Commons Sitting of 17 November 1969

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

    Initial Teaching Alphabet
    Mr. Tilneyasked the Secretary of State for Foreign and Commonwealth Affairs (1) to what extent the British Council has made use of teaching the English language through the medium of the initial teaching alphabet; and to what extent the Council has co-operated with the Initial Teaching Alphabet Foundation;
    (2) in how many libraries of the British Council books in the initial teaching alphabet are available.
    The Joint Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Evan Luard): The British Council does not itself use the initial teaching alphabet at present for teaching English and has no books in this alphabet in its libraries. The Council is represented on the Advisory Committee of the Initial Teaching Alphabet Foundation and has co-operated in launching two experimental projects overseas.
    Mr. Tilney: First, I should like to congratulate the hon. Gentleman on his new appointment. Will he look at the experiment in the Gambia? Does he not regard it as of great importance that people who learn English as a second language should only have to learn by this system 40 signs as against 2,000 ordinary characters?
    Mr. Luard: The British Council has been co-operating in the experiment in the Gambia which the hon. Gentleman
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    mentions, but he will realise that the problem of teaching English to a foreigner is quite different from teaching it to English children for the first time, and the initial teaching alphabet is much less relevant to foreigners than it is to British children.

    Nigeria and Biafra
    5. Mr. Barnesasked the Secretary of State for Foreign and Commonwealth Affairs if he will launch a further initiative to obtain an internationally agreed embargo on the supply of arms to either side in the war between Nigeria and Biafra.
    The Secretary of State for Foreign and Commonwealth Affairs (Mr. Michael Stewart): I would refer my hon. Friend to the reply given by my right hon. Friend the Prime Minister to the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) on 21st October. I have nothing to add.
    Mr. Barnes: Will not my right hon. Friend agree that his repeated refusals to take any public initiative of this kind makes his constant blaming of the Biafrans for everything less and less credible? What has he to say about Group Captain Cheshire's statements? Are they not a formidable indictment of the closed-mind attitude which the Foreign Office has adopted throughout this whole tragic business?
    Mr. Stewart: No, Sir. I cannot accept that view at all. I have already explained publicly to the House the steps we have taken to try to get agreement both with France and the Soviet Union on this matter. I must repeat that if one wants a workable arms embargo, it must be combined with a cease-fire on the spot. With regard to what my hon. Friend said about Group Captain Cheshire. I would make just two points. First, we have, with the help of a great many people, obtained first-hand knowledge of what is going on in Biafra. Secondly, we were obliged to disagree with Group Captain Cheshire's judgment that what Colonel Ojukwu was concerned with was not secession but security. I wish that were true, but Colonel Ojukwu has himself explicitly denied it.
    Mr. Hugh Fraser: Surely, when the right hon. Gentleman talks about an arms

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    embargo he is being totally hypocritical. The one thing that this Government are doing is stepping up arms supply to Nigeria, and his own miserable Under-Secretary admitted it yesterday. I am told that as much as 60 per cent. of the battle weapons are now coming from this country. Can the right hon. Gentleman explain that?
    Mr. Stewart: The right hon. Gentleman always uses words like "hypocritical" and "miserable" when he begins to run out of arguments. In the first place, we have made, as I have repeatedly explained to the House, efforts to get an agreement for an arms embargo, and for reasons that also have been explained to the House it has not been possible to reach such an agreement. The Government believe, and so do the great majority in the House, that it would be wrong for this country to give up arms supplies to Nigeria, because that would amount to condoning a tribal secession of great injury to Nigeria and African people as a whole. That, I think, is the view that the majority in the House have accepted. With the increase in size of the Nigerian Army, there has, of course, been an increase in the absolute amount of arms sent to that country. They still remain at about 15 per cent., by value, of all the arms which Nigeria is obtaining from abroad, and some of them, I may say, recently took the form of anti-aircraft defences, which I think it is quite legitimate to provide.
    Mr. Winnick: Is my right hon. Friend aware that millions of British people have seen on the television screen the sheer horror of the starvation and near-starvation in Biafra and would like to see the Government make some positive contribution to ending the misery? Is he aware that it would be far more honourable to us as a nation to send food instead of continuing to send arms?
    Mr. Stewart: My hon. Friend may be a little anticipating other Questions on the Order Paper, but it is right to say, first, that we have made a very substantial contribution to the supply of food and medicines. Second, we played a proper part in helping bring about an agreement between the Red Cross and the Nigerian Government for a plan for daylight relief. Colonel Ojukwu objected on grounds that it would involve him in
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    some military risk and said that he wanted a third party guarantee. Such a guarantee was provided by the United States, but Colonel Ojukwu still refuses to accept. In these circumstances, the blame for starvation cannot be laid at Britain's door.
    Sir Alec Douglas-Home: As the right hon. Gentleman says, we shall come back to the question of food supplies on later Questions. Would he recognise that there is an increasing impatience that the British Government are not seen to be trying for an arms embargo? Is it not as well if either the French or the Russians seem to be objecting that they should be shown in the United Nations to be objecting?
    Mr. Stewart: I shall consider whether we should take any other step, but I do not want to deceive the House about this. We have examined it very carefully. I raised the matter when I was at the United Nations recently. I think it would be wrong to deceive the House into thinking that all that is needed is a few words to get something which I do not believe can be done without co-operation of the parties on the spot.
    Mr. Thorpe: The Foreign Secretary will be aware of the growing horror in this country that we are one of the main suppliers of arms in a civil war. Surely the Foreign Secretary is no longer suggesting that this civil war, which has gone on for two and a half years, is merely a tribal secession? Is there any reason why this Government —whatever the recalcitrance of the Americans, the Russians or the French —should not raise this publicly in the Security Council and let those who are not prepared to have an arms embargo be counted before the full glare of world publicity?
    Mr. Stewart: I discussed this with the Secretary General in New York. I do not believe we would succeed in getting agreement to get this inscribed on the agenda of the Security Council.
    Mr. Hugh Fraser: Why?
    Mr. Stewart: The right hon. Gentleman must realise how strongly African States feel about this issue of tribal secession, which is not something which can be brushed aside in the way the

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    right hon. Gentleman thinks. This is at the heart of the matter and the welfare of Africans is concerned with it.
    Mr. Hugh Fraserasked the Secretary of State for Foreign and Commonwealth Affairs whether, in view of the breakdown of the International Red Cross's negotiations for relief flights into Biafra and the declared inability of the Nigerian Red Cross to move supplies, he will now financially assist Joint Church Aid who are actively relieving famine both in Nigeria and Biafra.
    Mr. M. Stewart: No, Sir. Her Majesty's Government could not properly give aid for an operation through the air-space of a country with which we are in normal, friendly relations in contravention of the requirements of the Government of that country in accordance with international law.
    Mr. Hugh Fraser: Surely the right hon. Gentleman knows that he is assisting what has become genocide by starvation. He knows that it is up to the human beings in Britain who want to support relief to act. He surely ought to do something about it now. Will he confirm or deny the truth of the article in The Guardian last week which said that he is trying to put pressure on the Churches to stop it?
    Mr. Stewart: Of course that article was not true. It is surprising that it should even have been published. For the reasons I have given, we cannot properly give aid for an operation of this kind. The right way and the most efficient way to get food into Nigeria is either by daylight flights or by land. We have played a considerable part in putting plans forward by which that could be done. It is by now quite clear who is responsible for the fact that the food is not going in in the way it could.
    Mr. James Johnson: While not forgetting earlier comments about the mission of Group Captain Cheshire, is not my right hon. Friend puzzled, as I am, by the changing attitude of Colonel Ojukwu? On a Monday we are told that he is willing to discuss with no conditions and forgetting secession. Two days later we are told that conditions have entirely changed. How can we negotiate on this position?
    Mr. Stewart: This is difficult, but there have been statements on behalf of Colonel Ojukwu that he is prepared to talk without pre-conditions. I hope that that is correct and that, as that is also the Nigerian Government's view, if Colonel Ojukwu wishes it the talks could begin.
    Sir Alec Douglas-Home: Will the Secretary of State clarify the existing situation for the House? Is it true that there could be now, if Colonel Ojukwu would accept them, daylight flights every day between 9 and 5, that the aeroplanes would start from outside Nigeria, and that on the aeroplanes the Red Cross could choose who would accompany the cargoes?
    Mr. Stewart: That is so. There is the further point that I have already mentioned, that there would be a guarantee from the United States Government that this would be done in a manner which would not give military advantage to the Nigerian Government.
    Mr. Frank Allaunasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on efforts to end the Nigerian war; and if he will hold discussions with the Union of Soviet Socialist Republics and France regarding a joint ban on arms to both sides.
    Mr. M. Stewart: I would refer my hon. Friend to my reply to my hon. Friend the Member for Croydon, South (Mr. Winnick) on 13th October. The vigorous efforts of African statesmen to bring about peace talks are continuing. We are ready to support them if we can help in any way. On the proposals for a joint ban on arms, my information continues to point to the conclusion that an initiative of the kind suggested would not be successful.—[Vol. 788, c. 12–13.]
    Mr. Allaun: Is not Group Captain Cheshire quite correct in saying that our Government are laying all the blame on one side, when those of us who have been to both sides know that there is a desire for peace on both sides? Therefore, will Her Majesty's Government put themselves in a position to act as mediator by ceasing their present attitude, act in an unbiased way, and do as the right hon. Member

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    for Kinross and West Perthshire (Sir Alec Douglas-Home) suggests—raise the matter in the United Nations?
    Mr. Stewart: There are several points there. First, if my hon. Friend has listened to the several speeches that I have made in this House, he will know that it is not true to say that we have put all the blame on one side. I have referred to the massacre of Ibos, and to the tragic events which preceded the war, on the assumption that solving the problem by armed secession was wrong.
    On the immediate issue of who is responsible for the fact that food does not go through, I have, in answer to the previous Question, given the facts to the House, and the House can judge who is responsible. I think that we should also notice that if this country were to decide to change its policy on arms supply it would be an illusion to suppose that that would put us in a position to be a mediator.
    Mr. Goodhew: Is not the right hon. Gentleman disclosing how prejudiced he is in this matter? Was it not his Government who were so confident that they could prevent all other countries in the world from providing any goods for Rhodesia? How can the right hon. Gentleman say on the one hand that that is possible and in the next breath suggest that he cannot get together with two countries to stop the supply of arms to Biafra?
    Mr. Stewart: That question seems to be prejudiced and nonsensical.
    Mr. Alexander W. Lyon: Would not Group Captain Cheshire, if he is satisfied about the sincerity of Colonel Ojukwu, and satisfied also that the Nigerians are not planning genocide, be better employed in trying to bring this home to Colonel Gjukwu? This is really the source and cause of this war. If it were brought home to him, might it not any longer be necessary to have these protracted inquiries into the causes and outturn of the war?
    Mr. Stewart: I hope that anyone who has any access to Colonel Ojukwu will urge on him two things: first, that he ought to agree to the daylight flights, particularly now that he has the third party guarantee for which he asked. Second, that he should be prepared to enter into talks without pre-conditions.

    Council of Europe (Greece)
    Mr. Winnickasked the Secretary of State for Foreign and Commonwealth Affairs if Her Majesty's Government intends to vote for the expulsion of Greece from the Council of Europe at the Council of Europe at the Council's forthcoming meeting.
    The Chancellor of the Duchy of Lancaster (Mr. George Thomson): It would be premature for me to say now how we shall vote when the question of Greek membership of the Council of Europe is discussed at the meeting of the Committee of Ministers on 12th December. The Greek Government still have an opportunity to convince European opinion that they are prepared to make an early return to democratic practices.
    Mr. Winnick: Since there is no chance of the Greek Government changing their spots, will my right hon. Friend give a pledge here that if there is no change between now and the next meeting of the Council of Europe, when a decision will be made, Britain's vote will be for Greece to be expelled from that body?
    Mr. Thomson: Her Majesty's Government's decision remains as it was set out by my right hon. Friend the Foreign and Commonwealth Secretary on 7th May and subsequently in this House. It is that unless the Greek Government are in a position to conform to what is required by the Council of Europe, it will not be possible for that membership to continue.
    Mr. Wood: Will the right hon. Gentleman say whether the Foreign Secretary has now taken legal advice on the question of whether in this question the unanimity rule applies or not?
    Mr. Thomson: We are quite satisfied on the question about the legal questions which lie behind voting in the Council of Ministers, but the House I am sure would hope that it will be possible for the necessary changes to be made inside Greece to prevent that kind of situation being reached.

    Gibraltar
    Mr. George Jegerasked the Secretary of State for Foreign and Commonwealth Affairs whether he has now received the development plans from the

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    Gibraltar Government; and what action is being taken to sustain the economy of Gibraltar.
    Mr. Dalyellasked the Secretary of State for Foreign and Commonwealth Affairs if he will outline what Her Majesty's Government are doing to provide physical help to the people of Gibraltar.
    Mr. George Thomson: Expert advice in various fields has been made available to the Gibraltar Government. At the invitation of Her Majesty's Government the Gibraltar Government have formulated development proposals which are now being considered in London prior to discussion at an early date with the Governor and Gibraltar Ministers.
    Mr. Jeger: I thank my right hon. Friend for that reply. Will he undertake to make a statement to the House when he has completed those discussions with the Government of Gibraltar?
    Mr. Thomson: Certainly, sir.
    Mr. Braine: Has the attention of the right hon. Gentleman been drawn to a report from Madrid in yesterday's Sunday Telegraph that Washington has been suggesting a package deal tying a Gibraltar settlement with eventual Spanish membership of N.A.T.O.? Is there any truth in that? Will he give an assurance that no consideration will halt the steps now being taken to sustain the Gibraltar economy?
    Mr. Thomson: I can certainly give the hon. Member the assurance that we are pledged to support the people of Gibraltar, and we shall take all the necessary steps to do that. I am not responsible for what appears in the Sunday Telegraph, but there are other Questions about Spain later on the Order Paper.
    Mr. George Jegerasked the Secretary of State for Foreign and Commonwealth Affairs whether he will publish the Beeching Report on the use of manpower in Gibraltar.
    Mr. van Straubenzeeasked the Secretary of State for Foreign and Commonwealth Affairs what action he proposes consequent upon the Beeching plan for the economy of Gibraltar.
    Mr. George Thomson: The report of the Manpower Mission to Gibraltar has been published and copies are available in the Library of the House. Certain confidential material has been omitted, but this does not in any way affect the recommendations of the report. These are being carefully studied by the Gibraltar Government in connection with future labour policy.
    Mr. van Straubenzee: Will the Minister of State kindly say whether he anticipates early discussions with the Chief Minister of Gibraltar upon the recommendations contained in the report?
    Mr. Thomson: As the hon. Member may have seen in the Press, the Governor of Gibraltar is to be in London this week and we shall be consulting with him. We would like talks to begin with the new Ministers of the Gibraltar Government as soon as possible.

    Western European Union (France)
    Mr. Wingfield Digbyasked the Secretary of State for Foreign and Commonwealth Affairs what consultations he has had with the French Government about French participation in the Council of Ministers of the Western European Union; and with what result.
    Mr. George Thomson: Western European Union was one of the subjects which my right hon. Friend the Foreign and Commonwealth Secretary discussed with M. Schumann in New York on 20th September. He made clear to M. Schumann our hope that France would return to the Western European Union Council and take part in its work of political consultation.
    Mr. Digby: As the Council has now been deferred to January, when it should be held in France under French presidency, will this not be a good opportunity to try to persuade France to come back to the Council of Ministers?
    Mr. Thomson: We would very much like to see France playing her proper part in the work of the W.E.U. Council. No date has yet been fixed for the next meeting of the Council. That is a matter for the permanent representatives, and they will be discussing it very shortly.
    Mr. Anderson: Was it made clear in the discussions that the French are no longer insisting on the completion of the

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    agreement on agricultural financing before their willingness to discuss enlargement of the Community?
    Mr. Thomson: That is a different point. The W.E.U. Council is not concerned with that.
    Mr. Wood: Can the right hon. Gentleman say that without the return of France the package of the budget of the next financial year would be impeded?
    Mr. Thomson: I should not like to speculate about a hypothetical situation like that. We hope that France will come back and play her proper part in the deliberations of the Council.

    China (Detained British Subjects)
    11. Mr. Boyd-Carpenterasked the Secretary of State for Foreign and Commonwealth Affairs what explanations or apologies he has received from the Chinese Government in respect of the maltreatment of British subjects detained in China.
    Mr. Luard: Repeated representations have been made about the detention and, where appropriate, about the treatment of British subjects in China. Such explanations as have been given by the Chinese authorities have been unsatisfactory. My hon. Friend the Parliamentary Under-Secretary of State summoned the Chinese Chargé d'Affaires on 11th November and expressed our grave concern on these matters.
    Mr. Boyd-Carpenter: Is not the behaviour of the Chinese Government towards foreigners quite inconsistent with the normal standards of intercourse between civilised Powers? Is not the time approaching when if China persists in this attitude we should review our attitude towards her?
    Mr. Luard: I agree that the attitude by China towards some of the persons detained in China is deplorable, and we have made persistent representations, for example, about Mr. Grey. Our main concern is with some of these people who are detained, and we are doing all possible to ensure their release as soon as possible.
    Mr. Rankin: Does my hon. Friend agree that the attitude of China towards
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    certain of our people from Britain is in retaliation to the treatment meted out by us, or through us, to prisoners in Hong Kong?
    Mr. Luard: It has been suggested that the detention of Mr. Grey was in retaliation for the detention of certain people in Hong Kong, but there was a complete difference between the two cases. Those detained in Hong Kong had been tried in courts of law and detained according to the processes of law, but that was not true in the case of Mr. Grey.
    Mr. McMaster: How many of our citizens are being held in China with or without trial? Has diplomatic access been granted to any of them?
    Mr. Luard: There are nine British subjects at present under detention in China. Six were released not long ago. There is access to most but not quite all of those British subjects. I should need notice to be able to give the exact number.

    Spanish Coastal Batteries (Firing)
    Mr. Boyd-Carpenterasked the Secretary of State for Foreign and Commonwealth Affairs whether he has made representations to the Spanish Government about firing on 21st October last by Spanish coastal batteries near the British liner "Uganda" off Cape Trafalgar; and whether he has secured any explanation.
    Mr. George Thomson: No, Sir. We have looked carefully into this and there are no grounds for making representations. We do not attach any political significance to what happened.
    Mr. Boyd-Carpenter: Without attaching political significance to what happened, can the right hon. Gentleman say whether the normal warning of practice firing on seas which are part of the trade route was given; and, if not, why not?
    Mr. Thomson: I am grateful for what the right hon. Gentleman said about not seeking to make this a political issue. The normal notice was given to the Gibraltar maritime authorities, but the ship in question did not call at Gibraltar. I can best explain the matter by saying that the incident involved firing by the Spanish authorities in exactly the same way as would be conducted by British authorities in the same circumstances.

    Anguillans (Technical Training)
    Mr. Martenasked the Secretary of State for Foreign arid Commonwealth Affairs what proposals he has for the training of Anguillans as technicians for the management of their island.
    Mr. Luard: Her Majesty's Commissioner is endeavouring to arrange technical training for Anguillans to meet specific urgent needs.
    Mr. Marten: Does not the Joint Under-Secretary realise that what is wanted in Anguilla when the British forces and British police have left is a comprehensive training programme so that the Anguillans themselves can run their island? From what he has just said, it does not sound as if they are doing enough. Can he tell us more?
    Mr. Luard: Quite a lot is being done. Six teachers from Anguilla recently started three-year training courses in St. Lucia. Three more teachers have started degree courses at the University of the West Indies. There are places for four more as air traffic controllers. As regards the future, we are hoping to arrange for the recruitment and training of more Anguillans for technical posts in agriculture, education and public works.
    Mr. Braine: Has a decision yet been taken about the composition of the Commission which is to be set up to consider the future of Anguilla? When is it expected that the Commission will get down to work?
    Mr. Luard: There is another Question on the Order Paper on the first part of that supplementary question. It is hoped to be able to announce the names of the members of the Commission tomorrow. The Commission will start work soon after that.

    Warsaw Pact Powers (Security Conference)
    16. Mrs. Renée Shortasked the Secretary of State for Foreign and Commonwealth Affairs what progress is being made in the arrangements for the holding of the Security Conference proposed by the Warsaw Powers in the light of the invitation issued by the President of Finland; and if he will make a statement.
    Mr. Frank Allaunasked the Secretary of State for Foreign and Commonwealth Affairs what initiative the British Government intend to take at the December meeting of the North Atlantic Treaty Organisation for the holding of an East-West conference on a European security pact.
    Mr. Will Owenasked the Secretary of State for Foreign and Commonwealth Affairs what is the policy of Her Majesty's Government concerning participation in the proposed European Security Conference; and whether he will make a statement.
    Mr. George Thomson: The N.A.T.O. Powers have been for some time engaged in an examination in depth of ways of initiating useful discussions with the Warsaw Pact Powers on fundamental problems of European Security. For example, at Reykjavik in 1968 N.A.T.O. called on the Warsaw Pact Powers to join in discussions of mutual force reductions. This invitation has so far not been answered, but it remains open. In preparing for the December meeting of N.A.T.O., we are taking into account with our Allies the Declaration issued by the Warsaw Pact at Prague on 31st October, and the invitation issued by the President of Finland.
    Mrs. Short: Will my right hon. Friend give an undertaking to the House that artificial barriers will not be placed in the way of continuing with the discussions about a security conference, because for many years the Warsaw Pact Powers have been anxious to get a conference of this kind organised and have received a rather cold reply from the Foreign Office?
    Mr. Thomson: I cannot accept my hon. Friend's premise. I assure her that there will be no artificial barriers placed from the N.A.T.O. Council side. Indeed, the present position, as I see it, is that the N.A.T.O. Council has made positive proposals to which we have not yet had a response from the Warsaw Pact Powers.
    On the question of a European security conference, the Secretary-General of N.A.T.O. put it for all the members of N.A.T.O. very accurately, at the recent meeting which I attended a week or so

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    ago, when he talked about the readiness of the Alliance members to consider all possible procedures for negotiations on the East-West issue, including a conference or series of conferences.
    Mr. Frank Allaun: Would it not be a wonderful thing for peace if such a conference resulted in the mutual force reductions to which my right hon. Friend referred? In that case, why was it that at the recent conference which he attended he, instead of taking the initiative, appeared to drag his feet?
    Mr. Thomson: I am sorry that my hon. Friend prefers to believe what he reads in the newspapers instead of coming and having a word with me about what I said. I do not believe that the Press reports accurately reflected what I said at the Council meeting. To give one isolated quotation, I said at the N.A.T.O. Council that we must continue to probe and to seize any opportunity that may exist of improving East-West relations. I went on to say that we must be ready to assume a positive posture at any time.
    Mr. Dodds-Parker: Will the right hon. Gentleman ensure that every member of he alliance is brought into these and all such discussions?
    Mr. Thomson: Yes, certainly. We have made it clear from the beginning that any general European security conference must be a conference between the N.A.T.O. alliance and the Warsaw Pact alliance and, therefore, must include both our transatlantic allies—Canada and the United States—from the beginning.

    European Economic Community
    Mr. Alfred Morrisasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a further statement on the progress of Great Britain's application to join the European Economic Community.
    Mr. St. John-Stevasasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on British policy concerning the application to join the European Economic Community.
    Mr. Mayhewasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Great Britain's application to join the Common Market in the light of the conference of European Economic Community Ministers at The Hague.
    Mr. Croninasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the present situation with regard to Great Britain's application to join the European Economic Community.
    Mr. George Thomson: I would refer my hon. Friend to the reply which my right hon. Friend the Foreign and Commonwealth Secretary gave on 13th October to the hon. Member for Haltemprice (Mr. Wall). [Vol. 788, c. 3–5.]
    Mr. Morris: Can we now make it finally clear to our Western European friends that there can be no question of allowing into this country a flood of expensive French farm produce to the hurt of our traditional suppliers in the Commonwealth, the home producer, and, most of all, the British housewife?
    Mr. Thomson: I think that the Government's position at this stage is very clear. We have put down our application. We have publicly stated the conditions that we attach to that application. We have said that we have to come to terms with the common agricultural policy, but decisions still have to be made—and this is what I want to emphasise to my hon. Friend—by the six members of the Community themselves about the nature and working of that policy. Then there have to be negotiations.
    Mr. St. John-Stevas: Can the right hon. Gentleman say whether he has any firm evidence that the attitude of the French Government has changed on this issue, and can he say that he is confident that the French veto will not be exercised once again if negotiations are begun?
    Mr. Thomson: As regards the attitude of the French Government, I have very much in mind what the Foreign Minister of France said during the General Assembly meeting of the United Nations, which was also attended by my right hon. Friend. If I remember rightly, he

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    then said that he thought that British membership of a wider European Economic Community was indispensable.
    Mr. Mayhew: While waiting for the negotiations to develop, will the Government make a study of the relative decline in the standard of living in this country over the years compared with that in the Common Market countries? Are British families not entitled to know by how much they would be better off even now were it not for the misguided opposition of hon. Members in this House to our entry?
    Mr. Thomson: I think that on reflection my hon. Friend will feel that he put the matter slightly inaccurately, though I think that his main argument is a strong one. It is not that our standard of living has declined, but that it has been increasing less quickly than the standard of living in the countries of the Six. I think that it is important for all of us who are engaged in this historic debate to concentrate our attention on the standard of living, and not simply on the cost of living.
    Mr. Braine: Is it still the Government's intention, as and when negotiations open, to press for special arrangements for New Zealand?
    Mr. Thomson: Yes, Sir. The position about New Zealand is exactly the same as set out in the White Paper put before the House in 1967.
    Mr. Shinwell: Will my right hon. Friend and the Foreign Secretary take a look at this afternoon's edition of the Evening Standard? In it my right hon. Friend will see a statement by the head of the Economic Department of the Confederation of British Industry in which he throws an icy douche of cold water on the whole project.
    Mr. Thomson: I must confess that I have been so busy preparing my replies to the House this afternoon that I have not had an opportunity of seeing the afternoon edition of the Evening Standard.
    Mr. Eldon Griffiths: Will the right hon. Gentleman cast his mind back to the Prime Minister's promise that a White Paper or some similar document would be published setting out the Government's new estimates of the cost and the pros
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    and cons of joining the Common Market? Is the publication ready? If it is, when are we likely to have it?
    Mr. Thomson: The publication is urgently in hand. It will be made available to the House and to the nation as quickly as is consistent with giving the nation all the necessary information.
    Mr. Alfred Morrisasked the Secretary of State for Foreign and Commonwealth Affairs what grants 'are paid by his Department to organisations working for British membership of the European Economic Community; and how much is paid to each organisation.
    Mr. George Thomson: I would refer my hon. Friend to the reply given by the Joint Under-Secretary of State to the hon. Member for Banbury (Mr. Marten) on 3rd November and to the reply given to my hon. Friend himself on 1st November, 1968.—[Vol. 790, c. 26; Vol. 772, c. 5.]
    Mr. Morris: Can my right hon. Friend say whether any of this public money is spent in explaining to our Western European friends the majority view of the British people that we should not proceed with the application?
    Mr. Thomson: My hon. Friend will not expect me to accept the assumption about the majority view of the British people—[HON. MEMBERS: Why not?] Because I think that the House of Commons and Her Majesty's Government are bound in these matters to rest on the majority view when it was last expressed in this House.
    Mr. Marten: Does the right hon. Gentleman recall that in the reply given to me by the Joint Under-Secretary of State it was said that £5,000 a year is paid to this pro-European Council for promoting an understanding of the attitude of the British people towards Europe? Can the right hon. Gentleman say that that money will be withdrawn if it is not putting abroad in the Common Market countries the true attitude of the British people that they do not want to go into the Common Market?
    Mr. Thomson: I should not like the hon. Gentleman to be under a misapprehension about the facts. The current grant to the organisation to which I think the

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    hon. Gentleman is referring, which is Britain in Europe, is £7,500. It is used to help to promote a proper understanding in Europe of the British point of view generally on European affairs. The second part of the hon. Gentleman's question is hypothetical.
    Mr. William Hamiltonasked the Secretary of State for Foreign and Commonwealth Affairs what representations he has received in the last six months from members of the Commonwealth concerning the effects on their economies of a possible United Kingdom entry into the European Economic Community.
    Mr. George Thomson: Exchanges between Her Majesty's Government and other Commonwealth Governments are, of course confidential, but I can confirm that the question of Commonwealth interests involved in British membership of the European Economic Community has been discussed both bilaterally and multilaterally on a number of occasions during the last six months. The meeting of the Commonwealth Finance Ministers which took place in Barbados in September provided, for example, an important opportunity for an exchange of views with Commonwealth Governments.
    Mr. Hamilton: Has any positive approval been given by all members of tie Commonwealth of the Government's insistence on going ahead with the negotiations, and, further, has any positive assurance been given to a country like, in particular, New Zealand that no agreement will be ratified by Her Majesty's Government unless and until the interests of New Zealand are safeguarded?
    Mr. Thomson: The position of New Zealand, like the position of the developing sugar economies, has been made clear in our application, and, as I said earlier today, that position remains absolutely as it was originally stated in 1967. I myself had the honour of leading the British delegation to the recent Commonwealth Parliamentary Association conference in Trinidad, where we had a most vigorous debate on this matter, and I was left with the general impression that there was an increasing understanding among the Commonwealth countries of the desirability of British membership of a wider European economic community. Many of the
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    countries of the Commonwealth are making their own arrangements both with the European Economic Community and among themselves., in the form of various free trade area and common market arrangements. I think that the general view throughout the Commonwealth was that they could not deny to us the right to do the kind of things which they themselves were seeking to do.

    Common Market, Euratom and European Coal and Steel Community
    Mr. Biffenasked the Secretary of State for Foreign and Commonwealth Affairs what discussions he has had with the European Economic Community Commission and the Council of Ministers concerning the proposal to merge the treaties which have established the Common Market, Euratom and the European Coal and Steel Community, respectively; and if he will make a statement.
    Mr. George Thomson: None, Sir.
    Mr. Biffen: Do not these emergency proposals provide an excellent opportunity for an initiative by Her Majesty's Government in promulgating some form of treaty embodying a European Association which precludes both supranational and the federal characteristics present in the Treaties of Rome and Paris which are so unacceptable to a large number of people in this country, and now to many in Continental Europe?
    Mr. Thomson: I think that the present position is very clear as regards the three treaties. The Councils of the three European Communities were merged in July, 1967, but the six nations themselves have not so far taken any further steps to merge the treaties. We have made an application to adhere to the treaties, and the treaties lay down carefully what obligations are involved.
    Mr. Orme: Is it not a fact that particularly Euratom and the Iron and Steel Community are far from working satisfactorily in the E.E.C., and should this not be fully acknowledged? Second, what comment has my right hon. Friend to make about the nationalisation of steel in this country, which was adversely criticised and claimed by a recent E.E.C. publication to be outside the terms of the Treaty of Rome?
    Mr. Thomson: I understand that there is no question but that our arrangements in this country regarding the organisation of the steel industry are consistent with British membership of the Community.

    Rhodesia
    Mr. Biffenasked the Secretary of State for Foreign and Commonwealth Affairs if he has now completed the study undertaken to examine the implications of communications sanctions against Rhodesia; and if he will make a statement.
    Mr. Luard: The study is continuing, and I have nothing to add to what my hon. Friend the Joint Under-Secretary of State said in this House on 13th October.—[Vol. 788, c. 21–2.]
    Mr. Biffen: When does the Minister expect to conclude the study, what are the factors holding up its conclusions, and has not ample evidence been adduced by my right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home) to indicate the self-defeating futility of such an exercise?
    Mr. Luard: It is true that the study has taken longer than we expected, but we hope to have results in the fairly near future. As regards the advantages or otherwise of communications sanctions, feelings on this are mixed in this country, in the Commonwealth and in the United Nations, but it is entirely understandable that this should be one of the measures being discussed and considered for the purpose of making sanctions effective.
    Mr. Philip Noel-Baker: In view of the great long-term importance of the precedents being set by the sanctions imposed on Rhodesia, will my hon. Friend recommend to his right hon. Friend that he should give the House a White Paper setting out the whole history of sanctions and what has happened?
    Mr. Luard: I think that the course and development of sanctions is well known, but I shall consider what my right hon. Friend has said.
    Mr. Braine: Will this study make any distinction between the tightening of sanctions against the Smith régime and the injuring of innocent people? Does he realise that any proposal to stop postal communications between families in this
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    country and their close relatives in Rhodesia would be regarded by most people as inhumane, rather petty, and possibly counter-productive?
    Mr. Luard: The Commonwealth Sanctions Committee is concerned with the application of sanctions as a whole, and this question of communications sanctions is one of the many subjects which it has to consider. In considering communications sanctions, obviously, it will take some account of factors of the kind which the hon. Gentleman has mentioned, but, clearly, we must balance against that the possible advantages in terms of greater effectiveness. Communications are a two-way function, and, we, therefore, have to take into account not only any harm which may be done to Rhodesia by cutting off communications but also any disadvantage to us in preventing us from making our views known in Rhodesia.
    Mr. Bruce-Gardyneasked the Secretary of State for Foreign and Commonwealth Affairs what instructions he has given to Her Majesty's representative at the United Nations regarding the attitude he is to adopt to the Portuguese Government's request for compensation for losses of trade consequent upon the application of sanctions against Rhodesia.
    Mr. Luard: None, Sir. The Security Council has not decided to take up this question.
    Mr. Bruce-Gardyne: Since Article 50 of the Charter expressly endows any third country which feels itself damaged by sanctions with a right of appeal under the Charter, why has Lord Caradon not called the Council together to discuss the Portuguese Government's complaint—or does the United Nations Charter apply only to countries which have not offended the Foreign Secretary's sensitive and selective conscience?
    Mr. Luard: The interpretation of Article 50 of the Charter is subject to dispute. But Portugal is a member of the United Nations and is subject to the decisions of the United Nations, just as any other members are. If any country is to raise this Article in connection with sanctions, it should be not Portugal but one or two other countries, such as Zambia, which have suffered far greater

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    economic problems. It is not for us, in any case, to take up this question with the Security Council. It is open to the Security Council to consider it at any time, and it has decided not to do so.
    Mr. Ronald Atkins: Will my hon. Friend instruct Her Majesty's representative to express the contempt of Her Majesty's Government for all the actions of Portugal in Africa?
    Mr. Luard: It is not for our representative at the United Nations to express his opinion about all such actions, but our opinion of Portugal's deplorable failure to apply sanctions in general has been made clear on many occasions.

    West German Foreign Minister (Meeting)
    Mr. Wingfield Digbyasked the Secretary of State for Foreign and Commonwealth Affairs when he plans to meet the new West German Foreign Minister.
    Mr. M. Stewart: I met Herr Scheel in Bonn on 14th November and we had a very useful first exchange of views.
    Mr. Digby: I am glad to hear that the Foreign Secretary took an early opportunity to meet the new Minister. May we take it that he had a wide exchange of views informally, and that he dealt also with the question of relations between the Federal Republic and Eastern Germany, both politically and economically?
    Mr. Stewart: The hon. Gentleman will realise that the discussions were confidential. However, I can properly tell the House that, naturally, we discussed among other things relations between Eastern and Western Europe, which would include the point which he raised.
    Mr. Ronald Atkins: In view of the increase in exchange costs of British Army of the Rhine consequent upon the revaluation of the Mark, will my right hon. Friend seek an early opportunity to renegotiate the offset agreement to cover the extra cost?
    Mr. Stewart: Our discussions on 14th November did not cover defence questions, but Her Majesty's Government are aware of the implications of the point my lion. Friend has raised.
    Mr. John Hynd: In has discussions with Herr Scheel, did my right hon. Friend gain the impression that the initiative and lead which the West German Government have given in regard to signing the Non-proliferation Treaty is likely to be taken up by the other non-nuclear Powers?
    Mr. Stewart: I could not say for certain. I hope that that would be so.

    United States Military Forces (Europe)
    Sir T. Beamishasked the Secretary of State for Foreign and Commonwealth Affairs what assurances he has received about the intention of the United States Government to maintain their contribution to the North Atlantic Treaty Organisation; and if he will seek an assurance that substantial reductions of United States military strength in Europe will be contingent upon similar Soviet withdrawals.
    Mr. George Thomson: The American Secretary for Defence, Mr. Laird, has emphasised on more than one occasion that the United States has no programme to reduce American troop strength in Europe either in this fiscal year or the next.
    Sir T. Beamish: Are Her Majesty's Government generally in agreement with the American Government about the likely effects on our vital interests in Europe and beyond and on the interests of our allies if progress is made towards a Soviet-American détente? Is there general agreement with the United States Government about the effect upon us of such a détente?
    Mr. Thomson: Yes, Sir; we keep in the most thorough consultation about these matters.

    West Irian
    Mr. Bruce-Gardyneasked the Secretary of State for Foreign and Commonwealth Affairs what instructions he has given to Her Majesty's representative at the United Nations regarding that organisation's failure to fulfil its responsibility for ensuring that the desires of the inhabitants of West Irian regarding the future of their country were properly ascertained during the course of the current calendar year.
    Mr. Luard: Responsibility for carrying out the act of free choice in West Irian lay with the Government of Indonesia, not with the United Nations. The Secretary-General was authorised by the General Assembly to appoint a representative to carry out his responsibilities under the 1962 Agreement between Indonesia and the Netherlands to advise, assist and participate in the arrangements for the act. He has now submitted a report on the conduct of the act and the results thereof, and has thus carried out the tasks entrusted to him.
    Mr. Bruce-Gardyne: Is it not a fact that this is the one territory in the world for which the United Nations assumed direct responsibility for ensuring, among other things, free movement, free speech and free choice in this exercise which the hon. Gentleman has just said has been carried out, but is it not evident from the Secretary-General's representative's report that none of these things has in any way been carried through? How does the hon. Gentleman, therefore, explain the Government's deafening silence in the matter, given the interest which they always express in the United Nations and the Charter?
    Mr. Luard: It is not true that the United Nations was given direct responsibility for this territory or even for administering the act of choice. This matter was governed by the agreement between Indonesia and the Netherlands reached in 1962. The United Nations was given responsibility only for sending a special representative of the Secretary-General to observe the act of choice. In fact, his comments were not quite so unfavourable as the hon. Gentleman suggested, since his main conclusion was that
    "it can be stated that, with the limitations imposed by the geographical characteristics of the territory and the general political situation in the area, an act of free choice has taken place in West Irian in accordance with Indonesian practice, in which representatives of the population have expressed their wish to remain with Indonesia."

    Arab-Israeli Dispute
    Sir T. Beamishasked the Secretary of State for Foreign and Commonwealth Affairs what indications have been given by the Israeli Government of their willingness to implement the 1967 Security Coun
    844
    cil resolution; and if he will make a statement on the progress towards a settlement of the Arab-Israeli dispute.
    Mr. M. Stewart: The Foreign Minister of Israel, Mr. Abba Eban, spoke about Israel's acceptance of the 1967 Security Council resolution in his speech at the United Nations General Assembly on 19th September. The full text of Mr. Eban's speech is in the Library of the House.
    Sir T. Beamish: What success has the right hon. Gentleman had in persuading the Israeli Government that a United Nations guarantee of new frontiers after withdrawal from Arab-occupied lands and an end of the state of war could be relied on next time?
    Mr. Stewart: I think that it is well known that the Israeli Government's doubts about the certainty of such a a guarantee are one of the difficulties in reaching a settlement. But this is by no means the whole story in reaching a settlement. What we must do through the four-Power talks and Dr. Jarring is to try to make out a workable settlement on the lines of the Security Council resolution.
    Mr. Rose: Is it not right that Mr. Eban has also said that nothing is not negotiable, and that the Israelis have modified their position and agreed to Rhodes-type talks, which were subsequently dismissed by the Egyptian Government? Does my right hon. Friend agree that recent bloodand-fire speeches do not help to lower the temperature in the area?
    Mr. Stewart: My hon. Friend is quite correct on his first point. He also correctly describes the Israeli Government's attitude to what are called Rhodes-type talks. There seems to be some misunderstanding and disagreement about exactly what that phrase means. As to the speech of President Nasser to which my hon. Friend refers, a speech of that kind is unhelpful and drives home how important it is to obtain a settlement before the danger becomes more acute.
    Viscount Lambton: What is the British interpretation of the wording of the 1967 resolution? Does the right hon. Gentleman understand it to mean that the Israelis should withdraw from all territory taken in the late war?
    Mr. Stewart: No, Sir. That is not the phrase used in the resolution. The resolution speaks of secure and recognised boundaries. Those words must be read concurrently with the statement on withdrawal.
    Mr. Mayhew: Can my right hon. Friend say precisely how far the Israelis have discussed the question of security if and when they return to their old territories? is not this a case where perhaps the French and British could take an initiative, since the Americans and Russians seem to have become bogged down in commitment to one side or the other?
    Mr. Stewart: There has been some progress in the talks between the Soviet Union and the United States. I agree that it would be desirable for the Four to resume their talks to try to work out at least the beginning of a settlement that would conform to everything in the Security Council resolution.
    Mr. Longden: Is not the situation in the Middle East drifting towards inevitable disaster? Cannot the British Government take an initiative? Would not an additional guarantee such as that suggested in my later Question on the Order Paper increase the confidence of Israel that any settlement would be honoured?
    Mr. Stewart: It would be better to wait until we reach that Question.
    Mr. Shinwell: In view of the recent declaration by Colonel Nasser that the Middle East problem can be resolved only by force, and the attitude of another Arab Government, that of Libya, towards Great Britain, is not the United Nations resolution just a farce? Will my right hon. Friend take into account the fact that the only country in the Middle East friendly disposed towards Great Britain is the State of Israel?
    Mr. Stewart: There has been some criticism in the House of hon. Members trying to advance their Questions by linking them with others. There are Questions later about Libya. I have already expressed my view about President Nasser's speech. I do not believe, despite that speech, that we should regard a disaster as inevitable, and certainly we should not set aside the Security Council resolution as the basis of a settlement. If
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    any settlement that is workable and will last is reached, it will be broadly on the basis of that resolution.

    South Africa
    Mr. Pardoeasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Government policy towards South Africa, following his recent meeting with the South African Foreign Minister.
    Mr. M. Stewart: There is no change in Government policy towards South Africa.
    Mr. Pardoe: Did the South African Foreign Minister stress his Government's desire to play a greater part in the defence of the free world, and did the right hon. Gentleman assure his guest that Her Majesty's Government did not necessarily think that the ideals of Western freedom would be more secure by having the military support of the South African régime?
    Mr. Stewart: I did not say anything like that in the course of conversations, which were confidential.
    Mr. Prentice: Will my right hon. Friend confirm that British economic involvement in South Africa has tended to increase recently? Is there a danger in this that we shall have a greater and greater stake in the status quo, and that this might affect our political attitudes in the period ahead?
    Mr. Stewart: There has been an increase of trade between us and South Africa, but I take the view, which I have expressed in the House before, that we must desire an increase of peaceful trade with all countries.

    Nairobi (Asian Holders of United Kingdom Passports)
    Mr. Huntasked the Secretary of State for Foreign and Commonwealth Affairs whether he is satisfied with the guidance and assistance offered by the British High Commission in Nairobi to Asian holders of United Kingdom passports; and if he will make a statement.
    Mr. Luard: Yes, Sir. I am satisfied that our High Commission in Nairobi takes all proper steps to safeguard the interests of Asian holders of United Kingdom passports and that any advice

    847
    or assistance they may require is freely given by the High Commission staff concerned.
    Mr. Hunt: Is the hon. Gentleman aware that that is not the impression I have received from a number of representations I have had from reputable and reliable people living in Kenya, who are bitterly concerned about the treatment they and their friends are receiving at the High Commission, particularly from the counter staff? Can it therefore be made clear to all those who work at the High Commission that these Asians are our citizens and our responsibility, and should therefore be treated with courtesy and respect?
    Mr. Luard: In general, I think that it is true to say that the staff of our High Commission are very well qualified to advise, and are very anxious to advise and give as much help as possible. I note what the hon. Gentleman has said, and I shall make sure that everything is done to ensure that the general instructions are faithfully carried out.

    Deputy Prime Minister of New Zealand (Discussions)
    Mr. van Straubenzeeasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on his recent consultations with the Deputy Prime Minister of New Zealand.
    Mr. M. Stewart: Mr. Marshall and I had confidential discussions on 6th and 17th October primarily about the implications for New Zealand of Britain joining the European Economic Community. We had a cordial exchange of views in the course of which the positions of our respective Governments were re-stated and well understood.
    Mr. van Straubenzee: I am grateful to the right hon. Gentleman for that reply. Is it right that his consultations with Mr. Marshall took place while Mr. Marshall was able to have extensive consultations within Europe, and did he return feeling that there was an insuperable difficulty in finding a special arrangement for New Zealand if Britain should join the Common Market?
    Mr. Stewart: I had talks with Mr. Marshall both before and after his visits to Europe. It would not be appropriate
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    for me to comment on his talks with other Governments, but I am very much of the view that there is no insuperable difficulty here.

    Libya (British Bases)
    Mr. Roseasked the Secretary of State for Foreign and Commonwealth Affairs what action he proposes to take following the unilateral cancellation of Great Britain's right to bases in Libya.
    Mr. M. Stewart: The Libyan Government asked on 29th October that we should enter into negotiations with them for the early evacuation of our forces from Libya. We informed the Libyan Government on 13th November that we hoped to establish a new relationship of co-operation on a different basis from that of the Anglo-Libyan Treaty of 1953 and that we are, therefore, willing to open negotiations to this end immediately.
    Mr. Rose: In view of the instability of military dictatorships and feudal sheikdoms in that area, will my right hon. Friend be influenced less by sterling balances and oil and more by the moral obligation to the only democratic State in that area, which faces genocide?
    Mr. Stewart: I take it that my hon. Friend is referring to the question of arms supplies in the Middle East. I would refer him to what I have said earlier about this, that it is not our practice to reveal details of specific transactions. We judge particular requests from the Middle East on their merits, and I explained to the House on 30th October what I mean by that phrase. That policy applies to the sale of arms and military relations with Libya and other countries in the Middle East.
    Mr. Dodds-Parker: Does not the right hon. Gentleman agree that the general wish is to have the best possible relations with the new régime in Libya? At the same time, will he also acknowledge the nearly 30 years of mutually beneficial co-operation we had with the old régime. particularly in the war years?
    Mr. Stewart: I certainly acknowledge the fruitful co-operation there was in the past. I think that it is important, as I said in my original reply, to get a satisfactory new relationship now.

    NIGERIAN DIPLOMAT (ARREST)
    Mr. John Fraser(by Private Notice) asked the Secretary of State for the Home Department whether he will make a statement about the arrest of the Nigerian diplomat in the constituency of Norwood last Saturday.
    The Secretary of State for the Home Department (Mr. James Callaghan): Police inquiries took place on the morning of 15th November about a car which was causing a serious obstruction in a No waiting area in Brixton. The licence plate bore a different number from the Road Fund licence disc and there was a possibility that the vehicle might have been stolen.
    Mr. Gomwalk, who was not at this stage known to be a diplomat, returned to the car, and refused to give any explanation of the ownership. During questioning by the police, a hostile crowd gathered, a struggle took place, and in order to prevent a breach of the peace Mr. Gomwalk was arrested and taken to Brixton police station. His identity and entitlement to diplomatic immunity were established while he was there and he was released.
    In the meantime, a disturbance developed as a result of which six other persons were arrested, against whom proceedings are now pending. In the circumstances, it would not be proper for me to make any further comment.
    Mr. Fraser: Can my right hon. Friend confirm that the police in Lambeth will continue to work with all sections of the community and do what they have done hitherto—try to maintain the best possible race relations within the borough? My right hon. Friend has already confirmed that the car registration plates differed from the Road Fund licence disc and that this car was parked in the most congested and clearly marked "No waiting" area of my constituency. Can he also confirm that this diplomat did not produce his diplomatic papers at the time and that while people enjoy diplomatic immunity in this country they have an equal duty with all other members of the community to try to maintain good relations in the places they visit?
    Mr. Callaghan: I am obliged to my hon. Friend for those comments. The police certainly endeavoured to deal with this matter in a manner which would have caused the minimum damage to any relationships either with any Government or with any diplomat, or, indeed, with any normal member of the public. If this gentleman had co-operated with the police by telling them what was the nature of the ownership and had answered a few simple inquiries, the whole matter would have been over very quickly. Alas, Mr. Gomwalk did not do so.
    Mr. Farr: Can the right hon. Gentleman say whether the vehicle was carrying a C.D. plate on the front or the back? Have Her Majesty's Government considered inquiring into the great latitude which C.D. plate holders have in this country and whether there is not a case for tightening up the regulations?
    Mr. Callaghan: That is a wider question. But as the reply given in the House on 22nd October last showed, there were about 26,000 cases of diplomats who declined to pay traffic penalties in the Metropolitan area during the last 12 months. Diplomats really do have a responsibility to conduct themselves, when they are in this country, in a manner that is expected of ordinary citizens here.

