Commons Sitting of 15 May 1970

Preamble
The House met at Eleven o'clock
PRAYERS
[Mr. SPEAKER in the Chair]

SUPPLEMENTARY BENEFIT RATES (INCREASES)
The Secretary of State for Social Services (Mr. Richard Crossman): I will, with permission, make a statement about supplementary benefits.
I have today laid before the House draft Regulations containing proposals for increases in supplementary benefits. These draft Regulations require the approval of both Houses of Parliament by affirmative Resolution. Subject to this approval, the effective date will, as last year, be the first Monday in November.
I propose that the rate for a single householder should be increased by 8s. a week and that for a married couple by 13s. a week, bringing the single rate up to £5 4s. and the married rate up to £8 10s.—plus, of course, rent. Suitable increases will be made in other rates. I will, with permission, circulate a full list of the proposals in the OFFICIAL REPORT.
These increases will more than restore the real value of the scales brought in last November.
The current Estimates provide a figure of £485 million for supplementary benefits this year. The proposed increases, which are as usual to be met from the Consolidated Fund, will add about £70 million in a full year. Some 2,700,000 recipients will benefit.
Mr. Dean: Is the right hon. Gentleman aware that we welcome these proposed increases and were pressing for them in the House on Monday of this week? Would he care to tell the House why he has made the announcement today in view of the proposed starting date of November?
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Will he confirm that the prices explosion is hitting hard the most needy families, that half the increase given last November is already eaten away by rising prices, and that if prices go on rising at the present rate a married couple will be 12s. worse off by the coming November? Is he asking the House to accept that position as satisfactory?
What will be the effect on those who are wage-stopped, in particular the disabled, who do their utmost to earn their own living? Has he taken any action on the suggestion of the Supplementary Benefits Commission in 1967 that there should be a review of the disabled wage-stop?
Mr. Crossman: The hon. Gentleman asked me why I am doing it now. I am a little disappointed by that question. Last year I did it in June and was censured for being so late, and so I thought that this year I would bring it forward a little to get the applause of the Opposition.
I think that the hon. Gentleman got the figures of value rather wrong. As I reckon it, the cost of living has gone up 2·8 per cent. in the most recent figures since the rise last November and the increase which we have now made is 8·3 per cent. If he looks at the figures again, the hon. Member will find that his calculation is quite wrong when he says that there may be a 12 per cent. increase in the time allotted.
Mr. Maudling: The right hon. Gentleman is not dealing with the point. The point is the increase in the cost of living over the 12 months' interval. As the cost of living increase is now running at nearly 8 per cent., what will be the respective positions? Is it not true that prices generally are now rising between 7 and 8 per cent. while food prices are rising by more like 10 to 12 per cent.?
Mr. Crossman: I should like to keep to firm facts. From November to now there has been a 2·8 per cent. increase. I am not prepared to speculate and I simply say that in my view this will more than cover any increase which will occur before November this year.
Mr. Spriggs: May I congratulate my right hon. Friend on making a statement

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which will be welcomed not only by the nation but by those in genuine need? How does the current expenditure on supplementary benefits compare with that in the last two years under the Tories?
Mr. Crossman: I am grateful to my hon. Friend for those kind words. I happen to have the figures which will answer his question. The full figures are that in the last year under the Tories the figure was £217 million. In 1969–70 it was £470 million and I reckon that in this year it will be £555 million.
Mr. Boyd-Carpenter: What rise in the cost of living to next November has the right hon. Gentleman calculated in relation to this increase? Can he say what has happened since last Monday when he rejected my suggestion that he should take this action?
Mr. Crossman: I do not think that anything really has happened since Monday—[Laughter.]—except that, as often happens, a Minister then decides on the date when he will make the pronouncement, and I thought that today would be a suitable day to make it. I was not quite so convinced of it on Monday. It was a growing feeling in my mind during this happy week which we have all been through and I thought that it would be nice to end the week on a happy note.
As to the estimate that we have made, we calculate that in terms of the increase in the cost of living these improvements will more than cover the increase that we anticipate by November.
Mr. William Hamilton: Can my right hon. Friend say what this increase means in real terms since October, 1964, and whether the Regulations will be debated before the Summer Recess?
Mr. Crossman: The advance in real terms since the Tories was 23 per cent., and that is fully restored—and more than fully restored—by this increase.
Mr. Lubbock: May I put a supplementary question which has not been written for me by the Secretary of State? Is he aware that the general cost of living increase is not of particular interest to the people receiving supplementary benefit? For the purposes of comparison, will he give the House the figure of the
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percentage increase in the cost of food since November, 1969? Further, does he not think that it is time an improvement was made in the 10s. long-term addition, which has remained constant for a very tog time?
Mr. Crossman: The hon. Member has asked a question for which, no doubt, he knew I had prepared but did not bother to tell me about it beforehand. I had prepared for it. With regard to the cost-of-living index, the hon. Member is well aware that my right hon. Friend the First Secretary has now organised a special cost-of-living index for old-age pensioners, and the difference over the last four months between the movement of the two indices is very small indeed.
As to the 10s. long-term addition, I considered doing this and dividing the increase between all the beneficiaries and the four-fifths who get the 10s. long-term addition. I thought that, on the whole, it would be a mistake to exclude those who do not get the long-term addition, who include the long-term unemployed and the sick. I felt it better to give it all round than to concentrate on the long-term recipients.
Mr. Gardner: Is my right hon. Friend aware that, despite the understandable comments from the benches opposite, this increase will be welcomed, particularly by elderly people? When he makes these adjustments, will he look particularly at two categories: those who are obliged to have special diets and who are finding life difficult, and those who live in older houses and have very heavy fuel bills and who do not heat themselves sufficiently in winter?
Mr. Crossman: As I think my hon. Friend may be aware if he has studied our new handbook on supplementary benefits which also deals with the problem of the wage-stop in connection with which we have handled certain matters to which the Opposition have referred—both diets and fuel are matters on which discretionary payments can be and are being made. All people who read the handbook should be encouraged and stimulated by it to ensure that applicants claim these benefits.
Mr. Maudling: I must press the Minister on the important question put by my right hon. Friend the Member

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for Kingston-upon-Thames (Mr. Boyd-Carpenter). The right hon. Gentleman has repeatedly said that in his judgment and calculation these increases will more than restore the real value of the scales introduced last November. He cannot make that statement honestly unless he has worked out a figure for the increase in prices. He must, therefore, have in mind a figure for the increase in prices. Why will he not disclose it to the House?
Mr. Crossman: We can see a factor which is the amount of increase from November to the last figure in March; that is statistically factual and announced. Then one has to estimate how much one thinks it will rise and, on our estimate, this increase will more than cover it.
Mr. Roebuck: Is not this further bonus for pensioners another indication that the Government have been pursuing wise economic policies? Is my right hon. Friend aware that the country will want to congratulate the Government on making this increase to pensioners rather than cutting the higher rates of surtax, as advocated by the Opposition? With regard to the possibility of the erosion of this bonus, has my right hon. Friend made any calculation of what the effect on pensioners would be if, by some aberration, the party opposite were returned to office and introduced the iniquitous value-added tax?
Mr. Crossman: I am grateful to my hon. Friend for those interesting political thoughts, but I do not have a brief on the value-added tax as it would affect pensioners. I have no doubt that the right hon. Member for Barnet (Mr. Maudling) has it and can tell us. I would, however, comment on what my hon. Friend called the bonus for pensioners. I prefer to say that this is what they are entitled to. This is something which we have worked out. We give it not as a bonus but because we have kept a fine record in giving an increase in supplementary benefits every year, whereas under our predecessors there was often a gap of 20 or 25 months between increases in supplementary benefit. I believe that we should do this annually and uprate National Insurance biennially because pensioners like to know that we do it regularly.
Sir G. Nabarro: While I accept absolutely that the contemporary conditions of rip-roaring inflation demand that the poorest section of the community should be partially reimbursed by higher supplementary benefits, will the right hon. Gentleman now apply himself to the question of whether the earnings rule is to be revised on 1st November next and the existing limit of £7 10s. a week for a single person adjusted to a realistic scale of, say, £10 a week in line with contemporary values and figures of earnings?
Mr. Crossman: The hon. Member will appreciate that he is asking me a question not about supplementary benefit but about National Insurance, to which my statement does not relate. We are dealing here not with a National Insurance increase but with a supplementary benefit increase, which does not relate to people with earnings.
The hon. Gentleman seems to suggest that there should be reimbursement of pensioners only in what he calls times of roaring inflation. That is not my view. My view is that even quite small increases in the cost of living undermine the value of the pension and that nothing less than an absolutely regular system, such as we have now introduced for the first time, meets the needs of pensioners.
Mr. Sharpies: The right hon. Gentleman says that he has made an estimate of the rise in the cost of living up to 1st November. Will he tell the House what that estimate is?
Mr. Crossman: I have nothing to add to what I have said. We are confident—and we will see who is right—that when we come to 1st November we shall find that the real value of the pension has been maintained, if not increased.
Mr. Ogden: Has my right hon. Friend noted how hard it has been to please the Opposition during the past week? Will he note that his statement is welcome not only for itself but as another indication that the Government are determined to make sure that the benefits of our increased economic prosperity are shared not only by the strong and powerful but by the weak and needy?
Mr. Crossman: I am grateful to my hon. Friend. The fact is that over these six years we have done this regularly. We did it in times of great economic difficulty. Now, when things are better, we maintain the same policy that we had in times of stress.
Mr. Ronald Bell: Does the right hon. Gentleman's statement this morning mean that the Prime Minister will be announcing a General Election at the weekend?
Mr. Crossman: That would be a deduction which it would be improper to draw from my statement.
Mr. Bidwell: May I congratulate my right hon. Friend on being able to keep the basic old age pension 20 per cent. higher than was sustained under the Tories in real terms? After we get back following the General Election, will my right hon. Friend's Department consider making this an even higher percentage in real terms?
Mr. Crossman: Looking back over the period, I think that this success in maintaining the 20 per cent. real increase has been a real achievement. I was asked whether when we get back we can do better. This will depend on the readiness of the contributor to see that we raise contributions to pay for the pension. I believe contributors understand

