Commons Sitting of 20 April 1971

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  ETON RURAL DISTRICT COUNCIL BILL
    HARINGEY CORPORATION BILL
    Bills read the Third time and passed.
PLYMOUTH CORPORATION BILL [Lords]
Read the Third time and passed, with Amendments.

MANCHESTER CORPORATION (LOTTERIES) BILL (By Order)
Order for Second Reading read.
Bill to be read a Second time upon Tuesday, 15th June.

MERSEY DOCKS AND HARBOUR BILL (By Order)
Order for Second Reading read.
Bill to be read a Second time upon Tuesday next at Seven o'clock.

MERSEY DOCKS AND HARBOUR [MONEY]
Queen's recommendation signified—
Motion made,
That for the purposes of any Act of the present Session providing for the reconstitution of the Mersey Docks and Harbour Board as a
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Company and the reorganisation of the capital of the Board it is expedient to authorise any loss to public funds arising from the making of provision by that Act for:—
(1) (a) the conversion of the existing mortgage securities for loans made to the Board before 27th November, 1970 under section 11 of the Harbours Act, 1964 or otherwise into new debenture stock secured by a floating charge upon the whole undertaking of the Company, so that the said conversion be effected in manner similar to the conversion into new debenture stock of other securities issued in respect of moneys raised by the Board;
(b) the postponement of the dates of redemption of, and the reduction of the rates of interest payable on, the new debenture stock during a moratorium period applicable in a similar manner to all such new debenture stock;
(c) the alteration (by a scheme made under the Act so as to be binding on the Company and each of the holders of such new debenture stock to secure, so far as practicable, the financial viability of the Company) of the rights and privileges attaching to the new debenture stock in a manner equitable to all such holders of new debenture stock, including the writing down of the nominal value thereof, the postponement of the dates of redemeption thereof and the reduction of the rates of interest payable thereon; and
(d) the allotment (in accordance with the said scheme) of share capital to the holders of such new debenture stock in a manner equitable to all such holders of new debenture stock;
(2) providing security for loans so made to the Board on or after 27th November, 1970 as priority borrowings secured by a floating charge upon the whole undertaking of the Company, similar to the floating charge provided as security for the new debenture stock, but taking effect for the purposes of section 322 of the Companies Act, 1948 as if created at the time of, and in consideration for, each such loan, being borrowings ranking as to interest and capital pari passu one with another and in priority to all other borrowings of the Company, whether made before or after any such priority borrowing, subject to such alteration of the rights and privileges attaching to such priority borrowings as may be agreed by the Secretary of State with the approval of the Treasury;
(3) the discharge of the appointment by the High Court of a Receiver of rates of the Board on behalf of the Crown.—[Mr. Patrick Jenkin.]
Hon. Members: Object.
Money Resolution to be considered upon Tuesday next at Seven o'clock.

ORAL ANSWERS TO QUESTIONS
  AGRICULTURE, FISHERIES AND FOOD

    Import Levies
    Mrs. Renée Shortasked the Minister of Agriculture, Fisheries and Food what representations he has received from Commonwealth Governments, including India, New Zealand, Australia and Canada, about the import levies announced on 17th March: and what replies he has given.
    The Minister of Agriculture, Fisheries and Food (Mr. James Prior): Our main Commonwealth suppliers, notably New Zealand, Australia and Canada, were fully consulted and the levies schemes announced on 17th March take account of points which they and other major suppliers raised with us. I have received no subsequent representations from any Commonwealth Government.—[Vol. 813. c. 1438–40.]
    Mrs. Short: I thank the right hon. Gentleman for that reply. Is it not clear that this action by the Government will have a direct effect on the cost of living? Is it not also clear that this is part of the Government's plan to get us into the Common Market without even trying to negotiate any reasonable terms, and that it is doing damage to Commonwealth trade in the meantime?
    Mr. Prior: No. The hon. Lady is wrong on both counts. First, it will have a very minor effect on the cost of living. The latest estimates I have given are one-half of 1 per cent. on the cost of food index, spead over the 12 months from the start of the implementation of the interim levy schemes. Secondly, it is part of our policy to change to a levy system over the next three or four years regardless of Common Market considerations.

    Food Prices
    Mr. Carterasked the Minister of Agriculture, Fisheries and Food how many letters he has received since 1st January on food prices.
    Mr. Prior: About 120.
    Mr. Carter: I thank the right hon. Gentleman for that answer. Does he appreciate that his policy, which is deliberately encouraging increased food costs, has dealt a savage blow at the living standards of millions of people, particularly old-age pensioners? Is he aware that he is likely to go down in history as the Minister who turned the saying "Half a loaf is better than none" into a living reality for many thousands of families?
    Mr. Prior: The hon. Gentleman must not exaggerate the effect of increased food prices resulting from the introduction of the levy system. As I said earlier, the increase which will be brought about by the levy system over the 12 months starting next July will be one-half of 1 per cent. on the cost of food index. As the food index represents about one-quarter of the cost of living index, the hon. Gentleman cannot possibly justify his accusations.
    Mr. Peter Mills: Has it been brought to the attention of my right hon. Friend that recent legislation in the transport sphere has increased the cost of distribution by 15 per cent., and that most of this legislation was introduced by the Labour Government?
    Mr. Prior: I do not think there is any doubt that the effects of the Transport Act, introduced by hon. Gentlemen opposite when in office, have been extremely severe on the cost of food and that this is a very important factor to be taken into consideration.
    Mr. Barnes: Is the right hon. Gentleman unaware that in the first three months of this year non-seasonal food prices rose by three points on the food index, and that it now appears that only a comparatively few retailers will pass on the cut in S.E.T.? Does he not think that his non-intervention on food prices is contributing greatly to the growing feeling among people that the Government do not have the right policies to deal with inflation?
    Mr. Prior: We must get clear what happens when we have intervention. This time last year it could be assumed that we had intervention under the Labour Government, but at that time, in the three

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    months from January to March, the cost of food index went up by 2·2 per cent., whereas this year it has gone up by 1·6 per cent. [Interruption.] I am not making that as a point about food price increases. I am merely saying that I do not believe that interventionist policies work as well as competition.

    West Edinburgh
    Mr. Dalyellasked the Minister of Agriculture, Fisheries and Food if he will pay an official visit to west Edinburgh.
    Mr. Prior: I have been invited to visit west Edinburgh and am hoping to do so before long. In the meanwhile I am extremely grateful for the able and hardworking support given to me by its hon. Member.
    Mr. Dalyell: When the right hon. Gentleman comes, will he unravel the mystery of why bread prices in the east of Scotland should be higher than those in the west of Scotland?
    Mr. Prior: At least that shows that competition works, because prices in the west of Scotland, according to my latest information, are as much as 4d. lower than in other parts of Scotland, or in some other parts of the United Kingdom. Certainly the more competition, the better.

    Agricultural Products (Marketing)
    Mr. Peter Millsasked the Minister of Agriculture, Fisheries and Food what discussions he has had with the National Farmers' Union about the future marketing of British agricultural products; and whether he will make a statement.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Anthony Stodart): My right hon. Friend has had no further discussions with the N.F.U. on this subject since my hon. Friend's previous Question was answered on 23rd March.—[Vol. 814, c. 72.]
    Mr. Mills: Does not my hon. Friend agree that while British agriculture can lead the world in methods of production and efficiency, in marketing it is very weak? Does he not also agree that other major exporters of food to this country have their marketing well organised, and that it is about time that we did, too?
    Mr. Stodart: Both my right hon. Friend and I have said that we recognise the critical importance of marketing over the next few years and that we are willing to consider any proposals which the industry may put to us.

    Home-Killed Beef and Veal
    Mr. Farrasked the Minister of Agriculture, Fisheries and Food what was the total production of home-killed beef and veal in 1963, 1969 and 1970.
    Mr. Anthony Stodart: Total production of home-killed beef and veal in 1963 was 929,081 tons, in 1969 856,876 tons, and the provisional total for 1970 is 931,370 tons.
    Mr. Farr: As six years of Socialist Government between 1964 and 1969 saw a decline of nearly 100,000 tons in beef output, can my hon. Friend assure the House that the recent steps taken by his right hon. Friend are adequate to reverse this serious trend?
    Mr. Stodart: I certainly expect the award announced in 1971 to stimulate production considerably. I merely enter the caveat, as I have previously, that figures given for calendar years can be misleading.
    Mr. Cledwyn Hughes: Does not the hon. Gentleman agree that his right hon. Friend's White Paper on the Price Review indicated that the selective expansion programme for beef was satisfactorily on target?
    Mr. Stodart: I should not quarrel with that. I can well understand the right hon. Gentleman's eagerness to snap up any crumb of success to be found in his otherwise rather uneventful programme.

    Bacon Industry
    Mr. John E. B. Hillasked the Minister of Agriculture, Fisheries and Food what new arrangement he has made for the stabilisation of the bacon market.
    Mr. Peter Millsasked the Minister of Agriculture, Fisheries and Food if he is satisfied with the present working of the bacon stabilisation agreement; and whether he will make a statement.
    Mr. Scott-Hopkinsasked the Minister of Agriculture, Fisheries and Food

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    whether he will review the Bacon Stabilisation Fund with a view to its abolition; and if he will make a statement.
    Mr. Prior: The Government have decided to make some changes in the Bacon Curing Industry Stabilisation Scheme so as to stimulate closer attention to market conditions and reduce the cost to public funds. For 1971–72 the formula will provide for a pigmeat price at a lower level in relation to the standard price for pigs and for a bacon price not lower than 2½ per cent. below the average price of First Selection bacon from all sources. Curers will also be asked to provide information about costs and profitability of bacon curing.
    Mr. Hill: Will this change, which is welcome as curtailing excessive public expenditure, affect the capacity of the home bacon curing industry to fulfil its share of the British bacon market as internationally agreed?
    Mr. Prior: I do not think it will have any ill-effects on the ability of the curing industry to fulfil its quota, which is 26,000 tons above the quota for last year. What will decide the issue is whether we can produce bacon competitively. If we can, we can have a much bigger share of the market.
    Mr. Mills: Will my right hon. Friend bear in mind that while the curing industry has made strides lately, much more needs to be done, particularly in the rationalisation of plant and seeing that there is a constant supply of good quality bacon? Will he remind the curers that this is what the Fund is all about?
    Mr. Prior: I think the curers are well aware of some of their shortcomings, but they have been doing a better job recently. I have every confidence that in the next year or so they will improve on their previous performance by a large amount. It is important, to get stability into the industry, that the industry should know that it can go ahead on the assumption that it can get the pigs and can sell the bacon at a reasonable price.
    Mr. Scott-Hopkins: Is my right hon. Friend aware that in the past the scheme has been one of the biggest drains on the public purse and that it has been quite unjustifiably used? Will he assure the
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    House that in future the money will be properly used? Does he not agree that the bacon curing industry must take a proper grip on its methods of operation so that it operates efficiently and does not waste the taxpayers' money, as it undoubtedly has in past years?
    Mr. Prior: I have impressed very strongly on the curing industry the need for greater efficiency. The purpose of the scheme which I am introducing is to make it go for a higher price and to force it to get a higher price for its products. Apart from that, the industry has to face subsidised imports from Denmark, and it has a right to further support from us at this stage.
    Mr. Barnes: Will the right hon. Gentleman tell us what effect this change will have on the price of bacon in the shops?
    Mr. Prior: At the moment bacon prices are lower than they have been for some years. The immediate effect in the shops will be absolutely negligible; but if the change brings about a small cut-back in British supplies going on to the market, I should expect to see some hardening of the price.

    Cereal Acreage
    Mr. Adam Butlerasked the Minister of Agriculture, Fisheries and Food what is his estimate of the cereal acreage planted for the 1971 harvest.
    Mr. Anthony StodartI regret that I cannot yet give an estimate. The March Census returns were delayed by the postal strike, and examination of the figures has not been completed. It is hoped to publish them during May.
    Mr. Butler: My hon. Friend will be aware that the White Paper referred to higher acreages of winter wheat. May I therefore ask, first, what influence he expects this to have on the import of wheat?
    Secondly, will he give any assessment at this stage of how much of the return to farmers will come from the market and how much from the guaranteed price system?
    Mr. Stodart: The planting of winter wheat was 300,000 acres more than in the previous year. At this stage, as a farmer, I should not wish to prophesy what the yield will be in August and

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    September. It would take a drop in yield of only 4 cwt. an acre to bring the total figure to what it was last year for the smaller acreage.
    I hope that the market will take up as much of the supplies of good quality imported wheat as before. I think an announcement will be made shortly about the level of the target indicator price, which should give some indication of the amount of returns as between the support price and the market.

    European Economic Community
    Mr. Bodyasked the Minister of Agriculture, Fisheries and Food whether he has completed his study of the common fisheries policy of the European Economic Community and its effect upon the United Kingdom's inshore fishing industry.
    Mr. Prior: I have nothing to add to my reply on 30th March to the hon. Member for Walthamstow, West (Mr. Deakins).—[Vol. 814, c. 334.]
    Mr. Body: I appreciate that my right hon. Friend has received and studied a memorandum from the Fisheries Organisation Society. Will he give an undertaking not to make up his mind finally on the subject without consulting a body which is representative of more than 100 fishery organisations?
    Mr. Prior: I certainly give that undertaking straight away to my hon. Friend, and to all other bodies interested in this difficult problem.
    Mr. James Johnson: Representing Lowestoft, the Minister must know the feelings in all coastal constituencies about this matter. Is the right hon. Gentleman aware that there has been a joint meeting of M.P.s on both sides of the House representing fisheries interests, and we have unanimously sent a letter to his colleague the Chancellor of the Duchy of Lancaster? Has the Minister seen the letter? If so, would he care to comment on it?
    Mr. Prior: I have not seen that letter, although I have seen the Motion. I am well aware not only of the strong feelings in the fishery constituencies but of the strong feelings in the House. The negotiations have not yet begun. The E.E.C. has been made aware of the importance which we attach to the problem, and I
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    and my right hon. and learned Friend will keep the House fully informed of what happens.
    Mr. Maxwell-Hyslop: Would my right hon. Friend bear in mind two specific questions in the negotiations: first, the necessity to prevent over-fishing by anybody, so that stocks will not decrease; secondly, the special problems of shellfish, such as mussels and oysters, which are physically planted and, under our law, owned by people, entitled to reap the benefit from them, and the need to ensure that this exclusive use remains for those who planted them?
    Mr. Prior: Yes, Sir. These are two problems which we shall certainly want to consider when we come to discuss this matter.
    Mr. Cledwyn Hughes: I understand the Minister's difficulty about giving specific details while negotiations proceed, but would he give the House an undertaking that British inshore fishermen will be treated with the same circumspection and the same degree of protection as French inshore fishermen have been treated by the French Government within the Comman Market at present?
    Mr. Prior: I think the right hon. Gentleman refers to a three-mile limit, which the French have at present. At this stage, I do not want to be drawn on the negotiations, which have not even begun, but I am well aware of what the inshore fishing industry requires. I shall do everything in my power to obtain it for the industry, and I shall report to the House as soon as we know more.
    Mr. Mawbyasked the Minister of Agriculture, Fisheries and Food what plans his Department have to sponsor increased contacts between farmers in the United Kingdom and those in the European Economic Community.
    Mr. Prior: I am glad to say that our farmers' organisations are actively developing their contacts with those in the Community, and I think the initiative is best left with them.
    Mr. Mawby: Is my right hon. Friend aware that, in the view of most people, contacts of this nature are very beneficial and should be encouraged as much as possible?
    Mr. Prior: Yes, I agree entirely, and we shall do all we can to help.
    Mr. Bruce-Gardyneasked the Minister of Agriculture, Fisheries and Food what are his latest estimates about the extent to which beef production would benefit from Great Britain's entry into the European Economic Community.
    Mr. Anthony Stodart: I foresee good prospects for United Kingdom beef producers within an enlarged Community.
    Mr. Bruce-Gardyne: Would my hon. Friend not agree that higher end prices for beef cattle, which we should expect in an enlarged European Community, would be of particular value to the traditional stock-raising areas of Scotland, whether high ground or low ground?
    Mr. Stodart: Undoubtedly, Sir, and the guide price in the Commu1nity is considerably higher than it is in this country. One should not neglect the fact that feed costs would rise, but, I think, not enough to offset the advantage. The use of hill ground would bring into discussion the question of the production grants, and, as my hon. Friend knows, these are a matter for negotiation.
    Mr. Douglas: If the Minister is going for quality, would he indicate what services his Department is likely to offer housewives, especially in Scotland, so that they may have a clear indication that the quality they are paying for is the quality being sold?
    Mr. Stodart: Giving guidance to housewives in Scotland is a matter for my hon. Friend the Under-Secretary of State for Scotland.
    Mr. Selwyn Gummerasked the Minister of Agriculture, Fisheries and Food what plans he has to seek to visit the countries of the European Economic Community in the near future.
    Mr. Spenceasked the Minister of Agriculture, Fisheries and Food what recent official consultations he has had with European Economic Community Ministers of Agriculture.
    Mr. Prior: Subject to consultation with my right hon. Friend the Chancellor of the Duchy of Lancaster, I am ready to visit any of the European Economic Community countries if it would serve a useful
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    purpose. My hon. Friend and I have already met some of the Ministers of the Six and their deputies on various occasions, and I have recently received an invitation to visit Italy which I intend to take up when a mutually convenient date has been agreed.
    Mr. Gummer: Would not my right hon. Friend agree that it has been a considerable help to our fanning community that he has made a number of speeches saying how helpful it would be to that community were we to enter the E.E.C.? Would he seek to see what has happened in Italy, where the agricultural community has been encouraged considerably by Italy's entry into the E.E.C., despite considerable doubts when Italian entry was first mooted?
    Mr. Prior: I agree with my hon. Friend.
    Mr. Spence: What arrangements, if any, exist in the Community in which my right hon. Friend will probably be able to take part for consultations between Agriculture Ministers on a regular basis?
    Mr. Prior: The Agriculture Ministers within the Community have frequent meetings. They have also had meetings at various times in Brussels with my right hon. and learned Friend the Chancellor of the Duchy of Lancaster. The more meetings that take place with the Council of Ministers, the better it will be and the more emphasis and the more influence we can bring to bear on them.
    Mr. Heffer: If the right hon. Gentleman visits the E.E.C. countries, will he make a tour of the various warehouses that are stocked with food and consider the high prices that working people in the E.E.C. countries pay for their food, and then return and explain to us the advantages of accepting the E.E.C's agricultural policy?
    Mr. Prior: As for the accusation that warehouses are stocked with food, the fact is that there is now no surplus of butter in the Common Market.
    Mr. Mawbyasked the Minister of Agriculture, Fisheries and Food what plans he now has to inform British farmers about the advantages which they would be likely to obtain for Great Britain's entry into the European Economic Community on the terms now envisaged.
    Mr. Prior: I believe that British farmers are generally alive to the advantages they would gain from membership, and I am keeping their representatives fully informed of developments.
    Mr. Mawby: Has my right hon. Friend any plans to set up an advisory body to assist farmers to accommodate the new situation which obviously will arise if we join the E.E.C.?
    Mr. Prior: All farmers are pretty well informed about the possibilities if we join the E.E.C., and, in addition, there are now publications coming out which, I think, will help in this respect. Hon. Members can do a lot themselves to convince farmers of the advantages.
    Mr. Hooson: Does not the Minister realise that, particularly in hill farming areas, what farmers want to know is which grants and subsidies will be payable under the Common Market arrangements and which will not?
    Mr. Prior: I am well aware of that, and in due course we shall be able to tell them.
    Mr. Marten: As it is the Government's duty to be absolutely fair and objective in presenting the Common Market case to the country, what steps are they taking to tell farmers of the disadvantages, since this is not apparent in their recent propaganda through the Post Office?
    Mr. Prior: I hope that my hon. Friend is not suggesting that we have not been fair and objective in putting the Government's case. As regards agriculture and horticulture, I think that no one will accuse me of failing to tell hortculturists of some of the difficulties involved.
    Mr. Selwyn Gummerasked the Minister of Agriculture, Fisheries and Food what estimate he has made of the effect of Great Britain's entry into the European Economic Community on the consumption of liquid milk.
    Mr. Anthony Stodart: It is not possible to make a reliable estimate, but, as the price of liquid milk to the consumer is likely to be lower if the United Kingdom were a member of the European Economic Community than it would otherwise be, the effect of United Kingdom membership of the European Economic Com-
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    munity would probably be favourable to liquid milk consumption.
    Mr. Gummer: I thank my hon. Friend for that answer. Will he go out of his way to make sure that facts of this kind are made clear to the public, who are at present considerably confused by the nonsense spoken by those who are opposed to our entry into the Common Market?
    Mr. Stodart: Yes, Sir; if my hon. Friend cares to put down other Questions of this kind, he will receive similar answers.
    Mr. Cledwyn Hughes: What does the hon. Gentleman envisage will take the place of the Milk Marketing Board in the event of our entering the Common Market?
    Mr. Stodart: It has been established that the marketing boards will be able to carry out certain of their functions, and I very much hope—this is founded on the interest which, in my experience, people in France and Germany have shown in the efficiency of our marketing boards— that we shall be able to carry over many of the functions.

    Banana Trade
    Mr. Moyleasked the Minister of Agriculture, Fisheries and Food whether he will establish a committee of management for the banana trade similar to that established in France, details of which are in his possession.
    Mr. Bodyasked the Minister of Agriculture, Fisheries and Food whether he will harmonise arrangements for the banana trade with those in France, details of which are in his possession, and set up a council similar to the Comité Interprofessionel Bananier de L'Union Francaise.
    Mr. Anthony Stodart: No, Sir.
    Mr. Moyle: Would not the hon. Gentleman agree that this is how the French secured a large share of the European market for the Francophone banana exporters? If we are to discharge our moral obligations to Jamaica and the Windward Isles and protect them against the dangers of our entry into the E.E.C. and the depredations of the United Fruit Company, ought we not to be doing the same ourselves?
    Mr. Stodart: This was a proposal which arose through the dispute between Jamaica and Fyffes, and the dispute was settled to each side's satisfaction by a commercial agreement. The idea of a committee was recommended by Lord Denning, but was rejected by him when Fyffes declined to take part.
    Mr. Body: Is not the Minister aware that Lord Denning recommended this very proposal? Moreover, is he not aware that the E.E.C. has on its agenda now, and has had since September, 1970, the formulation of a common banana policy? Is he not aware that if that policy is formulated before we enter, tens of thousands of people will be put out of work and will suffer privation and hardship because of dilatory action by the Government?
    Mr. Stodart: I thought that I did make myself aware of Lord Denning's views. He did not maintain those views when one side declined to take part. Subsequently, the commerial agreement between both sides was arrived at. The present French régime differs from the system operated in West Germany and need not be the ultimate E.E.C. system.

    Farmers' Incomes (Computer Databanks)
    Mr. Leslie Huckfieldasked the Minister of Agriculture, Fisheries and Food what arrangements have been made to integrate data on farmers' incomes with data stored in computer databanks operated by other Government departments.
    Mr. Anthony Stodart: None, Sir.
    Mr. Huckfield: I am grateful for that enlightening answer. Would not the Parliamentary Secretary admit that there is at least a temptation to integrate data from various sources as that which would save farmers filling out so many forms? When he succumbs to the temptation, will he ensure that adequate safeguards are maintained to ensure the confidentiality of this information?
    Mr. Stodart: I am well aware, as is the House, of the hon. Gentleman's anxiety on this subject. There are some 2,500 farm businesses which provide information on various items to the Department. It is passed to the university departments which then send it to us
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    in a form which absolutely ensures non-identification of contributors. It would thus be physically impossible for us to associate any of this information with other information about the same farm.

    Herbicides 2,4-D and 2,45-T
    Mr. Hardyasked the Minister of Agriculture, Fisheries and Food if he will take steps to prohibit or restrict the use of the herbicides 2,4-D and 2,45-T.
    Mr. Anthony Stodart: My right hon. Friend has asked the Advisory Committee on Pesticides and other Toxic Chemicals to advise him whether further precautions are needed for 2,4-D following recent reports suggesting that it might harm wildlife. As I told the hon. Member for West Lothian (Mr. Dalyell) on 19th January, prohibition is not envisaged for 2,45-T although the Committee has its safety implications under continuous review.—[Vol. 809, c. 240–1.]
    Mr. Hardy: I am grateful for some evidence of progress in this matter. Can the Minister give some idea about when the report he has requested will be available and when it will be acted upon? Is he aware that with this sort of chemical spray by aircraft there seem to be frequest instances of growing inaccuracy in spraying and that the areas affected are much more extensive than was originally supposed?
    Mr. Stodart: The second question goes a little wide of these matters. I cannot give a firm date by which the committee will report; it is a matter for the committee. But I shall certainly undertake to draw to the committee's attention the hon. Gentleman's anxiety that the report should be made as speedily as possible.

    In-Calf Heifers
    Mr. Scott-Hopkinsasked the Minister of Agriculture, Fisheries and Food by how many has the number of in-calf heifers increased during the first three months of 1971.
    Mr. Anthony Stodart: The results of the March, 1971, Census, which will provide this information, are not yet available.
    Mr. Scott-Hopkins: Does my hon. Friend agree that, although there might

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    have been a slight increase in dairying in-calf heifers, this is probably not sufficient bearing in mind the need to increase production after the Price Review and in view of the rise in the price of manufacturing milk? Is he aware that there is great anxiety that there will not be a sufficient increase in the beef herd to supply our needs whether or not we join the Common Market and particularly if we do?
    Mr. Stodart: The figures for the first three quarters are available. Although they are only sample figures, they tend to show that, although the dairy herd is down marginally, the overall cattle herd is up. We have no reason to suppose that from June, 1970 to 1971, there will not be a further increase in the beef herd.

    Frozen Brussels Sprouts (Imports)
    Sir D. Rentonasked the Minister of Agriculture, Fisheries and Food why 3,000 tons of frozen brussels sprouts were permitted to be imported from South Africa in or about the month of March, 1971, when the home crop was so plentiful that it could not all be sold.
    Mr. Anthony Stodart: Detailed statistics for March are not available and I cannot comment on the figure mentioned. Imports of frozen brussels sprouts from South Africa are not subject to quantitative restrictions.
    Sir D. Renton: Is my hon. Friend aware that it is very frustrating for our home growers to produce a fine crop of fresh vegetables only to find that they cannot sell them at a reasonable price because of imported produce coming in at just the wrong time of year? Will my hon. Friend bear in mind what has happened this season in regard to brussels sprouts with a view to action being taken in the future?
    Mr. Stodart: I sympathise with those who have produced a very big crop of brussels sprouts. I cannot substantiate the figure which has been quoted by my right hon. and learned Friend, which is over twice as high as any figure for such imports over a whole 12-month period.

    Soil Micro-biology
    Mr. Spearingasked the Minister of Agriculture, Fisheries and Food
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    what investigations he intends to make into the effects of different cropping and cultivation practices on the micro-biology of soils.
    Mr. Anthony Stodart: I have nothing to add to the Written Answer I gave the hon. Member to a similar Question on 22nd March.—[Vol. 814, c. 68.]
    Mr. Spearing: Does not the hon. Gentleman realise that in the important recent report "Modern Farming and The Soil", published by the Agricultural Advisory Council, this aspect of soil science was not present and that the reply to which the hon. Gentleman has referred gave no indication that any research is being done on this subject? Does he not think that he should initiate it?
    Mr. Stodart: Long-term research is being done into such things as the root diseases of cereals in different soils and under varying conditions. Studies are being made of eel-worm in potatoes. The soil report concluded that more basic knowledge was needed about the optimum conditions for root development. That is mainly a matter for the Agricultural Research Council. I will draw the attention of the Council to what the hon. Gentleman has said, but the Council is an independent body.

    Fowl Pest (Vaccination)
    Rear-Admiral Morgan-Gilesasked the Minister of Agriculture, Fisheries and Food what further consideration he has given to vaccination policy following recent outbreaks of fowl pest in Hampshire and elsewhere.
    Mr. Anthony Stodart: Outbreaks of fowl pest are declining and I am satisfied that vaccination is the right policy. My Department will be examining our control measures in consultation with the interests concerned, but I must emphasise the crucial importance of vaccination.
    Rear-Admiral Morgan-Giles: Does my hon. Friend realise that the situation does not seem to be improving in Hampshire and that my constituents think that the Ministry perhaps does not realise how serious the situation is? Will the Ministry consider setting up a court of inquiry in conjunction with the N.F.U. to

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    examine the whole question of fowl pest rather on the same lines as the Northumberland inquiry into foot and mouth disease?
    Mr. Stodart: I regret to say that in Hampshire, as elsewhere, a lamentably small number of flocks was thoroughly vaccinated before the outbreak and, therefore, they fell victim to a particularly vicious form of this disease. There was an inquiry in 1962. I do not think that there needs to be a full inquiry on that scale again. I do not think that that form of inquiry is justified, but all the interests involved will be invited to take pant in the forthcoming review and will be able to make their views known.
    Mr. Cledwyn Hughes: The House will welcome the hon. Gentleman's statement that this grave epidemic is on the decline, but may I press him to consider further the request made by the hon. and gallant Gentleman—namely, that there should be an independent inquiry—in the light of the fact that on this occasion the difference is that live vaccine is being used and the House and the country will wish to know the full implications of its use, without going into the merits of the case at this time? If the hon. Gentleman refuses to institute such an inquiry, will he give the House an undertaking that the report of the departmental inquiry that is proposed by his right hon. Friend will be published so that the House can be aware of its contents and recommendations?
    Mr. Stodart: I have all along said that this subject is far too serious not to consider seriously any suggestion that is made, no matter from which part of the House it comes. My right hon. Friend has heard what the right hon. Gentleman has said. We will consider the suggestions that have been made. I do not wish to go further than that today.

    Sugar Consumption
    Mr. Farrasked the Minister of Agriculture, Fisheries and Food what proportion of total United Kingdom sugar consumption in 1969 and 1970 was supplied by member countries of the Commonwealth Sugar Agreement.
    Mr. Anthony Stodart: The proportions were 67 per cent. and 62 per cent. respectively.
    Mr. Farr: As so high a proportion of our sugar comes from Commonwealth sources, will my hon. Friend ask my right hon. Friend not to tamper with this source of supply, which has become a part of history and serves to put first-class cheap sugar on our tables?
    Mr. Stodart: The review is a triennial one. The agreement for 1972–74 comes up for review in the autumn. No doubt my right hon. Friend will take note of what my hon. Friend has said.
    Mr. Strang: Is the hon. Gentleman aware that there is some speculation that in the present E.E.C. negotiations the Government are considering a formula by which the Commonwealth sugar-producing countries would be allowed to supply less sugar but would be paid a higher price for it? For obvious reasons those countries are against such a proposition. Can the hon. Gentleman assure the House that such a formula is no longer being seriously considered?
    Mr. Stodart: The members of the Community have been told that the Commonwealth Sugar Agreement is a contract up till 1974, and they have been asked for continuing arrangements after that for imports from the developing countries. We have not yet had a formal reply from them, but the problem is admitted.

    Soya Beans and Maize (Field Trials)
    Mr. Charles Morrisonasked the Minister of Agriculture, Fisheries and Food whether he will consider conducting field trials of new varieties of soya beans and maize which could be grown economically in Great Britain.
    Mr. Anthony Stodart: Field trials on maize are being conducted by the Agricultural Development and Advisory Services in conjunction with the National Institute of Agricultural Botany. No field work is being done on soya beans, as conditions are not suitable for growing them economically in this country.
    Mr. Morrison: Is it not a fact that soya beans are being grown further and further north in Europe now? Will my hon. Friend look at this question again and see whether it might be worth while to conduct trials with soya bean,

    939
    since there is considerable scope for import saving with soya bean as well as maize?
    Mr. Stodart: The import-saving potential for maize is £89 million and for soya £36 million. Soya needs a much warmer climate than we have, and it is an extremely sensitive plant to the length of day. Even after what we did with British Standard Time, I am not quite sure that it could be said to have done any good in this sphere, and I still do not think that our conditions would suit soya.

    Veterinary Profession Inquiry (Northern Ireland Representative)
    Mr. John E. B. Hillasked the Minister of Agriculture, Fisheries and Food whether he has yet appointed a Northern Ireland representative to the Committee of Inquiry into the Veterinary Profession.
    Mr. Prior: Members are not being appointed to represent particular areas, but my colleagues and I are glad that Mr. R. A. Hamilton, C.B.E., who is an Ulsterman, has agreed to serve on this Committee.
    Mr. Hill: Are the numbers of the Committee now complete, and may we know when it will start its work?
    Mr. Prior: The numbers 1are now complete. We think that the Committee will start its work very soon, but it will take a considerable time to complete it.

    Cattle De-horning
    Mr. Adam Butlerasked the Minister of Agriculture, Fisheries and Food whether he will consider amending the Calf Subsidy Scheme to encourage the de-horning of cattle.
    Mr. Anthony Stodart: The policy of my right hon. Friend remains one of reducing Government activity and intervention in the affairs of the agricultural industry, and he would need convincing evidence before making an exception in this case.
    Mr. Butler: I thank my hon. Friend for that answer, but will he investigate the matter further because of the well known and established benefit which results from de-horning, particularly in the yarding
    940
    of cattle and in milking parlours? Will he review the question once more?
    Mr. Stodart: I regard this idea as wholly laudable, but it is one for the market rather than for direction; horned beasts at the market undoubtedly fetch a little less. However, I must point out that if some sort of statutory direction were imposed it would affect a celebrated breed of cattle which live in the Highlands of Scotland.

  ROLLS-ROYCE
  Mr. Sheldonasked the Prime Minister if he will seek an official meeting with President Nixon to discuss the future of Rolls-Royce.
  The Prime Minister (Mr. Edward Heath): I have at present no plans for a further meeting with President Nixon.
  Mr. Sheldon: I welcome reports today as to the future outcome of the RB211 discussions in the United States, and I do not wish to press the Prime Minister on the details of these negotiations, but can he at least say whether he is prepared to continue with the RB211 contract in the absence of guarantees as to the future of Lockheed?
  The Prime Minister: No, Sir, we consider it essential to have guarantees about the future of the aircraft if we are to go ahead with the engine.
  Mr. Rost: Will my right hon. Friend resist the temptation to visit some of the obscure places which hon. Members opposite are always trying to persuade him to visit and so find time to come to Derbyshire, where he will see for himself the rousing welcome which he will receive from many thousands of my constituents who greatly appreciate the Government's efforts to rescue the RB211 project? Further, would it not be a most important boost to morale and the future of the project if we could now have an order from a British airline for the RB211 Tri-Star?
  The Prime Minister: The question of orders by B.E.A. or B.O.A.C. for the TriStar is a matter for their commercial judgment.
  Mr. Harold Wilson: While these difficult negotiations are going on, no hon. Member will wish to make matters more

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  difficult for the right hon. Gentleman by pressing him on the details of the negotiations, but, if the stories from America which we read in the Press are correct, the matter may be protracted for some further weeks because of a possible need to secure Congressional approval. So will the Prime Minister say whether the Government will be able to continue to finance the RB211 programme in this country while whatever American procedures are necessary are carried through?
  The Prime Minister: I appreciate the attitude of Her Majesty's Opposition in this matter. We are pressing ahead with the negotiations as hard as possible, and while the negotiations go on we shall continue the work which is being done on the RB211.
  Mr. Thorpe: I do not wish to probe the present state of the existing negotiations, but, as the Government have said that a Federal guarantee is regarded by them as a vital condition, could the Prime Minister say who is currently negotiating in Washington on this issue and when we are likely to have a statement?
  The Prime Minister: It is impossible to say at the moment when a statement will be made. Secretary Connally told the Press, as was reported on Sunday, that he and the American Administration were monitoring the whole of these proceedings which are now going on. As regards the general negotiations, a further team from Rolls-Royce, accompanied by Members of the Ministry of Aviation Supply, are going to Burbank this week.

  INFLATION
  Mr. Carterasked the Prime Minister how many letters he has received since 1st January on the subject of inflation.
  The Prime Minister: Two hundred and seventy-seven, Sir. Many of these correspondents express their concern about the impact of inflationary wage settlements on prices.
  Mr. Carter: I thank the Prime Minister for that reply, but will he not agree that the Government's complete loss of control of the economic situation was adequately summed up yesterday in remarks of the Ministry of State at the
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  Department of Employment when in reply to my right hon. Friend the Member for Blackburn (Mrs. Castle) he said that cost inflation was the cause of unemployment, yet in a subsequent reply to his hon. Friend the Member for Harrow, West (Mr. John Page) he said that he could produce no evidence to link cost inflation and unemployment? Has the Prime Minister any evidence?
  The Prime Minister: I was here when my hon. Friend gave his answers to questions, and that was not the gist of what he was saying. I should have thought that it was absolutely clear to everyone that many firms which are being pressed very hard by increasing wages are being forced to stand off workers. There is absolutely no doubt about this, and both employers and the T.U.C. recognise it.
  Mr. Hordern: Does my right hon. Friend agree that the best description of the Labour Government's policy for controlling inflation was given by the right hon. Member for Coventry, East (Mr. Crossman), when he said that their policy was to allow wages to let rip before prices rose? Will my right hon. Friend consider giving the right hon. Gentleman some recognition for having not only the largest mouth but the largest foot in the whole business?
  The Prime Minister: That is not a matter about which I am likely to quarrel, if that is the case. It is true that the right hon. Gentleman made that point very clearly in a broadcast on Radio 4, in which he said that the General Election of 1966 was won by the Labour Party by choosing the moment of wage inflation before prices had caught up. He went on.
  "Obviously, we were seeking to do it again in this Election in 1970."
  What annoys the right hon. and hon. Members opposite so much is that they failed.
  Mr. Harold Wilson: Since the right hon. Gentleman rushed to use the quotation yesterday, and since his memory seems to be as bad as that of my right hon. Friend, will the Prime Minister explain—if he accepts this, as he did last night—why prices rose in the year after the March, 1966, election less than in the year up to that election?
  The Prime Minister: If the right hon. Gentleman is questioning the words which his right hon. Friend used—[HON. MEMBERS "Answer."] I am dealing with the first part of the question. If the right hon. Gentleman is asking me not to accept his right hon. Friend's word, I must say that I have confidence in what his right hon. Friend says; he has so often been proved right in the past. If the right hon. Gentleman is asking me to choose between his own words and those of his right hon. Friend, he must not embarrass me. I am perfectly prepared to examine the figures the right hon. Gentleman has given.
  Mr. Harold Wilson: I did not ask the right hon. Gentleman to question my right hon Friend. I asked him how he explains, in view of his speech last night, the fact that prices rose less immediately after that election than before it.
  The Prime Minister: I have told the right hon. Gentleman that I am perfectly prepared to examine the figures he alleges.

  NATIONAL ECONOMIC DEVELOPMENT COUNCIL
  Mr. Barnettasked the Prime Minister when he next intends to take the chair at a meeting of the National Economic Development Council.
  The Prime Minister: I did so at the last meeting on 7th April. My right hon. Friend the Chancellor of the Exchequer is Chairman of the Council, but I shall continue to take the chair from time to time.
  Mr. Barnett: In the present serious situation, will the Prime Minister consider attending again soon? If he is not prepared to answer the previous question from my right hon. Friend the ex-Prime Minister—-and the future Prime Minister—will he not accept that the Chancellor said categorically in his Budget Statement that he has the power to reduce unemployment? If, as his speech last night indicated, the Prime Minister is not prepared to say that a figure of 800,000 unemployed is intolerable, will he at least tell the House today clearly that he is prepared to intervene if it should reach the outrageous level of 1 million that is forecast?
  The Prime Minister: The figure given by the hon. Gentleman is a forecast for which he must be responsible, not the Government. I have made it clear that I will from time to time preside over meetings of the N.E.D.C., and I always tell the Council when I am going to do so. My right hon. Friend the Chancellor said that he had made a judgment on the best information that he could get of what was likely to happen to unemployment in relation to productive capacity and wage demands, that in his Budget he had taken action to deal with these, and that if in the future further action is necessary he has the means to take it.

  INDIA AND PAKISTAN
  Mr. William Hamiltonasked the Prime Minister if he will seek to pay an official visit to India and Pakistan.
  The Prime Minister: I had the pleasure of visiting India and Pakistan in January, and I have no plans at present for further visits.
  Mr. Hamilton: Does the Prime Minister agree that there is a great danger of conflict in the area between Pakistan and India? Is not it time Her Majesty's Government made an outright and forthright condemnation of the bloody outrages now being committed by the Pakistani Army on the East Pakistanis?
  The Prime Minister: The Prime Minister of India has given very firm assurances, both in public and in private, that India has no intention of intervening in the situation in East Pakistan. The object of Her Majesty's Government is to do everything possible to bring an end to strife and to try to bring about a political solution to the difficulties. It is to that end that we have been working.
  Mr. David Steel: Whilst we accept the general proposition that we do not comment on the internal difficulties of any other member of the Commonwealth, are not the reports coming out of East Pakistan so outrageous that some comment is called for from other members of the Commonwealth?
  The Prime Minister: We are all aware of the reports which have come out of

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  East Pakistan, but if we are endeavouring to bring an end to conflict and achieve a political solution, we must be allowed to adopt the means which seem to us best.
  Mr. Sandys: Whilst I deplore the tragic loss of life in East Pakistan, is my right hon. Friend aware that he will have general support for maintaining the policy adopted by the previous Government in regard to Biafra and giving no encouragement to rebel forces in any Commonwealth country?
  The Prime Minister: I have set out what our objective is in the matter. My right hon. Friend understands that we want to see a political solution to an immensely difficult situation. In my messages to the President of Pakistan it has been my purpose to achieve this.
  Mr. Harold Wilson: We took the view, supported by the then Opposition, that it was not right for the House to intervene in the internal problems of Nigeria, but we at least used our influence with the Nigerian Government together with others, to persuade them to invite observers into the areas concerned to provide some guarantee that there was no genocide and that there was no truth in some of the allegations being made internationally about what was going on, and what would go on, in the so-called Biafran territory. That was totally successful, and the reports showed that there was no genocide. Has the Prime Minister made such a proposal, either separately or with Commonwealth colleagues, that there should be international observers—one from this country, perhaps, one from Asia, one from the United Nations, and so on—to report to the world outside about conditions in East Pakistan and about the very grave accusations of murder of civilian populations?
  The Prime Minister: I would appreciate it if the right hon. Gentleman would not press me on the details of the exchanges I have had with the President of Pakistan. If I recall correctly, the right hon. Gentleman himself was very careful in his discussions with the Nigerian Government not to reveal the details of confidential exchanges and was extremely careful in the timing of any of the proposals he made.
  Mr. Harold Wilson: I answered many questions in the House on the matter, and made a very full statement after my visit to Nigeria. We had a series of debates, including Standing Order No. 9 Adjournment debates, about these questions at the time. The House was informed about the proposal for observers after we made it and it was accepted, and was kept fully informed about further proposals we made. At the right moment, surely, the right hon. Gentleman will want to give a full account to the House of what he has done in this matter?
  The Prime Minister: Yes—at the right moment I am fully prepared to give further information to the House.

  BATHGATE
  Mr. Dalyellasked the Prime Minister if he will make an official visit to Bathgate.
  The Prime Minister: I have at present no plans to do so.
  Mr. Dalyell: With the 7·5 per cent. male unemployment rate in Scotland and serious figures in the north and west of England, is it sensible and rational at this moment to change from a system of investment grants, which give money to firms when they want it in the initial stages, to a system of tax allowances, which are a long-term issue?
  The Prime Minister: We have discussed this question before in considerable detail. The point has always been that we must take the complex of measures for development areas together. I am confident that free depreciation, the additional assistance under the Local Employment Acts, and the cuts we have made in corporation tax, will be an effective inducement to the development areas, just as effective as the regional differential in the investment grant scheme.
  The hon. Gentleman is concerned with the Bathgate area. In a very serious unemployment situation in Scotland, it is a matter of encouragement that in the Bathgate group of employment exchange areas unemployment fell from 6·9 per cent. in March to 6·7 per cent. in April. If that can be maintained, it is a matter of pleasure.
  Mr. Geoffrey Finsberg: Does not my right hon. Friend agree, however, that the situation is not being assisted by companies like the Ford Motor Company giving inflationary wage increases and at the same time opting out of legally binding trade union agreements?
  The Prime Minister: I think we all recognise the problem posed by the awards made by the motor industry. I would have thought that it was in the interests of the Opposition and those whom they are seeking to serve to recognise the impact of such awards on the rest of industry—in particular when their own policy was that there should be no increase greater than 4½ per cent. For them to support very large wage increases reveals the bankruptcy of their own policy.
  Mr. Roy Jenkins: Will the right hon. Gentleman tell us whether the recent formidable and apparently continuing rise in unemployment in Scotland and elsewhere was in accordance with the forecasts on which the Budget was based or not?
  The Prime Minister: My right hon. Friend the Chancellor of the Exchequer has made plain, as many Ministers have done in both Governments, that there are difficulties at any time in forecasting the movement of unemployment, particularly at a time when there is obviously a considerable increase in redundancies because employers are standing men down on account of wage costs. [Interruption.] There can be absolutely no doubt about this. [Interruption.] However much his hon. Friends may shout behind him, the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) is intelligent enough to know that that is the case.
  Mr. Roy Jenkins: Will the right hon. Gentleman please explain a point which is found generally mystifying by me and, I believe, by a large number of other people? If it is right, given the present level of wage and cost inflation, for the Chancellor to plan in his Budget, as he clearly stated, to prevent unemployment rising further, even though this appears to be a very delayed effect, why is it not right for him and the Government to take any steps to bring it down from its present totally unacceptable level?
  The Prime Minister: The answer is straightforward. If my right hon. Friend were to go further at this moment before seeing the results of the measures he has taken, he would be running what he himself has described as irresponsible risks in relation to further inflation and the effect on the balance of payments. This judgment is also supported by the National Economic Development Office, which took the view that my right hon. Friend had made a judgment which in the circumstances was broadly right.
  Mr. Bruce-Gardyne: Does my right hon. Friend recall that, at the time of the last Budget of the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), it was broadly predicted by most economic commentators that the monetary targets he then set would lead to a substantial increase in unemployment during the past winter? Is this not what we are seeing today?
  The Prime Minister: We are seeing today the continuation of a complex of factors certainly in operation under the last Administration. We have debated control of monetary policy many times. Money supply was brought under control at the end of the year.
  Mr. Harold Wilson: Perhaps I misheard the right hon. Gentleman and no doubt he will correct me if I did, but I understood him to say that the Chancellor and other Ministers, even with all the information available to the Government, cannot forecast the trend ahead. Does not he recall that when he was sitting on these benches he twice forecast a level of 750,000 unemployed for the following winter but that it never reached that level? Unemployment has now reached over 800,000. Does he not recall his forecast on 16th June last, when he promised to reduced unemployment at a stroke?
  The Prime Minister: The action we have taken in halving selective employment tax is going to have its own impact both on prices and on unemployment. Whereas the right hon. Gentleman caused unemployment in the service industries, what we are doing will provide greater employment in those industries, particularly in the tourist areas.
  Several Hon. Members—
  Mr. Speaker: Order. This is becoming a debate.

PAKISTAN
Mr. Shore: On a point of order, Mr. Speaker. I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 in order to discuss a specific and important matter which should have urgent consideration, namely,
"The need for a Government initiative to halt the savage repression by the Pakistan Army of the people of East Bengal and of the majority party in the recent all-Pakistan elections."
Recent events in East Pakistan have caused growing concern on both sides of the House. Before the Easter Recess, over 200 right hon. and hon. Members put their names to a Motion calling for a cease fire. The matter is specific enough, I believe. It is the suppression in a Commonwealth country—which recently subscribed to the Commonwealth Declaration of Principles—of a new-born democracy by armed power. There can be few examples in history where the will of the majority so recently and clearly expressed in a free election has been so ruthlessly set aside. That is the heart of the matter.
I say to the Prime Minister and others who have commented that it is this which distinguishes what is happening in Pakistan and in East Bengal in particular from many other cases where there has been internal strife, both in the Commonwealth and in other countries, and where we have not thought it right perhaps to be over-ready with comment. We are seeing the suppression of a democracy and the recent declaration of the will of the electorate. That is the heart of the matter, and it is that, of course, which has led to the bitter civil war which is now raging and which is bound to leave a grim legacy of division, strife and hunger.
The matter is urgent because great damage is being done out there day by day. The shelling, bombing and strafing of important centres of population and the use of force on a scale which often appears to be as senseless as it is brutal are now known to most right hon. and hon. Members. There is, I regret to say, evidence of the Pakistan Army's intention to eliminate many of the civil, military and intellectual leaders of East Bengal. There are reports of serious food short-
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age, and the House will recall that it is only three or four months ago that East Bengal was ravaged by the cyclone. These events have come on top of the devastation caused then. Furthermore, hundreds of thousands of refugees are on the march in East Bengal and about 100,000 are reported to have crossed the Indian frontier in the last three days alone.
We are in the midst of a tragedy and, unhappily, one in which the next stage may be even worse than the one gone before. On 5th April, the Foreign and Commonwealth Secretary—[Interruption.]—I am coming rapidly to my conclusion—urged an end to strife and a start to reconciliation. That view was shared by all of us, but there has been no response.
I say to the Prime Minister that there is a point at which our desire to be restrained may be interpreted as a shameful and indifferent silence in face of events. Whatever the Government may feel about expressing too clearly what they are saying to the Pakistan Government, it is right—and I hope that we shall have an opportunity in a debate—for this House to express on behalf of the British people its feelings that the fighting should stop, the troops be withdrawn, the political process resumed and the future of Pakistan and East Bengal decided by none other than the people themselves.
Mr. Speaker: The right hon. Member for Stepney (Mr. Shore) asks leave to move the Adjournment of the House under Standing Order No. 9 in order to discuss a specific and important matter which should have urgent consideration, namely,
"The need for a Government initiative to halt the savage repression by the Pakistan Army of the people of East Bengal and of the majority party in the recent all-Pakistan elections."
The right hon. Gentleman was good enough to give me notice of his intention to make this application. I have considered the matter and have noted very carefully what he has said. This is a serious matter. I have to interpret the Standing Order according to its terms and in the light of the Report of the Select Committee upon the basis of which the Standing Order was changed. I regret that I cannot submit his application to the House.