SPRINGBOKS' RUGBY MATCH, SWANSEA (DISTURBANCES)
Mr. Hugh Jenkins(by Private Notice) asked the Secretary of State for the Home Department whether he has received a report from an Inspector of Constabulary on the disturbances and casualties at the Springboks' match at Swansea last Saturday, and whether he will make a statement.
The Secretary of State for the Home Department (Mr. James Callaghan): I have received a preliminary report. Disturbances took place at Swansea both outside and inside the ground. A number of people were injured, including 11 police officers. Charges have been brought against 63 people, who will appear in court on 19th November. Complaints have been made about a number of police officers and these are to be investigated under Section 49 of the Police

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Act, 1964 by an Assistant Chief Constable of the Northumberland force.
The leaders of the demonstration had previously agreed with the Chief Constable of the South Wales Constabulary that a meeting should be held outside the Civic Hall, and they had also agreed a line of route that should be followed by a procession from the Civic Hall past the ground to the foreshore where they were to hold a further meeting.
The meeting outside the Civic Hall passed off peaceably and the procession itself was peaceable until the ground was reached, when the head of the procession halted, and it was at this stage that disturbances began. Inside the ground, a number of demonstrators broke on to the pitch just after half-time. Stewards had been engaged by the Swansea Rugby Football Club to remove demonstrators from the pitch. The task of the police in such circumstances is extremely difficult. They have a duty to assist the stewards where physical force is necessary to remove intruders. At the same time, they have a duty to preserve the peace.
These developments are placing a very heavy responsibility on the police service. I have, therefore, decided to call a conference of chief constables in those areas where games are still to be played in order to discuss the best way in which the responsibilities of the police can be carried out. Among the questions that I shall ask to be examined is the extent to which stewards are helpful. At two previous games, there was little or no complaint of the activities of stewards, but it is clear that their behaviour at Swansea caused a great deal of public disquiet.
In the meantime, outbreaks of disturbances can be limited inside the grounds if matches are by admission by ticket holders only.
As regards the game to be held at Ebbw Vale, one of Her Majesty's Inspectors of Constabulary is consulting the Chief Constable of Gwent.
Mr. Jenkins: Is my right hon. Friend aware that many hon. Members will be grateful for his statement? Will he take into consideration the degree of the violence which was exerted at Swansea and the number of casualties, some of
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whom are still in hospital? Will he, in his consultations with the police officers concerned, take into consideration the possibility that it might be in the public interest if the rest of this tour were to be cancelled?
Mr. Callaghan: There is a joint responsibility here upon the clubs and upon the protesters. If the newspaper is correct, I observe that one of the chairmen of the "Stop the '70 tour" has said:
"The match at Ebbw Vale could make Swansea seem like a tea party."
It is for the demonstrators themselves to consider how far that attitude is likely to advance the cause of anti-apartheid to which they are, I have no doubt, sincerely devoted.
The question of concellation of the rest of the tour gets us on to very difficult ground. If the police or the Government were to be called in to stop events that people did not like for various reasons, this would be the first step on what could be a dangerous and slippery slope.
I ask the House to appreciate the very difficult circumstances in which those who are trying to prevent a breach of the peace are being placed at the present time. It is unwelcome, no one will want it, and it is also inevitable that there will be occasional examples of roughness. If people break on to a ground, certainly a Rugby ground, the prospects in such circumstances of trying to prevent a breach of the peace are extremely slim and I must ask support for the police who, I believe, could carry out this task. That is what I want to discuss with the chief constables.
Mr. Monro: I welcome the right hon. Gentleman's statement that rugby footballers who wish to see a game have every right to do so. Does not he agree with rugby footballers who sincerely and genuinely believe that it is far better to keep contact with South Africa than to indulge in riots which will only harden opinion there? [HON. MEMBERS: "It is a class sport."]
Mr. Callaghan: I do not think that it is a particularly class ridden sport. At any rate, in parts of South Wales we regard it as a working-class game.
I must say that those who do not enjoy a game against the South Africans are free to stay away. If I may express my

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own personal view, I shall not go to see them, because I object to their sending a totally white team to this country. But, having expressed that personal view, I do not think that it would be right for the Government to step into this matter and to try to ensure that the tour was not played. It is for those who organise the tour to judge what the public reaction is and how far they go towards helping the cause to which the hon. Gentleman referred.
Mr. Michael Foot: I am grateful to my right hon. Friend for what he has said of his personal view of the undesirability of these people coming here in the form they have come. I recognise, as I am sure my right hon. Friend will, that the main purpose of the demonstrators, too, is to demonstrate their views. However, will he also accept that the serious reports in newspapers such as The Times, serious allegations, not so much against the police, although partly against the police, but more against the vigilantes, call for an entirely independent investigation of what happened at Swansea? Will he not also see that no such vigilantes will be operating at Ebbw Vale on Wednesday?
Mr. Callaghan: I have already said that one of the inspectors of constabulary at the Home Office is consulting the Chief Constable of Gwent to see what arrangements should be made. I have not had much time since these Private Notice Questions were put forward, but I have considered whether a public inquiry would help and my preliminary view is that it would not. I doubt whether there are many impartial people in this connection. I am sure that there are many thousands who saw what happened, and they will draw their own conclusions. If there are complaints against the police, as there are, those who have made the complaints will have them followed up under Section 49 of the 1964 Act.
It is not the job of a steward to assault people; he should escort them from the ground, if such a thing is possible, and, if physical force is required, it is his duty to call upon the police for that purpose. If any demonstrator feels that he has been assaulted by a steward, he has a remedy in the courts and it is for him to apply. I doubt whether any
854
general inquiry would produce anything new that we do not already know.
Mr. Hogg: Is it not plain that, whatever may be one's attitude to the desirability or otherwise of these games, people who desire to take part in football matches, or to watch them, have a perfectly valid legal right to do so, and that if this right is to be interdicted by those who do not happen to share their views there will be neither freedom nor law in Britain?
Mr. Callaghan: It is extremely difficult for police officers to be obliged to judge the worthiness or motives of persons who are organising events, or those who attend them. I do not see how the House could ask the police to be put in that position. The preservation of the peace is particularly difficult when one section of the public may be in conflict with another. If demonstrators succeed in occupying a pitch, there will almost certainly be clashes between them and a number of spectators who want to see the match. The duty of the police, and this is what I am concerned with, is to try to prevent such clashes and to judge the action necessary to do so, and this is where the House must support them.
Mr. Philip Noel-Baker: Is it not high time that the Rugby Union and the M.C.C. accepted the principle annunciated by the Olympic movement that States which apply apartheid should not take part in international sport, a principle which has been reasserted by the International Council of Sport and Physical Education of U.N.E.S.C.O., of which I have the honour to be chairman?
Mr. Callaghan: My right hon. Friend's services to this cause are well known, but, as he correctly put it at the beginning of his question, it is a matter for the Rugby Union or the M.C.C., not the Government, to decide.
Mr. Gresham Cooke: Was it not obvious to anyone who watched the events on television on Saturday that considerable force was brought to bear by the demonstrators against the police and that police were severely injured? In these cases, is it not the duty of members of the public to come to the help of the police and, if necessary, to use force against the demonstrators? Is it not

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deplorable for these demonstrators to import violence into these affairs?
Mr. Callaghan: A statement of general principle can often lead to great difficulties. I myself would see a great difference between a member of the public going to the help of a policeman who was surrounded by a gang of hooligans outside a main line London station and a paid and recruited group of stewards helping the police in the middle of a rugby ground on an excitable afternoon in Wales, where we know how to play rugby.
My own view, and I want to put this to the chief constables, is that it is better for the police to tackle this job themselves rather than to have amateur assistants, no doubt of a very beefy character, but not necessarily designed to ensure that the peace is not breached.
Mr. Coleman: Is my right hon. Friend aware that there have been complaints that some of those who were arrested were detained for periods of up to nine hours, refused permission to acquaint relatives and friends of their whereabouts and refused any tea or other refreshment? [Laughter.] Hon. Members opposite are clearly not interested in the liberty of the people. Will my right hon. Friend refer these complaints to the inquiry, which I welcome, to see whether they can be substantiated?
Mr. Callaghan: Of course. Under Section 49, it will be for the complainants —and I think about 30 complaints have been received, mostly from students of Swansea University to establish their case and the facts can then be made clear to the Assistant Chief Constable of Northumberland who will conduct the inquiry.
Sir C. Taylor: May we assume that neither the right hon. Gentleman nor the Minister for Sport, nor any other Minister, will go to the Bolshoi Ballet or Henley to cheer the Russians next year? Is the right hon. Gentleman aware that there have been many peaceable games at Swansea between English and Welsh teams in the days when the English and Welsh were a little het up?
Mr. Callaghan: This is a personal matter. I shall continue in future to choose the events to which I go, as I have in the past. On the whole, I have
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not numbered Henley among my basic recreations, but I can promise the hon. Gentleman that I shall be at the next rugby international to see Wales beat England.
Mr. Judd: Would not my right hon. Friend agree that the most despicable form of social conduct is the bullet-headed provocation of peaceful demonstrators and that it cannot be tolerated and must be dealt with in the firmest possible way by society?
Mr. Callaghan: It is for the inquiry to bring out what the rights and wrongs of this were, where the demonstration started and who started it.
Mr. David Steel: Will the right hon. Gentleman accept that it is not the policy of the anti-apartheid movement either to organise or to get involved in disruptive or violent demonstrations? [HON. MEMBERS: "They did."] Will he equally accept that if there is a minority, whether inside or outside the movement, which decides to carry its views beyond that and to act in a disruptive way, it is far better for it to be dealt with under the law by the police, who are responsible to him and through him to Parliament, rather than by enthusiastic amateurs?
Mr. Callaghan: On this occasion the anti-apartheid demonstrators agreed the route and agreed both meeting places. However, as we all know from experience, although the leaders or the organisers may wish to carry out agreements, these demonstrations are sometimes taken over by other people, or at least they attach themselves to a demonstration. This is one of the difficulties of free assembly, but it is one that we have to live with and in which we must try to ensure, as the police did, what their obligations are in the matter—they will do their best to carry them out.
However, I am bound to say that anybody who rushes on to the middle of a rugby football pitch, even in a minor game in a Welsh valley, is likely to suffer a little trouble. It will be difficult if spectators allow themselves to give way to this, but I appeal to spectators not to give way. They will make the task of keeping order, and, if they want to see the game completed, the task of playing the game, much more difficult if they do not leave these matters to the police to handle.
Mr. Milne: Is my right hon. Friend aware that it is no longer a question of the Government intervening in sport, because the South African Government have already intervened in this matter by deliberately, in all sports, selecting the teams of other countries? Would he take a close look at the action taken recently in South Africa by persons in widely differing categories, such as Dr. Barnard and Gary Player, about golf, and tell us that it is time that some demonstration was given to South Africa about their attitude?
Mr. Callaghan: I have no doubt that the South African Government are fully aware of the attitude of a great many people in this country, who resented very bitterly the fact that they believe that d'Oliviera was excluded from a team when he would otherwise have been chosen to go to that country.
Mr. Boyd-Carpenter: In view of the terms of the Home Secretary's reply to my right hon. and learned Friend the Member for St. Marylebone (Mr. Hogg), is consideration being given to the legal responsibilities of those who organise demonstrations inside football grounds, which they must know are certain to lead to a breach of the peace?
Mr. Callaghan: I will certainly consider that matter. It is one of the issues at which our conference could look. We could also ask for other opinion on it. I am sure that the right hon. Gentleman will agree that as always on these issues we must not allow one or two serious incidents to destroy what are regarded as our basic and traditional rights, which have been built up over a period of years. They are founded on very good practice indeed and I am always slow to move to try to inhibit them in any way.
Several Hon. Members rose—
Mr. Speaker: Order. Mr. Godber. Private Notice Question.

RABIES
Mr. Godber(by Private Notice) asked the Minister of Agriculture, Fisheries and Food whether he will make a statement about the further case of rabies reported over the weekend and what new action he is taking in regard to this matter.
The Minister of Agriculture, Fisheries and Food (Mr. Cledwyn Hughes): On 13th November a dog at Folkestone—[Interruption.]
Mr. Speaker: Order. We are still on very serious business.
Mr. Hughes: On 13th November a dog at Folkestone kennels showed symptoms suspicious of rabies. It was destroyed at the owner's request. Laboratory examination revealed the presence of rabies.
The dog is known to have been in an area of West Germany where rabies is prevalent. However, as a precaution I have placed restrictions on all the 15 dogs which have been released from this block of these kennels since the first case was reported there in July. These dogs have been placed under house arrest. They may only be exercised on a leash and wearing a muzzle. Their owners have been asked to report any suspicious symptoms. In addition, these dogs are being regularly inspected by my veterinary staff.
I have also placed a temporary ban on any further releases from this block of kennels pending receipt of the report of the inquiry which I announced in the House on 29th October. I hope to receive this report within a few days.
Mr. Godber: We are, of course, awaiting that report. I am glad to know that it is coming soon. In the meantime, may I ask one or two questions arising from the Minister's statement? Could he tell us, now that these three cases have been confirmed, arising from the same kennels, whether there is not, at least in his view, strong circumstantial evidence that cross-infection could have taken place there?
Secondly, while we were glad to hear what he had to say about further release, is he taking that to the extent of restraining further releases for a period of up to six months from the last infection with which they have been in contact or could have been in contact with infected animals?
Thirdly, with regard to the 15 dogs already released, which he tells us are now under house arrest, is he really satisfied that a precaution of this nature is adequate? Ought not these dogs be put back into quarantine until he is satisfied?
Mr. Hughes: On the question of cross-infection, it is impossible to say at this stage whether that took place. We should await the results of the inquiry to see whether it will have any information.
The 15 dogs which have been released are under restraint and veterinary surveillance. This method is accepted by veterinary authorities throughout the world as an effective control for this small number of animals. The dogs who are at present in this block are not to be released, certainly until we have received the report of the inquiry.
Mr. Alfred Morris: Is my right hon. Friend aware that the whole House will be relieved that this further case of rabies affected a dog already in quarantine? Is he also aware that what has happened now puts into perspective some of the criticisms levelled against him on the previous occasion?
Mr. Hughes: I am obliged. Certainly, the outbreak which has occurred has fully justified the quarantine period which we have insisted upon.
Sir Richard Glyn: Will the Minister say a little more about the risks and dangers of cross-infection occurring in these quarantine kennels? Will he tell us whether it is correct that all three of these dogs were in the same compound in the kennels? Is it correct that they were all exercised in the same exercising area?
Would he agree that an infected dog can transmit rabies through its saliva, and possibly its excrement? Since the animals are infected for an appreciable time before the dog in question shows symptoms of rabies, could he help the House on this point?
Mr. Hughes: The regulations on this question are strict. Dogs must be exercised quite separately, and on the evidence which I have before me at present it is quite clear that this was so. This is a matter into which the inquiry will look and we should await its report. As for contagion, rabies is passed by saliva being placed on an open wound, not by saliva in the ordinary way.
Mr. Roebuck: Would my right hon. Friend confirm that this infection came from a Common Market country where
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the regulations for keeping animals in quarantine are much more lax than they are here? Can he say that the Government, in pursuit of their application to join the Common Market, will ensure that we have a safeguard with respect to our quarantine arrangements, so that we can remain one of the few countries in Europe which does not have this scourge?
Mr. Hughes: I would be grateful if my hon. Friend would put that question down to the Foreign Secretary.
Mr. Amery: Can the right hon. Gentleman say what the implications of his statement are in the light of the Prime Minister's policy statement that every dog is allowed one bite?
Mr. Arthur Lewis: My right hon. Friend has said something about imposing restrictions at the kennels and about the various steps that have been taken. He has told us that these dogs come from an area in West Germany where rabies is prevalent. He has not said anything about placing a restriction on dogs coming from West Germany while this danger remains. Could he not put a restriction on any dogs coming from West Germany until this matter is cleared up?
Mr. Hughes: It is important for the House to remember that rabies is endemic in many countries in Europe and Asia quite apart from West Germany. I am reviewing our safeguards against the introduction of this disease from any country in the light of the report which I expect to receive in a few days' time.
Sir B. Craddock: Having had the appalling experience of once seeing a human being suffering from rabies—and everyone realises what that means—may I ask the Minister whether he has considered the possibility of extending the quarantine period—say, from six to 12 months?
Mr. Hughes: As I said in the House a fortnight ago, the period of six months is the longest period imposed by any country. The World Health Organisation recommends four months. But the question whether the period should be extended beyond six months is clearly one which I shall have to consider in the light of the report.
Mr. Onslow: This is a serious matter and the House will be glad that the Minister is taking it as such. Would he consider whether it would be in the wider public interest that dogs which possibly have been exposed to infection should be taken back into quarantine kennels where they are released to their owners' custody?
Mr. Hughes: I have dealt with that question. I have considered it very carefully. It is one of the questions which I shall have to consider in the light of the report which I shall be receiving and which I shall be making available to the House in a few days.

SCHOOL MEALS
The Secretary of State for Education and Science (Mr. Edward Short): With permission, Mr. Speaker, I wish to make a statement about a decision which the Government have taken about the subsidy on school meals and to explain the background to it.
The average cost of providing a school dinner in England and Wales is at present approximately 2s. 10d. The charge to the parent is 1s. 6d. There is thus a subsidy of ls. 4d. on each meal.
The cost of the subsidy for the present financial year is about £93·9 million, including £12·9 million capital expenditure. In 1964–65 it was about £64·3 million, including £10·3 million capital expenditure. The Government have decided that the subsidy should be restored to 1s. ld. at which it stood after the last increase in the charge. The charge will, in consequence, be increased from ls. 6d. to ls. 9d. on 1st April, 1970.
My right hon. Friend the Secretary of State for Scotland has asked me to say that the same increase in the charge will be made in Scotland from the beginning of the summer term 1970.
As a result of these increases there will be a saving in public expenditure by central Government and local authorities of about £l1 million in a year. This will be taken into account in any subsequent review of the rate support grant.
Meals will, of course, continue to be supplied free for children whose parents cannot afford to pay the new charge without financial hardship, and the
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remission scales will be improved to allow for this change in addition to the improvements earlier this month to take account of improved benefit rates.
Mr. van Straubenzee: The Secretary of State ended his statement with a reference to exemption. Has he made any estimate of the increased percentage of children on whose behalf exemption will be claimed as a result of the increase which he has just announced? Would he agree that this increase, and others which may follow, make it wise to consider a method of claiming exemption for children which does not positively identify an individual child in class? Would he give his mind to this problem?
Mr. Short: I am grateful to the hon. Gentleman for the last point which he makes. I am considering at the moment whether a better method can be devised. It is difficult to answer his first point, but the fall in the take-up of paid meals will probably be very small. We estimate the £11 million saving on the basis of a 5 per cent. fall. But quite a lot of pupils will get free meals.
Mr. R. C. Mitchell: How much of the £11 million estimated saving will accrue to the Government and how much to local authorities? What guarantee do we have that the money saved by the local authorities will be used for other educational expenditure?
Mr. Short: Local authority expenditure at the moment is paid for in the proportion of 57 per cent. by the rate support grant and 43 per cent. from local rates. On that basis, about £4·7 million will accrue to the local authorities. They can spend it as they like, but I certainly hope that they will spend it on employing more teachers, particularly part-time teachers.
Mr. Pardoe: Does the £81 million subsidy take account of the full cost of free meals? Would the Secretary of State undertake to have another look at the suggestion which I made in the debate that we had at the time of the last increase, that the full cost of the meals should be taken back in income tax so that there is no question of money passing across the classroom?
Mr. Short: The answer to the first part of the question is, "Yes". I suggest that

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the hon. Gentleman puts the second part to my right hon. Friend the Chancellor of the Exchequer.
Sir M. Galpern: Does my right hon. Friend recognise that there is a steady whittling away of the school meals service —first, the abolition of the supply of free milk in secondary schools, which has been roundly condemned throughout the country, and now this further increase in the charge for school meals, which will save, on my right hon. Friend's estimate, £11 million? Should my right hon. Friend proceed with this proposed increase for the sake of this niggardly saving of £11 million?
Mr. Short: To say that the school meals service is being whittled away is plainly nonsense. Sixty-nine per cent. of all school children are getting school meals. In 1964, the figure was 62 per cent. So the service is not being whittled away; it is increasing. But the subsidy is now approaching the £100 million mark, and we must be prepared to weigh one priority in the education service against another.
Mr. Edward M. Taylor: Would the right hon. Gentleman say whether there was any significant or lasting reduction in the numbers of children taking school meals at the time of the last price increase, and whether he expects one this time?
Mr. Short: There was a small fall-off immediately afterwards, but it very quickly came back again.
Mr. Christopher Price: Is my right hon. Friend aware that he has now reduced the subsidy from over 50 per cent. to less than 40 per cent. of the cost of the meals? Is it not unrealistic to take a flat-rate figure as the subsidy and far more proper to try to hold the subsidy at a particular percentage of the total cost? Could he not stick to the 50 per cent., which has been traditional in the past?
Mr. Short: It has not been traditional. The subsidy has fluctuated. It has gone up and it has gone down at various times. As I said before, the cost of the subsidy is now approaching £100 million. [Interruption.] There are other ways of spending money well in the education service. We must consider one priority against another.
Mr. J. E. B. Hill: Is not the most worrying aspect of this increase the very sharp rise in the cost of school meals, food and labour, over the last five years? Does it not indicate a really appalling degree of inflation?
Mr. Short: It does not. The cost of school meals has increased much less than retail prices generally, and great credit is due to the local authorities for organising their school meals service much more efficiently.
Mr. English: My right hon. Friend says that the cost of the subsidy is now approaching £100 million. Has his Department compared this with the cost of subsidies given by employers in industry to their employees?
Mr. Short: That is another point. But this is a very big subsidy. We are willing to have a very big subsidy, but I think that we must look at other areas of expenditure in the education service and weigh one thing against another and try to hold a reasonable balance.
Mr. Fortescue: Has the right hon. Gentleman been informed about the system for school meals, based on frozen food entirely, introduced by the City of Liverpool on the advice of a leading firm of management consultants, which will save a lot of money? Will the right hon. Gentleman consider this system for the rest of the country?
Mr. Short: We are watching the experiment in Liverpool very carefully.

ULSTER DEFENCE REGIMENT (ADVERTISEMENTS)
Miss Devlin: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
" the conduct of the Minister of Defence for Administration in agreeing with the Government of Northern Ireland in television and newspaper advertisements, issued by the Government of Northern Ireland, describing in terms of established fact the strength, organisation and recruitment policy of the proposed new military defence force for Northern Ireland although the first discussion of these proposals will not take place in this House until Wednesday, 19th November ".

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I should like to ask that the Minister be instructed to arrange that such advertisement be discontinued until such time as this Parliament has had an opportunity to discuss and decide this matter. I have just returned from my constituency. A succession of advertisements is now appearing on Northern Ireland television and in newspapers circulating in the area purporting to describe the strength, organisation and recruitment policy of the new military defence force. These advertisements are issued and paid for by the Government of Northern Ireland. Purported factual descriptions of this defence force contained in the advertisements are not qualified by mention of the fact that a Bill containing proposals for the establishment of this force is to be debated in this House later this week.
The presentation and content of the advertisements seriously impinge upon the activities of this House. By anticipating our parliamentary decisions, the Government of Northern Ireland are endeavouring to bind in advance this House to the proposals set out in the Bill. Further, it is quite clear that the advertisements are not conceived primarily as sources of information to the public, but rather form the basis of a campaign to obtain recruits for the new force.
I have, in a letter from the Minister of Defence for Administration, a statement that this was passed through his office on Friday. By Friday evening, at the closing of the television station, this advertisement had appeared no less than three times. Over the past three days, it has appeared seven times. The tendency of the advertisements is to encourage recruitment from an identifiable section of the population and to discourage others.
The Government of Northern Ireland have no responsibility for recruitment of the Armed Forces of the Crown. Indeed, such powers are wholly reserved to this Parliament under the Government of Ireland Act.
The matter is made more serious by the participation of a senior British Army officer in a televised advertisement, an officer holding the rank of lieutenant-colonel. This officer states as a matter of fact that up to 6,000 men will be
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placed in the proposed military force. The Bill, as published, to be laid before this House specifically reserves to Members of this Parliament the right to stipulate from time to time the maximum number of men allowed to serve.
The White Paper, Command 4188, clearly indicates that the control of Armed Forces in Northern Ireland will remain with the Westminster Government. I assume that the arrogant assumption of the function of this Parliament by the Northern Ireland Government was totally their responsibility.
I have with me a letter from the Minister of Defence for Administration stating how the precise contents of the television advertisement were passed and approved by him—
Mr. Speaker: Order. With respect, the hon. Lady must not debate the merits of what she seeks to debate.
Miss Devlin: I apologise, Mr. Speaker. I therefore ask leave to move,
"That the Minister be asked to refrain from further commitments to matters not yet discussed by this House and that this matter be now discussed by the Members of this House."
Mr. Speaker: The hon. Lady the Member for Mid-Ulster (Miss Devlin) indicated this morning that she might seek this afternoon to raise an application under Standing Order No. 9.
The hon. Lady seeks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that she thinks should have urgent consideration, namely,
" the conduct of the Minister of Defence for Administration in agreeing with the Government of Northern Ireland in television and newspaper advertisements, issued by the Government of Northern Ireland, describing in terms of established fact the strength, organisation and recruitment policy of the proposed new military defence force for Northern Ireland although the first discussion of these proposals will not take place in this House until Wednesday, 19th November."
As the House knows, under the revised Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reasons for my decision. I have given careful consideration to the representations which the hon. Member has made, but I have to rule that the hon. Lady's submission does not fall within the provisions of the revised Standing Order No. 9 and

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that, therefore, I cannot submit her application to the House.
Mr. Heath: On a point of order. The House accepts your Ruling, Mr. Speaker, but may I ask the Leader of the House whether he will look into this matter and ask the Secretary of State to make a statement to the House tomorrow or deal with it when the Bill comes before the House on Wednesday?
The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): Yes, I give that assurance.
Mr. John Mendelson: Further to the point of order. While what the Leader of the Opposition has asked for is essential, even more urgent, I submit, Mr. Speaker, is that no action should be taken before Wednesday, before the House has an opportunity to have the debate on the Bill.
It has always been held that although there might be doubts on many other matters, where legislation is concerned the legislature, and the House of Commons in particular, is the only body responsible for legislation. In protecting the rights of Members of this House in the specific matter of legislation, Mr. Speaker, will you see to it that the Government take no action in implementing these advertisements and plans, which at present are only plans and have no legal validity, until such time as this House has made its decision?
Mr. Speaker: Order. I have given my Ruling on the application under Standing Order No. 9. I abide by my Ruling.
Mr. Lubbock: Further to the point of Order. I understand, Mr. Speaker, that in the Bill, or accompanying it, there is a Money Resolution permitting moneys to be spent for the purposes set out in the Bill. Can you tell me what remedy this House has if the Minister of Defence for Administration, or any other Minister, has spent money without the authority of Parliament and before the Money Resolution has been passed?
Mr. Speaker: This matter can be raised when the Money Resolution is discussed. If the House disapproves of what the Minister has done, it can vote against the Money Resolution.
Mr. Shinwell: May I, with your consent, Mr. Speaker, ask the Leader of the House to ensure that any advertisement which is contemplated by the Ministry of Defence is cancelled at once?
Mr. Peart: I am not responsible for advertisements, etc., but I have given an assurance to the Leader of the Opposition that I will ask my right hon. Friend to look into the matter quickly and make a statement.
Mr. Arthur Lewis: May I raise a different point of order, Mr. Speaker? You have given your Ruling on the application under Standing Order No. 9, but the hon. Lady the Member for Mid-Ulster (Miss Devlin) has made a number of charges and allegations and has said that she has written evidence to substantiate them. If what I heard was only 1 per cent. true, it would appear that there is—
Mr. Speaker: Order. We can debate neither Mr. Speaker's Ruling on the application under Standing Order No. 9 nor the submission made by the hon. Lady when making her application.
Mr. Lewis: Then may I raise the matter in a different way, Mr. Speaker? As announcements have been made and actions have been taken by persons purporting to act with the authority of the Minister and of this House before the House has had an opportunity of debating this issue, is this not prima facie a case of breach of privilege? People are trying to take away the rights and authority of this House.
I ask you, Mr. Speaker, to be good enough to consider this matter. No person, whether a Minister of the Crown, an hon. Member of this House or a lieutenant-colonel, is allowed to take action which purports to have the authority of the House when the House has never given that authority.
I raise this matter at the first possible opportunity—that is, now—and I ask you, Mr. Speaker, to consider it and rule on it as a possible breach of privilege.
Mr. Speaker: I am in a little difficulty, because the hon. Member asks me to rule as a matter of privilege on a statement made by the hon. Lady the Member for Mid-Ulster which, he said, was partly

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inaccurate. If the hon. Member wishes to make a formal submission of breach of privilege, perhaps he will do so in writing and let me know, and I will rule on it in the usual way after 24 hours.
Mr. Lewis: I understand that one has to do this immediately, Mr. Speaker, and that I have done. I will now take the opportunity of putting it in writing, because I believe that the action in question is something to which you should give consideration.
Mr. Rose: On a point of order. Although it seems strange, Mr. Speaker, that the Leader of the Opposition has evinced a sudden interest in Northern Ireland after his remarks last week—[Interruption.]
Mr. Speaker: Order. Whether it is strange or not is not a point of order.
Mr. Rose: Nevertheless it was true.
May I, very respectfully, make two points? First, as to the urgency, I think that in view of the fact—
Mr. Speaker: Order. The hon. Member is out of order. He is attempting to submit again under Standing Order No. 9 an application which I have refused.
Mr. Rose: I was not intending to do that, Mr. Speaker. This is further to the point of order raised by the right
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hon. Gentleman the Leader of the Opposition, that on Wednesday there should be an adequate statement, because this has already appeared, and is appearing, in print.
Perhaps it may be relevant to this matter to point out that this is not the first time this has happened. It happened over the question of the appointment of the Parliamentary Commissioner. It is a very dangerous precedent that these things happen before Parliament has time to pronounce upon them.
Mr. English: Further to the point of order. Would it not be appropriate, Mr. Speaker, for you to draw the attention of the Comptroller and Auditor General to the point mentioned by the hon. Member for Orpington (Mr. Lubbock)?
Mr. Speaker: I take note of what the hon. Member has said.
Mr. Fitt: Further to the point of order by my hon. Friend. Could the Leader of the House make representations to his right hon. Friend that when, tomorrow, he is explaining to the House the actual position he will tell us the exact circumstances in which a senior member of the British military forces seems to have usurped the rights of this Parliament?
Mr. Speaker: I think that exactitude will help the whole House.

ORDERS OF THE DAY

  CUSTOMS (IMPORT DEPOSITS) BILL
  Order for Second Reading read.
  4.21 p.m.
  The Financial Secretary to the Treasury (Mr. Dick Taverne): I beg to move, That the Bill be now read a second time.
  There are three reasons why I am asking the House to review the import deposits scheme. First, because it plays an important part in our present policy for the control of credit expansion; secondly, because its continuance avoids an adverse effect in the next six months on our reserves; and, thirdly, because the scheme would appear to have to useful direct effect on imports. All these are good reasons, I suggest, for its continuance in present circumstances.
  Before, I come to these arguments, however, I would like at the outset to say a word about the duration of the scheme. It is quite true that last year we stressed its temporary character. I have already been reminded of htat by the hon. Member for Worthing (Mr. Higgins) last Monday, and no doubt shall be again. It was not anticipated this time last year that the scheme would not be. Not only did we stress in this House, but my right hon. Friend the Chancellor of the Exchequer repeated this statement in the Letter of Intent last May, when he made it clear that the Government intended to abolish this scheme as soon as they were satisfied that the circumstances so perimitted.
  The Pledge has, therefore, been given, both here and aborad, that the scheme is a temporary and not a permanent one. This pledge remains valid, and, indeed, it is possible, Under the terms of the Bill, to modifiy the scheme by reducing the deposit yet further or to terminate it before 5th December, 1970.
  Let me, however, make one thing quite clear to the House. I am not seeking by any hint or suggestion to indicate when or how or whether it may be possible to
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  modify or terminate the scheme before that date. It would be quite wrong, whatever our present hopes, to give rise to any particular expectation, either gloomy or optimistic, when at this stage I simply do not know, but I am sure that hon. Members will agree with me that it would be better for those who are unfortunately affected by this scheme to be pleasantly surprised during the course of the next year rather than unpleasantly disappointed. But the reduction of the deposit from 50 per cent. to 40 per cent. is in itself a firm indication that this is not intended to be a permanent feature of our trade policy.
  I come now to the reasons for its renewal. First, as I have said, comes its contribution to the successful policy of credit restraint. Now, clearly, there is no one who can dispute that the scheme has played a considerable part in this policy. Indeed, its effect on the liquidity of importers gave rise to the strongest criticisms and fears which were expressed last year, and, as I understand, is the main ground why there is opposition to our present proposals for its renewal, and certainly, with about £550 million at present held by Customs, and with monthly repayments after December now reduced from a prospective £90 million to £100 million net to about £20 million net, it is obvious that the force on the credit squeeze is materially effected by the Bill we are now debating. This is true even after some allowance is made to financing of the deposits from abroad, a point which I shall come to presently.
  So to make good my first main argument I have to persuade the House of two things: first, that the policy of credit restraint has so far helped our economic recovery; and, secondly, that its continued tight application as a result of this Bill will not do more harm than good.
  The first proposition cannot, of course, be demonstrated beyond all doubt, but recent experience strongly suggests that fiscal measures are to some extent offset if the monetary policy is working in an opposite direction. To some degree this was the case in 1968, when we made substantial progress, but when, nevertheless, the rate at which we made progress, the rate of improvement, was disappointing. In 1969, fiscal and monetary policy have worked in the closest harmony and the

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  results on the balance of payments have certainly been excellent.
  We are not, of course, in a position to point to the precise relationship between a given level of credit expansion and its effect on the external account, but clearly, restraint on credit has a considerable effect on personal consumption. One can reasonably expect it to have a salutary effect on stock-building which has added to the strains on our balance of payments in the past. It may be a useful incentive to companies to get their hands quickly on money earned by exports or overseas investments, and there are a number of ways in which one would expect it to operate to the advantage of the reserves and balance of payments. But, in the end, my first proposition rests on pragmatic rather than theoretical grounds, the simple fact that so far it has worked.
  The more controversial question concerns the second leg of the argument, and that is this. Having achieved good results, has the time not come to ease off, and would a continuation of the tight squeeze not do more harm than good? I say to the House that there is at present no good reason to suppose that the overall credit squeeze is proving harmful.
  In the first place, it may be pertinent to recall for a moment the dire predictions made by many hon. and right hon. Gentlemen opposite last year. There was widespread prediction of a devastating effect on the company sector, driving large firms into liquidation and leading to a surge of bankruptcies. In the event, this has not happened. It is true that during the last month or two there has been a slight upturn in the monthly figures relating to bankruptcies and liquidations, but the increases have not so far been dramatic as predicted, and certainly, in the first three-quarters of this year, they are not greatly in excess of the number of bankruptcies in 1968 and they do not significantly differ from the figure in 1967.
  Mr. Michael Shaw: Is it possible to obtain figures of receiverships as well as of liquidations, because I believe there is a much wider increase than in liquidations?
  Mr. Taverne: I do not think that the hon. Member can divide it up in that way. One has to look at the figures
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  overall. In the first three-quarters of this year there was no appreciable difference between this year and last, and not since 1967. In any event, I would say to the hon. Member that it has not been possible in any way to link the number of bankruptcies that have occurred—and there has not been an unusual number —with the effects of the import deposits scheme.
  We were also told last year by hon. and right hon. Gentlemen opposite that the scheme would disrupt trade, that it would disrupt exports, and that it would prevent any chance of moving into an export boom. I think that the hon. Member for St. Ives (Mr. Nott) made this point. I have the greatest respect for him, but on this occasion his forecast was a little inaccurate, as forecasts tend to be. He told us that it would move production capacity away from exporting into domestic production. In fact, there has been no disruption to trade, and exports have soared. Anxieties were expressed about the administration of the scheme, but many compliments have been paid by all sections of industry to the Customs for the way in which the scheme has been administered, Lnd the 200 staff involved has proved to be less than the number we anticipated.
  More importantly, if one looks at the future plans in the all-important fields of manufacturing investment the latest reports suggest that investment here is expanding healthily at a steady underlying annual rate of about 10 per cent. for 1969, with similar prospects for 1970. Of course, if we relaxed credit restraint, for example, if we allowed the present scheme to run down, it might well be that industrial investment would go ahead faster. I concede that, but what would happen then? In all probability, the result would be that the balance of payments would suffer, and we might then find that a sharper burst of investment than at present would in due course be followed by an investment slump. We would be far better off with a steady and sustained rate of investment based on a balance of payments surplus than with sharp ups and downs as we have experienced in the past.
  Mr. J. Bruce-Gardyne: In referring to the manufacturing investment intention, I think that the Financial Secretary was referring to the Board of

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  Trade survey. What are the months of investigation to which the result of that survey applied, and what was the date on which the Chancellor of the Exchequer announced that the import deposits scheme was to be renewed?
  Mr. Taverne: The survey was about what investment intentions looked like for the years 1969 to 1970. There was no evidence whatsoever of the kind which has been suggested to us many times by hon. Members opposite and by other quarters that the investment intentions of manufacturing industry were about to face a down turn. The choice which one faces is between the possibility of a higher degree of investment intentions coupled with a down turn in the balance of payments, and an investment increase which is firmly based on a healthy balance of payments position.
  There will be pressures on the liquidity of companies in the tax quarter, but, on the best estimates which we can make at the moment, the amount that the central Government will take out of the system in the next revenue quarter will be of the same order of magnitude as last year; and the position certainly did not become intolerably tight last year. We also know that the company sector added substantially, by about £300 million, to its net financial assets in the June quarter.
  In general, at the moment all the indicators point to a healthy growth in industrial production, based on exports and investment, not on a rapid rise in consumption, and this is exactly the position which we are hoping to achieve. It would, therefore, seem far more risky to relax than to keep credit on a tight rein, although we shall certainly watch most carefully how the situation develops in the months ahead.
  Mr. John Hall: I realise that it is difficult to make a speech while being constantly interrupted, but has the Financial Secretary any evidence of the effect of the import deposits scheme on the cash growth of companies? This is a very important matter.
  Mr. Taverne: I think that the hon. Gentleman must see this in proportion. What it amounts to is that, during the course of the next tax quarter, about £300
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  million would normally be repaid, but some allowance has to be made for part of this to be financed by credit from overseas. If something like one-third of this is being financed from overseas, it is a flow which is not going back to industry of four-fifths of £200 million. Having regard to the liquidity position of companies, there is no reason at present to suppose that this will have an adverse effect on the industrial investment plans which are in evidence. So that, as I say, the balance of risk is against relaxation and in favour of keeping credit on a tight rein.
  May I come now to my second main reason for renewing the scheme; the effect on the reserves. I can deal with this quite briefly. Our best estimates, as I have just mentioned to the hon. Member for Wycombe (Mr. John Hall), and as I revealed in a Written Answer some time ago, are that 30 to 40 per cent. of the deposits have been effectively financed from abroad, either by loans or by credit to importers from foreign suppliers. This very useful benefit to the reserves is, of course, purely temporary, though it provided help at a time when it was sorely needed.
  I suggest to the House that, from this point of view, the renewal of the scheme is essentially a matter of common sense. It is true that we have had an excellent surplus so far this year, but our recovery is still very recent, and I am sure that everyone in the House will realise the need for this happy state of affairs to be more firmly established for a longer period before we can afford to take any avoidable measures that will weaken the reserves.
  It is clearly, therefore, a matter of common sense to avoid at this particular time, in the next half-year, a monthly outflow from the reserves of £30 to £40 million which this foreign credit has represented. By means of the Bill it will be possible to phase out these payments more gradually over a longer period than the next six months.
  Mr. Robert Sheldon: How does the Financial Secretary expect this to be phased out if 40 per cent. is to be carried through for the whole of the year?
  Mr. Taverne: I said earlier that it is possible under the Bill to terminate the

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  scheme earlier or to modify the proportion. I am not making any promises whatever, but it is possible for this to be phased out, whereas, if we had not continued the scheme, automatically it would have been repaid within the next six months.
  I come now to the third main argument, the direct effect of the scheme on the level of imports. Last year my right hon. Friend, my predecessor, was very careful to avoid a specific forecast, and so was I. We said, time after time in our debates, that the direct effects of the scheme would be marginal but useful, and, as it turns out, this would appear to have been the case. I cannot, however, give the House an exact figure now any more than I could last year. Such a figure is no easier to arrive at in retrospect than it was in anticipation.
  Since the scheme was introduced, the level of imports has shown only a comparatively slight upward trend of about 4½ per cent., and this has been almost entirely attributable to higher import prices. Recently, imports have been flat, and the average for the last three months is little different from the average for the three months of May to July. I concede straight away that it would be quite wrong to ascribe all this improvement to the direct impact of the import deposits scheme. The other major measures taken to restrain consumption have clearly been the major factor, and, indeed, the slow growth of imports this year is as true of goods exempt from the scheme as it is of goods which are covered.
  Probably, the best indicator which I can give to the House can be found from comparing the annual rate of increase, on the one hand, of goods subject to the scheme before and after its introduction with the comparable rates, on the other, over a similar period for exempt goods. Before giving the House the figures, I must re-emphasise the extreme difficulty of assessing what would have happened if the scheme had not been in existence and the difficulty of isolating the impact of the scheme from other measures.
  Over the five-year period before the scheme, from 1964 to 1968, imports of goods now covered by it rose from an average of £135 million a month in 1964
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  to £225 million a month in 1968; a rise of 66 per cent. or an annual rate of just over 13 per cent. I have taken this rather longer period in order to excuse the distorting effects of the temporary import charge. In the same period, imports of exempted goods grew from £338 million a month in 1964 to £422 million a month in 1968; an increase of just under 25 per cent., or an annual rate of about 5 per cent. Non-exempt goods were, therefore, growing at a rate approaching three times that of exempted goods.
  Since the scheme, imports of exempted goods have grown by about 3 per cent. and those of non-exempted goods have grown by about 6½ per cent. That is just over twice as fast. So the difference between the rate of increase in nonexempt and exempt goods has dropped from nearly three times to just over twice. These figures would, therefore, suggest that the scheme has had a valuable slowing down effect on the rate of increase and, therefore, a useful effect on the level of imports of goods subjected to the scheme, and one may reasonably expect the scheme to have a continuing useful and significant direct effect on imports in 1970—though, again, as in the past, one is not in a position to give any actual figures.
  These are the main reasons for the continuance of the scheme. There is little need to say much about the actual terms of the Bill itself. Subsection 1(1) of Clause 1 contains the guts—the extension of the provisions of the Act for a further year, and the reduction of the rate of deposit from 50 per cent. to 40 per cent. Subsection 2(2) of that Clause looks a little complicated but is necessary to ensure the continued exemption from import deposits of goods imported for blind welfare purposes. As far as I know, no point arises under Clause 2.
  I will sum up. The purpose of the Bill is to continue a measure of selective credit control operating on importers that has made a useful contribution in a number of ways to the success of our economic policies. It would be rash and it would be foolish to reverse these policies, or any part of them, just when they are paying off. I therefore ask the House to give the Bill its Second Reading so as to enable the scheme, in a modified form, to be continued for a further time.
  4.53 p.m.
  Mr. Terence L. Higgins: When, last week, we debated the Ways and Means Resolution governing the Bill I suggested that what was needed was not so much an explanation as an apology from the Minister. It is true to say that in his opening remarks the Minister got as near to an apology for the Bill as we are likely to get. As for the explanation, I must say that I find it a trifle odd. On the one hand, he was saying that he was very optimistic about the general economic position, that there was nothing to worry about, and, on the other hand, he was a little pessimistic and did not think the Government could do other than introduce the Bill.
  That takes me to the core of the whole point I want to make and on which I shall concentrate. It is right and proper to stress how much more cautious the Minister is being this year than last. As he points out, when what is now the Act was introduced last year, the temporary nature of its proposals was stressed time and time again. On 22nd November, the Chancellor of the Exchequer said:
  " The scheme is not one which can or should be kept in being for more than a limited period, but it will have a powerful effect over the next few months … "— [OFFICIAL REPORT, 22nd November. 1968; Vol. 773, c. 1796.]
  Again, the Financial Secretary himself, speaking last year as Minister of State, on the Second Reading of this Bill's predecessor, said:
  " It was made abundantly clear that the Government view this as a temporary Measure, as a Measure which is necessary in present circumstances to have an immediate impact on balance of payments … It is with reluctance that one introduces a Measure of this kind, but its aim is to have an immediate effect …"—[OFFICIAL REPORT, 28th November, 1968; Vol. 774, c. 865.]
  One can get further quotations from the then Financial Secretary throughout the Committee stage. On 3rd December, quoting the words of the subsection under discussion, he said that the duty
  "'shall cease to be in force at the expiration of a period of one year beginning with the date on which this Act is passed, or at such earlier time as the Treasury may by order …'".—[OFFICIAL REPORT, 3rd December, 1968; Vol. 777; c. 1484.]determine.
  It is, therefore, quite extraordinary that we should now be asked to consider a
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  Bill precisely similar to its predecessor except that the rate is reduced from 50 to 40 per cent. We should go into it in some detail since the previous Measure was introduced in very much an atmosphere of crisis. It was first mentioned by the Chancellor of the Exchequer on a Friday afternoon, when he pointed out that the international monetary situation was very dangerous, and that this was an emergency measure which he needed to introduce.
  Since then, we have had a quite different approach by the Government, and a number of things have happened internationally. We have had a devaluation of the French franc and an up-valuation of the German mark, and we hope that there is now greater stability in the world currency markets than there was then. Nevertheless, the Government propose to continue a measure which they themselves made abundantly clear was temporary. So we should examine their arguments. The essential point that we need to make is that in our view the Government are right to be cautious about the present economic situation, but that it would quite wrong to rely on the Bill and to perpetuate the scheme, because it has very adverse effects to which I shall refer in a moment.
  The fact is that if it were true, as the Prime Minister, for example, is constantly assuring the House, that there had been a fundamental change in our economic structure, the Bill would not be necesasry, because all it would be doing would be increasing the improvement and bringing it forward a very short period of time. It may be that if the Bill had not been introduced a number of imports which had been delayed because of anticipation of the ending of the scheme would have taken place. The Government do not think that the amount is very large. The National Institute for Economic Affairs thinks that perhaps it would be between £10 and £20 million. But now that the scheme is to be continued, some of the delay will come about. The effect is small one way and another; none the less, if there really were a continuing long-term improvement in the balance of payments, and the Government were confident, they would not need to resort to the Bill.
  One of the worrying things was pointed out by my right hon. Friend the Member for Barnet (Mr. Maudling) on 21st

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  October, when he suggested that the Government were really quite wrong if they thought that the introduction of this Bill would not itself have some effect on confidence. It is not sufficient for the Prime Minister to go round saying that all our economic problems are over and then for the Government to introduce a Bill like this which shows just how very worried they are about the actual situation. We must, therefore, examine why it is that the Government are so nervous and why they feel that even this scheme should be continued despite its disadvantages.
  Two main points are clear. The first is that the Government are now worried about the situation brought about by their own weakness over wages and prices in the public sector and that as this is in danger of undermining the Chancellor of the Exchequer's entire strategy they do not think that they can allow even this moderate amount of relaxation and yet avoid the disadvantages.
  The second is that the Government realise, although they will not admit it, that any Government can achieve a balance of payments surplus if they are prepared to sacrifice all their other aims as well. This is the difficulty that any Government face. The crucial question we have to ask is: what happens to the balance of payments when the brakes are taken off again? It is an indication of the Government's hesitancy and lack of confidence that they feel the need for the Bill.
  Before dealing with those points, there are two other things that perhaps I should say in parenthesis. I make it very clear that we on this side welcome as strongly as anyone the improvement in balance of payments that has taken place, but it is the duty of the Opposition to appraise the situation as they see it and to put forward arguments for their view.
  I hope that we shall not have more speeches by the present Home Secretary about an £800 million deficit in 1964 as, apparently, we had again last weekend. Time and time again we have explained why this is so. It cannot be reconciled by the kind of "Sunny Jim" speech that he was making in his own period of office, because we have had many troubles since, although he said then that
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  the deficit problem had been overcome, and so on.
  We need to get the actual figure in perspective. All of us have problems when we come to look at figures on the balance of payments with overseas debts of £3,000 million. If we knock off the noughts from the end and treat them in simpler terms, we have run up overseas debts, looked at from the point of view of an ordinary banker with an ordinary customer, of about £3,000. If we look at the amount being made on a current account basis, the Government have had surpluses, on the most optimistic basis, over the months of £40, £22 and £3, giving a total of £65. On the whole, if a person goes to his bank and says, "I am sorry, I have run up £3,000 in debts over five years, but I have £65 on current account," I do not think that this would be justification for people saying that his economic problems were over. It is true that there has been an improvement in our invisible earnings. The Government have done everything by way of S.E.T., and so on, to frustrate these rather than encourage them.
  Mr. J. T. Price: The hon. Gentleman, in his usual way, is being quite fair in his critical argument, and I am not complaining about that. But when he makes simple comparisons, saying that we would be in trouble with the banker if we were still under a heavy liability of £3,000, he forgets that the banker would also want to know whether we were servicing the original debts, and had any assets as a result of those loans being advanced. It is not quite fair to put it like that. Every major British employer of labour, every industrialist, is running into enormous debts to finance work in progress. So long as he finances those debts by paying the interest on them he is not in any trouble with his banker.
  Mr. Higgins: This is a net increase in debt, over a time, and it is doubtful whether there has been any increase in corresponding real assets.
  I have two main points to put forward. First, the Government are concerned about the present situation and are determined to introduce this Bill because they have been irresponsible in the public sector, in wage claims. The Government have now given up any pretence that they are really maintaining any coherent prices

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  and incomes policy. True, the latest economic estimates of the Treasury seek to put a brave face on this but the Economist for 15th November says:
  " Nevertheless, the Treasury has to admit that the index of average earnings in July and August, taken together, was already 3 per cent. about its level in January-March and less six months before. In the period October-December, the number of inflationary settlements is likely to rise considerably."
  It goes on to say that we could well have a very rapid increase indeed in the coming months.
  If we look at the individual wage claims generally, whether of the miners, or the dustmen, with an increase of 16 per cent., exhibition stand-fitters, 16·3 per cent., British Leyland—spreading into the other sector—up into the 14·4 per cent. figure, it is abundantly clear that all pretext of the norm has been totally abandoned and that the Government are right to be concerned.
  It has been sought to justify this in terms of productivity, but in almost every case the increase in wages has taken place, on ground of productivity, before the increase in productivity has taken place in the specific industry. This has undermined the entire Government policy. Now we hear that the right hon. Lady, at the D.E.P., is planning pay rises for another 900,000 workers. We are entirely in favour of a high-wage, high-efficiency economy, but we do not believe that Government's present measures are likely to bring that about. We do believe that the claims and the pace being set by the public sector is likely to be inflationary and, therefore, the Government will be unable to take measures in other areas which on grounds of encouraging investment they ought to take.
  We do not know what the position will be when the brakes are taken off. In essence, my right hon. Friend the Leader of the Opposition, in the debate on the Address, compared the Chancellor —I thought it was a singularly accurate metaphor—to a juggler with five plates, one full employment, another controlling inflation, another collective bargaining, the fourth economic growth and, finally, balance of payments. He pointed out that the balance of payments was the only plate which the Chancellor had in the air at the moment. If I may presume
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  to extend the metaphor it seems that the crucial question is what happens when the Chancellor seeks to pick up the other four plates? This is really the point at issue.
  Once this is attempted, what happens to the balance of payments? So far, we have no real evidence to support the view that there will be other than a repetition of previous circumstances. The danger here is to investment, because if one looks at the present situation, with the credit squeeze, it will be seen that it is adversely affecting investment. The effects of this can only be resolved either by allowing profit margins to rise in the present squeeze, which will inevitably mean an increase in prices and a further inflationary spiral, or, alternatively, the Government will have to take the kind of line which the Minister is suggesting, to have a continuation of the credit squeeze, which, in turn, will shrink investment.
  Either way, the Government are in a difficult situation and we do not accept that the Bill will do anything significant to help them out of their dilemma. The main objections to this Measure can be listed easily. It is important not to say that this is something which, given the picture we have been discussing, is necessary, but rather to ask whether it is the right Measure in the present circumstances. It is clear that it has a number of grave disadvantages, internationally and nationally.
  If we look at the international position we must refer again to the grave doubts expressed in the debates last year with regard to whether this Measure is consistent with our legal obligations under the G.A.T.T. or European Free Trade Area proposals. This was debated on 3rd December last year at great length. My right hon. and learned Friend the Member for Epsom (Sir P. Rawlinson) pointed out that the Government were apparently applying a duty, as they are in the Bill, and it was abundantly clear that this was a duty charged upon commodities on their importation into the country and that this was inconsistent with the European Free Trade Area convention which said quite clearly that member States shall reduce and ultimately eliminate, in accordance with the Article, Customs duties and other charges. He went on to say that the

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  Article pointed out that member States should not apply import duty on any products at various levels and that the member States shall not apply, directly or indirectly, to imported articles any fiscal charges in excess of those applied indirectly to like domestic goods.
  There is grave doubt about the legality of this Measure. When I challenged the Financial Secretary on this in the debate on the Ways and Means Resolution last week we were told that this was really not a problem, that it was discussed in the debates in E.F.T.A. last year and as a result the E.F.T.A. Council effectively agreed to defer the matter and to take no action upon it. When it came up in the present context the Minister told us that it was decided not to mention it. I do not think that it enhances the international prestige of this country or confidence in its economic situation if the Government can get round doubt about the legality of these measures only by ensuring that they are not discussed, and by pushing them under the carpet.
  Mr. Taverne: Whether they are discussed is not a matter for Her Majesty's Government, but for the other members of the E.F.T.A. Council, and they chose not to raise the question.
  Mr. Higgins: It is no good having a situation in which the House argues the case and strong feelings are expressed, and some overwhelming arguments are put that the import deposits were not legal, and then the Minister tries to get round it by saying that this was simply not discussed in the E.F.T.A. Council. This is not a satisfactory situation. If there is doubt about the matter, the Government should have sufficient confidence themselves to take it to the E.F.T.A. Council and have it decided in one way or the other. This they have refused to do. We know that this is something they find objectionable, but it is a matter which should be decided beyond doubt.
  Mr. John Hall: In the debate last year I asked a number of questions of the Attorney-General. I asked whether or not this was legal and the House was given the impression at that time that it was. Is my hon. Friend saying that this is not legal under the terms of the E.F.T.A. agreement?
  Mr. Higgins: My feeling was that I was convinced by the argument that it was not. It is now becoming abundantly clear that the Government are not prepared to put the matter to the test. They have avoided doing so.
  That this is clearly contrary to the spirit of the E.F.T.A. convention cannot be seriously disputed. That being so, it is clear that actions of this kind—in particular, repetitions of actions of this kind —are likely to result in an adverse effect on treaties with the E.F.T.A., the I.M.F. and the G.A.T.T. Yet we in this country have more to gain than anyone from a rapid expansion of world trade. This kind of action inevitably tends to encourage restrictionism rather than encouragement of further free trade and inevitably protectionist elements at a time when we are anxious that they should not succeed.
  On the more detailed domestic points, we have some difficulty in recognising the picture painted by the Financial Secretary as it concerns the credit squeeze. Travelling around the country, particularly in the East Midlands and Yorkshire, I have been very much struck by the severe effect the credit squeeze is having on a number of otherwise extremely viable concerns. This will no doubt be seen in the coming winter in the effect of bankruptcies, liquidity and the level of activity of ordinary viable commercial concerns.
  The Bill is very unfair and discriminatory against a particular group of people—importers. The Government last year sought to suggest that it was purely temporary. In such circumstances it might be that this group could bear this kind of impost, but if one looks at the kind of profit margin normally achieved by those in the import industries it becomes abundantly clear that it is very little, if anything, greater than the extra cost they will incur as a result of this scheme.
  Instead of the normal system by which they borrow money to finance activities, pay the interest and make a profit, they now have to borrow roughly half their additional capital, pay a rate of interest on it which may rise as high as 14 or 15 per cent., and then lend it to the Government free of interest. The amount

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  they will incur by this kind of transaction is likely to be roughly the same as the profit which they would normally make.
  A number of firms in a perfectly viable position—some of which have been operating for 60 years or more—suddenly find their whole livelihood taken from them. This the House should bear in mind when deciding whether to perpetuate a proposal of this kind. It is objectionable even in the short run, but if it is perpetuated it will put out people who have viable businesses meeting the needs of their customers, by an arbitrary act. I hope that we shall have an opportunity of returning to specific cases on later stages of the Bill.
  At the moment, there are a number of examples of cases which are not exempt under the present provision which we should seriously consider. The imposition on paper and board for packaging must make it more difficult for firms which package goods for export. For plywood, there are no adequate substitutes. The total United Kingdom supply of plywood is about 4 per cent. of overall consumption. The imposition of the surcharge on plywood must increase total costs of production. I understand that although the import duty has been removed by a special provision by the Board of Trade from certain types of steel needed for exports, the import deposit will still be charged. This is an absurd situation which we should discuss in detail in later stages on the Bill.
  I invite my hon. and right hon. Friends to join me in opposing the Second Reading of the Bill. First, because it perpetuates a device which was originally introduced in last year's crisis. It was objectionable then, but it is a great deal more objectionable now. Secondly, it is contrary both to the letter and spirit of the law. The Government are not prepared to meet the first point and put it to the test, and on the second it can have only an adverse effect on international relations and the prospect of encouraging world trade. Thirdly, it is quite clear that the Measure further accentuates the credit squeeze at the beginning of a winter which is likely to be very difficult for many sectors of in-
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  dustry and discriminates against a small part of the business community in an arbitrary way.
  This is not to say that we believe the balance of payments to be in a satisfactory situation. On the contrary, we still have grave doubts about whether the Government will succeed in maintaining the surplus once they take the brakes off. Although further measures are needed to achieve a solution to our economic problems—particularly trade union reform and reform of the tax structure so that the principle is not that the Government collects all the money and then decides who shall have some back rather than leaving it to industry to decide what to do with it—this Bill is a very objectionable device. I hope that the House will reject it.
  5.7 p.m.
  Mr. J. T. Price: We are dealing this afternoon with a very complex question. In support of the Bill we have had some very powerful arguments presented by the Financial Secretary. I hope that I may be able to say without rancour or malice that, having been in this House for a number of years, one becomes a little sceptical of all professional economic opinion on major questions of this kind. I have been here long enough and listened to all kinds of wise prognostications and judgments about the unknowable to find that in the event we are faced with the fact that many of those prophecies which have been presented as objective, scientific analyses of our economic affairs have been presented purely from a political point of view and coloured according to on which side of the House the hon. Member sits.
  I do not want to make too much of that except to say that we are dealing in this Bill with one of the pieces of protective legislation that has been designed by Her Majesty's Government to help to arrest inflation. Whatever our differences on the respective sides of the House on these matters might be, we all at least agree that one of the greatest troubles and tribulations which have afflicted all of us for the last 20 years has been the continuing adverse effect on our affairs of inflation. This has been a world-wide occurrence. Having shed our empire and

