Commons Sitting of 23 November 1970

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

    District General Hospital, Rhyl
    Sir A. Meyerasked the Secretary of State for Wales when he expects work to begin on the construction of a regional general hospital at Bodelwyddan.
    The Secretary of State for Wales (Mr. Peter Thomas): It is hoped that construction of the new Rhyl District General Hospital will begin towards the end of 1971 or early the following year.
    Sir A. Meyer: I thank my right hon. and learned Friend for that reply. May I take it that this is a firm decision to proceed not later than that date? There have been so many postponements in this case that people are beginning to lose hope.
    Mr. Peter Thomas: That decision is as firm as I can possibly make it.

    Llanelly General Hospital
    Mr. Denzil Daviesasked the Secretary of State for Wales what consultations his Department has had with the Welsh Hospital Board regarding the services to be provided at Llanelly General Hospital in the future.
    Mr. Peter Thomas: I have nothing to add to the reply which my hon. Friend gave to the hon. Member on 16th July.—[Vol. 803, c. 267–8.]
    Mr. Davies: Will the Minister recognise that there is considerable fear in my constituency that the Welsh Hospital Board's policy towards Llanelly Hospital is one of benign, and perhaps not so benign, neglect? Will he urge the board to carry out the promise given in 1966 by the then chairman to spend £1 million on the immediate development of Llanelly Hospital?
    Mr. Peter Thomas: I know that concern has been expressed about the future of the Llanelly Hospital. I know, too, that the board is anxious to do what it can, having regard to its other many commitments.

    Mobile X-ray Service
    Mr. Barry Jonesasked the Secretary of State for Wales when he proposes to discontinue the Welsh Mobile X-ray Service.
    Mr. Peter Thomas: I am still considering the Welsh Hospital Board's proposals to discontinue the mass miniature mobile X-ray service and I hope to announce a decision soon.
    Mr. Jones: Is the Minister aware that the total annual budget for hospitals in Wales is about £49 million, while the expenditure on mobile X-ray units is a comparative fleabite, in that they cost only £27,000 a year? Will the Minister consider the inconvenience that the closing down of the mobile X-ray service will cause to people in rural areas? Finally, will he give serious consideration to the letter that he received from 7,000 steel workers in East Flintshire?
    Mr. Peter Thomas: I shall take all those matters into consideration before reaching a decision. My predecessor circulated his views about the future of these units.

    Gunnery Range, Pembrey
    Mr. Denzil Daviesasked the Secretary of State for Wales whether he will, immediately upon receipt, send copies of the inspector's report of the public inquiry into the proposal to locate a gunnery range at Pembrey to all those local authorities which gave notice of objection at the inquiry.
    Mr. Peter Thomas: The report will be published and copies made available to interested parties when the inspector's findings have been considered.
    Mr. Davies: As the Minister does not appear to be willing to release the report immediately he receives it to one of the protagonists—that is, the councils—will he undertake not to discuss the contents of the report with the other protagonist—the Ministry of Defence—before he finally makes up his mind and publishes it?
    Mr. Peter Thomas: I cannot say that I shall not discuss the matter with my noble Friend the Secretary of State for Defence. The reason why the report will not be issued to one protagonist is that all interested parties should get it at the same time. It is the normal practice in planning inquires for the report to be issued to the parties when the Minister concerned has considered it.
    Mr. George Thomas: I accept what the Minister has just said, but will he
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    assure us that he will deal as speedily as possible with this report when it is received—or, if it has been received—because the issue of Pembrey concerns the people of the whole of Wales?
    Mr. Peter Thomas: I am aware of the importance of this. I am also aware that I have a quasi-judicial function, and for that reason it would be wrong of me, as the Secretary of State, to make any observations before reading this very carefully thought out and complex report.

    Dentists
    Mr. Brynmor Johnasked the Secretary of State for Wales what is the ratio of dentists to population, respectively, in Wales and the South-East of England; and what is the proportion in the Pontypridd and Rhondda Valley areas.
    Mr. Peter Thomas: At 30th September, 1969, the latest date for which comparable figures are available, the numbers of people to each dentist in Wales and South-East England respectively were 6,639 and 3,367. Comparable figures for Pontypridd and the Rhondda were 5,835 and 10,478 respectively.
    Mr. John: Is it not clear, and will not the Minister accept, that from the point of view of dental health Wales is an underprivileged nation? Does the Minister accept that the recent rise in dental charges proposed by the Government will have a deleterious effect, and will prolong for a long time that state of being under-privileged? Will the Minister undertake, in addition to considering the matter of charges, to consider what other steps he can take to improve the present ratio?
    Mr. Peter Thomas: I agree that there is some cause for concern about this matter in Wales. As to the new charges, the hon. Member will appreciate that the regular attender at the dentist's will save under the new scheme, although he may have to pay more for a big job.
    Mr. G. Elfed Davies: In view of the alarming figures which the right hon. and learned Gentleman gave for Pontypridd and Rhondda, will he now promise to take immediate steps to remedy the position in that area?
    Mr. Peter Thomas: It is difficult to know, apart from special inducements—which do not apply to dentists—what powers I have to direct them to the area. However, I will look into the possibility raised by the hon. Gentleman.

    Rural Bus Services
    Mr. Brynmor Johnasked the Secretary of State for Wales how many local authorities have made applications to him for grant for rural bus services.
    Mr. Peter Thomas: Five.
    Mr. John: Would the Secretary of State accept that the reason for the comparative lack of applications is that those authorities which have to contemplate the subsidies are exactly the poorest authorities in Wales, and that the position is becoming monthly more serious because bus services are being discontinued? Would he now undertake to call a national conference to discuss this very serious position?
    Mr. Peter Thomas: I agree that the matter is serious. As the hon. Gentleman knows, a 50 per cent. grant is available to the authorities, and the remainder is taken into account under the rate support grant.
    Mr. John Morris: Having regard to the last Tory Government's record on butchery of railway lines in Wales, can the right hon. and learned Gentleman say what the Government's intentions are about the continuation of grants for socially necessary railway lines?
    Mr. Peter Thomas: The continuation of railway lines is not a matter primarily for the Government.
    Mr. Hooson: In dealing with the first question, would the Secretary of State look at the relative success of the experiment in Montgomeryshire of post buses? There is an intractable problem in the rural areas and an extension of this kind of scheme might be the answer to this problem.
    Mr. Peter Thomas: I am obliged to the hon. and learned Gentleman. This and other schemes are being looked at. The Welsh Council is going into this with some care. I am having discussions at the moment with my right hon. Friend the
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    Minister for Transport Industries about the whole transport position in Wales.
    Mr. William Edwards: In view of the Secretary of State's statement just now about the Government's responsibility for railway lines, how can he say that he is not responsible for the future of the railway lines in Wales in view of the fact that under the Transport Act nearly all the money to help run nearly all the railway lines in Wales comes from the Government?
    Mr. Peter Thomas: I did not say that I was not responsible. [HON. MEMBERS: "Yes you did."] If hon. Members will look at HANSARD tomorrow they will see that I said that I was not "primarily" responsible.
    Mr. John Morris: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I propose to raise it as early as possible on the Adjournment.

    Development Areas
    Mr. Gwynoro Jonesasked the Secretary of State for Wales what is his estimate of the effect of the Government's measures regarding industrial assistance in the development areas on small firms in Wales.
    Mr. Kinnockasked the Secretary of State for Wales if he will estimate the effects on Wales of Government changes in regional development policy; and if he will make a statement.
    Mr. Peter Thomas: All the measures which were announced on 27th October by my right hon. Friend the Chancellor of the Exchequer are designed to create conditions for economic growth both in the United Kingdom as a whole and in Wales. I have no doubt that the Welsh economy, including the small firms in it, will benefit considerably from the measures we have taken.
    Mr. Jones: Is the Secretary of State aware that similar measures were in existence from 1960 to 1964, when some 63 firms came to Wales? Under the previous Government, from 1965 to 1969, the figure was 196 firms. Furthermore, there is a definite pattern of decline in industrialists seeking information about Wales. The total for the third quarter of 1970

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    was the lowest for three years, so it is quite incorrect of the right hon. Gentleman to hope for any growth. Furthermore, how will small firms which are not making a profit benefit from industrial allowances and free depreciation?
    Mr. Speaker: Order. Long questions cut out someone else.
    Mr. Peter Thomas: I am aware that, despite the very large sums disbursed under the previous arrangements, in the last six years the number of employees in employment in Wales declined very sharply, unemployment increased, and so did net outward migration.
    Mr. Kinnock: Is the right hon. and learned Gentleman aware that the proposals that he drew to our attention which were made by his right hon. Friend on 27th October are at best irrelevant to the needs of small firms in Wales? Is he aware that those firms occupy the technological frontier, and that the Welsh economy is partly dependent on this kind of firm? Will he give an undertaking that he will review his Government's policy, in view of the fact that it is direct injections of financial capital that these firms require?
    Mr. Peter Thomas: Yes, small firms are valued very much in Wales, and I have no doubt that most of them in Wales will benefit considerably from these new measures.
    Mr. Gower: Is it not a fact that during the last six years the ups and downs of the British economy as a whole have been deeply injurious to the Welsh economy?
    Mr. Peter Thomas: This is perfectly correct.
    Mr. George Thomas: Would the right hon. and learned Gentleman tell me what has been the attitude of the C.B.I. in Wales to his proposals, particularly its attitude to the new flexible policy with regard to the granting of industrial development certificates? Have small industries in Wales written to express their satisfaction with his proposals?
    Mr. Peter Thomas: The question of industrial development certificates does not arise on this question. As for the C.B.I. in Wales, I met it not long ago, when it expressed general support for the proposals put forward.
    Mr. Nicholas Edwards: Will my right hon. and learned Friend ensure that money expended in the Welsh development areas has some relation to the number of jobs provided, and not follow his predecessor's example of doling out huge sums to companies, often from overseas, paying little United Kingdom tax?
    Mr. Peter Thomas: Yes, by placing greater emphasis on assistance under the Local Employment Acts we shall be gearing the assistance to meet the most important requirement of Wales, which is more jobs.
    Mr. Elystan Morgan: Is the Secretary of State aware that his replies are evasive and nonsensical? Is he aware that every Welsh Member knows in his heart that the changes announced by the Chancellor last month have completely destroyed the allurement which the Welsh development area had? Is he willing to give an undertaking that if he cannot move his colleagues in Cabinet to give Wales the special assistance it needs he will resign?
    Mr. Peter Thomas: If the hon. Gentleman persists in exaggerating to the extent that he did in that question, he will not get very far in politics.
    An Hon. Member: He could become Chairman of the Conservative Party.

    Industrial Infrastructure
    Mr. Kinnockasked the Secretary of State for Wales what plans he has for improving the industrial infrastructure of Wales.
    Mr. Peter Thomas: The totality of the Government's policies on assistance to industry, including the wider use of Local Employment Acts powers, is intended to secure an improvement in the industrial infrastructure of Wales.
    Mr. Kinnock: I accept that the present Government want to make some gestare of support towards Wales, because the last Government made it such an absolute stanchion of Government policy towards the region. However, would the right hon. and learned Gentleman not accept that the generalised support available under the Local Employment Acts is the most inadequate, and that in 1963–64 the total expenditure was £35 million, and that this was raised last year to £89 million nationally, mainly because of the other

    9
    attractions available? Will he therefore explain to the House and the people of Wales how he expects that we can have the rise in employment opportunities required just by generalised Local Employment Act policies?
    Mr. Speaker: Order. I would remind the House again that long questions cut out some hon. Member who also has a right to put a Question if it is reached.
    Mr. Peter Thomas: The £25 million earmarked under the Local Employment Act for the United Kingdom as a whole will be spent mainly on the infrastructure. As the hon. Member knows—I announced it last Question Time—we are spending considerably more on roads.
    Mr. Goronwy Roberts: Will the Minister confirm that in at least some parts of Wales an adequate industrial infrastructure depends on the retention and development of railways lines, particularly on the Cambrian coast?
    Mr. Peter Thomas: I agree with the right hon. Gentleman that communications are of vital importance in Wales.

    School Transport
    Sir A. Meyerasked the Secretary of State for Wales whether, in view of recent fare increases which now impose hardship on families living just within the statutory distance from their children's schools, he will legislate to reduce this statutory distance to half a mile.
    Mr. Peter Thomas: No, Sir. Local—
    Several Hon. Members rose—
    Mr. Speaker: Order. No hon. Member has a prescriptive right to ask a supplementary question.
    Mr. Peter Thomas: Local education authorities already have adequate discretionary powers to provide transport for pupils living within the statutory walking distance.
    Sir A. Meyer: Is my right hon. Friend aware that since it seems to be the policy of this nationalised monopoly to place the heaviest burdens on those who can least bear them, something must be done about this? Is he further aware that some families pay up to 14s. for each child which they send to school if they live within the two-mile limit?
    Mr. Peter Thomas: I am aware of these difficulties, but when people live nearer school than the statutory distance local education authorities have powers to provide free transport and may exercise those powers in special circumstances.
    Mr. Alec Jones: Will the Minister take some advice from local education authorities in Wales on this matter? Their views do not seem to be borne out by what the right hon. Gentleman has just said. Will he not call a conference of local education authorities in Wales in order to examine this pressing problem? Unless something is done some of our people will shortly be unable to afford to send their children to school in order to benefit from the free education service.
    Mr. Peter Thomas: I shall be meeting representatives of all local education authorities shortly, and I shall be pleased to discuss this matter with them.

    Pedestrian Subway, Llanllwch
    Mr. Gwynoro Jonesasked the Secretary of State for Wales what further consideration he has given to the request by the villagers of Llanllwch for an underground footpath to cross the Carmarthen C Diversion dual carriageway now being built.
    Mr. Peter Thomas: I have decided to provide a pedestrian subway to go under the new road.
    Mr. Jones: I thank the right hon. Gentleman for his reply, which will be very welcome to the people of Llanllwch. The Minister can probably pronounce the name better than some of my hon. Friends. I welcome his reply.
    Mr. Peter Thomas: I am glad that the people of Llanllwch will be very pleased.

    Mentally Handicapped Persons
    Mr. Ellisasked the Secretary of State for Wales what arrangements he makes for the boarding out to private persons of mentally handicapped persons in Wales.
    Mr. Peter Thomas: None. County and county borough councils are required to consider boarding out arrangements as part of their general responsibility to provide, where necessary, residential accommodation in the community for mentally handicapped persons.
    Mr. Ellis: Is the right hon. Gentleman aware that growing disquiet is felt in some parts of Wales at the practice that is growing up of boarding out mentally handicapped people, and that commercial practices may be growing up in the reception of these mentally handicapped people by private persons? Can the Minister assure that House that he will take steps to see that no bad commercial practices are adopted in this matter?
    Mr. Peter Thomas: The problem has arisen mainly because of the boarding out of the mentally ill. It is a matter that I am fully aware of. I am happy to say that in certain areas where complaints were made it appears that something is being done in this respect.
    Mr. Ellisasked the Secretary of State for Wales how many mentally handicapped persons have been discharged from mental hospitals in Wales each year for the past 10 years.
    Mr. Peter Thomas: With permission, I will circulate the figures in the OFFICIAL REPORT.
    Mr. Ellis: I thank the Minister for his reply, and appreciate that I have not had an opportunity of seeing the figures, but can he assure the House that there is no question of hospital authorities adopting a policy of the lesser of two evils and discharging people from hospitals that are overcrowded, thereby palming off their responsibilities to private people who act as recipients of mentally handicapped people?
    Mr. Peter Thomas: At the moment local health and hospital authorities are co-operating very well in the examination of this problem.
    Mr. William Edwards: Is the Minister aware that some disquiet exists in the health service in Wales at the fact that mental hospitals are evading their responsibilities and placing an additional burden upon the already overburdened geriatric service by the practice of discharging old mentally ill people and then trying to find places for them in geriatric units which are now overcrowded?
    Mr. Peter Thomas: This is a complicated matter. The increase in the number of discharges in the last three years is attributable to the change of attitude
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    towards the treatment of mental illness. It is felt that every effort should be made to prevent prolonged hospitalisation and that it is better for people to be discharged in accordance with a policy of short stay and readmission if necessary.
    Following is the information:

    1960

    1961

    1962

    1963

    1964

    356

    497

    518

    484

    500

    1965

    1966

    1967

    1968

    1969

    521

    589

    747

    602

    493

    Island of Bardsey
    Mr. Goronwy Robertsasked the Secretary of State for Wales if he will take steps to amend the boundaries of the Snowdonia National Park so as to include the Island of Bardsey, Caernarvonshire.
    Mr. Peter Thomas: The island of Bardsey is more than 27 miles from the nearest point of the Snowdonia National Park and has already been included in the Lleyn Area of Outstanding Natural Beauty. Therefore my answer to the Question is "No, Sir".
    Mr. Roberts: Will the Secretary of State confirm that the local planning authority has power to make an access order to this island although it is not at present included in the Snowdonia National Park? Secondly, does the right hon. Gentleman agree that, the island being outside the National Park, it is somewhat unlikely that the local planning authority will move in the matter? Will the right hon. Gentleman encourage it to do so, so as to secure access, even if the ownership of this historic and attractive island changes hands?
    Mr. Peter Thomas: I confirm what the right hon. Gentleman says: namely, that the local planning authority has certain power. I apologise to him for misleading him in the letter that I sent him recently on the subject. The power itself is contained in the National Parks and Access to the Countryside Act, 1949, and the amending Act of 1968. The local planning authority has power, subject to my confirmation, but the matter is initially one for the planning authority.

    Canals
    Mr. John Wellsasked the Secretary of State for Wales how many British

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    Waterways' canals he has visited officially since he took office; and where these visits have been paid.
    Mr. Peter Thomas: One. I officially reopened the northern section of the Monmouthshire and Brecon Canal on 16th October, 1970.
    Mr. Ellis: On a point of order. I speak with some diffidence, in the realisation that I may be reprimanded if what I say is not strictly a point of order. I should like your guidance, Mr. Speaker, in relation to the difficulty which faces Welsh Members. Already we are entitled only to 19 Questions, and now we have a Question which has nothing to do with Wales.
    Mr. Speaker: I cannot comment on that point. I believe that Wales is part of Britain.
    Mr. Wells: I am glad that my right hon. Friend is taking this interest in inland waterways and hope that he will see that the section of waterway that he reopened remains open as a waterway and that he can assure the House that he will give his enthusiastic support to waterways as such, so that they will not be used for other purposes.
    Mr. Peter Thomas: I am certainly in favour of keeping open the part of the canal that I reopened. I am also in favour of the maintenance of canals as national amenities where practicable.
    Mr. Alan Williams: Since the right hon. Gentleman has no plans for the expansion of the motorways or main roads in Wales, since he intends to cut back on other road expenditure in Wales, and since he denies responsibility for the railways in Wales and his only claim to be interested in the transport system of Wales is his opening of a few miles of canal, will he resign from his present job and devote himself fully to the Chairmanship of the Conservative Party?
    Mr. Peter Thomas: I suggest that the hon. Gentleman looks at some of the answers that I have already given in the House. If he does he will find that what he said in the preface to his long supplementary question is totally wrong.

    Afan Valley (Employment)
    Mr. John Morrisasked the Secretary of State for Wales whether he will
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    pay an official visit to the Afan Valley in view of the employment problem in the area.
    Mr. Peter Thomas: I have no plans at present to visit the Afan Valley, but I am well aware of the employment problem in the area.
    Mr. Morris: Is the right hon. Gentleman aware that it took nearly five weeks for his office to give my local authority the brush-off to a request to bring a deputation to see him? Is he aware that his predecessor had agreed to meet such a deputation? As there are now nearly 200 people unemployed in this area, representing about 10 per cent. of the insured male population, will he spare a little of his time to acquaint himself with some of the problems of industrial Glamorgan?
    Mr. Peter Thomas: I apologise for the delay in replying to the letter in question. I shall certainly be prepared to consider a visit to the Afan Valley. I am aware of the problems of the area, as is the right hon. Gentleman, because these problems are not recent ones. The reason I did not make a visit was that the council was in close touch with the Department of Trade and Industry in Wales, which kept me fully informed.
    Mr. Gower: As the ailments of the Welsh economy are constantly being described in speeches by hon. Gentlemen opposite, is it not a fact that the Labour Party cannot be exonerated from responsibility for those problems, since we have been in power for only four months?
    Mr. Peter Thomas: The right hon. Member for Aberavon (Mr. John Morris) and his colleagues know perfectly well how the difficult employment situation arose in the Afan Valley.
    Mr. George Thomas: Is the right hon. Gentleman aware that, while we appreciate that he can spare Wales only a limited amount of his time, this local authority was promised by me that the Secretary of State would pay the area a visit? Does he appreciate that the need for the Minister to visit this area to meet the people who are dealing with this problem on the spot is very real and that there are genuine grievances in Wales about the way in which the right hon. Gentleman

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    is refusing to meet authorities which are concerned with problems of this scale?
    Mr. Peter Thomas: I will not go into the question of the standard which the right hon. Gentleman set. He certainly concentrated on certain authorities. [Interruption.] I am perfectly prepared to meet authorities in Wales and to visit Wales, but it is quite clear, as the right hon. Gentleman knows, that there are many demands on one's time—[HON. MEMBERS: "Oh !"]—and that one cannot accept every invitation. The demands on my time as Secretary of State for Wales are such that I have to be in London, in particular to attend the Cabinet and Cabinet Committees where the interests of Wales are put forward.

    Flintshire and Cheshire (Boundary)
    Mr. Barry Jonesasked the Secretary of State for Wales if he plans to alter the boundary lines between Flint-shire and Cheshire so far as the Dee Estuary is concerned, as proposed by the Ordnance Survey.
    Mr. Peter Thomas: No, Sir. I have no powers to do so in the absence of proposals from the county councils.
    Mr. Jones: Is the right hon. Gentleman aware that the Welsh national boundary has always been hard by the Wirral shore, certainly since 1284, and that this was confirmed in 1732? Is it not an outrage that the faceless bureaucrats of the Ordnance Survey should indicate that the boundary might be changed? Will he fight and fight again to retain the territorial integrity of our nation, on the understanding that, if he does not, it will be said of him that he is too busy clearing up the mess in Central Office to listen to the rightful requests of the land of his fathers?
    Mr. Peter Thomas: The hon. Gentleman is becoming as boring as his hon. Friends in that respect. [Interruption.] The line shown on the Ordnance map is, I am advised, arbitrary. It has no legal significance. The Ordnance Survey is, I understand, seeking to establish what the right line is in consultation with the local authorities concerned.
    Sir A. Meyerx: Is the Secretary of State aware that lines drawn on maps tend to acquire importance as precedents and
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    that if it were to become established that the boundary line runs so close to the Flintshire coast, a large area of land which is about to be reclaimed could find itself outside Wales and, therefore, not available for Revenue purposes to Wales?
    Mr. Peter Thomas: I appreciate that. The issue, however, is what the correct legal boundary is. It can best be settled by the authorities concerned in consultation with the Ordnance Survey.
    Mr. Elystan Morgan: Is the right hon. Gentleman prepared to take legislative powers to have the line fixed in the same position as that which it has occupied since time immemorial?
    Mr. Peter Thomas: That is precisely the issue—where the legal line is. I am not prepared to say that I would take legislative powers, though I am prepared to consider the question.
    Mr. Jones: On a point of order, Mr. Speaker. With due deference to the Secretary of State, I wish to give notice that, because of the unsatisfactory nature of his reply, I may raise this matter on the Adjournment.

    Primary Schools (Modernisation)
    Mr. Gowerasked the Secretary of State for Wales what plans he has for speeding up the improvement of older primary schools which lack modern washing systems and water-closets.
    Mr. Peter Thomas: In addition to minor works allocations, £3 million is being allocated in the major school building programme for 1972–73 for the replacement and improvement of old primary schools. I hope to make further allocations in successive years.
    Mr. Gower: I thank my right hon. Friend for that encouraging answer. Will this be looked at in connection with the Government's assurance that emphasis will be given to primary education?
    Mr. Peter Thomas: Yes, Sir. This is the highest sum ever to be allocated in one year solely for this purpose, and virtually the whole amount will go towards the replacement and improvement of inadequate primary schools built before 1903.

    School-building Programme
    Mr. Gowerasked the Secretary of State for Wales if he is satisfied with the size of the proposed school-building programme, in view of the decision to raise the school-leaving age; and if he will make a statement.
    Mr. Peter Thomas: The special building programme for raising the school-leaving age was announced on 8th January, 1969. I am satisfied that the block allocations totalling £8·8 million made to Welsh authorities for the years 1970–73 are adequate to meet the expected needs.

  POSTS AND TELECOMMUNICATIONS

    Exchange Equipment
    Mrs. Sally Oppenheimasked the Minister of Posts and Telecommunications if he will give a general direction to the Post Office to take steps to improve the supply of exchange equipment from the contractors to the telephone exchanges.
    The Minister of Posts and Telecommunications (Mr. Christopher Chataway): No, Sir. Procurement of equipment is a matter for the Post Office.
    Mrs. Oppenheim: Is the right hon. Gentleman aware that there are over 800 people on the waiting list for telephones in Gloucester as a result of progressive delays in the supply of exchange equipment by the contractors? How many contractors are involved nationally in the supply of exchange equipment to the Post Office? What will be the effect of this shortage on the implementation of Section 2(h) of the Chronically Sick and Disabled Persons Act?
    Mr. Chataway: There are, I understand, three main suppliers. The Post Office, for which this is a management matter, is doing all it can to speed up the supply of equipment and I am informed, is having a good deal of success. I hope—and have every reason to believe—that this will not stand in the way of the supply of telephones to the chronic sick.
    Mr. Richard: In view of the right hon. Gentleman's answer, which repeated that given by his hon. Friend the Financial Secretary to the Treasury last week, may we take it that the Government have no intention of either repealing or amending the Post Office Act so as to exclude the statutory power which the Post Office at present has to manufacture this equipment, if it sees fit to do so?
    Mr. Chataway: The Post Office has not put to me any proposals for manufacturing equipment of this kind, and, therefore, that is not a matter at issue. May I take this opportunity of congratulating the hon. Member for Barons Court (Mr. Richard) on his appointment.
    Mr. Richard: I am grateful for the right hon. Gentleman's congratulations. May I now have an answer to my Question, in which I asked for an assurance that the Government have no intention of amending or repealing this part of the Act?
    Mr. Chataway: We have no proposal at the moment for amending or repealing the Act.
    Mr. Richard: I asked for the Government's intention.

    Crown Post Office, Horwich
    Mr. J. T. Priceasked the Minister of Posts and Telecommunications if he will exercise his powers under Section 11(4) of the Post Office Act 1969 to secure the cessation of the undue discrimination exercised against Horwich, Lancashire, a township of 16,670 inhabitants, by the downgrading of its Crown post office, the refusal of the request of the urban district council for further consultations, and the adverse effect on industrial development of the inferior service consequent on the downgrading.
    Mr. Chataway: I have no evidence of discrimination.
    Mr. Price: Arising out of that totally unsatisfactory answer to what was a serious Question from me, may I ask the right hon. Gentleman to give further thought to the point I raised with him; namely, the downgrading of a large industrial area, Horwich, in the North of England, which has a population of 16,200, to the status of a sub-post office?

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    Does the right hon. Gentleman seriously believe that after all the complaints which have been made by his supporters in the Conservative Party about the arrogance of bureaucracy and the overwhelming insensibility of the bureaucratic machine, it is right for him to give me a reply which is as unsatisfactory as the one he has just given? Is he aware that Horwich is a large town in the North of England and not in the backwoods of Canada? May I have a straightforward answer, and will he please see the Director-General of the Post Office Corporation and have a good talk to him about his vanity?
    Mr. Speaker: Order. Supplementary questions must be reasonably brief.
    Mr. Chataway: Under the Post Office Act, of which the hon. Member for Barons Court (Mr. Richard) is such a defender, responsibility in this matter rests primarily with the Post Office and not with me. I am informed by the Post Office that there is absolutely no reason why regrading in the interests of economy and efficiency should result in an inferior service.
    Mr. Price: On a point of order. Are you aware, Mr. Speaker, that the right hon. Gentleman is referring to the Post Office Act as though he had no powers in this matter when certain powers are vested—[Interruption.]—in the Minister of Posts and Telecommunications? Are you aware that it is quite wrong of him to make the sort of allegation which he has been making because it is not constitutionally correct?
    Mr. Speaker: That is a point of argument and not a point of order.

    Licences
    Mr. John Hannamasked the Minister of Posts and Telecommunications if he will take steps to introduce a system whereby one licence can be issued by the Post Office covering all the various forms of annual car, television and radio, dog and gun licences.
    Mr. Chataway: No, Sir. The many differnt licensing authorities for whom the Post Office acts as agent, and the differing conditions attached to the licences, make it impracticable.
    Mr. Hannam: I appreciate the problems involved, but will my right hon.
    20
    Friend consider the difficulties facing those people who have to try to keep track of the many statutory licences and permits now required, and who would be greatly assisted by being able to hold one multiple renewal card which they could present to the Post Office for renewal of these licences and permits?
    Mr. Chataway: My hon. Friend has made an interesting suggestion but as I gather than the starting dates of these various licences and permits and the conditions on which they are issued are necessarily different I do not think that it is a practical proposition.
    Mr. Kaufman: Will the Minister reconsider the matter, and consult his right hon. Friend the Minister of Agriculture, Fisheries and Food? Does he not think that the gun licence element of the proposal would be a great convenience to old age pensioners wishing to go pigeon shooting?

    Election Arrangements, North Ilford
    Mr. Iremongerasked the Minister of Posts and Telecommunications if he will institute an inquiry into the handling of electoral mail and the installation and servicing of candidates' special telephone lines by the Post Office during the General Election with special reference to delay in respect of the Ilford, North constituency.
    Mr. Chataway: No, Sir. I have no evidence to justify an inquiry.
    Mr. Iremonger: Then why did it take so long to get our telephone?
    Mr. Chataway: I will refer my hon. Friend's very direct question to the Post Office, and ask it to reply to him.

    Staff Pay
    Mr. Arthur Lewisasked the Minister of Posts and Telecommunications if he will give a general direction to the Post Office to increase the salaries of all its staffs by 43 per cent.
    Mr. Chataway: No, Sir.
    Mr. Lewis: That is a surprising reply. Is the Minister aware that only this month the Government have given to the higher paid civil servants cumulative increases, both retrospective and in advance,

    21
    amounting to soe 43 per cent. when at the same time the Prime Minister was saying that 15 per cent. was inflationary? When the Post Office workers come for increases, will he tell the Post Office Corporation that 43 per cent. is not inflationary?
    Mr. Chataway: Each case has to be considered on its merits. I am sure that in making these comparisons the hon. Gentleman will bear in mind that some of the percentages he has quoted are for an annual increase and some for increases covering a number of years.
    Sir G. Nabarro: Would my right hon. Friend bear in mind that there is a direct connection today between the declining quality of Post Office Services—and they are declining faster than ever today—and the fact that postal staffs, notably the lower grades, are so poorly paid in relation to the remainder of British industry?
    Mr. Chataway: I will certainly bear my hon. Friend's observation in mind.

    Telephone Kiosks
    Mr. Milneasked the Minister of Posts and Telecommunications if he will introduce legislation to compel the post and telecommunications authorities to consult local residents in regard to the siting of telephone kiosks.
    Mr. Chataway: No, Sir. The siting of individual kiosks is a management matter for the Post Office. It consults the highway authority or the planning authority, as the case may be, and I am sure it is fully aware of the need to take local community interests into account.
    Mr. Milne: In view of that disappointing reply, will the right hon. Gentleman look at the possibility of stronger recommendations being made to the Post Office Corporation on this subject? Is he aware that in Cramlington New Town recently the siting of the telephone kiosk and complaints arising from it were replied to by his Department, which said that it did not matter a great deal anyway because the kiosk would not be used to any great extent? That is a complete negation of planning and something more is needed. When the job is being done, consultation with local people is important.
    Mr. Chataway: I am surprised that there was a reply from my Department on that matter, but I will certainly pass on the hon. Gentleman's remarks to the Post Office.
    Mr. Marten: If my right hon. Friend will not introduce legislation, would he give a general direction to the Post Office on this subject? Is he aware that in Banbury the Post Office has sited a kiosk right outside someone's house, and that after the pubs have closed the language of frustrated people trying to use the telephone is disturbing the sleep of the children in the house?
    Mr. Chataway: It would not be a suitable matter for general direction, but I am sure that the Post Office will take note of what my hon. Friend says.
    Mr. Liptonasked the Minister of Posts and Telecommunications how many public telephone kiosks are not in service due to vandalism.
    Mr. Dykesasked the Minister of Posts and Telecommunications how many public telephone kiosks there are by number and per head of the population; and how many kiosks, approximately, are out of action due to vandalism and technical faults compared with the position a year ago.
    Mr. Chataway: The information given by the Post Office is that at 31st March, 1970, there were 75,293 kiosks, representing about one for every 735 people in the United Kingdom; roughly 1,100 were out of order due to vandalism compared with roughly 1,000 on 31st March, 1969. No statistics about technical faults are available.
    Mr. Lipton: When destroyed telephones or telephone kiosks are being replaced, will the Minister consider the possibility of using a new installation which is more or less vandal-proof? A new design has been conceived, of which he knows something.
    Mr. Chataway: Yes, indeed. The Post Office is making considerable efforts to ensure that kiosks are less vulnerable.

    Telephone Charges
    Mr. Arthur Lewisasked the Minister of Posts and Telecommunications whether he is aware that the gas

    23
    and electricity companies supply customers with a meter which registers the amount of gas and electricity consumed, upon which bills are issued; and whether, as most telephone subscribers dispute the correctness of their charges as there has been overcharging on the part of the Post Office, he will issue a general direction to the Post Office to install meters in subscribers' homes upon which telephone charges can be based.
    Mr. Chataway: This is a matter between the Post Office and its users, on whom the cost of providing meters would fall. I see no reason, therefore, to intervene.
    Mr. Lewis: Is the Minister aware—and I am sure that he is, because I have sent him letters from his own constituents proving it—that people are being charged for calls which they do not make, and that even where a person pays for a meter the telephone people will not accept the meter as a correct record that they have overcharged? If the Post Office will not do something about it, surely the Minister will.
    Mr. Chataway: As the hon. Gentleman says, the subscriber can, if he wishes, have a meter—
    Mr. Lewis: But the Post Office will not take it as evidence.
    Mr. Chataway:—and I will certainly pass on to the Post Office his suggestion that this should be used as evidence.
    Mr. Selwyn Glimmer: Will not my right hon. Friend agree that there is widespread feeling over the fact that the Post Office will not accept the evidence of a meter paid for by the subscriber? Would he not further agree that many subscribers feel that, while computers make messes of other bills, computers should not be allowed to make messes of Post Office bills because subscribers have no redress? Will he look into the matter, and see whether some redress cannot be made by the Post Office?
    Mr. Chataway: There is certainly anxiety on this score, but I have no evidence at all that the Post Office is refusing to accept the evidence of its own meters in cases of dispute.

    Local Radio
    Mr. Ashleyasked the Minister of Posts and Telecommunications if he has yet had discussions with the Musicians' Union on the proposals for commercial local radio.
    Mr. Chataway: Yes, Sir.
    Mr. Ashley: When does the Minister think that the agreement with the union is likely to be concluded? Can he ensure that any influence he may exercise will be used to make sure that any agreement is not detrimental to the B.B.C.?
    Mr. Chataway: Negotiations on agreements with the Musicians' Union would be for the authority that would be set up to oversee commercial radio and the station operators themselves, and it would be primarily a matter for the B.B.C. to safeguard its own interests.
    Mr. Richard: The Minister will be aware that there are different and, indeed, firmly held views about the advisability or otherwise of the introduction of commercial radio. Can he give an assurance that before the Government make up their mind on the details of the proposals in this respect there will be full opportunity, and not merely a White Paper debate, for consultation with the unions concerned? Is the right hon. Gentleman also aware that through my post this morning I received an invitation to attend a dinner on 9th December at which he will speak to the Young European Management Association on commercial radio and its future within the United Kingdom? If he intends to tell it anything of substance, would it not be a good idea to let the House into his confidence first?
    Mr. Chataway: I have, of course, talked to a number of bodies about the Government's proposals for commercial radio. The hon. Gentleman knows that I have undertaken to publish a White Paper early in the new year. This I shall do, and it is intended to be a prelude to discussion here.
    Sir H. Harrison: Will my right hon. Friend give any indication when these members of the Musicians' Union will be able to be employed on commercial radio?
    Mr. Chataway: I certainly hope that the advent of commercial radio will mean an increase in opportunities for the employment of musicians.
    Mr. Ashleyasked the Minister of Posts and Telecommunications whether, following his review of the Corporation's priorities, he intends to allow the British Broadcasting Corporation to proceed with its plans for the extension of local radio.
    Mr. Chataway: I have nothing to add to the announcement I made on 6th August, a copy of which is in the Library.
    Mr. Ashley: Will the right hon. Gentleman give a categorical assurance that any competition between the B.B.C. and any commercial radio will be completely fair both in terms of location of stations and in use of the medium wave?
    Mr. Chataway: I made it clear at the beginning of August that the Government would not be committed to sanctioning B.B.C. local stations on any permanent basis. Whether there should be one network of local stations or two networks will depend on questions of finance and frequencies available.

    Postal Mini-buses
    Mr. Evelyn Kingasked the Minister of Posts and Telecommunications if he will seek powers to provide postal mini-buses in order to provide transport in rural areas.
    Mr. Chataway: The Post Office already has such powers under Section 7(2)(n) of the Post Office Act, 1969.
    Mr. King: Will my right hon. Friend use those powers? Will he accept that in many parts of rural England, certainly in South Dorset, the withdrawal of bus services and the raising of bus fares between villages has now reach crisis point? Is he further aware that there are cases where rail services have been closed on the understanding that bus services will replace them, and then the bus services have been withdrawn? Will he urgently consult his right hon. Friend, and use the powers he appears to possess?
    Mr. Chataway: I entirely accept that there are serious problems involved. It is primarily a matter for my right hon. Friend the Secretary of State for the Environment, but his Department is in touch
    26
    with the Post Office about possible extensions to the postal mini-bus service.
    Mr. Hooson: Does the Minister intend to use his influence with the Post Office to ensure that these services are expanded? My constituency had the first experimental service years ago and I think that there have been three others since then, but there is great scope for the expansion of this service for the general benefit of the public.
    Mr. Chataway: The Post Office has assured me that it will do all in its power to make a success of the discussions that are at present proceeding between itself and the Department of the Environment.
    Mr. William Edwards: As the Secretary of State for Wales is not primarily responsible for transport facilities in Wales, would the Minister of Posts and Telecommunications like to take over the responsibility when his job comes to an end?
    Mr. Chataway: I am glad that the hon. Gentleman correctly quoted my right hon. Friend by saying that my right hon. Friend is not primarily responsible for transport facilities in Wales, because there was some suggestion earlier that my right hon. Friend had said that he was not responsible.

    British Broadcasting Corporation (External Services)
    Mr. Evelyn Kingasked the Minister of Posts and Telecommunications if he will recommend the transfer of control of the British Broadcasting Corporation's external services from the British Broadcasting Corporation to the Foreign Office.
    Mr. Chataway: No, Sir. It would be contrary to the fundamental principle that the content of programmes broadcast by the B.B.C.'s External Services should be independent of Government control.
    Mr. King: I appreciate that, but is it not true that those who listen overseas will not believe for a moment other than that the British Broadcasting Corporation is the voice of the Government and that this has at times embarrassed successive Governments of both parties? Further, is not the whole of the cost of this service borne by the Government and not by the

    27
    B.B.C.? Will he consider some of the Foreign Office embarrassments which, if he consults the Secretary of State for Foreign and Commonwealth Affairs, he will find have occurred?
    Mr. Chataway: Hon. Members may think that there are errors in judgment from time to time, but we should respect the B.B.C.'s independence and on balance it has been the firm conclusion of successive Governments that allowing the B.B.C. this independence is good for Britain.
    Sir G. de Freitas: Is it not the considered opinion of all our high commissioners and ambassadors that the very reason for the tremendous impact of B.B.C. Overseas Service is that it is known to be independent of the Government of the day?
    Mr. Chataway: I agree with that point of view.
    Mr. Gorst: Is any proportion of the finances available to the B.B.C. for external broadcasting in any way deployed for domestic broadcasting?
    Mr. Chataway: No, Sir. I understand that the external services are financed by a Government grant-in-aid which is used solely for the external services.

    Deaf and Dumb Persons (Television Licences)
    Mr. Bob Brownasked the Minister of Posts and Telecommunications if he will make provision for a concessionary television licence for the deaf and dumb.
    Mr. Chataway: No, Sir. It has been the policy of successive Governments to give cash benefits through the social security system to those in need rather than gifts in kind.
    Mr. Brown: This is a disgracefully disappointing reply. Is the Minister aware that there are many thousands of deaf people who cannot lip-read and that their enjoyment is curtailed to such an extent that they are paying £6 for something which is worth only about 30s.? Will he reconsider this scandalous reply and consider at least making a concession to the deaf and dumb who live alone?
    Mr. Chataway: As the hon. Gentleman well knows, that is the reply that has been given by successive Government
    28
    They, like ourselves, have taken the view that the best way of helping people in need, whatever the reason for that need, is to give social security benefits which they can spend as they choose.
    Mr. Marten: Are not those social security benefits given right across the board? Do we not need to give more to those who are actually in need?
    Mr. Chataway: There are arrangements for concentrating help upon those in need, whereas if a blanket subsidy of this kind is given to everyone in a certain category, irrespective of need, resources are used less accurately to relieve those in need.
    Mr. Brown: On a point of order, Mr. Speaker. In view of the scandalous reply I have just—
    Mr. Speaker: Order. Notice must be given in the conventional way.
    Mr. Brown: I wish to give notice that I will raise this matter on the Adjournment.

