respectfully submit to you that it would be in order for us to discuss retrospection, provided that it was within the terms of a Section 63 Order? I understand that we must not talk about the White Paper, but we can surely talk about retrospection otherwise?
  Mr. Deputy Speaker: I understand that it is not possible to have retrospection under a Section 63 Order. It would be out of order to anticipate the debate on the Finance Bill.
  Mr. Walter Clegg: Further to that point of order, Mr. Deputy Speaker. Has not the House already passed retrospective legislation under Section 63?
  Mr. Deputy Speaker: We cannot discuss the question of retrospective legislation since the Finance Bill is likely to be published shortly. It would be out of order under Standing Order No. 11 on anticipation.
  Mr. William Baxter: Mr. Deputy Speaker, I thought

  1039
  we were discussing a Motion on the development levy. Surely in discussing such a subject one must have regard to what has taken place in the past. I see nothing in this Motion that prohibits a Member from bringing in, as a germane point in his argument, a reference to the fact that someone has paid betterment levy in the past and is experiencing financial embarrassment.
  Mr. Deputy Speaker: What the hon. Gentleman has said would be quite in order in the debate.
  Mr. Willey: Perhaps it would help if I were to refer to the past, as I was endeavouring to do, in dealing with the action already taken by the Government concerning the interim period, when, in the light of their experience, the Government made concessionary provisions in the case of transactions already carried out.
  I agree with the hon. Member for Crosby that this appears to be a precedent for dealing with cases under the Land Commission Act. In this case, as I understand it, the concession has retrospective effect. As that has already been done, we ought to consider generally from an administrative point of view whether there are any difficulties in taking similar action in further cases. I expressed myself tentatively in the debate on the Budget when I was referring to the White Paper, which I agree we must not discuss this evening, because one never knows how difficult administratively retrospective action will be. But the day after I had spoken I noticed that Sir Henry Wells, the Chairman, said that he had recommended this course of action to the Government. He said:
  "There are administrative difficulties but they are not insuperable. If the Government give the go-ahead we can make retrospective payments to all concerned."
  I regard this as convincing evidence that from an administrative point of view whatever action the Government take, the Land Commission would be in a position to do this. This is not unimportant. If one took action such as this, one would not be likely to take such action if it might result in incidental unfairness. But Sir Henry Wells said:
  "I am naturally concerned about hardship. I am only human after all."
  1040
  I should have thought that in the light of that, one would accept, for the purposes of considering what action should be taken, that administratively this can be done, and one should also take note of the fact that the Chairman of the Commission has expressed an opinion which I assume carries the weight of the Commission itself.
  I have always held—hon. Members who have heard me speak about the Land Commission before will know this—that if one sets up a Commission such as this, its authority should be respected. If one chooses to administer in this way, one does not administer through a Department but through a public body and one should recognise its opinions and advice.
  I also take the point which has been raised by the hon. Members for Crosby and for Bromsgrove (Mr. Dance) that some of these cases have been before my right hon. Friend for a considerable time. During this time it appears that my right hon. Friend has also been aware of the views of the Land Commission about some of these categories of case. That is something which ought to be considered. One ought to consider, whatever action my right hon. Friend takes, avoiding the creation of hardship among similar cases. As the House knows, I am against retrospective legislation as a rule. It is out of order to discuss the matter tonight, but if one is considering administratively what should be done and one decides in some of the cases to change the position with regard to the levy, then in one way or another the Government ought to do it in all cases.
  There is a further fact which the hon. Gentleman mentioned, and that is the question whether this is taxation. The hon. Gentleman is quite right. I emphasised, speaking for the Government, that this was not taxation. If one turns to the White Paper on the Land Commission one finds that it is not represented as taxation. We emphasised that this was a device to avoid a two-price system. The hon. Member for Crosby criticised me because of the view I took, but, taking the view that I and the Government took, there is much greater flexibility here than there would be in the case of taxation. That is a fact to which my right hon. Friend ought to pay attention.

  1041
  I emphasise this factor because it is relevant to the position that we touched upon, namely the relationship of the Land Commission to the Department and the Government.
  I was surprised to read—I hope it was an inaccurate report—that Sir Henry Wells was understood to be talking about a wide breach between himself and the Department, and he was reported as being very angry. In fact, he is a very mild man, and I hope this report is not true. I hope my right hon. Friend will take the occasion to assure us that relations between the Land Commission and the Department are amicable and constructive. I mention this because when we set up the Land Commission the Chairman of the Commission, Sir Henry Wells, declared his position without ambiguity. He said:
  "The first job of the Land Commission … will be to build up a land fund …"
  He went on:
  "… money collected as betterment levy would go straight to the Treasury, but money the Commission made out of dealing in land would go into the land account, which would be under the control of the Commission subject only to the Minister and Parliament."
  Sir Henry added:
  "I would fight like hell if there was any suggestion that the fund should be raided as we built it up. We shall have money for dealing with this difficult and intractable problem of redeveloping the twilight areas, but this can take a little time."
  Mr. W. Baxter: Will my right hon. Friend accept that the intervention of the Land Commission in the purchase of ground has caused a considerable rise in the price of ground and, therefore, indirectly a considerable rise in the cost of the houses put upon that ground, the whole cost ultimately being thrown back on the person who wants his little cottage or house? I ask my right hon. Friend to direct his attention to the iniquities which have been brought about by the intervention of the Land Commission in this way.
  Mr. Wiley: I come to the directly opposite conclusion about it—that a greater intervention by the Land Commission would tend to depress land prices.
  Mr. Clegg rose—
  Mr. Willey: No; the hon. Gentleman will have the opportunity. There are
  1042
  others who wish to speak, and we have only a short time for the debate.
  Sir Henry Wells made quite clear that he wished the Land Commission to acquire land on a large scale. In these cases, there is no levy and no payment to the Treasury, but the Commission would build up the land fund, and his particular interest in the use of the fund, as he said, was in the rehabilitation of twilight areas.
  In one of our recent debates, I made plain, as the Commission itself has made plain, that I told the Land Commission that its objective should be to build up the scale of its acquisition programme within the first two years as rapidly as possible. This the Commission has failed to do. I feel that a new situation is developing. I do not consider that the matters dealt with in the White Paper need have been dealt with in the Finance Bill, and it seems to me that the Treasury is now having a much too effective voice in what the Land Commission does. There is certainly in Sir Henry Wells' mind a dichotomy between the Treasury endeavour to raise money by way of levy and the Land Commission's endeavour to do the real job which it was set up to do. I hope that my right hon. Friend, who gave us an encouraging report in an earlier debate on the Land Commission, will be able to assure us that every effort is now being made to encourage the Land Commission to go ahead, as it intended to go ahead, with the land acquisition programme. This is the job which it really wants to do, and I hope that no restrictions or restraints will be put upon it in going ahead with that job.
  7.53 p.m.
  Mr. Walter Clegg: I follow the right hon. Gentleman the Member for Sunderland, North (Mr. Willey) in expressing my delight at seeing my hon. Friend the Member for Hornsey (Mr. Rossi) on the Opposition Front Bench. He well deserves his place there, for he has played a great part in our debates on the Land Commission Bill, and I am certain that he will give the Minister for Planning and Land a hammering later tonight.
  I find the right hon. Member for Sunderland, North so personally disarming that it is often more difficult to go for him than for some other hon. Members on the benches opposite, but I shall

  1043
  take up some of the points which he made. He pointed out that Sir Henry Wells had said that to put everyone right and to give everyone his money back is feasible. Therefore, the House is not debating something impossible. I discount in advance any argument from the benches opposite tonight that this would be too difficult to do technically—an argument which, coming from the mouths of those who invented the Land Commission in the first place, would be absolutely diabolical. It just would not wash.
  I take up also the point which the right hon. Gentleman made about the hand of the Treasury in this business. In our first debate today, we had Jewell and Warris. Now we have the juvenile lead from the Treasury here in the person of the Minister of State. No doubt, he will be keeping the Minister in order. It is wrong that the Treasury should have an influence in this matter. We are talking tonight about hardship and injustice.
  The right hon. Gentleman expressed worry about widespread evasion. This was one of the constant themes during our discussions on the Land Commission Bill in Committee, but I cannot see how that could be a factor which could militate against the remedying of hardship which has already been established.
  I turn now to the debate on the Report stage of the Land Commission Bill on 26th October, 1966 and I refer to the Cassandra-like speech of my hon. Friend the Member for Crosby (Mr. Graham Page). He made it in a debate initiated by a new Clause moved by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) for the exemption of owner-occupiers. My hon. Friend had this to say:
  "Because the Bill is called the Land Commission Bill, many people have thought that it affects merely the great landed estates and areas of land and have never realised that the levy is a levy also on bricks and mortar, not only on factories and offices and things like petrol stations and restaurants but on dwelling houses and on the homes of the people."—[OFFICIAL REPORT, 26th October, 1966; Vol. 734, c. 1113.]
  That has been proved very true.
  The right hon. Gentleman the Member for Sunderland, North did not exactly pooh-pooh what we were saying, but he referred to something which, he said, was more important:
  1044
  "The most important consideration to the owner-occupier is what we do about mortgage rates."—[OFFICIAL REPORT, 26th October, 1966: Vol. 734, c. 1111.]
  Events have proved him very right there. The right hon. Gentleman was being a Cassandra in the opposite sense.
  One matter which mystifies me and makes me wonder what the Minister will say tonight is the attitude which he showed to hardship on the occasion of our last debate, again initiated by the Opposition. After an intervention by my hon. Friend the Member for Worcester (Mr. Peter Walker), the Minister for Planning and Land said:
  "I shall come to the hon. Gentleman's other point. I certainly have no further amendments to the Land Commission Act to announce today. The Act has been in operation for less than two years, with long transitional provisions, and it is much too early to review the main provisions."—[OFFICIAL REPORT, 6th February, 1969; Vol. 777, c. 622–3.]
  Since then, there has been a review. It will be interesting to hear from the Minister what persuaded the Government to take a different attitude so soon after that positive statement. I suggest that there were two motivating influences. First, there was the pressure exerted in the House by hon. Members on both sides who brought forward examples of hardship. Second, and, perhaps, even more potent—I suspect that it was, though I do not like to think so—there was the tremendous interest in hardship taken by the Press. Hardly a day passed without new evidence of hardship being brought out. I pay great tribute to the Press for the pressure which it put on and the very proper campaign it has run against the Land Commission Act and the hardship which it has created.
  I could cite many examples of hardship, and I know that others of my hon. Friends will be putting such matters before the House tonight, but I shall not go into detail because the case has been so thoroughly established. It was established in the debate to which I have just referred, and masses of evidence are coming in every day. The Government's response to the hardship has been grudging, belated and insufficient.
  We have to face the fact that there is here a division of justice. People on one side of the line get justice while those on the other side do not. The bitterness

  1045
  which this creates is corrosive. Any constituent in this trouble knows that someone in exactly similar circumstances, but divided from him merely by a date, may get compensation, or his money back, while he does not. That sort of situation reflects on the good name of both the Government and Parliament.
  I do not think that the Government will listen to what we have to say. They have become deaf to all reason. If the Government will not listen, I shall address my arguments to right hon. and hon. Members on the back benches opposite. It is not good enough to say that it is not possible to do justice. Parliament has an interest here. If the Treasury were to say that these injustices could not be put right for technical reasons or—even worse—because we could not afford it, that would be intolerable because it is the House of Commons and not the Government and not the Treasury which is responsible for putting this injustice right. The Opposition have done all they could to bring the problem into the light of day. We predicted that this situation would arise.
  Sir Harmar Nicholls: My hon. Friend is making an effective speech, but he should not give up heart at this stage. It is reported, following a meeting between Government back benchers and the Chancellor of the Exchequer, that the Chancellor indicated that he was considering retrospective legislation on this matter.
  Mr. Clegg: Perhaps that is why we have the Minister of State, Treasury here. I hope so. The opportunity to put the matter right rests no longer with this side of the House. We have done all we could to persuade the Government. The people who can put it right are the back benchers opposite, and they can do it in one of two ways. Either they can revolt against the Government in public, which they might not want to do, or they can bring pressure to bear on the Government behind the scenes.
  It is the fair name of Parliament which is at stake here. I am not bothered about the reputation of the Government, but I am concerned with the reputation of this House, which has the ancient duty of seeing that the grievances of the people are put right—and put right they should be and without nonsense. If back
  1046
  benchers opposite fail in this, they will be failing not only their party but Parliament itself. It is very important that Parliament should be shown to have the power to remedy grievances and injustices.
  I have made my position clear from time to time about the Land Commission Act. I say in fairness to the Commission, although it has often the rough edge of my tongue, that, so far as I can see from its reaction to these grievances, it is on the side of justice. The ball lies clearly in the Government's court and, in making that clear to the House and the public, the Commission has done us a great favour and I hope that it will be heeded.
  8.5 p.m.
  Mr. Niall MacDermot: This is a somewhat curious sort of debate and curiously timed. The Opposition have chosen, on a Supply day, to put down a motion criticising a situation which they know perfectly well is being fully dealt with in a White Paper which has been published, and they know that a Finance Bill is to be published very shortly which will deal with the points they have raised.
  Mr. Graham Page: No.
  Mr. MacDermot: I listened attentively to the speech of the hon. Member for Crosby (Mr. Graham Page) to see what more he was going to suggest should be done than is contained in the White Paper. I can only recall his making one suggestion—that the first and major exemption should apply not only to properties where the market value is £1,500 or less but to properties where the market value is £5,000 or less.
  Mr. Graham Page: I am sorry that I did not make myself clear or that the hon. and learned Gentleman was not listening. I intended to convey the impression, if I did not say it in words, that there should be refund of levy and that there should have been retrospective orders under Section 63 or other devices used for retrospection.
  Mr. MacDermot: This is the difficulty. I have no doubt that what the Opposition wanted to do was to put down a Motion to say that the changes proposed in the White Paper should be retrospective. No doubt, however, they were told

  1047
  that, under Standing Orders, this would not be in order because we were shortly to debate the Finance Bill, on which they would be able to raise that point. The result is that we have what I repeat is a curious debate in which everyone is trying to find a way round the rules of order in order to discuss the one and only live issue, everything else being as dead as a dodo.
  Mr. Clegg: We are told that the levy is not a tax. Is it definite, therefore, that it will be in the Finance Bill?
  Mr. MacDermot: I think that we have been told definitely that proposals for these amendments will be in the Finance Bill, and that is a perfectly normal and proper way of dealing with the matter. I agree that betterment levy is not a tax—that has been made clear throughout. But occasionally Homer nods and it is wrongly referred to as a tax. I made the error myself in a letter to The Times not long ago and was taken up on the point next day. But it is an important consideration when we consider what is the right way to deal with what are admitted cases of hardship. I shall come to this point later in my speech.
  The proposals themselves, leaving aside this question which we find difficult to discuss within the rules of order, are not subject to criticism, and I am not surprised. I congratulate my right hon. Friend the Minister for Planning and Land and the Government most warmly on the boldness of the White Paper. We all know that for some considerable time hon. Members have been raising particular cases which have arisen. My right hon. Friend rightly would not be rushed into making piecemeal decisions on them. He wanted to look at the working of the Act in the light of the review being made of it by the Land Commission itself. He said so clearly. Now that that has been completed, he has brought forward proposals which, if hon. Members opposite were frank, they would admit have surprised them by their comprehensiveness and by how far they have gone—I say this without fear of contradiction—beyond what was being asked for by critics of the working of the Act. I can recollect a host of detailed proposals put forward from the Front Bench opposite which are quite unnecessary now because
  1048
  of the sweeping nature of the first major concession, the general exemption for property where the market value is £1,500 or less.
  Mr. Graham Page: What would the hon. and learned Gentleman do about the cases that have already arisen where hardship has been suffered?
  Mr. MacDermot: The hon. Gentleman knows me better than to interrupt me with a point like that. I have said that I shall return to that point, and he knows me well enough to know that I shall. He has made his speech. Perhaps he will now listen patiently and take it when hon. Members reply to him, and let them make their speeches in their own way. I repeat, since the hon. Gentleman apparently interrupted me so as not to let me make this point—he did not have the generosity to concede it, though the hon. Member for North Fylde (Mr. Clegg) did—that the first concession is a very sweeping provision, which at one stroke gets rid of nearly all the complaints there have been on the working of the Act.
  It does not stop there. I shall not weary the House by going through the White Paper, but it goes on to deal with other points which should be dealt with but are not covered by that first, general provision. I can recall the kind of speeches which were made suggesting that the definition of "family" should be extended to deal with the case, for example, where a plot of land was given not to a son or daughter but to a grandson or granddaughter. The complex legislation which would be involved in meeting cases of this sort is now rendered unnecessary because of the general provisions in the first and second reliefs.
  Mr. Eric Lubbock: The hon. and learned Gentleman dealt with the Act in Committee. If he says that these proposals are so good now, why did he not accept them in those days?
  Mr. MacDermot: The hon. Gentleman is wrong. I was not one of the Ministers dealing with the Act in Committee. I was at the Treasury at the time. I was responsible for the administration of the Act during the year I was at the Ministry of Housing and Local Government, but by then the Act was already on the Statute Book.