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  what has been called our imperial heritage, our vulnerability has been particularly acute and we have had to take exceptionally stern measures to arrest inflation.
  It was all very well for the hon. Member for Worthing (Mr. Higgins), in his very eloquent speech, to say that these measures are ill-conceived. He as a reasonable man with a liberal mind, although he sits on the Conservative benches, will be the first to agree that a fire brigade, having put out a fire, does not immediately return to the fire station whilst the embers are still smouldering; it keeps a watchful eye on things.
  It would be unwise for the Government, because their policy is paying off aid because our economic affairs are reaching a state of success which has not been experienced for some years, to take these brakes off. The hon. Gentleman says to the Government, "Take the brakes off Submit your case to the international organisations—for example, G.A.T.T. and E.F.T.A.—with which Britain is associated". That would be most unwise.
  I am as sensitive as the hon. Gentleman is to our good name and our standing in the international organisations of which we are members, but it was naughty of the bon. Gentleman to suggest that we are in breach of G.A.T.T. The General Agreement on Tariffs and Trade has specific clauses permitting a country which is having trouble with its balance of payments to take exceptional measures. Such suggestions as that made by the hon. Gentleman are theoretical to a degree which it is difficult to accept.
  When we discussed this matter 12 months ago I had the privilege of addressing the House for a few minutes. I then cited, not a theoretical case, but the impact of these measures on our trade. I quoted the case of the textile industry, which used to be one of the major industtries in Lancashire. I have complained bitterly, in the House and elsewhere, about the unfair competition that the textile industry has had to face over many years and which has caused it to lose ground.
  Twelve months ago, because of the tariff fiituation, there were large imports of towelling against the general run of
  890
  the international trade in textiles. These measures have at least been accepted by Lancashire's textile industry as part of the answer to its problem. Some hon. Members opposite have supported these measures. I know that this is theoretical, and perhaps my hon. Friend the Member for Heywood and Royton (Mr. Barnett) will disagree with me.
  When hon. Members opposite talk about imports and suggest, in resistance to the Bill, that these measures will have a damping-down effect on British manufacturers, they are very wide of the mark. Many of those who are importing many things that the country does not need and cannot afford are not manufacturers at all, but commission takers. The import machinery is not run by manufacturers but by agents and corporations who have never made anything in their life, any more than any Member of Parliament has ever made anything in his life, except many speeches—[An HON. MEMBER: "Speak for yourself."] Perhaps I am speaking figuratively. Hon. Members will allow me the liberty of a little humour, because we are all so miserable in these matters. We tend to look at each other as though we were reading the funeral oration for a dear departed colleague.
  Britain is on the move forward. I want it to continue to do so. I do not accept that people who are taking commission for conducting international trade are adding anything to the nation's wealth. I therefore do not accept it as a valid argument that, because of the inconvenience to those who are having to tie up £500 million of their capital by way of deposits, this scheme should be ended. So long as it is necessary to maintain these controls, even at their reduced level of 40 per cent., I, who am sometimes critical of my own Front Bench, am completely with the Government and hope that the Bill will be supported by the House.
  The hon. Member for Worthing dealt with the question of imports. He is aware, as is my hon. Friend the Minister of State, Treasury, that our imports have been greatly in excess of anything we either needed or could pay for. For many years they were rising at a rate of 25 per cent. per annum. Since the import deposit scheme was introduced, imports

  891
  have been steady, with a nominal increase of 3½ per cent. and 6½ per cent. in the exempted class. This difference is even greater than the gross figures would suggest, because in this period devaluation at 14 per cent. has occurred. Taking 14 per cent. off the value of the currency means, other things being equal, that prices for imports should increase by 11½ per cent. Therefore, if we were dealing with the same volume of imports as previously, there would have been a far greater increase than 3½ per cent. To that extent, these measures have justified themselves.
  Not wishing to make any polemical points on a very difficult matter, I want to say that I shall welcome it when Britain is sufficiently strong to remove all artificial controls on the free flow of trade. Until such time, as a British Member of Parliament my duty is to see that the interests of those I represent take priority over the interests of international speculators and people who are taking commission on the flow of international trade.
  I leave it there, assuring my hon. and learned Friend the Financial Secretary, who has just returned to the Chamber, having missed a very good speech, that tonight he will have my strong support on this Measure. I hope he will continue these controls in force for as long as they are necessary.
  5.18 p.m.
  Mr. Julian Amery: I agree with the hon. Member for Westhoughton (Mr. J. T. Price) that almost every doctrinaire view on economics is wrong. Having written three rather heavy volumes on the free trade tariff reform controversy, I am not at all inclined to be convinced of the infallibility of economic forecasts.
  I find it difficult to make up my mind whether the import deposit scheme has done good or not. Some industrialists tell me that it has. Some say that it has not. With the proper humility which I hope that I always show in the House, I am prepared on this occasion to accept the collective wisdom of my right hon. Friends above the Gangway. If they say that the scheme is wrong, so be it. However, I shall support them tonight with a slight misgiving.
  892
  I grant at once that, if the Government had spent rather less on Government expenditure and given rather more encouragement to producers—inventors, investors, managers and workers—this would not have been necessary. I agree that if the weight of taxes had been less severe it might not have been necessary. I agree, too, that if the burden of debt had not been so heavy it would not have been necessary, but we have to deal with the situation as it is. When I say "we" I mean we on this side of the House, because this is a situation which the Government have built up, and which we look like inheriting.
  The trade figures are better, and we are glad of that, but we are not out of the wood by a long way; and the Government's decision to keep on the import deposit scheme shows that they are conscious of this. There are a lot of unknown factors ahead. There is the deflationary trend in America. There is the gradual erosion of the Kennedy Round, as I see it. There are many other problems which may come up before we reach the end of the year ahead, and so I feel some sympathy—which I do not often feel for him—for the Chancellor of the Exchequer at his not wanting at this stage to dismantle whatever economic defences he still has.
  This particular defence, as my hon. Friend and his right hon. colleagues argue, may not be a very effective measure, but it is a measure, and in deciding to oppose it tonight and I shall join my right hon. Friends in doing so—let us at least be quite clear what the implications are for us in the Conservative Party.
  It is our avowed aim when we return to power to pursue a policy of economic expansion, to relax the credit squeeze, to cut taxes, and to strengthen our defences. I think that all those steps are right. But let us not be under any illusion that, even if the present Chancellor is as successful as he hopes to be, the measures that I want to see us adopt when we take over will put some pressure on the balance of payments.
  We have in the past had a dash for freedom, and had it successfully. We confounded the critics who thought that we would not get away with it. We did it in 1932. Then we had a tremendous

  893
  pool of unemployment and a great element of unused industrial capacity. It was thus fairly easy to expand without any strain on the balance of payments. We did it in 1952 when there was full employment and industrial capacity was fully utilised, but we still had then the network of wartime economic controls. These have nearly all gone, and there are very few economic defences left to any Government, even a Socialist Government; and the measure that we are debating is one of them.
  Let us accept that this one is ineffective. Let us agree that we on this side of the House are right to vote against it. But I trust that we shall be very careful not to close our minds, from any doctrinnaire adherence to old-fashioned views of free trade, to other ways of regulating the flow of imports if we have to do so when we come back.
  There are many ways in which it can be done, not least by administrative action in the public sector. I shall not go into them, because to do so would be out of order in this debate. I conclude by saying that I am not so confident about the situation that we are going to inherit as to be sure that we can do without at least some measure of economic defence where the import programme is concerned.
  5.24 p.m.
  Mr. R. B. Cant: En the months before the economic miracle I thought on a number of occasions about the import deposits scheme as something that might exercise some sort of constraint on the rise in imports which was alarming many of us. In those times used to put down Questions, a habit which I have given up because of its futility. On two occasions I asked that a survey be published of the assessment of the effectiveness of the import deposit scheme. As the Chancellor turned me down, I thought that I would go to the source of all economic inspiration, at that time the Department of Economic Affairs.
  In July, 1968, I asked whether a survey could be published of the operation of the import deposits scheme, and I received the usual polite but terse reply, "No, Sir". Being a loyal party Member of Parliament, I went round to my con-
  894
  stituency during the Recess saying that an import deposits scheme had nothing to recommend it. When we returned to the House I discovered that we had in operation an import deposits scheme, which I found, not for the first time, slightly disconcerting.
  I always thought that this was a slightly better type of approach, if one were trying to restrain imports than, for example, import controls. My interest in it grew when, following a publication in February, 1968, of the National Institute Bulletin which advocated import controls I asked one of the people who wrote the survey whether he had paid any regard to the possibility of an import deposits scheme. He replied, "Actually, we do not know very much about it, but we have asked the Italians to translate some of their documentation so that we can have a look at it".
  I was not altogether put off, but I have never really been attracted to the import deposits scheme, because I felt that it would have an effective impact on the balance of payments. Its attraction for me has always been that, unlike import controls, it has this sort of deflationary side effect. I accept the figures given by my hon. Friend about the direct effect of import controls on the balance of payments, but I think that he is a bit optimistic about the addition to reserves because foreigners will put down the import deposit for importers in this country. They might have done that when they felt—perhaps they believe politicians in this country rather more than we do —that it was going to be of an essentially temporary kind. If they feel that it is something that will be with us for a considerable time, their willingness to put down the deposits might decrease somewhat.
  Mr. Sheldon: I see the point that the enthusiasm of exporters to finance their exports for six months may be somewhat diminished if the measure continues, but what is much more likely is that they will give longer credit, which may be for three months or four months. That is not unusual.
  Mr. Cant: I accept that. I do not want to go into any calculations on this rather difficult theme. In any case, my hon. Friend has much more experience of this than I have, and I should like to

  895
  get him into a good mood because I am going to introduce a concept which always makes his hackles rise, and that is the concept of money supply.
  We have to face the fact that although we have got a bit euphoric, if I may coin a verb, during the second quarter of this year because money supply—if I can speak in this old-fashioned term—was down somewhat, we now know that in the third quarter money supply has begun to rise again. The reason I support what the Government are doing is not because of its effect on the import bill, but rather because I feel that the net repayment of this £550 million held by Customs will have an unfortunate inflationary effect, and I am thinking only of the period up to the next election. The inflationary pressures will be very much greater, quantitatively speaking, than the deflationary pressures about which we have heard so much from the the hon. Member for Worthing (Mr. Higgins). I have a high regard for the hon. Member for Worthing, but if he sticks to economics and economic quantification he impresses me more than when he strays into the realms of political philosophy.
  Perhaps I may say something in parenthesis here. The hon. Gentleman almost brought tears to my eyes when he talked about how terrible we were because we were breaching what he called the G.A.T.T.—I read those awful American detective stores in which the "gat" is entirely different from what, I suspect, the hon. Gentleman had in mind—or we were doing something which gave grave offence to our E.F.T.A. colleagues. I have never suggested that the world owes us a living in any sense, but, when we get on this high horse of international political morality, we should do well to look around the world and ask ourselves what other countries do in breach of all the sacred testaments of the G.A.T.T., E.F.T.A. and the rest. When the hon. Gentleman presses that point, he does not make any impression.
  Also, when the hon. Gentleman talks about the terrible fate of people engaged in importing, I can only remind him that that sort of thing can happen to anyone at any time. To go from the sublime to the ridiculous, from the hon. Gentleman's importers who have been so gravely
  896
  embarrassed by the Government to a constituent of mine who sells hot dogs, I must tell him that the local authority decided to draw two yellow lines along the road and, as a result of that terrible official act, my constituent is out of business. So let us all weep now. Perhaps we can forget that, and close the parenthesis.
  I shall now be slightly technical because, as I have said, I feel that the reason why the Chancellor cannot at this moment release £550 million is quite simply that, on balance, the inflationary pressures which are likely to build up will be much greater than the deflationary ones. It is obvious—although one does not know the answer to it—that, on balance the Government will not in the next two quarters commit the heinous crime of increasing liquidity in this country. They may be a heavy borrower at the moment net because they are short of tax revenues, but this will be completely changed in the first quarter of 1970.
  Mr. Joel Barnett: I am not clear whether my hon. Friend is now arguing that the only way open to the Government to control domestic credit expansion, even taking his argument, is through an import deposits scheme.
  Mr. Cant: No, I am not doing that. What I am saying is that there is a particular situation here in relation to the import deposits scheme which, if we unwind, would create a significant increase, perhaps, in the liquidity position in the country, in domestic credit expansion, money supply, call it what one will. On the whole, I think that the Government's operations might well be deflationary, and I think, too, that there might be a certain deflationary effect through the operation of the capital account internationally. We gather that we are almost in balance, but we could so easily move out of balance, and that would have a deflationary impact.
  I am not sure that the great optimism about interest rates coming down will be fulfilled. The behaviour of the Eurodollar rate at the moment is fascinating. A fall from 11½ to 8½ per cent. made even pessimistic local government treasurers believe that we were at the beginning of a new millennium in this context. But the strange thing is that the Eurodollar rate has already swung

  897
  back to 10 per cent. because of certain action which the Federal Reserve Bank in the United States is taking. The evasive action of what we can call the commercial banks always presents the Federal Reserve Bank with a difficult situation, but, if it so happens that, in order to circumvent the pressure which is being put on liquidity in the United States, the commercial banks increase their borrowing in the Eurodollar market, we may once again see funds going across the Atlantic out of our reserves; and that might have its deflationary impact.
  But that is chicken-feed compared with what I regard as the potential inflationary pressure. Reading from that great journal of economic truth, the Economist, the hon. Member for Worthing, quite rightly, I think, tried to scare us about the inflationary impact of wage increases. I am glad that he left me the last sentence, and I thought that he would quote it all. The economists say that, on their calculations, this will add, at current rates, £3,000 million to the wage and salary bill of this country, and as it is at the moment only £25,000 million, that £3,000 million increase would make many of the other factors which we discuss look like peanuts.
  Mr. Sheldon: About 12 per cent.
  Mr. Cant: I am much obliged. I was searching for a figure, and I am now told that it is approximately 12 per cent. That is one of the reasons why I believe in rather more constraint on money supply, or, at least, a better mix of fiscal and monetary policy; and I say that precisely because I think that it will give us the right sort of financial framework in which these rather large—I had better be careful here, in case I am quoted in my constituency—wage bargains which have been struck recently would not be possible, if—and here I agree with the hon. Member for Worthing—the Government played their part more effectively in the public sector.
  Apart from that, there are several other factors which we sometimes overlook when we say that about us all is despair and despondency, deflation, rising unemployment and the rest. There are other sources of inflationary pressure. One is the balance of payments itself. Nobody
  898
  seems to use the argument that, if we move from a balance of payments deficit to a balance of payments surplus of, say, £500 million or £600 million—I had better stop myself at that figure—the inflationary impact of that is very considerable. There are all sorts of other influences. There is the considerable and continuing inward borrowing from the Eurodollar market. There is the apparently innocuous factor of the use of the funds which are flowing into this country to repay our swaps with the central banks, which have their sterling counterpart.
  Finally, there is the effect of any short-term investment that comes into this country, the process so eloquently and poetically described as the unwinding of the leads and lags. All this has sterling implications, and as the country grows in economic strength it will, on balance, present an inflationary situation for the Chancellor.
  What about the problem of disclosure by the banks? There will be a separation of deposits from reserves. To what extent will the liquidity position of the banking system increase next February? Technically, it will increase by between a half of one per cent. and one per cent. What will the consequences be?
  What about the Bank of England? What will its policy be? I am certain that the Chancellor does not know its policy in relation to money supply. The Governor of the Bank of England keeps on saying that its means of support in the gilt-edged market have not changed, and that its objectives are the same as they ever were. I do not really believe that. If suddenly the investing public turned their back on the gilt-edged market, I wonder what the Governor of the Bank of England would feel he had to do. I think that he would feel he had to support it.
  What about the monetary lags? What about that man Friedman, who is now dominating our economic consciousness? What will be the impact, if the Friedman lag is somewhere between six and 18 months, of the upsurge in the supply of money which took place in the fourth quarter of 1968? Nobody knows, but I am very good at posing questions. All I am saying in support of my hon. and learned Friend the Financial Secretary

  899
  is that I think that on balance the inflationary pressures in the economy are likely to be sufficiently serious for him to retain the import deposits scheme.
  5.43 p.m.
  Sir Arthur Vere Harvey: The hon. Member for Stoke-on-Trent, Central (Mr. Cant) made a powerful case for a spring election. I only wish that all his colleagues on the Treasury Bench could have heard what he said. I also hope that the speech of the hon. Member for Westhoughton (Mr. J. T. Price) will receive full publicity in his constituency. If he discusses the matter with any of the small firms trading there, as his hon. Friend the Member for Stoke-on-Trent, Central has spoken to some of his, he will find that they are alarmed about the continuation of the tax, even at 40 per cent.
  Mr. J. T. Price: I do not make wild statements in the House. I have spoken to textile manufacturers in my constituency who welcome the legislation and have supported it all along. I know that the hon. Gentleman would not wish to misrepresent me, any more than I would wish to misrepresent my constituents.
  Sir A. V. Harvey: I am not doing anything of the kind. I also have the privilege to represent textile manufacturers, but they are in some ways a different category from those who import to reexport.
  The Financial Secretary was very cagey in presenting the Bill, in comparison with what happened last year. He said that we must now be more careful. Why must we be more careful today? He also said the same amount of money was taken out last year and that no more damage would be done than was done then. But if one continues a tax for two years instead of one and small firms have not the liquid funds to reinvest, they are hurt twice as much. The hon. and learned Gentleman has hold of the wrong and of the stick if he contends that.
  The hon. Member for Stoke-on-Trent, Central was right to talk about inflationary pressures. They are alarming. We have seen increases in pay for dustmen, firemen and so on, many of them justified to some extent. But there is a shoal of them, and such increases will become the
  900
  pattern throughout industry in the months ahead, with terrifying implications for the economy.
  But I want to return to the problem of import deposits. It is my firm impression that during the past 12 months most companies believed that this tax was to last for only a year. The Minister can say that the Government never gave a categorical assurance that it would not continue beyond the year, but the inference was there. Speaking as Minister of State, Treasury, the hon. and learned Gentleman himself said last 28th November:
  " It is a stop-gap Measure, a temporary measure, to accelerate the improvement in our balance of payments, …"—[OFFICIAL REPORT, 28th November, 1968; Vol. 774, c. 868.]
  Nobody reading that would have thought that it would be continued for another period after a year.
  In answer to a Question about the scheme not being revived after 5th December this year, the then Financial Secretary told my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) on 1st April:
  "… It is not one which could or should be kept in being for more than a limited period and I have nothing to add to that statement." —[OFFICIAL REPORT, 1st April, 1969; Vol. 781, c. 220–1.]
  The decision to continue the scheme has thrown a great many firms out of gear, and I shall show why. It is not the Government that have achieved even the three months favourable balance of payments; it is industry. It has been said that firms dealing in commissions and so on do not contribute anything. But £40 million a month is earned through insurance, brokerage, shipping and so on. I do not think that many hon. Gentlemen opposite realise what the City of London contributes to our favourable trade balance. It should be given due credit for a great achievement; it has saved the day so far.
  My information is that about 70 per cent. of the firms affected have been unable to meet their demands from United Kingdom suppliers, so they have still had to import the products they need. Some found the price differential was adverse. The cost of home-produced alternatives was a competitive handicap, and this in turn affected exports.

  901
  There are many extraordinary anomalies. We heard of many of them last year. For example, all calcium carbide has to be imported. It is essential in the production of many goods for export. But it is still necessary to pay the 40 per cent. import deposit, whereas Ferro alloys, which are allied to carbide, and manufactured along with it, are exempt. This does not begin to add up. Caviar can be imported free of the duty. We know that it is a food. Dirty rags, clothes, carpets and mats made with rope can all be imported without paying the 40 per cent. tax.
  Therefore, I find it difficult to understand the workings of the Government's mind. I have had that experience for five years with the present Government. I found the workings of the Government's mind in the post-war years under the Attlee Government vastly better, because there was much more logic in what they did. One understood the Ministers better.
  The reduction of the rate from 50 per cent. last year to 40 per cent. for the next period will do little to alleviate what promises to be the most severe squeeze of company liquidity since the war. Firms and individuals will have to pay their tax next spring, and that will be the testing time for industry. The scheme is bound to have an adverse effect on British industry's ability to invest. We want British firms to invest more, and the tax is holding the money back in Government hands when it should be going into new machinery and equipment.
  Sir Steuart Mitchell emphasised in his paper to "Neddy" how grave the country's record on this score is. He referred to the age of our machine tools and the fact that in real terms British industrial investment is no higher than it was in the peak year of 1961. That is a terrifying thought when we talk about our industrial recovery.
  The import savings are comparatively small; they are not enormous. That has been admitted. The National Institute puts forward the figure of £60 million for 1969. The Association of British Chambers of Commerce thinks that a relaxation would have eased the liquidity problems of industry but would not have seriously affected the volume of imports. The small companies are being increasingly affected. Let any hon. Member go
  902
  to his constituency to get the truth from the people trying to run companies—and not the large companies. The I.C.Is of this world can find the money. It is the small firms which are affected. Seventy per cent. of British industry is made up of firms with from 70 to 100 or 200 people.
  I do not think that the pressure which we shall get next year is fully appreciated by the Government. In the autumn, in early September, most firms prepare their industrial budgets, not just for one year but for five years ahead. They try to work out what their capital investment will be and what increases there will be in wages, bonuses, and so on, in order to make a cash plan for their business. Having done most of this work, they now have to add 40 per cent. for the import deposits scheme. I know that the Government budget, rather indifferently, for only a year ahead, but most firms try to look ahead for at least five years, which is the right thing to do. It would not be a bad thing if the Government did more of it themselves. We should then know where we stood.
  On 22nd October this year, The Guardian predicted a noticeable jump in imports in the next two or three months. It is a well known fact that from about August most firms thought that this imposition would come off in the next few days. Quite rightly, they held back on imports because it was in their interest so to do. I have heard it said—I do not know whether it is true—that even the Government are holding back on the import of Virginian tobacco, not for import tax reasons but because it will help the balance of payments in the runup to the general election. I should like to know whether this is true. I am prepared to wager that in the next two or three months the import figures will increase considerably. I hope that they will not, but I think that there will be quite a large increase. Firms do not know when the tax will come off, whether it will he in the lifetime of this Government or the next Government, and they are uncertain about the future.
  Reference has been raade to E.F.T.A. We have only to cast our minds back to the time when the Government slapped on the import surcharge overnight without reference to our friends and colleagues

  903
  in Europe to know what an uproar it caused. This imports tax, which is not in the same category as the import surcharge, is nevertheless against the spirit of the E.F.T.A. agreement; I am not qualified to talk about G.A.T.T. I know from my friends in Europe that they resent this imposition very much. Even the Irish Government are very concerned and are seeking discussions with the Government about it at an early date. We should liberalise trade as much as possible.
  I ask the Government to think about this matter very carefully. While we have had two or three months good trade figures, what will happen next year if the Americans continue with their deflationary policy and world trade goes against us? Surely we want to get the momentum going in this country. Recently home sales in the motor car industry have been right down, and this must in the long term affect export business. That applies to every other industry in this country which is trying to export. We live by exports. I hope that we shall have a better explanation when the Minister winds up than we had at the beginning of the debate.
  5.54 p.m.
  Mr. George Darling: It would be a mistake for me to agree with the suggestion of the hon. Member for Macclesfield (Sir A. V. Harvey) that all small firms have been hit by the import deposits scheme. Obviously one cannot make a generalisation like that. I agree that a number of small firms have been hit, depending on whether their imports are essential or not. I support the plea which he made by implication and the plea made by the hon. Member for Worthing (Mr. Higgins) for the Schedule to the Act to be examined again so that many of the borderline cases—and I wish later to mention one with a constituency angle—between essential and not quite essential raw materials may be considered and adjustments made before the Bill goes on the Statute Book.
  I was very interested in the rather peculiar speech of the hon. Member for Worthing. I have often chided him by saying that his speeches run to a common pattern. He lambasts the Government politically in the first part of his
  904
  speech and then quickly goes on to make some constructive observations to which I always listen with great attention. But on this occasion he was politically critical throughout his speech. That rather destroyed the impact which he wished to make on the House.
  Mr. Barnett: It was out of keeping.
  Mr. Darling: As my hon. Friend says, it was out of keeping with the hon. Member's usual way of trying to educate —and I mean this quite sincerely—the House in his economic theories.
  I was interested to hear the hon. Gentleman say that he had been venturing north of Watford to discover, in the areas where the wealth of the country is produced and not squandered in places like Worthing, what is going on and how far the import deposits scheme has affected the firms there. He said that many of the firms which he went to see, I believe in my part of the country, told him that the scheme had harmed them, that their cash flow has been upset, and so on. He went on to say that many of them were 60 years old. This gives the clue.
  I know many small firms in my part of the country. What they are suffering from is not so much this scheme or any other measures introduced by the Government, which the Opposition say have placed unfortunate impositions on them, but managerial inefficiency.
  Mr. Higgins: The point which I was making was that the scheme is seriously jeopardising the future of many firms which have been in operation for a long time and which would be perfectly viable were it not for the scheme.
  Mr. Darling: I should like to examine the firms. I do not deny that the hon. Gentleman believes that what he is saying is correct.
  Mr. Barnett: He believes what he has been told.
  Mr. Darling: I do not think the hon. Gentleman has spent long enough in the areas where the wealth of the country is produced to discover precisely what is going on. I should be very glad to take him round and to show him what goes on, not only in the board rooms but on the workshop floors, and to look at the old-fashioned machinery and methods which some firms stick to. It is about time that

  905
  a lot more pressure was put on them to bring them up to date. I do not propose to say anything about the hon. Gentleman's curious use of statistics, which began in 1965. Apparently, nothing went on prior to 1965, when the hon. Gentleman was putting forward his views.
  What impressed me was the comment—and the hon. Member for Macclesfield echoed this and, to some extent, I agree with it—that wage increases on the scale that we have had recently could lead to inflation. I understand that if the Conservative Party had been in power the increases recently granted to dustmen, firemen, coal miners and others would have been strenuously opposed by a Conservative Government.
  The hon. Member for Worthing went on to say that a Conservative Government would introduce trade union law to put legal restrictions on demands for wage increases made unofficially by work-people. This is not the time to discuss trade union law, but when we discuss that matter later this Session we shall put some pointed questions to hon. Members opposite about how a trade union law of that kind would operate. I understand that workpeople would have no defence if they came out unofficially on strike against a trade union agreement.
  Mr. Higgins: The right hon. Gentleman must accept that I said no such thing as the proposal which he has just attributed to me.
  Mr. Deputy Speaker (Mr. Sydney Irving): Order. Both the hon. Gentleman and the right hon. Gentleman are getting rather out of order, even on the Second Reading of the Bill.
  Mr. Darling: It was the combination of the two observations that led me astray, and I accept what the hon. Gentleman has said.
  I am prepared to believe that the import deposits scheme has played a part in improving our trade balance and in bringing our balance of payments into surplus. For many years our national imports bill has been far too high, and unnecessarily too high. We have been importing far too many goods which should have been and could have been manufactured competitively here, and I agree with all those hon. Members who
  906
  have said that it is only on a competitive basis that we can keep our imports. It is the backwardness cf many firms and of British management which has prevented us from competing effectively, and, consequently, imports have come in on too big a scale. It is my experience that the import deposits scheme has made many of the smaller firms look again at what they can do to save imports and to get things manufactured in this country, but there are many essential materials which must be obtained from abroad, and I mean not just the raw materials not found in this country but materials which are essential for British industry.
  The hon. Member for Macclesfield mentioned one of them, calcium carbide. Curiously enough, I want to mention silicon carbide, which is of great importance to many of what are called the light trades in Sheffield, cutlery manufacture, hand tools and things made of the special steels which are manufactured in Sheffield. The abrasives industry, as it calls itself, has to produce grinding wheels and other abrasive equipment for modern grinding methods, and it has to use silicon carbide to do so. Silicon carbide might be made in this country, but if anyone were to set up a plant to manufacture it, he would have to be heavily subsidised, because its manufacture requires a great deal of cheap electricity. That is why the biggest manufacturer in Europe is Norway. I understand that there is surplus capacity in Europe for the manufacture of silicon carbide which we want here. Just because the classification of the various groups in the Schedule follows a sort of traditional pattern and the classes are fairly wide, silicon carbide is buried in one of the classes and is not exempt from import deposits although it is an essential material.
  Here I come to the point mentioned by the hon. Member for Macclesfield about small firms being affected by import deposits. It depends a great deal on the extent to which they are dependent on essential imports. The firms which I am mentioning which use silicon carbide have to obtain what is practically their main material from abroad. There may be other materials of this kind which are essential to the manufacture of goods in this country and which must be imported because they cannot be produced

  907
  here economically and for which it would be impossible to start plants on the basis of import saving. I therefore think that the classifications in the Schedule should be looked at again and I make a special plea, admittedly on a constituency basis, for silicon carbide.
  I am sure that there are many other marginal cases of this kind, marginal in the sense of the classification in which they appear, which should be looked at again. I sincerely hope that my hon. and right hon. Friends in the Treasury will undertake this exercise so that the Schedule may be amended before the Bill reaches the Statute Book.
  6.6 p.m.
  Mr. Kenneth Baker: Any debate on import deposits has to start with the question of how effective they have been over the last 12 months, because they have been operable since November, 1968. Have they been effective in restraining imports? This afternoon the Financial Secretary put forward three reasons for import deposits, but they were three very different reasons from those which the Government adduced a year ago. He said that they were important first because of their effect on domestic credit; second, because of their effect on the reserves; third, and in a very minor way, because of their effect on the import bill. When the Government introduced these measures a year ago, those three arguments were in exactly the reverse order and the main argument was that there would be a significant effect on our import bill.
  One has to start by asking what effect there has been on the import bill. The Chancellor of the Exchequer gave the lead to the Treasury case in his speech earlier this year when he said:
  "There is no way of quantifying the precise effect of import deposits".
  In the second breath he took after saying that he said categorically:
  " But there can be no doubt that the scheme has had a useful restraining effect on imports …"—[OFFICIAL REPORT, 21st October, 1969; Vol. 788, c. 953.]
  What did the Chancellor mean when he referred to a useful restraining effect on imports? How can he know what the useful restraining effect is if in a sentence earlier he has said that there is no way
  908
  of quantifying the precise effect of import deposits? It is illogical to say that the effect cannot be quantified and in the next breath to say that there has been a useful restraining effect. Can the Minister of State, who will be speaking tonight on a Bill for the first time as a Minister at the Treasury, start by explaining what the Chancellor meant by that? The Minister of State is an acolyte of the temple and much of his time will be spent explaining the Delphic utterances of the Chancellor, and we should like him to start by explaining what the Chancellor means by a "useful restraining effect".
  I think that the scheme has had only a little effect in restraining imports, a marginal effect. The Financial Secretary as good as admitted that when giving us the figures for the five years prior to the scheme for imports of goods on which import deposit now has to be paid and which rose by 13 per cent. whereas in the last year they have risen by only 6½ per cent., or roughly half; but imports of those goods which are specifically exempt from import deposits in the same five-year period rose 5 per cent. and last year 3 per cent.
  Mr. Barnett: The other way round.
  Mr. Baker: No, I believe that that is what the hon. and learned Gentleman said. My own researches into some sort of pattern in trade would indicate that that is the case. This change in the relationship between exempted and non-exempted goods is statistically insignificant.
  But there are many other questions to which I should like an answer. First, how much money has been put up by foreign suppliers? How much will our reserves be hit when the scheme is withdrawn? Second, what proportion of imports are now covered by extended payments?
  The Treasury Minister may ask "How can we be expected to know this?", but if we are being asked to extend the scheme for a further year we ought to have an answer to these questions, because the case for an import deposit scheme has yet to be made. The only evidence I have come across that the scheme is effective was a statement from the Spanish Foreign Trade Ministry last week when the Spanish Foreign Trade Minister said that the import deposit

  909
  scheme had affected Spanish exports to this country. I give that to the Government for what support they can get from it. I suspect that even that opinion was distorted and owes more to the influence of the Gibraltar situation than to the import deposit scheme.
  On this evidence we should be reluctant to approve an extension of the scheme. The Government are acting from two motives in bringing in the Bill. One is inorance, because they simply do not know the effect of the scheme, and the other is fear, because they are rather apprehensive of what would happen if the scheme were scrapped today. These twin motives of ignorance and fear seem to have been the constant companions of most Socialist legislation over the last five years. Quite apart from not believing that the scheme has been effective, I believe that it has had three very unfortunate side effects.
  The first of these concerns the price of imported goods. A year ago we were told that the import deposit scheme would give a little inflationary push, it was thought as much as 2 per cent., on imported goods. The Government got to the strange figure of 2 per cent. by saying that the prevailing interest rate a year ago was 8 per cent. and as one had to put up import deposits for only six months it was therefore cut in half to 4 per cent., and as one only pays 50 per cent. of the amount of the goods it is cut to 2 per cent.
  Let us do this strange sum in the figures of today. Take a rate which many importers have to bear, of 15 per cent. Halve that to 7½ per cent. and halve that again to 3·75 per cent. That seems to be the minimum inflationary result on these imported goods. There is a price increase in the region of 4 per cent., I suspect slightly higher. This is entirely gratuitous inflation. It is not inflation due to any act other than the import deposit scheme It is totally unnecessary.
  The second unfortunate side effect has to do with the point raised by my hon. Friend the Member for Worthing (Mr. Higgins); namely, the legality of this measure. I quite accept what the minister says, that we are, strictly, acting within the legal framework of E.F.T.A. and G.A.T.T. Loopholes in both these arrangements allow certain countries to
  910
  bring in measures of this sort, but were mainly intended for the small countries which get into difficulties. They were never intended, particularly with E.F.T.A., for the richest and most powerful country in the Association; namely, the United Kingdom. To use them once last year was bad enough, but to do it a second time is humiliating.
  The third effect is the effect of the scheme upon liquidity of companies in our economy. There is no doubt that business throughout the country is under considerable pressure because of the cash flow situation. This is not surprising when we realise that only a month ago businesses had to meet extra S.E.T. charges totalling annually £120 million, extra National Insurance charges payable this month totalling annually £150 million and extra corporation tax charges payable next January which come to £120 million.
  In addition there is the whole force of the import deposit scheme, which comes to £558 million. Companies throughout the country are strained, and in my business experience and the experience of many companies in my constituency, investment programmes are being cut. The Financial Secretary virtually admitted this when he said that there is an improvement in investment and hon. Members opposite could argue that it would be even better without this scheme. It would be substantially better without it. Money is so tight that we have seen the growth of a subterranean money market to finance import deposits. Hon. Members can see advertisements in the financial press and in various magazines by people who are prepared to put up money to finance import deposits. The starting rate for this is usually 15 per cent. or more. The money-lenders are doing well under Socialism. There is plenty of life and soul for those engaged in usury. This is a further example of how Socialist controls create the conditions in which "spivs" survive.
  Because there are these unfortunate side effects I would not support the scheme, because I do not believe that a case has been made out for extending it. I do not believe that overall it is effective. It has harmful effects on the liquidity of companies, particularly small companies, and I hope that the House will reject it.
  6.15 p.m.
  Mr. Robert Sheldon: I am in favour of this Bill, but I should declare my interest in a small importing company. I am in favour of the Bill because fundamentally we have no alternative. The scheme as devised was intended to bring a certain restriction of credit and if one accepts this policy no one can say that we are now in a position to say that success has fully been achieved.
  Whether or not the scheme did bring about a reduction in imports—and my own figure all along of £50 million or £100 million was not far out—we are not in a position to allow imports to rise suddenly. The Chancellor has no alternative but to continue the scheme and to find a more suitable means of ending it in the diminishing manner to which my hon. Friend referred. I am not too sure about what level of credit restriction we should be engaging in, but one thing is fairly clear and it is that the policy of the Government permits no rapid increase in credit until the balance of payments situation continues along the present course for some time.
  I have always felt that we have underestimated the enormous changes that came over this country in the last decade, and the kind of reactions which we should have undertaken long ago. In my latest Answer from the Board of Trade I find that exports to the Commonwealth are now only 22 per cent. of our total exports as compared with a level of 45 per cent. throughout the 1950s. A crucial change has come over our trade, a reorientation from the Commonwealth to other markets and it has brought in its train some necessary fundamental changes in the direction of our economic policy, to which we have always reacted far too late.
  My own solution all along was to impose restrictions on imports, preferably by means of import quotas, but if not by this, then at any rate by getting some advantage from the use of import deposits. A better alternative would have been a floating rate for the £. I always felt that control over imports is really the kernel of the issue. However much incentive and encouragement the Government give at any time to exports these are something which depend upon the importing countries whereas we do have
  912
  absolute control over imports, whether by means of import deposits, which can be varied or import quotas which can be rigid. This is a matter for argument, but there has always been the possibility of exercising control over imports, which we utterly funked for too long. We are not now in a position to introduce import quotas. We are now too far committed to our present strategy. I regret the opportunity to use quantitative restrictions of imports but it is now too late. We have had, first, the import surcharge and now the import deposits scheme, and there is no room for any further experimentation.
  I come now to the question of legality. If the countries with which we trade, or countries with which we have financial or monetary agreements—and I include the I.M.F. here—feel that there is something wrong in taking unilateral action of this kind, then that view must be contested. I do not believe that they can hold a view as rigid as that. If we are not allowed to introduce import quotas because that would be contrary to the G.A.T.T., or to move to a floating rate because too many people have interests or theories against it, then we are faced with an impossible situation in which we are unable to manage our own economy in a way which any Government have a right to manage it.
  No other country which has been in economic difficulties has accepted a situation in which it would be unable to exercise a degree of control over its economy. A country cannot be put in a position where it cannot advocate controls in the final resort. Whether it be by import quotas or deposits, by floating exchange rates or by other means open to them internationally, a Government must have control over the economy of the country in order to get the balance of payments right, and if this means a conflict with a certain number of international agreements, then that merely proves that those agreements are wrong. That is the only possible conclusion if countries are to be placed in a position where they cannot act to maintain a proper balance of payments situation. So I accept wholeheartedly the need to continue the scheme but I hope that it will be possible to phase it out in the manner suggested by my hon. and learned Friend.

  913
  The phasing out required can be left for decision later, both as to the percentage of deposit and the term of deposit. It may be done by one or other or both; it depends on the circumstances over the next 12 months. With the balance of payments situation as it is, we need to wait a few months longer.
  6.22 p.m.
  Mr. J. Bruce-Gardyne: Earlier, the hon. Member for Westhoughton (Mr. J. T. Price) warned us, properly, that we should try and avoid omniscience in making our forecasts of what was liable to happen in the next year or so if we did or did not renew this scheme. Many of us, in looking back on forecasts we have made over the last 18 months or longer, will hardly dispute the wisdom of that remark.
  As always, I listened with great attention to the hon. Member for Ashton-under-Lyne (Mr. Sheldon). While I respect many of his ideas, I have always regarded his views on the control of imports as his Achilles' heel. I do not know whether he was among the large majority of hon. Members opposite who voted for the Government's decision to apply for membership of the European Common Market, but he would no doubt accept that the sort of autonomy he demands is incompatible with membership of the Community. I regard that as one of the Community's more attractive rather than less attractive features.
  Mr. Sheldon: The hon. Gentleman will no doubt recall that France imposed import quotas last year.
  Mr. Bruce-Gardyne: Yes, but France had to get the sanction and approval of the Commission in order to do so. Of course it is open to any member to do so, but one cannot apply the sort of automatic autonomy in the Community which the hon. Gentleman is demanding.
  I look forward with great satisfaction to voting against the Bill. My reason is a (most precisely the opposite of that advanced in favour of the Bill by the hon. Member for Stoke-on-Trent, Central (Mr. Cant). Here I am being careful to avoid any danger of hard and fast crystal gazing, but I have a strong suspicion about his forecast of dire inflationary dangers ahead. I think that, if
  914
  there are dangers, they point in the opposite direction.
  I was astonished to hear my hon. Friend the Member for Worthing (Mr. Higgins) complain that the Government should be introducing this Bill after what they had said last year about the temporary nature of the scheme. On the Government's record, cne would surely have been astonished if they had not introduced the Bill. It is quite normal with the Government that, when they say something is only temporary, it becomes permanent, and that, when they say something is permanent, it proves to be temporary. I am, therefore, not in the least surprised by the Bill. On the contrary, after all the Government said last year, I would have been surprised if they had not introduced it.
  I am concerned about the reasons for retention of the scheme and its consequences. The hon. and learned Member claimed to advance three reasons but I detected a fourth, which I shall ber claimed to advance three reasons which he did advance, as has been pointed out, has been demoted from last year—the need for control of imports. I am glad that has been demoted because I regard it as the most heinous aspect of Government policy.
  I always hope that the Government will resist the sort of pressures put on them by the hon. Member for Ashton-under-Lyne and some of his less numerate companions on the benches below the Gangway. The hon. Gentleman has now lost the assistance of the former President of the Board of Trade and of the Paymaster-General, who were both on the side of the angels. I am glad, therefore, that the hon. and learned Gentleman the Financial Secretary did not give the need to control imports as the first of his reasons in importance.
  The first of the hon. and learned Gentleman's reasons in importance was control of credit expansion. We have not heard from the Government any explanation of the change of mind which undoubtedly occurred in the Government on this matter. In the Letter of Intent of last July, the Chancellor said that he planned to limit domestic credit expansion to £400 million in the current year. In October, he told the hon. Member for Heywood and Royton (Mr. Barnett) that

  915
  he had made this forecast on the assumption that the import deposits scheme would be rescinded. What happened between July and October, when it was announced that the scheme was to be continued, to make the Chancellor, despite the substantial contraction in domestic credit expansion in the first quarter, change his mind and decide that, in order to reach his target of £400 million, the scheme should be renewed? We are entitled to an explanation because there clearly has been a change in the Government's thinking on this. The Chancellor has admitted it and no reason for it has been given today.
  The hon. Member for Stoke on Trent, Central advanced several arguments for fearing inflation in the months ahead. One of his main reasons was the degree of inflation caused by recent wage settlements in the public sector. That is an argument which one should view with a certain amount of scepticism. There have, of course, been recent highly inflationary wage settlements in the public sector. Every time that the right hon. Lady sticks her sticky finger into the negotiating procedure, we know that the results will be all that much more inflationary at the end of the day.
  I wonder, however, whether we will see settlements of that sort reflected in the general run of wage settlements in the private•sector of industry during the next six months, for this simple reason. After allowing for the effect of the Bill, which the Government are asking us to approve today, I do not believe that private sector companies will have the sort of cash flow that will enable them to do anything other than resist wage claims, perhaps, more severely than they have done in the past. In other words, I think that the general control of money supply in the domestic economy is now such that we may well expect that the effect of recent inflationary wage increases in the public sector is not followed in the private sector. If that is so, that argument for renewing the scheme falls down.
  The fourth argument advanced by the Minister of State in support of the Bill was, to my mind, the most ominous of all. He said that if the import deposit scheme was not renewed, there might be an expansion of domestic private manufacturing investment to such an
  916
  extent that the balance of payments would be damaged. That is a highly dangerous assessment because it amounts to saying openly that the purpose of renewing the scheme is to reduce the volume of private manufacturing investment.
  Furthermore, the Minister of State—and this was why I interrupted him—referred to forecasts of private manufacturing investment during the next year and quoted a figure of 10 per cent. above this year. That clearly relates the Board of Trade's survey of manufacturers' intentions which was published on 21st October. The point about that survey was that it resulted from a questionnaire of firms' intentions taken in September, before there was any news of the Government's intention to renew the import deposit scheme and at a time when it was widely expected that the scheme would be taken off. I believe that, as several of my hon. Friends have pointed out, the effect of renewing the scheme must have a severe effect, particularly next spring, on companies' cash flow. The immediate effect of that must be to curb their investment intentions.
  In the Minister of State's introductory remarks, the background against which this should be considered seemed to me to be very out of date. The hon. Gentleman was back on the track which his right hon. Friend the Chancellor gave the overseas bankers in October, when investment was "on course" and going ahead magnificently. Since then, the Chancellor has very much changed his tone. When he spoke the other day to "Neddy"—it is, I suppose, a question of horses for courses he sounded distinctly unhappy about the level of manufacturing investment at the present time. He said that the problems could not all be solved in one year and that while the investment level was not satisfactory, the Government could not get everything right at once. Therefore, the Minister of State's highly optimistic expectations about manufacturing industry are not only very out of date, but are even more out of date than those of the Chancellor. Hence, I find it difficult to accept the rosy picture painted by the Minister of State.
  There have, of course, been suggestions, to which the hon. Member for Stoke-on-Trent, Central referred, that the automatic effect of a substantial balance

  917
  of payment surplus would be to increase the amount of liquidity available in the domestic economy. That surely overlooks the operation of the Exchange Equalisation Account. The beauty—or the horror—of this is that just as the Government were free to continue to expand the money supply at a time of acute deficit in 1967–68, so they are free today, if they so choose—and they are showing every indication of so choosing—to contract the money supply at a period of growing surplus. Therefore, there is none of the automatic interrelation between the two.
  Like my hon. Friend the Member for Macclesfield (Sir A. V. Harvey), I am also particularly concerned about the effect that the sort of acute liquidity squeeze, which, I believe, we will see in the early months of next year will have on smaller companies. For the larger companies, I believe that it will mean a drastic cutback in manufacturing investment, thus preparing all the most suitable grounds for the next balance of payment crisis in a few years' time. For the small company, however, which in many cases is probably up against its overdraft limits, it could well mean, as my hon. Friend suggested, a rash of bankruptcies. The consequences of this will be particularly acute in Scotland, where the private company—the so-called close company, so hated by the Chief Secretary to the Treasury—forms the backbone of our manufacturing capacity.
  I believe that the consequences of a credit squeeze with the kind of intensity that the renewal of the scheme implies in the course of the spring of next year could have a serious effect on private companies in Scotland—a much more acute effect overall both on the structure of companies in Scotland and on the level of unemployment and employment than probably in other parts of the United Kingdom, where, on the whole, the privately-owned company is less significant in the contribution which it makes to the local economy than it is in Scotland.
  When one considers that pressures of this sort seem to have been applied by the Chancellor very largely because of his personal tiff with the London clearing banks, who failed to come down to their lending ceiling and he therefore de-
  918
  cided, apparently, almost in a moment of pique, to extend the import deposit scheme to teach them a lesson, it is irresponsible that such widespread effects should be caused in areas like Scotland in the pursuit of one of the Chancellor's personal quarrels.
  What worries me most is not so much the direct impact of the Bill. I admit that the effect of not returning to companies the forced loans which they have made to the Government, as they expected them to be returned, in the spring, may be only limited in quantitative terms. What worries me is that this is an indication of the Chancellor's whole attitude, which seems to me to be one of "Hold on tight. Disregard all the danger signals on the internal credit system, keep all the goodies together for a good old consumer boom Budget next year—and then go on to the next balance of payment crisis thereafter".
  6.40 p.m.
  Mr. Joel Barnett: I always think of the Member for South Angus (Mr. Bruce-Gardyne) as the other extreme to my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant). The hon. Gentleman always condemns domestic credit expansion out of hand, and my hon. Friend thinks it is the most wonderful thing in the world—at least at the moment. I find myself somewhere in the middle. I do not know what effect domestic credit restraint, in the way it is being used at the moment, will have on our economy. I really doubt whether either of the hon. Gentlemen really knows what effect, or how quickly, it will have.
  I would like to say a few words about what the hon. Member for Worthing (Mr. Higgins) said in starting the debate for the Opposition this afternoon. He knows that I hold him in the greatest respect, but his speech today was extremely disappointing, to say the least. He said the reason for the Bill was that the Government were worried about the balance of payments because of the problem of prices and incomes and the way there was wage inflation as we have recently seen. He was concerned with what happens when the brakes come off, and he accused the Government of being irresponsible in their attitude to wage claims.

