Sitting of 20 December 1956

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

    Shopbreaking
    Mr. Jannerasked the Secretary of State for the Home Department how many smash-and-grab raids, both inside and outside buildings, have taken place in 1954, 1955, and the first six months of 1956; and how much money has been unrecovered as a result.
    The Secretary of State for the Home Department and Minister for Welsh Affairs (Major Gwilym Lloyd-George): If the hon. Member is thinking of cases where someone openly drives up to a shop, breaks the window, steals and drives away, there were three such cases known to the Metropolitan police in 1954, one in 1955 and two in the first six months of 1956. The property stolen was valued at £4,000. All but £5 worth is as yet unrecovered. No corresponding figures are available for other forces.
    If the hon. Member is thinking of all cases of shopbreaking by smashing the front window, there were 1,094 such cases known to the Metropolitan police in 1954, 1,025 in 1955 and 708 in the first six months of 1956. No information is available about the total value of the property stolen and unrecovered, without considerable research.

    Refugees from Egypt (Visas)
    Dr. Strossasked the Secretary of State for the Home Department how many visas have been issued to non-British subjects who have been expelled from Egypt; and how many British subjects have already reached Britain.
    Major Lloyd-George: The Swiss authorities, acting as protecting Power, have issued 51 visas to foreigners in Egypt
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    to come to the United Kingdom. No precise figures are available of the number of British subjects who have arrived from Egypt, but such records as it has been possible to make show that nearly 2,000 British refugees from Egypt are now in the United Kingdom.
    Dr. Stross: Can the right hon. and gallant Gentleman say what conditions, if any, have to be subscribed to in order to allow non-British subjects to enter the country? Are they allowed if, for example, they have relatives or friends here who can give some warranty that they will care for them financially when they come?
    Major Lloyd-George: Very sympathetic consideration is given in the case of those who have relatives here, and of others who have not. About 40 have been allowed to come in without visas.
    Mr. Janner: I appreciate the interest which the right hon. and gallant Gentleman is taking in these cases. Will he continue this policy with a view to giving accommodation to those who come here from Egypt in future? He knows that barbaric treatment is being meted out by Egypt to people, including those who have no nationality. Will he also see to it that in those cases where Egyptians are insisting upon men of this description leaving other countries sympathetic consideration is given to their coming and remaining here?
    Major Lloyd-George: I am not quite clear what the hon. Member means by Egyptians insisting upon them leaving other countries. About 2,000 British refugees have come in from Egypt and about 1,400 of them are accommodated in hostels.
    Mr. Janner: Perhaps I did not make myself clear. Is the right hon. and gallant Gentleman aware that in the Sudan, for example, the Sudanese are asking Jewish Egyptian subjects to leave the Sudan, at the instigation of Egypt? I assume that what the right hon. and gallant Gentleman has said about receiving the refugees will apply to those who come from countries other than Egypt.
    Major Lloyd-George: Yes. I now follow what the hon. Gentleman means. I shall certainly give sympatheic consideration to that point.

    Electoral Register
    Mr. H. Hyndasked the Secretary of State for the Home Department what action he is taking to remedy the anomaly under which people reaching 21 years of age in July are still not able to vote in an election until the following October.
    Major Lloyd-George: The hon. Member is under a misapprehension. In 1949 the autumn register, the qualifying date for which was 15th June, was abolished on grounds of economy. In response to strong representations from both sides of the House the Government of the day introduced the present provision to give persons reaching the age of 21 by 15th June the same voting rights as they would have had if the autumn register had not been abolished. When there were two registers annually a person reaching the age of 21 after 15th June had to wait until the spring register came into force on 16th March before he could vote. Now he waits until the register comes into force on 16th February.
    Mr. Hynd: As those people's names are already on the register, is there any reason why they should not vote when they become 21? Why should they have to wait four more months? Has the right hon. and gallant Gentleman noticed from the result of the Melton by-election that voters are now using their votes more intelligently?
    Major Lloyd-George: I think that the hon. Member is under a misapprehension. Under the old scheme they had to wait for sixteen months before they were entitled to vote.
    Mr. Hynd: Why should they wait four months?
    Major Lloyd-George: That is what Parliament decided, and there is nothing we can do about it.

    State Management Licensed Premises
    Mr. Vaneasked the Secretary of State for the Home Department whether he will arrange for milk to be on sale at all licensed premises under his control within State management districts.
    Major Lloyd-George: No, Sir.
    Mr. Vane: In view of the surplus of liquid milk which is worrying producers,
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    the Milk Marketing Board, and taxpayers, could not the right hon. and gallant Gentleman try this experiment, to see whether he cannot make a small contribution towards dealing with this very important problem?
    Major Lloyd-George: There are other places in Carlisle where one can get milk. If my hon. Friend is hoping to get rid of surplus milk by offering it for sale in public houses he is more optimistic than I am. There are milk bars in Carlisle, and in all the hotels and restaurants run by State management people can get milk.
    Mr. Hastings: Is it not the duty of licensed houses to provide food as well as drink? Does not the right hon. and gallant Gentleman agree that one of the most valuable foods is milk?
    Major Lloyd-George: I do not dispute that with the hon. Member for a moment that is perfectly true. But I regret to have to inform him that there is no demand for milk in licensed premises in Carlisle.
    Dr. D. Johnsonasked the Secretary of State for the Home Department whether he is aware that the managers of Carlisle State Management Scheme public houses have been instructed to increase their profit margins by putting a bigger collar on the pints of beer they serve; by what authority this instruction has been given; and if he will make a statement.
    Major Lloyd-George: I am glad to take this opportunity of repudiating the suggestion that any public house manager in the Carlisle State Management Scheme has ever been instructed to increase profits by giving short measure. On the contrary the Home Office has assured the Civil Service Union, which represents the managers of State Management Public Houses, that such practices would not be tolerated.
    Dr. Johnson: Is the Home Secretary aware that I have checked this information and I am prepared to supply to him the reliable source from which I obtained it? Will he at least ensure that my constituents who, as he has just said, would prefer to drink beer rather than milk in their pubs, are not subjected to this form of national economy during the coming season?
    Major Lloyd-George: I have already said that I repudiate wholly what has been said, and I have done so on information. Before I took over the office of Home Secretary, in September, 1954, the Civil Service Union was asked to supply evidence in regard to this, and up to now we have not received any such evidence.
    Mr. Wigg: Will the right hon. and gallant Gentleman consult the Secretary of State for War and ascertain from him that the technical name for this operation is not a collar on the pint but giving it too wide a chinstrap?

    Drunkenness (Young Persons)
    Mr. Gibsonasked the Secretary of State for the Home Department how far the 669 persons under 18 years of age against whom the offence of drunkenness was proved represents an increase or decrease as compared with the previous three years; and, in view of the aim of the law to prevent the sale of intoxicants to persons under 18 years of age, what steps he has taken to ascertain the principal sources from which these young persons obtain intoxicants.
    Major Lloyd-George: The figure of 669 represents an increase over previous years, the corresponding figures for 1954 and 1953 being 511 and 368 respectively. Figures for 1952 are not available. Last year I asked chief constables for whatever information was available about each offence of drunkenness by persons under 18 in their police districts during 1954 and 1955. In 55 per cent. of the cases reported on, the source of the drink was not known, in 31 per cent. it is stated to be the public house; the next most frequent source was described as "friends or domestic sources". I have asked chief constables to supply similar information for offences in 1956.
    Mr. Gibson: I am much obliged to the right hon. and gallant Gentleman for that information. Would he inquire whether one of the greatest sources of this kind of drinking by young people under the age of 18 years is not those occasions when occasional licences are given for dances and activities of that kind all over the country? In my experience that is what I have found, and I should be glad if the Home Secretary would make some inquiries into that.
    Major Lloyd-George: I made some inquiries last year on this subject, when the question was raised of the danger of occasional licences. The granting of these licences is in the hands of the justices. I asked the chief constables of England and Wales to look into this, and they then said that they could not find any evidence to that effect. I have asked them again, and if I thought that this was becoming a serious matter—and I cannot say as yet that it is—I would take any steps that I could to stop it.

