Title

HC Deb 24 June 1969 vol 785 cc1385-410

Amendments made: No. 86, in line 1, leave out 'Travel Association' and insert 'Tourist Authority'.

No. 88, in line 10, after 'business', insert: 'and for securing that the prices charged there for such accommodation are brought to the notice of persons seeking to avail themselves of it'—[Mr. William Rodgers.]

12.14 a.m.

Mr. William Rodgers

I beg to move, That the Bill be now read the Third time.

We have now spent almost 70 hours discussing the Bill, which I think is a measure of its importance and of the attention that the House was prepared to give to it. It is a better Bill for our discussion. I am sure that it will be greatly appreciated by the tourist industry and will do much to give an extra impetus to the growth which we have all seen and welcomed.

I do not intend on Third Reading to deal with any of the broad issues. But, in view of the particular points made by the hon. Member for the Isle of Thanet (Mr. Rees-Davies), I think that I should say something about betterment levy. As there are some important points of concern to the industry, I should place the position clearly on record, though I do not suppose that on Third Reading we can go into all the details which may be of interest to the trade.

First, there is the question raised by the hon. Member for Blackpool, South (Mr. Blaker) during the Fourteenth sitting of the Committee when he said: I had the impression that in the case of hotel extensions, there is to be no exemption for a small extension as there is in the case of an industrial building."—[OFFICIAL REPORT, Standing Committee E, 8th May, 1969; c. 633.] I am glad to tell the hon. Gentleman, and the House, that his fears were groundless. A small extension to an hotel, and by this I take it the hon. Gentleman means an extension which increases the cubic capacity by less than 10 per cent., would not give rise to a liability for betterment levy. In this respect hotels are in precisely the same position as industrial buildings.

The hon. Member for the Isle of Thanet (Mr. Rees-Davies) asked: … what is the position with regard to betterment levy in the building both of the new hotels and also for extending or altering existing ones?"—[OFFICIAL REPORT, Standing Committee E, 6th May, 1969; c. 621.] First let us look for a moment at the position of a new hotel development. If an hotelier buys a piece of land at the current market price and builds on that piece of land a new hotel, he will not be liable for betterment levy. If, on the other hand, a hotel developer already owns a piece of land which he brought, say, 20 years ago as a green field and decides to apply for planning permission to build an hotel on the land, he will be liable to betterment levy. I think that the position is clear. That hotelier would be in the some position as an industrial developer.

Take also the case of an extension to an hotel which amounted to an increase of more than 10 per cent. in the cubic capacity of the hotel. Here again liability for betterment levy would arise, as it would in the case of an extension to an industrial building. The hotel developer is therefore in precisely the same position as an industrial developer.

There is, however, one exception which I should make clear. In the case of extensions amounting to more than a 10 per cent. increase in cubic capacity an industrial developer may be able to postpone the actual payment of the betterment levy until he sells the building. He does not pay interest on the sum due in the meantime, but he will have to provide security in the form for example of a charge on the property. This is the only way in which the liability of a hotel developer differs from that of an industrial developer.

Mr. W. Baxter

Why has the figure been set at 10 per cent.?

Mr. Rodgers

The important thing is to draw a line between what may be regarded as a minor extension, and a major one, both for administrative purposes, and generally to enable the small man to have an easier passage than some of the larger developers. This is a reasonable provision. I should make it clear to my hon. Friend, in case he has it in mind to pursue this, that this is not something built into the Bill. It is therefore something which should be pursued in relation to betterment levy generally, and not in relation to any provision in the Bill.

Mr. Baxter

This is rather important. Is the 10 per cent. applicable to the grounds, to the buildings, and to the assets of the hotel, or to the practical buildings of the hotel?

Mr. Rodgers

I used the phrase "cubic capacity". That can apply neither to the grounds, nor to the value, but only to the total capacity of the buildings themselves. It is 10 per cent. of cubic capacity.

Mr. Rees-Davies

Would not the hon. Gentleman agree that the criterion of a 10 per cent. increase in cubic capacity is reasonable for an industrial building, but that where we are inviting the extension and expansion of an hotel, and where, as the hon. Gentleman has said, we are giving specific grants for that purpose, one ought to consider reviewing what would be the appropriate percentage increase in cubic capacity?

Mr. Rodgers

I do not think so.

If I may turn to the third point, again one which was pursued by the hon. Member for the Isle of Thanet, perhaps I can deal with the argument that somehow the betterment levy takes away the value of the development. This is not the case at all, and I hope that it will not go on record as being so. May I take a project which involved the building of a large hotel on the site of one or two acres which are at present undeveloped.

Let us suppose—and we can take any range of examples but I will take this one—that the developer bought this field 20 years ago for £5,000, and its present value for hotel development is £25,000. These circumstances could give rise to an increase in value of £20,000, and on this betterment levy at 40 per cent. would be £8,000, subject to allowances and so forth. So the developer pays £8,000. He has to pay this whether he gets a grant or not. But if I may go back to our discussions in Committee, a hotel on this site might be of 100 bedrooms and might involve a cost of £500,000. This could attract grant of £100,000, and we must set the betterment levy of £8,000 against grant of £100,000. I think in that case there is a very considerable advantage in taking up the grant. The liability for betterment levy does not stem from taking up grant. One still pays the levy, but by taking up grant one might be £92,000 better off.