  919
  The hon. Gentleman is always very good at asking the most intelligent questions, but he is never quite so good in giving us the intelligent answers, because generally he keeps himself strictly to the questions, and he did so again today. When he accuses the Government of being irresponsible in their attitude to wage claims the assumption must be that he is implying that a Tory Government would be responsible about wage claims and that, though they would not be pursuing any legal, compulsory incomes policy, if they had control, none of these public sector wage claims would have been allowed.
  I can only assume that that is what the hon. Gentleman meant and it would have been more honest if he had spelt it out. I think that is what he meant, but if my understanding of what he said is wrong I should be delighted to give way to him; but that is the clear implication of what he said. The obvious implication for the economy and the industrial sector of doing that, of preventing all public sector wage claims, is such as would not exactly help the balance of payments situation, I would have thought or, indeed, the economy generally.
  What was perhaps the worst thing in the hon. Gentleman's speech was the way in which he spoke about the small importers. I myself have some contacts—considerable contacts, really—with small companies, small importers, and in last year's debate I declared an interest, in that I advise them. To suggest, as the hon. Gentleman did, that as he goes round the country and speaks to small importers he finds they are extremely concerned about their liquidity problems seems to indicate a less critical approach to the small companies giving him information than his normal, critical approach to the Government when they give information, because if he really expects any small company director to take a nice, optimistic attitude towards any Government proposals, then he really is rather more naive than I would have expected him to be.
  My own experience is that pretty well every director of a small company will complain bitterly about all sorts of things, not least about Government action in all sorts of directions. To suggest that one
  920
  should just accept their point of view without question is also to suggest that the hon. Gentleman is rather more naive in his approach to these matters than I would have expected.
  However, at least the hon. Gentleman did not go quite as far as his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) did last year in trying to have it both ways, as some hon. Gentlemen have tried to have it. The right hon. Gentleman said last year that the whole scheme would be ineffective because the money would be found, and then he went on to say that it would be damaging because it would featherbed home producers. I really do not quite see how it featherbeds home producers at the same time as it is not working, but that is precisely what the right hon. Gentleman said last year and what we are constantly being told.
  I myself, as I made clear in the debate last year, do not hold out very great hopes—I never did—about what the scheme will do. I never like quoting myself, and I shall certainly not do so today, but 12 months ago I forecast that the scheme would not come off after 12 months, and should not come off, and I forecast that the money would be available to importers, and that the scheme would have a marginal effect; and, of course, it has.
  I will take up the view that this is having a selective pressure on liquidity. This is what the hon. Gentleman and others have said, that it is having a selective effect on the liquidity of importers. This measure does not have that effect directly at all, because any importer, small or large, can find funds without affecting his current cash flow, and the hon. Gentleman really must know that. I suggested in the debate last year that it would be a very simple matter for an importer to put an advertisement in The Financial Times, saying, "Wanting to borrow money. Security for that money will be cash—that is, money left with the Government in deposits." He need not do that any more because there were and there still are advertisements in The Financial Times and elsewhere offering money—admittedly, at 15 per cent. and upwards: but money is available.
  So it becomes a problem of price. It is the size of the tax, as it were, which

  921
  is the problem, not liquidity. It is not directly a liquidity problem on small importers.
  Of course, what happens with the larger firms is that they very often will use moneys which they have available and which they had meant to use for manufacturing investment. That is a different thing, and I want to come to that in a moment, but to suggest, as the hon. Gentleman did, that the scheme is causing small importers such liquidity problems asto put them into bankruptcy and liquidation is a totally false argument.
  Mr. Higgins: Yes, but that was not entirely my point. I agree that in many cases the point the hon. Gentleman makes about liquidity may be true, but my point was that the cost of financing the deposit on top of the cost of financing capital investment might be greater than the profits of the concern, particularly if it is perpetuated over more than a year.
  Mr. Barnett: The hon. Gentleman did not spell it out. He is wriggling a bit now. He was arguing about the liquidity problem of small importers. I am saying there is no problem because the money is available outside existing resources. Now he is arguing that it is increased cost. Of course it is true. It adds to the cost of the goods. Nobody would dispute it. Even at the 40 per cent. import deposit level, with the average rate of interest being charged today the real increased cost is probably somewhere between 2 per cent. and 3 per cent.—counting it twice a year, because it comes only every six months. This is an increased cost. All that is happening is like adding on purchase tax to the cost of goods. Most importers are passing that increase off. So we can talk about price inflation. But what we cannot do—I would like to get this clear—is to talk about small importers having a liquidity problem.
  Mr. Richard Body: When the hon. Gentleman made precisely this point a year ago he went on to say that it would be deflationary. Does he still hold to that view?
  Mr. Barnett: The hon. Gentleman is diverting me—[Laughter.) I am quite happy to be diverted, but I thought many other hon. Gentlemen wanted to get into the debate. All these fiscal measures will be, at one and the same time, both
  922
  inflationary and deflationary; in one sense inflationary through increase of prices, and in the other sense deflationary in the way the hon. Gentleman the Member for South Angus was referring to it, in the effect on money supply. So there is a double effect. However, I hope I have dealt with this main point.
  There is so much confusion about the effect on small companies. I am very concerned about the effect of the general credit squeeze on small companies, but the crazy thing about this situation is that this general squeeze is having an effect on small companies and not on small importing companies, because small importing companies can obtain funds. My criticism, therefore, is that this is not a selective pressure on liquidity but a general added pressure on liquidity.
  My hon. and learned Friend the Financial Secretary gave some figures which seemed to show that the scheme was having some effect, and that where previously the non-exempt imports have been increasing at an annual rate of 13 per cent., they increased last year at the rate of 3 per cent. I am not sure whether those figures are correct, but the burden of his point was that the only evidence available showed a reduction in the increase in. imports. If this is so, and I accept that it is possibly so, although I believe that it is because of the general credit squeeze and not the selective nature of the pressure, and if it is perfectly legal. under G.A.T.T. and E.F.T.A., why say that it will be only temporary? If it is having only some effect, why not leave it? I have no objection to leaving it for some time if this is a legal weapon which is open to us.
  The argument of the hon. Member for Worthing was that, having signed an agreement which we believed enabled us to put on an import deposit, we need to go to the other parties to the agreement and ask them to examine it in minute detail to find if it is wrong, although we have already said that what we have done is right. I cannot accept that argument.
  If the Government's main concern and their top priority is to achieve an extra £50 million surplus on the balance of payments, then this and any other measure is of value. But that is not my

  923
  main concern. My main concern is to give the highest possible priority to increased manufacturing investment. That 1 regard as a higher priority than an extra £50 million surplus on the balance of payments.
  All the squeezes of recent years—and not going back merely to 1964—presumably have some effect somewhere on investment and on stocks. In the debate on the Queen's Speech I referred to research on stocks held by companies in this country which had been done by Norman Cunningham of the Liverpool University School of Business Studies, to which nobody seems to have paid much attention. The research showed that stocks as a percentage of national income over an eight-year period were 24 per cent. for the United States, 25 per cent. for Sweden, 28·5 per cent. for France and Germany and 45 per cent. for the United Kingdom. These are significant figures. All the credit squeezes seem to have had no effect in forcing management to look more closely at the level of stocks carried in relation to turnover. I put that down to inefficient management; it obviously cannot be put down to inefficient workers.
  The hon. Member for Worthing is, I understand, opposed to credit squeezes and says that they are not the answer to our economic problems. But one would have expected that credit squeezes would have had some effect. We know that they have some effect on manufacturing investment and one would expect them to have an effect on the ratio of stock to sales and production. I would be interested to know from my hon. Friend whether the Government are looking at this aspect. The report of last year from the Washington Brookings Institute showed that our management was less efficient than that of some of our competitors. If this is so, it warrants close examination, because of the great damage that is done to our economic and balance of payments position.
  The Government are not the first Government to find that the answer to economic problems lies in credit squeezes. We have had credit squeezes for a long time. Hon. Members on both sides of the House say how terrible credit squeezes are, but I wonder what sort of world they are living in if they think that for years
  924
  and years there have been credit squeezes which have had no effect.
  Mr. Bruce-Gardyne: Would not the hon. Gentleman agree that the severity of the credit squeeze on this occasion is very much greater, in that for the first time since the war, I believe, the domestic money supply actually declined in the first quarter of this financial year?
  Mr. Barnett: A comparison of the current credit squeeze with other credit squeezes depends upon many circumstances, and it is unfair to take it out of context. The effect of credit squeezes on companies depends on many factors. One cannot say, with the stricter control of domestic credit expansion, that we are now, because of Milton Friedman and the money supply theory, looking more closely than we did at the amount of control. It may be that on other occasions the control was exercised without anybody being aware of it, including those exercising it.
  The manufacturing investment figures have been bandied about, and all of us, including the Chancellor of the Exchequer, feel these to be inadequate. I do not want to go into the question of whether the manufacturing investment figures provided by the Board of Trade survey or the C.B.I. survey are the right ones. Those figures could be used in many ways. One problem about debates on economic affairs in the House is that, unlike the more reputable papers, we do not always separate opinion from fact. The hon. Gentleman, who is normally so good with his facts, got himself politically involved this afternoon, and we did not get a separation of opinion and facts.
  It would be astonishing if the credit squeeze did not have some effect on the decision of a board of directors as to its expectations and also on liquidity. Whether or not management is efficient is not the point. The point is that manufacturing investment will be affected. If the figure goes up 10 per cent., one would assume that had it not been for the credit squeeze it would have gone up further.
  One of the heaviest prices which we pay for parliamentary democracy is that manufacturing investment does not pay off in the short term. Every Government, not just this Government, put other economic factors before manufacturing

  925
  investment because the pay-off from manufacturing investment does not come in the short term, and we have elections in the short term. This is one of the prices we must pay.
  I put my priority with manufacturing investment. If in the process of getting a higher rate of manufacturing investment, vie had a balance of payments surplus of, say, £300 million instead of £500 million, I would be satisfied that my priorities were right.
  7.0 p.m.
  Mr. Richard Body: I was disappointed with the speech of the hon. Member for Heywood and Royton (Mr. Barnett) because I thought that this year he would come out against this scheme of import deposits in view of his remarks last year.
  The hon. Member said on that occasion that he could give only half-hearted support to the scheme, which would cause much administrative trouble and distortion. He added then, however, that as it was to be only a temporary measure, he would support it. Like all of us, he thought that it would be temporary.
  Mr. Barnett: If the hon. Gentleman will read the speeches I made last year he will see that I accepted the scheme not just for a year but, if necessary, for a longer period.
  Mr. Body: I thought that it was only only the hon. Member for Stoke-on-Trent, Central (Mr. Cant) who argued that it should be a permanent weapon for the management of the economy.
  However, I was disappointed at the hon. Gentleman's speech because I thought that he was an uncompromising free trader who believed in liberalising trade. It must be beyond doubt that this scheme creates a non-tariff barrier to trade, a point which I wish to emphasise because 1 believe that it could have a serious effect in the present primate of world opinion.
  A year ago, particularly when we debated the subject in Committee, we argued at length about whether import deposits would conflict with the Convention of Stockholm. It was agreed that the spirit if not the letter, of E.F.T.A. was being offended. At the time our partners in
  926
  E.F.T.A. were disappointed. Indeed, they maintain that attitude. It was made clear at the meeting on 6th and 7th November of the Ministerial Council of E.F.T.A. that concern was still being expressed at the existence of this scheme. Yet they showed much understanding of the problem we were facing a year ago.
  Our E.F.T.A. partners realised a year ago that we were in a state of crisis. They also accepted the word of Her Majesty's Government that this was to be only a temporary scheme. Indeed, several hon. Members have referred to the language that was used by the Government on that occasion. I remind the House of an exchange which took place between my hon. Friend the Member for St. Ives (Mr. Nott) and the Financial Secretary. The Financial Secretary said, for the nth time:
  "It is temporary …"
  to which my hon. Friend interrupted:
  " Like Income Tax."
  The Financial Secretary replied:
  " Unlike Income Tax, it would not need another Act of Parliament to renew it."
  Following that comment, HANSARD describes, in brackets, an "Interruption" —and we know that that is an OFFICIAL REPORT euphemism for a real old rumpus. The Financial Secretary added:
  "I suppose that that is not so. All I can say is in anything like the present circumstances I would find it deplorable to renew any form of restriction, and it is not our intention to do so. Our intention at present is to bring this to an end automatically after 12 months."—[OFFICIAL REPORT, 26th November, 1968; Vol. 774, c. 267.]
  Exactly 12 months have passed, but far from the scheme automatically coming to an end—it would have done but for this Measure—we find the Government proposing it for a further year. This is causing our partners in E.F.T.A. not just apprehension but some degree of alarm.
  Everyone recognises that as long as countries persist in fixing rates of exchange they must have some safeguards reserved to themselves in the event of balance of payments trouble. Like the hon. Member for Ashton-under-Lyne (Mr. Sheldon), I accept that this is necessary, and presumably such a safeguard must take the form of a non-tariff barrier. However, nations are anxious, now that the Kennedy Round has been completed,

  927
  not to resort to non-tariff barriers. Unfortunately nations are devising, and employing, non-tariff barriers which were not even thought of a decade ago.
  It is beyond argument that the proposal before us is a non-tariff barrier. The definition of such a barrier, in commonsense —it may not be precise but it will do—is any interruption of the free flow of international trade. We heard sufficient figures from the Financial Secretary to know that this scheme has had a check on the flow of imports into this country. This is to be welcomed, though one would wish that such a check would be only temporary if it is likely to endanger our relations with countries which historically have been our markets.
  For this reason I regret the retention of this scheme unless it can be proved to be strictly necessary. It is humbug for this House to advocate any form of liberalising trade in or out of the Common Market if we persist in this kind of non-tariff barrier once it is seen by ourselves and the world that our balance of payments are no longer in serious trouble.
  Mr. J. T. Price: I agree with much of what the hon. Gentleman is saying and I, too, believe in purity, as long as I live in a pure world. I remind the hon. Gentleman—he might bear this in mind before developing his argument—that even some of our Commonwealth partners—for example, one of our historic markets in Australia—when in balance of payments trouble do not adopt devices of this kind but go further and close their ports against all imports of British goods. This has been done to the great detriment of the Lancashire textile industry on many occasions. I would like the hon. Gentleman's views on this.
  Mr. Body: I thought that I had given them. I acknowledged that there must be safeguards for countries which may be in balance of payments trouble, especially if we persist in maintaining fixed rates of exchange. That is acknowledged by G.A.T.T. and our partners in E.F.T.A., and that is why they did not kick up such a shindig a year ago as they did in 1964 when we introduced the surcharge.
  It is right that a country should reserve to itself a protective measure
  928
  such as this if it is clear that there are balance of payments problems. That, however, is no longer clear. Many countries have heard it gleefully said ad nauseam by Her Majesty's Government —I do not deny them the right to say it and I am pleased that this state of affairs has occurred—that our balance of payments is healthy and in surplus. That cannot be a justification for renewing this scheme for a further 12 months. To do so only undermines the confidence that has existed among our E.F.T.A. partners and I am concerned tonight to point out the effects that the scheme is having on our partners in E.F.T.A.
  The astonishing success of E.F.T.A. during the last few years is not sufficiently acknowledged by the Government. The trade between the E.F.T.A. countries increased 2½ times since it was formed.
  The hon. Member for Ashton-under-Lyne told us how the trading pattern had changed in the last few years; and that only 22 per cent. of our trade is now with the Commonwealth compared with 45 per cent. some years ago. One reason is that we have enlarged our home market, which no longer comprises only the 50 million population of these islands but the 100 million in the E.F.T.A. countries. This is an excellent state of affairs, and it explains why in the first six months of 1969 trade among the E.F.T.A. partners rose by no less than 16 per cent.
  What is even more significant is the remarkable growth of trade between E.F.T.A. and the E.E.C. E.F.T.A. exports to the E.E.C. are twice as large as those in the other direction. To give precise figures, the E.F.T.A. countries have increased their exports to the E.E.C. by 17·8 per cent., while the E.E.C. has increased its exports to the E.F.T.A. countries by only 9·4 per cent. Trade between E.F.T.A. and the rest of the world has shown almost as considerable an increase.
  It has been said elsewhere that E.F.T.A. is the fastest growing market in the world, and it would be tragic if we were to do anything to impair its strength or imperil the confidence that exists between its partners. The scheme that it is now proposed to continue will be in force during next year when we may well be negotiating with the E.E.C. If those

  929
  negotiations taken place, it will be imperative for us at the same time to retain the good will and co-operation of our E.F.T.A. partners. The present scheme does not do that.
  If it were clear that we were still in balance of payments trouble our partners in E.F.T.A. would acknowledge the necessity for the scheme, but the Government cannot say "We have achieved a balance of payments surplus; we are out of the red now" and in the same breath offend against the spirit of the E.F.T.A. agreement and, in so doing, jeopardise both trade and good will among our E.F.T.A. partners.
  Any course of action which throws doubt upon our good faith is morally bad and politically dangerous. A Bill which perpetuates a non-tariff barrier, which offends against the Convention of Stockholm—to which we are a signatory—and which offends against the spirit of E.F.T.A. must call in doubt our good faith towards E.F.T.A. I therefore believe that the Bill must be morally bad and politically wrong.
  7.15 p.m.
  Mr. Ted Leadbitter: A year ago I had the privilege of speaking on this subject, and I believe that it was then considered more than likely that a year later we should be again debating whether, in view of changing economic circumstances, to remove these duties or extend their operation for a further period. The hon. Member for Holland with Boston (Mr. Body) said that if we were so hopeful about the balance of payments the Bill would not be needed, but the strength of the trading figures for the last three months is hardly by itself, sufficient foundation upon which to make a change.
  The problem with which we have been struggling for many years is still with us, and although the trend towards a healthy balance of payments looks stronger than fcr many decades, hasty action now could be ill-advised. Nevertheless, the gravity of the Bill, the enormity of the Bill, the seriousness of the Bill and its effect on E.F.T.A. nations or any other outside group of trading nations must be put into perspective.
  It was, I think, the First Secretary who last year defined quite clearly what the
  930
  scheme meant. It was pointed out that it did not deal with certain imports from developing countries, or with large categories of raw materials. In total, it affects only about one-third of our import bill—just under £3,000 million. It is, therefore, not very large. Indeed, it is only part of a package of other steps that have been taken by the Government in order to get an export bias and some marginal control of imports.
  When the hon. Member spoke of the effect of the scheme on the E.F.T.A. countries I was rather pleased to hear my hon. Friend the Member for Westhoughton (Mr. J. T. Price) intervene to indicate that we do not live in a pure world. In an aside, I might say that it is the desire of most of us that the world might be purer than it is, and certainly in terms of economics and of moral values it is to be hoped that there will be some improvement.
  I was the chairman last year of a subcommittee of the Estimates Committee which dealt with the subject of exports. One of the pleasing things I was able to tell the House was that in the year under review the United Kingdom earned abroad about £10,000 million. That is the highest earning capacity per head of population of any country, including the United States. It therefore serves the country not well at all for hon. Members opposite, within the climate of a deficit on balance of payments or within the climate of a change for the good, to indicate to the world outside that we are behaving dishonourably towards our trading partners, wherever they may be. It serves the House and the country not well for hon. Members opposite to try to minimise abroad the significance of Government policies that have brought about a trend for the good in the balance of payments position, albeit only in recent months. If the rest of the world conducted its trading affairs at the high standard which this country adopts, our trading fortunes might have been better without some of the steps we have had to take. That sometimes hurts us at home far more than those abroad.
  If the Financial Secretary was right a year ago, as I suspect my hon. and learned Friend was right today in talking about the very marginal effect of this Bill, I presume that the idea was to take out of home consumption a certain amount of liquidity. That was one of the parts

  931
  of the package deal arrangements. There were two objectives of the Bill. One was to modify imports in the limited area to which I have referred, and the other was to take out of home consumption some of the demand.
  Mr. F. A. Burden: On the assumption that this country is exporting more per head of the population than any other country, would not other countries—if we put up barriers against them when they are importing in substantial quantities from us—be upset and object to this imposition?
  Mr. Leadbitter: I do not take the point; the hon. Member must bear with me. When I have travelled abroad one of the things which have worried me is the charitableness of this country. It is a joke in the Far East that we provide aid and the Chinese exploit it. I shall not be a party to anything which suggests that if we conducted ourselves differently our friends abroad would be happier. The trading relationships of this country are of a high order. When this House looks pertinently at our record we find that we increased exports to Japan last year by 26 per cent. The instruments used by the Government have been useful. Whether one attempts to make political capital out of it or not, our record stands for many years. We could not have got that relationship which is desirable to help the economy, on our exports and imports—
  Mr. Body: Will not the hon. Member agree that the proposal to introduce charges—import deposits, to use the words of the 1968 Act—offends at least against the spirit of the Convention of Stockholm of which we are a signatory?
  Mr. Leadbitter: I fully agree that any measures which go outside the desirable principles outlined in the E.F.T.A. and the G.A.T.T. are unhappy, but we are not loners in this respect. The principles of free trade and of the G.A.T.T. and the E.F.T.A. have been attacked from time to time by other countries. I was glad to find that my right hon. Friend the then Financial Secretary to the Treasury said on 28th November last year:
  " I want to say a word about the E.F.T.A. and G.A.T.T. situation. I am entirely wedded to the belief that the move to free world trade from restrictions initiated in the G.A.T.T.,
  932
  E.F.T.A. and other efforts we have been making, such as the Kennedy Round, is vital for the prosperity of the world, and to no country is it more vital than our own which is so dependent upon world trade."—[OFFICIAL REPORT, 28th November. 1968; Vol. 774,c. 754.]
  It is not valid to say that when we are trying to put our own house in order it is wrong to have a small marginal instrument such as this Bill, which deals with only one-third of our imports and protects the developing countries. To maximise the charge that we are behaving dishonourably is going beyond what has been practised by many other countries.
  My firm belief is that even in the European Community the economic difficulties suffered by the members of the Six are such that time and again the principles of the Rome Treaty have been violated. Let us not point an accusing finger at this country. This country has had to deal with the problem of getting the balance right between exports and imports. I have indicated that this is a marginal Bill and I refer to a matter which I raised in that same debate last year. I said:
  " I noticed in the Financial Times this morning this comment when it referred to the review of the National Institute of Economic and Social Research:"
  " There is no doubt the reason for the difference '"—
  I defined that difference in the estimates of the balance of payments and went on with the quotation from the Financial Times—
  "' lies in the behaviour of imports relative to the level of domestic demand. It is chiefly in respect of import forecasts—price and volume—that successive revisions have taken place. Thus the Institute's call for import controls earlier this year was amply justified.'"—[OFFICIAL REPORT, 28th November, 1968; Vol. 774, c. 8511
  The Financial Secretary has informed us today that the rate of increase in imports has fallen from something like 13 per cent. to 6½ per cent. last year. He made the point that the Bill is marginal, but I take a different line—not in order to contradict the Government but merely to suggest that there were other means. If the report Ihave quoted was correct, we might have been more selective and applied physical controls in the right areas and on the right kind of imports.
  I say this for a particular reason. The general reason is known to the House,

  933
  but there is a particular reason. In this country today we are involved, not only with the larger question of getting our world trading problems put right, not only with the question of balance of trade and balance of payments, but simultaneously with the restructuring of industries at home. It would take more than someone with a crystal ball to be able with certainty to ascribe the consequences of this Bill in such a way that the problems we are suffering from the restructuring of industry should not be made more difficult than they are.
  Because of the redistribution of industry, and particularly the settlement of small industries on Merseyside, in Wales and in Scotland, we could adversely affect those industries with a Bill which did not clearly define the kinds of imports which are affected. It is far better when dealing with restructuring and redistribution of industry to pinpoint the kinds of imports which we want to control. That would do two things which are desirable. One has been outlined by the Financial Secretary, the marginal effect on increase of imports. The other is to protect industries which need protection in developing areas.
  First, during the past 12 months these controls have done no harm that can be detected in the economy. Secondly, they have helped to level out imports, which has made some contribution to righting the balance of payments. Thirdly, there does not appear to be any sufficiently strong evidence to justify withdrawing these controls.
  Therefore, there is a case for continuing them in force. A year ago I asked if some aspects could be examined. During the course of the past year there does not seem to have been sufficient research to highlight our need to be more selective in the physical control of cur imports to achieve the important objectives of any imports control system—namely, to achieve the required balance in international trading and to protect home industries which are in the process of being resettled in development areas.
  If the hon. Member for Worthing (Mr. Higgins) were to balance his language about Britain's conduct with the hard facts of improvement, he would modify his viewpoint and agree that this is a storm in a teacup. It is not a matter of
  934
  major importance. It is no more than part of a package deal. The concern of both the hon. Gentleman and myself can be expressed by my asking the Minister to take note of our concern and, if import controls of some kind have made a useful contribution to Britain's trading fortunes, during the next year could some more research be carried out so that we can be more selective in achieving our objectives?
  7.32 p.m.
  Mr. David Crouch: The hon. Member for The Hartlepools (Mr. Leadbitter) has said that this is a very small Measure which has done no harm. Perhaps it has not. I shall address myself to that problem.
  A year ago, when the then Financial Secretary took us into the labyrinth of these controls, he told us that it was his intention to bring the scheme to an end automatically after 12 months. That is why we on this side will vote against the Bill tonight. There was no great enthusiasm on either side of the House for last year's Bill.
  Today I listened to the speech of the hon. Member for Heywood and Royton (Mr. Barnett) with great interest, as always. He made some constructive points, as he did in his speech a year ago when he said this of last year's Bill:
  "… I am not sure that it is worth the trouble of the distortion, administrative problems and anomalies that it creates."
  We should keep this subject in perspective. We can work ourselves up into a colossal tizzy about the one-third of our imports to which we are applying some sort of restriction. The very fact that we applied these administrative controls has a depressing effect both ways in our trade. It has not only a depressing effect on the restriction of imports, as my hon. Friend the Member for Worthing (Mr. Higgins) described, but also a reciprocal depressing effect on exports because of the interference with the free flow that is necessary between our manufacturers who export and those who import.
  The then Financial Secretary said some interesting things about what he thought was the intention of last year's Bill. I ask the House to listen to what he then said, very honestly—the right

  935
  hon. Gentleman is always very honest with the House—
  " I do not know exactly, or even within a wide range, what the effect will be "—
  that was honest?
  " but I do know that the less effect on reducing imports the more is the effect on reducing extra bank liquidity … I am hoping that there will be a significant and marginal effect in terms of imports themselves. I shall be very surprised if there is not such a marginal effect, but the exact amount of it obviously no one can know."—[OFFICIAL REPORT, 28th November 1968; Vol. 773, c. 752–84.]
  We were left in no doubt that it was a doubtful Bill—a small Bill and a marginal Bill.
  I was present for the debates both on Second Reading and in Committee on last year's Bill. It was designed, as I thought, to reduce imports. I listened to those debates with an open mind, because I was concerned about the Government's overall aim to achieve a surplus on balance of payments—the surplus that the Chancellor was then looking forward to and which he now proudly says he can see being achieved.
  What has been achieved during the last year? I was not very happy with the answer that we got from the present Financial Secretary today. How marginal has been the achievement, and how marginal or how large is to be the achievement if we continue with this scheme at 40 per cent.? We have heard that the scheme is designed, on the one hand, to apply a selective liquidity pressure, to take a little heat out of the economy. Have I heard the figure £650 million somewhere? How much heat has been taken out of the economy by this scheme?
  By how much have imports been reduced? I thought that imports would be reduced. A year ago I was even prepared to consider supporting a Measure which might have had some dramatic advantage for the country in reducing the factor for imports in the sum that goes to make up the balance of payments at the end of each month and at the end of the year. As I understand it, imports have not been reduced. Only the rate of increase in imports has been reduced.
  Therefore, after a year of this administrative interference and intervention by the Government, the heat has been taken
  936
  out of the economy in reducing the liquidity pressure, on the one hand, and some heat has been taken out of the rate of increase in imports in the balance of payments sum by a factor which we have not been told in terms of hundreds of millions of £s or millions of £s.
  When there are exchanges in this House and in the country about the balance of payments situation, it is really because we want to know where we stand. If, tonight, we are to give sanction to the Government to go ahead with this Measure, which they said they wanted for only 12 months and now they want to continue for another 12 months, we should be told exactly what we will get for it. Having listened to the debate this afternoon, I am still not clear what is the answer to the sum.
  I believe that the Government's aim is to achieve a surplus on the balance of payments, to maintain the rate of achievement which we have seen. We know how the sum is made up on the balance of payments. We want to know what savings of imports will result from a continuation of the Bill. I should even be ready to consider supporting the Bill if I thought that it would make a valuable contribution to our economy, but I do not know its value. It do not know its value in reducing imports. I have been told that it may reduce the rate of increase, but that is not enough.
  I know that this Measure interferes with our overseas trade. The hon. Member for Heywood and Royton said that it increases costs by about 2 per cent. to 3 per cent., and I can only accept the hon. Gentleman's word for that. I think that this Measure is yet another example of the Government's concern to interfere and control, and in this instance to do so to very little purpose and with very little real advantage. It illustrates the Government's incompetence—this is my fear—in the overall management of our economy.
  We can see some light at the end of that tunnel. The amperage of that light is about £300 million. This flickering light is a long way off, and we want to do nothing to let that light of a surplus of £300 million go out, but we want the Government to take positive and real steps so that people in this House and outside can recognise them as competent steps in the management of the economy.

  937
  The Bill does not seem to me to do that. It seems to me to be a continuation of the muddling, interfering, and administrative intention which produces very little.
  There are much bigger things involved than those which the Bill will control. We are faced with a massive overseas debt of £3,000 million, which has been built up in five years. We are faced with the extra burden of taxation. Those are the factors which sit, not in the balance of payments, but in the balance which the Chancellor has to maintain on the economic tightrope which he has to walk and take us with him. We know that the measures taken by the Government have resulted in price increases of more than 22 per cent. in the last five years. I do not wish to range widely from the Bill, but we are debating this Measure as though it is of massive importance. I say that it is of minimal importance.
  Having spoken about the economic tightrope across which the Chancellor has to walk, perhaps I might remind him ard his hon. Friends of some of the things that they have done while attempting to reduce imports which have made it more difficult for the Chancellor and the nation to keep their balance. The Government have attempted to reduce imports, but they have more than attempted to reduce demand at home. They have succeeded in drastically reducing demand at home by a succession of deflationary measures. They have successfully reduced and restricted our economic growth and industrial investment. They have reduced employment. They have reduced savings, and they have reduced the whole object of people wanting to save.
  Mr. R. W. Brown: The hon. Gentleman said that we had reduced employment. That is not true. Would he not agree that the real problem is that we have not succeeded in marrying up the vacancies one sees in the Sunday papers with the people who need jobs?
  Mr. Crouch: I am interested to hear what the hon. Gentleman says about this country having more than 500,000 unemployed. I am sure that the men and women concerned will not be impressed
  938
  by this explanation of why it is so difficult to find them employment. The fact is that the unemployment figure is more than twice what it used to be.
  The Government have succeeded in making some reductions. They have succeeded in reducing the value of the £ by 3s. 9d. in the last five years. Those are the major things that are getting us out of balance. Those are the dangerous factors facing us. Those are the matters to which we should devote our attention on another occasion in the very near future. Those are the serious matters which we must face when we are considering our economic problems.
  We must take such steps as are necessary to get into balance and to help the Chancellor and the country to ensure that the light at the end of the tunnel burns a little brighter. Let the Government therefore take the real steps which would take the whole country with them. Let them reduce unofficial strikes. Such a measure would be a more positive step towards helping the country than the little Bill that we are considering tonight. Let the Government take steps to reduce the wastage of manpower. Let them take steps to increase efficiency in management and in the unions. Those are the matters to which the House should be addressing itself. Let the Government take steps to improve the efficiency of the management of the nationalised industries. If such steps were taken, there would be a restoration of confidence in the country and in the Government.
  We are messing about with a little Measure which Government spokesmen said a year ago they could not see how effective it would be. Tonight we have heard nothing in defence of the Bill, except that it is an interesting piece of administrative mechanism which they do not want to drop. I suggest that this Measure is an interference with the free flow of our trade, and that it in no way helps to balance our economy and maintain a surplus on our balance of payments.
  I have tried to suggest that there are real problems to which the Government should address themselves. The Government should address themselves to the real problem of reforming industrial relations. The Bill does not deal with a real problem, and I shall therefore not vote for this Measure tonight.
  7.50 p.m.
  Mr. Donald Chapman (Birmingham, Northfield): I apologise for having been away for some time. I have been attending some Committees. What I have wanted to do all day, and have now succeeded in doing, is to read some of the speeches made last year in precisely similar circumstances.
  Mr. J. T. Price: Better to forget them.
  Mr. Chapman: I am not sure that it is a good thing to forget them. I am not accustomed to repeating my speeches, and I shall not do so tonight, but I was one of about three Members who supported last year's Act. Everybody else was sceptical, and I was one of the few who pointed to exactly what it would probably do if we gave it a chance.
  I also pointed out then some of the extraordinary remarks made by hon. Members opposite. I said that their prognostications were doomed never to be realised. I remember weeping tears as hon. Member after hon. Member opposite told us graphically, almost chancing their arm at the exact numbers involved, of the number of people who would be driven to bankruptcy by the Act. According to the Opposition. the queues in Carey Street would be miles long as a result of the little Act we passed then.
  One hon. Member opposite looks as though he does not believe me. If I am challenged, I will read some of the things his hon. Friends said about last year's Act. It would make good reading, and make one wonder whether hon. Members opposite ever learn from their mistakes. I begin to doubt it.
  Last year I said that the Bill we were considering was designed to have a marginal effect; we wanted to hold down our imports, or if possible slightly to economise at the margin, for a limited period. I said that, with an import bill of about £6,000 million or £7,000 million a year, to turn the corner into a period of surplus we needed to economise by about 2 per cent. at the margin. That was just to turn the corner towards home in the long effort to solve our balance of payments problem.
  I added:
  "We are gradually reducing the monthly deficit on the balance of payments. We have got it down to a figure, at the moment,
  940
  of between £20 million and £30 million a month."
  After an intervention, I continued;
  "By the time we take invisibles into account. we have the figure down to £20 million or £30 million a month. What we are trying to do is to make a quick action to get it turned round the corner as soon as possible into surplus …."—[OFFICIAL REPORT, 28th November, 1968; Vol. 774, c. 845.]
  I said that this was for very good reasons which my right hon. Friend the Chancellor of the Exchequer had outlined.
  That is precisely what last year's Act has helped us to do, despite all the fears of hon. Members opposite and some of my hon. Friends, and without the enormous queues in Carey Street that hon. Members opposite were wailing about at the top of their voices a year ago. Do they never learn?
  I went so far as to put down an Amendment in Committee, about which I am quite unrepentant, because I believe that such legislation, to be used as infrequently as possible, should be a part of any country's permanent armoury in the modern world.
  Mr. Body: The hon. Gentleman has left out the choice bit of the speech from which he quoted. He later advocated that Act as a once-for-all action for 12 months. But the 12 months are now up.
  Mr. Chapman: The hon. Gentleman is right, but perhaps he did not hear what I said. Having reflected on the matter, I put down an Amendment in Committee saying that we would do much better to keep it permanently as part of our armoury. It is an entirely proper method to use.
  I do a certain amount of work on the Economic Committee of the Council of Europe, where I mix with my Scandinavian and E.F.T.A. colleagues. I take part in meetings three or four times a year with all my parliamentary colleagues from the E.F.T.A. countries and talk to them openly, and also privately behind the scenes. They do not do the wailing that hon. Members opposite do on their behalf. They realise that these things are the facts of life today, given the necessity of countries to take action from time to time, driven by difficult adjustments in national economies. They recognise that our legislation is perfectly legitimate, because nobody will physically cut imports from E.F.T.A. countries in any order of

  941
  magnitude. We are trying to limit imports from E.F.T.A. countries, as from elsewhere, to a point that can be coped with, having turned the corner with our steady rise in exports. They realise that all countries must tailor these matters as they go along to some extent, because we cannot afford to remain in a debtor position for many years.
  What is the alternative? My E.F.T.A. colleagues are sensible about this. Many of them are good Socialists, and see this from first principle. If one is faced with a balance of payments situation which is very difficult to correct, the classical remedy is to have a good old deflation. That will solve one's balance of payments problems and give one a beautiful surplus. The last right hon. Gentleman opposite to be successful, the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), did precisely this in 1961–62. Have a good old wallop at the problem, and one achieves a balance of payments surplus. But my E.F.T.A. colleagues recognise that they may then come off much worse in their trading relationships with this country than if we take a gentle action, as is taken at the margin in legislation of this kind.
  That is why last year's Act was sensible, and why the Bill is sensible, and why I hope again in Committee to press my point that the Government should realise that such legislation is a good thing to have tucked away, for use as infrequently as possible, as a good alternative to the blunter weapons of real deflation.
  There is another point that makes one think harder about the matter. When France moved into a balance of payments deficit in the middle of this year, what was the French Government's first response? It was not to have deflation on the old recognised pattern but to use the physical weapons of control and things like an export subsidy. I know that France had difficulties with the Brussels Commission as a result. In other words, country after country in the modern world recognises that one can no longer solve significant balance of payments problems of individual countries by old-fashioned methods. I know that labour will not politically stand for massive deflation. It is quite right. There are other, sophisticated weapons to
  942
  use, such as methods of encouraging exports and the restructuring of industry, as well as measures such as the import deposit scheme which one may need to have as well in case it is difficult to make the changes vitally needed. But I agree they should be used as sparingly as possible.
  I am glad to have been one of the three hon. Members last year who said how much they welcomed the then Bill and to have foretold how successful it would be in precisely the way it has been successful. I am glad that I pointed out how ridiculous were the complaints and fears and wailings of hon. Members opposite about it. I know that it is not up to him, but I hope that my right hon. Friend the Chief Secretary will try to ensure greater latitude this year in Committee, since a number of us would like a debate on whether to make this scheme part of our permanent system of reserve controls.
  We should stop worrying about the supposed complaints in Europe. I go into Europe to mix with fellow-Parliamentarians more than anyone now in this Chamber and more than most hon. Members in the whole House of Commons. That is currently part of my job. I can tell the House that the fears which have been expressed about the reactions of our colleagues in Europe are entirely unfounded. Hon. Members opposite would do well to recognise the Bill for what it is—a sensible, small Bill, operating at the margin, with a year of success behind it, and which is quite properly being renewed for a year. Indeed, I hope that it will be renewed for beyond a year ahead.
  8.2 p.m.
  Mr. Edward M. Taylor: The hon. Member for Birmingham, Northfield (Mr. Chapman) has been fortunate and unique in being able to quote a speech he made last year. This is what many lion. Members opposite have not been able to do, for obvious reasons. The then Financial Secretary made a splendid speech last year. He said that he would find it deplorable to renew this form of restriction and that it was not the Government's intention to do so. Many such speeches were made from the benches opposite. They all said that it was a deplorable Measure brought in once for all, for 12 months.
  Mr. J. T. Price: I do not go rooting through the Library to find and regurgitate old speeches. I spoke last year. I made an unequivocal supporting speech for the scheme. Since the hon. Gentleman is challenging us, I challenge him. If he stands up and objects, as he often does, to the unregulated import of immigrants from all parts of the world, I am equally free—and I agree about the regulation of immigrants—to advocate—
  Mr. Deputy Speaker (Mr. Harry (Gourlay): Order. The hon. Gentleman is getting wide of the Bill.
  Mr. Price: I will finish in a moment, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Order. The hon. Gentleman cannot pursue that argument.
  Mr. Price: No matter. The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) has got the point.
  Mr. Taylor: I am sorry if I have offended the hon. Member for Westhoughton (Mr. J. T. Price). It was not my intention. I did not refer to his speech because I know that we on this side always listen with such care to his speeches that there is no need to repeat them because they are always fresh in our memory.
  The Financial Secretary gave us the real reason for this Bill today. These regulations are like something I equally condemn—strong drink. Once one has started, it is difficult to stop. The hon. and learned Gentleman indicated that today because he made it clear that, if we were to remove these controls, two things would happen. First, a free movement of credit—the £500 million tied up in deposits—would flow back into the economy; secondly, there would be an inflow of the built-up demand for imports which have been waiting for the restrictions to go. We know that this would happen and thus, import deposits, like many other bad habits, are difficult to stop, once started, because of the consequences involved.
  Only one basic argument has been made for continuance of the scheme. It included the strange figures which have been mentioned. We are entitled to ask what those figures mean. One hon. Mem-
  944
  ber said that the figures showed that there had been a reduction in imports. That is not my understanding. Another hon. Member said that the rate of increase has slowed up. That is not my understanding either. The hon. and learned Gentleman said that the increase in exempted goods had been at a slower rate than non-exempted. That is not saying a great deal, particularly talking in terms of an annual rate of increase of 7 per cent. in money terms, and not at constant prices, and it takes no account of movement in existing prices. If the hon. and learned Gentleman was trying to indicate that the scheme has done something, we should know what it has done. If there has been any increase, then to what specific purposes and for what reasons? But he failed to give any reasons, apart from these mysterious figures.
  When the restrictions were introduced, they were accepted reluctantly by some of our trading partners because they appreciated that we were in a state of crisis and that something had to be done—although perhaps the wrong thing from our point of view. The Government said clearly that this would be a temporary Measure for only 12 months and would not be repeated. The 12 months have passed and our trading partners could understandably ask, "What have you done in the interim to solve the roots of the problems which brought you into this crisis? Have you taken specific measures to deal with wage inflation?" Within the last few weeks we have seen wage inflation appear to be soaring. The idea of a norm of 31 per cent. has disappeared and has no significance. Our partners could ask whether the Government have made any real endeavour to cut down unnecessary administrative costs. The answer would be, "Far from it".
  Perhaps the hon. Member for Northfield has seen the interesting figures published recently. If this were an average British audience, 22 per cent. of the people would be employed by the public services; in America, the figure would be 11 per cent. and in Japan 5 per cent. The hon. Gentleman should think of that as being among the root problems we should be tackling. If we had tackled those problems, our trading partners would look upon us with far more understanding.
  Mr. Chapman: Does the hon. Gentleman really think that our colleagues in the E.F.T.A. countries are saying these things? They are not. They are saying that they are glad to see that we have had a package of measures which has brought us a balance of payments surplus which looks like totalling £500 million. They are not sharing the hon. Gentleman's ideas. They do not go around Europe saying what he says.
  Mr. Taylor: They may not say it in exactly the same way but I have splendid quotations of what has been said by E.F.T.A. Ministers, and if the hon. Gentleman goes around E.F.T.A. meetings and gets the impression that its members are not concerned about the scheme, he must be blind and deaf and unconscious at the same time. This is not the impression given by E.F.T.A. Ministers.
  Whether or not there is this concern in E.F.T.A., we are taking action in breach of the spirit of both E.F.T.A. and the G.A.T.T. There is no doubt of that. Whether one is concerned with the small print of the agreements, this scheme is in conflict with their spirit. The Government should be concerned about it. Are they saying that we will take part in a trading organisation but will not pay too much attention to the rules and that, if the rules do not suit us, we will change them from time to time?
  The Government are to start a grand exercise in which they hope to get Britain into the E.E.C., an organisation which imposes rigid rules and restrictions. If the Government regard the less onerous restrictions imposed by E.F.T.A. as being of no concern, and if they are prepared to shuffle them aside, they will find it difficult to persuade the countries of Europe to accept us into the Community.
  Personally, I do not urge the Government to press ahead speedily to enter the Common Market. Like many hon. Members on both sides of the House, I have strong reservations about it. But the Government give the impression that they are anxious for Britain to enter the Common Market. I hope that they will consider seriously what the reaction will be in Europe if they break a solemn undertaking which was given to E.F.T.A. when these arrangements were intro-
  946
  duced, when they said that they would be operated for only 12 months.
  As has been rightly said, these arrangements cannot be applied selectively to help the economy. They cannot be operated so as to allow firms to buy machines and equipment to make themselves more efficient. On the other hand, as is well known to the hon. Member for West Ham, North (Mr. Arthur Lewis), who is one of the most active Members in this respect, they cannot be used to keep our things like gaming machines. At Question Time and on other occasions, the hon. Member has produced staggering figures of the amount of our resources take by imports of what many people regard as unnecessary luxuries. These restrictions do not differentiate between what would generally be regarded as in the interests of the efficiency of British industry and something not necessarily important to British industry.
  If we are in serious imbalance, there is a restriction which we can use without breaking the E.F.T.A. or G.A.T.T. arrangements. That is the use of import quotas. They can be used selectively, according to the category of goods or materials, or the purpose for which they are to be used. I often wonder why import quotas are not used. They have much to commend them, It is suggested that to introduce them would invite retaliation, but there would be retaliation only if another country found itself in serious imbalance, too. have a sneaking suspicion that one of the reasons why quotas are not used is that, although they are acceptable under G.A.T.T., they are not acceptable under the Treaty of Rome, which is significant in view of the Government's campaign for British membership of the Common Market.
  If we have to have a restriction of this sort, we should concentrate on making it a restriction which is in the interests of the country and of industry and which does not break solemn undertakings which we have concluded with other countries, or contradict words clearly stated by the Chancellor of the Exchequer and his advisers.
  Unfortunately, like many others advanced by the Government, these restrictions have an undoubted inflationary effect. They have certainly put up prices and have increased the costs of industry.

  947
  It is a sad fact that one of the things which has been most marked under the Labour Government, particularly in recent years, has been the staggering increase in prices. The hon. Member for Northfield suggests that that is not new, and of course inflation is not new; but if he were to talk to his constituents, not his friends in E.F.T.A., but the man in the street, many would tell him, particularly those on fixed incomes, that they were now more concerned about rising prices, because of the squandermania of Socialism, than they had ever been. When we have so many measures which have so clear an inflationary effect, the Government should avoid unnecessary action which has a further inflationary effect.
  I am not normally a suspicious person. I like to find the best in people and to identify those factors in a policy which may have something to commend them, but I have a suspicion that the reason the Government are pressing ahead with import deposits is that in that way they can maintain a check on liquidity, a hold on money supply, and keep the economy decently in check until they can look forward to the next Budget, a pre-election Budget, and then let things rip.
  If they were to remove import deposits now, the effect would be rather inflationary. It would improve the credit position and improve the money supply. The Government are holding things in the international economy while they wait for a grand slam Budget, a boom of about six months and then an election. Of course I am suspicious [Interruption.] If the hon. Member for Central Ayrshire (Mr. Manuel) had studied seriously and with any sense of conviction some of the disasters which have stemmed from the policies of his Government and the ill advice of their advisers who formulate the policies, he, too, would be suspicious. Coming from Scotland and representing a Scottish constituency, he more than anyone else should be suspicious. I am ashamed of him.
  Mr. Archie Manuel: The hon. Member is ranting on in his usual way. I was explaining to a colleague that the hon. Gentleman had said that he was not suspicious and two sentences later told us that he was. It does not seem right.
  Mr. Taylor: I said that I was not generally suspicious. If the hon. Member had sat on these benches and watched the policies brought forward by the Labour Government, with such catastrophic and devastating effect on the economy, as I have, he would be suspicious. I am not suggesting that he is not here regularly. He is a very conscientious Member and is regularly in his place. However if he had been here on 28th November, last year—I am sure that he had an important engagement which kept him from the House that day—and had heard the Financial Secretary to the Treasury, a very important man, saying that he would find it deplorable to renew a restriction like this in any form and that it was not his intention to do so and that it was the present intention to end these restrictions automatically at the end of 12 months, and 12 months later had found that these restrictions were to be continued and that the Government refused to undertake that the extension was for only another 12 months, he would be very suspicious.
  Once again, instead of being concerned with the important factors in the economy and with the steps which need to be taken, the Government are concerned with only one brutally limited timetable, the timetable which might help them shakily to survive for another five years. Whether we consider import deposits or anything else, nothing could be worse for the country than another five years of the present Administration.
  8.19 p.m.
  Mr. R. W. Brown: I shall try to resist the temptation to comment at length on the speech of the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor). To some extent he has let the cat out of the bag. In his peroration he firmly said that these restrictions had been working, that they were keeping the economy in check. He went on to say that, although he was not suspicious, he was nevertheless provoked into believing that the Government's reason for using this scheme for getting the economy into good shape was that they would use it for electoral purposes. He is entitled to make that judgment, but if he does, he cannot argue, as his hon. Friends have been arguing, that the scheme has upset everybody and is having

  949
  a bad effect. I thank him for the point he made. He made a powerful argument for showing that these measures were first class.
  I listened with especial interest to one part of the hon. Member's argument. During the months that I have been in the House, as a Scotsman he has called for more and more Government activity in Scotland. He devoted part of his speech to arguing that departments set up in Scotland should be disbanded, saying how wrong it was to have various Ministries sending employment to Scotland. I am sure that my right hon. Friend the Secretary of State for Scotland will bear this in mind in future. He has taken many into Scotland, and some of us Londoners have been a little worried about it. I was pleased to hear what he said, because I shall remind him of it from time to time. The whole problem of the debate is that hon. Gentlemen opposite can never get into perspective the whole strategy.
  Every time we have a debate like this it is disjointed because we are attempting to address ourselves to a particular problern at a particular time and, consequently, no one ever really sees the whole picture. The point of bringing in this Measure last year was to provide an armament, to pursue a strategy, which, as the hon. Gentleman rightly said, enabled us to control the economy. It has to be seen in that light. Another hon. Member went on about some of the other things that we should be doing. He said we should be looking at unofficial strikes, at the wastage of manpower, at unemployment. This is true, and we are doing this, too. It is necessary to look at each in turn within the broad strategy. We are addressing ourselves to these various aspects.
  The whole of our industrial relations policy is designed to ensure that as far as possible we remove any provocation that causes men to be so incensed about their conditions that they come out on strike, unofficial or official. As to wastage of manpower, one of the great problems is marrying up the amount of vacancies which do not coincide with the skills available of those who are unemployed. It is true that the 500,000 figure is too
  950
  high but there are vast numbers of vacancies remaining unfilled.
  It is in this respect that many of our manufacturers are feeling concerned; they cannot meet their delivery dates and they cannot meet their obligations because they cannot get the type of skill that they require. Our industrial training policy is trying to take care of this but it cannot be cured overnight. We can only set up all the facilities enabling industrial training to take place as quickly as possible and to provide people with the skills which they can use in areas where at present they are unemployed.
  People talk about wastage of manpower. There are far too many people employed on public relations. Someone had better try to persuade me of the value of all these people to society. I see it most perhaps in local government. As is well known, a vast number of Conservative councillors were elected in 1968. When I look at their backgrounds I find that many are public relations people, "ad-men", this, that and the other. None of them produces one iota towards the health of the economy and this nation's recovery.
  When talking about wastage of manpower it is worth pursuing it a bit further. I am asking that this Measure should be continued for as long as we have to do so. I am not so sure that this particular tool ought to be retained only in the armoury of management. It seems extraordinary that there is an argument to be adduced here that industry can use a whole range of tools of management but the Government cannot.
  There is a powerful case for my right hon. Friend to consider whether this ought not to become a tool of government to enable us to deal correctly with the economy. I have some experience in E.F.T.A. and on the Council of Europe where I, too, served on the Economic Committee. I never heard there the sort of wailing that goes on from hon. Gentlemen opposite. Those people were impressed by what we were trying to do. True, they objected to the 15 per cent. surcharge, not because they thought that we were wrong in applying it, but because they thought that others might copy us. They understood why we were doing it, and they took our word that we would get rid of it as soon as possible, which is what

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  we did. Their concern was not for what we were doing but for what others might claim the right to do, without our reasons.
  Hon. Gentlemen opposite are doing the country a disservice when they try to create friction and bad feeling between ourselves and our partners in other parts of the world by using this as a political issue. I have no objection to hon. Gentlemen advancing their arguments, but they must go back to their own period in Government because there are many areas where they are open to criticism for having done precisely the same thing. If they can argue the case with a basic premise then we will listen with interest.
  So far all that we have heard is a petulant comment from the hon. Member for Cathcart, in which he let the cat out of the bag. All that he has said is that we may be successful in all that we are attempting to do. By the time we come to a General Election we will be able to prove to the electorate that the country has had five years of first-class government. Hon. Gentlemen opposite are doing a very great disservice in creating trouble purely for a political end.
  My last point has to do with the problem we have in trying to encourage our manufacturers to innovate. There is indiscriminate purchasing of imports, of semi-manufactured goods, that could easily be produced in this country. They are not being so produced because it is much easier to buy them in. When hon. Gentlemen talk about pushing up the prices at home it is because our manufacturers are prepared to buy in because it causes them no problems. They pay just as high a price in buying in as if they had set about the task of using research and development to innovate and produce the goods.
  I think that this Measure has helped here. It has encouraged industry to try to provide its needs from its own resources, rather than buy in from abroad. I believe that in the further year for which this Measure is being extended it is likely to encourage industrialists to innovate more, to provide alternatives, to provide substitutes from within our own country. It is in this area that our country is so good, at being able to produce first-class quality goods through innovation, by using all its skills and expertise.
  952
  I support this extension, because this Measure has a real chance of providing us with a firm basis and of enabling our industries to try to provide for themselves without simply importing unnecessarily. I hope that those in industry will note that we are encouraging them. This Government have given more funds to industry than any other. This will pay off in terms of the quality of life that our people will enjoy.
  8.29 p.m.
  Mr. Michael Shaw: I was particularly interested in the criticisms which the hon. Member for Shoreditch and Finsbury (Mr. R. W. Brown) made of my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor). The crux of the argument between them was: what was the original intention of the Bill?
  As my hon. Friend says, the clear intention which was put forward was that this was a temporary Measure which was to last for one year. That clearly emerged from what was said by the Financial Secretary last year. It is true that not all of us last year believed that the Bill would end in December, 1969. Without making too much of a point of it, I said:
  " A time-bomb is built into this Measure… just when we should be getting on our feet, a further drain on sterling is likely to take place ".—[OFFICIAL REPORT, 28th November, 1968; Vol. 774, c. 850.]
  In other words, I was saying that there would be a further drain on sterling in December, 1969. That is curious timing for those interested in General Elections.
  It was clear to me at that time that it would have been inconvenient, to say no more, to have suddenly had a drain on our reserves by people paying their debts to foreigners who had lent us money to pay the import deposits, and, by an increase in imports, it would have been strange if the Government had been willing to allow that sudden drain on resources through to the first quarter of next year. I am therefore not surprised that we have this Bill, in spite of the clear statement that the scheme was to last for a year.
  The debate last year and indeed this year had two main themes. The first was the direct effect of the Bill on importers. It has been spelt out in speeches that it has a direct effect. The

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  only question was just how great would the effect be. I accept that anyone who has a good market for goods which he can import can get the credit to pay the deposit. There is no doubt about that. But that is not the end of the story, because he can get it only at a price, and it is a substantial price, because of the interest which has to be paid. Therefore, the increase in the cost of the goods to the public is bound to be substantial. The likely increase has varied from 2 to 4 per cent.
  I was talking to a substantial importer from a big firm today who told me that he firmly believed that the import deposits would end in December. He told his foreign suppliers that they could be sure that this would happen. It is an interesting commentary that his foreign suppliers told him not to be a fool. They were equally sure that it would remain on the simple ground that once a tax is on it stays on. Therefore, whatever the importer felt, clearly his supplier was under no illusion about what would happen this December.
  I wish to concentrate not on the direct effect of the scheme but on the general effect on the economy as a whole. The Bill, together with its predecessor, is part of one of the severest squeeze policies that we have known. We must consider whether this means that the policy of very severe squeeze is to continue exactly as it has done over the past months. Of course this is not necessarily so. Admittedly, it was almost the last turn of the screw in the squeeze conditions as they were created. Indeed—and this is what caused me so much concern when last year's Bill was before the House—once that Bill began to operate, so went the last chance of the banks getting down to their limits. I believe that it was the last straw.
  Conditions were such that banks had the alternative either to obey the Chancellor's request and get down to the credit limit, at the same time putting many people out of business, or to see the condition in which they were placing their customers, resist applying the final pressure and thus fail to reach the Chancellor's target. As things turned out, the target was fixed at too difficult a level for the banks, with the greatest good will in the world, to reach. I think it is now tacitly
  954
  agreed, although it has not been publicly stated, that the banks stand no chance of ever reaching that target.
  As we said last year, the squeeze, of which the Bill and its predecessor form part, has a particularly harsh effect on small companies. I spell, out last year the various ways in which the squeeze worked and I will not repeat them. We have heard a lot recently about the fact that there has not been a noticeable increase in bankruptcies and liquidations, but I believe that the figures will now begin to increase.
  I should like to take up the point which I made in an intervention. It is not only in liquidations that one finds companies in difficulty. Very often, particularly if they are basically viable concerns, but simply because much more credit is taken by customers, if they cannot keep within the limits set by the banks there is the danger of receivers being put in. That is happening. In certai cases—I accept that this is of limited application—it is possible to escape one's creditors by putting in a receiver for a while and taking off the pressure. I believe that if figures could be produced for the number of receiverships which have arisen during the last few months—certainly, most practising accountants would be able to give a fair indication—the numbers would be seen to be increasing considerably.
  An argument was put forward that we need not worry too much about the continuing severity of squeeze next January because, it was said, people survived last January when the original Act was in force. That, however, is a completely false argument. In January of this year credit was nothing like as tight as it is today. There can be no question of that. Secondly, because this has been going on so long, because people have been taking longer to pay their bills, there has been mounting pressure throughout the year. I believe that there must be an easing of the credit restictions if a great deal of unnecessary harm is not to be caused.
  This is especially important for the small companies in the development areas. In a speech the other day I expressed the view that in considering the development areas insufficient attention had been given to the question of credit in those areas, in which we accept that

  955
  trading is more difficult. In the development areas people are in greater danger of going out of business, taking more credit and the like, and, therefore, there are additional difficulties. There are also people who have moved into development areas seeking to expand and lacking the backing to withstand periods of severe credit restrictions, and, of course, going into those areas on purpose to expand, and yet, at the vital time, finding they cannot get help.
  Mr. J. T. Price: This is fascinating, and I am following with great interest, but could the hon. Gentleman explain to the House how all this financial opinion is related to the Bill? He is right off beam, if I may say so with great respect.
  Mr. Shaw: With equal respect, I am perfectly on the beam, and it has to do with it in this respect, that if a squeeze is put on, and if additional credit is required, no matter where it comes from, it comes from within the economy, and it has an effect on the overall availability of credit. If people find they cannot go to the bank they go to some other financial institution. They have to get the money from somewhere, and it all has to come from somewhere within the economy, and pressure builds up, and finance becomes more and more difficult to get.
  Look at the sale and lease bankarrangements which were very popular at the beginning of the year when this squeeze had really begun. Many of those arrangements were made, but those institutions which went into them quickly got sufficient of them, of that particular industrial type, and so they closed their books to that sort of deal, and that meant that that sort of credit was no longer available, and people went to seek other sources of credit. I shall not go into the details now, but I do assure the hon. Gentleman that we have to look at credit overall when we are studying a matter of this sort.
  The availability of credit is a very important factor in dealing with development areas, and it is being under-estimated by this present Government. One has only to look at a constituency such as my own, for example. Before it ever became part of a development area the unemployment level was 4·4 per cent. at
  956
  Scarborough and 5·5 per cent. at Whitby. Before this present Act came into being it was running at 5·3 per cent. and 9·9 per cent. respectively. Now, a year after the Act has been in operation, it is running at the highest level ever at this time of year, 5·6 per cent. at Scarborough and 10·4 per cent. at Whitby. It is because there is a general lack of confidence, and because there is this very severe credit squeeze which is being applied to small businesses. One has only to inquire whether it is having a serious effect on industry in my constituency to find that there is no doubt that it is.
  We were initially asked to consider this legislation as temporary. If it were to be considered as a temporary measure that would be another reason why some form of import quota would not be applicable, because to set up the rigmarole of an import quota system would not be worth while if the control were regarded as purely temporary. By the new Bill, the original Act will run for a further year, and there are powers to withdraw its provisions at an earlier date. Quite honestly, I do not believe that there is much likelihood that the provisions which we have been discussing this afternoon will be withdrawn or altered in the next 12 months. To put it another way, I very much doubt whether they will be altered before the next General Election.
  8.45 p.m.
  Mr. John Hall: My hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw) made a thoughtful speech and rightly drew attention to the effect of the import deposits scheme on credit availability, a subject to which I will refer later.
  I have listened to the greater part of the debate—I was not able to be here for one part of the afternoon—and the theme running through it, certainly from the point of view of my hon. Friends, has been two fold; first, surprise and condemnation of the Government for renewing a scheme which they repeatedly said was temporary and likely to come to an end after 12 months, and, secondly, surprise and condemnation of the Government for continuing an Act which was contrary to the spirit and letter of E.F.T.A. agreements.