Following are the details of the Proposed Supplementary Benefit Rates

Present weekly rate

Proposed weekly rate

Ordinary scale

£ s. d.

£ s. d.

(a) husband and wife

…

…

…

…

…

…

…

7 17 0

8 10 0

(b)person living alone or single householder

…

…

…

…

4 16 0

5 4 0

(c) any other person aged

(i) not less than 21 years

…

…

…

…

…

…

3 17 0

4 3 0

(ii) less than 21 but not less than 18 years

…

…

…

…

3 4 0

3 10 0

(iii) less than 18 but not less than 16 years

…

…

…

…

2 16 0

3 1 0

(iv) less than 16 but not less than 13 years

…

…

…

…

2 4 0

2 8 0

(v) less than 13 but not less than 11 years

…

…

…

…

2 1 0

2 4 0

(vi) less than 11 but not less than 5 years

…

…

…

…

1 13 0

1 16 0

(vii) less than 5 years

…

…

…

…

…

…

…

1 8 0

1 10 0

that, but it would be easier to do it after we have introduced our national superannuation scheme with a proper earnings-related contribution, with the burden fairly on the higher paid worker.
Mr. Worsley: Will the hon. Gentleman make it clear whether this announcement means that the Government intend to do nothing for the low income families when the father is in work, since they are worse off as a result of rising prices?
Mr. Crossman: It does not mean that. This is an announcement dealing with supplementary benefit. It does not mean that we have closed our minds to the problem of family allowances. As the Minister of State made clear in a long altercation on Monday on the question of family allowances, which we are considering at the moment, we cannot make up our minds finally until we have studied in detail the results of the Family Expenditure Survey.
Mr. Farr: Is the reason that the Secretary of State refuses to disclose the estimate of the rising prices by next November that he believes it will be of the order of about 10 per cent.?
Mr. Crossman: On the contrary. If I thought that it was 10 per cent. I would be very unwise to have made a statement confident that we have given an increase which more than covers the increase of the cost of living.

Blind Scale

(a) husband and wife

(i)if one of them blind

…

…

…

…

…

…

…

9 2 0

9 15 0

(ii) if both of them blind

…

…

…

…

…

…

9 18 0

10 11 0

(b) any other blind person aged—

(i)not less than 21 years

…

…

…

…

…

…

6 1 0

6 9 0

(ii) less than 21 but not less than 18 years

…

…

…

…

4 4 0

4 10 0

(iii) less than 18 but not less than 16 years

…

…

…

…

3 12 0

3 17 0

(iv) less than 16 but not less than 13 years

…

…

…

…

2 4 0

2 8 0

(v) less than 13 but not less than 11 years

…

…

…

…

2 1 0

2 4 0

(vi) less than 11 but not less than 5 years

…

…

…

…

1 13 0

1 16 0

(vii) less than 5 years

…

…

…

…

…

…

…

1 8 0

1 10 0

Rent addition for non-householders

…

…

…

…

11 0

12 0

Notes (i) an allowance for rent is added to the above rates.

(ii) Both the existing and the proposed rates given above exclude the 10s. long-term addition which is added to the requirements of persons over pensionable age and to those of persons under pensionable age (other than the unemployed) who have received supplementary benefit for a period of two years.

RIDING ESTABLISHMENTS BILL [Lords]
Not amended (in the Standing Committee), considered.
Clause 1

  PROVISIONAL LICENCES FOR RIDING ESTABLISHMENTS
  11.12 a.m.
  Mr. Speaker: I have not posted my selection of Amendments because I have selected all the Amendments in the name of the promoter of the Bill the hon. Member for Lewisham, South (Mr. Carol Johnson).
  Mr. Carol Johnson: I beg to move Amendment No. 1, in page 1, line 16, after ' not ', insert ' under this subsection '.
  I preface my few remarks on the Amendment by explaining that, through the courtesy of the Home Office, Parliamentary Counsel have cast their eagle eyes over the Bill as it emerged from Standing Committee and have suggested to me some Amendments which would improve the language and deal with one or two small anomalies. So that the Bill is in order in all respects before, as I hope, it reaches the Statute Book. I am deeply indebted to the Home Department for arranging for that advice to be available to me.
  Amendment No. 1 is a drafting Amendment. The proviso to Clause 1(2) limits the period for which a riding establishment may be kept under the authority of a provisional licence to six months in any period of twelve months. How
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  ever, the limitation it imposes was not intended to affect the local authority's discretion to extend a licence deemed to be granted to the personal representatives of the deceased holder of a provisional licence by virtue of section 1(8) of the principal Act.
  This Amendment makes it clear that the proviso applies only to provisional licences granted under clause 1 of the Bill, and does not operate on extensions made under section 1(8) of the 1964 Act.
  Amendment agreed to.
  Mr. Carol Johnson: I beg to move Amendment No. 2, in line 6, leave out ' in place of ' and insert ' for '.
  This Amendment can conveniently be taken with Amendment No. 3. The Amendments are straightforward drafting matters.
  Section 1(8) of the principal Act provides that when the holder of an annual licence dies, his personal representatives shall be deemed to have been granted a licence valid for one year from the date of death. The effect of the proviso to clause 1(3) of the Bill is to limit this period to three months when the deceased was the holder of a provisional licence. The substitution by the proviso of " three months " for " one year " in section 1(8) of the 1964 Act should be made in both places where those words appear, and this is achieved by this amendment.
  Amendment agreed to.
  Further Amendments made: No. 3, in page 2, line 7, after ' year " ', insert ' in each place where they occur '.
  No. 4, in page 2, line 7, after ' substituted ', insert the words '.—[Mr. Carol Johnson.]

Clause 2

  AMENDMENT OF SECTION 1 OF PRINCIPAL ACT
  11.15 a.m.
  Mr. Carol Johnson: I beg to move Amendment No. 5, in page 3, line 34, leave out from ' conditions ' to ' in ' in line 35.
  With this Amendment it will be convenient to take Amendment No. 8.
  Amendment No. 5, which proposes to leave out the words " (hereinafter referred to as discretionary conditions ')", is consequential on Amendment No. 8. The redraft of Clause 2(2) proposed in that Amendment would remove the reference to discretionary conditions.
  On Amendment No. 8 I am advised that as at present drafted Clause 2(2) would prevent a person from appealing to a magistrates' court under Section 1(5) of the 1964 Act against any condition which is not a " discretionary condition ". The exclusion is not therefore limited to the conditions imposed by the new subsection (4A), as was the intention in drafting the Bill, but would extend to, for example, a condition imposed under paragraph (a) of the new subsection (4) that an experienced manager should be employed to run the riding establishment.
  This Amendment, together with Amendment No. 5, restores the licensee's rights of appeal, and allows a person to appeal against any condition attached to his licence except those set out in the new subsection (4A).
  The Amendment also has the effect of amending subsection (9) of section 1 of the 1964 Act to make it clear that contravention of any condition attached to the licence, whether by virtue of the new subsection (4A) or otherwise, constitutes an offence.
  Amendment agreed to.
  Mr. Carol Johnson: I beg to move Amendment No. 6, in page 3, line 40, leave out from section ' to every '.
  It will be convenient to take also Amendment No. 7, since the two Amendments run together.
  The new subsection (4A) which is to be inserted in Section 1 of the principal Act by this Bill specifies a number of conditions which shall be applicable to
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  every licence to keep a riding establishment. I am assured that the words
  " it shall be a condition of every licence granted under this Act that…"
  which appear in the first sentence of the new subsection (4A) do not make it clear whether the conditions are deemed to be applied to every licence, or whether the local authority is under a statutory duty to subject every licence to those conditions. Any such ambiguity needs to be removed, because by virtue of Section 1(9) of the principal Act contravention of a licence condition is an offence.
  I am also advised that it is not clear whether, when the Bill comes into operation on 1st January, 1971, the conditions will be applied to all licences in force at that time, as well as to any granted subsequently. I agree that it would not be right to alter the conditions of licences already in force and it is therefore necessary to make it clear that the additional conditions in paragraphs (a) to (e) of the new subsection (4A) shall apply only to licences granted on or after 1st January, 1971.
  The effect of these two Amendments is to alter the wording of the first sentence of the new subsectiton (4A) to make it clear that the conditions in paragraphs (a) to (e) shall apply automatically to all licences issued after 31st December, 1970.
  Amendment agreed to.
  Further Amendments made: No. 7, in page 3, line 41, leave out that ' and insert:
  `after 31st December 1970 shall be subject to the following conditions (whether they are specified in the licence or not), namely—'.
  No. 8, in page 4, line 28, leave out from if ' to end of line 29, and insert:
  ' after the words " proposed to be granted "there were inserted the words " (not being one of the conditions set out in subsection (4A) of this section)" and subsection (9) of that section shall be read and have effect as if for the words from " subject " to " Act " there were substituted the words " to which a licence under this Act is subject (whether by virtue of subsection (4A) of this section or otherwise)" '.—[Mr. Carol Johnson.]
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 55 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, with Amendments.