QUESTIONS TO MINISTERS
Mr. St. John-Stevas: On a point of order, Mr. Speaker. May I draw your attention to the near monopolising of the Question period that took place today by the Leader of the Opposition, who has since evaporated, aided and abetted by the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), who has remained in his place? May we appeal to you, Mr. Speaker, to protect the rights of back benchers on both sides of the House, remembering that one of our few opportunities to get at Ministers occurs at Question time?
Mr. C. Pannell: Further to that point of order. In giving your Ruling, Mr. Speaker, will you bear in mind the fact that it has always been laid down that the Leader of the Opposition is an exceptional person? [HON. MEMBERS: "Hear, hear."] It was laid down, for example, in the case of Winston Churchill, though it caused a great deal of acrimony at the time when I had to raise a similar point of order with one of your predecessors, Mr. Speaker Morrison, over the rights of back benchers. It should be borne in mind that the Leader of the Opposition speaks in a collective capacity for nearly half the House and that what he has to say is far more relevant and important than anything the hon. Member for Chelmsford (Mr. St. John-Stevas) might say.
Mr. Boyd-Carpenter: While not disputing the submission made to you, Mr. Speaker, by the right hon. Member for Leeds, West (Mr. C. Pannell) that the Leader of the Opposition is an exceptional person—[Interruption.]—th e trouble this afternoon was that not only the Leader of the Opposition but the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) were conducting a duet, no doubt on the principle of healthy competition. [HON. MEMBERS: "Cheap."]
Mr. Bob Brown: Further to that point of order. Notwithstanding anything the hon. Member for Chelmsford (Mr. St. John-Stevas) has already said about my right hon. Friend the Leader of the Opposition, is it not a fact that my right hon. Friend had to persist in pressing the Prime Minister because of the right hon.
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Gentleman's wriggling and refusal to answer his questions?
Mr. Speaker: I am grateful for the assistance which hon. and right hon. Members on both sides are giving the Chair. I believe that I would be unwise to agree with the remarks of the hon. Member for Newcastle-upon-Tyne, West (Mr. Bob Brown) or the comments of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), but with the themes of the hon. Member for Chelmsford (Mr. St. John-Stevas) and the right hon. Member for Leeds, West (Mr. C. Pannell) I found myself in greater agreement, and I shall act accordingly.

PRIME MINISTER'S OFFICE (MEMBERS' LETTERS)
Mr. McNamara: On a point of order, Mr. Speaker. I seek your guidance on a matter concerning the privacy of hon. Members' correspondence with the office of the right hon. Gentleman the Prime Minister. I have given notice to the right hon Gentleman's office that I would be raising this point.
I will briefly indicate the background to the situation, and although the facts put it in context they do not reveal the principle. On 24th March, 1971, I wrote to the Prime Minister enclosing a petition from one of my local co-operative guilds about rising prices. On 1st April, 1971, I received a reply signed by Mr. Douglas Hurd, Political Secretary, answering on behalf of the Prime Minister.
Last Thursday, 15th April, I received a telephone call from the Hull Daily Mail. I assumed they were asking me for my comments on the letter I had received from Mr. Hurd, which I had sent to them via a Lobby correspondent. However, they were asking me about a totally different matter, so I asked them what they were doing about the Prime Minister's letter. They replied that they had already received a copy of the correspondence from the Kingston-upon-Hull Conservative Federation's agent, Mr. R. MacKenzie.
I was somewhat surprised because I would normally have imagined that the Prime Minister, if he was intending to release a letter to the Press, would have done it through his Press Office and

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probably, but not necessarily, would have informed me of his intention. I was surprised therefore to learn that he had done it through his party machine, particularly as I had written to him as Prime Minister and not as Leader of the Conservative Party. [HON. MEMBERS: "Reading."] I accept that I am reading and speaking quickly. I am endeavouring to save the time of the House.
I asked the Hull Daily Mail if they would allow me to see the correspondence, which they kindly did, and the letter from Mr. MacKenzie to the Hull Daily Mail briefly stating the nature of the correspondence enclosed, the last paragraph of which stated:
"I am asked by Mr. Douglas Hurd to indicate that there is no objection to the publication of any part of this reply."
A number of questions immediately arise from this paragraph, which is the nub of the situation and the principle involved. [HON. MEMBERS: "Reading."] I said that I was endeavouring to avoid delaying the House.
First, is it normal practice for Mr. Hurd, on behalf of the Prime Minister, to send correspondence addressed to the Prime Minister by hon. Members of the Opposition to local Conservative organisations?
Second, what correspondence is, in fact, sent and what criteria are used in deciding whether or not to inform local Conservative organisations about it?
Third, is correspondence sent which the local federation has been asked not to publish?
Fourth, is correspondence sent which the local federation is told it can publish in part?
Fifth, by what criteria does Mr. Hurd decide whether local correspondence should be forwarded to the Conservative federation, and what guarantee do back benchers have that correspondence will be treated in confidence when the occasion arises?
Sixth, who is Mr. Hurd? Who pays him? Is he a civil servant? Has he signed the Official Secrets Act?
Seven, what happens when a Minister is acting in a quasi-judicial capacity and matters relating to the affairs of a local
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authority are sent when a Minister is acting in such a capacity?
I apologise for delaying the House at this time, but I have done so only because this seems to me to be an extremely important matter.
Mr. Speaker: The hon. Gentleman has raised this as a point of order, but I do not detect any point of order in it. Had he raised it as a matter of Privilege I would, of course, have taken time to consider it; but as a point of order, I must rule that he has raised no point of order for me.
The Prime Minister: Although the hon. Member for Kingston upon Hull, North (Mr. McNamara) has raised what has been ruled not to be a point of order, perhaps I may be allowed to comment on it, particularly as he was kind enough to give me information that he intended to raise this subject. Perhaps I should say at the outset that had he at the same time, or at any time, sent me a list of the questions which he just posed, I would have sent him a detailed answer to each.
On the main point of his submission, he said that the letter and petition which he had sent to me had appeared in a report in the local Press and that therefore the matter had been made entirely public. My office was asked what answer had been sent and the reply which he has quoted was then forwarded. The hon. Member himself said that he had given it to a Lobby correspondent of a newspaper. In the circumstances, the office which handled this at No. 10 felt justified, in order that there would be no misunderstanding about it, to send the full text.
In view of the point which the hon. Gentleman has raised, I have now said that each of these letters to any hon. Member will he signed and handled by myself, even when it is a standard petition sent in by hon. Gentlemen opposite with covering letters.
Mr. McNamara: On a point of order—
Mr. Speaker: I have ruled that it is not a point of order.
Mr. McNamara: This is another point of order, Mr. Speaker, which relates to the comments just made by the Prime Minister. In view of what the right hon.

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Gentleman said about the treatment of correspondence in future, I have no further wish to proceed with the matter.
Mr. James Johnson: Further to that point of order—
Mr. Speaker: I said that it was not a point of order.
Mr. Johnson: As a point of substance, may I inform you, Mr. Speaker, that I had a very similar experience. I was beginning to wonder whether the Prime Minister had an obsession with the citizens of Hull. I, too, received a letter signed by Mr. Hurd. I hope that in future—
Mr. Speaker: Order. This is very interesting, but I have ruled that it is not a point of order.
Sir Harmar Nicholls: On a point of order. Is it not an abuse of the privilege which an hon. Member has in this House to try to embroil an impartial Chair in what is obviously a spiteful party wrangle? [Interruption.]

LAND REGISTRATION AND LAND CHARGES BILL [Lords]
Ordered,
That the Land Registration and Land Charges Bill [Lords] be referred to a Second Reading Committee.—[Mr. Hawkins.]

WELSH AFFAIRS
Ordered,
That the matter of the Economic Situation in Wales and Monmouthshire, being a matter relating exclusively to Wales and Monmouthshire, be referred to the Welsh Grand Committee for their consideration.—[Mr. Whitelaw.]

COUNCIL HOUSING (TENANTS' REPRESENTATION)
3.50 p.m.
Mr. Dick Leonard: I beg to move,
That leave be given to bring in a Bill to provide for the establishment in each local authority area of housing advisory committees containing representatives of council tenants and other members" and for the co-option on to housing management committees of tenants' representatives; and for purposes connected therewith.
There is in some circles a belief that council tenants are exceptionally privileged people. Indeed, the Minister for Housing and Construction recently vastly amused the House by digging up an old quotation from my right hon. Friend the Member for Coventry, East (Mr. Crossman) containing some notably inapposite remarks about them being a pampered and cosseted class. The reality for council tenants is somewhat different.
Technically, local authorities have mostly been excellent landlords, providing good quality accommodation with, in practice if not in theory, almost absolute security of tenure and, at least until recently, at rents markedly below those prevailing in the private sector. But the attitude of councils to their tenants has from the outset been one of almost unalloyed paternalism. Pettifogging restrictions on such matters as lodgers, domestic animals and musical instruments are not as prevalent as they are widely reported to be, but they do exist.
Almost alone among householders, however, the 5½ million families living in council houses have no say at all in the most elementary aspects of their home environment, such as choice of colour schemes and the timing and frequency of repairs and maintenance. Is it really surprising, then, that the leader of the Labour group of a London borough recently said to me with great force, "Nobody would choose to be a council tenant if he did not have to. I know—I have been a council tenant all my life".
For far too long council tenants suffered in silence their almost total lack of participation, only breaking into spasmodic bouts of protest at times of large rent increases. For their part, local authorities of both political parties have been painfully slow in associating tenants with the management of their own homes.

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As long ago as 1948 Political and Economic Planning, in a powerfully argued tract entitled "Councils and their Tenants", urged councils to devolve management functions to local committees on which tenants would be directly represented. It had no apparent effect and it was over 20 years before any discernible impetus towards tenant participation began to develop.
Two years ago, in June, 1969, my hon. Friend the Member for Bilston (Mr. Robert Edwards) introduced his Council Tenants Charter Bill, which included a provision for establishing housing advisory committees, including tenants' representatives, in all local authority areas. That Bill made little headway, but my hon.' Friend the Member for Bilston, whose long-standing struggle to increase the rights of council tenants has been a shining example, hit upon a most valuable means of improving democracy at the local level. Although I have adapted them to some extent, the main ideas in the Bill which I seek leave to introduce today derive directly from my hon. Friend's Bill, and I am delighted that he has agreed to be one of my sponsors.
Although the Council Tenants Charter Bill was not enacted, there have been during the last two years repeated signs of stirrings at the grass roots level. In Liverpool, an organisation representing all the tenants' associations in the city has had regular meetings over 3½ years with the housing chiefs of the city and have discussed detailed questions of housing management with them. The Association of London Housing Estates has, through its local groups, more recently established similar liaison with the Southwark and Lambeth Borough Councils.
The Labour opposition on the Greater London Council recently attempted to promote a scheme for tenant participation, but it was rejected by the Conservative majority on the Council. However, the Conservative-led Camden Council recently initiated the most ambitious programme of tenant representation which has yet been proposed.
Since my proposals were published a few weeks ago I have received numerous inquiries from tenant groups in many parts of the country, including areas as
958
far apart as Ebbw Vale and Hamilton. Hon. Members will have noted that the councils I have mentioned as having already initiated schemes of tenant participation include both Labour and Conservative-controlled authorities, and the Bill which I seek leave to introduce is supported by Conservative and Liberal as well as Labour sponsors. It is in no sense intended as a partisan Measure.
The proposed Bill contains two principal proposals. The first is that each local authority with housing powers should establish a housing advisory committee, at least half of whose members should be council tenants and at least one member who was an elected councillor. The advisory committees could deal with such matters as repairs, colour schemes for external painting, the layout of open spaces and the siting of children's play areas. Sub-committees may be appointed at the council's discretion for particular areas and individual estates, and in the case of large estates they shall be appointed if 10 per cent. of the tenants or more submit a written request to the council to that effect. The size of the committees, their method of appointment and their detailed functions would be left to the discretion of the local authority. This should allow for considerable variations to suit local needs and for later adaptations to the proposed new structure in the light of experience.
The second proposal in the Bill is that at least two council tenants shall be co-opted on to the housing management committee of each local authority. As hon. Members are aware, councils already have the power to co-opt up to one-third of the membership of these committees, but very few of them appear to make use of this power. Once again, the method of selection will, under the Bill, be left to the discretion of the local authority.
The proposed Bill is a modest Measure. It does not compel any local authority to do anything which it does not already have the power to do. Some councils—very few, regrettably—have already gone a good deal further towards increasing tenant participation in housing management than my Bill proposes. Nothing in the Bill would confine the activities of these councils or prevent them from taking further initiatives in the same

959
direction. But if it is enacted it will mean that in every local authority area council tenants will be given some say in the management of their own affairs. I hope that hon. Members will feel that this is a worthy objective and that they will give me leave to introduce the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Leonard, Mr. Frank Allaun, Mr. Blenkinsop, Mr. Critchley, Mr. Robert Edwards, Mr. Alexander W. Lyon, Mr. Pardoe and Mr. Pavitt.

COUNCIL HOUSING (TENANTS' REPRESENTATION)
Bill to provide for the establishment in each local authority area of housing advisory committees containing representatives of council enants and other members, and for the co-option on to housing management committees of tenants' representatives; and for purposes connected therewith presented accordingly, and read the First time; to be read a Second time upon Friday, 30th April, and to be printed. [Bill 151.]
ORDERS OF THE DAY

  LICENSING (ABOLITION OF STATE MANAGEMENT) BILL
  Order for Second Reading read.
  4.0 p.m.
  The Secretary of State for the Home Department (Mr. Reginald Maudling): I beg to move—
  Mr. William Hamilton: On a point of order, Mr. Speaker. You will be aware that a lot of hon. Members are new Members and therefore probably not too well acquainted with the procedures of the House. Since there are many hon. Members opposite who are either chairmen or directors of breweries, would you make it clear that they must declare their interest before they speak, just in case their companies might be thinking of taking over some of those State-owned breweries which are very profitable enterprises?
  Mr. Maudling: I beg to move, That the Bill be now read a Second time.
  The purpose of the Bill is a simple one and clearly indicated in the Short Title. Its purpose is to wind up State management of the liquor trade in three small areas of Great Britain where it now operates. In effect, it will bring to an end an experiment that began something like half a century ago. I would have thought that half a century was enough for any experiment, even an experiment in State management. It also accords completely with the Government's declared intention of eliminating any functions of the central Government which can be shown to be unnecessary in the sense that they can be carried out by other means—
  Mr. William Hamilton: Like Rolls-Royce?
  Mr. Maudling: —and without any wasteful use of public resources.
  No doubt this Bill will be called doctrinaire by hon. Members opposite—
  Mr. Stanley Orme: It is.
  Mr. Mandling: It is my experience over many years that the word "doctrinaire" is one generally applied in Opposition to a Government carrying out

  961
  the policies for which they were elected by the people. I do not particularly mind if we are declared doctrinaire on this. The Government's decision to abolish State management was announced by my right hon. Friend the Secretary of State for Scotland and myself on 19th January when we indicated that legislation would be forthcoming to wind up the activities of the Carlisle and District State Management Scheme and those of the State Management Districts of Gretna and Cromarty Firth. This is the object of the Bill. Its particular effect is to repeal the statutory provisions relating to State management and to facilitate the disposal of that management—
  Mr. Orme: Are you giving it to Youngers?
  Mr. Maudling: Of course not.
  Mr. Orme: Who then?
  Mr. Maudling: I will explain to the House. If the rather garrulous Members opposite will look at the Bill they will see that we have to dispose of the property on such terms as would be expedient in the public interest. That is the obligation laid on the Government by this Bill. I will describe the provisions of the Bill shortly.
  Meanwhile, it might help the House if I were first of all to outline the historic origins of State management in England and Scotland and explain why we have concluded that this experiment ought now to be discontinued. When World War I arose it brought a sudden and unaccustomed affluence to various parts of Great Britain. Drunkenness increased, and the Government of the day was concerned about the effect of drink on war production. So in 1915 a Defence of the Realm Act set up a Central Control Board with wide powers to control liquor.
  Some of the measures it introduced then, such as the "afternoon break", have since been incorporated into the general licensing law of the country. However, there were particular areas in which measures of this general character were not thought to be sufficient. In these areas there was started what became known as an experiment in "disinterested management". The underlying idea was that some publicans were encouraging excessive drinking to divert people's affluence into their own pockets
  Mr. Eric S. Heffer: It is not unknown today.
  Mr. Maudling: It was thought that if a "disinterested management" with no direct interest in the profits from the sale of liquor organised the liquor supply and if no one else was authorised to sell liquor the evil would be remedied. It was, to put it mildly, a rather peculiar conception.
  So State management areas were designated, the Central Control Board compulsorily acquired all but a few of the licensed premises in the areas and sale by anyone else was prohibited. In Carlisle this power went hand in hand with the closing of a number of breweries and public houses. By the end of the war State management had been established in three districts: in Carlisle and the bordering Gretna area of Scotland where munition work had provided the affluence and in Cromarty where there was the naval base of Invergordon.
  It might be thought that an emergency war-time experiment of this kind would have been brought to an end with the end of the war, but it was then decided that this so-called experiment in "disinterested management" should continue in all three districts. The Licensing Act 1921, abolished the Central Control Board and the function of controlling and supplying liquor in the districts was transferred to the Home Secretary and the Secretary of State for Scotland. The statutory powers conferred on Ministers have remained virtually unchanged since and are contained in the Licensing Act, 1964, Part V and Schedule 9, and in the Licensing (Scotland) Act, 1959, Part V and Schedule 8.
  We should be clear that this experiment was never intended to be an experiment to determine whether the State can successfully run a liquor business. There are two things involved—State supply of liquor and State control over the provision of liquor. The Act empowers the Home Secretary to supply it and, with certain exceptions, prohibits anyone else from doing so except with the Home Secretary's legislation. The Scottish legislation is similar. It was an experiment to see whether a system of liquor control, in which the supply of liquor was in the hands of a "disinterested management" responsible to the Secretary of State, was better than the ordinary system

  963
  in which the supply was by private enterprise subject to the control of local licensing justices. In other words, it was an experiment to see whether excessive drinking was better cured by abolishing any incentive to make the production of liquor efficient rather than limiting the times and conditions in which it could be provided in normal trading circumstances.
  We are now far from the original problems that caused State management to be introduced in these three areas. No one could reasonably suggest that there is any risk there today of outbursts of drunkenness promoted by the publicans.
  Mr. Orme: Or anywhere else.
  Mr. Maudling: That is the whole point. We are bringing this area into the general system. The experiment must be judged on its value as a method of liquor control in the circumstances of today.
  On this test, we can only say that there is no evidence that this is a better way of controlling liquor supply than through the ordinary licensing laws. There is still a social problem about the consumption of liquor, but one that has changed enormously in recent decades. I believe that the present system of licensing laws is archaic and, for that reason, I and my right hon. Friend have set up two Committees to consider the whole system of control of liquor supply and to make recommendations. I accept that between the wars the example of State management may have helped to improve the standard of licensed premises throughout the country, but the general system has now improved and I do not believe that State management is in any way in the lead. I do not believe that anyone can honestly claim this to be so.
  It is a rather strange comment that the original purpose of the State management scheme was to stop people drinking through discouragement, whereas now I suspect that some hon. Members opposite will argue that the beer is so good and so cheap that people are being encouraged to drink far more than they otherwise would. The wheel has gone full circle. The Government have concluded that this experiment no longer serves any useful purpose. It is up to those who wish to continue it to show that it does, and I challenge them to do this. It certainly cannot be demonstrated by any
  964
  drunkenness statistic or any other indicator or statistic of which I am aware.
  As for the concept of "disinterested management", it seems wholly absurd in modern times. What we want is the maximum of interested management, the maximum of management interested as far as possible in doing its job as efficiently as possible and making its product as attractive as possible. If it is thought that there is something immoral in trying to sell liquor, then the sale of liquor should be limited by licensing laws, not by making those who purvey it operate in conditions of less than full efficiency.
  It is more than a question of no good purpose being served. This experiment is certainly having bad consequences. It prevents the licensing authorities from exercising their proper function of liquor control. The justices may decide there is a case for additional facilities and may grant a licence, but their action is rendered nugatory by the Secretary of State who can decline to grant his written authority without necessarily himself supplying the facilities that the justices thought were needed. Enterprise thereby is certainly restricted. Shopkeepers are prevented from extending their trade by selling liquor. Supermarkets, which provide liquor at very competitive prices in many areas, are prevented from operating in these areas because of the power of the Secretary of State. People in the areas are deprived of the facilities which they should have and which the licensing authority may consider to be both needed and justified.
  Nor is it any answer to say that State management will provide everything that is reasonably needed. This is certainly not so. The great disadvantage of a geographically restricted monopoly organisation is that it does not always have the resources to cope with all that needs to be done in the area, and the advantage of commercial freedom in these matters which the whole of the rest of the country enjoys is that it allows a flexible and more vigorous and efficient response to any consumer need that is not at present being met. So much for the State control aspect.
  I now turn to the State management organisation, in other words, the organisation of supplies of liquor for sale in the areas—
  Mr. Gregor Mackenzie: Is the Home Secretary suggesting that in Ross and Cromarty and Gretna there has been a demand for more public houses, and would he be willing to support more public houses in either of these places?
  Mr. Maudling: My right hon. Friend the Secretary of State for Scotland assures me that there are 19 applications, and I hope he will be able to deal with that in more detail when he replies to the debate.
  I come to the question of management organisation—
  Mr. William Ross: Surely the Secretary of State has the power to grant written authority to the 19 applicants if he thinks the public houses are required?
  Mr. Maudling: I understand not under the present system. The point is that State management and State control go together, and the only reason why the present system operates as it does is because of the exercise of the monopoly powers by the Government. This is precisely the point I am coming to next. If one takes away the monopoly powers all that is left is a State organisation for brewing and providing liquor in general competition with other suppliers, and this in the view of the Government is not a sensible, reasonable or proper activity for Government enterprise in this country. These are the reasons why the abolition of the monopoly control necessarily embraces a change in the management operation of the organisation. There can be no justification for the expenditure of public money and Government resources on the operation of liquor businesses in three small areas of Great Britain alone, nor does it make any economic sense. I cannot help wondering why, if the Labour Party thought it was such a good idea in these areas, it did not take the opportunity when it was in power to extend the idea throughout the country as a whole. I shall be interested to hear the answer to that.
  It has been suggested in some quarters that it would be wrong to dispose of what is described as a profitable nationalised industry. It is not a nationalised industry in the true sense. It is a Govern-
  966
  ment Department, staffed by civil servants and run directly by Ministers. This is very different from the modern concept of a nationalised industry as it has evolved in recent decades. The activities are geographically restricted to three small areas. It is true that there is a profit, but it is a very small one and a very inadequate return on capital. The two Scottish districts in the last year for which figures are available had a return on capital of just under 7 per cent. The figure for Carlisle for the year 1969–70 was about 5 per cent. return on capital. The year 1970–71 will probably be better than that. But the previous year was much worse, only 3 per cent. Taking a three-year average the return on capital is 4 per cent., which is a wholly inadequate return on the capital invested.
  I wonder when the Labour Party will finally come to realise that in a capitalist society, whether the capital is privately owned or State capital, the prosperity of society depends on the efficiency with which that capital is used and the rate of return on the capital. The rate of 4 percent. —
  Mr. W. E. Garrett: A cheaper product.
  Mr. Maudling: Yes, subsidised by the taxpayer, as I will now proceed to demonstrate. A rate of 4 per cent. return on taxpayers' capital invested is far below the normal target rate set for the nationalised industries by the Labour Government, which was something like 10 per cent., and is totally inadequate. It is also far below the rate of return which is normal in the brewing industry, which I am told is between 9 and 11 per cent. What is particularly important is that while the taxpayer has been getting about 4 per cent. on average in the last three years on the money invested he has been paying 8 or 9 per cent. for the money he has been borrowing. The going rate of Government borrowing has ranged between 7 and 9 per cent. over that period. Any business that went about borrowing money at 8 or 9 per cent. and investing it at 4 or 5 per cent. would very quickly go bust, unless it had a subsidy from the taxpayer, which is precisely where this subsidy comes from.
  Mr. James Callaghan: Will the Home Secretary tell me how much money this organisation has

  967
  borrowed from the Treasury over any recent period of years?
  Mr. Maudling: It is not a question of borrowing from the Treasury. This is a capital investment by the taxpayer. A former Chancellor of the Exchequer should understand that. When this enterprise has been disposed of, the money will reduce the National Debt on which the taxpayer pays 8 or 9 per cent. in exchange for an asset on which he is getting 4 or 5 per cent., which is fundamental economic nonsense.
  Mr. Tom Boardman: Is it not the case that a greater amount has been repaid from the Consolidated Fund for capital project making and so on than the total amount that has been paid into the Consolidated Fund, so that there has been a nil return?
  Mr. Mandling: It is true that in recent years the amount of capital injected by the taxpayer has exceeded the amount actually received by the taxpayer from the operations of the enterprise. When this organisation is operated by private enterprise, and when the capital is properly used to produce the yield one would expect to get, the corporation tax payable by private enterprise will probably be almost as much, if not just as much, as the amount the taxpayer is getting at present for an investment of £4 million. In other words, as a matter of economics, this is the craziest thing I have seen. If the Labour Party thinks it makes sense to borrow money with one hand at 8 per cent. and invest money on the other hand at 5 per cent., I am not surprised that it left the economy in the state in which it was—
  Mr. Gavin Strang: Surely the Minister realises that the relatively low return on capital at present is the result of past neglect and insufficient investment. In the last five to 10 years there has been new investment and the profits have been shooting up. It is precisely because those profits are rising that the Government want to denationalise the enterprise and the brewers want to get their hands on it.
  Mr. Maudling: I am afraid the hon. Gentleman has his facts wrong. Strangely enough, the hightest profit made was in 1963. Since then the figures have
  968
  fallen and in 1969 the profit was less than half what it was in 1963. Those are the actual facts. This year will be higher, I do not know by how much because the figures for the financial year have not—
  Mr. Callaghan: The figure is £259,000, an increase of £97,000. If I have those figures, why cannot the Home Secretary have them?
  Mr. Maudling: Because the financial year is the year on which the organisation operates and not the calendar year. I have not firm figures for that year. I gave the figures for 1969–70 and I said that 1970–71 will be higher and that 1968–69 was very much lower. Taking the average of three years, the return on capital was 4 per cent., which is a totally inadequate return on capital on any commonsense standards. That is the basic economic argument for the Government's Measure and is the background to our decision to end State management.
  I will now briefly describe the Bill's provisions. Except for one licensing complication, the Bill is straightforward. Clause 1 provides for the immediate repeal of the provisions which prohibit other persons selling liquor in the State management districts except with the Secretary of State's consent. Private traders will still be subject to the control of licensing authorities, as they are now. The repeal of these prohibitions will put them in the same position as private traders in the rest of the country.
  Clauses 2 and 3 apply to England and Scotland respectively. Subsection (1) is the main provision of the Bill and requires the Secretary of State to dispose of the property which he holds for State management purposes.
  Mr. Orme: Could the right hon. Gentleman give an assurance that when this property is disposed of the new brewers will not increase prices and that the present Government, which profess a desire to keep down prices, will not allow the price to rise by as much as 90 per cent. if current beer prices are applied in Carlisle?
  Mr. Maudling: I do not think there is much reality in the extraordinary figure of 90 per cent. put forward by the hon. Gentleman. No doubt later on in his own speech he will provide the detailed

  969
  evidence to prove what he is saying. I will deal with the matter of price a little later. I am now dealing with the provisions of the Bill.
  Clauses 2 and 3 are the operative Clauses. There is provision to enable the Secretary of State in disposing of premises to "deem" a licence to be in existence, since technically at present the premises do not have to be licensed.
  Clause 4 is a formal provision relating to expenditure and payment of moneys from and into the Exchequer.
  Clause 5 provides for the repeal by Statutory Instrument of the remaining statutory provisions relating to State management. These are basically provisions which allow Ministers to trade in those districts. The continuation of these powers after the Bill's enactment will be necessary for the maintenance of service in the districts until the process of sale is completed. This inevitably will take some time and clearly cannot begin until the Bill has become law. Hence the need for these powers.
  Mr. Callaghan: Is this to be sold as a going concern?
  Mr. Maudling: I will come to the sale in a moment. In the meantime, as long as State management remains we must ensure that it continues to be run profitably. This will mean an increase in price. Prices in Carlisle beer have been unchanged for over a year and sharply rising costs have made it necessary to review the prices shortly. Therefore, I regret that an increase in prices will be necessary in any circumstances to cover increasing costs.
  As for the most important question of employment and staff, it will be appreciated that State management staff are all civil servants. They number about 1,500, 900 of whom are part-time—mostly barmaids, barmen, hotel staff and cleaners. Their future will be governed by ordinary Civil Service arrangements and will be the subject of discussion between the staffs and the Departments. The staff has worked loyally and well in a system which, in the Government's view, has now become obsolete and should be replaced, but we believe that we should do what we can to help in any cases of difficulty. Our hope—and it is a well-founded hope—is that such cases will be few.
  970
  There are a number of administrative posts and certain tradesmen's grades for which alternative suitable employment may be found in other parts of the Civil Service. But for the great majority of the rest, the job they have been doing will continue. I see no reason why a change of management should lead to reduction in job opportunities in these areas. Clearly, I cannot go into detail at the moment until we know what transpires, how the properties are disposed of and who will be the new owners. Those staff who cannot be found employment within the Civil Service will receive appropriate compensation under the Superannuation Acts or the Redundancy Payments Act, 1965, whichever would be the more favourable. The Civil Service Department at present is discussing with the national staff side some changes in compensation to those who become redundant and State management staff will receive the benefit of these new terms which will be agreed.
  Mr. Norman Buchan: The right hon. Gentleman refers to the expectation of little redundancy on the part of barmen and barmaids and other staff in hotels, but can he say what will happen to the brewery? Could he give a guarantee that it will continue in being?
  Mr. Maudling: I cannot give a guarantee of that kind until I know what form the disposal will take. Clearly I cannot guarantee continuation of a particular enterprise which may be proved to be wholly uneconomic in modern conditions. The obligation placed by the Bill on the Secretary of State is to dispose of the property held by him on such terms as appear to him expedient in the public interest. The public interest means that we shall dispose of the properties in such a way as to realise the best possible return for the taxpayer, the highest possible price, bearing in mind the desirability so far as possible of maintaining freedom of choice for the consuming public. That must be the principle on which this sale takes place.
  I have explained briefly the purpose of the Bill which seeks to bring to an end the anomalous situation involving a quite old-fashioned experiment which has continued throughout succeeding Governments in certain parts of this country, whose social purpose is outmoded and

  971
  whose continuation is a burden on the taxpayer and is a burden which we intend to bring to an end.
  4.28 p.m.
  Mr. James Callaghan: The Press and the public have so far taken little interest in this proposal by the Government. Indeed, until this afternoon we have experienced some difficulty in getting information about what has been proposed by the Government. Even now, having heard the Home Secretary, I am still unclear as to his reasons for getting rid of these State premises and abolishing State management. I hope that in the weeks ahead, although this Bill has only a limited local connection and is not likely in the normal course to command very much public attention, we shall devote a great deal of public attention to this matter.
  There are objectionable features about the Bill which I am sure will prove to be embarrassing to the Conservative Party and which, in my view, will lay them—unless major Amendments are made to the Bill—open to a charge of grave impropriety in their actions with the brewers. I will explain what I mean by that statement a little later.
  Despite the ingenuousness of the Home Secretary's speech, I wish to make it clear that the Opposition object to the Bill on two grounds. First, that there is no real case for disposing of this business which has existed for 66 years under Liberal, Conservative and Labour Governments. Not until after the General Election was there any proposal to sell the business to the brewers in the way which is now intended. The public certainly never voted on this issue. The public was never given any idea by the Secretary of State for Scotland, who is now beginning to look a little impatient, or by the present Lord Chancellor, that this was the intention. If the Secretary of State wishes to intervene, I will gladly give way, but I warn him that I have with me exactly what he said before the General Election.
  The Secretary of State for Scotland (Mr. Gordon Campbell): I merely wish to point out that this matter was in the Scottish Election manifesto.
  Mr. Callaghan: I will come later to what was in the Scottish Election manifesto. Whatever else was in it, it was certainly not this proposal. [Interrup-
  972
  tion.] I understand the Secretary of State now to be saying that we must look at the 1966 manifesto. I did not realise that we were now discussing legislation arising out of the manifesto on which they were defeated. I thought we were considering what arose out of the manifesto on which they won.
  Mr. Gordon Campbell: The right hon. Gentleman did not hear what I said. If he looks at both the 1966 and the 1970 manifestos, he will see that the Scottish Conservative Party has for a considerable number of years made it clear that it aimed to do this for the two districts in Scotland.
  Mr. Callaghan: I will come back to that. But the Secretary of State is misleading the House. That is not what his party undertook to do, and I will demonstrate that when I come to the appropriate part of my speech. What the right hon. Gentleman says is in line with the deception which is going on about this Measure and about which we intend to open the eyes of the public.
  The first objection which we on this side take is to disposal in any case, because it was not put to the people in this form or anything like this form.
  Secondly, we take the strongest objection to the proposed method of disposal. We submit that the proposed method of disposal, which is to be left to the Secretary of State for Scotland and the Home Secretary, must he changed in view of the financial payments which the intended beneficiaries of the Bill made to the Conservative Party's election funds. We shall expect changes in the Bill to safeguard the public interest in selling these assets. If they are not made, the Conservative Party, if not the Government, will lay themselves open to charges of corruption. I will return to that and demonstrate what I am saying in due course. Right hon. and hon. Gentlemen opposite need have no fear of that.
  The Home Secretary thought that as a former Chancellor of the Exchequer I should know better than to make some of the comments that I made. As a former Chancellor of the Exchequer himself, his arithmetic on this matter seems to be as bad as it was when he left me an £800 million deficit on the balance of payments.

  973
  Whatever the right hon. Gentleman may say, the fact remains that this is a thriving business. I agree that the estimates are not yet translated into actual final figures. However, if they are correct, there has been a sharp recovery in profits during the past 12 months, for reasons which should be known to the Home Secretary and which he should have disclosed. I understand that the estimated profits for the year will show an increase of £97,000 on the previous year. In other words, the estimated profit is of the order of £259,000.
  Mr. John Brewis: The report of the State Management Districts is available for the year ended 31st March, 1970. Both figures are exactly what is in the Report for last year.
  Mr. Callaghan: I have the report before me. I am referring to the estimated profits for the year ended March 1971, about which I have been given information and which should be available to anyone who chooses to inquire into these matters.
  Mr. Ron Lewis: The Home Secretary knows it.
  Mr. Callaghan: Of course, and so do his supporters in Carlisle. The hon. Member who represents Allied Breweries in this House, as well as the interests of his own constituents—
  Mr. Tom Boardman: Mr. Deputy Speaker, is it in order for the right hon. Gentleman to make an allegation of that kind? In this House I represent Leicester, South-West—
  Mr. Orme: And the breweries.
  Mr. Boardman: It must be—
  Mr. Deputy Speaker (Miss Harvie Anderson): Order. The hon. Gentleman will know that this is not a matter for the Chair.
  Mr. Callaghan: I am sure that Allied Breweries have other ways of communicating their views to the Government without using the hon. Member for Leicester, South-West (Mr. Tom Boardman). In any event, I have a great deal more to say about the brewers in this connection, including their contributions to Conservative Party funds. It is no use the hon. Gentleman getting indignant now. He will have to listen to a lot more before I finish.
  974
  The second point is that the historical cost of the land, the buildings and the plant is of the order of £3·7 million, before any allowance for depreciation. The real value is very much higher, but no one knows exactly how much higher, and we are being asked to leave it to two Ministers who are beholden to the brewing companies to determine what the real value of the assets is to be. We are not content to do it in that way.
  Thirdly, as regards this State management situation, it has a wide range of products. It is in no sense a tied house. It blends its own whiskies and bottles its own wines. It sells 20 brands of beer, quite apart from the beer that it brews. Prices are low, and that apparently is a source of complaint. The former Chancellor of the Exchequer knows how to get a better return on capital, and apparently he intends to do so.
  I have before me the list contained in the Sunday Mirror, which I hope all Members have seen. I must commend the Sunday Mirror for its inquiry of 21st March which, understandably, is headed "The sobering truth about the British pint". It is one of the best pieces of work that I have seen recently. In connection with prices, under the heading "medium beers", it lists all of the major breweries in the country. There are 27 brewing medium beers. The price of Carlisle State Bitter is much lower than that of any of the remaining 26. At 10½p per pint it is the lowest price in the country. Of course that is an embarrassment to the brewers. Prices range from 10½p in Carlisle to 16p for Double Diamond Keg, Charrington's Crown Bitter, Whitbread Tankard, and the rest. These are the people who are out to acquire this asset, and the Home Secretary intends to do their work for them in that he will see to it that the price is put up before they take it over.
  I turn, then, to what are called "weak beers", and how weak they are. If there is one old song which has come true, it is the one which begins "I am the very fat man who watered the workers' beer". My right hon. Friend the Member for Cardiff, West (Mr. George Thomas) will be delighted to know that they have been lowering the gravity of the beer to the extent that some of it is almost near-beer

  975
  which could be sold as non-alcoholic. However, the brewers continue to put up their prices.
  The State brewery has the advantage of the cheapest prices in the country, and that is why the return on capital is so low. It has the advantage of a near monopoly. Its premises are concentrated in and around Carlisle. Because there is a compact area transport costs are low. These are among the reasons why it charges low prices.
  This is to be broken up. But we do not hear why. It is not to produce cheaper beer. On the contrary, it will produce dearer beer. It will not produce more employment. Hon. Members will have noticed the discreet silence of the Home Secretary when we was asked whether the brewery will be kept in action. There is nothing in this about the public interest. There is nothing in it which will help the customer. All that the Bill is doing is to redeem whatever private pledges were made by the party opposite to the brewers before the election. There have been justifiable complaints—
  Mr. Maudling: Did the right hon. Gentleman say that I had said that we were redeeming private pledges made before the election? Certainly he appeared to say that.
  Mr. Callaghan: I was paraphrasing the Home Secretary's statement that they were redeeming their election pledges. I was averring that these were not made to the public, because this view was never put to the public. Therefore, they can only have been made to other persons.
  Mr. Maudling: Our policy of reducing the area of State enterprise in every way was well known to the electorate. If the right hon. Gentleman is suggesting that we made private pledges or that I in particular am carrying out a private pledge to do this, he is talking arrant nonsense.
  Mr. Callaghan: What I am saying is that what was put to the public before the election was different from what is in the Bill, and I shall come back to it later, as I told the Secretary of State for Scotland I would. The Bill has nothing to do with what hon. Gentlemen opposite told the electors before the election they intended to do.
  Mr. Ian MacArthur: The right hon. Gentleman should read the Scottish manifesto.
  Mr. Callaghan: The hon. Gentleman need not worry because I shall come to that. I made myself read even that turgid document in my pursuit of the truth.
  There have been complaints about the remoteness of the Home Office, and the demand for local control has rumbled on. My hon. Friend the Member for Carlisle (Mr. Ron Lewis) has often said that he would have preferred something interposed between the Home Office control and the consumer so that local people could feel that they had more control over this matter. I agree that that is something which concerns people, and perhaps it is a matter about which something might have been done.
  The Government, when they were the Opposition, took this matter up, and I now come to what they said then, because the former Shadow Home Secretary, now the Lord Chancellor, gave an undertaking on this matter. In January, 1970 he said:
  "It is increasingly obvious that it is thoroughly inappropriate for the Home Office to be directly concerned in a commercial operation of this kind.
  We shall, therefore, be ready to consider any viable proposal for transferring the ownership and management of the State scheme to a suitably constituted local body, such as a trust."
  There was not a word about the brewers. That is what was said by Conservative candidates. That is what appeared in any public pledges and promises, that they were going to consider transferring the scheme to some locally constituted body such as a trust, and it is no good the Home Secretary now saying that they propose to sell it to the brewers and not expect to arouse the deepest suspicions about what has gone on between the brewers and the Conservative Party in this matter.
  The Scottish Conservative Party was slightly different and more evasive in what it said. It said that it intended to break the State monopoly.
  Mr. MacArthur: Hear, hear.
  Mr. Callaghan: For the benefit of the hon. Gentleman, let me tell him that breaking a State monopoly is not the same as selling to the brewers. A State monopoly can be broken in a number of

  977
  ways. It can mean local competition. It could and did mean—although the Home Secretary did not seem to bring the House into his confidence on this matter —that others in these areas who applied could be granted licences to sell beer and spirits. That is what breaking the State monopoly can mean. The hon. Gentleman says that that is not what he means, but that is what it can mean.
  Mr. MacArthur: What I said was—
  Mr. Callaghan: The hon. Gentleman does not bounce me. Does he want to intervene?
  Mr. MacArthur: Yes. When I rise to my feet, it is because I wish to intervene. I am obliged to the right hon. Gentleman for giving way. What I said was that breaking a State monopoly means breaking a State monopoly, and that is precisely what the Bill does.
  Mr. Callaghan: Of course it breaks a State monopoly, but if one reads the Conservative Scottish manifesto, and puts it alongside what Lord Hailsham said, it is quite clear—I may not convince the hon. Gentleman, but I shall convince the public—that what was intended was to make arrangements for transferring this business to a suitably constituted local body, such as a trust. That is what Lord Hailsham said, and that is what breaking a State monopoly means. What it does not mean is enriching the brewers, and that is what will happen.
  The State monopoly has already been broken. There is no need for the Bill. A privately-owned hotel in Carlisle has been given a full licence. It only needs the Home Secretary not to enter an objection for a full licence to be granted, and this has happened. Bass-Charrington—not Allied Breweries in this case—have plans for a new hotel on the Carlisle by-pass. Their application has been supported by the local committee, and the Home Secretary can give permission now for a licence to be granted. The right hon. Gentleman does not need any legislation to help him break the State monopoly, which is all that was put to the people of this country before and during the election.
  Whatever complaints may have been made about the attitude of the Home Office, or about its remoteness, or about the Scottish Office, there is precious little
  978
  support for the Conservative Party's plan, outside of the directors of the brewery companies. Indeed, there is very little support for it among back-bench Members. If hon. Gentlemen opposite do not believe me, perhaps they will believe the Chairman of the State Scheme Advisory Committee, Mr. Jim Aspey, a Conservative councillor who said:
  "It is disgusting treatment. The State sells the best and cheapest beer in Britain, and they are just about to announce"
  he knows the figures, apparently—
  "the highest ever profit of £269,000 for last year".
  That is what a local Conservative councillor on the spot has to say about it.
  I hope that the Secretary of State for Scotland, who is to reply to the debate, will answer these questions. Has Lord Hailsham's undertaking been carried out? Has this undertaking been offered to a local trust? Has any effort been made to transfer it to a suitably constituted local body? Have the Government considered setting up a public corporation to run this scheme? If they have, for what reasons have they turned down the idea? If they have not considered it, why have they not carried out the undertaking given by Lord Hailsham? Why is the right hon. Gentleman's first recourse to sell this to his friends the brewers? That is the charge which the right hon. Gentleman has to answer.
  I must make it clear that we take the strongest exception to the Home Secretary and the Secretary of State for Scotland having any hand in the disposal of these assets. These two right hon. Gentlemen are handling an extremely attractive business proposition. It is clear that the properties are undervalued. I take it that there is no denial of that. The historic cost of acquisition is known, but today's values are clearly much higher. Does anybody deny that? The assets are written into the balance sheet at their historic value. There is no businessman on the other side of the House who, if he were selling a business on that basis, would not want the up-to-date value of the premises to be substituted for the historic value. It is the Home Secretary and the Secretary of State who will determine the true value today unless an Amendment is made to the Bill.

  979
  If this were a private company I would agree with the Home Secretary if he took the line that it was ripe for a take-over bid. It would be a classic case. Some smart gentleman would acquire these assets. If he were handling a sleepy corporation, he would do a little revaluation followed by asset stripping, and pay himself substantial dividends. This is a classic case, and I am not prepared to leave it to these two Ministers to deal with in this way, when I recognise what is happening.
  One must consider, too, the value of the goodwill. There is nothing in the balance sheet in respect of that, and in all these businesses that is a matter of great controversy. If any hon. Gentleman cares to look at Appendix 12 of the report on the supply of beer, published in April, 1969, under the heading of costs and profits he will see that there is a great controversy between the leading brewers and the Monopolies Commission which investigated the question of how far and to what extent goodwill should be taken into account. I should not care to dogmatise about it. I know that it is a complicated and a technical subject, and some of the exchanges with the Home Secretary earlier show how much room there is for argument.
  I say that there is clearly a substantial sum to be included in the disposal price of this set-up for goodwill. Who will determine it? The Home Secretary? The Secretary of State for Scotland? No. We are not prepared to allow this to happen. I shall come back to that and say why.
  There are other issues, too. Thanks to the Labour Government's industrial policy, there is to be a new aluminium smelter at Invergordon which will employ hundreds of workers and their families within a relatively short time. This is a wonderful asset for somebody to get his hands on. What value will the Home Secretary and the Secretary of State for Scotland put on it? If I were a purchaser—the brewers know all about this—I should recognise that I had a very good asset here because there is no commercial competition in this sphere. It is tied, tied, tied. The Home Secretary knows this as well as I do.
  There are two ways of disposal. I asked the Home Secretary which he
  980
  intended to follow, but I did not get an answer, so I put the question now to the Secretary of State for Scotland. We shall want to pursue these matters in Committee. It will not be a short Committee stage. I hope that no one is under any delusion about that. Although it is a short Bill, there are too many serious issues of public importance involved.
  Either the Home Secretary and the Secretary of State for Scotland can sell this asset on the basis of the break-up value—that is, they can sell each house or collection of houses without regard to the business they are doing—or, alternatively, they can sell it as a going concern.
  As a going concern, sold in one or two lots, I believe that it would fetch much more than if sold on the basis of the break-up value. We have had no indication from the Home Secretary today as to which of these two important methods will be adopted. Which is it to be? Surely the Government have made up their mind about this before coming to the House. How will it be done? We do not know.
  My suspicion has been aroused, although the Home Secretary gave a partial answer on this point, by Clause 2 which refers to the repeal only of Section 103 of the Act. If the Home Secretary does not oppose any new application for a licence by anyone else—my hon. Friends should understand the inwardness of this —ipso facto if that application is successful before the licensing justices the monopoly is broken, and if the monopoly is broken the going value of the concern will fall straight away. This is a simple matter of fact. We should like to know from the Home Secretary—he should have told us in his speech—whether it is his intention, in repealing Section 103 of the 1964 Act, and only that Section, not to oppose any applications for licences by others in the interim period between the passage of the Bill and the sale of the assets. If so, he is giving away public money. We ask for an assurance on this matter, because to do it by permitting new applications for licenses and not opposing them would destroy the goodwill of the business straight away.
  I said earlier that there was no real competition here. The brewers have survived, as the Monopolies Commission

  981
  makes clear—the same firms have been in the business for 70 years—because they keep a closed shop. It is essentially a closed shop in which the retail outlets are tied to the brewers. The licensing system constitutes an effective barrier to any new entrant, so, in disposing of the licences, or, putting it another way, if the Home Secretary does not object to anyone coming in and getting a new licence, he is removing the effective barrier which has maintained the value of this asset. It would be a public scandal if this system were to be followed.
  If this system is not to be followed, if it is not to be done on the basis of the break-up value but selling as a going concern, how can we trust the Home Secretary and the Secretary of State for Scotland and no one else to do the valuation? This situation is pretty embarrassing to the Government and certainly to the Conservative Party because they will be selling to purchasers who are their close allies.
  On 19th January The Times said:
  "At this stage the brewers are standing cautiously by. Bass Charringtons said yesterday they were adopting a 'wait and see' approach. Allied Brewers are 'interested' in the situation and Scottish and Newcastle are keeping mum 'until we know how the Government plan to dispose of' their brewing interests. These are three of a bevy of some 10 brewery companies into whose existing pub profile the state pubs would fit fairly neatly. Watney's Whitbread's, Cameron's, Vaux, Brown are some others."
  This group of firms which have been named contributed £104,000 to the Conservative Party's election funds in the run-up to the election. The Lord President, the Secretary of State for Scotland, the Home Secretary and other senior Ministers are under pressure from these interests. But it goes further than that.
  This, incidentally, is why, although it was not said before because dear Quintin Hogg genuinely believed that he was going to convert it into a public trust of some kind, since the election the pressure which has been put on Ministers is resulting in their now being willing to sell it to the brewers. But it goes further than that.
  The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw): Will the right hon. Gentleman give way?
  Mr. Callaghan: The Lord President has only just come in.
  Mr. Whitelaw: I have a very special reason for intervening.
  Mr. Callaghan: Perhaps the right hon. Gentleman will hear further what I have to say and then I will give way.
  It goes further than that. The new Chairman of the Conservative Party in Scotland is Sir William McEwan Younger. He is not only here for the beer; he is here for the gravy!Scottish and Newcastle Breweries are not as well known in the South as in the North. However, for the benefit of my hon. Friends from the South, they qualify in all the league tables as one of the big six breweries. I should have said that Sir William McEwan Younger was the chairman and managing director of those breweries until a few months ago. His companies contributed £16,000 to Tory Party funds in the run-up to the election, and he has recently become chairman of the Scottish Tories. What a remarkable coincidence!I should like my hon. Friends to know that we would have known nothing of these payments to Tory Party election funds if it had not been for the Act which requires them to be disclosed.
  Clause 2(1), which talks of disposal in the public interest, is a mockery of words. It is not in the interests of the public, it is not in the interests of the customers, and it is not in the interests of efficiency. The Home Secretary referred to disposing of this asset in the public interest. Let us look at what those who have studied the matter say about the brewers and the public interest. In paragraph 415 of the Monopolies Commission's Report of April, 1969—not so long ago—the Commission gives its conclusions about the tied house system. We must remember that the Home Secretary said that he wanted to dispose of the scheme in the public interest. The Report states:
  "We conclude that the conditions which we have found to prevail operate and may be expected to operate against the public interest since the restrictions on competition involved in the tied house system operated by the brewer suppliers concerned are detrimental to efficiency in brewing, wholesaling and retailing, to the interests of independent suppliers (including potential new entrants), and to the interests of consumers."
  Yet the Home Secretary has the brass-faced cheek to come here and say that