  1049
  When we consider past cases I remind hon. Members that when we passed the Act the object was to have a comprehensive levy on all betterment. There is no reason in principle why an owner-occupier with a single plot of land should not pay his contribution by way of betterment levy to enable the public purse to get back that which the public has given, the development value in the land. The principle is just as much valid in the case of a single plot as in other cases. It was for this reason that when the betterment levy was introduced it was made comprehensive and applicable in all cases.
  But two things have emerged from experience of the working of the Act in particular cases. First, it has been seen that many other factors can be at work in particular cases which would make it unreasonable or unjust to levy the betterment levy in those cases, or in some of them. The other is that the cost of dealing with a large number of small cases makes it hardly worth while administratively to try to collect the levy. Those together are two very good reasons for altering the provisions in the way suggested in the White Paper.
  The general argument put forward by the Treasury against making retrospective a tax concession, a tax relief, is very simple. It is that if one tries to make it retrospective one must draw the line somewhere, and the question is, "Where do you stop? How far can you go back?" There must be a limit to the period for which one can reopen old cases.
  When we are dealing, as we are here, with a levy which is relatively new and has not been operating for many years, my view is that that argument of principle does not have much force, and we must look at whether retrospection is administratively practicable. I imagine that the money at stake is not of an order that would worry the Chancellor very greatly.
  If what has been done here is an effort on the basis of our experience to get the levy right for the future and to meet cases of what are considered to be proved hardship and injustice, it seems to me that there are very strong arguments for trying to make the concession apply to people who have already paid levy as well as those upon whom the levy will
  1050
  fall in the future. I shall be very interested to hear what my right hon. Friend has to say about this.
  I have no doubt that there are considerable administrative difficulties. We must remember that one of them is that under these proposals it is intended that cases which are exempt from betterment levy should still be open to the charge under Capital Gains Tax. Very many of the cases concern owner-occupier plots, and they will be entitled to the owner-occupier exemption. It might be that it would be right to enable the relief to be applied to all such cases. There would be great administrative complications in the cases where one was to say, looking back, "This transaction is no longer to be liable to betterment levy. We will repay the levy." What is to happen then? A great deal more trouble and expense must be gone through in trying to make the transaction subject to Capital Gains Tax. I should be interested to hear what my right hon. Friend has to say on this point too. I hope that he will listen to the arguments on the subject in the debate, and will not close the door to further debate on this topic.
  I very much welcome the action taken by the Government in the White Paper. I entirely reject the argument put forward that the problem could have been dealt with by order. I am surprised to hear such an argument from the hon. Member for Crosby, who is the Chairman of the Statutory Instruments Committee. I recall that on one occasion when we were trying to lay an order to deal with a matter in connection with the levy we had our proposal reported on unfavourably by the hon. Gentleman's Committee. We had instead to announce a concession and to say that we would have the matter dealt with by legislation under the Act. That was on a very minor point.
  I am sure that if we had brought forward proposals of this kind, and, in particular, if we had tried to make them retrospective to the time of the coming into force of the Act, all hell would have been let loose in the report which the hon. Gentleman would have made as Chairman of the Statutory Instruments Committee. The matter had to be dealt with by legislation, and that is why it was right for my right hon. Friend to deal with it in the way in which he did.
  8.19 p.m.
  Mr. Eric Lubbock: A Government who introduced the War Damage Act, 1965, concerning the Burmah Oil Company, can hardly argue against retrospection. There have been several other examples since I have had experience in these matters in the House where, if it has been in their own interests, they were happy to go back several years. Therefore, I think that the argument of the hon. and learned Member for Derby, North (Mr. MacDermot) is wrong in that respect.
  I think that the hon. and learned Member is also wrong on the question of making an Order to effect the changes. Section 63 of the Act provides precisely for making an Order that certain transactions shall be exempt from the betterment levy. The most important of the concessions in the White Paper is the first—exemption in the case of sales of land for development where the sale price does not exceed £1,500. I should have thought that that was precisely the kind of case that was designed to be included in this provision if it was found suitable later.
  Mr. MacDermot indicated dissent.
  Mr. Lubbock: The hon. and learned Gentleman shakes his head. I am not a lawyer, but that was said by the hon. Member for Crosby (Mr. Graham Page) and the Chairman of the Land Commission, Sir Henry Wells, who is an eminent authority and who has lived with the Commission for several years, and I believe that it is also the opinion of Mr. Desmond Heap, who has written a book on the Land Commission, and who has recently indicated in a letter which he wrote to The Times that the use of Section 63 was the right way in which to remedy injustice.
  The hon. and learned Gentleman said that he would be interested to know how much it would cost to make these provisions retrospective to the initial date of the operation of the levy. He said that he could see no reason in principle why this should not be done, because it was a comparatively recent imposition and was not like discovering that some amendment was needed to a tax which had been instituted many years before. I was glad to hear him say that, because it is a useful thing to have on the record
  1052
  from the hon. and learned Gentleman who knows a good deal about these matters.
  In his Budget Statement, the Chancellor of the Exchequer said that the amount which had been collected from transactions which came to less than £1,500 was only one-tenth of the total. I cannot remember how much of the levy was collected in during the years 1967–68 and 1968–69, but it was very small, so small as to be almost derisory in relation to the cost of the Commission itself, as the hon. and learned Gentleman knows.
  One of the complaints which my hon. Friends and I have had to make in the past—my hon. Friend the Member for Cheadle (Dr. Winstanley) was asking Questions about it only the other day—was the ridiculousness of the yield of the levy in relation to the number of people employed to collect it.
  Mr. MacDermot: I am sure that the hon. Gentleman realises that that is a false argument. It always takes time to build up a new levy or a new tax if its operation is not made retrospective. There are bound to be high costs of collection in the early stages. One must look to the eventual yield and then set the cost against that.
  Mr. Lubbock: I do not want to go into this in detail, but that intervention reinforces my point in the context of this debate, which is that the yield took a long time to build up, much longer than Ministers gave the impression it would take when the Second Reading debate took place.
  If the cost of the concession is £1½ million in 1969–70 and £3½ million in subsequent years, it must have been a much smaller figure than that in previous years. Therefore, I doubt whether it could cost the taxpayer more than £3 million to make reimbursement right back to the starting date of the operation of the levy.
  My hon. Friend the Member for Cheadle says that it would cost less than that. It is a tiny amount, but it is important in relation to the cases of hardship which we have heard mentioned this afternoon. I do not want to rehearse many of them, for they are well-documented in various newspapers, but I shall later mention one which has occurred in my constituency.

  1053
  The hon. and learned Gentleman said that there was no reason in principle for exempting the sale of houses by owner-occupiers who, after all, if there were an increase in the value of their land created by the community, ought to make their contribution, however small, to the recovery of betterment for the community as a whole. I am not sure that there is not a very good reason in principle for exempting these small transactions by owner-occupiers.
  When a man moves house and, presumably, goes into one with the same amount of accommodation, as he would if he had a family of a certain size, needing, say, a three-bedroomed house, he moves from one three-bedroomed house into another at the same price, if he is not moving from one region to another. If he has to pay betterment levy on the first, the proceeds of the sale are not enough to enable him to buy the new house, and if he does so, he finishes up out of pocket. That could deter mobility, because people would say that they were not prepared to move if they had to face the burden of these costs which they could not recover in terms of an increased sale price and so on. That would be a marginal disincentive to the kind of mobility which we all want.
  Some time ago, we warned the Government that these things were bound to happen. My hon. Friend the Member for Cheadle made his maiden speech on the subject of the Land Commission. He said that we sympathised with the Government's objectives, that we wanted land to be more readily available and that we wanted active steps to be taken to discourage speculation and that we wanted to allow the community to share the fruits of the appreciation of land values.
  My hon. Friend said:
  "… we feel that these proposals will not achieve these very desirable aims."—[OFFICIAL REPORT, 12th May, 1966; Vol. 728, c. 659.]
  My hon. Friend went on to explain in some detail why they would not do so, and we tried to make some alterations in the scheme when the Bill was on Report to achieve the right kind of development levy. No one disagrees with that principle and at the time the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) was in sympathy with the idea that some part of the development
  1054
  value should be recoverable by the community.
  Unfortunately, at that time the Government paid no attention to us. They refused to listen to our advice and now we are in the position of having to consider how best to recover from the difficulties which have been drawn to the Government's attention in debates and in newspapers which have done a great service in focusing attention on the problems of the Land Commission.
  I make no apology for speaking in this debate notwithstanding the fact that we shall have another opportunity to discuss the problem in debates on the Finance Bill, because the more occasions we bring it to the attention of the Minister for Planning and Land, the more likely he is to come to a solution with which both sides of the House agree.
  It is most unfortunate for the Minister for Planning and Land. He seems to be always saddled with the most difficult questions. He has only just finished dealing with prescription charges and now he is having to defend these policies which are of extreme unpopularity. I expect, when the summer is over, to see him moved to the Department of Employment and Productivity to help the right hon. Lady with her difficult task there. I am sorry for him, because he has been given the impossible task of defending this White Paper—impossible unless there is to be an element of retrospection.
  The right hon. Member for Sunderland, North (Mr. Willey), who was responsible for the introduction of the Act, said that he did not believe it right to create hardship as between similar cases. That is exactly what will happen if we are to have cut-off dates, for certain people who entered the transactions immediately before that date will not be able to derive benefit from these concessions, while those who entered them immediately afterwards will be able to derive benefit.
  Looking through the White Paper I am not at all clear who is to benefit. This has been brought home to me with some force when, at my advice bureau last weekend, I had to discuss a case with a lady who has disposed of a small plot of land and who wanted to know whether she would be liable to the levy. If the Minister can tell me whether this lady will escape, I would be grateful.

  1055
  This lady is 79, living on social security and supplementary benefit. This is not one of those invented cases one sometimes hears, these are the facts. She looked after an aged gentleman, and he then died. The only asset was his house, which he left to her. The house was an old one, built a long time before the war, and she decided that the sensible thing to do was to sell off a little bit of garden and to use the proceeds to install modern amenities such as a bathroom, and so on. She sold the land for £850, then the Land Commission came along and said that she was liable to pay £218 betterment levy, thus wrecking her plans for improving the property and bringing it into a reasonable condition.
  Is this really the objective of the Minister for Planning and Land? I am sure that it is not, because another of the Government's policies is to try to renovate older houses. Yet if this lady has to pay £218 out of the proceeds she received from the sale of the land, it would be impossible for her to carry out her plans. I will give the right hon. Gentleman the relevant dates, and perhaps he will be good enough to reply to me, because my constituent is extremely anxious about this. Naturally, she wants to know as soon as possible, and I assured her, when we discussed this on Saturday morning, that, since there was a debate in the House on Monday, I would raise it then.
  I am informed by her financial advisers that the date of the assessment, whatever that means, was 13th February, and the date of charge was 24th April. If the right hon. Gentleman can assure me that this old lady will be exempt from a charge of £218, remembering that she has nothing else to live on but her pension and social benefits, I should be very well satisfied with having taken part in the debate. Probably it is not only the £1,500 limit to which this kind of argument applies.
  The right hon. Gentleman ought to listen very carefully not only to the arguments put from the Opposition Front Bench by the hon. Member for Crosby (Mr. Graham Page), but also to the many voices being raised on his own back benches, in particular, the experts on the Land Commission Act, the right hon. Member for Sunderland, North and the
  1056
  hon. and learned Member for Derby, North. If these hon. Members, who have studied the Act and have watched its operation, say that the concessions ought to be back-dated to the beginning of the coming into force of the Act, then it is a very strong argument for the Minister accepting that and saying tonight that he will do so, thus relieving the anxieties of a great many people.
  8.33 p.m.
  Mr. William Baxter: We are in some difficulty tonight in debating this Motion since this matter will come up again on the Finance Bill. I very much regret that the Opposition have drawn the Motion in such narrow terms, rather than on a broader base so that we could consider most of the aspects of the Land Commission Act. We are fairly fortunate in Scotland in that, as the Act has not been operated to a great extent, there are fewer people who have had to pay betterment levy than there are in England.
  The White Paper says that we ought to give relief to those whose land is worth not more than £1,500. Even if there are only a few in Scotland, there are many people in England and Wales who will be compelled to pay the betterment levy for the period that the Bill has been in operation. I add my voice to those who have spoken tonight, and ask my right hon. Friend and the Chancellor to pay special regard to retrospective payments in cases such as we have been discussing. I should like to see all aspects of the Land Commission Act reviewed by Parliament.
  My right hon. Friend for Sunderland, North (Mr. Willey) introduced what is probably the most complicated and difficult Measure ever put upon the Statute Book. Even today many valuers and others who have to work the Act find it difficult to understand and apply in a fair and equitable manner.
  There was no reason for this legislation to be so complicated. Most people agree that when betterment has occurred because of acts by the community as a whole, a proportion of the betterment value should return to the common weal. There should be machinery available throughout the country to operate this legislation in a simple and satisfactory manner.

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  There should be a utilisation of the powers which are already in the hands of local authorities to value land as originally purchased. If agricultural land is used for housing, one can understand that a completely different situation will arise. The rise in the value of that land should not go solely to the owner of the land, but to the community as a whole. Nobody would question the rightness of a proportion of that increased value being paid back to the common weal.
  This policy could have been implemented in a simple and straightforward way. My right hon. Friend the Member for Sunderland, North seemed to indicate that the intervention of the Land Commission, even in the purchase of the land, would not boost the price of land to the betterment of those who sought to build their homes upon it. But the fact is that this is what has occurred.
  We have had a limited experience of this provision in Scotland and we can see the problem growing in momentum as the years go by. The cost of housing will increase considerably to those who want a house of their own. I know of one case involving 28 acres of fairly good land on which a firm had an option amounting to £28,000 prior to the Act coming into operation. I understand that at the time the planning committee did not give planning consent for the land to be utilised for housing. At present the Land Commission is negotiating for the land provided that the local authority will give it planning permission. It is not proposing to pay £28,000, but I understand that it is prepared to pay £80,000 for the land. If it pays that sum for the land, its value will increase immeasurably. For what purpose? It will bring in a certain amount of revenue to the Treasury. But who ultimately will pay? Will it not be the young married couple who want a house, or the elderly couple who wish to build a cottage for retirement on that land?
  I feel that my right hon. Friends have misunderstood the basic principles of the Labour Party on this matter. I am a member of the Labour Party, and do not apologise for saying this. I believe that a proportion of the improvement value of land should go back to the people. This is a simple belief. But what this
  1058
  Act has done is to increase the price of the land to people who wish to build their own houses upon it. This must be borne in mind.
  There should have appeared on the Order Paper a straightforward Motion to the effect that the Government be asked to reconsider the whole concept of the Land Commission Act, even to the extent that it should be reviewed and recast. However, the Motion which is at present on the Order Paper does not indicate that. It is just an expression of opinion, which is of no great moment or importance. It deprecates the fact that hardship is being caused to certain people, and certainly hardship has been caused to individuals. The hon. Member for Orpington (Mr. Lubbock) has given examples of such cases, and one understands that individual cases of hardship will be rectified. But this does not rectify a bad Act of Parliament. This Act is bad in conception. Not only is it not understood by the mass of the people or even by professional people but it does not do what it is intended to do; namely, keep the price of land as cheap as possible and give any profits back to the community. It does the opposite.
  This is a bad Act. The concept of introducing a proper land levy system was good, but this system has been compiled in the most ham-fisted manner possible. One of the great tragedies of the House is that there are too many academic thinkers in it who are not practical people. As a builder, as a member of a local authority for more than 30 years, and as someone who knows something about the problem and has discussed it with district valuers, I believe that the Act which the Labour Government put on the Statute Book to control the price of land was the most stupid Measure I have ever come across. In the circumstances, a straightforward Motion asking that reconsideration be given to the Act would have been the most appropriate.
  8.41 p.m.
  Mr. W. R. van Straubenzee: I did not think that it could happen, but I am beginning to feel sorry for the Minister for Planning and Land. There is no nicer individual in the House, but night after night, day after day, he gets a merciless battering. That is to be expected from this side of the House, but

  1059
  we have listened to three speeches in succession by hon. Members opposite giving him a walloping. We have listened to the originator of the Act, the right hon. Member for Sunderland, North (Mr. Willey) and the hon. and learned Member for Derby, North (Mr. MacDermot), and we have just heard a swingeing speech from the hon. Member for West Stirlingshire (Mr. W. Baxter). I do not think that any diehard Tory could have assembled a better set of adjectives than those used by the hon. Member. We salute him. We have reason to know that he is one of a select band of hon. Members opposite whose feet follow their voice. We know that when he speaks as he has just spoken he means business.
  We should have liked to table the sort of Motion to which the hon. Member for West Stirlingshire has just referred, but we are restricted by the rules of order. In principle, concessions under the Act have been made retrospective. That has been established by the Opposition Front Bench and it is not disputed on the benches opposite. Secondly, as the right hon. Member for Sunderland, North made clear, the Chairman of the Land Commission, using the full authority of his position, has said that there is no insuperable difficulty about making any future action retrospective. That clears out of the way any difficulties of the Minister on those two grounds.
  I wonder whether the Minister understands the irritation, expressed throughout the country, caused by any suggestion that there should be a date before or after which transactions should be effected. Just before Easter, through the courtesy of the Chair, I was permitted to raise on the Floor of the House the case of a Mr. Frank Whitfield of Bracknell, a window cleaner whose house has been compulsorily purchased. He was born in the house. He had to pay a substantial levy on what he had called his cabbage patch.
  One of the results of that debate, which was courteously answered by the Minister, was that last week an elderly gentleman got in touch with me. He has asked me to keep his name private. He has been to see Mr. Whitfield—he does not come from within my constituency—and has offered to pay the whole of the development levy. It will be agreed that that is an extraordinarily generous gesture, particularly
  1060
  when it is made totally anonymously without strings. It illustrates, however, the strength of feeling which these cases have aroused in the general public. It is illustrative of the difficulties which have touched the hearts of innumerable people.
  Secondly, I want to draw attention once again to the special difficulty in which those whose houses are compulsorily purchased find themselves. In all fairness, I think that there is considerable strength in the argument, used by the Minister when we debated this matter previously, that it would be difficult to exempt from levy as a class those whose properties were compulsorily purchased. I respectfully differ on this from one or two of my hon. Friends. I have raised the matter in this way only to get the argument on its feet.
  The argument is legitimate in the sense that one of the difficulties faced by a person whose house is compulsorily purchased is that he is not free in terms of the time which the transaction takes. It is clear to any observer of our proceedings that the Government, however unwillingly, were being shoved, pushed and harassed by the Opposition. Certain matters will come forward in the Finance Bill, which for procedural reasons we do not debate tonight, showing that clearly to be true. That would never have happened had it not been for sustained Opposition pressure.
  A person selling voluntarily by private treaty can control the time at which he completes his sale. For example, if I have understood the matter aright, the key date that the Minister needs to know to answer the case raised by the hon. Member for Orpington (Mr. Lubbock) is the date of the conveyance of the additional land sold by the old lady whose predicament, I am certain, touched the hearts of everyone who heard it.
  A person whose land is being purchased compulsorily cannot control the date. Therefore, if later the allevation is tied to a date, it will once again hit those whose property is being compulsorily purchased. It is this aspect of compulsory purchase which I draw once again to the right hon. Gentleman's attention for consideration when he replies.
  That is all I want on this occasion to say about this matter, and in my concluding sentence I give this word of

  1061
  advice not only to my constituents but to anyone else who wishes to observe it. It has come to my attention, not surprisingly, that those whose duty it is—a duty laid upon them by Parliament—to impose levies in cases which are mentioned in the White Paper are doing so with a very heavy heart.
  I have a case, which came to me on Saturday, of a person of modest means. In all sympathy the case has been discussed by the southern regional offices of the Land Commission. It is quite clear—it comes right through the reported conversations—that those concerned in the offices feel mighty bad about still having to impose a levy in the case because of the date which is mentioned in the White Paper.
  Therefore, my advice to all such affected people is that they should undertake a form of civil disobedience: that is to say, they should prevaricate. I am quite certain that the answer is to extend the correspondence, to extend the negotiations, to wait and delay and not to pay, because I cannot believe that the Minister, who is a man of keen intelligence, can fail to be impressed by the arguments which have been thrust upon him from all sides today and which, in particular, have come from behind him. When that day comes, it will be the sustained pressure of this side of the House which will be responsible more than any other single factor.
  8.50 p.m.
  Mr. R. F. H. Dobson: I want to start almost where the hon. Member for Wokingham (Mr. van Straubenzee) left off. I was hoping that, in his concluding passages, he would have paid some tribute to my right hon. Friend the Minister for listening to the pleas made in this House on many occasions about the hardship cases, and I have played some part myself in making those pleas. I was hoping that at least one hon. Member on the Opposition benches would have placed on record that my right hon. Friend has been active, has measured up to the discussions which we have had, and has really tried to help in these very difficult personal cases which have come to light.
  My right hon. Friend's attitude, I think, has been exemplary, for he has had to administer a difficult Act in difficult circumstances. He has had to
  1062
  persuade, and to argue with other people about whether or not he was in a position to give some remedy in the difficult cases to which Members of this House and the Press have drawn attention. Despite the fact that this is a critical Motion I should have thought that at least one hon. Member on the Opposition benches would have had the graciousness to have applauded my right hon. Friend's efforts which are so clearly laid out in Cmnd. 4001. If hon. Members opposite will not, I will, for I believe that my right hon. Friend has gone a long way to meeting all the criticisms which have been made against the Act.
  My right hon. Friend has one further step to take, and that is on the question which has been raised particularly by my hon. and learned Friend the Member for Derby, North (Mr. MacDermot), the question—and it is a difficult one for us to deal with tonight—how far retrospection will be allowed and whether there will or will not be a paying back of the amounts collected, which have caused hardship throughout.
  Mr. Deputy Speaker (Mr. Sydney Irving): The hon. Member cannot talk about retrospection, for he would be anticipating consideration of the Finance Bill.
  Mr. Dobson: I was only relating it to the Motion as it speaks of hardship. Some of the hardship has arisen because the money has already been collected. Of course, I heard the Rulings which were given early in the debate, and I will abide by them. However, I should have thought that the statements made by Sir Henry Wells were most important, coming from a high-ranking official in the Land Commission. If he says that there will be no administrative difficulty for the Land Commission in any changes which might possibly flow later on, I would hope that my right hon. Friend would accept that statement made with some authority and would take it into account when he makes his decisions.
  I remember when the Bill was first debated in the House talking about it to some back-bench colleagues on this side of the House, and they forecast, incorrectly as it turned out, that we would have a series of Land Commission amending orders or Bills in most years because of the complexity of the Bill.