    British Broadcasting Corporation (Finances)
    Mr. William Hamiltonasked the Minister of Posts and Telecommunications if he will make a statement on the finances of the British Broadcasting Corporation, in view of the recent announcement of substantial deficits in the Corporation's accounts.
    Mr. Chataway: I am considering the representations which the B.B.C. has made to me about its financial prospects. I have not yet reached any conclusions but will make a statement as soon as practicable.
    Mr. Hamilton: Does not the B.B.C. attribute part of this deficit to the fact that licence evasion is still rampant, despite the very welcome measures that the Minister himself has taken? What further steps does he mean to take in this direction? If they do not meet the problem, will he consider smypathetically a B.B.C. request for increasing the licence fee?
    Mr. Chataway: I will certainly consider representations which have been made to me by the B.B.C. The hon. Gentleman, who takes a great interest in these matters, will know that it has been possible over the last two years to halve

    29
    the number of licence evaders; and by a number of measures I am determined to reduce that number further.
    Mr. Gorst: Before any additional responsibilities are given to the B.B.C., will the Minister ensure that it discharges its responsibilities more impartially and effectively?
    Mr. Whitehead: On a point of order—
    Mr. Faulds: On a point of order—
    Mr. Speaker: Order. One point of order at a time, please. Mr. Whitehead.
    Mr. Whitehead: I apologise for my inexperience in the House, Mr. Speaker. Is it not usual for an hon. Member to declare an interest when he asks a question?
    Mr. Speaker: I dealt with that point of order last week. The answer is that it is not.
    Mr. Chataway: Matters of programme content are for the B.B.C.
    Mr. Richard: If the BBC. has substantial deficits, is it not important that steps should be taken to deal with them early rather than late? We on this side would view with a great deal of concern a situation in which the deficits were allowed to continue and the fact of those deficits was used, as most hon. Members opposite seem to be using it, as an argument in favour of commercial broadcasting and against public service broadcasting?
    Mr. Chataway: It is a pity that the concern of hon. Members opposite did not lead them to take a little action before the General Election, when they were urging new services upon the B.B.C. but not providing the B.B.C. with the money to carry out those services.

    Postal, Telegraph and Telephone International
    Mr. Goldingasked the Minister of Posts and Telecommunications why the British delegation refused to support Austria, Italy, West Germany, France, Belgium and Sweden in their declaration of support at the European Conference of Posts and Telecommunications in August for the principle of granting to the Postal, Telegraph and Telephone International
    30
    observer status at the European Conference of Posts and Telecommunications Assemblies.
    Mr. Chataway: The United Kingdom's position was set out fully by our spokesman at the conference, and I am circulating in the OFFICIAL REPORT a translation of his remarks as they will appear in the record of the Conference.
    Mr. Golding: Is the Minister aware that the British delegation's refusal to go along with most of the other major countries has brought the British Post Office into disrepute with many Administrations and that this decision was received with great anger by trade unionists in Britain?
    Mr. Chataway: As the view we took was supported by 14 voting countries present, whereas only eight voted against, I do not think that the hon. Gentleman's analysis of the position is correct.
    Following is the translation:
    C.E.P.T. PLENARY ASSEMBLY, MONTREUX, AUGUST, 1970
    5TH MEETING, 26TH AUGUST, 1970
    Statement by United Kingdom spokesman (translation from French)
    In the United Kingdom's view adoption of the Austrian proposal would create a precedent which would embarrass other international organisations in which participation of trade union representatives was not customary. If Austria's proposal were accepted it would be difficult not only to identify the problems that directly concerned the staff but also to deny observer status to other international bodies which represented the interests of users, carriers, etc. Furthermore, there was a danger that if the present scope of C.E.P.T. were enlarged its effectiveness would be impaired and its operation as an administrative conference would be hampered by the introduction into the debates of an element of political controversy, which would be contrary to Article 2 of the Arrangement
    The fundamentals of the problem ought to be examined by the Plenary Assembly, which would have to reach a clear decision. At the present the United Kingdom was opposed to the adoption of the Austrian proposal.

    Telephone Installations
    Mr. Goldingasked the Minister of Posts and Telecommunications if he will state the percentage growth in telephones installed between 1st April, 1958, and 31st March, 1964, and between 1st April, 1964, and 31st March, 1970, respectively.
    Mr. Chataway: About 25 per cent. and 50 per cent. respectively.
    Mr. Golding: Is the Minister aware that this dramatic increase followed a large increase in investment but also a very large increase in the productivity of Post Office telecommunications staff? Will he correct the impression he gave at the Conservative Party conference that the productivity of Post Office staffs fell in the last two years?
    Mr. Chataway: At the Conservative Party conference I was referring to the postal side of the busines, where, as the hon. Gentleman knows, there has been a decline in productivity. I am glad that the investment that followed the Post Office reorganisation of finances in 1961 bore such fruit in the latter part of the decade.

GUINEA
Mr. Healey(by Private Notice) asked the Secretary of State for Foreign and Commonwealth Affairs to make a statement on the situation in Guinea and on the policy of Her Majesty's Government in the Security Council discussions on this matter.
The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home): I have no Ministerial responsibility for the situation in Guinea.
The Security Council met last night following allegations made by the Government of Guinea that their country was being invaded by foreign mercenaries. A resolution was adopted unanimously demanding the immediate cessation of the armed attack against the Republic of Guinea and the immediate withdrawal of all external armed forces and mercenaries. The Council decided to send a special Mission to Guinea to report immediately on the situation. The Mission will be formed after consultations between the President of the Security Council, the Secretary General and Council members.
Mr. Healey: While I welcome the decision of the Security Council, may I ask the right hon. Gentleman whether he can explain why Her Majesty's Government allowed themselves, with the representatives of Nationalist China and the United States, to seek a delay in action by the Security Council on this matter?
Secondly, in view of the fact that the United Nations representative in Conakry
32
has been reported as saying that he has personally seen landing craft and fighter aircraft operating in support of the military operation, will the right hon. Gentleman assure the House that Her Majesty's Government will oppose any action by foreign Governments who interfere in the internal affairs of an independent State in Africa?
Sir Alec Douglas-Home: Yes, Sir. This is what we have constantly said. We have constantly emphasised the danger of States interfering in the internal affairs of each other. That is underlined in the Charter. On the face of it, although we have not the facts, and it is wise to establish the facts before I comment any further, it would seem that this might be a case of unauthorised armed forces interfering in the affairs of another country.
Mr. Healey: Would the right hon. Gentleman answer my first question and say why Her Majesty's Government, alone with Nationalist China and the representative of the United States, voted against the immediate action by the Security Council in this matter?
Sir Alec Douglas-Home: We thought it more sensible to establish the facts.
Mr. Biggs-Davison: Will the Security Council also investigate the long-standing aggression launched from the territory of the Republic of Guinea against the territory of our Portuguese ally? Should not Secretary General U Thant now take up the invitation, hitherto rejected, to visit Portuguese Africa? Thirdly, may I ask whether our United Nations delegation will keep constantly in mind the strategic importance of the Cape Verde Islands and the threat to Sal?
Sir Alec Douglas-Home: I am concerned with one question only. It must be for the Secretary General to decide whether he pays a visit to Portuguese Africa at a later date.
Mr. Ronald Bell: Would my right hon. Friend bear in mind that, apart from the inherent absurdity of the suggestions made against Portugal by President Sekou Touré, it is extraordinary to see this arch-intervener in the affairs of his neighbours now putting in a complaint to the Security Council?
Sir Alec Douglas-Home: I had noted that the Government of Portugal had denied any knowledge.
Mr. Healey: Would the right hon. Gentleman agree that it would be a disaster, with respect to his hon. Friends, if there were an attempt to repeat the Bay of Pigs experience in West Africa? Will the right hon. Gentleman give an unequivocal assurance that he would not support any such action?
Sir Alec Douglas-Home: I think the right hon. Gentleman's imagination is running too far.

QUESTIONS TO MINISTERS
Mr. Denzil Davies: On a point of order, Mr. Speaker. May I ask whether you have received notification from the Secretary of State for Wales that he intends to reconcile the apparent conflict or contradiction in the Answer which he gave to me on Question No. 4 relating to the proposal to locale a gunnery range at Pembrey in my constituency, when, on the one hand, the Secretary of State said that he intended to consult the Ministry of Defence, and, on the other hand, he decided that he was acting in a quasi-judicial capacity?
Mr. Speaker: Order. It is not for the Chair to attempt to reconcile statements by Ministers or hon. Members. It seems to me that this is a difference of opinion between the hon. Member and the Minister. The simple answer is that the Secretary of State for Wales has not asked whether he may make a statement reconciling what the hon. Gentleman regards as an inconsistent statement.
Mr. George Thomas: On a point of order, Mr. Speaker. Whilst, of course, we accept your Ruling, may I ask you what redress there is for the people of Wales, as the Secretary of State, who is supposed to act in a semi-judicial capacity in this matter, has indicated to the House this afternoon that he proposes to consult one side to this dispute and to show them the report whilst he withholds it from the other?
Mr. Speaker: Again this is a point of difference between the Secretary of State for Wales and the ex-Secretary of State for Wales. They must reconcile it themselves. I cannot interfere.
Mr. Alan Williams: Mr. Speaker, are you saying that this is a matter involving a point of honour for the person concerned who has made a mistake to decide whether or not to correct that mistake?
Mr. Speaker: Order, I would never rule on a point of honour. We are in a House where all are honourable men—except the ladies, who are honourable ladies.

PERSONAL STATEMENT
Mr. Leslie Huckfield: Mr. Speaker, may I make a statement arising out of the Adjournment debate which I initiated in this House on Friday last, 20th November.
During that debate I referred to the travel firm of Horizon Holidays Ltd. May I say that my reference to this firm was completely mistaken. I was, in fact, thinking of a different firm. I should like unreservedly to withdraw my comments about Horizon Holidays and to apologise very sincerely for any damage or harm that my remarks may have caused to the reputation of that firm.
Mr. Speaker: What the hon. Gentleman has said will be recorded in HANSARD.

QUESTIONS TO MINISTERS
Mr. Hooson: On a point of order, Mr. Speaker. May I invite your attention to the dissecting of Questions to the Secretary of State for Wales today and the inclusion of Questions to the Minister of Posts and Telecommunications between Questions 19 and 41? It seems to me that this is an unusual procedure. We have not had this kind of thing, save with Questions to the Attorney-General, so far as I am aware. Such Questions to another Minister have all been interjected, as it were, between Questions to the No. 1 Department on the list.
Is it intended to continue with this practice? If so, as the Secretary of State for Wales answers Questions on education, agriculture, local government and many other spheres, and as we have an opportunity to put only two Questions down to him, could we have your assurance that this kind of procedure will not be followed in the future?
Mr. Speaker: I can in no wise rule in the way which the hon. and learned Gentleman suggests. This happened last time Welsh Questions were on the Order Paper. There was an intervention of another Department at a certain spot. It also happened last week in the Scottish Questions. The arrangement for bringing in certain Ministries at certain points on the Order Paper is a matter for the usual channels. They will listen to what has been said. It is not a matter for Mr. Speaker at all.
Mr. Alec Jones: Further to that point of order, Mr. Speaker. May I have some guidance as to what can be done in the present circumstances to protect the rights of every Welsh Member of Parliament? In this House at the present moment every Welsh Member is a back bench Member. There is not one Welsh Member represented in the Government. Yet we are denied the opportunity of reaching our Questions which directly affect the well-being of the people of Wales.
Mr. Speaker: Order. No matter how eloquently it was put, that is exactly the same point on which I have just ruled.

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

  ROLLS-ROYCE (LAUNCHING AID)
  3.40 p.m.
  Mr. Anthony Wedgwood Benn: I beg to move,
  That this House notes the decision to give a further £42 million launching aid to Rolls-Royce for the RB211 engine, but regrets the lack both of consistency and of effective accountability in the industrial policy for the private sector pursued by Her Majesty's Government.
  Mr. Speaker: May I announce that I have selected the Amendment standing in the names of the Prime Minister and several of his right hon. Friends.
  Mr. Benn: The House will have opportunity today to debate three matters of considerable concern. First, we shall consider the Government's decision to give a further £42 million to Rolls-Royce. Second, we shall have the opportunity to discuss the affairs of Rolls-Royce, one of Britain's most famous companies. Third, we shall have an opportunity to examine, in the light of this affair, the relations, and particularly the financial relations, between Government and industry. There could hardly be a more important subject, and I was glad to read in the Financial Times that the Secretary of State for Trade and Industry intended himself to take the opportunity today to make a major statement on relations between the Government and industry.
  Whatever the outcome of the debate may be, Parliament and the public are entitled to know the truth about the relations which obtain, as revealed by the particular circumstance of the RB211 order. Since I was responsible from February, 1967, until this summer for the affairs of Government in relation to Rolls-Royce, perhaps I might be allowed to give details of the circumstances in which Rolls-Royce won the original RB211 order.
  This was announced by Lockheed at a Press conference in New York on Friday, 29th March 1968. Rolls-Royce had won

  37
  against very stiff competition by General Electric, which had offered its CF6 engine, the engine order for the Lockheed 1011 Tristar aircraft. The value to Rolls-Royce of that initial order, on its launching for two airlines, was £98 million, and it was estimated at the time that the whole order with spares could be worth as much as £350 million to Rolls-Royce, possibly the largest export order ever.
  I wish to pay a tribute to Rolls-Royce for the work which it did in connection with the engine and with the order. The RB211 engine is a considerable engineering achievement. It is a larger engine than it has ever built before. It is a quieter engine and a more powerful engine. It was not only the engineering achievement which aroused public comment. There was also the fact that Rolls-Royce put so much effort into selling this engine. Sir Denning Pearson and Sir David Huddie worked for months personally on the marketing of this engine. I read in Aviation Week, a reliable American aviation magazine, that Rolls-Royce had told them that it had spent no less than 840,000 dollars on the marketing campaign alone. My evidence confirms what I read, also, in Aviation Week, that there had been 250 individual trips totalling 3 million miles by Rolls-Royce executives back and forth across the Atlantic in order to win the order. and Sir David Huddie and his family moved to New York in order to be on the spot.
  This also involved Rolls-Royce in offering to open service and repair facilities in the United States, which in turn could employ up to 1,000 people, and to make a substantial investment in the United States. It was a formidable achievement to secure the order. I wish that some of the critics in the City of some of our major companies would be a little more respectful towards the difficulty of winning orders of this kind against that sort of competition. Some articles written by people who could not mend a puncture in their own bicycle seem to make light of the engineering problems in building a complex aero-engine. It really makes it very hard for those engaged in the export business to do their work well.
  But Rolls-Royce did not win this order alone. Sir Denning Pearson at the Press
  38
  conference at which it was announced very generously said that he had received
  "the greatest help and co-operation from the British Government."
  Since we are debating relations between the Government and industry, I think that it would be helpful if I filled in the detail of what was meant by the phrase, "the greatest help and co-operation from the British Government". The RB211 order was a product of co-operation between the company, my old Department and the civil servants working in it, the civil servants who worked as engineers and scientists in the research and development establishments, the British Ambassador and the Embassy in Washington, and the taxpayer who picked up the bill. I wish now, therefore, to devote a few minutes to tell the House the background.
  First, let us examine the previous support before the RB211 order which Rolls-Royce received from the Government. From 1960 to 1968, Rolls-Royce received £11·25 million in launching aid for three varieties of the Spey engine and the RB178. In addition, it received 100 per cent. financing of the Olympus 593 for Concorde, now costing the British taxpayer in total about £1 million a week and involving the company in every substantial receipts from the taxpayer. All this money which went from the taxpayer into Rolls-Royce contributed to fund the research and development for the RB211 engine.
  Lest the House be too shocked to hear those figures in relation to the figures we are debating today, may I set them against the background of American support for the American aerospace industry? For the purpose of comparison, I think it helpful to take the figures for research and development by the Pentagon and N.A.S.A., the American space agency, for the year 1967, the year exactly preceding the year of the RB211 order. The Pentagon and N.A.S.A. had a research and development budget between them of 2,932 million dollars, of which a very great deal found its way into the aerospace industry, and much of it into the two engine manufacturers, General Electric and Pratt and Witney, which were the competitors of Rolls-Royce on that occasion. That is the background against which the House debates the matter today.

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  In addition, there was specific financial support by my Department for Rolls-Royce in the final months before the contract came to be won, and a proportion of the costs incurred by Rolls leading up to the date of 29th March was paid by the Government. In addition to that, Rolls-Royce had decided to introduce into the RB211 carbon fibre or Hyfil high speed compressor blades, which were invented in the Royal Aircraft Establishment, Farnborough, worked on in Atomic Energy Research Establishment, Harwell, licensed to Rolls by N.R.D.C., all being organisations funded by the taxpayer.
  In addition, the National Gas Turbine establishment at Pyestock, also a Government establishment funded by the taxpayer, built special test facilities, which Rolls-Royce, being the only aero engine company in this country, depended on almost entirely for its specialist testing. In addition, Shorts in Belfast was kept going by the previous Government when, on a profit and loss basis, it would have gone bust, and got the huge order for the pods for the RB211.
  In addition, to that, negotiations were opened, in which I was involved, for the Royal Air Force to lease a VC10 so that the RB211 engine could be tested in flight before taking its first flight in the 1011 aircraft. On top of that, the Ambassador and his staff in Washington worked continually with us, and with Rolls-Royce, in order to pave the way for the order.
  That was how the matter stood in March, 1968. Rolls-Royce had submitted tenders to two American airframe manufacturers, Douglas for the DC10—its option with Douglas expired on 30th April, 1968—and Lockheed for the 1011. The Government had agreed to 70 per cent. of the launching aid on the basis that the engine would be launched only if either Douglas or Lockheed came forward with three airlines ready to order with the Rolls-Royce engine.
  At 5.30 on Wednesday, 27th March, Rolls-Royce came to me and said that Lockheed had decided to go ahead with only two airline orders, and it required another £20 million, which it must have five hours later if it was not to withdraw altogether from the race. It explained that if it went with Lockheed with two airlines, and if by the end of April
  40
  Douglas held it to its pledge to go ahead as well it would have to produce two sets of prototypes of the RB211, one for each airframe manufacturer. That would cost it another £20 million, and it needed the £20 million by 10 o'clock that night because the Lockheed board was meeting then in New York to reach a decision. The Rolls board had to decide whether it could afford to go ahead with Lockheed and Lockheed whether it would be right to go ahead with Rolls. An immediate decision was necessary.
  I have heard it said many times—I have heard it said by hon. Gentlemen opposite and seen it on television in "The Power Game" and "The Plane Makers"—that Governments are very slow when it comes to major industrial decisions, that only businesssmen can take big risks at critical moments. Because my memoirs are not appearing in the Sunday Times. perhaps I can be allowed to give them to the House. In fact,5½ hours later—I noted the time in my diary—at four minutes past 11 that night I rang Rolls-Royce and authorised a guarantee not for £20 million but for £9 million to carry it over that four-week period.
  How was that money offered, under what legislation? It was under the provisions of the Industrial Expansion Act, which the Secretary of State for Trade and Industry now says he will not use. Rolls-Royce accepted the Lockheed proposal on the basis of the £9 million guarantee. The order was announced in New York 48 hours later and at the end of April, since Douglas did not select the Rolls-Royce engine, the option lapsed and the £9 million guarantee was not required.
  That is the reality of Government-industry relations. That is what actually happens when it comes to the point of decision about an order of that magnitude. The Secretary of State in his old capacity as the head of the C.B.I. bitterly attacked the Industrial Expansion Act and has now announced that he does not intend to use it. The House should note that had his Administration been in power in March, 1968, Rolls-Royce would not have got that order.
  That was not the end of the degree of Government support. To get the order there had to be an offset arrangement, which was to be undertaken by

  41
  Air Holdings Ltd. Air Holdings Ltd., supported and led by Lazards, included a number of shipping interests: British and Commonwealth Shipping; P. and O. Steam Navigation—Lord Cowdray personally, as far as I could make out; and Eagle Star Insurance. They offered to buy 20 Lockheed 1011s, with exclusive worldwide rights to sell them anywhere outside the United States and when they had sold the 20 were committed to buy up to a total of 50. That was part of the deal which led Rolls-Royce to get the order.
  When the order was announced, Conservative Members in droves joined in signing a Motion congratulating the company and the "financial institutions of this country which assisted so materially in the British triumph." Of course, the Air Holdings operation was also carried by us, in the sense that these marvellous financial institutions which had come to the support of Rolls-Royce had to be underpinned by Government. It was known at the time that Government backed the Air Holdings operation. I can give hon. Members the reference if they want it.
  It did not end there. After the Government had injected their money into Rolls-Royce through the launching aid we became partners with Rolls and Lockheed in the business of selling the aircraft. There were endless consultations continuing between the Government, Rolls-Royce and Lockheed to try to get not only the Rolls-Royce engine more widely used but also the 1011 which contains it.
  Rear-Admiral Morgan-Giles: Who are "us" and "we"?
  Mr. Benn: The "we" of whom I am speaking is the taxpayer, a function which unites us all.
  An Hon. Member: Did the hon. and gallant Gentleman think it came out of my right hon. Friend's pocket?
  Mr. Benn: What I am trying to bring home to the hon. and gallant Gentleman is that such an operation is not possible without Government support.
  Later, indeed a year ago, when Rolls-Royce's difficulties became apparent to us, we invited the Industrial Reorganisation Corporation to look at Rolls-Royce.
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  The proper place for businesmen working with Government is not trying to be Ministers or civil servants at No. 10 Downing Street, but actually engaged in the business of supervising and watching Government investment in industry. The I.R.C. made a report identifying the problems of the management of Rolls-Royce. It put Lord Beeching on the board as its spokesman and watchdog and also Mr. Morrow. It agreed to provide £10 million, and another £10 million was indicated in order to provide the finance Rolls-Royce needed to carry this very large order and its other business.
  Now, besides the Industrial Expansion Act having been put into cold storage, the I.R.C. is to be wound up, and no such supervision is available.
  The reason I have gone into such detail is this—and this is what I was coming to if the hon. and gallant Gentleman had not interrupted. The truth is that this is how Government-industry relations actually work, that every Government does what we did, and if right hon. and hon. Gentlemen opposite, were they not so hog-tied by their own ideology, would have done exactly the same as we did in March 1968.
  Nobody need say that they did not know, because on the board of Rolls-Royce was the then Member for Cities of London and Westminster, John Smith, a member of the Rolls-Royce board since 15th July, 1958. What I have now told the House was known to everybody who had any reason to know it in the C.B.I. or industry in general. That was the background to the order we are now debating.
  Criticise my judgment if you like, say that it was wrong to support Rolls-Royce, and that that was the wrong judgment to make. Hon. Members may say that the fixed price was unwise. That was the Rolls-Royce decision in a highly competitive position. It may be said that it was unwise for Rolls to put its money on the Hyfil carbon fibre when it was partly untested; that the escalation that occurred later through doubt on the capacity of Rolls-Royce to analyse its likely costs. But, for heaven's sake, do not say that private enterprise had much to do with the operation that we have discussed, because that is how government must operate in the areas of highly competitive international business.
  Mr. J. Crimond: What the right hon. Gentleman has told us is very interesting. Can he give us any estimate of the total amount of taxpayers' money advanced to Rolls-Royce during the period about which he has been talking?
  Mr. Benn: I have given some figures up to 1968. I have given the figure of £47 million and the £10 million from the I.R.C., and the other £10 million which is part of that deal. I asked the Minister of Aviation the other day whether he would give the total figures. No doubt he will do so in winding up. Those figures leave out of account entirely the Government money Rolls-Royce received for Concorde and that it will receive as the makers of the MRCA RB199 engine and so on. The right hon. Gentleman rightly identified that Rolls-Royce received a certain amount of the taxpayers' money, if that was the object of his question.
  Now let us compare this little bit of reality with the statements made by the party opposite on the subject of Government industry relations. Let me begin with a speech in Edinburgh by the Prime Minister, then Leader of the Opposition, reported in the Sunday Times of 3rd September, 1967, which said:
  "'It is no good kowtowing to a Labour Government in order to get money for investment which the Labour Government's taxation makes it impossible to get inside the firm or on the open market,' he declared in Edinburgh. 'Private enterprise must fight for the free enterprise system'."
  Or let us take what the Secretary of State for Social Services said in a speech reported in the Daily Telegraph of 9th February, 1970, in which he referred to a speech I had made about Rolls-Royce, though I had not then gone into such detail. He said:
  "Benn boasted in the same speech that Rolls-Royce would not have won its huge RB211 export order without Government support.
  "This is monstrous cheek."
  Or take the little leaflet that was pushed through my door during election. It was published by Conservative Central Office. On page 3 was an item headed: "The Great Divide". It said:
  "Between Conservative and Labour attitudes to privately owned business is a great divide. The Conservative Party believes wholeheartedly in Free Enterprise and in the market economy."
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  Or take the maiden speech by the Secretary of State to the Conservative Party conference, a speech that earned him enormous applause from the delegates. This is what he said—and I quote from the Conservative Party hand out issued by Central Office. He said that industry is in poor shape
  "… because self-reliance and initiative have been undermined by intervention and the pursuit of false objectives …".
  Let us take the right hon. Gentleman's great speech in the House of Commons on 4th November. We do not need the Whips to get our Members here to listen to the right hon. Gentleman because we enjoy him. He said:
  "We believe that the essential need of the country is to gear its policies to the great majority of people, who are not lame ducks, who do not need a hand, who are quite capable of looking after their own interests and only demand to be allowed to do so."
  A little later, he added:
  "The vast majority lives and thrives in a bracing climate and not in a soft, sodden morass of subsidised incompetence."—[OFFICIAL REPORT, 4th November, 1970; Vol. 805, c 1211–2.]
  Having made that speech in the House, he discovered that his right hon. Friend was coming along to ask for £42 million. He was rather surprised, so he went to the electronic dinner and said, according to The Times of 20th November,
  "To try and pretend that Rolls-Royce is just like any other company is laughable to the point of the ridiculous."
  I hope he was rightly quoted. He went on:
  "The alternative would certainly have been to wave goodbye to the original launching aid of £47m., not to speak of the consequences to the vast civil and military programme for which Rolls-Royce is responsible."
  But, of course, Rolls-Royce would have gone bust if the right hon. Gentleman had not been prepared to support it. At least the right hon. Member for Wolver-hampton, South-West (Mr. Powell) is honest about it. He knows that the logic of the prospectus upon which he and the Secretary of State were elected is that Rolls-Royce should go bust, and I greatly admire the right hon. Member for Wolver-hampton, South-West, although I disagree with much of what he says, because at least he has the guts to articulate the gobbledy-gook that lurks beneath the surface of his mind and to accept the consequences of what he says. Not so the Secretary of State.

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  Of course Rolls-Royce would have gone bust. Of course so would the British shipbuilding industry have gone bust if the Government had not been prepared to support it. If the right hon. Gentleman had been in power at the time Upper Clyde Shipbuilders came for help, there would have been 13,000 more people unemployed on the Clyde. Harland and Wolff would have gone bust if it had not been for Government support. Anyone who looks at the profit and loss account of Harland and Wolff alone, without considering the political consequences of massive unemployment in Northern Ireland with the possible military consequences which might have flowed from that, is simply blinding himself by his own ideology just to take a narrow view of this whole problem of industry.
  Then there was the case of the Furness shipyard, where 5,000 jobs were at stake in one of the best-equipped yards in the industry. Indeed, it did go bust and, without the £1 million which we, the taxpayers, put up, so that Furness could join the Swan Hunter group, it would not now be working to get the exports that it is doing.
  Mr. Carol Mather: The right hon. Gentleman, in quoting the Secretary of State's Blackpool speech, missed out what my right hon. Friend said about the aircraft industry.
  Mr. Benn: I have read the speech with great care. The right hon. Gentleman said that the aircraft industry was different. I am now dealing with the shipbuilding industry to show that the aircraft industry is not different. I will quote the figures of the American taxpayers' support for the American shipbuilding industry which the right hon. Gentleman used to justify supporting Rolls-Royce with £42 million. I checked the figures with the American Embassy by telephone today.
  Only a few days ago the United States Government raised their subsidies to the American shipbuilding industry by 81 million dollars, so that in the current year the American taxpayers are paying 199 million dollars of their money to keep the American shipbuilding industry going.
  If anyone doubts the good consequences of our policy, let him look at today's Times. He will see that the total output
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  of British shipbuilders this year could exceed £1·5 million gross, a level which has not been surpassed since the 1939–45 war. It is because of the support which the Labour Government gave to the shipbuilding industry that we have been able to bring it to and retain it in its competitive position.
  Of course, the computer industry would have gone bust without Government support. Make no mistake about it. With I.B.M. and the other big American computer company dominating the world, if we had not put £17 million—in this case in equity—under the Industrial Expansion Act into I.C.L., the alternative, to use the right hon. Gentleman's own words, would have been "to wave goodbye" to the British computer industry.
  Do not think that the American taxpayers do not finance their computer industry, since N.A.S.A. has spent about 50,000 million dollars on the space programme. That was not just for a one-way ticket to the moon. It was money which filtered out right through the American electronics industry—and the right hon. Gentleman talked about I.C.L. as a lame duck. Short Bros. and Harland would have gone bust, so would British Motors, A.E.I. and parts of English Electric.
  The only industrial country that has a Government today preaching a medieval policy is this one. I quote to the House the words of the Scientific American in its report on relations between Government and industry in Japan. It said this:
  "The relations between the Japanese government and business are difficult to describe in Western terms. The relations are close. Government and business work in partnership towards goals which are for the most part mutually agreed on; it is often difficult to say where government action ends and business action begins."
  The Economist, also commenting on Japan, said:
  "… the ultimate responsibility for industrial planning, for deciding in which new directions Japan's burgeoning industrial effort should try to go, and for fostering and protecting business as it moves in those directions, lies with the government."
  Competition as it is preached by the Prime Minister and the Secretary of State, between firms in a laissez-faire atmosphere, has not existed for 100 years except in margarine and detergents, which is no doubt why the Government appointed Lord Cole to take over Rolls-Royce when they decided to give it money.

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  No one knows that better than the Secretary of State. As head of the C.B.I., he knew everything which went on between Government and industry and from his previous experience in the oil industry he knows more about rigged markets than almost anyone else. The only competition in the oil industry is in advertising, when one firm says that it has a tiger in its tank. Is he the tiger in the Tory Government's tank, which is what I suspect? May I borrow from the thoughts of Chairman Mao—he is a "paper tiger" in their tank and he is "living in a soft morass of subsidised incompetence".
  What of the future projects which will have to be discussed when this debate is over? What of the BAC311 and the A300B? We do not expect clear answers from the Government today, but we want to probe. In the absence of clear statements, I have tried to find out as best I can the thinking of the Minister of Aviation Supply. I went back to an election leaflet published in Chipping Sodbury, which I think is in his constituency. This pamphlet was published during the election and it is called "Labour and the Aircraft Industry". It is a bitter attack on the Labour Government and contains a reference to the BAC311. It quotes Sir Anthony Milward very approvingly—he was not described then as speaking "stridently" as he was the other day. This is what is said in a leaflet about the BAC311:
  "Even if a decision to go ahead is given now, precious time has been lost, and the A.300 B, to a large extent aimed at the same market will have secured an invaluable lead."
  That was when the right hon. Gentleman was campaigning for votes among the aircraft workers. But what did he say when he was appointed a Minister?
  He gave an interview to the Bristol Evening Post on 17th October. Let me read his words. He was being probed about the future and he said:
  "If the industry can find most of the money itself and come to the Government for, say, no more than 10 per cent., it would be healthier all round."
  Once the right hon. Gentleman was elected to office there was a very different tone. Then he wonders why we laugh at him when, about three weeks after he talks of 10 per cent., he comes here
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  and asks for 70 per cent. for the continuation of the Rolls-Royce order.
  The Government's problem has been made much worse by the setting-up of his own Department. Within one Department comparisons between support for computers, shipbuilding and the aircraft industry could be made using a common criterion and we could compare across the board. The right hon. Gentleman is not in the Cabinet, he has to rely on his right hon. Friend to speak for him and he has my sympathy. It is not a very happy position to be a Minister for a single industry out of the Cabinet when these decisions have to be made.
  These are difficult problems. Anyone who has to make decisions involving the future of great companies and thousands of workers, and involving this country's export trade knows how difficult and exceptional they are. Adam Smith is no help. Private enterprise is not what we are talking about and we never have been talking about it. We are talking about a new type of relationship, call it partnership, call it what you like, a new relationship between Government and industry which exists now in every modern industrial society. It cannot be looked at solely in terms of the profit and loss, on an agricultural time cycle year by year. We are talking about skills that have been acquired over decades, we are talking about other costs. If we go wrong, as we could have done in Northern Ireland, the other costs that may be involved in a decision to cancel enter the decision. We are talking about a new strategy of international competition.
  Some of my hon. Friends would say that this is a case for the public ownership of the aircraft industry. [HON. MEMBERS: "Hear, hear."] It is arguable whether one should buy out the aircraft companies at prices inflated by the contracts which they have received from Government. There must be realism in discussing these issues. There must be clear criteria, consultation and accountability and these things are not secured by the proposal that the Government have made which have occasioned this debate.
  The Motion we have tabled notes the decision to give Rolls-Royce the £42 million. Why does it note it? We cannot do more than note it because the

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  right hon. Gentleman who came forward with this said that it was subject to a further check on the figures. Who has every heard of a Minister saying he wants £42 million subject to a further check on the figures? Until we have the figures and we know that it is correct, how can we approve this in detail? We have also put in our Motion our regret that there is a lack of consistency between the aircraft industry and other industries, improper accountability and, with the disappearance of the I.R.C., no supervision other than what might be given by the Ministry, over enormous sums of public money.
  Then we come to the Government's Amendment. I read today how clever this Amendment was because it would put us in a spot. I assure the House that it does not put us in a spot at all. It begins by approving what the previous Government did. Then it talks about the existing rate of 70 per cent. launching aid. I would be interested to know where the adjective "existing" came from. There never has been 70 per cent. launching aid until the Rolls-Royce RB211. That was the first time. If the right hon. Gentleman, having said that 10 per cent. is his objective is now talking about 70 per cent. as the existing rate then he is giving a commitment going far beyond anything he has so far said.
  The final laugh of the Amendment comes when it says that they welcome the fact that this has been:
  "… handled through the resources of the company itself."
  Handled through the resources of the company itself! This is a company that has been propped up and has received public money to retain its competitive position. To ask the House to congratulate the Government on having arranged that it should be handled through the resources of the company itself when the debate is to approve £42 million more in public money is nonsensical.
  The issue today is not support for Rolls-Royce. This side of the House takes the view that, having taken a very big decision on the 211 it is right to follow it through. No Government did more for Rolls-Royce than the previous Government, although others may think it wrong to have done so. The issue
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  today is the consistency of the Government, the credibility of the Government, in handling problems affecting millions of people in Britain—not only in the aircraft industry—their jobs and their prospects. The Amendment to be moved by the right hon. Gentleman reeks of odious hypocrisy and I ask the House to reject it.
  4.16 p.m.
  The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  "approves Her Majesty's Government's decision to continue the established policy of providing launching aid for appropriate projects in the aircraft industry including in particular the Rolls-Royce 211–22 engine at the existing rate of 70 per cent., subject to independent accounting procedures, up to a total of £89 million, and welcomes the fact that the financial problems encountered by Rolls-Royce are being handled through the resources of the company itself and other non-governmental institutions."
  The whole sense of the Motion tabled by the Opposition and of the speech by the right hon. Member for Bristol, South-East (Mr. Benn) has been to demonstrate that the decisions which have been put forward in relation to this great project are ones seen as being in sharp contradiction with our declared policy in the whole area of industrial prosperity. The object of the Amendment is clearly to bring before the House the need to welcome and approve the decisions taken, and I mean to show that these decisions are in no way contradictory to our industrial policy but fall squarely within its framework.
  First, there is the issue of launching aid. I am grateful to the right hon. Gentleman because he clearly presented a reasonable and fair statement of the attitude of mind of his party when in government to this problem. I should like to reiterate some of the points which have had to be reviewed in taking these different decisions. The whole system of launching aid was adopted about 10 years ago. It has since been practised by successive Governments in relation to particular projects and problems inherent in major developments within the aircraft industry. There is no doubt that the aircraft industry presents important problems which are different from those of

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  any other industry. I have never made a secret of that. It presents exceptional difficulties because the sheer size, complexity and time scale of the problems involved are of a kind which increasingly exceed the capacity of any normal company's resources to meet on its own account. Over the years all these factors have grown extensively. The size, the extent, the time-scale and the complexity have all grown very much.
  I shall illustrate the point. The development of that great aircraft the VC10 involved, both from private and public resources, about £50 million to see it safely off the ground. Yet today we are discussing the BAC311, which can give rise to three times that amount.
  The great Spey family of aero-engines cost between £30 million and £40 million to put into production. Yet today we speak of an RB211/22 which on present estimates will cost £135 million to develop. If that were carried forward into what is called the "Dash 60" version—the extended version with larger thrust—we would be speaking of an amount approaching £200 million.
  These projects are enormous. They present not only the difficulties of size and complexity, but also great unknowns. The right hon. Gentleman rightly referred to the problems inherent not only in developing and putting into use new materials in the development of such projects but no less in the demanding, in stress terms, on existing materials of exacting requirements hitherto unknown.
  In confronting the problem of the RB211 engine Rolls-Royce was moving into a genuinely new technological dimension which it never had to confront before. This kind of development is wholly unlike the development problems of any other industry. No industry has to face this size and complexity of individual development projects with the resources of individual companies.
  Every country which has and seeks to preserve a major aircraft industry faces the problem. They overcome the problem by a variety of different methods of support. They recognise that the development and putting into effect of projects of this kind exceeds the normal resources of single companies in private industry.
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  We do too, and I have never made a secret of that.
  Another vital factor is that directly or indirectly Governments are often the principal customers, either in defence or in direct terms, and they have a major part to play as customers in that relationship. In America, as the right hon. Gentleman said, the matter is catered for by enormous military development programmes which are unequalled in Europe. We have no military base of a kind to justify the amount of such programmes, and therefore we have no equivalent capacity.
  I remind the House that the principal rival to the 211 engine is the CF6. This was developed entirely as a military project, in its original form, to power the C5A transport aircraft of the United States forces.
  Mr. Tam Dalyell: If the Government are the chief customers, why are better arrangements not made for public accountability? Why, particularly, has the right hon. Gentleman chosen to dismantle the I.R.C.?
  Mr. Davies: I shall come to those questions in due course. I do not dissent from what the right hon. Gentleman has said about the importance of association of public and private operations in joint ventures of this kind. I understand that these are necessary. It is wrong to build up the public contributions or the private contribution as being the more important. They have a joint part to play and they play it effectively. There is, though, nothing sacrosanct about launching aid as a sysem for attaining these purposes. It may be that in the future we shall see some variation of it, but at present it is a method which has been used both by the party opposite when in Government and by ourselves. It seems, therefore, not an inappropriate method to deal with the problems with which we are currently faced.
  Mr. Benn: Could the right hon. Gentleman tell the House how he differentiates between Government support given indirectly to the aircraft industry in the United States with the direct subsidies for their shipbuilding industry and the equally indirect and equally important American taxpayers' contribution to the computer industry, the electronics industry and all

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  those other industries which he says are totally different to the aircraft industry?
  Mr. Davies: The position of the American shipbuilding industry, in relation to the level of support which he mentions, is surprising, in that its position in the line up of world-wide fleets would not seem to have shown an enormous result from the expenditure made—[Interruption.] That is exactly the question the right hon. Gentleman put to me. If, therefore, we accept that the launching aid method is not an inappropriate method for dealing with situations of this kind, we have to consider whether the project justifies it. I should have thought that the project in question could hardly be a matter of controversy between us.
  When in Government, the Opposition put up £47 million, on the basis of 70 per cent. of the estimated development costs which were then set at £65 million, and the 70 per cent. represents some modest deductions from that figure. They did it because they realised, as the right hon. Gentleman said, that we had in the project an enormous achievement by a British company, an achievement which was, as he said, in the face of great competition problems. They therefore had no doubt that they were supporting an operation which justified Government help and the joint venture principle to which I have referred. They did so also because in their investigations, though the right hon. Gentleman did not mention it I have no doubt that they satisfied themselves that the likely outlet for such an aircraft in relation to the total expenditure level of world fleets should guarantee both to the Lockheed Company, which was the airframe generator, and the engine manufacturer a reasonable and sensible future in terms of the outlet. From the Opposition's point of view, they saw in this project, as we do, a project of major importance, with a likely outcome which would not be unsatisfactory.
  I hope that I have the agreement of the whole House when I say that one could only be happy to have seen the successful first flight of this aircraft last week with the Rolls-Royce engines in it performing so well.
  It might be said that what had been assessed as being a reasonable and sustainable project on the basis of £75 million, as it subsequently transpired to be
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  in terms of development costs, becomes unreasonable and unsustainable when the cost rises to such a high figure as £135 million, as we now find out. But I do not think that it is reasonable to suppose that the very great increase in development costs necessarily undermines the prospects of the project. After the most careful appraisal, we came to the conclusion, albeit this large increase in costs, that there were on balance undoubtedly advantages in preserving the project and continuing to play that proportionate part in it to which the right hon. Gentleman gave authority when he was Minister of Technology.
  The alternative would have been to have lost the whole of the stake that he put in it. Without continuing, Rolls-Royce would not have been able to fulfil its undertakings. It would have had to face a traumatic experience in terms of the claims which would have been brought upon it. Undoubtedly it would have failed to register any engine sales, and the whole basis of the launching aid, being related to a levy based upon engine sales, would have fallen. Both from the company's and the Government's point of view, the result could only have been damaging in the extreme.
  There were a lot of consequential damages involved. Rolls-Royce is a company which is not only a supplier of spares, maintenance and engines to an enormous number of airlines of other buyers throughout the world but is at the very basis of our own defence procurement programme. Any risk of losing that would have represented most serious consequences—
  Mr. William Hamilton: We know all that.
  Mr. Davies: Was the record of Rolls-Royce itself wholly unacceptable? We learned of the sharp deterioration in the development cost factors about the middle of August for the first time. In due course, I will deal with the part that the I.R.C. played in the scrutiny which we then had to undertake to establish what the extent of the excess cost was likely to be.
  I would not hesitate to say, nor would the company, that serious shortcomings had existed in the capacity of the company to get timely warning of the increase in costs and to have its financial forecasting systems in a form which allowed

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  it to take action in time to obviate the real difficulties into which it had fallen. But that is not the same as castigating the company as generally incompetent. That is simply not the case. It is a company, after all, which alone outside the United States of America has been able to preserve a capacity for competing in the most sophisticated and variegated aero engine projects. It has undertaken a vast number with great success, and currently it is concerned with some major collaborative projects with Europe. I need only refer to the Olympus and Concorde, to the Adour engine for Jaguar, the RB199 for MRCA, and the M45H, all of which are most important collaborative projects in relation to our European interests. If in the future there is to be retained in Europe any self-contained individual aircraft capability of a total kind, it cannot be without Rolls-Royce.
  There is no occasion on that account to condone the financial shortcomings to which I have referred, and new men and methods are being introduced to set that right.
  As to the arrangement itself, I should be surprised if it could be regarded as objectionable. We have had to face the fact that Government support has to rise to the very high figure of £89 million. However, that total sum is redeemable on engine sales and, on present calculations at least, the total redemption should be possible within the sale of 225 Tristars, which involves not only the three engines per aircraft, but also the spares provision and excess engine provision plus a further 100 engines sold for other purposes. The redemption of the total amount involved is not entirely without—on the contrary, it is well within—the concept of a reasonable outlet for this great aircraft.
  Although the right hon. Gentleman was rather derogatory about the private interests in Rolls-Royce in this regard, those private interests have not only produced another £18 million to add to their very extensive existing commitments to the company, but with the shareholders, take in the last resort the full result of the profit and loss outcome of the project and of any others in which the company is concerned.
  Mr. Robert Sheldon: Will the right hon. Gentleman confirm the reports in the Financial Times
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  and elsewhere that the £18 million is being put up by private backers, and will he say who they are?
  Mr. Davies: No. I am not at liberty to reveal who the private financial backers of the company are. It is a matter which is privy to them. It is not a subject which they are required to reveal under the companies legislation.
  Mr. Harold Wilson: The right hon. Gentleman has now used the word "private". He is reported in the Press as saying that they were private. Can he say that they are entirely private backers?
  Mr. Davies: The funds are entirely private. The source of the funds is entirely private. But I am not prepared to declare who are the firms concerned. That is a matter about which the company is entitled to maintain in its confidence.
  Mr. Harold Wilson: I am sure that the right hon. Gentleman does not want to mislead the House. I asked him whether he was satisfied that these interests were entirely private. Is he saying that these are private banks, meaning joint stock banks or merchant banks? Can he assure us that no public institution is involved?
  Mr. Davies: I will not give any such assurance—[HON. MEMBERS: "Oh."] I will simply say that the sources of the funds are private sources. I hope that that will satisfy the right hon. Gentleman.
  Mr. Harold Wilson: All that I ask the right hon. Gentleman to say, without, pressing for the names of the institutions—I can understand some discretion on his part—is that no public institution is involved. Will he say that no public institution is involved?
  Mr. Davies: No. I have simply said that no public funds are involved. I think that that must satisfy the right hon. Gentleman. It is as far as I am prepared to go.
  Mr. Jeremy Thorpe rose—
  Mr. Davies: If I may—
  Mr. Thorpe rose—
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. Mr. Secretary Davies.
  Mr. Thrope rose—
  Mr. Davies: I do not wish to resist the right hon. Gentleman—
  Mr. Thorpe rose—
  Mr. Deputy-Speaker: Order. The right hon. Member for Devon, North (Mr. Thorpe) knows, I am sure, that unless the Secretary of State gives way he must remain in his seat. Mr. Davies.
  Mr. Davies: I do not wish to resist the right hon. Member for Devon, North (Mr. Thorpe). My sole intention is to continue on this point to the end of what I have to say so that he might take that into account in any question that he wishes to put to me. [HON. MEMBERS: "Answer."] I have answered the question. The point that I wish to add is simply to say that the Government's input of funds would not take place until such time as we had the necessary reassurance from a review undertaken by independent accountants on our account. The right hon. Gentleman found some objection to that which I was not able to understand. The truth of the matter, as he knows better than anybody, is that the extraordinary complexity of accounts in terms of forward estimates of development is of a kind that needs deep and close examination. The I.R.C. is able to carry out a certain measure of examination, but not in the depth that the Government require before they put their money in.
  Mr. Thorpe: I am sorry to intervene at a difficult moment, but would the right hon. Gentleman not consider that if the British taxpayers are being asked to go into financial partnership with others they are entitled to know with whom they are going into partnership?
  Mr. Davies: The truth is that they are going into financial partnership with Rolls-Royce. Rolls-Royce is a concern which has a variety of different sources of financial support, some of which are well known through the operations of the Share Register; some of which are not publicly declared, through the operations of normal banking practice. It is those that I seek to respect.
  Mr. Harold Wilson rose—
  Mr. Davies: No. I have repeatedly given way to the right hon. Gentleman. Perhaps as a matter of clarification—
  Mr. Andrew Faulds: There's a lame duck for you, a sitting bloody target.
  Mr. Deputy Speaker: Order. We seem to be getting a little hot. I think we should take care not to do so. I am sure the House would agree that a very good reception was given to the speech by the right hon. Member for Bristol, South-East (Mr. Benn). The House, which is one of the fairest places in the world, will want to give the same hearing to the Secretary of State. The House has put me in my present position to see that a fair hearing is given, and I appeal to hon. Members to give just that now.
  Mr. Davies: I have at this point to take up the question of the position in this matter of the I.R.C. Under arrangements made by the right hon. Member for Bristol, South-East at the end of last year, the I.R.C. undertook an examination of the affairs of Rolls-Royce with a view to seeing whether additional funds should be provided. After that and following protracted negotiations, they did in fact, under an arrangement which was agreed by the right hon. Gentleman, put in a sum of £10 million and they undertook, moreover, in response to the need which they expressed for certain satisfaction on the subject of improvements in Rolls-Royce's control system, to make a further £10 million available during the course of next year. In the event, the arrangements which have now been made embrace that second tranche of £10 million to which I have referred, and it will therefore not be made.
  If, as I think, the launching aid system, the project itself, the company, itself and the agreement into which we have entered with it are matters which, on the whole, do not demand dissent from the other side of the House, as far as I can understand from the right hon. Gentleman's speech, it must be that the Opposition feel that what would be right for them to do is wrong for us. Apparently they would seem to indicate that, while they would agree to its being done—[HON. MEMBERS: "Not at all."]—well, this would certainly seem the inference of the Motion—I would simply say that I do not consider that it is in any way incompatible with the industrial policy we have so clearly declared. [An HON. MEMBER: "You have not got one."]