The hotel developer who takes up grant will always be in a better position than anyone taking up a form of development which is not grant-aided.

I hope that is helpful to hon. Members. These are not provisions included in the Bill, but I think it makes doubly clear, if there was doubt in anyone's mind, that the provisions of Part II are valuable in any circumstances. Of course, they could be spread more widely, but given the need to keep some check on public expenditure, and given the desirability of putting public money where private finance is not available to meet a perceived need, then I think the provisions of Part II are in all respects adequate.

Mr. Rees-Davies

The Minister said that industry is entitled to defer payment in respect of betterment levy. Where the Government is inviting development here of an urgent nature now, surely the hotel industry is going to receive pari passu the same treatment as industry by giving them the entitlement to delay the payment of betterment levy in order to secure—

Mr. Deputy Speaker

Order. Before we pursue the question of betterment levy too far, we must remember that we are on Third Reading and that betterment levy is not covered in the Bill. I allowed the Minister to make reference to this, but we cannot pursue the matter on Third Reading.

Mr. Rodgers

Bearing in mind what you have said, Mr. Deputy Speaker, what I have been seeking to say—and this was the nub of the point raised by the hon. Gentleman—is that the developer will be no worse off because of betterment levy if he accepts grant. That is the point which is relevant to the provisions of this Bill, and where I think it has been necessary to remove doubt in the minds of possible developers.

I do not think that this is an appropriate time to pursue the whole question of the future of betterment levy. No doubt there will be future debates when that can be considered. We are concerned for the moment with the provisions for hotel development, and here I hope I have satisfied any doubts which there may have been.

Mr. W. Baxterrose—

Mr. Deputy Speaker

Order. I understood the Minister to have resumed his seat.

12.25 a.m.

Sir K. Joseph

We are grateful to the Minister for fulfilling his undertaking to make a statement on betterment levy. It is not possible for us to comment accurately or constructively on what he has said, but he has now given an opportunity for his statement to be analysed before the debates in another place, and for that we thank him.

We should also like to thank the Minister of State for his patience during the relatively long proceedings on this Bill. We sympathise with him for the relatively grudging attendance he has had from his colleagues, and for the very sparse speaking support he has had from them, both in Committee and on Report stage. I, on the other hand, have had extremely able and vigorous colleagues, to whom I wish to express my gratitude, both in Committee and on Report.

It might be helpful for me to review, in the light of the alternatives open to the Opposition when the Bill was brought before the House, what has happened during the Measure's passage through the House.

My hon. Friends and I recognised, when the Bill was introduced, that there was some need for a degree of public co-operation with private enterprise in tourism. Having given that recognition, we spent the entire Committee and Report stages trying to put some constraint on the results of that recognition. Ideally, we would have liked to have seen the voluntary British Travel Association allowed to continue and to conduct the tourist promotion that we all want to see. However, we reckon that, on balance, the sections of private enterprise concerned with tourism require a body of considerable standing to unlock the potential of the tourist industry, and many public bodies are concerned with the infrastructure of tourism.

We did not think that it would be possible for a voluntary B.T.A., a company limited by guarantee, to secure the co-operation of all these public bodies in the same way that a statutory body could. We also recognised—though not all of my hon. Friends will agree with this—that the body concerned with tourism should have access to some money; and I will come to the reasons for that shortly.

Having recognised the need for some statutory body, we then found ourselves needing to treat the English as fairly as the Scottish and Welsh had been treated in the Bill. On Report we were concerned with four tourist organisations and a proliferation of voluntary tourist bodies throughout the country, which both the Government and Opposition saw as thoroughly desirable.

It is in this connection that we wish to emphasise the need for good appointments to the boards and the need for co-operation among all sections of the tourist industry, a degree of co-operation which the B.T.A. has successfully won by its efforts.

In Committee there was much controversy about the power that is being given to the new boards to support both general tourist schemes and individual tourist projects. We found it difficult to pin the Government down to the sort of projects and costs that might be involved in this part of the Bill. We saw public money needed by these tourist boards primarily for trigger operations, such as a contribution to the infrastructure, necessary to allow private enterprise to carry out a tourist project in localities where the local authorities were either too poor, or felt themselves too poor, to pay for all the infrastructure on their own.

Another example that we thought might be practicable was a contribution towards market research in a locality where the local board thought there was tourist potential but where the local authorities required a bargain before embarking on giving encouragement. We envisaged an occasional project like the national conference centre, where there appeared to be a strong national need but where private enterprise would not, on its own—perhaps understandably—take the risk, although it would, once the project was constructed, either completely, or very nearly completely, cover the running cost.

At this stage, perhaps I should refer to the next part of the Bill which caused a good deal of controversy in Committee, and that is the power given to the new bodies to serve as a sort of agent for the Ministry of Overseas Development. I would draw attention to the initiative of my hon. Friend the Member for Eastbourne (Sir C. Taylor) who played so large a part in our proceedings, and who, in Committee, raised critically the subject of the enabling powers being given—the arguments ranged over 15 columns of HANSARD—and whether they should be in the Bill at all. Of course, we now know that the powers are not necessary for the Ministry which already has authority to ask the new tourist boards to carry out work for it. We remain sceptical about these powers being in the Bill, although we did not vote in Committee on the matter, but, perhaps, that was only because of the geniality of my hon. Friend the Member for Chichester (Mr. Chataway) or because we were weary of well doing.