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  I am surprised that anybody should have been surprised over these things. I cannot understand how anybody could believe that any imposition or restriction imposed on the British people by the present Government should be temporary. I am also surprised that anybody should comment on the feelings of the E.F.T.A. members about this because not only my hon. Friends but people abroad realise that it is useless to take matters up with Her Majesty's Government.
  When we debated this matter on 3rd December last year I intervened in the speech of the Attorney-General to ask whether our action was legal under E.F.T.A. agreements. I got the impression—perhaps I did not hear his words correctly, but I gather that the House generally got the same impression —that what we were doing was legal. We gather now, however, that we have not been acting legally and that what we have been doing has been contrary to agreements into which we entered.
  The speeches of hon. Gentlemen opposite today have taken the view that it does not matter very much if we have acted legally or illegally because other countries have done the same sort of thing. Hon. Gentlemen opposite have said, in effect, that when it has suited their purpose, they have breached either the letter or the spirit of agreements previously freely entered into. Thus, they argue, it does not matter if we do the same. This is excusing one sin with another and I am sure that the Devil excusing sin would find support and comfort from the arguments of hon. Gentlemen opposite.
  I should have thought that Her Majesty's Government would have attempted to have held to their bond, word and agreements and would not have knowingly taken steps which were contrary not only to the spirit but to the letter of freely entered into agreements, bat apparently this has not been the case.
  I was not surprised when I first learned that the Government intended to extend the scheme. Indeed, about six weeks after the passing of the original Act—that is, in the early part of this year—when having discussions with colleagues in companies on which I serve I suggested
  958
  that it would not be a temporary measure, and I gave reasons why I took that view. I pointed out, for example, that the Act provided for the Government to receive large sums of money—we were told earlier that it could be £550 million—free of interest. It was a great windfall for the Government which they would not lightly give up. I suggested, secondly, that it would not be temporary because it took a considerable time for measures of this kind to become effective.
  Governments of both parties have erroneously supposed for a long time that their measures take effect virtually the following day. It frequently takes a considerable time for legislation to work its way through the economy. I suggested to the people I was advising that the real effect of the legislation would not be felt in the first 12 months but after that time, so certain was I that the scheme would be extended. This is the time when the real effect would be felt.
  The reason the effect would not be felt at the beginning was that, first, a lot of imports were in the pipeline, and, secondly, in many cases the overseas suppliers would attempt to keep their buyers going by extending their credit, which is what they did. I was also fairly certain that it would be difficult for the overseas suppliers to continue indefinitely, this long credit, and I will mention one or two examples from personal experience which show this to be true. After all, we have been talking about the general effect all over the country, but it is sometimes necessary and salutary to come down to particular examples to see how certain sections in the community are affected.
  In the debate on this subject last year I opposed the Measure, because I thought that it was likely to impose considerable hardship on a small section of the community. One section of the community, the importers, has already been mentioned. The importers are seriously affected because of the way in which the import materials are selected, and certain limited sections of the industrial world are much more severely affected than others. Because of the way in which the imported goods have been selected for this impost, certain manufacturers who are unable to find any substitutes in this country are forced to pay import deposits, whether or not they wish to, if they are

  959
  to continue in business. This imposes special hardships on a comparatively limited number of people. At that time I thought this was wrong.
  Above all, I was concerned about the long-term effect on industrial development and capital investment in this country. I was certain that in the first 12 months people would try to find ways of maintaining liquidity and of overcoming the problems imposed by the import deposits, but that as we came into the latter part of the first 12 months, and as the Measure was extended for a further period, as I was certain it would be, industry would find itself faced more and more with the difficulty of being sufficiently liquid to finance capital investment, and there was the problem of the effect of this Measure on cash flow in general.
  The Financial Secretary said that most of the forecasts made by the Opposition had been falsified. I quoted the experience of companies in which I am personally concerned, which represent the experience of many other companies similarly situated. The forecasts which I made at that time certainly have not been falsified. The amount which I forecast that the company would probably have to pay was just about right; it was rather less than it might have been, because imports from America were restricted by strikes in that country in the early part of the year. My forecast of its effect on capital development has come right.
  This company, in common with many others similarly placed, being unable to raise money from the bank to pay the import deposit, had to restrict its capital investment for its originally planned development and thus slow down expansion. One consequence of this was that, instead of expanding at the planned rate, it will now, especially as this Measure is to be extended for a further period, find itself two to three years, if not more, late with its development plans. As a result instead of being able to make itself independent of imported materials, which it could do if it developed a large market sufficient to enable it to put up additional factories in this country, it will have to postpone the day when it does that, so that several years later it will have to go
  960
  on importing semi-finished materials, which are the factory's raw materials, whereas, if it were not for this Measure, it would be within measurable sight of being able to make itself independent of imports and therefore saving foreign exchange. This Measure has postponed its capital expansion. Although this is the experience of only one company it must be typical of many others—
  Mr. R. W. Brown: The point is why the company which the hon. Gentleman has quoted should have waited until 1968 before making plans to provide for substitution of imports. Such a company ought to have been thinking of that matter many years earlier. The criticism of such companies has been based on their not deciding to do that sort of development when it would have been to their own advantage.
  Mr. Hall: The company I quoted started about 10 years ago and has expended very rapidly in that time, but has to get a very considerable market indeed to justify a capital investment of several millions of pounds before making itself independent of imported raw material. As it is, I must say that the company has made quite amazing progress in that 10 years—I am one of the managers.
  That example is certainly not unique. Many people have been affected. The greatest damage has been done by the Measure's long-term effect on the cash flows of companies caught by this import deposit. If the scheme is to work as it is said it will in the coming year, certain amendments are needed. I would not necessarily disagree with the hon. Member for Birmingham, Northfield (Mr. Chapman), who suggested a Statute which would enable us from time to time, as necessary, to introduce various checks and restrictions designed to correct our imbalance.
  Where I do disagree, and violently, is with the way in which the Measure has been introduced and operated. That has done a great deal of harm. The whole thing should be reviewed. During the last 12 months investigations should have been made to see how the scheme was affecting the various interests that were most hard hit by the payment of import deposits. So far as I can gather from what we have heard from the Government

  961
  today, no such investigation has taken place. There have been vague remarks about its effect on the rate of imports but we have had no information about the very serious effect that the scheme can have on certain industries most affected by it.
  If we are to put on the Statute Book a Measure designed to introduce certain checks to redress balance of payments, we must endeavour to ensure that it is reasonably fair in its impact on industry as a whole; and that that impact does not fall only on one small section of industry. My criticism is that the impact does fall on a small section. It has been said that the Measure as a whole is not of great importance, but it is of great importance to those companies most affected by it. We should review the list of imports affected, and see whether it should not be brought up to date.
  If our economy is as strong as the Government Front Bench would have us believe, a continuation of this scheme is unnecessary. If it is not as strong as they would have us believe, the scheme, by making capital expansion more difficult, is sacrificing long-term advantage for a short-term benefit. I am sure that those of my hon. Friends who suggested earlier that removal of this import deposits scheme would have more impact on the electorate next year were quite right.
  9.0 p.m.
  Miss J. M. Quennell: I shall not detain the House unnecessarily for more than the few moments which remain before Front Bench speakers wind up the debate. I sometimes wonder how those who never before have attended our debates must marvel that such a pea-green piece of paper as this Bill should evoke such intense argument for the whole of an afternoon.
  I want to speak about the effects of the Act during the last year and of this Measure in future on the agriculture industry in that there are certain imported forms of agricultural machinery, substitutes for which cannot be found in this country but which would enable this country enormously to save imports of particular forms of foodstuff. I have endeavoured to take up this matter with the Department concerned but as yet I have not had a satisfactory reply, so I avail myself of the opportunity to bring
  962
  it to the attention of the Government once again.
  One of my constituents embarked on a farming project for the production and conservation of grass by using a new grass-drying method. A considerable amount of research and growing interest in farming and research circles has developed in this technique. So that hon. Members who are not familiar with this extraordinary operation can be put in the picture—although far be it from me to suggest that they should "go out to grass"—I should explain the process.
  Grass pellets, or cubes as they are called, which are the end product of the process are sold to compounders and the compounders use them in poultry food.
  If they are produced in a certain way the protein-rich grass of this country can be utilised to feed as cattle cake and especially for winter feed of both poultry and animals. Most of the protein at present used to feed animals in winter is imported. It is ridiculous in a country which, goodness knows, can grow grass which our animals can convert into meat, to penalise farmers who wish to import this machine so that they can supply the crop for this sort of cube to compounders.
  This machine costs E36,000 to import and there is an import deposit charge on it of a substantial amount. The agriculture industry is penalised in other ways and it is almost impossible under present circumstances for agriculturists to advance by using modern techniques which could be applied in this country, provided they can get these machines, certainly for the forthcoming year. I therefore ask the Treasury Bench to consider in Committee the Schedules to the Bill so that this sort of machinery may be exempted.
  9.4 p.m.
  Mr. Michael Alison: It cannot be said that the debate this afternoon has shown this Bill to have very many honest long-term friends. [Interruption.] It has had a few foul-weather friends; who said they would stay with it so long as the dirty weather necessitated it but would abandon it as soon as the economic weather improves. If hon. Members below the Gangway opposite want to start jibbing so early in my speech, I should draw attention

  963
  to the fact that the Government ran out of defenders of the Bill and the last five speeches have been made from this side of the House.
  The best thing that can be said about import deposits in the 12 months in which they have applied is a very negative thing, that their impact has been at best marginal. Indeed, to do the Government justice, initially they never claimed that the impact would be anything but marginal. The impact has been so marginal as to be barely perceptible.
  The worst that can be said about import deposits is that they have been positively damaging. There is much more to be said in support of the argument that they have been positively damaging, as my right hon. and hon. Friends have unfailingly succeeded in showing, than for the argument that they are merely marginal in their effect.
  However, to put the best possible complexion upon the Government's case, I start by considering some of the alleged benefits which have been claimed for this nasty little one-page Bill. The Chancellor was the most emphatic and the most confident prophet about the prospects for import deposits when he announced them last year in these terms:
  " Imports will be reduced directly because of the difficulty and cost of obtaining credit ".—[OFFICIAL REPORT, 22nd November, 1968; Vol. 773, c. 1795.]
  Incidentally, my hon. Friend the Member for Acton (Mr. Kenneth Baker) was right to point out that the whole emphasis, when this scheme was launched, was on the positive effect of restricting imports. It is a far cry from the note sounded by the Financial Secretary who described it this afternoon as a useful selective measure of credit control. That is a very different animal from something which was to have a direct effect in reducing imports.
  The Chancellor was speaking in the context of stocks. There have been one or two references to stocks and stock-building today. The Chancellor, when he told us that
  " Imports will be reduced directly "
  was specifically referring to the squeeze which was to be imposed upon stocks as the result of credit difficulties.
  964
  In fact, the seasonally adjusted level of manufacturing stocks, taking them at 1963 prices so as to take volume into account, having been static in the second, third and fourth quarters of 1968—that is, in the year before import deposits came into effect—promptly jumped 2 per centage points in the first half of 1969. I believe that this was no fluke. I believe that the scheme of import deposits is positively perverse. It actually stimulates, and has stimulated, imports above the level which would otherwise have occurred.
  Mr. Barnett: Does not the hon. Gentleman realise that manufacturers' stocks will be raw materials, which are not affected, or partly finished goods, which equally are not affected, or finished goods which they have been manufacturing, which equally will not be imported goods affected by the deposit scheme?
  Mr. Alison: The hon. Gentleman has left out semi-manufactures, which are very important. I will illustrate the point by taking a specific commodity—fractional horse power electric a.c. motors, a stage ahead from the Prime Minister's famous subject of fractional horsepower steam engines, when he sought to link Socialism to steam and steam to Socialism. Unfortunately, he forgot to look into the question of fractional horsepower electric motors. In this vital category we find that in 1969 the import of these motors rose at a rate of 20 per cent. over what it was in the full year before import deposits came into effect.
  The explanation from the trade is that that was due almost entirely to the fact that before import deposits were introduced manufacturers and users of fractional horsepower electric motors were not carrying stocks. The chairman of one of the manufacturing companies concerned with the British production of these motors said:
  " Brook— "
  that is, Brook Motors—
  " feels part of the increased demand "—
  which has entirely reached the end of the capacity of British manufacturers—
  " might be the result of client companies not carrying stocks, then finding demand picking up and so going in for rushed over-stocking."
  That is what happened. Towards the end of 1968 the Chancellor announced a

  965
  scheme affecting the import of a type of machinery of which people did not carry large stocks but which they had hitherto used in fairly large quantities and bought British. If someone thinks—and the psychological effect is crucial—that there will be a run on the home stocks of fractional horsepower electric motors because imports will be squeezed, he stocks up. The British manufacturer runs out of stocks, and delivery dates then become a long way ahead for these motors-30 weeks in most cases compared with 12 weeks for the Swedish equivalent—so he promptly imports materials in the categories which import deposits are meant to keep out. This is perverse, and we see this quite unmistakably from the figures which are available.
  But that is not all. The Chancellor went on to say:
  "The scheme is not one which can or should be kept in being for more than a limited period, but it will have powerful effects over the few months when we most need its benefit."—[OFFICIAL REPORT, 26th November, 1968; Vol. 774, c. 1796.]
  There is the second strand of the Chancellor's argument—not a marginal increase, but a positive reduction in imports resulting from this deposit scheme, and a positive reduction occurring in the early months of the scheme.
  Again what do we find if we look at the actual figures? I pass over the throwaway line about the temporary nature of the scheme, and it not being one which should or could be kept in being for more than a limited period, and come to the question of the early months of imports.
  Believe it or not—and I do not know whether the Financial Secretary will believe it since he digested his own Treasury figures—in those very early months which the Chancellor singled out as being strategic we find not only an increase in the volume of imports, but an increase concentrated substantially on those very categories which the scheme was meant to exclude.
  The Financial Secretary slightly misled the House—I am sure unwittingly—by trying to make the comparison over a period of five years from 1964 onwards. That will not do, because we know that the rate of economic growth since 1964 has dropped by about three-quarters,
  966
  from about 4 per cent. or 5 per cent. per annum of G.N.P. to the anticipated growth this year of 1·9 per cent. This is the forecast of the National Institute. One would really expect stocks of manufactured articles and semi-manufactures of this kind to drop. But what happened in the few months before the end of 1968, when the scheme was announced, and the first part of 1969? I shall quote here from the Board of Trade Journal, taking an extract from the issue of 6th August, 1969, the time when the Board of Trade reviewed the progress of trade in the first six months of this year:
  " By volume, imports in the first half of 1969 averaged 144 "—
  on an index number with a base of 100 at 1961—
  " the same as in the second half of 1968, and little more than the average of 143 in the first half of last year."
  Then, says the Board of Trade Journal—I hope that the Minister of State will note this concluding quotation—
  " The Imports Deposit Scheme has probably helped to restrain imports this year. Arrivals of goods subject to the Scheme in the first half year were only slightly higher than in the second half of last year… "
  Not a positive reduction—" only slightly higher ". In fact, one ands that overall, by volume, imports have not gone up between the second half of 1968 and the first half of 1969, but some have gone down, and the category specified here by the Board of Trade Journal as relating to the import deposit scheme has positively risen. Clearly, therefore, the scheme is not having the sort of effect which the Financial Secretary alleged.
  Mr. J. T. Price: The hon. Gentleman's argument seems logical up to a point, save that he omits the main factor in it. If, during the period about which he is speaking, exports have expanded dramatically, one would expect a slight drag in an upward direction for raw materials imported to sustain that vast expansion in our export trade. The overall figures are entirely destructive of the hon. Gentleman's general argument.
  Mr. Alison: I have great respect and affection for the hon. Member for Westhoughton (Mr. J. T. Price), but is he suggesting that there must be a preliminary import boom if one is trying to generate an export boom? If an export

  967
  boom necessitates as a corollary a preliminary import boom, what on earth is the point of having the import deposits scheme? It is the hon. Gentleman who lacks logic. [HON. MEMBERS: "Oh."] It is evident from the reaction on the benches opposite that it is the truth that wounds.
  Now, another quotation from the Board of Trade Journal of 6th August:
  "The Import Deposit scheme, which came into operation on November 22 last year, may have affected the level of certain imports among industrial materials. There is no clear evidence of any marked effect, however, since imports of semi-manufactures, which were largely subject to the scheme, increased a little by volume between the second half of 1968 and the first half of this year."
  Again, the out-turn entirely falsifies the Chancellor's prophecy of a specific cutback in imports as a result of the scheme. In my view, it is perverse, as I have sought to show.
  The House will note the rather delicate way in which the Board of Trade Journal attempted to make the transition to a positive increase in imports against the background of the expected result which, clearly, was a positive decrease. One might say that it succeeded in striking the slightly hysterical note of reassurance which one would expect from a doctor who had prescribed for a young lady a fertility drug potion instead of the pill, and it could be said to have succeeded, because of the perverse results, in giving British imports a dose of the fertility drug.
  Perversity of result is one of the hallmarks of the economic fruits of the present Administration. Let me remind the House how this happened. They imposed a selective employment tax squeeze to get men out of the service industry, and then found that above all the men were squeezed out of manufacturing. They concentrated investment incentives on manufacturing industries, by contrast, and then found that the solitary growth sector, the real loner in investment growth in the British economy, is the retail distribution sector, that industry sector most detested by the Prime Minister and on the whole bitterly resented by most Socialists—a totally perverse result. They clobbered the service sector and investment overseas, and
  968
  lo and behold the whole salvation of the British balance of payments comes from the invisibles, including dividends on capital earlier exported. Now we see exactly the same perverse effect of import deposits: the Government slap them on, and up go the imports of semi-manufactures, almost in isolation.
  It is a situation worthy of Alice in Wonderland. It was Alice who taught us that if one wanted to grow small one took a drink out of a bottle marked "Take me" and instantly grew larger. The Government's whole economic philosophy is to hunt around for any old bottle marked "Take me". They take it in the expectation that something will happen, and the reverse occurs.
  A direct reduction of imports, and especially stocks, was not the only benefit which it was alleged import deposits would yield. There was also the little matter of liquidity, touched on by the then Financial Secretary to the Treasury, now the Paymaster-General, when he said on 28th November last year that the effect of import deposits
  " … will be that of mopping up liquidity which would otherwise be available to finance other consumption or other expenditures."—[OFFICIAL REPORT, 28th November, 1968; Vol. 774, c. 751.]
  But this pious hope shows how extraordinarily little the present Administration understand about the complexity and sophistication of the economic system they are trying to manhandle. They should learn their Friedman a little better, and take a few lessons from the hon. Member for Stoke-on-Trent, Central (Mr. Cant).
  The fallacy of the argument that liquidity is mopped up on a large scale is exposed by the fact that many suppliers of goods to this country are now introducing substantially deferred credit payment terms. As one example, whereas the Government of India previously asked for extremely rapid settlement of debts they now ask only for a down payment of 50 per cent. until the import deposits are released and they can be paid in full. The effect on liquidity of such an arrangement is totally neutral. The British importer who hitherto promptly paid 100 per cent. of the cost now pays 50 per cent. to the seller and 50 per cent. to the Chancellor, and does not have to pay the seller the full price

  969
  until the import deposit is released. This practice is growing, and I believe that it is disadvantageous to Britain. It teaches a large number of foreign suppliers the art which we and other countries have developed to a nicety of extended deferred credit payments. At the end of the day we may well find that we have taught foreign suppliers to British importers some of the tricks of the trade, and that it has made Britain more vulnerable to foreign salesmen. I do not think that that is a good idea.
  This will not have the same effect on all importers. The selectively discriminating effect of the squeeze on some importers will hit, above all, the small firms. Many of my hon. Friends have spoken eloquently on behalf of small firms. It should not be overlooked by the House that about half the country's industrial output is in the hands of firms with fewer than 500 employees, and the sort of discrimination which the scheme brings about—because, on the whole, the big operators get easier credit terms from those from whom they borrow—bites wholly irrationally and in a predatory manner usually on the small and the weak firms. No rational regard is had to the needs of small importing business firms or, indeed, of some of the small imports which particular firms find crucially necessary to their operations.
  The right hon. Member for Sheffield, Hillsborough (Mr. Darling) referred to silicon carbide, and my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) drew our attention to the need of some firms for calcium carbide. These crucial ingredients, of vital and sometimes overwhelming importance to small firms, are simply lost in the small print of the list of exemptions and non-exemptions in the Bill, although they are a matter of life and death to many firms.
  But this is typical of Socialism. At one time we were told that the religion of Socialism was the language of priorities. It is now expressed above all by priorities for big business. It is big business which gets the benefits under Socialism while the small firms are squeezed all the time.
  Mr. Barnett: The hon. Gentleman must read the Financial Times and see the advertisements offering as much money as they require to precisely the small firms
  970
  that he is talking about against the security of the money. Of course, this would be at a cost but it is a price cost and not a liquidity cost.
  Lieut-Colonel Sir Walter Bromley-Davenport: Before my hon. Friend the Member for Barkston Ash (Mr. Alison) brings his excellent speech to a conclusion, could he spell out his remarks in simple language to the knuckleheads opposite who do not understand one word of what he is saying?
  Mr. Alison: I assure my hon. and gallant Friend the Member for Knutsford (Sir W. Bromley-Davenport) that I shall not be bringing my remarks to a conclusion just yet. For the benefit of hon. Members opposite who may need this point about small firms spelt out in plain language, I will explain that it is the small firms which have youthfulness and vigour and willingness to take risks, which have the vision of building something big from something small, and which are alone the base upon which this country can go forward in future.
  Mr. Barnett rose
  Sir W. Bromley-Davenport: Oh, no! Sit down.
  Mr. Alison: The hon. Member for Barnett and Sheldon—as we used to call him in Committee on the Finance Bill —should contain himself. I shall deal with his question about liquidity. Although the scheme in terms of liquidity will have extremely difficult implications for the small firms because of the cost, it will not have—and here I agree with the hon. Gentleman—overall a significant effect, I believe, on liquidity. I pay ready tribute to the hon. Gentleman for having a heart and head in sympathy with us on the Conservative side.
  The Chancellor undoubtedly let the cat out of the bag on the liquidity question—I am glad that we have the right hon. Gentleman in his place for at any rate the concluding part of the debate—when he said in the debate on the I.M.F. Letter of Intent of 25th June, halfway through the first year of operation of import deposits, that bank lending to the private sector would increase this financial year by not less than that of last year; that is, by between £600 million and £700 million.

  971
  It is curious that the Chancellor should have said that, for bank lending is of the essence of liquidity. If bank lending is to be allowed to go up in the year of import deposits in exactly the same degree and quantity as it did in the year before import deposits were imposed, it does not look as if we shall get that much of a squeeze overall on liquidity.
  In any event, we know that bank lending will increase this year. The Chancellor will have to let it. He is having to make a virtue out of a necessity. He has long since had to abandon the idea of keeping bank lending within the original ceiling prescribed, and the reason is simple. If the right hon. Gentleman attacks the private sector tooth and nail in the matter of bank lending and private credit, that sector will fight back through the gilt-edged market or through the market for non-marketable Government securities, to state a paradox.
  The Chancellor must be aware that in the financial year 1968–69 the private sector liquidated over £525 million worth of central Government debt, £300 million worth of it in the revenue quarter; that is, the first quarter of this year. If the private sector did the same thing again in the revenue quarter of this financial year—that is, the first quarter of 1970—and liquidated central Government debt to anything like the same degree, the whole Government domestic credit expansion calculation, which pledged to the I.M.F. an increase of not more than £400 million in this financial year, would be totally falsified. I calculate that if the private sector liquidates central Government debt on the same scale as last year, the I.M.F. pledge will be exceeded by a good 50 per cent.
  Mr. Cant: I have listened to most of the debate and I confess to being completely baffled by what the hon. Gentleman is saying. Are we in for a shocking bout of deflation or inflation?
  Mr. Alison: I suggest that the hon. Gentleman puts that question—
  Mr. Cant: Answer.
  Mr. Chapman: The hon. Gentleman does not know the answer. [Interruption.]
  Mr. Speaker: Order. The hon. Member for Birmingham, Northfield (Mr. Chapman) must restrain his enthusiasm.
  Mr. Alison: The hon. Member for Stoke-on-Trent, Central has his own interpretation of the figures somewhat wrong. In his speech he contradicted himself. While being against any increase in the money supply, he was at the same time in favour of import deposits. They are contradictory, because if one introduces import deposits with a view to cutting down the balance of payments deficit to encourage a surplus—the Chancellor will corroborate this only too readily—then a balance of payments surplus tends to decrease—no—increase—
  Hon.Members: Make up your mind.
  Mr. Barnett: Oh, dear!
  Mr. Alison: —tends to increase the money supply. In other words, more money is drawn out of the E.E.A. and handed to the people. The hon. Gentleman therefore cannot have it both ways. If he wants to restrict the money supply he must have a deficit on the balance of payments.
  Mr. Cant: I said that I believed that the inflationary pressures which were likely to develop were fairly considerable and that I therefore did not believe that the Chancellor of the Exchequer could release the £550 million held by Customs as import deposits.
  Mr. Alison: If the hon. Gentleman thinks that we are in danger of inflation, the one thing he should not advocate is a cutback in imports. If imports are cut back and the money supply is allowed to go on increasing at the same time, there will certainly be far greater pressure on home resources and a greater tendency for prices to rise.
  Sir W. Bromley-Davenport: Got it?
  Mr. Alison: The domestic credit expansion point is one that the House needs to note with some care. The thing that we should be worrying about—and here I hope that I carry the hon. Member for Heywood and Royton (Mr. Barnett) with me—in the context of domestic credit expansion is what happens to the extra sums that the Chancellor of the

  973
  Exchequer mops up with the import deposits scheme. It is by no means self-evident that this means that credit is restricted. It depends entirely on what is done with the money. If the effect is to decrease the Government's need to borrow money, it simply means that those who would otherwise have lent to the Government have more to lend to others.
  Again, if it simply has the effect that money taken by way of import deposits from some unfortunate importers is handed out to others by way of debt repayment, this is totally cyclical and has no effect on mopping up credit. It simply shunts resources, by no means in an economic and rational way, to those capable of paying a higher price for it. The arguments on the liquidity basis, which the now Paymaster-General advanced so eloquently, are beside the point.
  I want to conclude by bringing forward what to me and many of my hon. and right hon. Friends are our definite puzzlement and misgivings about the Government's determination and steely-eyed purpose in keeping on this irrelevant little Bi11. What is the basis for the Chancellor of the Exchequer coming forward with the Bill a second time? We have already shown that although he talked of imports being reduced directly, this has not happened and that, on the contrary, the opposite has been the case. We heard the Chancellor talking originally of keeping the scheme in operation for a limited period, in a context of months, because he specifically said that the earlier months of the scheme were crucial. That has already been stretched to two years.
  The Paymaster-General said that the whole scheme was intended to have a temporary effect until the strategy enabled us to come into surplus. I thought that we had now come into surplus. We all noticed how extraordinarily euphoric the Prime Minister was at Question Time on Thursday about the upturn in the export figures. As the Government are bringing forward the Bill a second time, one may ask whether there is a snag. Is there some element of doubt? Is there some gnawing uncertainty about the surplus that we hear being crowed about so much? Can it be that the improvement
  974
  is illusory after all? Can it be that the substantial margin on the trade account as suggested by the latest three-monthly figures is in reality so accidental, or so confused with over and under recording, or distorted by special factors, that it requires the utterly marginal prop of the import deposits scheme to keep the whole ship afloat?
  One is driven to the conclusion that we are much nearer the truth in fearing that the trade figures may not be nearly as good as they look than in thinking that this is simply an elementary precautionary measure. Here we are forced, with some regret, to look at the league table. Many people will have noticed how unwilling the Prime Minister is nowadays to go back to his erstwhile habit of quoting league tables. But the much vaunted increase in the rate of exports of British industry in recent years must be seen in the context of world increases in exports.
  For the year 1968 the United Kingdom percentage rate of increase in manufacturing exports of 71½per cent. was exactly half the average for the leading industrial nations of the world and is not a good enough performance. But it provides the only tolerable background against which the Government could hope to get away with a scheme of import deposits. It is only because other countries' exports have been so remarkably buoyant at double our rate that they have, in a sense, overlooked the circumstance of the British import deposits scheme because it has not bitten so firmly on to them. But this is the only circumstance—the circumstance of the huge boom in world exports—in which our import deposits scheme would be tolerable.
  If world trade slackens in 1970—and there is some indication that it will—woe betide us. If the United States get inflation under control, if the Germans feel that they need a fair crack of the whip after revaluation, and if circumstances change in the terms of the rate of growth of world exports, others will import, or will have imported, this extremely bad habit—this protectionist habit, as my hon. Friends the Members for Wycombe (Mr. John Hall) and Holland with Boston (Mr. Body) called it—from Britain. It will rapidly be learned by other countries

  975
  overseas and will be sent back to us with interest.
  I suspect that the lack of enthusiasm of the E.F.T.A. Council about discussing this too explicity, to which the Financial Secretary referred, is precisely for this reason. It has learned that this is a useful card to have in the pack, and as soon as the growth in world trade slackens off we shall be paid back in our own coin. This is the moment to drop the Bill.
  9.42 p.m.
  The Minister of State, Treasury (Mr. William Rodgers): Unlike my hon. and learned Friend the Financial Secretary, I come new to the world of import deposits. I suppose this accounts for the naivety with which I approached today's debate. I had assumed that there were great issues at stake and fresh arguments which would be deployed. There seemed no other explanation of the Opposition's determination to make such a fuss. I confess that I am no wiser, particularly after having listened to the speech of the hon. Member for Barkston Ash (Mr. Alison). I was not sure which side he was on. But at least some of his arguments were arguments which I might have used had not he deployed them. They were arguments, especially on money supply, which were totally contrary to those used by his hon. Friends earlier.
  There has been some constructive discussion of the Import Deposits Scheme and its consequences for those most closely affected, and genuine concern was expressed by the hon. Member for Worthing (Mr. Higgins) and my right hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) about the Bill's effects in certain fields. But we have also heard a good deal of nonsense. The Opposition, including the hon. Member for Barkston Ash, have attempted to widen the debate and take it away from the limited case for the Bill. They have certainly tried to avoid facing the particular issue, and I think that they have done so because in their hearts they are divided about it.
  My right hon. Friend the Member for Hillsborough referred to the speech of the hon. Member for Worthing as being rather peculiar. My hon. Friend the Member
  976
  for Heywood and Royton (Mr. Barnett) referred to it as being below the hon. Gentleman's usual standard. If I may be allowed to do so, I will disagree with both my right hon. Friend and my hon. Friend. I thought it was a rather good speech. It was ingenious sometimes; it was oblique for most of the time. It was a good speech because the hon. Gentleman was making the best of a very bad job. I enjoyed the speech and I sympathise with the hon. Member. It is the sort of speech which all of us from time to time have been obliged to make. The hon. Member did well on a sticky wicket. His honest doubts on this issue, reflected in the remarks of his hon. Friend, have been part of the background to all that we have heard this afternoon.
  It was the right hon. Member for Brighton, Pavilion (Mr. Amery) who gave the game away. He said that we have to deal with the issue as it is. In other words, he was prepared to face the issue as of now about what ought to be done concerning the import deposit scheme. He said that he had some sympathy for my right hon. Friend the Chancellor. Then he said that he would support his side with slight misgivings.
  We know what that Parliamentary language means. The right hon. Gentleman is in favour of the Bill. He is not against the Bill, but, in all the circumstances, he thinks that the only loyal thing to do is to go into the Lobby with his colleagues. That, I think, is the perversity—and it is perversity on the other side of the House today which is at stake —which is a measure of the perversity of the speeches which have been made. I think that hon. Members opposite, particularly on the Opposition Front Bench, wish that they had never been forced to take the stand they have. They have, however, done their best, and even if they have not done it very well, certainly I would have—and it would be appropriate to have—no complaint on that score.
  The test of the Bill is simple. First, has our economic recovery advanced so far that we can take avoidable risks with the balance of payments? Second, on the experience of the last year, would an end to import deposits contribute towards such a risk? In the Government's view, the answer to the first question is "No" and to the second question "Yes".

  977
  Here again, the Opposition have shown themselves to be in a cleft stick. They can hardly set out to persuade us and the country that we have done better than we claim. They cannot say that Britain's economic recovery has gone so far and so fast that risks of that kind can be run. They resort, therefore, to the oldest device of all. They attribute to us a complacency which we have never expressed in order to draw a contrast which would not otherwise stand up.
  Mr. John Page: When the Government said last year that the scheme would last for a year or less, were bey expecting the balance of payments to go better or worse than it has gone?
  Mr. Rodgers: The hon. Member, I am sure unwittingly, misrepresents what my hon. Friends said. They said last year that the scheme was a temporary one and would have an immediate effect, but they were careful not to give an undertaking, which properly they could not give, about the longer future of the scheme. I ask the hon. Member to examine carefully, as I have done, precisely what was said on Second Reading and what was said in Committee last year. It may be that they and he would like the scheme to have ended, but no commitment whatever was given.
  For that reason, hon. Members opposite have found what they regard as a paradox. On the one hand, when the scheme was introduced my right hon. Friend the then Financial Secretary to the Treasury, now Paymaster-General, explained that it was intended to cover the period until our strategy enabled us to come into surplus. On the other hand, my right hon. Friend the Chancellor has said that we crossed the line in about the middle of the first half of this year and have since been in substantial surplus.
  The point, however, is surely this. We are making very good progress but we have not yet reached our immediate target of a surplus of £300 million on current and long-term capital account combined during the present financial year. We are moving in the right direction but we are still short of our destination, the destination that my right hon. Friend the former Financial Secretary had in mind a year ago.
  978
  I admit that we are being cautious in bringing forward the Bill. My hon. and learned Friend the Financial Secretary was frank about this this afternoon. It would, however, be extremely foolish not to remain in a cautious stance until the position is plain beyond all doubt. We should take a dangerously short-term view if we were to relax immediately we had crossed the line.
  This, after all, was the view of the hon. Member for Worthing. His quarrel—his half quarrel: it was no more than that—was not with the stance of the Government, the cautious one, the reluctance to relax because it might be to relax too soon, but with the means. In other words, he did not like the Bill, but he recognised the necessity, as we see it, for remaining in this cautious posture. I think that is a fair view, it is an honest view, but, with respect, it is not the view which some of his hon. Friends have expressed, and so far as it has been sustained, their argument has been that, because things are better, we can take risks now.
  I am not saying that in economic management, any more than in any other field, risks are not involved in all decisions. They are. I think it would be an unusual Chancellor and an unusual Government who said that at no time might a risk have to be taken. There are on this side of the House a number of my hon. Friends who, quite rightly, have been drawing attention to the dangers which might follow if we held the squeeze too tight, but, at the end of the day, having set our target, and having had it accepted, I think both by the House and by the country, it would certainly be wrong to take risks if risks can be avoided.
  Mr. Crouch: I am following the hon. Gentleman most carefully, but would he not agree that a year ago the whole House understood the then Financial Secretary to say that the Measure was a 12-month Measure, and that the whole House went with it on that occasion, although the whole House did not vote for it? But the whole House did understand it was a 12-month Measure, no matter how difficult our problems were.
  Mr. Rodgers: I am not at all sure that the hon. Gentleman is correct when he says the whole House went for the Bill

  979
  and went for the Financial Secretary. My memory of that time is that there was a good deal of scepticism, to put it no higher, on the other side of the Chamber about that Bill. But I take the hon. Gentleman's point. It may be that he thought it was a good Bill. I hope he said so. I quite appreciate what he said about a sense of crisis at that time. There is no sense of crisis now, but it nevertheless remains the case that we cannot be sure what the next few months will hold. In these circumstances the choice is surely a simple one. We take a risk, we take off import deposits, and we hope there will not be disaster; or, alternatively, we do what the Government have done, and say it is a risk which cannot be run.
  I follow those hon. Gentlemen who have said that the Bill will make a difference only at the margins. Certainly I would concede and I recognise the point made by the hon. Member for Acton (Mr. Kenneth Baker) that there are difficulties in quantifying the precise consequences of the scheme, both directly for imports and on credit. I know he will understand when I say that he asks us in that respect to do the impossible. But the question is this. If the Bill does not have a perverse effect, if it operates only on the margin, surely it is still a scheme which has to be retained unless the contrary disadvantages are overwhelming.
  It has been interesting, listening to the debate this afternoon and comparing it with what was said a year ago, that very few practical disadvantages have been demonstrated. Despite the argument about exemptions, and how many there ought to be, the fact is that the scheme has worked smoothly, and there are many organisations which have been affected by it, trade associations and the C.B.I., which, whatever they may have thought of the principle, have been prepared to say that the scheme, as administered, has proved to be an effective and efficient scheme. In these circumstances, surely the case is for retaining the scheme and not for doing away with it, even if the difference it may make is slight, although I would not necessarily concede this.
  My hon. and learned Friend the Financial Secretary put forward three
  980
  very good reasons for continuing the scheme. [HON. MEMBERS: "Four."] I know hon. Gentlemen thought that there were four, but if they will read HANSARD tomorrow they will find that there were three, although my hon. Friend developed them with so much conviction that he may have convinced the Opposition that there was more to be said for the scheme than even he imagined. The three important arguments which he advanced still stand up.
  First, there is the effect of credit restraint. Although we know that here there is an area for argument, there is no doubt that it is a measure of credit restraint, and, for the moment, as I have said, this is the right stance to be in. Second, my hon. and learned Friend spoke of the effect on the import figures, and, with respect, I do not think the comparisons made by the hon. Member for Barkston Ash were always right. The comparison surely is between the trend in exempt and non-exempt goods before the scheme came in and the trend in exempt and non-exempt goods afterwards. It is a question of ratios, and my hon. and learned Friend summarised it by saying that, on the evidence, the difference between the rates of increase in non-exempt and exempt goods has dropped from three times to twice. Nobody has said that imports have not been rising; of course they have. The question is not only the rate of increase of imports but the relative rate of increase of imports as between the exempt and non-exempt sectors. If hon. Gentlemen will examine my hon. and learned Friend's speech, they will see that that has been spelt out.
  To summarise, we do not say that the Bill is a matter of life and death, but we do say that all the evidence points to its being very useful on the margin at a time when we must continue to give top priority to the need for a substantial surplus. Thus, the Bill must be seen against a background of growing success but of a continuing need for vigilance, restraint and care. This is a matter of common sense and not of sophisticated economic analysis.
  I said a moment ago that removing import deposits is a risk we cannot take. This is the theme of my remarks and of my right hon. Friend's. I had in mind

  981
  there both the effects directly on imports and the consequences for liquidity. As 1. have said, there are some risks that are inescapable in economic management, but this is not the time to seek them. The argument is about method and timing. As my right hon. Friend the Chancellor of the Exchequer has said, we walk on a tightrope. What is correct at one time may not necessarily have been correct earlier. These are matters of judgment, not of principle. Bearing all the factors in mind, and reflecting on what has been said this afternoon, I believe that our judgment is right.
  With regard to the past, the predictions made last year have not proved to be correct. With regard to the future, there is no doubt that the overall credit position will be tight in the months ahead, but I do not believe—
  Mr. Stephen Hastings (Mid-Bedfordshire): There is only a minute to go.
  Mr. Rodgers: The hon. Gentleman is mistaken; we are on exempted business, and, unless you, Mr. Speaker, correct me, I have a considerable time ahead of me if the House wishes me to develop the argument. I would point out to the hon. Gentleman that his hon. Friend the Member for Barkston Ash spoke for about 35 minutes. This gives me another 15 minutes. If he would prefer to absent himself in this period, I would have no complaint.
  I assure the hon. Member for Macclesfield (Sir A. V. Harvey) and others who have raised this point that I am not dismissing as a matter of no importance the possible effects of credit restriction on some companies, though I would have some doubts about the glowing tribute of vision and usefulness which the hon. Member for Barkston Ash painted. Rather, I share the view of my right hon. Friend the Member for Hillsborough when he sought to suggest—
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That the Proceedings on the Motion relating to Business of the House (Customs (Import Deposits) Bill) and on the Police Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Harper.]
  982
  Question again proposed, That the Bill be now read a Second time.
  Mr. Rodgers: —that if small firms are in difficulties, it is less likely that they will be concerned with problems of liquidity than with considerations of, for example, managerial competence. However, I am not dismissing the arguments that have been adduced and I do not want it to be thought that we are indifferent to this matter or will not watch it very closely. We will certainly do so.
  To hon. Members who have spoken about E.F.T.A. I say that, while I respect their feeling that there was something at stake here, and while it was right for them to mention our obligations to E.F.T.A., there seems to have been a curious persistence in the Opposition's approach to this problem. They are more royalist than the king.
  E.F.T.A. has considered this matter. It has heard statements both last year and on this occasion from my right hon. Friend the President of the Board of Trade. It is in a position to make such inquiries as it thinks should be made. Surely E.F.T.A. can decide its own view of this scheme without requiring hon. Gentlemen opposite to make unnecessary speeches about it.
  Mr. Bruce-Gardyne: The hon. Gentleman is not relating his remarks—the same could be said of the speech of his hon. and learned Friend—to the effects of the continuation of the scheme on the Government's application for entry into the E.E.C. The fact that the Government have decided to continue the scheme is bound to be regarded somewhat adversely—
  Mr. Speaker: Order. The hon. Gentleman has made a speech. He may make only a brief intervention now.
  Mr. Rodgers: I accept—
  Mr. Bruce-Gardyne: May I complete my question?
  Mr. Rodgers: I had better bring my remarks to a close. I assure the hon. Gentleman that I have taken note of the interesting point which he makes, but I believe that his conclusion is wrong. If he would like me to develop the matter further I would be happy to do so on another occasion.

  983
  In preparation for today's proceedings I carefully read the OFFICIAL REPORT of the debates a year ago and especially the speeches made by hon. Gentlemen on the Front Bench opposite. As my right hon. Friend the then Financial Secretary said, they were schizophrenic; they were against the Bill on principle but in two minds about the virtues of a deposit scheme as a method of import restriction. More reasonably, there were anxieties expressed on both sides concerning the Bill's administration. In practice, as I have said, the Measure has worked very smoothly. As my hon. and learned Friend said earlier, it has, among other things, required fewer staff than was originally estimated.
  I do not complain about the anxieties of a year ago. They were natural. But I do complain that when they have been proved unfounded hon. Gentlemen opposite are too mealy-mouthed to admit it. The plain fact is that, for the most part, the speeches against the Bill—I exempt the hon. Member for Worthing and the hon. Member for Barkston Ash—have
  been motivated by that least constructive of human emotions, resentment.
  Resentment has characterised so much of the Opposition's tactics throughout the life of this Parliament—resentment that hon. Gentlemen opposite were not sitting in our place, which they regard as their natural right; resentment that marks their attitude to Britain's economic recovery now; and resentment that they are not presiding over it, mixed with fear that we will succeed. It is resentment which will send them into the Division Lobby tonight—at least some of them: resentment that import deposits have worked, and will contribute further to Britain's rising strength. That is their affair. I do not keep their conscience. But I still wish that they would sometimes judge an issue on its merit, for on merit this is a useful Bill, relevant to the country's need and deserving support from all reasonable men.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 297, Noes 220.

  Division No. 7.]

  AYES

  [10.5 p.m.

  Abse, Leo

  Cant, R. B.

  Ennals, David

  Albu, Austen

  Carmichael, Neil

  Evans, Albert(Islington, S.W.)

  Allaun, Frank (Salford, E.)

  Carter-Jones, Lewis

  Evans, Fred (Caerphilly)

  Atfildtt, Walter

  Castle, Rt. Hn. Barbara

  Evans, loan L. (Birm'h'm, Yardley)

  Allen, Scholefield

  Chapman, Donald

  Fault's, Andrew

  Anderson, Donald

  Coe, Denis

  Fernyhough, E.

  Ashley, Jack

  Coleman, Donald

  Finch, Harold

  Ashton, Joe (Bassetlaw)

  Concannon, J. D.

  Fitch, Alan (Wigan)

  Atkins, Ronald (Preston, N.)

  Conlan, Bernard

  Fitt, Gerard (Belfast, W.)

  Atkinson, Norman (Tottenham)

  Corbet, Mrs. Freda

  Fletcher,Rt.Hn.SirEric(Islington,E.)

  Bacon, Rt. Hn. Alice

  Craddock, George (Bradford, S.)

  Fletcher, Raymond (Ilkeston)

  Bagier, Cordon A. T.

  Crawshaw, Richard

  Fletcher, Ted (Doncaster)

  Barnes, Michael

  Cronin, John

  Foley, Maurice

  Barnett, Joel

  Crosland, Rt. Hn. Anthony

  Foot, Michael (Ebbw Vale)

  Baxter, William

  Grossman, Rt. Hn. Richard

  Ford, Ben

  Beaney, Alan

  Darling, Rt. Hn. George

  Forrester, John

  Bence, Cyril

  Davidson, Arthur (Accrington)

  Fowler, Gerry

  Benn, Rt. Hn. Anthony Wedgwood

  Davies, Ednyfed Hudson (Conway)

  Fraser, John (Norwood)

  Bennett, James (G'gow, Bridgeton)

  Davies, G. Elfed (Rhondda, E.)

  Freeson, Reginald

  Bidwell, Sydney

  Davies, Dr. Ernest (Stretford)

  Galpern, Sir Myer

  Binns, John

  Davies, 'for (Gower)

  Gardner, Tony

  Bishop, E. S.

  Davies, S. 0. (Merthyr)

  Garrett, W. E.

  Blackburn, F.

  Delargy, Hugh

  Ginsburg, David

  Boardman, H. (Leigh)

  Dell, Edmund

  Golding, J.

  Booth, Albert

  Dempsey, James

  Gordon Walker, Rt. Hn. P. C.

  Boston, Terence

  Dewar, Donald

  Gray, Dr. Hugh (Yarmouth)

  Boyden, James

  Diamond, Rt. Hn. John

  Greenwood, Rt. Hn. Anthony

  Bradley, Tom

  Dickens, James

  Gregory, Arnold

  Bray, Dr. Jeremy

  Dobson, Ray

  Grey, Charles (Durham)

  Brooks, Edwin

  Doig, Peter

  Griffiths, David (Rother Valley)

  Broughton, Sir Alfred

  Driberg, Tom

  Griffiths, Eddie (Brightside)

  Brown, Rt. Hn. Geogre (Belper)

  Dunn, James A.

  Griffiths, Will (Exchange)

  Brown, Hugh D. (G'gow, Provan)

  Dunnett, Jack

  Gunter, Rt. Hn. R. J.

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

  Dunwoody, Mrs. Gwyneth (Exeter)

  Hamilton, James (Bothwell)

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

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

  Hamilton, William (Fife, W.)

  Buchan, Norman

  Eadie, Alex

  Hamling, William

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

  Edelman, Maurice

  Hannan, William

  Butler, Herbert (Hackney, C.)

  Edwards, Robert (Bilston)

  Harper, Joseph

  Butler, Mrs. Joyce (Wood Green)

  Edwards, William (Merioneth)

  Harrison, Walter (Wakefield)

  Callaghan, Rt. Hn. James

  English, Michael

  Hart, Rt. Hn. Judith

  Haseldine, Norman,

  Maciennan, Robert

  Roberts, Rt. Hn. Goronwy

  Hattersley, Roy

  McMillan, Tom (Glasgow, C.)

  Roberts, Gwilym (Bedfordshire, S.)

  Hazell, Bert

  McNamara, J. Kevln

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

  Healey, Rt. Hn. Denis

  MacPherson, Malcolm

  Rodgers, william (Stockton)

  Heffer, Eric S.

  Mahon, Peter (Preston, S.)

  Roebuck, Roy

  Henig, Stanley

  Mallalieu, E. L. (Brigg)

  Rogers, George (Kensington, N.)

  Herbison, Rt. Hn. Margaret

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

  Rose, Paul

  Hilton, W.S.

  Manuel, Archle

  Ross, Rt. Hn. William

  Hooley, Frank

  Mapp, Charles

  Rowlands, E.

  Horner, John

  Marks, Kenneth

  Shaw, Arnold (IIford, S.)

  Houghton, Rt. Hn. Douglas

  Marquand, David

  Sheldon, Robert

  Howarth, Robert (Bolton, E.

  Marsh, Rt. Hn. Richard

  Shinwell, Rt. Hn. E.

  Howell, Denis (Small Heath)

  Mason, Rt. Hn. Roy

  Shore, Rt. Hn Peter (Stepney)

  Howle, W.

  Maxwell, Robert

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

  Hoy, Rt. Hn. James

  Mayhew, Christopher

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

  Huckfield, Leslie

  Mikardo, Ian

  Silkin, Rt. Hn. John (Deptford)

  Hughes, Rt. Hn. cledwyn(Anglesey)

  Miller, Dr. M. S.

  Silkin, Hn. S.C. (Dulwich)

  Hughes, Hector (Aberdeen, N.)

  Milne, Edward (Biyth)

  Sliverman, Julius

  Hughes, Roy (Newport)

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

  Slater, Joseph

  Hunter, Adam

  Molloy, Willam

  Small, William

  Hynd, John

  Moonman, Eric

  Snow, Julian

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

  Morgan, Elystan (Cardinganshire)

  Spriggs, Leslie

  Jackson, Peter M. (High Peak)

  Morris, Alfred (Wythenshawe)

  Stewart, Rt. Hn. Michael

  Janner, Sir Barnett

  Morris, Charles R. (Openshaw)

  Stonehouse, Rt. Hn. John

  Jay, Rt. Hn. Douglas

  Morris, John (Aberavon)

  Strauss, Rt. Hn. G.R.

  Jeger, George (Goole)

  Moyle, Roland

  Summerskill, Hn. Dr. Shirley

  Jeger, Mrs. Lena (H'b'n&st. p'cras, S.)

  Mulley, Rt. Hn. Frederick

  Taverne, Dick

  Jenkins, Rt. Hn. Roy (Stechford)

  Murray, Albert

  Thomson, Rt. Hn. George

  Johnson, Carol (Lewisham, S.)

  Neil, Harold

  Thornton, Ernest

  Johnson, James (K'ston-on-Hull, W.)

  Newens, Stan

  Tinn, James

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

  Noel-Baker, Rt. Hn. Philip

  Tomney, Frank

  Jones, J. Idwal (Wrexham)

  Norwood, Christopher

  Urwin, T. W.

  Kelley, Richard

  Ogden, Eric

  Varley, Eric G.

  Kerr, Mrs. Anne (R'ter & Chatham)

  O'Halloran, M. J.

  Wainwright, Edwin (Dearne Valley)

  Kerr, Russell (Feltham)

  Oram, Albert E.

  Walker, Harcld (Doncaster)

  Latham, A.

  Orme, Stanley

  Wallace, George

  Lawson, George

  Oswald, Thomas

  Watkins, David (Consett)

  L eadbitter, Ted

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

  Weitzman, David

  Lee, Rt. Hn. Frederick (Newton)

  Owen, Will (Morpeth)

  Wellbeloved, James

  Lee, Rt. Hn. Jennie (Cannock)

  Page, Derek (King's Lynn)

  Wells, William (Walsall, N.)

  Lee, John (Reading)

  Paget, R. T.

  Whitaker, Ben

  Lessor, Miss Joan

  Palmer, Arthur

  White, Mrs. Eirene

  Lever, Rt. Hn. Harold (Cheetham)

  Pannell, Rt. Hn. Charles

  Whitlock, William

  Lewis, Arthur (W. Ham, N.)

  Park, Trevor

  Wilkins, W. A.

  Lewis, Ron (Carlisle)

  Parker, John (Dagenham)

  Willey, Rt. Fin. Frederick

  Lipton, Marcus

  Parkyn, Brian (Bedford)

  Williams, Alan (Swansea, W.)