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  So far as I was able to understand, the right hon. Gentleman, in moving the Motion, referred to a great series of industries which he found to be in a struggling, if not catastrophic, state. It struck me that perhaps that was as serious an indictment of the conduct of industrial affairs in this country as we have heard in the last two years. Our declared industrial policy is manifest. We have made clear that we dissociate ourselves and wish to disengage from an excessive degree of intervention in private industry. Equally, we wish to bring about a reduction in public expenditure which such disengagement arouses. We have already given an earnest of our intentions in this regard. We have made it clear that we believe in stimulating, by all the means available to us, the profitability of private industry.
  We have also given an earnest of our intentions in this regard in relation to the reduction of corporation tax and in replacement of the investment grant system by a tax-related allowance system. We have made it clear that we propose to reduce the contrast to which the Labour Government gave such emphasis in discriminating between the manufacturing and service sectors of industry, and we have already shown some evidence of our intention to move in that direction. We have declared our belief that, by measures the Government themselves can take, we can sharpen the climate of competition within which private industry lives. I shall soon be stating precisely by what means we propose to attain that end.
  We believe that private industry can and should stand more and more on its own feet. In that regard we have already instituted a very careful examination of all those fields, be they research, export support and the like, where the Government have increasingly over the years sought to back up the whole of private industry's own affairs. We have decided to disband the I.R.C. We have done so not because we consider the corporation to have carried out its mission in any way imperfectly. On the contrary, we thought that both the Corporation and its executives, within their remit, carried out their task well. But we believe that the existence of the I.R.C., as it stands at the moment, is a temptation to do other than to have recourse to the proper private
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  enterprise system for sustaining industry. These factors and their development are now the industrial policy of this Government and they will be pursued.
  We believe that they will produce a much more viable economy, which is quite essential if we are to realise the increased resources which the Labour Party, during their period in Government so signally failed to achieve in terms of the growth of our national product and the sustainability of our external competition. We have seen nothing in this to contradict the purpose of undertaking a joint venture of the kind to which the Motion refers with a company—and here the Opposition agree with us—which requires a joint venture of this kind.
  We believe that such joint ventures are of immense importance. They have a vast impact not only on our international prestige, but on our foreign earnings. They have an enormous importance in the whole field of technical and scientific achievement. They conduce to the growth of our industrial prosperity, but they cannot be accepted, they cannot be effective, unless they can also be proved to be cost-effective in real terms, and this, also, this Government will see to.
  Mr. Benn: The Amendment asks the House to approve what the right hon. Gentleman has done, on the basis that this will be handled by non-governmental institutions. The right hon. Gentleman now says that the Government will see to it that these things will happen. Can he say how?
  Mr. Davies: I commend to the right hon. Gentleman the terms of the Amendment which says:
  "… through the resources of the company itself and other non-governmental institutions."
  I am coming to the question which is implicit in the Motion and which refers to the question of effective accountability. I find this part of the Motion most perplexing of all. I am not able to understand quite what is aimed at. Is it the question of the accountability of Rolls-Royce to its shareholders, which in any case is provided for within the framework of the Companies Act, and which is well known to the public? Is it thought that Rolls-Royce will in some way or other conceal the facts about the whole of its

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  customer relationships with Lockheed or other customers?—[Interruption.]—Not at all. I am living within the framework of confidence in the company. Is it perhaps the concern of the Opposition that the facts upon which we are undertaking this operation are themselves incorrect? The very purpose of having instituted an independent examination by accountants is to find out whether that is so. Is there some fear that the Government will not submit to the normal scrutiny of Parliament and the Comptroller and Auditor General? Of course the answer is "No".
  I maintain that what we have done is wholly consistent with the Government's industrial policy, is fully safeguarded by both public and private accountability, and is the result of careful appraisal and analysis. I ask the House to dismiss this vague and woolly Motion tabled by the Opposition and to support our Amendment.
  4.53 p.m.
  Mr. Peter Shore: I think that we have heard an extremely vague and woolly speech from the right hon. Member for Knutsford (Mr. John Davies) and, further, a rather disappointing one. The real reason why the right hon. Gentleman disappointed the House on this occasion was that he decided to take on a mythical foe. He fought a pitched battle with an enemy that was not there. He had received some party political intelligence to the effect that we on this side of the House, having undertaken over the years this immense supportive effort which my right hon. Friend the Member for Bristol, South-East (Mr. Benn) described in his opening speech, would suddenly at this stage of the game decide that we should withdraw from it and oppose its continuance.
  I must tell the right hon. Gentleman that nothing is further at least from my mind. The decision, though a difficult one, was right. I am certain that it was a decision which, having been taken, we should continue unless there were some new factors which would cause us to revise our judgment, and no such new factors have been adduced.
  The only people with whom the right hon. Gentleman might have been engaged in large numbers were some of his hon. Friends behind him. There are some rather stoney-faced people who clearly believe that the Government ought not
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  to support Rolls-Royce, and ought not to support British industry in its efforts to win large export orders. Some of them were here from Wolverhampton and Oswestry, and no doubt there were others on the benches opposite who took that view, but not on this side of the House.
  The second reason why the right hon. Gentleman has disappointed us is that he has not cleared up the important question of what the Government's policy is towards the support of private industry the circumstances, the nature and the amount of that support—outside of the aircraft industry. That is what we were expecting to hear from the right hon. Gentleman and what the country and industry generally also want to know.
  I shall devote most of my remarks to that topic, but I should like to say a few more words about the Rolls-Royce issue itself. I am very sorry to hear that the I.R.C. arrangement—the £20 million that had previously been provided by the I.R.C.—is not to be carried out in full, and that the second tranche of £10 million is to be withdrawn and to be, as it were, superseded by the new launching aid arrangement.
  I am sorry about that for a good reason, and one that will appeal to my right hon. and hon. Friends. It is simply this, that when large sums of money are made available to private industry it is right that the nation should be satisfied that it is getting a fair return on its investment, and I have never taken the view that that return was fully met simply by getting a levy on the sales of the completed engines. There are other forms of participation in the profitability of a company so helped which we have in the past pursued and which we should pursue in the future.
  The essence of the I.R.C. investment is that not only did it make £20 million available, but it took out a convertible stock option so that it could, if it thought the condition right, turn that into substantial equity holding in the company itself. I regret that this form of aid has been withdrawn and has been replaced by the launching aid about which we heard earlier.
  Why have my right hon. and hon. Friends put down this Motion? The answer is clearly so that they can go beyond simply a discussion of aid for

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  Rolls-Royce and the aircraft industry. They have put it down because it reflects the concern which we on this ide of the House all feel about the performance of the private sector of British industry and our desire to make certain that the policies and practices in the private sector add up to and conform to the national interest as we know it.
  The Government's policy on this appears to be really a non-policy. They seem to be telling themselves and the House that they believe that the Government should withdraw as much as they conceivably can from involvement in and active concern in the affairs of private industry. That appears to be their philosophy.
  In this argument there is a strong element of ideology on both sides. It is none the worse for that. But the reason why the party opposite—like the Labour Party—came to the conclusion that broad, widely spread Government intervention in industry was necessary was not that it was convinced by the ideological case for intervention; on the contrary, it was convinced by the hard facts of its experience in Government during the 13 years up to 1964.
  I want to put to the House two points which make my case in a summary form. It is a remarkable coincidence—if we look through the national accounts—that whenever company profits reach a new peak the national accounts reach a new depth. There appears to be a directly contrary relationship between the overall profitability of industry and the performance of the nation as measured in its most difficult area—the balance of payments. That should make anyone reflect on the simple proposition that what is good for industry is good for the nation. I regret to say that that is not the case. I wish it were true, but it is more complicated than that.
  If the right hon. Gentleman looks back over the 13 years in which his party was in office and thinks of the period in terms of quinquennia he will find that from 1952 onwards there was a steady decline in our national economic performance over each five-year period, and the last five years—1960 to 1964—was the period in which we chalked up a balance of payments deficit of about £1,150 million.
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  Taking the five years from 1960 to 1964, there were two periods of major crisis. It was not the time of a Labour Government. The then Chancellor of the Exchequer, the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) and, later, the right hon. Gentleman who is now Home Secretary, found themselves forced to abandon the empty slogans of free enterprise with which they had begun their period of power in 1951. They began to grope their way forward, late and in an inadequate fashion, to a new concept of industrial planning. It was the right hon. Gentlemen opposite who formed and founded the N.E.D.C., the N.I.C., and many other instruments of intervention in industry, in the very teeth of their ideological beliefs. They did it because of the hard facts of experience. By now it surely must be recognised that it is not enough to leave the prosperity and performance of this country's industry simply to fiscal, monetary or exchange rate policies. Governments are bound to intervene in the economy. We should be concerned now that the intervention should be certainly as cheap as possible and—still more important in many ways—as effective as possible.
  The right hon. Gentleman and his colleagues have restated their ideology and have announced some of the decisions which they hope will give effect to it. On 27th October the Chancellor said that investment grants would go. Incidentally, it is interesting to note why they must go. Investment grants are a system of selectively stimulating investment. That is their real crime; that is the unacceptable part of the investment grants. They actually discriminate between manufacturing industry and service industry. Why do they discriminate? It is because in the whole experience of 1951 to 1964 it was clear that the real area of weakness in the British economy was in the performance and, above all, the investment, of British manufacturing industry.
  On 30th October, on a Friday morning, the right hon. Gentleman told the House that we were to see the end of the I.R.C. He said that he liked the chaps who had helped. He thought that they had done a splendid job, and he could not fault them; but they had been given the wrong remit. Let him recall what the remit was. It was to strengthen the structure of British industry. It was not a remit that

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  was carried out by a certain Minister, following his own prejudices and, perhaps, insufficiently advised. He might have objected if that had been so. It was a remit carried out by people who, by his own admission, constitute the outstanding talent of British industry. They were given the job of advising, and the power to carry out their decisions, to carry through the restructuring of British industry.
  If the right hon. Gentleman thinks that the firms that were restructured are a lot of lame ducks who should not have been helped, he should look carefully at the list of firms who have been helped. It is almost a roll-call of the great names of British industry. The plain truth is that the I.R.C. was doing a job which, for many good reasons of which we are all aware, was not being done by the normal agencies of the private sector.
  What else was the I.R.C. doing to cause it to be slain? It was taking up Section 2(1)(b) powers under which it was able to direct aid support to firms which were making a contribution to our exports, or to import saving. He knows of the grants made in my time as Secretary of State in respect of the de-inking process in two paper-making firms which we thought would make a contribution to our balance of payments of about £2 million a year.
  We are also told that the Industrial Expansion Act is to be repealed. The right hon. Gentleman surely remembers that that Act enabled us to finance the aluminium smelters which, next year, will be contributing £40 million a year in import saving to our economy.
  To complete the package of slaughter of the interventionist bodies that we had established, the Prices and Incomes Board is to go, even in its rôle as a provider of information, let alone its ability to lead the action against prices. Even in respect of its ability to provide the country and the House with information on prices and incomes it is to be dismantled and thrown aside.
  This is a curious and wanton course of destruction, and I am not clear that the right hon. Gentleman knows what he is doing. His policy is very fuzzy at the edges. He has told us that aircraft are the great exception, although how much of an exception they are he has not defined. I have read his recent speech
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  to the electronics industry, and I would ask him to re-read it to see what he said. The crucial factor with Rolls-Royce, apparently, is not just that it is related to aviation, but that it is of crucial importance to our defence effort. How many other firms come into that category? Are they eligible, and if so under what terms, for such assistance? The right hon. Gentleman went on to say:
  "Market forces alone may not always produce acceptable solutions."
  He was not talking solely about aviation then. He was referring, indeed, specifically to the electronics industry. Microelectronics and computers also apparently are to be eligible under his own doctrine for help.
  If the right hon. Gentleman consults other members of his Government, he will know that his predecessor in his present post, who was there very briefly and is now unfortunately engaged on a wholly disagreeable task, delivered himself on the subject of shipbuilding. In the debate in July, he said:
  "We intend to continue to give special assistance for particular industries like shipbuilding."—[OFFICIAL REPORT, 9th July, 1970; Vol. 803, c. 882.]
  I cannot imagine what the other industries are, but we should like to hear. If the right hon. Gentleman cannot give me the replies, perhaps he will see that his right hon. Friend supplies them in winding up.
  We attach great importance to Government policy towards private industry. It is not just a question of helping particular firms which are in difficulty: much more than that, it is accepting that there is an inter-relationship' and an increasing interface between Government and industry, and that it is far better to be in a relationship with industry before disaster strikes than to try to pick up the pieces when the thing has already reached a stage where one can no longer help except at great cost.
  One cannot separate policy towards industry, the private sector in particular, which accounts for so large a part of our exports and imports, from policies which are related to the economy as a whole.
  There are many different ways of affecting the economy. One of them of course is to use tax policy. The right hon. Gentleman and his colleagues are

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  obviously very keen to reduce taxation, which they maintain will create a good climate. They could also, if they wished, have tried to operate directly on industrial costs, with some form of prices and incomes policy. That, they have made perfectly clear they have no intention of doing.
  They could also have attempted to operate, as we did with increasing success, on what I call the supply side of the economy, in a real attempt to remove those constraints which always appear whenever the economy, over the last 10 or 20 years, has begun to expand. That of course was the real aim of the greatly increased industrial interventionism in which my right hon. Friend and some others of us were involved in these last few years. The right hon. Gentleman clearly will not do that.
  He has rejected that particular weapon as well, and the House must face just what he is left with. At the moment, no one can pretend that the British economy is in a very healthy condition. There certainly is a great deal of inflation, and there appears to be very little evidence that anyone knows how to deal with it. Certainly, we hear different voices giving different remedies among Government spokesmen in the other place. At the same time, investment is falling, production is growing far below productive potential, and unemployment this last month, at over 600,000, was the highest figure that we have had for 30 years.
  What is left in the armoury of weapons which the right hon. Gentleman and his colleagues can deploy now on the economy? He has destroyed interventionism in industry, he has rejected any attempt at a prices and incomes policy, he has used up what he can do at present at any rate in cutting taxation.
  I can think of only two further instruments which are left to him. One would be to operate on the exchange rate, and I have no reason to believe that that is their intention. We have all heard about what the Chancellor said during his visit to Copenhagen.
  So it comes down to one last regulator—unemployment. It is the throttling of the economy, the so-called free market economy, that they are trying to deflate with monetary controls and rigid d.c.e.
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  formulae, in which they are placing their hopes. It is in that broad context that the House should recognise their folly in rejecting and moving away from the very constructive work on industrial partnership, on micro-economics, which we had certainly embarked upon and could most fruitfully have developed in the years ahead.
  5.16 p.m.
  Mr. Michael Grylls: I ask for the traditional tolerance and kindness that the House always accords to a maiden speech. I am very conscious that it will be difficult for me to emulate my predecessor, Sir Lionel Heald, who represented my constituency with such distinction for the last 20 years. For his successor, he set the very highest standards. Sir Lionel was greatly admired in the House of Commons, and in the short time that I have been here, I know how much he is missed. In Chertsey, he looked after his constituents with exceptional care and humanity.
  One of the problems in which Sir Lionel always took a great interest, and which I have inherited, is the long-term future of the B.A.C. factory at Weybridge, where many of my constituents work. The factory's future prosperity, or lack of prosperity, affects literally thousands of my constituents. It is one of the largest aircraft factories in Europe, and its future is a national problem as well as a constituency one.
  It has a record of which it is rightly proud. It has exported over £800 million worth of civil aircraft in the last 20 years. The famous names that have rolled off the Weybridge assembly line are legion. It was in 1945 that the Brabazon Committee decided to support the propeller-turbine aero-engine, rather than the pure jet, which at that time was running into problems of development.
  So the famous Weybridge design team was born, under Sir George Edwards, the present Chairman of B.A.C. This team gave birth to perhaps the most famous of all civil airliners—the Viscount. It was a milestone in British aviation history. It was the first British aircraft to sell in quantity in the United States, and it subsequently went into service throughout the world. Some 445 of these aircraft were sold at an export value of £177 million—rather cheaper than the prices we are talking about now.

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  The Viscount was followed by the Vanguard, and then by the VC10, which was the most popular aircraft on the North Atlantic, and then the 111, which has sold over £200 million worth in the last few years, with 72 aircraft sold to the United States.
  We all know what marvellous aeroplanes these are, and the majority have been built at Weybridge by many of my constituents—or Sir Lionel's at that time. Today, Weybridge has a large part of the Concorde programme. I am told that it has the difficult part, that nobody else can do, but since that may offend other hon. Members, I will not pursue it. Its long-term future in the 'seventies depends on the development of the BAC311.
  Here the Government's choice is between building the 311 or joining in with the European airbus venture.
  B.A.C. has shown that it can build a very financially successful modern aircraft, as it has done with the 111. If it achieves the same market penetration with the 311 as it has with the 111, it will easily be able to repay all the launching aid that it would need from the Government. Many of the 111 customers want the 311 as the natural successor, it is very much easier for them to buy a follow-on aircraft. And at home B.E.A. has said that it wants to buy British, and it wants the 311. The greater part of it would be produced in this country and most observers want the 311. The aero-engine for the airbus could be made by the American General Electric Company in which case there would be no need for any further expensive launching aid for the Rolls Royce 211–61.
  Sad though it would be to have to drop that new developed engine, I believe that it is unrealistic in the present economic climate to expect the Government to produce still more money to back yet another new aero-engine. If that happened, we would have an Anglo-American airbus which would be useful and which would greatly help us with our sales in North America. For an aircraft project to be really successful, it must sell well in the North American market, and this is a factor which I commend to hon. Members.
  I suspect that the financial proposals put by B.A.C. to the Government are
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  largely acceptable, but I hope that my right hon. Friend the Minister of Aviation Supply will comment on this when he replies to the debate. On the other hand, I cannot believe that the European airbus, an aircraft with a very limited export potential in which Britain would have only the smallest share, is really in the national interest. It would, I suppose, suit the European airbus developers to see the 311 permanently grounded but, were this to happen, it would be disastrous not only for this country as a whole but for 6,000 of my constituents in particular. Indeed, it could in the long run mean the end of the British aeroplane industry.
  B.A.C.'s marketing studies of the 311 are probably the most carefully prepared of any aircraft project. B.A.C. estimates the sale of 280 aircraft with an export value of £1,500 million, and this would be a significant contribution to Britain's balance of payments in the late 'seventies and early 'eighties. I therefore urge the Government to end the suspense for me and my constituents by giving the 311 the go-ahead. Tonight would be an excellent moment for an announcement, and I shall look forward to it with anticipation. The Government should hesitate no longer.
  As the Minister said on 11th November, Rolls-Royce's need for the extra launching aid for the RB211/22 became apparent to my right hon. Friend only late in August. This means that the present Government came into the picture very late in the day in the middle of the Rolls-Royce/Lockheed saga. No doubt Rolls-Royce should have insisted on a tougher contract. No doubt the I.R.C. could have looked more closely into the problem before giving launching aid. But that is history.
  Today, we are dealing with the present. I believe that the last Government were right to have given Rolls-Royce launching aid. However, while not wishing to whitewash any management failures on the part of Rolls-Royce, we should recognise the intense difficulties of estimating projects of such advanced technology. Rolls-Royce was pioneering the carbon fibre development for a new engine with all the problems inherent in such inventions. I understand that the difficulty was the bird-repellent qualities of the engine. Who would have thought that

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  it would cost £42 million to get the better of a bird? That is indeed inflation. Despite this, I hope the House will recognise the considerable achievement involved in getting a British-designed engine into a major American airframe.
  In the debate earlier this month and today, hon. Members have expressed concern about the Government's financial control over the rest of the RB211/22 programme and I, too, am rather worried about this. My right hon. Friend said on an earlier occasion that he would talk to Lord Beeching, the I.R.C.-appointed director, about it. I welcome that, and I hope that the noble Lord will continue to look after the Government's interests on the Rolls-Royce board. Perhaps it would not be out of order for me to suggest that Lord Beeching be invited to address an all-party meeting of the House upstairs so that we may question him directly.
  I thank the House for listening to me with great patience as I have made my maiden speech. I felt that this afternoon was a wonderful opportunity for me to make my first contribution on a subject about which my constituents and I feel passionately. Again, I thank hon. Members for extending great courtesy to a maiden speaker.
  5.27 p.m.
  Mr. Maurice Edelman: It is a privilege to speak following the hon. Member for Chertsey (Mr. Grylls) because it gives me an opportunity to congratulate him on a maiden speech that was made with great conviction, elegance and charm. I know that the whole House will look forward to hearing him on many occasions. He spoke persuasively on behalf of his constituents and on behalf of the cause of British aviation, a subject which is close to the hearts of many hon. Members who wish to take part in this debate.
  I hope that the debate will not resolve itself into a discussion between the interventionists and the non-interventionists. The Minister made it clear that he has renounced the case for non-intervention. He has made it perfectly clear that, henceforth, despite all their ideological protestations, the Government are not so strictly bound by their past affirmation that, where they feel it necessary, they
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  will not intervene to assist private industry.
  Those on this side of the House who have always approved of appropriate Government intervention to assist private industry and to promote the public good will not dissent from that. With the exception of perhaps the right hon. Member for Wolverhampton, South-West (Mr. Powell), hon. Members accept that Rolls-Royce is a company of such great strategic and economic importance to the country that it should not be allowed to fall into a condition of bankruptcy.
  For this reason, to preserve the industry's various teams—scientific, design and so on—and to make provision for all the technical skill of the workers at Rolls-Royce to be maintained and used, it was right that the Government continued to give the company support to try to safeguard its future.
  But that is not the end of the matter. Apart from the hon. Member for Chertsey, I am surprised that so far no one on either side has made any detailed reference to the nature of the RB211 contract, or has tried to explore the cost of making the engine and the nature of the profit or loss which had to be endured in the early stages and which is likely to be increasingly endured in the future. That aspect seems to me to be the heart of the matter, and it is to that that I propose to address myself.
  I would not wish to pretend in any sense that when the contract was first announced on 29th March, 1968, I was not absolutely delighted that Rolls-Royce had landed it. I congratulated the Government at the time. I said that we in Coventry, which is directly affected by the order, all welcomed the fact that by a partnership of Government and private industry a deal had been arranged which was likely to guarantee employment in the aero-engine industry for at least 10 years.
  At that time The Times newspaper even had a leading article from which I will read two very short extracts. It described the Rolls-Royce deal as "a triumph of expertise", and went on:
  "In any terms the order that Rolls-Royce has won for its engines in America is a triumph. Most immediately, it is a commercial triumph for the company."
  It went on:
  "This order, initially worth £150m. but potentially worth far more (the company

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  estimates £1,000m.) secures Rolls-Royce's place among the world's top three or four aero-engine makers for the next 10 years. And this is also important, not for the modest thrill of pride the fact brings to every Briton, but because it is a position held entirely on the merits of the company's products."
  To describe our reaction at the time as a modest thrill of pride is to understate that reaction to what seemed to be a massive achievement. We were all delighted at the prospect of what Rolls-Royce had done. My right hon. Friend the Member for Bristol, South-East (Mr. Benn) to this very day obviously recalls with more than a modest thrill of pride the way in which Rolls-Royce salesmen went to and fro across the Atlantic; the manner in which offices were set up, and the way in which there was coming and going between Whitehall and the Rolls-Royce company. He recalled that it was the finest hour of the Ministry of Technology.
  So it seemed at the time, and I do not complain that the joy in that order still persists. Yet we must look a little at the inwardness of that contract, because if we look at the deal for the RB211; at the fact that this was a fixed-price contract which seems to have made little provision even for the normal process of inflation; at the fact that it deals with an untried material—Hyfil carbon fibre—and consider all the technical snags and difficulties which might arise; at the penalty clauses which have been announced in connection with the contract and, in addition, if we consider that this contract was won in the teeth of the most fierce competition from General Electric and Pratt and Whitney, who eventually pulled out of the competition, then, with that hindsight which is supplied to everyone here today, we must ask whether the terms of the contract were wisely drawn.
  Accountants cannot achieve miracles in industry. When a company runs into trouble the immediate call is for some accountant to be introduced to see where the trouble lies. I have the greatest respect for accountants: they are admirable when doing one's own books and when resisting the Treasury. On the other hand, I do not believe that accountants, especially accountants who do not have either the expertise or the general experience to examine costs—some of which at times are not even disclosed—can work miracles.
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  When Mr. Ian Morrow, an admirable executive, was introduced into the company he was even then working, and the Minister will correct me if I am wrong, only two days a week as a part-time executive. Now, when Rolls-Royce was progressively sinking into a mire with the RB211 contract which, whatever its technical merits—and they were and are extremely great—became an albatross, as it were, round the neck of the company, the fact that Mr. Morrow did not earlier discover what was going on is something for which Rolls-Royce and its management must be held responsible.
  The Minister of Aviation Supply (Mr. Frederick Corfield): It is only fair to Mr. Morrow to point out that he was not actually appointed till July, although the I.R.C. had been pressing for his appointment very much earlier.
  Mr. Edelman: I am delighted to hear it. But even at that time, and even to this day, the actual costing methods used by Rolls-Royce have not been disclosed. Perhaps the right hon. Gentleman will tell us later what is now being done to obtain adequate disclosure of the internal costs of Rolls-Royce so that we will know where the money is going. That is absolutely essential.
  The fact that we now have Sir Henry Benson—who, I understand, is to be an independent accountant—looking after the developments in Rolls-Royce, is to some extent encouraging. It will be remembered that Sir Henry Benson was responsible for another, though smaller, firm of Rolls—Rolls Razor—though he was rather too late to carry out the purpose to which he might, much earlier, have made such a great contribution. I hope that in this case we shall have a different experience.
  I should like to know from the Government what they mean by talking about the support which they have given to the company as being
  "… subject to independent accounting procedures …"
  That seems to me to be the greatest mystery in the whole Rolls-Royce enigma. What does that phrase mean? Does it mean that every month or so Sir Henry Benson and his team will get figures from the company; that they will look at them; that they will evaluate the money that is going in to see to what

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  purpose it is to be applied? It all seems to me to be inadequate to the problem of the public accountability and the proper control of public moneys that are being put into the company.
  What I believe is necessary, and this is most important of all, is that we have to look again at the RB211 contract. We have to consider whether, if we make 180 sets of engines, it is true that according to present indications the loss which the company and—therefore, partially the public exchequer—will incur will be of the order of £35 million. Perhaps we can be told that we are putting up a very large sum of money which will make a guaranteed loss of £35 million.
  If that is so, Rolls-Royce, Lockheed, and the British and American Governments should re-examine the nature of the contract and see what can be done in the best interests of everyone. The firm of Lockheed is in cash difficulties. It has made a settlement with the United States Administration by which it will be bailed out, for the time being, of some of its problems, but the civil airlines which had intended to make long run purchases of Tristar also have their own difficulties and are hesitant about buying forward long runs of aircraft.
  Therefore, it is not only a Rolls-Royce problem but an inter-related problem facing Lockheed. For these reasons, just to continue blindly presevering with the RB211 in a kind of vacuum without direct contact or relationship with the United States is something which is bound to lead to increasing loss, and will lead. I forecast, to increasing demands for subsidies from Her Majesty's Government.
  There has been a malaise of management in the Rolls-Royce Company. Sir Denning Pearson's very honourable retirement is surely a pointer to the fact that all has not been well with the Rolls-Royce management.
  Mr. R. J. Maxwell-Hyslop: As I understand it, Sir Denning has not retired; he has been retained as deputy chairman.
  Mr. Edelman: I said that Sir Denning had honourably retired from his chairmanship and had been promoted to another place, where no doubt his services will be of the greatest value. Over the weekend I was talking to some Rolls-Royce
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  workers in my constituency. One of these workers said to me, "The trouble with this place is that there are more sheriffs than cowboys". His point was that Rolls-Royce has been overloaded with management and that, although it has had some remarkable salesmen and outstanding engineers who, in the great tradition of the company, have performed, and are performing, feats which must command everyone's admiration, in commercial administration and commercial management there is clearly much to be desired.
  What of the future? First, the RB211 contract must be reconsidered very carefully to see whether the company can persevere in the project without a situation being persisted in which every new engine that is manufactured means an added loss to the company and therefore, in the present situation, for Britain.
  I have said—I have sponsored a Motion to this effect which is not on the Order Paper—that I believe in the public ownership of Rolls-Royce, because that is the only way to achieve direct public accountability. After all, public ownership is only another degree of public intervention, which hon. Members opposite now accept. Public investment demands public accountability.
  If we cannot have public ownership of Rolls-Royce, the Government must recognise that they have a duty to the nation as part of their stewardship to ensure that on the board of Rolls-Royce there are directors nominated by the Government who will have the task specifically of caring for public investment. Only by this drastic means can Rolls-Royce become commercially viable again and give Britain the great service in the future which it has given in the past.
  5.43 p.m.
  Mr. Stanley R. McMaster: I congratulate my hon. Friend the Member for Chertsey (Mr. Grylls) on his excellent maiden speech. He spoke of B.A.C. I want to speak of the firm in my constituency of Short Brothers and Harland.
  I welcome the fact that Rolls-Royce has received the Government's further support on the RB211/22. Short Brothers and Harland are engaged in this deal and have been manufacturing the pods for the engines. The firm looks forward, if the

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  Government decide in favour of the BAC311, to valuable sub-contract work on this aircraft.
  The British aircraft industry is in a very special case. My right hon. Friend the Minister said that he recognises that the aircraft industry is not generally to be classified as the lame duck in Britain. Because of the vast amount of public money which is required to support new projects and because of the type of competition it faces from abroad, it requires very special help from the Government.
  If this help is not forthcoming, Britain will lose technological leadership in many of the most advanced aspects of technology, an outstanding example of which is the carbon fibre which Rolls-Royce has unfortunately had so much trouble in developing for the blades of the engine which is the subject of the Motion. Britain can benefit from this type of technological progress, can gain worldwide prestige, and gain the "know-how" which is so essential to the economic well-being of a trading nation, only if the Government are prepared to support our aircraft industry.
  Obviously the risks involved are not of an ordinary commercial nature. I therefore welcome the fact that the Government, in spite of their general policy of not supporting lame ducks, are prepared in the case of Rolls-Royce, and presumably in the case of other aircraft projects, to make an exception to the general rule.
  I am very concerned with the employment position in my constituency. Between 6,000 and 8,000 people are employed by Short Brothers and Harland. Much of the work done by that firm has been a valuable help to Britain. The firm's present project—manufacturing light Skyvan aircraft—is meeting success in its export drive throughout the world. Sales of this aircraft have doubled in the past year. The firm is also involved, not only in the podding for the RB engine, but in sub-contract work on the Fokker aircraft in Europe. This is a type of collaboration with the European aircraft industry which the Government particularly favour.
  In missile development Short Brothers and Harland, with Sea Cat and Tiger Cat missiles and the new project—Blowpipe—have won many valuable export orders.
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  Therefore, not only would I seek to justify a decision in favour of the 311 on the grounds of the employment which it would create both for BAC and in respect of sub-contract work in my constituency, but I can make a good and strong case on the ground of the success that the company has had in its own small way—because it is a small way compared with the rest of the aircraft industry—with projects such as the Skyvan and the missiles. The large freighter aircraft—the Belfast—has been used very successfully by the British Armed Forces and has made a valuable contribution to the British defence effort.
  In addition, the company has, though its technical training school, set a standard of technological progress and education which has been a great help to Northern Ireland over the past years and which, in view of the present disturbed state of affairs in Northern Ireland, is absolutely essential. At the moment it is proving increasingly difficult to attract new industry to our shores. This has a bearing not only on the general Motion relating to Rolls-Royce but on the wider wording when it discusses the Government's entire policy of industrial aid. Northern Ireland stands to lose from the transfer from investment grants to investment allowances. Therefore, unless companies such as Short Bros and Harland are encouraged by the Government, quite openly and deliberately, it may well prove impossible to attract the new industry which is so essential to us in order to take up the slack which comes from the rundown of our traditional industries, such as linen and shipbuilding.
  It has been estimated, and special surveys have shown, that Northern Ireland requires to create 50,000–60,000 new jobs each year. In the past year little interest has been shown by expanding firms in Britain or elsewhere in setting up business in Northern Ireland because of the well-known risks.
  Mr. Dalyell: I am following the hon. Gentleman's argument with interest and some sympathy. But if it is right to give help to Short Bros.—and I believe it is—why not extend the powerful arguments that he has adduced in relation to the Northern Ireland problems, to Harland and Wolff for shipbuilding too?
  Mr. McMaster: I am obliged for that intervention. In so far as it is in order on the present Motion I will, of course, extend my argument to cover the shipbuilding industry. Indeed, during the defence debate a week ago on the Government measures, I did so extend it.
  I feel that it might be in order to say a little about this, particularly as the right hon. Member for Bristol, South-East (Mr. Benn) made particular mention of Harlands in my constituency. Much of the argument from the Front Bench opposite was based on the competition that this country has to face abroad, in the case not only of the aircraft industry but such industries as shipbuilding, and so forth, and the figures which the right hon. Member for Bristol, South-East quoted support this particular special pleading in which I am engaged. I therefore feel that while, in general, one must support the Government's policy, one cannot agree with the way in which the Opposition, when in office, were carried away by their policy of assisting industry willy-nilly. The policy basically has good sense. If one has to face a special case such as the aircraft industry with a technological spin-off, or the shipbuilding industry which is subsidised abroad to the tune of 15 per cent.—
  Mr. Deputy Speaker (Miss Harvie Anderson): Order. I hope the hon. Gentleman will not address himself too much to shipbuilding. The debate is mainly about aviation.
  Mr. McMaster: Mr. Deputy Speaker, I should like to refer to the Motion on the Order Paper which reads as follows:
  "That this House notes the decision to give a further £42 million launching aid to Rolls-Royce for the RB211 engine, but regrets"—
  and this is what I am addressing myself to at the moment—
  "the lack both of consistency and of effective accountability in the industrial policy for the private sector pursued by Her Majesty's Government."
  I apologise if I have tried the patience of the House, but it is those words in the Motion referring to the private sector which led me up this attractive avenue.
  May I return to my main remarks on the aircraft industry? With regard to the last phrase in the Motion, while it is easy to be carried away once one embarks on a policy of subsidy, to be completely
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  seduced, to lose sight of the main aim, which must be to produce a viable and effective industry in this country—while one can be completely carried away by the social argument, the argument that I was advancing a moment ago about employment and "know-how"—one must keep one's eyes mainly on the final result for the country as a whole.
  Therefore, so far as the aircraft industry is concerned, and support for the BAC311, when I ask the Government to give a favourable answer to this problem, I would point out that by so doing they would not only indirectly assist the British aircraft industry, but, because of the export record of this industry and the potential exports of an aircraft like the BAC311 in the future, would pay a real dividend to this country in the long run.
  Government support is required only because in the short run the amount of money and risk capital necessary is not forthcoming from the City. But I am sure that those hon. Members, many of whom I see in the Chamber today, who have a deep and detailed knowledge of the aircraft industry, will all agree when I say that the future of the aircraft industry lies with the large, wide-bodied type of aircraft, the airbus. At the moment we have the Lockheed airbus which has just had its maiden flight in America, with Rolls-Royce engines. We have the A300B, on which the metal is being cut; and there is a projected scheme by Boeing in America to produce a Boeing version, perhaps a version of the 747, adapted for short haul—another American airbus.
  There is, however, room for a British airbus. I suggest that Britain must also remain in this valuable activity of the future. Unless the Government are prepared to support the BAC311, Britain is in danger. Our airframe industry, in the shape of the British Aircraft Corporation, and our main engine producer—in fact, Europe's engine producer—Rolls-Royce, are all in danger of going out of business altogether unless the Government are prepared to show their confidence in our aircraft industry and give it this type of special support which is so essential for it.
  5.58 p.m.
  Mr. J. P. W. Mallalieu: It is an even bet that when the

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  hon. Member for Belfast, East (Mr. McMaster) addresses this House he will make some mention of Short Bros. and Harland—and quite right, too. During the time that I have known him he has been the great protagonist of that company and, indeed, of Harland and Wolff, which it seemed to me he was in order in mentioning. I, too, share his interest especially in some of the products of that firm.
  I wish to ask the Minister of Aviation Supply who will wind up the debate—to whom personally I offer my best wishes in the job that he is doing—what has happened to the Skyvan. They had reached a dicey point in about July and I should be delighted to hear that that point has been passed successfully.
  The Minister faces some very serious difficulties, difficulties for which the solution may be the more difficult because of the seemingly aggressive dogmatism of his right hon. Friend. The trouble with dogma is that, when one lays it on the line, almost at once some facts of life which do not fit that dogma come up behind one with a piece of lead piping. That is pretty well what has happened with Rolls-Royce. It may conceivably happen in the whole aerospace industry, and, indeed, I am much afraid that it may happen with things outside that industry altogether.
  On matters outside the industry, I have two questions to put to the Minister, and, although the Departmental responsibility is not directly his, perhaps he could obtain some briefing on them. First, what about the pre-production order scheme which was initiated by the old Ministry of Technology? As the House knows, it was a scheme designed to try to overcome the almost inevitable conservatism of users in this country, a conservatism which tended to discourage the designing and building of new machines. The scheme allowed the Government to buy newly designed machines and to put them out into industry where they could be tested and where their value could be properly assessed. This is not a scheme for standing on one's own feet. It is a scheme for direct intervention. I should be horrified if the Government, just following dogma, were to say tonight that the pre-production order scheme was to be abandoned, and I hope that the right hon. Gentleman will give me an assurance about it.
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  My second point on matters outside the aircraft industry concerns the future of the industrial liaison officers. These are trained engineers, not politicians or civil servants, who are most effective agents for disseminating throughout industry new ideas, some from the Government research establishments and some from elsewhere. I am certain that industry itself has had tremendous benefit from their operations. But the grants under which they operate are due to finish in March, unless renewed. I very much hope that dogma here will not prevent the continued operation of a first-class scheme, and I ask the Minister to give an assurance about the future of the industrial liaison officers.
  I turn to Rolls-Royce. I shall not go over the whole history of this contract, which was so lucidly exposed by my right hon. Friend the Member for Bristol, South-East (Mr. Benn) in opening, but from almost every speech we have had so far it has become clear that the whole House recognises that Rolls-Royce cannot stand on its own feet and that there is not sufficient help forthcoming from the City to enable it to carry on. This company needs Government support. In my view, that support cannot be confined to the dishing out of temporary sums of money. It cannot be confined even to making sure that this great company at last does its sums right. Rolls-Royce is a national asset. Because it is a national asset, it is of direct concern to the people of this country and their Government to see where the company is going and to help it in the right direction.
  Here is an example of what I mean. One of the biggest problems in the aircraft engine industry today is the problem of noise. People are getting so fed up with aircraft noise that they just will not stand for it much longer. Therefore, the engine company which first produces the quiet engine will scoop the world. It is the Government's job, in part, to make certain that Rolls-Royce, this great national asset, is spending enough money on research and development into the quiet engine. But I seriously doubt that that is being done at present.
  I will offer a few words about the airframe side of the industry. Because of the tragedies of the Comet and the VC10,

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  both of them potentially wonderful aeroplanes, we are out of the long-haul side of the business except for the Concorde. I should be in favour of scrapping Concorde and so going right out of the long-haul business if the tests which are still going on produce technically unsatisfactory results. I have a question to put about those tests. I remember being told that the Concorde payload would have to be at least 18,000 lb. The only estimates of likely payload which I could find at the time ranged from 8,000 lb. to 22,000 lb., as wide a spread as that. If he touches on Concorde, as perhaps he will, could the Minister say what the payload looks like being now?
  Also, could the right hon. Gentleman say something about a rather disturbing rumour which I heard when I was in the United States a few weeks ago, the rumour that the airport authorities in New York and Los Angeles are proposing to refuse entry to S.S.T.s—in this instance, Concorde—not on the ground of boom but on the ground of airport noise? I heard that rumour quite strongly in the United States. Have the Government heard it, too, and, if so, what representations, if any, are they and their French colleagues making to the American authorities on the subject?
  However, subject to the payload being right and subject to whatever answers the Minister can give about the attitude of the American authorities, I should say that, now that we have spent so much money on Concorde, we ought to go on with it. There is no doubt that, if one airline puts it into service, all the other long-haul airlines will have to do the same, and, in spite of the cost, it will produce a great saving on the balance of payments.
  I come to the other end of the scale of the airframe industry. Apart from the Skyvan—I have said that I should like to know how that rugged little aircraft is going on, if it is still going on—there is the Britten-Norman Islander, again, potentially, an absolute winner, as also, I think, is the Nymph. These are being supported to some extent out of public funds. I hope that no dogma will interfere with the present Government's continuing that support, for I believe that, whatever the City may feel about the
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  financing, we have in those two real winners.
  What of the medium haul? I do not believe that it would be a tragedy if the Government decided to back neither the Continental airbus, the 300B, nor the BAC 311, or that, if they so refused, we should thereby put ourselves for all time out of the medium-haul market. Much of the future in medium haul will rest not with the conventional planes at all but with vertical take-off. Here, we in Britain still have a lead over the rest of the world. The Harrier is an example—a magnificent plane. In the commercial side of the business, we still have a long lead. I hope that no considerations of dogma, of standing on one's own feet, will prevent the British nation and the British industry from maintaining the lead in vertical take-off which we at present hold.
  Those are some reflections arising mainly out of this debate. As every speaker has already said, the aero-space industry in this country is very important, and possibly vital to this country. It is vital in terms of the balance of payments, employment, defence and technical spin-off. The Government would be totally disregarding their duty if, in this industry, as in some others, they tried to stand aside. They have a duty not merely to help with the finance and the accountancy but to consider whether there should not be still further amalgamations in this industry. I am not sure that we can any longer afford two companies like Hawker Siddeley and B.A.C. It is possible that an amalgamation of those two would be in the best interests of the industry. Beyond integration at home, there must be a great deal more integration with firms in Europe if we are to stand against the great American giants.
  So I say to the Government—please disregard some of these more fanciful expressions of dogma which have come from the Secretary of State for Trade and Industry. There is no possibility of this great industry being able to stand on its own feet. If it is to have a future, as I hope it will, it will have to be in partnership with the Government.
  6.13 p.m.
  Mr. John M. Temple: I would congratulate my right hon.