    Attempted Suicide (Law)
    Dame Irene Wardasked the Secretary of State for the Home Department whether he will take steps to bring English legislation regarding attempted suicide into line with Scottish law.
    Major Lloyd-George: As long ago as 1916 the Metropolitan Police adopted, with the approval of the then Secretary of State, the practice of preferring a charge of attempted suicide only where there is no responsible person able or willing to take charge of the individual concerned, or where special circumstances, such as threats of renewed attempts of suicide or positive indications of insanity suggest that the individual should be kept in custody for his own protection. In 1921 the Metropolitan practice was brought to the notice of provincial forces. In the great majority of cases no proceedings are taken and I am not satisfied that a change in the law is desirable.
    Dame Irene Ward: While thanking my right hon. and gallant Friend for that reply, may I ask him if he will not agree that these cases are among some of the greatest human tragedies? Attempted suicides are brought to a police station and sometimes to the courts, and if the law in Scotland is more humane than it is in England, what objection is there to introducing the Scottish law in England?
    Major Lloyd-George: I should not like to get into a discussion about what is better in Scotland or in England. There are one or two things which we have accepted from Scotland as being better, but I am not at all sure that this would be one of those cases. So far as the Metropolitan Police are concerned, this circular was issued in 1921, the idea

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    being—and I think that it is a sound one—that where a person charged with attemped suicide had no friends or relatives to go to it might be thought, and I think rightly thought, that it would be better for him to be charged so that the court could take some steps to protect a person from himself or herself. I do not think that is inhuman at all. It has worked very well, and so far as the Metropolitan Police are concerned I think that only 1 in 20 cases has been proceeded against. We circularised the provinces some time ago, and I am doing the same again.
    Dame Irene Ward: Will my right hon. and gallant Friend bear in mind that I am a Northerner and I am tired of hearing about the Metropolitan practice. Are there not first-class voluntary organisations and first-class local authorities, and why should people who are friendless have to go to court when there are public bodies which will befriend them? Will the Home Secretary please look at the matter again, and remember the North?
    Major Lloyd-George: I am not likely to forget the North, because I happen to sit for a seat in the North. The fact of the matter is that it is through the courts that it is possible to get the use of these voluntary organisations, and all that the Metropolitan Police have done since 1921 has been to tell the provincial forces of their experience, and they are prepared to do so again.

    Fee-Charging Employment Agencies
    Miss Burtonasked the Secretary of State for the Home Department whether, in view of the unemployment position in Coventry and the urgency affecting notification of vacancies, he will make an interim statement upon fee-charging employment agencies and their position in such an emergency.
    Major Lloyd-George: The legislation to which I referred in my Answer to the hon. Member on 13th December would regulate the conduct of fee-charging employment agencies, and would not in any way affect the notification of vacancies by employers to employment exchanges. If the hon. Member is suggesting that all vacancies should be notified to the employment exchanges, I can only refer her to the reply given by my right
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    hon. Friend the Minister of Labour to her Question on 23rd October.
    Miss Burton: Is the right hon. and gallant Gentleman aware that I have followed this matter week by week because of the events in Coventry, and would he not agree that it is intolerable when people are out of work that agencies should take advantage of their misfortune? Is he aware that agencies in Coventry charge not only a registration fee but take half of the first week's money as well, and is there nothing he can do under the present position?
    Major Lloyd-George: As I think I told the hon. Lady before, it will need legislation which I will bring in as soon as Parliamentary time permits. As to the other part of the Question, I can only refer her to what my right hon. Friend said in answer to her Question on 23rd October with regard to the Notification of Vacancies Order.
    Mr. Lindgren: Will the right hon. and gallant Gentleman consult the Minister of Labour because much of this trouble has arisen from the fact that, owing to the Government's economies, Ministry of Labour officials are now having to concentrate on the payment of benefits rather than on placings? If the Ministry of Labour are so concentrating on the payment of benefits in areas where unemployment has arisen that they cannot deal with placings, then the agencies are it greater attraction than they would otherwise be.
    Major Lloyd-George: I will consult my right hon. Friend.

    Homosexuality and Prostitution (Committee's Report)
    Mr. Hydeasked the Secretary of State for the Home Department when he expects to receive the Report of the Committee on Homosexuality and Prostitution.
    Major Lloyd-George: I am informed that the Committee is still engaged in drafting its Report. It is aware of my anxiety to have it as soon as possible, but I cannot say when it will be completed.
    Mr. Hyde: Has my right hon. and gallant Friend noticed the remarks of one of the Metropolitan magistrates recently

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    to the effect that unless the courts are given wider powers to deal with the problem of prostitution, a serious scandal will develop? Is he aware that streets which not long ago were regarded as respectable neighbourhoods are now places where no decent person would wish to be seen after dark; and will he draw the attention of the Committee to the urgency of this matter and the need for their making recommendations which can be quickly implemented?
    Major Lloyd-George: What the Committee recommends is entirely its own affair. I did see what the magistrate said. I should have thought that to take any action in the form of legislation before we have the Report would be the height of folly.

    Mental Deficiency Acts (Juvenile Delinquents)
    Lieut.-Colonel Liptonasked the Secretary of State for the Home Department how many juvenile delinquents, certified under the Mental Deficiency Acts, are now detained under orders made by him.
    Major Lloyd-George: Children and young persons committed to approved schools and certain other establishments who are transferred to mental deficiency hospitals by order under Section 9 of the Mental Deficiency Act, 1913, become the responsibility of my right hon. Friend the Minister of Health. Statistics are not kept in a form showing the number of such persons who are detained at any one time. The orders expire after a year unless continued by the Board of Control. Thirty-two orders were made in 1955, and 39 so far this year.
    Lieut.-Colonel Lipton: In view of the recent court cases showing that some persons in this category have been wrongly detained, will the Home Secretary have an urgent review made of all the outstanding cases in which juvenile delinquents have been detained by an order of the Home Secretary, sometimes for very many years after the original sentence to an approved school or Borstal has expired? Is the Home Secretary aware that there is very great uneasiness about the way in which some of these people are put away for the rest of their lives?
    Major Lloyd-George: That, of course, as the hon. and gallant Member appreciates, is a matter for the Board of Control dealing with people certified in this way.
    Lieut.-Colonel Lipton: But the right hon. and gallant Gentleman makes the detention orders.
    Major Lloyd-George: Of course; that does not make any difference to what I have just said. I will look into any matter at any time. Whatever outstanding cases the hon. and gallant Member has in mind, there has been a steady decline in the last few years.
    Dr. D. Johnson: Is my right hon. and gallant Friend aware that there is uneasiness about these medical certifications which are made under conditions of imprisonment and from which there is no appeal, as the detention which they warrant is continued after the prison sentences have lapsed? Will he review this matter in the same way as he promised me that he would look into the Criminal Lunatics Act when I asked him a similar Question?
    Major Lloyd-George: Of course I will certainly look into anything about which my hon. Friend asks me on this question. I would remind him that the orders expire after a year unless they are continued by the Board of Control.

    Ex-Prisoners (Employment)
    Mr. Hydeasked the Secretary of State for the Home Department, in view of the increasing difficulties which are being experienced by ex-prisoners in obtaining employment, particularly in the London area, what steps he is taking, in consultation with the Central After-Care Association and the National Association of Discharged Prisoners' Aid Societies, to ensure that all possible action is taken to assist ex-prisoners to be suitably employed as soon as possible after their release from prison.
    Major Lloyd-George: Certain types of prisoner tend to be difficult to place in employment but my right hon. Friend the Minister of Labour is not aware of any recent general difficulty. If my hon. Friend will let me have details of any cases he has in mind I will look into them.
    Mr. Hyde: Would not my right hon. and gallant Friend agree that ex-prisoners who are unable to find suitable employment may be forced back into crime, thus constituting a liability on the taxpayer? Would he not think it would be useful, in consultation with the Minister of Labour, to detail special officials in the employment exchanges to help these men to find suitable work?
    Major Lloyd-George: As my hon. Friend probably knows, employment exchanges work in very close contact with discharged prisoners' aid societies and after-care associations. The primary responsibility for finding employment for discharged prisoners rests with my right hon. Friend the Minister of Labour. I would remind my hon. Friend that this task is not always easy. There are some types of prisoners who may be unskilled, or physically unfit, and others who are professional men may have abused a position of trust. We must also never forget the work-shy psychopath, who on the whole is the loudest in his complaints.

    Hungarian Refugees
    Mr. Holtasked the Secretary of State for the Home Department when he expects to be able to remove the temporary ban on the admission of Hungarian refugees into this country.
    Major Lloyd-George: I would refer the hon. Member to the statement made on my behalf by my right hon. Friend the Foreign Secretary in his opening speech in yesterday's debate on Hungary.
    Mr. Holt: Can the right hon. and gallant Gentleman give the House any information as to the number of refugees who have now been moved out of first and second line reception centres, either into private homes, empty houses, or hostels run by local authorities?
    Major Lloyd-George: I can give the hon. Member these figures: 11,500 have come here, and we have had very great congestion at the receiving centres, which at one time ran up to 6,000, but that has now been reduced to 2,000. As my right hon. and learned Friend said yesterday, we hope in the New Year to consider reopening.