CARRIAGE OF GOODS BY SEA (AMENDMENT) BILL
Considered in Committee.
[Mr. SYDNEY IRVING in the Chair]

Clause 1

  APPLICATION OF HAGUE RULES AS AMENDED
  Question proposed, That Clause 1 stand part of the Bill.
  11.30 a.m.
  Mr. Charles Fletcher-Cooke: This Clause is the nub of the Bill. I should like to say a few words about it, prefacing them with a word of thanks to the Minister of State, Board of Trade, and his advisers for their great help to me in preparing the Bill and not least in seeing its way through so far. They have been kindness and efficiency itself.
  Although at one time it looked as though we might lose the Bill, I am still hopeful, in spite of the times in which we live, that it will not be massacred, along with a lot of other innocents in the next few weeks, because the Bill blazes a trail by the United Kingdom for the ratification of the new Hague Rules related to the carriage of goods at sea. Clause 1 does just that.
  The old rules do not take account of the great container revolution which has occurred. It is essential for the maritime community to have revisions of those Rules and for those revisions to be carried through into statutory force in all the great maritime nations. By what we are doing today we are setting an example and blazing a trail in that regard. It is over two years since the noble Lord, Lord Diplock, managed to lead these nations at the conference in Brussels to agree—and it was not difficult—to tile revisions. The revisions are in the Schedule to the Bill which Clause 1 makes effective.
  The main proposal in the Clause and its annexures, Schedules and Protocol is that the limit of liability of carriers be raised from £100 to the equivalent in gold francs of about £270 per package. Higher but not lower limits can be negotiated between the parties. Moreover—and this is the important part of
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  the Bill which must be passed unless the container business in a way is to be brought to a stop—packages inside a container could be enumerated separately on a bill of lading and would then count as separate packages for limits of liability. Hon. Members will appreciate the difficulty today where a container which may contain the most enormous and valuable assortments of goods is regarded as a single package for the purpose of limitation of liability—which is only £100—and therefore, the peril in which traders, shippers and ship owners find themselves. That is the urgency of the Bill and why the Clause is so important, and that is why I very much hope that the chopper—the Sword of Damocles—which looks as if it might descend upon our deliberations in the House and elsewhere will not hit this Bill.
  The necessary changes to the 1924 Act were so numerous that it seemed sensible and more convenient to those whose interests are affected by this legislation to repeal the 1924 Act and to introduce a completely new Bill. Thus, Clause 1, which is the nub and crux of the Bill, with its appendages, gives those who have to deal with this branch of the law a very convenient place and method in which to find out not merely what the new law is but all the law on the subject. I therefore hope that the Clause commends itself to the Committee.
  The Minister of State, Board of Trade (Mr. Goronwy Roberts): As the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) said, this Clause is the nub of the Bill. In supporting what he said, I can indicate the Government's complete approval and support for the Bill. I welcome the hon. and learned Member's initiative in introducing the Bill. He has explained the background to the signature of the Protocol at Brussels two years ago, when it was agreed that the Protocol would not come into effect until at least 10 nations had ratified it. It takes time, as he indicated, for Governments to consult all their domestic interests, before appropriate legislation is introduced, and to complete the necessary process of legislation and ratification. As he reminded us, over two years have elapsed. The Government welcome the opportunity, if

  1681
  the Bill becomes law, with this crucial Clause and its related Schedule as part of it, to give an example and lead to other Governments and, if I may quote the hon. and learned Member, to blaze the trail.
  The Clause which sustains the Bill is simple and serviceable. The changes which the Bill introduces will bring the law more into line with the needs of modern sea transport. For example, the need for raising limits of liability set nearly 50 years ago is obvious. The hon. and learned Member also referred, quite rightly, but obliquely, to the container Clause. This illustrates strikingly the need for legislation to keep up with innovations. The other changes which partly stem from the Clause and partly from other Clauses are no less useful.
  I am glad that the hon. and learned Member so rightly emphasised that the Protocol stemmed from an initiative by the commercial interests concerned. It forms a balanced set of improvements which will benefit shipper, carrier and underwriter alike. I understand that all the parties concerned are happy about the Bill. The Government support the Bill. I am pleased to commend it to the House and I congratulate the hon. and learned Member on the progress which he has achieved so far.
  Question put and agreed to.
  Clause 1 ordered to stand part of the Bill.
  Clauses 2 to 6 ordered to stand part of the Bill.
  Schedule agreed to.
  Bill reported, without Amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 55 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed.

SELECTIVE EMPLOYMENT TAX AMENDMENT BILL
Order for Second Reading read.
11.40 a.m.
Mr. Stanley R. McMaster: I beg to move, That the Bill be now read a Second time.
Although a short Measure, this represents an important amendment to the law. Selective Employment Tax was introduced in 1966 and partly repeated the payroll provisions which had been introduced by a Conservative Government, but which were never implemented.
When introducing this new form of taxation, S.E.T., the Chancellor of the Exchequer said that it was needed to
" make a positive contribution to the long-run structural changes we need in order to achieve a healthy balance of payments ".—[OFFICIAL. REPORT, 3rd May, 1966;Vol. 727, c. 1453.]
S.E.T. has been amended in various subsequent Finance Acts. Exemptions have been made in respect of public bodies and premiums have been provided for manufacturing industry. However, despite the original intentions of the Government—that is, that S.E.T. should be used to encourage, among other things, a transfer of labour from service to manufacturing industry—the purposes of this new form of taxation have been largely frustrated during the four years since its introduction.
Unemployment figures have remained persistently high, particularly in regions like Northern Ireland, where this month we have a stubborn 7 per cent, unemployment figure. My Bill, which is an additional amendment to the law—it is intended to add to, rather than to replace, the existing law—will enable S.E.T. to be used to help to reduce the unemployment figures, particularly in development areas and Northern Ireland.
One of the shocking features of our economy today is the waste of human resources in the development areas. All possible efforts should be made to bring these resources into use. If we could do this, we would benefit both the Exchequer and the nation as a whole. The Exchequer would gain a double benefit from such an improvement because, first, direct income from taxation would be increased, and, secondly, there