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  Friend the Member for Knutsford (Mr. John Davies) on a performance reminiscent of his eminent predecessor, who was so very robust in this House. I feel that my right hon. Friend is getting the feel of what I call the slightly slippery turf of this House. It was significant that, as he was speaking, such was the interest of the Opposition that their benches were crammed. Such is their interest in their Motion of censure that there have been only four backbenchers sitting there for about the last hour—and two more have come in in the last few moments.
  I have for many years taken a considerable interest in the aircraft industry. I should like to congratulate all those involved in the industry—the aircrew, the operators, the airframe manufacturers, the engine manufacturers and the financiers. Everyone connected with the industry must have iron nerves to survive.
  My recollections of the aircraft industry and of aircraft operators go back to the days when British Airways, as it was called then, was operating Hannibals. That seems a long time ago, because they were bi-planes in those days. I had a little personal ambition in that era—to fly round the world by buying a ticket. I got most of the way around by starting off in Hannibals, but I was defeated—this was in the 'thirties—by the fact that the Graf Zeppelin in winter did not fly the Atlantic. Things have moved on since those days. Today, of course, there are aircraft flying the Atlantic with immense frequency. In those days, it was only the Graf Zeppelin which did so.
  Connected with Chester as I have been for many years, and its Member of Parliament for some 15 years now, I have seen the vicissitudes of the aircraft industry at reasonably close quarters. I well remember the great promise of the Comet, the traumatic experiences which the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu) mentioned, which everyone had with that great aircraft. I forecast that the industry will go through traumatic experiences again, but that is no reason why we should not stay in that industry.
  Tonight, I make no apology for dealing with one aspect of the industry—the air-bus side. I shall say something about
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  aero-engines as well, because the airframes and aero-engines are inter-linked, but I believe that we are now looking at another generation of aircraft. This generation will undoubtedly embrace the air bus, whether it is built in the United States, the U.S.S.R., Britain or a combination of Britain and Europe.
  One must clear one's mind first of a few irrelevancies with regard to comparisons of the advantages and disadvantages of the European airbus and the BAC311. One of the irrelevancies is the suggestion that, by backing the European airbus, one is backing the project so as to crawl into the Common Market. The European airbus has nothing to do with Common Market negotiations. It was in existence long before the new application and will go on even if that application is unsuccessful.
  Another irrelevancy is that, if the United Kingdom backed the BAC311, it would help Rolls-Royce. My hon. Friend the Member for Chertsey (Mr. Grylls), in an admirable maiden speech, said that the 311 might well use the American General Electric engine.
  Then there is the other irrelevancy, which we hear from people in high places, that international consortia do not work. If they do not work, why are all the great power projects around the world built by international consortia?
  I should now like to make my one quotation, from Sir Anthony Milward, speaking in 1965 of the B.E.A. airbus requirements:
  "It is clear that if such an aircraft is to have general European support, it will have to be an international venture."
  Those are not the words being used today by the Chairman of B.E.A. but at that time—decisions had to be made long in advance in the aircraft industry—they were the views of Sir Anthony Milward himself on international ventures.
  So these are the irrelevancies which we must dismiss from the argument straight away.
  Mr. John Nott: Would my hon. Friend include as another of his irrelevancies the fact that whether the European airbus has a Rolls-Royce engine is as much an irrelevancy as whether the BAC311 has one?
  Mr. Temple: I said that I would come to aircraft engines, but I entirely agree with my hon. Friend. I always admire his sagacity in these matters.
  I congratulate once again my right hon. Friend the Secretary of State for Trade and Industry because he has spelled out clearly—I know that he annoyed the Opposition by doing so—the policy of Her Majesty's Government in regard to non-intervention in industry.
  Mr. Dalyell rose—
  Mr. Temple: No, the hon. Member has had his opportunities before. He intervenes in every speech, but he will not intervene in mine. He can make his own speech later on, with your permission, Mr. Deputy Speaker.
  We must look extremely closely at the financing of the so-called all-British 311. I speak about the "all-British BAC311 in no derogatory manner. I admire the British Aircraft Corporation but one must look at the financial implications which the country would be taking on it if it was the single backer of this project. First, the airframe. To get the scale of magnitude of the proposition, one has to look around the world. The A300B—the so-called European airbus—needs a funded launching capacity of about £500 million. The DCIO needed £600 million. So I think it is naïve to suppose that the BAC311 can be funded on any lesser basis. The B.A.C. has said that it wants about £140 million, 60 per cent. of which would come from the Government. But I doubt whether the company could find the odd £400 million, a sum which takes a bit of financing in any city circles round the world today, in order that the proposition can be viable without considerably more Government help.
  Mr. John Wilkinson: Can my hon. Friend inform the House of any occasion when B.A.C. has had to come to the Government again for launching aid further to that for which it asked in the first place? Can he also bring into his speech, if he thinks that it is not naïve, the question of the balance of payments in the matter of the airbus?
  Mr. Temple: The short answer is that B.A.C. has never been involved in a project of this magnitude single-handed before. Time will show. I am only
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  posing a question whether it can raise £400 million. I am not endeavouring to answer it. I am asking it because it is extremely pertinent.
  I refer now to the engine for this air bus. Unfortunately, a suitable Rolls-Royce engine does not exist. It has been estimated that launching aid would be required of about £60 million plus, and I think that all hon. Members know, that when I refer to an initial figure of £60 million, that is just a starter in these circles. I have great sympathy with the Government in this quandary, for they have been let in for the most appalling gamble with the engine for the Lockheed 1011. Details of the contract have already been asked for in the debate and there are details which need probing. The Government have already involved themselves on a great deal of launching aid for the RB211, and I doubt whether it would be wise, their having done so on that particular tack, to back the BAC 311, which, as I say, might bring an involvement of about £400 million. As my hon. Friend the Member for Chertsey said, this aircraft would probably have an American General Electric engine, and certainly a Rumanian tail plane and a Yugoslav undercarriage, so one could hardly say that it would be an all-British project.
  My speech is essentially one of a practical nature, so I turn now to the world market for air buses. It has been reliably estimated that the world market in the late 1970s and early 1980s will be about 1,100 aircraft. If one omits the slightly longer-haul aircraft of a similar nature, like the Lockheed 1011, at the upper end of the scale, and smaller aircraft at the lower end, one arrives at a practical market for such aircraft of about 850. The European airbus is aiming to achieve about half that market. It is estimated reliably that the United States aircraft industry would take another half—about 450. If the BAC311 is financed and put into the air, it is aiming at a market of about 300 aircraft to make it viable. If the European end of the market is split two ways, if the BAC311 achieved 200 and the European airbus 200, probably at that stage both propositions would become unviable.
  Now I come to what I call the case for the European airbus, the A300B. I have a constituency involvement in this matter,

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  and I can inform the House that this is not a "drawing board" aircraft. It is being built now. It has a 20 per cent. United Kingdom content, and I had the privilege only last Friday of seeing the wings being fabricated in the great factory of Hawker-Siddeley very close to the City of Chester. This was most interesting because the wings are being fabricated by an entirely new process. The skins of the wings are going to take most of the weight of the aircraft—in other words, the spars inside will be a relatively small factor, the skins taking most of the load and the stress of carrying the aircraft.
  The jigs are in existence and the size of the jigs and the equipment is so immense that I thought to myself, when I saw the anodising tank, that it would make rather a good miniature Olympic swimming pool. That indicates the size of the project which is already being fabricated and which is a major part of the European airbus.
  As I was sitting in the managing director's office, a telex came in from Sud-Aviation requesting the wing assembly to be brought forward by two months. That indicates that there is a great pressure to get this aircraft into the air. It will fly by 1972 and be in operational service by 1974. Judged by any standard, that aircraft will be two years ahead of any comparable BAC311 project.
  Now I turn to the consortium building the aircraft because it is important that the House should satisfy itself that the consortium is in existence, is operative and has a reasonable hope of getting orders. The consortium consists of France, West Germany and Holland. Under the last Government, Britain had rather an unfortunate record of blowing hot and cold and at the moment is not directly involved. But the firm of Hawker-Siddeley is involved in the construction.
  Orders are fantastically important. Air France, the biggest airline in the world, and Lufthansa and five other airlines have given orders of intent to purchase some 130 aircraft. The project is definitely in business. It will use a proved engine, the General Electric, and there will be no difficulty about funding the research and development for a special engine.
  I ask whether the Minister of Aviation Supply will be able to tell us whether
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  the Government have decided to take up the offer made to them recently with regard to a share of the consortium building the European airbus. If the British Government take up the share on what I believe to be rather favourable terms, our country might well construct much more than 20 per cent. of the project.
  I promised to be brisk and brief, so I will draw my remarks to a close by saying that, in my view, the hard evidence points straight in one direction. I advise the Government to press on with this practical proposition full funded and backed up by a sound order book. The stakes in the world aircraft industry are gigantic and the competition extremely fierce. I know all the political chicanery that goes on at the top with regard to the manoeuvring in the world aircraft industry. [HON. MEMBERS: "Oh."] Perhaps I should not have used that word and perhaps "manoeuvring" would have been better. There are no survival kits for failed aircraft manufacturers. The only survival kits are those manufactured by governments. I do not want our Government to get involved in the manufacture of survival kits for airframe manufacturers. Britain cannot afford prestige products that have little chance of financial success.
  6.31 p.m.
  Mr. Tam Dalyell: Perhaps I may begin by explaining why I sought to intervene in the speech of the hon. Member for the City of Chester (Mr. Temple). The truth was that I could not contain my curiosity about whether his opening remark was made tongue in cheek or seriously. If, as is unlikely—we know that he is a very shrewd man—it was serious, then one wonders at his naivety. I can only say, tongue in cheek, that I thought it about the rudest insult that I have heard during some eight years in this House, coming as it did from a back bencher about one of his own senior Cabinet Ministers. It was so neatly done with such a sharp sword that perhaps even the right hon. Gentleman will forgive his colleague, but it is not for me to enter into this kind of internecine warfare. [An HON. MEMBER: "You have done so."] I had to explain why I tried to interrupt his speech, but all of us must at least appreciate such swordsmanship as the hon. Gentleman displayed.
  Mr. Nott: I was listening to the speech of my hon. Friend the Member for City of Chester (Mr. Temple) and I heard him say that my right hon. Friend made a very good speech. I do not understand what the hon. Member for West Lothian (Mr. Dalyell) is worrying about.
  Mr. Dalyell: I interpreted what the hon. Gentleman said as being that the right hon. Gentleman, with some practice, might if he perseveres come up to the standard of the hon. Gentleman's former colleague, Sir Walter Bromley-Davenport.
  Mr. Temple: The hon. Gentleman could not have been listening to what I said. I said that he would soon get up to the robustness of my former hon. Friend.
  Mr. Dalyell: It is a good thing that we have cleared that matter up.
  I wish to put a number of factual questions. The first concerns the exchange that took place between my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) and my hon. Friend the Member for Huyton (Mr. Harold Wilson) and the Government Front Bench. Is it not the case that the merchant banks which might be expected to undertake long-term lending have been reluctant to come forward, that most of the £18 million comes from the joint stock banks and that the joint stock banks do not have a tradition of long-term lending? Therefore, this is a rather exceptional financial circumstance which would appear to destroy, in a sense, the argument that the traditional markets of the City of London have come forward to play a traditional rôle.
  It would serve the country much better if the Government were candid about this matter. It does not leave much to the imagination to think what will happen if any real mystery is allowed to develop from the circumstances. Perhaps when the Government reply to this debate this evening they will be a little more candid about the matter. I am not saying that there is anything disreputable involved, but it is better that the House should know the truth about where the £18 million has come from.
  My second question was raised during the statement by the Minister of Aviation Supply on 11th November. I asked why there was to be a further check by
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  independent accountants and the Minister replied:
  "On the question of an independent accountant, I took the view, which I sensed to be the view of the whole House, that the magnitude of these figures was such that it was right that they should be checked and it was right that any Government support should be subject to that check."
  Perhaps we may be told in the reply a little more about the rôle of the independent accountants and why they had to be introduced.
  There are some of us—and incidentally I am a great supporter of Rolls-Royce—who simply do not believe that the figure will stick to £89 million. Questions must be asked about this figure, and as a supporter of the project I ask the Government about their commitment to £89 million. What happens if it is a great deal more? Is there an open-ended commitment?
  My third question is to ask whether we are to hear more about the basis of the calculation of the appropriate levy to the right hon. Gentleman's Department about which he spoke in his opening remarks. The Minister of Aviation Supply replied:
  "As regards the levy, I am sure the hon. Gentleman realises that the normal arrangement is for a rising amount per batch of aircraft. I could not give the details in an oral answer now, but I shall be glad to publish the information in the OFFICIAL REPORT."—[OFFICIAL REPORT. 11th November, 1970; Vol. 806, c. 406.]
  I may have missed something, but after checking I could not find it in the OFFICIAL REPORT. Perhaps this information on the levy could be brought to the notice of the House as soon as possible since it is a matter of some consequence.
  To return to the £89 million. I should like to draw attention to a report in Aviation Weekly under the heading "RB211 Back-up Blade under Impact Tests" which appeared on 9th November.
  "Derby. England—Rolls-Royce is conducting bird impact tests on a rotating hollow titanium blade being developed as a backup in the RB211–21 power-plant programme for the Lockheed L-1011. Project officials here said research into the hollow blade is being conducted in parallel with work on the Hyfil carbon fibre blade, which is showing improved strength after changes in lay-up at the root. Resin mixes have been changed, and tests have shown higher sheer strength. Hollow titanium blade work is being conducted at Rolls here and involves a blade that is filled with honeycomb for added strength."

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  I will not continue quoting that report, but any research costs on that kind of basis will mean money with a capital "M". If there is to be research into these hollow blades and into the whole subject embracing these vast technical and engineering problems, can we be sure that the limit would be only £89 million?
  I do not wish to go into all the technical matters involved, but simply wish to ask what is the Government's commitment if posts turn out to be very much higher than those estimated at present? My first experience of the House of Commons was to hear a solemn assurance given in a Ministerial statement by the right hon. Member for Brighton, Pavilion (Mr. Amery), now Minister of Public Building and Works, that the research costs of Concorde would be between £75 and £85 million between Britain and France. I, like my right hon. Friend the Member for Bristol, South East (Mr. Benn), keep a diary. "Bet that it reaches £200 million", I wrote in it. How naïve can one get! These troubles have been with us before. It is not in any curmudgeonly spirit that I wish to ask the Government Front Bench whether there is any certainty that £89 million will be the end of the story and that we shall not be faced with an open-ended commitment. If so, what will be the consequences for public accountability?
  Perhaps something could be said in the Government's reply this evening about the eventuality of an open-ended commitment. There are some people who think that the Government will be lucky indeed to get away with a figure not of £89 million but of about £150 million. I do not say this in any way disparagingly of British industry, which of course I hope will succeed. We all know that Pratt and Witney have equal problems, as have others. These are problems that face all major world aircraft manufacturers. I see the hon. Member for Oswestry (Mr. Biffen) nodding his head and with his experience of the Public Accounts Committee the House will respect his opinion in these matters. If the hon. Gentleman wishes to intervene, I will of course give way.
  I should like to refer to a passage in a recent book by my friend and former colleague, Eric Moonman, the former Member for Billericay, who would have been speaking in the debate had he been a Member of the House:
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  "In February, 1969, the Select Committee on Science and Technology reported on the state of development and in so doing, pinpointed the problem which is central to this whole question of industries of innovation and the relationship between government and industry: 'A technological advance of the greatest importance has been made by government scientists. The advent of carbon fibre reinforced plastics, metals, ceramics and glass may well influence the entire practice of engineering on a vaster scale than any previously developed new material. How then is the nation to reap the maximum benefit without it becoming yet another British invention to be exploited more successfully or more fully overseas?'"
  This is the nub of an important question which has to be faced. Related to this is the question of the dismantling of the I.R.C., on which I interrupted the right hon. Gentleman, I hope courteously, in his opening speech. With the best will in the world, it is not sufficient to do as he said and say that it can be handed over to the workings of private enterprise, because with respect I say to him that that is thinking in slogans. It cannot be handed over to private enterprise, because who will monitor the situation, or is there to be no public accountability? I am somewhat more sympathetic about this than are many of my colleagues. Six years ago I was a member of the Public Accounts Committee which examined the Bloodhound question, and one of the difficulties arising was that there was a shortage of technical costs officers.
  Monitoring is not easy, but is such monitoring as has to be done in fact achieved by the men in Millbank Tower? I have the same regard for many of them as has my right hon. Friend the Member for Bristol, South-East. But no one in his right senses thinks that these civil servants, however talented they may be, can do the kind of monitoring operation required in these circumstances and with the dismantling of I.R.C. I cannot get it out of my head that it is all through political pique. Without I.R.C. how do the Government intend to do any kind of meaningful monitoring? If monitoring is not to be done—
  Mr. Nott: I am sure that the hon. Gentleman visited the I.R.C. on many occasions, as I did. There was never any capacity on the part of the I.R.C. which was capable of carrying out the function which the hon. Gentleman is suggesting. The I.R.C. had an executive of no more than ten people, five or six

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  of them being young people, who had the same background that I had in a merchant bank. They had none of the capacities which the hon. Gentleman suggests and were not equipped to do that sort of job.
  Mr. Dalyell: There is a point of disagreement here. It is true that both the hon. Gentleman and I have studied the workings of the I.R.C. Although the I.R.C. would do the job somewhat imperfectly, at least that was the embryo of the machinery to do it. Do the Government intend that there should be any, even fairly rough, monitoring of this substantial amount of public funds, or do we just hand the money over and trust Rolls-Royce? Those are two possible points of view. I should not be unduly shocked if the answer were to hand it over in a lump sum and give it to this famous firm. But we ought to know the answer. The worst of all possible worlds is to pretend that there is public accountability when there is none. Therefore there is an obligation on the Government to say, first of all, what kind of public accountability is intended, and secondly, to say what is possible.
  The right hon. Gentleman referred to total redemption. As I understood it, the total redemption would be achieved on the basis of 225 Tristars plus 100 engines for other purposes. I should like to be clear as to what are these other purposes. Is it the amount of naval orders which we have been reading about in the Sunday Press, or have I misunderstood this and does the other 100 refer to something else? If the right hon. Gentleman wants to clear up that matter, I will give way to him.
  My next question concerns the so-called big engine and what the Government's attitude is to the RB211 75/80. Is it a big paper dream or does it approach the reality of an engine? This is relevant to the future of Rolls-Royce. In all this discussion, there is a problem for the House as to the public treatment of a great firm.
  I should like to conclude on this matter. I reflect that it is of considerable concern that in no other country would one have this sort of public examination of a great engineering organisation. For example, can we imagine the West Germans
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  doing to Siemens what we have done to Rolls-Royce if they got into difficulties? Do the Americans do it? It is inconceivable that this could happen among our competitors in Japan. What contrast there was between what happened over the QE2 and all the public rows that that involved—my hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. Douglas) will remember that well—and the fact that at the same time a Japanese tanker broke its back in Mid-Pacific and aroused only a minor paragraph in the Japanese Press, Asahi Shimbun. That is an indication of the difference in the way in which we treat our various industrial knotty problems.
  I am worried about this endless business in the Sunday Press of examination into Rolls-Royce. It is hard to recall when we last had such a display of hindsight as that exuded from the Sunday Press on Rolls-Royce eight days ago. Not many months ago the same pundits were telling us in chorus what heroes of export were Sir Denning Pearson and Sir David Huddie. I have worked with Sir Denning Pearson in his frequent and courteous contact with the Labour Party Association Group. He has been very kind to me. In a sense I have an axe of personal friendship to grind. It is nauseating that these sabbath starlings have now alighted on another perch. We are expected to believe that the Rolls-Royce management, having been heroes of export, are now fallen aristocrats who have led us astray. That is easier for someone on these benches to say. I have a feeling of nausea at the treatment of those men.
  The truth is that they are neither as bad now nor perhaps as good as in 1968–69 as is made out. The euphoria when the American contract was signed was created not at the instigation of Rolls-Royce but by non-technical leader writers caught up in the export craze. With recently acquired insight, those gentlemen may assure us that engineers, however good, are not suitable people to be bosses of great engineering firms. Apparently, we are told, accountants do the job so much better.
  Whatever else it is, this is a somewhat different tune from the refrain played throughout the 1960s which contrasted the success of American and British firms and attributed it partly to

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  the fact that in the States it was easier for an engineer to become vice-president or managing director of his company. Was Sir Paul Chambers really so much more successful at I.C.I. than Sir Alexander Fleck? Certainly not, I would think.
  However, there is a related substantial point which has not been clearly perceived. It is that sheer size at a certain level creates a fundamental difference in the task to be performed at the top. Whatever a man's training, can he be expected in his 60s to jump from running a large firm like Rolls-Royce was to a new giant organisation created, in this case, by the merger of Rolls-Royce and Bristol-Siddeley? This is a matter of some importance on which the Government should reflect. The same query applies to Lord Stokes at British Leyland as it does to Pearson and Rolls-Royce.
  This is a matter about which we as a society have to think. I am not convinced that handing over a great industry to an accountant is in any way a panacea or cure. To go on with the Sunday Press for a moment, in the Observer, Mr. Eglin proceeded to attack Rolls-Royce for not knowing how much the Hyfil blade fibre cost the company. If he had attended the debate on the Report of the Public Accounts Committee last week, he would have learned how difficult, expensive and sometimes impossible it is to isolate such costs. This, again, seems to be a real argument against rushing to take refuge in the accountant as the panacea for our troubles. It is my strong impression that, even if Rolls-Royce had had a financial genius in the shape of Mr. Ian Morrow for the last five years, the situation would have been only marginally better.
  The truth is that no firm in the world engaged in this sort of activity has kept remotely to its cost estimates. The troubles of Pratt and Witney, Rolls-Royce's most formidable American competitor, with the Jumbo JT90 engine are most spectacular, and General Electric lost at least a cool £14 million on its estimate for the engines in the giant C5A.
  In the absence of perfect foresight, who would have guessed at the rate of cost escalation over the past 18 months due to worldwide inflation? It was unpredictable. Certainly it was unpredicted.
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  Nor is it sufficient to reply that Rolls should not have signed fixed-price contracts. I am sorry that my hon. Friend the Member for Coventry, North (Mr. Edelman) is not here at the moment. It strikes some of us as being far too easy to say with hindsight that Rolls should not have signed fixed-price contracts. It is my understanding that, if the company had not been prepared to do so, it would not have been in the hunt for the contract. The quick answer is that, if the company had not been willing to sign fixed-price contracts, it would not have been in the running for an order. Moreover, in the fixed-price approach the company was supported by my right hon. Friend the Member for Bristol, South-East.
  The Rolls dilemma once again raises the whole issue between the State as a purchaser and private industry as a supplier, military and civil, of goods which depend on a large degree of innovation which as yet is not within the known state of the technical art, to adopt a phrase very often used by the Parliamentary Secretary, the hon. Member for Eastleigh (Mr. David Price). I agree very much with much of what the hon. Gentleman has said and written in the past on these many important points.
  At one level, it is simple. Either we take a risk and innovate, as with carbon fibres, or timidly we opt out of the lead. The right hon. Member for Wolverhampton, South-West (Mr. Powell) might turn his mind to how major innovation should take place in a modern industrial society if it is somehow not to be underpinned by the State.
  The Sunday pundits have been guilty of another piece of double-think. How often have they lectured us in the past to the effect that Britain makes the inventions and leaves others to exploit them. The stock examples are Whittle and the jet engine and the British development of variable-geometry techniques in aircraft and our related failure to exploit them. But what happens when a British company, in this case Rolls-Royce, makes a genuine attempt to leapfrog into the future and comes to grief? Mr. Eglin pontificates in the Observer about Rolls'
  "Abortive essay into carbon fibres".
  In my view, he might just as easily have been writing an article rebuking British industry for not taking advantage of

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  developments at the R.A.E., Farnborough, and using carbon fibres to reduce aero-engine weights to the advantage of the balance of payments. The Sunday papers and other commentators have to get it clear that it would be very unfortunate if the example of Rolls-Royce and carbon fibres were used as a deterrent to British industry undertaking this kind of innovation risk.
  As I have said, it is easy to write an article saying that Rolls made an
  "abortive essay into cargon fibres".
  But when that comes from the same people who have made such a fuss about about our not taking advantage of jet engines, variable-geometry techniques and a host of other British inventions, it seems to be hypocrisy to a degree which we should begin to challenge.
  Mr. Michael MacNair-Wilson: Is not the hon. Gentleman asking too much of the Press? Surely the Press tends to act as a watchdog for the ordinary person, including the shareholders of Rolls-Royce. The company has got itself into a mess which could lead to bankruptcy. Surely it is fair for a reporter to make his comments.
  Mr. Dalyell: It may be fair to make them, but is it wise? There is no doubt that the job of our exporters is made far more difficult by this country than that of the exporters of any other country is made by their own Press and so-called influential establishments.
  Mr. Dick Douglas: Television.
  Mr. Dalyell: My hon. Friend says "Television". If I may follow his example, viewers watched for a solid hour a gradual analysis of the British motor industry and Leyland in particular. I have an interest in this, because the Bathgate factory of British Leyland is in my constituency. My hon. Friend the Member for Birmingham, Northfield (Mr. Carter) may know even more about it, since the major Longbridge factory is in his constituency. That television programme was shown widely and seen not only in this country. Much of it was reproduced in Japan. As those of us who have been to the United States recently know, some of it was shown to American audiences. They were amazed that the British should
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  embark on what they regard as a course of self-destruction. We are a curious people.
  I do not look at the situation from the point of view of shareholders but from that of the country's export performance. Here, in the context of Rolls-Royce, we have to ask some rather less glib questions than have been asked by many of those who earn their bread and butter by writing offhand articles. In writing their articles, I hope that they will in the future reflect a little more on the issues at stake. There is no ideal solution to these problems, but I have not the least doubt that the best instrument so far devised in any modern industrial country is the Labour Government's I.R.C. It may have been inadequate. As the hon. Member for St. Ives (Mr. Nott) pointed out, it may have had a staff of only 15 or 20 people. But it could have been built up into a satisfactory organisation. The trouble with the present Government is that I can see no sign of any organisation which will look after such problems.
  It is rather important to keep the whole saga of the RB211 in perspective because the truth is that it represents only about one-quarter of Rolls' total work. I do not just speak about Rolls-Royce as the main private employer in Scotland because that does not directly affect my constituency. The position has to be kept in perspective. The production of diesel and industrial engines, gas turbines and other similar manufactures is going well.
  It would be a pity if we inflict wounds, by what we say inside this House or outside it, on a British company, or if we to couple some parliamentary criticism which would astonish our industrial competitors. In such Press criticism I have to couple some parliamentary criticism because it is not up to us in Parliament, whatever else we do, to make unnecessarily and gratuitously more difficult the problems of those who export for this country.
  7.0 p.m.
  Mr. Peter Rost: It cannot be often that a new Member is given the opportunity to intervene for the first time in a debate of such importance on a subject so directly affecting his own constituency. South-East Derbyshire is Rolls-Royce country. Many thousands of my constituents depend for their livelihood upon the prosperity of

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  Rolls-Royce, not only through direct employment but through sub-contracting industries and the service industries.
  The previous Member for Derbyshire, South-East—Mr. Trevor Park—has my humble admiration for the work that he did on behalf of his constituents. It is an honour for me to pay tribute to him. Although he belonged to a different side of the political spectrum, I found myself admiring his frequent and forceful criticisms of his own Front Bench. If it were not the tradition of this House for a maiden speaker to be non-controversial, I would be tempted to add that such criticism was entirely justified.
  I am intervening in this debate because I believe that it is time someone spoke up for Rolls-Royce. I have listened patiently to a number of hon. Members opening their remarks by saying that of course they support Rolls-Royce—and then they went on to devote the rest of their address to tearing the company to pieces. In South-East Derbyshire we are justly proud of Rolls-Royce. We are not amused by the denigration and sniping that has been going on for some weeks now, undermining the self-confidence and morale of the company and those involved with it, as well as damaging the potential export prospects of a great British industry.
  I do not regard kicking an organisation when it is down as a particularly endearing or particularly British characteristic. I urge the House to consider ceasing from this activity, at least within the Chamber. Knocking the British aero-engine industry is entirely unjust. It has a world-wide reputation for technological achievement. It has met overseas contractual obligations with honour in the face of extreme difficulties and even financial loss. That is not something to be criticised. The eventual rewards which some such commercial risk brings is well accepted in this country.
  I find the suggestion by some hon. Members that nationalisation is the solution to be somewhat disturbing. Surely nationalisation has been proved time and again as the one formula for failure, inefficiency and financial ruin. Can any hon. Member suggest one nationalised industry that has made any contribution of significance to the British export market?
  Those critics of the Government's policy should ask themselves whether they would
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  be sitting in this House today had it not been for Rolls-Royce in, say, 1940. We undoubtedly owe our salvation to that brilliant team, the saviours of Western civilisation in a time of great crisis. I challenge those critics to stand up in this House and say that there may never come a time when this country will again depend upon Rolls-Royce for its future survival, will never again depend upon the skills of those who now work on the thresholds of advanced aero-space technology.
  Those critics who are most adamant have a lot to answer for because of their previous policies. This Motion asks us to discuss accountability, yet those who are asking us to do this are the very people who got their own sums wrong for six years, every single one of them. As a Government, they were only bailed out from bankruptcy by the world's banks. These are the people now criticising accountability in Rolls-Royce.
  It is also true that the whole country has been left in a run-down condition. The problem facing aviation, and Rolls-Royce in particular, is to a great extent the result of the rundown of British industry over the past six years. Could we not say that Britain as a whole is a lame duck and this is just one example of what happens when industry becomes starved of cash flow, crippled with taxation, when incentive and enterprise is largely removed, when capital investment has been stifled and risk capital is impossible to obtain? There has been a continuity of increasing squeeze on profits which are the lifeblood of British industry.
  Meanwhile, we have had a background of raging inflation, little improvement in productivity and industrial stagnation, with a failure to make any effort to improve industrial relations. It is against that background that we must view a company like Rolls-Royce and an industry such as aviation in its present difficulties. We cannot expect to solve the problems of British aviation until we change the economic environment, and this is where our new Government's policies will take effect. We will ensure that the climate of industrial expansion is improved and in that climate companies such as Rolls-Royce will once again be allowed to flourish. Until we have achieved an effective improvement in the economic environment, there must be an interim

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  period. We are now in that interim period when many companies are in difficulties.
  It is right for the Government to help those companies back to economic prosperity, to repair some of the damage that has been done over the last few years, and aviation is undoubtedly an industry where special help is necessary. I therefore endorse the future prosperity of this industry by supporting the BAC311 project, which is essential if we are to have an airframe industry in this country into which we can put British engines. I also endorse and congratulate the achievements of the Tristar RB211 development. This is a magnificent and encouraging sign for the future. I hope that the British aviation industry will be given the opportunity to develop STOL and vertical takeoff and landing, and supersonic flight, without allowing our competitors to take the lead from us once we have developed in these advanced fields, as has happened, so often with innovation in this country.
  It is right for the Government to support an industry which makes a major contribution to our export markets and which has proved its success in the past, not only technologically, but financially. I am sure that it is right to support an industry which will make even greater contributions to the nation's future prosperity and prestige. Britain's aerospace achievements are justly admired and respected and, indeed, feared all over the world. These achievements are an incalculable symbol of Britain's inventive genius, and in South-East Derbyshire we are rightly proud and confident of further advances and future successes. It is for these reasons that I support the Amendment and find the censure Motion completely unworthy of this House.
  7.12 p.m.
  Mr. Phillip Whitehead: It is a particular pleasure for me to follow the hon. Member for Derbyshire, South-East (Mr. Rost), my near neighbour, for several reasons. First, because I had not expected to find so much on which I might agree with him, but we have found common ground in Rolls-Royce, a great firm which means so much to the Borough of Derby.
  The hon. Gentleman might perhaps have expected and, indeed, might yet get,
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  congratulations from someone more experienced than myself in the ways of the House, but at least I offer him the condolence that he and I share the honour of our recently surrendered maiden-hoods and inexperience in the House with the right hon. Member for Knutsford (Mr. John Davies). In the eloquence and, indeed, the style in which the hon. Gentleman spoke he does not suffer by comparison with others more eminent in his party, and I am relieved to see that he has put so large a gap between himself and the right hon. Member for Wolverhampton, South-West (Mr. Powell), whom he rather seemed to echo at times, one thought, during the election campaign.
  I should like to speak, at least partly, from the point of view of the 70,000 people occupied in Rolls-Royce, working for the aerospace industry not only in Derby, but in Bristol, Coventry and many other places. They are deeply concerned with, and extremely proud of the industry in which they work. They are not happy to think that they might have been dumped in a morass of subsidised incompetence. They would be even unhappier to feel and believe that they were going to be abandoned either to unemployment or to take-over by the already unwieldy and over-reached American aerospace industry, which would be the fate that would befall them if the doctrines of the right hon. Member for Wolverhampton, South-West were to be followed. Luckily, on both sides of the House, his doctrines have received small support tonight.
  There is considerable agreement about the further support which Rolls-Royce has received. That does not, I think, appear to be the major point between us tonight. We, just as much as hon. Gentlemen opposite are agreed that that support should have been given. The argument tends to come much more on the level of public accountability, because if we are in a situation where this firm is largely subsidised as a result of Government contracts—and this is a matter which goes back to 1938 or 1939; it is not something that has happened from 1964, or 1968 or 1970—and also from Government orders, as my right hon. Friend the Member for Bristol, South-East (Mr. Benn) said, surely public accountability must be clearly established. That is why the Minister cannot be surprised at the lack of confidence felt and

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  shown on this side of the House at the bland way in which he dismissed the I.R.C. and said that it was doing a pretty good job, but he did not think that private enterprise should be encouraged in feeling that there were people there to bale it out.
  We endorse the policy of intervention in the aerospace industry, without, I think, indulging in the orgy of self-congratulation which has been rather notable on the other side of the House, but there are things wrong with it, and there have been things wrong with this industry. When one is dealing with millions of pounds for the cost of developing this engine, which is the central point of the debate—the RB211 project in its various forms is costing in excess of £200 million—of course we have to be serious about the kind of mistakes that can be made, and have been made, and it is no good saying, "Do not let us knock British industry. Let us go on with this project because somewhere along the line we shall get the money back". It does not work out that way any more. We have to be realistic.
  The right hon. Gentleman would perhaps agree that even if ducks fly at supersonic speed they may be lame all the same. We have to look at projects realistically and see what we are getting. When we come to the affairs of the Lockheed Air Company and its involvement with Rolls-Royce, there is a matter for concern, and that concern has been expressed on this side of the House.
  Over the last few years the aviation industry has been in a bonanza situation. By and large, projects have been launched, and aircraft have been developed, and because one airline, or two airlines, have taken them up, others have followed. The public have gone on buying tickets, industry has expanded, trade has expanded, and the airlines have boomed.
  That is not the situation any more. Some hon. Members may have seen the report in the United States News & World three weeks ago of the crash in the profits of the American airlines. In 1967 they reached profits in excess of £400 million In the three years since, that has been converted to a loss of £50 million. Anyone who has been in the United States recently and has flown on almost empty jumbo jets lurching unprofitably from one
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  airport to another, and who has been confronted with the situation at American airports of one aircraft after another failing to take off on time, would realise that things are not—hon. Gentlemen opposite seem to be disagreeing with me. Would they disagree with the fact that two of the largest American airlines, American Airlines and T.W.A., are contemplating merging?
  Mr. Temple: The hon. Gentleman accused American airlines of not keeping time. In my experience they are pretty good timekeepers. That was my reason for disagreeing with the hon. Gentleman.
  Mr. Whitehead: That is a matter of personal experience. My experience after some hours in the stack over these airports is that they are not good because of the congestion of aircraft over airports. There are too many aircraft circling airports because there are too many in service. That is why I believe that we may be in a situation in which airlines are not only contemplating mergers, but are grounding some aircraft, and may be looking closely at future orders.
  That brings me to the troubles of the Lockheed Company. This company, one of the three major airframe companies in the United States, is in the most trouble, not only because of the C5A transport plane, but because of the difficulties that it has in raising adequate financial backing. If I am right in thinking that there may arise a situation in which the American airlines which have dominated the American domestic market are going back on orders, which firm is most likely to suffer? My belief is that it is likely to be Lockheed, and not Boeing—which has a comprehensive range of aircraft—or Douglas, which is doing extremely well in both short-range and long-haul aircraft, and has far more orders for the DC10 than the Lockheed Tristar, whose last civil aircraft was the Electra, which was not a particularly happy precedent.
  We may be in a situation where the optimism shown by the right hon. Gentleman that we can reach a profitable position quickly in which 225 aircraft will be sold with 100 additional engines would be unjustified, because it might be false optimism and because we are seriously lagging in the other projects mentioned by hon. Members.