In all seriousness, however, while none of us is against overseas aid, as such, and particularly if it can be carried out by private enterprise—[Interruption.] —well, I withdraw the word "none" and say most of us—we were told by the Government that the immediate project involved some help for the hotel industry of Malta. This country has an obligation to Malta as the Royal Navy's presence dwindles, and perhaps that is why we did not vote against this power.

So far as Part II of the Bill is concerned, I say straight away that we recognise that, because of the economic and tax policies of this Government, the hotel industry has largely ceased to invest and that, consequently, some sort of injection was necessary to stimulate that much needed investment. We would much have preferred, in this situation, to have used the tax allowance system. That was something which we explored in Committee, but the Government seem to prefer the grant principle. That may offer a shorter burden on the taxpayer, but it also imposes a heavier one than there would be by the tax allowance.

We also say that it cannot be right to have it only for new hotels and not to allow it for the existing ones.

Mr. Eldon Griffiths

Would my right hon. Friend also suggest that never again will a large hotel company ever think of investment without Government assistance?

Sir K. Joseph

I do not think that my hon. Friend's pessimism is justified—at least in the great metropolitan areas—always assuming, of course, that the tax system is tailored a little more to the needs of private enterprise. We have not committed ourselves as an Opposition to what we should do by way of tax allowances, but we have already started an experiment in the treatment of hotels. We shall see to it that we do whatever we can to make certain that the hotel industry flourishes. We shall watch how investment goes, and we shall watch the likely reaction of the British hotel industry to the tax changes we hope to introduce. I merely mention the very strong arguments presented, particularly by my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies), in favour of modern conversions and provision for the tourist industry such as the self-catering trade.

There was great controversy between the two sides of the House when we came to the provision for hotel registration. We remain firmly attached to the concept that the whole rigmarole of controls, penalties and criminal law is quite unnecessary. We believe that the voluntary system should be used and we have voted consistently to have the voluntary system used for registration, classification and grading so far as the voluntary system can do those things effectively, which is quite a long way, for hotels. We hope that the Government will see the light. We were somewhat encouraged by the assurance of the Minister of State that the Government would not activate the compulsory registration powers without the advice of the new British Tourist Authority.

A considerable point which has not so far been ventilated is the power given in the First Schedule to the Ministers concerned to approve the salaries of all staff of the new tourist boards. The boards, which will be competing in the market for highly specialised professional people dealing in market research, public relations, advertising and related fields, should not be shackled by having to get Ministerial permission and to conform to Civil Service salaries. They are bound to suffer by not getting the best talent. We hope that in another place these shackles will be struck off. Private enterprise will not be able to fulfil its full potential in connection with tourism without the co-operation of a large number of different public bodies in different parts of the country.

We hope that the new authorities will be successful in mobilising public support necessary so that private enterprise shall serve the increasing tourist industry. We ask the Minister to bear in mind that when the Bill becomes law, as it probably will, the two basic precepts: that the appointments to these boards need to be of shrewd commercial, vigorous people and that without the co-operation of the private sector of the tourist industry no success will be achieved.

12.37 a.m.

Sir C. Taylor

I warmly congratulate the Minister of State on his patience. I sat through the Second Reading and 16 of the 18 sittings in Committee. The Minister has been extremely courteous in the way in which he has dealt with the Opposition.

However, I still think this a flabby Bill; it is a Socialist Bill. It would have been much better if all the Amendments we proposed had been carried in Committee, but they were not. I am glad of one thing—that at last a Government have recognised, or sought to recognise, the importance of tourism. For so long tourism has been neglected by a series of Governments, and I include Conservative Governments. They did not appreciate the enormous potentialities of the tourist trade which we see throughout the world, and which will grow enormously.

I still believe that if a succession of Governments had recognised the industry's importance and taken action before, the Bill would not have been necessary. I say this for the benefit not only of the Government but also of those on the Opposition Front Bench who, I hope, will heed my remarks. If the industry had been regarded as a great invisible exporting industry and treated in the same way as manufacturing industries are treated in the matter of investment allowances, and if purchase tax had not been charged on all equipment of hotels—

Mr. Speaker

Order. We cannot on the Third Reading of this Bill discuss all taxes and reliefs which are not in it.

Sir C. Taylor

I do not want to discuss them in detail, Mr. Speaker. I am merely saying that if these things had happened earlier, perhaps 20 years ago, the Bill would not have been necessary and we should have been in the van of the world tourist trade. If there had been no S.E.T. and if there had been easier planning consents for the development of new hotels and new projects, the Bill would not have been necessary. If in some small way the Bill helps the industry after the way it has been neglected over the last 20 years, and if it helps some of my constituents in a small way, I shall not oppose it. Nevertheless, it could have been done differently. It should have been done certainly 10 or 15 years ago. I blame all parties for not realising the importance of the industry. Their inaction did not arise from lack of trying on the part of some of us in the House, who consistently stressed the need for the development of tourism.

Finally, it would be churlish of me not to thank the Minister for the kind and generous way in which he has dealt with all our arguments. I wish that he had accepted all of them.