1683
would be a direct saving in unemployment pay.
In other words, the nation's bill for unemployment assistance and other social benefits—particularly expensive items in areas of high unemployment—would be greatly reduced. Not only would direct tax income be increased, but those who would become employed would contribute to, rather than be a charge on, the National Insurance Fund.
From the national point of view, there would be tremendous benefit. The resources brought into use would contribute to the gross national product, first by contributing directly to Britain's exports and, secondly, by contributing indirectly in that those not employed in export industries would presumably be employed in other industries, so leading to import saving. There would, therefore, be a great improvement in our external trade balance, an aspect with which we have been preoccupied since the war.
I lay particular emphasis on the human aspect of this for those who are at present unemployed and who face the misery and despair which comes from long-term unemployment would be filled with hope. In Northern Ireland 35,760 men, women, boys and girls, almost 7 per cent. of the insured population, are unemployed. When broken down, that figure reflects an even more alarming position.
In Northern Ireland as a whole the figures vary greatly. Whereas in Belfast the average figure of unemployed is 5 per cent., in Kilkeel—I am glad to see my hon. Friend the Member for Londonderry (Mr. Chichester-Clark) in his place —it is 22·3 per cent. Even that does not reveal the whole picture. The 5 per cent. figure masks the fact that in Belfast 6 per cent. of males are unemployed, representing almost 11,000 on the insurance register in Belfast. At Kilkeel male unemployment is running at 26 per cent., which means that one man in four in that area is unemployed. In other towns like Newtownards, Omagh and Strabane the unemployment figures are also high.
No matter what the cost of my Bill —I have explained that the cost would be minimised by the contributions which people would make to our export trade and to the gross tax income—it has a wholly desirable aim and I hope that my arguments will weigh strongly with the Treasury.
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While it might be said that under existing legislation a rebate of S.E.T. is paid to manufacturing industry, it must be remembered that in the development areas one looks particularly to the service industries to take up the slack. It is to services like tourism that we must look if we are to employ our present unemployed resources.
There is no need to treat this aspect of the Measure disparagingly or to say that it would be a burden on the economy. On Second Reading of the Finance Bill it was pointed out that the service industries contribute substantially to the balance of payments. Indeed, without that contribution we would not have a substantial credit balance on the balance of payments. I therefore make no apology for admitting that my Bill would particularly assist those employed in the service industries in places like Northern Ireland, a subject on which I hope my hon. Friend the Member for Londonderry will speak later.
The main Clause provides that for every 1 per cent. by which the level of unemployment in a development area or in Northern Ireland rises above the national average, the payment into the Exchequer shall be reduced by 20 per cent. In Northern Ireland, where unemployment is running at 7 per cent., that would mean a complete 100 per cent. repayment. With such a sliding scale, the contribution to the Treasury—if the Bill is successful, as I am sure that it will be—would be gradually increased until it was the same throughout the United Kingdom. Northern Ireland is not slow to want to make her full contribution to the national income, but particularly in the light of the failure of measures taken by respective Governments since the war to cure our unemployment problem I feel that this method should be tried.
I speak having keenly in mind the serious events which have taken place in Northern Ireland in the last 12 months. I firmly believe, as I understand do all my colleagues, that unemployment, and its accompanying misery, has been a large contributing factor to the unrest and the uprising we have seen here. If my proposals are adopted by the House, they may do something to bring to an end disturbances which, in themselves, drive industry away from Northern Ireland.

1685
I have seen in my constituency the results of a male unemployment figure of 6½ per cent. I have seen the frantic search for jobs, and the jealousies and fears which can result. I particularly emphasise that last aspect, because I believe that it is the fear of unemployment and the fear, too, of political unrest which is the main factor behind our unsettled state in Ulster. It is the fear that people have about what is to happen tomorrow; what is to happen next.
If the Government do not like the exact form of the wording, they might look at it themselves and then introduce their own Measure: it is the underlying idea that I stress. From the Treasury's point of view, from the point of view of balance of payments, and particularly from the human point of view, I commend this Bill and the idea behind it to the House.
11.54 a.m.
Mr. R. Chichester-Clark: As I wish to see the Bill make as rapid progress as possible, I shall not detain the House for long. I support much of what has been said by my hon. Friend the Member for Belfast, East (Mr. McMaster) and I congratulate him on his determination in bringing forward a Bill which he believes will do something, perhaps a great deal, to alleviate the unemployment from which we in Northern Ireland have for so long suffered. My hon. Friend, like myself, has a great problem of unemployment in his constituency, where is situated the great firm of Harland and Wolff.
As any hon. Member representing a Northern Ireland constituency inevitably must, I take particular interest in a Bill of this nature. Londonderry has an unemployment rate of 12·6 per cent., in the nearby town of Strabane the figure is 18·6 per cent., and similar percentages exist in many other areas, particularly on the western side of Ulster. The Northern Ireland Government have been grappling with the problem of the West for a very long time. It is not a question of neglecting the area, but of difficulty in persuading industrialists to come that far. As the Minister knows, inducements which are away ahead of those offered to industrialists in respect of other areas are offered by the north-western area.
1686
The selective employment tax has un-undoubtedly made a considerable difference to our situation. In a sense, we are a development area and, above everything else, we have wished to encourage the service industries. The tax has its criticis in the rest of the country but, in Northern Ireland, had it been the intention to make sure that people left service industries to go into manufacturing industry, the authors of the tax could claim some success. It is not, however, a success that any of us would wish to have.
The service industries are particularly important to us. I will not weary the House now with many figures, but the numbers employed in our distributive trades have shown a very heavy fall since the introduction of the tax. The same is true of other service industries. The tax has had a particularly serious effect on the tourist industry. In 1967, when Northern Ireland had well over 1 million tourists, and that trade was being much built up, the catering trade employed 10,099 people who could be said to be looking after the interests of the tourists, and 9,610 of them were permanent. Since 1968, despite the fact that the number of tourists has increased, the number employed to cater for their needs has fallen to 9,182, the important thing being that of that number only 7,530 are now permanent. Such a drop shows the very dramatic effect that selective employment tax must be said to have had, and for that reason alone my hon. Friend's proposals deserve serious consideration.
I beg the Minister to look very seriously at the Bill to see whether it could be improved. On the other hand, as my hon. Friend has said, if the Minister does not like certain provisions, let him bring forward proposals of his own. We are here dealing with a matter of very great importance. In Northern Ireland, the tax is a real chain around our necks and a real stumbling block to our development.
11.59 p.m.
The Minister of State, Treasury (Mr. William Rodgers): I believe that on a previous occasion the hon. Member for Belfast, East (Mr. McMaster) referred in particular to the selective employment tax as a wholly bad tax. Were we discussing S.E.T. generally, I should find it necessary to contest that view. It is certainly true that it is a tax which lends

1687
itself less to rational discussion, even here, than do some other forms of taxation. Today, however, the hon. Member has not put forward a major case against S.E.T. but has made a very sympathetic plea on behalf of his constituents, and others in Northern Ireland in the development areas, who are out of work. I entirely share his concern, and. in that sense, I am very glad that he has had the opportunity of seeking a Second Reading for his Bill.
The hon. Member referred to the shocking waste of human resources: that is an old and familiar phrase, but no less effective for that reason. It is a shocking waste of human resources when men are out of work who would wish to work, and I appreciate the concern of the hon. Member and of his hon. Friend the Member for Londonderry (Mr. Chichester-Clark) for the areas they have in mind, where the figure of unemployment is intolerably high.
As I think the hon. Member for Belfast, East, may recall, in the early days of this Government I had some responsibility for regional policy and, partly as a result of his urging, I went to Belfast. I flew in a Skyvan over Belfast Lough before it received its certificate of air worthiness. I was at that time very much struck by the problem with which the hon. Member has been dealing and the need to get to grips with it, but I think it was true of Northern Ireland and the development areas then than it would be a mistake to assume that in a relatively short period—although I do not suggest nothing had been done before—we could totally transform the situation in areas of high unemployment and structural weakness in the economy.
Some of my hon. Friends might have thought that it was a matter of incentives and waving a wand and all would come right, but that is not true, particularly in areas where industries are in decline and there is a serious rural problem. I hope that five years ago I did not seek to suggest that within a relatively short period the problems would be overcome. I think we set out on the right course and the whole House has shown over the five years or so deep concern about these problems and a full recognition of the complexity and difficulty of the situation. I do not exclude—the House has already learned this—a con-
1688
tinuing review of incentives in areas of high unemployment, given only two considerations.
The first is that they must continue to receive the very highest priority. A Government which switched on and off would be doing a great deal of damage, because continuous attention to development areas over a decade can make a great difference. Secondly, there should be a fair element of certainty. If those in the development areas do not know whether the incentives they enjoy today will be the same as those they enjoy tomorrow, we shall not get the prosperity for development for which we are looking.
I entirely share the hon. Member's concern. I think that broadly the House has recognised that the steps we have taken in the last five years have been the right ones. We have attached great priority to the problems of Northern Ireland and the development areas. I certainly do not exclude a change at any time if it can be demonstrated that this would make an essential difference to solving the problem. My case against the Bill, if I must put it that way, is not simply the loss to the Exchequer which would be involved of something like £50 million in Great Britain and £11 million to £12 million in Northern Ireland.
It is arguable that that is a sum of money which at any time we might have to make available additionally to Northern Ireland and the development areas. I should say, however, that there is insufficient evidence to believe that the sort of proposals made in the Bill would be the basis on which to deal with the problems which the hon. Member has described; or the best use of £50 million for Great Britain or £11 million to £12 million for Northern Ireland if these sums of money were available. I would not exclude that in our review of policy towards the development areas. This is something we shall be bearing in mind. I prefer to say to the hon. Member and to the hon. Member for Londonderry that of course this sort of factor and approach to the development areas will never be excluded from our consideration.
Whereas the Chancellor of the Exchequer decided that this was not the year to make changes in S.E.T.—which is a further reason for not being able