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  We may see in these cases how the mistakes endemic in much of our backing of these immensely complex and expensive aircraft projects in the past may be avoided. My feeling is that they can best be avoided if we look at what we are getting. The Minister said in the debate that joint ventures have a great impact not only on prestige but on foreign earnings, provided we are cost-effective. That principle of cost effectiveness should be followed rigorously in the selection of the European airbus or the BAC311 which is now being offered, because all too often we see these costs, as mentioned by my hon. Friend the Member for West Lothian (Mr. Dalyell), escalating out of all belief, because of the complexity of the research involved. What we have seen all too often is a project that is given its launching aid and which then fails to come up to the sales estimate made in a spirit of enthusiasm and adventure by the company concerned.
  B.A.C. will have to sell 280 or 300 of its series 111. It has not done so yet, and it is unlikely that it will. It claims that it will sell at least 280 of its series 311. Again, I doubt that it will, although there is an airbus market. That is why I think we should look at the A 300 B, because what we are looking at here is a European project with a very wide spread of capital cost involved in the launching scheme and also, I understand, a firm offer for co-operation with the Rolls-Royce company, with the development of the Rolls-Royce 211 series engines which would get us into a wide European market, with an aircraft which, at the moment, has no comparable competitor, and into a market into which the Lockheed Tristar is not venturing very successfully.
  The DC10 has done much better in its European orders. If we can get into Europe at least with this aircraft in a way that guarantees our own aerospace industry and which is not, as is the case with so many projects, likely to leave us at the end of the day with a new stake in the industry but no conceivable financial remuneration, not only will we and our aerospace industry be much better off, and more likely to be preserved, but we shall get the prestige that is so often invoked by hon. Members opposite and
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  also the safeguard for the future employment of the 70,000 people in Rolls-Royce and those working in the rest of the aviation industry and its allied concerns in this country, who are themselves equally committed and tied to the future.
  What is at issue is the effective selling power of British aviation in the next decade. We cannot do everything, but I beg the House and the right hon. Gentleman to consider that in what we are committing ourselves to we must be certain that we shall do well.
  7.24 p.m.
  Mr. Kenneth Warren: The Motion is rather too glib, despite some of the very commendable phrases with which the right hon. Member for Bristol, South-East (Mr. Benn) introduced it. It seeks to conceal—but fails to conceal—the bad relationship which developed between British technology and the previous Government. It gives my hon. Friends and me an opportunity to explore this a little further than I would have expected possible. The Motion notes the decision to give £42 million in aid to Rolls-Royce but happily does not mention the £47 million launching aid that the last Government gave to Rolls-Royce.
  I start by asking exactly what hon. and right hon. Gentlemen opposite were doing whilst that sum of £47 million was being expended by Rolls-Royce. The escalation occurred under their noses but apparently out of their sight. The hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu) put forward another analogy. He said that it came up behind them. It was an escalation that took place long after the previous Government must have had full knowledge of the terms and conditions of the contract into which Rolls-Royce had entered with Lockheed. It is extraordinary to find note being taken of the £42 million but no mention being made of what happened to the £47 million.
  The RB211 engine has been said to have been started many years before the contract was won by Rolls-Royce. It was started in 1961, and there was over six years' basic design of the engine before the contract was won. A great tribute is due to the engineers at Derby, as my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) mentioned in an excellent maiden speech. I

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  hope that we shall hear much more of him in the near future. Throughout the negotiating period Her Majesty's Government appeared to be very closely involved in all the negotiations, and in the last six months of the negotiations were intimately involved in discussing the offset deal with Lockheed. In February, 1968, when the Air Holdings concept was put forward, it was said to have been approved by Her Majesty's Government, but in the terms and conditions of the contract there is also a liability to buy through Air Holdings. Her Majesty's Government at that time apparently approved the liability in respect of imports into this country of 850 million dollars' worth of aircraft as part of the offset deal. I should like to know whether the Government were fully aware of the terms and conditions of that liability as well as the original contract.
  Mr. Benn: I should like to correct the hon. Member on one point. There was no question of the import of Lockheeds into this country. This was the worldwide sale of Lockheeds outside the United States. The two figures are not comparable.
  Mr. Warren: The Air Holdings company is registered in this country. The commitment was, first, to buy 20 aircraft and to have an option on 30 more.
  Mr. Benn: Not for Britain.
  Mr. Warren: It is the import into this country, and therefore the implied sale here.
  Mr. Benn: No. Air Holdings undertook to purchase the aircraft for sale outside the United States but there was no commitment that the aircraft would be bought for use inside the United Kingdom. Therefore the hon. Member's point does not arise.
  Mr. Warren: I fully accept the right hon. Gentleman's intervention. I am sure that he was intimately concerned with the situation at the time, but it appears that if these aircraft were not sold there would be a liability.
  I want to deal with the contract. It was said that it would provide 10,000 jobs and £3,000 million in sales over 15 years. Those are not the words of anybody on this side of the Atlantic but the words of one of the representatives of
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  the State of Ohio where the General Electric Works are situated, which found itself having to lobby its own senator on the effects of the deal going out of the United States. That offset contract was probably the way in which Rolls-Royce eventually won the order. When Trans-World Airlines and Eastern Airlines wanted to buy Rolls-Royce engines, it was this offset deal that made it possible. When the order was achieved in March, 1968, it was the fulfilment of six years' work by Rolls-Royce to try to break into the world market. I am convinced that it was quite right to back Rolls-Royce at the time. In the tributes paid to Rolls-Royce it is worth repeating what was said by Mr. Haughton, the president of the company immediately after the Lockheed Tristar flew. He said:
  "The people of Rolls-Royce have a great reputation. Nobody has one higher. It is a wonderful thing to have teamed with such a fine company."
  In mentioning Sir Denning Pearson, I should like to mention also Sir David Huddie, an engineer whom I have had the privilege of knowing for over 20 years. A great tribute is due to that man, who did all he could to win that contract. It is a particular personal tragedy for me to know that he has had to retire because of the personal effort that he put into winning that contract and starting it off.
  The State aid which was given to help win that contract was a good thing. It was a welcome change from what was commented on in Aviation Week, the "reliable magazine" referred to by the right hon. Member for Bristol, South-East, which said, only two months before that contract was won:
  "The British aerospace industry will decline badly without some firm decisions and intelligent support that the Labour Government appears incapable of providing."
  With that switch, and coming two and a half years forward, it would be interesting to know whether, today, a Labour Government in power would have allowed Rolls-Royce to go bust. It would be very interesting to know whether—recognising that this is the responsibility which is now upon us, with this £42 million of extra investment—if they were not willing to support it, they would also have committed Lockheed to liquidation. This is something of a responsibility which has not been brought out adequately today.

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  I am very concerned with this £47 million which was spent. The Opposition select in their Motion the phrase, "lack of effective accountability". This is like pretending that history has never happened. What did they do about the £47 million? Two and a half years ago and today, they were crowing about the tremendous help that they gave Rolls-Royce, yet last year, when they were in power, when the Rolls-Royce accounts came up, one heard nothing about any worry being expressed about the danger signals which were being flown.
  One could see in the Rolls-Royce research and development expenditure, which was normally running at about £30 million a year, a sudden creeping up, as the Olympus and RB211 engines reached the peak of expenditure, to £40 million in 1968 and £50 million in 1969. One has seen examples. The last five engine types which Rolls-Royce developed for the civil market came to a total of just over £120 million in all, yet here was the RB211 going up from £65 million to £75 million and then being shrouded in silence.
  There is a great deal that the last Government have to answer for. Did they really know the terms and conditions of the contract, and did they really monitor what was going on in Rolls-Royce with the taxpayer's money? The right hon. Member for Bristol, South-East did not tell us about that.
  Two further questions arise. First of all, if they did know what was going on, why did they not put in the effective accountability that they want us to talk about now? Secondly, if they did not know, why did they put in money without effective accountability? It cannot be because they did not know how to manage this. They had had not only the Zuckermann Report on management and control of research and development, which they hailed, but, in 1966, they had the Downey Report on development cost estimating.
  It is significant that this all took place when there was supersonic escalation of costs going on on the Concorde. Again, there was constant surprise for hon. Members whenever the right hon. Member for Bristol, South-East had to tell us of the latest and greatest increases which were being incurred.
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  What we have to do now, therefore, is to probe the reality of the Opposition's attitude towards the future relationship of State aid to industrial ventures which have chances of success. These are mentioned in the Amendment, and many people have turned this afternoon to looking at the problems of the A300 and the BAC311. It would be worth while knowing exactly what is the attitude of the Opposition Front Bench towards this airbus venture.
  We are told that we can have the A300B, or the BAC311, or nothing at all. The hon. Member for Huddersfield, East said that we should have nothing at all, but go straight on to vertical take-off and so on. With respect, he missed out a very important need in aviation—continuity. One cannot do a quantum jump. This is where the Comet came unstuck, to put it at its mildest. This continuity cannot be produced unless one continues in the civil air transportation game.
  In my judgment, as an aeronautical engineer, there is no doubt that it is the expensive route that we must take in order to succeed properly. That expensive route lies through an investment of some £100 million in the BAC311. The prime point about that aircraft is that it is one that the market needs. It is not an aircraft which has been made to satisfy some unworkable political consortium. It is coming from a proven organisation, as opposed to an unproven co-operative consortium among a group of companies none of whom has ever worked together before.
  With great respect to my hon. Friend the Member for the City of Chester (Mr. Temple) and the hon. Member for Derby, North (Mr. Whitehead) and their statements about the aeroplane, which they are personally backing, I should like to comment that, in backing what was called the all-British 311, we are not talking of an irrelevancy. There is a difference of £1,000 million on the balance of payments between the 311 and the A300, since the latter would incur a deficiency on the balance of payments.
  Surely this is not a venture to which we want to attach ourselves at the moment. The aircraft has only one-fifth British content. Why should we back something with such a small British content, which yet costs so much money?

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  Some of the comments of my hon. Friend the Member for the City of Chester on wing design made me resolve that if I were walking up to that aeroplane, I would back off and go by Tristar. But I have a feeling that the consortium for the A300 cannot build the aeroplane without British help.
  Some of the questions which are posed at the moment and which I hope the Government will consider in reaching their final decision, are questions that the customers want answered far more than the taxpayers in choosing a particular aeroplane.
  First, and fundamental, who on the A300 would be in charge of the consortium? Second, arising out of this, who will be picked when things go wrong? Third, what aircraft have the consortium built before? Fourth, what experience have they of working together?
  Last, and perhaps most important, what product support have the consortium to offer on a worldwide scale? The airline expects to buy an aircraft which can be kept going for at least 10 to 15 years. The 311 will sell in the main world market—North America—but I do not think that the A300 has a chance of getting off the ground on that side of the Atlantic.
  Returning to the Motion and the Amendment, what has worried me most about the considerations that we have had before us today is that I hope that the Government have the courage to stand up for this particular British capability, and that they will not be put off by debates about lame ducks. I hope that the Opposition will also have the courage to support such a decision. It would be a very good thing if we backed an all-British project, because I believe that there is a good deal of public emotion involved now in this decision and that the British public themselves want to see the 311 get going.
  There is absolutely no virtue in trading our technological capability across the counter of the Common Market negotiations. We must negotiate from a position of strength. We have gained nothing in the past from being involved in co-operative ventures with Europe. The Concorde shows this. It got us nowhere nearer the Common Market.
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  A very difficult question that we have to face in this choice, if it is to be the 311, is how then will both sides of the House feel if my right hon. Friend comes before us to say, "B.A.C. believe that it must be a Rolls-Royce engine for the 311, but they will need another £60 million to get that engine going." This is a very difficult choice, and one of the tremendous questions we face is whether or not it would be more desirable to go for an American engine to ease the British taxpayer of that extra burden of the £100 million which B.A.C. needs to get it started.
  We do not want to forget that the sum total of the venture, an investment of £100 million or £160 million, will bring this country overseas sales of about £1,000 million to £1,200 million. At some time we must accept somebody's figures. I accept B.A.C.'s findings, which have been checked. B.A.C. has a tradition of achievement and Lockheed and Douglas both think B.A.C. is right.
  The Motion is constraining. All the time hon. Gentlemen opposite are trying to lock us into a particular attitude towards this industry. This exposes their prime collective weakness, which is lack of adequate experience of the British aircraft industry and, above all, of the selling of British aerospace products abroad. The needs of export customers are always evolving and one must maintain a flexible, mobile relationship between Government and industry if one is to take advantage of the changes which occur, as they occur, in the market.
  It has been said that the big trick in industry is always to back the winners. Obviously, one does not make much money putting small stakes on losers. In all the years I spent as an aeronautical engineer, I was never of the opinion—I say this with respect to hon. Gentlemen opposite—that the Labour Party ever had a lasting awareness of the problems of the aircraft industry, and that is the basic trouble with the Motion.
  Hon. Gentlemen opposite should have known what decision to take over the RB211, but what a calamity it was when they cancelled the TSR2. The hon. Member for Stepney (Mr. Shore) said that we must get into a relationship with the industry before disaster strikes, but as he was talking I was reminded of that shambles which became the Beagle Company, with all that that meant in terms of

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  "ineffective accountability". The hon. Member for Huddersfield, East talked about getting into VTOL technology but I recalled how, in 1965, we had the cancellation of the P1154 and the Hawker HS681 projects, which set back vertical take-off and landing progress in this country at least ten years.
  I had a small example of what this means. I recall that under the last Government I was on one occasion seeking some help from them in an export battle in the United States. The help I got was to have a competitor introduced against me.
  Time and again the last Government handed over design leadership. For example, there was the Jaguar, an advanced variable geometry aircraft about which we were in collaboration with the French and a multi-rôle combat aircraft. There is no tradition on the benches opposite to commend the Motion. We must try as a Government to help industry to face up to modern developments, and that is what hon. Gentlemen opposite never did when they were in power. Perhaps their belief in Clause Four has a lot to do with their attitude.
  To me as an engineer the Motion is rather like a damp squib in that it resembles "the white-hot technology" of 1964 to 1970. I hope that tonight we will find a genuine awareness of the capabilities and objectives of advanced technology, because it is in this way that the Government should be helping the industry.
  7.45 p.m.
  Mr. John Rankin: I regretted the change of tone and attitude which the hon. Member for Hastings (Mr. Warren) adopted towards the end of his speech. Earlier I thought that I would be able to congratulate him on an excellent contribution, but then he began to fish in the murky depths in which his party lay and lowered the tone of his effort completely.
  As I listened to him, my mind went back to a matter that occurred in my constituency some years ago. On that occasion, my local shipbuilding industry was threatened with closure. Fortunately, the Labour Party were in power. The Government stepped in; provided £1 million for Fairfield Shipbuilding; and the day was saved.
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  On that occasion the then Minister, who is now Lord George-Brown, rose to give the House the details of the £1 million that was being made available. The right hon. Gentleman who is the present Chancellor of the Exchequer was about to get to his feet, obviously to protest at the Government's sinking—as he would have put it—£1 million of public money in Govan constituency. Seated beside him was the present Prime Minister, who grabbed him by the coat tails and pulled him back on to the Opposition Front Bench. I thought then that what the present Chancellor might have said on that occasion was in the minds of many of his hon. Friends. That was a wonderfully redemptive act on the part of the Labour Government. It was, after all, the Government performing one of its functions, which is to assist industry.
  How can the hon. Member for Hastings and some of his hon. Friends decry the efforts which were made by the Labour Government? Are not the present Government doing more or less the same thing—having taken a leaf out of our book? We took that step in Govan in 1954 and in a recent period, when Labour were in power, similar acts to help industry were done.
  Had the shipbuilding industry in my constituency closed, thousands of jobs would have gone, hundreds of shopkeepers would have had to put up their shutters and great institutions such as the Co-operative movement, which had its central premises for that part of the city in my constituency, would have lost many of its supporters because thousands of men and women—women as well, because they, too, are employed in shipbuilding—would have left my constituency seeking work.
  The engine under discussion is a Rolls-Royce engine and I hope that if it is decided to use it to power the BAC311 Scotland will get some benefit from the decision. We certainly badly need some such benefit at present. Just recently, 2,500 men were dismissed by Rolls-Royce, bring our total unemployed up to 96,000. Against the background of London or England in general that number may not seem very big, but in Scotland it represents 2·5 per cent. of the employed population.
  The programme would generate more than 72,000 jobs over our country as a

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  whole, but the effect would not stop there. We are assured that a world market awaits this aircraft, and we can all accept that as a fact. Current provisional orders confirm it. Even at this very early stage we are told that 43 aircraft are on order for eight operators, four of whom operate overseas, and the order is expected to expand eventually to at least 100 aircraft. That is only a beginning. It would be bound to have a benevolent effect on our balance of payments and would mean, additionally, through the generation of jobs an improvement in the national income. It would enable the Government to speed up their social programme. These are things that any Government would want to do.
  The programme would also benefit our European relationships. The BAC311 could be a most helpful link in that process. In view of the time I will not further expand the topic. I have given some examples of the good that would derive from a decision which I hope will be fully implemented.
  7.55 p.m.
  Sir Anthony Meyer: I will not follow the hon. Member for Glasgow, Govan (Mr. Rankin), because I I am not quite sure where he was going, nor am I sure whether he himself quite knew where he was going either. I wish, however, to comment briefly on the speech of my hon. Friend the Member for Hastings (Mr. Warren), who is about to leave the Chamber. My hon. Friend has a very good case. The BAC311, if it is ever built, will be an excellent aircraft. It is a pity, however, to spoil a good case, if one has it, by abusing a rival product. It inevitably gives rise to the suspicion that one's own case is not so impeccable as it might at first seem.
  I am quite sure that if the BAC311 is ever built it will be a magnificent aircraft, but it is two years behind its immediate rival—the European product, the A300B. It requires a large investment by the British Government. I doubt whether any of the champions of the BAC311 can put their hands on their hearts and swear that the figure they are now giving as the maximum investment required from the British Government is likely to bear any relationship whatever to the eventual figure if the product is carried out to its conclusion.
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  There is an even more powerful argument. Even if the BAC311 is an magnificent as, say, the VC10, it will have to fight for a share of a limited market not only with American tri-jets but also with the European A300B, which is an aircraft that is now being made. Like my hon. Friend the Member for City of Chester (Mr. Temple), I have seen the metal for that aircraft being cut, and early next year the wings are being flown to Toulouse.
  It is all very fine to say that an untried consortium is manufacturing the aircraft and that untried consortia do not produce good aircraft—like the committee designing a horse, which turned out to be a camel. Nevertheless, the plane is being made, and will continue to be made—perhaps for reasons of which we might not approve—whatever may be the decision of the Government. Therefore, whatever the Government decide, if the BAC3111 goes ahead it will have to fight with a European project for a share of a limited market.
  One thing certain is that in that case both aircraft will lose money; that neither can possibly recover its research and development and initial construction expenditure—
  Mr. Robert Adley: Can my hon. Friend in his turn put his hand on his heart and repeat that the aircraft is being made and will continue to be made in any case? I ask because many of us suspect that if there is not British Government backing for the 'plane some prototypes will be developed but the 'plane will never go into commercial service.
  Sir A. Meyer: I can certainly say that there is every intention to proceed with the 'plane and that the decision is not dependent on any decision of our Government to participate. Perhaps the aircraft will not be a success, and maybe it will lose a lot of money: the point is that the European Governments, perhaps for political reasons of their own, are determined to go on with it, thus ensuring the failure of both aircraft if both are proceeded with.
  It is all very well to lose money in the aircraft industry if we are operating at the frontiers of knowledge. It is all very well to lose large sums of money building an aircraft like the Concorde. But we

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  cannot for ever live on an aircraft industry which is taking in its own washing. Somewhere or other the industry must pay its way. If ever there were a generation of aircraft which should be able to stand on its own feet and pay its way, it must be this wide-bodied, relatively short-haul airbus. These things must be made profitable ventures.
  It is all very well to have an emotional argument about the need to maintain a profitable British aeroplane industry, but "profitable" means selling an aeroplane at a profit, or can we contemplate a situation in which the British Government go on paying high subsidies for what should be a bread-and-butter aircraft?
  Therefore, the British Government have three courses of action open to them to meet an admitted need now for a large-capacity medium to short-haul airliner. The first is the specious course, which is to back the BAC311—a very fine 'plane but one which is certain to lose money for the Government.
  The second course is the short-term course, which is to authorise B.E.A. to fall back on its second choice, which is to purchase the Lockheed Tristar. I should have declared my interest earlier. Many of my constituents work at Hawker Siddeley [An HON. MEMBER: "Ah."] In response to that "Ah" may I also say that an equal number of my constituents work for Pilkingtons, which have asked me to support the BAC311 project; so I can claim to be reasonably disinterested in the matter.
  If B.E.A. is authorised to purchase the Lockheed aircraft, it is not the ideal solution for Hawkers, but they will live with it and they reckon that they can still make a profitable venture out of their private participation in the A300B project.
  The present Government have made it a point of policy to cling to the long-term rather than to the short-term solution. The Government have decided to look wherever possible into the distant future and to ignore excitements in the short term. There are powerful long-term arguments for Britain to invest in the stretched version of the A300B, which will also provide a long-term outlet for the creative capacities of Rolls-Royce.
  This long-term argument has nothing to do with what is sometimes called
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  crawling into Europe. I believe that we can perfectly well decide to back the BAC311 and that it would not in any way affect our chances of getting into the European Community. Equally, I believe that we could back the A300B and not join the European Community. These two questions are to that extent distinct. The decision on the aircraft will not affect the negotiations one way or the other.
  Why do we want to join the European Community? If we are merely thinking in terms of signing the Treaty of Rome to participate in the limited arrangements which exist here and now for abolishing economic frontiers and for a limited pooling of economies, we shall not derive from the E.E.C. the advantages which could come to us from it.
  If we are looking further ahead, and if our object in joining the European Community is to recover for Western Europe as a whole a measure of true sovereignty in world affairs—by "sovereignty" I mean an ability to exercise influence in world affairs—an indispensable element in that recovery of sovereignty must be the maintenance of an effective modern technology in Europe.
  We are faced with a decision which I think is critical in this process of retaining an effective modern technology in Europe. Every time the question arises—how can we contribute to maintaining an effective aircraft industry in Europe, an effective electronics industry in Europe, an effective atomic energy industry in Europe?—voices will be raised in Britain, France and Germany saying, "We have a better aircraft industry in Britain", or "We have a better chemical industry in France or "We have a better electronics industry in Germany and therefore we should not combine our resources. We should go for the purely national model".
  We have a perfect instance in the present case of the airbus. This is an instance where probably, if we went ahead with our purely British airbus, we would create a better technological project but we would be fatally sabotaging a perfectly good opportunity for promoting active co-operation in European technology.
  Mr. Mather: Has my hon. Friend taken into consideration the fact that if we do

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  not decide to go for the BAC311 it will hit the British aircraft industry in a very big way? This means that one of our most important bargaining counters in entering the E.E.C. will have gone. The fact that we have a high technology industry—the aircraft industry—in which we are pre-eminent as a going concern, which we shall have if we choose the BAC311, will be a very important bargaining counter when the time comes to get down to hard negotiations.
  Sir A. Meyer: I am grateful to my hon. Friend. There is a tendency to think that the British aircraft industry begins and ends with the British Aircraft Corporation. I remind hon. Members that Hawkers are the largest airframe manufacturers in Europe. This is a very large element in the British aircraft industry.
  I greatly hope that, if the Government decide to participate in the stetched version of the A300B, ways can be found of associating B.A.C. actively in this enterprise. I agree with my hon. Friend the Member for Esher (Mr. Mather) that there must be a healthy British aircraft industry as an indispensable element of a European aircraft industry. I am convinced that by insisting on building our separate British airbus we shall contribute to the disaster both of the British and of the European aircraft industry.
  I beseech the Government to view the problem in this light, to bear in mind the possibility of an open-ended commitment which may take them a long way down the road to Government financing, and to take the longer, the more difficult, but I believe ultimately the right, decision of backing the A300B.
  8.7 p.m.
  Mr. Douglas Jay: I have listened with great interest to the hon. Member for Flint, West (Sir A. Meyer). I still disagree with him about the choice between the 311 and the European airbus.
  The Government are constantly telling us that they mean to make the defence of British interests the main criterion of their policy. I hope that they will observe that principle in reaching a decision on the BAC311, because I believe that support of this aircraft is the overwhelming British interest at present.
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  Unlike some hon. Members, I have no constituency or other personal interest in this. It is simply that two years of experience of responsibility for civil aviation, which brought me very close to this problem, as well as the Rolls-Royce/Lockheed project, left me in no doubt that if Britain is to have a real aircraft industry in the future the case is conclusive for Government support for the 311. Subsequent evidence has only confirmed that.
  The hon. Member for Flint, West spoke of the long-term argument. Let us look briefly at this from the point of view of Britain's industrial future. We must excel in high technology industries, and high technology industries with a large re-export potential with expanding world markets. Civil aviation and the manufacture of civil aircraft is certainly one of these.
  This is an industry where technique is so specialised and investment so vast that once a country has dropped out there is little chance of its getting back again. For 100 years ship-building and shipping were the major pillars of the British balance of payments. In passenger traffic, the aircraft is rapidly superseding shipping. Therefore, if we drop out of the aircraft manufacturing industry our balance of payments is bound to suffer severely in the long-term future. This decision is one of those types of decision which have a tremendous effect, perhaps irreversibly, on our economic future.
  Of course, the decision must also depend on producing the right aircraft at the right time and at a reasonable cost, but it seems to me that the more one considers the choice from that point of view the stronger is the case for the 311. First of all, B.A.C., who I fully agree are not the whole British aircraft industry, have great confidence in it as they have shown by the money which they have already invested.
  What impresses me is that the companies now forming B.A.C. have produced the two most successful British civil aircraft since the war—the Viscount and the 311—which have contributed many hundreds of millions of £s to the British balance of payments over the last 20 years. B.A.C. assured me, as a Minister, as far back as 1965, when there were many sceptics around, that they

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  would sell 200 BAC111s, and offered what seemed to me, though not certain, nevertheless convincing evidence at that time. They have now sold 201 to date and they expect to sell over 250. That is an ounce of experience against a good deal of theory. I think that the vindication of their estimates is strong support for their prediction that they should be able to sell over 250 311s in the 10 years between 1975 and 1985. Indeed, since the war—this is fact, which I do not think the hon. Gentleman will dispute—B.A.C. have sold nearly 250 aircraft of all kinds in the United States, and there is no other non-American company which can compare with that.
  Next, it seems to me that we are fortunate at this time in that both B.E.A. and B.A.C. have confidence in the same aircraft which B.A.C. is able to manufacture. It has been one of the misfortunes of the British aircraft industry since the war that there has been a tendency for the manufacturers either to design an aircraft which British airlines did not want, like the VC10, despite all its merits, or to manufacture one like the Trident which was specifically tailored for one airline and other airlines did not like to buy it.
  Mr. Wilkinson: Does the right hon. Gentleman think that B.E.A. would be justified in going to the Government for subsidy if they were forced by the Government to accept the aircraft which they wanted least—the 300B—for their future requirements, instead of the BAC311?
  Mr. Jay: I think they would. I do not say that they would get a subsidy, but they would have a strong case for compensation, which I think is the word usually used. But this time we have a golden opportunity to produce an aircraft which B.E.A. have strongly supported in the past five years and still support, and for which aircraft already there are provisional orders for 43 up to date. We shall be lucky if that opportunity occurs again in the near future.
  Of course, the cost matters very much indeed; but what B.A.C. are asking for is not a subsidy but launching aid. The Government in their Amendment tonight are asking the House quite rightly to approve the principle of launching aid. No hon. Gentleman will suggest that we
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  could hold our place in aircraft or civil aviation in the world without very considerable Government support. Indeed, that was the burden of one part of the speech of the Secretary of State today, and it is quite incontrovertible. Neither the American, the Russian nor the French aircraft industries could possibly survive without it.
  I believe that at this moment Lockheed are earning 90 per cent. of their total receipts from the Government of the United States. In my view, this aid should take the form not of direct subsidies or grants but rather of risk-taking investment by the Government, and that surely is the essential principle of launching aid, because in proportion to sales, money returns to the Government who originally advanced it. Indeed, this has happened already on quite a major scale with both the Viscount and the BAC111.
  I understand that the figures are—the Minister can correct me if I am wrong—that in the 20 years from 1950 to 1970 B.A.C.'s civil aircraft have benefited the United Kingdom balance of payments by about £800 million, and the amount of launching aid now oustanding after allowing for the levies which have come back to the taxpayer is only £25 million and is still falling as more and more 111's are sold at home and abroad. That shows, on the basis of actual experience, that similar aid for the 311 would be a reasonable risk financially even in a field in which obviously complete certainty cannot be obtained. If we ask for complete certainty we shall build no aircraft at all, and other will.
  I understand—again the Government can give us their estimates—that if the B.A.C. estimate of 311 sales turned out to be as reliable as their estimates of 111 sales, the gross export return over the whole life of the aircraft would approach £1,100 million with the Rolls-Royce engine and would approach £1,000 million even if we had to use the G.E.C. engine. That is far higher than any balance-of-payments return which can possibly be obtained for this country by the so-called European airbus, whatever its merits may be, and even on the assumption that it goes ahead as presumably it will in any case. It seems to me that important as are the employment and taxation arguments, the balance-of-payments argument and our whole

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  industrial future ought to be the conclusive factor.
  However, the clinching arguments seem to me to be these, and here I agree with a great deal of what the hon. Member for Hastings (Mr. Warren) said: if we lose this particular British aircraft, now that we have the chance to make it a success, we shall lose design leadership in the airframe industry, and it is very unlikely that we shall recover it for as far ahead as we can see. If we lose the airframe industry we shall risk losing the aero-engine industry as well, because we shall no longer be able to influence to the same extent the orders for aeroengines. That would be a major industrial disaster.
  I hope, at any rate, that the Government will take this decision on the ground of the technical and economic realities and not out of any political doctrine one way or the other. Let us remember that the so-called European airbus is not really a European aircraft. It is predominently a French aircraft, far more under the control of the French Government than of anyone else, and likely to bring far more reward and more strength to the French aircraft industry than to our own.
  The other argument which seems to me to be decisive is this—and here again I agree with the hon. Member for Hastings: experience is aircraft production, both back in wartime and in the far more complicated circumstances of today, has shown that modern aircraft and missile projects are so complex as well as expensive, and so many parties are involved in them, that beyond a point they become unmanageable. That is one reason for the failure of so many missile projects and for the difficulties over the Concorde, of which we all know.
  If, in addition to the airframe manufacturers, the aero-engine manufacturers and a host of sub-contractors as well as the airline customers and three or four Government Departments, which is bad enough, we bring in two or three other countries with a corresponding array of authorities there, then in my judgment the chances of conflict and confusion are so great that we have proportionately reduced the chances of success and made them pretty remote. If we keep these complexities and conflicts within bounds by confining them within British control,
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  we shall have by far the best chance of bringing off the whole project.
  Let us be realistic and not too starry-eyed about this. It is pretty clear that the somewhat frantic efforts of the French aircraft industry and the French Government to prevent our building the 311 at all are the strongest testimony to the prospects of success of that aircraft. If it had little chance of success, they would not be so exceedingly keen on preventing our building it. I think that it is also some sign of the strong desire overseas to undermine the British airframe industry, too. At any rate, that is the real issue at stake in this choice, behind all the statistics and the technicalities, and I strongly urge the Government on this issue, even if they do not do it elsewhere, genuinely to put British interests first.
  8.21 p.m.
  Mr. Robert Adley: It is unusual for me to agree almost entirely with the right hon. Gentleman the Member for Battersea, North (Mr. Jay) while finding myself in conflict with my hon. Friends the Members for the City of Chester (Mr. Temple) and for Flint, West (Sir A. Meyer), who have conducted a most successful pincer movement this afternoon on behalf of the Motion, with its five signatures, in favour of the A300B. Those of us—the 73 hon. Members on both sides—who have signed the Motion supporting the BAC311, have, perhaps, not had proportionately quite so many opportunities to catch the eye of the Chair.
  What is the argument put in favour of the airbus? First, the proponents consider that it is a great advantage to be first in the field. As a marketing man, I regard timing as more important than speed. In my view, B.A.C. has its timing right. It has done a great deal of research into when the airlines, its customers, feel that the wide-body airbus will be needed. In my opinion, there is no question of rushing into production at the very earliest opportunity, and, apart from that, experience shows that aeroplanes which are, perhaps, built too quickly do not always come out best in the long run. The 311 ought to get off the ground quickly from a production point of view, but not necessarily be rushed straight into production without adequate testing time.
  My hon. Friend the Member for the City of Chester spoke of Air France as

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  being the biggest airline in the world, and he argued that, because it is the biggest airline in the world, the A300B should be pushed ahead immediately, because Air France wants it. In fact, Air France is not the biggest in the world by a long way. Moreover, history shows that no aircraft which has been built purely on the basis of what one might call blackmail orders from airlines whose Governments have forced them to buy it has ever yet been a commercial success. The greatest strength of the BAC311 is that it is being built for airlines which want it, but, not because they are being forced to have it.
  In their Motion, the Opposition "note" the decision to support Rolls-Royce, but in the debate so far, with one exception, I have yet to hear an hon. Member opposite openly come out and welcome the Government's decision to provide further aid to Rolls-Royce. The Motion goes on to criticise,
  "the lack both of consistency and of effective accountability"
  in the Government's policy. As for lack of consistency, we are following the Labour Government's example in providing £47 million for the launching of the RB211 engine by Rolls-Royce. So there is no lack of consistency there.
  Right hon. and hon. Members opposite have tried to show that my right hon. Friend the Secretary of State for Trade and Industry has been lacking in consistency by pointing to his references to lame ducks and his assistance thereafter to Rolls-Royce. The lack of consistency, I suspect, is in the ear of the listener in this instance. Hon. Members opposite continue to refer to only one speech by my right hon. Friend. I shall refer them to his speech at the Conservative Party conference—just three sentences—
  "I recognise that some industries, like for instance the production of aircraft, are going through a period of world wide disarray and need a supporting hand. But I will not accept involvement in an openended liability. To do so is simply to throw good money after bad—and it is your money at that."
  The Government are consistently following the line which the Secretary of State has indicated. If we could have a little less reference to Rolls-Royce as a lame duck and reference to it as, perhaps, a swan with cartilage trouble—which might be more appropriate—it
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  might be more helpful to that great company in its present difficulties.
  We have heard words of support for Rolls-Royce from the hon. Gentleman the Member for West Lothian (Mr. Dalyell). I entirely agree with his words in the latest issue of the New Statesman, when he described Rolls-Royce as
  "A priceless national asset without which there would be no aero-engine industry in the West, outside the United States."
  That is the nub of the matter. If Europe does not hang on to Rolls-Royce—if we do not hang on to Rolls-Royce—we shall for our future civil and defence aviation requirements be entirely dependent upon the Americans. In his article in the New Statesmen, the hon. Member for West Lothian makes a point about the exorbitant cost of spares for American aircraft. It would be fatal if, by failing to support Rolls-Royce, we finished up having to rely indefinitely for the supply of aircraft and spares on a North American manufacturer.
  The Opposition have made much play of accountability. I thought that my hon. Friend the Member for Hastings (Mr. Warren) very successfully dealt with the point of the original £47 million which the previous Government gave to the support of Rolls-Royce for the RB211 engine. I take the point a little further. Why should we chastise Rolls-Royce if, in its hour of need, it requires money for investment for the development of an engine which should in return create great assets for this country, when we rarely hear from hon. Members opposite of some of the other large sums of money which have been poured out of the public purse in the past few years?
  Here are two examples. The figures are available in respect of British Rail from 1956 to 1969. During that time, the British taxpayer has been called upon to provide £1,524·9 million to support this nationalised monolith. I do not know how much British Rail has exported, and I am not aware of the value of its efforts to our balance of payments. As the right hon. Member for Battersea, North (Mr. Jay) said, the balance of payments is the vital factor here.
  Mr. Arthur Palmer: Surely the hon. Gentleman must take the point that the nationalised industries

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  belong to the nation. Rolls-Royce does not.
  Mr. Adley: If I am offered the opportunity of something which costs me £1,524·9 million, I might well decline.
  The National Coal Board from 1947 to 1969 showed a deficit of £149·5 million. This does not take into account the number of neat phrases like "Excluding any contribution towards central charges" and so on.
  There is a very good case for supporting Rolls-Royce, and I am delighted that the Government are supporting this great industry, because it has enormous potential for our future. We have heard about carbon fibres. The technological spinoff from Rolls-Royce is enormous, and set alongside the sums of money provided for British Rail or for the National Coal Board it shows that there is no sense in denying Rolls-Royce the funds it needs.
  Mr. Charles Loughlin: Is not the hon. Gentleman misrepresenting what the differences between the two sides are? What we say is that the inconsistency of the Government's policy is that they are advancing money to Rolls-Royce, in my view correctly, but will deny it to other organisations which are vital to the economy. Does not the hon. Gentleman agree that if British Leyland, for instance, which makes a tremendous contribution to our balance of payments, were in a similar position to Rolls-Royce it would be wrong of the Government to refuse to assist it?
  Mr. Adley: British Leyland, to my knowledge, has never asked for Government funds to date—
  Mr. Loughlin: Forty million pounds.
  Mr. Adley: I took the hon. Gentleman's point. British Leyland has never asked for funds in the way that industries to which my right hon. Friend the Secretary of State referred are asking for funds to bail them out of difficulties into which they have got time after time, industries in which there is no future, no export potential, no balance of payments content. I ask hon. Members opposite to differentiate between lending a company money for investment and providing funds for inefficient and out-dated industries. Over the past six years at any rate, they bailed out for political rather
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  than commercial reasons or reasons of future benefit, organisations which bring profit to this country.
  "Technological spin-off" is a much misquoted phrase. I have mentioned the deficits of the coal mines and the railways and I could pick many more. Since industrial derivatives of aero-engines came into being in 1958, when the first conversions took place, Rolls-Royce has exported £56·6 million-worth of derivatives of the aero-engines which it has been developing, and this is a continuing process. Two of the main derivatives are marine turbines and turbines for electrical generation.
  On the marine side, the new Type-42 destroyers, the first of which, H.M.S. "Sheffield", is coming into commission soon, will be the first new major warships in the world to be powered entirely by gas turbines. That is a great achievement by British technology and in itself would be a major justification for assisting a company like Rolls-Royce to develop into an entirely new field. The "Sheffield" and her sister ships will be able to fit engines in complete packages, and the RB211–22 engine, which we are discussing, will slip into those ships without any drastic alteration. That is a major technological innovation which we should all support. I believe that it is now official that all future Royal Navy warships will be powered by gas turbines, as pioneered by Rolls-Royce.
  The hon. Member for Bristol, Central (Mr. Palmer) will perhaps agree that in the same way as Brunel led the world with the SS. "Great Britain", Rolls-Royce is helping to lead the world yet again in technology connected with ships.
  Mr. Palmer: I hope that Rolls-Royce is more successful than was that ship.
  Mr. Adley: It has attracted a great number of visitors! I think that the hon. Gentleman will find that as a tourist attraction it will be extremely successful in our city.
  The Olympus engine, which is being developed in Concorde and was initiated with the Olympus 101 in 1947, has a tremendous future. Its derivatives are probably the most successful adaptations of the products of one industry to the needs of another. This is the direction in which we should be moving in the years ahead.