  Loughlin, Charles

  Pavitt, Laurence

  Williams, Clifford (Ahertillery)

  L uard, Evan

  Pearson, Arthur (Pontypridd)

  Williams, Mrs. Shirley (Hitchln)

  Lyon, Alexander W. (York)

  Peart, Rt. Hn. Fred

  Willis, Rt. Hn. George

  Lyons, Edward (Bradford, E.)

  Pentland, Norman

  Wilson, Rt. Hn. Harold (Huyton)

  Mahon, Dr. J. Dickson

  Perry, George H. (Nottingham, S.)

  Wilson, William (Coventry, S.)

  McBride, Neil

  Prentice, Rt. Hn. R. E.

  Winnick, David

  McCann, John

  Price, Christopher (Perry Barr)

  Woodburn, Bt. Hon. A.

  MacColl, James

  Price, Thomas (Westhoughton)

  Woof, Robert

  MaoDennot, Niall

  Price, William (Rugby)

  Wyatt, Woodrow

  Macdonald, A. H.

  Probert, Arthur

  McElhone, F.

  Randall, Harry

  TELLERS FOR THE AYES:

  McGuire, Michael

  Rankin, John

  Mr. Ernest i3. Perry and

  McKay, Mrs. Margaret

  Rhodes, Geoffrey

  Mr. Ernest Armstrong.

  Mackenzie, Gregor (Rutherglen)

  Richard, Ivor

  Mackie, John

  Roberts, Albert (Normanton)

  NOES

  Alison, Michael (Barkston Ash)

  Bossom, Sir Clive

  Clegg, Walter

  Allason, James (Hemel Hempstead)

  Boyd-Carpenter, Rt. Hn. John

  Cooke, Robert

  Amery, Rt. Hn. Julian

  Boyle, Rt. Hn. Sir Edward

  Cooper-Key, Sir Neill

  Astor, John

  Brains, Bernard

  Corfield, F. V.

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

  Brinton, Sir Tatton

  Costain, A. P.

  Awdry, Daniel

  Bromley-Davenport,Lt.-Col.SirWalter

  Craddock, Sir Beresforcl (Spelthorne)

  Baker, Kenneth (Acton)

  Brown, Sir Edward (Bath)

  Crouch, David

  Baker, W. H. K. (Banff)

  Bruce-Gardyne, J.

  Crowder, F. P.

  Balniel, Lord

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

  Dalkeith, Earl of

  Batsford, Brian

  Buck, Antony (Colchester)

  Dance, Jamees

  Beamish, Col. Sir Tutton

  Bullus, Sir Eric

  Davidson,James(Aberdeenshire,W.)

  Bell, Ronald

  Burden, F. A.

  Dean, Paul

  Berry, Hn. Anthony

  Campbell, B. (Oldham, W.)

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

  Biffen, John

  Campbell, Gordon (Moray & Nairn)

  Digby, Simon Wingfield

  Birch, Rt. Hn. Nigel

  Carlisle, Mark

  Dodds-Parker, Douglas

  Black, Sir Cyril

  Channon, H. P. G.

  Drayson, G. B.

  Blaker, Peter

  Chataway, Christopher

  du Cann, Rt. Hn. Edward

  Boardman, Tom (Leicester, S.W.)

  Chichester-Clark, R.

  Eden, Sir John

  Body, Richard

  Clark, Henry

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

  986

  987

  Emery, Peter

  Lancaster, Col. C. G.

  Ramsden, Rt. Hn. James

  Errington, Sir Eric

  Lane, David

  Rawlinson, Rt. Hn. Sir Peter

  Eyre, Reginald

  Langford-Holt, Sir John

  Rees-Davies, W. R.

  Farr, John

  Legge-Bourke, Sir Harry

  Renton, 111. Hn. Sir David

  Fisher, Nigel

  Lloyd,Rt.Hn.Geoffrey(SuenC'dfield)

  Rhys Williams, Sir Brandon

  Fletcher-Cooke, Charles

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

  Ridley, He. Nicholas

  Fortescue, Tim

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Ridsdale, Julian

  Foster, Sir John

  Longden, Gilbert

  Rodgers, sir John (Sevenoaks)

  Fraser,Rt.Hn.Hugh(STfford&Stone)

  Lubbock, Eric

  Rossi, Hugh (Hornsey)

  Gilmour, Ian (Norfolk, C.)

  McAdden, Sir Stephen

  Royle, Anthony

  Glover, Sir Douglas

  MacArthur, Ian

  Rusself, Sir Ronald

  Glyn, Sir Richard

  Maclean, Sir Fitzroy

  St. John-Stevas, Norman

  Godlier, Rt. Hn. J. B.

  Macleod, Rt. Hn. lain

  Scott, Nicholas

  Goodhart, Philip

  McMaster, Stanley

  Sharpies, Richard

  Goodhew, Victor

  McNair-Wilson,

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

  Grant, Anthony

  Michael McNair-Wilson, Patrick (New Forest)

  Silvester, Frederick

  Grant-Ferris, Sir Robert

  Madden, Martin

  Sinclair, Sir George

  Gresham Cooke, R.

  Maginnis, John E.

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

  Grieve, Percy

  Marples, Rt. Hn. Ernest

  Speed, Keith

  Griffiths, Eldon (Bury St. Edmunds)

  Marten, Neil

  Stainton, Keith

  Gurden, Harold

  Maude, Angus

  Steel, David (Roxburgh)

  Hall, John (Wycombe)

  Maudling, Rt. Hn. Reginald

  Stodart, Anthony

  Hall-Davis, A. G. F.

  Mawby, Ray

  toddart-Scott, Col.Sir M.

  Hamilton, Michael (Salisbury)

  Maxwell-Hyslop, F. J.

  Summers, Sir Spencer

  Harris, Reader (Heston)

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

  Tapsell, Peter

  Harrison, Brian (Malden)

  Mills, Peter (Torringtn)

  Taylor, Sir Charles (Eastbourne)

  Harvey, Sir Arthur Vere

  Mills, Stratton (Belfast, N.)

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

  Harvie Anderson, Miss

  Miscampbell, Norman

  Taylor, Frank (Moss Side)

  Hastings, Stephen

  Mitchell, David (Basingstoke)

  Temple, John M.

  Hawkins, Paul

  Munro, Hector

  Thatcher, Mrs. Margaret

  Heald, Rt. Hn. Sir Lionel

  Montgomery, Fergus

  Thorpe, Rt. Hn. Jeremy

  Heath, Rt. Hn,Edward

  More, Jasper

  Tilney, John

  Heseltine, Michael

  Morgan, Geraint (Denbigh)

  Turton, Rt. Hn. R. H.

  Higgins, Terence L.

  Morgan-Giles, Rear-Adm.

  van Straubenzee, W. R.

  Hiley, Joseph

  Morrison, Charles (Devizes)

  Vickers, Dame Joan

  Hill, J. E. B.

  Munro-Lucas-Tooth, Sir Hugh

  Waddington, David

  Hirst, Geoffrey

  Murton, Oscar

  Wainwrighl, Richard (Colne Valley)

  Hogg, Rt. Hn. Quintin

  Nabarro, Sir Gerald

  Walker, Peter (Worcester)

  Holland, Philip

  Neave, Airey

  Walters, Dennis

  Hordern Peter

  Nott, John

  Ward, C. (Swindon)

  Hornhy, Richard

  Onslow, Cranley

  Ward, Dame Irene (Tynemouth)

  Howell, David (Guildford)

  Orr, Capt. L. P. S.

  Wells, John (Maidstone)

  Hunt, John

  Page, Graham (Crosby)

  Whitelaw, Rt. Hn. William

  Hutchison, Michael Clark

  Page, John (Harrow, W.)

  Wiggin, A. W.

  Iremonger, T. L.

  Pearson, Sir Frank (Clitheroe)

  Williams, Donald (Dudley)

  Irvine, Bryant Godman (Rye)

  Peel, John

  Wilson, Geoffrey (Truro)

  Jennings, J. C.(Burton)

  Percival, Ian

  Wolrige-Gordon, Patrick

  Johnson Smith, G. (E. Grinstead)

  Peyton, John

  Wood, Rt. Hn. Richard

  Johnston, Russell (Inverness)

  Pike, Miss Mervyn

  Woodnutt, Mark

  Kaberry, Sir Donald

  Pink, R. Bonner

  Worsley, Marcus

  Kershaw, Anthony

  Pounder, Rafton

  Wright, Esmond

  Kimball, Marcus

  Powell, Rt. Hn. J. Enoch

  Wylie, N. R.

  King, Evelyn (Dorset, S.)

  Price, David (Eastleigh)

  Knight, Mrs. Jill

  Prior, J. M. L.

  TELLERS FOR THE NOES:

  Lambton, Viscount

  Pym, Francis

  Mr. Timothy Kitson and

  Quennell, Miss J. M.

  Mr. Bernard Wcatherill.

  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Harper.]
  Committee Tomorrow.

  BUSINESS OF THE HOUSE (CUSTOMS (IMPORT DEPOSITS) BILL)
  Ordered,
  That, notwithstanding the practice of the House relating to the interval between the various stages of a Bill brought in on a Ways and Means Resolution, more than one stage of the Customs (Import Deposits) Bill may be proceeded with at any sitting of the House. —[Mr. Roy Jenkins.]

  POLICE BILL
  Order for Second Reading read.
  10.18 p.m.
  The Secretary of State for the Home Department (Mr. James Callaghan)rose—
  Mr. Kevin McNamara: On a point of order. On Thursday during Business Questions I asked my right hon. Friend the Leader of the House whether it would be possible for copies of the proposed legislation which would be produced in the Stormont as a result of the enabling legislation which would come before the House today to be made available in the Vote Office or the Library. It is not. May we have an explanation?
  Mr. Speaker: I cannot make any explanation of that. The appropriate Minister probably will explain it. There is no reason why we should not proceed with the Second Reading.
  Mr. Eric S. Helfer: Further to that point of order. I seek your guidance, Mr. Speaker. This afternoon we were told by the hon. Lady the Member for Mid-Ulster (Miss Devlin) that certain advertisements were appearing before the House had taken a decision. Tonight my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) has stressed the importance of the House having documents to enable it to discuss the Bill in a more adequate way than it can in the absence of the documents.
  I appreciate your point, Mr. Speaker, that you are not able to instruct a Minister to produce this material. I believe that we are getting into a very difficult situation where, first, decisions are being taken without reference to the House and, secondly, where the House is being asked to discuss a Bill without having all relevant material before it. Is not this a serious situation? What remedy do hon. Members have to ensure that such a thing does not happen again in the future?
  Mr. Speaker: The hon. Member will be aware—I think that he was in the Chamber—that this afternoon I dealt
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  with the first half of the point that he is raising. The other matter that he has raised was raised more concisely just now by his hon. Friend, and I have ruled that there is no reason why we should not proceed with the Second Reading.
  Mr. Callaghan: With your leave, Mr. Speaker, I can explain the matter now, or deal with it during the course of my Second Reading Speech. I had intended to do it then.
  Mr. Speaker: Perhaps the Minister will do it now.
  Mr. Callaghan: The reason why no Northern Ireland Bill has been published yet is that they do not have the power to offer this kind of mutual aid until this House, under the 1920 Act, has given them such authority. It would therefore be improper for them to publish a Bill of this sort until we have put our Bill through the House of Commons.
  Ours is an enabling Bill and will be brought into operation when I publish the commencement date, and clearly I do not intend to bring in a commencement date until we have seen the Northern Ireland legislation. It would be unconstitutional for the Northern Ireland Government to publish their Bill until our Bill has become law.
  Mr. Heffer: I accept that completely, but if it is correct in this case, can my right hon. Friend say why, on the other hand, advertisements have been appearing in the Northern Ireland Press before we have taken a decision in relation to the other debate that took place on Wednesday? My right hon. Friend cannot have it both ways.
  Mr. Speaker: Order. With respect, that issue was raised this afternoon, and the Speaker is ruling on it tomorrow.
  Mr. Callaghan: I think that my hon. Friend will agree that that is a different debate on a different force, and whether it is the same principle will, I understand, be dealt with tomorrow at some time after Questions.
  If I might conclude my point, this is to be found in Clause 1(4), which says:
  " An enactment of the Parliament of Northern Ireland … shall be deemed to be within the powers of that Parliament notwithstanding anything in the Government of Ireland Act, 1920."

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  That will give the Northern Ireland Government power to publish their Bill, if the House of Commons and the other place agree to this Bill, after it has become law.
  I beg to move, That the Bill be now read a Second time.
  We have discussed these matters on a number of occasions, including both the reorganisation of the police and the creation of special constables to support them, as well as on earlier occasions, and again on the establishment of the Ulster Defence Regiment.
  The purpose of the Bill is to give effect to the proposals in relation to the police. The first thing that I should like to put to the House is that it was always our view that the Royal Ulster Constabulary and the British police forces should be brought more closely in touch with each other, but what made this difficult was the para-military duties of the Royal Ulster Constabulary.
  The Hunt Report recommended that the Royal Ulster Constabulary should be relieved of duties of a military nature, as it put it, saying that only in this way would it continue to be able to serve the whole community. This recommendation commended itself to the whole House the last time we discussed it. It commends itself also to the Royal Ulster Constabulary. Its representatives, whom I have seen on a number of informal occasions—most recently at a social engagement only three or four days ago—have told me in so many words that it is their desire not to represent 70 or 80 per cent. of the people but 100 per cent. of the people. They welcome, therefore, the splitting away of semi-military duties which they once had.
  What has happened so far is that the Reserve Force, which was part of the Royal Ulster Constabulary has given up its automatic weapons, and the armoured cars which it had have been withdrawn and taken into store. The members of this force are now restricted to ordinary police duties. Another point is that the Northern Ireland Government have accepted the concept of a police authority, which we understand well in this House. They have accepted, also, the concept of inspection by Home Office
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  inspectors, and a recruitment campaign is already going on among all communities in Northern Ireland.
  Taking these essential points and others, therefore, I think it fair to say that the Royal Ulster Constabulary is beginning to approximate more and more closely to a police force in Great Britain. For this purpose, the Bill is an enabling Bill which will be brought into force, as I said a few minutes ago, when it seems appropriate to do so and the type of duty required from the two forces is more equivalent than it has been hitherto. The Bill is mainly concerned with arrangements for closer association between the R.U.C. and British police forces, in matters such as training facilities, secondment of personnel, and the temporary reinforcement of the Royal Ulster Constabulary in emergencies. In addition, there is the proposal for the creation of a Police Council for the United Kingdom instead of a Police Council for Great Britain, such as we have had up to the moment.
  In the past, of course, there have been contacts between the R.U.C. and British police forces on an informal basis, but the military rôle which the Royal Ulster Constabulary had—it did not particularly want it, but it was forced to assume it—has been an insurmountable obstacle in the past to full co-operation between a force of that kind and the fully civilian unarmed forces in the rest of the United Kingdom. Both sides realised this, and the R.U.C. has never been a full member of the family of police forces in the United Kingdom, and neither could it be so long as it carried arms in its day-to-day duties.
  The Northern Ireland Government accepted that the disarming of the R.U.C. was essential, and over the past few weeks they have gone ahead vigorously with the civilianisation process. In general, I understand the position to be that all foot patrols are now going unarmed by day and by night, and, I may add, the Inspector-General has told me that this is by their own decision.
  In some senses, the 11 th November was a historic day in the annals of the force because that was the first day in its history, I am told, when it went on duty entirely without arms. This is a remarkable change in the nature of the

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  R.U.C. in Northern Ireland. There are no arms now carried in vehicles, and very soon the only circumstances in which the force will carry arms will be those in which they would carry arms in Britain, namely, in dealing with suspects or escaped convicted persons who are themselves carrying arms and who, it is believed, would use them to resist arrest. Far the time being, a proportion of the R.U.C. will continue to carry arms, but not automatic weapons, when they are carrying out special duties in non-urban areas. But these arms also will be handed in when the proposed Ulster Defence Regiment is in being and able to take over the responsibility for the defence of the Province, which was previously shouldered by the R.U.C. So the R.U.C. is being transformed.
  One of the first consequences of abandoning its military rôle is that its period of training has already been reduced from 18 to 12 weeks, the reduction being achieved because it is no longer necessary to instruct in a para-military rôle. This has increased the throughput of the training depôt.
  I am glad to say that applications for recruiting are going well. One of the other changes being made is that would-be recruits are no longer accepted or rejected by their local sergeant or head constable—equivalent in British terms to an inspector. Applications are now sent to police headquarters for assessment. That is a change that I think will be welcome, because we must not overlook the suspicions that will continue to exist in this matter.
  I believe that a number of these changes that have taken place and are taking place in the R.U.C., which is moving with remarkable speed, have helped to contribute towards the noticeable lessening of tension in the troubled areas, especially in Belfast and Londonderry. With the present exception of two areas of Belfast at night, joint patrols of Royal Ulster Constabulary and the military personnel are carried on for 24 hours every day.
  Four police stations have recently been reopened in Belfast, and in almost every way there are clear indications that a good beginning has been made in implementing the recommendations in the Hunt Report. But, although a number of the Hunt recommendations are
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  administrative changes which are already being carried out, some of them—and these are the ones we are discussing—will require legislation. The main task of legislating for the reorganisation of the R.U.C. falls on the Northern Ireland Parliament. I understand that it is the Northern Ireland Government's intention to introduce a Bill as soon as this Bill becomes law, or at any rate very shortly afterwards.
  Perhaps the most important provision of this Bill—at any rate, it is one to which I have always attached a great deal of constitutional importance—is the establishment of a police authority representing a variety of interests in the Northern Ireland community, so that the police will become responsible to a police authority and not to the Minister for Home Affairs. I regard this as a very important and welcome change. The result will be that the Constabulary will be administered by a body of citizens representing many different aspects of public life, instead of directly by the Minister.
  I turn to the aspect of the reorganisation with which the Bill deals—the establishing of closer links betwéen the Constabulary and police forces in Great Britain. The Hunt Committee devoted quite a number of pages to this matter. It thought that this was important for a number of reasons. First, it said that it thought increased police efficiency would flow from such matters as inspection of the force by Her Majesty's Inspectorate. I believe that to be true. The Committee also thought that it would make possible more places on courses in Great Britain being made available at police training establishments here for members of the R.U.C., and a close association with the research being undertaken by the Home Office in the management services, development and planning branch of the Police Department, which, although it is maintained by the Home Office, already covers Scotland as well as England and Wales.
  Besides these practical benefits, there are some other benefits. I do not think that it would be misunderstood in Northern Ireland if I staid that association with police forces in Great Britain may well widen the horizons of members of the Constabulary, enabling them to profit from the experience of forces in

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  Great Britain and to get wider experience. I think that there is something in the point that the Constabulary felt isolated from other police forces, and that very few people taking an unprejudiced view could be found who could deny that this kind of association and interchange between personnel will be of benefit to the Royal Ulster Constabulary and—who knows?—may be of benefit to British police forces as well, by introducing them to an entirely different range of experience—one that I hope they will not have to profit by in this country.
  Some of the proposals are achieved by administrative means without legislation. This is because the arrangements for such matters as mutual aid and the facilitating of short-service engagements with the Constabulary require the conferment of powers and the imposition of obligations partly in Great Britain, which is the responsibility of the Westminster Parliament, and partly in Northern Ireland, which is the responsibility of the Stormont Parliament.
  The plan, therefore, which my right hon. Friend the Secretary of State for Scotland and I have made with the Northern Ireland Government, is that these arrangements should be made by means of provisions in this Bill enacting the British parts of the arrangements and in complementary provisions enacting the Irish parts, to be included in the broader legislation which the Northern Ireland Government intend to introduce in Stormont. I have already explained why we are dealing with the Bill before the Northern Ireland Government introduce their own Bill, and I shall not repeat it. I turn to the Clauses of the Bill.
  Clause 1 provides for aid by way of temporary reinforcement to the R.U.C. by home police forces—that is to say, police forces in England and Wales and Scotland—and vice versa. There is already provision for mutual aid of this kind between forces in England and Wales in Section 14 of the Police Act, 1964, and between police forces in Scotland in Section 11 of the Police (Scotland) Act, 1967. The object is to assist a force whose manpower resources are insufficient to meet an extraordinary commitment of comparatively short duration. Under these provisions, aid may be provided by the
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  chief officer of one force at the request of the chief officer of another. If the Secretary of State regards aid as necessary, he has power to direct a chief officer to provide it.
  There is provision for the police authority of the aided force to pay to the authority of the aiding force an agreed contribution in respect of the aid provided. Subsections (1) and (2) make corresponding provision for aid by a British police force to the R.U.C. The question of making a payment for the aid is for the Northern Ireland Government, since it will be necessary to confer a power of payment upon the Northern Ireland authorities. This will be a matter therefore for a complementary provision in the Northern Ireland Bill.
  It would be right that arrangements should also be made for mutual aid to operate in the opposite direction, a conferment of power to enable the R.U.C. to aid a British police force. This is a matter for the Northern Ireland Bill. It is for the Northern Ireland Parliament to say that they will make it available for forces in this country if required. As the law stands, power to enact such an enabling power is not within the powers available to the Stormont Parliament under the Government of Ireland Act, 1920. That is another reason for widening their powers and is the purpose of subsection (4).
  Mr. Eldon Griffiths: Could the right hon. Gentleman clear up the financial aspect? How would a home police force recover its expenses from the Ulster Government? Would it simply be a matter for the Stormont Parliament to decide to pay? In the reverse direction, what would be the authority by which a receiving police force in this country would meet the expenses of the Ulster Constabulary?
  Mr. Callaghan: The new legislation, I understand, would confer upon the Inspector-General and the police authority power to pay but it would then be a matter for negotiation between the two forces as to what payment should be made. The same applies already in this country as between neighbouring forces—when, for example, the Metropolitan Police is called upon to go to the aid of another force. Perhaps we can take this up in Committee if necessary

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  but I believe that a formula exists under which it is decided how much should be paid for these services.
  Clause 3 deals with the British end of aid by the R.U.C. to a British force. Two provisions are required. The first is to enact that the aiding officers are under the direction of the chief officer of the aided force and have the powers of a constable in the aided area, as they have in the case of mutual aid within England and Wales or within Scotland. This is done by subsection (1). The second is to empower the police authority of the aided British force to make a payment for the aid to the Northern Ireland authorities. That is the purpose of subsection (2).
  Having for the moment finished with the subject of aid, I come back to Clause 2 This makes provision for facilitating short-service engagements of members of British police forces with the Royal Ulster Constabulary. There is already provision under the existing law for a member of a British police force with consent to leave that force entirely and to join the R.U.C. with continuity of service for pension and where a member of the R.U.C. transfers to a British force, the Constabulary Pension Code provides for the payment of a transfer value and the previous service in Northern Ireland counts by virtue of our Police Pensions Regulations. It is thus already possible for a British police officer to leave his force and be accepted as a member of the R.U.C. without loss of pension rights and vice versa, but the present arrangements assume that the transfer will be permanent.
  The Hunt Committee recommended that members of the Constabulary should be encouraged to apply for posts in Great Britain and vice versa. This involves permanent transfer and the legislative basis already exists for this, as I have said, but it went on to suggest the interchange of personnel between the Constabulary and forces on the mainland by means of attachments or secondments. In order to arrange short-service engagements of this kind, it seems right to make use of the existing provisions for transfer in either direction. All that needs to be added is a right of reversion at the conclusion of the agreed period of short service.
  Dame Joan Vickers: Can the right hon. Gentleman say what "short service" means? How many years does he contemplate as being short service? Would families be able to accompany men so transferred?
  Mr. Callaghan: I could not say that, but it will naturally be a matter for negotiation later to fix what is meant by a short-service engagement. It will be a purely voluntary matter and so, when the negotiations are concluded, people will be able to decide whether they wish to go.
  I am sure that the hon. Lady will know that there is a certain amount of switching between forces in this country, especially when a man wants promotion and therefore wants to leave his force to go elsewhere. Indeed, in the past the Home Office has sometimes insisted that at the top level of chief constable a man should not be promoted if he has served all his time in one force, and therefore men move around. We want to make the arrangements between Northern Ireland and here easier. We believe that basically it will be to the advantage of R.U.C. men to have experience of how British forces work before returning to their own force, either in the same rank or, if a man is ambitious, in a promoted rank.
  Mr. Norman St. John-Stevas: If the right hon. Gentleman cannot say what period short service is, can he say whether there will be any time limit on meeting a special demand under the previous Clause? Is there not a danger that if members of a police force in Britain are provided to Northern Ireland for more than a very short period, that will disrupt their lives and be greatly resented?
  Mr. Callaghan: There is no prospect of that. We are dealing with two entirely different matters and I am most anxious that they should not be confused. I am now dealing with an application by an individual officer who may be serving in the R.U.C. who thinks that for additional experience he would like to serve with a British force for a period of some years—that is a matter for negotiation and that is why I will not state a period; it is not for me to decide now what the police authorities would want to fix as an appropriate period of engagement; it is for them.

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  The other question, which I had already left, is that of mutual aid, which is literally for a weekend, or a football match, if I may venture to use that sort of phrase, or a procession when a police force which is normally sufficient to encompass the general arrangements might find itself heavily pressed, as it could in this country, by a particular procession or demonstration which, for a particular reason, decided to go to a particular area. I am grateful to the hon. Gentleman for raising this question, because I must make sure that this is absolutely clear. The whole purpose of the mutual aid scheme is not that, by misadventure or some hidden design, anybody in the British police forces should be sent to Northern Ireland for weeks and certainly not for months, but for a very short period, for a particular event. That is the purpose. It is not even days rather than weeks in this case; I would say weekends rather than anything else. I will come back to the point because, as it has been raised, it is important that there should not be any misunderstanding about this or it might foul the whole arrangement.
  Clause 4 gives effect to a recommendation of Chapter 7 of the Hunt Report that the Central Representative Committee of the R.U.C. should be given a statutory right to take part in negotiations about conditions of service. There is already in existence the Police Council for Great Britain, established by Section 45 of the Police Act, 1964. I had something to do with its establishment before I was in Government. That is the negotiating body for the police service on specified matters, which cover pay, allowances and other conditions of service, and the advisory body on pensions matters. It consists of what is called an official side, which is, loosely speaking, the employers' side and it includes representatives of the local authority associations and the Secretary of State for Scotland and myself. It also includes a staff side, which includes representatives of the various bodies representing the police, such as the chief constables' and superintendents' associations and the two Police Federations, that of England and Wales and that of Scotland.
  What we propose here, with the assent of the Police Council, although the assent
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  has not been formally given—but consultations have taken place with the organisations making up the Council—is to enlarge the existing body for Great Britain into a Police Council for the United Kingdom by the addition on each side of representatives of the representative body of the R.U.C., on the one hand, and of the new Police Authority, when it is set up, on the other hand.
  For technical reasons, it is, apparently, simpler and clearer to replace Section 45 of the Police Act, 1964, rather than amend it so as to extend it to the R.U.C. That is why Clause 4 is so lengthy, but its effect is confined to the change which I have just described.
  Mr. Eldon Griffiths: May I be clear what the representation of the R.U.C. on the Police Council of the United Kingdom will consist of? Is new legislation by the Northern Ireland Government required to make sure that the representative body of the men, the equivalent of the British Police Federation, is included in the United Kingdom Police Council?
  Mr. Callaghan: I will, of course, check the point, but I would have thought not, because it is for this House to decide who serves on the Police Council for the United Kingdom. Provided, therefore, that this House says that it shall be the R.U.C. and the Police Authority, or whoever it is, that will be sufficient authority for that purpose and I doubt whether any other legislation is needed in Stormont to make that effective. We can look at this again in Committee if I find that I am wrong, but I would not have thought so.
  Clause 6 is formal. Clause 7 cites the Short Title and provides for the fixing of appointed days for the coming into operation of various provisions of the Bill. I intend to consult the various police organisations, before fixing the dates for the appointed days. I have considered, and shall consider very carefully, the date of implementation of the Bill and the date of making a commencement order if the House gives me the Bill.
  Mutual aid should not be brought into force until I am satisfied that the conditions of service would be fair to those who would be required to serve in each

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  country. This arises from the possibility that police officers from Great Britain might otherwise be sent to Northern Ireland in circumstances in which they might have to serve alongside a constabulary whose relations with the public and methods of working might be very different. That would place an unfair strain on police forces in Great Britain. It is important, therefore, that the progress that has already begun towards bringing the methods of working of the Constabulary into line with British methods should continue if we are to make real use of the process of mutual aid.
  I know that great value was attached to the idea of mutual aid by the Northern Ireland Government. I hope, therefore, that the R.U.C. will understand that if it is to receive this reinforcement, it is important that, as far as possible, the conditions of service and the methods of work should be standardised, with due attention, of course, to the different details.
  Mr. McNamara: In explanation of what he has said, can my right hon. Friend say that members of British police forces seconded to Ulster will not be expected to enforce legislation which is not in force in the United Kingdom as a whole or arrest people for crimes which would not be crimes in any other part of the United Kingdom?
  Mr. Callaghan: I am not sure what the technical meaning of the word "seconded" is, but let me put it in this way. If a man volunteers for a short-service engagement he is of course absolutely required to accept the law of Northern Ireland as it stands. He has joined the Royal Ulster Constabulary on a short-service engagement, and one cannot have two policemen in the same force, wearing the same uniform, side by side, operating different systems of law.
  As regards mutual aid, the situation here is complicated by the existence of the special powers which exist in Northern Ireland, and it is not fair to ask a policeman to administer a system of law with which he is not familiar. This, therefore, is a difficulty which we had to consider in this question of mutual aid. I know that my hon. Friend is aware that a good deal of the work which goes on among police forces is not limited or bound by the Special Powers Act, that there is a
  1002
  good deal of other work which has to be done—in controlling a procession, or whatever it may be—which is quite outside the scope of the special powers.
  I do not expect, nor would it be my intention, that any British policeman who went over on short term for mutual aid in the particular circumstances we were envisaging earlier, would operate the Special Powers Act. This is not something which should be required of him. It would be improper for us to expect it, because he would not fully understand the powers he would be operating. My hon. Friend says, "Abolish them". The Northern Ireland Government are most anxious to get rid of a number of these powers. They regard a number of them as otiose and see no very good reason for retaining them. I have not felt up to the moment, although I have raised the matter with them on several occasions, that I could press them to get rid of them all straight away, but I have no doubt that as the situation settles down, as I hope and believe it will, they will themselves wish to rid themselves of a great number of those powers.
  Mr. Peter Mahon: Would my right hon. Friend not agree that the dire necessity in Northern Ireland appears to be to establish the new police force on an ecumenical basis rather than to Anglicise it? The tone of his speech seems to denote a sort of infiltration of large numbers of people from England. Perhaps in the initial stages this would not be as good a thing as it sounds.
  Mr. Callaghan: If I gave that impression I wish to remove it. It is not my view that large numbers of Englishmen are needed in the Royal Ulster Constabulary. We were talking—I emphasise again—about a particular occasion, a particular weekend, where the force in Northern Ireland, the R.U.C., needs strengthening. That is all we are talking about at the present. It has nothing to do with infiltration of a great many Englishmen into the R.U.C., but we have made provision for these exchanges.
  I am grateful to my hon. Friend for emphasising a point which I did mention in passing, and which I am very happy to emphasise again, and that is that I regard it as absolutely essential that one of the communities in Northern Ireland should come forward to the fullest extent

  1003
  to volunteer for service with this new police force. My hon. Friend has given me an opportunity of saying that, and I say it—as regards that sotto voce remark —in relation to any other force which may be set up in Northern Ireland. I should be out of order if I were to go further than that.
  My hon. Friend the Minister of State will wind up the debate, and, as I have trespassed so much on the time of the House, I think I should leave it to her to deal with any other points that are raised.
  I understand the misgivings of those who are concerned that Clause 1 should not be brought into force too soon. On the whole, it is not my hon. Friends but the police authorities in this country who are anxious about that. Apart from subsection (4), which I have already explained, Clause 1 gives the Parliament of Northern Ireland additional power, and I intend that the Clause shall be brought into force when conditions of police operations and service in Northern Ireland approximate more closely than they have done in the past with those in Great Britain. This, I think, is essential, and is the basis on which we must proceed.
  10.56 p.m.
  Mr. Mark Carlisle: The Home Secretary commented generally on the situation of the police in Northern Ireland, and it may be that we can return to that topic during the debate.
  The Bill which is before us is, as I think the Home Secretary would agree, a fairly narrow Bill arising out of the recommendation of the Hunt Committee. The Opposition welcome the provisions of the Bill and the fact that the proposals of the Hunt Committee are being put into legislative form, and we support the general principle behind the Bill.
  The Advisory Committee on the Police in Northern Ireland, or the Hunt Committee as it has come to be known, was set up by the Stormont Government and by the Minister of Home Affairs in the Northern Ireland Government. I appreciate that the Home Secretary did this in a previous debate, but on behalf of the Opposition I should like to congratulate Lord Hunt on his sensible, thorough and lucid report and for the speed with which
  1004
  it was produced. Mr. Gourlay, the Committee was set up on 26th August, it had reported by 3rd October, and here we are in the middle of November giving legislative effect to some of its suggested reforms.
  Mr. Deputy Speaker (Mr. Harry Gourlay): I would remind the hon. Gentleman that we are sitting as the House.
  Mr. Carlisle: Perhaps there is here a lesson to be learned by some other committees. The Northern Ireland Government should also be congratulated for so speedily accepting the major recommendations in the report.
  The major part of the report dealt with the removal of the para-military role from the Royal Ulster Constabulary. We shall be debating that on Wednesday when the Ulster Defence Regiment Bill is before the House, and it would be out of order for me to make wide comments now, but the Opposition welcome that Bill, and the fact that the proposals have been accepted by Her Majesty's Government. I believe that it will ease the difficult situation in which the Royal Ulster Constabulary have found themselves in carrying out at the same time both a peace-keeping civilian police rôle and a military rôle. The Bill is related to the proposals in Chapter 7 of the report to allow for a closer link between the Royal Ulster Constabulary and the police forces in this country, and this is welcomed by the House.
  I had the opportunity to go to Northern Ireland slightly in advance of the time when the Home Secretary was there. I was there, in company with three of my hon. Friends on 18th and 19th August, in the immediate aftermath of the troubles that had occurred. We had an opportunity to see the police in action in Northern Ireland, and the troops who had then taken over in the Falls Road area in Belfast and in Londonderry.
  One could not but help being struck by the problems which were facing a police force of 3,000 in a country of that size, particularly as at that stage the police were carrying out a dual civil and military role. It was dramatically brought home to my hon. Friends and I that whereas the size of the police force in Northern Ireland at that stage was, I

  1005
  believe, despite what the Hunt Committee pointed out, adequate for normal policing duties such as traffic and crime patrol—the crime rate is lower in Northern Ireland and, happily, the detection rate is far higher than it is in this country—it was inadequate to deal with any special emergency that might occur because it had no spare capacity to deal with any civil disturbances of the kind that we saw.
  In this country it is easy, if necessary, to move the police from other areas rapidly to London. It is possible, within the Metropolitan Police Force, to provide a substantial body of policemen to control any potentially dangerous situation. In Northern Ireland, however—with a country of that size and a police force limited to 3,000—those possibilities do riot exist.
  The Bill enables the police from forces in England to go to the assistance of the Northern Ireland police. [Interruption.] Police stationed in England, Scotland and Wales will be able to go to the assistance of the police in Northern Ireland if a special demand is necessary, and I believe this to be a useful provision. While this power of mutual aid is valuable, I hope that it will not have to be used often.
  I remind the House, however, that we are, by the Bill, imposing further duties on our present police forces and I remind the Home Secretary that the police are already very much under strength.
  Mr. Stanley Orme: I have been listening carefully to the hon. Gentleman's remarks. Is the hon. Gentleman aware that he is speaking of a police force that has lost the confidence of one-third of the population of that part of Northern Ireland? That is why these reforms are being introduced. We want to see a strengthened police force, but the hon. Gentleman cannot sidestep the basic issue of why we are tonight clebating this subject.
  Mr. Carlisle: If, as he said he had, the hon. Gentleman had been listening carefully to me, he would know that I a m not sidestepping any basic issues. When I was talking about the police force being under strength I was referring to the police forces in England and riot the police in Northern Ireland. I
  1006
  said that the Bill would enable us to assist by providing additional policemen in certain circumstances. As I repeat, it is a power which was recommended by the Hunt Committee, and one which we welcome.
  Perhaps I may now return to what I was saying about the police forces of England, Scotland and Wales, which is that when we are passing legislation like this we should at the same time remember that we are imposing further duties on the police forces of this country which are, at the moment, substantially under strength. At the end of 1968, the police forces in the provincial areas were 11,000 under establishment, and that to the end of June of this year, the latest date for which figures are available, the police forces in the Metropolitan area and throughout England, Scotland and Wales were 19,000 under strength—
  Mr. Paul B. Rose: The hon. Gentleman is confusing two matters—being under strength and being under establishment. Would he not agree that the establishment has risen greatly, and that it can therefore be very misleading to talk of a police force being under strength when there are actually more police because the establishment has risen?
  Mr. Carlisle: With respect, I think that it is the hon. Gentleman who is confused. I accept that the establishment figures have been raised, but he is implying that the establishment figures have risen above the strength necessary, and with that view I do not agree. Although the establishment figures have risen, if one says that the forces are 19,000 below establishment, it is the same as saying that they are 19,000 below strength, because the strength we wish to achieve is the establishment figure. The hon. Gentleman can only argue the opposite if he was arguing that the establishment is above the needed strength.
  My reason for making this point, particularly against the background of the rise in crime figures, is to repeat to the Home Secretary that whenever we put a further burden on the police forces in this country we should always remember that there is a shortage of police, that there is need for more police, and that the more tasks we put upon them the greater that need becomes. I can only

  1007
  regret, as has been regretted from this side previously, that the Home Secretary saw fit in 1967 to "turn the tap off" I think that was the phrase used in regard to recruitment and the effect that that has since had on police recruitment.
  Where will this police force come from? I understand that because of the time factor these men will come from the police forces in Liverpool, Bootle, Lancashire and the North-West—and I am glad to see the hon. Member for Liverpool, Walton (Mr. Helfer) nodding his agreement. I am sure that he will agree that these forces, too, are under strength at the moment, and that that strength is something we must bear in mind when considering the burdens to be put on them by the Bill.
  I want now to deal with the task in Northern Ireland which the Bill will impose. I notice that the Home Secretary says that the commencing date will have to be decided on in the light of the reorganisation of the police in Northern Ireland, and that is something with which we can all agree. May I take it that the task they will be asked to perform in Northern Ireland will be the normal police functions as we know them in this country—namely, assisting in the maintenance of law and order—in the country to which they go? The answer which the Home Secretary made to his hon. Friend in regard to the powers of the police in Northern Ireland rather surprised me.
  Mr. McNamara: It was a good answer.
  Mr. Carlisle: I did not say that it was not a good answer, but that it rather surprised me. The right hon. Gentleman said that the police would be required to carry out duties or to support laws which were different from those which exist in this part of the United Kingdom. The arguments for this were in the Special Powers Act. It may be a more of a Committee point, but it is worth making at this stage if only to alert hon. Members to it. Clause 1 (3) says:
  "A constable shall, during any period during which he is provided under this section for the assistance of the Royal Ulster Constabulary be under the like direction and control as a member of that force …"
  I should have thought that it must follow that a member of the British police forces
  1008
  —this is the only way in which mutual aid can work—while having been seconded, if that is the right word, to the Royal Ulster Constabulary, would be under the orders of the Royal Ulster Constabulary and required to carry out the law there at that moment. I was therefore slightly surprised at the answer the Home Secretary gave.
  Mr. Heffer: If that is the interpretation, it is quite clear that there will have to be an Amendment that in no circumstances will British police seconded to Northern Ireland be expected to act under the Special Powers Act.
  Mr. Carlisle: I made the point because I thought it one which should be raised now. I had not intended to refer to Clause 1(3) until the Home Secretary gave that answer. It occurred to me that it was open to two interpretations in view of the wording of the subsection. This presumably is a matter which will have to be discussed. It is difficult to see how any form of mutual aid among police forces can act successfully unless those who go are under the duty while with this force to carry out the law as it exists in that part of the United Kingdom. It is difficult to see how anything that the hon. Member for Walton wants could be written into the Bill. I am not suggesting that it should be.
  Mr. Niall MacDermot: Would the hon. Member agree that there is something more than a Committee point involved here? There is a very important point of principle. Does the hon. Member agree with the statement of principle by the Home Secretary that it would be invidious if these powers under Clause 1(3) were used in such a way that a member of a British police force going to Northern Ireland to assist the Constabulary there would be called upon to enforce a system of law which is alien to the traditions of this country?
  Mr. Carlisle: Obviously one would not wish members of the British police forces to be parties to imposing what the hon. and learned Member called "a system of law alien to this country". Speaking for myself, there seemed considerable force in what the hon and learned Member said, but that is not quite what the Home Secretary said. The Home Secretary said that this position could not arise. Clearly under the provisions of

  1009
  the Bill these police forces will presumably be required to carry out the law in that part of the United Kingdom to which they go. I do not know what the position is in regard to Scotland, where there are substantial differences as to the powers of arrest. What happens if mutual aid exists between England and Scotland, which has happened very seldom, if ever? It is a matter which must be thrashed out.
  It is a principle which must be accepted that, if mutual aid is to be established. aid if the forces that go to Northern ireland are to be of use in enforcing law and order there, they must be under the control of the officers of that force for the time being and presumably, therefore, must carry out the laws that obtain there at that time. I see the Home Secrery nodding. I should have thought that that must be the position.
  Mr. Heffer: The logic of the hon. Gentleman's case is that all of us should now be arguing for the repeal of the Special Powers Act.
  Mr. Carlisle: If we did that, Mr. Speaker, I take it that we should be out of order, because I believe that that is legislation passed by the Northern Ireland Government over which the House has no control. [HON. MEMBERS: "Oh.") Can I end this exchange by saying that I raised this subject in an attempt to alert the House to what I judged to be the meaning of Clause 1(3). Many of these critical questions should be related to the Home Secretary or the Minister of State as to what the passage means. I merely point out that it may not mean exactly what the Home Secretary has said.
  I end this part of my speech by repeating that I assume that the task which such men would be required to do would be what we in this country look upon as the normal police function of maintaining law and order.
  Mr. Callaghan: The Commencement Order must reflect the kind of situation to which the hon. Gentleman has been referring.
  Mr. Carlisle: I started that part of my speech by referring to the Commencement Order and to the need to appreciate what the Home Secretary had said about it.
  1010
  I do not think that Clause 1(1)is likely to cause any trouble. It refers to a request made by the Inspector General of the Royal Ulster Constabulary to a chief officer of police to provide assistance.
  I do not say that Clause 1(2) is contentious, but it is a matter that should be borne in mind by the House. It empowers the Home Secretary to direct chief officers of police to see that assistance is given to Northern Ireland on request, he having been satisfied by the Minister of Home Affairs for Northern Ireland, even against the wishes of the police authority or the chief officer of police in this country.
  I appreciate that this is not a new power. I appreciate that the words are to all intents and purposes identical to those in Section 14 of the Police Act, 1964. The Home Secretary slightly underestimated the difference in circumstances that may exist between any mutual aid as envisaged under the Bill and mutual aid as it exists under the 1964 Act. Under the 1964 Act, a force from, say, the Midlands may come to London to assist on the day of a demonstration in Trafalgar Square or Grosvenor Square, but such mutual aid is short lived. It probably means a motor journey of an hour or so. The moment the incident, demonstration or procession is over, the force can re-embark in the buses and return to its town or county of origin.
  The right hon. Gentleman envisaged throughout his speech that an identical situation will occur if a police force is required to go to Northern Ireland. I hope that Clause 1 will never have to be implemented, or certainly only occasionally. Equally, I hope that if it has to be implemented it will be implemented in that way, but I am not sure that one can say that with such confidence as the Home Secretary does.
  I think that the time-scale is vital. How long is it envisaged that the police who go over to meet a special demand for which the resources of the Ulster Constabulary are unsatisfactory will stay? The right hon. Gentleman used the phrase "a comparatively short duration", and referred to weekends. I remind the right hon. Gentleman that at the time when I and some of my hon. Friends went to Northern Ireland, on 18th August, people were talking about British

  1011
  troops being there for a very short duration, and one cannot help feeling that if assistance is given in this way, admittedly to another part of the United Kingdom, and admittedly not a great distance away, even though it means crossing a sea to get to Northern Ireland, it may, regrettably, mean that those who go would have to stay for slightly longer periods than the Home Secretary envisages. I hope that if that situation arises those concerned will ensure that the men who go there are volunteers.
  I appreciate that the power of the Home Secretary to direct such movements may he necessary, but I should like to keep the position open by saying that we may return to this in Committee. I was relieved by what the right hon. Gentleman said about Clause 1(2) and about the time-scale. That was not what one envisaged on first reading the Bill. I still, however, raise a cautionary note. I hope that it will be for as short a period as the right hon. Gentleman envisages, but one has to consider the possibility that it might be for longer than he suggests.
  We welcome the provisions of Clause 2, and the power that it gives to allow members of British police forces to join the Northern Ireland force for a period of service. As the right hon. Gentleman said, the difference between Clauses 1 and 2 is that these people volunteer to go there for part of their service. This interchange is valuable, and I was glad to hear the right hon. Gentleman say that similar arrangements are to be made by the Stormont Government. It was particularly in relation to the movement of members of the R.U.C. to the police forces in this country that the Hunt Committee laid such stress, because it believed that it would give them wide knowledge of police powers in this country.
  The Hunt Committee suggested that the R.U.C. should be subject to inspection by Her Majesty's Inspectorate. I understand from the Home Secretary that this has been accepted by the Stormont Government. Does this need legislation?
  The training recommendation in paragraph 128 of the Hunt Committee's Report is important. It says that members of the R.U.C. should have power to come here to train. I hope that the right hon.
  1012
  Gentleman is making sure that facilities for training are available, because we have an expertise in such matters as crowd control which we could usefully pass on to members of other police forces.
  We welcome the principle of the Bill. It is obvious from some of the interjections from the benches opposite that there is likely to be a Committee stage of the Bill, but I hope that the valuable principle of mutual aid between the police forces will not be lost, and that it will be to the advantage both of the police forces in this country, and the R.U.C.
  11.25 p.m.
  Mr. Paul B. Rose: There are two popular views of policemen. One tends to regard them as ogres intent upon depriving the citizen of his individual rights. The other assumes that a blue or even a green uniform automatically endows its wearer with some sort of angelic qualities. But policemen, like all bodies of men, can be good or bad; they can be provoked, like all of us, and, when provoked, they can be nasty. For this reason, they must be subject to the control of the community, and, in this case, to the House of Commons.
  What we have a right to expect of a police force in a democratic society is that they will respect equally all sections of the community with which they are dealing, and that their training and their demeanour in dealing with people will be such as to inspire confidence in their fairness and impartiality. One can be gentle while being firm, and, equally, one can be vicious while being lax. I believe that it is the feeling that some sections of the R.U.C., admittedly under great pressure in recent months, have not always lived up to this standard which makes this Bill necessary and generally welcome on this side.
  In my view, the hon. Member for Runcorn (Mr. Carlisle)—one is always pleased to follow him, and one has for him a great regard—entirely failed to deal with the background to the Bill. Without an understanding of that background, it is impossible to comment fairly on it. That the R.U.C. is no longer armed is a great tribute to my right hon. Friend the Home Secretary, for the manner in which he has up to now dealt with this very delicate and tense problem in Northern Ireland.

  1013
  It is sad that in any street in the United Kingdom people could be so incensed against a police force, as they were in the Falls Road, as to write, "RUC = child killers". That might be unfair, but it is no more unfair than the rather foolish allegation by one of the public relations officers for the police after the unpleasant incidents at Londonderry, when my hon. Friend the Member for Belfast. West (Mr. Fitt) was allegedly hit on the head not by a police baton of the R.U.C. but by a placard wielded by one of his own supporters, an allegation which was later refuted by the Cameron Commission.
  What is happier, and what should encourage the House, is the second photograph in this same document which shows Falls Road being patrolled by an unarmed R.U.C. man, with a military policeman by his side, in an atmosphere of relative peace and tranquillity. This is why some of my hon. Friends who welcome the Bill in general terms have the gravest misgivings—it would be out of order to deal with it now—about its counterpart next Wednesday, which threatens us with yet another paramilitary and, perhaps, provocative force in this delicate area.
  There is a great tribute to the Inspector-General in this paper, the Voice of the North—an Opposition paper with which I generally agree—for it describes him as
  " in every respect a truly professional policeman with a keen regard for fair play and an international reputation which is impeccable".
  That is an expression of something for which some of us on this side have been asking for many years. The Stormont Government, which came in for some lavish praise, have suddenly accepted what we have asked for for a long time.
  The interchange provided for by the Bill ought to raise the standards of the Royal Ulster Constabulary. It ought to encourage professionalism. It ought to inject an element of outside impartiality, and—I appeal here to my hon. Friend the Member for Preston, South (Mr. Peter Mahon) and hope he will agree—some humanism within the force in relation to the numbers drawn from the different communities. This is so necessary in a Province which often harks back to 1690 rather than to an age when we are trying to break down the barriers
  1014
  between the nations of Europe. The proposal for a United Kingdom Police Council is welcome also inasmuch as it will bring in representatives from various sections of the community and from wide strata of the public.
  I refer now to an interesting article written by Mr. Anthony Judge in the police magazine, in which he points out:
  " For the first time, the force is to have a police authority with roughly the same responsibilities as those of a British one. Its constitution is different, but Hunt was right to include representatives from outside the local authorities; universities, trades unions, lawyers and business interests."
  He goes on to say:
  The less that party politics and sectarian issues intrude, the better."
  He goes on to say:
  "It would be clear to any observer that for some years past attempts have been made to run the force on a shoe string. Items of equipment which most British forces now take for granted have yet to be intoduced into the R.U.C. Many of the buildings are old and totally unsuitable for police use."
  So let there be no mistake that I want to see a better equipped force, a better paid and better trained force; that is, a better type of police force than the type that has unfortunately lost the confidence of at least one-third of the population of Northern Ireland.
  It lost that confidence because of incidents such as that described in a letter addressed to me, with a name and address, from a Protestant gentleman in Belfast who describes how 10 policemen stood by while citizens of the United Kingdom who pay their taxes were turned into the street in Belfast and haw thugs—as he describes them—arrived at a home and gave a lady one hour to get out, and they were accompanied by two policemen.
  I do not say that in a spirit of antagonism, because I want to have a debate in which we look to the future, but it raises problems. One problem is that of those people who in the past, while members of the R.U.C., have transgressed, those who were responsible for the wild and vicious batoning which millions of us saw on our television screens; and one or two hon. Members were present at the time that my hon. Friend was struck on the head in that famous incident which led to the end of the so-called Convention of Westminster.

  1015
  Some of us would be interested to know whether the police photographs and the other photographs with regard to the incident well documented in the book "Bumtollet", by Bower Egar, are available so that these people who have transgressed in the past can be either punished or left out of the new force so as to inspire a new confidence on the part of the minority in Northern Ireland. Perhaps those who fired shots which they ought not to have done, which resulted in the fatality referred to in this unpleasant graffiti on the walls in Falls Road should also not properly be entitled to be members of a force which is to inspire confidence in Northern Ireland.
  The question that I want to put to my right hon. and hon. Friends is: are such members of the R.U.C., the present R.U.C., automatically to become members of the new force? Following on that, I believe that the force—[Interruption.]—the force as reconstituted, if that satisfies hon. Gentlemen opposite, and as restructured—
  Captain L. P. S. Off rose
  Mr. Rose: Perhaps I might be allowed to finish. The Bill provides for changes in the force, and in essence, to my mind, provides essentially a new force intended to inspire confidence because of its impartiality. The point of mutual aid is to inject an element of impartiality by bringing people over, as we have done in the command structure, who cannot be accused of partiality with regard to the two communities.
  I am not suggesting that the name has been changed or anything of that kind, but, in effect, we are trying to start the long haul to a situation where we have a police force which is widely respected. That is what I am trying to say. I hope that the hon. and gallant Member for Down, South (Captain Orr) will accept that that is what I am attempting to say.
  Much will depend on the officer corps in the R.U.C. As it stands after the passing of this legislation, how can one expect to recruit the people that my right hon. Friend referred to before in large numbers if their promotion prospects are to be damaged because senior officers in the existing R.U.C. are politically moti-
  1016
  vated or partisan in their political or religious views? This is something that we have to look into very carefully.
  Will the new Inspector-General, for example, be given a free hand if necessary—one has to go as far as this—to purge those elements that are guilty of partisanship or have been so in the past? Some of them are identifiable from photographs and films which are available to my right hon. Friend.
  It will be a long, slow haul to gain the kind of respect from all sections of the community which the R.U.C. must have if it is to carry out its functions as a police force. This is why I would always have preferred Westminster control.
  I am concerned that Clause 1 may mean that when British police are needed in Northern Ireland, and the British Home Secretary wishes them to be sent, they will not be sent unless the Northern Ireland Home Secretary also asks for them. Forgive me if I do not have the uttermost faith in all Home Secretaries in Northern Ireland. I remember a visit to the then Home Secretary, Mr. Brian Faulkner, who courteously received me about four years ago, immediately before the 50th anniversary of the Easter Risings, when he assured me that once all the trouble then was over they would be able to get rid of the Special Powers Act. Yet several years after we are still talking about whether we shall get rid of it. Let us not forget that a gentleman of the name of Mr. Craig was also a senior member of a Northern Ireland Government.
  Mr. John E. Maginnis: Is the hon. Gentleman aware that but for the existence of the special powers the Army could not operate in Belfast today?
  Mr. Rose: There is no reason why the Army could not otherwise operate in Belfast today, because there happens to be an Act passed in 1920, Section 75 of which tends to be forgotten very often in this House, which gives ultimate control to the Government at Westminster. When one considers that a gentleman like Mr. Craig was once a Minister and could again be a Minister, and that he wants to see
  "… a much stronger police force, aided by an armed auxiliary police force, and if there was further trouble the Amy would not be needed …"
  one begins to worry a little.