  EDUCATION

    Education Committees (Co-opted Members)
    Dr. Kingasked the Minister of Education how many local education authorities do not co-opt on to the education committee two representatives of the teaching profession.
    The Minister of Education (Sir David Eccles): Every education committee of a local education authority must include persons of experience in education, and the great majority of authorities, in giving effect to this requirement, co-opt one or more serving or retired teachers.
    Dr. King: The Minister has not given me the information for which I asked in the Question. May I ask if he is aware that, as most local education authorities do co-opt teacher representatives, they appreciate the practical value of the services which those representatives can render? Will he call to the attention of the minority group of local education authorities the fact that they are not doing what is provided for under successive Acts of Parliament?
    Sir D. Eccles: I agree with the hon. Member, and I advise committees to do this. I cannot go further than that, but perhaps the Question and Answer today will bring this subject again to the notice of local committees.
    Dr. Kingasked the Minister of Education if he will circularise local education authorities recommending that when co-opting to education committees persons representing industry, one such co-optee should be a trade unionist.
    Sir D. Eccles: Local education authorities have always been advised that their education committees should, according to local circumstances, include members with knowledge of industry, commerce and agriculture, but I leave them to decide how best to give effect to this advice.
    Dr. King: Whilst thanking the Minister for that sympathetic Answer, might I ask him if he is aware that the trade union movement was keenly interested in education long before the Conservative Party was, and that the practice of many Conservative authorities in the country is almost to build a co-opted membership on education committees from one social class? In view of what the right hon.

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    Gentleman has said, will he convey this sentiment to the education authorities concerned?
    Sir D. Eccles: Of course I cannot agree with the first part of that supplementary question. The Conservative Party existed long before the trade union move—
    Mr. Rankin: It was only interested in chimney sweeping then.
    Sir D. Eccles:—and took a great interest in education. I am entirely in favour of the co-option of members who are going to be useful to the committees. I have no doubt that some trade unionists would be very useful to committees, but I believe the co-option should be on the basis of the person concerned being of use and not as a representative.
    Major Beamish: Is "co-optee" King's English?
    Hon. Members: Queen's English.
    Mr. M. Stewart: In view of the remarkable statement made by the Minister, may I ask whether, if he has had any book tokens given to him for Christmas, he will use one to get Sidney and Beatrice Webb's "History of Trade Unionism"?
    Sir D. Eccles: Yes, if the hon. Member will oblige with a token.

    Scientists, Technologists and Engineers
    Mr. Ellis Smithasked the Minister of Education (1) if he is satisfied that the 11-plus selection and present secondary education facilities are providing the required increases in numbers of students who may qualify or be suitable to meet the increasing needs of industry; what action he intends to take to provide for the needs of the next 10 years in science, technology and engineering; and if he will call together the directors of education of all large concerns so that arrangements may be made for the works educational facilities, when not in use, to provide the foundation for a co-operative educational programme to meet the growing needs of industry;
    (2) what further action he proposes to take on the White Papers Command Paper No. 9703, Command Paper No. 8357, the 1955 Report on the Recruitment of Scientists and Engineers by the
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    Engineering Industry and the 1956 Report on Scientific and Engineering Manpower.
    Sir D. Eccles: The hon. Member is asking me to describe the policy for education which we are pursuing. This I cannot do in answer to a Parliamentary Question but I can assure the hon. Gentleman that we have the needs of industry constantly in mind, and if he can tell me of any spare capacity in any works school I shall be much obliged for the information.
    Mr. Ellis Smith: I will treat the Answer as the Minister has treated the Question. Question No. 21.
    Mr. Ellis Smithasked the Minister of Education what action he has taken on the need to encourage girls to study for science and engineering; and what special attention has been given to paragraphs 87 to 92 on further education for girls in the White Paper on Technical Education, Command Paper No. 9703.
    Sir D. Eccles: These paragraphs have already received wide publicity and there is encouraging evidence that the advantages of further education for girls are becoming better appreciated.
    Mr. Ellis Smith: Does the Minister agree that knowledge of geometry and mathematics is the basis for meeting our present needs in industry? If so, what steps is he taking in order that girls can be encouraged to go in more for those subjects, to undertake teaching and take their place in industry?
    Sir D. Eccles: I agree with what the hon. Member has said. I think that industry can do a great deal by making head mistresses and girls in schools aware of the kind of jobs which are open to the girls if they take those subjects. As a matter of fact, the number of girls who obtained passes at advanced level G.C.E. in mathematics and science has increased by 40 per cent. in the last five years.
    Mr. Ellis Smith: Would not the Minister agree that industry, and especially large-scale industry, is doing all it possibly can in this respect? Has not the time arrived when some sense of urgency should be introduced in the matter by the Minister in particular, and by the Government in general?
    Sir D. Eccles: Of course I do not agree that industry is doing all it can. It is doing a great deal, but industry and the Minister together have still a long way to go.

    Refugees (Further Education)
    Dr. Strossasked the Minister of Education whether he is aware that among the Hungarian refugees and British nationals expelled from Egypt, there are young men and women who were in the midst of their university or technical training; what are the numbers involved; and whether he will give an assurance that facilities will be offered them to continue their education.
    Sir D. Eccles: Yes, Sir. The universities have very generously undertaken to accept and, if possible, maintain up to 150 Hungarian students. It is possible that of those wishing to remain in this country more than this number will be found suitable for a university education, and that others will require other forms of further education. The arrangements to be made for Hungarian refugees and British nationals from Egypt are now being considered.
    Dr. Stross: I thank the Minister for that reply, which will give great reassurance to the people who are involved. Is the right hon. Gentleman aware that such an Answer will do much to show the world that we are deeply and consciously aware of the plight of these young people?
    Sir D. Eccles: We hope to give them a new start in life.

    Stourbridge Grammar School (Public Meeting)
    Mr. Wiggasked the Minister of Education whether he is aware that, contrary to accepted practice approved by his Department, the Stourbridge Labour Party has been refused the use of Stourbridge Grammar School, a grant-aided school, for a public meeting; and whether he will make a statement.
    Sir D. Eccles: There is no accepted practice in this matter. Except during Parliamentary and local government elections, the governors of voluntary aided schools have unrestricted power under the Education Act, 1944, to control the use
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    of their school premises for public meetings.
    Mr. Wigg: Surely the right hon. Gentleman is aware of what happened in Stourbridge on this occasion. While he may have no direct responsibility, surely he will take this opportunity of expressing disquiet at the action taken by one man, Alderman Jones, Chairman of the Governors, in preventing the Stourbridge Labour Party having the use of this hall for violently protesting against the Government's Suez policy?
    Sir D. Eccles: The hon. Gentleman has many opportunities of speaking and I am sorry that he did not get this one. The fact is that the buildings of aided grammar schools belong to the school trustees and, as the Act stands, I have no power to direct them in their use, other than during elections. I am sorry that the hon. Gentleman was not allowed to speak. I understand that the Governors took a decision not to allow any political meetings during the Suez crisis.
    Mr. M. Stewart: Does not the right hon. Gentleman agree that a very serious principle is involved here? If it were a question of a local authority or the governors of an aided school laying down a general principle to allow political meetings or not to allow political meetings, we might allow them discretion to take one of those decisions or the other. Here, as I understand it, the governors refused permission for a particular meeting because of the opinions that were to be expressed at that meeting. Surely it is extremely undesirable that buildings connected with the public education system should be used in such a manner. If the Minister has no powers, will he not consider whether it is necessary for him to take them?
    Sir D. Eccles: That is another point. I have not the powers, and whether we should have them over the governors of an aided school requires consideration. I am not prepared to give an answer now.
    Mr. J. Griffiths: While the use of school buildings for public meetings is a matter for the authorities concerned, does not the right hon. Gentleman think it is unwise and undesirable that the authorities should exercise political discrimination? Suppose this happened in a county

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    with a Labour majority and the boot were on the other foot; what would the Minister say?
    Sir D. Eccles: I should take exactly the same view as I have taken in this case.