  983
  he is disposing of the scheme in the public interest to people who have been condemned in this way by those who have studied the matter.
  What is to be done? I wish to make it clear what is the least the Opposition thinks should be done if the Conservative Party is to be acquitted of charges of corruption. First, the brewers who have contributed to Conservative Party funds should be ruled out of the bidding. Next, there should be protection for the public from the Secretary of State for Scotland and the Home Secretary in the disposal of these interests. The public should be protected from both of them in particular and from the Government in general.
  There is a precedent for this. When iron and steel was denationalised in 1953 the Government of the day did not leave it to the Minister to do the job, although it was a far cleaner operation than this is ever likely to be. Under Section 18(1) and 18(5) of the Iron and Steel Act, 1953 it was provided that there should be established a body called the Iron and Steel Holding and Realisation Agency. The Act stated that before appointing anybody to be a member of the Agency
  "the Treasury shall satisfy themselves that the person has no such financial or other interest as is likely to affect prejudicially the exercise or performance by him of his functions as a member of the Agency, and the Treasury shall also satisfy themselves from time to time with respect to every member of the Agency that he has no such interest; and any person who is, or whom the Treasury propose to appoint and who has consented to be, a member of the Agency shall, whenever requested by the Treasury so to do, furnish to them such information as the Treasury consider necessary for the performance by them of their duties under this subsection "
  We believe it to be essential that in this Bill amendments should be made to provide for an independent valuation of the assets, that that should be taken out of the hands of the Secretary of State for Scotland and the Home Secretary, that there should be a proper, independent assessment of the capital value of the business and that a special agency should be appointed to ensure that there can be no accusation made against the Government that contributions to their election funds are influencing them in the disposal of these assets. The Governments of Sir Winston Churchill, R. A. Butler and Sir Anthony Eden had higher standards than this Government have shown so far—
  Mr. Whitelaw: I apologise to the right hon. Gentleman for my absence, which was unavoidable.
  I naturally have, in a constituency capacity, been concerned with this matter for certainly the last 16 years. In view of some of the right hon. Gentleman's accusations, I feel entitled to tell him that at no time in any of those 16 years has any member of a brewery company, or anybody concerned with breweries, ever approached me with any suggestion that this scheme should be sold off, or discussed any matter at all with me of that kind. I wish to make that perfectly clear, so that the accusations of pressure which the right hon. Gentleman has made are absolutely unfounded. I repudiate them absolutely and I hope that he will take my word for that.
  Mr. Callaghan: The right hon. Gentleman has no need for any approaches to be made to him. [HON. MEMBERS: "Withdraw."] No. The fortunes of the Government and the brewers are too closely intertwined. Indeed, one of the Joint Under-Secretaries of State at the Scottish Office is a former director of a subsidiary of these brewery companies. What does the Leader of the House think we are? We know how close is this tie-up.
  Mr. MacArthur: The right hon. Gentleman gets worse all the time.
  Mr. Callaghan: If the Leader of the House wants to rid himself of any accusation of impropriety, which is what I am alleging at the moment, he will no doubt urge his hon. Friends to accept amendments which will ensure the establishment of an independent disposal agency, containing independent persons unassociated with the Conservative Party who will value the assets and put a capital value on the business. If he does that, and if we can be given an answer to the effect that that will be done, then this debate will have been well worth-while, for it will have shown that our strictures have gone home.
  Indeed, the right hon. Gentleman must not only say that he is above suspicion but look as though he is; and in the eyes of the House and the country, he and the Government must be seen to be beyond suspicion. The setting up of an agency similar to that of the Iron and Steel Realisation Agency would go a long way

  985
  to achieving that. Unless these changes are made and unless the disposal is taken out of the hands of Ministers, this affair has all the makings of a nasty scandal, with talk of the friends of the Conservative Party plundering the assets.
  There are others ripe for the picking. Thomas Cook is just waiting for a similar sort of operation—[HON. MEMBERS: "Hear, hear."]—and I appreciate that hon. Gentlemen opposite would welcome that. On the same basis, there is a particular steel works which we are watching very closely to see what the Conservatives will do because we know that their friends are pressing for its return.
  Do not let hon. Gentlemen opposite be under any illusion about this. This will build up into a big public campaign unless the Government are willing to show that they intend to make the necessary amendments to prove that they are not acting just in the interests of those who subscribe to the funds of the Conservative Party, but out of a mistaken sense of irrelevant ideology.
  As for the future, we, the next Labour Government, reserve the right to reacquire these assets either in total or in part as best suits the national interest at the time. We shall not be bound in these cases by our conventional basis of compensation. Up to now we have, of course, operated on the basis of either share or asset value. In defining the area of denationalisation, we shall take into account the extent to which the resources have been stripped in an attempt to frustrate any attempt at renationalisation in this case.
  I re-emphasise that as licences are granted by the justices for only one year, we shall not have to pay compensation in respect of those licences at the end of any particular period of 12 months. We shall carefully scrutinise the extent to which resources or profits have been pillaged or salted away. Indeed, we shall judge it by reference to the public interest.
  I have shown that the Bill does not carry out what the Conservative Party said it would carry out. I have shown that these interests are not to be sold to any group of people who can be construed to be in public competition or to be serving the public interest. I have shown that the method of disposal is of such a character that unless it is substantially altered, Ministers will stand
  986
  accused of grave impropriety. I have shown that this dissipation of assets will bring no benefit to the people of Carlisle or the customers of the Carlisle State Breweries. Accordingly, we shall vote against this squalid and corrupt piece of legislation.
  5.9 p.m.
  Mr. Michael Jopling: I have not heard a more nasty, cheap and sneering type of speech in the six years that I have been in this House than that to which we have just listened. I hope that the right hon. Member for Cardiff, South-East (Mr. Callaghan) will repeat outside the House some of the remarks he made today. Indeed, having made those remarks, he should, in honesty, repeat them outside. I am prepared to sit down and give way to him if he will rise and give an assurance that he will repeat them outside.
  Mr. James Hamilton: On a point of order, Mr. Deputy Speaker. Is it not incumbent upon every speaker in the debate to declare his or her interest before starting their speech?
  Mr. Deputy Speaker (Miss Harvie Anderson): The hon. Gentleman knows that that is not a point of order.
  Mr. Jopling: I shall come to that matter. I have not finished with the right hon. Gentleman. In charity, the right hon. Gentleman must have listened to the earlier exchanges in the House, in which his right hon. Friends the ex-Prime Minister and the ex-Chancellor of the Exchequer were accused of joining in a leadership race. I can only assume that he made his speech this afternoon joining in that sort of race.
  I have no interest to declare in this matter, except that I am a consumer of alcoholic beverages of all sorts. I warmly welcome the Bill. I have an interest in that my constituency is nearby. Although no pubs which are operated under this scheme are to be found there, a great number of my constituencts spend their time in Carlisle and in parts of Cumberland, where they know a good deal about it. Constituents seem to have very little interest in this matter. I have had no representations opposing the Government's plans. All of my constituents to whom I have spoken about them have told me that they think it is a good thing

  987
  that the Government should divest themselves of capital and business which they never had good reason to begin, and should get out of as soon as possible.
  What staggers me about the whole business is the history of this extraordinary set-up. In 1970, it is astonishing to find an operation of this sort still in existence and to think that we still have State-managed pubs and State-managed beer, and so on, which were brought in by Mr. Lloyd George during the First World War as a means of combating drunkenness among the munitions workers and against a background of what Mr. Lloyd George said in 1915:
  "We are fighting Germany, Austria and drink, and the greatest of those deadly foes is drink".
  It seems astonishing that under various previous Governments opportunities to get rid of this astonishing scheme have been missed. The only excuse I have been able to find for continuing it is that it has been kept going as a useful social exercise. Surely no one can argue today that this "useful social exercise" still has a useful purpose. It has surely served its purpose. Various Royal Commissions have, in the past, been very lukewarm about the continuation of the Carlisle part of the scheme, and I believe that one Royal Commission suggested forcibly that the Scottish side of it should be abolished. This so-called useful social experiment has been a most astonishing way of running drinking habits. Some of the most uncivilised practices of pub behaviour have been insisted upon in the pubs, especially in the Carlisle area.
  I am told that one was not allowed to buy a drink for a friend. One could buy only one drink at a time. One could not buy whisky on a Sunday at one time.
  Mr. William Hamilton: When was this?
  Mr. Jopling: I am talking about some of the rules which have been in practice —[HON. MEMBERS: "When?"]—and I am told that, until very recently, one was not allowed to stand at the bar and have a drink. I believe that that has been curtailed since the war. Certainly in some bars in the Carlisle area, until not
  988
  so long ago, no women were allowed to be served. I find it hard to understand how this has survived for 50 years. Although the amenities of some of these pubs are very much improved now, as recently as 28th October, 1966, the Financial Times was talking about the pubs in these terms:
  "Many—probably the majority—are very basic drinking establishments, where no food is provided. The furnishings are institutional, the floor covering generally linoleum."
  If that is the "useful social experiment" which we are told justifies the continuation of this scheme, surely it is high time it was abolished. It may be said that all of these rules have been done away with and that the amenities of the pubs are now brought up to normal practice. If normal practice is found throughout the State pubs, if the practices and the furnishings and amenities are brought up to normal standard with the rest of the country, this is the moment to do away with the scheme altogether.
  There is no need for this "useful experiment" in the future. It seems that it is merely an example of unecessary State interference in all of our lives. It is no place of the State to be operating a scheme of this sort, which, as my right hon. Friend said, has such a very poor return on capital.
  It seems extraordinary that the right hon. Gentleman did not seem to understand what my right hon. Friend was trying to explain, that the overall return on capital with the scheme is around 5 per cent., and that means that the capital is being subsidised. In view of the mess which the right hon. Gentleman made when he was Chancellor of the Exchequer, it does not surprise me that he did not understand it.
  I take up one point. The right hon. Gentleman seemed to suggest that the capital value of this enterprise is greater than it appears to be. If that is so, the return on capital is even less, and it is an even worse deal for the State.
  We heard a good deal about low prices, and the right hon. Gentleman said that, because of the low return on capital, prices tended to be a little lower. Why should my constituents in Westmorland, a few miles down the road, have to subsidise the beer drinkers of Carlisle? I do not see why they should do this

  989
  by making use of State capital, which is not being used properly.
  I welcome the Bill very much. The Labour Party oppose it. They say that it is a very good scheme, although we heard little from the right hon. Gentleman about the merits of the scheme. We did not hear much about the interests of the consumer and all the rest. We must ask them what their policy is over this matter. I repeat my right hon. Friend's question. Why did they not extend the scheme, if it is so marvellous, in the years when they were in power? Is that their policy now?
  Will it be their policy in their next election manifesto? The hon. Member for Fife, West (Mr. William Hamilton) nods his head and indicates that this will be so. I am sure that the public will be delighted to know that. It will want to know whether it will be the policy of a future Labour Government to nationalise the pubs. We ought to know this, and to know it very soon. Does the Labour Party approve of having, all over the country, the concept of disinterested salaried landlords who have no interest in the business or pub and who do not receive any commission from increased sales, and so on?
  In my experience as a consumer, I have always found Carlisle barmen very friendly, but I prefer a barman who has an interest in the business and a publican who is interested in the sales. I like a landlord who will have a drink with me and buy me one in return. That is all part of the stock in trade of the publican, who tries to boost consumption in that way. The Labour Party must come clean and tell the country whether it wants a civil servant behind every bar.
  Mr. Gordon A. T. Bagier: Are not the majority of public houses managed nowadays? Is not the present policy of large breweries to move from a system of tenants, who tend to give good management, to one of managers?
  Mr. Jopling: I am told that fewer than one-third of all the pubs are managed. Managers have a commission and are interested in boosting the business, which I find attractive.
  990
  I ask my right hon. Friend the Secretary of State for Scotland to tell us how the property will be disposed of. I should like an assurance that there will be nothing to stop the grocers in Carlisle and elsewhere from getting back the off-licences which were taken from them during the First World War, an act of deprivation which caused a great deal of bitterness in those districts. I hope that my right hon. Friend will also assure us that when the pubs are disposed of some thought will be given to ways in which private individuals will be able to buy individual pubs and operate free houses.
  The right hon. Member for Cardiff. South-East talked of those who will acquire the pubs as beneficiaries. He then read an extract from The Times of 19th January and named a whole lot of brewery companies which might be interested in buying and described the State Management Scheme as a very attractive proposition. If it is a very attractive proposition, and if all the breweries the right hon. Gentleman mentioned are potential buyers, I envisage the greatest possible competition amongst breweries to lay their hands on what the right hon. Gentleman described as a very attractive proposition. It therefore seems inconceivable that the State will not sell this operation at the best possible price, because although I am not qualified to comment on the merits of the scheme, I envisage hot competition among brewery companies if the right hon. Gentleman's description is accurate.
  I have rarely heard so much synthetic indignation as that which issued from the Opposition spokesman this afternoon. I hope that the Bill will have a speedy passage and that we can soon rid the State of this encumbrance.
  5.23 p.m.
  Mr. Ron Lewis: We have just listened to some synthetic indignation from the hon. Member for Westmorland (Mr. Jopling): I doubt whether the hon. Gentleman has ever been to Carlisle to see any of these pubs.
  Mr. Jopling: Rubbish.
  Mr. Lewis: I declare my interest immediately, as my hon. Friend the Member for Fife, West (Mr. William Hamilton) suggested that everyone should

  991
  in this debate. Today I am in a position in which very few Members of the House can have been. I am the Member for Carlisle, within whose boundaries lies the greater part of the State management scheme. During the last seven years I have made numerous visits to almost every part of the Carlisle and District State Management Scheme. I am also a member of the Temperance Group and secretary of the Temperance Group of the House of Commons.
  It may seem rather illogical for a member of the Temperance Group who represents a constituency which has an enterprise like the State brewery within its boundaries to be speaking in the vein in which I am speaking; but I should be acting dishonourably if I abdicated my responsibility as a Member of Parliament and allowed the State Management Scheme, in view of its importance to my constituency, to die without a protest from me. I have never attempted to hide my temperance views from my constituents. Wherever I go in Carlisle my views are well known.
  I estimate that if the Bill goes through it will affect 40 per cent. to 50 per cent. of the adult population of my constituency and in the end will mean dearer beer for them. So I shall not abdicate my responsibility, even though I hold certain views.
  During the General Election not one word was said about the intention to denationalise the State brewery. Not once during the last General Election did the right hon. Member for Penrith and The Border (Mr. Whitelaw) make any statement to that effect. The Bill is the voice of Reggie, but behind it is the hand of Willie.
  I charge the right hon. Member for Penrith and The Border with being the instigator in this matter and with bringing it to the attention of the Cabinet. After the Bill becomes law and the State Management Scheme is handed back to private enterprise, every time the right hon. Gentleman comes to Carlisle the slime and the trail will follow him as the one who sold out the Carlisle State brewery.
  Many hon. Members know nothing about the scheme. The Carlisle and District State Management Scheme is run by the Home Office. The Home Secretary's
  992
  speech was the biggest piece of bluff since the spider sheltered Bruce. The scheme is essentially a business enterprise with most of the problems with which ordinary businesses must contend and which are found in any organisation of a similar kind. The scheme produces malt, draught and bottled beers. It bottles Guinness, Bass, Worthington, Tennants, lagers, wines and spirits. So the State Management Scheme is already looking after private enterprise.
  The scheme's properties include 11 hotels, 147 public houses, two restaurants, ten off-sale shops, and about 200 unlicensed premises. It also owns a number of business premises scattered in various parts of Carlisle, many houses, and the brewery. The annual turnover is over £3 million, including sales worth about £320,000 to about 100 free trade customers outside the city. The staff employed, including part-timers, number about 1,350.
  I concede that the scheme has a virtual monopoly of public houses in Carlisle. But other breweries run public houses in competition with the scheme in the major part of the 320 square miles of Cumberland in which the scheme is empowered to trade. There is competition from licensed hotels, restaurants and clubs throughout its trading area, and in Carlisle itself we have two hotels run under private ownership. So there is competition, although, admittedly, that competition is mostly outside the perimeter of Carlisle.
  As has been said, the scheme is small in comparison with the national breweries, but, despite everything said by the Home Secretary, it is an efficient business making its contribution to the Exchequer. An analysis of brewery costs published by the National Board for Prices and Incomes in 1966 showed that the cost of production labour at Carlisle brewery was 20 per cent. below that of the average of the large number of commercial breweries examined by the Board. The brewery's net profit in Carlisle was 17 per cent. of the wholesale price, compared with an average of 15 per cent, for other breweries covered by the inquiry at that time. In the past five years, certain major schemes of reconstruction have been completed in five hotels and 33 of the public houses.
  My right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan)

  993
  referred to what Mr. Quintin Hogg, as he then was, said in a letter to the prospective Tory candidate for Carlisle. The Tory candidate, after his adoption as candidate for the forthcoming general election, wrote a rather lengthy article in the Cumberland News of Friday, 19th July, 1968, and, among other things, this is what he said:
  "Before coming to Carlisle, I would have supported denationalisation of the State Management Scheme. However, having been introduced to it, I would strongly oppose such an idea for several reasons. As a former accountant of a brewery, I recognise that the State Management Scheme is comparatively successful, with modern plant and spare capacity, and a capable management. Denationalisation would mean its being bought out by one of the large combines and private monopolies"—
  and he was opposed to that. That was written by him in the Cumberland News. [HON. MEMBERS: "He did not get in, did he?"] No, he did not get in, and no wonder, because of the trickery and treachery of the Tory Party.
  Not only did he write that in 1966, but, coming nearer to the date of the General Election, in the Newcastle Journal he came out boldly in praise of what Mr. Quintin Hogg had said the Tories would do. This is what he said then, only a few months before the General Election:
  "I am delighted that under a future Conservative Government it will be up to local people and organisations to decide whether they can run the scheme without Government interference, which on several occasions has proved extraordinarily inept. It is also sensible that the question of licences should be left to the local justices. Denationalisation of the Scheme is not the answer, for there are many good features about it. Prices are marginally cheaper than elsewhere, and reforms should protect local benefits."
  Here comes the crunch, as I see it:
  "Denationalisation would also mean that the Scheme would be swallowed up by one of the brewery giants, and I am very hostile to that idea. It would inevitably mean the closure of the brewery, and that is the last thing I want to see in Carlisle."
  That is what the Tory candidate said, and there was not one word about it at the General Election. I charge the present Government with unsavoury dealings in the way they have handled this matter, for the first intimation we had came in a report in the Sunday Times. When I raised the matter on a point of order and challenged the Government on why the Press had news of it before those of us who represent the area, we
  994
  never had an answer. This has added insult to injury.
  We are now told that the scheme is not paying. There is a lot of juggling with figures. The Home Secretary did his best today, aided by his hon. Friend the Member for Westmorland, but if ever the Home Secretary were uncomfortable in making a case, it was this afternoon, for I am sure that he had no heart in what he was trying to put to the House.
  The finance needed to purchase the property and settle compensation claims at the inception of the scheme came, I understand, direct from the Treasury, and by 1928 the debt had been cleared. From 1928 until 1966, the golden jubilee of the scheme, the profit from the Carlisle area alone, which does not include Gretna and Cromarty, was £4,793,877—and that from a very small organisation. The profits from 1966 were as follows: 1966, £249,514; 1967, £228,301; 1968, £159,590; 1969, £112,457; 1970, £203,314. According to the chairman of the Local Advisory Committee, who I understand has had his fingers rapped by the Tory Central Office because he has been speaking out of turn, the profits for the year ending 31st March this year are estimated to be £300,000.
  Mr. Tom Boardman: The right hon. Member for Cardiff, South-East (Mr. Callaghan) spoke of an increase in profits of about £97,000. The hon. Gentleman's figures show an increase of about £30.000. Can he reconcile those figures?
  Mr. Lewis: The figures are taken from a reply to a Question I put to the Home Secretary.
  Another important feature of the scheme is that, unlike the private breweries, it never advertises its products. The only advertising is of the hotel side, which is understandable, because we are in the centre of an area of tourist attraction. The beer sold in Carlisle is about 3d. or 4d. a pint below the national average for beers of a corresponding gravity. I admit that the profits showed a decline after the General Election of 1964. In my view, that was the direct result of the Labour Government's price control. With the removal of price restriction by the present Government, prices in the State Management District

  995
  have increased in line with increases elsewhere, and the profits of the scheme have gone up accordingly, but the prices are still well below those in the rest of the country. If high profits are the criterion of efficiency, the State management scheme could boost its profits by £240,000 a year by charging an extra 4d. for a pint of beer, which would give the scheme a profit of £540,000 a year and the profitability ratio after tax would be better than that of the private brewery generally. It is no wonder that the Government are anxious to sell the scheme out, and it is no wonder that the citizens of Carlisle in the main approve of the scheme, with the exception of a few Tories, who have been trying rather belatedly, aided by the Cumberland News, to whip up a little opposition, but so far that opposition is negligible. The plain fact is that if private enterprise takes over the scheme in Carlisle, the prices to my people will rise considerably.
  Charges for hotel accommodation and food in our hotels are well below the national average. The prices in the Carlisle area tend to be comparatively low because of the competition from the State management scheme.
  Mr. Brewis: If the advantages of the State Management Scheme in Carlisle are so remarkable, why is not there an outcry from Labour hon. Members to extend it into Cumberland, Westmorland and other areas?
  Mr. Lewis: I understand that the Labour Government of 1950 passed legislation allowing new towns to set up State Management Schemes if they desired. I hope that this is something to which we shall give attention.
  I come to the question of the current value of the assets. There has been much speculation about this. Whoever produced the figure in the Bill suggesting that the assets are worth about £4,700,000 should see a psychiatrist.
  Mr. John Golding: Or a lawyer.
  Mr. Lewis: Heaven save him from that. My information is that the figure is much nearer £6 million on current prices. The figure given in the Bill is a long way out.
  996
  Capital investment has gone ahead in the past few years. Expenditure on the modernisation of the brewery, hotels and public houses has increased to six times the expenditure 10 years ago—four times in real money values. This rate of improvement is well above the national average.
  I come to the question of the brewery, about which we have heard so much. I invite anyone who has not been there to go and see it.
  Mr. Russell Kerr: Before it is closed.
  Mr. Lewis: The brewery occupies an old building which is nevertheless sound and well maintained. In the past 10 years it has been equipped with the most modern plant and machinery, and it is recognised by the brewing industry to be as well equipped as any brewery of its size in the country, and better than many of the large breweries.
  If the scheme is taken over the brewery will inevitably close. That will mean the loss of about 80 jobs in the brewery, including clerical staff, another 70 in the works department, and about 60 in the head office of the scheme. With the rise in the unemployment figures since the present Government took over last June, I shudder to think what the position will be in Carlisle if this happens. One of the Government's major themes in their programme at the General Election was that they would cut out many civil servants. How many civil servants will be made redundant in the Home Office as a result of the take-over?
  Are the pension rights of my constituents in the scheme to be safeguarded? What about the 60 private dwellings owned by the scheme and those who occupy them? What about the business premises? Many business people with businesses in the premises are becoming a little alarmed and have even been to see me about the matter.
  The scheme has another important feature which the private breweries do not have. It has certain sporting facilities. Every Tuesday and Thursday in the winter five divisions of the Carlisle and District State Management Darts League play their matches. In summer, we have the bowling greens.—[Laughter.]

  997
  The hon. Member for Woking (Mr. Onslow) may laugh, but it is no laughing matter to people in Carlisle. He is showing his ignorance and upbringing. I am concerned about my people and about supporting the facilities they have. It is all very well for him to laugh and shake his head. The summer months see the bowling greens attached to a number of our pubs as hives of activity for league games and friendly matches. This will all go by the board if the private brewers take over. [Interruption.] Yes, it will.
  Mr. Cranley Onslow: I do not see why the hon. Gentleman should assume that. But even supposing that he is right, as an ardent temperance worker he has been trying to make it go by the board for some time.
  Mr. Lewis: If the private breweries take over, they will turn the bowling greens into car parks. They have done it elsewhere.
  The differences between the State management public houses and those of the commercial breweries have lessened over the years with the decline in drunkenness, which we all welcome. I certainly welcome it. I only wish we could bring it down even lower. I confess, as the Member for Carlisle, that the State Management Scheme is no longer a temporary social experiment. It is expected to justify itself as a commercial enterprise and has succeeded in that despite what has been said to the opposite, and it has done it without promotional advertising. In the public houses in Carlisle, great care is taken to maintain a high standard of supervision and to ensure that the sale of liquor is conducted in a creditable manner. That cannot be said of a lot of private enterprise public houses.
  I confess that, during the term of office of the last Government, I was critical of certain aspects of the scheme. I raised many points with my right hon. Friends the Members for Cardiff, South-East and Birmingham, Stechford (Mr. Roy Jenkins) and Lord Stow Hill, our Home Secretaries. I agree with every word said today by my right hon. Friend the Member for Cardiff, South-East. I want to see the monopoly taken out of the hands of the Home Office but I do not want
  998
  to see it handed back to the private brewers.
  Why not some kind of liquor board? Why not a small board with full or part-time members, with power to run the scheme as a business? Or why not a trust—call it by any name, I shall not argue about it?
  Mr. Anthony Fell: Keg.
  Mr. Lewis: The hon. Gentleman has just come in, so he does not know what keg is or anything else.
  I want to see the scheme taken over as some kind of trust. Over the years, it has become as important to Carlisle as Prince's Street has become to Edinburgh. I believe that some kind of trust could be formed and that the voice of the temperance movement could be heard upon it, as it has been heard already, because we have had a representative of the temperance movement on the local advisory committee almost since the inception of the scheme.
  I shall not labour this point, but I remind the House that the Tory Party has benefited by over £150,000 from the breweries. In case the House is not aware of the fact, I add that within two weeks of this de-nationalisation Measure being announced, the private brewers were on the ball and going around the pubs in Carlisle checking up and asking questions of the various managers. Yet hon. Members opposite have the audacity to say that there is no connection between the Bill and the brewers' political donations.
  To me as a temperance worker, this is a vital issue of principle between private enterprise and public enterprise. I come down on the side of public enterprise every time. One of the tragedies with the Labour Party is that when we are in government we tend at time to become too soft. I say to my right hon. Friends that when we become the Government again we have to take the kid gloves off and behave in the same way as the Tories are doing now. We have been gentlemanly, and look where it has landed us!
  The Government have no mandate to denationalise the Carlisle and District State Management Scheme, and they will do so at their peril because, as far as I am concerned, they can be assured that there will never be another Tory Member sitting for Carlisle. I end with some

  999
  advice to the Government. I suggest that the Post Office issue a new stamp to mark the demise of the scheme and that it should include on the stamp a symbol commemorating the brewers' successful bid in return for their financial generosity in donating just over £150,000 to Tory Party funds in the last two years.
  5.58 p.m.
  Mr. John Brewis: We all recognise the concern which the hon. Member for Carlisle (Mr. Ron Lewis) has for the people living in his constituency, for the brewery there and also for the various sporting competitions he has told us about. But I think that his concern is vastly over-exaggerated. I was sorry to hear him using the phrase, "trail of slime". If anything, that could be applied more to the speech of the right hon. Member for Cardiff, South-East (Mr. Callaghan). The right hon. Gentleman's speech was amusing and knockabout at the start but got out of hand and ended up as disgraceful. It was one of the worst speeches I have heard in this House.
  I welcome the Bill because it carries out one of the pledges in the Conservative Party's Scottish manifesto, which said that we should end—not break up, but end—the State monopoly in the two districts in Scotland.
  Mr. Buchan: The hon. Gentleman must not distort the case. This means a whole number of things. As the person in charge of State management for the last few years, I was under continual pressure from hon. Members opposite to grant licences within the State area but not one of them raised the question of taking it over and handing it to the private brewer. Secondly, the manifesto was rejected by the people of Scotland.
  Mr. Brewis: The hon. Gentleman replied to a debate in the House on 29th April to which I shall refer. I certainly understood that ending the State monopoly meant exactly what we are debating.
  I want to say a few words about the Gretna district. Although it is not in my constituency and is represented by my hon. Friend the Member for Dumfries (Mr. Monro) who I am glad to see in his place, it has a certain amount of interest for the people who come to
  1000
  Galloway. They come up the A74, which has recently been greatly improved, and often they would like to stop in Gretna because it is a place of considerable renown and a great tourist attraction. They can look round the numerous blacksmiths' shops and try to decide which is the authentic one.
  Hon. Gentlemen may be interested to know that, until recently, there was not a single hotel in Gretna with a full licence. There was, for example, the Gretna Hall Hotel which had more bedrooms than all the other hotels in the Gretna district put together. It did not have a full licence, nor did another hotel—the Hunter's Lodge Hotel. The Gretna Hall Hotel has numerous historical connections and is a very good hostelry.
  I understand that licences have frequently been applied for in Gretna, have been agreed to by the local licensing court under the Licensing Act and then vetoed by successive Secretaries of State for Scotland in the interests of the State Management District. To protect a Government monopoly by turning down the decision of a licensing court is disagreeable. It shows the Secretary of State acting as both judge and jury in his own case. Overruling local representatives on the licensing court is equally distasteful because it is redolent of the Socialist remark that the man in St. Andrew's House knows best. Certainly the lack of facilities in the State Management District of Gretna has militated against the tourist trade.
  I am glad that my right hon. Friend has, as I understand it, granted full licences to the two hotels I have mentioned. Not only is it unfair to people who want to stay at hotels in the management district, but it is also unfair to the local grocers because many of them had off-licences in the old days and now such licences are not granted to grocers in State Management Districts. It is easy for a grocer outside the district, say in Dumfries, to supply bottles of liquor to people in the State Management District when his van is going round. To that extent, he is pinching the trade which belongs to the grocers in the district.
  It is interesting to note that the three schemes we are discussing were more extensive. There used to be four State-owned public houses in the Enfield Lock area in London. They were taken over at much the same time and sold back in

  1001
  1922. I suppose the reason for that was that four public houses in a highly populated area did not give a sufficient monopoly. People, if they were dissatisfied, could go round the corner. This is certainly not true in the extensive districts now covered by the State Management Scheme.
  Facilities for the tourist trade are undoubtedly best improved by competition. It must be competition reasonably supervised by the licensing courts and the police. At the moment there are a number of social clubs which have sprung up in recent years within the State Management Districts. There is nothing wrong with social clubs as such, except when they are an effort to avoid the licensing laws. They are not nearly so strictly supervised by the police as are licensed premises.
  Another point is that considerable sums of capital must be injected into licensed premises to keep them up with modern trends. For example, it cannot be imagined that the Aviemore Centre could ever have been built by a State Management District because the funds simply would not have been released by the Government. It is the same in the Cromarty district, where little interest has been shown by State management in the tourist centre developing at Ben Wyvis.
  In Annan, for a number of years, there was no hotel with a room large enough for big functions. Once again, a private enterprise hotelier came into the area and proposed that he should provide this. I believe that he was vetoed for a long time and eventually the Queensberry Hotel, one of the State management hotels, was greatly improved and now provides the necessary facility. Here we see the effect of outside competition.
  The Government are notoriously closefisted when it comes to capital expenditure. The hon. Member for Carlisle, in his remarks about his State Management District, mentioned many figures. One that struck me forcibly was the value of the assets, which he said was about £6 million.
  Mr. Ron Lewis: That was my estimation.
  Mr. Brewis: I wonder whether the hon. Gentleman realises that the higher the asset value the more lamentable appears to be the performance. Take the Gretna
  1002
  district, which is the district I know best. There the gross trading profit compared with turnover shows something like 15·7 per cent. profit in 1968–69 and 13·7 per cent. in 1969–70. I am informed that the average publican normally works on a margin of more like 28 per cent. between gross turnover and gross profit.
  Mr. William Hamilton: Simple. He charges more.
  Mr. Brewis: Does the hon. Gentleman see any reason why people should have their beer subsidised?
  Mr. Neil Kinnoch: While the hon. Member is on the subject of subsidy, would he like to explain why every beer drinker in the United Kingdom—or almost every beer drinker—is obliged compulsorily to subscribe to Tory Party funds?
  Mr. Brewis: That would be off my beat. I will leave that sort of canard to hon. Members opposite, who do it so much better. In the Gretna area, the not State profits were 6·7 per cent. in 1968–69 and 4·1 per cent. last year. Taking the net profit compared with the assets, this is a very low return. This presents a perfect hiving-off situation. If this district had been in private hands there would have been a takeover bid long before. If the assets were worth £6 million, which was the hon. Gentleman's estimate, I would much rather see £6 million spent on improving public services like hospitals and houses rather than invested in public houses which bring in a very small return. As my right hon. Friend the Home Secretary said, one could obtain a much better return by investing the money in Government securities.
  I am glad that my right hon. Friend the Home Secretary was able to say that provision is being made to look after the interests of the staff who will be affected by the Bill. I do not envisage that there will be too much difficulty for the staff because most of their jobs are bound to remain in being.
  Mr. Ron Lewis: What about the brewery?
  Mr. Brewis: I do not know the ins and outs of the hon. Gentleman's constituency, but I hope that the brewery continues.

  1003
  If the State scheme has been such a remarkable success, why has it not been extended? It has been in existence for 60 years. It is a social economic experiment which has not been a success. It should not be extended and I am glad that it is to be wound up by the Bill.
  6.11 p.m.
  Mr. William Hamilton: The hon. Member for Galloway (Mr. Brewis) ended his speech on a rather peculiar note by wondering why the State scheme had not been extended in 60 years. Why has it not been abolished? If the Conservative Party was so enthralled with the prospect of private enterprise as against State enterprise in breweries, it had from 1916 to 1964 to deal with it. It is only now taking steps to remedy what it regards as an evil—a profit-making public enterprise.
  The public will be appalled by the priorities of the House. Yesterday we heard one of the most serious statements about the economic situation in this country which we have heard for 30 years. There was an announcement about unemployment figures which were a disgrace to a civilised society. There are more than 800,000 people unemployed, 122,000 of them in Scotland, and here we have the Secretary of State for Scotland sitting on his backside and probably later winding up the debate and trying to justify the handing back to his brewery friends of a few pubs in Scotland in reward for the few thousands of pounds his party received to help to win the election in England—but not in Scotland.
  I am reminded of almost the first Bill passed by the Tory Party on its accession to power in 1951. Its object was to repeal the legislation which the Labour Government had put on the Statute Book to provide for State pubs in new towns. I served on the Committee which dealt with the Bill. It was in the charge of Maxwell Fyfe, who was then the Tory Home Secretary, and when the Tory Party wanted a dirty job to be done it gave it to Maxwell Fyfe. The fact that the new towns had been built up by public enterprise and with public money from the Treasury made the Labour Government think it right that profits from drink in State enterprise—because
  1004
  that is what new towns were and are—should go to public enterprise and be ploughed back to the people who made them.
  The Tory Party did then what it is doing now: it prevented the extension of State enterprise into this field. I hope that my party will commit itself to the extension of State enterprise into this field. If the Tory Party should go one way, there is no reason why we should not go the other.
  I said that we are discussing this squalid little Bill at a time when members of the public must be wondering what we are up to. They do not know why we are doing it, and I propose to tell them. My right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) referred to the contributions which the brewers had made to Tory Party funds. The Tory Party does not like to be reminded of them.
  Mr. Ron Lewis: It is understandable.
  Mr. Hamilton: It is—but I want to put the facts and figures on the record.
  It is disgraceful that there are hon. Members with financial interests in this matter who will be calculating the £.s.d. profit which they will make from this Bill who will be allowed to vote in their own financial interest tonight when a local councillor is not allowed to vote at local level. He is not even allowed to take part in the debate, let alone vote.
  We must refer to Andrew Roth's book to find out which Tory members and Ministers were associated with brewery companies. I think that there is a powerful case—and I have stated it many times in the House and in other places—for a special register compelling Members of the House to declare all their outside financial interests, and members of the public should have access to it so that they may know exactly what is going on in the House. There is a good deal of corruption in the House, and I do not care who knows it. It is time that the public knew it. When the Tory Party talks about "flogging" Thomas Cook and Son Ltd. to private enterprise and "flogging" the profitable sections of the steel and coal industries and now the State breweries to their own friends because they made it financially possible for them to win the last election, it is

  1005
  time that the public knew that corruption here exists to a far greater degree than they know.
  Let me give some examples—and I hope to God that I get on the Committee dealing with the Bill. On 29th April, 1970, when the Labour Party was in office, I asked my right hon. Friend the Member for Barnsley (Mr. Mason), then President of the Board of Trade, to give details of the political contributions made by the brewery companies to the Tory Party in 1968 and 1969 as disclosed in returns filed with the Registrar of Companies. I got a long list and I shall read it out; my right hon. Friend was, characteristically, very helpful.
  In 1968, Arthur Guinness, Son and Co. Ltd. gave £16,700 to the Tory Party and, in 1969, £16,500. There is a member of the Guinness family in the Tory Government at this very moment. Will that company be allowed to bid for the State pubs? I hope that the Amendment suggested by my right hon. Friend the Member for Cardiff, South-East to the effect that such companies shall not be allowed to bid will be accepted. Scottish and Newcastle Breweries made small contributions—£3,906 in 1968 and £8,006 in 1969. I think that company is associated with the Youngers. There is a Younger in the Government, a junior Minister, who denied that he any longer had associations with the brewery trade, and I was bound to accept that. I wonder how neatly the ties have been cut since he became a Minister?
  Mr. MacArthur: Disgraceful.
  Mr. Hamilton: I will repeat it in case the hon. Gentleman did not hear it. I wonder how neatly the ties between that hon. Gentleman and the Younger Brewery Company have been cut since he became a Minister?
  Mr. MacArthur: Will the hon. Gentleman spell out clearly what he means?
  Mr. Hamilton: The hon. Gentleman has heard it twice. He is extremely dull but not deaf. I stand by what I said, and it is time the public became aware of these facts—
  Mr. Gordon Campbell: Perhaps I can help the hon. Gentleman.
  Mr. Hamilton: The right hon. Gentleman will help me in nothing at all. He cannot help me in any way whatsoever.
  Mr. Campbell Mr. Campbell rose—
  Mr. Hamilton: No, the right hon. Gentleman must bide his time. He has been a silent Member of this House for far too long, and he will not get a chance to break his silence by intervening in my speech. He will be winding up.
  Mr. Campbell: On a point of order. Aspersions have been cast on my hon. Friend who happens to be a junior Minister in the Department of which I am Secretary of State. I therefore seize the earliest opportunity of stating that lie of course severed all connection with the firm of Bass-Charrington Ltd. when he became a Minister, in accordance with the normal rules.
  Mr. MacArthur: Withdraw.
  Mr. Hamilton: I withdraw nothing. I asked a question—
  Mr. MacArthur: The hon. Gentleman has had the answer.
  Mr. Hamilton: The right hon. Gentleman has presumed to answer it. We will leave it at that, but I repeat that I hope that I shall be on the Committee which deals with this Bill, when we can go into these facts in much greater detail than in a Second Reading debate.
  Mr. MacArthur: Withdraw.
  Mr. Hamilton: No, I do not withdraw. Mr. MacArthur: Withdraw.
  Mr. Hamilton: I do not withdraw one word of what I have said. I simply repeat what my right hon. Friend said about the Youngers and their association with the Tory Party still. It might be, as the right hon. Gentleman said—and my hon. Friend as a junior Minister accepted it at the time—that the junior Minister severed all his links with the brewery company, but there are family links. The Tory Party is riddled with party connections with business interests of all kinds in the City. One only has to look down this list of companies:

  "Arthur Guinness, Son & Co. Ltd.

  Associated British Maltsters.

  Boddingtons Breweries Ltd.

  Cameron (J.W.) & Co. Ltd.

  Higsons Brewery Ltd.

  Home Brewery Co. Ltd.

  Hull Brewery Co. Ltd.

  Mansfield Brewery Co. Ltd.

  Morland & Co. Ltd.

  1007

  Brickwoods Ltd.

  Brown (Matthew) & Co. Ltd.

  Marston, Thompson & Evershed Ltd.

  Greene, King & Sons Ltd.

  Shipstone (James) & Sons Ltd.

  Truman Hanbury Buxton & Co. Ltd.…

  —[OFFICIAL REPORT, 29th April, 1970; Vol. 800, c. 1249.]
  The whole ruddy lot contributed to party funds in 1968, 1969 and 1970. Watney Mann Ltd. contributed £24,750 in 1968 and £25,000 in 1969. Bass-Charrington, the firm my right hon. Friend referred to—they must be a mean lot—contributed £450 in 1968 and £67 in 1969. Their profits must have been very low in those years.
  The Bill must be seen for what it is, a squalid Bill based on corruption and on an obligation felt by the Tory Party to reward its paymasters. It should not be called the Licensing (Abolition of State Management) Bill, it should be called the Brewers Loot Bill—for services rendered to the Tory Party. We shall see how many hon. Members who take part in the debate declare their interests and, because of those interests, refuse to vote to night in case their vote might be misinterpreted by the public. It is not enough to declare an interest. One must carry that to its logical conclusion and refuse to vote, lest one be accused of corruption. They would not like to be accused of that, I am sure.
  Despite what has been said by hon. Gentlemen opposite, we are handing over valuable assets. I have here an article written by John Fowler in the magazine "Scotland" of December, 1970, on "Maudling's Pubs". North of the Border I suppose they will be "Campbell's pubs" and "Campbell's dole queues", they will go together, and he will be responsible for both of them. This is what the self-confessed rank Tory Alderman Jim Aspey said:
  "I can't imagine any sane Government getting rid of the only nationalised industry that makes a profit."
  This is what the State Management Districts Council's top guy says—he knows what he is talking about. He is the fellow who says that the Government must be mad. They are mad. They are corrupt too, a terrible combination. The article goes on to say that the handing over is coming at a particularly propitious moment because the Cromarty
  1008
  area is one of the growth points in Scotland, largely due to public enterprise. The expenditure of vast amounts of public money—£37 million on the aluminium smelter alone—will create a vast market for drink. It is at this moment that the Tory Party and the Scottish Office see fit to bring in this miserable little Bill to give the pickings to the friends of the Tory Party.
  It is rather interesting. A profitable State enterprise like this the Government flog off to their friends. A private enterprise that is going bankrupt—Rolls-Royce—is taken over into public ownership. Where is the morality, the sense, the honesty of that allocation between State enterprise and private enterprise? There is no morality in it. The Bill ranks with the Profumo affair. [HON. MEMBERS: "Oh."] The Tories do not like that either, do they? It is on the same scale of morality in the economic field as the Profumo affair was in the social field. I believe in calling a spade a spade. This Bill is produced by a squalid Government for squalid reasons at the most inopportune time. I hope the House will reject it and that hon. Gentlemen opposite who have vested interests at least will have the decency not to vote tonight. If they do, I hope the people outside will understand what a corrupt lot they are.
  6.30 p.m.
  Mr. Tom Boardman: I will not deal with the speech of the hon. Member for Fife, West (Mr. William Hamilton) in detail, except to say that it was as nasty and cheap a speech as I have had the displeasure to hear in this Chamber. He made accusations and smears against hon. Members which he would be unwilling to make outside the House.
  Mr. MacArthur: He would not dare to do so outside.
  Mr. Boardman: I did not need the hon. Gentleman's reminder that before participating in this debate hon. Members should declare their interests. I have an interest since I am a director of a brewery company, as has been made clear.
  Mr. Ron Lewis: Name?
  Mr. Boardman: I am a director of the Allied Brewery Company.
  Mr. William Hamilton: What are your fees?
  Mr. Speaker: Order. The hon. Gentleman must not make remarks from a sedentary position.
  Mr. Boardman: Although the hon. Member wishes to brand me with prejudice in the eyes of some hon. Members opposite, I hope that my remarks will compensate for the lack of knowledge on this subject which has been evident in the speeches on the other side of the House.
  Many jibes have been thrown across the Floor of the House today about brewery companies and hon. Members with interests in such companies and people with a financial interest. I have always been prepared to declare an interest, and I hope that hon. Members have been prepared to accept it as honourably given. The fact that I have taken part in a debate is not in furtherance of any interest I may have but in the belief that I and other hon. Members who are so affected have a contribution to make.
  It is a difficult matter to know whether to join in a debate such as this when one has an interest to declare, whether to sit silent and suppress such knowledge as one has of the industry and its problems, or whether to take part in the debate and then be accused, as the hon. Member for Fife, West has accused me, of speaking in my own cause.
  The extent of my financial interest in the affairs which we are now debating and the consequences of this Bill or of any decision in regard to this State scheme could not make the difference of a pint of beer to my personal position. That is probably the extent of my interest.
  Let me make clear that although my interest in this industry is well known on both sides of the House, at no time has any member of the Government or of the Conservative Party approached me to canvass my views or to examine me about my company's attitude on this matter; nor indeed, to the best of my knowledge, has any member of my company been approached or asked to give views on this subject. I do not know what the views of my company will be on the possible trade consequences of this
  1010
  Bill, but I know that its views will be in line with the views of many people throughout the country, namely, that in the interest of the taxpayers as a whole this Bill should go through. It is in that capacity in regard to the financial implications of the management of the State scheme that I am intervening in this debate.
  Mr. Ron Lewis Mr. Ron Lewis rose—
  Mr. Boardman: I do not wish to give way. The hon. Member for Carlisle (Mr. Ron Lewis) spoke for an interminable length of time. We respect his views as a member of the Temperance Society, though I fail to understand his logic in wishing to subsidise a State brewery.
  Mr. Lewis: Will the hon. Gentleman give an undertaking that his firm will not be bidding for the State breweries in Carlisle?
  Mr. Boardman: I shall give no such undertaking. I have no power to bind my company on whether it bids. I do not know its attitude on this matter. It would be most improper of me to give any undertaking and it is ridiculous that the hon. Member should ask me to do so.
  I turn now to deal with the speech of the right hon. Member for Cardiff, South-East (Mr. Callaghan), and I am sorry that he is not here to hear what I have to say. I was surprised that a right hon. Member who has held such high office should sink to the low level he did in seeking to score cheap and mean points in a debate of this kind, and that he should do so by producing wrong figures. That perhaps was the lesser of the evils. He quoted figures for the current year which he alleged were unknown to my right hon. Friend, and he said that profits of the current year were £97,000 up and would amount to £259,000. Those in fact are the figures for the year to 31st March, 1970.
  Mr. Elystan Morgan: That is what my right hon. Friend said.
  Mr. Boardman: If that is what he indicated, then I apologise, but the right hon. Gentleman certainly did not make that clear. Those were the figures which had been referred to by my right hon. Friend and therefore the point that was made by the right hon. Member for Cardiff, South-East was not relevant.