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  In 1963 the first Olympus engine was installed at, I think, Hams Hall power station outside Birmingham. Now, Rolls-Royce has installed over 180 jet engines in United Kingdom electrical utilities. Here again we have a tremendous potential deriving directly from investment in the aircraft industry.
  Abroad, gas turbines are now being used on the trans-Canada natural gas pumping stations. There is great export potential here.
  I am aware of the numbers of other hon. Members who want to speak, so I shall end with a few remarks dealing with the point made by the hon. Member for Huddersfield, East who referred to Concorde noise. He expressed a fear that the American airport authorities will be opposing Concorde on environmental grounds. I believe their opposition to be a real threat. I believe it equally to be a bogus threat.
  We are all aware of the trials and tribulations of the Comet when it was first introduced and the difficulties place in its way, which miraculously disappeared when the Boeing 707 came on the scene. I am confident that, with the experience of the Comet, plus the extra strength of an Anglo-French battlehead against the Concorde's natural and unnatural enemies in North America, the British and French Governments will ensure that the Concorde is not subjected to unnatural and undue pressure.
  I am sure we shall be supporting the Government's Amendment tonight and I echo the words of my hon. Friend the Member for Hastings, who said that, in the last six years, the Government have been acting as the only merchant bankers to which companies like Rolls-Royce could turn. I am hopeful that the present Government will restore the position whereby merchant banking is carried out by merchant bankers and not by Government, and I would add that perhaps after the VC10 and the BAC111 we can finish up with EC3.
  8.36 p.m.
  Mr. Ray Carter: The hon. Member for Bristol, North-East (Mr. Adley) suggested that no speaker on this side of the House has so far supported the latest grant to Rolls-Royce. He suggested that the Opposition
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  was, as a whole, critical of the grant. He must have been listening to a different debate from that which I have been hearing. The biggest criticism of the grant has come from his own side.
  Last week, in a debate which covered aviation, the hon. Member for Oswestry (Mr. Biffen) observed that it would be better to support Carnaby Street than the British aircraft industry. The hon. Member for Oswestry is a disciple of the ghost which I see lurking opposite and who has some influence there, and I suggest that there is a significant number of hon. Members opposite who, if they were to come out in the open, would be severely critical of the Government's new grant.
  The debate has ranged far and wide. My hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu) referred to the future of the industrial liaison centres. I want to dwell on this for a while because I have been in correspondence with one of the officers of those centres who is concerned at the possibility of the vindictive axe of the Government falling on this most worthwhile service.
  I mentioned in the House last week that these centres have produced benefits shown by a survey to be of the order of £750,000 to industry and, incidentally, at minimum cost. I have been informed, however, that the survey was based on only ten centres and that if we take them all into account the benefits would amount to about £3 million. I sincerely hope that, before the Government take any decision on these centres, they will examine closely the benefits they have given to industry at minimum cost and in a way which has benefited not only small and medium-sized industries but the polytechnics and the technical institutions upon which they are based.
  I thought it worthwhile to dwell on that matter for a moment because, although it is not perhaps as important as Rolls-Royce, it was a very important development by the Ministry of Technology and, although small, proved to be highly successful. We should not forget it.
  Turning to Rolls-Royce, I find it remarkable that two years after the Press contained wonderful tales of the achievements of Rolls-Royce in gaining massive

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  orders in the United States we should now be discussing an apparent tragedy for the company. But in fact it is not a tragedy. The sum of money recently granted to Rolls-Royce is merely a matter of taking up the complete instalment. It is not an additional amount. We must also bear in mind that the Government initially were not buying anything but were merely backing up a research and development programme.
  Politicians should clearly understand the problems encountered in research and development, particularly in matters of high technology on the frontiers of advanced knowledge. We do not always know where we are going and therefore, if the Government step in with a commitment, they should be prepared at the end of the day if there is failure—although in this case there is no failure—to stand up to criticism. In the case of Rolls-Royce private capital could not be found and the Government, rightly in my view, saw fit to step and safeguard a valuable national effort. I believe that the State was right to step in.
  I have one point of departure, and this point has been voiced by other speakers. If the State is to be asked to step in and take a risk, it should at the same time be able to retain control of its capital. The problems involved, whether the industry remains private or public, are precisely the same. Whereas politicians are always prepared to accept success and to bask in the glow that radiates from it, they are not always prepared to accept failure. In this sense politicians should be prepared, as some of my earthy car-worker friends might observe, to put their money where their mouth is.
  Having said that the State should step in, I ought to say why I feel it should do so. In aviation, competition is international. We have seen a gradual reorganisation and restructuring of the British aircraft industry to a point at which there is virtual monopoly. Therefore, Britain and its aircraft industry find themselves in competition with the world. If necessary, the State must step in to ensure that British industry, which is vital to our balance of payments and so on, is viable and the State should retain control of the capital invested.
  Research and development is extremely expensive. I speak with some experience
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  for I worked for some years in research and development and I know some of the problems that are encountered by engineers. Research and development, as in many other areas of activity, is concerned with success, and success is equal to time-over-money. If, for instance, Rolls-Royce had had sufficient capital they probably would have reduced the time factor. That is extremely important. The Government side of the House know a good deal about the problems of aerospace. For 13 years they had charge of this vital sector of the economy, but for most of the time did precious little about it. The profit and loss argument is constantly flung at us from the Government. They forget that defence is a vital area of Government activity which is extremely difficult to determine in terms of profit and loss.
  The hon. Member for Bristol, North-East referred to the Labour Government's failures. But they are nothing when compared with the failures in defence matters during the Tories' 13 years in office. Millions of pounds were squandered for absolutely no return, yet they are not prepared when they return to office to advance marginal sums of capital to industry which could have a vital bearing on our economic performance. British industry is still in a state of crisis. Some of the reasons for that are known. But the Government have given the impression that they are without philosophy and that, in pursuing or not pursuing that rôle, they have not got far.
  The Rolls-Royce affair has caught them with their trousers down. They have reacted in the only way possible. I suggest that the Government will not get too far and that their trousers will still be hanging round their knees when another such incident occurs. I hope that by that time they will have acquired a philosophy based on State intervention, because in these vital and strategic areas of advanced technology, only Governments can play the most useful and productive rôle. In the United States, for example, there is not one advanced technological project that is not supported by the Federal Government. The same will apply in Britain and in Europe in the years ahead.
  I hope that the Government will see reason and that, when other problems crop up, they will ensure that our basic industries get their support.
  8.48 p.m.
  Mr. Michael McNair-Wilson: Listening to the hon. Member for West Lothian (Mr. Dalyell) during the debate, one had a feeling that, to misquote, the only stain on Rolls-Royce's reputation was to be the whitewash. He is wrong when he suggests that we should applaud everything a British industry does but should not probe and knock if we are required to do so.
  Rolls-Royce is taking £89 million of the taxpayers' money. Our task is to be watchdogs of how that money is spent. A company which can start with a figure of £65 million as being the likely cash needed and end with a figure of £134 million is not being as careful as it should be with the money being invested in it.
  To some extent, that is a red herring. The debate is about whether the help given by the Government to Rolls-Royce somehow breaches the general policy which was enunciated by my right hon. Friend, to the extent that it was not a Government's task to help lame ducks. I agree totally with him. The only difference is that Rolls-Royce is probably not the sort of lame duck about which my right hon. Friend was thinking.
  It could be argued that, far from being a lame duck, Rolls-Royce is a golden goose which at the moment is egg-bound. I say that because, in my view, the company has taken on rather more than it can cope with, which is why the Government are asked to bail it out. But it is also guilty of mismanagement, and that is a charge which can be fairly levelled against its management and which has promoted changes in its top management. One cannot escape that. If the men were blameless, why were they changed? If they were blameless, the Labour Party is also blameless. But the men are not blameless, and it follows that the Government who originally accepted their quotations must admit either that the Ministry of Technology was taken for a ride by Rolls-Royce or that its sums were as clearly wrong as Rolls-Royce's.
  Mr. Benn: Before the hon. Gentleman leaves that point, I hope that he will make it clear that we were not the customers for the RB211. Rolls-Royce came with a project which they were selling to someone else, and we
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  offered the company a fixed sum of £47 million. It is not like a Government contract where escalation automatically falls back on the Government and where it would have been open to the present Government to refuse to give the company further assistance, though I am glad that they did not do that.
  Mr. McNair-Wilson: Of course we were not the customer. We were an investor. However, I have never met an investor who is so profligate that he does not check the investment over and over again, especially when the money is not his but the taxpayers'.
  We on this side must now follow through the logic of our action and our threats when we talk about not propping up lame ducks. We have accepted that Rolls-Royce, mainly because of its defence contribution and because it has to honour this contract, must be supported to the point where the Lockheed Tristar flies and where all 200 aircraft have their three Rolls-Royce engines.
  Let us remember that Rolls-Royce will lose £25,000 on every engine which goes into the Tristar aircraft and, therefore, that it is not until the 200 aircraft have been supplied and sold that any profit will flow back to the Government and thus to the taxpayer from the investment in the aircraft. It follows, therefore, that we have a vested interest in the success of the Tristar in world markets. The tragedy is that the Tristar is a direct competitor with the BAC311, into which so many hon. Members today have asked the Government to put money, and of the A300B airbus.
  Following the argument through, though we have a vested interest in the success of the Tristar, in its stretched version the aircraft will require another mark of Rolls-Royce engine, which will cost at least another £60 million. Today, we have questioned whether the British Government should spend £42 million on bailing out the company. What are we to do when Rolls-Royce says that it must have the 211–61 because the engine is crucial to what it should be able to offer in the civil market? Shall we have another debate and question once again whether the lame duck is being propped up, or have we thought through our policy and come to the conclusion that the only way

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  in which Rolls-Royce can continue without repeated borrowings from the Government is by broadening the base upon which the company stands and seeing that it is the only European aero-engine manufacturer? Once we accept Rolls-Royce in those terms, we have to see how Europe can be persuaded to invest in the company and so share the enormous bills.
  There is a way. It is not a matter of arguing the pros and cons of the 311 or the A300B. The BAC311 will require at least £90 million more of Government money. The farcical situation is that, even if it is given that money, the aircraft may then be powered by American engines. So one would be supporting the Tristar with its Rolls-Royce engines and supporting the BAC311 with American engines—clearly a crazy situation, since both are competing for the same market.
  On the other hand, even assuming shortcomings in the A300B, one fact stands out—that no Government money is required, and the Europeans, if we go back into the project, are prepared to invest in Rolls-Royce. Immediately, one has begun to broaden the base of that great company and to find new finance for it. Immediately, one is picking it up and turning it into what it should be—the European aero-engine manufacturer. Immediately, one is being logical about our policy of not supporting lame ducks, and of letting private industry cope with its own problems.
  We are talking not only of the A300B but also of a stretched version. This is the aeroplane that B.E.A. will buy, and it will be largely designed in this country by Hawker Siddeley and will mean a great deal of work for our aero industry. Surely we must decide tonight whether we want to go on supporting industries which have now become too complex and costly for one nation, or whether we are going to be logical and take the right step, which is a step towards Western Europe and towards putting our industry on a totally new and much more important basis.
  8.57 p.m.
  Mr. Dick Douglas: The hon. Member for Walthamstow, East (Mr. Michael McNair-Wilson) will forgive me, I hope, if I do not comment on his general argument,
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  because of the shortage of time. I want to deal particularly with the effective accountability in industrial policy in the private sector which the Government are pursuing. Both sides of the House will agree that, in the prevailing circumstances, we should have been highly critical of Rolls-Royce if it had decided some years back not to go forward with the development of the RB211. It was essential at the time, as history shows, that the firm should undertake this type of development in order to stay in the major league.
  This type of advanced technological development is complex, costly and capital-intensive, and requires a large market. Hon. Members opposite must decide what the alternative cost is of not supporting such a venture. It is all very well to say that there are lame ducks—a phrase which will be much used and abused in the days to come—in industry, but what does one do if one decides against supporting certain branches of industry? The capital and labour there are specific, and one cannot transfer this type of technological manpower into other industries overnight. The Government must take a much longer term view than the annual balance sheet of any firm or industry.
  That is our major criticism. The Minister has a great deal of accountancy knowledge. We know from the Rolls-Royce balance sheet that they started capitalising the research and development of this project as early as 1967. I wonder whether, in his monitoring of this development, the Minister will look at the nature of the capitalising of this type of development in future, because we will have more of this. It is right to do this if one is reasonably sure of the market. I will not go into the argument about the marketability of this engine, but the market must be taken into consideration in allowing a company whose development one is underwriting to do this.
  The Minister said that some funds had been acquired from joint stock banks in the City and that the Government are to look at the overall investment now in prospect, of nearly £90 million. We criticised the Government for destroying the I.R.C. This was a unique device which had gathered to it expertise to look after this type of capital development. Will the organisations of the Ministry and the

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  banks concerned do the same job as the I.R.C., that is, will they have more than a banker's responsibility for this type of investment? As the latest report of the I.R.C. pointed out, there must be more concern for such investments than ensuring their security. There must be a concern with the purpose of the investment and the rate at which exports, productivity, capital and labour develop as a result of it.
  What organisation has the Ministry or the banks to ensure this sort of monitoring? These questions have a long-term relevance, going far beyond the present debate because of the nature of the industrial process upon which the United Kingdom has to embark to remain in the forefront of the technological race.
  I disagree with hon. Gentlemen opposite who say that the private sector can carry out such research and development on the basis of its own risk capital. This is not so and the international comparisons prove that Governments must intervene in this type of investment. I hope that hon. Members will restrain their criticism of engineers at such times because such experts must be acquired to do a proper job and we do not have a proliferation of them. We must accept that it is right to have this further launching aid, there should not be any disagreement about that.
  What we look to the Government for is a set of criteria by which they will help industry and a clear acknowledgement that they will have another look at the device of the I.R.C. which was uniquely geared to this type of job, dealing with such investments and underwriting British engines and other devices in the technological sphere.
  9.3 p.m.
  Mr. John Wilkinson: I will not burden the indulgence of the House too much because I know that my right hon. Friend is champing at the bit. Where I come from they say:
  "When in doubt, say nowt, but if tha' must say owt, say it quickly."
  I wholeheartedly endorse the Government Amendment. It is a fact that 25 per cent. of the world's civil aero-engine market will be held by Rolls-Royce by 1975 as a result of this launching aid and the SRB211–22 going ahead. It is
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  another fact that world demand for civil-commercial aircraft has doubled in the last 10 years and will double yet again in the next decade.
  The Government are wise to ensure that Britain will play her part in this expansion. In the next decade the big power plants, that is the 40,000 lbs thrust plus plant, will have 60 per cent. of the market. If the Government had not gone ahead with this launching aid we should have been out of the big league for good, and that is something we cannot afford to have happen. There are three other important Rolls-Royce projects in hand. We are alone outside the States and the Soviet Union in having a proper supersonic power plant, the Olympus, the Adour military power plant has a magnificent reheat to dry thrust ratio and the RB199 is an advanced engine with a three-shaft layout.
  In terms of employment, about 65 per cent. of the work force in the European aero-engine industry is in Rolls-Royce. We must not only consider them; we must also consider those working in component manufacturing industries. In my part of the world, which has a notoriously low earnings record in industry, we have Hepworth and Grandage who are producing turbine blades and are one of the high-earning companies. In Barnoldswick, Rolls-Royce has an important plant in an area suffering a severe industrial decline. This is an industry that affects us right across the board, in terms both of our balance of payments and of employment.
  I am delighted to see both my right hon. Friends here, and in particular the Secretary of State for Trade and Industry with his colours nailed so firmly to the mast, with such a fine B.A.C. tie on.
  9.6 p.m.
  Mr. William Rodgers: We have had a good debate, with no fewer than 18 contributions from back benchers. Among these have been two excellent maiden speeches, which had the virtue—not always found in maiden speeches—of being appropriate to the occasion, to the extent that they referred to their constituencies and yet were relevant to our debate. I was delighted to hear the maiden speech of the hon. Member for Chertsey (Mr. Grylls), and I am looking forward to

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  hearing from him again. I missed the speech of the hon. Member for Derbyshire, South-East (Mr. Rost) but I hope that on a subsequent occasion I shall be able to hear him add to the reputation that he has created for himself today.
  The debate is not on a random Motion, on a peripheral issue; on the contrary, we have been debating not only crucial decisions affecting a large sector of British industry but the whole declared philosophy of right hon. Gentlemen opposite. We have been doing so against the background of a Government under attack not only from this side of the House but from many of their own friends outside the House.
  To help fill in the background I want to give a short quotation.
  "Even the veterans with the longest memories find it difficult to recall a similar precedent when confidence in a new Government, not only at Westminster but in the City, in business and industry, and even in Fleet Street, proved so sluggish, obstinate and unimpressed."
  That is not Tribune, or the New Statesman, or the Guardian or even the Economist; it is the Investors Chronicle.
  Another quotation from the Investors Chronicle brings us even nearer our debate today. It is:
  "Even in the case of I.R.C., M.P.s"—
  and the Investors Chronicle means Tory Members of Parliament—
  "suspect that in the end the Government must recognise that a body like it must be restored to fill the vacuum. It was good politics to claim that I.R.C., being a Socialist Government's creation, must be evil so it must be killed off, but it's bad economics, and certainly bad for the economy and many companies, to leave so many uncertainties and question marks about future policy."
  That is precisely our starting point today—that decisions have been made which, in our view, are damaging to the country and have been made for narrow political reasons. I had hoped that after the right hon. Gentleman's speech the position would have been clearer, not necessarily or mainly for our sake but because many people were listening to what he said. The questions that we must ask now are precisely those that were being asked before today's debate.
  I quote again from the Investors Chronicle, which puts the position clearly:
  "Just how far will John Davies apply the tough squeeze to all those 'lame ducks' which
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  he suspects have been kept alive by state help in various forms? Who are they? When would he feel justified to intervene himself to help industries and firms on the lame duck list? And will he help to wring the necks of others?"
  Those are fair questions but we are no clearer now as to precisely what the new brutalism means.
  For some hon. Gentlemen opposite more and more bankruptcies might be the measure of the right hon. Gentleman's success, and it is at least arguable, in the tough, rough spirit of freedom that is now to prevail, that steps will be measured by how many companies, large or small, go under. I would be prepared to bet that as time goes by the right hon. Gentleman will receive many more complaints from his hon. Friends than we ever received during the period of the Labour Government.
  We shall hear, though we did not hear it very much this afternoon, the spurious, intellectual case for this policy. We shall be told—we have been told—that what is painful in the short run will be bracing in the long. We shall be led to believe in a relationship between industry and Government of sublime and elevated simplicity, where each knows its place, and the boundaries are clearly shown, but the real world is different. I thought that my hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu) put it very well this afternoon. He was making, not a political point, but a plea to the Government when he said that experience shows that "preconceived notions of this kind simply are not relevant to the real problems which the Government have to solve".
  I was interested to read a speech made in another place last week during the censure debate. After a reference to the views of the right hon. Member for Knutsfor (Mr. John Davies) the speaker went on:
  "… it will not work. It is impossible to put the clock back half a century. For better or worse, the Government, industrial management, the trade unions and the City of London are enmeshed in the modern world and you cannot undo that mesh, ever, however hard you try. The Government occupy the driver's seat, and they cannot take their hands off the steering wheel as they now seem anxious to do."—[OFFICIAL REPORT. House of Lords, 17th November, 1970; Vol. 312, c. 1010.]
  The speaker on that occasion was not my noble Friend, Lord Shackleton, or Lord

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  Balogh, or even my old boss, Lord George-Brown. It was none other than the former Conservative Member for Aberdeenshire, East, Lord Boothby.
  This afternoon my right hon. Friend the Member for Stepney (Mr. Shore) put the Government's decision into an historical perspective. I thought that he spelled out very clearly the development of informed opinion over the last 25 years. He made it clear that in the early part of the 1960s the then Government, a Conservative Government, were forced to adopt policies which they had previously not supported because experience told them that other instruments were needed. I believe that in their heart of hearts right hon. Gentleman opposite know that their new policy will not work. The more experienced of them see that, faced with other crucial and sensitive decisions like that on Rolls-Royce, with which we do not disagree in so far as it goes, they will have to make the same sort of decision.
  If there is one thing worse than the single-minded pursuit of a mistaken theory, it is to deviate at frequent intervals when the obstacles are great, while claiming that one's own destination is the same. It induces schizophrenia in oneself, and total confusion in others. That is how it is with the Government today in the Rolls-Royce case. They have made a decision with which we would not quarrel, but they have not answered the question that was put by a number of hon. Members, on both sides, about precisely how they would act presented with cases which are similar in a number of respects, but which may, or may not, be within the aircraft industry.
  In his speech at Blackpool the right hon. Gentleman said:
  "I believe that simply to abandon great sectors of our productive capacity at their moment of maximum weakness would be folly indeed."
  I do not quarrel with that view, and it is the view which the right hon. Gentleman has put forward as the excuse for his decision on Rolls-Royce, but the difficulty still is, as my hon. Friend the Member for Gloucestershire, West (Mr. Loughlin) made clear in an intervention, and as the hon. Member for Waltham-stow, East (Mr. Michael McNair-Wilson) asked in his thoughtful speech, what will happen in other circumstances outside the aircraft industry?
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  The hon. Member for Belfast, East (Mr. MacMaster) hoped the Government would intervene, if need be, despite their stated philosophy, in the shipbuilding industry. A similar hope was expressed by my hon. Friend the Member for Glasgow, Govan (Mr. Rankin). We are entitled to know whether the aircraft industry is exclusive or whether there are circumstances in which other industries could qualify in the way the right hon. Gentleman suggested in his Blackpool speech.
  British Leyland may or may not be in danger of imminent collapse. Indeed, it could, I suppose, limp along for many years without really making the contribution to our economy of which it is capable. British Leyland employs nearly 200,000 men, in 70 factories, in probably one-quarter of the constituencies represented in this House. It has a dependent labour force of half a million and total sales of £1,000 million, a considerable proportion of which are concerned with exports, a point to which my hon. Friend the Member for Battersea, North (Mr. Jay) referred.
  This is by any criteria one of the great sectors of the economy. We are entitled to know whether, in the event of British Leyland needing help from the Government, the right hon. Gentleman would rule it out on principle or whether he would consider it on its merits. If he were to rule it out on principle. Would he be prepared to see British Leyland dismembered, with parts going into American and part into Continental ownership? Would he also be prepared to see substantial unemployment in the motor industry as a result of major closures? This is a fair question and I hope that the Government's attitude will be made more precise.
  The right hon. Gentleman's Blackpool speech provides a better text than anything he said today. In that speech he referred to a point raised today by the hon. Member for Bristol, North-East (Mr. Adley), about aircraft production going through a period of worldwide disarray. It was the hon. Member for the City of Chester (Mr. Temple) who referred to traumatic experiences in the aircraft industry. He must know that this industry is subject, as a chronic disease, to traumatic experiences. It is in the nature of the business.

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  It is, therefore, no good the right hon. Gentleman saying, as he said in Blackpool, that this is a once-and-for-all step as far as the aviation industry is concerned. What he has done on this occasion he may be obliged to do time and again if he is to rescue not only the engine industry but the airframe industry from disaster. In this area there can be no disengagement by the Government and I hope that hon. Gentlemen opposite have got that wholly clear.
  We are discussing not only the future of the RB211/22, on which a decision has been taken by the Government, but also the future of the RB211/61, the whole next generation of new technology engines. The right hon. Gentleman must know now whether he is in principle prepared to consider launching aid for the next generation of aircraft, or whether in principle that is ruled out under the rules which he has laid down. I shall return to this subject shortly. I have referred to the BAC111 and I must make a passing reference to the Concorde, a subject which is in all our minds today.
  It would be—and here, again, I join with the hon. Member for Walthamstow, East—a very dangerous doctrine if we were not to discuss the performance of any aircraft receiving large sums of public money on the grounds that commercial confidence was at stake. When vast sums of public money are involved it is not only the right but the duty of hon. Members to probe, and I hope that the right hon. Gentleman will confirm that. I do not for a moment think that the hardheaded bosses of the world's airlines will make their decisions on the basis of what is said in this House: when the presidents of Pan Am and T.W.A. make cautious statements it is entirely because they are concerned with Concorde's commercial viability.
  No one doubts—I certainly do not—that Concorde is a remarkable technical and engineering achievement reflecting great credit on its designers and engineers. Nor do I doubt that in ten or 15 years' time flying the world supersonic will be commonplace, and that in 20 years it will be routine. What is at stake is whether Concorde is the right plane at the right time in the right place. So it is reasonable that we should express our reservations or hesitations here without
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  being dogmatic in any way about the future the aircraft will have.
  One can only say that even with a very substantial surcharge of 30 to 40 per cent. on fares, it will be the next generation of S.S.T.s that will make the killing. In those circumstances, it is reasonable to ask at what point enough will be enough. When will the Government decide—and I do not press them to decide now, nor do I say what the limit should be—that whatever the situation the escalation of development costs can go no further? When will the kissing have to stop?
  So I come to the BAC311. On this subject we have had a great exchange of views today. I found six hon. and right hon. Members in favour of going ahead with it, and I found four who would put their money on the airbus. This is a reasonable difference of opinion, and it is a cross-bench difference of opinion. It is a very difficult decision for the Government to make. My right hon. Friend the Member for Battersea, North made a very powerful case for the BAC311, and I think that, generally speaking, the House is more convinced at the moment that this aircraft should go ahead than that the Government should back any other.
  As I say, this is a very difficult decision. The Minister of Aviation Supply is on the spot. I do not envy him the decision he has to make, or the announcement of it in the House. But I have a respect for the right hon. Gentleman and his knowledge of this industry, and it is fair to say that that is true of the House as a whole. The Minister knows his stuff, if he will not mind my putting it that way. Although I might quarrel with his decision, I would be prepared to give him the benefit of the doubt.
  But it is not the Minister's probity that is most likely to determine the issue. It is not what is best for Britain that will decide which aircraft we back. The right hon. Gentleman is being squeezed between his right hon. Friend the Secretary of State, with his preconceived notions of what is right and what is wrong for the Government, and his right hon. Friend the Chancellor of the Exchequer who is concerned wholly and exclusively with problems of public expenditure. If I felt that the decision, when it came, was the right hon. Gentleman's decision I would find it difficult to differ from him, though I might ask questions, but I do

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  not believe that it will be his decision: I believe that it will be made by others.
  I hope that the right hon. Gentleman will spell out for us this evening precisely what the decision means in employment terms. We must know the figures, because even if he has not yet made the decision, and is not to announce it to the House, he must know, broadly speaking, the parameters within which the decision lies. So I hope that he will not hide behind false arguments of commercial security but will tell us frankly what is involved in terms of employment if one solution is adopted rather than another.
  Then there is the position of B.E.A. The hon. Member for Bradford, West (Mr. Wilkinson) made a very shrewd point about the decision which would have to be made. What is B.E.A. to do if the 311 does not go ahead? Will it be then free to buy off the shelf the aircraft which suits its needs best?
  I remember, as I am sure that the Minister of Aviation Supply does, a debate we had just over a year ago on the Air Corporations Bill. We were dealing with the question of compensation to B.E.A. for being obliged to take the Trident 3B instead of the 727 which would have been available earlier. The then Opposition did not vote on Second Reading but we had some very constructive exchanges about the difficult problem of buying aircraft for B.E.A.
  The hon. Member for Cirencester and Tewksbury (Mr. Ridley) said this:
  "In future, the right policy for the country will be to trade in the world as a whole, to design aircraft for the world as a whole, and to sell them in the world as a whole and perhaps—who knows?—to subsidise them, and I am not saying that we should not. … If the Government wish to subsidise the aircraft industry, let them aid and supplement its revenues directly and let them tell B.E.A. and B.O.A.C. to buy their aircraft in the world market and to buy aircraft which suit them most."
  The hon. Member for Cirencester and Tewksbury is now the Under-Secretary of State for Trade and Industry. I wonder whether he holds the same view today.
  In that debate the Minister of Aviation Supply, then speaking on behalf of the Opposition, said this:
  "I agree with my hon. Friend … that in future the aircraft manufacturers … will have to aim at world markets. If they are successful, and a particular aircraft does not
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  quite fit B.E.A., we should be able to afford, … either to let it buy the foreigner or certainly to subsidise the cost of the British aircraft …".—[OFFICIAL REPORT, 7th July, 1969; Vol. 786, c. 1111–15.]
  That was the Minister only a year ago. Has he changed his mind; and, if not, which is it to be—a subsidy or freedom for B.E.A.? If a subsidy is ruled out as a result of the doctrinaire rigidity of the Secretary of State, will the right hon. Gentleman at least make it clear that he will extend to B.E.A. the freedom which he is so anxious to extend to everybody else? It is reasonable that we should know, and it is reasonable that B.E.A. should know where it stands.
  I again ask the right hon. Gentleman to undertake to place before the House, if he is not prepared to give us the figures we want in advance, a White Paper once the decision is made; because nobody doubts that this decision will affect the aviation industry right through the 1970s. It will affect not only the airframe industry—what will happen to B.A.C. and Hawker Siddeley—but it may well have a bearing on the future of Rolls-Royce, on whether it will have the funds to develop the RB211 in its next generation—the 61 and others in that series. May we have an undertaking that we shall have a White Paper in due course?
  I am sorry that today we have not spent more time discussing the question of accountability, because this is a far more serious matter than the right hon. Gentleman suggested this afternoon. I.R.C. has gone and I, as a political realist, do not expect that, whatever pressures are brought to bear on the right hon. Gentleman, he will reverse that decision tonight or next week.
  However, let him not believe that the matter of accountability can be dismissed. It is not sufficient to leave the responsibility with a Government Department which is both too close to and too far from those who are spending the money. Although I should like to believe that our own Public Accounts Committee can extend its activities into policing this sort of expenditure, at the end of the day there must be an instrument of some kind.
  I hope that the hon. Gentleman will think, free from his ideological ties, of a formula which will meet a need which, if he cannot see it now, he will find as time goes by. In so far as it is comprehensible—and I have very grave hesitations about this—the industrial policy of

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  the Government is based on political dogma and not on the country's needs. In so far as most of it remains obscure, it creates continuing uncertainty and conditions.
  There are real, hard, serious issues to be faced, not least in the field of aviation, and they ought to be faced coolly, objectively and consistently in the best interests of our long-term future. I hope that when this debate is over, right hon. and hon. Members will face these complex problems with the proper responsibility, which they are not at present showing.
  9.31 p.m.
  The Minister of Aviation Supply (Mr. Frederick Corfield): I think this is the first time that I have had the pleasure of congratulating from the Front Bench two hon. Friends on maiden speeches. My hon. Friends the Members for Chertsey (Mr. Grylls) and for Derbyshire, South-East (Mr. Rost) both referred to their predecessors in terms which I am sure will find an echo in all parts of the House, for both were highly respected. Both my hon. Friends spoke on behalf of parts of the aviation industry in their constituencies, and I was reminded of my own maiden speech, when I think the Britannia was the aircraft of the day, and I also spoke of B.A.C., which is those days stood for the Bristol Aeroplane Company. I am sure we were all delighted to hear my two hon. Friends. They clearly have a great deal to contribute to our deliberations, and we look forward to hearing them again.
  My hon. Friend the Member for Derbyshire, South-East made the point that nobody does any good by knocking a great firm like Rolls-Royce. We all appreciate that. But, as the hon. Member for Stockton-on-Tees (Mr. William Rodgers) has just said, we must all accept that where large sums of money are concerned there is an obligation of scrutiny.
  Both my hon. Friends and, indeed, many other hon. Members, referred to the 311 and the 300B, and the hon. Gentleman has obliged me by giving me the score. I can assure hon. Members that all of the arguments that have been put to me—the questions of employment, of B.E.A.'s preference and so on—are all factors which will be taken into account. I also undertake that when the decision
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  is made I shall be as forthcoming as possible, although I will not guarantee at the moment the actual form which the information will take.
  I confess that I was a bit mystified by the right hon. Member for Bristol, South-East (Mr. Benn). He chided me for saying that life would be easier if these sums were not so large. Indeed, it would be. I do not think that this is a matter which any of us who are not wholly indifferent to public expenditure would dispute. I make no apology for saying that, and I was surprised that the right hon. Gentleman thought otherwise.
  At the outset I wish to apologise to the hon. Member for West Lothian (Mr. Dalyell), because I promised to send him some information. The draft letter is in my in-tray. I am sorry that it is not in my out-tray, but it will be there tomorrow and I hope the hon. Gentleman will receive the letter shortly afterwards.
  As to the hon. Member for Stockton-on-Tees, I should like to refer briefly to some of his questions. I should like to deploy them more fully a little later in my speech, but for fear that time does not allow me to do so, I would not wish him to feel that I had been discourteous in ignoring his questions. In response to his first question, I assure him that the Government continue to accept the policy of launching aid and will look at all such projects on their merits, as they will in relation to other projects outside the advanced technological industries about which he specifically asked. But he will know from his own experience that the criteria are inevitably different and one must, therefore, look to the merits of each particular case.
  Next, as regards Concorde, the hon. Gentleman asked when the kissing would stop. All I can tell him is that I do not think that there is much difference on this subject between his right hon. Friend the Member for Bristol, South-East and myself. I have always maintained, and he has always maintained, that only when it is reasonable to expect options to be turned into firm orders would it make sense to try to judge the commercial viability of this project. Obviously, as the right hon. Gentleman himself said, what will matter is whether the airlines will buy.

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  We have, I understand, heard about egg-bound geese and about a swan with a broken cartilage.
  "We have had some discussion about lame ducks. We have had a lot of fun with them, but a lame duck is no advantage to the Minister who promotes it. I assure the House that I have no desire to allow something to come forward which could be a lame duck."—[OFFICIAL REPORT, 3rd April, 1970; Vol. 762, c. 466.]
  I am sure that the right hon. Gentleman will recognise those words from his own speech on the Industrial Expansion Act in April, 1968.
  I was glad that the right hon. Gentleman opened the debate by recalling some of the history of the Rolls-Royce contracts. Earlier, he had explained—it was not clear from the Motion—that the intention for the debate was to discuss the Rolls-Royce operation, to discuss Rolls-Royce affairs, and to consider the general relationship between the Government and industry. I was glad, therefore, that he recalled some of the history of the contracts, on the one hand, the contract between Rolls-Royce and Lockheed with regard to the supply of the RB211 for the 1011 Tristar, and, on the other hand, the contract between Rolls-Royce and Her Majesty's Government in regard to launching aid and certain other financial support, among other things, the air holdings contract, which I hope to have time to refer to later.
  When I took over responsibility for this Department—I remind the right hon. Gentleman that it has been only four weeks; he was delaying a decision for many more months than I have been there weeks—and I began to learn some of the details of Rolls-Royce's financial predicaments, the feature which struck me most forcibly was the appallingly large estimated losses on production engines, amounting, I think, to between £35 million and £45 million on approximately the first 500 engines.
  I was interested to note that the hon. Member for Coventry, North (Mr. Edelman) underlined that aspect of the situation. It arises from Rolls-Royce having tied itself to a price which events have shown to be much too low in relation to actual costs. While this state of affairs is, of course, a reflection of the technical problems encountered and the cost of their solution, it is a reflection also of the very
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  rigid contract which Rolls-Royce had entered into with Lockheed.
  I fully share—or, perhaps, I should say shared—the enthusiasm and delight of the hon. Member for Coventry, North at the time in the achievement of this contract by Rolls-Royce. But there is no doubt that, with the advantages of hindsight, it is abundantly clear that to have entered into a contract of such rigidity in terms of the penalties, on the one hand, and the price, on the other, was, against the background of the technological problems involved, unwise, to say the least of it. But I deliberately prefaced that comment with the words "with advantages of hindsight", because it is also clear, as the right hon. Gentleman said, that any attempt then or at any other time, to achieve the adoption of a British engine in an American airframe was bound to encounter the fiercest possible competition, particularly from General Electric, which had the great advantage of having developed its own immediate competitor largely, if not entirely, under a military contract for the C5A.
  But the whole basis of launching aid, certainly as applied by this Government, and I think at any rate in intention by the previous Government, has been for the Government to examine projects put forward by firms and satisfy themselves that they represent a commercial proposition. As I listened to the right hon. Gentleman, with his enthusiasm for the amount of money that he has offered to Rolls-Royce at every stage, I could not help wondering whether he had not given it some encouragement to put its commercial considerations at a rather lower level of its priorities than we would have hoped.
  I return for a moment to the contract, and here I am really replying to the hon. Member for Coventry, North again. It was abundantly clear when we considered the matter that the contingencies for breach of contract, bearing in mind that the contract involved not only Lockheed but direct contractual relationships with many of the airlines as well, were such that the way in which the hon. Gentleman wished the problem to be solved would have been devastatingly expensive.
  It is at least open to doubt, even without the advantages of hindsight, whether it was not apparent at the time when the contract was agreed that the fierceness

  153
  of the competition to which I have referred forced Rolls-Royce into accepting a degree of risk higher than would otherwise have been regarded as commercially prudent.
  However that may be, there were apparently no reservations in the mind of the right hon. Gentleman. Certainly he did not give us the impression this afternoon that there were any reservations, then or now. This is what he said when he announced to the House in 1968 the decision to back Rolls-Royce. In the light of the wording of the Motion, it is perhaps not entirely out of place that that statement was made on 1st April. He said:
  "Her Majesty's Government gave Rolls Royce full support in its efforts to obtain the order. In accordance with normal practice, the Government have agreed in principle to grant launching aid for the RB211, subject to agreement on satisfactory contract terms. This aid takes the form of a contribution by the Government to the costs of developing the engine and getting it into production. It will be recoverable over sales of the engine and was therefore reflected in the price Rolls Royce quoted."
  Alas!
  "Details of the launching aid are being negotiated."—[OFFICIAL REPORT, 1st April, 1968; Vol. 762, c. 44.]
  When the right hon. Gentleman mentions accountability, at any rate if he has in mind accountability to the House, it is of some interest that the actual sums involved were not disclosed to the House until some 19 months later. But it is inherent in any very advanced technology such as that with which we are here concerned, that the costs of resolving the hitherto unresolved are by definition extremely difficult to estimate in advance. That is one of the factors, in association with the long-term nature of the investment, plus the sheer magnitude of the sums involved, that has made it impracticable for the aviation industry in any country in the world to keep pace with modern technology without some form of Government support. As my right hon. Friend and others have pointed out, in the United States the aircraft industry relies on massive military support. Whether that in future will be adequate remains to be seen.
  The principle of launching aid has been adopted and applied by successive Governments from both sides of the House in this country. Indeed, the last
  154
  Government extended the policy by increasing significantly the percentage up to 70 per cent. in this contract over and above everything else that had gone before. If one can reasonably overlook the right hon. Gentleman's over-confidence on 1st April, 1968, one finds it difficult to acquit him and his right hon. Friends of hypocrisy in sponsoring the Motion. It notes but carefully refrains from specifically welcoming the Government's action in regard to Rolls-Royce, action required to remedy a miscalculation to which he was a party. They have said in the debate that they approve our decision and I think therefore that we may leave it at that. But I would underline what has been said by many hon. Members—namely, the importance of Rolls-Royce to our defence and to the whole of Europe, if, indeed, Europe is ever to have an aero-engine industry which can begin to compete with the United States.
  Mr. Robert Maclennan: The hon. Gentleman refers to the importance of the defence aspect of Rolls-Royce. Is he prepared to say more about this than was the right hon. Gentleman earlier—as to whether or not this is the crucial criterion which differentiates Rolls-Royce from other industries which may be seeking similar assistance?
  Mr. Corfield: I made it clear that each case would be considered on its merits and clearly this is one of the considerations one takes into account.
  The Motion goes on to accuse us of inconsistency, and of being inconsistent in applying both our own policy of launching aid and that of the last Government. In this case, we have applied the further launching aid of £42 million on almost exactly the same basis as they applied the original launching aid of £47 million. It is a little difficult to think of any action which can be more consistent. It is no good hon. Member opposite defending themselves by saying that this is not the inconsistency with which they are charging us. It is no good their saying that they are only concerned in this regard to draw comparison between the Government's approach to the aviation industry or other industries of advanced technology on the one hand and industries which do not come into that category on the other.

  155
  It is no good the Opposition saying that, first, because the subject of the debate, which is the sole choice of the Opposition, has consistently been advertised and is shown on the Order Paper as concerning "aviation supply", and second, because my right hon. Friend has been equally consistent, in relation to direct Government involvement in industry, in drawing a specific and special distinction between the aviation and other advanced technology industries and industries which may from time to time apply for assistance. Of course the special considerations which affect the aviation industry are well known to the House and have been enumerated on a number of occasions.
  I turn now to the question of accountability. I should like first to look at the record. It was first apparent to the Department, then headed by the right hon. Gentleman, in October last year—certainly in the autumn of last year—that Rolls-Royce might be running into serious financial difficulties. It was then that the right hon. Gentleman invited the I.R.C. to investigate its finances. It is only fair to the I.R.C. to state that at that time the technological difficulties with which Rolls-Royce were faced in the development of this engine were as yet too ill-defined to permit any accurate assessment of the increased cost likely to be incurred.
  Nevertheless, it having become increasingly clear to I.R.C. over the ensuing months that Rolls-Royce had failed to appreciate the inadequacies of its resources in relation to mounting costs, the full magnitude of this shortfall did not, however, become apparent, or reported, until after the appointment to the board, at the suggestion of I.R.C., of Mr. Morrow and Lord Beeching in July.
  I am not casting aspersions on the I.R.C., but since so much had been said about I.R.C. in connection with this debate and since the implication has been that the Government have disposed of some irreplaceable weapon of accountability, it is relevant to remind hon. Members opposite that, as the right hon. Member for Stepney (Mr. Shore) pointed out, the I.R.C. was designed basically to restructure industry. It was not designed as a rescue operation, as something to
  156
  investigate firms which were in financial difficulty.
  What the right hon. Gentleman was doing was to employ I.R.C. in these particular circumstances and ask it to do something which it was not designed or equipped to do. The right hon. Gentleman or one of his colleagues in the then Government made it clear when the Corporation was given statutory form that its function was basically in restructuring industry and in bringing about mergers which might otherwise not take place and would be in the national interest. Indeed, the Chairman of I.R.C. had consistently boasted that, rightly and justifiably, it had managed to keep a very small staff which was not large enough to undertake the sort of investigation that was thrust upon it.
  The principal reason for the appointment of Mr. Morrow to the board to a position in which he could study the financial situation and the reason that it was so long delayed was that, until Rolls-Royce agreed to accept from I.R.C. the £10 million loan, or whatever was the figure, the I.R.C. had no locus whatever to put anybody on to the board of the Company. That, of course, against the background of this unhappy affair, shows clearly that had the Government acted directly, and not within I.R.C., the accountability would certainly have been more prompt and more accurate.
  Mr. Douglas rose—
  Mr. Benn rose—
  Mr. Speaker: The right hon. Gentleman is giving way to the right hon. Member for Bristol, South-East (Mr. Benn).
  Mr. Benn: Is the Minister saying that I or my Department should have placed a Government director on the board of Rolls-Royce rather than have asked I.R.C. to do it?
  Mr. Corfield: I do not think that is the issue. I am saying that, had the Government of the day adopted the procedure that we have adopted and put in a firm of accountants at once, I have very little doubt that the discrepancy in the sums put forward from time to time by Rolls-Royce as to what was in fact the shortfall would have come to light

  157
  much earlier. Furthermore, had they done so, we must face the possibility that the escalation would have been less rapid and less large.
  One or two hon. Members asked what was meant by the £42 million being subject to the appointment of an outside accountant. It was solely because the sums varied so rapidly and so often. I thought it right, because of the magnitude of the sums, to make sure exactly what the shortfall was, because the sums required to meet the cash flow depend upon the degree of shortfall.
  If the full extent of the problem had been revealed earlier, as it could have been, perhaps we could have prevented the escalation which took place. If there are no aspersions to cast upon the I.R.C., I ask the House to consider the standard of accountability adopted by the party opposite. When we were in opposition, as with Oppositions in any circumstances, we had very limited access to the details of transactions of this sort. Hon. Members will agree that there were many grounds for suspicion many months ago that the financial position of Rolls-Royce was not all that it might be. But one hesitates to make any public statement of suspicion rather than fact, which risks damaging both Rolls-Royce in this case, and the nation. I would willingly have given the right hon. Gentleman every credit for any similar reservations which may have influenced him at that time. Unfortunately he made it abundantly clear that he had no reservations of that sort and has none today.
  Mr. Richard Marsh: Now that the right hon. Gentleman has had the opportunity of carrying out some of these investigations, will he say, first, what rate of return he expects on the public money which has been invested, and, second, how much, if any, of this money is guaranteed by the bank?
  Mr. Corfield: I am sure that the right hon. Gentleman will agree on reflection that neither of those questions is strictly relevant to launching aid. If not, no doubt his right hon. Friend the Member for Bristol, South-East will be willing to re-educate him.
  The right hon. Gentleman was sufficiently disturbed to ask the I.R.C. to intervene as early as October of last year, but he was content to stand by until 19th May of this year before any information was given to Parliament, and then only in a short answer by his Minister of State in another place. In it Parliament was told that the I.R.C. had arranged to give a £10 million loan, with the possibility of a further £10 million being required later. If anybody imagines that the situation in Rolls-Royce changed to the extent of requiring the injection of some £60 million, between 20th July and 20th August, it is abundantly clear that any ground for censure will be against the right hon. Gentleman for failing to realise the situation which was developing under his very nose.
  Question put, That the Amendment be made:—
  The House divided: Ayes 297, Noes 263.

  Division No. 33.]

  AYES

  [10.0 p.m.

  Adley, Robert

  Boardman, Tom (Leicester, S. W.)

  Chataway, Rt. Hn. Christopher

  Alison, Michael (Barkston Ash)

  Body, Richard

  Chichester-Clark, R.

  Allason, James (Hemel Hempstead)

  Boscawen, R. T.

  Churchill, W. S.

  Amery, Rt. Hn. Julian

  Bossom, Sir Clive

  Clark, William (Surrey, East)

  Archer, Jeffrey (Louth)

  Bowden, Andrew

  Clarke, Kenneth (Rushcliffe)

  Astor, John

  Boyd-Carpenter, Rt. Hn. John

  Clegg, Walter

  Atkins, Humphrey

  Braine, Bernard

  Cockeram, Eric

  Awdry, Daniel

  Bray, Ronald

  Cooke, Robert

  Baker, Kenneth (St. Marylebone)

  Bnewis, John

  Coombs, Derek

  Baker, W. H. K. (Banff)

  Brinton, Sir Tatton

  Cooper, A. E.

  Balniel, Lord

  Brocklebank-Fowler, Christopher

  Cordle, John

  Barber, Rt. Hn. Anthony

  Brown, Sir Edward (Bath)

  Corfield, Rt. Hn. Frederick

  Batsford, Brian

  Bruce-Gardyne, J.

  Cormack, Patrick

  Beamish, Col. Sir Tufton

  Bryan, Paul

  Costain, A. P.

  Bell, Ronald

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

  Critchley, Julian

  Bennett, Sir Frederic (Torquay)

  Bullus, Sir Eric

  Crouch, David

  Bennett, Dr. Reginald (Gosport)

  Burden, F. A.

  Crowder, F. P.

  Benyon, W.