12.42 a.m.

Mr. J. Enoch Powell (Wolverhampton, South-West)

My constituency is not commonly regarded as one of the most sought after tourist resorts. Indeed, its beauties, such as they are, are perhaps perceptible only to the sophisticated and partial eye of the native and the inhabitant. Nevertheless, I think that it would be a bad principle and habit if, when the House is discussing legislation which appears at any rate to confer advantages upon certain sections of the country and applies public money to do so, it were to become the rule that the debates were participated in only by hon. Members representing constituencies which stood to benefit, while other hon. Members either absented themselves or observed silence, hoping that when their turn came at the pork barrel their colleagues would observe a similar discretion.

Perhaps we would do better if our practice were the reverse and if hon. Members whose constituencies stood to benefit and whose view and criticism was perhaps not, therefore, quite so acid as that of some of their colleagues were to practise more silence, whereas hon. Members representing constituencies which would have to contribute without receiving direct benefit were more often heard. My constituency, along with others, will be laid under contribution for whatever benefits at the public expense are to be conferred by the Bill.

It would be a pity if the Bill were to leave this House without at least one Member on this side laying his curse upon it as being a thoroughly Socialist Measure. That will not in any way discredit it in the eyes of its begetters, but it should not be a recommendation of the Bill on this side of the House. It has all the classic features of a Socialist Measure. It establishes bureaucratic boards in order to perceive commercial opportunities and promote commercial operations. I should like to congratulate my hon. Friend the Member for Honiton (Mr. Emery) on having succeeded in adding to a Socialist Bill a bureaucratic board which had not been thought of when the Bill was introduced, so that we have now four boards instead of three as there were when the Bill was introduced. This at any rate gives it a certain symmetry and perfection which it did not initially possess.

Then there is the use, of course, of public money for various schemes which, if justifiable at all, are justifiable commercially, and to enable the State to buy its way into and take a share in private enterprise undertakings.

When we come to the main and second Part of the Bill we find that public money is used to pay grants towards new capital expenditure, towards new expenditure on fixed equipment, and that there are in addition to be loans of up to £500,000 towards capital expenditure, in all cases expenditure which is justified only if at all by the prospect of a profit comparable with that which the same resources applied in any other way would attain.

Finally, we have provision made for the registration, classification and grading by a State authority of hotels, something which, if it is justifiable at all—that is to say, if it enhances the commercial efficiency of the industry—will be undertaken voluntarily on the initiative of the industry itself, as indeed it is already to our knowledge here and in many other countries.

All these provisions in the Bill are not only unnecessary but worse than unnecessary, since they introduce distortions into the use of our resouces and our activities which did not exist before. I was glad that my right hon. Friend in the very cool and astringent—it could hardly be called—welcome which he gave to the Bill on Second Reading and again tonight sought to justify the Bill only on the ground that there were distortions already existing which might be counteracted to some extent by the Bill. These distortions, of course, are the distortions of the tax system introduced by the present Administration. I will not—I cannot, indeed, in this debate—refer to them at any length. There are the perhaps more fundamental difficulties of treating these types of undertaking in precisely the same way for tax purposes as other forms of commercial and industrial undertaking with which they are in competition for capital and manpower. But it seems to me that if we are faced with distortions of that kind the proper remedy is to remove the distortions and not superimpose a new set of distortions on top of them.

Indeed, this is the breeding ground of Socialism. It is the chosen method of Socialists to introduce a distortion into the economy and, when they discover the mischief they have produced, to come to the House with a new Measure and say, "You cannot possibly deny that it is necessary to legislate further to correct the consequences of what we have already done". So they pass from one stage of Socialist intervention to another. This is the second or third stage along that line.

We have not heard much this evening about the other ground on which the Bill is sought to be justified—it has been referred to in passing—that of the alleged requirements of the balance of payments. We shall be entering at somewhat more length this day upon the question of the balance of payments and its true causes and nature, but, strictly referring to this Bill in that context, it is not reasonable or justifiable to pretend that to provide precisely these forms of subsidy and assistance to precisely this industry can have any predictable or relevant effect upon the balance of payments. Almost every activity which can be engaged in in this country can be regarded as relevant either to exports or to the saving of imports, and it is absurd to argue that any relevant effect is produced upon our balance of payments—such as it is—by their Bill. Even supposing that the whole cause of the balance of payments deficit is not an absurdity dreamed up by our present monetary system, even supposing it were the reality, it would be absurd to pretend that a Bill of this sort could have a relevant effect upon that balance.

Mr. Rees-Davies

Will my right hon. Friend apply his acute mind to one question? If, as a result of this Measure, we have a further 40,000 or 50,000 bedrooms, of which 80 per cent. are occupied by foreigners coming to this country, it will achieve about £200 million or £250 million in foreign currency. Would not that assist the balance of payments?

Mr. Powell

Yes, but I am pointing out that there are about two dozen other ways in which public money could be used artificially to produce one effect or another, plus or minus, upon the balance of payments. We could subsidise any range of exports that we pleased. There is no virtue in picking out this invisible export, or this import saving, for this treatment.