  1011
  The right hon. Gentleman also made comparisons in regard to beer prices. He quoted the price of the traditional beers, mild and bitter, against what are known as the keg beers, and he sought to use the gap between the two to show an enormous variation in price. But had he wished, he could have arrived at an accurate comparison of the price differential between beers in the State managed houses and other beers in the immediate neighbourhood. He would have seen that there is a difference of about 1p a pint between mild beer and commercial mild beer—in other words, commercial mild beer is 1p a pint dearer. There is a similar differential in regard to bitter beer, which varies between 1p and 1½p a pint. Those are the figures with which I have been supplied—not, incidentally, by my company—as to the difference between the price of beers sold in Carlisle and those being sold in neighbouring companies in the districts immediately surrounding Carlisle. I am not suggesting that there are no differences as between individual houses, but this is the general category. It was certainly quite wrong to quote a differential of 4p a pint.
  Mr. Bagier: The hon. Member quoted beer prices in the immediate vicinity of the Carlisle State brewery. Has he any comparisons of prices of beers sold by competitive breweries away from the Carlisle State area where there is not the competition of the Carlisle State brewery?
  Mr. Boardman: No; the prices I am giving are in areas where there is an element of competition, as exists in those parts of the country which are not subject to a State monopoly. It is in Carlisle alone where there is a State monopoly. I will return later to the reasons for the difference in price. It was quite unrealistic for the right hon. Member for Cardiff, South-East to quote differences of up to 6p a pint. This was not the standard of honest debating one would expect of such a right hon. Gentleman. He also selected extracts from the Monopolies Commission Report and correctly quoted paragraph 415 on tied houses, which was not particularly relevant, but he did not go on to say that the Monopolies Commission did not recommend any change except in the context of a complete review of the licensing laws and a body has now
  1012
  been set up by my right hon. Friend to look into the licensing situation, as the Monopolies Commission recommended.
  Mr. Elystan Morgan: It is rather strange for the hon. Gentleman to say that the tied house issue has nothing to do with this matter. The Home Secretary said that he was against all local monopolies. The most glaring example that we have of a local monopoly in the brewery trade stems from the tied house itself.
  Mr. Boardman: To quote from the Monopolies Commission Report, to suggest that the breaking of the State monopoly was wrong was quite irrelevant and carried no weight. The right hon. Gentleman could have gone on to say that there is a problem with the tie which has been stated by the Monopolies Commission and which can be looked at only in the light of a complete review of the licensing system, to which my answer would be that the Government have initiated that review by setting up the Erroll Committee.
  The right hon. Gentleman went on to produce his usual threat to reacquire the State group on penal terms, making the proposition so unattractive that no one is likely to pay a vey substantial price for these houses or even buy them at all. I cannot understand the right hon. Gentleman's objective. He ended by saying that he believed that to be in the public interest. However, it must be common ground between the two sides of the House that, if these State assets are to be disposed of, they should be sold at the most profitable price. We shall not sell them at the best price if the right hon. Gentleman threatens that they will be required in due course at some knockdown figure. However, the public will have the satisfaction of knowing that the right hon. Gentleman's threat is a hollow one and that it is unlikely that the party opposite will have an opportunity to put into effect in the span of most of us.
  My criticisms of the State houses in no way reflect upon the staff, the management or the Council for them. I am sure that the hon. Member for Carlisle and I are in agreement about that. My criticism concerns the dead hand of bureaucracy and the disinterested management philosophy which has permeated the

  1013
  group and caused the financial results to which I shall refer in a moment. There must be no motivation; there must be no financial profit incentive, for fear that the management will be corrupted. The result is that we have a financial situation which is even less attractive than that put forward by a number of my hon. Friends.
  Hon. Members may ask why this state of affairs has been allowed to continue. It is part of Socialist philosophy, of course. However, previous Conservative Governments were dilatory in not dealing with it, and I am glad that we now have a Government who propose early action to eradicate the Socialist bureaucratic system which was tried as an experiment and which has now developed into a situation where the State is making beer and running pubs in a way which is quite inappropriate for any Government. A Conservative Government have far better things to do than set themselves up to run pubs and a brewery.
  No one has suggested in the debate that the State scheme provides more choice. There is a reasonable choice of beers in the State houses, but not even the hon. Member for Carlisle has suggested that they offer a greater choice than that to be found in any other well-run house.
  Mr. Ron Lewis: My information is that the Carlisle pubs offer a greater choice than houses run by private breweries.
  Mr. Boardman: Of course, the hon. Gentleman is bound to say that. However, I believe that any statistical exercise would show that the choice is no better and probably not as good—
  Mr. Lewis Mr. Lewis rose—
  Mr. Boardman: No. I will not give way again. Despite not drinking himself, I am sure that the hon. Gentleman has been observant in watching labels and finding out from others what is on the shelves of the Carlisle pubs.
  No one has suggested that the State products are better—
  Mr. Lewis: The hon. Gentleman has never been in a Carlisle pub.
  Mr. Boardman: I have motored through Carlisle on occasions and I have been in some State pubs, though I could
  1014
  not say which ones. No one has said that the products, the choice or the facilities are better. In fact, there have been suggestions that they are rather worse than in other parts of the country.
  The point has been made that some of the beers are cheaper. That may be so, although the price differential is not as great as has been suggested. It is 1 p or 2p, and not the 4p or 9p about which we have heard. According to my information, there was no differential until about the end of last year, when price increases were made throughout the industry. Until then, the prices of beers in Carlisle were roughly equivalent to those outside.
  Obviously there will always be some variation in prices throughout the country, and no doubt there were differences between Carlisle and other places. It is an industry which competes, and one of the elements of the competition is a choice of product and a difference in prices. However, the price differential was comparatively small until general increases were made at the end of last year. Understandably, the State houses are now increasing their prices. As my right hon. Friend the Home Secretary has announced, they are having to keep up with the increased costs which have arisen.
  I turn to the financial results of the group. Over the last three years, the average profit has been approximately £200,000. Of that, on average, £70,000 has been remitted to the Consolidated Fund. Over a long period, the returns from the Consolidated Fund to the State scheme for expenditure for which it has indented have been roughly equal to the sums that have gone into the Consolidated Fund. In other words, the actual return to the Treasury has been nil. Whatever has gone into the Consolidated Fund over the period has been approximately equal to the amounts which have been paid out from the Fund.
  Various figures have been quoted for the value of the assets. The book value of the assets is just over £2·2 million. Various figures have been bandied about for their realisable value. The hon. Member for Carlisle referred to a figure of £6 million, and various figures below that have been mentioned. I make no suggestion other than that basically assets are worth what they will earn, and one must

  1015
  therefore look at the profit-earning capacity of these assets. It will be necessary for there to be a careful evaluation of the assets, and of the best method of disposing of them.
  I notice that no charge is made for the work done by the Home Office. Perhaps the sum involved is comparatively small.
  I think that it would have been fitting if hon. Gentlemen opposite had paid tribute to the substantial contribution that has been made to the State scheme by private brewers who, through the years, have made the results of their research and development expenditure available for the State scheme. In a way the State scheme has been a competitor of theirs but it has, nevertheless, leaned on them for their development work. I have in mind such things as the cultivation of yeast strains, and other matters. Hon. Gentlemen opposite who are unduly critical of the private brewers might acknowledge that that assistance was statesmanlike behaviour on the part of the private brewers.
  Mr. James Tinn: Was the contribution made by means of a trade association, to which the State scheme would subscribe, or was this a donation of knowledge by individual brewery undertakings as a result of their own private research?
  Mr. Boardman: I think the hon. Gentleman will accept some hesitation on my part in answering that, because I am not certain of the precise way in which it was done. I believe that most contributions came from individual companies, but some may have come from trade research associations, which were provided, not from contributions from the State scheme, but were dependent on the private brewers. I think that is correct.
  We know that there has been a nil return on the capital involved. If the value of the assets was £6 million, what sort of return would have been expected? I do not propose to use a figure of £6 million, because I think that to do so would exaggerate my case. I shall take what I hope may be considered to be a low figure. I shall use the figure of £3½ million as representing the value of the assets.
  If the Government had financed that sum by loan capital, they should have
  1016
  required a return of about 10 per cent. In addition, it would have been essential for the scheme to generate sufficient surplus cash and profits to finance its capital expenditure. It is no good paying a 10 per cent. return on capital and then handing the whole lot back to enable development to be carried out. There would need to be a return of at least £450,000 profit per annum to give a return of 10 per cent. on the capital employed and provide for capital commitments.
  Looking at it in another way, if the scheme were financed by equity capital, in an ordinary commercial transaction one would want a profit of £500,000 per annum to justify an asset value which I have put at the unrealistically low figure of £3½ million. I shall not bore the House by going through the arithmetic, but if hon. Members care to do it they will find that £500,000, less corporation tax at the rate which applied during the three years about which we are talking, would leave an earnings yield of about 7½ per cent. on the amount involved, which I do not think can be considered unduly extravagant. Instead of achieving a profit of £450,000 or £500,000 to justify the retention and use of the resources, the return has been nil. Putting it another way, if one ignores the capital which has been paid back, the return has been £70,000 a year for the last three years.
  That has meant that the taxpayer has been deprived of a return on his capital. He has been deprived of his interest on his money. He has been deprived of the corporation tax which would normally be payable, which means that he has been subsidising the beer drinkers of Carlisle and the surrounding district. He has been subsidising them to the tune of 7d. or 8d. a pint.
  In The People of 21st March, 1971, a former general manager, in an article headed
  "What a way to run a brewery!",
  made some swingeing criticisms about the ineffectiveness of the State scheme which he said should be handed back to private enterprise.
  The article referred to the sale of 50,000 barrels of beer per year by the Carlisle brewery. Hon. Members can calculate that if there is a shortfall of £350,000 in profits there is a subsidy of that amount being spread over 50,000

  1017
  barrels of beer, which is £7 a barrel, or about 6d. a pint. Hon. Gentlemen opposite can do their arithmetic.
  Mr. Neil Kinnock: That is more than the hon. Gentleman has done.
  Mr. Boardman: It is no wonder that the Carlisle brewery is able to sell beer at a 1p or 1½p per pint less than that charged by private firms. If hon. Gentlemen opposite believe that it is right for the taxpayer to subsidise the beer drinkers of Carlisle, let them stand up and be counted. Let the hon. Member for Carlisle tell his temperance friends that he considers it right that they should contribute 6d. a pint to the beer drinkers of Carlisle. That is what is happening, and it is that nonsense which the Bill proposes to stop.
  In these accounts one sees a capital commitment at 31st March, 1970 of £480,000. There has been an expenditure of about £100,000 a year towards this type of capital expenditure over several years, and I think it will be found that that is part of the subsidy which has been paid.
  I do not believe that it is the job of the State to run a brewery. In fact, it is not the job of the State to run anything which can be run as efficiently, or more efficiently, by private enterprise.
  Hon. Members: Such as Rolls-Royce.
  Mr. Boardman: I do not believe that it is the job of the State to run Rolls-Royce, but I would be out of order if I expanded upon that.
  Despite all the good will that has been earned by the staff and the brewery companies, I believe that there has been an inefficient deployment of resources, and an insufficient return on capital. The Labour Party's objective of "disinterested management" can only mean lower standards, resulting in the taxpayer having to subsidise the beer drinkers of Carlisle. That is not the job of the taxpayer, who has enough burdens to carry already. It is right that the taxpayer should pay for hospitals, schools, and so on. Let the money which has been devoted to the beer drinkers of Carlisle be devoted, instead, to those worth-while objectives. I can understand hon. Gentlemen opposite be-
  1018
  lieving that there should be subsidies for many things, but I am surprised that they should believe that there should be a subsidy for beer. Such a subsidy will be ended by the Bill, and for that reason, among many others, I shall support this Measure.
  7.0 p.m.
  Mr. Michael Cocks: The debate has been in the pipeline for some time and from time to time I have wondered what line the Tory Party would take. I felt that two words which would occur in our discussions would be "monopoly" and "choice". The Home Secretary was early off the mark when he referred to the position in Carlisle as a monopoly. He said that what was required was the commercial freedom which the rest of the country enjoyed.
  I ask who enjoys this freedom. Is it the general public or the shareholders of the large breweries? I do not believe that the two interests are necessarily synonymous. The Home Secretary also said that the function of brewers was to make their product as attractive as possible, but here, too, the product may be more attractive to the shareholders than to the general public. The Home Secretary talked of a choice for the consuming public, and I, too, should like to discuss that aspect of the matter.
  I am sorry that in doing so I shall not comment on what was said by the hon. Member for Leicester, South-West (Mr. Tom Boardman), not because his figures were incomprehensible, but rather because of my own inadequacy to understand them. I am sorry that he spoke before me. I appreciate that he has wide knowledge of the industry and the comments which I want to make concern generally the way in which the industry is developing.
  In the Carlisle area the local Labour Party issued a leaflet dealing with the proposal to denationalise the pubs and mentioning the possibility of one of the big breweries making a bid to take over the State group. It said that that would be a real monopoly and it gave as possibilities Bass of Birmingham and Courage of Bristol. I want to speak for a few moments about the position in Bristol, because there is an example of a big brewery in a dominant position—Courage.

  1019
  Of the 50 public houses in my constituency in Bristol 47 are controlled by Courages, as I have found from looking through the records of the magistrates' courts. That is pretty nearly a monopoly. After the war, in Bristol there were some small local breweries, Georges and United, but a series of take-overs occurred and the unit became larger and in the end seemed to be dominated not so much by Bristol's interests as by London's interests. For a long time Bristol has been known as a city where a comparatively cheap pint of bitter was available. Many people enjoy a drink, including many old people for whom it is an important part of their social life.
  Last year, advertisements began to appear in the local newspapers advertising a new beer by Courages—Full Brew; it was called "the regular's bitter." The advertisements showed three glasses and at the top were the words "Same again, Frank? Same again, Bert." I presume that using those names was some "adman's" idea of a working-class image, and it is a nice point of how far within the Trade Descriptons Act something may be called the regular's bitter when it has just come on the market.
  Not surprisingly, this is a more expensive beer than the ordinary bitter, the "cooking" bitter, which is the general drink in Bristol. A number of my constituents were worried about this and some of them got in touch with me because they feared that the brewery was trying to persuade the general public to accept this more expensive bitter in place of the cheaper ordinary bitter to which they had become accustomed.
  I was concerned because the more expensive price would obviously hit those of limited means who enjoyed a quiet drink. Someone wrote to the Evening Post, the local newspaper, pointing out that in her local the ordinary bitter had been withdrawn and that only this more expensive beer was available—apart from the other keg beers and so on. There was a reply from a brewery spokesman to say that there was another house nearby where the cheaper beer was available.
  This was a bad answer, because it completely ignored the fact that elderly people get accustomed to going to one house over many years and they build
  1020
  up social contacts. If they are then told that if they go down the road to another house, their beer will be 2d. a pint cheaper, the way in which they have woven their local into the fabric of their life is completely ignored. I wrote to the managing director pointing out these fears and he replied that there has been a great deal of market research into the public's taste in beer and that some 1,500 opinions had been taken. He referred to this large-scale market research upon which the new beer had been evolved.
  A big campaign was launched with prizes offered to the licensees who could get rid of the most new beer—one of the prizes was a Paris trip for two—and there was a large publicity campaign in the trade papers. In 1969, the managing director came to Bristol from another part of the Courage area and probably thought that we were making a bit of fuss about nothing. But Bristol people were suspicious about this move, because in 1968 there had been a similar campaign for Courage Light.
  I went to Bristol Public Library and turned up the Courage house journal and found that a campaign had been launched for Courage Light and the advertisement said:
  "Who drinks Light Ale? What does he or she look like?…Are they rugger players, secretaries, dockers, doctors?
  We researched the public's drinking habits for months before this tremendous new campaign was launched."
  The trade advertisement went on to talk about displays and prizes and so on. When the campaign was launched, there was widespread newspaper and television advertising, and shortly after that the bottled bitter ale which had been one of the most popular bottled drinks in the Bristol area was withdrawn from circulation. A number of people saw a similar pattern beginning to emerge when this new campaign started.
  I believe that when large companies claim that new products are based on the results of market research they should make those results available to the general public in order that anybody interested may see whether they are following trends in the public taste. I have written along those lines to the managing director of Courage today.
  Some of the Courage representatives in the area have been outstandingly frank

  1021
  about this campaign. One man was reported to me as having said about the new beer, "The public has got to learn to like it". How did the public like it in my constituency? In the constituency there is the largest draught beer selling house in the whole of the SouthWest of England and I had a word with the tenant. He told me that when the campaign was in full swing he made a sample one Sunday when he sold seven barrels of ordinary draught beer and six pints of Full Brew. As hon. Members will know, seven barrels at 36 gallons a time means 2,016 pints, which hardly seems as though the new beer was regarded as the elixir of life, or nectar, by beer drinkers in the search to satisfy public taste.
  It was a similar story elsewhere. Soon after this matter was aired in public these advertisements stopped, but they have lately reappeared. However, this time "Frank" has disappeared and it is simply, "Same again, Bert". I took one from a place which I visited last night. There is a suspicion that it is being tried again.
  Many people believe that somewhere in this organisation the accountants said: "The profit margin on ordinary bitter is not large enough; we want something which shows a better profit margin". So the publicity department goes into action and there is an attempt to persuade the public to take something else.
  How is the public to be protected against this kind of thing in an area where there is so little choice of houses which can be visted? For hon. Gentlemen opposite to talk about monopoly when people in my area have so little choice of houses in this respect is farcical.
  Another disturbing thing is the way that the prices of beers and so on are really not accountable to the public. I should like to conclude with an example from my local area. Courage's Brewery has recently announced that, because of the Chancellor's Budget Statement about selective employment tax, it was cutting the prices of four of its bottled beers. The Western Daily Press welcomed this in its editorial, hoping that more popular brands would be cut. In fact, the chairman of the Bristol Licensed Victuallers' Association said that the prices had been reduced only on the worst selling beers. Four were mentioned: Bulldog, Barley
  1022
  Wine, Russian Stout and Magnet Old. The chairman said that out of these he only sold Barley Wine and had never heard of Magnet Old.
  Here again, this is not treating the public fairly, because the brewery is in a position to say that it has reduced prices as a result of the Government's action over S.E.T. But when the number of bottles sold is so small, it is ludicrous; it is not part of its substantial trade.
  This morning I rang a friend and asked how many he sold. He said: "Barley Wine, probably three a week. For Bulldog there is no demand. The last Russian Stout I sold was in 1964." He also had never heard of Magnet Old.
  When the announcement about cuts was made there was a momentary drop in the value of Courage's shares on the Stock Exchange until it filtered through to the people concerned what the actual extent of the cuts involved. I am not necessarily happy to say that Courage's shares recovered and are again at the level at which they stood before the announcement. The share investing public has therefore rumbled what the cuts mean.
  This is a serious position. I am concerned about trends in the brewing industry. My right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) mentioned an article in one of the Sunday journals. I think that that article did a great public service. If the Government are sincere in what they say about monopoly and giving a choice to the consumer, they should be prepared to support measures to give the general public more information about beers, about the different strengths of beers, and about the tax paid on beers. In this way they would be protecting members of the public at a time when the trends are all against them.
  7.14 p.m.
  Mr. Charles Fletcher-Cooke: The hon. Member for Bristol, South (Mr. Michael Cocks) made a great plea for the consumer, which I support. He is right in saying that in this modern world the consumer is at a great disadvantage and that anything which we can do, jointly or severally, to protect him will certainly have the support of my party.
  I should like to ask, in a perhaps discordant manner, one question. This is

  1023
  the first denationalisation Measure which this Government have produced. Thinking back almost exactly 20 years, our first denationalisation measures when we got power in 1951 were concerned with road transport and steel. They were matters of great and fundamental importance and we tackled them. What do we find today? We are denationalising a small local, not unimportant but nevertheless rather peripheral matter—the Carlisle and District State Management. Another similar Measure has been announced for Thomas Cook Limited, about which the same epithets might be ascribed. Are these two swallows which are to herald the summer or are they mere substitutes for what this party stands, namely, a denationalisation of the commanding heights of the economy?
  I have a great suspicion that we are being put off by what is called the hiving off process. I am sorry to strike this discordant note, but it is a serious matter.
  At one time I had some responsibility for the State Management Scheme and I visited it over two years. I found it not popular, but not unpopular; not brilliant, but not bad. I thought that its virtues lay in its smallness. It was moderately efficient because it was a small concern. It did not show the scandals of the steel, transport and coal nationalised industries. That was because it was manageable. I support its denationalisation, but if there is any idea that this is to be a substitute for a serious campaign of denationalisation then I think that the Government will get into serious trouble from behind it.
  I remind my hon. Friend the Under-Secretary of State that in 1967, at the Conservative Party Conference at Brighton, a resolution, which I proposed, was passed without dissent saying that there should be a large and comprehensive measure of denationalisation by the next Conservative Government.
  So far as we have had the Carlisle and District State Management Scheme, and Thomas Cook is promised. If that is thought to be a large and comprehensive denationalisation scheme, all I can say is that we vary very much on quality and degree. The truth of the matter is that it is not the periphery of the nationalised industries, it is not those
  1024
  things which are to be hived off, to use the modern phrase, which are the trouble; it is the rotten core. It is no good thinking that the problem of the nationalised industries will be solved by selling off bits and pieces at the edge. It will not have very much effect one way or the other. It will merely irritate our political opponents without causing any proper economic result. I should think that the noise in the Chamber today must persuade the Government that they do not get any less opposition from taking small bites at small cherries than they would from the kind of frontal attack upon the problem that was boldly taken and achieved 20 years ago.
  This is the burden of my complaint. It is not that what we are doing is bad—what we are doing today is good—but that it pales into insignificance before what has to be done and makes one wonder where the Government's priorities are in this vital matter of denationalisation.
  Speaking on the resolution which was passed unanimously at the Brighton Conference, the present Secretary of State for Education repeated a pledge previously given by the present Chancellor of the Exchequer, namely, that the steel industry would be returned to private hands during the period of the next Conservative Administration. I would have thought, if that was to be the case, that it would have taken priority over this modest, not ineffective but not very effective, little enterprise based on the Border between England and Scotland. I would have put steel somewhere above a travel agency, important though that is.
  I therefore ask the Government not to withdraw the Bill, because I feel it right that the State should get out of the liquor business, but in the context of the Bill to consider the other and more important things that require to be done. I am amazed that so many hon. Gentlemen opposite want the State to stay in the liquor business. Of all businesses this seems the most unsuitable for the State to be in, if only because it arouses such deep-seated feelings among people.
  The former Home Secretary, the right hon. Member for Cardiff, South-East (Mr. Callaghan), launched a great attack on the compensation provisions. He said there was a scandal in allowing this

  1025
  to be decided under Clauses 2 and 3 by the two Secretaries of State. I do not for a moment believe there will be any impropriety by those Secretaries of State, but I hope that that attack will not only be met but be seen to be met by an elaboration of the manner in which the property is to be disposed of and the method by which the price is to be fixed.
  Let there be no doubt that the method of fixing the price in a denationalisation process is absolutely crucial to the operation and that the machinery for providing for it in this Measure is likely to become a precedent for the further denationalisation Measures which I hope we will see on the lines I have suggested. It is necessary, therefore, that we are more specific in the Bill about how the price is to be fixed, how the sale is to be conducted and in what lots the properties and shares, if it is to be done by way of shares, are to be split, or whether it is to be sold as a single concern.
  It seemed strange that the former Home Secretary wished the property to be sold in one piece. That was his suggestion. I would have thought that that would have been more objectionable to him from the social point of view than that it should be sold split up. Be that as it may, the prime objective must be that the public should get the greatest amount of money. That must be the chief care of the Government. There are other interests and factors concerned in spreading the property as widely as possible among as many people as possible, but the Government are the trustees of the public purse and must get the highest possible price.
  It is no good hon. Gentlemen opposite objecting to what the price must be if they have depreciated that price by their threats not merely to renationalise but to confiscate when they next get to power. If they do that, then the results are on their head and they cannot complain if people do not bid as highly as they might otherwise do for these assets.
  7.25 p.m.
  Mr. W. E. Garrett: It seems the fashion in this debate to declare one's interest. I am one of thousands of shareholders in the Northern Clubs' Federation Brewery, a co-ownership organisation about which many hon. Members know but about which I want
  1026
  them to know more. This brewery is an example which should be followed throughout the country, and in some respects the State brewery at Carlisle could be said to follow a similar pattern.
  I have been saddened to realise that many hon. Members are completely ignorant not only about the operation of the State brewery but about the premises which are under its jurisdiction. For example, I was appalled at the ignorance of the hon. Member for Westmorland (Mr. Jopling), who unfortunately is not in his place. He does not live far from the area which we are debating, but it is clear that he has little knowledge of the licensed premises there.
  I have been in those premises on many occasions and I assure the House that it is not true to say that they are dark and dingy. On the contrary, they are bright and well managed and I would call them some of the best in the United Kingdom. Some of the licensed premises built there in the last five or six years are equal, if not superior, to any in Britain.
  It is alleged that the facilities in the licensed premises in the area are inadequate. The hon. Member for Leicester, South-West (Mr. Tom Boardman), who said this, is also no longer in his place. At least in the pubs of Carlisle one can, if one does not wish to spend one's time consuming drink, participate in many recreational pursuits from bowls to dominoes. I wonder in how many of the pubs owned by Allied Breweries, of which the hon. Gentleman is a director, one can bowl, play darts and dominoes and be occupied in that sort of pursuit instead of drinking. I suggest that the answer is very few.
  It is completely untrue to say that the State-owned premises are featureless affairs. Equally untrue remarks are often made about the quality of the product. I have had the pleasure of sampling the beer in the brewery and I can assure the House, as a connoisseur of beer if not of wines and spirits, that it is first class. In terms of gravity, it is equal to any produced by any private brewery in Britain. One might ask why the brewers are so reluctant to specify the gravity of their products. If they were obliged to do so, I think we should find that the State brew would come out very near the top.
  I recall the fuss caused by private

  1027
  brewers when the State brewery wanted to extend its products to the British Railways catering service. A terrific fight was put up by the private brewers, obviously because they feared the outcome of that competition. I hope that hon. Members will accept that in addition to offering a cheaper price range, the State brew is of a first-class quality.
  I have been in a number of breweries both here and abroad and I assure hon. Members that the State brewery at Carlisle is as well equipped as any in Britain and contais some of the most modern machinery. It is a tribute to its efficiency, and particularly to the efficiency of its bottling section, that the Guinness group of companies allows its bottling to take place there. Guinness insists on very high standards of hygiene and efficiency before allowing a brewery to bottle its products under licence.
  I should have been happier if the Home Secretary had given more information about the selling-off process. In my view, the big groups will get together, do a quiet little deal, and then step forward and there will be no competition for the licensed premises. In other words, it will be a Dutch auction. I dare say that Allied Breweries, Bass-Charrington and Scottish-Newcastle will have a complete monopoly, purchasing the premises at a knock-down price.
  They will not be keen to get the brewery because they are already brewing to capacity in various parts of the country and cannot find outlets. For this reason they will be anxious to get the licensed premises, which will be additional outlets, but they will not be interested in the brewery. What is to happen to the brewery? Will it be a separate sale? Will it be dismantled? Will it be cannibalised, having parts taken out and put into other private breweries? We want more precise details as to what is to happen to the loyal people in the brewery, most of whom have worked there all their lives.
  I am pleased that my hon. Friend the Member for Carlisle (Mr. Ron Lewis) is present. I was much impressed by his speech this afternoon. Bearing in mind his temperance outlook, he gave probably the best reply to the ill-informed criticism from the other side of the House on this subject.
  1028
  The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) claimed some administrative knowledge about the area gained from his experience as a Minister. He said it was not such a big matter. But to the people in that area, Cumberland, fringing on to Northumberland, Scotland, Westmorland and Lancashire, it is important. It is a tradition. We have a feeling that it should remain a State concern. This feeling should be allowed to exist.
  The hon. and learned Member for Darwen also said that the State should not own any breweries. There are some successful breweries in Denmark which are owned by the State, and there is a very good one in Czechoslovakia which is owned by the State and produces the best Pilsen brew in the world. No one denies the right of those countries to run them efficiently and to make a profit. On beer production, the economics of the hon. Member for Leicester, South-West baffled me. I could not see how he could argue that the State was subsidising, by £7 per barrel of 36 gallons, the people of Carlisle. If that is the case, of how much are the people in this country being robbed by the private brewers? The Northern Clubs' Federation Brewery, to which I have referred, can give a rebate of £4·50 per barrel to all clubs which form its membership, so one has an indication as to how much is going into private profits and from there into Tory Party funds.
  Mr. Callaghan: The figure is known. The profits made two years ago were £103 million.
  Mr. Garrett: I am grateful to my right hon. Friend for giving that information.
  Finally, during the Committee stage we should be entitled to more specific information as to what is to happen. We cannot allow this transaction to take place without the detailed analysis required, because one thing that the people of this country like is to get fair play on their beer drinking habits, and they are getting sick and cynical about the monopoly of brewing in the private sector of this industry.
  If the debate has done anything it has exposed once again the close relationship between the brewing industry, with its private monopoly, and the Tory Party,

  1029
  The Government will have a very unhappy experience before the Bill reaches the Statute Book.
  7.34 p.m.
  Mr. Hamish Gray: I am happy to follow the hon. Member for Wallsend (Mr. Garrett). We were all grateful to him for the reasoned and rational way in which he presented his arguments. It is a pity that some of the speakers on the Labour benches did not adopt the same attitude earlier this afternoon.
  I am sorry that the hon. Member for Fife, West (Mr. William Hamilton) is not in his place because he made probably the most vitriolic attack of all on my hon. Friends. One or two of his points should be dealt with. For example, he suggested that in 1951 a Conservative Government repealed the Act which would have enabled them to extend State management into new towns, but what he completely failed to point out was that previous Governments had had from 1916 until 1951 to extend this method if they thought it worth while. Indeed, for the previous six years, from 1945 to 1951, his party could have adopted this procedure. He also went to great lengths to read out the various contributions made by brewers to Conservative Party funds. To keep the matter in perspective, it might have been as well if he had also read out the contributions which certain unions make to Labour Party funds.
  I hope that everyone will take note of what has been said from the other side of the House, especially with regard to the proposal—I take it to be a proposal—to recreate State management areas. Some hon. Members even went a little further and suggested that this should be vastly developed into a nationalisation of the pubs. This is interesting, but it will never come to pass because the Labour Party will not return to government. Even if they did, we have heard this sort of thing before. We have heard wild shouts from the other side of the House during the debates on the Industrial Relations Bill, and suggestions that it would be repealed. But it was noticeable that when the Leader of the Opposition was asked whether this would
  1030
  be the case, he did not answer the question.
  The Bill deals with two aspects of the matter—first the removal from State control, and second, the termination of State management. People who have been resident in the areas in which these restrictions have taken place have been waiting for a very long time for this. Two generations have grown up without the facility of competition in the area. Despite the fact that the 1931 and 1932 Royal Commissions recommended that State management and control be discontinued, it was continued by successive Governments.
  My right hon. Friend explained in detail how the scheme started in 1916 with the emergency legislation. But many of us believe that the scheme has outlived its usefulness. It has been said that State management contributed to the control of drunkenness in certain areas. This, indeed, was the case, but times have vastly changed and it is said, perhaps, to think that in a country which has moved forward so much we still have an acute problem of alcoholism. There are other ways of dealing with that problem, and State control is not one of them.
  One of the most attractive aspects of the Bill is that it will enable licences to be granted to hotels which, up until now, have been denied them. It is ridiculous that for years licensing courts in these areas have approved licences and, purely because the area is State controlled, the Secretary of State has been reluctant to make the necessary ruling and they have been granted in only a few instances.
  Mr. Callaghan: I am sure that the hon. Gentleman does not want to mislead the House. I thought that he said that the two Royal Commissions had recommended the discontinuance of State management. That is not the way that it is put in paragraph 111 of the Monopolies Commission Report which says about Carlisle:
  "The Scheme was examined by the Southborough Committee on the Disinterested Management of Public Houses (Cmd. 2862) in 1927 and by the Royal Commission on Licensing (England and Wales) 1929–1931 (Cmd. 3988) which reported in 1932. Both

  1031
  bodies were in favour of the continuance of the Carlisle Scheme…"
  That is 90 per cent. of what we are talking about today.
  Mr. Gray: I accept that, and I apologise if I have misled the right hon. Gentleman. I was referring particularly to Scotland.
  The tourist boards have been encouraging areas such as mine to develop their activities; they have been encouraging hotels to expand. At a time when tourist boards, and in my area the Highlands and Islands Development Board, have been making money available to help the tourist industry, it is ridiculous that hotels should have been stifled by being unable to obtain full licences, which is what has applied in Gretna and in my area.
  The public in these areas is undoubtedly in favour of competition. All the researches I have conducted in my constituency have shown this to be so. However, the public is apprehensive to some extent about the method of disposal. There is some concern that there will be a sell-out to one brewery. This is not the intention, and I am sure that my right hon. Friend the Secretary of State for Scotland will make it clear that it is hoped that there will be local participation.
  I again make it clear that I am dealing, not with the Carlisle area, but with my area where there is a smaller number of licences and where the possibility of private individuals being purchasers is much greater.
  Mr. Gregor Mackenzie: There is no provision in the Bill to support what the hon. Gentleman has just said. This is why my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) was at pains to make it clear that the Bill gives far too much power to the Secretaries of State to dispose to one group or to sell as they choose and why we suggest a more satisfactory method of disposal.
  Mr. Gray: The hon. Member for Rutherglen (Mr. Gregor Mackenzie) will appreciate that there is nothing in the Bill to substantiate what he has implied. It is a natural worry in an area where State control exists that a brewery will take over.
  1032
  The State scheme has operated in the form of disinterested management. I do not wish to reflect upon those involved in the scheme, but it has been purely disinterested management in the matter of profits. Last year, in reply to an Adjournment debate raised by my hon. Friend the Member for Dumfries (Mr. Monro), the hon. Member for Renfrew, West (Mr. Buchan), who was then an UnderSecretary at the Scottish Office, said:
  "As we and successive Governments have seen, it would be contrary to the spirit of disinterested management for a private individual to sell for profit…"—[OFFICIAL REPORT, 29th April, 1970; Vol. 800, c. 1401.]
  Hon. Members have asked: even though the monopoly is allowed to be broken, why sell the State-owned hotels? If the Government broke the monopoly but did not sell the hotels, there would be an obvious danger that by creating competition they would be devaluing their own assets. My right hon. Friends have obviously taken this reasonable argument into account in deciding to sell the State managed houses.
  Mr. Buchan: The hon. Gentleman does not understand the meaning of "disinterested management". I used the term in the sense in which it was used this afternoon by the Home Secretary, when he claimed that the Bill would be in the public interest. "Disinterested management" means management in the public interest.
  The hon. Gentleman said that in the Ross and Cromarty area, which I know well, the people were keen to dispense with the State Management Scheme. Did the hon. Gentleman tell them that the price of their beer would rise, as it has with every private brewery?
  Mr. Gray: The hon. Gentleman has misquoted me. I did not say that everybody wanted State management to go. I said that everybody was very anxious that the monopoly be broken and that competition be created. I pointed out that there was apprehension about what might happen if a brewery took over, and this is what I would oppose, as would some of my hon. Friends.
  In the debate we have tended to get ourselves bogged down with Carlisle and to forget that Gretna and Ross and Cromarty are in a similar situation.
  The amount of reinvestment in the project has been very poor considering

  1033
  that State ownership has been with us for 55 years. In my constituency there are 18 licensed premises. The profit in that area to 31st March, 1970, was £29,724. In the year to 31st March, 1971, I understand that the figure is just on £30,000—this is not a substantiated figure. This shows a minimal increase. This has been achieved without any competition. If they could not make a profit in these conditions, things would indeed be in a poor way.
  It has been said that beer from the Carlisle brewery is supplied all over the surrounding area. My constituency does not benefit from that, because of the high transport costs. If beer from Carlisle were to be supplied in my constituency, presumably it would be that much more expensive and would compare with that which is already available there.
  Again speaking only about my own area, unfortunately the State combine has not shown great initiative. The proposed development at Ben Wyvis has been mentioned. I should have thought that the State Management Scheme, having hotels nearby, would have been more anxious to further this project than has appeared to be the case. I am surprised that there is no State motel in the area. It is surprising that in an area which attracts so much tourism the State has not ventured out in these ways. Nowadays orders are placed for buffet snacks rather than for lunches. Although these snacks are available at certain State hotels, they compare very unfavourably with what is available in areas outside the State Management Scheme.
  Mr. Ron Lewis: That certainly does not apply in Carlisle. The snacks supplied by the State Management Scheme in Carlisle are as good as, if not better than, those supplied by other trades.
  Mr. Gray: I stressed that I was referring only to my own area.
  Although three statutory local bodies give advice, and although State management district committees are there to advise, some of the advice has not been accepted and some of the suggestions which have been made have not been followed up.
  Mr. Buchan: All that the hon. Gentleman is saying is an argument for the extension of the facilities of the State
  1034
  Management District. He should vote with us tonight and then seek to persuade his right hon. Friends to extend the State Management Scheme and spend more money in the area.
  Mr. Gray: Our philosophies differ on that point.
  It has been suggested that unemployment would come as a result of the hotels being sold off. I do not for a moment accept that—certainly not in Scotland. The breaking of the monopoly, the creation of additional licences, and the building—one hopes—of further hotels as a result will create more employment, not less. It is a little odd that everybody is worried about the loss of jobs in these hotels. In fact, the hotels will not be bulldozed away. They will merely be transferred from State management to private ownership, and the staff will be required in exactly the same way.
  It is said that profits from the hotels will no longer go to the Government. They will go to the Government, but in a different way. [Laughter.] The profits will go by means of corporation tax, for example, or ordinary company or personal taxation. Moreover, the Government will receive capital sums for each hotel which is sold off. So I do not see that there can be much argument there.
  One must be fair about it: local needs in the past have been met. But, while the food has always been good in these hotels, the hotels themselves have not been developed to the extent they should have been, particularly in an area which prides itself on the number of tourists which it attracts. I pay a tribute to the staff at these hotels, particularly in my own area, where one is always received in a most courteous manner. What I criticise about the system is not the staff but the policy and the principle.
  Mr. Buchan: The ideology, yes.
  Mr. Gray: That is true. My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) raised an interesting point about the method which will be used for disposal. He emphasised the importance of this aspect of the matter, and how the method adopted could be taken as a precedent. I entirely agree. Although the public interest must always be served and the best price obtained, I am anxious that every facility should be afforded for local participation.

  1035
  This is an important matter, and my area is one in which that should operate.
  Mr. Strang: Would not the hon. Gentleman agree that if these assets were sold to such a concern as Scottish and Newcastle Breweries, that would be quite incompatible with the sort of local participation which he wants to see?
  Mr. Gray: I do not entirely agree. I agree to the extent that, if all the hotels in the area were sold to one brewery company, that would merely transfer one monopoly to the hands of another, but there is, I believe, a place for both public companies and private individuals.
  Mr. Strang: Does the hon. Gentleman mean that if Watney Mann bought the pub next door, that would increase local participation?
  Mr. Gray: That is a ridiculous argument. Obviously, one is not advocating that at all. There is a place for both. In the Highlands today, there are many excellent brewery-owned and brewery-run houses which give an excellent service. We must not forget that. There is a place for both.
  I hope that my right hon. Friend will be able to tell us something about the methods for disposing of these premises. I should like him to consider carefully the question of hotel buildings in my constituency which are not used entirely for hotel or public house purposes. There are, for example, certain hotel premises in which there are shops as well. Those shops have been operated by local people who have built up a business over a period of years, and I wish to know whether it is intended that consideration will be given to these people when the premises are disposed of.
  In the unlikely event of there being no bidders for, perhaps, one of these properties, for instance, one hotel in a relatively remote part of the country, may we have an assurance that the Government will continue to operate it until such time as a suitable buyer is found? It would be tragic in the more remote areas if, say, a village were to be left without its local hotel. I am sure that there is an easy way round this. I know of no case in my constituency where that problem would occur, but it is possible, and I hope that my right hon. Friend will give me that assurance.
  1036
  I consider that the Government are wise in the move which they are making. I do not believe that there is a place for the Government in the running of pubs or hotels. I am certain that this scheme will prove successful, and I am glad that my right hon. Friends have embarked upon it in this first session of Parliament.
  7.56 p.m.
  Mr. Neil Kinnock: Several interesting points have arisen in the debate, notably the points about competition made by the hon. Member for Ross and Cromarty (Mr. Gray), to which I shall return later. Before coming to what I regard as the main theme of the debate, however, I must comment on the speech of the hon. Member for Leicester, South-West (Mr. Tom Boardman), who, unfortunately, is not in his place at the moment. The hon. Gentleman said that he has a notable brewery interest and he occupies a position of some responsibility in the brewery industry. In the light of the speech which he made, I can only say that I know several working men's club chairmen and several managers of local pubs who could qualify for at least twice the retainer which I imagine is paid by Allied Breweries to the hon. Member for Leicester, South-West. His total lack of knowledge of the "nitty gritty" of the Monopolies Commission Reports in 1969 on the brewery industry—notably the one on Allied Breweries and Unilever—give good reason for thinking that he came down in the last shower and found himself very fortunately placed at or near the head of a substantial brewery concern.
  The hon. Gentleman made a point of referring to the variety of beers provided in Carlisle. My hon. Friend the Member for Carlisle (Mr. Ron Lewis) drew his attention to the fact that at least 20 brands were on sale in the city. He need not have gone that far. My hon. Friend could have reminded him of what does not happen in Carlisle, which, unlike Birmingham, is not dominated by one brewery; it cannot be called "Bass country", and it is not like Bristol, either, which the Monopolies Commission pointed out in its Report on brewery supply was dominated by the beers produced by Courage.
  Had the hon. Member for Leicester, South-West done his homework, he could have avoided making that false point

  1037
  about the provision of a variety of beers by the State concern in Carlisle.
  Again, on the subject of prices, I can only agree with my hon. Friend the Member for Wallsend (Mr. Garrett) that the hon. Member's sums—I cannot call them economics—were thoroughly confusing. First, he told us that Carlisle beer prices were only a penny a pint, on average, less than those paid in comparable establishments elsewhere in the country. Then he told us that the taxpayer was subsidising the Carlisle beer imbiber to the tune of sevenpence a pint. For a moment, I almost hared off to Carlisle to get my share of subsidised beer before denationalisation came in. It really is nonsense. We find it difficult to imagine that the taxpayer, or someone else, is subsidising the private brewer to the tune of sixpence a pint, that is, the difference between the penny less which, apparently, Carlisle charges and the subsidy of seven-pence about which the hon. Gentleman told us. I find those sums most confusing and extraordinary. The hon. Gentleman calculates on the basis of charges made for barrels, but if he had made any reference to the report of the Monopolies Commission on beer supply, he would have noted that it said in paragraph 388:
  "We note that there is now price competition between the off-licensed shops of a king that hardly occurs in the public house trade."
  The main competition between brewers' public houses takes the form of rivalry in amenities and environment in order to acquire larger portions of the captive market and not competitive pricing. So how anyone as closely involved in the brewing industry as the hon. Gentleman could say that there is anything aproaching price competition is beyond me. He would not have to be involved in the industry at the level at which he obviously is, but would simply have to go to two or three pubs in different areas of a town and compare the prices charged, to discover that there is very little difference and that price competition between breweries does not arise.
  The Home Secretary's is the speech to which we must pay most attention, because it was supposed to set the keynote for the Government's policy on the denationalisation of the State pubs. He said that he expected the word
  1038
  "doctrinaire" to be flung at him repeatedly from this side of the House during the debate. He then defined it as the title given by an Opposition to a Government who fulfil election pledges. He is only partially correct. When we have used it since 18th June last, we have done so against a Government who, in many spheres, have undertaken policies with no technical advantage, no social advantage, and no public interest advantage, but which are simply introduced to give preferential treatment and political reward. I do not think that we are in the least mistaken in describing the Bill as a purely doctrinaire and blind piece of legislation.
  As to the question of fulfilling election pledges, I did not note anywhere in the Tory manifesto a specific—or even a vague—undertaking that one of the first targets for plundering would be the State pubs. It did not appear at all, but since the Bill has appeared so early in the Government's legislative programme, it leads me to think that the title of the Tory manifesto, "A Better Tomorrow" was a misprint and that, in view of the denationalisation of State pubs Bill it should have been called "A Bitter Tomorrow".
  Mr. Golding: "A Dearer Bitter Tomorrow."
  Mr. Kinnock: The Home Secretary said that, for a period of over 50 years, the State Management Scheme had been "an experiment in disinterested management". That is some experiment. It is probably heading for the world record in length of experiments. What baffles me is why this Government have now chosen to introduce a Measure which will enable them to denationalise State pubs. After all, we have had, regrettably, Tory Governments for most of the time since the First World War. At no time since then have they chosen to introduce such a Measure. Commissions established by Tory Governments have twice said that the system in Carlisle should continue. This Government have decided to denationalise.
  Why now? The Home Secretary, in what was for him a rather puny explanation, explained that the reason seemed to be that the social problem connected with liquor consumption has changed

  1039
  out of recognition over past decades. I am not much of a mathematician, but I wonder how many decades have elapsed since 1964. Why in 13 years of fairly similar social circumstances, in a period when our present social habits were developing, did not the pre-1964 Conservative Government take it upon themselves to denationalise the pubs? There is a fairly straighforward reason. This Government are committed in a way that no other Tory Government have ever been committed, certainly not since the war, to setting three criteria against any State concern—is it profitable, is it risk-free, and can it be easily transferred to private enterprise? The Carlisle pubs meet those criteria. The consequence is that the present Government, acting on a strictly doctrinaire basis, have decided that the Carlisle and the Scottish State pubs will have to go.
  It is a straightforward dogmatic decision. I do not blame them for their dogma. In some respects, I prefer the dogmatic to the pragmatic. But if they had intended to do this, if they were so proud of it as Government legislation, why did not they announce in their manifesto that they would do it, and why do they come before us so apologetically, trying to justify their denationalisation Measure as saving the taxpayers' money, or in terms of competition? Why do not they honestly say, proudly, that they owe a debt to the brewers and are prepared to pay their debt? At least we could give them credit then for being honest in those respects.
  Hon. Members: Rubbish.
  Mr. Kinnock: Hon. Members say "Rubbish", but it is stretching the credibility of hon. Members on this side too far, and the credibility of the country, when everyone can read in the columns Of HANSARD and in reports outside the House that the Tory Party has received contributions amounting to hundreds of thousands of pounds from a particular industrial interest, and when one of their first pieces of legislation is a Bill that will put well over 100 public houses and hotels on to the market. It is stretching the credibility of the British people too far for the Government to think that we are not bound to draw conclusions from that. Conservative hon. Members could
  1040
  shake their heads until they fall off. It would not make any difference to their thinking powers. No one will convince us that there is not a coincidence of interest.
  Mr. Bob Brown: Does my hon. Friend agree that far more reprehensible conduct by the Government was allowing an official Tory candidate to make public pronouncements to the people of Carlisle that he would oppose denationalisation of the pubs, saying, in other words, as an official Tory candidate that his party was opposed to denationalisation of the State scheme?
  Mr. Kinnock: I agree that it was thoroughly reprehensible. That is what we come to expect from the Tories, but it might have been the case that in Carlisle a unique character, an honest Tory candidate, appeared. Perhaps he was simply telling the truth on the basis of his experience while fighting the election in Carlisle. I suppose that such people exist, though they are very rare creatures. I will give the candidate for Carlisle the benefit of the doubt, since he is not in this House, and I hope never will be, though I have not had the pleasure of meeting the gentleman. I am very glad that my hon. Friend the Member for Carlisle beat him in such a resounding victory, because if my hon. Friend were not here we should not have been treated to the down-to-earth, factual description of what is going on in Carlisle that we had in his excellent speech.
  The Home Secretary spoke of the First World War publicans who unscrupulously diverted the affluence of the workers into their own pockets. Villainous as those publicans of 50 or 60 years ago may seem to have been, they compared favourably with the Tory Government who have, as their first reward to the brewing interests, put those pubs on the market.
  We have heard a great deal from hon. Members opposite about the effect that the denationalisation of the State pubs will have on competition in the brewing industry and how much of an improvement competition will make for the users of public houses and hotels in Carlisle. The right hon. Gentleman mentioned it several times. The hon. Member for Westmorland (Mr. Jopling) became positively euphoric about the idea of free

  1041
  market competition going into Carlisle, although he stumbled through one of the most ill-informed speeches that I have heard in my few months in this House. Then we heard the hon. Member for Leicester, South-West (Mr. Tom Boardman), who is, I suppose, an expert on brewery competition. The fact that there is no such thing as that competition probably qualifies my remark about his being an expert. Then the hon. Member for Ross and Cromarty (Mr. Gray) treated us to a dissertation on the advantages of competition and the fact that his constituents had told him that they were in favour of competition.
  I say categorically that on the basis of the two recent reports of the Monopolies Commission, of personal experience and of conversations which anyone can undertake with the managers of tied houses or with the management committees of working mens' clubs it will be easier for the Home Secretary to pass through the eye of a needle—and that would really be something—than for competition to be found in the brewing industry. On the basis of the findings of the Monopolies Commission, competition is a rare gem in the beer industry. Paragraph 60 of Chapter 3 of the Commission's Report on Unilever Limited and Allied Brewers Limited said:
  "The United Kingdom is one of the major beer drinking countries in the world. In 1967, with a consumption of 20·5 gallons per head of the population it ranked seventh …"
  However, because of its barrel consumption,
  "… the United Kingdom was the third largest national market…"
  In paragraph 61 there came this important point:
  "The industry has been characterised for very many years by a substantial and continuing reduction in the number of separate breweries. This has been due to the disappearance during the later part of the nineteenth and the early part of the twentieth centuries of the small brewery belonging to and brewing for a single licensed house, and also to a process, which has continued up to the present, of amalgamations and acquisitions resulting in closures of redundant capacity."
  The Report then gives some important figures:
  "In 1950, 567 brewers-for-sale licences were issued; in 1960, 358; in 1967, 244. The reduction in the numbers of breweries has been accompanied by an increasing concentration of ownership."
  1042
  To get more detail on this, I refer the House to the Commission's Report on the Supply of Beer. This tells us that in 1900 there were over 6,400 breweries in this country. In 1961, as might be expected, there were 240. These were owned by 11l companies. Within a year—by the end of 1968—another eight companies had been swallowed up, and we now have 103 companies.
  Even that figure would suggest, if there were a fair spread throughout the country, that there is a great deal of cutthroat productive competition between the brewery interests, but a close study of the figures shows that out of the 103 companies the "big seven" account for 73 per cent. of production—an overwhelming oligopoly if not monopoly. They own over 56 per cent. of all the pubs between them and those pubs sell about 67 per cent. of the beer. But it would not be any good for anyone who objected to buying his beer in an oligopolistic pub to go to an off-licence instead, because the "big seven" control 35 per cent. of the off-licences as well.
  No one can pretend either that this Bill will promote competition in the brewery and catering industry in Carlisle and Scotland. Neither can anyone pretend that the influx of these 100 or so pubs and hotels into the market will promote competition in the brewery industry. The market is already carved up. The positions are already tightly drawn and, as has been said, it is only a matter of which one or two of the "big seven" breweries the rest of the big seven decide are to have the pickings of this bunch. Paragraph 388 of the Monopolies Commission's Report on the Supply of Beer says:
  "We note that there is price competition between off-licensed shops of a kind which hardly occurs in the public house trade."
  There is also a reference to quality. I note with distress that the Commission interviewed a witness who said that he had "gassy beer" which is being served by all the half-dozen big companies which are gaining a complete monopoly of the pubs. He considered that tied houses obliged people to drink stuff they otherwise would not touch, or go without altogether. There is an extensive monopoly in the brewing industry.
  Because we have a State concern in Carlisle, in terms of price the people of

  1043
  Carlisle and parts of Scotland also are in some way insulated against the worst pressures of a monopolistic brewing industry. On that basis alone I would have asked the Government to reconsider the Bill, but there is added force when I get the support of a substantial but nearly defunct newspaper like the Daily Sketch. This is probably the first time that I have ever quoted from the Daily Sketch, and, due to its coming demise, it will probably be the last. It is perhaps a fitting epitaph to the odd occasion when the Daily Sketch has shown independent journalistic spirit. In its editorial on 1st February, it said:
  "Roll up!Roll up!State-owned bargains for sale!On offer … the nationalised pubs of Carlisle."
  I will spare the blushes of the party opposite by not including the next passage. But afterwards it continues:
  "What's in it for the customers? Will the beer in Carlisle be cheaper and better under private management? Will selling Thomas Cook out to one or other of the independent operators give holiday-makers a better deal or do anything to improve travel standards? If the Government goes on flogging off—'hiving off', is the fashionable term—most of the State's money-making sidelines, what are we, the taxpayers, likely to be left with?"
  Hon. Members opposite have given us the excuse that it is in the interests of the taxpayers that the pubs are to be denationalised. Yet here is a newspaper which supports the Conservative Party asking how the interests of the tax payers are going to be guarded by the Tory Government. It says:
  "… selling off the succulent fillet steaks and leaving the loss-making rump behind would be a very bad bargain indeed for the public."
  On that basis, every decision the Government have taken to hive off or "flog off" the best parts of the various nationalised industries, including the State-owned pubs, is a disservice to and a tragedy for the tax payer, and I therefore ask my right hon. and hon. Friends to vote against the Bill. I hope that people outside this House will have the sense to see what is involved.
  8.20 p.m.
  Sir John Gilmour: I was at one time a director of a brewery company so I have a past interest which I am happy to declare. I was interested in the figures quoted by the hon. Member
  1044
  for Bedwellty (Mr. Kinnock) about the decrease in the number of breweries over the years. I have been through it and seen it happening. What I am certain of is that during these years, in spite of the closing-down of breweries and amalgamations, there has been a greater interchange of brands and much more coming and going between breweries than was the case in the past. Then they stuck rigidly to their own market and tied their tenants down to taking all of their products.
  I should like to explain why I support the Bill. The State management areas are basically Carlisle and Gretna which are athwart the main tourist routes between England and Scotland. We have, fortunately, seen a great improvement in the route recently. The other State Management District is in the North of Scotland in a rapidly developing tourist and industrial area.
  Opening the debate, my right hon. Friend mentioned the great amount of money that had to be ploughed back into the improvement of the State managed public houses. The hon. Member for Bedwellty mentioned the fact that competition among breweries has to do with providing better amenities and all the money that has to be spent in this way. This means that not only have we an asset which seems to be valued, from what is said in the Preamble, at about £5 million, but there will obviously be a need to spend a great deal more money, particularly in the tourist areas, if these public houses and hotels are to be brought up to date.
  No Government ever find themselves flush with money and they always look for ways of spending it which have a high priority. One of the criticisms which the hon. Member for Fife, West (Mr. William Hamilton) made was that we were debating this subject and not that of unemployment. It is good sense to see whether there is a regional enterprise in which the State is engaged and in which it is not earning a high return—and all the figures quoted show that the return on investment is not high, that more needs to be put in. Then there is commonsense in saying that this should be one area of enterprise from which the State should remove itself and, not hand over as one hon. Member said, but sell to the best advantage.
  Mr. R. B. Cant: The hon. Member has talked about the amount of money it has been necessary to provide for better furnishings and so forth in pubs. Has he seen the survey, which was of importance to people like myself who enjoy a drink, which indicated that in the last few years the alcoholic content of beer has gone down dramatically? Would he not agree that this is an absolute essential of an alcoholic beverage? Did he see the reference to "arms and legs" beer with no body? Did he see the reference to the fact that most of the beer produced in this country could have been produced during Prohibition in America? Would he not agree that the real bench-mark in terms of alcohol content and specific gravity is the State beer of Carlisle?
  Sir J. Gilmour: I do not think that is true of the State beer of Carlisle but what the hon. Member for Wallsend (Mr. Garrett) said about the Northern Clubs' Federation Brewery was more likely to be true.
  This is not relevant. The point is, are we to continue, in changed circumstances, something which was started as an experiment, for what reason it is now difficult to discover? Are we to continue ploughing back money in this or are we to dispose of it? One of the difficulties is that while in Scotland it would be fairly easy to dispose of the hotels and public houses to a wide range of people, it might be more difficult to do so in Carlisle. The problem of the disposal of the brewery in Carlisle is real. There has been criticism that not enough is said in the Bill about how these assets are to be disposed of. The answer surely is that Ministers must be given discretion to dispose of these assets in the best way available. The hon. Member for Wallsend might help over the brewery. Perhaps the Northern Clubs' Federation Brewery might be interested in supplying beer.
  Mr. Garrett: That possibility has already been considered.
  Sir J. Gilmour: I am glad to hear it. I shall be glad to hear what my hon. Friend says at the end of the debate about whether any information can be given on how the assets can best be disposed of. Perhaps the best answer is to leave my right hon. Friend with a
  1046
  wide discretion so that it is possible to experiment in finding out what is the best way of disposing of the assets.
  Mr. Ron Lewis: Before the hon. Member sits down, may we have an assurance that his firm will not be bidding?
  Sir J. Gilmour: I said that I used to be a director of a brewery. I have no further connection with it and I cannot comment on that.
  8.27 p.m.
  Mr. Gordon A. T. Bagier: Whatever else may be said about this debate it has certainly been wide-ranging and, on this side of the House, well attended. If the donations which have been given to the Tory Party by the brewers had been based on attendance today they would not have got as much as they did. They will be here at ten o'clock without any doubt.
  The debate was opened rather weakly by the Home Secretary. I have listened to him now from time to time since 1964 and I have never heard him quite so unsettled and ill at ease in presenting a case. I felt that at the back of his mind, because he is basically an honourable man, he knew that there was no real case to be made for selling off this State-owned asset. He knew that he was so open to attack from this side of the House that he could not make too strong a case. His supporters have deserted the field in the face of the arguments against them.
  My right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) put one of the strongest cases I have heard him present in this House. He made an appeal, certainly followed on this side, that this should not be looked at as an isolated case dealing with one small section of the country in the North-West of England and the South-West of Scotland. This was a matter of principle, he said, a measure based on the philosophy of hiving-off State assets. He asked that the whole country should note what was happening.
  I have listened with interest to most speeches this afternoon to see what the case is. The debate has ranged widely and included the meanderings of the hon. Member for Westmorland (Mr. Jopling) who talked about some grotty pubs in Carlisle where they even had linoleum on

  1047
  the floor!I do not know where he does his drinking, but if he comes with me round some of the privately-owned pubs in London he would be surprised to see how much grottier they are than those in Carlisle. One cannot judge a pub in that way. We are talking about selling a State asset and not about whether one pub or hotel is better than another.
  The hon. Member for Leicester, South-West said that he once had a drink as he passed through Carlisle. He admitted in answer to my hon. Friend the Member for Wallsend (Mr. Garrett) that he had been there. Probably he had it in the cocktail bar of the County Hotel. He would not have had much time to go round the 100 or so pubs in Carlisle. He opened his remarks by saying that he was an expert on the brewing industry and he hoped that the House would listen to him. I am surprised that the brewing industry made a £103 million profit last year because I tried to follow the hon. Gentleman's economics and found it extremely difficult.
  The hon. Member for Leicester, South-West made his case on prices and competition. It is here that the Government's case for the denationalisation of the State-owned breweries falls down. It is the effect of competition against their friends which is the cause of the Bill. It is not without accident that the cheapest beer in Britain is to be found in a belt of the country from Carlisle to Newcastle, and the main reason is the competition, first, of the Carlisle State Brewery and, secondly, of the Federation Working Men's Brewery on the North-East Coast.
  As we in the House have good reason to know, we can enjoy a pint of Federation beer at 11p a pint, brought from the North-East and sold at such a profit that the federation gives the equivalent of £4·50 a barrel bonus. This brewery does not have a monopoly in the North by any stretch of the imagination. The effect of the competition is that the beer of competitors can be bought cheaper in the North-East and North-West than anywhere else in the country. There is a North-East price and a South-East price for Double Diamond and brown ale, for example. The difference is not entirely due to transport costs.
  1048
  The hon. Member for Leicester, South-West said that there was only a penny or twopenny difference in the prices charged in the pubs in the immediate vicinity of Carlisle. I was not sure whether he was talking about old or new pence. If the difference is two new pence, that represents about 5d. of the old currency in the cost of a pint of beer, and that is a considerable difference. The competition of the Carlisle State Brewery keeps down the prices of outside breweries in the area. When that competition does not exist elsewhere in the country, prices are extremely high. In London a pint of bitter is 2s. 10d. or 3s. in the old currency, or 15p.
  The question of competition is always the "beefcake" in the Government's argument. The competition in the area of the Carlisle State Brewery on one side of the country and the Federation Working Men's Club on the other side is sufficient to keep down the price to the consumer, and I am much more interested in the price to the consumer than in the making of excessively high profits for the brewers who then use them to make donations to their friends.
  The position of the staff should be taken into account. The Home Secretary said that he did not know how the State breweries would be sold. He was not able to say whether it would be a job lot or whether it would be done piecemeal. Yet he was able to say that the staff would be looked after. I wonder how. Surely some discussion has taken place on this subject. The right hon. Gentleman has not been in complete isolation since the Government's intentions were known. Is the right hon. Gentleman saying that representatives of the big breweries have not been to him to say that they are interested? They are friendly enough prior to elections. Surely they have had a chat about this nice little sweetmeat which is to be handed to them. What is wrong with that? We have no argument as long as it is done openly and above board. We are entitled to know what will happen to the staff.
  The debate has ranged round another basic piece of Tory philosophy which follows in the line of Thomas Cook and the Rolls-Royce announcement. We saw it more plainly there than anywhere. From the Rolls-Royce announcement it was apparent that we hang on to the losing part and sell off the profitable part.