  Campbell, Rt. Hn. G. (Moray & Nairn)

  Curran, Charles

  Berry, Hon. Anthony

  Carlisle, Mark

  Dalkeith, Earl of

  Biffen, John

  Carr, Rt. Hn. Robert

  Dance, James

  Biggs-Davison, John

  Channon, Paul

  Davies, Rt. Hn. John (Knutsford)

  Blaker, Peter

  Chapman, Sydney

  d'Avigdor-Goldsmid, Sir Henry

  d'Avigdor-Goldsmid, Maj.-Gen. Jack

  Jones, Arthur (Northants, South)

  Reed, Laurence (Bolton, East)

  Dean, Paul

  Jopling, Michael

  Pees, Hn. Peter (Dover)

  Deedes, Rt. Hn. W. F.

  Kaberry, Sir Donald

  Rees-Davies, W. R.

  Digby, Simon Wingfield

  Kellett, Mrs. Elaine

  Renton, Rt. Hn. Sir David

  Dixon, Piers

  Kerby, Capt. Henry

  Rhys Williams, Sir Brandon

  Dodds-Parker, Douglas

  Kershaw, Anthony

  Ridley, Hn. Nicholas

  Douglas-Home, Rt. Hn. Sir Alee

  Kilfedder, James

  Ridsdale, Julian

  Drayson, G. B.

  King, Evelyn (Dorset, South)

  Rippon, Rt. Hn. Geoffrey

  du Cann, Rt. Hn. Edward

  King, Tom (Bridgwater)

  Roberts, Michael (Cardiff, North)

  Eden, Sir John

  Kinsey, J. R.

  Roberts, Wyn (Conway)

  Edwards, Nicholas (Pembroke)

  Kitson, Timothy

  Rodgers, Sir John (Sevenoaks)

  Elliot, Capt. Walter (Carshalton)

  Knight, Mrs. Jill

  Rossi, Hugh (Hornsey)

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

  Knox, David

  Rost, Peter

  Emery, Peter

  Lambton, Antony

  Royle, Anthony

  Farr, John

  Lane, David

  Russell, Sir Ronald

  Fell, Anthony

  Langford-Holt, Sir John

  St. John-Stevas, Norman

  Fenner, Mrs. Peggy

  Legge-Bourke, Sir Harry

  Sandys, Rt. Hn. D.

  Fidler, Michael

  Le Marchant, Spencer

  Scott, Nicholas

  Finsberg, Geoffrey (Hampstead)

  Lewis, Kenneth (Rutland)

  Scott-Hopkins, James

  Fisher, Nigel (Surbiton)

  Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)

  Sharples, Richard

  Fletcher-Cooke, Charles

  Longden, Gilbert

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

  Fookes, Miss Janet

  Loveridge, John

  Shelton, William (Clapham)

  Fortescue, Tim

  McAdden, Sir Stephen

  Simeons, Charles

  Fowler, Norman

  MacArthur, Ian

  Sinclair, Sir George

  Fox, Marcus

  McGrindle, R. A.

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

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

  Maclean, Sir Fitzroy

  Soref, Harold

  Fry, Peter

  McMaster, Stanley

  Speed, Keith

  Galbraith, Hn. T. G.

  Macmillan, Maurice (Farnham)

  Spence, John

  Gardner, Edward

  McNair-Wilson, Michael

  Sproat, Iain

  Gilmour, Ian (Norfolk, C.)

  McNair-Wilson, Patrick (New Forest)

  Stainton, Keith

  Gilmour, Sir John (Fife, E.)

  Maddan, Martin

  Stanbrook, Ivor

  Madel, David

  Stewart-Smith, D. G. (Belper)

  Glyn, Dr. Alan

  Marples, Rt. Hn. Ernest

  Stodart, Anthony (Edinburgh, W.)

  Coodhart, Philip

  Marten, Neil

  Stoddart-Scott, Col. Sir M.

  Goodhew, Victor

  Mather, Carol

  Stokes, John

  Gorst, John

  Maude, Angus

  Stuttaford, Dr. Tom

  Gower, Raymond

  Maudling, Rt. Hn. Reginald

  Sutcliffe, John

  Gray, Hamish

  Mawby, Ray

  Tapsell, Peter

  Green, Alan

  Maxwell-Hyslop, R. J.

  Taylor, Sir Charles (Eastbourne)

  Grieve, Percy

  Meyer, Sir Anthony

  Taylor, Frank (Moss Side)

  Griffiths, Eldon (Bury St. Edmunds)

  Mills, Peter (Torrington)

  Taylor, Robert (Croydon, N. W.)

  Grylls, Michael

  Mills, Stratton (Belfast, N.)

  Tebbit, Norman

  Cummer, Selwyn

  Miscampbell, Norman

  Temple, John M.

  Gurden, Harold

  Mitchell, Lt.-Col. C. (Aberdeenshire, W)

  Thatcher, Rt. Hn. Mrs. Margaret

  Hall, Mist Joan (Keighley)

  Mitchell, David (Basingstoke)

  Thomas, John Stradling (Monmouth)

  Hall, John (Wycombe)

  Moate, Roger

  Thomas, Rt. Hn. Peter (Hendon, S.)

  Hall-Davis, A. G. F.

  Molyneaux, James

  Thompson, Sir Richard (Croydon, S.)

  Hannam, John (Exeter)

  Money, Ernie

  Tilney, John

  Harrison, Col. Sir Harwood (Eye)

  Monks, Mrs. Connie

  Trafford, Dr. Anthony

  Harvey, Sir Arthur Vere

  Monro, Hector

  Trew, Peter

  Haselhurst, Alan

  Montgomery, Fergus

  Tugendhat, Christopher

  Hastings, Stephen

  Morgan, Geraint (Denbigh)

  Turton, Rt. Hn. R. H.

  Havers, Michael

  Morgan-Giles, Rear-Adm.

  van Straubenzee, W. R.

  Hawkins, Paul

  Morrison, Charles (Devizes)

  Vaughan, Dr. Gerard

  Hay, John

  Mudd, David

  Waddington, David

  Hayhoe, Barney

  Murton, Oscar

  Walder, David (Clitheroe)

  Heath, Rt. Hn. Edward

  Nabarro, Sir Gerald

  Walker, Rt. Hn. Peter (Worcester)

  Heseltine, Michael

  Neave, Airey

  Walker-Smith, Rt. Hn. Sir Derek

  Hicks, Robert

  Nicholls, Sir Harmar

  Wall, Patrick

  Higgins, Terence L.

  Noble, Rt. Hn. Michael

  Walters, Dennis

  Hiley, Joseph

  Nott, John

  Ward, Dame Irene

  Hill, James (Southampton, Test)

  Onslow, Cranley

  Warren, Kenneth

  Holland, Philip

  Oppenheim, Mrs. Sally

  Weatherill, Bernard

  Holt, Miss Mary

  Orr, Capt. L. P. S.

  Wells, John (Maidstone)

  Hordern, Peter

  Osborn, John

  White, Roger (Gravesend)

  Hornby, Richard

  Owen, Idris (Stockport, North)

  Whitelaw, Rt. Hn. William

  Hornsby-Smith. Rt. Hn. Dame Patricia

  Page, Graham (Crosby)

  Wiggin, Jerry

  Howe, Hn. Sir Geoffrey (Reigate)

  Peel, John

  Wilkinson, John

  Howell, David (Guildford)

  Percival, Ian

  Wolrige-Gordon, Patrick

  Howell, Ralph (Norfolk, North)

  Peyton, Rt. Hn. John

  Woodhouse, Hn. Christopher

  Hunt, John

  Pike, Miss Mervyn

  Woodnutt, Mark

  Hutchison, Michael Clark

  Pink, R. Bonner

  Worsley, Marcus

  Iremonger, T, L.

  Pounder, Raft on

  Wylie, Rt. Hn. N. R.

  Irvine, Bryant Godman (Rye)

  Price, David (Eastleigh)

  Younger, Hn. George

  James, David

  Prior, Rt. Hn. J. M. L.

  Jenkin, Patrick (Woodford)

  Pym, Rt. Hn. Francis

  TELLERS FOR THE AYES:

  Jennings, J. C. (Burton)

  Quennell, Miss J. M.

  Mr. Reginald Eyre and

  Jessel, Toby

  Rawlinson, Rt. Hn. Sir Peter

  Mr. Jasper More.

  Johnson Smith, G. (E. Grinstead)

  Redmond, Robert

  160

  161

  NOES

  Abse, Leo

  Fraser, John (Norwood)

  Mendelson, John

  Albu, Austen

  Freeson, Reginald

  Mikardo, Ian

  Allaun, Frank (Salford, E.)

  Galpern, Sir Myer

  Miller, Dr. M. S.

  Archer, Peter (Rowley Regis)

  Garrett, W. E.

  Milne, Edward (Blyth)

  Armstrong, Ernest

  Gilbert, Dr. John

  Molloy, William

  Ashley, Jack

  Ginsburg, David

  Morgan, Elystan (Cardiganshire)

  Ashton, Joe

  Gordon Walker, Rt. Hn. P. C.

  Morris, Alfred (Wythenshawe)

  Atkinson, Norman

  Grant, George (Morpeth)

  Morris, Charles R. (Openshaw)

  Bagier, Gordon A. T.

  Grant, John D. (Islington, East)

  Morris, Rt. Hn. John (Aberavon)

  Barnes, Michael

  Griffiths, Eddie (Brightslde)

  Moyle, Roland

  Barnett, Joel

  Griffiths, Will (Exchange)

  Mulley, Rt. Hn. Frederick

  Baxter, william

  Grimond, Rt. Hn. J.

  Murray, Ronald King

  Beaney, Alan

  Gunter, Rt. Hn. R. J.

  Ogden, Eric

  Benn, Rt. Hn. Anthony Wedgwood

  Hamilton, James (Bothwell)

  O'Halloran, Michael

  Bennett, James (Glasgow, Bridgeton)

  Hamilton, William (Fife, W.)

  O'Malley, Brian

  Bidwell, Sydney

  Hannan, William (G'gow, Maryhill)

  Oram, Bert

  Bishop, E. S.

  Hardy, Peter

  Orbach, Maurice

  Blenkinsop, Arthur

  Harper, Joseph

  Orme, Stanley

  Boardman, H. (Leigh)

  Harrison, Walter (Wakefield)

  Oswald, Thomas

  Booth, Albert

  Hart, Rt. Hn. Judith

  Owen, Dr. David (Plymouth, Sutton)

  Bottomley, Rt. Hn. Arthur

  Hattersley, Roy

  Padley, Walter

  Boyden, James (Bishop Auckland)

  Healey, Rt. Hn. Denis

  Paget, R. T.

  Broughton, Sir Alfred

  Heffer, Eric S.

  Palmer, Arthur

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

  Hilton, W. S.

  Panned, Rt. Hn. Charles

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

  Horam, John

  Pardoe, John

  Brown, Ronald (Shoreditch & F'bury)

  Houghton, Rt. Hn. Douglas

  Parker, John (Dagenham)

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

  Howell, Denis (Small Heath)

  Parry, Robert (Liverpool, Exchange)

  Butler, Mrs. Joyce (Wood Green)

  Huckfield, Leslie

  Pavitt, Laurie

  Callaghan, Rt. Hn. James

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Peart, Rt. Hn. Fred

  Campbell, I. (Dunbartonshire, West)

  Hughes, Dr. Mark (Durham)

  Pendry, Tom

  Cant, R. B.

  Hughes, Robert (Aberdeen, North)

  Pentland, Norman

  Carmichael, Neil

  Hughes, Roy (Newport)

  Perry, Ernest G.

  Carter, Ray (Birmingham, Northfield)

  Hunter, Adam

  Prentice, Rt. Hn. Reg.

  Carter-Jones, Lewis (Eccles)

  Irvine, Rt. Hn. Sir Arthur (Edge Hill)

  Prescott, John

  Castle, Rt. Hn. Barbara

  Janner, Greville

  Price, J. T. (Westhoughton)

  Cocks, Michael (Bristol, S.)

  Jay, Rt. Hn. Douglas

  Price, William (Rugby)

  Cohen, Stanley

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

  Probert, Arthur

  Coleman, Donald

  Jenkins, Hugh (Putney)

  Rankin, John

  Concannon, J. D.

  Jenkins, Rt. Hn. Roy (Stechford)

  Reed, D. (Sedgefield)

  Conlan, Bernard

  John, Brynmor

  Rees, Merlyn (Leeds, S.)

  Corbet, Mrs. Freda

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

  Rhodes, Geoffrey

  Cox, Thomas (Wandsworth, Central)

  Johnson, Walter (Derby, South)

  Richard, Ivor

  Crawshaw, Richard

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

  Roberts, Albert (Normanton)

  Cronin, John

  Jones, Gwynoro (Carmarthen)

  Roberts. Rt. Hn. Goronwy (Caernarvon)

  Crosland, Rt. Hn. Anthony

  Jones, Barry (Flint, East)

  Robertson, John (Paisley)

  Cunningham, G. (Islington, S. W.)

  Jones, T. Alec (Rhondda, West)

  Roderick, Caerwyn E. (Br'c'n&R'dnor)

  Cunningham, Dr. J. A. (Whitehaven)

  Judd, Frank

  Rodgers, William (Stockton-on-Tees)

  Dalyell, Tam

  Kaufman, Gerald

  Roper, John

  Darling, Rt. Hn. George

  Kelley, Richard

  Rose, Paul B.

  Davidson, Arthur

  Kerr, Russell

  Ross, Rt. Hn. William (Kilmarnock)

  Davies, Denzil (Llanelly)

  Kinnock, Neil

  Sheldon, Robert (Ashton-under-Lyne)

  Davies, G. Elfed (Rhondda, E.)

  Lambie, David

  Shore, Rt. Hn. Peter (Stepney)

  Davies, Ifor (Gower)

  Latham, Arthur

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

  Davies, S. O. (Merthyr Tydvil)

  Lawson, George

  Silkin, Rt. Hn. John (Deptford)

  Davit, Clinton (Hackney, Central)

  Lee, Rt. Hn. Frederick

  Silkin, Hn. S. C. (Dulwich)

  Deakins, Eric

  Lestor, Miss Joan

  Sillars, James

  de Fraltas, Rt. Hn. Sir Geoffrey

  Lipton, Marcus

  Silverman, Julius

  Delargy, H. J.

  Lomas, Kenneth

  Skinner, Dennis

  Dell, Rt. Hn. Edmund

  Loughlin, Charles

  Small, William

  Dempsey, James

  Lyon, Alexander W. (York)

  Smith, John (Lanarkshire, North)

  Doig, Peter

  Lyons, Edward (Bradford, East)

  Spearing, Nigel

  Douglas, Dick (Stirlingshire, E.)

  Mabon, Dr. J. Dickson

  Spriggs, Leslie

  Douglas-Mann, Bruce

  McBride, Neil

  Stallard, A. W.

  Duffy, A. E. P.

  McCann, John

  Steel, David

  Dunn, James A.

  McCartney, Hugh

  Stewart, Donald (Western Isles)

  Dunnett, Jack

  MacColl, James

  Stewart, Rt. Hn. Michael (Fulham)

  Eadle, Alex

  McElhone, Frank

  Stoddart, David (Swindon)

  Edelman, Maurice

  McGuire, Michael

  Stonehouse, Rt. Hn. John

  Edwards, Robert (Bilston)

  Mackie, John

  Strang, Gavin

  Edwards, William (Merioneth)

  Mackintosh, John P.

  Strauss, Rt. Hn. G. R.

  Ellis, Tom

  Maclennan, Robert

  Summerskill, Hn. Dr. Shirley

  English, Michael

  McMillan, Tom (Glasgow, C.)

  Swain, Thomas

  Evans, Fred

  McNamara, J. Kevin

  Taverne, Dick

  Faulds, Andrew

  MacPnerson, Malcolm

  Thomas, Rt. Hn. George (Cardiff, W.)

  Fernyhough, E.

  Mallalieu, E. L. (Brigg)

  Thomas, Jeffrey (Abertillery)

  Fisher, Mrs. Doris (B'ham, Lady wood)

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

  Thomson, Rt. Hn. G. (Dundee, E.)

  Fitch, Alan (Wigan)

  Marquand, David

  Thorpe, Rt. Hn. Jeremy

  Fletcher, Ray mend (likes ton)

  Marsh, Rt. Hn. Richard

  Tomney, Frank

  Foley, Maurice

  Mason, Rt. Hn. Roy

  Torney, Tom

  Foot, Michael

  Mayhew, Christopher

  Tuck, Raphael

  Ford, Ben

  Meacher, Michael

  Urwin, T, W.

  Forrester, John

  Mellish, Rt. Hn. Robert

  Varley, Eric G.

  162

  163

  Wainwright, Edwin

  White, James (Gasgow, Pollok)

  Wilson, Alexander (Hamilton)

  Walden, Brian (B'm'ham, All Saints)

  Whitehead, Phillip

  Wilson, Williams (Coventry, S,)

  Walker, Harold (Doncaster)

  Whitlock, William

  Woof, Robert

  Wallace, George

  Willey, Rt. Hn. Frederick

  Watkins, David

  Williams, Alan (Swansea, W.)

  TELLERS FOR THE NOES:

  Weitzman, David

  Williams, Mrs. Shirley (Hitchin)

  Mr. Kenneth Marks and

  Wells, William (Walsall, N.)

  Williams, W. T. (Warrington)

  Mr. John Golding.

  Main Question, as amended, put and agreed to.
  Resolved,
  That this House approves Her Majesty's Government's decision to continue the established policy of providing launching aid for appropriate projects in the aircraft industry
  164
  including in particular the Rolls-Royce 211–22 engine at the existing rate of 70 per cent., subject to independent accounting procedures, up to a total of £89 million, and welcomes the fact that the financial problems encountered by Rolls-Royce are being handled through the resources of the company itself and other nongovernmental intitutions.

  BUSINESS OF THE HOUSE
  Ordered,
  That the Proceedings on the Motions relating to Standing Order No. 13 (Motions for leave to bring in bills and nomination of select committees at commencement of public business) may be entered upon and proceeded with at this day's Sitting at any hour during a period of one and a half hours after Ten o'clock, though opposed.—[The Prime Minister.]

  STANDING ORDER No. 13
  10.14 p.m.
  The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw): I beg to move,
  That Standing Order No. 13 (Motions for leave to bring in Bills and nomination of select committees at commencement of public business) be amended as follows:—
  Leave out lines 13 to 18 and add—
  (2) With respect to a Private Member's motion for leave to bring in a Bill under this Order—

  (a) notice shall be given in the Public Bill Office, by the Member in person or by another Member on his behalf, but on any one day not more than one notice shall be accepted from any one Member;

  (b) no notice shall be given for a day on which a notice of motion under this order already stands on the paper;

  (c)no notice shall be given for a day earlier than the fifth or later than the fifteenth sitting day after the day on which it is given;

  (d)not more than one such notice shall stand on the paper in the name of any one Member for a day within any period of fifteen sitting days.

  Mr. Speaker: It has been suggested to me that if the House approves we should take at the same time the next Motion:
  That Standing Order No. 13 (Motions for leave to bring in Bills and nomination of select committees at commencement of public business) be amended as follows:—
  Line 5, leave out 'for consideration'.
  Line 6, after 'business', insert Any such motion shall stand over and may not be moved until after a member of the Government shall have signified to the Chair his intention to move, That this House do now adjourn, for the purpose of bringing the sitting to a conclusion; whereupon Mr. Speaker shall immediately call upon the Member who has given notice of the Motion to move that Motion, and any proceedings thereon, though opposed, may be decided after the expiration of the time for opposed business, and the motion for the
  166
  adjournment of the House shall not be moved until after the conclusion of those proceedings'.
  I imagine that the first one is not very contentious. There may be a debate on the second one.
  Mr. Fred Peart: On a point of order, Mr. Speaker. To help the House—
  Mr. T. L. Iremonger: On a point of order.
  Mr. Speaker: Order The right hon. Member for Workington (Mr. Peart) is addressing me on a point of order.
  Mr. Peart: Mr. Speaker, we on this side of the House accept your view about taking the two Motions together. There is no controversy about the first one. It is the second one about which there is some controversy.
  Mr. Iremonger: On a point of order, Mr. Speaker. If the two Motions are debated together, will there be an opportunity to divide on them separately?
  Mr. Speaker: There can be a Division on each Motion if necessary.
  Mr. Whitelaw: These Motions concerning Ten Minute Rule Bills are put down in my name. If I move them together, I understand that it will be for the convenience of the House if they are voted on separately.
  Mr. Speaker: The right hon. Gentleman should move the first Motion but talk about them both, and then the House can divide if necessary.
  Mr. Whitelaw: Very well, Sir. The right hon. Member for Workington (Mr. Peart) says that the first Motion is non-controversial and that there will be no Division upon it but that the second Motion may be controversial. I do not have his knowledge. As there is a free vote I cannot say whether there will be a Division on the first Motion. If there is a free vote I cannot tell whether the first Motion will be controversial. It is very important that both should be offered fairly for the House.
  Both Motions are proposed by the First Report of the Select Committee on Procedure in Session 1969–70. The first Motion concerns the notice to be given of Ten Minute Rule Bills. This proposal seeks to deal with the aspect of the problem highlighted by the activities

  167
  of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) last year. I feel that my hon. Friend and any other hon. Members are absolutely entitled to take whatever advantage they can of our procedures as they stand. At the same time, I doubt whether a repetition of last year's events would be fair to all hon. Members or, indeed, would be conducive to the dignified conduct of our affairs.
  Having considered this situation, the Select Committee on Procedure recommends the procedure outlined in the first Motion on the Order Paper. Whatever view hon. Members may take about the time at which Ten Minute Rule Bills are moved, some limitation of notice, as proposed, seems desirable; indeed, if the House does not approve of this method, I feel that some change will be necessary and ought to be urgently considered.
  The second Motion concerns the time at which Ten Minute Rule Bills should be moved. I know that this proposal is controversial and in accordance with my undertaking last Thursday I will not enter into the merits or the history of this case. I will merely read out paragraph 4 of the Report of the Select Committee on Procedure. It says:
  "Your Committee appreciate that the opportunity to make a brief explanatory statement in favour of a bill at half-past three o'clock is much valued by some Members and has probably led in the past to subsequent changes being made in the law. Against this advantage must be set the fact that this motion is moved at the 'peak' period of the day's business, when the House is frequently about to enter upon a major debate, and the resultant delay in embarking upon the main business of the day reduces the time available for speeches from back benchers. For these reasons, Your Committee repeat the recommendation of the Select Committee on Procedure of 1964–65 that ten minute rule motions 'should be moved at the end of business, immediately before the half-hour adjournment debate'."
  Personally, and influencing only my own vote if Tellers are put on, I must tell the House that I agree with the Select Committee's view and I shall vote for it.
  10.20 p.m.
  Mr. Fred Peart: I was only trying to be helpful earlier in saying that the first Motion had the appearance of being uncontroversial. If there is controversy,
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  no doubt hon. Members will take a different line. I think that our experience in the last Session concerning the hon. Member for Tiverton (Mr. Maxwell-Hyslop) shows that something had to be done. I agree with the Leader of the House that an hon. Member is entitled to take advantage of procedure. When that incident occurred in the last Session I did not dissent from that view. I always compliment an hon. Member who takes advantage, but sometimes by taking advantage an hon. Member can bring procedures into disrepute. There are conventions in the House. Whilst we could condemn the hon. Gentleman, in the end probably what he did has enabled us to take another line of action. I welcome the Motion, and hope that it will be carried.
  I know that there will be controversy about the second Motion, which concerns the time at which a Ten Minute Rule Bill should be moved. It will be argued that the hon. Gentleman's Motion is the sort of Motion that any Leader of the House would put forward. It helps the Government. There will be those who argue that having the Ten Minute Rule Bill early in the day enables a backbencher to publicise his cause, to engage in controversy if necessary, and to focus public opinion on a worthy object. That is stated very clearly in paragraph 4 of the First Report from the Select Committee on Procedure. No doubt hon. Members have carefully read the Report and all the evidence which was before the Committee.
  It is right that we should have a free debate tonight. The Leader of the House has indicated his position, and I must indicate mine. My hon. Friends must not necessarily take my advice on the matter. [HON. MEMBERS: "Hear, hear."] I am committed. In the First Report of the Select Committee reference is made to my evidence and that of the Government Chief Whip in paragraph 3, which says:
  "… the Leader of the House and the Government Chief Whip, and the Opposition Chief Whip"—
  now Leader of the House—
  "suggested that Motions under the ten-minute rule should be taken at the end of business of the day, immediately before the half-hour adjournment debate".

  169
  It is important to note that the Opposition, too, made that suggestion. I submitted a memorandum which was discussed by the Select Committee on 17th December. There I said:
  "… the experiment of taking these Motions immediately before the daily half-hour adjournment should be renewed."
  I shall not go into the history of the matter. The issue is clear. If hon. Members feel that it is right to have the Ten Minute Rule Bills introduced early in the day, I can understand their point of view, but I took a contrary view, and therefore I am committed. I cannot, in all honour, alter my position. This is not a party issue or even an issue of government, because the Leader of the House when in Opposition took exactly the same view as he takes tonight.
  Sir Harmar Nicholls: Has not the right hon. Gentleman a duty to the House to justify by argument the memorandum he submitted and the general point of view he has just expressed, and not pass the matter off like that? As recent Leader of the House, he is entitled to give us a reasoned explanation.
  Mr. Peart: I should have thought that the hon. Gentleman, being an assiduous Member, would have read my evidence in that memorandum. The document is available. The Leader of the House, rightly, made a short, concise speech indicating his view and I am merely following precedent. This is a matter for the House and it should not be left to Front Bench speakers to decide an issue of this kind.
  Mr. Speaker: I remind the House that this debate will conclude at 11.30 p.m. Brief speeches on the Ten Minute Rule will help.
  10.25 p.m.
  Mr. John Boyd-Carpenter: I agree with the right hon. Member for Workington (Mr. Peart) that the first Motion seems to be not only wholly uncontroversial but wholly admirable. I will, therefore, address my remarks to the Second Motion and, unlike the two right hon. Members who preceded me, I hope that hon. Members will take the advice which I offer them.
  The point under discussion is a clear cut and relatively simple one to understand,
  170
  though it may be more difficult to make up one's mind about it. It is simply this: is it right to ask that the right of a backbencher to raise, if he is fortunate in obtaining permission to introduce a Bill, a topic of his own and make a speech on it at 3.30 in the afternoon should be taken away and have substituted for it a debate later at night?
  I accept entirely the argument of the Select Committee that sometimes a major debate is held up because a backbencher, having been fortunate in obtaining the right to do so, introduces a relatively trivial matter. This is true. On the other hand, I wonder whether the Select Committee fully appreciated—there is nothing in the evidence before it to suggest this—that it would be taking away one of the relatively few opportunities of a backbencher to make a speech at a time when it is reasonably likely to be reported.
  Both right hon. Members who have spoken referred to the advice of the Select Committee and I am the last person to suggest that the advice of any Select Committee should be taken anything other than seriously. However, there are a few facts about these proceedings which are worth mentioning.
  First, the Select Committee took evidence from both the right hon. Members who have spoken in this debate, the right hon. Gentleman who is now the Opposition Chief Whip and from two Clerks. They did not take the evidence of any backbencher. I make this point particularly, because a careless reading of the Report might suggest that I gave evidence. I have confirmed with the Clerk of the Committee this morning that the reference to myself in the Committee's Report relates to my giving evidence on a totally different matter, and that was about the arrangements for Parliamentary Questions.
  Faced with the Report of the Select Committee—and I agree that majorities must prevail—if one looks at paragraph 4 of the Report, which is the decisive one, one sees that it rests on an amendment of the Chairman's draft report and was carried by a majority of three to two in a Committee of ten. Therefore, with respect to the members of the Select Committee, this must be a somewhat marginal Report.
  I do not know that we really need to worry too much about that because this

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  is a matter which all of us can consider on its merits. It is true that if this Order is accepted there will be no actual loss of time to backbenchers and that there will be a change of the hour at which that right is exercised. While all parliamentary time is valuable, some is more valuable than other and, quite obviously, the peak hour of the afternoon—3.30—is a great deal more valuable than, not merely, perhaps, 10 o'clock at night but, if there is a Prayer or a suspension of the Rule, a great deal later, which is the alternative.
  Mr. R. J. Maxwell-Hyslop: My right hon. Friend mentioned how the Clerk of Public Bills. Mr. Mackenzie, pulled a fast one over him. Is he aware that the Clerk of Public Bills also pulled a fast one over me, in that he complained to the Committee—[HON. MEMBERS: "Oh."]—yes—of my conduct, without having the elementary courtesy to inform me—[Interruption.]—that he had done so—[Interruption.]—so that I could not reply to the complaint which he had made against me.
  Mr. Boyd-Carpenter: I did not say, and I am in the recollection of the House, that the very distinguished Officer—[HON. MEMBERS: "Hear, hear."]—who performs the duties of Clerk of Public Bills pulled anything on me, although he is so able a man that, if he wanted to, I am sure he could. But I did not say that he did and, in fact, he did not do so. All I made was that one reference, and that reference, again, is not by name but only by office to the fact that he did what one would expect any Officer of the House to do when called upon by a Select Committee to give evidence, which was to give it the benefit of his evidence.
  There is no complaint or criticism of him; there is no complaint or criticism of the Select Committee. I am simply pointing out that the Select Committee relied on its own back-bench knowledge, and did not decide to call any backbench Members. I merely mention it, not to go to the sincerity and integrity of any of the proceedings but simply as to the weight we give to the recommendation of the Select Committee when we now consider it.
  I have made the point, and it is the only point I want to make, as to the different value of 3.30 and 10 o'clock.
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  I am unhappy about the idea, standing by itself, of simply to transfer the more valuable time to Government business—[Interruption]—or to Opposition business, as I am rightly reminded by my right hon. Friend; but business chosen by the or to Opposition business, as I am rightly reminded; but business chosen by the Opposition Front Bench and not by back benchers opposite, any more than Government business necessarily is by back benchers on this side. But I accept the correction.
  I am doubtful about this proposition as it stands. The question is how the Government would use the time. Would they use it simply for Government—or Opposition—business? I hope that I am not out of order in saying that the same Select Committee on Procedure also recommended that more time earlier in the day should be given to Parliamentary Questions. If one had to weigh the use of the time round about 3.30 as between Ten Minute Rule Bills and additional time for Parliamentary Questions, I must say that I would feel tempted to prefer Parliamentary Questions, because whereas the 15 minutes or so, allowing for a speech in reply or a Division on a Ten Minute Rule Bill, only gives an opportunity for one or, at the best, two Members, that extra quarter of an hour given to Parliamentary Questions would give perhaps a dozen Members a chance to put questions to the Government.
  If, therefore, there were some concept that the time gained in this respect should be put at the disposal of back-bench Members in another way—which, in my own personal opinion, rightly or wrongly, is perhaps an even more useful way—by carrying out the recommendation of the Select Committee on Procedure that more time should be given for Parliamentary Questions, I should take a different view.
  But my point—and I am advised always by my hon. and wise Friend sitting below me—is that it is not a proposition at the moment—
  Sir Gerald Nabarro: To which of his hon. Friends seated below him does my right hon. Friend refer?
  Mr. Boyd-Carpenter: I said "my honourable and wise Friend".
  Sir G. Nabarro: I interjected so that my right hon. Friend should not fall into

  173
  the error of identifying me with his own perverted views as a Privy Councillor in this context.
  Mr. Boyd-Carpenter: My hon. Friend interrupted me for once prematurely, because if I had wanted to refer to him I should have said "my hon. and very wise Friend".
  I was trying to conclude when my hon. Friend—without adjective—tried to assist me. If we are faced with simply the choice of a transfer of better time into worse time for back benchers, I am against the proposition. The back bencher has comparatively little time at effective times reserved to him. I do not think that this moment—early in a Parliament, with a Leader of the House who really understands the House, who cares for the House and who feels for the House—is the right moment to diminish even marginally the privileges of back benchers unless something is put in its place.
  Mr. Whitelaw: I think that it would be fair to the House if I made one point clear, because I should not like the debate to proceed on a wrong basis. I have undertaken that the whole matter of the time of Questions and how much time should be allowed for Questions will be very carefully considered in the light of the Select Committee's Report. I cannot give an answer on that today. Therefore, it would be quite wrong for me to try to ride off this debate with any promise of that sort. I will look carefully into the whole question of the timing of Questions. This debate must proceed on its own.
  10.37 p.m.
  Mr. William Hamilton: The debate is essentially one between the Government and backbenchers, whether they be Opposition backbenchers or Government backbenchers. Both Front Benches are equally guilty in this matter of seeking to deprive back benchers of one of the few rights they have left them.
  I strongly agree with the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). The fact that a Select Committee made a recommendation is neither here nor there. This is a matter for the House itself to decide.
  The Leader of the House was commendably brief but rather less than forth-right.
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  He is on record as having said in the 1964–65 Session that he was very strongly in favour of changing the time for these debates. One can understand that attitude from Governments. Back benchers are a nuisance to Governments. Some backbenchers are a bigger nuisance than others. Governments see their back benchers as Lobby fodder; they want them to go passively into the Lobby at 10 o'clock at night and keep their mouths shut for the rest of the time.
  This is a classic example. The evidence which was given to the Select Committee was that the Ten Minute Rule procedure was being abused. The procedures of the House are abused every day of the week by one Member or another. Some Members are expert at it. That is no reason for depriving ordinary backbenchers of what I call a fundamental and important right.
  The argument was put to the Select Committee that rarely does a Ten Minute Rule Bill get on to the Statute Book. That is true. They are largely propaganda exercises. I can imagine arms going up in horror at the thought that anyone should dare to engage in propaganda in this Chamber—what a disgraceful thing to engage in. Of course it is a propaganda exercise. I intend to engage in it as soon as I can. I guess there are other hon. Members on both sides who intend to do just that. I am not interested in getting a Bill on to the Statute Book. I am interested in getting a lot of grievances off my chest. The Chamber is nothing if it is not a place to voice one's grievances. The Ten Minute Rule procedure is one of the ways of doing it.
  The present Leader of the House, the former Leader of the House, the right hon. and learned Member the Member for Wirral (Mr. Selwyn Lloyd)—an ex-Leader of the House, and a very good Leader of the House who wanted to get his Government's business through—and Lord Aylestone, now head of the I.T.V. crowd—all these Establishment figures wanted to push the backbencher back to 10 o'clock. Lord Aylestone went so far as to say that it sometimes took as long as 40 minutes for a Ten Minute Rule Bill. Suppose it did. Forty minutes on a Tuesday and a Wednesday amount to one hour and 20 minutes out of a 30-hour week, sitting from half-past 2 till 10 p.m. from Monday to Thursday. The then

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  Leader of the House thought that this was a terrible thing and that we ought to be put in our places at 10 o'clock at night.
  I have always been in favour of morning sittings. The Ten Minute Rule Bills could well be taken in the mornings without disadvantage, and the same applies to the Adjournment debates; it would be an advantage to the hon. Member who has got the Adjournment as well as to the Minister who has to reply to the debate. I imagine that there is no greater chore than being a junior Minister and having to answer an Adjournment debate, sitting wondering when he will have to reply. If we had morning sittings for Ten Minute Rule Bills and for Adjournment debates, it would meet the Government's case of private Members taking up time at half-past three, and would also safeguard the rights of the backbench Member in that he would be heard by the Press at an early part of the day when he would get maximum coverage.
  I hope that backbench Members on both sides of the House will unite against the Government. It is a very unhealthy trend that we are witnessing, thrusting back benchers further into impotence. I hope hon. Members in all quarters of the House will feel free to reject this proposition of the right hon. Gentleman's.
  10.42 p.m.
  Mr. R. H. Turton: I want to clear up one point. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) made an allegation against the Clerk who gave evidence. The Clerk made no attack. He was extremely discreet in the way in which he handled the whole way in which my hon. Friend the Member for Tiverton had got round the rules of the House. There was no criticism made of him by the Clerk or by anybody on the Committee. In fact, older Members of the House will recollect that this matter was referred to us by the House after my hon. Friend had been so eminently successful in getting up early in the morning.
  Mr. Maxwell-Hyslop: How my right hon. Friend imagines that something can be referred to as an abuse without implying criticism I do not understand.
  Mr. Turton: Because it was referred to us as an abuse, we had to look into it. The word was used, but not by the Clerk.
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  I ask my hon. Friend to do what is customary in this House and withdraw his allegation against a servant of the House.
  Mr. Maxwell-Hyslop: If my right hon. Friend will look at the printed report of the memorandum by the Clerk, he will see that the word "abuse" was there used and he will see that the Clerk was taken to task for it later on by my hon. Friend the Member for Tynemouth (Dame Irene Ward).
  Mr. Turton: I have already explained that this matter was referred to us as an abuse and that is why the Clerk used the word. But it is customary not to make allegations against servants of the House, and I hope that when my hon. Friend addresses the House, as no doubt he will, he will withdraw that allegation. It was quite improper.
  I think the hon. Member for Fife, West (Mr. William Hamilton) has put the matter a little crudely. If we take Ten Minute Rule Bills at the peak hour of the day, true we are giving one hon. Member a good advertisement, but let us remember that we are depriving one other backbench Member of taking part in a debate. In our view, there was a balance of advantage, and we thought that another consideration came into it. The House is not merely for the enjoyment of backbenchers and Front Benchers. It is the sounding board of the nation.
  It is important that those who listen to our debates may understand what is happening. I take, for example, what has happened only recently. On Budget day, everyone comes expecting to hear the Budget speech. On that day, after Prime Minister's Questions, an hon. Member on the back benches moves for leave to bring in a Private Member's Bill and makes his speech. How can the Gallery understand what he is doing? [HON. MEMBERS: "Oh."] This is the peak moment of the day, yet we have some hon. Member pursuing his own problem which he wants advertised at that time.
  In my view, that is the way the question should be looked at now. Many of the old customs of the House are archaic in the present day. We ought to try to proceed here as other Chambers do, bringing ourselves up to date. That is the point of the recommendation.