1689
to accept the limited proposals in this Bill—of course S.E.T., following Professor Reddaway's review and further reviews of the tax, will be looked at. When the time comes to consider its future, and any anomalies which may exist in it, the sort of arguments put forward by the hon. Member will certainly be fed in for consideration.
As the hon. Member knows, there is a considerable amount of discretion concerning S.E.T. in Northern Ireland. A loss of £11 million to £12 million would be a loss to the Northern Ireland Exchequer and therefore would not in a sense be available as it is for the purposes of the Northern Ireland Government. The Northern Ireland Government agreed to S.E.T. being levied by United Kingdom legislation, but retained the right to make their own refund arrangements. Even at present the effective rate of S.E.T. in Northern Ireland is lower than it is in Great Britain. It has been lower for a large part of the time since S.E.T. was introduced. The effective rate in September, 1966, was 12s. 6d. there when it was 25s. in Great Britain. The effective rate is now 43s. whereas in Great Britain it is 48s. So there is a real element of discretion given to the Northern Ireland Government. I am sure the hon. Member will consider whether the loss of revenue represented by the implementation of the Bill for the Northern Ireland Government would necessarily be the most acceptable way of using such sums were they available.
It is not clear that this would be the best way of spending the money. Secondly, the Northern Ireland Government have this discretion. Thirdly, the proposals would not be acceptable so long as the tax is collected through the National Insurance stamp. Since the introduction of the tax there have been administrative problems in making it as flexible as we should like it to be. Inevitably sometimes there has been clumsiness in the administration for that reason. Until this is remedied, as it will be in due course, it would be impossible to carry out the provisions set out by the hon. Member.
Fourthly, although of course it might be that the consequence of the Bill would be to help in the unemployment problem,
1690
it could work in a number of different ways. It could simply restore the level of profit. It might affect the price level and of course it might make more money available to be spent on goods from outside Northern Ireland. I should not like to say dogmatically that any one of these things would happen, but I put it to the hon. Member that even if the administrative problems could be overcome the Bill still might not achieve the the objectives he has in mind.
The hon. Member moved the Second Reading in a very moderate way. He said that the proposal was one which perhaps should be tried. The hon. Member for Londonderry said that he stressed the idea behind the Bill. I entirely share those sentiments. They are sentiments concerned with a great human problem. Very properly, close scrutiny should he given to all legislation, including tax legislation, in so far as it bears on this problem and its solution. But I hope that the hon. Member will not feel bound to press to a Division his Motion for the Second Reading of the Bill, because in such circumstances I should have to ask the House to reject it.
12.10 p.m.
Mr. McMaster: I ask the leave of the House to reply briefly to the debate. I welcome the support of my hon. Friend the Member for Londonderry (Mr. Chichester-Clark) and thank the Minister of State for answering in such a courteous and thoughtful manner.
I must admit that I am very disappointed with the last part of the Minister of State's speech. I said earlier that I was not wedded to the precise form of the Bill. However, I am wedded to the Bill's central idea. I sought to make this amendment in 1961, when the question of the payroll tax was originally debated. The then Tory Government saw fit to exclude Northern Ireland from the provisions of that Measure so that, if it had been made effective, it would not have applied in Northern Ireland.
I believe that this is the ideal way of assisting a development area. I stress that I do not restrict this concept to Northern Ireland. The Minister, in quoting a loss of £12 million to the Revenue, was speaking of a very small sum compared with the total tax levied. I do not accept, however, that this would be a

1691
loss to Northern Ireland's economy. This money is simply returned to people, particularly those who are employers in service industries in Northern Ireland. It enables employers, where there is some difference between the wages and salaries paid in Northern Ireland and the national average, to use part of the money to increase salaries and wages of their employees, to improve their capital facilities, and to extend their operations, all of which create more employment. This money is, in turn, spent by the employees in Northern Ireland, thus creating further employment. The same would apply, though to a lesser extent, in any development area.
Ulster has experienced particular trouble due to the run-down of traditional industries. The linen industry has run down. The shipbuilding industry has been rationalised. There have been difficulties in the aircraft industry in my constituency. More important, there has been the move from the land to the town.
This is one of the reasons why, try as hard as the Northern Ireland Government can, with the backing of the Imperial Parliament and Government at Westminster, they have been unable to alter the persistently high figure of unemployment to which the Minister referred. They have been unable to make any dent in it over the past 20 years. During the 1950s it rose to a peak of 11 per cent. or 12 per cent. It came down
to 7 per cent. and it has remained at that level for the last few years.
Ulster's difficulty is its distance from the markets. To overcome this difficulty and to overcome the cost, either we must provide some type of transport subsidy in Northern Ireland so that it can benefit fully from the fuller employment in Great Britain, or we must adopt a Measure such as this. This Measure would be a very valuable supplement to the industrial inducements which are already being offered by the Government and the attempts of the Northern Ireland Government, supported by the British Government, to build up the infrastructure.
This instrument would spread its effects throughout the country and benefit particularly areas such as seaside towns and the areas which I have already mentioned, by helping to build up service industries there where the most intractable problem in Ulster has been found.
It is for this reason that I must press the Bill to a Division. I repeat that I am not wedded to the wording and would have been quite prepared to accept any Amendments the Treasury had cared to suggest. I believe that this Measure should be accepted by the House.
Question put, That the Bill be now read a Second time:—
The House divided: Ayes 12, Noes 37.

Division No. 131.]

AYES

[12.14 p.m.

Bell, Ronald

Lane, David

Thorpe, Rt. Hn. Jeremy

Boyd-Carpentor, Rt. Hn. John

Legge-Bourke, Sir Harry

Chichester-Clark, R.

Lloyd, Rt. Hn. Selwyn (Wirral)

TELLERS FOR THE AYES:

Clegg, Walter

Longden, Gilbert

Mr. Stanley McMaster and

Errington, Sir Eric

Orr-Ewing, Sir Ian

Sir Ronald Russell.

Heald, Rt. Hn. Sir Lionel

NOES

Beaney, Alan

Hamilton, William (Fife, W.)

Ogden, Eric

Bldwell, Sydney

Heffer, Eric S.

O'Halloran, Michael

Bishop, E. S.

Huckficld, Leslie

Peart, Rt. Hn. Fred

Booth, Albert

Jackson, Peter M. (High Peak)

Perry, George H. (Nottingham, S.)

Boston, Terence

Jones, Dan (Burnley)

Rees, Merlyn

Brown, Rt. Hn. George (Belper)

Jones, J. Idwal (Wrexham)

Rodgers, William (Stockton)

Davies, Rt. Hn. Harold (Leek)

Lester, Miss Joan

Shore, Rt. Hn. Peter (Stepney)

Diamond, Rt. Hn. John

Lipton, Marcus

Taverne, Dick

English, Michael

Lyons, Edward (Bradford, E.)

Winnick, David

Ennals, David

McBride, Neil

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

MacDermot, Niall

TELLERS FOR THE NOES:

Gardner, Tony

Marsh, Rt. Hn. Richard

Mr. William Hamling and

Gregory, Arnold

Mellish, Rt. Hn. Robert

Mr. J. D. Concannon.

Gunter, Rt. Hn. R. J.

Morris, Alfred (Wythenshawe)

ROYAL ASSENT
Mr. Deputy Speaker (Mr. Sydney Irving): I have to notify the House, in accordance with the Royal Assent Act, 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. National Health Service Contributions Act, 1970.

2. Proceedings Against Estates Act, 1970.

3. Guyana Republic Act, 1970.

4. General Rate Act, 1970.

5. Roads (Scotland) Act, 1970.

6. New Forest Act, 1970.

7. Tonga Act, 1970.

8. Road Traffic (Disqualification) Act, 1970.

9. Regent, Royal and Carlton Terrace Gardens, Edinburgh Order Confirmation Act, 1970.

10. Royal Bank of Scotland Order Confirmation Act, 1970.

11. Basingstoke Corporation Act, 1970.

12. Australia and New Zealand Banking Group Act, 1970.

13. Warwickshire County Council Act, 1970.

14. Welland and Nene (Empingham Reservoir) and Mid-Northamptonshire Water Act, 1970.

15. Doncaster Corporation Act, 1970.

16. Newport Corporation Act, 1970.

17. Huddersfield Corporation Act, 1970.

18. Bolton Corporation Act, 1970.

19. Hampshire County Council Act, 1970.

20. Havering Corporation Act, 1970.

21. Leicestershire County Council Act, 1970.

22. Swansea Corporation Act, 1970.

23. Barclays Bank D.C.O. Act, 1970.

24. Wallasey Corporation Act, 1970.

25. Flintshire County Council Act, 1970.

RHODESIA INDEPENDENCE BILL
Order for Second Reading read.
Mr. Deputy Speaker (Mr. Sydney Irving): Queen's consent?
Mr. William Hamling: No, Sir.
Mr. Ronald Bell Mr. Ronald Bell(Buckinghamshire, South) rose—
Mr. Deputy Speaker: Order.
Mr. Bell: I wish to defer the Second Reading—
Mr. Deputy Speaker: Order. It is a requirement before the Second Reading of a Bill that the Queen's consent be available. It is not available. Therefore the hon. and learned Gentleman cannot move the Second Reading of his Bill.
Mr. Bell: I was trying to give you a day, Mr. Deputy Speaker. I was trying to indicate that I defer the Second Reading of this Bill till 5th June.
Mr. Deputy Speaker: I apologise.
Second Reading deferred till 5th June.