Here we are not attempting to correct distortions due to our failure to use the price mechanism or due to our misuse of the tax machinery; we are adding new distortions on top of them. Unfortunately, it is the experience that if we create new bureaucratic machinery—if we roll out yet another series of pork barrels—it is difficult in practice ever to withdraw what we have done.

I agree with my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths) that having once introduced the principle we cannot expect people to build or expand hotels—whatever the demand for them—without a grant from public money. What Government, and when, will withdraw it, and say, "From now onwards you can get on for yourselves"? What Government—I hope it will be the next Government, although I am not absolutely certain—will say "We have removed the distortion which, perhaps temporarily, justified the Development of Tourism Act, 1969, and we can now get rid of the bureaucratic boards and the rest of the machinery which the Bill introduced"?

I am afraid that we shall go on with the clobber of this kind of Measure, accumulating, one added to another, always increasing, never diminishing. With every Bill of this sort there come new jobs; there grow up around it new vested interests, new kinds of indispensability; new accesses of self-importance on the part of the bureaucracy, paid and unpaid, voluntary and involuntary, which will grow up in the shadow of this Bill.

As a result, as happens always, and as long as Socialism flourishes, we shall find more and more people will be messing other people about, instead of getting on with the job they ought to be doing and know best themselves.

12.55 a.m.

Mr. Biffen

I am sorry to expose the House to such a sense of anti-climax as to expect hon. Members to listen to me immediately after a speech such as that just delivered by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). I would offer one small correction. He suggested that he was rising to be the first to lay a curse on the Bill. In fairness to my hon. Friend the Member for Eastbourne (Sir C. Taylor), he called it a thoroughly Socialist Measure. I should like to put on record that there is wide, growing and substantial agreement about the true nature of the Measure to which we are now asked to give a Third Reading.

The Minister of State said that after 70 hours of discussion the Bill had been substantially improved. This worried me, because one of the major differences of substance now from what we were debating on Second Reading is that an authority and two boards have emerged as an authority and three boards.

I am not entirely happy about this incident. The OFFICIAL REPORT of the Committee proceedings tells me that my hon. Friend the Member for Honiton (Mr. Emery), on being told that we were now to have our third board, said: This is a great day. It is a terrific time for tourism in England. … We are to be allowed to have an English … Board."—[OFFICIAL REPORT, Standing Committee E, 18th March, 1969; c. 52.] I must confess my own reaction to be a shade less rapturous.

Having concluded my expression of scepticism on the proliferation of boards, authorities and commissions in the conduct of government, I am saddened that an industry such as the rapidly expanding tourist industry should be thought to be in such need of public finance. There may be arguments advanced, and I know they have been, which are related to tax distortion which, if I were to dwell on them, would lead to my being ruled out of order, so I will not dwell on them at length. I will say only that there is no industrial or commercial situation which does not lend itself to arguments that it needs public funds. It seems to me unfortunate that in a Bill the Long Title of which talks about the provision of new hotels and the extension, alteration and improvement of existing hotels we have widened the range in which Government intervention and finance is legitimate and legitimised through unwillingness to have an official Division on Second Reading.

My second point, on Part II of the Bill, has grown in substance with the passage of time. Part II covers grants and, more particularly, loans which will be made by public authorities under this Bill. Since the publication of the Bill and the evolution of this policy we have seen monetary policies at the very heart of Government affairs and the conduct of the Government's economic policy in exactly these circumstances. We have seen the privileged position of public authorities provided with credit giving to the public agencies foreseen in this Bill a leverage which I do not think we truly apprehended at the time of Second Reading.

This is a thoroughly meddlesome Bill, and I was absolutely confirmed in that judgment as I listened to the persuasive arguments of the hon. Member for Cornwall, North (Mr. Pardoe) when he addressed himself to Clause 8. The sheer minutiae of considerations in judging whether or not grants should be paid caused me to recoil, and I thought what a supreme example it was of the doctrine of countervailing nonsense which has been referred to by my right hon. Friend the Member for Wolverhampton, South-West, the Bringing in by the Government of distortions to redress distortions which they have already created. Make no mistake, the Bill lays one more straw of public expenditure. It tests the faith of those who believe in free enterprise, and it tests the faith of those who do not see a happy prospect in increasing officialdom and increasing public expenditure.

On Second Reading I voted against the Bill. Nothing that has happened since has caused me to regret my action. I am pleased to have stood up and been counted.

1.1 a.m.

Mr. Rees-Davies

After nine hours or thereabouts in the Chamber today it has been peculiarly refreshing, to hear the speech of my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) and also the speech of my hon. Friend the Member for Oswestry (Mr. Biffen). Indeed, I can say that we are all wide awake and ready for more. What I should like to do is to reply to those two speeches, because I fundamentally disagree with both of them.

The Opposition were faced with the publication of a Bill which we had to consider in three Parts, the first Part seeking to take an existing institution which was a company limited by guarantee and already receiving a large sum of public money, £3½ million, no doubt, which it had been receiving for a considerable time and first through the Tory Party. The purpose was to turn this company limited by guarantee into a company in receipt of public money and to make it accountable to the public as it was not then and hitherto had not been.