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  This is not the first time that the Select Committee on Procedure has made this recommendation. It was made before. It was tried as an experiment. It was tried in the Session 1965–66, and, when the time was 10 o'clock, out of the 15 occasions it could have been used it was used on 14 occasions. That is a higher proportion than its use has been on other occasions in other Parliaments. We said—rightly, I think—that that experiment was too short to be of value, and we considered that it ought to be prolonged. It was stopped because the hon. Member for Fife, West had his way and we took Private Members' Bills in the morning. Then we found that it was not used much; on 25 out of the 60 or so occasions, no one wanted to use that opportunity in the morning which the hon. Gentleman favours.
  I feel that we ought to allow the experiment, which we made in 1965–66, to go on for this Session to see how it works. I believe that the balance of advantage to the back bencher lies in his having opportunity to take part in important debates in the House. In major debates on the Floor, the proportion as between Front Benches and back benches is wrong. There is far too much monopoly of the time of the House by the Front Bench. This would bring the balance up a bit, making possible one more speech by a backbencher, or, if a Division be taken into account as well, perhaps two or three more.
  10.47 p.m.
  Mr. Raphael Tuck: Why do we have to go to extremes? If a private Member introduces a Bill at 3.30 in the afternoon, he takes up valuable time which could otherwise be used by backbenchers. Time is lost, but he can have his Bill reported in the papers and he receives publicity. If, on the other hand, we shuffle him off till just before Adjournment, he cannot get his Bill mentioned in the papers. Most hon. Members will have left the House anyway, so they will not hear him—as many do at 3.30 in the afternoon—leaving the Chamber noisily so that he cannot be readily heard.
  Why cannot the Leader of the House and the Select Committee take the middle course and make 10 o'clock in the evening the time when a private Member may present his Bill? I cannot
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  vote one way or the other on this Motion, but I should vote for 10 o'clock. I ask the Leader of the House seriously to consider 10 o'clock as the time.
  10.50 p.m.
  Mr. T. L. Iremonger: We do not want to take more time than absolutely necessary on this matter, because hon. Members want to vote, and they may drift off. I merely want to make it clear that I am against the second Motion. The virtue which was adduced in its favour by the right hon. Member for Workington (Mr. Peart), the former Leader of the House, that the two Front Benches were in agreement about it, seems to me the strongest argument we could possibly have against it. The last time we had the bipartisan Front Bench conspiracy was in the matter of the House of Lords.
  Mr. Peart: The recommendation was for a backbench report, not the Government Front Benches.
  Mr. Iremonger: I ask the right hon. Gentleman not to trifle with me. He does not fool his hon. Friends. I hope that on this occasion the backbenchers will teach the Front Benches a lesson, as we did on that previous occasion, without having to stay up all night for many nights.
  The rights of the private Member are steadily being eroded by the Government lobby on both sides. This is an issue upon which we should make our will clear. I hope that hon. Members on both sides, including, if I may say so without seeming presumptuous, hon. Members who may not have had quite a long experience as others, will take note that we should not lightly surrender a very valuable right and privilege of backbenchers. That right is to use a part of the time of the House, which is our time just as much as that of anyone on the Front Bench, in the middle of the day to put forward what may not be strictly legislative exercises but declamatory exercises.
  I hope that we may move swiftly to a Division and get the private Members into the Lobby.
  Mr. Whitelaw: My hon. Friend has suggested that there is a conspiracy between the Front Benches. He has suggested, as have other hon. Members, that there is an effort by the Government to

  179
  push the proposal through. If I had wished to push it through, would I have said that I wished the House to decide, without making any effort to have a Whip on, and giving the whole House a free vote? I do not think that my hon. Friend is being quite fair.
  Mr. Iremonger: I do not want to prolong the debate. My right hon. Friend will know that the last thing I want to do is to be unfair to him. To be perfectly fair to both of us, he certainly has not asked my right hon. Friend the Chief Whip to give guidance to me and my hon. Friends. But my right hon. Friend the Leader of the House has said, with all the authority of his personal and official position, that he favours the proposal, and his predecessor has said that he favours it. That alliance strikes me as very sinister. That is all that I was saying.
  10.53 p.m.
  Sir Geoffrey de Freitas: I seldom find myself in such agreement as I do tonight with the hon. Member for Ilford, North (Mr. Iremonger)—not complete agreement, but general agreement.
  Twice in the past few years it has been my pleasure to oppose the right hon Member for Streatham (Mr. Sandys) in a debate on a Ten Minutes Rule Bill on capital punishment. I am not arguing the merits, but I point out that on both occasions there was a full Chamber. On both occasions we had a vote by a very large number of hon. Members. On both occasions, it so happened that the right hon. Gentleman's Motion was defeated. But the point is that there was a large vote. Why? Why was there a large attendance? It was because it was at the peak time of the House.
  For that reason I am completely in agreement with those who seek to retain the right of backbenchers to debate such matters after Questions in those 20 minutes.
  10.54 p.m.
  Sir Harmar Nicholls: In theory the case has been made out for retaining the Ten Minute Rule Bill at half-past three. But in practice I do not think that it has.
  If it is that we go by our experience over recent years, then the hon. Member
  180
  for Fife, West (Mr. William Hamilton) let the cat out of the bag. For the most part the Ten Minute Rule Bill in the middle of the day has been used merely as a propaganda exercise on matters which would have been discussed in the general debate. Advantage has been taken of that because it is the publicity hour of the day.
  I have always argued, with all due humility—[Laughter.]—the House should let me be humble on at least one occasion—the rights of backbenchers and the necessity of their being able to raise matters which normally do not come into debates organised by the usual channels. I believe that, if it is that we move the Ten Minute Rule, which is a definite part of the procedures of the House for getting legislation on the Statute Book, and if it is that we put it at an hour which has less publicity, then it is more likely that the procedure will be used upon matters which are mainly of back benchers' concern.
  I believe that experience in recent years—and again I produce the hon. Member for Fife, West—[Interruption.] I am always delighted to bandy words with the hon. Member for Feltham (Mr. Russell Kerr) on other occasions but now I am arguing for a privilege which he will enjoy—has shown that publicity in our national life has become so acute and so deep-seated that it really has perverted the proper usage of the House. I believe that the 3.30 hour as it is at present worked is not worked upon the merits of getting worth-while legislation on to the Statute Book but is often argued on the merits of certain hon. Members hitting the headlines. If it is that we are to use this place properly, I believe that we have to try to retreat to some extent from the headline hunting and get down to sound legislating. I believe that by accepting the advice of my right hon. Friend we should be doing just that.
  The right hon. Member for Kettering (Sir G. de Freitas) quoted the exception which proves the rule—capital punishment. On emotive questions of that sort, where people have deep-rooted feelings, at whatever hour of the day the matter arose he would have a full house. I do not believe that his evidence in support of the 3.30 hour carries weight because such an issue as capital punishment always fills the House. One remembers

  181
  the late Sydney Silverman and his battle for abolition of capital punishment over the years. At whatever hour he raised the matter, the House was full. It was always interested and keen.
  I beg the House on this occasion to forgo the chance of hitting the headlines and really get down to use what backbenchers' time is given to us on doing serious matters which all add to the worthy legislation of the country.
  10.58 p.m.
  Mr. Eric S. Heffer: I oppose the Motion because it seems to me that one of the few remaining rights of backbenchers in the House is again under attack. Since I have been in the House, in the last six years, I have seen stage by stage the rights of backbenchers gradually being eroded. We have had to fight on a number of occasions to keep this particular right and it seems to me that we are going to have to wage that fight periodically, perhaps every two or three years.
  The hon. Member for Peterborough (Sir Harmar Nicholls) made a telling point when he said, on the question of capital punishment, that we may well have had the same vote at 10 o'clock or at one o'clock in the morning as we had at 3.30 in the afternoon. That may be so, but the point is that by that evening and by the next morning the whole country knows about the decision taken by the House. It is all very well to say that these debates on important issues can take place at one o'clock in the morning, but the facts are that much of what is said at that time is never reported or properly understood in the country. This factor, apart from anything else, is of the utmost importance for backbenchers.
  I can well understand right hon. and hon. Gentlemen on the Government Front Bench—and I suppose I now have a slight foot in the door—finding backbenchers a bit of a nuisance. I suppose the Parliament (No. 2) Bill was possibly the biggest nuisance any Government could possibly have had to face. But on that occasion we united to make certain that Parliament expressed its opinion without necessarily accepting the opinions of either Front Bench.
  We must look closely at the whole question of how we are governed, and
  182
  even a small matter like that which is now before the House raises fundamental questions of the rights and opportunities—and also the responsibilities—of backbench Members. For example, I have always been a great believer in having fixed periods for elections. If this system were instituted, the Government would have to come along and convince us that what they were putting into operation was something we ought to vote for.
  At present there is always the great threat hanging over our heads—and hon. Gentlemen opposite who have just come to the House will soon learn this—that from time to time the Prime Minister can say, "I will dissolve Parliament and go to the country." And the more timid Members will think, "Well, I do not want that to happen. I want to hang on to my seat for a bit longer."
  Mr. Stanley Orme: What has all this got to do with Ten Minute Bills?
  Mr. Heffer: It has got this to do with Ten Minute Bills, that if we had fixed parliamentary periods we would have to be convinced. When a matter is brought before the House hon. Members must make up their own minds without being cajoled and whipped into taking decisions. We have had, for example, the question of hare coursing—and we may well have fox hunting and other issues—brought before the House. I hope that when these issues come before us hon. Members will have sufficient courage, on one side or the other, to express their opinions by their votes. It is important that the country should know precisely where Members of Parliament stand on such issues.
  Why should we have the debates on these matters at 3.30 rather than late at night? The answer is simple. Because at 3.30 the House and the Public and Press Galleries are full and the nation knows what a Member is bringing before the House. Let us also appreciate that a matter may not come before the House at ten. It might be at one o'clock in the morning, or three o'clock, or seven o'clock, or even ten o'clock next morning—in fact that might be better than one o'clock in the morning.
  It is right that hon. Members should have the right from time to time to

  183
  explain fully to the whole country precisely what they are interested in bringing into law. They are raising important questions which ultimately they hope will become the law of the land. That is a right we must cling to.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Miss Harvie Anderson): Order. Before calling the next speaker, may I again remind the House that this debate has a time limit? Without the help of the House, many hon. Members will be disappointed. Mr. Kenneth Baker.
  11.5 p.m.
  Mr. Kenneth Baker: I rise to make only a brief intervention as a backbench hon. Member who has introduced two Ten Minute Bills.
  The procedure is of great advantage to an hon. Member who wants to make a propaganda point if he can speak early in the afternoon. As the hon. Member for Liverpool, Walton (Mr. Heffer) said, an hon. Member speaking at half-past three or four o'clock in the afternoon has a large audience, and the Gallery above Mr. Speaker's Chair is well attended. The result is that the Ten Minute Measure is likely to be reported widely in the morning papers the following day and even in the later editions of the London evening papers.
  I, too, recall the debate which the right hon. Member for Kettering (Sir G. de Freitas) mentioned, but he was not alone, since we had a number of interesting debates. In the last Parliament, under the Ten Minutes Rule procedure, we debated capital punishment. Then there was a debate on the freedom of the Press, initiated by the hon. Member for Ebbw Vale (Mr. Michael Foot). We debated ritual Jewish slaughter, and the reform of our abortion law. In each case, hon. Members were able to express a measured opinion on their feelings. That would not have been possible at one, two or three o'clock in the morning.
  The arguments adduced by those who support this Measure have been a little thin. My right hon. Friend the Member for Thirsk and Malton (Mr. Turton) said that there might be a Ten Minute Bill on Budget day. In fact, that never happens—[Interruption.] It may have
  184
  happened once, but it was an exception. This year on Budget day, a Ten Minute Bill was moved to another day.
  In any event, what do we lose if a major debate is delayed for 10 minutes? When half-past three comes, all Governments like to go into a jog-trot, but that is not always to the advantage of backbench hon. Members.
  This is a right which hon. Members on the back benches treasure. It enables them to gain publicity for the causes which interest them. I shall oppose any measure to push this right into obscurity, and that might well happen if such Measures were debated after ten o'clock.
  11.8 p.m.
  Mr. Alexander W. Lyon: There are two arguments against this Motion, both of which have been advanced already. The first is that the existing procedure comes at a time in the day when the House is more likely to be full than late at night. The second is that an hon. Member is more likely to be given decent Press coverage for the point that he wishes to raise in his Ten Minute Rule Bill.
  I hope that the House will not depreciate the importance of the Ten Minute Rule procedure. It is not only a valuable means of spreading propaganda, and in some senses the word "propaganda" is depreciatory; it is frequently concerned with a cause which is too little considered in the House, and the Ten Minute Bill is the beginning of consideration.
  No one pretends that it provides for the clear and exhaustive consideration of an issue. All that one hopes to do is raise it and interest other hon. Members and the Press and, in that way, gradually build up the lobby.
  One can only judge from experience. I have taken part in the procedure on three occasions. The first time was on a Bill about privacy. At the time, I think, the issue had not been raised before. In view of the public comment that there has been since, no one can now say that it was a matter which should not have been raised in the House. It helped that it could be raised at a time when it received decent Press publicity and attracted the attention of hon. Members.
  The second issue in which I took a part was to do with absolute liability, when there was a question of the owners

  185
  of premises being found guilty of allowing people on those premises who were consuming drugs. That was the Sweet case. What I tried to do was to show the House that this was a problem not confined to drugs but extending over a wider area. To my surprise, within a few weeks, on the proceedings on the Criminal Justice Bill I found the right hon. and learned Member for Huntingdonshire (Sir D. Renton) raising it as a Front Bench spokesman and trying to argue against a Government proposal in the Bill which would have extended the area of absolute liability. I was happy to say that on that occasion he was successful in defeating the Government and the result was that we did not extend the area of absolute liability.
  The third occasion was when I spoke against a Bill introduced by the hon. Member for Berwick-upon-Tweed (Mr. Lambton), I think, who raised the question of a Bill of Rights. No matter what view is taken about this, it is an issue which needs raising and it caused a good deal of discussion in the Press as a result of that debate, which I agree, took a little more than ten minutes on that occasion. But no one would say that that was an issue which ought to have been swept to the end of the day because there were more important things like Scottish fisheries and other major Government business to be considered.
  What we are saying is, "Yes we can abuse the procedure, as we can abuse any procedure of this House." But when one looks at the history of the Ten Minute Rule Bill and the kind of issues that have been raised one can only say that, if all the procedures of the House had been used as well, a great deal more good would have been done by this House.
  11.12 p.m.
  Mr. Gilbert Longden: I find myself in the unusual and rather embarrassing position of being entirely in support of both Front Benches. My amour propre is restored only because I am still in opposition to the hon. Member for Fife, West (Mr. William Hamilton) whose chestful of grievances must be as large as Pandora's Box. I am wholly in agreement with everything the Father of the House, my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), had to say. I also agree with my hon. Friend
  186
  the Member for Peterborough (Sir Harmar Nicholls), albeit in the somewhat ineffectual disguise of Uriah Heap.
  The reason I support this proposal of the Select Committee is that I believe that the rights of backbenchers are thereby enhanced. I would remind the hon. Member for Liverpool, Walton (Mr. Heffer) that nothing in the proposals will stop backbenchers getting together, as they did on the Parliament (No. 2) Bill and nothing in the proposals will prevent any hon. Member from carrying a Ten Minute Rule Bill through to the Statute Book.
  All that it will prevent will be the publicity received by the hon. Member in the evening newspapers. If there is sufficient substance in the issue he will get all the publicity he needs the next day, and thereafter. The most frustrating part of a backbencher's life is to come to the House with a carefully prepared speech for a big debate and not be able to deliver it. If the Ten Minutes Rule Bill is at half-past three, as it is now, it may take half an hour to debate and that is enough for three or four speeches. I respectfully recommend my hon. Friend's to vote in favour of the Select Committee's proposals.
  Mr. Tam Dalyell: Apart from the more recondite and weighty considerations, is there not an argument for an interval between Question Time and statements and the beginning of the main debate?
  11.15 p.m.
  Sir Gerald Nabarro: I am on the side of the angels in this matter. I strongly support my right hon. Friend the Leader of the House, for two reasons which I believe to be good. First, the majority of participants in this short debate seem to take the view of the hon. Member for Fife, West (Mr. William Hamilton) that "it is very rare for a Ten Minute Rule Motion to result in subsequent legislation". It is not very rare. There are countless examples of Ten Minute Rule Bills, with all-party support, reaching the Statute Book very rapidly.
  I have used this procedure on nine different occasions. I failed to get my Motion through, and the legislation on to the Statute Book on seven occasions. I have taken through to the Statute Book

  187
  the legislation on two occasions. That is not a bad record in this context, and there are many other hon. Members who have taken Ten Minute Rule Bills through.
  The essence of a Ten Minute Rule Motion is preparatory propaganda and publicity before the Motion, all-party support for the Motion, and at the various stages of the Bill full publicity by every medium available to the hon. Member. I say that with the utmost sincerity. No private Member's Bill can succeed unless it is accompanied by publicity through all the media that are available—television, radio, the Press and the remainder.
  My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) spoke about the "diminished opportunities of backbenchers". That is rather less than my right hon. Friend's characteristic and customary logic in these matters. There are no diminished opportunities at all. The opportunities are exactly the same. It is only a question of transferring the timing from half-past three in the afternoon to ten or eleven o'clock or to the early hours of the morning.
  I remind my right hon. Friend that if the cause is sound, if the Government are interested in the cause, as they often are, and as I hope they will be in my cause in opposition to smoking, and if there is general support among the two major parties, it is not a question of diminished opportunities at all. It is merely a matter of timing, and I believe that the time at the end of the major business of the day would be every bit as good to the Member moving the Motion as it is at half-past three in the afternoon.
  My third and last point, and I want to make it briefly in view of the time limit, is this: on 21st January last I endeavoured to initiate legislation under the Ten Minute Rule on cigarettes and health hazards associated with them. The debate immediately following was a very important two-day debate, led by the then Chancellor of the Exchequer, the Deputy Leader of the Opposition today, on the acceptance of the White Paper on public expenditure.
  It so happened that there was not a Division on my Motion but, had there been one, there would have been a ten-minute
  188
  speech from me, a ten-minute speech from an opposer, and about ten minutes to carry through the Division. If my hon. Friends from all parties and I had won on the Division, the total, including bringing the Bill down the Floor of the House and going through the customary procedures, would have occupied no less than 32 minutes. Those 32 minutes, in the context of that debate, and I believe that it was not an unusual debate, were equivalent to three speeches from backbenchers.
  Mr. Kenneth Baker: Two.
  Sir G. Nabarro: My hon. Friend who is shouting "two" might bear in mind that the average might be two, but in the context of that debate it was three, and as only about one-third of all the backbenchers who had sent their names in to you, Mr. Speaker, and asked to participate in the debate were called, I believe that the deprivation of those backbenchers in delivering three speeches was extremely important.
  It is for those reasons that I support my right hon. Friend in both his Motions.
  Mr. Speaker: Order. We must get on to the second Motion just before half past Eleven o'clock.
  11.20 p.m.
  Mr. Stanley Orme: The issue before the House is not those Measures that back benchers are agreed upon; it is the irritants that are important in politics. In the last Session many of us were exeremely irritated by some of the Measures introduced, but on reflection we appreciated that they were important to the House. We debate the issue of capital punishment. Many of us who had supported its abolition were not pleased to see the matter back on the Floor of the House, but if Members felt it important that it should be brought back it was right that it should come back, so as to allow the House to express its opinion on it. There were many Measures, some social and some political, that neither Front Bench wanted to see debated at the time, but it is the prerogative of Members, if they win the Ballot, to bring such subjects back.
  It is not merely a matter of trivia. Some of these matters are of the utmost importance. Capital punishment, the question of trade union reform, abortion

  189
  —all are important issues. I remember a debate on an issue that many hon. Members felt very uncomfortable about—the Ten Minute Rule Bill debate on euthenasia. Two points of view were put. The mover of the Motion did not feel that he wanted to take the matter to a Division at the time. Nevertheless, these matters were discussed in the House.
  Many of us might have felt at the time, "We have to make a decision." It makes us feel uncomfortable, but politics is about real issues. It is not a question whether we decide, or the Government decide, or the Opposition decide, whether it is right to discuss these matters. Often they come at the most unfortunate times, but we must make up our minds on them.
  When these matters are discussed, more than ten minutes is taken up only if there is opposition to the Bill. The matter is fully debated before a packed House and only then, if Members feel that it is a matter of the utmost importance, do they force it to a Division. In the last Session about eight or nine Divisions occurred on Ten Minute Rule Bills, on matters of the utmost importance to the nation. We expressed an opinion and had to stand up and be counted, whatever our views, on either side of the House. It is there on the record.
  I do not believe that back benchers are getting pushed aside. I believe—as witnessed by the attendance tonight—that backbenchers are prepared to fight for their rights, and I hope that tonight backbenchers will fight for their rights, one of which is maintaining the privilege that we have at half-past three in the afternoon on Tuesdays, Wednesdays and Thursdays.
  11.24 p.m.
  Dame Irene Ward: I want to make only one point. The debate seems to have taken place on the assumption that the Select Committee on Procedure was totally in favour of moving the debate on Ten Minute Rule Bills from half-past three to ten o'clock. I want to make it clear that—as is often the case with me—I was in the minority on the Select Committee. I did not wish to see the alteration made.
  It is true that when the actual vote was taken in the Select Committee I could not be present, but if anybody had read my evidence in the Report they
  190
  would not be surprised that every speech and intervention that I made was against the Select Committee's recommendation. I want to put that fact very clearly on the record today.
  I remember very well the Father of the House, after the final vote had been taken—which was a vote of very few Members—telling me that he knew very well that if I had been in the Committee he would not have got support for the alteration. Those who take my view will probably enjoy seeing me, a member of the Select Committee, in the Division Lobby with them.
  11.25 p.m.
  Mr. Whitelaw: I intervene only to make one point clear. I suspended the Rule for one and a half hours because I thought that that would give the House reasonable time within which to discuss this matter. In accordance with the procedure, I understand, in view of the way the debate has gone on the second Motion, that the first Motion should be got out of the way before 11.30 p.m. or there will be a danger of the matter being talked out, which would vitiate the whole of the debate. It is up to the House to decide the course to take.
  Hon. Members: Vote.
  Question put and agreed to.
  Ordered,
  That Standing Order No. 13 (Motions for leave to bring in Bills and nomination of select committees at commencement of public business) be amended as follows:—
  Leave out lines 13 to 18 and add—
  (2) With respect to a Private Member's motion for leave to bring in a Bill under this Order—

  (a) notice shall he given in the Public Bill Office, by the Member in person or by another Member on his behalf, but on any one day not more than one notice shall be accepted from any one Member;

  (b) no notice shall be given for a day on which a notice of motion under this order already stands on the paper;

  (c) no notice shall he given for a day earlier than the fifth or later than the fifteenth sitting day after the day on which it is given;

  (d) not more than one such notice shall stand on the paper in the name of any one Member for a day within any period of fifteen sitting days.

  Motion made, and Question put,
  That Standing Order No. 13 (Motions for leave to bring in Bills and nomination of select

  191
  committees at commencement of public business) be amended as follows:—
  Line 5, leave out 'for consideration'.
  Line 6, after 'business', insert 'Any such motion shall stand over and may not be moved until after a member of the Government shall have signified to the Chair his intention to move, That this House do now adjourn, for the purpose of bringing the sitting to a conclusion; whereupon Mr. Speaker shall immediately
  call upon the Member who has given notice of the Motion to move that Motion, and any proceedings thereon, though opposed, may be decided after the expiration of the time for opposed business, and the motion for the adjournment of the House shall not be moved until after the conclusion of those proceedings':—[Mr. Whitelaw.]
  The House divided: Ayes 52, Noes 167.

  Division No. 34.]

  AYES

  [11.28 p.m.

  Barnett, Joel

  Hunt, John

  Osborn, John

  Biffen, John

  Irvine, Bryant Godman (Rye)

  Owen, Idris (Stockport, North)

  Bray, Ronald

  James, David

  Page, Graham (Crosby)

  Brocklebank-Fowler, Christopher

  Kinsey, J. R.

  Pannell, Rt. Hn. Charles

  Cant, R. B.

  Knox, David

  Peart, Rt. Hn. Fred

  Chataway, Rt. Hn. Christopher

  Legge-Bourke, Sir Harry

  Rossi, Hugh (Hornsey)

  Chichester-Clark, R.

  Le Merchant, Spencer

  Sharples, Richard

  Churchill, W. S.

  Longden, Gilbert

  Stoddart-Scott, Col. Sir M.

  Dalkeith, Earl of

  Macmillan, Maurice (Farnham)

  Stuttaford, Dr. Tom

  d'Avigdor-Goldsmid, Sir Henry

  Mallalieu, E. L. (Brigg)

  Turton, Rt. Hn. R. H.

  Dell, Rt. Hn. Edmund

  Mawby, Ray

  Waddington, David

  Emery, Peter

  Mellish, Rt. Hn. Robert

  Weatherill, Bernard

  Galbraith, Hn. T. G.

  Moate, Roger

  Whitelaw, Rt. Hn. William

  Glyn, Dr. Alan

  Monro, Hector

  Worsley, Marcus

  Goodhart, Philip

  Morgan, Geraint (Denbigh)

  Gummer, Selwyn

  Mudd, David

  TELLERS FOR THE AYES:

  Harrison, Col. Sir Harwood (Eye)

  Nicholls, Sir Harmar

  Sir Gerald Nabarro and

  Havers, Michael

  Ogden, Eric

  Mr. David Crouch.

  Hicks, Robert

  Oram, Bert

  NOES

  Allason, James (Hemel Hempstead)

  Edwards, Nicholas (Pembroke)

  Lipton, Marcus

  Allaun, Frank (Salford, E.)

  Edwards, William (Merioneth)

  Lomas, Kenneth

  Ashton, Joe

  Ellis, Tom

  Loughlin, Charles

  Atkins, Humphrey

  English, Michael

  Loveridge, John

  Atkinson, Norman

  Evans, Fred

  Lyon, Alexander W. (York)

  Bagier, Gordon A. T.

  Farr, John

  Lyons, Edward (Bradford, E.)

  Berry, Hon. Anthony

  Faulds, Andrew

  McCartney, Hugh

  Bidwell, Sydney

  Fidler, Michael

  McElhone, Frank

  Blaker, Peter

  Fisher, Mrs. Doris (B'ham, Ladywood)

  McGuire, Michael

  Boardman, Tom (Leicester, S. W.)

  Fletcher, Raymond (Ilkeston)

  Mackie, John

  Bowden, Andrew

  Fletcher, Ted (Darlington)

  Maclean, Sir Fitzroy

  Boyd-Carpenter, Rt. Hn. John

  Fookes, Miss Janet

  Maclennan, Robert

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

  Forrester, John

  McMillan, Tom (Glasgow, C.)

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

  Gilbert, Dr. John

  McNamara, J. Kevin

  Callaghan, Rt. Hn. James

  Gilmour, Sir John (Fife, E.)

  Maddan, Martin

  Campbell, I. (Dunbartonshire, W.)

  Golding, John

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

  Carlisle, Mark

  Gorst, John

  Marks, Kenneth

  Carmichael, Neil

  Grant, John D. (Islington, East)

  Marquand, David

  Carter, Ray (Birmingh'm, Northfield)

  Gunter, Rt. Hn. R. J.

  Marten, Neil

  Clark William (Surrey, E.)

  Hall, Miss Joan (Keighley)

  Maxwell-Hyslop, R. J.

  Clegg, Walter

  Hall-Davis, A. G. F.

  Meacher, Michael

  Cocks, Michael (Bristol, S.)

  Hannan, William (G'gow, Maryhill)

  Mendelson, John

  Cohen, Stanley

  Hardy, Peter

  Montgomery, Fergus

  Concannon, J. D.

  Hart, Rt. Hn. Judith

  More, Jasper

  Conlan, Bernard

  Heffer, Eric S.

  Morgan, Elystan (Cardiganshire)

  Cooke, Robert

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Morris, Charles R. (Openshaw)

  Cordle, John

  Houghton, Rt. Hn. Douglas

  Mulley, Rt. Hn. Frederick

  Cormack, Patrick

  Howell, Denis (Small Heath)

  Murray, Ronald King

  Cox, Thomas (Wandsworth, C.)

  Howell, Ralph (Norfolk, N.)

  Nott, John

  Crawshaw, Richard

  Hughes, Dr. Mark (Durham)

  Orme, Stanley

  Crowder, F. P.

  Iremonger, T. L.

  Palmer, Arthur

  Cunningham, G. (Islington, S. W.)

  John, Brynmor

  Pardoe, John

  Dalyell, Tam

  Johnson Walter (Derby, S.)

  Pavitt, Laurie

  Davies, G. Elfed (Rhondda, E.)

  Jones, Gwynoro (Carmarthen)

  Pendry, Tom

  Davies, Ifor (Gower)

  Jones, Barry (Flint, E.)

  Perry, Ernest G.

  Davis, Clinton (Hackney, C.)

  Jones, T. Alec (Rhondda, W.)

  Prentice, Rt. Hn. Reg.

  Deakins, Eric

  Judd, Frank

  Prescott, John

  Deedes, Rt. Hn. W. F.

  Kaufman, Gerald

  Price, William (Rugby)

  de Freitas, Rt. Hn. Sir Geoffrey

  Kerr, Russell

  Probert, Arthur

  Doig, Peter

  Kinnock, Neil

  Rees, Merlyn (Leeds, S.)

  Douglas, Dick (Stirlingshire, E.)

  Lambie, David

  Rees, Hn. Peter (Dover)

  Douglas-Mann, Bruce

  Lane, David

  Rhodes, Geoffrey

  Dunn, James A.

  Latham, Arthur

  Rhys Williams, Sir Brandon

  Dunnett, Jack

  Lawson, George

  Richard, Ivor

  Eadie, Alex

  Roberts, Michael (Cardiff, North)

  Steel, David

  Wells, John (Maidstone)

  Roberts, Wyn (Conway)

  Stoddart, David (Swindon)

  Wells, William (Walsall, N.)

  Roderick, Caerwyn E. (Br'c'n & R'dnor)

  Strang, Gavin

  White, James (Glasgow, Pollok)

  Sheldon, Robert (Ashton-under-Lyne)

  Sutcliffe, John

  White, Roger (Gravesend)

  Shone, Rt. Hn. Peter (Stepney)

  Thorpe, Rt. Hn. Jeremy

  Whitehead, Phillip

  Sillars, James

  Trafford, Dr. Anthony

  Wiggin, Jerry

  Skinner, Dennis

  Trew, Peter

  Wilson, Alexander (Hamilton)

  Smith, John (Lanarkshire, N.)

  Urwin, T. W.

  Wilson, William (Coventry, S.)

  Spearing, Nigel

  Varley, Eric G.

  Speed, Keith

  Vaughan, Dr. Gerard

  TELLERS FOR THE NOES:

  Spriggs, Leslie

  Walker, Harold (Doncaster)

  Mr. William Hamilton and

  Stainton, Keith

  Ward, Dame Irene

  Mr. Kenneth Baker.

  Stanbrook, Ivor

  Watkins, David

  HOUSE OF COMMONS (SERVICES)
  Ordered,
  That the First Report of the Select Committee on House of Commons (Services) be now considered.—[Mr. Whitelaw.]
  Report considered accordingly.
  Resolved,
  That this House agrees with the Committee in the said Report.—[Mr. Whitelaw.]

  PRISON WORKSHOPS (MANUFACTURED GOODS)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Rossi.]
  11.36 p.m.
  Mr. John Cordle: I am very glad to have this opportunity to raise a matter which has been causing increasing concern among various textile and clothing manufacturers. I should say at this stage that I have some interest in this particular trade and in the manufacturing of protective clothing. I refer in the main to the increasing supply by Her Majesty's prisons of protective clothing—such things as suits, textiles, surgeons' gowns, theatre dresses and materials—to regional hospital boards and hospital management committees throughout the country.
  I should like to make it clear from the start that I am not against prisoners doing more constructive work. I believe that a paid element of sensible employment of prisoners is an essential part of trying to make the prisoner into a more useful and responsible citizen. But, clearly, whatever is manufactured in Her Majesty's prisons is bound in one way or another to compete with outside industry and outside workpeople. I am now indulging in special pleading on behalf of the clothing industry. What I am concerned about, however, is that
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  the competition between prisons and private contractors should not only be fair but be seen to be fair. I must confess that I have grave doubts that this is the present situation.
  On 5th November, in reply to a Parliamentary Question, the Under-Secretary told us the basis of costing employed by the prisons to enable them to quote for hospital garments and textiles. He said:
  "The general rule is to quote fair market prices; account is taken of the expenses of production in prison workshops, including the abnormal overheads."—[OFFICIAL REPORT, 5th November, 1970; Vol. 805, c. 409.]
  With respect, I thinks that this poses more questions than it answers. First of all, can the Minister tell me what method is employed to determine the market price, and at what stage? For example, hospitals could be requested or directed to obtain supplies from prisons. They could call for tenders from commercial contractors, open them, find the lowest price, and then inform the prisons of the lowest price they would need to quote. Can the Minister give an assurance that this does not and will not take place? Alternatively, the prisons may be submitting tenders forms in competition with outside contractors, but what guarantee can there be that their market price is kept continually up to date?
  Let me enlarge upon this point, which is important, at least to my mind. Commercial contractors are expected to quote firm prices for all supplies extending over a period of 12 months. In some cases provision is made for application for increases in prices because of national wage awards, but there are many cases where no price variation whatever is allowed. Before quoting, therefore, market trends, wage rates and other costs have to be carefully assessed over a 12-month period ahead. Do the same disciplines apply to Her Majesty's prisons-When submitting their prices?

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  The general conditions of contract issued by hospital boards require a contractor to accept a fair wages clause which includes such conditions as:
  "The contractor shall pay rates of wages and observe hours and conditions of labour not less favourable than those established for the trade or industry in the district where the work is carried out."
  It goes on to enlarge on these conditions and includes the obligation of a contractor to allow the workpeople to be members of trade unions.
  The failure of a contractor to comply with this fair wages clause may involve penalties as laid down in the Fair Wages Resolution passed by the House in 1946.
  What is the position of prison authorities signing this clause? It is difficult to see how they can do so, and yet if they are absolved from compliance with it, surely this in itself is unfair competition. The Minister has told the House that the general rule is for the Prison Department to avoid taking an undue share of the market for any one product. I understand that there is at least one metropolitan regional contract for protective clothing where the Prison Department had 50 per cent. of the contract in 1968–69 and 100 per cent. of the contract in 1969–70, and currently has over 75 per cent. of the contract.
  I also understand that the Prison Department has been engaged in the preparation of prototype garments for examination by the working parties set up by the Department of Health and Social Security. This indicates that the Prison Department may have prior knowledge of proposed standards at a time when they are confidential and not available to commercial firms. This would put the Prison Department in a very favourable position both for forward planning and when tenders are invited for the improved garments.
  There is substantial evidence that a similar situation is taking place in the operation of prison laundries, which appear to have an unfair advantage over commercial laundries. There have been many cases of laundries losing work to prisons and, indeed, of closures and re-dundancies occurring, although there is little evidence that the prisons have won the work on a fair and true cost-competitive basis.
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  This whole matter is causing grave concern among many companies and their workpeople, and I hope that my hon. Friend the Under-Secretary can give firm and categorical assurances and answers to the points that I have raised. All I ask is that the Prison Department gets its business on merit by quality and on prices costed on a formula that commercial firms can match in open competition.
  11.43 p.m.
  Mr. John Wells: I cannot agree with my hon. Friend the Member for Bournemouth, East and Christchurch (Mr. Cordle) in his criticism of the Prison Department. Those of us who represent constituencies that have prisons in them will be aware of the very great problems of getting adequate work for prisoners. The total prison population is now about 40,000. The great bulk of prisoners are doing only two or three, or at most 10, hours work a week. Their efforts are spread over a wide sector of industrial activity—printing, metal work, tailoring, clothing manufacture, farming, making vegetable bags, and many other activities I do not know about.
  My hon. Friend has expressed fears about possible competition for the textile and laundry industries; but this seems to be tilting at a windmill. Our great national problem is to get work for prisoners. In the past one problem has been the attitude of the unions, but I believe that in recent years there has been a substantial improvement in this respect.
  Albeit my hon. Friend disclaimed any special pleading, if we are to have a lobby from textile manufacturers, then laundrymen and who knows what will be next, my hon. Friend the Under-Secretary, who has to run this thankless Department, will never achieve anything worth while.
  11.45 p.m.
  Mr. Kenneth Lomas: I am grateful to the hon. Member for Bournemouth, East and Christchurch (Mr. Cordle) for giving me 60 seconds of the time in this debate to raise a constituency point.
  I raise the point on behalf of Mr. Eric Whittaker, the Managing Director of the Crompton Manufacturing Company, in Huddersfield. His firm, he tells me, is

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  likely to be affected if this scheme is allowed to go through. There is no objection at all to prisoners doing useful work; we all want that to happen. But that is no reason why the finished product should under-cut firms in the industry. This matter was brought to the attention of the public through the Yorkshire Post and the Huddersfield Examiner as long ago as May this year.
  I want to ask the Under-Secretary a number of questions. Will the price charged to customers by Her Majesty's prisons be the same as the price charged by other manufacturers? Could the Minister say by how much the volume of trade in Her Majesty's prisons has increased during the past few years? I am told that it has increased fairly substantially.
  The Under-Secretary of State for the Home Department (Mr. Mark Carlisle): Is the hon. Gentleman dealing specifically with contracts for the provision of protective clothing in hospitals?
  Mr. Lomas: Yes.
  We should recognise that in prisons we have captive employees, whereas in industry the people go there to do a certain job of work. There is a fundamental difference. I hope that the Home Office will give very careful consideration to the points which have been raised in this debate by the hon. Member for Bournemouth, East and Christchurch. I hope that these points will get a full investigation and will result in assurances to the trade that competition from the Prison Department will be restricted to a reasonable proportion and that full regard will be paid to current market prices and the average costs with which commercial firms have to contend, certainly in Huddersfield.
  We therefore hope that no unfair advantage will be given in the award of contracts to the Prison Department, that the business obtained will be awarded on merit and quality, and that prices will be costed on a formula which commercial firms can match in open competition. That request, coming from this side of the House, may seem strange. I believe that productive work should be done in the prisons, but I do not think it should have an unfair advantage over industry as a whole.
  11.47 p.m.
  Mr. Robert Cooke: At the time of the Mountbatten Inquiry I visited 14 prisons and penal establishments because I wanted to know what went on in them. I was struck by the need for useful work inside the prisons and to find markets for the products.
  I needed some special ironwork made for horticultural purposes. I put the work out to tender with local firms and the prison at Portland, Dorset, the Verne training prison. When I got the prices back I found that the price tendered by Verne was the middle price. It is interesting that its price came out exactly between the two commercial firms' prices. I accepted the cheapest of the three prices, though I am not sure that I was right in so doing because the results were not all that satisfactory. The point is that the prison tendered right in the middle of the two other prices and the prison could not have known what the two other prices were.
  I felt that that information might be of some use to my hon. Friend the Under-Secretary as an example of what happens when one asks for tenders. If other hon. Members were here, no doubt we could get other examples which would be equally useful.
  11.49 p.m.
  The Under-Secretary of State for the Home Department (Mr. Mark Carlisle): I am grateful to my hon. Friend the Member for Bournemouth, East and Christchurch (Mr. Cordle) for raising this issue tonight and for the opportunity of this very short debate on a matter which I know is of considerable concern, a concern which he has expressed on previous occasions.
  I should like to assure my hon. Friend at the outset that the whole matter of work in prisons, and in particular our desire not to engage in any form of unfair competition with outside industry, is one of concern and importance to the Home Office.
  Much of what my hon. Friend has said, and much of what was said by my hon. Friend the Member for Maidstone (Mr. John Wells) relates directly to the problem which is faced by the Prison Service today in carrying out the rôle which is expected of it by society. Before coming to the particular case which my

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  hon. Friend has raised, I wish to put the matter of prison work into perspective. I shall remind the House of the purposes of the prison industries and then narrow the focus specifically to the points raised by my hon. Friend the Member for Bournemouth, East and Christchurch and by the hon. Gentleman the Member for Huddersfield, West (Mr. Lomas).
  I need not remind the House that the task of the Prison Service is, broadly speaking, the safe custody and the rehabilitation of offenders. No hon. Member would argue today, I think, that it is sufficient merely to contain offenders, however civilised the conditions in which they are housed, while neglecting their rehabilitation. We must be positive in our approach to the training of those in custody, and, as my hon. Friend has accepted—and as my hon. Friend the Member for Maidstone emphasised—an undeniable duty rests on the Prison Service to seek through the provision of suitable forms of training to assist the people in its custody, with their varying needs, to enable them the better to face up to the demands of modern society after their release.
  This means devising ways of enhancing the confidence of prisoners, of instilling habits of work, and, where possible, of imparting skills to enable the released prisoner to find a job. It also means preserving the human personality of the prisoner from the degeneration which might well result from a wholly idle life while in custody.
  As my hon. Friend the Member for Bournemouth, East and Christchurch has appreciated, the provision of suitable work makes a valuable contribution to those purposes. In the past, the work has often been of a somewhat purposeless nature. It contributed little to the real needs of those in prison. But we have progressed in recent times, and we now see the provision of work within prisons as a civilising experience for those in need of training. We are, I may say, far from satisfied with what we have achieved, and prison industries all too often continue to operate in unsuitable and inefficient circumstances.
  Apart from the physical resources available to the system, there is the whole question of the nature of the work which can be provided. If we are to obtain
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  the greatest benefit from that work, it must be of a suitable type. It must be such as to influence prisoners and trainees in the way I have described. It must be available and capable of being carried out efficiently under the constraints of security which the general prison environment imposes, and it must bear as close a relationship as possible to work in the outside world.
  Certain industries lend themselves to those purposes. These lie, in particular, in light engineering, carpentry, metal recovery and in laundry, which has been mentioned, but of more particular relevance to this debate is the whole subject of weaving and garment making. The latter has special value to prison industries, not least in that its demands on space are less than those required by other types of work. My hon. Friend will understand that this is a vital factor in the present circumstances of severe overcrowding. Thus, the clothing and textile field is one on which prison industries must continue to expect to rely.
  I accept that the provision of such work raises important questions as to the sale of its products. It is axiomatic that any work done in prison might otherwise have been available to outside industry. But it would frustrate all our purposes if on that account we opted out of it. It is obviously not possible for prison industries to produce anything, even for the Prison Department's own use, that does not impinge to some extent on the interests of outside enterprises. It is a matter of balance. We recognise that our duty to society embraces not only the interest of those in custody but the interests and opportunities for employment of law-abiding members of society.
  Much of what we produce goes to the Prison Service. The next biggest outlet is the supply to other Government Departments. Here we tender for orders in the same way as other sheltered workshops, and we rely on the priority supply arrangements that exist between Government Departments. But some of the products, although not a large proportion—I understand that it is well below 20 per cent. of our total production—go to outside bodies. They include some to which my hon. Friend referred.
  I can give my hon. Friend two assurances on that part of our production.

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  First, we do not aim to take a significant share of any one market. Second, we seek to charge what we believe to be a fair market price. We cannot, as industry does, use the cost-plus basis as the sole factor in arriving at our prices. To do so would be unfair not only to the Prison Department but also to our competitors. It would be unfair to ourselves because of the abnormal overheads sometimes involved, dictated by such matters as security. Equally important, it would be unfair to our competitors in dealing with goods where the wage element makes up a significant proportion of the total cost. Therefore, we cannot rely entirely on the cost-plus basis. So we aim to tender at what we believe to be a fair market price.
  My right hon. Friend rightly asked how that is arrived at. With regard to protective clothing, we know what the market price is because of the priority supply arrangement for sales to Government Departments and because of the contracts we have for other protective clothing for other Government Departments. Therefore, we know the current market price of comparable products. We know the price of the materials which we have to buy, and we can work out what the conversion cost is to outside industry. In tendering for goods to the hospitals, we know the material cost of those goods. We add to that a conversion cost, and by that means arrive at what we believe to be a fair market price.
  My hon. Friend also asked at what stage we arrived at that price, and the answer is that we do so before tendering for any goods.
  We are dealing with hospital management committees. These are not Government Departments. The priority supply arrangements whereby we can ask to be allowed a proportion of a contract do not, therefore, apply. I can assure my hon. Friend that the hospital management committees are not directed or requested to obtain supplies from the Prison Department
  My hon. Friend also asked whether our tender prices are kept up to date. Again I am able to give him the assurance that they are kept continuously under review. In the last two years we have raised our tender prices to take account of rises in the cost of materials and general market trends. That they are fair and competitive
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  can be seen from the fact that we are both winning and losing contracts, although we are satisfied that we are highly competitive in both quality and delivery. I assure him that the results of our tendering are continuously monitored as to price, quality and delivery.
  My hon. Friend's next question was whether the same disciplines apply to the Prison Department when tendering as to outside industries. Again the answer is that they do. Like outside industries—such as the example he referred to—we also quote for a period over 12 months. Sometimes we quote on a firm price basis and sometimes, like other industries, we quote with a break clause in the agreement. Like them, we assess the cost over the 12-month period and are affected by changes in costs, particularly of materials, which may occur during that period.
  Whilst it is true that we are not so directly involved as any outside industry would be in wage increases, there have been occasions when we have gone back to the people to whom we are supplying goods and asked for higher prices for the goods on the basis of outside wage increases which have occurred during the period of contract.
  My hon. Friend raised a specific question about the fair wages clause. This cannot and does not apply and we strike it out in any contract we sign. In the case he quoted the Prison Department has secured contracts worth nearly £200,000.
  I am unable to give the hon. Member for Huddersfield, West an exact answer but I understand that the volume of trade in protective garments has increased during the last few years and certainly at the moment we are in the process of acquiring goods on a three-year basis of a contract entered into in October, 1969.
  I turn to our proportion of the market. This represents a barely measurable share of the national market in protective clothing but amounts to a reasonably significant share of this part of the hospital garment market. With regard to the Metropolitan Region contracts, there are 328 hospital management committees and overall we believe that our share is reasonable. It is not easy with the information at our disposal to quantify this with precision but we do not believe our share to be unreasonable, given the obligation we carry to sustain

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  and train prisoners during sentence and to the expectations of society in general.
  Despite what my hon. Friend says, I am not convinced that the interests of private industry have been significantly affected. We cannot contemplate withdrawing from this activity but we do not at present expect generally to increase our share of the hospital protective clothing market. I hope that what I have said has satisfied him. Against the background I have described, I assure him I am willing to undertake that, if any evidence can be produced that would indicate that Prison Industries is not quoting fair prices, or that the share of the market it gets is unavoidably threatening established firms and the employment they provide, I will look carefully and sympathetically at the position.
  I give my hon. Friend a complete assurance that it is not our wish to place Prison Industries in this situation. We are always ready to review prices or even, where necessary, to consider our level of output to satisfy the basic criteria
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  on which prison industries are run. We are always ready to discuss with manufacturers and their associations specific questions of pricing or markets. But we can do so only in the context of our task and responsibilities as a whole. We aim to get our work on the market by quality and price and, although we do not entirely assess our prices on a cost-plus basis, I believe our prices are ones that can always be matched in open conditions.
  I trust my hon. Friend will feel that I have gone as far as I can go in meeting his case. I hope that the House, and my hon. Friend too, will endorse the view that the purposes I have described are right in a just and humane society, and that in pursuit of those purposes it is necessary to develop Prison Industries as an important ingredient of penological treatment in modern conditions.
  Question put and agreed to.
  Adjourned accordingly at six minutes past Twelve o'clock.