CLIENTS MONEY (ACCOUNTS) BILL
Order for Second Reading read.
Hon. Members: Object.
Mr. Deputy Speaker: What day? No instruction.

SALE OF TICKETS (OFFENCES) (No. 2) BILL
Order for Second Reading read.
12.25 p.m.
Mr. Alfred Morris: I beg to move, That the Bill be now read a Second time.
I think the House is aware of the very strong feeling in the country that we should as soon as possible come to terms with the problem of those who exploit the genuine supporter of soccer and rugby football, although I should make it clear that this Bill does not relate only to soccer and rugby football. It has been put to me by some very reputable ticket

1695
agents that if there is not to be a " scalping " of theatre and ballet tickets, on the New York scale, we badly need an enactment of this kind.
I am sure that the House as a whole has read of the exploitation of genuine sports and theatre fans. There have been examples recently of prices having been charged which are out of all proportion to the face value of the tickets. Mr. Denis Follows, the Secretary of the Football Association has been in touch with me and has said that this Bill has the fullest support of that Association. I have heard from Messrs. Keith Prowse and other reputable ticket agents who have said that they feel that this Bill is urgently necessary. I have heard, as no doubt have other hon. Members, from constituents saying that they are tired of being exploited by ticket black marketeers.
I know it will be appreciated that this is an all-party Measure. There are hon. Members on both sides of the House who feel that the time has come to deal with those people who are not in the least interested in sporting occasions, in the theatre or in the ballet, but whose interest is simply in making a very quick and, I would have said, wholly reprehensible profit out of the genuine fan and theatre and ballet goer.
I am certain that the soccer fan who is kept out of Wembley and the rugby football fan who is kept out of Twickenham feel that we should be legislating against those who make it impossible for the ordinary fan to see the big occasion as well as the small occasion.
I hope the House will give the Bill a Second Reading.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

PROTECTION OF THE PERSON AND PROPERTY BILL
Order for Second Reading read.
An Hon. Member: Object.
12.28 p.m.
Mr. R. Chichester-Clark: I beg to move, That the Bill be now read a Second time.
I thought I heard the word " Object " muttered somewhere, and I suspect that it came from the Government Front Bench. It surprises me very much indeed that any member of this Government should openly be opposed to a Measure of this kind involving law and order. I am really appalled that any member of the Government should behave in this way.
It is with some surprise that I find myself able to make a speech here this morning, and I shall not detain the House for very long. This Bill deals with one of the most abhorrent and bestial devices invented in the 20th century. I was taken to task on a previous occasion by someone who said that perhaps I had never heard of the hydrogen or the atom bomb. Perhaps I should have qualified my remark. I had not forgotten those things but I had thought of them as comparatively successful deterrents, whereas I do not see any deterrent value in the petrol bomb.
Those who use these weapons can cause with them indiscriminate hurt and damage, and one must say that they show an utter disregard for human life and property. Since the war, petrol bombs have been used in Paris, in Spain, and, recently, in the United States. Only a week or two ago, petrol bombs were thrown into the offices of Thames Television near Euston, and last week more such weapons were thrown at the American Embassy.
The Times of 27th April carried an interesting news item about a young man sentenced to imprisonment in January last year for setting fire to the Imperial War Museum, which somewhat euphemistically referred to him as a pacifist. He had thrown two petrol bombs, and he had made the news, because his poems, written in prison, were published, strangely enough, in a magazine called Anarchy. If my Bill is

1697
passed, those who throw petrol bombs and are convicted will have plenty of time to write poetry.
I have seen many petrol bombs thrown when I have been endeavouring to restrain people during riots in Northern Ireland. I have seen them thrown at the police, and I have seen the appalling effect which they can have—policemen literally set alight in Londonderry—and I have seen the agonies which injury from this type of weapon can inflict.
At a time when the British public were being brain-washed about the alleged brutality of the Royal Ulster Constabulary, the men of that Constabulary were often standing for hours on end facing attack not just by stones and other missiles but by the very weapons of which I am now speaking. How wicked, it was said in certain organs and media of communication, when occasionally a policeman would throw back a small stone or even, sometimes, a larger one. This was said to be very wicked, but attitudes have now somewhat changed. When British troops in Northern Ireland —I readily pay tribute to their courage—have stones and even petrol bombs thrown at them, no one expresses the smallest surprise if occasionally they, too, throw a stone back. No one raises an eyebrow. I think that the British public have begun to realise what a serious menace this weapon could be when, or if, it comes in a large way to this country, just as they have come to realise how utterly unjustly denigrated were the Royal Ulster Constabulary who received their share of petrol bombs last year.
One of the problems to be dealt with is the ease with which petrol bombs can be made. I shall not attempt now to describe how they are made, but there are many varieties of them. The other day, I noticed that an Italian publisher who had published a book in which a description was given of how to make a petrol bomb was subsequently prosecuted, so I had better take care.
Some petrol bombs contain a special mixture of materials designed to spread the flame as widely as possible and to make the mixture stick that much better to whatever it hits. Others have contained stones—I have seen some of these —and other objects to make the bottles splinter more dangerously. Others—
1698
these were certainly thrown at the police in Londonderry last year—have been ingeniously equipped with hooks designed to attach the bombs to the clothing of the target.
The Bill would lay down stiffer maximum penalties for making or possessing a petrol bomb: on summary conviction, three months' imprisonment, £1,000 fine, or both; on conviction on indictment, five years' imprisonment, a fine, or both; or for using a petrol bomb, on conviction on indictment, 20 years' imprisonment, a fine, or both. That may seem Draconian to some, but there are many people in this country who have seen something of these weapons who will share my view that such penalties are fully merited.
The purpose of the Bill is obvious, and I need say little more about it now. I wish, so far as at all possible, to make it an offence of the highest order to throw these bombs. If the Bill is passed, it should prove a deterrent which will prevent the spread of this appalling weapon to any great extent in this country. Already, we are seeing something of it. Those who visited Northern Ireland in the past 18 months, who have seen the kind of appalling injury inflicted there, and who have seen the damage done to property, can have no doubt that, if there be anything which the House can do to prevent the spread of this atrocious mischief to this country as well, the House should do it.
12.36 p.m.
The Joint Under-Secretary of State for the Home Department (Mr. Merlyn Rees): The hon. Member for Londonderry (Mr. Chichester-Clark), with his connection in Northern Ireland, is well aware he illustrated them in his speech —of some of the problems which arise in our violent society. The sort of happening which he described, however, is not confined to Northern Ireland. One has slighter examples of it in this country, though not nearly to the degree which, unfortunately, one finds in Northern Ireland. This form of violence is found elsewhere in the world, too. Happily, despite our concern about events of this kind, however, they are not typical of these Islands; they are far more typical of other parts of the world.
While recognising the problem, I shall advise the House that there is no need

1699
to have the powers provided for in the Bill to deal with it. We are satisfied that there are sufficient powers already. Section I of the Prevention of Crime Act, 1953, deals with the problem of weapons, and the Malicious Damage Act, 1861, covers the petrol bomb. Therefore, while agreeing with the hon. Gentleman in recognising the nature of the problem, we in the Home Office are content that the legislation which we already have is sufficient, and I recommend the House to oppose the Bill.
12.38 p.m.
Mr. Chichester-Clark: May I have the leave of the House to speak again?
The Minister did not give much detail justifying his argument that these provisions are unnecessary. I think that he gave a rather hurried response, and I can understand why. I suspect that he, like myself, was surprised that we ever got this far this morning. We have all found ourselves from time to time in the position of not having done quite the amount of work on a subject which we should wish to have done, and I take it that that was the hon. Gentleman's position, as it was my own.
Although I am still anxious to see a Bill of this kind upon our Statute Book, because I believe, sorrowfully, that the need for it may increase rather than diminish over the next few months, I ask the Minister to undertake—when he has a little more leisure, as he may soon—to look again at my Bill and, parallel with it, the existing provisions so far as they may deal with the problem of the petrol bomb. I ask him to do that and to let me know whether he is still satisfied. There is a Question down on the Order Paper about it and, no doubt, there will be others. No doubt there will be other occasions when the hon. Gentleman will have the opportunity to give me the assurances I want.
However, I do not wish any other hon. Member to lose his Bill this afternoon, and I therefore do not propose—I hope that this will be taken in the spirit in which it is meant—to divide the House.
Mr. Merlyn Rees: With your permission, Mr. Speaker—
Mr. Speaker: It is an unusual day with some unusual permissions.
Mr. Rees: I should like to make it clear that the Home Office undoubtedly has a responsibility for Northern Ireland and we have no doubt that we have sufficient powers to deal with the problems there. There may be a marginal aspect and I should be pleased to draw it to the attention of the hon. Member, but I do not want anybody to be in any doubt.
Mr. Chichester-Clark Mr. Chichester-Clark rose—
Mr. Speaker: Even though the Chamber is almost empty we are not in Committee.
Mr. Chichester-Clark: The hon. Gentleman has shown that, as I suggested, he has not done all his homework. Had he done so, he would have discovered that the Bill does not deal with Northern Ireland. It deals with a problem which may well arise in this country, although I hope that it will not. I hope that, having heard what I have said, he will reconsider the situation.
Mr. Rees indicated assent.
Mr. Chichester-Clark: I understand he will, and I am obliged to him.
Question put and negatived.