  1063
  The hon. Member for West Stirlingshire (Mr. W. Baxter) said it is a cumbersome Act and a difficult one. I am sure that is true, and I do not think anyone would dissent from that. The important thing is that the changes which the Government propose to make, and for which we have heard not one good word in favour from the other side of the House, will meet the greater part of the problem and hardship cases which have been raised so far, and I am pleased indeed to have this opportunity of saying to the Government that I am delighted that the changes are to be made.
  I think that the Motion is, therefore, ill-balanced and ill-conceived in that sense, and I shall vote against it.
  8.55 p.m.
  Mr. Donald Williams: We have heard from both sides of the House an indictment of what the Land Commission has done in terms of betterment levy. We have also heard that most people welcome the rather belated move by the Government to modify the errors which have been committed.
  I want to take as my theme the cost of land for development. I am not talking of the innocent person of small means who has suffered hardship, but of people who know about the value of land, and there is no question that the operations of the Land Commission have substantially increased the cost of a house purchased by an individual.
  To give a simple illustration, a house sold for £5,000, which is purchased on a mortgage at the generous rate of interest of 8 per cent. per annum, which is a most unusual figure today, would cost in capital and interest, if the mortgage were repaid by half-yearly rests over 20 years, £10,105. The largest ingredient in the purchase of that house is interest, which is £5,105. The next largest item would be the house, built at a cost of between £3,500 and £3,750. The small plot of land upon which it stands will have cost between £1,250 and £1,500.
  These figures were given to me over the weekend by a reputable builder. In his opinion the increase in the cost of land due to the betterment levy is between £300 and £500. It is not the fault of the builder; he is producing a
  1064
  good product very cheaply. The additional cost is solely due to the operation of the levy, and this makes life difficult for people who want to buy houses.
  The nub of the argument tonight would have been in a discussion of retrospective legislation. On the debate on the Budget Statement, mine was the first voice to be raised requesting retrospective legislation in this context, but all that I can do now is to say that I think that such action would be correct.
  Arguments from this side of the House have repeatedly been based on the contents of postbags which have been filled with complaints and on correspondence in newspapers dealing with cases of hardship and injustice. I hardly dare mention to the Minister that when the opportunity came I intended to bring forward the case of a Mrs. Pierson, who had a small plot of land upon which stood a derelict cottage which had to be pulled down at a cost of £93. She had to spend £28 on professional fees, and betterment levy of £40 was raised upon her. The result was that out of the £200 she received for the sale of this small piece of land she was left with only £39. This is a ridiculous state of affairs. Strangely enough, the piece of land adjoining hers was sold in similar circumstances for £400, and on that land a further betterment levy of £110 was raised. The land was not used for a dwelling-house, but for a car park space for the local Liberal club.
  I have a third case in a different bracket which may be of interest to the House. This concerns a man and his wife purchasing a small bungalow with a large garden. The family increased until there were five children, and they had to move out of the two-bedroom bungalow. The parents sought to purchase an old house with a sufficient number of bedrooms and, in the process to sell their own house. They were warned by their legal advisers upon the sale of the house that betterment levy might be exigible.
  The builder or the purchaser therefore got in touch with the local office of the Land Commission and, in consequence, wrote a letter to my constituents stating that according to his information no betterment levy would be charged. My constituents therefore sold their small bungalow for £3,000 and put the whole

  1065
  of the proceeds into accommodation large enough to take their family, using every penny. The next thing they knew was that they had a demand for £276 and they had not a penny to pay it with.
  These are difficulties which many hon. Members have experienced. There is no question but that the pressures brought upon the Government by many hon. Members have produced this first step towards rectifying these injustices.
  9.1 p.m.
  Mr. J. E. B. Hill: It seems to me that in bringing in complicated legislation in this and the earlier Parliament the Government have made their task much more difficult by never having a satisfactory de minimis rule. We saw that in connection with the Finance Acts and the Transport Act. In the Land Commission Act the net chosen had such a small mesh that inevitably many small transactions were caught up in it, virtually clogging not only the administration of the Commission but involving the Ministry, Members of Parliament and professional men in a quite unprecedented stream of complicated correspondence.
  I pay tribute to the action of the Minister—who I acknowledge to be a very humane person, as we know from his actions as Minister of Health—in considering the position broadly. I see the White Paper as evidence of his conclusions about what should be done. None the less, the Motion is very much concerned with the degree of hardship which will remain in future. It would be most undesirable if that were to be the monument to the Minister's administration.
  One bad consequence of the last two years is that it has been difficult for people to change house as a result of the operation of the levy. That fact must operate against this Government's policy of wanting a degree of mobility in the movement of families and labour—and particularly the movement of families from one house to another. In the many and varied cases that we have all had one situation has struck me as particularly undesirable.
  I can give an example from my constituency of South Norfolk. A man and his wife were living in a three-bedroom council house. They owned a small piece of land—as is the case with many people;
  1066
  they may buy part of a field, representing a certain amount of their savings—and they wished to have a house of their own. They vacated the council house, thereby greatly assisting the local authority's housing policy, and sought to sell part of their land to obtain finance to erect a bungalow.
  The land was planned for three plots, and my constituent sold one to his bother-in-law for £500, intending to build on the third lot himself. He found when they measured it out that it was not actually fit for three bungalows. He gave part of the extra plot to his brother-in-law, and, I understand, did not charge him any more. He hoped thereby to have enough money to start building a bungalow for himself with the intention of completing much of the interior work himself. These are poor people. The bother-in-law is a pensioner, a retired agricultural worker. My constituent found that in total he was asked to pay out of his receipts of only £500 no less than £348 in levy. As a result, he is greatly discouraged from his project of building a bungalow for himself.
  I expect we have all had cases of constituents who have bought either in the open market or at arms length, separately advised, single plots of land on which to build houses. I have a constituent, a Mr. Cunliffe, of Diss, who paid £500 for part of a lady's garden on which he wished to build a bungalow. He is not a man of great means, and he had to calculate this on a very tight budget. Unfortunately the district valuer raised a case C assessment against him urging that the property is worth £750 market value, and he has to pay another £100 levy as a result.
  This is very undesirable in the small case C transactions because if the original vendor followed the Government advice at the commencement of the Act and did not seek to add the prospective levy to the asking price the district valuer could always quote the market price which was inclusive of any levy. This seemed from the start to be a great injustice to the purchaser from a vendor who was not seeking to add a levy element in the asking price.
  My constituent, and there are others like him, wrote to me through a solicitor 12 months ago. The Minister and his predecessor have been very courteous in

  1067
  answering complicated inquiries. I have advised such people, and their solicitors have advised them, to appeal on value, as a result of which protracted correspondence is going on on value. Solicitors inform me that one of the difficulties is that the fees of a valuation are not allowable. I quote from the letter from the solicitors:
  "We are afraid that we do not agree with the Minister's statement that valuers fees may be set off against assessment to levy. Paragraph 19 of Schedule 6 to the Act merely says that valuers fees may be set off against market value for the purpose of calculating the levy, which means in fact that only a proportion of the fees are allowed against actual levy. There is one further strange result, which is that if by any chance the market value is reduced on appeal to the base value, so that in fact no levy is payable, there is nothing against which the valuers fees can be set off. It will be seen, therefore, that whatever happens the appellants are bound to be out of pocket.
  Mr. Cunliffe says that at the moment he cannot afford to pay the levy, let alone pay the valuer, so that he is helpless.
  We once more urge that this situation be urgently reconsidered as the whole situation seems to be contrary to the principles of natural justice."
  That exactly summarises the position. It reflects the opinion of professional people in the countryside who are trying to advise small and in some ways simple people on what their rights and obligations are. It has been impossible to get clear rulings. This case, on which the Minister has already written to me twice, is still going on. I cannot help wondering how anyone can be expected to go on incurring costs which he is not allowed to set off against liability at present and will not be in the future unless something is done.
  I beg the Minister to follow up his assessment of the position with action under Section 63, which we believe he can take, to correct the manifest injustices that will remain even if as a result of the White Paper the situation is changed for the future. I cannot believe that it is desirable that there should be scattered about the countryside, and no doubt in towns as well, lasting grievances as to the treatment received from the Government by one householder as against his neighbour, just by the chance of date. It is not for me to try to remove the distrust and dislike of a Labour Government that may spring up in these cases. It is
  1068
  for me and for all of us to try to avoid lasting grievances which fester with the years.
  If one thing has come out of this short debate it is that the sense of the House as a whole is that the situation must not be left in a state of comparative hardship. I strongly urge the Minister to take action to put it right. I wonder how much this will cost. Sir Henry Wells has said that 10 per cent. is all that is yielded by 50 per cent. of the cases. How much is this 10 per cent? It would be a small price to pay to remove a sense of injustice which is persisting in countryside and town alike.
  9.3 p.m.
  Mr. E. Rowlands: The House may be interested to hear the figures relating to the collection of betterment levy in Wales. The Land Commission has a separate commission for Wales. I have been surprised at the few complaints that I have received about the operation of the levy. Although the figures for Wales follow the national pattern, the local and regional Press has not seriously taken up the levy as a major issue of hardship.
  A large number of people have paid small sums, aggravating sums, sums which must have caused some hardship. This has arisen because of the wide net which the levy spreads. Since the operation of the levy, 1,109 people have paid a total of £414,874. If the amendments proposed in the White Paper had been promulgated from the beginning, 1,000 of the 1,109 cases would have been exempted. These 1,000 cases brought in a total of £150,000. This represents £150 per case. These are small figures and do not represent the vicious cases of people speculating and making extortionate profits.
  The justification for the betterment levy is the fact that a small number of people should rightly pay a hefty levy for the enormous development value which results from some of the developments. I hope that my right hon. Friend will persist with the positive work of the Land Commission. In Wales, the Land Commission is not unpopular. We do not have a doctrinaire approach to it, as many hon. Members opposite have. There has been a wholehearted response from the local authorities in Wales, which see this as the answer to their problems in

  1069
  terms of development. The Land Commission in Wales and the local authorities are united in producing positive results which, under the Land Commission Act, will embrace both residential and industrial property.
  Mr. A. P. Costain: Could the hon. Gentleman give some information about the amount of land made available to the local authorities by the Land Commission?
  Mr. Rowlands: Yes. At the moment the Land Commission in Wales is involved in developing a 500 acre site in the Bridgend area which will almost double the size of that town. This is very welcome. It is one of the most imaginative and exciting developments which could happen in the mid-Glamorgan area. It is made possible by the Land Commission Act in consolidating the ownership of that property.
  There are five other areas, where the Land Commission is doing invaluable work in consolidating the ownership of derelict land. Pontlottyn, in Glamorgan, is a classic case where the Land Commissioners are doing valuable work in developing an extensive site.
  In Wales, we see many positive advantages coming from the work of the Land Commission, and the local authorities have responded willingly in co-operation with the Commission. I hope that the positive side of the Land Commission will be allowed to develop and that we shall not see the end of it, as hon. Members opposite apparently do.
  9.17 p.m.
  Mr. Hugh Rossi: The significance of this debate is that it is taking place against a background of innumerable cases of suffering, hardship, misery and anxiety which have come to the attention of hon. Members. No hon. Member hearing of these cases could fail to be moved. No Member could listen without a feeling of burning anger at the injustices done. No Member with a conscience could escape a profound sense of shame that all this has been brought about by legislation passed by this House in our names. Perhaps that is why the benches opposite have been so significantly empty throughout the whole of the debate.
  1070
  The hon. Member for Orpington (Mr. Lubbock), my hon. Friends the Members for Wokingham (Mr. van Straubenzee), for Dudley (Mr. Donald Williams) and for Norfolk, South (Mr. J. E. B. Hill) have given us instances of this kind. It is not only today that we have learned of the bitter experiences. From the very moment that the operations of the Land Commission began to take effect, hon. Members have sought to bring the hardship suffered by their constituents to the attention of the House. As my hon. Friend the Member for North Fylde (Mr. Clegg) said—I thank him for his kind welcome to me at the Dispatch Box—the national Press itself has conducted a campaign to expose these injustices.
  Sir Henry Wells, the Chairman of the Land Commission, has publicly admitted—
  "I have compiled at my offices a big dossier of unfairnesses—the Land Commission Act has some loose and rather nasty ends which need tightening up. I am aware of many cases of unfairness. I can only administer the law as it stands."
  Meanwhile, throughout the country there is a mounting tide of anger against this obnoxious and oppressive legislation which the people want to see swept away.
  How was it that Parliament in all its wisdom came to pass such a law? How can it be that right hon. and hon. Members have lent their names to such a repressive Measure? Let us think back for a moment. When the levy was first introduced, we were told that the object was to return to the community part of the wealth, the development value of land, created by the community. Previously, throughout two general election campaigns, the country had been told that huge profits were being made by speculators in land, forcing up the cost of housing for ordinary men and women.
  That self-appointed conscience of our society, the sole repository of all social justice, the Labour Party, told the nation that it would remedy all that. A new dynamic instrument of Government, the Land Commission, would do away with all these abuses, cleanse us of the unholy profit-making, and our green and pleasant land would become cheap and plentiful. So it happened that the Labour Government unleashed their hounds to hunt down those rapacious land wolves. What did they bring home?—thousands

  1071
  upon thousands of helpless creatures, which the Government proceeded to skin, gut and devour.
  The Government must not say that what has happened was not foreseen. Throughout every stage of the legislation my right hon. and hon. Friends fought the levy line by line. Amendment after Amendment to the Bill was moved to protect ordinary men and women from this monstrous impost. First, we tried to reject it altogether. We failed. Then we tried to exempt owner-occupiers from levy on their houses and gardens. In that we failed. We tried to exempt parcels of land below £5,000 in value. In that we failed. Yet in none of those cases could it be said that a speculator or profiteer would be involved. Throughout, we have said that the price of land could only be forced up by the levy, and that it was adequately confirmed tonight by the hon. Member for West Stirlingshire (Mr. W. Baxter).
  We have suggested alternatives. We proposed that the profits of persons buying or selling land by way of business could be taxed through the ordinary Income Tax and Surtax, and that those who bought for pure investment and then later resold at a profit could be made to pay through the Capital Gains Tax system. If those suggestions had been accepted, the man who sold his home to buy another, the man who made a gift to a relative for development, and the man who made a loss, would have been saved, as he has not been saved so far. But all these entreaties fell upon deaf ears.
  When, on occasion, the meaning of what we were trying to say was heard, we were informed that the Government were benign, that the Minister would act with compassion and understanding, that the Act contained a reserve power under Section 63, to which my right hon. and hon. Friends have referred today, which would enable him to order that no levy should be charged where suitable circumstances existed. The Minister at that time was the right hon. Gentleman the Member for Sunderland, North (Mr. Willey). I return to him the compliment which he paid me earlier this evening. He is known to us for his mildness, for his kindliness and the warmth of his personality. While we might have accepted his personal reassurances, we
  1072
  suggested to him that he might not always remain in office, and what if his successor proved to be flint-hearted, unmoved and obdurate?
  The right hon. Member for Sunderland, North has shown by his speech today that if he had remained Minister this debate need never have been necessary. He would have heeded Sir Henry Wells and introduced retrospective legislation to remove these injustices. The question the House must ask, having been right in half our prophecy, is whether we shall be proved right in the second half of it.
  Will the right hon. Gentleman's successor, by his reply, show himself to be flint-hearted, obdurate and unmoved by the tales of human misfortune he has heard tonight? He may indicate that he is about to make proposals which we may not discuss, but when we can discuss them we shall tell him that they are insufficient, niggardly, a sop to public opinion and no help to those already bruised and injured by the levy. Retrospection is really the urgent answer.
  The levy and all that flows from it is a classic example of the autocratic interference by the State in the lives and activities of ordinary people. It is a logical outcome of the application of Socialist dogma and theory and all the things that we on this side of the House loathe with a burning intensity.
  We have heard of hard cases of injustices, misery and anxiety. But there is another matter which probably is of far greater importance, to which my hon. Friend the Member for North Fylde (Mr. Clegg) referred. It is a situation to which the House must direct its mind. If we make laws which are palpably unfair we create in the minds of the people a deep and bitter resentment. Instead of acceptance of the rule of law, there grows up a climate of obstruction and evasion. If we are seen to act arbitrarily and unfairly, we undermine our very system of government, and the term "Parliamentary democracy" becomes a mockery. We remain without honour and without respect.
  I need to give but one example. Consider the case of Mr. Sweeting, who received the gift of a barn from his uncle and made it a home for his family with his own hands. As a recompense for his generosity, the uncle received a demand for betterment levy of £1,200.