    University Awards, West Riding
    Mr. Chapmanasked the Minister of Education to what extent the Yorkshire West Riding education authority has now agreed to increase the number of university awards it offers; and how the new figures will compare with those for Lancashire and for other comparable authorities.
    Sir D. Eccles: I understand that the authority is revising its selection arrangements. I have not yet received its detailed proposals, but I would expect the number of awards to be given to depend on the number of suitable candidates, and not to be limited to a total fixed in advance.
    Mr. Chapman: Is the right hon. Gentleman aware that the sort of figure which is being discussed in the West Riding, taken on the basis of last year's university awards, would mean an increase of 60 in grants, whereas if the children were living in Lancashire some 200 or 300 more would have got grants on the basis of the policy pursued in Lancashire? Does not that mean that the West Riding is still going to be open to the charge, now being made nationally against it, of niggardliness and parsimony?
    Sir D. Eccles: As the matter is under discussion, I had better wait and see what actual proposal is made to me.
    Mr. Chapmanasked the Minister of Education whether, in view of protests made by headmasters, divisional executives and parents in the area, and in view of cases which have been brought to his notice, he will ask the West Riding of Yorkshire education authority to conduct a special review of the cases of university students who have been refused awards in the last two years, with a view to helping sonic of those who have suffered from its recent policy.
    Sir D. Eccles: As I have just told the hon. Member, the authority is revising its selection arrangements, but I would not
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    expect it on this account to undertake a general review of the cases in which applications for awards have been rejected in the past.
    Mr. Chapman: Why not? Is it not the case that there are students who have got themselves into the universities and are now trying to pay their way, when they come from the West Riding, whereas their colleagues at the universities from other counties are getting substantial help? Is there not therefore a case for reviewing the position of those who are going to universities and are now suffering?
    Sir D. Eccles: Now that there is a Conservative majority in this council it is reviewing the bad policy of its predecessors. If it puts forward any proposals for students who are already at the universities I shall welcome them. I do not think that a general retrospective review is called for.
    Mr. Chapman rose—
    Mr. Hobson: As a Member for a West Riding constituency, may I ask the right hon. Gentleman if he does not think that undue bias is being shown by the West Riding County Council with regard to these grants? Does not he think that his Department ought to use the powers it possesses to review the whole position? It is all very well reversing the policy, which is at present taking place, but it is another thing to penalise those who have won their places at the universities and who should be beyond the to-and-fro of party politics.
    Sir D. Eccles: I agree with the lion. Member for Keighley (Mr. Hobson). In the past, this county council appears to have pursued a very niggardly policy, which is now being reviewed. The council has promised to send me proposals based on the review, and it seems sensible to wait for those proposals before I make any decision.
    Mr. Chapmanasked the Minister of Education to what extent the Yorkshire West Riding Education Authority regularly reviews the cases of university students who have not received awards, with a view to helping those who show promise in university examinations; and whether he will issue a circular to local education authorities encouraging this practice.
    Sir D. Eccles: The authority does not make any such review. Many authorities are prepared exceptionally to entertain applications for awards from students who are already at university. I see no need for a circular on the matter.
    Mr. Chapman: Cannot local education authorities, like other people, make mistakes in the first place, and should not the Minister encourage them to review cases where they have made mistakes, and where a lad or girl has shown promise later on?
    Sir D. Eccles: The hon. Gentleman forgets that although this authority has made mistakes it is now seeing how the mistakes can be put right. I assure him that it would be better to allow it to put its proposals up to me.

  COMMONWEALTH RELATIONS

    United Kingdom Bases, Ceylon
    Mr. Fenner Brockwayasked the Under-Secretary of State for Commonwealth Relations if he will make a statement on the negotiations with the Prime Minister of Ceylon on the use of the bases at Trincomalee and Katunayake.
    The Under-Secretary of State for Commonwealth Relations (Lord John Hope): I would refer the hon. Member to the reply given on 11th December to the Question asked by the hon. Member for Govan (Mr. Rankin).
    Mr. Brockway: I have read the terms of that reply. Has not the hon. Gentleman now some further statement to make in the matter? Can he particularly say whether alternative bases are being sought at Mombasa and Dar-es-Salaam in East Africa and, if so, whether the local population will be consulted.
    Lord John Hope: This matter is still the subject of discussion between the two Governments. So far as Ceylon is concerned, I would rather say nothing more at the moment.

    Kashmir
    Mr. F. M. Bennettasked the Under-Secretary of State for Commonwealth Relations, in view of the support given by Her Majesty's Government at the Security Council to the Resolution on Kashmir of 30th March, 1951, what representations he
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    has received from the Pakistan Government consequent upon recent declarations of the Kashmir Constituent Assembly on the state's political future.
    Lord John Hope: I am afraid that I cannot divulge the nature of confidential communications with another Commonwealth Government.
    Mr. Bennett: While I appreciate that point of view, may I ask whether my hon. Friend would be prepared at least to give an undertaking that Her Majesty's Government stands by all outstanding Resolutions of the United Nations Security Council as to the future of this State, and in particular the Resolution of 30th March, 1951, in which it is expressly laid down that the so-called Constituent Assembly of Kashmir has no right whatsoever by any method whatsoever to attempt to decide the future disposition of the State?
    Lord John Hope: Yes, Sir. Her Majesty's Government stand by their support of that Resolution of 30th March I take it that the affirmation to which my hon. Friend refers is that which affirms
    "that the convening of a Constituent Assembly recommended by the General Council of the All-Jammu and Kashmir National Conference and any action that the Assembly might attempt to take to determine the future shape and affiliation of the entire State or any part thereof would not constitute a disposition of the State in accordance with the above principle."
    The principle is, of course, that referring to the democratic method of a free and impartial plebiscite.
    Mr. J. Griffiths: In view of the fact that this Question concerning India has emanated from the Government side of the House, may I ask whether it is the desire of Her Majesty's Government that India should stay within the Commonwealth?
    Lord John Hope: The Answer, Sir, is "Yes".
    Major Beamishasked the Under. Secretary of State for Commonwealth Relations if he will publish in the OFFICIAL REPORT the terms of all United Nations Resolutions or recommendations regarding the future status of Kashmir; and whether Her Majesty's Government's representative in the United Nations will continue to press for the holding of a plebiscite in Kashmir, and, in particular,