REGULATION OF SELF-EMPLOYMENT IN THE BUILDING INDUSTRY BILL
Order for Second Reading read.
Mr. Speaker: What day? No instruction.

CHILDREN AND YOUNG PERSONS ACT 1963 (AMENDMENT) BILL
Read a Second time.
Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

PROTECTION OF PENSION RIGHTS BILL
Order read for resuming adjourned debate on Second Reading [1st May].
Mr. Speaker: What day? No instruction.

GENERAL RATE ACT 1967 (AMENDMENT) BILL
Order for Second Reading read.
Mr. Speaker: What day? No instruction.

HALLMARKING BILL
Order for Second Reading read.
Mr. Speaker: What day? No instruction.

REPRESENTATION OF THE PEOPLE BILL
Order read for resuming adjourned debate on Second Reading [6th February].
Mr. Speaker: What day? No instruction.

COMMONWEALTH PREFERENCES
Motion made, and Question proposed, That this House do now adjourn.—[Mr. McBride.]
12.42 p.m.
Sir Ronald Russell: The subject I wish to raise in this unexpectedly early Adjournment debate is the continuing effectiveness of Commonwealth preferences. May I say at the outset that I am grateful to the Joint Under-Secretary of State, Foreign and Commonwealth Office, for coming to reply to the debate in the absence of his colleague from the Board of Trade who has had to go elsewhere.
The reason I wish to raise the subject is contained in paragraph 56 of the White Paper " British and the European Communities ", Cmnd. 4289. Dealing with what is likely to happen to Commonwealth preference in the event of this country not joining the Common Market, it says:
" But in order to make a true comparison of our situation inside and outside the Community some years hence, it is necessary to take into account the probability of continuing erosion of preferences in the Commonwealth and the possibility of new preferential trading arrangements between the Community and some of our trading partners. It is relevant in this connection that a number of Commonwealth countries in Africa have found
1702
it to their advantage in recent years to give tariff preferences, to our disadvantage, to the Six."
I maintain that that part of the paragraph is misleading.
I think that I am right in saying that only four African Commonwealth countries have so far sought, or have made, arrangements with the E.E.C.—Kenya, Uganda, Tanzania and Nigeria. None has yet been ratified. I know that " four " taken literally is a number, but when No one says " a number of Commonwealth countries ", one usually means more than four, perhaps 10, or thereabouts. I cannot help feeling that the expression is somewhat misleading. However, although that is material, it is not the main point.
In order to clarify the position. I tabled a Question to the Board of Trade on 26th March asking:
" What will be the factors leading to the continuing erosion of Commonwealth preferences, referred to in paragraph 56 of Command Paper No. 4289. affecting our exports to Canada, Australia, New Zealand and the Republic of South Africa, other than the effect of inflation in those countries on specific preferences."
Those countries are the leading importers of British products in the Commonwealth Preference Area and most important to our trade. The Parliamentary Secretary to the Board of Trade replied:
" Mainly increased protection for domestic industry and bargains struck with our competitors in multilateral tariff negotiations."—[OFFICIAL REPORT, 26th March, 1970;Vol. 798, c. 553.]
Since then, I have gone into the position in some detail.
It is worth mentioning that the three Commonwealth countries and South Africa are most unlikely to be able to reach any arrangements with the E.E.C. for associate status, or anything like that. Last year, Australia took £321·2 million worth of our exports and re-exports; New Zealand £121·3 million; Canada, £308·6 million; South Africa, £290·8 million. Those figures are taken from the Overseas Trade Accounts of December, 1969. They give a total for the four territories of £1,041·9 million, which is more than half our exports to the Commonwealth Preference Area as a whole. In the Commonwealth Preference Area I am, of course, including South Africa and the Republic of Eire. Eire was our third largest customer last year, taking £339·5

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million worth of our exports and re-exports. That trade is clearly essential.
The United Kingdom-Australia Trade Agreement lays down that the margins of preference in the Australian tariff for British goods are protected by that agreement which guarantees the maintenance of certain minimum margins of preference. They are generally either 7½ per cent. or 10 per cent. They apply to both ad valorem and specific rates of duty. Even if the level of protection were increased on particular items, British exporters to the Australian market would, as a general rule, retain at least the minimum margin of preference applicable. Some preferences are very much above the minimum and even though the Australians took power to reduce them under the agreement, in fact they have not done so.
The agreement envisages the possibility of reductions in existing margins of preference. For example, where the difference between the British preferential tariff rate and the most favoured nation rate is greater than the guaranteed minimum margin of preference, the Tariff Board recommendation might result in a reduction in the margin of preference either by a reduction in the M.F.N. rate or an increase in the British preferential tariff rate if Britain were the major supplier.
The highest margin of preference which New Zealand is required to give us by our trade agreement is 10 per cent., but in practice some preferences are much higher. For instance, the tariff on cars entering New Zealand is only 6¼ per cent. on British cars and 45 per cent. on foreign cars, giving a margin of preference of 381 per cent. I am told that the National Development Conference in New Zealand last year as a basis of its policy recommended that the level of protection for the manufacturing sector should be such as to encourage competition, efficiency and reasonable prices to other sectors and to consumers, and should also have regard to the need to give the consumer choice and variety. It was recognised that the system of protection should be flexible, that import licensing should be replaced by tariffs as the main measure of protection of domestic industry and that this transition should be carried out in accordance with a clearly defined programme and within a reason-
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able time. Action to implement that recommendation has already been taken. But it is not likely to be on such a sweeping scale as to bring about a general erosion of Commonwealth preferences.
I understand that the South Africans have no plans for making tariff concessions to any of our competitors which would reduce the margin of preferences. The only country which goes against what I am suggesting is Canada, which has been on the course of trying to liberalise its trade policies for some time, but that means again that there is not much danger of increased protection against our exports.
The possibility of erosion due to bargains struck with our competitors in multilateral tariff negotiations seems highly unlikely, as I understand that any more negotiations of this kind would need a new round like the Kennedy Round and that is not on the horizon at the moment. It would depend on future United States trade legislation to begin with, and also the willingness of other countries, like the E.E.C. and Japan, which would have to take part actively.
Commonwealth preference has brought great benefits to most parts of the Commonwealth over many years, going back not only to 1932 but before that. At one time it was unilaterally granted by Canada, South Africa, Australia and New Zealand to us without our giving any return and no one wants to see it abolished. The value of it has been reaffirmed at many Commonwealth conferences which have been held even since the G.A.T.T. was concluded in 1947, and I cannot see in those countries which are our main markets for exports—Canada, South Africa, New Zealand and Australia plus the Republic of Ireland—that such erosion is likely to take place. We have a free trade agreement with Eire and if we joined the Common Market together we would have to share preference with the E.E.C. In the event of our not joining, presumably Eire would not join either. I can see nothing in Eire's case likely to happen which would justify any statement that there would be an erosion of Commonwealth preferences.
I am sure that if we did not join the E.E.C. and could give a stimulus to Commonwealth trade which has been lacking over the years there would be a welcome