  1073
  After weeks of negotiations this was reduced to £960. Then, conspiratorially, the Minister closeted himself with Mr. Sweeting's solicitor and suggested that the law could be circumvented by the uncle residing in the home for six months. What kind of law is it that imposes a repressive tax of this kind in the first place, and what kind of Government is it where a Minister has to suggest how it can be evaded? Our whole institution of Government is brought into hatred, ridicule and contempt by Measures of this kind.
  I say to the Minister that it will not be enough for him to state that he proposes to alter the law so that a Sweeting case need never arise again, nor that land worth less than the derisory figure of £1,500 will escape the levy. What we say is that he must uproot this law, root and branch. If he will not, then I tell him to go, and we will.
  9.30 p.m.
  The Minister for Planning and Land: (Mr. Kenneth Robinson): I first join in the congratulations offered to the hon. Member for Hornsey (Mr. Rossi) from both sides on his first appearance at the Dispatch Box. It may be that I found some of his language a little exaggerated and one or two of his statements at variance with the facts, but nevertheless he can be well satisfied with his speech.
  The fact that this debate is taking place today even before publication of the Finance Bill, during the Committee stage of which we shall doubtless cover the same ground all over again, illustrates the Opposition's studied determination to he dissatisfied with whatever action the Government choose to take. Sometimes, when listening to the distinctly churlish response to the sweeping changes we propose—at least that was the response until the Opposition redeemed it by one or two favourable references in the last two or three speeches—I am left in doubt whether some hon. Members opposite have even read the White Paper.
  The changes were welcomed generally on these benches, as, indeed, I would have expected. It is true that the first brief reference to the changes we propose was made by my right hon. Friend the Chancellor of the Exchequer in his Budget Statement and that the White Paper itself was issued when he sat down.
  1074
  Naturally, one might have preferred a separate announcement but, since the proposals are to be implemented in the Finance Bill, and because of the consequential changes in the Capital Gains Tax, it was entirely right that the changes should have been first announced by my right hon. Friend in the Budget.
  For some time past the House has been, as I well know, keenly aware of the impact of the betterment levy on those who have secured an increase in the value of their land by obtaining planning permission to develop it. It is not surprising that the House is well informed because already, within the last three months, the betterment levy has been debated on six separate occasions. I think that by now it is well appreciated that, apart from a transitional provision, the betterment levy is only sought where there has been a gain in the form of increased development value to the levy payer. This is not to say that the levy payer—
  Mr. Dance rose—
  Mr. Robinson: I wish to get on.
  Hon. Members: Give way.
  Mr. Robinson: Very well.
  Mr. Dance: Does the right hon. Gentleman believe that there is a gain to someone who has had to pay large legal expenses to be taken account of when he finally sells, as in the case put by my hon. Friend?
  Mr. Robinson: I think that I was right in my reluctance to give way to the hon. Gentleman in the first place. If he will allow me to deploy my argument—
  Mr. Clegg rose—
  Mr. Robinson: I will give way to the hon. Gentleman a little later.
  As I was saying, this is not to say that the levy payer will always have made a cash gain because the gain may have taken the form of his increasing the value of the asset which he holds, but a gain there must certainly have been, and 60 per cent. of that gain will be retained by the levy payer. In the ordinary case of sale of land for development, the main figure in the calculation is the price actually received.
  There are one or two other false ideas about betterment levy which the Government would dismiss. There is the

  1075
  idea that betterment levy was intended to apply only to speculators in land. This, as anyone who took part in the debates on the Bill must know, is quite untrue. There was no intention to discriminate against any section of the community in this way, and I suspect that the expression "land speculator" is one which is always applied to the other man and never to oneself. Be that as it may, it was always intended that the levy should be of general application.
  Nor is there any suggestion in the Act that owner-occupiers, or any other class of private individuals, are exempt from levy, apart from the provisions of Section 61 which were introduced into the legislation for the express purpose of providing a limited exemption for people who had, well in advance, already secured land with a view to building on it for their own or their family's occupation at some time in future.
  Nor does the Act provide, although I accept that some hon. Members opposite at the time of its passage claimed that it should, that transactions below any minimum figure should be exempt from levy. Small realisations of development value may be taken outside the levy provisions by the 10 per cent. which is added to the current use value to determine the base value in a levy calculation, but that is all. With such a comprehensive coverage, it is difficult to see how the claim that the purpose of betterment levy was to tax only those who speculated in land transactions could have originated.
  The scheme of betterment levy provides that levy is charged on the difference between a top figure, which is the market value, the purchase price received in the ordinary case of a sale of land, and a bottom figure called the base value. The base value may be either 11/10ths of the current use value of the land, that is, the value of the land for the purpose for which it is at present used, without taking into account any unused planning permission or prospect of its being granted, or the price paid for the land in a previous transaction if that is higher. There are other allowances which may be taken into account, but, broadly speaking, the levy is assessed on the difference between that top and that bottom figure. That means that of
  1076
  the net development value created by the community through the grant of planning permission 40 per cent. is returned to the community and 60 per cent. remains with the vendor, or the developer of the land.
  It is not surprising to me that this principle is not widely acceptable to hon. Members opposite, but it is a perfectly reasonable proposition that, in circumstances such as I have described, 40 per cent. of the development value created by the community should be returned to the community. I appreciate that, perhaps because they had insufficient professional advice about the incidence of the betterment levy, many members of the public may have spent the proceeds of their sale without taking liability into account.
  Mr. Graham Page rose—
  Mr. Robinson: I am sorry, but I cannot give way now.
  Hon. Members: Give way.
  Mr. Graham Page: The right hon. Gentleman has made that smear on the solicitors' profession before. Solicitors have advised their clients properly and their clients have still lost money through this betterment levy.
  Mr. Robinson: I should like the hon. Gentleman to read some of the letters which I have had alleging hardship and making it perfectly clear that the writers had not been advised that there was a liability to levy when there was a liability. I fully accept that there were others who did not take professional advice. I am certainly not smearing the solicitors' profession. I am stating the facts as they have been put to me in letters from the public and from hon. Members.
  Mr. Clegg rose—
  Mr. Robinson: No, I will not give way to the hon. Gentleman. I have a good deal to say and I have already given way several times.
  Hon. Members: Answer the debate.
  Mr. Robinson: I am answering the debate, and clearing away of lot of misconceptions which still appear to persist on the benches opposite. It was clear on the last occasion, when the Opposition devoted a Supply Day to the Land Commission, that there were many cases in

  1077
  which this sense of hardship prevailed. The House will recall that on that occasion I invited hon. Members to let me know of cases which they received from constituents where the incidence of betterment levy was operating with undue severity.
  This was to supplement the factual information I had already gathered from a close study of the operation of the Act, which I began shortly after taking up my present office. This enabled me, in time, to formulate clear ideas about what should be done to give some relief in future to private individuals of small means, particularly to those for whom a transaction chargeable to levy was an occasion which occurs once in a lifetime. I have considered this problem intensively, and the White Paper "Modifications in Betterment Levy" published on 15th April is the result of that consideration.
  It defines the steps which in the view of the Government, ought to be taken to relieve, by way of concession, the most severe impact of levy. I emphasise that I regard the modifications which are to be made as concessionary, because the White Paper reaffirms the view of the Government that the basic principle of the betterment levy still holds good.
  Sir John Rodgers: Is the right hon. Gentleman aware that the Chairman of the Land Commission says that this should be retrospective?
  Mr. Robinson: I will give notice now that I do not propose to give way again because I wish to deal with the debate in my own time and my own order. Since that problem has loomed large in most speeches, it would be very surprising if I were not to deal with it.
  I would like to deal with the points made by the hon. Member for Crosby (Mr. Graham Page) in his opening remarks. He is far too well informed about this matter to think that the concessions could have been made retrospectively by an exemption Order under Section 63. He knows perfectly well, as Chairman of the Statutory Instruments Committee that this could not have been made retrospective, nor could a Section 63 Order have been made to allow costs of sale as a deduction in assessing levy, as we have done, because this would only give total exemption and there is
  1078
  no power to reduce the levy. The hon. Member made another point about the sales of houses. He must know that the great majority of sales of houses are not liable to levy at all. Only about 1,000 sales of houses have given rise to liability to levy in the two years since the Act has been in operation whereas several hundreds of thousands of houses have been sold in this time. This figure will be much reduced as a result of the changes which we have announced.
  One of the cases in which it was most strongly represented that people were suffering injustice was where they had built a house on a plot of land which had been given to them free or at a very low price to enable them to do this. Although it will be appreciated that it is inherent in a scheme of betterment levy that levy should be charged on people who develop their own land in pursuit of planning permission, thereby increasing the value of the asset which they hold, levy in these circumstances hit the developers, if I may so describe people who build houses for themselves, particularly hard. In many cases, perhaps most cases, they were not counting on having to pay any levy, and they regarded the gift which they had received as a complete gift of land which could be developed. The White Paper recognises hardship in these circumstances, and the second proposal which it makes is that people who build on land which they have been given will be able to do so usually without any liability to levy. In this way the case is completely met.
  Hon. Members: What is "usually"?
  Mr. Robinson: Providing development takes place within a reasonable time.
  The first proposal in the White Paper deals with another form of hardship which was perhaps of more frequent occurrence. This was where a person who owned a small plot of land which was suitable for development decided to sell it and realise the increased value arising from planning permission with the intention of devoting the proceeds to some personal expense, essential repairs to his house, for example, or repayment of outstanding mortgage. There is no doubt that if many people who took this course had been properly advised professionally, they would have realised that the scheme of betterment levy would impose a liability upon them. But unfortunately this

  1079
  often did not happen. The White Paper acknowledges that an exception can be made in future—
  Mr. Clegg: Would the right hon. Gentleman allow me?
  Mr. Robinson: No.
  Mr. Clegg: On a point of order, Mr. Deputy Speaker. Is it fair for the Minister to make attacks on professions without allowing an intervention to explain it?
  Mr. Deputy Speaker (Mr. Sydney Irving): Order. There is nothing that the right hon. Gentleman has done so far that is out of order so far as the Chair is concerned.
  Mr. Robinson: I have already, as the hon. Gentleman knows, dealt with that precise point in reply to an earlier intervention.
  The White Paper acknowledges that an exception can be made in future for these small cases, and we propose that any leviable occasion whether it be a sale or development where the market value does not exceed £1,500 shall be exempt from levy. The money realised will be subject to Capital Gains Tax, but as the Capital Gains Tax does not fall on the owner-occupier, including a person who sells part of the garden of his principal residence, this will mean that there will be total exemption in future in the bulk of this class of case. As the White Paper indicates, this concession will exempt from levy about half the total number of cases under the Act, for the loss of something like 10 per cent. of the levy.
  Some people have advocated special treatment for all owner-occupiers who sell their house, but, as the White Paper states, the Government see no reason why a large house in extensive grounds which is sold for development at a high profit should not be liable to levy, even though it was owner-occupied prior to the sale. However, I was keen to do something to help the owner-occupier of the small or medium-sized house, and the White Paper proposes that where owner-occupied houses up to £10,000 value and a quarter acre in extent are sold or leased, the levy payer will receive an increased base value. This means that a really significant amount of development value in
  1080
  relation to the value of property must be realised before levy becomes chargeable. This can considerably reduce the levy payers' liability to levy and in some cases will remove it altogether.
  A further category of case which was represented as causing injustice, though not, I think, hardship, derived from the fact that the Land Commission Act makes no provision that the costs of sale of land, professional fees for example, may be taken into account in the levy calculation. One of the main reasons was that these costs were already being taken into account for the purpose of assessments to Capital Gains Tax. Experience has shown, however, that in many cases there is no liability to Capital Gains Tax, and since the charge to betterment levy occurs before the charge to to Capital Gains Tax, there are good grounds for changing the law so that these costs can, if the levy payer wishes, be allowed against his betterment levy assessment.
  A further change in the White Paper relates to payment of interest. It was said—and I had much sympathy with the view—that the Land Commission was conferring little benefit in accepting payments by instalments when, at the same time, the beneficiary was running up a liability to interest of quite significant proportions. Interest will not now accrue where the amount of levy assessed is £1,000 or less, so that on all small and medium transactions, the Commission can agree to accept payment by instalments in suitable cases and in so doing will confer a real benefit on the levy payer. The House will know from what is said in the White Paper that four of the five changes which we have announced require amending legislation. Detailed provisions will be made on the Finance Bill—
  Mr. Peter Walker: On a point of order, Mr. Deputy Speaker. Would it not be in the interests of the House if the Minister were to circulate his brief and spend his time replying to the debate?
  Mr. Deputy Speaker: Order. That is not a point of order.
  Mr. R. Gresham Cooke: On a point or order, Mr. Deputy Speaker. Is it in order for the Minister to read his speech and gabble through it?
  Mr. Deputy Speaker: The practice of the House is to allow latitude to Ministers.
  Mr. Robinson: The suggestion was made in some quarters—and this was the burden of much that was said by the hon. Member for Crosby—that the difficulties could have been overcome by giving a discretion to the Land Commission in the assessment of levy. This is not practicable. The essence of a fair tax system is that its provisions should be set down for all to see without widespread dependence on the exercise of a discretion by any arm of the Executive.
  There has been criticism—and this perhaps has been the major criticism in the debate—that the changes we have announced in the betterment levy in the White Paper apply to chargeable acts occurring after 5th April, 1969. This follows the long and well-established rule that general changes in taxation should not be made retrospective and should therefore apply only to liability to tax arising from the beginning of the current financial year. The changes which we have announced are, for the most part, general changes in taxation and there is no more reason why they should be made retrospective than any other change in taxation. This includes the exemption from levy of cases under £1,500 market value.
  I would remind the House that when the exemption for small amounts of capital gains was introduced in the Finance Bill last year there was no retrospection of this exemption back to the introduction of Capital Gains Tax. Nor was there any Opposition pressure campaign for such retrospection. There is no difference in principle between the main change we are proposing and this exemption.
  Mr. Clegg rose—
  Mr. Deputy Speaker: Order.
  Mr. Robinson: I have a certain amount more to say.
  Mr. Eldon Griffiths (Bury St. Edmunds): On a point of order, Mr. Deputy Speaker. It will be within the recollection of hon. Members that the Minister undertook to reply to the debate. How can he possibly be replying to the
  1082
  debate when he is reading a typescript of his speech?
  Mr. Deputy Speaker: That is not a matter for the Chair.
  Mr. Reginald Eyre: On a point of order, Mr. Deputy Speaker. Is it in order for a Minister speaking from a Dispatch Box repeatedly to deny the statement of his predecessor that the levy was not a tax?
  Mr. Deputy Speaker: The hon. Gentleman must not use a point of order to enter the debate.
  Mr. Robinson: I am endeavouring to reply to the debate. I am having considerable difficulty because of a lot of completely false points of order.
  I have said that there would be great difficulty in retrospection for the de minimis exemptions, and new anomalies would be bound to follow retrospection. I need mention only the case of someone who sold land for just over £1,500 and who might well prove to be substantially worse off than if he had accepted a lower price and was then given retrospective exemption. For the future, there is no problem because the seller of the land will know that he may be liable for levy if he sells for more than £1,500.
  The Opposition have made much play about the Chairman of the Land Commission and the remarks about the administrative problems. He said that the problems were not insuperable. But he did not say that he had recommended any course of action. He has always accepted that these are political decisions. He was as surprised as I was to find himself described as being angry either with me or with the Government and to read that there was a rift between us. I assure my right hon. Friend the Member for Sunderland, North (Mr. Willey) that my personal relationships with the Chairman are close and friendly.
  I do not, however, want to put undue stress on the administrative complications. The main issue remains that as regards the general changes in the levy, the governing principle—
  Mr. Lubbock: On a point of order. Mr. Deputy Speaker. The Minister promised that he would deal with all the points which have been raised in the debate. I specifically asked—[Interruption.]
  Mr. Deputy Speaker: Order. The House must allow me to hear the point of order.
  Mr. Lubbock: I asked the Minister specifically to deal with the case of a constituent of mine which I put to him. I hope that he will do so.
  Mr. Deputy Speaker: The hon. Member is using a point of order to enter into the debate.
  Mr. Robinson: The hon. Member knows that individual cases are for the Land Commission to assess. I will look into all the cases which have been raised, but I am not giving an off-the-cuff decision as to whether liability arises.
  I now come to the concession relating to gifts of land. Here a somewhat different situation arises. In one sense, the arrangement is to some extent already retrospective. The chargeable event here is not the gift or the inheriting of the land, but the commencement of building operations. Thus, so long as building has not begun, the concession will operate however long ago the gift of land was made. Thus, the general principle of no retrospection has considerably less force and relevance in these cases.
  There are two further considerations. First, I think it can fairly be said that, unlike the other categories of case where we are eliminating or reducing levy for the future, in the case of gifts what we are doing is not to make a general change in the levy, but a technical modification which is correcting the operation of the Land Commission Act where its working was producing an anomaly. Unlike the other categories of case where we are eliminating or reducing levy for the
  future, in the case of gifts the Act has, I believe, operated in a way that was not entirely foreseen at the time of its passage through Parliament. It is these cases which have seemed to produce undue hardship and have given rise to a degree of attention out of proportion to their number.
  For these reasons, the Government have concluded that the change proposed on gifts can be applied to all chargeable acts and events dating from the introduction of the betterment levy. In the same way, the Regulations we have already made—[Interruption.] Hon. Members opposite clearly do not want to hear this—waiving payment of interest outstanding on cases where the levy assessed did not exceed £1,000 apply not only to the future, but also to all amounts of interest now outstanding on all these smaller cases. We are satisfied that the changes we have proposed to the working of the betterment levy are fair.
  In certain respects, we have done more than our critics were demanding in the various debates which we have had on the levy. I am confident that the changes which we have made will benefit those involved in small and medium-sized transactions and will in consequence render betterment levy a more acceptable way of returning to the community a part of what the community has created.
  Mr. Francis Pym 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:—
  The House divided: Ayes 232, Noes 281.

  Division No. 171.]

  AYES

  [10.0 p.m.

  Alison, Michael (Barkston Ash)

  Black, Sir Cyril

  Clark, Henry

  Allason, James (Hemel Hempstead)

  Blaker, Peter

  Clegg, Walter

  Amery, Rt. Hn. Julian

  Boardman, Tom (Leicester, S. W.)

  Cordle, John

  Astor, John

  Boyd-Carpenter, Rt. Hn, John

  Costain, A. P.

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

  Boyle R. Hn. Sir Edward

  Craddock, Sir Beresford (Spelthorne)

  Awdry, Daniel

  Braine, Bernard

  Crouch, David

  Baker, Kenneth (Acton)

  Bromley-Davenport, Lt.-Col. Sir Walter

  Crowder, F. P.

  Baker, W. H. K. (Banff)

  Brown, Sir Edward (Bath)

  Cunningham, Sir Knox

  Balniel, Lord

  Bruce-Gardyne, J.

  Currie, G. B. H.

  Barber, Rt. Hn. Anthony

  Bryan, Paul

  Dalkeith, Earl of

  Batsford, Brian

  Buchanan-Smith, Alick (Angus, N & M)

  Dance, James

  Beamish, Col. Sir Tufton

  Buck, Antony (Colchester)

  d'Avigdor-Goldsmid, Sir Henry

  Bell, Ronald

  Bullus, Sir Eric

  Dean, Paul

  Bennett, Sir Frederic (Torquay)

  Burden, F. A.

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

  Bennett, Dr. Reginald (Gos. & Fhm)

  Campbell, B. (Oldham, W.)

  Digby, Simon Wingfield

  Berry, Hn. Anthony

  Campbell Gordon (Moray & Nairn)

  Dodds-Parker, Douglas

  Biffen, John

  Carlisle, Mark

  Doughty, Charles

  Biggs-Davison, John

  Carr, Rt. Hn. Robert

  Douglas-Home, Rt. Hn. Sir Alec

  Birch, Rt. Hn. Nigel

  Channon, H. P. G.

  Drayson, G. B.

  dn Cann, Rt. Hn. Edward

  Lambton, Viscount

  Renton, Rt. Hn. Sir David

  Eden, Sir John

  Lancaster, Col. C. G.