    1447
    for the consent of the Indian Government to the presence of United Nations observers in Kashmir during the forthcoming elections.
    Lord John Hope: The United Nations Resolutions on Kashmir have been published in the records of the United Nations and are available in the Library of the House. The most important are those of the United Nations Commission for India and Pakistan of 13th August, 1948, and 5th January, 1949, which were accepted by both sides and which provide for a settlement through a plebiscite under United Nations auspices. These Resolutions gave the plebiscite administrator authority to appoint observers. Her Majesty's Government have always hoped that this dispute would be settled by agreement between the two countries. That is still their hope. Meanwhile Her Majesty's Government will continue to support efforts to reach agreement which would give effect to the Resolutions of the United Nations.
    Major Beamish: Is my hon. Friend aware that many people find it very difficult indeed to reconcile Mr. Nehru's attitude to certain foreign problems with his repeated rejection of United Nations Resolutions on Kashmir? May I specifically ask my hon. Friend to be good enough to comment on some recent authorative reports that in the forthcoming elections in Kashmir in the spring, no party which wants union with Pakistan, or which even wants independence, is to be allowed to take part?
    Lord John Hope: I cannot comment on the last remarks of my hon. and gallant Friend, but I think that it would be most unjustified for the House to assume that Mr. Nehru will, in fact, go back on any undertaking which he has given. The Prime Minister of India did say, in the Council of States on 18th May, 1954, when talking about the Constitution (Application to Jammu and Kashmir) Order, 1954:
    "Every assurance we have given, or every international commitment we have made in regard to Kashmir, holds good and stands."
    Mr. Bottomley: Is the Under-Secretary aware that we welcome the statement that Her Majesty's Government will do all possible to bring about an amicable settlement of this problem?
    Mr. F. M. Bennettasked the Under-Secretary of State for Commonwealth Relations whether, in view of Pandit Nehru's forthcoming return visit to London on his way back from the United States of America to India he will take this opportunity to meet him to discuss implementation of outstanding Resolutions of the United Nations in regard to Kashmir.
    Lord John Hope: My right hon. Friend the Prime Minister expects to meet Mr. Nehru when he returns to this country on 24th December. I cannot, however, say what will be the subject of their conversation.
    Mr. Bennett: Would the Minister at least suggest to his right hon. Friend that, at a time when this country has been under particularly heavy fire, rightly or wrongly, for not promptly complying with United Nations Resolutions, it would not be a bad idea if one of the chief protagonists were to set an example and practise just a little of what he preaches? While it may be wrong to assume that Mr. Nehru does not intend to stand by United Nations Resolutions, is it not, nevertheless, a fact which no one in any quarter of this House can deny that at this moment Mr. Nehru stands in default of precisely six United Nations Resolutions?
    Mr. Ellis Smith: On a point of order, Mr. Speaker. Is it not, in accordance with the past practice of this House, wrong for hon. Members to make serious reflections of that kind upon a gentleman who is to visit this country especially to meet the Prime Minister?
    Mr. Speaker: This Question was addressed to the Under-Secretary of State for Commonwealth Relations. I presume that there is some Ministerial responsibility in the matter, otherwise it would not have been accepted by that Department.
    Mr. Ellis Smith: Further to that point of order. What I say, Mr. Speaker, is based on past practice; that, apart from Ministerial responsibility, it has been considered ill-advised, and has been deprecated by previous Speakers, that reflections of that character should be made upon a representative gentleman—who is the Prime Minister of India—visiting this country.
    Mr. Bennett: Before you reply, Mr. Speaker, may I ask whether it is not a fact that all I have done is to point out the absolutely truthful fact that, at this moment, India stands in default of no less than six Resolutions of the United Nations? I made no reflection on any statesman or country, but simply stated the truth. During the last few weeks, we have often enough been told that we stand in default of Resolutions, so why is it not right to draw attention to others who are in default?
    Mr. Speaker: Order. I hope that we shall not have a debate on this. I have myself checked before what I considered to be an undesirable reflection upon this gentleman and I should do so again, but it is very hard to draw the line between what is allowable and what is not. I think that the form of the original Question, asking if the Prime Minister would discuss this matter with Mr. Nehru, was quite in order.
    Mr. Bottomley: Does not the Minister think it a little difficult for the Prime Minister to raise this matter with the Indian Prime Minister, when our own hands are not clean in respect of the United Nations?
    Lord John Hope: The answer to the right hon. Gentleman is that we have observed all our obligations so far as Resolutions are concerned. But perhaps I might ask the House to let me rest on the reply which I gave to the Question, which asked me what the Prime Minister and Mr. Nehru were going to talk about when Mr. Nehru came to see my right hon. Friend. I have not the slightest idea what they will talk about. That is what I was asked, and I would very much rather leave the matter there.
    Mr. E. Johnsonasked the Under-Secretary of State for Commonwealth Relations when the situation in Kashmir was last discussed by the Security Council or the General Assembly of the United Nations; what decisions were taken; and what instructions have been given to our representative at the United Nations about ensuring that these decisions are carried out.
    Lord John Hope: Kashmir was last discussed by the Security Council of the United Nations in December, 1952, when a Resolution was passed urging the two
    1450
    Governments to enter into further negotiations about the specific number of forces to remain on either side of the cease-fire line in Kashmir at the end of the demilitarisation period. These negotiations, which unfortunately were unsuccessful, took place on the subject with Dr. Graham, the United Nations representative for India and Pakistan, as intermediary. The result is set out in detail in his fifth Report, which is available in the Library. This Report has not yet been considered by the Security Council, since the Kashmir dispute then became the subject of a series of direct discussions between the Prime Ministers of the two countries, and neither party has yet formally asked the Security Council to resume its consideration of the dispute.
    Mr. Johnson: May I ask my hon. Friend if he is aware that people in this country who recall India's act of aggression against Hyderabad would think more highly of that Government if they took some notice of the Resolutions of the United Nations with respect to Kashmir?
    Mr. Hobson: Could the hon. Gentleman state whether Her Majesty's Government are going to take the occasion of the discussion at the United Nations of this question of Kashmir to raise the question of the imprisonment of Sheik Abdullah, who has been imprisoned for nearly four years without any charges even being preferred?
    Lord John Hope: That is a different question, and I should be obliged if the hon. Gentleman would put it down.
    Mr. Speaker: I rather think that that is the responsibility of the Indian Government and not of Her Majesty's Government in the United Kingdom.

    Independent Territories (Assistance)
    Mr. K. Robinsonasked the Under-Secretary of State for Commonwealth Relations by what authority Her Majesty's Government will be enabled to provide financial and technical assistance to Colonial Territories after they became independent sovereign States.
    Lord John Hope: There is no general authority which would enable Her Majesty's Government to provide financial and technical assistance to independent Commonwealth Territories. Such

    1451
    authority would have to be sought from Parliament as and when occasion arose.
    Mr. Robinson: Does that mean that the noble Lord is to do nothing about seeking powers from Parliament to enable such a system to be set up? And why have the Government taken so long to deal with this matter, having in view its urgency as a result of the forthcoming independence of Ghana?
    Lord John Hope: if the hon. Member will read the debate during the Committee stage of the Ghana Independence Bill, the Second Reading debate on that Bill, and the debate in this House on 30th November, he will see exactly what Her Majesty's Government's intentions are in this matter.
    Mr. J. Griffiths: Would the Under-Secretary agree that in the debate which took place recently on the Motion of an hon. Member opposite, and in the debate on the Ghana Independence Bill, it was shown to be the desire of. I think, the overwhelming majority of this House that the Government should seek authority very quickly to enable us to make public grants to those territories that are now becoming independent, and will the Government bear that in mind, and bring in legislation as soon as possible to implement it?
    Lord John Hope: I am sure that the right hon. Gentleman has not forgotten that what we wish to do now is to seek the advice of the other members of the Commonwealth on this whole matter in all its aspects. I think that it would be very much better from the point of view of the Commonwealth and of everyone else to do that before we think of further steps.

    Emigration to Australia (Empire Settlement Acts)
    Mr. Allaunasked the Under-Secretary of State for Commonwealth Relations how the numbers of applicants for emigration from Britain to the Commonwealth under the Empire Settlement Act, in the last three or four months, compares with the number for the similar period last year; and if he will explain the increase.
    Lord John Hope: The only Commonwealth country to which emigrants are proceeding with assistance under the Empire Settlement Acts is Australia. During
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    the four months to the end of November, 1956, the number of applicants was 8,509 compared with 6,788 in the corresponding period of 1955. Hon. Members will appreciate that an applicant very often applies on behalf of a family group. The increase over the 1955 figures has been evident generally throughout the year; the total increase for the eleven months to the end of November, 1956, was 3,920. I therefore do not attach any special significant to the increase in recent months.
    Mr. Allaun: Is the Under-Secretary of State aware of the evidence showing that there has been an astounding threefold leap in the number of intending emigrants during the last three or four months compared with last year, and that this is explained largely by the widespread fears of parents for the safety of their children in this highly vulnerable country and the increased dangers of a third world war following the Government's aggression against Egypt?
    Lord John Hope: I do not accept one single word of what the hon. Gentleman has said.
    Mr. E. Johnson: Would my hon. Friend not agree, whatever the cause of this increase in Empire migration, that it is most desirable that British people should emigrate to such countries as Canada and Australia?
    Mr. J. Johnson: Is it not a fact that this Government's financial policy, with the credit squeeze, is disheartening many small businessmen, particularly those with between £5,000 and £25,000? Is it not an amazing thing that the hon. Gentleman's own Government is now losing the support of the people in his own party?

  TRADE AND COMMERCE

    Poles and Stave Oak (Imports)
    Mr. Gibson-Wattasked the President of the Board of Trade (1) what quantity of birch, alder and sycamore poles were imported in 1954 and 1955 for the purpose of brushwork and turnery manufacture; and what proportion came from dollar countries;
    (2) the quantity of stave oak imported for making beer barrels in 1954 and 1955; and what quantity was from dollar countries.
    The President of the Board of Trade (Mr. Peter Thorneycroft): These goods are not separately distinguished in the trade returns.
    Mr. Gibson-Watt: Would my right hon. Friend look into this matter again and see whether from the trade returns he could give some details, particularly with regard to birch which is being imported from Canada, when there is plenty of birch for cotton reels in this country? Surely that would be a way of saving foreign currency?
    Mr. Thorneycroft: This Question asks only for the figures. If my hon. Friend would see me about the policy, I should be glad to discuss it with him.
    Mrs. Mann: In view of the news on the tape, does the President of the Board of Trade really think that it will be necessary to roll out any beer barrels? Does he not think that a quarter-pint jug would now be sufficient for import purposes?

    Export Licences (Egypt)
    Mr. Peytonasked the President of the Board of Trade the policy of his Department concerning the issue of export licences for Egypt.
    Mr. P. Thorneycroft: Each case is examined on its individual merits, except in respect of goods of military significance for which no licences are granted.
    Mr. Peyton: While I am well aware of the present difficulties, may I ask my right hon. Friend whether he would bear in mind that there is a very considerable uncertainty about this point, and we would be very grateful if he would take steps to clear it up and make clear what the policy of the Government is?
    Mr. Thomeycroft: I hope that my Answer may have done something to that end.