  1049
  All right, this is Tory philosophy. Let us understand it, but let us not have these tittle tattling arguments about which will be more efficient. If it is a sell-off, then say so, be honest about it, and let us argue about it in the country. If the Government are not being honest about it, we are entitled to go into it in great depth. One of the most serious aspects of this short Bill, which was so eloquently underlined by my right hon. Friend the Member for Cardiff, East, is in Clause 2(1) where the Secretary of State is given power to dispose of property
  "on such terms as appear to him expedient in the public interest"
  We on this side of the House are entitled to be suspicious about that. The Secretary of State for Scotland owes it to himself and to his right hon. Friend to make some alteration to the Clause, and I hope he will reply to the point made by my right hon. Friend. If it is being done correctly, it must be seen to be done correctly and hon. Members on this side of the House have the right to be suspicious of the motivation of doing it in this way.
  We heard from several hon. Gentlemen on the Government side about the competiveness of brewers and tied houses resulting in prices being kept down. We have seen many examples of this, particularly with petrol. We are told that there is competition in petrol, but the moment one brand goes up in price every other brand follows. It is exactly the same with the brewers. They work in conjunction with each other. The only place in the country where this has not happened has been in the North-East and North-West of England and on the South-West coast of Scotland.
  This has been an interesting debate which has bared the soul of Tory philosophy. The country will see the Bill for what it is. It is a move which makes Robin Hood and his merry men look like amateurs in State plunder compared with hon. Gentlemen opposite. I hope that my hon. Friends will vote against the Bill.
  8.38 p.m.
  Mr. J. R. Kinsey: Hon. Members opposite have asked us to declare our interest when we start to speak. I immediately declare mine, which is a family interest in the licensing trade over many years. On my
  1050
  father's side my family were all at one time licensees in the Birmingham district, going back to the time when pubs were mainly privately owned by individuals and not by corporate brewers as they are today.
  My interest is not at director or executive level but from behind the bar, where one gets to know the problems and the trade by directly serving the public. I have pulled more pints than Opposition hon. Members have pulled faces today over the Bill. My mother and father when they started in the licensing trade were brewing their own beer—
  Mr. Charles Loughlin: Small shopkeepers.
  Mr. Kinsey: The hon. Member for Gloucestershire, West (Mr. Loughlin) stays in his seat and mumbles but it is people of many parts who make up this House in all its facets.
  Mr. Loughlin: It seems a little strange that at one moment the hon. Gentleman is the Tory shop steward, the next moment he becomes the Tory small shopkeeper, and now he is setting himself up as the Tory barman. He should make up his mind what he wants to be.
  Mr. Kinsey: People come to this House from many walks of life and have to earn their living in the ways best suited to them, and I have done all the things the hon. Member has attributed to me.
  Certainly the licensed trade is a difficult life and competition has always been fierce. To hear the Opposition speak, one would think that the licensed trade wants to see unemployment. It is the last thing that the licensed trade or anyone else wants to see. The sooner they stop throwing those sort of charges across the House the better.
  Competition in the trade at the moment is quite fantastic, as can be seen from the enormous cuts in various areas in the price of bottles of whisky and other spirits. This is the sort of competition we have to face. People who run their own private businesses can buy their wines and spirits cheaper from super-markets and stores than from the wholesalers who supply them. It can only be to the benefit of the shopping public if this is allowed to continue. Therefore, why should this not be allowed in Carlisle and in the

  1051
  Scottish areas as well as in other parts of the country?
  I have been shocked by the smear campaign carried out by hon. Members opposite. The hon. Member for Carlisle (Mr. Ron Lewis) talked about the trail of slime. Certainly a great deal of slime has been thrown across at us, not least by the right hon. Member for Cardiff, South-East (Mr. Callaghan) who took the part of the Ena Sharpies of the Opposition Front Bench with his waspish thoughts and the evil intent of some of his remarks. It is sufficient to quote what was said of the right hon. Gentleman by his right hon. Friend the Member for Coventry, East (Mr. Crossman) in The Sunday Times on 29th November last year, when asked about one of the qualities he admired in the right hon. Member for Cardiff, South-East:
  "… it was his appearance of candour when saying something finely calculated."
  Certainly the right hon. Gentleman was saying some finely calculated things in his speech today. In listening to the charges he made, I can only wonder at the deviousness of his mind. What sort of wheelings and dealings does he do in the background of politics if he thinks that other people do the same as himself? I shudder to think.
  Mr. Elystan Morgan: As I understood the case put by my right hon. Friend, it was that it was proven beyond doubt that the piper had been paid a handsome sum over the years and that it was not an unreasonable inference that the piper was able to call the tune. It was nothing more than that.
  Mr. Kinsey: What sort of inference are we to draw from that as to other people who are being paid to call the tune? What about the trade unions? Are they the people who call the tune? Do they do such wheelings and dealings as was suggested? These are the pipelines one is talking about, and when these charges are turned back on hon. Members opposite, they must be prepared to contain them. Apparently, right hon. and hon. Gentlemen opposite are involved in all sorts of wheelings and dealings about which they tell us nothing. I reject their charges.
  When we talk about management, we are discussing the quality of service and
  1052
  the character of a house. However, the character of a house depends on the quality of the manager of that house. I remember reading a word picture in a magazine which ran a national competition to find the best description of a barmaid. It read:
  "Our local barmaid is Flossie and not bossy."
  That describes the warmth of character that we expect from the staff and management of our licensed houses.
  The personality of the host and hostess of licensed premises is the greatest asset of the trade, and we should pay tribute to the work of the staff and management of licensed houses not only in Carlisle but in the country as a whole. They put in very long and difficult hours. They work when others are playing, seven days a week and at holiday times. A tremendous amount of work has to be done when the doors are closed and before they open. Those workers deserve our thanks, and it is to be hoped that the State employees concerned will receive the utmost consideration when my right hon. Friend the Home Secretary negotiates the disposal of the houses that we are discussing. Whether they are passed over to a combine or sold to individual companies, it is to be hoped that every manager and manageress of a State licensed house will have the chance at least to become a tenant in the new system of enterprise being created. Funds should be made available to enable these people to do so, and I look forward to seeing my right hon. Friend's intentions in this connection. It is right that the breakdown of the present State monopoly should give the small people in our society a chance to participate—[Interruption.] I cannot understand why those sentiments amuse right hon. and hon. Gentlemen opposite. I am sure that my right hon. Friend will listen to us. He will not regret it, nor will the customers, who will get the best of all worlds. Certainly they will get the service of hosts and hostesses who understand them, and I say that against the background of a home life centred on the serving of customers in the licensed trade.
  Our pubs are changing every day. Anyone looking at modern licensed premises must be amazed to see the change from spit and sawdust to wall-to-wall carpeting, modern lighting, and the different approach of managements.
  Mr. Ron Lewis: Will the hon. Gentleman say a word about the striptease shows being given in many private enterprise pubs, which do not take place in Carlisle?
  Mr. Kinsey: I am surprised to hear the hon. Gentleman making that charge against the clubs. I understand that there are some working men's clubs—
  Mr. Ron Lewis: I am talking about pubs.
  Mr. Kinsey: There are working men's clubs which do exactly the same. I do not hold with it, because it is not the sort of thing that I appreciate. But if it is what people pay to see in working men's clubs, I can only assume that the customers are being considered. I do not say that that is the sort of way in which I want to serve my customers, but if that is how customers want to be served in that area, they should be catered for in that way.
  Why should these differences be questioned in any case? I am surprised that the hon. Member should take this attitude. I thought that as a teetotaller he was against public houses, whether they were State run or privately run. I do not see how he can judge the two differently. But a public house is more likely to be in keeping with the character of the area and the people it serves if the management is recruited from among people who live in the area. That is why we should encourage the small men in the trade, and I hope that the Home Secretary will take this opportunity, when breaking up the State monopoly, to encourage the small man.
  8.50 p.m.
  Mr. John Golding: The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) referred to this as the first denationalisation debate. In fact it is not the first in which I have taken part since June last year. We have had similar debates on the Coal Industry Bill, giving away the publicly-owned air routes and Thomas Cook—and all are part of the pattern in which the Tory Party is rewarding its friends for money given before the last election. The differences among Government supporters are differences of degree. Tonight we listened to a hawk, the hon. and learned
  1054
  Member for Darwen, who hoped that Thomas Cook and the Carlisle State Brewery were not the only two swallows. The hawks will be demanding more and more swallows as time goes on.
  The arguments of the Tories have been pathetic, but at least the hon. and learned Gentleman was straight with the House. He argued in straight Tory ideological terms—"We want to denationalise Carlisle brewery because we want to denationalise". The arguments of the Home Secretary were different and bogus. He argued from the premise of the low rate of return on capital, trying to make a point of that. There is scepticism among Members of all parties about the use of rates of return as a measure of managerial efficiency. The Select Committee on Nationalised Industries in its Report on Ministerial responsibility clearly showed that to judge by rates of return was unsatisfactory, and the recent report of the British Airports Authority strengthens the scepticism of many of us about this measure.
  It was significant that because he had a weak case the Home Secretary was forced to use the worst year for profits for the Carlisle brewery. He quoted 1968–69 when profits were £113,000. He did not say that the profit was almost double at £212,000 the next year, although he admitted, while trying to blur it as he went, that profits this year would be even higher. Any businessman deciding whether to put in a takeover bid would be concerned not with the rate of return or profits for 1968–69 but only with present and potential profits. It is clear that the Tories have got hold of a profitable business and, because it is profitable, they are prepared to give it as cheaply as possible to their friends in the brewing industry.
  In the past, profits and the rate of return on capital could have been higher if the price of beer had been higher or the quality lower. There is no doubt that in future either prices will go up or the quality will be reduced, or both.
  It is significant that the first product threatened by the Tory Party is one which "Which?", the watchdog of the consumer, has described as one of the best and cheapest beers in the country. That was the view of the Consumer Association.

  1055
  People are interested in the quality as well as the price of beer. Being a non-beer drinker I cannot speak as passionately on this subject as my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Cant), but I share his constituency interest in the quality of beer sold. It is significant that the Government have from time to time refused to agree to requests from my hon. Friend the Member for Dudley (Dr. Gilbert) that the brewers should be compelled to tell the public how strong their brews are. In fact, they appear to be getting away with a great deal of misrepresentation.
  People are also interested in the price of beer. Hon. Members have given different amounts by which the price of beer is cheaper in Carlisle than in other parts of the country, but all are agreed that it is cheaper. Certainly the manager of the King's Head in Carlisle believes that 4d will be added to the price of beer in that area following denationalisation. This rings true to those of us from north of Watford, because the cost of beer is much lower in the communally-owned workingmen's clubs than in the privately-owned public houses. The brewers make considerable profits from the beer drinkers.
  I have been confused today listening to the Home Secretary on the subject of prices. I had assumed that it would be Tory policy not to subsidise consumers by holding down prices in the nationalised industries. For example, let us consider the Government's policy and attitude towards steel, coal and postage prices. In each of these cases the argument has been: "Never mind the rate of return, never mind the profits; we shall keep down the level of prices in the nationalised industries."
  Mr. Tom Boardman: Is the hon. Gentleman suggesting that the taxpayer should subsidise the price of beer in Carlisle and district?
  Mr. Golding: So long as we have a system where the taxpayer subsidises mail order firms and farmers through the provision of rural posts and telephones and so long as we have a mixed economy in which some sectors of the community subsidise others, yes, I accept that it is reasonable to have lower prices—
  Mr. Boardman: Subsidised?
  Mr. Golding: —in the State breweries in Carlisle than those charged, and overcharged by other breweries. Whereas the Government are prepared to subsidise certain industrialists, they are not prepared to subsidise ordinary working people.
  The Tory Party has historically been closely allied to the brewers. One can read the arguments that went on between the Tories and Liberals before the First World War. They were not concerned with education or reforming the House of Lords. The fight was between the brewers on the Tory side and those who opposed them on the Liberal side. The Tory Party remains a party of brewers and the brewers have poured money into Conservative funds not as donations or gifts but as an investment. Today they are picking the fruits of that investment at the cost of the consumer.
  Mr. Idris Owen: Is the hon. Gentleman aware that the brewers in my constituency have financed the Labour Party in the town to build social clubs by lending money at a rate of interest that is lower than that prevailing in any other part of the country?
  Mr. Golding: In many places the brewers have had to provide capital for building working men's clubs. Working men have had the sense to band together because they know that through the tied public house system they are exploited. They are now able to tell the brewers that unless they supply beer on reasonable terms they will lose their custom. In general, these working men's clubs have been independent of the Labour Party. They have been co-operative, publicly-owned clubs which have been well run to match the monopoly power of the brewers.
  Mr. Idris Owen: With brewers' capital.
  Mr. Golding: After the election in June the price of beer rose by at least 2½ per cent., according to Answers I received in the House. Naturally the brewers will back the Tory Party.
  Particularly disturbing to me and other Midlands hon. Members has been the change in the character of many public houses. Some hon. Gentlemen opposite sneer about pubs having linoleum on

  1057
  the floor. We are more concerned with the disappearance of the public bar, first because of the destruction that this represents of centres of social life for working-class people and, secondly, because with the disappearance of the public bar come increases in beer prices by the brewers. The brewers get up to every mean trick they can to increase the price of beer. In my constituency they are now even having the cheek to charge more for two half pints of beer than for one pint. There is nothing that they will not do, with their natural allies the Tories, to increase the price of beer, to increase their profits—corruption is the word—and to take from the public purse the very last half penny from ordinary working people.
  9.5 p.m.
  Mr. William Ross: I have been troubled at times by the absence of enthusiasm on the Government side for their own Measure. For the greater part of the debate, one could count on the fingers of one hand the number of supporters they had. I attribute this to the uninspiring speech of the Home Secretary. It was not his best. He appreciates that himself. He was very unconvincing, rather cynical, and he did not succeed in doing what he set out to do, which was to explain the Bill in terms of why the Government propose to do this, defining the public interest, and then giving details of the very important aspects of disposal and details of the Bill.
  The Home Secretary was ably dealt with by my right hon. Friend the Member for Cardiff, South-East (Mr. Callaghan). I do not want to appear patronising, as one colleague to another, but to every one of my hon. Friends it was a masterly performance and laid completely bare the embarrassing facts of the situation for the Government. Whether the Government like it or not, they are the facts and the facts will speak to the people about the traditional linkup today between the Conservative Party and the brewing interests. The facts and figures are there to be seen, to be totted up and calculated in respect of their contribution, and they cannot deny them.
  It is all very well for the Leader of the House to get up in high fury and say that no one spoke to him about it. When one
  1058
  has a man bearing the name McEwan Younger as the Chairman of the Tory Party in Scotland, he need not speak to anybody about it. That is not a cheap remark. It is a fact that until recently he was chairman and managing director of Scottish and Newcastle Breweries. The point was made by the hon. Member for Fife, East (Sir J. Gilmour) that within Scottish and Newcastle there has been, especially in the last ten years, a considerable concentration of ownership. It would take only half an hour to look up in the reference library the Stock Exchange Gazette in order to see the extent to which there has been this concentration. One would never have thought that many of these things were so linked.
  We start with Allied Breweries. The hon. Member for Leicester, South-West (Mr. Tom Boardman) will not mind this plug for his personal connection. It was embarrassing for him to sneak, having declared his interest, and then to try demonstrate that his knowledge and appreciation of all the facts about brewers and breweries was purely in the interests of his constituents. For Allied Breweries the figure is £92 million. That is all. It is probably a little more than that, as I am dealing with the 1969 figures. It has 100 hotels and 10,000 on- and off-licensed premises. This is the individual freedom we are talking about. Ind Coope, Tetley, Ansells are all there. They, too, make their annual contribution to the Tory Party.
  Mr. Tom Boardman: How much?
  Mr. Ross: Just over £1,000 a year from the main company in the three years before the General Election. I have figures here for the whole lot if the hon. Gentleman wants to keep me here for the whole hour, thus denying the Secretary of State for Scotland the opportunity of making his contribution. Then there is Bass-Charrington. My hon. Friends appreciate that the other Younger connected with this and with the Government was connected with Bass-Charrington. Bass-Charrington conceals not only Charrington but Canada Dry, Tenants, Caledonian Brewery, United Breweries of Ireland, Welsh Brewery, and United Breweries Ltd. Bass-Charrington has 10,750 licensed premises. Whitbreads has 16 breweries and about 6,000 licensed premises and in 1969 contributed £20,000 to the Tory Party.

  1059
  Watney Mann Ltd. has breweries from Whitechapel to Edinburgh—very comprehensive in its concerns and interests. It has a mere 8,000 hotels and licensed premises. In 1969 its contribution to the Tory Party was £26,767.
  Next, Scottish and Newcastle Breweries Ltd. This is where we come to the new Chairman of the Tory Party in Scotland with that lovely fruity name of McEwan Younger. This concern has only three breweries and 1,900 licensed premises. Since this list was compiled there has been further concentration, as was evidenced by the forlorn pleas which came occasionally from hon. Gentlemen opposite, including the hon. Members for Westmorland (Mr. Jopling) and for Ross and Cromarty (Mr. Gray). I could understand the distaste of the hon. Member for Ross and Cromarty for the job he had to do.
  Those hon. Members wanted freedom. What type of promise can those hon. Members be given that the sell-off will not be to one brewer, because it may well be that the Secretaries of State for the Home Department and for Scotland, in the discretion which the hon. Member for Fife, East suggested should be given to them, will decide that in the public interest it is best to dispose of these assets to one of these very large firms? Those hon. Gentlemen must wear those embarrassments.
  We have been talking about very valuable national assets. We have been talking about 14 public houses and hotels in Gretna, 15 in Ross and Cromarty, and 150 in Carlisle. These are considerable and very valuable, and they are probably even more potentially valuable. The whole plea from hon. Members opposite is that they could be much more valuable given the right approach.
  Mr. Tom Boardman Mr. Tom Boardman rose—
  Mr. Ross: I am way beyond Allied Breweries Ltd., but I will gladly give way.
  Mr. Boardman: Before the right hon. Gentleman leaves his figures, can he give an indication of how many hundreds of millions of pounds the companies he listed contribute to the national Exchequer and how many hundreds of
  1060
  thousands of pounds they contribute through the unions to which their employees belong to Labour Party funds?
  Mr. Ross: Hon. Members opposite have spent months attacking the unions, but we must not mention any connection between private industry and the breweries and the Government. I hope that the hon. Gentleman will sacrifice some of his Tuesday mornings and Thursday mornings and be with me; because I have decided that, if I have to answer this debate, I should serve on the Standing Committee, and I hope to spend quite a few Tuesday mornings and Thursday mornings on the Standing Committee, when we shall have an opportunity of going into all these matters in considerable detail.
  Mr. James Hamilton: They do not want that.
  Mr. Ross: That is not a threat; it is a promise. I do not imagine that the hon. Member for Fife, East will have much chance of going on the Committee. Indeed, there was great surprise on the Tory Front Bench when he said that he supported the Bill. I could almost hear the Secretary of State say, "Thank God", remembering that the hon. Gentleman had shown a certain independence of mind in relation to some Tory measures.
  I come to the question of mandate, which has not been cleared up by any Government speaker. The point was clearly made by my hon. Friend the Member for Carlisle (Mr. Ron Lewis), reinforced by my hon. Friend the Member for Bedwellty (Mr. Kinnock) and seven or eight others of my hon. Friends. There was no mandate in specific terms in the United Kingdom prospectus which the Tories put before the people. In Scotland, of course, there was something: they were going to end the monopoly. But we have some indications of what that ending of the monopoly meant, for in 1965 the Earl of Cromartie introduced a Private Member's Bill in the other place to end the monopoly, but it was not to abolish State management.
  I invite right hon. and hon. Members opposite to do as I did—it will take only a quarter of an hour—and read the report of that debate in the Lords HANSARD. I think that it is Vols. 264 and 265, Second

  1061
  Reading and Committee—not very many columns, since their Lordships make their points very sharply.
  It was interesting to note that not only was the intention not to end or abolish State management, but that every speaker, including ex-Ministers, paid tribute to State management for the job which it had done and for the kind of service which people received in the hotels in Gretna, the Annan area and the Cromarty Firth. It was a purely Scottish matter.
  The question was asked—it was answered by Lord Drumalbyn, now a Minister, and a Minister also in previous years—why this idea was produced after the Tories had been the Government for 13 years. Why was it put forward as purely for Scotland? Lord Drumalbyn confessed that for 12 years the Scots had fought the English in Tory counsels and had eventually, in 1965, after they had ceased to be the Government, decided that Scotland could go on its own.
  Every English Member should realise that the Home Secretary did not want to introduce this Bill. It was the Scots who wanted it—the big guns behind the scenes in Scotland, the McEwan Youngers and the rest. It was not the present Secretary of State for Scotland who won any kind of battle. And what a battle to win. I hope that the Secretary of State for Scotland is pleased with himself. My hon. Friend the Member for Fife, West (Mr. William Hamilton) was right to ask whether this was the sort of Measure which the Government proposed to deal with the problems of Scotland—the abolition of State management in Gretna and Cromarty Firth!
  The hon. Member for Fife, East had an answer to that. He said that this was worth while. It is a wonder that he did not suggest that we could have been better employed discussing local government reform. [An HON. MEMBER: "Or the Cupar sugar factory."] Or the Cupar sugar factory, yes. I am sorry that I missed the first part of the hon. Gentleman's speech, but I hope that he was careful not to refer to what the local authorities feel. I can tell him what Fife, Ayrshire and others think about local government reform and the rest. But I shall not play that kind of game.
  In fact, there was no mandate, and where they had some sort of mandate
  1062
  they lost the election. They lost the election in Scotland. The hon. Member for Ross and Cromarty had better be careful because he got only 33 per cent. of the votes in Ross and Cromarty, so he had no great mandate for this kind of thing, either.
  What they are interested in up there is industrial development. It used to be said that we could not get industrial development in Invergordon because of the licensing laws. Now, thanks to a Labour Government, they have industrial development there, and it is criticised by the Prime Minister because of the cost to the taxpayer. In the Alness area the population is growing, and in the Invergordon area we have only to look at the returns of the State Management Districts in Cromarty to realise exactly what it means there, what pickings there are and will be.
  The question we shall continue to ask the Government is why, whenever there is expenditure of Government money, whether in providing new roads for tourists to get nearer Gretna, Ecclefechan or anywhere else, or to bring industrial development to Invergordon, private enterprise must get all the fringe pickings. That is the question of principle that is at stake. There is no more justification for the Measure today than there has been in the past 40 years, and yet the Government introduce it.
  I think that the reason is that there is more money to be made now. The argument they used was, "Look at the profits being made by the State management—only £259,000 last year, with a projected sum of something over £300,000 in the year 1970–71. If this were in private hands the profit would be very much greater". Is that the only touchstone whether we do things, or whether they are worth doing? The message that has come through in speeches by a number of hon. Members opposite is that the State must not be allowed to touch anything which private enterprise could run at a greater profit, or on which it could at least make a profit.
  The bars in this House are not run by private enterprise. We shall wake up one day and discover that the Government are selling them off. The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) thinks that the Bill is

  1063
  small beer. It is the commanding heights, not the commanding tights, that he wants to be sold off. The Government are very weak both on the question of mandate and why they have decided to introduce the Bill at this time, after the State management has done so well in service as well as in fulfilling the original justification for the scheme.
  On the question of the image of the State Management Districts and the pubs there, we need not just to go to the Sketch, The Times and the rest. We have the Scottish Daily Express, a fair-minded paper, of 20th January this year talking about Mr. John Tredden, a night watchman. It says:
  "He likes his local. And he likes the price—1s. 10d.—at least 6d. cheaper than most pubs."
  Incidentally, there has been concern about the prices quoted by my right hon. Friend. He quoted, I think, from the Sunday Mirror. It is no good the Minister telling us that the difference is only a penny, when he means that it is a new penny. They are all there!
  But let us get back to the Scottish Daily Express and the night watchman. The article continued:
  "He can get a cheap nip of whisky too."
  Then there is a reference to Stamandi, a kind of rum, and he gets that cheaper as well. The article, by Mr. John Enos, continues:
  "Now the Government has said it will wind up this healthy undertaking, which last year netted £25,000 profit in the Gretna state management area alone."
  The touchstone is the £25,000 profit that could be maximised with the kind of prices which have to be paid in other places. That is what the debate is about. Right hon. and hon. Members opposite should be frank about the fact that they are subject to certain pressures from and loyalties to their friends. We would appreciate that honesty more than the dodging and manoeuvring we have had today from them.
  My hon. Friends have asked about disposal. I repeat what was said by my right hon. Friend. Ministers have taken this power and discretion unto themselves for disposal. The Bill says:
  "The Secretary of State shall dispose of property held by him for the purposes…
  1064
  of the Act … on such terms as appear to him expedient in the public interest"
  —he is the person who has to define "public interest" and "expediency"—
  "or shall use such property"
  —I am sorry to disappoint the hon. Member for Ross and Cromarty, who wants certain public houses kept even if they make a loss and no one wants to buy them—
  "for other purposes;"
  But when he is disposing of these, there is deemed to be a licence in operation. There are different kinds of licence—for example, table licences, restricted licences and full licences. Whether the Home Secretary knows it or not, Secretaries of State have exercised their discretion, although little of it has been exercised recently in Scotland, to give a full licence to a hotel. The licence can be granted on the written authority of the Secretary of State if the licensing authority has agreed. That is within the Secretary of State's power. He could end the monopoly tomorrow.
  The right hon. Gentleman told us about 19 applications. What is he going to do about them? If he grants one of them, the other 18 applicants will be very annoyed with him. If he grants the 19, that reduces the potential value of the asset. Do the Government appreciate the difficulties in which they are placing themselves if they keep this to themselves?
  This is particularly so if, by any chance, they decide that in the public interest it should be Scottish and Newcastle or Watney Mann or Whitbread's or Bass-Charrington or Allied Breweries in one area or a considerable part of it. What will be said then? We know about the contributions which the Conservative Party receives from the brewers. My right hon. Friend advised the Government to protect not just the public but themselves by using an independent realisation agency. That would put them in the clear, and I trust that they take his advice.
  This is a sordid and disgraceful Bill. Right hon. and hon. Members opposite are being terribly insensitive about the facts of political life in respect of where they get their financial support. I hope that they will recollect that they have a past in this. It is not a new situation

  1065
  for them to be accused of being connected with brewers or with vested interests.
  "We know what to expect when the Tories return to power, a party of great vested interests added together in a formidable confederation: corruption at home and aggression to cover it abroad, trickery of tariff juggles …?"
  Hon. Members: Reading!
  Mr. Ross: Of course I am reading.—It continues:
  "and the tyranny of wealth-fed party machine; sentiment by the bucketful; patriotism and imperialism by the imperial pint, an open hand at the public exchequer; and an open door at the public house; dear food for the millions; cheap labour for the millionaire, and that is the policy which the Tory Party offer you."
  That is Winston Churchill. Winston changed, but the Tory Party did not. This is only a sop. I hope that my hon. and right hon. Friends will rally round the Opposition to this Bill, not just tonight but in Committee, on Report and right through. Let us tell the people of Britain what this bedraggled Government really stand for.
  9.31 p.m.
  The Secretary of State for Scotland (Mr. Gordon Campbell): The right hon. Member for Kilmarnock (Mr. Ross) expressed some surprise that we should spend a day debating this Bill. I am surprised at the result of his party's decision to oppose a short and necessary reforming Measure and to use it as a pretext for spending a day indulging in ludicrous smears. This has prevented us from spending some of the time on more important matters. We could have got through this Bill in half a day or less if the Opposition had not decided to take this attitude.
  The Bill is designed to put an end to an experiment that is now 55 years old. It has become a complete anomaly. It started in the First World War at a time of emergency as a special measure in three small but important areas for reasons which have long since disappeared. Governments seem to have been too busy since then to rectify the situation. For some years I have been fully aware of the feelings of many people in the two areas of Scotland who wish this outdated system to be ended. My home and my constituency are beside one of the State Management Districts, the
  1066
  Cromarty district, and I have been well aware of the need to put an end to this anachronism for many years.
  The State monopoly has had the effect of inhibiting private development of the tourist industry. It is also causing inconvenience to those living in the district. For example, there are no licensed grocers in the district. The Scottish Conservative Party said in their election manifesto in 1966 and 1970 that we would at last bring to an end the State monopoly in the two districts of Scotland, the Cromarty and Gretna districts, and the electors of Ross and Cromarty indicated their views and my hon. Friend won the seat.
  Mr. Ron Lewis Mr. Ron Lewis rose—
  Mr. Campbell: The decision—
  Mr. Lewis: Will the right hon. Gentleman give way?
  Mr. Speaker: Order. If the right hon. Gentleman does not give way the hon. Member must not insist. I would point out that the right hon. Member for Kilmarnock was listened to with courtesy.
  Mr. Campbell: I have listened to the speech of the hon. Member for Carlisle (Mr. Ron Lewis) and I will come to the point that he raised. We propose to relinquish an unsuitable and unnecessary function of Government, a function operating only in three areas as a result of historic circumstances which have completely changed. This is a reflection of this Government's policy that Government Departments should not take on or carry on functions or tasks inappropriate for them.
  I spent last Thursday in the Cromarty district on an official visit. It is an area of industrial expansion. I visited an area where over 300 new houses had just been built and where a new community is coming into existence. With this industrial growth and increasing population it is natural that applications for licences to sell liquor are being made. But only the Secretary of State for Scotland and his Department have been able to retail liquor and manage the premises where it is sold across the counter unless exceptional licences are granted. The Invergordon area is also on the main tourist route to the north of Scotland, and it is difficult for me, as the Minister responsible for tourism in Scotland, to encourage those in the industry to build and

  1067
  expand and yet at the same time to preserve a monopoly which does not allow them to have licences.
  On my visit to the Invergordon area last week, I was interested but not surprised to note the number of people who commented favourably on the fact that we were introducing this Bill. Of course I heard expressions of gratitude to me also for the number of times that I advocated in the House three years ago that the smelter should be built at Invergordon at a time when the Labour Government were dithering for months about it and the fact that two and a half years ago, when the work was started, I took my right hon. Friend the Prime Minister to the site where the company showed me the plans. It was typical of the right hon. Member for Kilmarnock that he should this evening have referred to the wrong project when he said that the Prime Minister criticised the project. I also refer to the announcement I made in the House before the Easter Recess about the new road across the Black Isle which will shorten the trunk road by eight miles.
  In addition to hearing favourable comment on those matters, I was thanked by a number of residents for the fact that the Government were already carrying out the pledge in the Scottish election manifesto to bring an end to State monopoly. Why should a housewife living in the Invergordon area be unable to buy a bottle of sherry when she shops at the grocers? [HON. MEMBERS: "Oh."] The reaction of right hon. and hon. Members opposite confirms what we know about their attitude to the housewives.
  The present situation stems from a system which started in 1915 and which was related to alleged or anticipated drunkenness in Invergordon when it was a naval base. It ceased to be a naval base years ago and the situation is completely changed. Why should the people of this area be stigmatised as being more susceptible to drunkenness than people living elsewhere? Coming from nearby, I repudiate any such suggestion. My hon. Friend the Member for Dumfries (Mr. Monro), where the Gretna State Management District is situated, is of the same opinion and is aware of the local views.
  Mr. Ron Lewis Mr. Ron Lewis rose—
  Mr. Campbell: Much has been said about Carlisle, and I shall deal with Carlisle later. I am now talking about Scotland.
  My hon. Friend the Member for Dumfries initiated an important Adjournment debate a year ago in which he pointed to the adverse effects of the present system on tourism and development generally in his area. Why should the stigma of drunkenness attach to these areas? There are no grounds for the continuation of the State management experiment in these three areas of Britain. It has not proved itself to be of special value as a method of controlling liquor. Otherwise—and I have not heard this suggested as a serious possibility—there would be a case for extending it to the rest of the country.
  The whole system is an unnecessary activity of central government. It has been argued—and it has been argued here today—that while the State monopoly certainly should go the State management supply organisation could be kept in being since it is a sound organisation which has done well by the people in the districts. I can understand that point of view because, I am glad to say, the organisation has been well run. But State control and State supply cannot be divided in this way. If State control is abolished, the case against State supply becomes overwhelming. What has the State—the Home Office in Whitehall and the Scottish Home and Health Department in St. Andrew's House—to do with running a small liquor business in competition with other liquor businesses in three areas of the country only? On what theory of nationalisation could this be justified? Indeed, it is not nationalisation but direct administration by central Government Departments. If State control is ended there is no case for continuing State supply.
  As the right hon. Member for Kilmarnock pointed out, although it is possible for the Secretary of State to grant licences in practice successive Governments have consistently refused to do so except in very exceptional circumstances. Certainly in the five years when he was Secretary of State he also adopted that attitude. In these areas of the country Government capital and Government resources are tied up in the provision of facilities which could be provided as well,

  1069
  if not better, by ordinary commerce subject to licensing control. It is right that the Government should move out of this unsuitable activity being practised in three areas only.
  It has been suggested that it is important for employment—
  Mr. Ron Lewis Mr. Ron Lewis rose—
  Mr. Campbell: No, I cannot give way.
  Mr. Lewis Mr. Lewis rose—
  Mr. Speaker: Order. The hon. Member must be a little more patient.
  Mr. Campbell: It has been suggested—
  Mr. Lewis Mr. Lewis rose—
  Mr. Campbell: I will give way afterwards, not now—
  Mr. Lewis Mr. Lewis rose—
  Mr. Speaker: Order. The right hon. Member has said that he will give way to the hon. Member in due course.
  Mr. Campbell: It has been suggested that for employment and other reasons the Carlisle brewery should be continued in operation. This points to the sale of the bulk of the Carlisle pubs as one lot with the brewery, but against that it has been suggested that this would give the purchaser too monopolistic a position in the area. There have also been arguments that the staff and tenants should be given a chance to purchase themselves, which we accept.
  On the question of disposal, the premises used for the sale of liquor will be sold as going concerns. In the execution of their normal duty to the taxpayer the Government will obtain a full and fair price for their assets. Contrary to rumours in the Press, however, I must make it clear that the Government have taken no steps yet towards sale. I will give way to the hon. Gentleman.
  Mr. Ron Lewis: I am grateful to the right hon. Gentleman for giving way. I am sorry, Mr. Speaker. I understand it is not the custom to intervene in a maiden speech, and I apologise. Before the right hon. Gentleman gets to Carlisle I should like to deal with Scotland. The right hon. Gentleman mentioned Dumfries. Is he aware that at a conference in Carlisle a few weeks ago quite a num-
  1070
  ber of representatives from Dumfriesshire and Dumfries and Gretna were totally opposed to what the Government are doing?
  Mr. Campbell: I am aware of that, and I am also aware that these are many more who are in favour. In Scotland there is no brewery in either of the two districts. The property there to be sold consists mostly of hotels and public houses. The property in the three State Management Districts represents about £4½ million capital resources. We believe that this money could be better employed for the benefit of the taxpayers.
  It has been pointed out that the State management system makes a profit, but it is modest. The return on capital is less than that which successive Governments, Conservative and Labour, have set as targets for the nationalised industries. It should also be remembered that the State management organisation does not pay corporation tax. The ending of the State monopoly and the change from a Government Department to private enterprise will reduce the Civil Service by about 1,500. Most of those employed are likely to keep their jobs, but they will cease to be in the category of civil servants. In future they will be in the same situation as everyone else in the country who is engaged in work in hotels and public houses.
  The reduction of the number of civil servants by a withdrawal from a function which is totally inappropriate for a Government Department surely is to be welcomed. The Leader of the Opposition when Prime Minister, on one of the many occasions when he made a statement about an economic crisis, attempted to set a limit to the size of the Civil Service. He saw this as a necessary way of curbing public expenditure. Perhaps I am in a suitable position to make this comment since I was an established civil servant for a dozen years before a number of my constituents asked me to represent them in Parliament.
  As for the remarks of the right hon. Member for Cardiff, South-East (Mr. Callaghan), I have seldom heard such a scurrilous and irresponsible speech. It was even wrong in its fundamental facts. For example, he began by saying that the State management system had operated for 66 years, when everybody concerned knows that to be incorrect. He ended by

  1071
  referring to State breweries in Scotland when there are none. By innuendo and accusation he debased the standing of the Dispatch Box.
  Mr. Callaghan Mr. Callaghan rose—
  Mr. Campbell: I will give way in a moment. I crossed swords with the right hon. Gentleman in the last Parliament when he got up to a dirty trick in gerrymandering the constituencies. He was found out in that piece of skullduggery which has since been put right. But his speech today was even worse.
  Mr. Callaghan: I only want to make clear that I was not making any smears or innuendoes. I was openly alleging, and wish to repeat, that the close relations that exist between the Conservative Party and the contributions made by the brewers to the Conservative Party are a disgrace when legislation such as this is introduced. I hope that before the right hon. Gentleman concludes he will give an assurance that he and the Home Secretary will divest themselves of the responsibility for valuing and disposing of these assets and will hand them over to an independent statutory agency.
  Hon. Members: Answer that.
  Mr. Campbell: I will. Here is a Bill which will end an anomaly and which could have been introduced by any Government during the last 40 years. The right hon. Gentleman has chosen to mount a wholly synthetic and personal attack alleging corruption. Is this a charade? Does he really mean what he says that his party would reverse the position—incidentally without proper compensation? Would he in that case limit reversal to three districts, or does he think that the whole of our hotels and public houses should be taken over by Government Departments and should be run by them? That is certainly what was being suggested by the hon. Member for Fife. West (Mr. William Hamilton). Or is there another reason? Has the right hon. Gentleman decided to use this Bill as a vehicle to try to make a political comeback, leading an assault against an imaginary plot? Is he indulging in trying to win the support of some of his more gullible Left-wing friends.
  The right hon. Gentleman and the hon. Member for Fife, West have given us
  1072
  notice that they hope to be members of the Standing Committee which considers this Bill. Shall we see them outbidding each other in saying how many public houses and hotels they will take over in the country as a whole? Is this a new tenet of Fabian faith? Is the nationalisation or renationalisation of pubs to be, in the future, the touchstone of socialist orthodoxy?
  The hon. Member for Fife, West made a shocking speech. It was almost more disgraceful than that of the right hon. Member for Cardiff, South-East. The hon. Gentleman made wholesale charges of corruption. They might be taken seriously if it were not clear that he had no argument against what the Government propose and, therefore, that all that he was trying to do was to impute base motives.
  The hon. Gentleman asked us all to declare our interests. I had never been involved in the business of selling liquor until I became Secretary of State for Scotland. That was the occasion on which I found myself with the functions of which I am now asking to be deprived.
  Mr. Orme: What about Younger?
  Mr. Campbell: I dealt with that at the time.
  The right hon. Member for Cardiff, South-East asked about the valuation of the assets. The Government accept that the valuation of the assets is an important aspect of the Bill. To what my right hon. Friend said, I add only that this is a matter the details of which can be gone into in Committee.
  The right hon. Member for Cardiff, South-East has made the situation more difficult by his threat that the Opposition will reacquire the premises should they, by some mischance, again become the Government. How much is that likely to reduce the value of the assets at the expense of the taxpayer?
  Mr. Callaghan: I should like the right hon. Gentleman to be quite clear. I do not wish there to be any uncertainty. We shall hold ourselves free in the public interest to introduce any legislation that we think right on the basis of the formula that I gave at the end of my speech, and I hope that that will be taken into account.

  1073
  Before 10 o'clock, will the right hon. Gentleman give me a straight answer to the proposal that an independent realisation agency should be set up to preserve Conservative Ministers, if they deserve it, from the obliquy that will otherwise fall upon them?
  Mr. Campbell: I can assure the right hon. Gentleman that it is our intention to obtain an independent valuation to assist us in this operation.
  The right hon. Gentleman appears to be ignoring the whole structure of the Government's administrative machine, and Parliament's administrative machinery, through the Comptroller and Auditor General and the Public Accounts Committee, in ensuring that the taxpayers' assets are not misused. He also appeared erroneously to think that there were only two possible methods of sale—as a going concern or break-up value. The Government intend the "going concern" basis for the premises selling liquor, for each of those premises is a going concern in itself. The question that the Government wish to consider further is how they should be grouped for sale. In deciding this, the Government will be guided by the two considerations referred to by my right hon. Friend the Home Secretary: first, the aim of getting the best price for the taxpayer; and, secondly, the question of freedom of choice for the customer.
  My hon. Friend the Member for Ross and Cromarty (Mr. Gray) asked about the situation of a single pub or hotel not being sold and being let. The Government do not expect any difficulty in the disposal of premises in Scotland. But there is no time limit on disposal in the Bill. We would not hurry if that meant accepting an unreasonable offer.
  We are ending an anachronism originated as an experiment in completely different circumstances during the First World War. In doing this, we are carrying out the undertaking in the Scottish election manifesto that we would abolish the State monopoly in the two Management Districts.
  The Government are divesting themselves of an inappropriate and unnecessary function which, in any case, they
  1074
  have been exercising only in three districts. While most of those employed in State management are likely to continue in the same or similar jobs when it is ended, they will cease to be civil servants. Our action will also bring a bonus for the taxpayers by reducing public expenditure and making available the money from realising the assets.
  The right hon. Gentleman also inquired what the Governments' attitude would be towards future applications for licences before disposal. He appeared to suggest that it was right that the taxpayer should benefit from the State's present monopoly position and that it would be wrong for the Home Secretary, in the instance of Carlisle, to try to prevent competition from growing. We think that the monopoly position of the State in the three districts is unnecessary and wrong. There is wide agreement about this, even if there are differences of opinion about the future of the property concerned.
  We believe that it would be odd if, having enacted this long overdue Measure, the Ministers concerned were to continue to refuse applications and thus frustrate the effect of the Bill. I have received applications for my authority to provide liquor from no fewer than 19 persons who already hold certificates from the licensing courts authorising them to sell liquor. The Home Secretary has also received a number of such applications.
  Under the policy which has been followed by the State management under successive Governments, in particular the policy that the supply of liquor should normally be in the hands of the organisation, very few, if any, of these applications for authority would have been granted. The local inhabitants would, therefore, have been deprived of facilities which the licensing courts thought they ought to have. It will be one of the best effects of the Bill that the requirement will be abolished that persons who have already received an authority from the licensing court must also receive the Secretary of State's permission before they can operate their licence or certificate. These people will immediately be able to provide liquor as they have already been authorised to do by the licensing court.
  When in opposition my noble Friend Lord Hailsham put forward a proposal for consideration that a trust might be

  1075
  formed to manage the brewery in Carlisle. This was duly considered when we came into office. On looking at the full facts and figures made available by the Departments, we found that we should not have been justified in setting up a trust with public funds and that no such trust would be viable. Of course, if anyone were to come forward with a privately financed trust we should certainly consider that.
  The right hon. Member for Kilmarnock recited the number of pubs in most of the rest of the country outside the three districts. He sounded as though he wanted to alter that rather than what was in the Bill. The Bill is a reform. [Laughter.] I suggest that hon. Members opposite visit the districts in Scotland where they will certainly hear about it. This reform has been increasingly needed in Scotland. The people living there have been fed up with being treated as though the clock had stood still for 50 years.
  The debate has been marred by an extraordinary outburst from the right hon. Member for Cardiff, South-East. We are carrying out our undertaking to cut out unnecessary and inappropriate functions of the central Government and, in particular, our pledges to Scotland.
  The Parliamentary Secretary to the Treasury (Mr. Francis Pym)rose in his place and claimed to move, That the Question be now put.
  Mr. Thomas Swain(seated and covered): On a point of order. May I draw your attention, Mr. Speaker, to a serious omission on the part of the Government Chief Whip? The right hon. Gentleman moved the closure from a standing position immediately in front of the Mace. In the opinion of the House and according to the rules of the House that puts him outside the Chamber.
  Mr. Speaker: I heard the right hon. Gentleman and I accepted the closure. No point of order can arise on that.
  Mr. E. Fernyhough(seated and covered): On a point of order. In view of the Ruling which you have just given, Mr. Speaker, will it be in order henceforth for any Member—
  Mr. Speaker: Order.
  Question, That the Question be now put, put and agreed to.
  Question put accordingly, That the Bill be now read a Second time:—
  The House divided: Ayes 277, Noes 226.

  Division No. 341.]

  AYES

  [10.1 p.m.

  Adley, Robert

  Bryan, Paul

  Edwards, Nicholas (Pembroke)

  Alison, Michael (Barkston Ash)

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

  Elliot, Capt. Walter (Carshalton)

  Allason, James (Hemel Hempstead)

  Buck, Antony

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

  Amery, Rt. Hn. Julian

  Bullus, Sir Eric

  Emery, Peter

  Archer, Jeffrey (Louth)

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

  Farr, John

  Astor, John

  Carlisle, Mark

  Fell, Anthony

  Atkins, Humphrey

  Channon, Paul

  Fenner, Mrs. Peggy

  Awdry, Daniel

  Chapman, Sydney

  Fidler, Michael

  Baker, Kenneth (St. Marylebone)

  Chataway, Rt. Hn. Christopher

  Finsberg, Geoffrey (Hampstead)

  Baker, W. H. K. (Banff)

  Chichester-Clark, R.

  Fisher, Nigel (Surbiton)

  Balniel, Lord

  Clark, William (Surrey, E.)