  Rhys Williams, Sir Brandon

  Elliot, Capt, Walter (Carshalton)

  Lane, David

  Ridley, Hn. Nicholas

  Emery, Peter

  Langford-Holt, Sir John

  Ridsdale, Julian

  Errington, Sir Eric

  Legge-Bourke, Sir Harry

  Rippon, Rt. Hn. Geoffrey

  Eyre, Reginald

  Lewis, Kenneth (Rutland)

  Rodgers, Sir John (Sevenoaks)

  Farr, John

  Lloyd, Rt. Hn. Geoffrey (Sut'n C'dfield)

  Rossi, Hugh (Hornsey)

  Fisher, Nigel

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

  Royle, Anthony

  Fortescue, Tim

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Russell, Sir Ronald

  Foster, Sir John

  Longden, Gilbert

  St. John-Stevas, Norman

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Lubbock, Eric

  Sandys, Rt. Hn. D.

  Galbraith, Hn. T. G.

  MacArthur, Ian

  Scott, Nicholas

  Gilmour, Sir John (Fife, E.)

  Macleod, Rt. Hn. Iain

  Scott-Hopkins, James

  Glover, Sir Douglas

  McMaster, Stanley

  Sharples, Richard

  Glyn, Sir Richard

  Macmillan, Maurice (Farnham)

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

  Godber, Rt. Hn. J. B.

  McNair-Wilson, M. (Walthamstow, E.)

  Silvester, Frederick

  Goodhart, Philip

  McNair-Wilson, Patrick (New Forest)

  Sinclair, Sir George

  Goodhew, Victor

  Maddan, Martin

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

  Gower, Raymond

  Maginnis, John E.

  Smith, John (London & W'minster)

  Grant, Anthony

  Marples, Rt. Hn. Ernest

  Speed, Keith

  Grant-Ferris, R.

  Marten, Neil

  Stainton, Keith

  Gresham Cooke, R.

  Maude, Angus

  Stodart, Anthony

  Grieve, Percy

  Mawby, Ray

  Stoddart-Scott, Col. Sir M.

  Griffiths, Eldon (Bury St. Edmunds)

  Maxwell-Hyslop, R. J.

  Summers, Sir Spencer

  Gurden, Harold

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

  Tapsell, Peter

  Hall, John (Wycombe)

  Mills, Peter (Torrington)

  Taylor, Sir Charles (Eastbourne)

  Hall-Davis, A. G. F.

  Mills, Stratton (Belfast, N.)

  Taylor, Edward M. (G'gow, Cathcart)

  Hamilton, Lord (Fermanagh)

  Miscampbell, Norman

  Taylor, Frank (Moss Side)

  Hamilton, Michael (Salisbury)

  Mitchell, David (Basingstoke)

  Temple, John M.

  Harris, Frederic (Croydon, N. W.)

  Monro, Hector

  Thatcher, Mrs. Margaret

  Harris, Reader (Heston)

  Montgomery, Fergus

  Tilney, John

  Harrison Brian (Maldon)

  Morgan, Geraint (Denbigh)

  Turton, Rt. Hn, R. H.

  Harrison, Col. Sir Harwood (Eye)

  Morrison, Charles (Devizes)

  van Straubenzee, W. R.

  Harvey, Sir Arthur Vere

  Mott-Radclyffe, Sir Charles

  Vaughan-Morgan, Rt. Hn. Sir John

  Hastings, Stephen

  Munro-Lucas-Tooth, Sir Hugh

  Vickers, Dame Joan

  Hawkins, Paul

  Murton, Oscar

  Waddington, David

  Hay, John

  Nabarro, Sir Gerald

  Wainwright, Richard (Colne Valley)

  Heald, Rt. Hn. Sir Lionel

  Neave, Airey

  Walker, Peter (Worcester)

  Higgins, Terence L.

  Nicholls, Sir Harmar

  Walker-Smith, Rt. Hn. Sir Derek

  Hiley, Joseph

  Noble, Rt. Hn. Michael

  Ward, Dame Irene

  Hill, J. E. B.

  Nott, John

  Weatherill, Bernard

  Hirst, Geoffrey

  Onslow, Cranley

  Wells, John (Maidstone)

  Hogg, Rt. Hn. Quintin

  Orr, Capt. L. P. S.

  Whitelaw, Rt. Hn. William

  Holland, Philip

  Osborn, John (Hallam)

  Wiggin, A. W.

  Hordern, Peter

  Osborne, Sir Cyril (Louth)

  Williams, Donald (Dudley)

  Hornby, Richard

  Page, Graham (Crosby)

  Wilson, Geoffrey (Truro)

  Howell, David (Guildford)

  Page, John (Harrow, W.)

  Winstanley, Dr. M. P.

  Hunt, John

  Pearson, Sir Frank (Clitheroe)

  Wolrige-Cordon, Patrick

  Hutchison, Michael Clark

  Peel, John

  Wood, Rt. Hn. Richard

  Iremonger, T. L.

  Perclvai, Ian

  Woodnutt, Mark

  Irvine, Bryant Codman (Rye)

  Peyton, John

  Worsley, Marcus

  Jenkin, Patrick (Woodford)

  Pike, Miss Mervyn

  Wright, Esmond

  Jennings, J. C. (Burton)

  Pink, R. Bonner

  Wylie, N. R.

  Jones, Arthur (Northants, S.)

  Pounder, Rafton

  Younger, Hn. George

  Jopling, Michael

  Powell, Rt. Hn. J. Enoch

  Kaberry, Sir Donald

  Price, David (Eastleigh)

  TELLERS FOR THE AYES:

  Kerby, Capt. Henry

  Pym, Francis

  Mr. R. Mr. Elliott and

  Kershaw, Anthony

  Quennell, Miss J. M.

  Mr. Jasper More.

  Kimball, Marcus

  Rawlinson, Rt. Hn. Sir Peter

  King, Evelyn (Dorset, S.)

  Rees-Davies, W. R.

  Kitson, Timothy

  NOES

  Albu, Austen

  Bottomley, Rt. Hn. Arthur

  Crawshaw Richard

  Allaun, Frank (Salford, E.)

  Boyden, James

  Cronin John

  Alldritt, Walter

  Bradley, Tom

  Crosland Rt. Hn. Anthony

  Anderson, Donald

  Bray, Dr. Jeremy

  Crossman, Rt. Hn. Richard

  Archer, Peter

  Brooks, Edwin

  Cullen, Mrs. Alice

  Ashley, Jack

  Broughton, Dr. A. D. D.

  Dalyoll, Tam

  Ashton, Joe (Bassetlaw)

  Brown, Rt. Hn. George (Belper)

  Darling, Rt. Hn. George

  Atkins, Ronald (Preston, N.)

  Brown, Bob (N'c'tle-upon-Tyne, W.)

  Davidson, Arthur (Accrington)

  Atkinson, Norman (Tottenham)

  Brown, R. W. (Shoreditch & F'bury)

  Davies, G. Elfed (Rhondda, E.)

  Bacon, Rt. Hn. Alice

  Buchan, Norman

  Davies, Dr. Ernest (Stretford)

  Bagier, Gordon A. T.

  Buchanan, Richard (G'gow, Sp'burn)

  Davies, Rt. Hn. Harold (Leek)

  Barnes, Michael

  Butler, Herbert (Hackney, C.)

  Davies, Ifor (Gower)

  Barnett, Joel

  Butler, Mrs. Joyce (Wood Green)

  Delargy, Hugh

  Bence, Cyril

  Cant R. B.

  Dempsey, James

  Benn, Rt. Hn. Anthony Wedgwood

  Carmichael, Neil

  Dewar, Donald

  Bennett, James (G'gow, Bridgeton)

  Carter-Jones, Lewis

  Diamond, Rt. Hn. John

  Bidwell, Sydney

  Castle, Rt. Hn. Barbara

  Dickens, James

  Bishop, E. S.

  Chapman, Donald

  Dobson, Ray

  Blackburn, F.

  Coe, Denis

  Doig, Peter

  Blenkinsop, Arthur

  Coleman, Donald

  Driberg, Tom

  Booth, Albert

  Conlan, Bernard

  Dunn, James A.

  Boston, Terence

  Corbet, Mrs. Freda

  Dunwoody, Mrs. Gwyneth (Exeter)

  1086

  1087

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

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

  Parkin, Ben (Paddington, N.)

  Eadie, Alex

  Kerr, Russell (Feltham)

  Parkyn, Brian (Bedford)

  Edelman, Maurice

  Lawson, George

  Pavitt, Laurence

  Edwards, William (Merioneth)

  Leadbitter, Ted

  Pearson, Arthur (Pontypridd)

  Ellis, John

  Ledger, Ron

  Peart, Rt. Hn. Fred

  English, Michael

  Lee, Rt. Hn. Frederick (Newton)

  Pentland, Norman

  Ensor, David

  Lee, Rt. Hn. Jennie (Cannock)

  Perry, Ernest G. (Battersea, S.)

  Evans, Fred (Caerphilly)

  Lee, John (Reading)

  Perry, George H. (Nottingham, S.)

  Finch, Harold

  Lestor, Miss Joan

  Prentice, Rt. Hn. R. E.

  Fitch, Alan (Wigan)

  Lever, Harold (Cheetham)

  Price, William (Rugby)

  Fletcher, Rt. Hn. Sir Er. c (Islington, E.)

  Lever, L. M. (Ardwick)

  Probert, Arthur

  Flstcher, Raymond (Ilkeston)

  Lewis, Arthur (W. Ham, N.)

  Pursey, Cmdr. Harry

  Fletcher, Ted (Darlington)

  Lewis, Ron (Carlisle)

  Rankin, John

  Foley, Maurice

  Lipton, Marcus

  Rees, Merlyn

  Foot, Rt. Hn. Sir Dingle (Ipswich)

  Lomas, Kenneth

  Reynolds, Rt. Hn. G. W.

  Foot, Michael (Ebbw Vale)

  Luard, Evan

  Richard, Ivor

  Ford, Ben

  Lyon, Alexander W. (York)

  Roberts, Albert (Normanton)

  Forrester, John

  Lyons, Edward (Bradford, E.)

  Roberts, Rt. Hn. Goronwy

  Fowler, Gerry

  Mabon, Dr. J. Dickson

  Roberts, Gwilym (Bedfordshire, S.)

  Fraser, John (Norwood)

  McDride, Neil

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

  Freeson, Reginald

  McCann, John

  Rodgers, William (Stockton)

  Galpern, Sir Myer

  MacColl, James

  Roebuck, Roy

  Gardner, Tony

  MacDermot, Niall

  Rogers, George (Kensington, N.)

  Garrett, W. E.

  Macdonald, A. H.

  Rose, Paul

  Ginsburg, David

  McGuire, Michael

  Rowlands, E.

  Gray, Dr. Hugh (Yarmouth)

  McKay, Mrs. Margaret

  Shaw, Arnold (Ilford, S.)

  Greenwood, Rt. Hn. Anthony

  Mackenzie, Gregor (Rutherglen)

  Sheldon, Robert

  Gregory, Arnold

  Mackie, John

  Shinwell, Rt. Hn. E.

  Grey, Charles (Durham)

  Mackintosh, John P.

  Shore, Rt. Hn. Peter (Stepney)

  Griffiths, David (Rother Valley)

  Maclcnnan, Robert

  Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

  Griffiths, Eddie (Brightside)

  MacMillan, Malcolm (Western Isles)

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

  Griffiths, Rt. Hn. James (Llanelly)

  McMillan, Tom (Glasgow C.)

  Silkin, Rt. Hn. John (Deptford)

  Griffiths, Will (Exchange)

  McNamara, J. Kevin

  Silkin, Hn. S. C. (Dulwich)

  Gunter, Rt. Hn. R. J.

  MacPherson, Malcolm

  Silverman, Julius

  Hamilton, James (Bothwell)

  Mahon, Peter (Preston, S.)

  Skeffington, Arthur

  Hamilton, William (Fife, W.)

  Mallalieu E. L. (Brigg)

  Slater, Joseph

  Hamling, William

  Mallalieu, J. P. W. (Huddersfield, E.)

  Small, William

  Hannan, William

  Manuel, Archie

  Spriggs, Leslie

  Harper, Joseph

  Mapp, Charles

  Steele, Thomas (Dunbartonshire, W.)

  Hart, Rt. Hn. Judith

  Marks, Kenneth

  Storehouse, Rt. Hn. John

  Haseldine, Norman

  Marquand, David

  Strauss, Rt. Hn. G. R.

  Hattersley, Roy

  Mason, Rt. Hn. Roy

  Summerskill, Hn. Dr. Shirley

  Hazeil, Bert

  Mayhew, Christopher

  Taverne, Dick

  Healey, Rt. Hn. Denis

  Mellish, Rt. Hn. Robert

  Thomas, Rt. Hn. George

  Henig, Stanley

  Mendelson, John

  Thomson, Rt. Hn. George

  Herbison, Bt. Hn. Margaret

  Mikardo, Ian

  Tinn, James

  Hilton, W. S.

  Millan, Bruce

  Tomney, Frank

  Hobden Dennis

  Miller, Dr. M. S.

  Urwin, T. W.

  Hooley, Frank

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

  Walden, Brian (All Saints)

  Horner, John

  Molloy, William

  Walker, Harold (Doncaster)

  Houghton, Rt. Hn. Douglas

  Moonman, Eric

  Wallace, George

  Howarth Robert (Bolton, E.)

  Morris, Alfred (Wythenshawe)

  Watkins, David (Consett)

  Howell, Denis (Small Heath)

  Morris, Charles R. (Openshaw)

  Watkins, Tudor (Brecon & Radnor)

  Howle, W.

  Morris, John (Aberavon)

  Weitzman, David

  Hoy, James

  Moyle, Roland

  Wellbeloved, James

  Huckfield, Leslie

  Mulley, Rt. Hn. Frederick

  Wells, William (Walsall, N.)

  Hughes, Emrys (Ayrshire S.)

  Murray, Albert

  White, Mrs. Eirene

  Hughes, Hector (Aberdeen, N.)

  Newens, Stan

  Whitlock, William

  Hughes Roy (Newport)

  Noel-Baker, Rt. Hn. Philip (Derby, S.)

  Wilkins, W. A.

  Hunter, Adam

  Oakes, Gordon

  Willey, Rt. Hn. Frederick

  Hynd, John

  Ogden, Eric

  Williams, Alan (Swansea, W.)

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

  O'Malley, Brian

  Williams, Alan Lee (Hornchurch)

  Janner, Sir Barnett

  Oram, Albert E.

  Williams, Mrs. Shirley (Hitchin)

  Jay, Rt. Hn. Douglas

  Orbach, Maurice

  Williams, W. T. (Warrington)

  Jeger, George (Goole)

  Orme, Stanley

  Willis, Rt. Hn. George

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

  Oswald, Thomas

  Wilson, William (Coventry, S.)

  Jenkins, Hugh (Putney)

  Owen, Dr. David (Plymouth, S'tn)

  Woodburn, Rt. Hn. A.

  Jones, Dan (Burnley)

  Owen, Will (Morpeth)

  Woof, Robert

  Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

  Palmer, Arthur

  Wyatt, Woodrow

  Jones, J. Idwal (Wrexham)

  Pannell, Rt. Hn. Charles

  Jones, T. Alec (Rhondda, West)

  Park, Trevor

  TELLERS FOR THE NOES:

  Judd, Frank

  Parker, John (Dagenham)

  Mr. Ioan L. Evans and

  Kelley, Richard

  Mr. Walter Harrison.

  HOUSE OF COMMONS MEMBERS' FUND
  Resolved,
  That one-tenth of the sums deducted or set aside in the current year from the salaries of Members of Parliament under section one
  1088
  of the House of Commons Members' Fund Act 1939, and one-tenth of the contribution determined by the Treasury for the current year under section one of the House of Commons Members' Fund Act 1957, be appropriated for the purposes of section four of the House of Commons Members' Fund Act 1948.—[Mr. Selwyn Lloyd.]

  EGGS (GUARANTEED PRICES)
  10.13 p.m.
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): I beg to move.
  That the Eggs (Guaranteed Prices) Order 1969 (S.I., 1969, No. 401), dated 17th March, 1969, a copy of which was laid before this House on 26th March, be approved.
  The purpose of the Order, which is otherwise a consolidating Order, is to give effect to three changes in the basis of the subsidy payments to the Egg Marketing Board. The first change is the introduction of a standard quantity. This follows on the Government's decision to put an end to the stamping of subsidised eggs. This decision was welcomed by hon. Members opposite as a useful step forward when we were debating the Eggs (Protection of Guarantees) Order, 1969, on 20th March.
  Other things being equal, however, the removal of the stamp could be expected to lead to an increase in the number of eggs passing through the packing stations and thereby attracting subsidy. At the time when my right hon. Friend announced the decision to remove the stamp, therefore, he made it clear that it was our intention, in order to safeguard the interests of the Exchequer, to set a limit to the total number of eggs on which subsidy would be payable.
  Paragraph 4(2) of the present Order therefore makes provision for the introduction of a standard quantity, and paragraph 8 provides for the scaling down of the unit rate of subsidy in proportion to any excess of throughput over the standard quantity. While eggs remain within the agricultural guarantee arrangements the amount of the standard quantity will fall to be determined by Ministers each year in the light of the conclusions reached at the Annual Review.
  We announced in the 1969 Annual Review White Paper that the standard quantity for 1969–70 would be 651 million dozen. This is the same as the throughput of first quality eggs in 1967–68, which was the biggest throughput in any of the last three years.
  The two other changes brought about by the present Order relate to the operation of the profit and loss sharing
  1090
  arrangements between the Exchequer and the Egg Board. Under the present guarantee system which was introduced in 1963 the basic rate of subsidy payable to the Egg Board is the difference between the guaranteed price and an indicator price representing the Government's estimate of the price which the board can expect to receive for its eggs over the year as a whole in a market which is adequately but not over-supplied.
  A profit sharing arrangement comes into effect when the board's average selling price for the year is above the indicator price; the Exchequer receives two-thirds of the excess. The effect of paragraph 7(1) of the Order is to bring this arrangement to an end after 1969–70.
  Side by side with this profit-sharing arrangement there is a loss-sharing arrangement which applies when the board's selling price for the year falls below the indicator price. A proportion of the shortfall is then made good by the Exchequer. This was designed from the beginning as an interim arrangement, and under the timetable originally fixed in 1963 it was due to be finally phased out after 1968–69.
  In 1966 we extended this period by two years, and under this the Exchequer contribution in 1969–70 would have been 20 per cent., falling to 10 per cent. in 1970–71. We have decided to accelerate this timetable by one year so that the Exchequer contribution will fall to 10 per cent. in 1969–70. The broad effect of the Order, therefore, is that subject to the operation of the standard quantity the subsidy after this year will be put on to a flat rate basis, since the basic subsidy representing the difference between the guaranteed price and the indicator price will cease to be affected by profit or loss-sharing arrangements. At the same time the guaranteed price itself will no longer be subject to adjustment between Annual Reviews in the light of changes in feed costs since, as we announced in the 1969 Annual Review White Paper, the feed formula for eggs is being abolished from the beginning of the 1969–70 guarantee year. This was done administratively and did not involve any amendment of the Guarantee Payments Order.
  The changes which are being made in the guarantee arrangements for eggs follows from the conclusions on future egg