Second, we have been faced for many years and by both parties with a completely inept absence of any policy for the tourist industry whatever, about which a few of us on this side have made complaints for many years past; and, basically, seldom have they ever been listened to, and, effectively, by any Government. We found ourselves confronted with a situation which was quite intolerable. First of all this industry, the so-called tourist industry, is not an industry as it is treated, but, of course, it ought to have been treated, tax-wise and otherwise, as an industry. Had it been so treated by any Government, there would never have been the necessity for the Bill. The industry could have been provided with tax allowances and could have received fair and proper treatment from the Board of Trade. It did not receive it—until it became clear that it was becoming of the greatest importance to the country as an export industry.

The second factor with which we were confronted was the intolerable burden on the employment of labour in the industry. It was being deprived of manpower, milked by S.E.T. and was not receiving the training of staff so manifestly required. It needs emergency treatment to save it from expiration. It has been subjected to every kind of distortion until it is suffering from carbuncles and varicose veins and every other form of disease, and a surgical operation is necessary. My right hon. Friend admitted that the industry was suffering from these distortions but said that this was no excuse for imposing others.

My right hon. Friend said that the Bill was unnecessary. I disagree; I believe it essential if this country is to obtain the benefits that we want. It is essential because of the urgent need for speedy treatment for the tourist industry. We must recognise that if we allow private enterprise to continue completely freely the industry will not achieve its objectives. If we return to power next year or in 18 months time—and I have no doubt that we shall—we could set about the task of improving the tourist industry, but that would be far too late. The industry cannot wait that long before treatment is undertaken.

The industry is not only highly competitive but international. Worse still, it is involved in competition with State enterprises abroad. The Spanish tourist industry is completely controlled. If one wants to develop a hotel there, one gets at least 80 per cent. grant and loan and then it is controlled both as to price and performance. Standards and criteria are laid down. There has been an immeasurable expansion in the Spanish tourist industry. In Italy, the same applies. One can get very large loans and grants, and the hotel will ultimately become one's own, given to one by the Government, provided one is able to prove that one can bring in public from overseas.

I shall not illustrate further except to add that for the past twenty to thirty years the Swiss tourist industry has been governed largely by the State and has its own banking facilities to provide its loan requirements by special methods.

So, while I would rather see free enterprise able to handle the situation, we, being in Opposition, had to view the Bill through the lens of the Government. It was no good simply saying what we wanted to do. We had to set about improving the Bill, which we have done a little. Many hon. Members have been educated to a large extent about this problem during our proceedings. I am sure that all of us who have taken part have learnt a great deal.

We concluded that the best thing we could have were boards to represent the individual interests of England, Scotland and Wales and controlled by a central authority, the British Tourist Authority, which would have the same sort of set-up as the existing British Travel Association, enabling it to draw upon the leading amateurs as well as having a small and effective executive. This would be upon management lines similar to those of a normal industry and unlike the management of a nationalised industry. We took great care not to fall into the trap of the old style of nationalised industries.

We have never liked grants and have always preferred loans, and have called for the widest possible criteria to encourage the rapid expansion of the hotel industry. It is at the heart of the argument that we have to get another 40,000 to 50,000 bedrooms in the next two years. The jumbos are coming, and they are not white elephants; they are not even pink elephants. They are elephants carrying an enormous amount of dollars in their trunks. It is those trunks that we want to see coming to this country, winding their way around the countryside and spilling the dollars all over the place. It is for that reason that we regard this as an emergency Measure, not an attractive one, but one which we hope will have a good surgical effect in producing the shekels we want for this nation. We have also pointed out that it should be necessary to have some form of registration in reserve which will secure this benefit. We fought against any type of compulsory grading or classification.

That is the picture which I give in answer to my right hon. Friend. While I have always admired his brain, one of the great things about listening to him is that it always gives me the incentive to come back fighting with the alternative. He makes one think and by doing so one is sometimes able to get the effective reply.

1.12 a.m.

Mr. Pardoe

The right hon. Member for Wolverhampton, South-West (Mr. Powell) has made some of the points that I made but much more lucidly than I could have done. I should like to thank the Minister for his courtesy in replying to most of my points, but not for the Bill, which I do not like, in any shape or form. There are a few aspects of it that I welcome. I welcome what the hon. Member for Eastbourne (Sir C. Taylor) has called the recognition of the tourist trade. There would have been no need for this bureaucracy in Part 1, even if we accept that grants are now needed, because they never would have been needed if the hotels and restaurants had been treated equally with other industries and had been given the same incentives.

The Economic Development Committee of the hotel and catering industry said: We are strongly of the opinion that the right solution is to extend to hotels the assistance given to industrial establishments. If that recommendation had been implemented we should not have needed this panoply of grants. The main purpose of the Bill was undoubtedly to help the balance payments, both by importsaving—persuading the Britisher to stay at home for his holidays—and to attract more foreign tourists.

The right hon. Gentleman said that we should have a better international currency system, and I could not agree more. Other countries have very substantial subsidies for the tourist industry. Those of us who have stayed in foreign tourist resorts know this only too well. The hon. Member for the Isle of Thanet (Mr. Rees-Davies) said that if only the next Conservative Government would remove the distortions everything would be all right. The Conservatives may well come back to power, but they will not remove all the distortions. The distortions that make some parts of the Bill necessary are not just the distortions of the tax system, which the Conservatives may put right, but if they were to come back as a Free Trade Government committed to a floating exchange rate they would have no use for these subsidies.