  Fletcher-Cooke, Charles

  Barber, Rt. Hn. Anthony

  Clarke, Kenneth (Rushcliffe)

  Fookes, Miss Janet

  Batsford, Brian

  Clegg, Walter

  Fortescue, Tim

  Beamish, Col. Sir Tufton

  Cockeram, Eric

  Foster, Sir John

  Bell, Ronald

  Cooke, Robert

  Fowler, Norman

  Bennett, Dr. Reginald (Gosport)

  Cooper, A. E.

  Fox, Marcus

  Benyon, W.

  Cordle, John

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

  Berry, Hn. Anthony

  Corfield, Rt. Hn. Frederick

  Fry, Peter

  Biffen, John

  Biggs-Davison, John

  Cormack, Patrick

  Galbraith, Hn. T. G.

  Blaker, Peter

  Costain, A. P.

  Gardner, Edward

  Boardman, Tom (Leicester, S.W.)

  Critchley, Julian

  Gibson-Watt, David

  Body, Richard

  Crouch, David

  Gilmour, Ian (Norfolk, C.)

  Boscawen, Robert

  Crowder, F. P.

  Gilmour, Sir John (Fife, E.)

  Bossom, Sir Clive

  Davies, Rt. Hn, John (Knutsford)

  Glyn, Dr. Alan

  Bowden, Andrew

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

  Godber, Rt. Hn. J. B.

  Boyd-Carpenter, Rt. Hn. John

  Dean, Paul

  Goodhew, Victor

  Braine, Bernard

  Deedes, Rt. Hn. W. F.

  Gower, Raymond

  Bray, Ronald

  Dixon, Piers

  Grant, Anthony (Harrow, C.)

  Brewis, John

  Drayson, G. B.

  Gray, Hamish

  Brinton, Sir Tatton

  du Cann, Rt. Hn. Edward

  Green, Alan

  Brown, Sir Edward (Bath)

  Dykes, Hugh

  Grieve, Percy

  Bruce-Gardyne, J.

  Eden, Sir John

  Griffiths, Eldon (Bury St. Edmunds)

  Grylls, Michael

  Macmillan, Maurice (Farnham)

  Rost, Peter

  Gummer, Selwyn

  McNair-Wilson, Michael

  Royle, Anthony

  Gurden, Harold

  McNair-Wilson, Patrick (NewForest)

  Russell, Sir Ronald

  Hall, Miss Jean (Keighley)

  Maddan, Martin

  St. John-stevas, Norman

  Hall, John (Wycombe)

  Madel, David

  Sandys, Rt. Hn. D.

  Hall-Davis, A. G. F.

  Maginnis, John E.

  Scott, Nicholas

  Hamilton, Michael (Salisbury)

  Marples, Rt. Hn. Ernest

  Sharples, Richard

  Harrison, Brian (Maldon)

  Marten, Neil

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

  Harrison, Col. Sir Harwood (Eye)

  Mather, Carol

  Shelton, William (Clapham)

  Haselhurst, Alan

  Maude, Angus

  Simeons, Charles

  Havers, Michael

  Maudling, Rt. Hn. Reginald

  Sinclair, Sir George

  Hawkins, Paul

  Mawby, Ray

  Skeet, T. H. H.

  Hay, John

  Maxwell-Hyslop, R.J.

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

  Heath, Rt. Hn. Edward

  Meyer, Sir Anthony

  Soref, Harold

  Heseltine, Michael

  Mills, Peter (Torrington)

  Speed, Keith

  Hiley, Joseph

  Mills, Stratton (Belfast, N.)

  Spence, John

  Hill, John E. B. (Norfolk, S.)

  Miscampbell, Norman

  Sproat, Iain

  Hill, James (Southampton, Test)

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

  Stainton, Keith

  Holland, Philip

  Mitchell, David (Basingstoke)

  Stanbrook, Ivor

  Holt, Miss Mary

  Molyneaux, James

  Stewart-Smith, D. G. (Belper)

  Hordern, Peter

  Money, Ernie

  Stodart, Anthony (Edinburgh, W.)

  Monks, Mrs. Connie

  Hornby, Richard

  Monro, Hector

  Stoddart-Scott, Col. Sir M.

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Montgomery, Fergus

  Stokes, John

  Howe, Hn. Sir Geoffrey (Reigate)

  Morgan, Geraint (Denbigh)

  Stuttaford, Dr. Tom

  Howell, David (Guildford)

  Morgan-Giles, Rear-Adm.

  Sutcliffe, John

  Hutchison, Michael Clark

  Morrison, Charles (Devizes)

  Taylor, Sir Charles (Eastbourne)

  Iremonger, T. L.

  Mudd, David

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

  Irvine, Bryant Godman (Rye)

  Murton, Oscar

  Taylor, Frank (Moss Side)

  James, David

  Neave, Airey

  Tebbit, Norman

  Jenkin, Patrick (Woodford)

  Nicholls, Sir Harmar

  Temple, John M.

  Jennings, J. C. (Burton)

  Noble, Rt. Hn. Michael

  Thatcher, Rt. Hn. Mrs. Margaret

  Jones, Arthur (Northants, S.)

  Nott, John

  Thomas, John Stradling (Monmouth)

  Jopling, Michael

  Onslow, Cranley

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

  Joseph, Rt. Hn. Sir Keith

  Oppenheim, Mrs. Salty

  Thompson, Sir Richard (Croydon, S.)

  Kaberry, Sir Donald

  Owen, Idris (Stockport, N.)

  Tilney, John

  Kellett, Mrs. Elaine

  Page, Graham (Crosby)

  Trafford, Dr. Anthony

  Kershaw, Anthony

  Page, John (Harrow, W.)

  Trew, Peter

  Kilfedder, James

  Peel, John

  Tugendhat, Christopher

  Kimball, Marcus

  Percival, Ian

  van Straubenzee, W. R.

  King, Evelyn (Dorset, S.)

  Peyton, Rt. Hn. John

  Vaughan, Dr. Gerard

  King, Tom (Bridgwater)

  Pike, Miss Mervyn

  Waddington, David

  Kinsey, J. R.

  Pink, R. Bonner

  Walker, Rt. Hn. Peter (Worcester)

  Kirk, Peter

  Price, David (Eastleigh)

  Walker-Smith, Rt. Hn. Sir Derek

  Younger, Hn. George

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

  Ward, Dame Irene

  Kitson, Timothy

  Proudfoot, Wilfred

  Warren, Kenneth

  Knight, Mrs. Jill

  Pym, Rt. Hn. Francis

  Weatherill, Bernard

  Knox, David

  Quennell, Miss J. M.

  Wells, John (Maidstone)

  Lambton, Antony

  Raison, Timothy

  White, Roger (Gravesend)

  Lane, David

  Ramsden, Rt. Hn. James

  Whitelaw, Rt. Hn. William

  Le Marchant, Spencer

  Rawlinson, Rt. Hn. Sir Peter

  Wiggin, Jerry

  Lewis, Kenneth (Rutland)

  Redmond, Robert

  Wilkinson, John

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

  Reed, Laurance (Bolton, E.)

  Wolrige-Gordon, Patrick

  Longden, Gilbert

  Rees, Peter (Dover)

  Wood, Rt. Hn. Richard

  Loveridge, John

  Rees-Davies, W. R.

  Woodhouse, Hn. Christopher

  Luce, R. N.

  Ronton, Rt. Hn. Sir David

  Woodnutt, Mark

  McAdden, Sir Stephen

  Rhys Williams, Sir Brandon

  Worsley, Marcus

  MacArthur, Ian

  Ridley, Hn. Nicholas

  Wylie, Rt. Hn. N. R.

  McCrindle, R. A.

  Ridsdale, Julian

  McLaren, Martin

  Roberts, Michael (Cardiff, N.)

  TELLERS FOR THE AYES:

  Maclean, Sir Fitzroy

  Roberts, Wyn (Conway)

  Mr. Reginald Eyre and

  McMaster, Stanley

  Rossi, Hugh (Homsey)

  Mr. Jasper More.

  NOES

  Abse, Leo

  Boyden, James (Bishop Auckland)

  Cronin, John

  Albu, Austen

  Bradley, Tom

  Crosland, Rt. Hn. Anthony

  Allaun, Frank (Salford, E.)

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

  Dalyell, Tam

  Allen, Scholefield

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

  Darling, Rt. Hn. George

  Archer, Peter (Rowley Regis)

  Brown, Ronald (Shoreditch & F'bury)

  Davies, Denzil (Llanelly)

  Armstrong, Ernest

  Buchan, Norman

  Davies, G. Elfed (Rhondda, E.)

  Ashley, Jack

  Butler, Mrs. Joyce (Wood Green)

  Davies, Ifor (Gower)

  Ashton, Joe

  Callaghan, Rt. Hn. James

  Davis, Clinton (Hackney, C.)

  Atkinson, Norman

  Campbell, I. (Dunbartonshire, W.)

  Deakins, Eric

  Bagier, Gordon A. T.

  Cant, R. B.

  de Freitas, Rt. Hn. Sir Geoffrey

  Barnes, Michael

  Carmichael, Neil

  Delargy, H. J.

  Barnett, Joel

  Carter, Ray (Birmingh'm, Northfield)

  Dell, Rt. Hn. Edmund

  Beaney, Alan

  Carter-Jones, Lewis (Eccles)

  Dempsey, James

  Bennett, James (Glasgow, Bridgeton)

  Clark, David (Colne Valley)

  Doig, Peter

  Bidwell, Sydney

  Cocks, Michael (Bristol, S.)

  Dormand, J. D.

  Bishop, E. S.

  Cohen, Stanley

  Douglas, Dick (Stirlingshire, E.)

  Blenkinsop, Arthur

  Conlan, Bernard

  Duffy, A. E. P.

  Booth, Albert

  Corbet, Mrs. Freda

  Dunn, James A.

  Bottomley, Rt. Hn. Arthur

  Cox, Thomas (Wandsworth, C.)

  Edwards, William (Merioneth)

  1078

  1079

  Ellis, Tom

  Lawson, George

  Reed, D. (Sedgefield)

  English, Michael

  Leadbitter, Ted

  Rees, Merlyn (Leeds, S.)

  Evans, Fred

  Lee, Rt. Hn. Frederick

  Rhodes, Geoffrey

  Faulds, Andrew

  Leonard, Dick

  Richard, Ivor

  Fernyhough, Rt. Hn. E.

  Lestor, Miss Joan

  Roberts, Rt. Hn. Goronwy (Caernarvon)

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

  Lever, Rt. Hn. Harold

  Robertson, John (Paisley)

  Fletcher, Raymond (Ilkeston)

  Lewis, Arthur (W. Ham N.)

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

  Fletcher, Ted (Darlington)

  Lewis, Ron (Carlisle)

  Rodgers, William (Stockton-on-Tees)

  Foley, Maurice

  Lomas, Kenneth

  Roper, John

  Foot, Michael

  Loughlin, Charles

  Rose, Paul B.

  Forrester, John

  Marsden, F.

  Ross, Rt. Hn. William (Kilmarnock)

  Fraser, John (Norwood)

  Mabon, Dr. J. Dickson

  Sheldon, Robert (Ashton-under-Lyne)

  Freeson, Reginald

  McBride, Neil

  Shore, Rt. Hn. Peter (Stepney)

  Galpern, Sir Myer

  McCartney, Hugh

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

  Garrett, W. E.

  McElhone, Frank

  Short, Mrs. Renée (W'hampton, N.E.)

  Gilbert, Dr. John

  McGuire, Michael

  Silkin, Rt. Hn. John (Deptford)

  Ginsburg, David

  Mackenzie, Gregor

  Silkin, Hn. S. C. (Dulwich)

  Gordon Walker, Rt. Hn. P. C.

  Mackie, John

  Sillars, James

  Gourlay, Harry

  Mackintosh, John P.

  Silverman, Julius

  Grant, George (Morpeth)

  McMillan, Tom (Glasgow, C.)

  Skinner, Dennis

  Grant, John D. (Islington, E.)

  McNamara, J. Kevin

  Small, William

  Griffiths, Eddie (Brightside)

  MacPherson, Malcolm

  Smith, John (Lanarkshire, N.)

  Griffiths, Will (Exchange)

  Mahon, Simon (Bootle)

  Spearing, Nigel

  Hamilton, James (Bothwell)

  Mallalieu, E. L. (Brigs)

  Spriggs, Leslie

  Hamilton, William (Fife, W.)

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

  Stallard, A. W.

  Hamling, William

  Marks, Kenneth

  Stewart, Rt. Hn. Michael (Fulham)

  Hardy, Peter

  Marquand, David

  Stoddart, David (Swindon)

  Harper, Joseph

  Mason, Rt. Hn. Roy

  Strang, Gavin

  Harrison, Walter (Wakefield)

  Mayhew, Christopher

  Strauss, Rt. Hn. G. R.

  Meacher, Michael

  Heffer, Eric S.

  Mellish, Rt. Hn. Robert

  Summerskill, Hn. Dr. Shirley

  Hooson, Emlyn

  Mendelson, John

  Swain, Thomas

  Horam, John

  Mikardo, Ian

  Taverne, Dick

  Houghton, Rt. Hn. Douglas

  Millan, Bruce

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

  Howell, Denis (Small Health)

  Miller, Dr. M. S.

  Tinn, James

  Huckfield, Leslie

  Morgan, Elystan (Cardiganshire)

  Torney, Tom

  Hughes, Rt Hn. Cledwyn (Anglesey)

  Morris, Charles R. (Openshaw)

  Trew, Peter

  Hughes, Mark (Durham)

  Morris, Rt. Hn. John (Aberavon)

  Urwin, T. W.

  Hughes, Robert (Aberdeen, N.)

  Moyle, Roland

  Varley, Eric G.

  Hughes, Roy (Newport)

  Mulley, Rt. Hn. Frederick

  Wainwright, Edwin

  Hunter, Adam

  Murray, Ronald King

  Walker, Harold (Doncaster)

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

  Ogden, Eric

  Wallace, George

  Janner, Greville

  O'Halloran, Michael

  Watkins, David

  Jay, Rt. Hn. Douglas

  O'Malley, Brian

  Wellbeloved, James

  Jenkins, Hugh (Putney)

  Oram, Bert

  Whitehead, Phillip

  Jenkins, Rt. Hn. Roy (Stechford)

  Orbach, Maurice

  Whitlock, William

  John, Brynmor

  Orme, Stanley

  Willey, Rt. Hn. Frederick

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

  Oswald, Thomas

  Williams, Alan (Swansea, W.)

  Johnson, Walter (Derby, S.)

  Palmer, Arthur

  Williams, Mrs. Shirley (Hitchin)

  Jones, Barry (Flint, E.)

  Pannell, Rt. Hn. Charles

  Williams, W. T. (Warrington)

  Jones, Dan (Burnley)

  Parry, Robert (Liverpool, Exchange)

  Wilson, Alexander (Hamilton)

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

  Pendry, Tom

  Wilson, Rt. Hn. Harold (Huyton)

  Jones, Gwynoro (Carmarthen)

  Pentland, Norman

  Wilson, William (Coventry, S.)

  Jones, T. Alec (Rhondda, W.)

  Perry, Ernest G.

  Woof, Robert

  Kaufman, Gerald

  Prentice, Rt. Hn. Reg.

  Kelley, Richard

  Prescott, John

  TELLERS FOR THE NOES:

  Kerr, Russell

  Price, J. T. (Westhoughton)

  Mr. John Golding and

  Kinnock, Neil

  Price, William (Rugby)

  Mr. Donald Coleman.

  Lambie, David

  Probert, Arthur

  Bill accordingly read a Second time and committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  BUSINESS OF THE HOUSE
  Ordered,
  That the Rating Bill and the Education (Scotland) Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[The Prime Minister.]

  LICENSING (ABOLITION OF STATE MANAGEMENT) [MONEY]
  Queen's Recommendation having been signified—
  Motion made, and Question put,
  That, for the purposes of any Act of the present Session to remove the restriction on the sale and supply, otherwise than by the Secretary of State, of intoxicating liquor in the Carlisle district or of excisable liquor in the State management districts in Scotland, it is expedient to authorise

  (a) the payment out of moneys provided by Parliament of expenses incurred by the Secretary of State in the exercise of his functions under the Act;

  1081

  (b) the payment of any sums into the Consolidated Fund.—[Mr. Patrick Jenkin]:—

  The House divided: Ayes 276, Noes 223.

  Division No. 342.]

  AYES

  [10.12 p.m.

  Adley, Robert

  Fortescue, Tim

  Maclean, Sir Fitzroy

  Alison, Michael (Barkston Ash)

  Foster, Sir John

  McMaster, Stanley

  Allason, James (Hemel Hempstead)

  Fowler, Norman

  Macmillan, Maurice (Farnham)

  Amery, Rt. Hn. Julian

  Fox, Marcus

  McNair-Wilson, Michael

  Archer, Jeffrey (Louth)

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

  McNair-Wilson, Patrick (New Forest)

  Astor, John

  Fry, Peter

  Maddan, Martin

  Atkins, Humphrey

  Galbraith, Hn. T. G.

  Madel, David

  Awdry, Daniel

  Gardner, Edward

  Maginnis, John E.

  Baker, Kenneth (St. Marylebone)

  Gibson-Watt, David

  Marples, Rt. Hn. Ernest

  Baker, W. H. K. (Banff)

  Gilmour, Ian (Norfolk, C.)

  Marten, Neil

  Balniel, Lord

  Gilmour, Sir John (Fife, E.)

  Mather, Carol

  Glyn, Dr. Alan

  Maude, Angus

  Barber, Rt. Hn. Anthony

  Godber, Rt. Hn. J. B.

  Maudling, Rt. Hn. Reginald

  Batstord, Brian

  Goodhew, Victor

  Mawby, Ray

  Beamish, Col. Sir Tufton

  Gower, Raymond

  Maxwell-Hyslop, R. J.

  Bell, Ronald

  Grant, Anthony (Harrow, C.)

  Meyer, Sir Anthony

  Bennett, Dr. Reginald (Gosport)

  Gray, Hamish

  Mills, Peter (Torrington)

  Benyon, W.

  Green, Alan

  Mills, Stratton (Belfast, N.)

  Berry, Hn. Anthony

  Grieve, Percy

  Miscampbell, Norman

  Biffen, John

  Griffiths, Eldon (Bury St. Edmunds)

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

  Biggs-Davison, John

  Grylls, Michael

  Mitchell, David (Basingstoke)

  Blaker, Peter

  Gummer, Selwyn

  Molyneaux, James

  Boardman, Tom (Leicester, S.W.)

  Gurden, Harold

  Money, Ernie

  Body, Richard

  Hall, Miss Joan (Keighley)

  Monks, Mrs. Connie

  Boscawen, Robert

  Hall, John (Wycombe)

  Monro, Hector

  Bossom, Sir Clive

  Hall-Davis, A. G. F.

  Montgomery, Fergus

  Bowden, Andrew

  Hamilton, Michael (Salisbury)

  Morgan, Geraint (Denbigh)

  Boyd-Carpenter, Rt. Hn. John

  Harrison, Brian (Maldon)

  Morgan-Giles, Rear-Adm.

  Braine, Bernard

  Harrison, Col. Sir Harwood (Eye)

  Morrison, Charles (Devizes)

  Bray, Ronald

  Haselhurst, Alan

  Mudd, David

  Brewis, John

  Havers, Michael

  Murton, Oscar

  Brinton, Sir Tatton

  Hawkins, Paul

  Neave, Airey

  Brown, Sir Edward (Bath)

  Hay, John

  Nicholls, Sir Harmar

  Bruce-Gardyne, J.

  Heath, Rt. Hn. Edward

  Noble, Rt. Hn. Michael

  Bryan, Paul

  Heseltine, Michael

  Nott, John

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

  Hiley, Joseph

  Onslow, Cranley

  Buck, Anthony

  Hill, John E. B. (Norfolk, S.)

  Oppenneim, Mrs. Sally

  Bullus, Sir Eric

  Hill, James (Southampton, Test)

  Owen, Idris (Stockport, N.)

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

  Holland, Philip

  Page, Graham (Crosby)

  Carlisle, Mark

  Holt, Miss Mary

  Page, John (Harrow, W.)

  Channon, Paul

  Hordern, Peter

  Peel, John

  Chapman, Sydney

  Hornby, Richard

  Percival, Ian

  Chataway, Rt. Hn. Christopher

  Hornsby-Smith. Rt. Hn. Dame Patricia

  Pike, Miss Mervyn

  Chichester-Clark, R.

  Howe, Hn. Sir Geoffrey (Reigate)

  Pink, R. Bonner

  Clark, William (Surrey, E.)

  Howell, David (Guildford)

  Price, David (Eastleigh)

  Clarke, Kenneth (Rushcliffe)

  Hutchison, Michael Clark

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

  Clegg, Walter

  Iremonger, T. L.

  Proudfoot, Wilfred

  Cockeram, Eric

  Irvine, Bryant Godman (Rye)

  Pym, Rt. Hn. Francis

  Cooke, Robert

  James, David

  Quennell, Miss J. M.

  Cooper, A. E.

  Jenkin, Patrick (Woodford)

  Raison, Timothy

  Cordle, John

  Jennings, J. C. (Burton)

  Ramsden, Rt. Hn, James

  Corfield, Rt. Hn. Frederick

  Jones, Arthur (Northants, S.)

  Rawlinson, Rt. Hn. Sir Peter

  Cormack, Patrick

  Jopling, Michael

  Redmond, Robert

  Costain, A. P.

  Joseph, Rt.Hn. Sir Keith

  Reed, Laurance (Bolton, E.)

  Critchley, Julian

  Kaberry, Sir Donald

  Rees, Peter (Dover)

  Crouch, David

  Kellett, Mrs. Elaine

  Rees-Davies, W. R.

  Crowder, F. P.

  Kershaw, Anthony

  Renton, Rt. Hn. Sir David

  Davies, Rt. Hn. John (Knutsford)

  Kilfedder, James

  Rhys Williams, Sir Brandon

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

  Kimball, Marcus

  Ridley, Hn. Nicholas

  Dean, Paul

  King, Evelyn (Dorset, S.)

  Ridsdale, Julian

  Deedes, Rt. Hn. W. F.

  King, Tom (Bridgwater)

  Roberts, Michael (Cardiff, N.)

  Dixon, Piers

  Kinsey, J. R.

  Roberts, Wyn (Conway)

  Drayson, G. B.

  Kirk, Peter

  Rossi, Hugh (Hornsey)

  du Cann, Rt. Hn. Edward

  Kitson, Timothy

  Rost, Peter

  Dykes, Hugh

  Knight, Mrs. Jill

  Royle, Anthony

  Eden, Sir John

  Knox, David

  Russell, Sir Ronald

  Edwards, Nicholas (Pembroke)

  Lambton, Antony

  St. John-Stevas, Norman

  Elliot, Capt. Walter (Carshalton)

  Lane, David

  Sandys, Rt. Hn. D.

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

  Le Marchant, Spencer

  Scott, Nicholas

  Emery, Peter

  Lewis, Kenneth (Rutland)

  Sharples, Richard

  Farr, John

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

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

  Fell, Anthony

  Longden, Gilbert

  Shelton, William (Clapham)

  Fenner, Mrs. Peggy

  Loveridge, John

  Simeons, Charles

  Fidler, Michael

  Luce, R. N.

  Sinclair, Sir George

  Finsberg, Geoffrey (Hampstead)

  McAdden, Sir Stephen

  Skeet, T. H. H.

  Fisher, Nigel (Surbiton)

  MacArthur, Ian

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

  Fletchcr-Cooke, Charles

  McCrindle, R. A.

  Soref, Harold

  Fookes, Miss Janet

  McLaren, Martin

  Speed, Keith

  Spence, John

  Thomas, John Stradling (Monmouth)

  White, Roger (Gravesend)

  Sproat, Iain

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

  Whitelaw, Rt. Hn. William

  Stainton Keith

  Thompson, Sir Richard (Croydon, S.)

  Wiggin, Jerry

  Stanbrook, Ivor

  Tilney, John

  Wilkinson, John

  Stewart-Smith, D. G. (Belper)

  Trafford Dr. Anthony

  Wolrige-Gordon, Patrick

  Stodart, Anthony (Edinburgh, W.)

  Trew, Peter

  Wood, Rt. Hn. Richard

  Stoddart-Scott, Col. Sir M.

  Tugendhat, Christopher

  Woodhouse, Hn. Christopher

  Stokes, John

  van Straubenzee, W. R.

  Woodnutt, Mark

  Stuttaford, Dr. Tom

  Vaughan, Dr. Gerard

  Worsley, Marcus

  Sutcliffe, John

  Waddington, David

  Wylie, Rt. Hn. N. R.

  Taylor, Sir Charles (Eastbourne)

  Walker, Rt. Hn. Peter (Worcester)

  Younger, Hn. George

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

  Walker-Smith, Rt. Hn. Sir Derek

  Taylor, Frank (Moss Side)

  Ward, Dame Irene

  TELLERS FOR THE AYES:

  Tebbit, Norman

  Warren, Kenneth

  Mr. Reginald Eyre and

  Temple, John M.

  Weatherill, Bernard

  Mr. Jasper More.

  Thatcher, Rt. Hn. Mrs. Margaret

  Wells, John (Maidstone)

  NOES

  Abse, Leo

  Foley, Maurice

  Mackenzie, Gregor

  Albu, Austen

  Foot, Michael

  Mackie, John

  Allaun, Frank (Salford, E.)

  Forrester, John

  Mackintosh, John P.

  Allen, Scholefield

  Fraser, John (Norwood)

  McMillan, Tom (Glasgow, C.)

  Archer, Peter (Rowley Regis)

  Freeson, Reginald

  McNamara, J. Kevin

  Armstrong, Ernest

  Galpern, Sir Myer

  MacPherson, Malcolm

  Ashley, Jack

  Garrett, W. E.

  Mahon, Simon (Bootle)

  Ashton, Joe

  Gilbert, Dr. John

  Mallallieu, E. L. (Brigg)

  Atkinson, Norman

  Ginsburg, David

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

  Bagier, Gordon A. T.

  Golding, John

  Marks, Kenneth

  Barnes, Michael

  Gordon Walker, Rt. Hn. P. C.

  Marsden, F.

  Barnett, Joel

  Gourlay, Harry

  Marquand, David

  Bennett, James (Glasgow, Bridgeton)

  Grant, George (Morpeth)

  Mason, Rt. Hn. Roy

  Bidwell, Sydney

  Grant, John D. (Islington, E.)

  Mayhew, Christopher

  Bishop, E. S.

  Griffiths, Eddie (Brightside)

  Meacher, Michael

  Blenkinsop, Arthur

  Griffiths, Will (Exchange)

  Mellish, Rt. Hn. Robert

  Booth, Albert

  Hamilton, James (Bothwell)

  Mendelson, John

  Hamilton, William (Fife, W.)

  Mikardo, Ian

  Bottomley, Rt. Hn. Arthur

  Hamling, William

  Millan, Bruce

  Boyden, James (Bishop Auckland)

  Hardy, Peter

  Miller, Dr. M. S.

  Bradley, Tom

  Harrison, Walter (Wakefield)

  Morgan, Elystan (Cardiganshire)

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

  Heffer, Eric S.

  Morris, Charles R. (Openshaw)

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

  Hooson, Emlyn

  Morris, Rt. Hn. John (Aberavon)

  Brown, Ronald (Shoreditch & F'bury)

  Horam, John

  Moyle, Roland

  Buchan, Norman

  Houghton, Rt. Hn. Douglas

  Mulley, Rt. Hn. Frederick

  Butler, Mrs. Joyce (Wood Green)

  Howell, Denis (Small Heath)

  Murray, Ronald King

  Callaghan, Rt. Hn. James

  Huckfield, Leslie

  Ogden, Eric

  Campbell, I. (Dunbartonshire, W.)

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  O'Halloran, Michael

  Cant, R. B.

  Hughes, Mark (Durham)

  O'Malley, Brian

  Carmichael, Neil

  Hughes, Robert (Aberdeen, N.)

  Oram, Bert

  Carter, Ray (Birmingh'm, Northfield)

  Hughes, Roy (Newport)

  Orbach, Maurice

  Carter-Jones, Lewis (Eccles)

  Hunter, Adam

  Orme, Stanley

  Clark, David (Colne Valley)

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

  Oswald, Thomas

  Cocks, Michael (Bristol, S.)

  Janner, Greville

  Palmer, Arthur

  Cohen, Stanley

  Jay, Rt. Hn. Douglas

  Pannel, Rt. Hn. Charles

  Conlan, Bernard

  Jenkins, Hugh (Putney)

  Parry, Robert (Liverpool, Exchange)

  Corbet, Mrs. Freda

  Jenkins, Rt. Hn. Roy (Stechford)

  Pendry, Tom

  Cox, Thomas (Wandsworth, C.)

  John, Brynmor

  Pentland, Norman

  Cronin, John

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

  Perry, Ernest G.

  Crosland, Rt. Hn. Anthony

  Johnson, Walter (Derby, S.)

  Prentice, Rt. Hn. Reg.

  Cunningham, Dr. J. A. (Whitehaven)

  Jones, Barry (Flint, E.)

  Prescott, John

  Dalyell, Tam

  Jones, Dan (Burnley)

  Price, J. T. (Westhoughton)

  Darling, Rt. Hn. George

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

  Price, William (Rugby)

  Davies, Denzil (Llanelly)

  Jones, Gwynoro (Carmarthen)

  Probert, Arthur

  Davies, G. Elfed (Rhondda, E.)

  Jones, T. Alec (Rhondda, W.)

  Reed, D. (Sedgefield)

  Davies, Ifor (Gower)

  Kaufman, Gerald

  Rees, Merlyn (Leeds, S.)

  Davis, Clinton (Hackney, C.)

  Kelley, Richard

  Rhodes, Geoffrey

  Deakins, Eric

  Kerr, Russell

  Richard, Ivor

  de Freitas, Rt. Hn. Sir Geoffrey

  Kinnock, Neil

  Roberts, Rt. Hn. Goronwy (Caernarvon)

  Delargy, H. J.

  Lambie, David

  Robertson, John (Paisley)

  Dempsey, James

  Lawson, George

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

  Doig, Peter

  Leadbitter, Ted

  Rodgers, William (Stockton-on-Tees)

  Dormand, J. D.

  Lee, Rt. Hn. Frederick

  Roper, John

  Douglas, Dick (Stirlingshire, E.)

  Leonard, Dick

  Rose, Paul B.

  Duffy, A. E. P.

  Lestor, Miss Joan

  Ross, Rt. Hn. William (Kilmarnock)

  Dunn, James A.

  Lever, Rt. Hn. Harold

  Sheldon, Robert (Ashton-under-Lyne)

  Edwards, William (Merioneth)

  Lewis, Arthur (W. Ham, N.)

  Shore, Rt. Hn. Peter (Stepney)

  Ellis, Tom

  Lewis, Ron (Carlisle)

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

  English, Michael

  Lomas, Kenneth

  Silkin, Rt. Hn. John (Deptford)

  Evans, Fred

  Loughlin, Charles

  Silkin, Hn. S. C. (Dulwich)

  Faulds, Andrew

  Mabon, Dr. J. Dickson

  Sillars, James

  Ferrnyhough, Rt. Hn. E.

  McBride, Neil

  Silverman, Julius

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

  McCartney, Hugh

  Skinner, Dennis

  Fletcher, Raymond (Ilkeston)

  McElhone, Frank

  Small, William

  Fletcher, Ted (Darlington)

  McGuire, Michael

  Smith, John (Lanarkshire, N.)

  1084

  1085

  Spearing, Nigel

  Torney, Tom

  Williams, Alan (Swansea, W.)

  Spriggs, Leslie

  Urwin, T. W.

  Williams, Mrs. Shirley (Hitchin)

  Stallard, A. W.

  Varley, Eric G.

  Williams, W. T. (Warrington)

  Stewart, Rt. Hn. Michael (Fulham)

  Wainwright, Edwin

  Wilson, Alexander (Hamilton)

  Stoddart, David (Swindon)

  Walker, Harold (Doncaster)

  Wilson, Rt. Hn. Harold (Huyton)

  Strang, Gavin

  Wallace, George

  Wilson, William (Coventry, S.)

  Strauss, Rt. Hn. G. R.

  Watkinis, David

  Woof, Robert

  Summerskill, Hn. Dr. Shirley

  Wellbeloved, James

  Swain, Thomas

  Whitehead, Phillip

  TELLERS FOR THE NOES:

  Taverne, Dick

  Whitlock, William

  Mr. Donald Coleman and

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

  Willey, Rt. Hn. Frederick

  Mr. Joseph Harper.

  Tinn, James

  RATING BILL
  Motion made, and Question, That the Bill be now read the Third time, put
  forthwith pursuant to Standing Order No. 55 (Third Reading):
  The House divided: Ayes 272, Noes 218.

  Division No. 343.]

  AYES

  [10.26 p.m.

  Adley, Robert

  Drayson, G. B.

  Irvine, Bryant Godman (Rye)

  Alison, Michael (Barkston Ash)

  du Cann, Rt. Hn. Edward

  James, David

  Allason, James (Hemel Hempstead)

  Dykes, Hugh

  Jenkin, Patrick (Woodford)

  Amery, Rt. Hn, Julian

  Eden, Sir John

  Jennings, J. C. (Burton)

  Archer, Jeffrey (Louth)

  Edwards, Nicholas (Pembroke)

  Jones, Arthur (Northants, S.)

  Astor, John

  Elliot, Capt. Walter (Carshalton)

  Jopling, Micheal

  Atkins, Humphrey

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

  Joseph, Rt. Hn. Sir Keith

  Awdry, Daniel

  Eyre, Reginald

  Kaberry, Sir Donald

  Baker, Kenneth (St. Marylebone)

  Farr, John

  Kellet, Mrs. Elaine

  Baker, W. H. K. (Banff)

  Fell, Anthony

  Kershaw, Anthony

  Balniel, Lord

  Fenner, Mrs. Peggy

  Kilfedder, James

  Barber, Rt. Hn. Anthony

  Fidler, Michael

  Kimball, Marcus

  Batsford, Brian

  Finsberg, Geoffrey (Hampstead)

  King, Evelyn (Dorset, S.)

  Beamish, Col. Sir Tufton

  Fisher, Nigel (Surbiton)

  King, Tom (Bridgwater)

  Bell, Ronald

  Fletcher-Cooke, Charles

  Kinsey, J. R.

  Bennett, Dr. Reginald (Gosport)

  Fookes, Miss Janet

  Kirk, Peter

  Benyon, W.

  Fortescue, Tim

  Kitson, Timothy

  Berry, Hn. Anthony

  Foster, Sir John

  Knight, Mrs. Jill

  Biffen, John

  Fowler, Norman

  Knox, David

  Biggs-Davison, John

  Fox, Marcus

  Lambton Antony

  Blaker, Peter

  Fry, Peter

  Lane, David

  Boardman, Tom (Leicester, S.W.)

  Galbraith, Hn. T. G.

  Le Marchant, Spencer

  Body, Richard

  Gardner, Edward

  Lewis, Kenneth (Rutland)

  Boscawen, Robert

  Gibson-Watt, David

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

  Bossom, Sir Clive

  Gilmour, Ian (Norfolk, C.)

  Longden, Gilbert

  Bowden, Andrew

  Gilmour, Sir John (Fife, E.)

  Loveridge, John

  Boyd-Carpenter, Rt. Hn. John

  Glyn, Dr. Alan

  Luce, R. N.

  Braine, Bernard

  Godber, Rt. Hn. J. B.

  McAdden, Sir Stephen

  Bray, Ronald

  Goodhew, Victor

  MacArthur, Ian

  Brewis, John

  Gower, Raymond

  McCrindle, R. A.

  Brinton, Sir Tatton

  Grant, Anthony (Harrow, C.)

  McLaren, Martin

  Brown, Sir Edward (Bath)

  Gray, Hamish

  Maclean, Sir Fitzroy

  Bruce-Gardyne, J.

  Green, Alan

  McMaster, Stanley

  Bryan, Paul

  Grieve, Percy

  Macmillan, Maurice (Farnham)

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

  Griffiths, Eldon (Bury St. Edmunds)

  McNair-Wilson, Michael

  Buck, Antony

  Gummer, Selwyn

  Maddan, Martin

  Bullus, Sir Eric

  Gurden, Harold

  Madel, David

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

  Hall, Miss Joan (Keighley)

  Maginnis, John E.

  Carlisle, Mark

  Hall, John (Wycombe)

  Marples, Rt. Hn. Ernest

  Channon, Paul

  Hall-Davis, A. G. F.

  Marten, Neil

  Chapman, Sydney

  Hamilton, Michael (Salisbury)

  Mather, Carol

  Chataway, Rt. Hn. Christopher

  Harrison, Brian (Maldon)

  Maude, Angus

  Chichester-Clark, R.

  Harrison, Col. Sir Harwood (Eye)

  Maudling, Rt. Hn. Reginald

  Clark, William (Surrey, E.)

  Haselhurst, Alan

  Mawby, Ray

  Clarke, Kenneth (Rushcliffe)

  Havers, Michael

  Maxwell-Hyslop, R. J.

  Clegg, Walter

  Hawkins, Paul

  Meyer, Sir Anthony

  Cockeram, Eric

  Hay, John

  Mills, Peter (Torrington)

  Cooke, Robert

  Heath, Rt. Hn. Edward

  Mills, Stratton (Belfast, N.)

  Cooper, A. E.

  Heseltine, Michael

  Miscampbell, Norman

  Cordle, John

  Hiley, Joseph

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

  Corfield, Rt. Hn. Frederick

  Hill, John E. B. (Norfolk, S.)

  Mitchell, David (Basingstoke)

  Cormack, Patrick

  Hill, James (Southampton, Test)

  Molyneaux, James

  Costain, A. P.

  Holland, Philip

  Money, Ernie

  Critchley, Julian

  Holt, Miss Mary

  Monks, Mrs. Connie

  Crouch, David

  Hordern, Peter

  Monro, Hector

  Crowder, F. P.

  Hornby, Richard

  Montgomery, Fergus

  Davies, Rt. Hn. John (Knutsford)

  Hornsby-Smith, Rt. Hn. Dame Patricia

  More, Jasper

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

  Howe, Hn. Sir Geoffrey (Reigate)

  Morgan, Geraint (Denbigh)

  Dean, Paul

  Howell, David (Guildford)

  Morgan-Giles, Rear-Adm.

  Deedes, Rt. Hn. W. F.

  Hutchison, Michael Clark

  Morrison, Charlies (Devizes)

  Dixon, Piers

  Iremonger, T. L.

  Mudd, David

  Murton, Oscar

  Roberts, Wyn (Conway)

  Thatcher, Rt. Hn. Mrs. Margaret

  Neave, Airey

  Rossi, Hugh (Hornsey)

  Thomas, John Stradiing (Monmouth)

  Nicholls, Sir Harmar

  Rost, Peter

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

  Noble, Rt. Hn. Michael

  Royle, Anthony

  Thompson, Sir Richard (Croydon, S.)

  Nott, John

  Russell, Sir Ronald

  Tilney, John

  Onslow, Cranley

  St. John-Stevas, Norman

  Trafford, Dr. Anthony

  Oppenheim, Mrs. Sally

  Sandys, Rt. Hn. D.

  Trew, Peter

  Owen, Idris (Stockport, N.)

  Scott, Nicholas

  Tugendhat, Christopher

  Page, Graham (Crosby)

  Sharples, Richard

  van Straubenzee, W. R.

  Page, John (Harrow, W.)

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

  Vaughan, Dr. Gerard

  Peel, John

  Shelton, William (Clapham)

  Waldington, David

  Percival, Ian

  Simeons, Charles

  Walker, Harold (Doncaster)

  Pike, Miss Mervyn

  Sinclair, Sir George

  Walker-Smith, Rt. Hn. Sir Derek

  Pink, R. Bonner

  Skeet, T. H. H.

  Ward, Dama Irene

  Price, David (Eastleigh)

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

  Warren, Kenneth

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

  Soref, Harold

  Wells, John (Maidstone)

  Proudfoot, Wilfred

  Spence, John

  White, Roger (Gravesend)

  Pym, Rt. Hn. Francis

  Sproat, Iain

  Whitelaw, Rt. Hn. William

  Quennell, Miss J. M.

  stainton, Keith

  Wiggin, Jerry

  Raison, Timothy

  Stanbrook, Ivor

  Wilkinson, John

  Ramsden, Rt. Hn. James

  Stewart-Smith, D. G. (Belper)

  Wolrige-Gordon, Patrick

  Rawlinson, Rt. Hn. Sir Peter

  Stodart, Anthony (Edinburgh, W.)

  Wood, Rt. Hn. Richard

  Redmond, Robert

  Stoddart-Scott, Col. Sir M.

  Woodhouse, Hn. Christopher

  Reed, Laurance (Bolton, E.)

  Stokes, John

  Woodnutt, Mark

  Rees, Peter (Dover)

  Stuttaford, Dr. Tom

  Worsley, Marcus

  Ree-Davies, W. R.

  Sutcliffe, John

  Wylie, Rt. Hn. N. R.

  Renton, Rt. Hn. Sir David

  Taylor, Sir Charles (Eastbourne)

  Younger, Hn. George

  Rhys Williams, Sir Brandon

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

  Ridley, Hn. Nicholas

  Taylor, Frank (Moss Side)

  TELLERS FOR THE AYES:

  Ridsdale, Julian

  Tebbit, Norman

  Mr. Keith Speed and

  Roberts, Michael (Cardiff, N.)

  Temple, John M.

  Mr. Bernard Weatherfil.

  NOES

  Abse, Leo

  Dormand, J. D.

  Jenkins, Rt. Hn. Roy (Stechford)

  Albu, Austen

  Douglas, Dick (Stirlingshire, E.)

  John, Brynmor

  Allaun, Frank (Salford, E.)

  Duffy, A. E. P.

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

  Allen, Scholefield

  Dunn, James A.

  Johnson, Walter (Derby, S.)

  Archer, Peter (Rowley Regis)

  Edwards, William (Merioneth)

  Jones, Barry (Flint, E.)

  Armstrong, Ernest

  Ellis, Tom

  Jones, Dan (Burnley)

  Ashley, Jack

  English, Michael

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

  Ashton, Joe

  Evans, Fred

  Jones, Gwynoro (Carmarthen)

  Atkinson, Norman

  Faulds, Andrew

  Jones, T. Alec (Rhondda, W.)

  Bagier, Gordon A. T.

  Ferryhough, Rt. Hn. E.

  Kaufman, Gerald

  Barnett, Joel

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

  Kelley, Richard

  Bennett, James (Glasgow, Bridgeton)

  Fletcher, Raymond (Ilkeston)

  Kerr, Russell

  Bidwell, Sydney

  Fletcher, Ted (Darlington)

  Kinnock, Neil

  Bishop, E. S.

  Foley, Maurice

  Lambie, David

  Blenkinsop, Arthur

  Foot, Michael

  Lawson, George

  Booth, Albert

  Forrester, John

  Leadbitter, Ted

  Bottomley, Rt. Hn. Arthur

  Fraser, John (Norwood)

  Lee, Rt. Hn. Frederick

  Boyden, James (Bishop Auckland)

  Freeson, Reginald

  Leonard, Dick

  Bradley, Tom

  Galpern, Sir Myer

  Lestor, Miss Joan

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

  Garrett, W. E.

  Lever, Rt. Hn. Harold

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

  Gilbert, Dr. John

  Lewis, Arthur (W. Ham N.)

  Brown, Ronald (Shoreditch & F'bury)

  Ginsburg, David

  Lewis, Ron (Carlisle)

  Buchan, Norman

  Golding, John

  Loughlin, Charles

  Butler, Mrs. Joyce (Wood Green)

  Gordon Walker, Rt. Hn. P. C.

  Mabon, Dr. J. Dickson

  Callaghan, Rt. Hn. James

  Gourlay, Harry

  McBride, Neil

  Campbell, I. (Dunbartonshire, W.)

  Grant, George (Morpeth)

  McElhone, Frank

  Cant, R. B.

  Grant, John D. (Islington, E.)

  McGuire, Michael

  Carmichael, Neil

  Griffiths, Eddie (Brightside)

  Mackenzie, Gregor

  Carter, Ray (Birmingham, Northfield)

  Griffiths, Will (Exchange)

  Mackie, John

  Carter-Jones, Lewis (Eccles)

  Hamilton, James (Bothwell)

  Mackintosh, John P.

  Clark, David (Colne Valley)

  Hamilton, William (Fyfe, W.)

  McMillan, Tom (Glasgow, C.)

  Cocks, Michael (Bristol, S.)

  Hamling, William

  McNamara, J. Kevin

  Coleman, Donald

  Hardy, Peter

  MacPherson, Malcolm

  Conlan, Bernard

  Harrison, Walter (Wakefield)

  Mahon, Simon (Bootle)

  Corbet, Mrs. Freda

  Heffer, Eric S.

  Mallalieu, E. L. (Brigg)

  Cox, Thomas (Wandsworth, C.)

  Hooson, Emlyn

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

  Cronin, John

  Horam, John

  Marquand, David

  Crosland, Rt. Hn. Anthony

  Houghton, Rt. Hn. Douglas

  Marsden, F.

  Dalyell, Tam

  Howell, Denis (Small Heath)

  Mason, Rt. Hn. Roy

  Darling, Rt. Hn. George

  Huckfield, Leslie

  Mayhew, Christopher

  Davies, Denzil (Llanelly)

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Meacher, Michael

  Davies, G. Elfed (Rhondda, E.)

  Hughes, Mark (Durham)

  Mellish, Rt. Hn. Robert

  Davies, Ifor (Gower)

  Hughes, Robert (Aberdeen, N.)

  Mendelson, John

  Davis, Clinton (Hackney, C.)

  Hughes, Roy (Newport)

  Millan, Bruce

  Deakins, Eric

  Hunter, Adam

  Miller, Dr. M. S.

  de Freitas, Rt. Hn. Sir Geoffrey

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

  Morgan, Elystan (Cardiganshire)

  Delargy, H. J.

  Janner, Greville

  Morris, Charles R. (Openshaw)

  Dempsey, James

  Jay, Rt. Hn. Douglas

  Morris, Rt. Hn. John (Aberavon)

  Doig, Peter

  Jenkins, Hugh (Putney)

  Moyle, Roland

  1088

  1089

  Mulley, Rt. Hn. Frederick

  Robertson, John (Paisley)

  Taverne, Dick

  Murray, Ronald King

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

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

  Ogden, Eric

  Rodgers, William (Stockton-on-Tees)

  Tinn, James

  O'Halloran, Michael

  Roper, John

  Torney, Tom

  O'Malley, Brian

  Rose, Paul B.

  Urwin, T. W.

  Oram, Bert

  Ross, Rt. Hn. William (Kilmarnock)

  Varley, Eric G.

  Orbach, Maurice

  Sheldon, Robert (Ashton-under-Lyne)

  Wainwright, Edwin

  Orme, Stanley

  Shore, Rt. Hn. Peter (Stepney)

  Walker, Harold (Doncaster)

  Oswald, Thomas

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

  Wallace, George

  Palmer, Arthur

  Silkin, Rt. Hn. John (Deptford)

  Watkins, David

  Pannell, Rt. Hn. Charles

  Silkin, Hn. S. C. (Dulwich)

  Wellbeloved, James

  Parry, Robert (Liverpool, Exchange)

  Sillars, James

  Whitehead, Phillip

  Pendry, Tom

  Silverman, Julius

  Whitlock, William

  Pentland, Norman

  Skinner, Dennis

  Willey, Rt. Hn. Frederick

  Perry, Ernest G.

  Small, William

  Williams, Alan (Swansea, W.)

  Prentice, Rt. Hn. Reg.

  Smith, John (Lanarkshire, N.)

  Williams, Mrs. Shirley (Hitchin)

  Prescott, John

  Spearing, Nigel

  Williams, W. T. (Warrington)

  Price, J. T. (Weethoughton)

  Spriggs, Leslie

  Wilson, Alexander (Hamilton)

  Price, William (Rugby)

  Stallard, A. W.

  Wilson, Rt. Hn. Harold (Huyton)

  Probert, Arthur

  Stewart, Rt. Hn. Michael (Fulham)

  Wilson, William (Coventry, S.)

  Reed, D. (Sedgefield)

  Stoddart, David (Swindon)

  Woof, Robert

  Rees, Merlyn (Leeds, S.)

  Strang, Gavin

  Rhodes, Geoffrey

  Strauss, Rt. Hn. G. R.

  TELLERS FOR THE NOES:

  Richard, Ivor

  Summerskill, Hn. Dr. Shirley

  Mr. Joseph Harper and

  Roberts, Rt. Hn. Coronwy (Caernarvon)

  Swain, Thomas

  Mr. Kenneth Marks.

  Bill accordingly read the Third time and passed.

  EDUCATION (SCOTLAND) BILL
  Not amended in the Standing Committee, considered.
  10.35 p.m.
  Mr. Speaker: Earlier in the day I caused to be posted my provisional selection of Amendments. I have decided upon reconsideration slightly to extend that selection. First there can be debated with new Clause 1, Amendment No. 6. With new Clause 2 and Government Amendments 24 and 25 I am prepared to have discussed new Clause 3 in the name of the hon. Member for Renfrew, West (Mr. Buchan); then the other Government Amendments, Amendment 13, Government Amendment 14 and the sub-Amendment thereto. I am also prepared to have Amendment 9, also stand-in the name of the hon. Member for Renfrew, West, discussed with that Amendment, and then Government Amendments 20 and 21.
  Mr. George Lawson: On a point of order. This is the most important piece of legislation that we shall have from the Scottish Office in this Session. We spent a long time in Committee discussing this Bill which, according to the Government, is of major importance. When we return to the House I would have expected that we would have had an opportunity for a substantial debate on these important matters. Despite the additions, for which I am grateful, is this not a restricted debate on such an important subject?
  Mr. Speaker: On these important matters I take very experienced advice, and I am told I have been unusally generous.
  Mr. Lawson: Further to that point of order. I can recall vividly in the fairly recent past that we spent many hours on Report discussing subjects that had been discussed thoroughly in Committee. I wonder whether the advice comes from the same source. Why should there be such a difference?
  Mr. Speaker: The hon. Member has been in the House a long time and he knows that this is not a matter for discussion. It is a matter vested solely
  1092
  in the discretion of the Chair. I have done my best to meet the points of view expressed.

  EDUCATION (SCOTLAND) BILL
    New Clause 1

      EFFECT OF ACT ON RATE SUPPORT GRANT
      In the application of section 4(1) of the Local Government (Scotland) Act 1966 (variation of rate support grant orders) to a rate support grant order made before the date of the coming into force of this Act for a grant period ending after that date, the Secretary of State shall have power to take into consideration any income accrued or likely to accrue, to education authorities (within the meaning of the Education (Scotland) Act 1962) and any relief obtained, or likely to be obtained, by them—

      (a) which is attributable to the coming into force of this Act; and

      (b) which was not taken into consideration in making the rate support grant order the variation of which is in question.