  1091
  subsidy and marketing arrangements which the Government have reached in the light of their consideration of the Report of the Reorganisation Commission. The present Order, however, is a short-term Order since it is directly concerned only with the subsidy payments to the Egg Board.
  The longer-term proposals which were outlined by my right hon. Friend in a comprehensive statement in the House on 22nd January provide for the payment of the subsidy after 31st March, 1971, to a new central organisation for eggs.
  Mr. Speaker: Order. The hon. Gentleman must not go into the longterm proposals on this Order.
  Mr. Hoy: No, I did not want to do so but in case the House was wondering how they would be affected, I thought this was the way to do it. However, if I am out of order in going into that I shall proceed to the next part.
  These proposals are designed to facilitate the establishment of a free market for eggs, which we consider to be the right objective in the changed circumstances of the industry. The House will have the opportunity of considering our longer-term proposals as a whole when we come to introduce the necessary enabling legislation, which we intend to do as soon as possible. In the meantime we have asked the Egg Board to continue with its present functions until 31st March, 1971, and during this period the subsidy will continue to be paid to the board.
  The present Order sets out the basis of the calculation of the subsidy payments to the board.
  10.20 p.m.
  Mr. Peter Mills: I may as well say at the outset that it is difficult to debate the Order save in the wider context of the Government's proposals for the future of the egg industry.
  Mr. Speaker: Order. I appreciate the fact that the hon. Gentleman is at the Front Bench. He must, however, debate the Order without debating the wider context. To do so is a temptation to every hon. Member.
  Mr. Mills: I know it is, Mr. Speaker, but I thought that I should
  1092
  say at the outset how difficult it is to speak on an Order like this when there are serious policy decisions involved.
  As we consider the Order we are beginning to get more and more unhappy about the Government's attitude to the egg industry. I shall seek to show the reasons for this. We are watching with keen interest the Government's proposals, none more than those contained in the Order. Much needs to be done in the industry after the reorganisation reports. The Government's present attitude needs some explaining. Just what are they playing at. We want to know. The industry wants to know. I believe that there is, even with the Order, a certain amount of confusion and alarm, to say the least.
  The policy of the Conservatives on this issue is clear and definite. However, even with the Order there are some big question marks, and we need answers from the Government. We would hope to go to the Minister of Agriculture, Fisheries and Food for information yet on 31st January he said:
  "The abandonment of guaranteed prices and the introduction of target prices"—
  which is what is happening here—
  "could well turn out to be a move in the other direction towards greater uncertainty for farmers."
  Yet the title of the Order is
  "Guaranteed prices and Assured Markets."
  So the Minister introduces an Order which is the exact opposite of what he said on 31st January. We should have some explanation of how he could have suddenly changed, because only a few weeks before the introduction of the Order he had said that the reduction of guarantees was wrong.
  We have only to look at the briefs given to us by the National Farmers Union to show how concerned that organisation is at what is going on. I say again that even with the Order the industry is confused. There is a certain amount of distrust in the industry of the Government for bringing in an Order like this without certain safeguards.
  The Order could have a serious effect on consumers. This is the most important aspect. It could certainly mean an increase in egg prices. That is very odd after all that the Government have said. The Order will bring about the start of the removal of the subsidy, which is

  1093
  bound to increase the price. Yet the consumer has nothing in return. Indeed, the Order without other measures could allow in further imported eggs to the detriment of the consumer.
  The opening paragraph of the Order refers to the Minister of Agriculture, Fisheries and Food and the Secretaries of State responsible for agriculture in Scotland and Northern Ireland. The defects of the Order will be considerable in these remoter areas as the guaranteed prices are slowly removed. I wonder whether the Minister is concerned about the serious effect the Order could have and whether he has planned to cover the point. Make no mistake, this Order is the start of a guaranteed price running-down operation as the Government slowly withdraw these guarantees, and this will have a considerable effect on the remoter areas. They have problems of distance, and the social implications could be serious. This Order refers to "assured markets". Those words have a very hollow ring in an Order which withdraws the guaranteed prices without providing any other aid.
  Article 3 of the Order says:
  "This order shall apply to such … eggs … as conform to the standards and conditions specified by the Ministers …"
  I only hope that the Minister requires a rising standard, for quality must be the key word in future egg production. The housewife will demand it, and we hope that with branded eggs the supermarkets will be able to sell on quality. I certainly support Article 3, and I hope that the standards will rise.
  Article 4 refers to
  "normal imports into the United Kingdom."
  I should have thought that we could do without those words in the Order, because I do not believe imports are needed. If we had proper import control, there would be no necessity for those words in the Order. Imports are usually heavily subsidised. How can there be an assured market without a minimum import price scheme? I do not see how this can be done, especially as the guaranteed prices are slowly to be withdrawn. It is, therefore, vital that the should be included.
  As to the effect of this progressive reduction in guaranteed prices to the egg industry, in normal circumstances higher
  1094
  United Kingdom prices will attract a greater volume of imports, because we are still the only European country with an open general licence for eggs. The progressive reduction of this subsidy must therefore be tied to a system of effective import control.
  If the Minister is withdrawing these guarantees, many other things ought to be done to help the industry, supported by a form of organisation which the Minister has mentioned. The Order does not tell us enough. Farmers will be left in a vacuum. The future of the egg industry depends on various other forms of help and advice and, indeed, co-operation.
  The Order is the start of a phasing-out operation of guaranteed prices, including the abolition of the feed price formula and the phasing-out of the present profit and loss sharing arrangements. It also brings in a standard quantity for eggs, but it puts nothing in its place; there is no real transitional period of adjustment and advice. There are no minimum import prices; there is no Government participation in support buying. For this reason the industry is very concerned. Unless the Minister is prepared to adopt some of the measures which I have mentioned tonight, the industry will be in a very difficult position in the years that lie ahead.
  10.30 p.m.
  Mr. R. J. Maxwell-Hyslop: Naturally, I am concerned not only about what the Order says but about what is meant by the words used. One might almost be forgiven for thinking that it was about wool, so woolly is its phrasing. Article 4, guarantee prices and payments, is critical. I defy anyone to say what paragraph (1) (b) means, unless he be a psychiatrist looking into the Minister's mind—
  "an indicator price, being an estimate by the Minister of the average price to be received by the Board on the sale of hen eggs or duck eggs, as the case may be, on the basis that production thereof is sufficient but not excessive having regard to the national demand therefor and, in the case of hen eggs, to normal imports into the United Kingdom during the year of hen eggs produced outside".
  The critical words there are "normal imports into the United Kingdom". What does that mean? Does it mean normal in relation to the previous year, to the previous two years, to the previous five years? Does it mean normal in relation to the balance between domestic

  1095
  supply and domestic demand? What on earth does "normal" mean?
  Why does not the Minister put into the Order a specific term which means something definitive? It is the volume of imports which is critical to the effect of the Order upon the entire producing industry in this country. If the Minister says, "'Normal' means what I want it to mean when the moment comes to mean it"—which is what I fear he does intend—the Order presents the entire industry with utter uncertainty. It is sheer humbug to label the Order, "Guaranteed Prices and Assured Markets" when there is no definition of the market and no assurance that it will not be flooded by imports.
  What "normally" happens, and what has been happening "normally" for many years, is that far more eggs have come into this country than we need. In a country which produces more than 99 per cent. of its own domestic fresh egg consumption, it is an act of folly as a matter of general policy to have any fresh eggs imported at all. When Ministers rush round Poland on jaunts, they are apt, just before they leave, to say that they hope, for instance, that Anglo-Polish trade will be increased as a result of their visit, despite the fact that most of what the Poles want to send us causes great embarrassment to our own industry and involves expenditure of foreign currency for something which we do not need.
  Mr. Speaker: Order. The only Polish trade to which the hon. Gentleman may refer is in imported eggs.
  Mr. Maxwell-Hyslop: Yes, Mr. Speaker. I shall pretend that we do not have to pay for the pork products which we receive from Poland, but undoubtedly we have to pay for the eggs. This is something which has acted against the Exchequer in the past under the loss-sharing arrangements and against agriculture itself in two ways, (a) by depressing its earnings, and (b) by depressing its creditworthiness.
  Everyone knows that if egg production is to continue on a profitable basis in this country, it will require greater capital investment. That capital can be raised only on the basis of what the Order so
  1096
  dishonestly purports to provide; that is, the offer of an assured market. Therefore, the first thing I ask the Minister to define very clearly is what he considers "normal imports" to be.
  I particularly ask the Minister to answer categorically the following question. If we are within 2 per cent. of producing as many shell eggs as we consume as a nation, does he agree with the proposition that normal imports should be zero? He surely cannot deny that it is well within the industry's capacity to produce every egg the country needs. I hope that he can tell us that the interpretation of the Minister of Agriculture, Fisheries and Food, and the Secretary of State for Scotland and the Home Secretary, whose Seals also appear on the Order—if by some freak there is agreement between three members of the Cabinet on this point—is that in such conditions "normal imports" mean no imports of fresh eggs. That would go some way to meeting the title of the Order, "Guaranteed Prices and Assured Markets". If he cannot give this undertaking, the title is grossly misleading, and, worse, the Order is grossly inadequate.
  We are trying to get a balanced agriculture in this country, and eggs are still part of balanced agriculture. It is true that egg production is tending to become more and more specialised because of the economies of scale. Incidentally, in the same measure we are becoming very much more vulnerable to disease. We all know that vulnerability goes with increase in size. But until the Minister has defined the meaning of
  "… sufficient but not excessive having regard to the national demand therefor and, in the case of hen eggs, to normal imports into the United Kingdom …"
  nobody here really knows what we are debating.
  The elasticity of prices is so great that if the Minister gets his interpretation of that wrong by 1 per cent. collapse of the market could result. We know this perfectly well from experience.
  I turn to article 3, headed "Guarantee standards", which says:
  "This order shall apply to such hen eggs and duck eggs respectively as conform to the standards and conditions specified by the Ministers from time to time in the light of their conclusions from a review held under section 2 of the Agriculture Act 1947."

  1097
  When was such a review last held, and when will the next be held? This is of some importance, because the Minister can apparently alter the standards and throw the whole industry into chaos at his own discretion without a fresh order. I would be greatly reassured to learn that I am wrong in that, but I read "from time to time" as the most unspecific timing possible. If the Minister will tell us how the phrase has been interpreted in the past, how often this has happened, that will at any rate give us a basis for extrapolation. If he will give us an undertaking that he will not alter the guarantee standards without first making a case to the House for it, that could also be a matter for considerable reassurance to us.
  The Minister must realise that the industry, now left so desperately short of capital by a ludicrously inadequate Price Review, is suffering another hard blow—
  Mr. Speaker: Order. I anticipated this. We are not debating the Price Review on this Order. The hon. Gentleman knows that.
  Mr. Maxwell-Hyslop: Yes, Mr. Speaker, but eggs are one of the Price Review commodities and farm incomes are necessarily affected because many egg producers are farmers.
  Mr. Speaker: Order. I assure the hon. Gentleman that Mr. Speaker understands the Price Review and that it includes eggs.
  Mr. Maxwell-Hyslop: I am most concerned, without going into the Price Review aspects, about the effects the Order will have on farm incomes, so I ask the Minister to give specific answers on these matters of interpretation under Article 4(1)(b) and the history of the reclassification of the grading standards as provided for in Article 3.
  Why do the Government think it necessary to include Article (3) in the Order? Is it because they have it in mind to alter the guaranteed standards in the near future? Or is this just a reserve power for the Minister which has not been used in the past which he wants to have up his sleeve? Or is he planning to do it at some finite period in the future? If he is going to alter the guarantee standards, it is necessary that the industry
  1098
  should have the maximum amount of prior warning.
  There may be a good case—and I am not saying that there may not be—for exercising the powers under Article (3), but, if there is, the maximum amount of warning should be given to the producers and the hon. Gentleman should undertake to give the House publicly his explanation of why it is necessary to alter the standards. If he can give us the undertakings I have asked for under Articles 3 and 4, I shall be much happier to allow the Order to go through without a Division, but it is necessary to warn the Minister that he cannot take this for granted.
  10.43 p.m.
  Dr. Reginald Bennett: I cannot claim to be an expert on the marketing of eggs, as everyone else who has spoken in the debate seems to be, but my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) said that he found it difficult to comprehend the meaning of the Order and that he thought it required the intervention of a psychiatrist. Well, this is it.
  I find myself even more confused about the Order than my hon. Friend can be because, if I am not mistaken about the symptoms I have observed so far, we have Socialist Ministers proclaiming with pride that they are bringing us to a free market in eggs and we have representations sent by the N.F.U., of which possibly minor fragments may have been heard in the speeches so far, which is strongly in favour of a further protection of the industry. This, to me, as a mere psychiatrist, seems to be so bizzare as to verge on the schizophrenic.
  Mr. Speaker: Order. The hon. Gentleman must keep Freud out of it.
  Dr. Bennett: I am "a-Freud" I was straying a little, Mr. Speaker. However, with even profounder respect for you after that, I shall go on to say that it is from my constituency that a number of eggs producers have come who brought about, to a large extent, the opening of the free market in unsubsidised eggs and, therefore, I have a constituency interest and am well disposed to see what can be done to assist the free market in eggs. I am not disposed to see the continuation of a completely protected market. I see the sense of at least one of the misgivings

  1099
  voiced today—that about the possible penetration of our market by imports. I therefore add my voice to those who ask for a good deal more enlightenment about what a normal extent of importing of eggs is likely to be.
  10.45 p.m.
  Mr. W. H. K. Baker: The Explanatory Note to the Order says:
  "This order, which comes into operation on 30th March 1969 …".
  Unless I am mistaken, that is 29 days ago. In other words, the Order is operative even before we discuss it. If for any reason we vote against the Order and it is thrown out, what would be the position if the Order has been in operation for 29 days?
  It refers specifically to Scotland. The opening lines say:
  "The Minister of Agriculture, Fisheries and Food and the Secretaries of State respectively concerned with agriculture in Scotland and Northern Ireland …".
  What does the Minister expect the effect of the Order to be on the egg-producing industry in Scotland? He said that for 1969–70 the standard quantity for egg production, which I took to be for the whole of the United Kingdom and not just for England and Wales, was to be 651 million dozen eggs per annum. What proportion is expected to be produced in Scotland? I have to tell him, if he does not know it, that, because of the antics of his Ministry consequent on and before the Minister's statement of 22nd January, confidence has been undermined throughout agriculture, not least in the egg producing areas.
  Mr. Speaker: Order. The only antics of the Minister in which we are now interested are those in this Order which is concerned with the guaranteed price of eggs.
  Mr. Baker: Confidence in agriculture has been undermined by various Government pronouncements, so much that the level of production, particularly in Scotland, is liable to be lowered. I should like the Minister to say what proportion of the standard quantity is expected from Scotland. Can he honestly say that the amount expected will be realised?
  The Minister mentioned the Exchequer contribution in the profit and loss sharing arrangement for 1969–70 being reduced by
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  10 per cent. If further pronouncements are taken into account, that means that the profit and loss sharing arrangement will completely end. I was not clear from what the hon. Gentleman said whether that is to be the case, and perhaps he will tell us more about that.
  The abolition of the feed formula has contributed to the loss of confidence in egg producing areas. In the short term, if subsidy payments are to be withdrawn from the Egg Board, farmers in the remoter areas are bound to be influenced, because they are not convinced by anything the Government have said, or by anything in the Order, that the industry can continue without these subsidy arrangements.
  I refer particularly to my part of the world, which is extremely remote. The normal level of imports is a most important part of the Order. It is mentioned in Article 4(1)(b) and a few lines below. We are about 97½ per cent. self-sufficient in egg production, and if that 2½ per cent. is made up sensibly, obviously imports will be allowed in during a time of poor production. No one would quarrel with that, if we were to keep it at that level, at that time. What I fear is that with the abolition of the Egg Board, consequent upon this Order and the Minister's announcement, the level of imports will increase.
  This will further add to the detriment of the egg industry in the more remote parts of the country. In my part of the country, egg production has been the pin money for the farmer's wife. This Order, and other actions that the Government have taken, and are taking, means that the loss of this small amount of money, not a great amount which would have a vast effect on the economy of any one farm, will create genuine hardship in a large number of cases to farmers' wives in these areas.
  Article 4(2) says:
  "In respect of each year …"
  a standard quantity shall be determined for hen eggs. If it is to be determined for hen eggs, why not for duck eggs as well? Is the Minister convinced that it is necessary for duck eggs? Perhaps he would explain this.
  Mr. Speaker: Order. The hon. Gentleman knows that he cannot amend the Order. Mr. Baker.
  Mr. Baker: I have sat down.
  10.53 p.m.
  Mr. Michael Jopling: The Minister said that he expected the British Egg Marketing Board, which has done a very good job in general over the years, to continue until 1971. With the background of the policy which the Government have laid down, of which this Order is only a part, does he not feel that there is a danger that this will change the atmosphere of egg marketing? The authority of the Board is likely to fall away severely in those small areas dealt with in the Order, because everyone will know that it is to wind up, and its authority will be reduced.
  It is important that the Minister should tell us what the effect of the Order will be on a number of things. What effect on producers will the phasing-out of the guarantees have? Is there not a great danger that it will hit the small producers very hard? What has he to say about that? What effect does he think the introduction of standard quantities of eggs will have on the incomes of egg producers, particularly the small egg producers?
  To repeat the question which was asked by my hon. Friend the Member for Torrington (Mr. Peter Mills), what effect will the Order have on egg prices charged to housewives in the shops. The Government are making great play in another context about the effect on food prices on housewives. We must know what will be the effect of this Order on prices in the shops.
  Mr. Paul Hawkins: They do not know.
  Mr. Jopling: My hon. Friend says they do not know, but I cannot believe that they would come twice to the House not knowing the answer, as, of course, they did last week over the National Insurance contribution.
  I must come to the point which has been made by a number of my hon. Friends about import control. The Government in the past have said that part of their strategy on eggs, a strategy of which this Order is part, is to control imports through minimum import prices. Paragraph 4 of the Order says that the indicator price can be altered if the level of imports has altered.
  1102
  We must know why the Government have thought fit to bring in this Order which does so much without at the same time completing their strategy. The Government originally announced their policy in one statement. But here we have the strategy coming out in bits and pieces, in dribs and drabs. What is the reason? The Minister must explain it to us when he comes to reply.
  I wish to ask two more detailed questions. One is in regard to paragraph 9. where one sees
  "… the Minister may make available by way of advance to the Board such sums as he may from time to time think fit."
  May we be told what that means, and whether the Minister has in mind some very great change about which he has not told us? What ceiling is there on these sums of money which the Minister may make available to the Board? Parliament should not pass these Orders without a clear explanation from the Minister. I did not hear in the Minister's opening speech, unless I was not listening at the time, any reference to this particular matter.
  My last point is to ask the Government exactly what is their strategy over these guarantees. The new pattern which the Government are evolving appears to be that when any one form of production becomes self-sufficient, such as eggs in this Order, we are presented with this type of policy and have to debate Orders in which the whole guarantee structure is thrown out of the window. There are those in the House who think that there are good reasons for changing the system of support and guarantees. But if we are to have that change without the guarantee of import control, with which this Order does not deal at all, the Order is a dangerous weapon indeed, and is something which must be questioned most carefully.
  10.58 p.m.
  Mr. Patrick Wolrige-Gordon: I am not happy about the Order, and for very much the same reasons which have already been adduced by a number of my hon. Friends in the debate, particularly in their concern about the effect which it may have in the way of hardship for producers, particularly the small producers, and especially the producers in remote parts of the country, like North Scotland, who do not have