  1017
  When one hears Captain R. J. Mitchell, the Member for North Armagh, asking for
  "… a force similar to the National Guard in America which would ruthlessly and impartially deal with rioters ",
  and saying that he wants them
  " armed with tanks and flame-throwing bulldozers if necessary "
  one begins to worry about the possibility of a situation where the Home Secretary of Northern Ireland does not want the British police but we want them to go over there.
  I should like my right hon. Friend to look at this aspect. Are we again giving way to the same people to whom time and time again we have given way, and are we trying to walk a tight-rope so as to create goodwill on all sides, but really being intimidated by the Craigs of Northern Ireland?
  Are our policemen—and this is the crux of the matter—to be forced to operate under such obnoxious legislation as the Special Powers Act or the Flags and Emblems Act? I remember the most embarrassing time I spent at the Legal Committee of the Council of Europe having to defend our Government when we were unable to sign the European Convention on Human Rights in its entirety because of the Special Powers Act and our activities in Northern Ireland. I was in the rather invidious position of having to put our case.
  Mr. Eldon Griffiths: Am I not right in thinking that the public houses were closed in Belfast and Londonderry under the Special Powers Act, and was it not in the circumstances highly desirable that they should have been closed during recent weeks?
  Mr. Rose: I think that the hon. Gentleman would agree that to close a few public houses it does not need an Act which refuses the right to an inquiry after the death of a person in a police station, which allows arrest and search without warrant, which prevents a person communicating with a solicitor, an Act which I think it was Dr. Vorster who said that he would give his right arm to have in South Africa. Perhaps the hon. Gentleman is using a sledge hammer to crack his Guinness bottle. His comment is not relevant.
  1018
  The logic of the argument of the hon. Member for Runcorn is that if the Bill is to operate successfully Northern Ireland must fall into line with the accepted standards of the rest of the United Kingdom, with the abolition of the Special Powers Act and Acts which prevent people from wearing emblems which somehow appear to be provocative in Northern Ireland but in my constituency are quite acceptable.
  I welcome the Police Council for the United Kingdom but there is one provision above all that is abhorrent to me—subsection (4) of Clause 1. To me, the ultimate safeguard we have had in this House has been Section 75 of the Government of Ireland Act, 1920. I congratulate my hon. Friend the Minister of State because I think that she will tonight make her first speech as a Home Office Minister. I regard the Home Office as the most important Ministry in the Government and I am delighted that she will be replying to the debate. Perhaps she will tell us whether the effect of this provision is once again to resurrect the convention that we thought we had destroyed by providing that the Northern Ireland Parliament may make provisions notwithstanding anything in the 1920 Act. I am greatly disturbed that we are delegating a power which then overrides the original Statute of 1920. If that is not so, I shall be delighted. If it is so, then it is a grave step and one which I would ask my hon. Friends in Committee to vote against. If my hon. Friend the Minister of State accepts that it overrides Section 75, then the subsection must he struck out.
  Would it be an offence for an officer seconded, say, from the, excellent police forces we have in Manchester and Salford—many of whom I know personally and who do a good job there—to refuse to enforce a Section of one of these Acts. such as the Special Powers Act, which he found abhorrent to his conscience and which he would never be expected to enforce under the law as it stands in Manchester and Salford?
  Mr. Heffer: Or in Liverpool or Bootle.
  Mr. Rose: No doubt in Liverpool and Bootle as well but I have never had dealings with the police forces there.
  The Bill has many good aspects and many good safeguards. Although I am

  1019
  not a Member for Northern Ireland, as the Leader of the Opposition suggested last week, we all in this House have an interest in that part of the United Kingdom, where grave events have occurred. Last week, the right hon. Gentleman, rather petulantly after that remark, refused to allow me the privilege of intervening, although my right hon. Friend had given way many times for interventions.
  The Leader of the Opposition is not here. I wrote to him and asked him to be present because it seems to me that, whenever Northern Ireland is debated, he turns into a shy, retiring orange blossom and retires from the benches opposite. Yet he is able to make offensive remarks on his feet against back benchers who have not the privilege of being allowed to intervene. He has not come tonight. After his cheap gibes last week about Northern Ireland. he should realise that this Bill is being debated tonight because of the disregard of the situation in Northern Ireland by his party over a period of nearly half a century.
  On 27th April, 1967, my hon. Friends the Members for Glasgow, Kelvingrove (Dr. Miller) and Salford, West (Mr. Orme) and I wrote a report which we submitted to the then Home Secretary. It was in a compressed form almost word for word what Lord Cameron was to discover two years later. It comes ill from right hon. Gentlemen who have ignored these warnings to act in the way the Leader of the Opposition acted. So far as I am concerned, that chapter is now closed.
  This could be a good Bill. It depends on the context in which it is to work. It will not work as long as the Special Powers Act continues. It depends ultimately for its success on the answers which my hon. Friend will give tonight and upon some of the Amendments which I feel will be necessary in Committee in order to turn what is a good intentioned Bill into a really effective Measure which will restore the morale of the R.U.C. and give it the confidence of the whole of the people of Northern Ireland and not merely one section of them.
  11.45 p.m.
  Mr. Eldon Griffiths: I do not propose, Mr. Gourlay, to follow—
  Mr. MacDermot: On a point of Order. Is it correct, Mr. Deputy Speaker, for hon. Members opposite to continue to address you as Mr. Gourlay?
  Mr. Deputy Speaker (Mr. Harry Gourlay): I have already indicated to the House that we are meeting as a House and that I should therefore be addressed as Mr. Deputy Speaker.
  Mr. Eldon Griffiths: I did not intend, Mr. Deputy Speaker, to confuse your name and your office. Nor do I propose to comment on the speech of the hon. Member for Manchester, Blackley (Mr. Rose), although I noted with some interest that the hon. Member spoke of his desire to improve the confidence and morale of the Royal Ulster Constabulary. In his words tonight he did nothing towards that end.
  I welcome the Bill and I welcome as much as the Bill the way in which the Home Secretary introduced it and some of the things he had to say. He was able to paint on the whole a most encouraging picture of what is happening in the R.U.C. of the improvement in recruiting, the change in training methods, the move from a para-military towards a civilian role. To the extent that he has personally overseen this change, I pay my tribute to him. Similarly, I pay a tribute, in which I am sure the Home Secretary will join, to Sir Arthur Young. In so far as these changes have been brought about and brought about speedily, a large measure of the credit goes to Sir Arthur for the work which he has done.
  I also think it right to recognise that it takes great courage and flexibility on the part of the men and officers of the R.U.C. to make these changes in so short a time. It is a force with a great tradition and with long and bitter memories, and the ability to accept change that these men and officers have shown is greatly to their credit.
  It is only fair to add that the tributes which have come tonight and which I hope will continue to come to the R.U.C. are not couched in quite the same language as we were hearing some time ago. In paragraph 14 of its report, the Hunt Committee said:
  " We feel bound to deplore the extent to which some press and television coverage of these events has resulted in magnifying, in the

  1021
  minds of readers and viewers, the actual extent of the disorders, in generalising the impression of misconduct by the police and of bad relations between police and public …"
  The House should endorse that conclusion. While there may have been occasional incidents of which the R.U.C. is and was ashamed, the basic fact is that the great majority of officers and men of the R.U.C. comported themselves with dignity and calm. They deserve the confidence and the vote of confidence of the House.
  I welcome the Bill. But we have to look at it with care. In particular, we should recognise the extremely wide powers that the Home Secretary will be taking under Clause 1(2). As my hon. Friend the Member for Runcorn (Mr. Carlisle) said, the language is basically the same as that of Section 14 of the Police Act, 1964. But there are some important differences. The Police Act, 1964, applies to mutual aid between forces in England and Wales or between the Scottish forces. This is perfectly reasonable because basically all the police forces of England and Wales and of Scotland are the same kind of forces. They wear the same uniform, they have the same standards of admission and of training. Their men join in the expectation of maintaining those conditions of employment throughout their service career, and they are trained to have an instinct to act as an unarmed civilian police force operating in the essentially and, I believe, uniquely peaceful conditions of this country.
  Unfortunately, it is not like that in Ulster. Ulster has a border, and the border will not go away because this House passes the Bill tonight. Ulster has an internal security problem. It may be that the internal security problem is reduced, but it will not go away because this House passes the Bill tonight.
  Ulster too has a number of people who do not accept the authority of the Government here or of this House. Ulster even has some representatives who have gone on record as saying that there is need for a revolution to destroy the union with England and to break up the Constitution as we know it. No one can describe these as comparable conditions.
  Mr. Peter Mahon: If the hon. Member maintains that there are people who will not accept the authority of this Govern
  1022
  ment, does he not agree—[Interruption.] I am sorry, I have forgotten my point.
  Mr. Eldon Griffiths: I have no doubt that the hon. Member may come to it a little later and, of course, I will give way again. I am merely making the point that conditions in Ulster and conditions in England and Wales are not the same. It is because those conditions were not the same that we have the Bill tonight.
  Mr. Peter Mahon: I am indebted to the hon. Member for his courtesy in giving way again. People refuse, and will continue to refuse, to accept the authority of this Parliament, perhaps wrongly in many instances, but because they recognise the border as an anachronism they can never accept it. The whole history of Ireland and what they have been through dictates that course as being the right one for them.
  Mr. Eldon Griffiths: That is another subject. It is for the House of Commons to decide these matters. But it is not for the police to be placed in a position where they are arguing the question of the border. The police must have objective conditions in which to work. That is the important point.
  All I am seeking to demonstrate is that the circumstances in Ulster are not the same as the circumstances in which the police operate in this country. They are not the circumstances in which the police volunteered to serve when they joined the British police forces. That is the relevant point.
  And it is because the conditions are so dissimilar that there was the revolutionary commune in Londonderry and, for a while, widespread fighting between what I am bound to call urban guerrillas and the police. [HON. MEMBERS: "Come off it."] Hon. Members opposite may not like my descripticn, but it is a perfectly objective description: urban guerrillas who were fighting the police. There was shooting, Caere was bombing,there was a state —
  Miss Bernadette Devlin: The hon. Member has stated that there was shooting and that there was fighting by the urban guerrillas. I ask the hon. Member to accept that there were two sides fighting. The attack was guerrilla on both sides and in Londonderry all shots came from the Royal Ulster Constabulary and their supporters.
  Mr. Eldon Griffiths: It is immaterial where the shooting came from, for the purpose of this Bill. We are not fighting the battle of Londonderry all over again. What we are concerned with is the question whether or not British police are to be sent from this country into the different conditions of Northern Ireland. I say again, there was shooting, there was bombing, there was a condition of civil anarchy. These are objective facts, and these are the conditions into which this Bill, if it were to be implemented at once, would commit British policemen to go.
  So I say simply, these are not conditions into which any British Government ought to send the civilian British police as they exist today. These are conditions for the Army, and it is precisely for that reason that the Government were compelled to send the Army.
  Miss Devlin rose
  Mr. Eldon Griffiths: The hon. Lady will have her chance later.
  The Home Secretary has said, and I think his words are extremely important, that he will not move the Commencement Order till he is satisfied that conditions in Ulster have more or less been equalised with those in the United Kingdom. For that assurance I, for one, am extremely grateful. The Home Secretary knows that that is the nub of the issue. I am bound to say, though, that he worried me just a little when he went on to define this as not till conditions in Ulster approximate more closely with British conditions than they have in the recent past. That was his phrase: not till conditions in Ulster approximate more closely with British conditions than they have in the recent past would he move the Commencement Order. I think he ought to be a little more precise. I think he ought to indicate a little more closely how and when he is to make that decision that conditions have been mutualised between Britain and Northern Ireland. Perhaps I can put it in a phrase to him. I am all for mutual aid when the conditions of service have been mutualised.
  That means—I will define it—
  Mr. Orme: Will the hon. Member declare his interest?
  Mr. Eldon Griffiths: My interest is well known to the House. I have a connection with the Police Federation. If that will satisfy the hon. Gentleman, bless him.
  I go on to define the conditions on which the Home Secretary should satisfy himself. First, the political situation must be seen to be normalised; that is to say, that communal violence in Ulster must be brought under control. Police asked to go from this country must be able to see in advance that armed fighting is no longer going on. I am happy to recognise that this is gradually coming to be so.
  The second condition the police are entitled to request is that the State security role which the Royal Ulster Constabulary have so long had to discharge is laid aside, so that no British policeman sent to Ulster need be expected to undertake anything even approximating to the para-military or internal security role. The British police must be assured that this is not the game into which they are being sent.
  Thirdly, the situation under the Special Powers Act requires to be cleared up. I am not at this stage—because I hope there will be a Committee stage for the Bill—going to take any precise view on this matter, because it is complex. But I repeat what I said. The pubs could not have been closed in Ulster during recent weeks without the Special Powers Act.
  There is a real problem here. The Home Secretary will recognise that a policeman on duty in Ulster, whether he comes from Liverpool or Londonderry, must obey orders. It is therefore essential to be clear whether or not orders arising under the Special Powers Act shall be binding upon him. This is a detailed point, but it is important that it should be clarified before any policemen are asked to move.
  The fourth condition, and one which to a great extent the Home Secretary has already met, is that arms should be "out" for the purpose of Ulster policing. I was glad to hear the Home Secretary say that the Royal Ulster Constabulary is now patrolling without weapons, and I think it shows a great deal of courage to do this in some parts. Will the Minister say whether this is now the normal situation, or whether this is an experiment likely to last only a short time?
  Mr. Stanley R. McMaster: Is my hon. Friend aware that a year ago the decision was made that the police should patrol without arms, and six months before the trouble started they were patrolling without arms?
  Mr. Eldon Griffiths: I am obliged to my hon. Friend for that information, which I did not know.
  The fifth and last condition on which the police should be assured is that the whole question of the B Specials has been resolved. We need to see that the Ulster Regiment has been set up and that members of the B Specials have been entirely removed from normal policing. Normal policing is not their business, and the police are entitled to that assurance.
  I turn now to detailed points on the Bill, one of which concerns the British police forces who may be asked to provide the mutual aid. This is an enabling power, and we all hope that the need for it will seldom, if ever, arise, but if police are sent from Britain to Northern Ireland—by agreement I hope—it is possible that they will have to come from those north-western forces which are closest to Northern Ireland. It would be administratively convenient for them to be taken from Lancashire, Liverpool and Bootle, Manchester or Glasgow. Now it is well known to the House that these forces are among the most severely undermanned in the Kingdom. I hope the Home Secretary will bear in mind the needs of those supplying forces before he asks them to move men to Ulster. I feel sure that the Minister will be able to give that assurance, but I believe she should put it on record.
  The demands on the police forces in those areas are growing. With the growth of crime, traffic, drug-taking and demonstrations, and the enforcement of all the laws which we pass, how can we expect the police to cope without providing them with the means to do it? There is already a condition of overstretch of our domestic police services, and we should have an assurance that forces that are already overstretched will not be required to bear the brunt of reinforcements for Ulster.
  My next point of detail concerns the number of British police officers—I think that there may be less than half a dozen already in Ulster, including Sir
  1026
  Arthur Young. What precisely is the status of those British policemen? Under what powers were they sent there—I cannot find any—and what are their conditions of service and salaries? I hope that the Minister will be able to regularise the position of these men.
  How will our home authorities recover their costs, and how will the Northern Ireland Government, if we are to be asked to send help, recover their costs from the domestic police authorities? If the Minister cannot answer this question tonight, there will be ample opportunity in Committee to discuss the matter; but our home police authorities require to know the position.
  I welcome what the Bill sets out for the Police Council. Indeed, I had the privilege of recommending this to the Hunt Committee. However, I wish to be clear on precisely who will represent the Royal Ulster Constabulary on the Police Council. On the staff side, British police forces are represented by a combination of chief police officers, superintendents and the Police Federation. It is important that the R.U.C. should have confidence that its representative body, representing the rank and file, will be physically there. It is not enough that they should be represented, as has happened too often in the past, by appointed senior officers. It is essential that the Council has the elected representatives of the men.
  The representative body of the R.U.C. has done a good job. But it has not been allowed to grow in experience or authority to anything like the strength of the police federations of England, Wales and Scotland. It is, therefore, essential that the men's own representative body is assisted with, for example, office space and time off for its officers —particularly to enable its chairman and secretary to do their work competently —and it is vital that they should be represented on the Police Council along with the rest. This may require some action on the part of the Northern Ireland Government. If so, I hope that the Minister will give the Stormont authorities all possible encouragement to do this, as I have every reason to believe is their intention.
  I draw attention too to the question of police pensions, about which there is an interesting little wrinkle in the Bill.

  1027
  Police pensions will, at least for 12 months, be subject only to the negative procedure in the House if new Orders have to be made. This is rather unusual. No doubt there is a special reason for this in Clause 5, and perhaps it is to achieve greater speed. I hope that the Minister will clear the matter up.
  Finally, I welcome the Bill and I have not the slightest doubt that the British police will respond, as they always do and as they always have done, to any call that is made on them. I hope, however, that it will not be necessary to make that call very often.
  To sum up the police must not be asked to go into a situation for which they have not been trained and of which neither they nor their families could have had any expectation when they first joined the service.
  We must not, in helping Ulster—much as we wish to do that—weaken our home forces, and particularly those in the North-West which are at present severely under-manned.
  We must also—and this is crucial—make it worth the policeman's while if he is asked to go to Ulster to undertake new duties in different circumstances. In many walks of life this might be described as a change in his contract of employment. In such circumstances he might expect a little something to compensate for the new duties. While this may be in general a subject for the Police Council, it is important, at a time when the police are in considerable difficulties, that it is made worth while for them to undertake new duties in these circumstances.
  Mr. Eddie Griffiths:Is not the hon. Gentleman contradicting himself? He said that under no circumstances should policemen in England and Wales be asked to undertake duties in Northern Ireland for which they had not been trained and for which they had not enlisted. He went on to say that policemen called on to do such duties should be compensated for doing them.
  Mr. Eldon Griffiths: The hon. Gentleman makes a logical point but he will understand that even though the conditions be broadly mutualised in Northern Ireland, there will always remain a
  1028
  difference of circumstance, a condition, possibly, of tension. I mentioned some of the points: the open border, the fact that there is an extra-constitutional opposition, if that is the polite way to describe it, in Northern Ireland. Therefore, however much we seek—and, I think, will find—mutualisation of conditions, there will always be a little extra strain on the officers who go there. I think that the hon. Gentleman will accept that view.
  If we ask our police to undertake new obligations to go to Ulster, where there has been storm and bitterness, it is even more crucial that the House should demonstrate its confidence in them. It should back them all the way. There will always be circumstances in which we shall wish to complain about the police, and it is right that we should. That is what Parliament is for, and I honour hon. Members who have complaints to make. But it is essential when we seek to change a police service with the tradition and pride of the R.U.C. and seek as well to send, occasionally, British forces to help it, that this House of Commons should show its confidence and support for the police.
  I cannot end without saying that there are hon. Members who, in respect of the R.U.C., have done neither themselves nor the House of Commons any credit. I wish to read one sentence, and one sentence, only from a book shortly to be published on this subject. This was after the incident at Burntollet, where passions ran high. It reads:
  " There was only one way to deal with the police force, I said: give them three weeks for every honest man to get out, then systematically shoot the rest."
  That was said and written by the hon. Lady the Member for Mid-Ulster (Miss Devlin). It is no way to command the confidence and help the morale of the British police, whether Irish, Scottish, English or Welsh.
  Miss Devlin: On the point of order, Mr. Deputy Speaker. Is it in order for the hon. Gentleman to read out of context a number of statements which were, in fact, made to a police officer who had on that occasion struck me?
  Mr. Deputy Speaker(Mr. Harry Gourlay): It is in order for the hon.

  1029
  Gentleman to quote. It is not a matter for the Chair whether it is in context Dr not.
  Mr. Rose: What was the context?
  12.13 a.m.
  Mr. Gerard Fitt: I am amazed at the low temperature of this debate so far. I can assure hon. Members that when the police force is discussed in Northern Ireland there will be many reasons for raised passions on both sides. I accept that this Bill is yet another measure in the reform which has been brought about at the insistence of the British Government and reluctantly accepted by the Northern Ireland Government.
  The hon. Gentleman the Member for Runcorn (Mr. Carlisle) made great play of the fact that the Northern Ireland Government had accepted the recommendations of the Hunt Committee, and seemed to imply that they should be congratulated on it. I wonder whether he is aware that the Northern Ireland Government will tomorrow refuse to accept. in the most gracious way, those recommendations? Tomorrow, the Opposition Members there have a Motion on the Order Paper welcoming the conclusions of the Hunt Report, and the Unionist Government of Northern Ireland have gone out of their way to put down an Amendment taking note of the conclusions, and not welcoming them. I want to impress on the House that we had the Hunt Committee set up at the insistence of the British Government and any changes which have taken place in the police structure of Northern Ireland have been brought about through pressure by the Home Secretary.
  During his recent visit to Northern Ireland, the Home Secretary said on many occasions—and I agree—that respect for the forces of law and order is the cement which hinds together the fabric of a democratic society. Yet, after almost 50 years of self-government in Northern Ireland it has taken an absolute convulsion in which many people lost their lives and many hundreds, of all ages, were injured to enable us to look forward to the day when we would have an impartial police force.
  I welcome this Bill and I hope that it will set the standard for police activity in
  1030
  Northern Ireland for years ahead. Hon. Members in all parts of the House will have reason to support us when we say that we have had real suspicion that the Royal Ulster Constabulary has been acting as the political aim of the Government there. They have at all times administered the law in favour of the Unionist Government and not as an impartial police service. This has been brought out by an investigation by the Cameron Commission, which had absolutely no doubt of the infamous conduct of members of the R.U.C. in the last 12 months. Hon. Members watched their television in October, 1968, and saw District Inspector Ross McGimpsey, with a blackthorn stick, viciously beating an 18-year-old boy into the ground. Had that man been a member of the police forces of Scotland, England or Wales. would he not have been dismissed immediately?
  Mr. Stratton Mills: To put into context the incidents of 5th October, will the hon. Member for Belfast. West (Mr. Fitt) comment on the views of the Cameron Commission in its Report, which says on page 27 that the hon. Member:
  " sought publicity for himself and his political views, and must clearly have envisaged the possibility of a violent clash with the police as providing the publicity he so ardently sought. His conduct in our view was reckless and wholly irresponsible in a person occupying his public positions."
  Mr. Deputy Speaker (Mr. Harry Gourlay): Order. I hope hon. Members will not depart too far from the contents of the Bill. While some background is obviously necessary in discussing the Bill, I hope that hon. Members will not stray too far.
  Mr. Fitt: I have repeatedly said that I regard that particular section of the Cameron Report as rather a compliment than a criticism because it was only the events which happened in Derry on that day as referred to by my hon. Friend the Member for Manchester, Blackley (Mr. Rose) which brought the attention of the British public to what was happening in Northern Ireland. They were able to see on their television screens what was happening there when thousands of people were demanding the right to hold a peaceful protest.
  Mr. Orme: It should be put on record that many of us in this House applaud what my hon. Friend did in attracting publicity which has brought condemnation by a section of the Cameron Report. I and many of my colleagues refute that section. We believe that my hon. Friend was bringing into the dispute publicity to prevent further disorders, which unfortunately arose in Northern Ireland. My hon. Friend has the support of a large section of hon. Members on this side of the House.
  Mr. Fitt: The hon. Member for Belfast, North (Mr. Stratton Mills) has conveniently forgotten another paragraph in the Cameron Report, which states that the Commission was under absolutely no doubt that while I was walking in the parade unarmed and defenceless I was set upon by the police and battered to the ground.
  Mr. Russell Kerr: I saw it myself.
  Mr. Fitt: My hon. Friend was there with me on that occasion. For 50 years in Northern Ireland there has been no confidence by one-third of the community in the activities of the Royal Ulster Constabulary. The R.U.C. has at all times acted as the militant arm of the Unionist Government and, on many occasions, of the Orange Order.
  I am the first to say that there are many honourable men in the R.U.C. I have never gone on record as condemning in a wholesale way each and every individual member of the R.U.C. There are many honourable men in it. There are many members of the R.U.C. who did not want to be in Derry on 5th October or in Armagh or in Newry or in the other trouble spots in Northern Ireland recently. But they were forced to take part in those actions because of dictates by the Unionist Government.
  I agree with the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths) that the Home Secretary may be arrogating to himself the right to send a policeman to a certain place in Northern Ireland without that British police officer having any say in whether he should be sent there. I agree with the hon. Gentleman there. If the Home Secretary does not have the fullest consultation with the authority and the police officers con
  1032
  cerned before he dispatches them to Northern Ireland, it should be fully resisted. That is what we have objected to in Northern Ireland over the past 50 years where the Home Secretary was able to tell ordinary members of the police force to act in a political way. I would support any hon. Member in whatever stand he may take to prevent the forces of law and order in this country from acting as a political arm of whatever party may be in power.
  I welcome the Bill. Any criticism which I may have to make is made because I do not believe that the Bill goes far enough. Hon. Members opposite should take it as rather complimentary that I, an Irishman, am extending a welcome to British police forces to come to Northern Ireland. I have faith in that impartiality of the British police forces. I know that they do not act from any political motive or with any political bias. I am certain, after having watched members of the British police forces, particularly the Metropolitan Police Force on 27th October of last year in the Vietnam demonstration which took place in the heart of this city, that they would have been quite capable, and would be quite capable, of crowd control in Northern Ireland without the use of batons, water cannon, and undue violence.
  The hon. Member for Bury St. Edmunds seemed to argue that British policemen should be seconded to Northern Ireland only when there is normality in the situation. When the situation is normal in Northern Ireland, there will be no need for British police forces to come there. I hope that it will be unnecessary in the future, but I want them to come there now so that, if there are further demonstrations, British police will be in the vicinity and will be able to influence their colleagues in the R.U.C. and show them that it is unnecessary to use brutality against people who are unarmed and defenceless.
  I am sure that I shall have the support of the hon. Member for Bury St. Edmunds in the submissions I am about to make. Clause 1(2) obliges the Secretary of State to await a request from the Minister of Home Affairs in Northern Ireland or some senior police officer before dispatching British police officers. I should like the Home Secretary to be in the position of being able to ask a

  1033
  number of volunteers from British police forces to go to Northern Ireland if necessary, rather than having to force men to go there. I make that suggestion because in March and April of this year, just after the election, when the former Prime Minister, whom we all admired as a man who was trying to bring about a better community, fell from power, there were a number of explosions. These were no doubt the work of a subversive organisation. Water mains were blown up, and an electricity transformer was blown up. Members on the opposite side put forward the view that these attacks were carried out by members of the illegal extreme Protestant U.V.F. forces. We were repeatedly told from the Government side that suspicion also attached ID members of the I.R.A., but we now know that the I.R.A. was in no way involved.
  From March and April until two or three weeks ago none of the people involved in those explosions was apprehended, and one wondered why there did not seem to be any great anxiety on the part of the police to apprehend those who were responsible. Then a new Inspector-General was seconded to Northern Ireland, Sir Arthur Young, and here I agree with those who have spoken about him. In my estimation, and in the estirnation of many people in Northern Ireland, Sir Arthur Young is a wonderful police officer. He has done a great deal to restore confidence in the R.U.C. even as it is at present constituted. He has worked wonders in the short time that he has been there, and we hope that he will be with us for many years to come.
  What worries us is who will succeed him. He may leave Northern Ireland in two or three years' time. The officers under him have been members of the R.U.C. for many years. We have no faith in the county inspectors, the district inspectors, and the commissioners. We do not believe that any of them could compete with the efficiency and the impartiality which we are experiencing under Sir Arthur Young.
  It appears to me, and to many others, that the R.U.C. was not terribly anxious to apprehend the perpetrators of the explosions in March and April, and I should like that to be confirmed or contradicted. It has been said in Northern Ireland in recent weeks that on taking
  1034
  up his post as Inspector-General Sir Arthur Young sent for the details of the explosions and the records of the men who were suspected of having been involved, and immediately gave orders to arrest certain persons, and those people are now awaiting trial. if Sir Arthur Young had not been made Inspector-General, would those arrests have taken place? I have a strong suspicion that they would not.
  Mr. Deputy Speaker (Mr. Harry Gourlay): Order. I think that the hon. Member must relate his remarks a little more closely to the Bill. The background is interesting, but it is not relevant to the Bill.
  Mr. Fitt: I agree with you, Mr. Deputy Speaker, but I am trying to illustrate my point by saying that we welcome the secondment of British police forces because we accept that they are impartial.
  Mr. Eldon Griffiths: As I understand it, the Northern Ireland Government have accepted the principle of inspection by Her Majesty's Inspectors of Constabulary. To that extent it is plain that the problem to which the hon. Gentleman alludes could not arise again if Her Majesty's inspectors are doing their job. This is a real safeguard which the Northern Ireland Government have accepted.
  Mr. Fitt: Yes, I agree that the Northern Ireland Government have, albeit reluctantly, accepted many of the recommendations in both the Cameron and the Hunt Reports, but what I am urging upon my right lion. Friend is that he should have the right, when it appears to him, or if information is laid at his disposal, that the Northern Ireland Government are not acting or do not seem to be acting to detect certain criminals, to dispatch British police officers to Northern Ireland, after consultation with the United Kingdom force, so that they may inquire into crimes which have taken place. I believe that the R.U.C. have on occasion, perhaps reluctantly, been forced to act as a political arm of the Northern Ireland Government, and I hope that, in view of the Hunt Committee's proposals, that will never again happen.
  What is to be the position of a British police officer in Northern Ireland who feels that he has to object to undertaking

  1035
  a certain duty, arrest or investigation because he believes that it would be repugnant to the standards of police service as he has known them in this country? There is the example of the Special Powers Act. My right hon. Friend said that he hoped that British police officers seconded to Northern Ireland would not have to be involved in the implementation of that Act. I should like to see that written into the Bill.
  There is a law in Northern Ireland known as the Flags and Emblems Act, under which certain flags and emblems are prohibited, under severe penalties. In this country, in Hyde Park every Sunday, one can see the flags of many different nations as the protest meetings and other meetings take place at that well known assembly point. Many a time, I have seen flags of the Irish Republic being flown there. In Northern Ireland it is illegal to fly the flag of the Irish Republic. The flag of any other country in the world may be flown there without giving offence, but it is illegal to fly the flag of the Irish Republic.
  One can readily envisage a situation in which a British police officer accompanied by a Northern Ireland police officer is on street patrol duty in any part of Northern Ireland, but particularly in some streets of Belfast, and he sees some individual wave the tricolour. This would not unduly concern the British police officer, especially if he was a member of the Metropolitan force, because he probably sees flags waved on all sorts of occasions and for all sorts of reasons. He would not be particularly annoyed. But his Northern Ireland colleague would say. "Is not that very provoking? I think we should arrest that fellow for contravening the Flags and Emblems Act". The British police officer would reply, "It is not provoking me. I do not see any harm in it". The other one would say, "I shall report you to our senior officer, to the district or county inspector", and the poor British police officer would find himself in serious trouble because he did not go out of his way to arrest someone who he did not believe was committing an offence anyhow.
  That is the sort of situation in which British police officers could find themselves. When seconded to Northern
  1036
  Ireland, British police officers should not be forced to undertake duties which are repugnant to the service which they have known in this part of the United Kingdom.
  My right hon. Friend referred to the Special Powers Act. The hon. Member for Armagh (Mr. Maginnis) tried to make an excuse for it this evening by saying that it was only by virtue of the Special Powers Act that the British military are now in Northern Ireland. That is utter nonsense, because the British military force—
  Mr. Maginnis: If one reads the record—
  Mr. Speaker: Order. We cannot discuss the military in this debate.
  Mr. Fitt: I just wanted to point out that they were there under other legislation, not because of the Special Powers Act. The Special Powers Act, one of the most draconian Acts that has ever existed on the Statute Book of Northern Ireland —it still exists there—has been condemned by all freedom-loving countries of the world. It would not be tolerated in any country outside the Iron Curtain. It is an acute embarrassment to all hon. Members in the House. Many of them are deeply concerned
  Mr. Orme: Except hon. Gentlemen opposite.
  Mr. Fitt: I agree with my hon. Friend. Except those who represent the Unionist Party in this House. They have tried at all times to find a justification for the existence of the Act.
  My right hon. Friend said he hoped that British police officers seconded to Northern Ireland would not be placed in the position of having to enforce the provisions of the Act. I would have hoped that he would go much further in that direction and ensure that it was written into the Bill in Committee that in no circumstances will members of the British police forces be called upon to operate the provisions of that notorious Act.
  Mr. McNamara: Does my hon. Friend, in the course of his speech, intend to ask the Minister of State whether there are any people at the moment in prison in Northern Ireland under the Special Powers Act, what is the nature of the complaints, and whether any of them are

  1037
  there for holding documents which may have been duplicated, editions of books and photostat copies, as an example of the situation?
  Mr. Fitt: I am delighted that my hon. Friend has raised that point. In Northern Ireland there is something of a contradiction at the moment. As we understand it, in Northern Ireland—I know that my hon. Friend who is to reply will attempt to give the information for which I now ask—it is stated that two men are still detained under the provisions of the Special Powers Act. We have had statements made both in this House and in Northern Ireland that no one is in prison now because of the provisions of the Act. I should like to have the matter clarified once and for all so that we know exactly where we stand in relation to the implementation of the Act at present.
  It is a question which should be answered so that the people of Northern Ireland will know whether to accept the remarks by spokesmen in the Northern Ireland Government and my right hon. Friend the Home Secretary when he stated that it would be hoped that within the very near future the Act should be repealed or abolished.
  If at the present moment when we are discussing reforms—and this is one of the measures of reform—there is any person in Northern Ireland detained under the Act, it makes nonsense of my right hon. Friend's pious hope this evening that British police officers seconded to Northern Ireland should not be asked to implement the provisions of the Act.
  I find myself in the position of accepting the Bill as another instalment in the reform package which has been brought about at the insistence of this Government. But I welcome it more particularly—here I shall have the support of my right hon. Friends—because it is a further erosion of the ridiculous convention which existed for so many years and prevented us from discussing Northern Ireland matters in this House. We have now arrived at a position where we can discuss matters relating to Northern Ireland.
  Because of the terrible price that we had to pay for this in the loss of lives and property and disruption in Northern Ireland we are in the position to do that if the House of Commons is going to accept its full authority over all matters,
  1038
  persons, places and things, according to the wording of Section 75 of the 1920 Act.
  I think that the Home Secretary will see the seriousness of the positions as it exists in Northern Ireland. We want the Bill. We realise the importance of it. We realise that British police officers seconded to Northern Ireland will act in a very impartial way. We want now to set down the basis for an impartial police force in Northern Ireland which will act in the interests of all its citizens. That is the request I make on behalf of my constituents and an awful lot more people who do not live in my constituency. I hope that my hon. Friend will be able to accede to this request.
  12.40 a.m.
  Captain L. P. S. Orr: My hon. Friends representing English and Scottish constituencies will be surprised to learn that the hon. Member for Belfast, West (Mr. Fitt) has made a moderate speech—moderate for him. We welcome that. The hon. Member welcomed the Bill, and we are glad that we have his support, as is the Home Secretary, no doubt. But on examination of what he said I do not think he has necessarily made a terribly good start. I think that he would accept from me that it is not the best way to bring about confidence in the police force to say that one-third of the population for 50 years has had no confidence in the impartiality of the Royal Ulster Constabulary. I repudiate that completely. I do not think it is true. It is no service to the cause the hon. Member has at heart, the restoration of the confidence in the police force of the whole community, of whatever class or creed, to say that he has no confidence in the present senior officers of the Royal Ulster Constabulary.
  Mr. Fitt: Some of them.
  Captain Orr: I am sure I am not misrepresenting the hon. Gentleman. If I am, I will withdraw. He said that if perchance Sir Arthur Young had to leave his office in the next two or three years he had no confidence, in any of the present officers as being fitted to be his successor. Perhaps the next time the hon. Gentleman is being moderate he would be more careful to avoid that kind of exaggeration and to weigh his words a little more carefully. I believe that

  1039
  at heart the hon. Gentleman wants to see what we all want to see, the Royal Ulster Constabulary in a position to command the respect of the entire community. This we have in common, and for this reason we both support the Bill.
  The hon. Gentleman talked about the scenes on television as a result of which so many people lost confidence in the impartiality of the police.
  Mr. Fitt: The British public.
  Captain Orr: I would draw the hon. Gentleman's attention to what the Hunt Committee said, part of which has already been quoted by my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths). The hon. Gentleman has said that he welcomes the Hunt Report. One takes it that in welcoming it he accepts it. The Committee stated:
  "We feel bound to deplore the extent to which some press and television coverage of these events has resulted in magnifying, in the minds of readers and viewers, the actual extent of the disorders, in generalising the impression of misconduct by the police and of bad relations between police and public, while sometimes failing correspondingly to illustrate the calm which has prevailed in most parts of Ulster, or the degree of deliberate provocation, the danger and the strain under which the police frequently and for long periods, tried to do their duty, as well as the fact that the great majority acted not only with courage but with restraint."
  I trust that the hon. Gentleman accepts that.
  Mr. Fitt indicated assent.
  Captain Orr: But what he said is not consistent with that acceptance. However, I am glad to have his acceptance. It is a great step forward.
  Mr. Heffer: I draw the hon. and gallant Gentleman's attention to page 28 of the Cameron Report, which deals with precisely the circumstances to which my hon. Friend the Member for Belfast, West (Mr. Fitt) referred. The report says:
  "The procession marched straight up to the police, and it appears to us established on the evidence that at this stage batons were used by certain police officers without explicit order, although this is denied by the police. We regret to say that we have no doubt that both Mr. Fitt and Mr. McAteer were batoned by the police, at a time when no order to draw batons had been given and in circumstances in which the use of batons on these gentlemen was wholly without justification or excuse."
  1040
  I saw that incident myself on television and I thought that it was most horrible.
  Captain Orr: That is not the point of the hon. Member for Belfast, West, to which I was referring. I was referring to the generalisation he made, and I was adding that the Hunt Report is much more important in the context of this Bill, since it is upon chapter 7 of the report that the Bill is founded. The Hunt Report is more relevant to the Bill, therefore. That is why I emphasise page 14 of the report and I am glad to record that the hon. Member for Belfast, West accepts it. I think that is very good.
  Mr. Rose: Would not the hon. and gallant Gentleman agree that there is no inconsistency between the fact that some incidents may well have been exaggerated in the public mind and the fact that one-third of the population lost confidence in the police? Does not he also agree that my hon. Friend the Member for Belfast, West (Mr. Fitt) is making precisely the point that because perhaps incidents of this very unpleasant kind, which we witnessed, do get out of proportion, one loses confidence, and that this is why the one-third of the population lost confidence?
  Captain Orr: It may well be that one-third lost confidence but the hon. Member for Belfast, West exaggerated by suggesting that for 50 years one-third of the population had had no confidence in the R.U.C. These are two very different things. I certainly accept. as did the Hunt Committee, that television coverage, which it criticised, did have the effect of making one-third of the population, or certainly a large proportion, since that is perhaps putting the figure too high, lose confidence in the police. But the Hunt Report says clearly that this was not the fault of the police but the fault of quite a number of things.
  Mr. Fitt: Coming from Northern Ireland, the hon. and gallant Gentleman will remember that, in 1953, an unjustified baton charge took place in Pomeroy. in County Tyrone, when hundreds of innocent people were beaten by the R.U.C. Unfortunately, at that time we did not have television so the British people did not get to know what was

  1041
  happening. As my right hon. Friend the Prime Minister said in this House during a debate on Northern Ireland in a aswer to the hon. and gallant Gentleman, people here did not know what was happening because they used to have to rely on reports from people like the hon. and gallant Gentleman, but now there is British television.
  Sir David Renton: On a point of order. May we have your guidance, Mr. Speaker, on the range of the debate? The Bill suggests various ways in which the police forces of England, Scotland and Wales may be called to assist the maintenance of law and order in Northern Ireland. It does not deal with the disturbances which have taken place in Northern Ireland and which have been the subject of various reports. Is it in order for us to discuss, apart from passing references, all those disturbances and the causes which no doubt led to the Bill?
  Mr. Speaker: With respect, the right hon. and learned Gentleman should leave the Chair to rule what is in order. I gather than the present argument of the hon. and gallant Member for Down, South (Captain Orr) is whether there should be confidence in the new co-operation between the Royal Ulster Constabulary and the British police forces and the reasons why that confidence may or may not exist.
  Captain Orr: In any case, I intended to leave the purely background situation, because what we are discussing is the necessity for ending the isolation in which the R.U.C. has stood and to which the Hunt Committee drew attention. It is difficult to discuss it without looking at the Hunt Report as a whole and realising that part of the operation is the removal from the R.U.C. of the para-military role which it has had for many years and which has been an exceedingly difficult role for it to fulfil.
  I have said in the House before that the Royal Ulster Constabulary is probably one of the finest police forces in Western Europe. It is easy to be wise after the event, but, looking back, it has had to carry a task which it ought never to have had to carry. It has had to carry a role which ought properly to have been carried by the forces of the Crown. It
  1042
  has had to carry out military tasks which it ought never to have had to carry out for so long. Looking back at the burden which the R.U.C. and the Special Constabulary have had to carry ever since the I.R.A. troubles of a decade or so ago, the police forces in Ulster have had to do a job which they ought never to have had to do for so long, para-military functions which for a long time now should have been performed by the forces of the Crown.
  What is being done now is right. Military operations are properly to be the responsibility of the military authorities which we are to debate on Wednesday. As a corollary, the Royal Ulster Constabulary is being civilianised, to use a term used by an hon. Member opposite, and as part of that it is being brought within the ambit of the rest of the United Kingdom police forces.
  As it stands, the Bill is admirable and I agree with the hon. Member for Belfast, West that we must support it. I was interested in what the Home Secretary had to say about Clause 1 when he said that he did not envisage any movement of members of the forces in England and Wales for anything more than a weekend. The Bill does not say that, but I welcome that intention. None of us wants to be in a position in which we call upon police forces from England and Wales for any prolonged period of service in Ulster. If a situation developed which looked as if such a requirement might be needed, we would think that the right way in which it should be dealt with would be by the military forces. If a situation developed to that extent, it would obviously be a question of military force. We would, however, hope that such a situation would not arise.
  Mr. Callaghan: I should like to repeat once again, as the hon. and gallant Member gives me the opportunity to do so, that the power now being sought in the Bill is the same power as is sought for the giving and receiving of mutual aid in England and Wales. I know of no example where a force is asked for help for longer than a day or two days for a weekend demonstration. I can do no more than re-emphasise that the policy will be to apply it in the same way as between English and Welsh

  1043
  forces and Scottish forces and Northern Ireland as it now applies between forces in Britain and in no different way. I am grateful to be able to say that again.
  Captain Orr: I am grateful to the Home Secretary. That, we understand, is the position. So far as I know, in Northern Ireland we are perfectly happy with that. That is exactly what we would envisage.
  It is a two-way traffic. I might with fairness make the point that there could be quite a lot of experience which the R.U.C. has had as a result of the difficult pressures to which it has been subjected in the operation of a police force heavily outnumbered, which perhaps has not happened in this country to anything like the same extent.
  It is a fair point to make that in dealing with the situation in Grosvenor Square, the Home Secretary, or the Metropolitan Police, could call upon something like 3,000 police to deal with the situation, whereas at the height of the terrible troubles in Londonderry, I understand, the maximum that could be called upon by the Royal Ulster Constabulary to deal with something which was infinitely worse than Grosvenor Square, the Springboks or anything else could produce, was something like 700 at the very most. It may well be that this kind of experience might even be useful the other way, so I am sure that the Home Secretary will accept that this might be of mutual advantage.
  To my hon. Friend the Member for Bury St. Edmunds who was worried about the denuding of certain of the home police forces, perhaps I could say that if things were settled and quiet, it may well be that that mutual arrangement might be of advantage when one had a football match in Bootle or Liverpool, or Walton-on-Thames, in which order might have to be kept. We would hope, therefore, that it would be a two-way traffic.
  A good deal of discussion of, for example, the kind of point which hon. Members opposite have raised about the Special Powers Act and the kind of law which visiting policemen might be called upon to enforce might well arise in Committee, when we can go into the matter in more detail. It is a somewhat sus-
  1044
  tained argument which would be better put in the context than the context of Second Reading. I hope to deal with it when we come to it. I have no intention of dodging the point.
  At this stage, I simply welcome the Bill and hope that the House generally, on Second Reading, will wish the Royal Ulster Constabulary every success in setting out to be the police force which, in the past, was far from being the military or political arm—I cannot remember precisely the words of the hon. Member for Belfast, West, but he said that it was expected to be the political arm of the Ulster Government. I would repudiate that completely. With very few exceptions—and, of course, there are exceptions, as there always are in any organisation like this—the record of the Royal Ulster Constabulary, from the top downwards, is that of a force which has always sought to enforce the law impartially and fairly. The hon. Gentleman opposite who is shaking his head really does the cause he wishes to see no good by suggesting that that is not true.
  Mr. Rose: The hon. and gallant Gentleman knows only too well what happened at Burntollet. He knows what was said in the Cameron Report about Burntollet. He also knows what happened to my hon. Friend, which has been described in somewhat gruesome detail tonight. If those were impartial actions I am rather worried as to what would have happened if they had been partial.
  Captain Orr: I said there may have been exceptions. There always are. One can find exceptions in any police force in the world; one could find individual members of any police force who had fallen short of the highest standards. What I am asserting now is the general proposition that the Royal Ulster Constabulary for 50 years have endeavoured to act with impartiality and fairness towards all sections of the community. The hon. Gentleman really does not do any good service to the cause which he himself professes to wish to see enhanced —the Royal Ulster Constabulary coming forward now to serve all classes of the community fairly and responsibly. The Hunt Committee would not have referred to the "distinguished history" of the R.U.C. if the hon. Gentleman's general

  1045
  thesis could be sustained. The Royal Ulster Constabulary have in the past been a great police force, and I believe they will be in the future, and I believe this Bill will help them to be so.
  1.2 a.m.
  Miss Bernadette Devlin: I should like to join with previous speakers this evening in saying that the Bill is acceptable. It is to me and, I think, to most of the people in Northern Ireland. It is acceptable with a few reservations, most of which have been mentioned here already.
  While all hon. Members will join with me in wishing to see decent standards of living and of law enforcement established in Northern Ireland, however much we may disagree on the best way to achieve those ends, I feel there are in the Bill several points which give rise to concern. The past record of the Royal Ulster Constabulary, the peculiarities of the Northern Ireland legal system, and the differential rates of pay in that part of the country, are three points we must consider with all seriousness when trying to produce between the police forces in Northern Ireland and this country a kind of fluid mobility.
  I should like to take up hon. Members opposite on a number of real points. They are, basically, confidence, and the past record of the Royal Ulster Constabulary. These are important, I feel, because we are not only trying to do something to end the situation which has developed over the years in Northern Ireland but also to improve matters. Therefore, we must not allow the individual members of the police forces in this country to have their own positions, or their own consciences, in their jobs prejudiced by the job they may be asked to do in Northern Ireland. This is why I wish to illustrate the past record of the Royal Ulster Constabulary. During the past year it has been subjected to sustained criticism. Those who have witnessed the conduct of the force when involved in crowd control have repeatedly remarked on its partisan nature and political orientation.
  The report prepared by Lord Cameron contained repeated examples of the biased conduct of law enforcement officers. Thus, reference is made to the action of a county inspector who warned
  1046
  all women and children to leave a procession before he gave the order for a baton charge to commence. Other senior officers did not show this curious concern for potential victims. District Inspector Ross McGimpsey is reported as using his blackthorn stick with needless violence and behaving in a way which brought the force into disrepute. Other senior police officers, including County Inspector Cramsie and District Inspector Harrison, are criticised for failing to provide competent and impartial protection for peaceful protesters.
  An hon. Gentleman quoted from my as yet unpublished book on my attitude to the Royal Ulster Constabulary. I would refer again to Burntollet and Irish Street to demonstrate why such men as County Inspectors Kerr and Corbett and District Inspector Harrison can never be regarded as impartial law enforcement officers in Northern Ireland. The findings of the Cameron Comm ission on the disturbances in Derry on 4th and 5th January and on 19th April show grave indiscipline and criminal activity on the part of policemen and reflect most harshly on the senior officers concerned. I ask the hon. Gentleman, in passing, if he considers all those a number of isolated incidents.
  From the outset of the troubles these senior officers should have looked for guidance from the Inspector-General at the time, Mr. Anthony Peacocke. Mr. Anthony Peacocke, during the course of his career, engaged in continual political broadcasts designed to vilify those who protested against injustices, and this was later substantiated by Lord Cameron in subsequent injuries. Therefore, I would join with hon. Members in welcoming the appointment of Sir Arthur Young as Inspector-General of the Royal Ulster Constabulary.
  Hon. Members have referred to the change which this one action has made to the Royal Ulster Constabulary, and to the confidence which many people have managed to regain in at least the possibility of getting in Northern Ireland something like impartial law and justice. This has been achieved by one man, by Sir Arthur Young. If the Bill goes through, with the few Amendments which I and other hon. Members think necessary, the people of Northern Ireland will have a police force the members of which

  1047
  are enforcing law and order and not their own political opinions. Without doubt, the political conduct of several police officers has been largely responsible for the low reputation of the force.
  I should like now to deal with the Bill and the points on which I disagree with the Home Secretary. First, on British police officers who would be called to serve in Northern Ireland, the Bill does not contain any clause of conscience for a police officer who joined the force in this country and was not expecting to enforce such laws as the Special Powers Act as applied to Northern Ireland. If he is seconded to Northern Ireland, he may be asked to enforce laws which are against his own conscience. The Home Secretary said that such a man would not be called upon to carry out this duty, but this is not stated in the Bill. Furthermore, the Bill states that if such a member is disciplined, as he would naturally be. by his senior officer for not carrying out the duty given to him, he would be likely to be disciplined as a member of his home force on returning to this country. The Special Powers Act is, therefore, not only a matter for this House but one concerning the career of every policeman in this country who volunteers for service or is directed to offer service in Northern Ireland.
  In considering the question of seconding policemen from this country to Northern Ireland, we must not forget the differential pay rates which exist in the two countries. What rates will be received by English policemen in Northern Ireland and what rates will be received by policemen from Northern Ireland who come here?
  Mr. Callaghan: They are the same. A constable, sergeant and head constable—that is, up to the rank of inspector—receive rates of pay that are exactly the same in both countries. Only above that rank—for example, at the superintendent and chief constable levels—do the rates vary, and then not greatly.
  Miss Devlin: I am grateful for that information, of which I was not aware.
  My hon. Friend the Member for Belfast, West (Mr. Fitt) mentioned the possibility of the Minister of Home Affairs not feeling inclined to call on the
  1048
  Home Secretary to take action under the Bill. I, too, advise the Home Secretary to make adequate provision to override, should he deem it necessary, such matters and direct police officers from this country to be seconded to Northern Ireland without a direction from the Minister of Home Affairs.
  With these few reservations, I find the Bill wholly acceptable and I am sure that the people of Northern Ireland will find it equally acceptable. With the proposals being implemented by Sir Arthur Young, we hope to see the Royal Ulster Constabulary, under much more strict guidance from this Parliament, as a force which we, the people of Northern Ireland, can for once be satisfied has no function other than to maintain the law of the country. I ask that in future the law be such that we can respect it, for we can never respect the Special Powers Act.
  I assure the hon. Member for Bury St. Edmunds—or should I say the Police Federation?—(Mr. Eldon Griffiths) that his argument completely collapsed when he said that the function of British policemen was not the same as the function of Northern Ireland policemen, because some people in Northern Ireland did not accept the authority of this House. I remind him that some people in Wales do not accept the authority of this House, but a Special Powers Act is not necessary to deal with them.
  1.14 a.m.
  Mr. Norman Miscampbell: I will not adopt the tone which has characterised the speeches of some hon. Members in this debate because I believe that the best service which this House can render to Ulster at present is to look on the hopeful side of the situation and not dwell on recriminations about the past and the fears which we know are felt in Northern Ireland. There will be enough of that in that country in the coming months.
  A recriminating attitude has been the theme of a century of debates about Northern Ireland in this House, and that has provided some of the most unrewarding and unprofitable debates this Parliament has ever had. Thus, tonight I welcome the Bill for three briefly stated reasons. First, it will integrate the Northern Ireland force as never before with the forces in the other parts of the