      The provisions of this section are without prejudice to section 4(4) of the said Act of 1966 (under which an order under that section may vary the matters prescribed by a rate support grant order).—[Mr. Edward Taylor.]
      Brought up, and read the First time.
      10.37 p.m.
      The Under-Secretary of State for Health and Education, Scottish Office (Mr. Edward Taylor): I beg to move, That the Clause be read a Second time.
      This Clause is being introduced in fulfilment of an undertaking I gave in Committee on 2nd February. Its purpose is to allow the Secretary of State to adjust rate support grant within the grant period 1971–73 to take account of any extra income or reduced expenditure arising from this Bill.
      Once a rate support grant order has been made, its terms can only be altered under the Local Government (Scotland) Act, 1966, to take account of the effects of unforeseen increases in the level of prices, costs or remuneration. No account can be taken under the 1966 Act of increases or decreases in expenditure which arise for other reasons such as new legislation or inaccurate forecasting. On the income side the Secretary of State is able to take account of the effects of increased charges but not of new sources of income. In these circumstances, there are problems when a new piece of legislation comes along which is likely to have a significant effect on total reckonable expenditure and which is to come into

      1093
      effect in the course of a grant period for which an order has already been made.
      The Secretary of State has two courses of action open to him. He can do what the right hon. Member for Kilmarnock (Mr. Ross) did when the Education (Scotland) Bill of 1969 was going through the House—that is, he can try to take account of the effects of the new legislation in the main rate support grant order before the Bill has become law. We considered the possibility of adopting this course of action, but when my right hon. Friend met the local authority associations in January to discuss the rate support grant settlement they made it clear that they did not like the idea of making the estimates in advance of the Bill becoming law. My right hon. Friend readily took their advice and as a result the Rate Support Grant (Scotland) Order, 1971, which this House approved on 16th March, makes no allowance for the effects of the Bill.
      Instead, as I explained in Committee on 2nd February, we are adopting the second possible course of action—and, by more or less common consent of all those directly concerned, the better one—which is to introduce a Clause enabling the Secretary of State to take account of the effects of the Bill in an increase order.
      It might be helpful if I were now to say a few words about the Clause. Under subsection (1) of Section 4 of the Local Government (Scotland) Act, 1966, the Secretary of State can make an order varying the terms of an existing rate support grant order, but under subsection (3) of the same Section he is able to have regard only to unforeseen increases in the level of price, costs and remuneration. The new Clause empowers him to take into consideration also any extra income or relief from the obligation to spend money which results or is likely to result when the Bill becomes law. This power will in practice apply only to an increase order for the grant period 1971–73 and the Secretary of State will make use of this power only after the usual negotiations with the local authority associations; and before an increase order which is made using this power can become effective it will have to come before this House for approval in the usual way. I commend the new Clause to the House.
      1094
      Mr. Speaker, you have indicated that we can discuss Amendment No. 6 at the same time and, therefore, it might be helpful if I said a few words about it. I am rather surprised to see the Amendment on the Order Paper. It is identical with Amendment No. 21 moved in Committee, which was discussed very briefly and then withdrawn. As I explained in Committee, the Amendment contains a fundamental flaw. It assumes that there is a system under which grants are made by the Government to individual authority schools. With the exception of grants towards the costs of nursery schools and classes in urban areas of special social need, this is simply not the case. As in the past, any fee-paying authority schools will simply be part of the authorities' provision for education, and expenditure on them will merit no special treatment. In arriving at the forecasts of reckonable expenditure on which rate support grant is based, the Secretary of State must take into account net expenditure by all authorities on the whole of their educational provision, including fee-paying schools—and this is just what the right hon. Member for Kilmarnock did when he was Secretary of State.
      These forecasts of reckonable expenditure will be affected by the reintroduction of fee paying, but the right way to deal with that is by the provisions of the new Clause which we have added to the Bill. This will enable the Secretary of State, in varying the main rate support grant order for 1971–73, to take into consideration income attributable to the coming into force of the Act. The Amendment would simply push up fees and remove freedom of choice from the less well-off. For these reasons, the right way to deal with the situation is that outlined in new Clause No. 1, which I hope will be accepted.
      Mr. Norman Buchan: I take it, Mr. Speaker, that I must first move Amendment No. 6, in—
      Mr. Speaker: It is not necessary for the hon. Gentleman to move the Amendment. He can discuss it with the new Clause.
      Mr. Buchan: Two points are involved. First, I shall discuss the new Clause.

      1095
      The Under-Secretary of State's attitude has not changed much since the Committee stage. What the Government have proposed is one way of dealing with the problem posed to them and I do not disagree with it, but it is shocking that it was only as a result of our discussion in Committee and my discussion with the Secretary of State on, I think, 16th March about the rate support grant that this problem was even seen. Behind this problem is a much murkier problem, namely, what is to happen about the rate support grant in Glasgow for the period during which charges were made in place of fees? The position was described by the right hon. Gentleman as totally unforeseen, but he nevertheless failed to condemn it. Will the new Clause cover the past year in Glasgow? I can see nothing to indicate that it does.
      10.45 p.m.
      I am willing to accept the new Clause as a means of dealing with the future position. The rate support grant will be affected, since fees will be charged if the Bill gets through, but the Bill does nothing to deal with the murky problem which arose when Glasgow used a method of charging contained in one Section of the Act to circumvent the declared will of Parliament to abolish fees in the fee-paying schools in Glasgow. We should have had an honest explanation of the Government's position and a condemnation of what has happened in Glasgow.
      On Amendment 6, it is precisely because the net expenditure in an area can be totalled that it is possible for the Department to do its sums and determine how much of the expenditure of an education authority falls to the fee-paying schools. There is no great difficulty in this. The number of pupils attending the schools is known, and the cost of running the schools can be estimated fairly accurately. There is no reason why the rate support grant cannot be reduced. There is nothing technically wrong with the Amendment from that point of view. The cost can be detected quite easily.
      The Minister said that this will have the effect of putting up fees and depriving people of their freedom of choice. But if parents want to buy privilege they must be prepared to pay for it, and not expect the rest of the nation to do so. Not only the local authority which decides to have fee-paying but the rest
      1096
      of Scotland will be affected by the rate support grant position, and penalised because Glasgow, Edinburgh or any other local authority wants to have fee-paying. Above all, let the cost be borne by the local authority which wishes to play ball with the curious reaction which has emerged from this squalid Government, and Amendment No. 6 will achieve this.
      Mr. John Brewis: Does this mean that the hon. Gentleman wishes to reduce the rate support to Glasgow?
      Mr. Buchan: It is doubtful that Glasgow will ever operate the Bill. There is to be an election on 5th May and the conspiracy and conniving over this Bill in the last six months is because the Tories in Glasgow know that they will lose the election and are attempting to get the Bill through before they do.
      Mr. John Smith
      Mr. Brewis: Would it not also have the effect of increasing the rate burden in the city of Glasgow?
      Mr. Smith: The actual amounts are very little. Hon. Members opposite shy away from the economic arguments. The only hon. Member opposite who deploys the economic argument is the hon. Member for Glasgow, Hillhead (Mr. Galbraith), who thinks that it is right to charge fees because it will cut down costs. But this antediluvian approach to education is not shared by other hon. Members opposite.
      The answer was given by the Under-Secretary of State for Scotland in a celebrated speech during the 1969 Bill when he said that the matter of fees was irrelevant and that selection was the real issue. The present Government seeks to bring back selectivity by withdrawing the circular on comprehensives and issuing another circular embodying selectivity in order to achieve the objective of the Under-Secretary, but they still must have their fees.
      This is the first piece of controversial legislation which the Scottish Conservative Party have sought to introduce into Parliament. It perpetuates the situation of snobbery on the cheap. The reason people send their children to fee-paying schools is that they think it will cut them off from other children and feel that their children will receive a better education if they are fenced round with
      1098
      fees. I do not know what justification there is for it. It is curious when one remembers that the Under-Secretary said in Committee that if we implement the idea proposed in the Amendment, we shall destroy freedom of choice and that, if the fees are too high, there will not be freedom of choice. That means that there must be no freedom of choice over the vast area of Scottish education because there are so few people in the fee-paying system, either direct grant, independent, or local authority fee-paying.
      Of course we should have freedom of choice. Parents should be free to decide where they send their children. But we do not need fees for that. It is curious how, whenever freedom is mentioned by hon. Gentlemen opposite, money is always close by in their minds. Freedom is always related to the privilege that money buys. What crimes are committed by hon. Gentlemen opposite in the name of freedom.
      Mr. Ian MacArthur: By the hon. Gentleman's argument, he is restricting freedom of choice to the very rich.
      Mr. Smith: The hon. Gentleman speaks from a profound misunderstanding of the approach adopted by this side of the House. We say that there will never be proper opportunity in education while we have these gradations of privilege. We say that if they were restricted to the very rich, which might be the effect of our Amendment, that would have such a small impact on the educational system that it would not have a deleterious effect on the rest. In Edinburgh, we have a highly selective and fee-paying system, but the effect on the non-fee-paying state schools is disastrous. When we get to the higher ranges of secondary education, the vast majority of children are in either the direct grant schools or the local authority fee-paying schools. The head of the classes has been taken off and put into these schools.
      The vast majority of children in Edinburgh and Glasgow go to local authority non-fee-paying schools, and it is more important to look at their interests. It is their interests which are being harmed. It is not a satisfactory situation where there is creaming off and separation of

      1099
      children into different types of education. We are trying to minimise the caste system of education which exists in Edinburgh, which must have the worst educational set-up in the United Kingdom. It is difficult to think of another city with more gradations. Perhaps it reflects the social outlook of the city itself. If so, it is high time that it was changed.
      When the South-East Regional Council is set up, I hope that we shall see an end of local authority fee-paying schools Our only comfort is that such damage as will be done by the Bill will not exist in Glasgow and will be short-lived in Edinburgh.
      The general effect of our Amendment is to restrict the operation of local authority fee-paying schools. To the extent that it does that, it will minimise the harm that this squalid Bill seeks to do to the education of the majority of children in Scotland. There are a million children in local authority non-fee-paying schools, and a few thousand in local authority fee-paying schools. In the name of the alleged freedom of a few thousand children, the party opposite is prepared to damage the educational opportunities of the million children in State schools who are the prime concrn of this side of the House.
      10.59 p.m.
      Mr. Dick Douglas: I welcome the opportunity to obtain some information from the Under-Secretary about the new Clause, the direct intention of which is fairly complicated. As the hon. Gentleman knows, the formula for rate support grant comprises a lengthy series of averages amounting in total to a weighted average, resulting at the end of the day in the distribution of a global sum. I hope that the hon. Gentleman will make it clear that the effect of the Clause will not to be reduce the global sum. If the effect is to reduce the global sum, that will fulfil the intention of the Opposition Amendment and strike at those local authorities which provide fee-paying schools by cutting their rate support grants.
      11.0 p.m.
      I seek advice about this. It seems to me that the effect of the new Clause will be to reduce the global sum without
      1100
      necessarily reducing that proportion going to local authority areas with fee-paying schools. If so, I should like the Under-Secretary to come clean and say so, because that is not an intention which I could support. If I am wrong, I shall accept the hon. Gentleman's explanation, but if I am right, this will be a disgraceful back door method of glossing over the Government's intentions.
      Mr. Edward Taylor: By leave of the House, we have had a knowledgeable contribution from the hon. Member for East Stirlingshire (Mr. Douglas), to which I shall reply later, and the usual emotive language and comments from the hon. Member for Renfrew, West (Mr. Buchan) and his colleague, the hon. Member for Lanarkshire, North (Mr. John Smith). They succeeded, as they did several times in Committee, in introducing so many red herrings that I wondered whether the hon. Member for Renfrew, West was trying to set himself up as an expert on Comintern fisheries policy.
      He asked whether the new Clause allowed for clawing back from Glasgow fees charged under the 1969 Act for social, cultural and recreational activities. The answer is that it does not and the reason is precisely that the 1969 Act, under which these fees were charged, did not provide for clawing back through the rate support grant. We are correcting that situation for the future, but at the moment we have no power to claw back under the 1969 Act.
      Mr. Buchan: The hon. Member is saying, then, that fees were charged by the Glasgow Tories for which they had no legislative power and that no rectification will be made and that the Government are not willing even to condemn that.
      Mr. Taylor: I am saying nothing of the sort. These fees were paid for those attending these schools under the 1969 Act, and Glasgow Corporation has expressed the view that it was making legal use of the powers available. Glasgow Corporation has stated the position clearly and said that it believes that it was making legal use of these powers. It is not the case, as the hon. Member is trying to imply, that we are taking any action. The 1969 Act did not provide for any income accruing to local authorities under this part of the Act to be clawed back through the rate support grant.
      Mr. Buchan: The hon. Gentleman says that Glasgow claims that it believes that it was acting legally. I am now asking him, in the presence of the Lord Advocate, whether the Government believe that the Corporation was acting legally and, secondly, whether the hon. Gentleman thinks that it was acting morally.
      Mr. Taylor: I have no intention of answering hypothetical questions of that kind; nor have I any wish to give legal interpretations.
      Mr. MacArthur: Whether the hon. Member for Renfrew, West likes it or not, surely Glasgow, by making these charges, was acting in accordance with Section 1 of the 1969 Act which was passed by the Labour Government. If the hon. Gentleman wishes to make any criticism, it should not be of us or of Glasgow, but of his colleagues who drafted the Act.
      Mr. Taylor: My hon. Friend is correct.
      Mr. Buchan Mr. Buchan rose—
      Mr. Taylor: I think that I should try to proceed with the reply. I shall not give interpretations on the way that the law is being applied in Glasgow. In fact, Glasgow has indicated that it believes that it is making a perfectly legal use of the provision in the 1969 Act. I emphasise that this is not our Act. This Act was introduced by the hon. Member for Glasgow, Craigton (Mr. Millan) and was approved by the party opposite.
      The hon. Member for Renfrew, West asked: why are we not making provision for clawing this back in rate support grant? It is not because of any decision of this Government, but because there is no provision in the 1969 Act for this to be done.
      Mr. Buchan: Is it legal?
      Mr. Michael Clark Hutchison: The hon. Member for Renfrew, West accuses Glasgow all the time. If he thought that Glasgow was wrong, why did he not take the matter to the court and find out?
      Mr. Taylor: Some disreputable things have been said about Glasgow, and indeed about the educational systems in Glasgow and Edinburgh, of which hon. Gentlemen opposite should be ashamed.
      1102
      The hon. Member for Renfrew, West made no secret that the effect of the Amendment would be to shove up fees to a substantial figure which would put these schools well outwith the reach of the vast majority of people in Scotland in local authority areas which might consider introducing these schools.
      In effect, the hon. Gentleman is proposing, as my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) rightly said, that we should have freedom of choice in education for the rich only and for nobody else. This is the effect of the Amendment.
      The hon. Member for Lanarkshire, North said that it was all about privilege. The hon. Gentleman, like many hon. Gentlemen opposite, seems to be obsessed with class. I am wondering what he meant by "privilege". He seemed to be arguing this matter in relation to the privilege of selection; that privilege was being in a selective school. The hon. Gentleman said that if parents wanted privilege of this kind then they should pay for it. Is the hon. Gentleman suggesting that in a selective school fees should automatically be charged and that they should be at an astronomical level?
      If, on the other hand, it is nothing to do with the selective system but with the hon. Gentleman's obsession with class and that it is the class of children which should be related to the fees, is he not aware of the situation which inevitably arises under a universal territorial comprehensive scheme that there will be wide variations in the class structure of the various territorial schools? The hon. Gentleman's argument is absurd and I do not think the House would accept it.
      I turn now to the point raised by the hon. Member for East Stirlingshire. Under the new Clause, any alterations made in the rate support grant will apply to the total sum. This is the basis of any change of this kind which is made. The distribution to which the hon. Gentleman referred is discussed by the local authorities and a decision is arrived at by them. I suggest that, in view of the precedents on alterations of this kind, this is not the place to make any fundamental change on the basis of calculation and the distribution of the rate support grant.
      Mr. Lawson: The Under-Secretary has given a most unsatisfactory answer. Indeed, he has not answered the case at all. I am still not satisfied about the way in which this allocation is made in the first place. Without repeating the figures which were quoted on many occasions upstairs, we should be told how this operates. Consider, for example, the problem which faces Edinburgh. Apart from one other authority in Scotland, the item we are discussing costs less per head of the population in Edinburgh than in any other authority, but the Under-Secretary has not bothered to deal with this. It is too fundamental for him.
      Is a lump sum available in Scotland for expenditure of this sort? If less goes to Edinburgh, will more go to other authorities. On the other hand, if more goes to Edinburgh, is there less available for other authorities? It is a pity that the hon. Member for Galloway (Mr. Brewis) is not in his place because he holds interesting views about fee paying, rate saving and so on.
      It should not be forgotten that the parents of the majority of children—those who leave school at 15—pay taxes in a host of ways, direct and indirect, through P.A.Y.E. and the tax on smoking and drinking. They cannot escape their taxes. Meanwhile, some of the finest mathematical brains are at work to see how people can avoid or evade their taxes. Hon. Gentlemen opposite applaud these activities. As long as one is within the law, even if one is acting against the spirit of the wishes of this House, that is all right by them.
      The majority of youngsters leave school at 15. It costs five times more to educate a youngster who goes through senior secondary school and on to university than it does to educate a youngster who leaves at 15. I do not deplore this, but I want it understood. Often it is the very people who complain about paying taxes and carrying the rest of society on their shoulders who are being carried by the population. The great pity is that so many of our youngsters get so little education; that in so many schools it does not matter what the standards are; that two-thirds of our youngsters in this proud Scotland of ours leave school without any kind of qualification whatsoever—not even the lowest qualification.
      1104
      11.15 p.m.
      We are dealing with a serious matter, and I want to know from the hon Gentleman how this scheme will operate. The extra money charged in respect of fees is charged for no other reason than to buy a privilege for the children going to these schools. This is the root of the matter. We have found out that if the parents of children at these schools can continue to keep them there without paying the fee they very quickly want to do just that.
      How will this scheme operate? When Edinburgh makes a sizeable income from fees, will that mean that additional money will be available for areas such as my own? If it is not to operate like that, will it operate so as to reduce the total amount coming to Scotland, and so injure areas such as my own?
      Mr. Edward Taylor: The hon. Member for Motherwell (Mr. Lawson) has raised an important point. It is because this is a complicated matter that I made rather a long speech in introducing the new Clause. What we are here doing is allowing the Secretary of State to adjust the rate support grant within the grant period 1971–73 to take account of any extra income or reduced expenditure arising from the Bill. We are not introducing any new principle for the distribution of rate support grant, but introducing a new Clause which deals with transitional provision within the rate support grant period 1971–73.
      The hon. Gentleman raises a much wider question, but the new Clause is concerned with the assessment of the total reckonable expenditure and total rate support grant for the country as a whole. Until 1970 account has always been taken in the rate support grant of income from school fees in assessing total reckonable expenditure. The new Clause merely provides for the restoration of the normal position which has existed in this regard and in many other regards over previous years. The grant distribution formula is very much a matter for the local authority associations themselves to deal with.
      Mr. Lawson: Is the hon. Gentleman saying that the fact that Edinburgh has been charging fees affects the total grant available to Scotland, and does not that mean that my area and all other areas

      1105
      have lost money to divide amongst themselves? Is not that the position?
      Mr. Taylor: The position is, to paraphrase what the hon. Gentleman says, that it is net reckonable expenditure that is taken into account. If new income arises, that has an effect on the total grant available for Scotland, and if new expenditure arises, that has an effect on the total grant for Scotland. That is the position that has existed. But the hon. Gentleman is dealing with the wider question of the reform of the whole system, which is something we should not consider in relation to the new Clause. The new Clause deals with transitional arrangements for the grant period 1971–73.
      Mr. Lawson: But the hon. Gentleman has answered—
      Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order.
      Mr. Lawson: With respect, Mr. Deputy Speaker, as I understand the position, this is the Second Reading of a new Clause. It is not the Report stage, and if that is so—
      Mr. Deputy Speaker: It is quite true that it is the Second Reading of a new Clause, but the hon. Gentleman cannot make two speeches: we are not in Committee.
      Mr. Lawson: I am not making two speeches, but asking a question.
      Mr. Deputy Speaker: If the Under-Secretary of State does not choose to answer that is the end of the matter.
      Question put and agreed to.
      Clause read a Second time and added to the Bill.

    New Clause 2

      AMENDMENT OF SECTION 7 OF EDUCATION (SCOTLAND) ACT 1962
      In the Education (Scotland) Act 1962 for subsection (3) of section 7, there shall be substituted the following subsection:—
      "(3) An education authority may at any time and shall if and when so required by the Secretary of State, or when any such scheme or modification introduces the charge ing of fees for school education in any school under their management, prepare and submit for his approval a revised scheme or
      1106
      modification of an existing scheme under this section."—[Mr. Buchan.]
      Brought up, and read the First time.
      Mr. Buchan: I beg to move, That the Clause be read a Second time.
      This covers not the same but related ground to two basic themes which we feel vital before proceeding further with the Bill. The first is that we tried to get from the Under-Secretary a full explanation as to whether or not any scheme of modification brought forward by a local authority was caused merely because of the introduction of fee paying required to go before the Secretary of State.
      As I recall his defence, which was very involved, he allied it to the general powers laid down upon the Secretary of State. If this is the case, he can have no objection to our setting it out in the form in which we have in New Clause 2, because what the Clause does is merely to spell out that if fee paying is introduced in any way, a scheme must be put forward; in other words, not only in the situation when local authorities are required to do so by the Secretary of State but, in any such situation, this must be brought forward to the Secretary of State.
      Linked with that—and I am grateful to Mr. Speaker for allowing discussion of New Clause 3—is the point of simple democracy that if the Secretary of State decides to approve of a scheme which involves fee paying, that scheme must be brought before these Houses of Parliament. Our reason, above all, for doing that is partly answered by the dodging that we saw on the Front Bench during the last discussion. They still have not answered the question as to whether they believe Glasgow is behaving legally. It is for this reason that this Government, of all Governments, cannot be left to approve of a scheme coming forward, because we do not trust the Government. That is why schemes must be brought before the House to be looked after. That is the important thing.
      I am told that this is interfering with local freedoms and local authority powers. We have gone through this for a long time. We limit local authority freedoms and powers considerably. The Government are about to limit their power enormously on the question of

      1107
      local authority power to decide their rents and even the number of houses that they build. We see housing subsidies coming forward. I want no more rubbish of that kind from the Under-Secretary.
      We are asking, as a matter of simple democracy and so that the scheme can be discussed, having compelled the Government to insist on schemes of modification being brought forward, that they should be brought forward to the House for discussion.
      We are to discuss Amendments No. 24 and No. 25. As I understand the procedure at this stage of a Bill, it will be only when they come in their proper order at the end of the day that there can be voting on those two Amendments, but we discuss them now. This is how the muck becomes muckier. The Amendments say that despite the Acts that exist—the Government go back to the year 1889 to carry out their plots and to change the Act of 1889 to try to facilitate the submission of schemes and the approval of schemes by the Secretary of State—even before the Bill has gone to the House of Lords, this is what will happen. As of the passing of the Bill and before it becomes an Act on 1st August, local authorities can already start preparing their schemes and the Secretary of State can start approving them. Why? It is for the same reason that has necessitated the tabling of New Clause 1. The Government introduced the Bill hurriedly because they wanted to get it through before they were defeated at the local elections at Glasgow. That is the reason for the haste and that is why any schemes must be submitted to and be approved by the Secretary of State.
      I have never known a Government and a party in a city who were so convinced of their defeat in the May elections as this Government. It is a proclamation of defeat. That is the significance of Amendments Nos. 24 and 25. We will have no part in it. It is squalid and sordid, as have been preceding events today. When we reach Amendments Nos. 24 and 25, we shall seek to reject them.
      I hope that my hon. Friends, if not hon. Members opposite, will in the interests
      1108
      of democracy be prepared to support the new Clauses and that all sides of the House will, when we reach Amendments Nos. 24 and 25, show their contempt for the squalid little deal which has been unfolded over the last few months.
      Mr. Edward Taylor: It is unfortunate that once again the hon. Member for Renfrew, West (Mr. Buchan) has approached this technical and important matter in this very emotive and aggressive way. The hon. Gentleman referred to conspiracies and deals, which we have all along denied and which I again deny.
      As to the question which the hon. Gentleman once again raised about the use which Glasgow made of the previous Government's 1969 Act, I make it clear that it is not the job of my right hon. Friend or myself to give legal decisions in the House of Commons; but for the avoidance of doubt I will say that I have no reason to believe that Glasgow acted in any way illegally.
      As to the important question about the submitting of schemes, I promised during the 24th sitting of the Standing Committee to consider what had been said by the hon. Gentleman and to write to him. I wrote to the hon. Gentleman on 31st March, and in the preparation of the letter I had the benefit of the Lord Advocate's advice. That letter confirmed the line I had taken in Committee.
      In view of that letter and in view of the assurances which I gave in Committee and which I repeat now, I suggest that there is no need for the Clause. There is no dispute between us about the procedure which should be followed, and the 1962 Act already provides for it. In addition, the House may wish to know that a circular to be issued by the Scottish Education Department after the passing of the Bill, if it becomes law, will make it clear that the Secretary of State will require a revised scheme or modification of an existing scheme to be submitted to him where it is proposed to charge school fees. I hope that this will make it clear beyond any doubt that, if there is a proposal to charge fees in Scottish local authority schools, it will need the submission of a modification of a scheme or a new scheme.
      New Clause 3 in effect seeks to amend Section 70 of the 1962 Act subsection (2) of which deals with a dispute between

      1109
      the education authority and the Secretary of State about the latter's modification or amendment of a scheme. If an authority were aggrieved by the Secretary of State's modification or amendment of a scheme which included fee-paying schools the matter could be brought before Parliament. But it seems quite unnecessary to include a provision to bring before Parliament every scheme or modification for the introduction of fee paying.
      11.30 p.m.
      The new Clause illustrates the Opposition's unwillingness to trust education authorities. The authorities already have to obtain the Secretary of State's approval to their schemes, and this will continue in relation to any schemes for the introduction of fee paying. It is entirely contrary to the spirit of the Bill, which is designed to restore freedom to education authorities, to impose a further restriction on the implementation of decisions taken by education authorities in the light of local circumstances. I could not recommend the House to accept new Clause No. 3.
      I was disappointed by the way in which the hon. Member for Renfrew, West approached Amendments No. 24 and 25, which are technical Amendments designed for a straightforward and practical purpose. In case it may be required, Amendment No. 24 gives the necessary statutory cover so as to allow any authority which may wish to use it to take the necessary preliminary steps to restore the charging of fees in the session 1971–72. As the House knows, the Bill, when enacted, will come into force on 1st August 1971. As I said in Committee, we chose that date since authorities make their arrangements on a year-to-year basis, and 1st August 1971 was the earliest convenient date.
      Both in Committee and on new Clause No. 2 we have already discussed the need for authorities intending to restore fees to submit revised schemes or modifications of existing schemes. The Amendment removes any doubt about whether the Secretary of State or any authority can take the necessary preliminary steps towards the restoration of fees between the date of the passing of the Bill and 1st August 1971.
      That is entirely reasonable and consistent with the spirit of the Bill and the
      1110
      comments and statements made by my right hon. Friend. It is clear. We have named the date in the Bill. All the Amendment does is to remove any doubt on the matter: 1st August is the appropriate date.
      Mr. Buchan: Why was this not included in the Bill in the first place?
      Mr. Taylor: We listened, as we always do, to the observations of the hon. Gentleman and his hon. Friends in Committee. It appeared to me, on hearing some of the speeches, that it was necessary to remove any doubt on this point. It seemed that there was, perhaps, some doubt about it, and to that extent I thought it better to deal with it. That is what we have done.
      Mr. Buchan: When was this question raised by the Opposition? It is news to me.
      Mr. Taylor: The matter was not specifically raised. If it had been, I should certainly have referred to it. We discussed many aspects of these matters, and I gave constant consideration not only to the arguments advanced by the Opposition but to their implications, too. It seemed to me appropriate to check up on every part of the Bill to make sure that there was no doubt about anything. It was in part of that consideration that I thought that there was, perhaps, some doubt on this matter, and I thought that it ought to be removed. I have introduced these two Amendments for that reason.
      iMr. Robert Hughes: The Under-Secretary of State said that new Clause No. 3 showed that we did not trust the local authorities, to which, he said, the Bill would give great freedom. One can only judge how much trust to put in local authorities by the behaviour of particular authorities in relation to education. Moreover, it is not just a question of trusting local authorities; it is a question also of how far we trust the Secretary of State to look closely at schemes which are laid before him.
      I remember the occasion when the Secretary of State's friends on the Aberdeen Town Council had a majority and, therefore, controlled the education committee. The scheme of comprehensive

      1111
      education which had been carefully prepared by the Labour-controlled education authority, in conjunction with education experts, came under review. Some very odd things came out of the review. That is why we wonder very much about giving this so-called freedom to local authorities.
      One of the schemes proposed was to the effect that certain schools in Aberdeen should remain as single-sex schools, and that to preserve freedom of choice not only should they be comprehensive on a single-sex and area basis but there should be freedom to all people within the city to choose which kind of education should be available It was pointed out to those in charge of the education authority that because the two schools chosen as single-sex schools were also the two with the highest educational reputation in the city parents might have a hangover from the bad old days and feel that it would be desirable to send their children to those schools, because there might still be better education there, and therefore there might be more applications than there were places. That question was put directly to the Progressive convenor of education, "How will children to go to those schools be selected if there are insufficient places for the number of applicants?" We had the astonishing proposal that the places would be allocated by ballot. I do not know of a more ridiculous method.
      The so-called Progressive members of Aberdeen local authority have for years sailed under false colours, and are only now beginning to call themselves Conservatives and come into the open. We wonder at the tortuous reasoning in their minds. If they consider it to be reasonable to allocate education places by ballot, we wonder how far it would be regarded as reasonable by the Secretary of State. It is precisely because of the tie-up between those in control of the Scottish Office today and people who might by some grave mischance once again have control of local education services that we seek to preserve the right to have schemes brought before the House where at least we have a chance to discuss and expose the mad reasoning that is sometimes behind them.
      The policy of fee-paying schools is dressed up in all kinds of language—freedom of choice and all the rest But it is
      1112
      strange that when the crunch comes and people are expected to pay the true cost of education, which one of our defeated Amendments would have made them pay, suddenly all these things are revised, and we hear all kinds of false statements about freedom for the rich and not the vast majority. The education system that is in the process of being changed has always led to privilege in education for the rich. It is precisely that kind of thing that we want to change. Because of the very odd reasoning behind it, I should like the Under-Secretary of State to say now that he would never approve of such a scheme as I have mentioned. I hope that he will find it in the interests of democracy and freedom to agree to the Clause being accepted as it stands.
      Mr. James Sillars: The Under-Secretary presented Amendments No. 24 and 25 as being merely technical issues, to straighten the lines of communication between the Scottish Education Department and the local authorities. He said that we did not have to worry about them, because they dealt with a simple little technical matter between the administrators at central Government and local government level, and that they were nothing to get annoyed about.
      I am sure that the hon. Gentleman will not mind my saying that we have a number of very sound reasons for doubting the political integrity of the Conservative Party in Government. We had very clear demonstrations of these earlier this evening in our debate on the Bill to denationalise State pubs. We are all aware of the fact that the Under-Secretary of State has dashed North on occasion to meet people in Cathcart Conservative Association to try to resolve problems there. There was some suspicion that he might have done a deal with Councillor Wylie. However, he has denied it and we will have to accept what he says because we were not present at those meetings.
      Mr. Edward Taylor: For the avoidance of doubt, may I say that we have no problems in the Cathcart Conservative Association.
      Mr. Sillars: The Under-Secretary has many problems in his Association. We have some reason to doubt the political

      1113
      integrity of the Conservatives in this matter. This is a crucial period in Glasgow's history since in two weeks from now the first Labour victories will be rolling out of the ballot boxes and Labour will be on the way to controlling the city.
      The hon. Gentleman can clear up the whole issue as to his Governments integrity and intentions in this matter. A letter sent by the Secretary of State for Scotland to my right hon. Friend the Member for Kilmarnock (Mr. Ross), as recorded in the Sixteenth Sitting of the Committee upstairs, said:
      "Before any authority can reimpose fees a modification of the scheme of educational provision will have to be submitted to me. All authorities are well aware of this and I shall of course be arranging for a circular about the Bill to be issued as soon as it is enacted."
      The Under-Secretary mentioned the issue of a circular. Do we take it that the circular will not simply indicate to local authorities that the Bill has become an Act because they can all read this in the Press or in the reports of parliamentary proceedings? Any reasonable circular sent out by a sensible Government would give some guidelines to local authorities about two very important aspects of the Bill: the definition of "limited" in its application to the number of schools for which fees can be charged and the definition of the word "adequate" in relation to the so called free education that applies in non fee-paying schools in a local authority area. It is important that we should be given an adequate definition.
      May we be given an assurance by the Under-Secretary that between now and two weeks' time—in other words, before the municipal elections in Glasgow—there is no possibility of the Government issuing their circular and the Glasgow education authority setting out its intentions so that approval can be given in that two-week period by the Secretary of State? I am not sure whether the Under-Secretary has agreed or disagreed with this suggestion. He is as mixed up on these matters as he is about his position vis-à-vis the Common Market. I hope that we will have a categoric statement that at no time in the next fortnight will Glasgow be allowed to go forward with a modified educational provision, including the matter of fees.
      11.45 p.m.
      Mr. Lawson: I should like to have some explanation about any changes which are to be made in the law, and here I address myself to the Lord Advocate. Amendment No. 24 says
      "Without prejudice to the operation of section 37 of the Interpretation Act 1889…"
      That Section, which I have before me, is concerned with giving to the Minister concerned, powers to take certain actions in the interim. There are many things that can be done. There is mention of the issuing of notices. It may be that officers have to be appointed or offices set up. There are many preliminary or interim activities relating to the coming into operation of any Measure.
      Unless I am mistaken this Amendment gives an education authority the power to take action and put through a motion which may be bitterly opposed and which cannot be reversed for a long time. This is a substantial power. The Under-Secretary says that this is to remove doubt, but I want to know whether the existing position as laid down in Section 37 of the 1889 Act has been used to give some authority than the Government the power to engage in substantial activities.
      An education authority is being given the power to decide to do something which up to a point is illegal. The necessary decision has been taken, the scheme has been submitted to the Secretary of State and approval has been given and the scheme is ready to come into operation on the commencing date. This is a very different set of circumstances from the circumstances which seem to be disscribed in Section 37. I want to know whether this change in the law is being made or whether there are established precedents for this.
      Mr. Edward Taylor: Once again we are grateful to the hon. Member for Motherwell (Mr. Lawson) for the careful way in which he has studied this matter. I hope that the information I am about to give will be helpful. The subsection is without prejudice to Section 37 of the 1889 Act.
      Mr. Lawson: What does that mean?
      Mr. Taylor: It means that Section 37 still stands. It still exists. It makes provisions similar to those contained in the Amendment in relation to Statutes

      1115
      generally which do not come into operation immediately. As there might be room for doubt as to whether what is covered by the Amendment is in the terms of that Section the Amendment seeks to make the position clear. It safeguards the provisions of Section 37 and at the same time spells out the position in relation to the Bill in detail. Section 37 exists, but, in view of the very careful arguments of the Opposition, I wished to make sure that there was no doubt about the matter.
      Similar considerations have arisen in recent and not so recent legislation. The formula used in the proposed subsection (3A) is not an innovation. It is purely a machinery provision which is well precedented in, for example, Section 117 of the Mental Health (Scotland) Act, 1960, Section 36 of the Hire Purchase Act, 1964, Section 4 of the English Education (No. 2) Act, 1968, and more recently in Section 132 of the Post Office Act, 1969. I hope that those precedents show that we are not making a constitutional innovation but are simply using machinery used in other Acts for no doubt similar reasons. I hope that that information is helpful to hon. Members.
      Mr. Lawson: The hon. Gentleman must not look tired and annoyed. He has recited a number of Acts, but he has not answered my question. The Government's proposal gives education authorities very extensive powers of action during a period when a Measure is not an Act. Do the Acts to which the hon. Gentleman has referred give bodies other than the Government power to do certain things?
      Mr. Taylor: The advice which I have received—and I always consult the Lord Advocate on important matters—is that the answer to the hon. Gentleman's question is "Yes".
      Mr. Douglas: Is there any precedent in any Act for giving this power to bodies external to the Government?
      Mr. Taylor: I have given several precedents which I hoped would be helpful. We are not dealing with a legal argument but simply facilitating legislation. A date has been clearly spelled out in the Bill. The Government have made their intentions clear. It was our intention, on the passing of the Bill, that authorities which
      1116
      wished to do so could take the necessary steps to provide for fee-paying in the forthcoming session. No one can suggest that our intentions have been in any doubt. We are merely facilitating legislation and removing any doubt there may be.
      The hon. Member for South Ayrshire (Mr. Sillars) was concerned lest there was any possibility of the circular being sent out over the next two weeks. It is unlikely that the Bill will have passed through all its stages in the next two weeks. If it completed all its stages in the next two weeks, that would be a possibility. But I give the clear assurance that the circular will not be issued until the Bill is enacted.
      The hon. Member for South Ayrshire asked whether the circular on the Bill would give guidance on the meaning of the words "limited" and "adequate". The answer is, no, because it is not the function of a circular of this type to interpret the law. In submitting any modification of a scheme, an authority would have to reach a view on "limited" and "adequate". It will then be for the Secretary of State to consider whether to approve the modification.
      The hon. Member for South Ayrshire said that we were obsessed with the situation in Glasgow. The hon. Gentleman should be cautious in making such remarks, bearing in mind that it is not so long since we had a General Election when hon. Gentlemen opposite were expressing the same wild enthusiasm about their prospects as the hon. Gentleman is doing about his party's prospects in Glasgow. The Labour Party had a sad shock on that occasion and the same situation could arise here.
      Mr. Sillars: Is the hon. Gentleman unaware that the Labour Party trounced the Tory Party in Scotland at the General Election?
      Mr. Taylor: The enthusiasm to which I was referring applied to all members of the Labour Party, and all of them had a sad shock. I hope the hon. Gentleman will not get too enthusiastic in case he suffers a similar disappointment in Glasgow and elsewhere.
      The hon. Member for Motherwell (Mr. Lawson) asked me specifically whether Section 37 gave the Government power to do things. Section 37 makes no mention

      1117
      of the Government but refers to bye-laws, which are commonly local authority matters.
      The hon. Member for Aberdeen, North (Mr. Robert Hughes) asked me about Aberdeen. I give him the clear assurance that if Aberdeen, or any other Scottish local authority, wished to consider the introduction of fees in local authority schools it would be necessary for the local authority to bring forward a modification to its existing scheme. He also said that some members of the Progressive Conservative Group in Aberdeen had put forward the proposal of a ballot. He asked, if anyone was crazy enough to bring forward a proposal to select pupils by ballot, whether the Secretary of State would condemn this absolutely. I would not like to give a decision on hypothetical considerations, but I would point out to him that the Opposition presented Amendment No. 31 in Committee which called for the selection of pupils by ballot and which contained these words:
      "In the event of such applications being in more in number than 75 per cent. of the available places then these will be allocated by a random selection within that authority in order to obtain an adequate social mix."
      If the hon. Gentleman is asking me to condemn out of hand something which was argued for fiercely by the hon. Member for Renfrew, West, it would be discourteous for me to do so in a discussion which has been so harmonious. He is, of course an advocate of the ballot and the raffle but I suggest that it is not my job to try to work out the ideological cleavages which exist in the Labour Party, have existed for years and will no doubt exist for years to come.
      12 midnight
      Mr. Buchan: I hope the House will allow me to congratulate the Under-Secretary of State on trying to avoid a difficult position with his rhodomontade at the end of his reply. What he said about new Clause 2 was his usual brisk nonsense. But let us leave that for a moment. I want to talk of serious things, about the points raised by his arguments on Amendments 24 and 25.
      Throughout the Committee stage, we pressed for the presence of the Lord Advocate because of the intense legal implications of so much of the drafting
      1118
      of the Bill. The Lord Advocate is present tonight. I would have thought that, on this extremely complicated part of the Bill, we would have had the benefit of his advice. I have found the last ten minutes rather sad, and I think that the Under-Secretary of State was put into unnecessary difficulties.
      The hon. Gentleman was asked about precedent. He gave no answer. That question concerned whether or not powers have been given to a body other than the Government. The Act was quoted and the question put—but we got no answer. Yet this is extremely important.
      My hon. Friend the Member for Motherwell (Mr. Lawson) put a valid point in relation to Section 37 of the Interpretation Act, 1889. What a position we find ourselves in when we have to go back to 1889 in order to get the Government out of a mess! Section 37 relates to an Act which is not to come into operation immediately and it confers powers to do various things. But it does those things
      "…so far as may be necessary or expedient for the purpose of bringing the Act into operation at the date of the commencement…"
      What the Government are proposing is not necessary but it is expedient in order that Glasgow in particular, and other local authorities in general, can start moving before the 5th May elections. Clearly, what it does not do is what Section 37 of the 1889 Act spells out. The hon. Gentleman should not have allowed himself to be put in such a mess.
      If it is so important, why was this matter not raised earlier? Why was it not in the Bill in the first place if it is so important? The hon. Gentleman said that it is here because it was raised in Standing Committee. I asked him who raised it in Standing Committee. He said that no one had raised it in Standing Committee. It was not raised in Committee, but the time spent there in making sense of the Bill brought the Government close to 5th May, so they put their little minds to work. These Amendments were introduced so that they could get the Bill into operation quickly. Everything said by the hon.

      1119
      Gentleman has borne that out. No precedent has been produced. His argument in relation to Section 37 of the 1889 Act has been proved wrong. His argument about he discussion in Committee has been proved wrong as well.
      Had this matter been so important, it could have been raised in Committee, but it was not. We are seeing now a squalid conspiracy between the Government and the Glasgow Tories to get this Bill into operation before 5th May. We are accused of boasting that we shall win the elections. I have never boasted that. I am saying that the action of the Under-Secretary and of the Convenor of Edu-
      cation in Glasgow is an admission that they will be beaten. I have never claimed that we shall win. But their action is a flaunting of the consciousness of their own defeat, and that is the reason for their squalid Amendments.
      I now see the vital necessity of my own Amendments Nos. 2 and 3, and I give notice of our intention to vote against Amendments Nos. 24 and 25 when we eventually reach them.
      Question put, That the Clause be read a Second time:—
      The House divided: Ayes, 70, Noes 107.

      Division No. 344.]

      AYES

      [12.5 a.m.

      Armstrong, Ernest

      Hughes, Robert (Aberdeen, N.)

      Parry, Robert (Liverpool, Exchange)

      Ashton, Joe

      Hunter, Adam

      Pentland, Norman

      Atkinson, Norman

      John, Brynmor

      Perry, Ernest G.

      Bagier, Gordon A. T.

      Kaufman, Gerald

      Prescott, John

      Bennett, James (Glasgow, Bridgeton)

      Kerr, Russell

      Price, William (Rugby)

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

      Kinnock, Neil

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

      Buchan, Norman

      Lambie, David

      Ross, Rt. Hn. William (Kilmarnock)

      Campbell, I. (Dunbartonshire, W.)

      Lawson, George

      Sillars, James

      Carmichael, Neil

      Leadbitter, Ted

      Silverman, Julius

      Cocks, Michael (Bristol, S.)

      Leonard, Dick

      Skinner, Dennis

      Cox, Thomas (Wandsworth, C.)

      Lestor, Miss Joan

      Small, William

      Dalyell, Tam

      Mabon, Dr. J. Dickson

      Smith, John (Lanarkshire, N.)

      Davies, Ifor (Gower)

      McElhone, Frank

      Spearing, Nigel

      Davis, Clinton (Hackney, C.)

      Mackenzie, Gregor

      Stallard, A. W.

      Dormand, J. D.

      Mackintosh, John P.

      Strang, Gavin

      Douglas, Dick (Stirlingshire, E.)

      McMillan, Tom (Glasgow, C.)

      Tinn, James

      Freeson, Reginald

      McNamara, J. Kevin

      Urwin, T. W.

      Galpern, Sir Myer

      Mahon, Simon (Bootle)

      Walker, Harold (Doncaster)

      Golding, John

      Marks, Kenneth

      Wellbeloved, James

      Grant, John D. (Islington, E.)

      Mellish, Rt. Hn. Robert

      Wilson, Alexander (Hamilton)

      Hamilton, William (Fife, W.)

      Millan, Bruce

      Hamling, William

      Miller, Dr. M. S.

      TELLERS FOR THE AYES:

      Harper, Joseph

      Murray, Ronald King

      Mr. James Hamilton and

      Harrison, Walter (Wakefield)

      Oswald, Thomas

      Mr. Donald Coleman.

      Huckfield, Leslie

      Palmer, Arthur

      NOES

      Adley, Robert

      Fortescue, Tim

      McLaren, Martin

      Atkins, Humphrey

      Gardner, Edward

      McNair-Wilson, Michael

      Baker, W. H. K. (Banff)

      Gibson-Watt, David

      Maddan, Martin

      Biffen, John

      Gilmour, Sir John (Fife, E.)

      Maginnis, John E.

      Biggs-Davison, John

      Goodhew, Victor

      Mather, Carol

      Boscawen, Robert

      Gower, Raymond

      Maude, Angus

      Bowden, Andrew

      Gray, Hamish

      Meyer, Sir Anthony

      Bray, Ronald

      Green, Alan

      Mitchell, David (Basingstoke)

      Brown, Sir Edgar (Bath)

      Gummer, Selwyn

      Molyneaux, James

      Bruce-Gardyne, J.

      Hall, Miss Joan (Keighley)

      Money, Ernie

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

      Haselhurst, Alan

      Monks, Mrs. Connie

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

      Hawkins, Paul

      Montgomery, Fergus

      Channon, Paul

      Hill, James (Southampton, Test)

      More, Jasper

      Chapman, Sydney

      Holt, Miss Mary

      Murton, Oscar

      Chataway, Rt. Hn. Christopher

      Hornby, Richard

      Neave, Airey

      Clegg, Walter

      Hutchison, Michael Clark

      Owen, Idris (Stockport, N.)

      Cockeram, Eric

      Iremonger, T. L.

      Page, Graham (Crosby)

      Cooke, Robert

      Irvine, Bryant Godman (Rye)

      Percival, Ian

      Crouch, David

      James, David

      Pym, Rt. Hn. Francis

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

      Kellett, Mrs. Elaine

      Raison, Timothy

      Deedes, Rt. Hn. W. F.

      King, Evelyn (Dorset, S.)

      Reed, Laurence (Bolton, E.)

      Dykes, Hugh

      King, Tom (Bridgwater)

      Rees-Davies, W. R.

      Edwards Nicholas (Pembroke)

      Kinsey, J, R.

      Rhys Williams, Sir Brandon

      Elliot, Capt. Walter (Carshalton)

      Knight, Mrs. Jill

      Roberts, Michael (Caridff, N.)

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

      Knox, David

      Russell, Sir Ronald

      Eyre, Reginald

      Loveridge, John

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

      Fenner, Mrs. Peggy

      Luce, R. N.

      Shelton, William (Clapham)

      Finsberg, Geoffrey (Hampstead)

      MacArthur, Ian

      Sinclair, Sir George

      Soref, Harold

      Sutcliffe, John

      Wolrige-Gordon, Patrick

      Speed, Keith

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

      Worsley, Marcus

      Spence, John

      Taylor, Frank (Moss Side)

      Wylie, Rt. Hn. N. R.

      Sproat, Iain

      Tebbit, Norman

      Younger, Hn. George

      Stanbrook, Ivor

      Tilney, John

      Stodart, Anthony (Edinburgh, W.)

      Trafford, Dr. Anthony

      TELLERS FOR THE NOES:

      Stoddart-Scott, Col. Sir M.

      Waddington, David

      Mr. Hector Monro and

      Stokes, John

      Walker, Rt. Hn. Peter (Worcester)

      Mr. Hugh Rossi.

      Stuttaford, Dr. Tom

      Weatherill, Bernard

    Clause 1

      RE-ENACTMENT WITH MODIFICATIONS OF SECTION 3 OF THE EDUCATION (SCOTLAND) ACT 1962
      12.15 a.m.
      Mr. Buchan: I beg to move Amendment No. 13, in page 1, line 25, at end insert:
      (4) Any school in which fees are charged for school education shall be incorporated into the territorial zoning of that local authority's scheme and any pupil resident within that zone shall be entitled to attend that school without the payment of fees if his parent so chooses, and any pupil resident outwith that zone who attends that school shall be charged the full economic cost of his school education.
      The purpose of this Amendment is simple. It is to try to break down some of the potential privilege being written into education in our cities by the Bill. Our fear is that the introduction of fee paying will act adversely against the free provision of education within our cities.
      Secondly, we are saying that it is wrong for two standards of education to be created within our cities. Therefore, to ensure that this does not happen, the school which parents choose as being the better, in the sense that some are prepared to pay to send their children there, should also be provided for the children who live in the neighbourhood.
      I was frequently told, on this aspect of the Bill, that no one suggested that the education in these schools was better. If hon. Gentlemen opposite had admitted that the education in these schools was better, they would be open to the charge that they were allowing the buying of privilege. But they cannot have it both ways. If the education in these schools is not better, then the people paying fees are being conned. This will be the test and judgment.
      If we allow those schools which charge fees to parents of children who come from outside the catchment area to remain open to the children in the neighbourhood, this will go some way towards
      1122
      establishing a consciousness of equality in education.
      This is the purpose of the Amendment. I cannot see how it wrecks, to use the Under-Secretary's favourite word, the concept of the Bill. The hon. Gentleman said that it was to give freedom to local authorities to charge fees. The Amendment will still allow this. He said that it was to give freedom to parents to pay fees. It will still allow parents to pay fees. If, however, fee-paying parents object to their children associating with the ordinary children of the neighbourhood, they can opt out. So be it. But the Amendment fulfils all the requirements established in the best theoretical principles of the party opposite.
      The Amendment seems fair and just. It will, at any rate, ensure that parents living in the neighbourhood of one of these schools, which are claimed to be better, will be able to take advantage of it without feeling that they are gaining privilege.
      Mr. Edward Taylor: I appreciate the sincerity with which the hon. Member for Renfrew, West (Mr. Buchan) has put forward the Amendment. I realise that for him this is one of the fundamental points in the Bill. However, I cannot recommend the House to accept the Amendment, because it would destroy the basis on which the fee-paying schools were formerly organised. One of their great distinguishing features was that they had no catchment area and served as city-wide schools. Indeed, in some cases they acted almost as schools for a region.
      Apart from ruling out selection for entry for some of the pupils, the Amendment assumes that the former fee-paying schools can be readily fitted into an authority's scheme of normal provision. But all those who have studied in detail the situation of the former fee-paying schools in Glasgow and Edinburgh, to quote two examples, will appreciate that it would be a very real practical problem for the authorities concerned to fit them into a comprehensive system which might exist.