  1103
  any assistance. There is a danger of hardship to producers in the Order, and they, too, will be as sceptical of its Title when it refers to an assured market as was my hon. Friend the Member for Torrington (Mr. Peter Mills) in so ably opening the debate from the Front Bench on this side of the House.
  Obviously, imports are the vital question. So far as I am aware, we have produced 97 to 98 per cent. of our eggs for a considerable number of years, and from the technical point of view there is obviously no reason why we should not produce 100 per cent. at any time. It is certainly within the capacity of our industry to produce 100 per cent. of our eggs at any time. There is no indication in the Order that the settlement of the question of imports will satisfy our egg producers.
  In Article 4(2) the Order states that
  "In respect of each year a standard quantity shall be determined for hen eggs."
  Standard quantities have not had a very happy history in our agricultural experiences over the last few years. No Government can be asked to produce more of a standard quantity than 100 per cent. of the market, but I hope that we shall have that assurance at least as a result of the Order.
  11.2 p.m.
  Mr. R. H. Turton: In listening to the Joint Parliamentary Secretary, I found it hard to see how the Order fitted into the expansion programme announced by the Minister in November. As I see it, it all depends on Article 4 and, as my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has said, normal imports. At the moment, the industry saves something like £176 million in imports. I hoped that it would save more under Government policy, but it appears from Article 4 that the result will be very different.
  My first question, therefore, to the Joint Parliamentary Secretary is to ask why he used the phrase "normal imports" rather than "estimate of imports". The Minister must know what he expects the imports to be in any year as a result of any policy that he may pursue within or without the Order. Here, however, he has tied himself to
  1104
  normal imports, presumably the imports of the last two years.
  The position becomes even more difficult because the Minister then makes the proviso that if the normal imports are more than he expects he will lower the indicator price. What will happen if the normal imports are less than he expects? Will he then raise the indicator price? The Order appears to make no provision for that. Surely it should. Therefore, the Order is incomplete.
  My last point is less important, but it concerns something which is not clear from the Order. Article 3 provides that
  "This order shall apply to such hen eggs and duck eggs respectively as conform to the standards and conditions specified by the Ministers".
  Does that apply merely to eggs which are home produced, or does it also apply to hen eggs produced elsewhere? If it applies to hen eggs produced outside this country, clearly the normal imports are of little value, because Polish eggs will not conform to the specification for guarantee standards. It should be made clear in the Order that Article 3 applies merely to hen eggs produced in this country and not to hen eggs produced elsewhere. I ask the Minister to consider this.
  You said earlier, Mr. Speaker, that it is not in our power to amend the Order. That is unfortunate, because it is so badly drafted that we should like to amend it.
  11.5 p.m.
  Mr. Alick Buchanan-Smith: I should like to follow my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) in saying that I also cannot see how this Order fits the context of the statement made by the Minister of Agriculture, Fisheries and Food last November about the expansion of agriculture. If we are to have expansion we must have confidence, and, as far as I can see, this Order will not engender confidence in the poultry industry.
  I would reinforce strongly what my hon. Friend the Member for Torrington (Mr. Peter Mills) said, that it is absolute folly to introduce an Order like this without assurances about the minimum import prices of eggs. That causes great concern in the industry, which is also

  1105
  wondering what the attitude of the Government is towards marketing boards in general. People are wondering if this is the beginning of an attack on producers' marketing boards in general.
  I refer specifically, as did my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), to paragraph 4 and what constitutes "a normal level of imports". My hon. Friend the Member for Banff (Mr. W. H. K. Baker) mentioned that 2½ per cent. of shell eggs consumed in this country are imported. That, by itself, does not seem in absolute terms a desperately large quantity. I am not concerned about that normal level in terms of absolute quantity if it is phased over a year; but in recent years we have often seen imports concentrated in a very short period of weeks, knocking the bottom out of the egg market for our producers, which is a "normal level of imports" I for one am certainly not prepared to accept. I may accept 2½ per cent. if it is phased reasonably over the year as a whole. I certainly do not accept that as a normal level if it means imports are to be concentrated in a short time, knocking the feet from under our producers in this country.
  Without wanting to go into it in detail now, I would like also to follow what my hon. Friends have said about what will be the effect of this Order on producers in the remoter areas. The North-East of Scotland has been mentioned in particular, where we have many egg producers. I am extremely anxious to know what the effect of this Order will be on them. They are anxious, and I should like the Minister to do something tonight to allay some of the very genuine anxiety which is felt in my part of Scotland. In particular, I would like to know what he proposes to do to relieve the anxiety of those producers concerned with co-operative marketing, because producers in the remote areas have until now had the full protection of the guaranteed price, and I am very anxious to know what the future holds for them.
  11.9 p.m.
  Mr. Paul Hawkins: I wish to follow what my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) has said about the lack of confidence which this Order will engender in the industry, but
  1106
  first I should like to raise two minor questions.
  The Order starts by saying
  "The Minister of Agriculture, Fisheries and Food and the Secretaries of State respectively concerned with agriculture in Scotland and Northern Ireland"
  and it is signed by the Minister of Agriculture, the Secretary of State for Scotland, the Home Secretary and other people. I do not know whether this Order applies to Wales, because I understand Wales has a Secretary of State. If it does not, perhaps the Minister could give some reason why it does not.
  Secondly, I wonder why duck eggs are still covered by the guarantee. I do not think there are many imported duck eggs, and I would have thought that probably they did not need to be covered by the guarantee.
  My main point is that the uncertainty of so many Articles will result in a lack of confidence among egg producers. Article 3 states:
  "This order shall apply to such hen eggs and duck eggs respectively as conform to the standards and conditions specified by the Ministers from time to time …"
  If standards are to be laid down for duck eggs and hen eggs we should be told what those standards are. Will the normal imports of Polish and other eggs also conform to the standards and conditions? How will the Minister discover the conditions and standards to which imported eggs will conform? The Order should set out the standards and conditions which are to be specified by the Minister.
  Article 4 refers to "normal imports". If the industry does not know what is in the Minister's mind about "normal imports" it will not be able to govern its production so as to meet the "normal imports". Will "normal imports" be the average over the last three years, or how are they to be determined? This great industry produces practically all the eggs that are needed and could easily produce the lot, and I see no reason why any eggs should be imported.
  Article 5 also creates uncertainty in the minds of egg producers. It states:
  "After 28th March, 1970, an average selling price of hen eggs and duck eggs respectively for the year ending on that day shall be ascertained by the Minister in accordance with arrangements agreed with the Board or in default of agreement in accordance with such principles as the Minister shall decide."

  1107
  Supposing that the Board and the Minister disagree, what are the principles which will apply? If there were to be no imports, or levies where imposed on imports, and if this were set out in the Article, egg producers could work out how many eggs would be needed for the home market.
  To sum up, Article 3 does not set out the standards and conditions which will be specified. Article 4 refers to any increase above a normal level of imports, but does not define what is the normal level. Article 5 provides that the Minister is to decide certain principles in default of agreement with the Board, but we are not told what these principles are. The Order is so had that we should reject it and ask the Minister to bring forward another one.
  11.15 p.m.
  Mr. Bryant Godman Irvine: One of the difficulties about debates taking place at this time of night is the difficulty that hon. Members have in keeping within the rules of order, but looking at the heading of this Statutory Instrument I wonder whether it is not an example of the reverse of that coin. The Order is headed "Guaranteed Prices and Assured Markets". Addressing myself to the problem of finding any reference in the Order to assured markets, I find myself in some difficulty. We have "Interpretation", "Guarantee standards", "Guarantee prices and payments", "Keeping of records", and "Revocation".
  Whether the Minister has left half the Order behind, or whether the heading about assured markets should be on some other Order, which we shall debate on another night, I do not know. If the Minister will look at the Explanatory Note he will see that that does not contain anything about assured markets. Perhaps, with your assistancse, Mr. Speaker, he will be able to explain how the heading "Assured markets" covers anything in the Order.
  My second point is that this is an Order which cannot give confidence to anybody who produces eggs. Those with a little experience of Statutory Instruments would find this Order as difficult to interpret as most. Article 4 refers to an indicator price and the normal level
  1108
  of imports, but sub-paragraph (1) (b) defines the indicator price as
  "on the basis that production thereof is sufficient but not excessive having regard to the national demand therefor"
  and it goes on to provide that a reduction shall be made which is
  "appropriate having regard to any increase above a normal level of imports into the United Kingdom."
  I do not think that the average egg producer will make much of that.
  If the Minister will turn to Article 7 he will find that the position becomes even more complicated, for it says:
  "If … the average selling price … if higher than the indicator price … the Board shall pay to the Minister two thirds of the difference"
  and a little further on,
  "If … the indicator price … is higher than the average selling price … the Minister may pay to the Board one tenth of the difference".
  That seems to be a difficult calculation for the egg producer.
  Article 8 provides that in any year when the number of eggs packed exceeds the standard quantity
  "any reference in articles 6 and 7 hereof to the difference between the guaranteed price and the indicator price and the difference between the average selling price and the indicator price respectively shall in each case, in so far as each of the said provisions relates to hen eggs, be taken to be a reference to the respective difference divided by the proportion which the number of hen eggs packed in that year bears to the standard quantity."
  A person would have to be a good mathematician to work that out without the assistance of the Minister, which I hope we can have in a moment.
  Why have these arrangments to be related only to packing stations? We have been told that the producer-retailers will probably find themselves considerably reduced in numbers as a consequence of the Order, and it may be that some of them will consider setting up a co-operative packing station to get themselves within the scope of the Order. If that is the case it will, I am told, add about 2d. per dozen to the cost of the eggs which will then be made available. I therefore hope that the Minister will tell us whether what he is trying to do in this Order—among other things—is to see that there is an integration of the egg industry and a reduction in the number of producer-retailers.
  Sir Harmar Nicholls: May I draw your attention, Mr. Speaker, to the fact that, despite the importance of this debate, there is not a quorum present?
  Mr. Speaker: Strangers withdraw—Order. I am reminded that there can be no count after Ten o'clock.
  11.20 p.m.
  Mr. Anthony Stodart: We have had a debate which, although on a subject which no one would describe as sensational, had at least one sensational statement in it. I do not know, Mr. Speaker, if you have ever heard—I certainly have not—a member of the psychiatric profession confess that he was confused by anything. It is indeed a condemnation of the Government that they have produced an Order which confused my hon. Friend the Member for Gosport and Fareham (Dr. Bennett).
  Mr. Hoy: I think the hon. Member for Edinburgh, West (Mr. Stodart) will agree that his hon. Friend said he got into that condition only after listening to the speech of his hon. Friend the Member for Tiverton (Mr. Maxwell-Hylsop).
  Mr. Stodart: I do not think my hon. Friend the Member for Gosport and Fareham said that. My impression was that he made the comment—and a very balanced one it was—having studied the Order and found it extremely difficult to understand.
  The three points which have been made by my hon. Friends have been: that they are worried about the confidence which might be shaken concerning egg producers, they have rightly questioned the meaning of the words "normal imports"—
  Sir Harmar Nicholls: Is there not an addendum to that point? The Order lays down clearly that it shall refer to shell eggs. Article 4 talks about normal imports and makes no reference to the possibility of processed eggs being imported. The hon. Gentleman who is to reply for the Government knows that one of the great problems his Department has is that many processed eggs come into the country in competition with the home market.
  Mr. Stodart: That is just the sort of telling point I would have expected my hon. Friend to make.
  1110
  The third point I was about to mention was the question of difficulties which will come upon egg producers who are further away from markets because they are bound to suffer first from any withdrawal or diminution in Government guarantee.
  Whatever may be said about the Order, it will not help egg producers. My hon. Friend the Member for Westmorland (Mr. Jopling) put the point very well when he referred to small producers in all parts of the country. No confidence can be inspired in the minds of egg producers when the Government decide to opt out of their part in the loss-sharing arrangements which have obtained hitherto. My hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) made the kind of speech we expect him to make with his tremendous wealth of knowledge gained on the Select Committee with all the very valuable delving it made into many aspects of the industry. What the Government are doing in this Order is quite inevitably going to produce uncertainty, which is very damaging to food production of all kinds.
  I turn to the question which was raised first by my hon. Friend the Member for Tiverton, the unusual word "normal" in reference to imports. There need be no imports at all. It was the argument of the Government a year ago that the imports were so small that they were virtually negligible. I suspect that the Minister might say that normal imports are something like 2 per cent. or 3 per cent. A 2 per cent. import at the wrong time can completely wreck the market. We have had many unhappy experiences of this.
  I would like the Parliamentary Secretary to tell us, because clearly the House is interested, what his interpretation of "normal" is. Why has this word been used? Is it possible for this normal lot of imports to come into the country in one whole dollop at one extremely awkward time for home producers? It is a most unusual—I would almost say an extraordinary—description to put into an Order.
  My right hon. Friend the Member for Thirsk and Malton (Mr. Turton) asked why the Order refers only to a fall in the indicator price and makes no reference to a possible increase. This is a

  1111
  one-sided Order and a one-sided approach. If the effect of uncertainty is to reduce home production, as I should have thought it almost certainly would, and if imports increase, as is only too likely, once there is an increased level of imports it will be only too easy to claim this as the yardstick and for this to become the normal feature of the egg trade. That is why I think that the Government are taking producers on to a very slippery slope.
  As my hon. Friends have argued, producers who are further away from the markets are inevitably the people who will suffer first and suffer most. I recognise that there will be further legislation in due course, in which no doubt we shall hear more about the subvention which is being negotiated, I understand, with regard to egg producers from the other side of the Irish Channel and of the Pentland Firth. All the same, I hope that the Parliamentary Secretary will be able to tell us what the effect will be upon those in the sort of constituency represented by my hon. Friend the Member for Banff (Mr. W. H. K. Baker), which is on the mainland pretty far from the egg markets and where the producers, by a reduction in the standard quantities and by the other action that the Government propose to take in the Order, will suffer before any hardship will be caused to those who are much nearer the sectors of consumption.
  These are relevant and important points. Whether the Government have thought about them remains to be seen. It is most important that the hon. Gentleman should tell us all that he can about these plans.
  11.29 p.m.
  Mr. Hoy: I am grateful to all those who have spoken. I am glad that the rules of order allowed us to finish the debate and that we did not need a Count to bring it to a halt.
  Sir Harmar Nicholls: On a point of order. Is the hon. Gentleman admitting that there are not enough Government supporters in the House to get the Order through?
  Mr. Hoy: I regret having given way to the hon. Gentleman on as foolish a point as that. Most of us who are here tonight have a real interest in agriculture.
  1112
  I knew that I should be in some difficulty with the Order, not because it is not complete, but because action took place prior to the Order and we shall have something to do after the Order is approved tonight. Therefore, it has been taken in three sections, and I do not think there should be any complaint about that because for each section we have been allowed an hour and a half. If we had done as some hon. Members requested, and had pushed it all into one, we would have had to deal with the whole lot in an hour and a half. The procedure which we have followed has enabled the House to discuss it with much more time.
  When we introduced the Order we were concerned with the removal of the stamp because the whole industry wanted the stamp removed. The industry wanted this done quickly, and this is why it was done at Christmas time. So we went ahead and produced an Order which met the needs of the industry, and that completed that section.
  The hon. Member for Rye (Mr. Bryant Godman Irvine) asked what we are doing in the Order tonight. Let me explain to him as succinctly as possible. In the Order which we are debating tonight we have a statutory provision for short-term changes in the guarantee arrangements within the present marketing arrangements. It also protects the taxpayer from any increase in subsidy following the removal of the stamp. The hon. Member for Torrington (Mr. Peter Mills) will remember that in the last debate he asked me how we proposed to do this, and I told him that it would be dealt with in the Order which was to follow. Therefore, we are doing what we promised and what I assumed would be acceptable to the hon. Gentleman. In addition, the Order accelerates the phasing out of loss-sharing, and details the changes which were announced in the Annual Review.
  I said that there would have to be an Order following on the two previous Orders—I believe the hon. Member for Edinburgh, West (Mr. Stodart) agreed that I had said so—and therefore, the longer-term measures concerned with major changes in the marketing arrangements—the new authority, the removal of the guarantee and so on—will come

  1113
  within the next Order. When I introduced the Order I said that this would take a little more time because obviously we have got to consult the industry. This will take time, but the next Order will make provision for many of the matters which have been raised by hon. Members.
  Let me now deal with the general points. A number of hon. Members—I am surprised that the father of the House fell by the wayside in this respect—drew attention to the wording of the Order and said that they could not understand it. They criticised what they referred to as the defective wording. May I remind hon. Members that this is a consolidating Order which merely repeats word for word the provisions introduced by hon. Members opposite.
  Mr. Hawkins rose—
  Mr. Hoy: I will come to the hon. Gentleman's point in a moment.
  The Order of 1963, in Articles 3, 4(1), 5, 6 and 9, contained words for which hon. Members opposite were responsible. I cannot claim responsibility for the wording. Indeed, I do not take exception to it. I think those measures worked admirably. As a result we are doing this consolidation.
  I take, first, Article 4(6). The hon. Member for Tiverton (Mr. Maxwell-Hyslop) made a lot of noise about this, and I do not mind because one can always have a little fun when Orders are introduced. But the wording of Article 4(6) was first introduced by hon. Members opposite in 1963. I am surprised that there has been so much comment about it.
  Mr. Stodart: The hon. Gentleman has twice referred us to Article 4(6). I am baffled. There is no paragraph (6).
  Mr. Hoy: I apologise. It was a slip, and I meant 4(b). Hon. Members have asked what "normal" means. It is based on past experience. It is the actual figures. Normal imports in this respect are as laid down in 1963. It is based on past experience, as I say, and we have not changed the criterion introduced by hon. Members opposite. We merely repeat that criterion, and the import percentage about which there has been so much talk was laid down then at 2½ per cent.
  1114
  I was asked also about Article 3 and what was meant by the review. It is the review as laid down, the Annual Review, and it has always been so since the original Order of 1963. I cannot think that hon. Members have any real objection to the Order at all, or, if they have, the criticism ought to be directed not to us but to the wording of their own Orders.
  The hon. Member for Banff (Mr. W. H. K. Baker) wanted to know about the procedure and timetable following this debate. I assure him that we are following the standard practice. There has been no departure there. He wanted to know also what the Scottish share was. The figures which he gave were correct, as were those which I gave when introducing the Order. I understand that Scotland produces about 10 per cent. of total egg production, but not all of these are sold to the Board, thus counting against the standard quantity. He asked also whether the profit and loss sharing arrangement ends this year. It is 1970–71.
  As to the need for standard quantities for duck eggs, the simple answer is that the subsidy has been running at only about £200 per annum for this part of egg production. Hon. Members can see the reason there.
  The hon. Member for Westmorland (Mr. Jopling) stressed that the position of the Egg Board is important. I do not deny that, but, as I said, it has nothing to do with the Order. That will come at a later stage.
  The hon. Member for Tiverton spoke of the small producer. This is an extremely important aspect of the matter, but the number of small producers in this country has been declining substantially, not in the last four or five years but over a period. The number of producers registered with the Board fell from 396,000 to 194,000 between 1957 and 1968. The hon. Gentleman knows as well as the rest of us do that the tendency is for much bigger units. This is one of the facts of life which we have to face. I would have thought that most hon. Members would agree that that is so.
  I was also asked about the meaning of Article 9. I am told that this is the standard form of previous Orders, and

  1115
  enables Ministers to maintain board income by making advance payments of subsidy. This standard form has been used by all Governments for this purpose.
  The question of import control was raised. This could be introduced, but not under the Order; it would need to be under a separate Act.
  The hon. Member for Torrington asked about minimum import prices, and the hon. Member for Tiverton also mentioned this question. Of course, we are considering minimum import prices. As has been said, we usually produce 98½ per cent. of our own egg requirements, but I know that at certain times of the year it is important that phasing should be taken into account, and this is what we have been trying to do. We must obviously discuss with the industry the question of when such a measure should be introduced. If we are to make it successful it is essential that we discuss it with the industry before the next Order is laid.
  The question of market support in the long term was also raised. When the Egg Commission made its first report it wanted the change done in a much shorter period than we have laid down. It recommended a three-year period, and we extended this to five, because we thought it essential to allow a longer period so that the industry could make the arrangements necessary following the changes flowing from the decisions that have been made.
  Dr. Bennett: Why was the period shortened again?
  Mr. Hoy: It has not been. Eggs will continue in the Review right up till that date. It is true that the support will be phased out. By the date I have given the market will be absolutely free.
  I was interested in the hon. Gentleman's point, which I thought very important. I understood that what was being done was meeting the wishes of the industry—
  It being one and a half hours after the commencement of Proceedings on the Motion, Mr. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 2 (Exempted business).
  Question agreed to.
  Resolved,
  That the Eggs (Guaranteed Prices) Order 1969 (S.I., 1969, No. 401), dated 17th March 1969, a copy of which was laid before this House on 26th March, be approved.