A Government led by the right hon. Member for Wolverhampton, South-West might come back committed to these views; a Government led by me might come back committed to those views. But no Government that we are likely to get in the foreseeable future would come back committed to these views. It will probably be necessary for us to carry on distorting the economy ad infinitum in order to catch up with the subsidies of other Governments overseas.

I end by making a point that I was precluded from making by the intelligent selection of Amendments. I tabled an Amendment which would have got rid of the whole Clause. I believe there is no need for registration. I cannot see who will benefit from it. If it is merely classification of hotels and certain standards, like the number of hotel bedrooms, the only people who will benefit from it will be the market researchers, among whom I number myself. I should be delighted to have a list of hotels, with the sizes of all the bedrooms; it would make my job, and that of mail order houses, that much easier. To charge fees to hoteliers in order to help the bureaucrats to build up a list so that market researchers and mail order houses may do their job more easily cannot be the job of a sensible Government.

It is not true to say that countries overseas have a system of classification. Germany, Belgium, Canada, Denmark, Holland, the United States, Finland, Norway, Sweden and Switzerland all have highly developed tourist trades, but not one has a statutory classified list of hotels, and I do not believe one is needed.

I shall watch carefully in the months and years ahead the bureaucracy that undoubtedly will grow as a result of the Bill. It is not bureaucracy but "adhocracy"—the continuous implementation of new ad hoc boards to look after us and interfere with us. I shall also watch carefully the inexorable and inevitable rise of the administration costs of the bureaucratic juggernaut.

1.18 a.m.

Mr. Eldon Griffiths

My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph), in tracing the progress of the Bill and in speaking of the stewardship of those members of the Opposition party who managed the Bill in Committee, ventured to say that the Government had been comparatively silent and had given the Minister little vocal support.

In the final stages of the Bill it is instructive to realise that the intelligent debate has taken place on this side of the House. The views of the Government are well known; we understand their doctrines. What matters to the country is the discussion now taking place on this side of the House.

Although I have great respect for his deep knowledge, I do not accept the arguments put forward by my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies). I do not agree that our tourist industry has been reduced to such a pass that it is in need of what he several times described as an emergency operation. On the contrary, my own impression of the tourist industry in Britain is that it is extremely resilient and is making rapid progress. Much of the industry is quite rightly making a profit and has great growth potential. I cannot think of many industries in Britain which are more able to stand on their own feet. Consequently, I cannot agree with the proposition that here is an industry so bereft of initiative and so lacking in opportunity and resources that the Government have to come to its aid. If tourism requires Government aid, there are few industries which, on that sort of criterion, could not ask for similar handouts.

Mr. Rees-Davies

I was not saying that it needed treatment in that sense. I said that if we wanted urgently to earn extra foreign exchange we needed an emergency operation to ensure the acceleration of the industry's growth rate. That is quite a different point.

Mr. Griffiths

I hear what my hon. Friend says. He based much of his case on the need rapidly to obtain 40,000 more bedrooms because of the advent of the jumbo jets. He spoke of there being international competition, and he observed rightly that in Italy, Spain and elsewhere the competition is on for American and other tourists with their dollars.

There is no evidence on an international scale that those countries which have vast Government tourist organisations handing out public money are better at providing hotel bedrooms rapidly than those which have not. The most massive expansion in the provision of bedrooms in the world is that which has taken place over the last 10 years in the State of California, in Arizona—

Mr. Deputy Speaker

Order. The hon. Gentleman must relate his remarks a little more to the Bill, which has nothing to do with California and Arizona. On Third Reading, hon. Members may discuss only that which is in the Bill and how it will apply to the industry concerned.

Mr. Griffiths

I accept your admonition, Mr. Deputy Speaker. My point is that it is not necessary to have this large apparatus to achieve the rapid expansion of bedrooms. In California and Albuquerque, where there is no such apparatus, the provision of bedrooms has been made at a rate and in a style and fashion vastly superior to that in Spain and Italy—or to what there will be here, for that matter.

I am bound to disagree with the whole principle put forward by my hon. Friend. The evidence is not with him. It does not follow that a system lacking a Government apparatus of this kind would not be able to provide the necessary number of bedrooms.

I am more impressed by the arguments of my hon. Friend the Member for Oswestry (Mr. Biffen) and those preceding them advanced so eloquently by my right hon. Friend the Member for Wolverhampton, South West (Mr. Powell). Between the publication of the White Paper and Third Reading the squeeze on credit has become much tighter, with the result that the partiality shown by the Bill to public sector lending is greater and more distorted than it was when the Measure was first conceived.

Although I did not vote against it on Second Reading, a process of education has taken place. I have learned a great deal from the arguments which have been advanced, and nearly all those in favour of the Bill have led me to the conclusion that we should be better off without it. I must make clear why I do not like the Bill.

First, I want to reduce Government spending. But the Bill will increase Government spending. It will hand out more money without any clear limit that I can see.

Second, I want to restrain the growth of Government agencies and limit the increase in numbers of those who work in the public sector. But the Bill will increase the size of the Government service. It will hand out more jobs for the boys. No doubt we shall see in the New Year's Honours lists in a few years a number of candidates from the various tourist boards, including the tourist board invented by one of my hon. Friends.