    Imported Timber (Dollar Currency)
    Mr. Gibson-Wattasked the President of the Board of Trade how much dollar currency was released by the Treasury for the purchase of imported timber for pitwood and railway sleepers in 1954 and 1955, respectively.
    Mr. P. Thorneycroft: Pitwood and railway sleepers may be imported from any country under open individual
    1454
    licences. Imports from the dollar area were £2·8 million in 1954 and £4·3 million in 1955. All this pitwood and about three quarters of these sleepers came from Canada.
    Mr. Gibson-Watt: Is my right hon. Friend aware that the Watson Report, which has just been produced, reveals that the figures relating to the National Coal Board's use of home-produced pitwood show a very great improvement? Would it be possible to urge British Railways, which in its way is doing good to the home trade, to improve its figures considerably in this respect?
    Mr. Thorneycroft: I will look into that paint, but these are imports from a Commonwealth country, and I am sure that my hon. Friend would not wish to stop them.

    Cinematograph Films Act, 1948
    Mr. Shepherdasked the President of the Board of Trade what proposals he entertains for the amendment of the Cinematograph Films Act, 1948, other than those contained in the Gracious Speech.
    Mr. P. Thorneycroft: None in the present Session, Sir.
    Mr. Shepherd: Do I take it that my right hon. Friend has no intention of varying the present definition of British films?
    Mr. Thorneycroft: There is no intention to introduce in the present Session detailed amendments to the Cinematograph Films Act, 1948, but that does not mean that I shall not be discussing with the industry possible amendments which might be introduced at some future time.

  HYDROGEN BOMB TESTS
  Mr. A. Hendersonasked the Prime Minister what proposals he has received from President Eisenhower since 11th December concerning the suspension of all hydrogen bomb tests.
  Mrs. Castleasked the Prime Minister whether, in view of President Eisenhower's decision to suspend United States hydrogen bomb tests, he will cancel the test of the British hydrogen bomb announced for next spring.
  The Prime Minister (Sir Anthony Eden): I am not aware of any decision by President Eisenhower to suspend the United States hydrogen bomb tests, nor have I received any proposals from the President on the subject. Certain exchanges have, however, been taking place between our two countries and are continuing on disarmament in general, including all aspects of nuclear disarmament. The point regarding the cancellation of the British test does not, therefore, arise.
  Mr. Henderson: Does it remain the policy of Her Majesty's Government that they will not be a party to any suspension of hydrogen bomb tests except within the context of a general disarmament agreement?
  The Prime Minister: I think that is right. I should like to check it up. We said, so far as limitation is concerned, that we were prepared for a separate arrangement. As to suspension, I think that the right hon. and learned Gentleman is right.
  Mrs. Castle: Is the right hon. Gentleman aware that these proposals of President Eisenhower have been aired in America in talks between the President's adviser and Press correspondents? Will he give an assurance that when an official offer is made by the American Government to suspend hydrogen bomb tests if the Soviet Union will do the same, this country will not jeopardise the chance of an international agreement by insisting on going on with our own tests next spring?
  The Prime Minister: I do not think that that arises at all now. We are having certain exchanges between the two Governments about the general disarmament position, including the whole nuclear field of disarmament. I am afraid that I cannot say more than that at the present time because they are conversations between two Governments.
  Mr. Gaitskell: The Prime Minister will recall that some time ago he said that Her Majesty's Government were prepared to put forward proposals for, at any rate, the limitation of hydrogen bomb tests, apart from any other disarmament arrangements which might be put forward. Could he say what measures precisely Her Majesty's Government are taking to carry out that undertaking?
  The Prime Minister: The right hon. Gentleman is perfectly correct. We have been at work on drafting these proposals, and it is my hope that within a very few weeks we shall have our proposals ready in that respect. The right hon. Gentleman knows that these are highly technical and not simple matters, but I have not forgotten what we said, and our purpose remains exactly the same.

  TREASURY MINISTERS
  Mr. Shepherdasked the Prime Minister whether, in view of the need particularly of overseas representation, he will consider the appointment of a Minister of State at the Treasury who would be able to relieve the Chancellor of some of his burdens.
  The Prime Minister: No, Sir. My right hon. Friend already has the able assistance of the Financial Secretary and the Economic Secretary; and he can, and he does whenever appropriate, depute one of them to represent him at conferences overseas.
  Mr. Shepherd: Does my right hon. Friend not consider that the prestige of the Treasury Minister would be enhanced if he had Privy Councillor status?
  The Prime Minister: I should like to say that when I was an Under-Secretary I was not unduly bothered about that, and I do not think that the right hon. Gentleman opposite was either.

  ISRAEL AND EGYPT (ANGLO-FRENCH ULTIMATUM)
  Mr. Youngerasked the Prime Minister whether he will consult with the Prime Minister of France with a view to issuing a joint statement on the circumstances surrounding the decision not to inform the United States Government in advance of the delivery of the Anglo-French ultimatum to Egypt and Israel on 30th October.
  The Prime Minister: No, Sir.
  Mr. Younger: Is the Prime Minister aware that, in his absence, a series of evasive answers on this Question has been given by his colleagues, and that we were hoping that on his return he would be able to clear this matter up, as was

  1457
  requested by Earl Attlee in a letter to The Times only two days ago? Is he aware that by answering as he has done, leaving the matter where his colleagues had left it, he is really inviting the country to believe that this very important operation, which was a departure from what had previously been discussed with our allies, was agreed, without any prior discussion, entirely in that last interview with the French Prime Minister, and that this explanation is no longer credible and is no longer believed; and that the alternative explanation given by the French Prime Minister holds the field, unless the right hon. Gentleman will deal with it?
  The Prime Minister: I was dealing with the actual Question on the Order Paper, and in that regard there are two points as to consultation and as to American policy. The United States Government have made it quite plain recently that their criticism is not in respect of consultation but in respect of policy. But I am perfectly ready, if the House will bear with me, to make some observations on the general, wider topic to which reference has been made. It will not take the House very long, but I should like to do that before we rise for Christmas. I should like to say just these things.
  We have been accused of being, ever since the Israeli attack on Egypt, and indeed long before that, in collusion with the Israelis. My right hon. and learned Friend the Foreign Secretary emphatically denied that charge on 31st October. Since then, it seems that the charge has been altered and Her Majesty's Government have been asked to prove that they had no foreknowledge of the Israeli attack.
  The extent of our knowledge has repeatedly been stated to the House and was explained fully by my right hon. and learned Friend on 5th December. [An HON. MEMBER: "What about the Minister of Defence?"] Hon. Members must be patient; I am dealing with the matter.
  There were certainly a number of indications of an increasingly dangerous situation, particularly, as we thought, between Israeli and Jordan. We warned the Israeli Government of the consequences of an attack on Jordan, and we gave a number of other warnings, including the general warning to which my right hon. and learned Friend referred. But to say—and this is what I want to repeat to the House—that Her Majesty's Government were
  1458
  engaged in some dishonourable conspiracy is completely untrue, and I most emphatically deny it.
  Mr. Gaitskell: Is the Prime Minister aware that the French Foreign Minister, M. Pineau, said yesterday in the French Chamber that France and Britain had for long realised Israel's predicament and had therefore decided together what action they would take if Israel began a preventive war? That, he went on to say, was the sole reason why, when the Israel attack came, France and Britain seemed so prepared for it.
  I should like to ask the Prime Minister, first, whether he would care to make any comment on M. Pineau's statement and, secondly, whether the decisions which M. Pineau says were taken well in advance were the ones taken at the private meeting on 16th October and again on 23rd October.
  The Prime Minister: I am much obliged to the right hon. Gentleman. The position is exactly as I have stated it to the House now. It is perfectly true that there were a number of discussions on every kind of hypothetical event in the Middle East—[Interruption.]—hypothetical attack. If anybody is surprised at that, I will merely mention—I forget the exact figure—that there were over 100 people killed on the Jordan-Israel frontier alone during a period of about six weeks. So of course we discussed every possible hypothesis. But I repeat that there was no agreement arrived at until I informed the House about it.
  Mr. Gaitskell: The Prime Minister has not answered my question. I asked him whether the decisions to which M. Pineau refers were taken at those meetings on 16th and 23rd October. In order to help the Prime Minister, may I ask whether the decisions were, in the event of an attack by Israel upon Egypt, to attack Egypt ourselves?
  The Prime Minister: I am responsible for what I say to the House and not for what Ministers in other countries say in other Houses. I must have an opportunity to examine the words used by other Foreign Ministers. I know myself what the position of our own Government was quite clearly. That is that the decisions were taken on the date I gave, and that, though we did discuss every other hypothesis—and far more