  1049
  two islands. That is something that everyone who has the best interests of Ulster at heart can welcome.
  I welcome it, secondly, because it will give help towards a force which, using as neutral a term as I can, certainly comes well out of the Hunt Report. We should give that force all the help we can at this time of difficulty. I know that it is said that one-third of the Ulster population does not have confidence in the Royal Ulster Constabulary, but that figure is produced by looking at the population figure as a whole and saying that one-third is Roman Catholic.
  In some areas, it is true, there is hostility and perhaps even fear of the Royal Ulster Constabulary, but then one thinks of the quiet villages and the small towns in the counties where there has been no trouble, and where the Royal Ulster Constabulary carries on its police duty with great distinction. And let us remember that 90 per cent. or 95 per cent. of its duties are just the ordinary duties of the ordinary man on the beat such as we see here in London. I cannot accept that one-third of the population of Northern Ireland does not accept its main law enforcing force. Heaven help Ulster if it is true, but I refuse to believe it.
  Above all, I welcome what the House is doing, because as integration goes on between the Royal Ulster Constabulary and the other forces a new horizon will be opened, as the Hunt Report and as the Home Secretary has said, for those in the smaller force, and a career will be offered that will make it the more possible for the minority to join the force and to increase the proportion, put by some at 11 per cent., of Roman Catholics at present in the force. That, again, is something we all want.
  As, I hope, the force changes slowly in character, we will have to make preparations in this country to fulfil the obligations that we are undertaking by the Bill. I am sure that the Home Secretary will take the opportunity of using its powers to encourage a certain number of officers to go from the forces in this country for a short period of service in Northern Ireland. If, unfortunately, we ever have to reinforce the Northern Ireland force it will be of tremendous importance to have a number
  1050
  of officers with deeper experience than that provided by just a short stay there.
  No one can pretend that the Northern Ireland problems are the same as those which the English policeman has to face, or that they are anything but unique in the British Isles. We all know of the deep sectarian divisions in society there. That is what the officers going from this country will have to meet. It is something which they may never have met before, and may never have understood before.
  Mr. Peter Mahon: I think the hon. Member's assessment of the situation is far too easy. The difficulties which he has outlined as confronting the new police forces in regard to sectarian differences are a figment of the imagination. The real difficulties lie in the deep-rooted social inequalities which have existed in Ulster for a long time.
  Mr. Miseampbell: I wish to heaven that it was only social inequalities that was Northern Ireland's problem. If that problem had been social inequalities the history of our two islands would have been far different.
  Mr. Speaker: Order. I now understand the point of order raised by the right hon. and learned Member for Huntingdonshire (Sir D. Renton). We must not discuss the social structure and history of Northern Ireland.
  Mr. Miseampbell: Debates on Ireland and its background lead to very unrewarding culs-de-sac which I shall not stray down tonight, but I do not underestimate the problems which this country and the police forces will have to face if they have to do what: we seek to give them power to do under this Bill. A long experience of Ulster has taught me that there are no easy solutions to Ulster's problems.
  I hope that not only will we provide a certain number of officers to go over there for longer periods, but that if we seriously hope to be able: in an emergency to provide a number of officers to go from here some preparation will be given to them and there will be some selection of them, some indication to them long before the day they are to go arrives. It will not do when trouble arises in Ireland simply to take a number of officers from Liverpool, Manchester or

  1051
  the Lancashire force. This is a problem which should be solved by the whole of the English force It can be solved best by picked men, perhaps volunteers, who have indicated their willingness to go, not just from the North-West, but from all over the country. Some help should be given them to understand the problems they will have to face.
  I am not altogether clear about whether facilities will be given for those in the Royal Ulster Constabulary who wish to come here for a period of service. Perhaps we can be given a little guidance on whether this would come under legislation on the Northern Ireland problem. It is easy to see in the Bill how they are to come here for crowd control duties if necessary, in Lancashire. I suspect that it would be a very rare occurrence, but it is right that there should be a reciprocal arrangement. I imagine that a Stormont decision would have to be made. I hope to hear from the Minister who winds up the debate that some indication has been given by Stormont that that will be the case.
  Mr. Eddie Griffiths: I am impressed by the point the hon. Member has made about an exchange of police forces. This evening plaudits have been awarded to the police forces of two cities. It would be right if those cities were the host forces for members of the Royal Ulster Constabulary who came here on such exchanges.
  Mr. Miscampbell: I am grateful for that intervention, which perhaps reinforces what I have said. It again shows how the widening of horizons and the prospects of those serving in the Ulster force might make it more acceptable to those of every view and creed to join the force.
  We should not forget why we may at some stage have to send men to Northern Ireland. We know perfectly well the kind of situation which is likely to arise and the kind of occasion on which it would arise. It is perhaps not inappropriate, at a time when the British Parliament is making provision to send law enforcement officers to Ulster, to say to both sides in Ulster that we know all too well when it will arise—the 12th, perhaps the Apprentice Boys parade and the parades of the other side, too. If
  1052
  Ulster could reach a compromise and say that for a year or two at least those parades will be limited, I believe that there would be good hopes that we should never have to send men from here to Ulster. It would be a sacrifice for both sides, and it would have to come from both sides, not just from one. It would be a sacrifice which would be infinitely to the benefit of Ulster and, I believe, of the whole of the United Kingdom.
  1.25 a.m.
  Mr. R. Chichester-Clark: It is not my wish at this very late hour to keep the House for more than a few minutes. In any case, I think that the Bill has now been so thoroughly examined and dissected that little remains of it but a few Committee points.
  However, there are a few things which are still worth saying. I dislike as much as anyone else any form of recriminations, but things have been said tonight about the past which, for the sake of the morale of the R.U.C., cannot go unanswered. If it is necessary to delve into the past, it is done with some reluctance. My hon. and gallant Friend the Member for Down, South (Captain Orr) and others have already answered some of the criticism. Things have been said which would have been better left out of the debate, but, as they have been said, they must, at least to some extent, be answered.
  I do not want to tangle with the hon. Member for Manchester, Blackley (Mr. Rose) in his references to my right hon. Friend the Leader of the Opposition. I thought that the hon. Gentleman's venting of personal spleen in that direction was well below his usual level, and it was very disappointing to hear it from him. The hon. Gentleman said—quite fairly, I suppose—that there had been a number of transgressions by the R.U.C. This is true. I said so in the last debate we had on Ulster. However, the transgressions were very few indeed —a mere handful. No matter whether it be Burntollet or any of the other places which have been mentioned, the number who transgressed and went beyond the bounds of good behaviour and decency was extremely few. I do not believe that any other force in the world would have had a better record. I share the view

  1053
  that the force itself will be ashamed of those few transgressions. Let us not forget how few they were.
  I have some qualification to speak of the behaviour of the police, because I spent what seemed like night after night —it was, I suppose, only three nights—watching what was going on in Londonderry at the time of the worst riots there. If I have criticism to make of the police, it is certainly not on account of their valour, their discipline, or their restraint. Far from it. Much more, it would have been on the ground of their organisation. No arrangements were made that they should be fed, sometimes for 11 hours at a time. There seemed to be no machinery —no transport—to take them food. During one night I carried several tea urns and numbers of sandwiches to people in dark and distant corners of Londonderry, because there was no one else to do it and no one else who knew where they were.
  The same was true of their sleeping accommodation. There was no sleeping accommodation for them in the middle of the night in the unexpected places m which they sometimes found themselves. So it is on the grounds of organisation, and not on grounds of their valour or behaviour, that I would criticise the R.U.C.
  There has been much reference to the Special Powers Act. If I were in a position to do so I am sure that I would carry the Northern Ireland Government with me when I say that no one wants to see this Act or any part of it kept in being for a moment longer than is necessary. I share the realistic view of the Home Secretary that it cannot go just like that. The situation just does not permit of its removal at once. I can make only one other observation on the subject of the Special Powers Act. I wish that there was complete consistency among its critics. I wish that we heard the same stream of abuse whenever any power is enforced against extremist Protestants as there is when it is enforced against certain other people.
  The Home Secretary referred at the beginning of his remarks to the subject of recruiting and said that he was pleased that the recruiting figures had been improving for the R.U.C. We are all very glad to hear that.
  1054
  The right hon. Gentleman said that 11 th November was a remarkable day, because on that day the police had gone out unarmed for the first time. As my hon. Friend the Member for Belfast, East (Mr. McMaster) said, it is true that they had on previous occasions been unarmed during the day time before the latest troubles broke out. I cannot say for what period, but no doubt the hon. Lady can tell us. In another respect that 1 1 th November was remarkable, because, unless my recollection is faulty, it was the anniversary of the day not long ago when one of their colleagues in. the R.U.C. was shot to death. It was a measure of their faith, trust, and courage that on such an anniversary they were prepared to go out unarmed for the first time.
  Like my hon. Friend the Member for Blackpool, North (Mr. Miscampbell), I want to see people recruited into the R.U.C. from all parts of the community. Let us not put it too thinly. We have got beyond that stage in this House. I want to see more Roman Catholics join the force in Northern:Ireland. I have always wanted that, but it has not been easy. It is true that advertising has been directed very largely, and particularly over the last year, to Roman Catholic newspapers. When I say that I mean newspapers read in particular by the Roman Catholic community.
  There have, however, been difficulties about such recruitment, and I was glad to see that the Hunt Report paid tribute to the exemplary manner in which Roman Catholic policemen had performed their duties. It praised their valour, too, and it went on to say that these men felt no sense of discrimination against them within the force in relation to promotion or any other factor. It also mentioned that they felt a sense of comradeship within the force, and I was glad to see that.
  But there is one matter—and here I defer to others who know more about this subject than I do—which has not been mentioned tonight in connection with recruiting. There is an organisation, powerful in the Republic of Ireland, but in pockets in Northern Ireland, known as the Gaelic Athletic Association. It is a remarkable association. It does not allow its members to watch hockey, rugby, or cricket, and I think that football, too,

  1055
  comes within this ban, because these are rather English or British games. As a matter of fact, it does not even allow its members to take part in ballroom dancing.
  But, more important than that, it forbids its members to join the police. This seems very unfortunate, and I hope that some hon. Gentlemen opposite, who perhaps know more about the organisation than I do, will ascertain the true facts and then get in among that organisation and use their influence to overcome this problem, because here is another potential recruiting ground for the police, and one which ought not to be neglected.
  Mr. McNamara: It will no doubt be within the hon. Gentleman's recollection that in certain parts of his constituency it was the habit of the police, so it was reported, to arrest people merely because they happened to be members of that association, and therefore this degree of suspicion, let us put it no higher than that, which may or may not exist is an understandable phenomenon. One should not, therefore, blame one side.
  Mr. Chichester-Clark: I suppose that that intervention is in some way relevant, but its relevance escapes me for the moment. It is the project of a fertile imagination. I should like the hon. Gentleman to go further into that aid let me know exactly what happenol. I do not think that he can possibly be right, but it is a most interesting if irrelevant observation.
  Mr. Peter Mahon: The hon. Gentleman seems to be impressed by this famous or infamous organisation. I can tell him that many of my friends in Northern Ireland pay very little regard to it. and there are a good many excellent Rugby Union players among them. I can speak with authority on that subject.
  Mr. Chichester-Clark: In that case, I hope that the hon. Gentleman will use his influence upon the members of that remarkable organisation to break its rules further and to join the police force, as that would be a great help. I want to see every possible bar to joining this force removed and as many people as possible of all the different communities joining it.
  1056
  Now, although she has gone from the Chamber, I must refer to the hon. Lady the Member for Mid-Ulster (Miss Devlin). I wanted to ask her a question, which is closely relevant to the number of police which may be required at any time in Northern Ireland and to the question of reinforcements. It concerns her own activities. She will be able to read what I say in HANSARD, and in due course she can answer it.
  Giving evidence to the Scarman Tribunal, having said that she was not discouraging people from throwing petrol bombs—indeed, she had organised the throwing of petrol bombs—she said that she had not thrown any herself, but she had thrown one stone. There seems to be considerable public doubt about whether it was, in fact, one stone, and I hope that the hon. Lady will clear it up. In cross-examination at the time, she made clear that she had not thrown any petrol bombs, but she said simply in answer to a question, "I threw one stone". Yet on page 205 of her recently written book—which, I understand, is on the bookstalls—she said, I have thrown stones at policemen ". Incidentally, this was after she had given her account of how she had "leafleted" the Eire Army and later campaigned the British Army urging soldiers to desert and join her cause. She said, I have thrown stones at policemen ", but then, presumably to illustrate her incompetence even in this field, she said, "Unfortunately, I cannot throw straight, and they missed".
  I find that last sentence rather surprising, after all the practice which she told us she had had in April, but what concerns me is which version is correct. One of them must be incorrect: either she threw one stone or she threw a considerable number. Which is right, the statement on oath before the Scarman Tribunal or the one in her book? We are entitled to know.
  Mr. Robert Maclennan: I am following the hon. Gentleman's speech with interest and care, though somewhat as an outsider. but I confess that I do not think that such remarks are very helpful or throw any light on the principle of the Bill which we are supposed to be discussing.
  Mr. Chichester-Clark: I sympathise with the hon. Gentleman. I said at the

  1057
  beginning of my speech that I dislike recrimination, but he has not had the doubtful pleasure of listening to the remarks of the hon. Lady, either earlier this afternoon or, indeed, on any other occasion in the House. I make no apology for what I have said. The Royal Ulster Constabulary are entitled to have these things said on their behalf for a change. However, I am concluding now, which is just as well because I do not want to raise the temperature of the debate.
  I strongly support the Bill. It seems to be very largely what the representative body of the force wanted. I agree with the Home Secretary that the R.U.C. will benefit from a closer association with other police forces, and, above all, I urge that all sections of the community will come forward—those who feel that they can and are admissible—and will join this force, as I hope they will join the other force which we are to discuss on Wednesday.
  1.34 a.m.
  Mr. John E. Maginnis: Like many of my hon. Friends, I welcome the Bill, but I have wondered at times during our debate whether we were really discussing it, as so many hon. Members took the opportunity to criticise the Royal Ulster Constabulary. Most hon. Members here tonight know that I was a member of the R.U.C. On behalf of the R.U.C., I warmly welcome the provisions of the Bill.
  It is not fully realised in this country that when a demonstration takes place in Northern Ireland, no matter what colour it may be, the maximum number of policemen to a demonstrator is very different from the number that can be fielded in this country. When there is a demonstration in London there is one policeman for every four demonstrators, whereas in Northern Ireland there is one policeman for every 10 demonstrators. So one can appreciate the difficulties with which the R.U.C. has been faced during the past 12 months.
  I welcome the provisions of the Bill whereby the R.U.C. can be reinforced on special occasions. All concerned in Northern Ireland, especially the police force, have welcomed the giving up of the para-military role. This was not, as many have said tonight, forced on the R.U.C. by the Hunt Committee. It
  1058
  was the representative body of the R.U.C. that recommended it to that committee.
  When the R.U.C. was being set up it was suggested that it should become a civilian police force. It is not fully understood in this country why it was set up as a para-military force. In the circumstances of 1921 Her Majesty's Government had not the military forces to send to Northern Ireland for the defence of the country. So the R.U.C. and the B Specials were embodied and empowered to carry out the defence of Northern Ireland. So, after all this time, I welcome the move of Her Majesty's Government to take over this role and relieve the police of their paramilitary duties.
  I also welcome the setting up of a Police Council which will take in the representative body of the R.U.C., and the Police Authority which will be set up as well. By this means we shall have a Police Council for the whole of the United Kingdom and not for Great Britain only.
  I am firmly convinced that, given the support and the good will of the majority of the people in Northern Ireland, the R.U.C. will continue to give good and impartial service in every part of the community. I refute very strongly suggestions made this evening that in the past the R.U.C. has been a partial body. I believe that when all the allegations that have been made have been fully sorted out it will be found that no police force in the world has given better service than the Royal Ulster Constabulary.
  1.43 a.m.
  Mr. Stanley R. McMaster: I shall not detain the House many minutes, but I want to join my hon. Friends and many hon. Members opposite who have spoken in welcoming the Bill. I want to put a couple of questions to the Minister which perhaps she will be able to deal with in her reply.
  The Bill springs mainly from chapter 7 of the Hunt Committee's Report. The chapter suggests that it would be for the good of the R.U.C. that it should not be isolated, but should have greater interchange with the police forces in the rest of the United Kingdom. However, studying the Bill, one finds that it simply

  1059
  makes provision for emergency conditions; either when more police are necessary in Northern Ireland and are called for by the Inspector-General, or if more police are required to deal with demonstrations in Great Britain those in Northern Ireland can come to help.
  I should like to know what the Government's intentions are on the broader aspect covered by chapter 7 for general exchange, whether there may be an exchange in ordinary circumstances for training, and so on, for short periods so that the two police forces can benefit from each other.
  Arising immediately from that, I am not prepared to accept that the Bill or its introduction in any way implies any fault in the R.U.C. I, and I think the majority of people in Northern Ireland who know it, look upon the R.U.C. as a fine force with a proud history. Its detection rate is much higher than that in any other part of the United Kingdom, and the interchange I have just mentioned could be of mutual benefit. There is experience of crowd control, and so on, in Great Britain that could help in Northern Ireland and the detection methods used in Northern Ireland could be of some benefit in Great Britain in the face of the current crime wave. I hope that this advantage for police forces in Great Britain will not be missed.
  During the debate, which I have followed carefully, much has been made of our Special Powers Act. The Hunt Committee deal at some length with the circumstances in Northern Ireland, and I would refer hon. Members to paragraph 26 of its report, which I think sums up the position realistically. After references in the preceding three or four paragraphs to the history of the I.R.A. and the campaigns of violence in the past in Northern Ireland, campaigns to which the hon. Member for Belfast, West (Mr. Fitt) also referred, the paragraph says:
  "As to the future, the I.R.A. and the revolutionary socialists "—
  of whom the hon. Member for Mid-Ulster (Miss Devlin) has often claimed to be one?
  " using their position in the Civil Rights Association. seem likely to maintain civil rights pressure; and this will no doubt generate Protestant reaction. If the conflict between these forces, working upon the tensions in society, were again to re-create the explosive
  1060
  atmosphere of last August, and the I.R.A. terrorists were ready to take advantage of it, it is possible that they might resume attacks on police stations and customs posts, R.U.C. and British Army personnel, and key points where it is essential to protect buildings and other installations that are important for general welfare in heavily populated areas."
  Paragraph 28 concludes chapter 2 by saying:
  "To sum up: precautions against possible terrorist attacks, for the reasons given in this Chapter, must be taken; but the greatest threat to order in Northern Ireland is more likely to be sectarian strife, stirred up by extremists on both sides."
  That is the unfortunate background in Northern Ireland. There has been strife, and there have been cases of policemen being shot while carrying out their duty. There have been vicious and violent attacks, as in Londonderry in the four days following 12th August and in Belfast on 14th and 15th August, savage attacks with petrol bombs in which policemen were set on fire. In Londonderry, 600 policemen were injured in three or four days, and in circumstances like that the special powers are necessary to keep the peace. It is to be regretted, but it would be unrealistic of the House not to face this.
  It has been objected that members of the British police seconded to Northern Ireland would find it difficult to apply the emergency regulations. The hon. Member for Belfast, West spoke about flying a tricolour flag in Northern Ireland. This would obviously incite a riot or at least a breach of the peace in Northern Ireland.
  Mr. Rafton Pounder: My hon. Friend will doubtless recall that the Prime Minister said at Question Time on, I think. 26th May that the Northern Ireland Government could not then be expected to repeal the Special Powers Act. How much more explosive the situation is now than it was in May!
  Mr. McMaster: That underlines the point I am making. The duty of any policeman is to keep the peace. There are parts of Great Britain where a tricolour could not be flown without inciting a breach of the peace. In the present situation in Northern Ireland, this would incite at least a breach of the peace and maybe a riot.
  Therefore, the answer to the hon. Member for Belfast, West, is that an English

  1061
  police officer would have no difficulty in dealing with this situation. His duty is to keep the peace and he would presumably ask anyone acting in this manner to desist and, if met with a refusal, would be likely to arrest the person.
  With these qualifications, I join those who have welcomed the Bill, which I hope will lead to peace and quiet and to much better relations in Northern Ireland.
  1.51 a.m.
  Sir David Renton: Thanks to the excellent speech of my hon. Friend the Member for Runcorn (Mr. Carlisle), I need not detain the House long, but I want to make some suggestions which I hope may be helpful in dealing with the difficulties to which hon. Members have drawn attention in this interesting debate.
  One can summarise the debate by saying that it is one in which the Bill has been welcomed but in which two doubts have been expressed. The first is whether our police can be spared. Here I should perhaps, if not being too bold, remind hon. Members that the Bill will not affect the R.U.C., which has been the subject of so much investigation during the debate, nearly as much as it is going to affect the members of the police forces of England, Wales and Scotland. The second doubt is on the important matters of principle which will arise when our police go to Northern Ireland unless we put these matters right in Committee. I hope that it will be helpful if I give a little advance warning as to how we might deal with these matters in Committee.
  First, I turn to the demand on the police. My hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths), with his special knowledge, drew attention to this and described it as a heavy demand to meet. I think that there are at least three things we might do to help our police forces meet this demand more easily and, therefore, release men more easily to go to Northern Ireland in accordance with the Bill.
  My first suggestion is that we should recruit many more special constables. I think that they could be recruited if there were a drive to recruit them. Secondly, I think that, under the arrangements made by the Government in the last two years, much too much of the time of the police is being taken up in advance planning for
  1062
  emergencies, co-ordination of the many bodies and authorities concerned in emergencies and in dealing with emergencies from the beginning to the end. If the hon. Lady will be so kind as to read something I published the other day, I think she would find it helpful in this context. I will send her a copy.
  Thirdly, wastage, although not as bad as it was two years ago, is still running a bit high—I have had a letter about this from the Under-Secretary only today. There is one thing the Government could do to help to stop wastage in our police forces, and it might help recruiting as well. The hon. Lady could do it tonight if she is in a position to do so. It is to give an unqualified, categorical assurance that the Government's new State pension scheme will not in any way diminish the pensions which the police receive under the Police Pension Scheme. Those are three constructive suggestions, and I hope that they will receive a favourable reception.
  Up to a point, the difficulty in which we find ourselves, and it is understandable, is that we are legislating in an unusual way about the police forces of England, Wales and Scotland. My first point concerns the phrase,
  " special demand on its resources "
  which appears several times in Clause 1. As the Home Secretary told us, that phrase comes, as I remember well, because I served on the Committee which considered it, from the Police Act, 1964, but it was never defined An that Act.
  The Home Secretary attempted to give it some definition today, and we welcomed his intervention on that, indicating that he felt that the kind of special demand which would have to be met in Northern Ireland would be a weekend demand, and in that context he no doubt had in mind what the Hunt Committee said and he gave the example of "the occasion of a meeting or procession ", which is what Lord Hunt mentioned in his report.
  That is splendid if we confine it in that way, but recent history in Northern Ireland should make us very cautious on this point. We should be prepared to consider exactly where the line should be drawn so that any police officer going from this country to Northern Ireland does not get over committed, whether unexpectedly or in a way which might have been anticipated.

  1063
  When disorder is in prospect, the idea will be to send for reinforcements of British police. But what happens when things get too hot for unarmed police? Obviously, one hopes that the Army would then be called in, as it was only a few weeks ago. But there should be some contingency planning to ensure that the Army will, if necessary, be alerted on just those occasions when police reinforcements from this country are considered necessary. I hope that we may have an assurance from the Home Secretary that the men who go out there unarmed and who unexpectedly find themselves in a dangerous, hot situation will not be expected to carry on without the support of the Army.
  My second point arises from the intervention by the hon. Member for Liverpool, Walton (Mr. Heller) in the Home Secretary's speech, and to which other hon. Members have referred. What is the position of officers from Great Britain who are required to carry out the Special Powers Act? There is no doubt that they may be required to do so. As my hon. Friend the Member for Runcorn pointed out so clearly, under Section 1(3), while a constable is in Northern Ireland, he will be under the direction and control of a senior officer of the Royal Ulster Constabulary. That officer may well find it necessary to ask his reinforcements to operate the Special Powers Act.
  We must be extremely careful about this point. I do not wish to express a general view at this moment about the Special Powers Act, but we certainly should not overlook it. Neither should we overlook the fact that in Belfast, at least, lives of people of both communities, Roman Catholic and Protestant, were most probably protected by the power which was given to close the public houses at the week-end. I want to try to be helpful about this and I think that an Amendment in Committee can probably put the matter right.
  There are special conditions in Northern Ireland. We should not blink our eyes to them. We should legislate on the basis of things as they are and not on the basis of things as we would like them to be or on the basis of things as they have been for a very long time
  1064
  in Great Britain and which we understand so well.
  Next, I come to an interesting point which was raised by the hon. Lady the Member for Mid-Ulster (Miss Devlin), who has left her scarlet cloak to challenge us. I hope that for that reason, she may return at any moment. The hon. Lady said that a British police officer's contract does not entitle him to enforce the laws in Northern Ireland. As far as I recollect, a British police officer does not have a contract. He has to be attested under Section 18 of the Police Act. The form of the attestation is set out in the Second Schedule to the Act and is quite short, but it is so relevant that I propose to burden the House with it, even at this late hour.
  The attestation is in the following form:
  " I … of … do solemnly and sincerely declare and affirm that I will well and truly serve Our Sovereign Lady the Queen in the office of constable, without favour or affection, malice or ill will; and that I will to the best of my power cause the peace to be kept and preserved?"
  so far, plain sailing, but it goes on?
  " and prevent all offences against the persons and properties of Her Majesty's subjects; and that while I continue to hold the said office I will to the best of my skill and knowledge discharge all the duties thereof faithfully according to law."
  Naturally, one has to ask, "Which law"? To get guidance on this, we have to turn to Section 19, which deals with the jurisdiction of constables. Section 19 is in very limited terms. It states:
  "A member of a police force shall have all the powers and privileges of a constable throughout England and Wales."
  It seems to me that we must somehow link those provisions in the Police Act with the Bill, otherwise these constitutional doubts and difficulties will remain. I hope that this is not too heavy grinding for this time of the morning, but it seems to me to be of great importance.
  I am grateful to my hon. Friend the Member for Bury St. Edmunds for drawing my attention to another point. The question arises whether the discipline regulations, which at present are different in Northern Ireland from what they are in Great Britain, will be assimilated, including the rights of appeal which police

  1065
  officers have and with which, no doubt, the Minister of State will soon be familiar, as I became. The Home Secretary is only too familiar with them, more than ever I was even. But it is an important point to be dealt with. There again, the Bill is silent.
  Mr. Callaghan: The right hon. and learned Gentleman will understand that not all of these points will be settled before the Bill goes through, because there will have to be negotiations on them. This is an enabling Bill, as he understands, and the question is whether the House will give it me on certain assumptions of good faith, recognising that it will not be operated till these matters have been fully worked out between both sides.
  Sir D. Renton: I quite understand that there may be some difficulty in tying up in the Bill the last point I mentioned. All that I say is that before any British police officers go to Northern Ireland it is a point which has got to be tied up somehow.
  It may well be that the power which the Home Secretary has to make disciplinary regulations may be sufficient, but I was not aware that his power to make disciplinary regulations related in any way to Northern Ireland, and it may be that in this enabling Bill he should take power to make regulations which either give the Inspector-General of the Royal Ulster Constabulary the power to deal with disciplinary cases or which enable the Home Secretary to deal with disciplinary offences and chief officers in England to deal with disciplinary offences committed by British constables while serving in Northern Ireland. Somehow it should be done.
  Mr. Eldon Griffiths: Would my right hon. and learned Friend say that the ideal ought to be that the disciplinary regulations should become the same as the forces themselves become more and more assimilated—that that should be the objective?
  Sir D. Renton: I quite agree, but there are two separate matters. It is one thing to say that each set of regulations should be the same, but we have got to have inter-reaction between them, and it was on that point that I was expressing some
  1066
  anxiety, because nothing seems to have been done about it so far. But now, as the Home Secretary has indicated, something, no doubt, will be done.
  Quite frankly, the remaining points which I wish to make are relatively minor, but this is the time to make them.
  I refer now to page 36, paragraph 149, of the Hunt Report, where it is recommended that
  " the Home Office should be invited to take the special needs of the R.U.C. into account when planning the work of the Police Research and Development Branch; and should invite the R.U.C. to second an officer to the Branch."
  It may be that this point was in the statement which the Home Secretary made earlier, but I do not think that it was. I think it is important because this question of research and development in police methods and equipment and so on is something which is of growing importance to all police forces, and the Royal Ulster Constabulary stands to gain very much from co-operating with that work which is going on here.
  Referring still to the same paragraph of the Hunt Report, we were told some weeks ago by the Home Secretary that he accepted the principle of applying Her Majesty's Inspectorate, as recommended by Hunt, to the Royal Ulster Constabulary. I wonder what action has so far been taken in order to bring that about, and if there is anything we can be told. it would be helpful.
  Finally, I wonder if I may, in the greatest spirit of concord, suggest that although the powers in Clause I are enabling powers from the Home Secretary's point of view they will in effect be powers of compulsion when they are carried out in practice. I have always thought that in the armed forces, in spite of the jokes sometimes made about it, the volunteer is better than the man who is detailed. It might be possible to call for volunteers from the English forces on the occasions, which perhaps will not be so very many, which arise. I would hope, for example, that some of the Catholic officers serving in English forces might feel that they could play a special part in helping the Royal Ulster Constabulary and both sections of the community in Northern Ireland. I hope that the Home Secretary will not lose sight of the possibility of

  1067
  making the best possible use of volunteers.
  The debate has involved a postmortem on matters which we hope will be soon forgotten, if anything in Ireland can ever be forgotten, but there is plenty in the Bill to occupy us in Committee, which will enable us to lay constructive foundations for the future and, although the red cloak of the hon. Member for Mid-Ulster is still here and she is not, I hope that she may heed that humble advice.
  2.12 a.m.
  The Minister of State, Home Office (Mrs. Shirley Williams): The debate has basically revolved round two points; first, the demands made upon the British police forces by the Bill; and, secondly, details about the way in which the Bill will operate in respect of support for the Royal Ulster Constabulary in Northern Ireland. I will deal, first, with the broad point about the effect on the police forces of this country, which was raised, amongst other things, by the right hon. and learned Member for Huntingdonshire (Sir D. Renton), the hon. Member for Runcorn (Mr. Carlisle) and the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths).
  Before doing so, may I say that not least in the light of his own distinguished tenure of the office which I now have the honour to hold, I will, of course, read any article which the right hon. and learned Gentleman cares to send me, and that I will trust his judgment in sending me only the articles which he thinks I should see.
  I can see the point made by hon. Gentlemen opposite about the imposition of any additional burden upon the police force. The police force has a great many duties to undertake, but I hope that hon. Gentlemen will forgive me if I say that the situation is not as grim, relatively speaking, as it was painted by them. I could not help thinking that the hon. Member for Runcorn was weeping the occasional crocodile tear in this respect.
  My information is that there are today 10,000 more policemen in the force than there were five years ago. On the basis of annual net increase in recruitment, compared with an average increase of
  1068
  1,300 policemen a year, since the present Government took over office there has been an increase of 2,300 a year. I would not for one moment suggest that the police forces in Britain can bear many additional burdens, nor is it the intention of the Bill that they should, but those figures put the matter in a slightly better perspective.
  The right hon. and learned Member for Huntingdonshire made a suggestion about special constables which I am sure my right hon. Friend and my hon. Friend the Under-Secretary will wish to look at. As he made clear, it has a relationship to what happens in Britain as well as to the Bill.
  Before coming to the specifically Northern Ireland points that have been made, I will answer some of the questions posed by the hon. Member for Bury St. Edmunds about police forces in this country. I remind him, and my hon. Friend the Member for Manchester, Blackley (Mr. Rose), that the Bill must be seen in the context of the changes that are being made in Northern Ireland because this directly affects the use to be made of any British police officers who are seconded, temporarily or on a more permanent basis, to Northern Ireland.
  The Northern Ireland Parliament intends to establish a new police authority. In doing so, we hope that not only will it be representative of all groups in the Northern Ireland community—it is important that this should happen—but that there will be a move to have a structure which is much closer to that which is commonplace on the mainland.
  As my right hon. Friend pointed out, we understand that the arrangements for inspection will be similar to those now applying on the mainland, and we understand that this is acceptable to the Northern Ireland Government. In other words, Her Majesty's Inspectors of Constabulary will have the duty to inspect the Royal Ulster Constabulary, with all that that implies in terms of the proper use of police powers.
  Bound up with the Bill is the provision for training and mutual training, which means training on both sides of the Irish Channel. We hope that this training will result in a closer understanding of what we need in both police forces and of the role of a modern police force in the sort

  1069
  of society which is emerging both in Northern Ireland and here.
  My hon. Friend the Minister of Defence for Administration made it clear in his statement that it was not the job of the Ulster Defence Regiment to engage in normal policing. I hope that the House will appreciate that one of the objects of the police reserve which the Northern Ireland Government are to establish shortly—indeed, one of the objects of this mutual assistance arrangement—is precisely to avoid a situation in which the military reserve or military forces must undertake normal policing duties. I wish to make that distinction clear. It is fundamental to the Hunt Report and to the steps which we and the Northern Ireland Government are trying to take with the successor bodies to the Ulster Special Constabulary.
  I give the assurance that we will be very careful to avoid any additional strain on an already strained local police force. I therefore assure the hon. Member for Bury St. Edmunds and other hon. Members who have raised this point that in any arrangements for mutual aid that are made, we will bear in mind the fact that a particular police force in England, Wales, or Scotland may at any time be under pressure.
  The hon. Member for Bury St. Edmunds raised a number of other points, including the question of costs. As he will know, under the present mutual aid arrangements, costs are met by mutual agreement between forces. Where mutual agreement is not able to be reached, a decision is then made by my right hon. Friend, who can determine the contribution, relating it to the occasion and the number of police officers involved.
  Exactly the same sort of situation will apply in respect of Northern Ireland. In other words, we trust that it will be possible to reach agreement for a mutual aid arrangement, though this must be subject to the exact terms of the Northern Ireland Bill. If that is not possible, it will be for my right hon. Friend and the Minister of Home Affairs in Northern Ireland to reach a mutual agreement about the way in which the costs shall be met. The House will appreciate that I cannot go further until we have the full legislation through both Houses.
  It is our intention that there shall be representatives of the new police autho-
  1070
  rity on the Police Council and, on the other side, representatives of the staff. The hon. Member for Bury St. Edmunds will appreciate that it is not for Westminster to determine exactly how that representation should be chosen.
  Mr. Eldon Griffiths: Will the hon. Lady also bear in mind the possibility at some future date of associating Ulster with the Police Advisory Board?
  Mrs. Williams: That is a very useful point which we might wish to discuss with Northern Ireland, or find out whether they prefer a similar body of their own. It is wide open to further consultations on both sides.
  I thank my hon. Friend the Member for Blackley for his wise words about the delicacy of the present situation. I thank him, too, and others of my hon. Friends and hon. Gentlemen opposite for what I think were richly deserved words about the Inspector-General of the Royal Ulster Constabulary.
  My hon. Friend referred back to a number of disciplinary offences, but he will appreciate that a number of his references were to the situation of August. As this is a matter which the Scarman Commission is investigating, it is in probably the best and most objective hands.
  My hon. Friend referred to Clause 1(4) and the setting aside of the powers of the Government of Northern Ireland Act. He need not for a moment worry about that. The only way in which this provision alters that Act is to permit the Royal Ulster Constabulary to request a British force. That is not possible without this enabling provision, but I can assure him that in no way at all does it derogate from the powers of Westminster with regard to the Government of Northern Ireland. I hope he will recognise, therefore, that he does not have to ask his hon. Friends and mine to vote against the subsection.
  It is true that where a mutual aid agreement is made any member of the constabulary involved in such arrangement is under a legal obligation by the making of that arrangement. That applies to any policeman. Further, if any policeman from a British force who had to serve in Northern Ireland were to find himself involved in a disciplinary offence on his return to his own force

  1071
  after secondment—and he would have the right of reversion to his own force—he would have the right of appeal to my right hon. Friend the Home Secretary. So if there were some division of opinion on the nature of a disciplinary offence, the British policeman would be covered, in effect, by the attitude taken by my right hon. Friend with regard to his appeal.
  My hon. Friend the Member for Belfast, West (Mr. Fitt) asked for what purpose policemen sent there would be used. Even though, one day, a typical English calm may settle over Northern Ireland—although I am not certain when that day will come—there may be the occasional demonstration. We believe that any demonstration or riot, or any question of a crowd deciding to move together for some political or other purpose, should be left essentially to the police to deal with, and not to a military force. It is largely for that reason that we believe it important to have more than one line of defence within the police sector of law and order. I hope my hon. Friend will agree that this is the way to reassure both communities in Northern Ireland, rather than adding to their doubts.
  Sir D. Renton: Could the hon. Lady deal with my point about reinforcements? If there is a possibility of disorder, what steps will be taken to ensure that the reinforcements are withdrawn before the disorder becomes so bad that the troops have to be called in? And what steps will be taken to ensure that the reinforcements do not get embroiled?
  Mrs. Williams: If the right hon. and learned Gentleman will allow me, I will deal with that when I deal with the Special Powers Acts.
  The hon. Member for Londonderry (Mr. Chichester-Clark) referred to the fact that we have unarmed patrols by the Royal Ulster Constabulary throughout most of Northern Ireland. I thank him for applauding this; it is a great step forward. He also said that he believed that Catholics as well as Protestants should be encouraged to join the Royal Ulster Constabulary and, I think, the police reserve. My right hon. Friend puts the greatest possible weight on having representatives of both communities
  1072
  in Northern Ireland as part of the forces of law and order there.
  The hon. Member for Belfast, East (Mr. McMaster) and the hon. Member for Blackpool, North (Mr. Miscampbell) asked if there might be more exchange of forces on a temporary basis. I assure them that part of the objects of the Bill, as seen in Clause 1, is not simply to deal with short-term reinforcements but also temporary secondments on the basis of several months or even a couple of years. This is of the greatest importance. I underline the point made by the Hunt Committee Report that ideally one would like to have a situation in which police have experience of more than one force during their period of service.
  The hon. Member for Belfast, East referred to the tragic shooting of a policeman. I think that it has perhaps been borne in on us all that when extremists of whatever party or colour get the upper hand policemen will be in danger and this does not come from one side only.
  I turn to questions raised by the right hon. and learned Member for Huntingdonshire and other hon. Members about the Special Powers Acts and the circumstances in which mutual aid would take place. I draw attention to something said by my right hon. Friend which has been rather overlooked since he spoke. He made absolutely clear that Clause 1, under which mutual aid arrangements are to be made, will be subject to the date on which he makes it operative. He said it will be made operative when conditions of police service in Northern Ireland are more in line with those in Great Britain. Here we are not talking about the present emergency in which troops are being used, but of a situation in which we hope sufficient peace will have been restored for troops to be withdrawn—essentially a police situation.
  It will be for the judgment of my right hon. Friend to decide whether the situation calls for police reinforcement or reinforcements on a much larger scale and for more serious action. Because we hope to reach the situation in which troops can be withdrawn, we believe this is an essential part of the restoration to the basis of a civilian situation. We bear in mind what the right hon. and learned Gentleman said, but my right hon. Friend

  1073
  will have to take the decision in the light of all the circumstances and advice from those who wish to consult him in Northern Ireland.
  A mutual agreement can be made only by a chief constable in this counry, or in certain circumstances, by my right hon. Friend. When that mutual agreement is made it will be for those responsible in Britain to decide whether a British policeman should be put in a situation which makes things particularly difficult for him. This relates back to the Special Powers Act, because, as my right hon. Friend said, he would not wish normally to put a British policeman in a situation in which he was obliged to carry out a law with which he was totally unfamiliar. The hon. Member for Bury St. Edmunds will recognise that this would raise very great difficulties for the Police Federation as well.
  Therefore, it is over the judgment about a situation in which that mutual arrangement is made that this issue will be decided, and it will be decided in the light of the fact that the police will he engaged in normal police duties and will not normally be expected to engage in duties which go beyond the interpretation of that phrase as understood on this side of the Irish Channel. We can explore this question at greater length in Committee.
  As I listened to the debate I felt strongly that I had been raised in a tradition of politics that was both calmer and duller than that of Northern Ire-land or, for that matter, of Eire. I felt that it might have been more exciting to have been in the politics of the other side of the Irish Channel.
  I also felt strongly that one of the things that we had to do—I say this with as much sincerity as I can possibly command—was to spend a little less time making selective quotations from the Cameron Report, pointing out that one side or the other had been guilty of this or that, because the Cameron Report shows that none of us can stand up in a white sheet, be we Nationalist, Unionist, Catholic, or Protestant, and say, "I am guiltless of any part of what has happened to Northern Ireland". I felt that we should now look forward to what can be constructed in Northern Ireland. Having listened to the quality, force and passion of the speeches made
  1074
  in this debate, I am sure that a great deal can be constructed there.
  Those of us on both sides of the House who believe that it is possible to build a society in which neither race nor religion becomes the basis which determines what a man or woman is capable of has perhaps the greatest possible responsibility for demonstrating here in the British Isles that it is true. When we say that other countries have not succeeded in doing this, it becomes extremely incumbent upon us to do it, and to do it as soon as we can.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Hamling.]
  Committee this day.

  POLICE [MONEY]
  Queen's Recommendation having been signified
  Resolved,
  That, for the purposes of any Act of the present Session to enable assistance to be given to the Royal Ulster Constabulary by home police forces and empower the Parliament of Northern Ireland to enable assistance to be given to home police forces by the Royal Ulster Constabulary; to make provision in connection with the giving of assistance to home police forces by the Royal Ulster Constabulary; to establish a Police Council for the United Kingdom in place of the Police Council for Great Britain; and to enable certain police pensions regulations to be made with retrospective effect an I alter the mode of exercising parliamentary control of the power to make them, it is expedient to authorise the payment out of moneys provided by Parliament of any sums required by the Secretary of State to en a ble him to defray expenses incurred by the first-mentioned Council.—[Mr. Hamling.]

  TELEVISION RECEPTION, THE HIGHLANDS
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hampling.
  2.33 a.m.
  Mr. Robert Maclennan: I wish to express to my hon. Friend the Parliamentary Secretary my appreciation of his attendance at this very late hour to participate in this debate,

  1075
  He will know that my interest in improving the television facilities in the Highlands goes back over a period of two years during which I have made repeated representations to my right hon. Friend the Minister of Posts and Telecommunications and his predecessors that the facilities should be extended at a rate more rapid than that which appeared to be planned, particularly by the B.B.C.
  In a letter to me dated 7th August this year my right hon. Friend indicated the plans for the extension of television broadcasting facilities in the Highlands, and described how it was not intended to introduce into Caithness in particular services on ultra high frequencies before 1974. In consequence, I wrote to advise my right hon. Friend of my intention to raise this matter in the House at the earliest possible opportunity.
  In the document which the B.B.C. produced in July outlining its plans for broadcasting in the 'seventies, the Chairman, Lord Hill, set out his view of the function of the B.B.C. In the foreward he said:
  "The B.B.C. is a public service, and wishes to remain one. The B.B.C. unhesitatingly accepts that this implies a responsibility to provide a comprehensive service to meet the needs of minorities as well as majorities. …Whatever else happens, the public service which the B.B.C. provides should be complete nationally and locally."
  How far short of that responsibility the B.B.C. has fallen in the Highlands is apparent to all.
  One must recognise that technical and economic difficulties make it impossible for the services to be extended immediately throughout such a geographically difficult area as the Highlands of Scotland, but what is quite unacceptable, and what induces a sense of unfairness in the minds of many of my constituents, is that the planned progress is so slow.
  There are, it is true, areas within the Highlands which do not receive any television at all. I believe, from a reported interview with the B.B.C. Controller for Scotland, that half the Highland area is not so placed as to be able to receive any television at all, it must be admitted that although these mountainous areas are inhabited by a relatively small number of people. In fact, it has been asserted that
  1076
  only 2 per cent. of the population of the Highlands cannot receive television at all.
  But the problem which exercises me is more that of those who are in areas which receive only one channel, B.B.C. 1. These are the people who feel particularly harshly the sense of unfairness and discrimination. After all, they pay the same licence fee as those more fortunately placed in other more populous parts of the country, yet they receive only one channel. The consequence of this is that some of the most worth-while broadcasting is denied to them. For example, it appears that the University of the Air will not be available to those who live in the northern parts of my constituency.
  What is resented even more, perhaps, than the restriction on choice of programmes is the serious problem of interference, a problem affecting those who watch B.B.C. 1 throughout the country but felt most acutely by those who have access only to that channel. What progress has been made by the B.B.C. in combating the difficult technical problems which have given rise to interference on B.B.C. 1?
  As early as 20th February, 1968, the Postmaster-General, now my right hon. Friend the Secretary of State for Education and Science, wrote to me to say that he had initiated a special study of this problem of interference. What has happened to it? Has it been completed? Is the product of the study the information sheet which has been put out by the B.B.C. engineering information service, and released in May of this year, describing the problem of television interference from distant transmitting stations?
  That document, a copy of which was sent to me by my right hon. Friend, does not lend itself to easy comprehension. It is not of a kind likely to be useful to those who suffer from interference. There are various technical explanations of why intereference occurs. It is described as due principally to interference from other users of the same channels, sometimes abroad. It may be attributable to reflection from ionised layers some miles above the earth's surface; also to tropospheric propagation in which waves are conducted through the atmosphere over greater distances

  1077
  than usual; and to drifting clouds of ionised gases in the atmosphere known as sporadic E which are capable of reflecting signals in the Band I range but which are transparent to the much higher frequency signals in the Band III range.
  That is an interesting explanation, but the information sheet is rather less helpful with advice as to what can be done about it. It is suggested that the best advice can be obtained from a television dealer with experience of local reception. That may be so, but I wonder how many television dealers are equipped to give the kind of advice which is necessary to deal with these problems.
  It is stated, also—this seems to be more a matter of history than of advice?
  " The B.B.C. is taking action to reduce the effect of these various kinds of interference by building different relay stations to provide strong signals in the areas particularly affected ".
  Perhaps accurately, though I suspect not, we are told that the programme of work "is almost complete". Is the programme of work almost complete in so far as it affects the Highlands and Islands of Scotland? if not, this is a most misleading document.
  The document summarises what one can do in three ways. It suggests that one should see that one's aerial is properly attached. That seems a matter of common sense. It suggests that, if there is an alternative transmission in one's area, one should ask the dealer to erect the necessary receiving aerial, which also seems common sense.
  It also states:
  " As soon as B.B.C. I is transmitted on ultra-high frequency in your area, take advantage of these transmissions, which are relatively free from interference."
  It is in respect of this third piece of advice that one must feel most dissatisfaction in view of the fact that in the area about which I am particularly concerned, the northern part of the mainland Highlands, there is no expectation of ultra high frequencies with 625 line definition starting before 1974.
  I should be grateful if my hon. Friend would state what progress is being made in tackling these difficult technical problems and explain, if there are barriers to the reallocation of channels, what these barriers are, and also what progress
  1078
  is being made in the building of relay stations.
  The programme for extending television services througilout the Highlands was, as I have said, described to me in a letter of 7th August, 1969. The Postmaster-General drew attention to the fact that it was intended to introduce B.B.C. 2 into the Inverness area by the opening of the Rosemarkie station in the spring of next year. This will be of great assistance to the more populous parts of the Moray Firth area. Inverness, Nairn, Invergordon and Dingwall can all expect to benefit. I should be grateful if my hon. Friend can say whether the eastern part of Sutherland will also be able to benefit from the opening of the Rosemarkie station.
  What came as a sharp disappointment was the news that no programme had been prepared for the extension of these services to the transmitting station at Rumster Forest, whence colour television would he relayed to Caithness. One is bound to ask what priorities the Government and the B.B.C., which has prime responsibility in this sphere, had in coming to this decision. It is clear that the cost of providing television to our population throughout the British Isles varies enormously depending upon the concentration of population as well as upon the technical difficulties of the area. But the priority which appears to have been left wholly out of account, in my view mistakenly, is that which ought to be given to a population which lives far from the advantages enjoyed by urban population which can enjoy the experiences of the live arts in particular and which may also have access to other means of educative facilities—the universities and further education classes.
  Television is also a most important source of information which throughout the Highlands is in many cases the most rapid means of communicating news in view of the necessary delays that at present occur in the postal services. In Thurso, in my constituency, it is not possible to obtain a daily newspaper before 10.30 a.m., and on Sundays the papers do not come urtil the afternoon. Television and broadcasting generally provide the most immediate source of information. In these areas the public pay the same licence fee as everyone else,

  1079
  but, particularly during the summer, they are subjected to extremely bad reception and the limitations of programme choice that I have described.
  How can this unfairness be dealt with save by extending the service and more rapidly introducing the new stations? I believe that no alternative to that extension will fill the bill. In the meantime I shall be grateful if my hon. Friend will give thought to the question whether it would be possible to vary the licence fee on a regional basis. I know that there are difficulties. They were described in a series of letters I received from my right hon. Friends the Secretary of State for Education and Science and the President of the Board of Trade when they held the position of Postmaster-General. I do not minimise the difficulties, but it is important to recognise that the sense of unfairness is justified.
  It has been suggested by the Controller of the B.B.C. in Scotland, Mr. Alasdair Milne, in an interview given to the arts editor of the Scotsman and reported in the Highlands and Islands Development Board's quarterly of autumn, 1969, that the best way to tackle the problem might be by some kind of subsidy—as I understand him, by the board. Apparently, it and the B.B.C. have been discussing ways of co-operating in places where there could be piped television with lamp-post reception masts.
  Although it would certainly fall within the powers of the Board to give such a grant, and it has given grants for purely social and non-economic purposes, it seems that the B.B.C., if Lord Hill's statement which I quoted is right, has shouldered the responsibility for providing a comprehensive service to meet the needs of minorities as well as majorities, a service which is complete nationally and locally. Therefore, I think it proper that the B.B.C. should consider whether it should not subsidise the piping of television into areas remote from the normal methods of relay.
  It must be acknowledged that the cost of installing television for the population not now enjoying it, or enjoying only one channel, is increasingly steep. It has been said that it might be as high as £150 per head of the population in communities where 2,000 people or fewer are receiving it. I think that the people of the High-
  1080
  lands are sick and tired of hearing about the cost of providing them with essential services, be they water, electricity, roads or whatever it may be. Services will always cost more in the remoter parts of the country where the population is sparse, and if we are not to see this vicious circle retained it is essential to recognise, in this matter as in others, that there must be a direct subsidy. I suggest to my hon. Friend that he should consider whether or not a subsidy could be made in this way.
  2.56 a.m.
  The Parliamentary Secretary to the Ministry of Posts and Telecommunications (Mr. Norman Pentland): My hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) has asked a number of questions, but he has left me very little time in which to pay fuli justice to every one of them. However, I congratulate him on raising the question of television reception in the Scottish Highlands. The subject is a new one to me, but I know that it is one to which he has paid a great deal of attention over a considerable period.
  The problem of television coverage in remote areas, particularly mountainous ones in Wales and England as well as in Scotland, has always presented difficulties. The services of B.B.C. I and Independent Television on V.H.F. and 405 line definition reach 99.5 per cent. and 98 per cent. of the United Kingdom respectively. Because of the special difficulties in mountainous areas, the figures for Scotland alone are 2 or 3 per cent. lower in each case.
  I am reluctant to quote statistics at this hour, but out of a total estimated population of about 300,000 in the Scottish Highlands about 120,000 hold television licences—a licence for every 2½ people. If the figures were as good in the rest of the United Kingdom, I doubt whether we should be very much concerned with licence evasion. Certainly, the figures seem to demonstrate that very many people there find it worth while to own a television set, and that by comparison with Europe our services are giving much greater coverage.
  But there are in Scotland, scattered about in a number of small isolated communities, not all of them in the Highlands, about 120,000 people whom television does not reach. Others may get

  1081
  only a very poor picture. To them, my statistics offer no comfort at all. No one would dispute that these are the very people for whom television could add a new dimension to the quality of life. The more remote they are, the fewer are the other amenities likely to be available to them.
  Furthermore, although only relatively few people cannot receive B.B.C.1 or Independent Television or both, about 25 per cent., nearly 11 million people, in Scotland are outside the range of B.B.C.2. The comparative figure for the United Kingdom as a whole is 20 per cent. or about 11 million.
  My hon. Friend has made it clear in the past as well as tonight that he attaches special importance to the spread of B.B.C.2 in the area of his constituency. One can sympathise with his concern here. B.B.C.2 offers not only an extension of programmes but the superiority of 625 line definition, the possibility of colour and a picture unhampered by interference from foreign stations which has reduced the quality of B.B.C.1 in some parts of the Highlands at various times. Such are the problems and I hope that my hon. Friend will feel that I have done them full justice. I am sure that my right hon. Friend the Minister does not underestimate the sense of deprivation of those who live in areas where television does not reach at all, or reaches only in part.
  Before going further, may I remind my hon. Friend that something is being done. The B.B.C. plans to bring its B.B.C.2 service to 90,000 people in the Inverness area next year, which is nearly one-third of the population of the Highlands. When the planning of other stations is being settled, the special needs, such as those advanced by my hon. Friend, are factors which will be taken into account in the programme. My hon. Friend will recognise, however, that there are other places in Scotland and also in Wales and England where people are equally anxious to receive the programmes. Some have much greater populations than the Highlands. Reasons can be and are advanced for special consideration for other places. It would not be possible to give special priority to them all.
  1082
  But to come back to the problem. I must ask my hon. Friend to consider the whole picture and not just one bit of it. An essential in the task of providing television reception is an exercise in frequency planning. Frequencies are extremely scarce and there are not enough to go round. Each frequency has to be used more than once, but there are severe limitations on the extent to which this is possible, even where stations are transmitting the same programme. Stations dotted all over the country have to be allocated frequencies from the choice available in a pattern so devised that no station will interfere with any other.
  In the case of V.H.F. especially the plan must also take account of possible mutual interference with stations abroad. Therefore, it follows that however carefully the sites for stations are chosen and frequencies and power output allocated to them, there are limits, dictated by the scarcity of frequencies, to what can he done. We must recognise that total universal coverage by a broadcast signal is just not a practicable proposition.
  I have, however, already said that the V.H.F. B.B.C.1 and I.T.V. coverage has achieved a level only a few per cent. short of this perfection. Could or should it be extended? The House knows that only last week we saw the official beginning of the new duplicated services of B.B.C.1 and I.T.V. These services are being provided on U.H.F. and with 625 line definition. They offer viewers the possibility of colour; they give a superior picture and one free from interference from other stations. They enable viewers to use cheaper single standard sets and they offer British manufacturers for the first time the possibility of exporting sets and components of the same specification as they are selling on the home market. But—
  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 four minutes past Three o'clock, a.m.