Third, I want to get the Government off the back of the private sector. This is what I say in my weekend constituency speeches. Yet the Bill proposes to put the Government on the back of the private sector.

Fourth, I want more effective Government accountability to Parliament for their expenditure. Yet the more I examine the Bill the more I see that the accountability is very tenuous indeed.

Finally, I want fewer restrictions and more freedom. But the Bill creates more restrictions and takes away existing freedoms.

I would not go as far as I suspect my right hon. Friend the Member for Wolverhampton, South-West would go. I do not say that the Government ought not to help at all. I think that that would be wholly impracticable. But it is incumbent upon me, having said that I do not like the Bill, to say how I think that the Government ought to have drawn the Bill, and I do so briefly.

First, the Government ought to help the tourist industry by providing the infrastructure—the roads, the communications, and so on. They have done the opposite. They have helped to reduce those things.

Second, they should be encouraging private investment in hotels and in tourism. But by their tax policy they have reduced and limited that investment.

Third, they should get out of the way of the private sector, which would be perfectly capable of providing what the Bill seeks without all the provision that that the Government are making. But they are not getting out of the way of the private sector. On the contrary, they are getting in its way.

I am bound to conclude on a slightly different note. I have to change gear, because every hon. Member of this House has two obligations. He has an obligation clearly to state his view on national policy, which I have now done. But the Government have their majority and they will pass the Bill. Therefore, at that stage, every hon. Member of this House must accept two other obligations: first, if this public money is to be spent—and I regret that it is to be spent—to see that it is spent well; second, if any money is to be spent at all, it is part of my job to see that some of it comes to Bury St. Edmunds. I want this money, which I do not think should be spent at all, to be spent well. If it is to be handed out, the English Tourist Board would be very wise to recognise the enormous advantages of spending some of it in East Anglia.

Mr. Emery

Thank goodness, we have an English Tourist Board.

Mr. Griffiths

My hon. Friend will have heard what I said. I should have preferred to do without it. But, as the Government are to lumber us with it, it becomes part of my duty, as it is the duty of every hon. Member of this House, to ensure that it is spent at least with some sense of good business.

I conclude on what is perhaps a somewhat lighter note at this hour of the morning. The Bill ought never to have been brought in. It is not necessary. We could do without it. But, if we must have it, will the Minister commend to the English Tourist Board the attractions of East Anglia?

1.30 a.m.

Mr. William Rodgers

I am not going to make such a promise, not at this time of the morning. If I were in a position to commend to the English Tourist Board any expenditure, I should in fairness have to commend the constituencies of the Leeds, North-East, Blackpool, South, Honiton, the Isle of Thanet, Fife, East, and Eastbourne, whose Members have played a long and constructive part in geetting the Bill through the House, and all of whom are present this evening.

It seems almost improper for me to intrude at this stage on a private quarrel which has developed on the other side of the House within the last hour or so. I was delighted with the splendid condemnation of the Bill by the right hon. Member for Wolverhampton. South-West (Mr. Powell) which finally confirmed me in my view that this is a good Bill. I think that this is broadly the view of the House, though there are some exceptions.

I was surprised to hear the hon. Member for Cornwall, North (Mr. Pardoe) speaking as a true nineteenth-century Liberal and aligning himself with those who do not like the Bill and would prefer not to have it at any price. I am surprised that the hon. Gentleman did not vote with some hon. Members against the Bill on Second Reading, because that is the logic of his view. At least three hon. Gentlemen opposite who are present this evening spoke against the Second Reading. I do not think they are on the side of virtue, but at least they are consistent with their votes.

Mr. Pardoe

This is the second time today that the hon. Gentleman has said that I did not speak against the Bill on Second Reading. The hon. Gentleman knows that there is a certain rationing of speeches among Liberal spokesmen. My right hon. Friend the Leader of the Liberal Party elected to speak on that occasion, and we could not get two speeches from the Liberal Party on that day. In any even, I was away in my constituency discussing tourism.

Mr. Rodgers

I accept the reason given by the hon. Gentleman. I am sure that he must be very disappointed at not having had the opportunity to speak, which I assume he would have taken had he the chance. However, he would have found himself in a different position from that of his leader, the right hon. Member for Devon, North (Mr. Thorpe).

There is not much more that I need say this evening. I am grateful to all those who have taken part in our discussions and helped to improve the Bill. I am grateful in particular to my hon. Friend the Member for Renfrew, West (Mr. Buchan), the Under-Secretary of State for Scotland, who shared with me some of the responsibility of getting the Bill through. I am grateful, too, to the right hon. Gentleman and his colleagues who provided a constructive Opposition, though we were not always in agreement. Our thanks are due also to those who stood behind us and, in one way or another, gave us advice and information, and sometimes got us out of difficulties which could otherwise have been more embarrassing than they turned out to be.

I think that it was the hon. Member for Eastbourne (Sir C. Taylor) who said that for the first time the Government of the day had recognised the importance of tourism. That is how I choose to sum up the Bill. It can, of course, be argued that certain provisions might have been different, and, of course, different views remain. But basically it is a good Bill, because it represents a partnership of public and private endeavour in an industry which is important now and which will become increasingly important in the years ahead.

Question put and agreed to.

Bill accordingly read the Third time and passed.