  1459
  than any other, I tell the House, the hypothesis of an Israeli attack upon Jordan—[An HON. MEMBER: "Jordan?"] Of course, it seemed for a long time the most probable, and was probably, I dare say—I do not know—much more likely to have taken place but for our very definite warnings.
  If the House asks why did we warn more definitely about Jordan than about Egypt, the answer is that we had Treaty obligations to Jordan which nobody shares with us.
  Sir H. Studholme: Does my right hon. Friend not think it deplorable, to put it mildly, that the right hon. Gentleman the Leader of the Opposition and his hon. and right hon. Friends should be so anxious to discredit our country—[HON. MEMBERS: "No."]—for the sake of trying to "do down" the Government?
  Mr. Paget: Will the Prime Minister tell us whether, when he was discussing the prospect of the possibility of an invasion of Jordan, the agreement come to with the French was not to the effect that the proposed attack on Jordan was to be diverted against Egypt?
  The Prime Minister: What we did, not only privately but publicly also, if the hon. and learned Gentleman would look at the record, was to issue repeated warnings that if there were an attack by Israel on Jordan we should act in accordance with our Treaty obligations. That is quite true, and we so informed our allies, including France. I see nothing whatever wrong in that. Indeed, I can imagine nothing which would have horrified the House more than if we had come here and said we must now act in accordance with our Jordan obligations against Israel, with the support of Col. Nasser.
  Dame Florence Horsbrugh: Is my right hon. Friend aware that the Opposition, in trying td bring discredit on the country—[Interruption.]—in making statements that they thought were discreditable to the country or misstatements so framed as though meant to bring credit to the country, have only here and throughout the world brought discredit on themselves?
  Mr. J. Griffiths: May I ask the Prime Minister whether he and his hon. Friends
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  realise that we represent some part of this nation as well? Will he consider, in view of what is very widely believed outside this country and in this country, arranging for a full statement to be made on what was discussed and decided at the meeting in Paris on 16th October?
  The Prime Minister: I have made a very full statement. I would add only this, that—[An HON. MEMBER: "What about Egypt?"] I am willing to answer about Egypt; I have no objection, if hon. Members will be patient. As regards a fuller statement, I have explained that we did examine—and I am not in the least ashamed of it—every conceivable hypothesis which might arise in a very dangerous Middle-Eastern situation. Of course we did, and I do not think that any Government would have done otherwise.
  As regards the position about Egypt, I have discussed this before. The hon. Member is perfectly correct. The position about Egypt was not the same as with Jordan, first because we did not have a treaty with Egypt. [An HON. MEMBER: "The Tripartite Declaration."] I know. Secondly, the House is aware of the statements already made about Egypt's own attitude towards the Tripartite Declaration.
  Several Hon. Members rose—
  Mr. Speaker: Order. It is long past Question Time.
  Mr. Wigg: On a point of order. If it is not in order to put supplementary questions to the Prime Minister now, it will, of course, be in order to raise them on the Motion to adjourn for the Christmas Recess, will it not, Mr. Speaker?
  Mr. Speaker: It might be a subject that would be fit to raise on the Motion for the Adjournment.
  Mr. Gaitskell: The Prime Minister has indicated, very properly, that he is prepared, and is anxious, to give every possible explanation of this matter. [HON. MEMBERS: "He has done so."] He has not as yet answered some of the questions put from this side, or given an explanation which is satisfactory to this side of the House. I would ask your permission, Mr. Speaker, to put one or two further questions to him.
  Mr. Speaker: The right hon. Member puts me in a difficulty. I have my duty to do to the House, which is to see that Questions should come to an end at half-past three and not be unduly prolonged. It is very unusual for me to allow Questions to carry on until after twenty minutes to four. I do not wish to stifle discussion, but this is an irregular debate and the rules are in my keeping. I cannot alter them.
  Mr. Gaitskell: With respect, Mr. Speaker, the circumstances are somewhat unusual. We are shortly to depart for the Christmas Recess. Furthermore, the Prime Minister, on his own initiative—we appreciate that—and not in reply directly to the original Question, made a statement on this matter, and I think that we really are entitled to put questions to him on that statement.
  Mr. Speaker: I understand that the Motion for the Adjournment is shortly to be moved. The matter can be pursued then; it would be quite in order. The subject is a responsibility of Her Majesty's Ministers, and it could be pursued then, but I cannot allow the Question hour to be unduly prolonged.
  Mr. H. Wilson: Further to that point of order, Mr. Speaker. Are these not, as my right hon. Friend suggested, completely unusual circumstances, in that, first, the House is due to adjourn tomorrow for several weeks, and secondly, the House has, for about three and a half weeks, been denied the presence of the Prime Minister? During that period, we have not had any answer even as full as the partial answer given by the Prime Minister today. Therefore, while we understand from your Ruling, Mr. Speaker, that it would be in order for my hon. and right hon. Friends to make speeches, short or long, on this subject later, what we do not have now is an opportunity to press the Prime Minister for clear answers to these questions.
  Mr. Speaker: That can be done in debate, but it cannot be done by a prolongation of the Question hour long after the time appointed by Standing Orders. That is my difficulty. The Adjournment is shortly to be moved.
  Mr. Gaitskell: I must again point out, Mr. Speaker, that the Prime Minister, on
  1462
  his own initiative, made a statement. It is quite usual, when statements are made from the Government Front Bench, that the Opposition should have an opportunity of putting questions; and questions, as you will agree, Mr. Speaker, frequently continue for up to half an hour or more. We have had only ten minutes of questions to the Prime Minister on this issue, and I submit that in all the circumstances, and in view of the fact that the Prime Minister himself, together with the Foreign Secretary, is the only person who was present at the meetings about which we are questioning him, we should have an opportunity of questioning him further.
  Mr. Speaker: All this arose, if I recollect aright, from a Question asked by the right hon. Member for Grimsby (Mr. Younger) before the expiration of Question Time. There were several supplementary questions which extended it and it has gone on and on. I am in an awkward position, but I could not alter the decision I have given.
  Mr. Donnelly: On a point of order. I am sorry to interrupt, but as you are aware, Mr. Speaker, I wrote to you to suggest that on the Christmas Adjournment we might have a debate on this question of collusion. The reason I suggested it, for the Christmas Adjournment specifically was that the Prime Minister would not be back for certain until the latter part of this week. You have decided to reject that subject as one of the Christmas Adjournment debates.
  I am not questioning your Ruling, Mr. Speaker, but I venture to seek your guidance. Here is a very important matter. The House will be going away for a month and the country will be left in doubt. This is not just a question of the status of the Government. The integrity of the House of Commons and of the country is also involved. Is there any way in which we might extend the time, either tomorrow or today, so that we can have an opportunity of having a fuller statement and of hearing the actual details of the position?
  Mr. Vane: Further to the point of order. Have the many hon. Members who wish to debate the country's economic situation no protection against the many versions of "his Nasser's voice" opposite?
  Mr. Speaker: I am not concerned in the slightest with that aspect of the matter. I am concerned with the rules of order in the House.
  In answer to the hon. Member for Pembroke (Mr. Donnelly), I can only repeat what I have said. We are about to move on to the Adjournment and the matter can be discussed then. It does not lie in my hands to rule out of order anything that is proper for the Adjournment, and I would not do so. Mr. Head.