      1123
      I think that the hon. Gentleman would at least accept that there would be very real practical difficulties about the integration of the former fee-paying schools within the comprehensive system. Because of the territorial areas and the situation of the schools, the schools have tended to be situated, certainly in Glasgow, near the city centre. To that extent, apart from anything else, I think that major practical problems would be presented.
      The main point is that the distinguishing feature of the schools has been not to have a catchment area but to serve as city-wide schools and sometimes as schools for a region. In these circumstances, I do not think that the Amendment would be consistent with the spirit of the Bill.
      Mr. Gavin Strang: We have repeatedly argued that our fundamental objection to these selective schools is the fact that they cream off the most able pupils and do not contain a cross-section of the community. This situation could be helped in Edinburgh—and to a large extent the Bill applies to Edinburgh—by arranging catchment areas for these selective schools.
      When we challenge the Government on this issue and call these snob schools, they point to the scholarships. Our suggestion would be a more satisfactory way of getting non-fee-paying pupils into the scholarship system. As a student, I stayed in "digs" in Edinburgh and witnessed the pressure on youngsters doing their best to get these scholarships. Anybody who has witnessed this appreciates that this is an undesirable aspect of the whole system. One need only live near one of these selective schools to witness children who live virtually on the doorstep having to travel to another part of the burgh because they have not been selected.
      While we oppose the Bill in principle, if we are to have this type of privilege those who wish to send their children to fee-paying schools should be prepared to bear the full cost and not expect to be subsidised by the State. The Amendment would result in less creaming off in Edinburgh, and this would benefit, for example, schools in my constituency. Because at present parents can opt out
      1124
      and send their children to fee-paying schools, many corporation non-fee-paying schools lose the benefit of the attendance of these parents at parent-teacher meetings.
      In Edinburgh we have the disgraceful situation of the provision in the ordinary corporation schools being inadequate because of the extent to which fee-paying schools have been pampered. We have had controversies about where the money should be allocated in the school building programme. There has been gross misuse of the resources for education available to the corporation simply because of the money that has been spent in this distorted education system.
      Mr. Neil Carmichael: It would be wrong to allow the Under-Secretary to mislead the House in the way he did, though I am sure he did so unintentionally. He said that fee-paying schools tended to be in the centre of cities. This is certainly not so in Glasgow.
      We have the Glasgow Girls High School, the Jordanhill High School and the Hillhead High School, all of which are outwith the central area. If one formed the three into a triangle, the Hillhead High School would be at the centre of gravity of the triangle, as it were. As part of the Minister's case rested on the geographical location of fee-paying schools, I trust that he appreciates that his remarks do not apply throughout Scotland.
      On Second Reading I tried to explain the problem of such a school as that at Hillhead in my area. Just last week I heard of a girl of 4½ years whose parents—unwisely, as I told them—sent her older brother to the High School there. After an examination the little girl was rejected, with the result that she has to go to a school round the corner. Such divisiveness in a family is quite wrong.
      I do not know about the geographical situation in Edinburgh, but the hon. Gentleman was quite wrong in what he said about Glasgow. I hope he will correct himself, and perhaps given an indication whether the Amendment would be applicable where a school was in the geographical position which he instanced.
      Mr. Ronald King Murray: Until the 1969 Act was passed there were in my constituency no fewer than three schools at which under local authority administration fees were charged. That was in one single zone of the city, and nowhere near the city centre. Selection of the type which the Government seek to introduce, with fee paying in these schools, produces social and territorial barriers. Both of these barriers are equally irrelevant to good education, and the Bill is irrelevant to it, too.
      Mr. Edward Taylor: It was not my intention to mislead the House when I said that in Glasgow the former fee-paying schools had tended to be in the city centre. I was thinking of such schools as the High School for Boys and the Allan Glen's School. Incidentally, Jordanhill School is not a local authority fee-paying school. But, irrespective of how many schools are in the city and how many are outwith, both the local authorities concerned have indicated their belief that there would be considerable practical geographical difficulties about the integration of the former fee-paying schools within a comprehensive system.
      To be fair, the hon. Member for Woodside (Mr. Carmichael) asked whether, if these difficulties could be overcome, we would feel the same about the Amendment. The answer is that we would, because the Amendment would destroy the basis on which the fee-paying schools were formerly organised.
      Mr. Carmichael: The hon. Gentleman accepts that Hillhead could be transferred tomorrow and become a comprehensive school, but that it would interfere with the basis on which the fee-paying schools are organised. The real basis is a case of the type of the little girl of 4½ who was rejected for the fee-paying school.
      Mr. Taylor: No, the basis was that they were city-wide schools, and sometimes schools for a region not linked to a small, precise territorial zone. That was the character of the schools in the past and the character that some local authorities may wish to restore once the Bill becomes law. It is a matter for the authorities, and for discussion and decision by the local people. But the Amendment would destroy the whole basis on which the schools were formerly organ-
      1126
      ised, and the basis which the authorities may wish to bring back when the Bill is enacted.
      Mr. Sillars: I had not meant to take part in the debate, but I must point out that we are here dealing not only with the former fee-paying schools but with education in the whole of Scotland. The hon. Gentleman cannot just say, "It does not happen in Glasgow, so let us not worry about it."
      The case seems to be that I may have children catered for within 200 or 300 yards of our community, but if the local authority decides to make that school one of a limited number of fee-paying schools I am forced to choose between paying fees or sending the children to a different community school altogether. That is what the Bill at present seems to mean.
      Bearing in mind what the Under-Secretary has just said, and to safeguard the position of parents in other areas of Scotland, the Amendment is essential, otherwise we shall be entitled in the municipal elections, for which we are only starting our campaign now, to tell people in other parts of Scotland that it is the intention of the Conservative Government that local authorities shall have the freedom to impose fees in local community schools and that parents who at present send their children to those schools by right will not be entitled to do so in future unless they pay an appropriate fee. If that is the situation it is disgraceful and the Under-Secretary is bound to accept the Amendment.
      Amendment negatived.
      12.30 a.m.
      Mr. Edward Taylor: I beg to move Amendment No. 14, in page 2, line 2, leave out "unless they secure at all times" and insert
      "Except where it may be exercised without prejudice to the".
      Mr. Speaker: As I said earlier, with this can be discussed the sub-Amendment and Amendment No. 9.
      Mr. Buchan: On a point of order, Mr. Speaker. May we have a little clarification on this? The sub-Amendment is of some significance. I shall seek to indicate my support for Amendment No. 14, but can we in that case have a vote,

      1127
      if necessary, on the sub-Amendment, which is so closely related?
      Mr. Speaker: The sub-Amendment was not chosen for Division, it was chosen for discussion.
      Mr. Taylor: The Amendment implements a promise which I gave during the Fifteenth Sitting of the Committee. Subsection (4) of new section 3 set out in Clause 1 contains the condition to be satisfied before fees for school education can be charged.
      "…the Government will be prepared to move an Amendment on Report giving effect to the Amendment—"
      that was the Opposition's Amendment—
      "…subject to correction of some of the technical defects which are at present in it."—[OFFICIAL REPORT, First Scottish Standing Committee, 23rd February 1971; c. 704.]
      The Opposition, particularly the hon. Member for Renfrew, West (Mr. Buchan), seemed to prefer some of the wording in the proviso to section 1(3) of the 1962 Act as originally enacted.
      For example, I note that the hon. Member for Lanarkshire, North (Mr. John Smith) said
      "I also consider that the words 'without prejudice' would appear to anyone reading the legislation to be stronger than the phraseology used by the Government in this Bill."—[OFFICIAL REPORT, First Scottish Standing Committee, 23rd February, 1971; c. 706.]
      I take it that hon. Members opposite want the condition to be stronger. I have looked at this very carefully, and, as the House will see, we are prepared to move some way in returning to the 1962 wording by adopting the "without prejudice" formula. I have no doubt that, in view of their speeches during Committee, the Opposition will support this move to wording nearer the wording of the 1962 Act.
      On the Amendment to this, the proposal to take out the proposed Amendment to Amendment No. 14 suggests a wording like that in Amendment No. 16. The words "in addition and" are unnecessary, I feel, and did not appear in Section 1 (3) of the Education (Scotland) Act, 1962, as originally enacted. But then we have Amendment No. 9. This is an interesting Amendment which illuminates the difference between the two sides of the House.
      1128
      The Opposition's basic approach is that all authorities should have a wholly comprehensive system of secondary education. Our view is that the organisation of secondary education is fundamentally a matter for education authorities. Our Circular 760 withdrew Circular 600 which asked authorities to submit proposals for comprehensive reorganisation. We are content to leave it to the authorities which are responsible for providing education to decide the best method for providing it, and if all authorities in Scotland want to have a wholly comprehensive system, no doubt they will submit proposals accordingly.
      What we have proposed in my right hon. Friend's Amendment fully implements the promise which I gave to the hon. Member for Renfrew, West and his hon. Friend the Member for Lanarkshire, North in Committee. I hope that they are happy with the wording of Amendment No. 14 and that the House can approve it.
      Mr. Buchan: This is very much of a gift horse whose teeth I propose to examine. It is correct that the wording arises from an Amendment which we tabled in Committee. It was the only Amendment the spirit of which was accepted. It was a probing Amendment which would have made no basic change in the meaning, so its being accepted in spirit is not much of a concession. There is not a substantial difference between the "without prejudice" formula and the wording in the Act. I was curious about why the change had been made. There may be certain advantages. I shall advise my hon. Friends to support the Amendment, especially as I have tabled a similar Amendment, with one significant difference—that is, the addition of the sub-Amendment. The addition of the words "in addition and" is very important.
      I am not sure why the question of the circular has entered the argument, unless it is in relation to Amendment No. 9. It has nothing to do with the sub-Amendment. The Under-Secretary did not deal with the sub-Amendment. It is not only I who think that the words "in addition" are significant. When in 1918 an Act was formulated to impose duties upon local authorities to provide free education but at the same time to allow the continuation of a limited amount of fee-paying the Government of the day were careful to spell out that such schools

      1129
      could be started only "in addition to". The words are:
      "a scheme for the adequate provision throughout the education area of the authority of all forms of primary, intermediate and secondary education in day schools…without payment of fees, and if the authority think fit for the maintenance or support (in addition and without prejudice to such adequate provision as aforesaid) of a limited number of schools where fees are charged…".
      The whole sense of importing into Scottish education the power to charge fees in a limited number of schools was that it should be in addition to the existing provision. This was changed in the 1945 and 1962 Acts. It was not necessary in the 1969 Act. The wording has been changed again in the Bill. Does this mean that there was a difference between the thinking in 1945 and 1962 from that in 1918? If that was so, it might be justified for the hon. Gentleman not to accept the sub-Amendment. However, there was no such change. On the contrary, there was, if anything, a greater consciousness in 1945 and in 1962 of the need for the adequate provision of free education. However, with the passing of the years the fee-paying areas were known. If any problem arose over what was meant by "a limited number of" or, later, of "adequate provision", this was the group of schools being referred to. The words "in addition and" were not necessary in the later Acts.
      But we now face the same situation as was faced in 1918. In 1945 it was not necessary, and in 1962 it was not necessary, because these schools were known. In 1971, however, there are no local authority fee-paying schools. We have abolished them. We start, therefore, from scratch, precisely as the legislators did in 1918, when they saw the importance of the words,
      "in addition and without prejudice to".
      I need not spell out the significance of it. If the Under-Secretary is convinced that the introduction of local authority fee-paying schools cannot prejudice existing free school education, he has nothing to lose by accepting our sub-Amendment. Because of my fear that it might prejudice free school education, I want the sub-Amendment. So we are at one, the hon. Gentleman because he claims that it will not harm the provision of free school education, so he can accept what
      1130
      we propose without damaging his purpose, and myself because I fear that it will harm it and I want the sub-Amendment so that, if necessary, it can be challenged.
      Because of the technicalities of the Report stage, I cannot press the question to a Division, as I should have liked to do. I ask the hon. Gentleman, therefore, either to give us an assurance that he will reconsider the matter and have the change made in another place, or to say, as I hope he will, that he accepts it now.
      Mr. John Smith: I am grateful to the Under-Secretary to the extent that his Amendment improves the phraseology, and I am glad that we were able to persuade him about that, but there is at the back of our minds the feeling that the Government put in the words "without prejudice" in relation to the adequate provision of free school education just as a sop to public opinion and to create the impression that free school education would in no way be prejudiced by the introduction of fee-paying schools.
      That is a matter of controversy between the two sides of the House. But the addition of the words "in addition and" would be of great value because they would make clear that the duty imposed by the Bill is that a local authority must first attend to the business of making sure that there is adequate provision of free school education, and only when it has done that may it start to play about with fee paying in schools.
      The Bill would make clear that authorities must not run two horses at the same time but must be satisfied first that there is adequate free school education. The addition of these words would be important for that reason. If we can accept the hon. Gentleman's Amendment, why does he not accept ours?
      Mr. Edward Taylor: I have no strong feelings about the Government Amendment. I was perfectly satisfied with the wording in the Bill as originally drafted, but, because of the strong representations made by the hon. Members for Renfrew, West (Mr. Buchan) and for Lanarkshire, North (Mr. John Smith), I agreed to look into the matter and try to improve it. I am sorry that the hon. Member for Renfrew, West is so suspicious about it. I can assure him that there were no grounds for his suspicion. I should be

      1131
      happy to leave things as they were in the Bill as drafted.
      12.45 a.m.
      I have not been convinced that the Amendment to the Amendment is necessary. The words "in addition" are unnecessary. They do not appear at all, for example, in Section 1(3) of the 1962 Act. We got on perfectly well without any such words, and I do not think they would add anything of value. We do not want to clutter up our legislation with redundant words. If I saw any benefit or greater clarification stemming from their use I would not wish to be difficult about the matter.
      We have gone a considerable way in introducing our own Amendment, which was perhaps unnecessary. I will, as always, read carefully hon. Members' speeches, but I can give no assurance about a further Amendment at a later stage because I can see no reason for it. I have not been convinced by any of the arguments.
      Mr. Buchan: I have been shattered by the Under-Secretary's reply. This is the final admission of awareness, almost, by the Government of the evil that they are doing in the Bill. If they were not convinced that the introduction of the fee-paying schools did not prejudice secondary education, they would be perfectly willing to accept the provision that they should be introduced only where there is no prejudice. They have simply to accept our Amendment and there is no problem. I am surprised that the hon. Gentleman has rejected it after all that he has said on the matter. It worries me a lot. It seems to me that the Government are quite willing to harm free school education. I have put it down to ignorance, to their failing to understand the effect on free education. Now I believe they are quite prepared to see it harmed in order to have a little bit of privilege. If I am wrong the hon. Gentleman will think again and encourage another place to include our words. I regret very much that I cannot vote on this matter.
      The Lord Advocate (Mr. Norman Wylie): I did not want to intervene in the debate, because I have not been concerned in Committee, but is the hon.
      1132
      Gentleman really serious when he says that the words have a totally different effect? I cannot see it. The primary duty and the proviso is that education authorities must secure at all times adequate education. Like my hon. Friend the Under-Secretary, I very much doubt that the Amendment would make any difference. The provision of adequate free education is a primary responsibility on the local authority, and the entitlement to charge fees can arise only after that requirement is satisfied.
      One hon. Gentleman asked what was meant by "adequate provision", and this matter was also canvassed in Committee. It has always been regarded as an administrative matter for the Secretary of State and not a matter for the courts. This sort of question has been raised in case law, particularly most recently in Quinn v. Dundee Education Authority in 1930, an action of declarator under Section 6 of the 1918 Act, whether a question arose whether someone was entitled to free education. There was a question of the nature of the obligation on the local authority when the Act talked of providing adequate free education. The court held in the most specific terms that the question of what were adequate facilities of that kind was not one with which a court of law could deal, that it was essentially a matter of administrative control. In one of their lordships' judgments the matter was put like this:
      "The advancement of education, especially secondary education, is an urgent problem. It cannot brook the delay and confusion that would arise from litigations in the courts between parents and the local education authority in regard to the preparation of educational schemes."
      This matter was raised at some length in Committee and I hope that the situation is now clear.
      Mr. Lawson: Why do we need to have such words in this legislation if they really mean very little and cannot be interpreted in a court of law?
      The Lord Advocate: The hon. Gentleman is well aware that words such as "adequate" and "substantial" are frequently used in public general legislation. They have been used throughout a whole series of education Acts and this is only the last of a very long series. The question asked in Committee was: who would decide what was adequate—would it be

      1133
      the courts or the Secretary of State? The answer is the Secretary of State. It is not a matter on which the court will express a view.
      Mr. William Small: I wish to ask whether it is administratively proper for some 1,800 children in Glasgow to be deemed to be fee-paying by this Administration.
      Mr. Lawson Mr. Lawson rose—
      Mr. Speaker: Order. The hon. Member has no right to speak again, nor has the Lord Advocate any right to do so. The Under-Secretary of State has a right to speak again, but no other hon. Member.
      Mr. Lawson: On a point of order, Mr. Speaker. I had not, in fact, spoken. I asked a question about the interpretation of the word "adequacy". I made no speech. If it is interpreted as a speech, it is not my understanding of a speech.
      Mr. SpeakerIt is true that the hon. Member has asked a question but nobody appears to be very willing to answer him.
      Amendment agreed to.
      Mr. Edward Taylor: I beg to move Amendment No. 20, in page 2, line 27, leave out from 'have' to the end of line 28 and insert 'power to make charges'.
      Mr. Speaker: It might be convenient to the House to take with this Amendment, Amendment No. 21, in line 33, after 'Act', add:
      'but the payment of such fees shall not be (and shall be deemed never to have been) a prior or necessary condition for admission to any school'.
      Mr. Taylor: There was an interesting debate in Committee about whether the words "make charges" should be substituted for "charge fees" in line 28 of page 2 of the Bill. The Amendment was moved by the hon. Member for Lanarkshire, North (Mr. John Smith), and I gave the following undertaking:
      "I assure him, without making a specific promise, that I will look at the question very carefully between now and Report with a view to tabling an Amendment which would implement his suggestion."—[OFFICIAL REORT, First Scottish Standing Committee, 9th March, 1971; c. 1240.]
      As the House will see, I have been able to do more than implement his suggestion since the substitution of "make charges"
      1134
      for "charge fees" enables us to remove the retrospective words in lines 27 to 28.
      Though the change of words from "fees" to "charges" will make no practical difference to education authorities, I am advised that, strictly speaking, a power to make charges cannot be regarded as identical with a power to charge fees. I have no doubt that the hon. Member for Lanarkshire, North will agree with this view since in Committee he said that
      "there is a wealth of difference between the proposition 'charge fees' and the proposition 'make charges'."—[OFFICIAL REPORT, First Scottish Standing Committee, 9th March, 1971; c. 1214.]
      Since at least nominally a new power is being conferred on education authorities, it follows as a consequence that the retrospective words in lines 27 and 28 can be deleted.
      Since there was some misunderstanding in Committee about the purpose of these words, I shall try to explain in detail why I think they can now be dispensed with. When I argued against the deletion of these words in Committee, I did so against the background that no new power was being given to authorities and that we were repeating words in Section 3 of the 1962 Act as set out in Section 1(1) of the 1969 Act. This is no longer the situation. We are at least formally giving authorities a new power—a power which I think on examination is more appropriate to the circumstances than the power granted in 1969—and there is no circumstance requiring the new power to be made retrospective.
      Mr. John Smith: Having promoted this matter in Committee, I would just say that I accept this Amendment.
      Amendment No. 21 reads:
      "but the payment of such fees shall not be (and shall be deemed never to have been) a prior or necessary condition for admission to any school".
      This relates to what happened in Glasgow education authority when certain charges were made which were in effect a condition of admission to a school. It was a device whereby charges were made when it was illegal to charge fees. This is to prevent this happening again. The qualifying words are an attempt not to give the cloak of legality by hindsight to what

      1135
      Glasgow Corporation did, legally or not—certainly immorally—during the period up to 1969.
      Amendment agreed to.

    Clause 3

      SHORT TITLE, CITATION, CONSTRUCTION, REPEALS, COMMENCEMENT AND EXTENT
      Amendment proposed: No. 24, in page 3, line 16, at end insert:
      (3A) Without prejudice to the operation of section 37 of the Interpretation Act 1889 (which relates to the operation of statutory powers between the passing and commencement of an Act), at any time after the
      passing of this Act, any scheme required by virtue of section 7 of the Education (Scotland) Act 1962 (schemes for educational provision) for the purposes of section 3 of the said Act as set out in section 1 of this Act, may be prepared and submitted to the Secretary of State for his approval, and the Secretary of State may approve any scheme, so submitted, in accordance with the provisions of section 70 of the said Act (approval and carrying out of schemes), but so that any scheme approved by virtue of this subsection before the date of the coming into force of this Act shall not have effect before that date; and in this subsection 'scheme' shall include a revised scheme or a modification of an existing scheme.—[Mr. Edward Taylor.]
      Question put, That the Amendment be made:—
      The House divided: Ayes 104, Noes 66.

      Division No. 345.]

      AYES

      [12.56 a.m.

      Adley, Robert

      Hall, Miss Joan (Keighley)

      Raison, Timothy

      Atkins, Humphrey

      Haselhurst, Alan

      Reed, Laurance (Bolton, E.)

      Baker, W. H. K. (Banff)

      Hawkins, Paul

      Rhys Williams, Sir Brandon

      Benyon, W.

      Hill, James (Southampton, Test)

      Roberts, Michael (Cardiff, N.)

      Biffen, John

      Holt, Miss Mary

      Rossi, Hugh (Hornsey)

      Biggs-Davison, John

      Hornby, Richard

      Russell, Sir Ronald

      Boscawen, Robert

      Hutchison, Michael Clark

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

      Bowden, Andrew

      Iremonger, T. L.

      Shelton, William (Clapham)

      Bray, Ronald

      Irvine, Bryant Godman (Rye)

      Sinclair, Sir George

      Brown, Sir Edward (Bath)

      James, David

      Soref, Harold

      Bruce-Gardyne, J.

      Kellett, Mrs. Elaine

      Speed, Keith

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

      King, Evelyn (Dorset, S.)

      Spence, John

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

      King, Tom (Bridgwater)

      Sproat, Iain

      Channon, Paul

      Kinsey, J. R.

      Stanbrook, Ivor

      Chapman, Sydney

      Knight, Mrs. Jill

      Stodart, Anthony (Edinburgh, W.)

      Chataway, Rt. Hn. Christopher

      Knox, David

      Stoddart-Scott, Col. Sir M.

      Clegg, Walter

      Loveridge, John

      Stokes, John

      Cockeram, Eric

      Luce, R. N.

      Stuttaford, Dr. Tom

      Cooke, Robert

      MacArthur, Ian

      Sutcliffe, John

      Cormack, Patrick

      McNair-Wilson, Michael

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

      Crouch, David

      Maddan, Martin

      Taylor, Frank (Moss Side)

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

      Maginnis, John E.

      Tebbit, Norman

      Edwards, Nicholas (Pembroke)

      Mather, Carol

      Tilney, John

      Elliot, Capt. Walter (Carshalton)

      Meyer, Sir Anthony

      Trafford, Dr. Anthony

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

      Mitchell, David (Basingstoke)

      Waddington, David

      Eyre, Reginald

      Molyneaux, James

      Walker, Rt. Hn. Peter (Worcester)

      Fenner, Mrs. Peggy

      Money, Ernie

      Weatherill, Bernard

      Finsberg, Geoffrey (Hampstead)

      Monks, Mrs. Connie

      White, Roger (Gravesend)

      Gardner, Edward

      Montgomery, Fergus

      Wolrige-Gordon, Patrick

      Gibson-Watt, David

      More, Jasper

      Worsley, Marcus

      Gilmour, Sir John (Fife, E.)

      Murton, Oscar

      Wylie, Rt. Hn. N. R.

      Goodhew, Victor

      Neave, Airey

      Younger, Hn. George

      Gower, Raymond

      Owen, Idris (Stockport, N.)

      Cray, Hamish

      Page Graham (Crosby)

      TELLERS FOR THE AYES:

      Green, Alan

      Percival, Ian

      Mr. Tim Fortescue and

      Gummer, Selwyn

      Pym, Rt. Hn. Francis

      Mr. Hector Monro.

      NOES

      Armstrong, Ernest

      Galpern, Sir Myer

      Lawson, George

      Bagier, Gordon A. T.

      Grant, John D. (Islington, E.)

      Leonard, Dick

      Bennett, James (Glasgow, Bridgeton)

      Hamilton, James (Bothwell)

      Lestor, Miss Joan

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

      Hamilton, William (Fife, W.)

      Lomas, Kenneth

      Buchan, Norman

      Hamling, William

      Mabon, Dr. J. Dickson

      Campbell, I. (Dunbartonshire, West)

      Harper, Joseph

      McElhone, Frank

      Carmichael, Neil

      Harrison, Walter (Wakefield)

      Mackenzie, Gregor

      Cocks, Michael (Bristol, S.)

      Huckfield, Leslie

      Mackintosh, John P.

      Cox, Thomas (Wandsworth, C.)

      Hughes, Robert (Aberdeen, N.)

      McMillan, Tom (Glasgow, C.)

      Dalyell, Tam

      Hunter, Adam

      McNamara, J. Kevin

      Davies, Ifor (Gower)

      John, Brynmor

      Mahon, Simon (Bootle)

      Davis, Clinton (Hackney, C.)

      Kaufman, Gerald

      Marks, Kenneth

      Dormand, J. D.

      Kerr, Russell

      Mellish, Rt. Hn. Robert

      Douglas, Dick (Stirlingshire, E.)

      Kinnock, Neil

      Millan, Bruce

      Freeson, Reginald

      Lambie, David

      Miller, Dr. M. S.

      Murray, Ronald King

      Sillars, James

      Tinn, James

      Oswald, Thomas

      Silverman, Julius

      Urwin, T. W.

      Parry, Robert (Liverpool, Exchange)

      Skinner, Dermis

      Wellbeloved, James

      Pentland, Norman

      Small, William

      Wilson, Alexander (Hamilton)

      Perry, Ernest G.

      Smith, John (Lanarkshire, N.)

      Prescott, John

      Spearing, Nigel

      TELLERS FOR THE NOES:

      Price, William (Rugby)

      Stallard, A. W.

      Mr. Donald Coleman and

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

      Strang, Gavin

      Mr. John Golding.

      Ross, Rt. Hn. William (Kilmarnock)

      Amendment made: No. 25, in page 3, line 17, after 'Act', insert:
      "(except subsections (1), (2) and (3A) of this section)".—[Mr. Gordon Campbell.]
      Motion made, and Question proposed, That the Bill be now read the Third time.
      1.5 p.m.
      Mr. Buchan Mr. Buchan rose—
      Mr. Kevin McNamara: On a point of order, Mr. Speaker. Is it in order for hon. Members below the Bar to shout when we are taking a collection of voices?
      Mr. Speaker: It is out of order.
      Mr. Buchan: I realise that some confusion has arisen here but I saw the Secretary of State getting up and I therefore waited. I gather that he got up to nod, but I thought he would speak. I am not sure what stage we have reached, but I have a word or two to say before we proceed to the vote. Will you guide me, Mr. Speaker, in what should be done. There was general confusion.
      Mr. Speaker: I agree that there was some confusion. The hon. Member for Renfrew, West (Mr. Buchan).
      Mr. Buchan: I do not wish to speak at length. Complaints were made in Committee about the length of time taken on the Bill. We were told that we need not take time because it was a small Bill. Not only is it a small Bill, but it is a small-minded, squalid Bill.
      We have seen today two of the most squalid little items to be introduced by any Government—the Bill we discussed earlier and this Bill. The Government have shown contempt for the people in Scotland by rushing forward with a Bill designed to aid their political allies in only two cities, completely regardless of the effect on education in Scotland. The Bill runs counter to every piece of advice given by parents', teachers' and academic organisations and by every educational speaker, thinker and writer in Scotland.
      1138
      I know of no one in the teaching bodies, in the universities, in the academic world or writing in any educational journal in Scotland who has supported the Bill.
      The Government have introduced the Bill in haste, in squalor, in contempt of expert advice and in contempt of the parents of Scotland, who have not spoken yet, but they will. It gives me great pleasure to invite the House to reject the Bill.
      1.9 a.m.
      Mr. Lawson: We spoke in Committee over a considerable time, not because we were wasting time but because we considered that the Bill was injurious to Scotland and, therefore, important. At 25 minutes past ten o'clock we started on the Report stage, and we have been under pressure all the time to get the Bill finished. We were considered to be wasting the time of the House in dealing with this miserable Bill which is the first important piece of legislation affecting Scotland brought forward by this crowd opposite. It was brought forward at 25 minutes past ten o'clock tonight.
      Mr. MacArthur: Nonsense.
      Mr. Lawson: The hon. Member for Perth and East Perthshire (Mr. MacArthur) said scarcely a word in Committee. I want to protest at the insulting way in which we have been treated. I see the Government Chief Whip looking at me. One can hear him say something occasionally. This Bill has no other objective but to give to some sections in Edinburgh and Glasgow—
      Mr. MacArthur: Freedom.
      Mr. Lawson:—the possibility of continuing with the miserable little privileges they had had up to now. Let us, if we have the means, turn it down. The Secretary of State assured us on Second Reading that the Bill would in no circumstances injure the ordinary pupils in any school in Scotland, but the whole

      1139
      purpose of the Bill is to maintain privilege and divide our children among themselves. We are ashamed of it. My hon. Friend the Member for Erith and Crayford (Mr. Wellbeloved) told us how his ancestors left Scotland. If this is how we behave in Scotland, I do not wonder
      Bill accordingly read the Third time, and passed.
      at it. I hope we reject this miserable Bill.
      Question put:—
      The House divided: Ayes 103, Noes 65.

      Division No. 346.]

      AYES

      [1.12 a.m.

      Adley, Robert

      Hall, Miss John (Keighley)

      Raison, Timothy

      Atkins, Humphrey

      Haselhurst, Alan

      Reed, Laurance (Bolton, E.)

      Baker, W. H. K. (Banff)

      Hawkins, Paul

      Rhys Williams, Sir Brandon

      Benyon, W.

      Hill, James (Southampton, Test)

      Roberts, Michael (Cardiff, N.)

      Biffen, John

      Holt, Miss Mary

      Rossi, Hugh (Hornsey)

      Biggs-Davison, John

      Hutchison, Michael Clark

      Russell, Sir Ronald

      Boscawen, Robert

      Iremonger, T. L.

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

      Bowden, Andrew

      Irvine, Bryant Godman (Rye)

      Shelton, William (Clapham)

      Bray, Ronald

      James, David

      Sinclair, Sir George

      Brown, Sir Edward (Bath)

      Kellett, Mrs. Elaine

      Soref, Harold

      Bruee-Gardyne, J.

      King, Evelyn (Dorset, S.)

      Speed, Keith

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

      King, Tom (Bridgwater)

      Spence, John

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

      Kinsey, J. R.

      Sproat, Iain

      Channon, Paul

      Knight, Mrs. Jill

      Stanbrook, Ivor

      Chapman, Sydney

      Knox, David

      Stodart, Anthony (Edinburgh, W.)

      Chataway, Rt. Hn. Christopher

      Loveridge, John

      Stoddart-Scott, Col. Sir M.

      Cockeram, Eric

      Luce, R. N.

      Stokes, John

      Cooke, Robert

      MacArthur, Ian

      Stuttaford, Dr. Tom

      Cormack, Patrick

      McNair-Wilson, Michael

      Sutcliffe, John

      Crouch, David

      Maddan, Martin

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

      d'Avigdor-Goldsmid, Maj. Gen. James

      Maginnis, John E.

      Taylor, Frank (Moss Side)

      Edwards, Nicholas (Pembroke)

      Mather, Carol

      Tebbit, Norman

      Elliot, Capt. Walter (Carshalton)

      Meyer, Sir Anthony

      Tilney, John

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

      Mitchell, David (Basingstoke)

      Trafford, Dr. Anthony

      Eyre, Reginald

      Molyneaux, James

      waldington, David

      Fenner, Mrs. Peggy

      Money, Ernie

      Walker, Rt. Hn. Peter (Worcester)

      Finsberg, Geoffrey (Hampstead)

      Monks, Mrs. Connie

      White, Roger (Gravesend)

      Fortescue, Tim

      Monro, Hector

      Wolrige-Gordon, Patrick

      Gardner, Edward

      Montgomery, Fergus

      Worsley, Marcus

      Gibson-Watt, David

      More, Jasper

      Wylie, Rt. Hn. N. R.

      Gilmour, Sir John (Fife, E.)

      Murton, Oscar

      Younger, Hn. George

      Goodhew, Victor

      Neave, Airey

      Gower, Raymond

      Owen, Idris (Stockport, N.)

      TELLERS FOR THE AYES:

      Gray, Hamish

      Page, Graham (Crosby)

      Mr. Bernard Weatherill and

      Green, Alan

      Percival, Ian

      Mr. Walter Clegg.

      Cummer, Selwyn

      Pym, Rt. Hn. Francis

      NOES

      Armstrong, Ernest

      Hughes, Robert (Aberdeen, N.)

      Parry, Robert (Liverpool, Exchange)

      Bagier, Gordon A. T.

      Hunter, Adam

      Pentland, Norman

      Bennett, James (Glasgow, Bridgeton)

      John, Brynmor

      Perry, Ernest G.

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

      Kaufman, Gerald

      Prescott, John

      Buchan, Norman

      Kerr, Russell

      Price, William (Rugby)

      Campbell, I. (Dunbartonshire, W.)

      Kinnock, Neil

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

      Carmichael, Neil

      Lambie, David

      Ross, Rt. Hn. William (Kilmarnock)

      Cocks, Michael (Bristol, S.)

      Lawson, George

      Sillars, James

      Cox, Thomas (Wandsworth, C.)

      Lestor, Miss Joan

      Silverman, Julius

      Dalyell, Tam

      Lomas, Kenneth

      Skinner, Dennis

      Davies, Ifor (Gower)

      Mabon, Dr. J. Dickson

      Small, William

      Davis, Clinton (Hackney, C.)

      McElhone, Frank

      Smith, John (Lanarkshire, N.)

      Dormand, J. D.

      Mackenzie, Gregor

      Spearing, Nigel

      Douglas, Dick (Stirlingshire, E.)

      Mackintosh, John P.

      Stallard, A. W.

      Freeson, Reginald

      McMillan, Tom (Glasgow, C.)

      Strang, Gavin

      Galpern, Sir Myer

      McNamara, J. Kevin

      Tinn, James

      Grant, John D. (Islington, E.)

      Mahon, Simon (Bootle)

      Urwin, T. W.

      Hamilton, James (Bothwell)

      Marks, Kenneth

      Wellbeloved, James

      Hamilton, William (Fife, W.)

      Mellish, Rt. Hn. Robert

      Wilson, Alexander (Hamilton)

      Hamling, William

      Millan, Bruce

      Harper, Joseph

      Miller, Dr. M. S.

      TELLERS FOR THE NOES:

      Harrison, Walter (Wakefield)

      Murray, Ronald King

      Mr. Donald Coleman and

      Huckfield, Leslie

      Oswald, Thomas

      Mr. John Golding.

  EUROPEAN ECONOMIC COMMUN ITY (INSHORE FISHING INDUS TRY)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Humphrey Atkins.]
  1.20 a.m.
  Mr. Patrick Wolrige-Gordon: The Government must be well aware by now, not only through their own obvious sagacity but because of the strenuous efforts made by many of my hon. Friends, like the hon. Member for Fife, East (Sir J. Gilmour) and others still in the Chamber at this late hour, of the very great threat posed to our inshore fishing industry by the E.E.C. fishing policy. The chief issue of that policy which concerns us lies in its concept that the nationals of any country in E.E.C. should be free to fish up to the beach in the territorial waters of every other country in the E.E.C.
  Taken by itself—and I will deal with the qualifications later—the effect of that policy is to rape at the point of a treaty the treasured and personal possessions of a great country. It will ruin our inshore fishing industry, because it will devour the seed corn. Men without the time to study the issue competently ask why our inshore industry cannot compete. They little know that our inshore fishing industry is currently one of the finest in the world. Britons, apparently unable these days to find many men prepared to work for the sake of service and self-satisfaction in a job well done, have little concept of the driving power of energy and go available in this country, unless they have sampled the enterprise of the inshore industry.
  With its every asset held in common, with leadership given to him who commands it best, to the extent of son in command of father and brother in command of brother, the industry has a camaraderie and a genius of which this country and the world need not less but more. So it is not the power to compete which is in question; it is the ground on which to play the game. We could not hope to distinguish between Aberdeen and Celtic or Arsenal and Leeds if we put all Europe's footballers on our grounds at the same time. That is what is proposed with her fishermen: it is nonsense.
  1142
  There are qualifications. Discrimination is still possible for certain types of fishing for a period of five years from the start of the regulations if the local population essentially lives off fishing. Individual countries can make legal dispositions and administrative rulings which apply to everybody, including their own nationals. As Dr. Mansholt pointed out to me in a letter dated 25th January, the Community regulations do not mention any delimitation of territorial limits. I must say that I enjoy the phrase "delimitation of limits". Nevertheless, I do not believe that the present apprehension among our inshore fishermen about our inshore waters is anything but well conceived, which is why I asked for and am grateful to have obtained this debate.
  There is, of course, much more to the E.E.C. policy than the obliteration of limits and the hard-won agreement of Europe of 1964. The grading of fish, which can involve as many as 10 different grades for any one kind of fish, will take an army of inspectors. The common price system could be particularly damaging to the more distant and smaller fishing harbours, because the idea is that when there is a glut, supplies are withdrawn from the market. But, inevitably, they will be those supplies furthest from the market, and almost certainly the best quality fish, too.
  Judging by reports from the White Fish Authority, the Community seems to think that compensation from its funds in such a case would be the best possible consolation. This type of thinking, I believe, we must reject.
  This is a particularly important and successful industry in Scotland. It involves some 2,500 boats directly employing 8,000 men. In 1969 they landed £10 million worth of demersal fish, £3½ million worth of shellfish and £3 million worth of herring.
  On this achievement has been built a massive framework, particularly throughout the north of the country, of canning and processing plants, of distributive machinery and, of course, the economy of many large and small towns and villages. Yesterday the chairman of the Herring Industry Board estimated that 100,00 jobs could be put in jeopardy by the implementation of this policy.
  Take away that industry's opportunity to prosper and there will be another

  1143
  clearance. I do not say that to be alarmist in any sense. But what else is there? The only alternative to the clearances in the last century were fishing settlements on the coast. The men and women in this industry are fine people. They will not want to sit and smoulder at the table of a Community official. They will go where there is the work and opportunity.
  I wonder whether the Government have yet made any study of a possible alternative should this industry go. I hope that they will never need to do so. That is why I want the Government to come out against this policy now and to reaffirm the sanctity and integrity of our territorial limits. If they want to build a united Europe—I believe that most of us here want that—the ruin of the fisherman is a poor way to start. Moreover, Europe might reflect that if it persists in this policy it will cost it money, too. It may get gold in the short term, but it will not last.
  I hope that we do not have to worry about the momentum of the negotiations, either. It took 100 years before Scotland was content to unite with England. I do not believe that there is any need to rush unions of this kind until the British people have been satisfied on this and every other point.
  The temptation for the Government is, of course, the soft sell: "Come in first and we will discuss it later when we are friends and are all in the Community together". If the Government fall for that I shall not be able to support them: I do not believe that I am making an unreasonable request, even to those who believe most ardently in the Common Market.
  British democracy has been built on its genius for giving a fair deal both to the majority and to the minority. That is how it has achieved its fantastic political stability. But can we yet really be sure that Europe also applies that lesson? The inshore fishermen are a case in point. I ask the House to support them, too.
  1.29 a.m.
  Mr. Gavin Strang: I am grateful for the opportunity to take part in the debate. I congratulate the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) on the splendid way that he has argued the case.
  1144
  This is an issue of grave concern to many of my constituents. As the hon. Gentleman said, their whole livelihood is at stake. If our territorial limits are not safeguarded, the Scottish inshore fishing industry, as we know it, will be finished. The concern of the fishermen arises basically from the fact that they see themselves, quite rightly, as a relatively small proportion of the electorate, and they feel that any Government might be tempted to sacrifice their interests. I do not doubt the sincerity of the Government in their desire to obtain satisfactory terms for the fishermen. That is not at issue. At issue is the fact that the Government will have to pay a price for entry into the Community, and it may be that, when the chips are shown, they will be prepared to pay this price, and it would be too high.
  In the few moments available to me I will make only two points. First, when the E.E.C. was last in the news and when the Chancellor of the Duchy of Lancaster was in Europe making Press statements, he listed three critical areas—the financial contribution, New Zealand and sugar. My fishermen would like to know why fisheries policy was not also listed. It cannot be that the Community's fisheries policy would be less detrimental to the fishermen than the agricultural policy would be to the New Zealanders, for the fisheries policy would be disastrous. It cannot be that the Common Market countries have indicated that they are likely to give way on this issue. After all, why did they anxiously push through their fisheries policy and wish to get it all tied up? Why not wait until we are in the E.E.C. before concluding the final details of that policy?
  Secondly, the British Government have recently said that they reserve their position. This might seem reasonable, but on this issue we have a right to expect them to go further. They could have said that the territorial limits were not negotiable. It is not unreasonable to ask the Government to give that assurance. To say that they reserve their position is not helpful and does not mean much to our fishermen.
  I do not have time to add to these comments. I trust that the Under-Secretary will answer these two important questions.
  1.33 a.m.
  Mr. Ernle Money: I appreciate the sincere and real concern that has been shown by hon. Members, particularly hon. Members with fishing constituencies, over this question. I hope the Minister will take comfort from the fact that there are adequate safeguards inherent in the situation. Those safeguards were admirably summarised in a letter to The Times yesterday by one of the joint editors of the Common Market Law Reports dealing specifically with the two main objections which have been raised tonight and on other occasions—those of regionalism and ecology.
  Immediately one accepts the fact that hon. Members who represent fishing communities cannot be concerned with the broad issue of imports from the point of view of the E.E.C., though at present the Community is an importer of fish and, indeed, in 1969 imported 500,000 tons of fish.
  The concern which has been expressed relates to the free access policy of the Treaty of Rome in connection with the protection of local fishing interests and inshore fishing. I will briefly refer to the two matters which are principally raised. First, on the question of local fishing, there is already written into the common fisheries policy for the Breton fishermen and others, as a transitional measure, the three-mile belt. The Commission is at present considering an extension of this and the possibility of making this provision permanent. There is clearly scope, as one of the editors of the Common Market Law Reports suggests, for an extension along these lines.
  The second matter concerns ecology. It was a matter touched on specifically by Lord Cameron and his Committee when they said that the question was one of
  "…controlling intensity of exploitation on the high seas."
  But I do not think that this is something which this country will find insuperable in the event, as I believe it will be, of a successful application for entry to the Common Market. My reason for believing this is dealt with in paragraph 259 of the Cameron Report in these terms:
  "As we understand the proposals, national regulations would continue in operation but would apply to all Community vessels exactly as they apply to a state's own vessels."
  1146
  In those circumstances, there is no reason why such terms should not be applied broadly, not only to visiting fishing vessels but to our own, and if it is a question of applying the inviolability of the inshore area to any fishing vessels, then, mutatis mutandis, that can apply to both sides.
  I conclude with the second heading of this as dealt with in the letter in The Times:
  "The second objection is ecological. This is both more serious and more easily met. For the Common Fisheries Policy merely requires national treatment, and does not prevent member states regulating all fishing, so long as the regulation is non-discriminatory. Norway, for instance, is contemplating an absolute ban on all trawling within Norwegian waters in order to preserve young, deep-living herring from capture. There is no reason at all why the conservation measures which have been so successfully taken by the present applicant countries should not continue to be applied—even more sternly, if necessary—when we are in the Common Market. In this we can expect the support of the E.E.C. Commission, which is even now fighting hard, supported by Holland and Germany, against the French and Belgian refusal to comply with the North Sea herring conservation measures agreed within the North East Atlantic Fisheries Commission."
  One appreciates the concern, but I do not believe that this is something which in the long run will prove to be insuperable.
  1.38 a.m.
  The Under-Secretary of State for Home Affairs and Agriculture, Scottish Office (Mr. Alick Buchanan-Smith): I congratulate my hon. Friend the Member for Aberdeenshire, East (Mr. Wolrige-Gordon) on being fortunate enough to be able to raise this subject this evening. It is a point of interest that although the matter has caused concern to hon. Members over a considerable period this is the first occasion when it has been positively debated here, though it has been raised at Question Time and in other ways.
  My other general comment is on the fact that no fewer than three hon. Members have taken part in the Adjournment debate, and that, quite apart from that the number of hon. Members who have been prepared to stay behind for this debate at a very late hour, demonstrates the great concern and interest of many hon. Members from many scattered constituencies, not only in Scotland but in England. This demonstrates how important a topic we believe this to be.

  1147
  I certainly personally acknowledge how important the subject is. I have inshore fishermen in my constituency, and I am in close personal touch with them. I met them in January last, and discussed with them at first hand their apprehensions in relation to the common fishing policies of the Common Market.
  I would like to re-emphasise the Government's concern, and our 100 per cent. awareness that this is a concern that spreads throughout the fishing industry and particularly its inshore sections. The concern of the Government is best demonstrated if I could go over the sequence of events of the past nine months leading up to the situation today.
  The House is right to recall that it was on 30th June last year that the E.E.C. decided to revive its proposals for a common fisheries policy. These proposals are implicit in the Treaty of Rome but had lain dormant for some years. On 30th June last year the Council of Ministers instructed the Commission to produce the necessary regulations as quickly as possible. On the same day that action was taken by the Common Market, this Government opened its negotiations. My right hon. Friend, who is now the Chancellor of the Exchequer, on that same day reserved Britain's position.
  It is important that the House should recognise at what an early stage the Government took action in relation to the fisheries policies of the Common Market. This was one of the first actions of the Government when we came into power. We took this action long before there was any general measure of public concern over the question of fisheries policy. Also, it demonstrated our immediate recognition that the interests of our fishing industry would have to be looked after in the light of the development of the common fisheries policy.
  During the autumn of last year we watched very carefully as the common fisheries policy developed, and at the end of the period of this development we lodged a formal note with the Community which expressed the hope that, in view of the great fishing interests of the United Kingdom and of our co-applicant countries, the Six would defer any final decisions on the common fisheries policies until negotiations on enlargement had
  1148
  been concluded. Unfortunately, the Six decided to proceed. On 20th October they produced two basic documents, one on structure and one on marketing. These were brought into effect on 1st February this year and now have largely been achieved through 20 subordinate regulations which they brought in.
  I assure the House that we have studied in great depth and extremely thoroughly what has emerged. But I emphasise, as I have done previously at Question Time, that we are in no way committed to the provisions of the common fisheries policy.
  I now deal quickly with precisely what that policy means. It is important to have it on the record. Basically, the policy is in two parts, the first part of which relates to structure, and the second to the regulation of marketing.
  In opening the debate my hon. Friend referred to marketing. I do not want to deal with that in detail tonight because in the short time available it is the question of fishing limits and the structural questions which are of most concern to hon. Members who have stayed here for the debate. On marketing, I am grateful for the intervention of my hon. Friend the Member for Ipswich (Mr. Money), who mentioned this topic briefly. It deals with questions of the organisation of fishermen, the methods, conditions and prices on sale of fish, questions of Government support, and the rules of international trade. They are of a very complex nature.
  But what is much more important to us this evening and on which I want to dwell—I say this perfectly freely—is the question of fishing limits, which the Government find most worrying.
  The E.E.C. has agreed that vessels of all member countries should have equal access to fish in the waters of all other member countries. But I emphasise—this has not been sufficiently said up till now—that this does not mean complete freedom to fish, as has so often been assumed, particularly by those who have chosen to criticise this policy without first examining it in depth. Member countries are free and, indeed, are expected to retain their domestic regulations as they see fit. In addition, member countries are free to make new regulations to deal with any increase in intensity of fishing or any alteration of the

  1149
  pattern of fishing effort, exactly as they can do at present before entry to the E.E.C. The only qualification I make is that in making these regulations they may not discriminate against vessels of other member countries.
  Mr. Michael Clark Hutchison: That is the whole point.
  Mr. Buchanan-Smith: I ask my hon. Friend the Member for Edinburgh, South (Mr. Clark Hutchison) to consider the practical implications of how the regulations have already been applied by members of the Common Market. For example, the French have banned double-beam trawling, which has had the effect of confining the waters there to the local fishermen. I discovered as recently as this weekend that the Germans have introduced regulations banning boats of over 200 h.p. from waters close inshore, which has had the effect, for certain reasons of which the Germans wish to take advantage, of preserving their inshore waters for their inshore fishermen.
  Further, conservation is still important. The common fisheries policy is not intended as a licence for countries to fish out each others' waters. Indeed, the Community itself can make regulations to prevent over-fishing, even where a country is not concerned about a problem in its own waters.
  Although what I have said about the application of the common fisheries policy might appear to indicate that the policy is not quite so drastic as some people would care to make out, I again emphasise that the Government are concerned about it. The inshore fishing industry is very important to Britain. My hon. Friend mentioned statistics in relation to employment and the value of the catches. The industry is proportionately more important in Scotland than it is South of the Border. We are aware
  1150
  of the indirect employment that the industry provides. We do not for a moment under-estimate the importance of this sector of the industry. It is doing a good job, and it is thriving into the bargain.
  A large proportion of our catch is taken from within our fishery limits. It was a Conservative Government which extended the limits to 12 miles, as finalised in the 1964 European Fisheries Convention. We would be the very last to wish to give up those hard fought for gains. That is why we find the Common Market fisheries policy as it stands so unsatisfactory. However, we must bear in mind, in the interests of accuracy, that other individual European countries already enjoy historic rights to fish up to six miles from our coast along particular but considerable stretches of our coast. The French can fish for shellfish between 6 and 12 miles along much of our south and west coasts. The Belgians can fish for whitefish between 6 and 12 miles in the Moray Firth area.
  In addition to the action that we have already taken, officials of my Department and of the Ministry of Agriculture, Fisheries and Food are in full consultation with the officials of the E.E.C. in Brussels. We have another contact with them on Thursday of this week.
  I welcome this debate as clarifying what is happening. My right hon. Friend the Secretary of State and my right hon. and learned Friend the Chancellor of the Duchy of Lancaster have already met inshore fishermen. I share the industry's concern as it has been expressed in the House tonight. The present fisheries policy of the E.E.C. is most unsatisfactory to us. This is why we are making it a matter for negotiation.
  Question put and agreed to.
  Adjourned accordingly at eleven minutes to Two o'clock.