  SUNDAY CINEMATOGRAPH ENTERTAINMENTS
  Order made by the Secretary of State for the Home Department, extending section 1 of the Sunday Entertainments Act 1932 to the Rural District of Derwent [copy laid before the House, 15th April], approved.—[Mr. Merlyn Rees.]

  HOUSING DEVELOPMENT PLAN, HIGH SPEN
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fitch.]
  11.45 p.m.
  Mr. Robert Woof: I am grateful for the opportunity to raise a subject of public importance. It is one on which my constituents hold the strongest views as a consequence of unwarranted circumstances that have been thrust upon them. I refer to the profound disappointment caused by the refusal of my right hon. Friend the Minister of Housing and Local Government to approve the construction of permanent dwellings. These were intended to replace occupied prefabricated bungalows that have long since outlived their usefulness in the village of High Spen, in my constituency.
  But before I deal with the crux of the matter, I want to assure my hon. Friend who is to reply that I openly admit that town and country planning, in its interpretation of most complex provisions, has become a speculative subject that is not always easy to follow. I am further led to believe that the whole object of planning is to ensure that the development of land should proceed in an orderly manner. One cannot complain about attempts to achieve satisfactory standards in order that unsightly errors of the past shall not be repeated. They should be considered in the light of public interest so that justice will not be denied.
  In the same sense, one can have the highest regard for Durham County Council Planning Authority, upon which falls

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  the responsibility to master the syllabus of planning, and the scope and clarity of thought that underlies its purpose to achieve a responsive recognition by the inhabitants of the administrative area. It is, in that respect, that Blaydon Urban District Council was delighted that the county planning authority acknowledged by resolution its approval of the application to replace the prefabricated bungalows in High Spen.
  It is, therefore, of some significance to note that Durham County Planning Authority advanced special factors warranting the approval of such application to build in High Spen. They are based on the fact that the existing prefabricated bungalows are served by roads and services linked to adjoining council estates, through which the use of them would reduce the cost of the replacement houses.
  The planning authority also submitted that, because the site of the bungalows was in the southern part of the village, there is a substantial amount of long life property, both local authority and postwar private housing, and the redevelopment of the bungalow site would be a fruitful stimulus to maintain the viability of the existing social facilities that are needed for the long life property.
  It all sounds very reasonable, sensible and encouraging, but at the same time it is also of equal significance to examine the planning authority's assumption on High Spen. In the same statement the authority claims High Spen to be a "relatively isolated mining village". According to conventional wisdom, a little knowledge is a dangerous thing, but I have need to point out that High Spen is anything but isolated. It is just not true. It is wilfully misleading to describe it to be so.
  The population of 2,000 in the village is extremely sensitive. The people do not accept that they are living in isolation. All the indications of the location of the village denote a definite and unmistakable attraction. It is served by public transport every 15 minutes to the city of Newcastle. The proximity of the village shows how it is an internal and component part of the whole area. It is directly linked with the town of Blaydon only four miles away.
  We are also left to recognise that the village is within short and easy approach
  1118
  of other important places. They have been urbanised in the concept of undertaking mass housing programmes to accommodate communities of considerable size. This at any rate should suffice to convince anyone of the fallacy of discriminating High Spen as a "relatively isolated mining village".
  It is also just as well clearly to understand that the planning authority stated in its case for approval of the application for the prefabricated bungalows to be replaced that
  "… new development in the Urban District should be concentrated in Blaydon, Winlaton, Rowlands Gill and Highfield, which offer the best prospects for creating settlements, attracting new industry and reducing migration"
  This is, of course, an extract taken from the county development plan approved by the Minister as long ago as 1954 and again in 1964.
  I think it grossly unfair for the county authority to include this in its statement of approval. It is not a skilful way to turn its approval to good use and I will explain why. It does not stand up to present-day circumstances. Any modern secondary schoolboy will be able to argue that the conditions which applied to High Spen when the county development plan was being prepared during the period of 1947 to 1953 are very different from those of these days.
  When we come to scrutinise such tragic irony, it is an entirely different matter. The difference consists in the considerable efforts made by Blaydon Council and private builders in the places referred to in the statement of the county authority. The redeeming feature of the joint process is the redevelopment and transformation of those places where, in many instances, practically nothing existed before. They have been turned into an environment of pleasant habitation.
  This undoubtedly has completely changed the physical character of the area out of all recognition, so much so that both the council and private builders are now finding it very difficult to acquire land on which to build. While they are prohibited from investing in housing development through the use of available land in High Spen, it is nevertheless only natural to assume a domestic atmosphere of gloom.

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  We can, however, be sanguine and rule out some of the regrettable indications envisaged in the restrictive settlements policy of the county authority. For instance, apart from anything else, the village should no longer be referred to as a mining village. The mine closed many years ago and everything connected with it has been completely obliterated.
  The working population, therefore, must in the main travel varying distances to work. It is an accepted pattern of life for people to travel many miles to work, either in their own cars or on public transport. There is no resentment in this respect, but in addition to the indignation emanating from the refusal to build houses, what has bred further resentment is the fact that even industrial firms wishing to establish themselves in the village have also been refused. Such a loss of job opportunity has incurred the wrath of many of my constituents. Such a state of affairs is absolutely scandalous, especially during a difficult time when we are trying every trick in the bag to attract industry and to ensure that people receive a weekly wage packet.
  But none of this is particularly surprising. To put it crudely, it is the backlash of the county development plan drafted 20 years ago. To my way of thinking, some of the material points advanced by the county planning authority appear to be an obligatory way of supporting the application to build. If they are so keen for building to be permitted, one wonders why they should trot out certain aspects of the county development plan which were moulded to fulfil future requirements, as I have just said, 20 years ago.
  But what has brought about the real break in confidence is the result of the conclusions of Inspector A. D. Hawkins, following the public inquiry held in Blaydon Council offices on 11th September, 1968. It was specifically held to inquire into the application to replace the prefabricated bungalows, nothing more and nothing less. I have every respect for Inspector Hawkins' ability, integrity, his outstanding knowledge on high-level experience on planning matters. But I am bound to disagree with his conclusions that influenced the Minister to refuse the application to replace the bungalows in question. The inspector
  1120
  states in his report that, although the application is limited to replacing the bungalows with permanent housing, the real issue in the case is much wider. He points out that the application to the settlement is of long standing, and often endorsed county settlements policy which is endeavouring to provide modern environment in selected centres, attracting industry and reducing migration.
  He further states that there is insufficient change of circumstances to justify a change in that accepted policy. In the time allowed I have tried to elucidate how the claim to "insufficient change of circumstances" is a long exploded illusion. It is something that cannot be swept to one side. While events confirm to that view, we are considering how the facts bear directly and pertinently upon the reasons which have led us into the present unsatisfactory situation.
  I need not remind the House that there is nothing alive that remains unchanging. Just as the world is always in a ceaseless state of flux, nothing happens without cause, and nothing happens without leaving behind some results. But the wheel of change has moved fast in the area that we are dealing with, and that is the reason why I do not for one moment accept the conclusions of Inspector Hawkins.
  It is anything but satisfactory. It would have been immensely more effective, and much more correct, to have limited the entanglement within the terms of reference to the public inquiry how could it be otherwise, when the county authority approved Blaydon Council's application to replace the bungalows? It is a matter on which both authorities are in agreement, from which it can be argued that real benefit could have been achieved without conflict between them. All this is substantially true. While I do not deny the wider issue referred to by Inspector Hawkins, it is one that the community is bridled and saddled with. For better or worse, in administrative terms, it will have to wait for a shift of policy in the forthcoming five yearly review of the county development plan. In the circumstances, and to put the essential point into its proper perspective, I feel emboldened to appeal to my hon. Friend to judge the application on its true merits. It is not a massive concession to make. If nothing else it would go a long way to remove the injurious effects and enmity that exists

  1121
  at the present time. It would be a great thing to think it would be instrumental in relieving despondency, and lifting up the spirit of the community.
  Constituents who make up this community do not seek anything great, but a blank refusal to this request will be tantamount to their forfeiting the right to a convenient and decent place in which to live. That is the basic necessity of life—after all we are dealing with human beings, not bingo numbers. Justice is supposed to be the fundamental and only virtue of social life. It should embrace all those things that are useful to society, but justice can be an odd pair of scales.
  In our little corner we should strive to do whatever we can to see that justice is properly done. Without doubt the appeal that I am making for the provision of new housing accommodation, with a change of mind in that direction, would mean that we could rejoice at doing our little bit to make life a little easier for many.
  On other occasions in the House I have quoted a favourite verse from Omar Khayyam. I do so again, because I think it applicable:
  "Ah, Love, could thou and I with Fate conspire,
  To grasp this sorry scheme of things entire,
  Would not we shatter it to bits, and then,
  Re-mould it nearer to the Heart's desire."
  I therefore hope that my hon. Friend will appreciate how my constituents feel aggrieved by the decision of his right hon. Friend. I hope that after tonight he will carefully consider the arguments that I have advanced on their behalf. If he can take any steps to correct the decision and allay their apprehensions, he will be performing a great service to them. It will facilitate the reconstruction of desirable confidence, and it will be one which will be greatly appreciated in being executed as a much fairer deal.
  12 m.
  The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Arthur Skeffington): I begin by paying tribute to the single-minded tenacity with which my hon. Friend the Member for Blaydon (Mr. Woof) has pursued this matter on behalf of his constituents. We have had considerable correspondence on the matter, he has asked Questions about it in the House,
  1122
  and I know that for a long time he has been trying to secure the opportunity to raise these very important issues on the Floor of the House. I am very glad that tonight he has had this opportunity to do so.
  He has done all that one could expect of a very conscientious Member of Parliament desperately concerned to do his utmost for constituents who, largely because of their location and their association with a declining industry, have had very often to put up with far more changes in fortune and in circumstances than many other sections of the community. He has performed a notable service in putting their case in the past and tonight.
  I only wish that as a result of the passionate well-documented plea which he has made tonight I could announce that the Minister would reconsider the whole issue. But legally the position is as follows. Once the Minister has made a decision in a planning matter of this kind his function is finished. It is impossible to go on arguing about the decision, otherwise one would never reach the point where decision became reality.
  Nevertheless, I would say to my hon. Friend that what he has said about the area and about this particular village community and the background is very important in helping us in regard to the general position of the Durham development plan. Certainly we shall want to consider every matter which he has put before the House in considering future planning matters in the area. I am only sorry, in view of the special plea made by my hon. Friend, that the Minister's legal function has already been discharged. That does not mean that my hon. Friend's efforts will not perhaps have important consequences in the future.
  I hope my hon. Friend will note that I am not speaking merely academically in this matter. I have had a close interest in these sorts of problems over a great many years. Although I do not know the area as well as my hon. Friend, or the other hon. Members for Durham whom I see sitting here tonight, I have visited the area and I know the tremendous hardship and heart-burning which has been aroused by the county's original plan of categorising these villages into four groups

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  It was bound to be a most difficult decision, and I know only too well what those communities feel which are left out of the areas A and B, or even area C, and are categorised as High Spen. In Category D under the county development plan it is generally conceded that there should be not much development in the future and very little expenditure of capital resources. I appreciate that point very much.
  This is a great human problem. One is always faced in these kinds of decisions with doing what one hopes is right for the community as a whole, and with balancing it against what human beings who live in a particular category must feel about it. I hope that nothing I say will be taken as suggesting that this is an academic paper decision without relation to the human feelings and needs of the community and its mining villages, which have given so much to the nation in the past and, I hope, will be able to do so in, perhaps, different ways in the future.
  My hon. Friend appeared to think that this decision could perhaps be looked at in isolation apart from the general proposals in the county development plan. The inspector, the Ministry and the Minister have not been able to accept that view. If we could accept that view, the fact that this is merely a replacement of 30-odd prefabricated houses and bungalows by permanent buildings would be easy to solve. I must, however, remind the House that this is related to the basic plan for the county as a whole. This was the point made by the Minister. I was glad to hear my hon. Friend pay full respect to the inspector's conscientious application, although he has every right to disagree with his conclusion. That was the view which the inspector came to in relation to the plan as a whole.
  In a previous debate initiated by my hon. Friend the Member for Consett (Mr. David Watkins), whom we are glad to have with us on this occasion—this shows how the Durham Members support one another in these important matters—I explained that the original concept of the Durham County Council—not Whitehall, but the county council—was to categorise the villages into categories A, B, C and D in that descending order because it was felt impossible to apply sufficient
  1124
  resources to all the settlements which have grown up round the mining industry and make them viable and effective.
  Therefore, a number of criteria were, as my hon. Friend has said, chosen by the county as long ago as 1951 for categorising these villages where the county thought that there was a chance of future development, rising population and new industries and activities, and where, on the other hand, it was thought that population would be likely to decline and, consequently, the employment of scarce resources of manpower and money would be less fruitful.
  High Spen and Hamsterley colliery, with which we were dealing earlier this month, were included in category D in the 1951 development plan. The Minister endorsed that plan in 1954. Throughout the last 15 years, the policy of this categorisation has been upheld both by the county council in general, although I agree that there were exceptions in two cases, and certainly by the Minister. There have been three called-in applications, as we call them, in relation to High Spen during that period.
  The first review of the development plan, which was due in 1959, was not made until 1964, but even then the proposals in the review included a restatement of the village grouping policy in a slightly different form. Nevertheless, the written analysis to the plan referred specifically to all the settlements previously classified in category D, including High Spen and Hamsterley colliery.
  The Minister, having taken a long time, perhaps almost as long as the county council did, to review the plan—as I say, it was due in 1959 but was not received by us until 1964—wrote a letter to the county council in July last year announcing his intention to approve the review of the development plan subject to certain modifications, which do not concern us tonight. He therefore endorsed what the county in general had put forward.
  That was the position until July. Then we had the application concerning High Spen, on which the county council, as in the case of Hamsterley colliery, adopted a different attitude towards these two specific developments. I do not think they were going back generally on the position of High Spen, but they did have a different view about the developments

  1125
  which have been the subject of these Adjournment debates.
  High Spen is, of course, one of the larger category D villages. I do know it myself. I recognise its position on this high and exposed ridge about four miles south-west of Blaydon. It is a scattered settlement on the Ryton Road, which is a winding and dangerous road, I think. It is within two miles of two settlements which get rather better treatment, category A settlement treatment, Rowlands Gill and Winlaton, and Blaydon itself is only four miles away.
  In January, 1968, the county council referred to the Minister this development which has been the subject of this debate. It did that because it was a departure, and it recognised it as a departure, from its previously announced development plan, and it asked for permission to erect permanent houses on the site of those 36 prefabricated bungalows.
  Why, in these circumstances, has the Minister gone against this changed emphasis in relation to this development? When a matter is referred, because it is considered by the local planning authority to be a departure from the development plan, the Minister can, if he thinks it necessary—he must, in certain circumstances—hold a public inquiry. That was done in this case. Mr. Hawkins was the inspector who went down and examined all the evidence, including the county council's case, which was very well put, and he came to the conclusion my hon. Friend has referred to. My hon. Friend referred to this—that the application is limited to the replacing of a number of prefabricated bungalows by permanent housing, but the real issue in this case is a much wider one. My hon. Friend would like to isolate this decision from the general development plan, but, rightly or wrongly, the inspector and the Department and my right hon. Friend think that it is very difficult so to do. Normally speaking, where permanent housing came to be replaced in category D villages there was a presumption against that replacement because of the general principles
  1126
  upon which the development plan was founded, if the population was falling, and I would point out to my hon. Friend that it is falling, and has fallen over the last few years, and the minehead is closed. Although there are, I think, 200 jobs in the settlement, some of these are filled by those who do not live any longer in High Spen. In these circumstances the general principle was a presumption against replacement of existing houses.
  The inspector went on to say that, because of that, he did not feel that he could make a decision in this case
  "without regard to the basic philosophy of the development plan"
  He went on to say that
  "this concerns the application to this settlement of the long-standing and often endorsed county settlement policy"—
  and it was endorsed in the review of the county submitted in 1964—
  "which is endeavouring to provide a modern environment in selected centres attracting industry and reducing emigration."
  Having considered the reasons why High Spen was originally excluded from the list of settlements where development would be permitted I am of the opinion that there is no sufficient change of circumstances to justify a change in that accepted policy, and this is the view which, after very considerable thought, the Minister himself has endorsed. As I say, the population is falling in this area; it is very near to three centres which are category A, where there can be expansion. The Minister's view was, based on the inspector's detailed investigation, that if the objectives of the plan were to be satisfactorily achieved—
  The Question having been proposed after Ten o'clock on Monday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at a quarter past Twelve o'clock.