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for continuation of the system just as there has been in the past and I hope the impression which I think is created by the White Paper will be corrected.
12.55 p.m.
The Joint Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Evan Luard): We all recognise that the hon. Member for Wembley, South (Sit R. Russell) has been a champion of the Comonwealth trading system and its benefits through many a debate and over many years. It is in keeping with his strong feelings and his long-standing tenacity on the subject that at this time, before we adjourn, and when the whole question of our future relations with the Common Market is so topical, he should have raised this subject in the House. No one would deny what he has claimed—the importance of the Commonwealth preference system within our general trading relations over many years.
It is significant that the official analysis of our world trade figures always begins with the figures for the Commonwealth preference area. Even an agreement as influential in post-war commercial relations as the G.A.T.T. contains in its first article provision for the continuation of Commonwealth preference. Governments of both parties have attached the utmost importance to the value which not only we but our Commonwealth partners receive from the continuation of the system.
The hon. Gentleman has read into paragraph 56 of the White Paper a certain depreciation of the value of the Commonwealth preference system. He believes that it gives a misleading impression in exaggerating the probability of the future erosion of Commonwealth preferences. I will say later why I think that he is perhaps slightly misled in thinking that this is so.
An Adjournment debate is, of course, not the time to argue the more fundamental issues at stake in the event of a successful outcome to our application to join the E.E.C. and of any subsequent adjustments which may be made to our present trading arrangements with the Commonwealth. These structures are a delicate exchange of interests. They range much wider than exchanges of preferences, although such exchanges are,
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of course, part of them. But it may be useful to respond to the hon. Gentleman by pointing out certain developments which have been taking place and which will continue to take place not only within the Commonwealth but in our general trading relationships and which may have the effect of reducing the significance of these preferential arrangements.
It is not possible to put any satisfactory figure on the trade value of preferences in either direction. Between 1959 and 1969, our exports to the present Commonwealth rose from £1,256 million to £1,601 million, although as a percentage of our exports there was a fall from 35 per cent. to 22 per cent. Over the same period, our imports from the Commonwealth rose from £1,437 million to £1,933 million. Again there was a fall in percentage from 35 to 23 per cent. of our total imports. It is impossible to estimate how much of this still very substantial trade is attributable to the existence of Commonwealth preferences.
Many of the products we import from the Commonwealth are anyway duty-free, whatever their source, and obviously preference has no influence on that. Commonwealth manufacturers enjoy no advantage over non-Commonwealth supplies. This is a development which now has a value undreamed of at the time of the Ottawa Agreements. In the reverse direction, preferences which our exporters receive in some Commonwealth countries are extensive. But a number of factors influence the direction of trade in Commonwealth countries and are modifying the rather simple pre-war and immediate post-war pattern on which the preference system is based.
There is, above all, the growth of production in other Commonwealth countries, far beyond the capacity of Britain to absorb their exports, so that they are having to look for alternative markets, which are not protected by preferences. They have naturally built up their trade with other countries. Canada in particular has developed its long-standing trade with the United States. Australia and New Zealand have increased their trade with nations like Japan, which needs their wool and particularly Australia's coal and iron. As the hon. Gentleman knows, both those two countries are looking for other markets in Asia and the Americas.

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The position as regards the developing Commonwealth countries is a special one. In many of them we enjoy preferences, but much as they might like to import more in total, the amount of their imports and the sources from which they buy depends very much on the aid they receive and the terms on which it is offered; that is, whether it is untied, tied or in kind.
In Australia, Canada and New Zealand and also in South Africa, although this problem does not arise, it is unreal to concentrate simply on margins of preference. Access depends on the level of tariffs and on other restraints of trade. Some preferential rates of import duties are still so high as to be a plain deterrent to Brtish exports. British companies may consider it better to establish local subsidiaries or even to face the more modest rates charged in other countries where we have no preference and compete on equal terms with other suppliers. Some Commonwealth countries, particularly certain developing countries whose economic problems impel them to restrict imports, operate import licensing which impairs the value of our preferences.
There are several reasons why our margins of preference have been eroded and why this process can be expected to continue. The rounds of tariff negotiations within the G.A.T.T. have had this effect, partly because this happens automatically when the " most favoured nation " rate is reduced on goods for which the preferential rate is nil, and partly because certain offers entailed the elimination of our preferences.
The hon. Gentleman suggested that there was not likely to be another general round of this kind in the near future. I am not sure that he is correct. However, even if that should be the case and such a round does not occur within the next year or two, it is clear that there will eventually be multilateral rounds of the kind that have occurred in the past and that these will continue to have an effect on the value of Commonwealth preferences.
Another factor is that, in adapting their tariffs to give the protection which they regard as necessary for domestic production, some countries have raised their rates of duty, at the same time often reducing our margins of preference. Two
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Commonwealth countries, Malaysia and Singapore, have abolished the preferential rates of duty on nearly all their imports from Britain.
Another development which has a bearing on Commonwealth preference is the establishment of regional trading groups such as the United States-Canada Automotive Pact, the Caribbean Free Trade Area and the New Zealand-Australia Free Trade area. All these have exemplified this process of the erosion of preferences.
Some Commonwealth countries have entered into free trade groups, such as the European Free Trade Association, of which Britain is a member. These too reduce the value of preferences to non-members of those associations. The Commonwealth preference relationship with the Irish Republic has been largely superseded by the Anglo-Irish Free Trade Agreement.
Then there are tariff arrangements such as those which the hon. Gentleman mentioned. For example, Kenya, Uganda and Tanzania have entered into an Association Agreement which entails giving certain preferences to the E.E.C. at the expense of Britain. Britain gives benefits to some Commonwealth countries outside the tariff preference system, and this includes products like sugar—under the International Sugar Agreement—bananas, cigars and rum. There are, therefore, a number of developments of this kind which have the effect of reducing the value of preferences.
There is increasing discussion of a generalised preference system, and this will have a strong bearing on the arrangements now made under the various preference systems, particularly within the Commonwealth and Community systems. There is a great deal of discussion about the replacement of these various systems by a generalised system for all developing countries. If this develops, and there is considerable support for it, it will have a big effect on the value of existing Commonwealth preference arrangements.
What of the future? The figures I gave earlier will not change overnight should we go into the E.E.C. Of course, they will redispose themselves as the transitional period for our adaptation to Community tariffs and systems proceeds. This is not the occasion to speculate on

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that adaptation, its extent, or its implementation. But even at the end of the period we shall still have major trading business with the Comonwealth countries and they with us. This of itself will establish a new and important relationship for the enlarged Community, and the Commonwealth will have as much to gain from increased trade with the Community as we may have.
Indeed, even without our entry, important new relationships may be established between the Community and developing Members of the Commonwealth as a result of the proposals for a generalised preference scheme in U.N.C.T.A.D. A unanimous resolution was passed at the Second United Nations Conference on Trade and Development in 1968 supporting the establishment of a non-reciprocal, non-discriminatory generalised preference scheme.
Since then the donor countries have been seeking to work out in O.E.C.D. an acceptable scheme; and last November illustrative submissions and lists of products which the donor countries had tabled were sent to U.N.C.T.A.D. to facilitate discussion. Work is continuing in O.E.C.D. A satisfactory scheme will give developing Commonwealth countries preferences in other countries in exchange for agreeing to share their preferences here. Throughout the discussions in O.E.C.D. we have stipulated that the developing Commonwealth countries should secure sufficient new advantages in other markets to compensate them for sharing their preferences in the United Kingdom. We have also made it clear that we must obtain the consent of those Commonwealth Preference Area countries with whom we have trade agreements before we can grant generalised preferences on products on which they have contractual rights to preferences in our market.
I submit that this is not a time to strike a gloomy note, either about the future of Commonwealth preferences in general or about the value of trade by the Commonwealth countries, either with this country or elsewhere. I have given some reasons why they may gain in
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other markets anything that they might finally lose in our market.
I also wish to make it clear that we have throughout, in approaching our negotiations with the Common Market, insisted on the need for satisfactory arrangements for certain Commonwealth countries. The hon. Gentleman will be aware that in the earlier White Paper on this subject, reproducing the speech which my right hon. Friend the Member for Belper (Mr. George Brown) made in 1967, there are a number of paragraphs, notably paragraphs 32 to 39, setting out the special arrangements that we wish to make for the Commonwealth countries, some of them relating to particular products, such as sugar and butter, and some relating to the position of the Commonwealth generally; expressing, for example, the hope that we may be able to reach an agreement similar to the Yaounde Convention Commonwealth countries.
The Commonwealth trading link could be said to be rooted not merely in the Preference Area but in the fact that each one of its members is heavily dependent on international trade, not merely with each other but with the whole world trading community. We have a deep interest in ensuring the highest levels of all our partners' prosperity. If the prosperity of individual members is enhanced by trading outside the preferential system, then each of us has in turn a more prosperous customer to do business with. At the end of the day this may prove an even more buoyant impulse for our exports to the Commonwealth in the coming decade and their exports to us than tariff margins fixed against the industrial trading backgrounds of four or more decades ago, a system which, in any case, must now be superseded by something more relevant to the needs of every member of the Commonwealth.
Question put and agreed to.
Adjourned accordingly at nine minutes past One o'clock till Monday 1st June, pursuant to the Resolution of the House of 11th May.