PORT SAID (CASUALTIES)
The following Question stood upon the Order Paper:
MR. WIGG: To ask the Minister of Defence whether he will make a further statement on the revised estimate of civilian casualties in the Port Said area.
The Minister of Defence (Mr. Antony Head): I will, with permission, Sir, answer Question No. 61.
In view of the conflicting estimates of the nature and extent of damage and casualties in Port Said, Her Majesty's Government thought it desirable that there should be an immediate independent inquiry. They were fortunate in securing for this task the services of Sir Edwin Herbert, the President of the Law Society.
Sir Edwin visited the Middle East from 8th to 15th December, spending four days in Port Said. His Report, which is now in the concluding stage of preparation, will be issued as a Command Paper, and it is hoped that it will be available in the Vote Office on Friday, 21st December.
I am placing in the Library copies of photographs and maps used by Sir Edwin Herbert in the course of his inquiry.
Mr. Wigg: What was the date upon which the right hon. Gentleman decided to have this independent inquiry? Was it before or after the Paymaster-General made his statement to the House? Does not the right hon. Gentleman consider it very regrettable that the White Paper is to be available to the House only when it is no longer possible to discuss it, in view of the fact that the American Consul has stated that the figures of 100 killed
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and 540 wounded are grotesquely wrong and that the number killed is at least 2,000?
Mr. Head: When the Paymaster-General returned, he had had only a limited amount of time at his disposal, and he himself felt that a further inquiry should be made if we were to go further in making an accurate estimate.
Concerning the availability of the Report, Sir Edwin Herbert was as quick as he could be. He returned on the 15th and had to draft his Report, and we have had the printers up all night getting it printed. There is no queston of our being able to get it out earlier. There was no delay because of any fear of the House. As it is an 11,000-word Report, it is a remarkable achievement on the part of the printers that it will be available tomorrow.
As far as the various assessments of casualties are concerned, the hon. Member would do much better to await the Report, because by quoting individual statements he is doing no good to impartiality and is only encouraging those who listen to very exaggerated versions.
Mr. Wigg: Why did not the Paymaster-General tell the House on 5th December that he was doubtful about the figures—[HON. MEMBERS: "He did."] Perhaps hon. Members will let me finish. Why did not the Paymaster-General tell the House on 5th December that he was so doubtful about the figures that it was necessary to have an impartial inquiry? Why have we had to wait until the House is about to depart for the Christmas Recess to discover the truth? We hope that the Report will give all the facts.
Mr. Head: My right hon. and learned Friend the Paymaster-General was at pains to explain the limitations within which he made his own inquiry at Port Said. He explained that it was impossible for him at that time to make a complete investigation. He reported to the House upon his inquiry, and he offered to go out again himself to inquire further, and suggested, alternatively, that somebody outside the Government should carry out an impartial inquiry. The Government, in my opinion quite rightly, thought that an impartial inquiry should be made. That was why the President of the Law Society went out.
Mr. G. Brown: Does not the right hon. Gentleman think that he is trifling with the House now, in view of the very dogmatic assertion he originally made about the truth always being on our side? There was continual evasion by the Paymaster-General of my repeated requests to him that we should be told whether the Government would make further inquiries.
Is it not trifling with the House now to tell us that an 11,000-word Report is to come out tomorrow, despite the printing difficulties? I ask the right hon. Gentleman to clear himself now with the House by giving us the figures which are in the report. The whole problem has arisen because the Government have hedged so much on the figures. If the right hon. Gentleman would tell us the figures we could judge whether they are significantly different from those we have been given already, and which he was so dogmatic about. It would be quite easy for the right hon. Gentleman to do that.
Mr. Head: The right hon. Gentleman talks of my "dogmatic assertion," but I have only given the House—and no Minister could do more, in the circumstances—the estimate of the casualties given to me by the Commander-in-Chief. He was concluding an operation at the time. There was nothing "phoney" or "cooked up" about those figures. There is nobody who can give an absolutely accurate estimate of these casualties. It is impossible to have disinterment, for that is not allowed by the law in Egypt. There can be only an estimate. It would be absolutely wrong to quote the Herbert Report out of context. When right hon. and hon. Members read the Report they will appreciate the problem that confronted Sir Edwin Herbert in getting accurate figures. I can, however, say that the Report entirely discountenances suggesting the sort of figures which the hon. Gentleman mentioned.
Mr. Brown: I am sorry to press this, but if the right hon. Gentleman can quote the Report out of context to discountenance a suggestion of 2,000 casualties he ought to be able to tell us, equally out of context and with no worse harm, whether the Report discountenances the suggestion that there were 100 or 200 casualties. We can read the Report afterwards, which is easier. So many things have been said that it is impossible not
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to have a feeling that the right hon. Gentleman is hedging. Would he not tell us whether the estimate in the Report is 500 or 1,500, or whatever the figure is?
Mr. Head: I have not been hedging on this. The story of this estimate is perfectly clear. I have said that the Commander-in-Chief gave me an estimate. Hon. Gentlemen opposite started quoting astronomical figures. [HON. MEMBERS: "No."] I am not blaming them, but I am saying that they did, and I say categorically that those are very high figures.
Mr. Wigg rose—
Mr. Head: The hon. Gentleman might let me finish. He has had a good go.
The astronomical figures are wrong. Sir Edwin Herbert went out and has written a very long and reasoned Report on the problem of making an estimate and of arriving at the figures. It is absolutely wrong for anybody in this House to take bits out of the Report and to give them in advance of the full Report. I am not ashamed of refusing to do so, or of anything I have said upon this matter. If hon. Members want to debate the Report when we return, I shall be only too delighted. They may debate it as much as they like when they have seen the Report. Sir Edwin Herbert arrived back on 15th December and wrote his Report. We have not yet got in my office the last words of the printed Report. I am not holding it up. We are making it available to the House at the earliest opportunity.
Lieut.-Colonel Cordeaux: Will my right hon. Friend also do his best to make public the extraordinary risks which members of our Armed Forces ran to ensure that nobody, or as few as possible, not only of the civilians but also of the Egyptian forces, should be hurt, as, for instance, when our aircraft destroyed Egyptian aircraft on the ground, and flew at a dangerously low altitude to avoid injury to Egyptian personnel; and as, for instance, when two Royal Marine officers were killed by being shot in the back by people in civilian clothes when they visited suspected houses because they were loath to take preliminary precautions which might have saved their lives but which would have been dangerous to the Egyptians?
Mr. Head: There is in Sir Edwin Herbert's Report quite a long section which deals with the operation itself and the precautions which were specially taken to avoid unnecessary casualties.
Mr. Bellenger: In view of what the right hon. Gentleman has now said, could he tell the House whether the Commander-in-Chief will write a despatch, as is usual after military operations? If so, will the House and the country have the opportunity some time of hearing what the Commander-in-Chief has to say about the operation?
Mr. Head: The Commander-in-Chief, in accordance with custom after all operations, will make a written report about the operations. As to what is done about publication, I should not like to answer that question without notice. It does not arise upon this Question. But I would say this, that if ever there was an operation which reflected credit on our troops it was this one.
Mr. Healey: Does the Minister of Defence recall informing the House on 5th December that, to quote his own words, he had
"true knowledge"—[OFFICIAL REPORT, 5th December, 1956; Vol. 561, c. 1244.]
on 26th October of Israeli intentions to attack Egypt? [HON. MEMBERS: "No."] Can he tell the House whether, on receiving this true knowledge of Israeli intentions to attack Egypt, he asked the Prime Minister—[HON. MEMBERS: "Speech."]—to warn Israel against such an attack and consult the American Government—
Mr. Speaker: Order. This seems to refer to the previous Question, which we have passed. This Question deals with a further statement on the revised estimate of civilian casualties in the Port Said area.
Mr. Healey: You have heard, Mr. Speaker, the prothesis of my question, but not its apothesis.
Mr. Speaker: I hope that the hon. Member will now produce the apothesis.
Mr. Healey: Did the right hon. Gentleman consult the Prime Minister and advise him to warn Israel against such an attack and to consult the United States and French Governments to consider action in order to ensure that there would be no casualties at all?
Mr. Head: That question does not in any way arise out of this Question.
Mr. P. Williams: Does my right hon. Friend not agree that the important thing is that there has been an independent inquiry, that it has been conducted quickly and that the Report is to be laid before the House urgently. That being so, would it not be more suitable if hon. Members opposite were to hold up their mischief until they have read the Report?
Mr. Wigg: If the right hon. Gentleman and his right hon. Friends are now converted to the idea of an inquiry, why do they not go a step further and either appoint a Select Committee, as in the case of the Jameson Raid, or a Royal Commission to inquire into the origin of this business? It would clear the name of the Prime Minister, assuming that was possible, and would also establish beyond any doubt the inception and origin and the conduct of this operation, and we should know, as far as that is humanly possible—
Hon. Members: Speech.
Mr. Speaker: I ask the House to remain quiet while the hon. Member finishes a question which has already been somewhat prolonged.
Mr. Wigg: I am much obliged, Mr. Speaker.
Now that the right hon. Gentleman and his right hon. Friends have become converted to the principle of independent inquiries will they not go a step further and appoint a Select Committee or a Royal Commission to inquire into the origin and the conduct of this operation, so that we shall establish beyond any shadow of a doubt what the casualties are, whether the Prime Minister has been telling the truth or not—
Hon. Members: Oh.
Sir L. Joynson-Hicks rose—
Major Legge-Bourke: On a point of order.
Mr. Speaker: Order. I ask the House not to let this matter grow into an irregular debate. It is really time that we were moving on to the next business. Sir Lancelot Joynson-Hicks.
Sir L. Joynson-Hicks: Will my right hon. Friend convey to Sir Edwin Herbert our very great appreciation—
Mr. Speaker: Order. I called the hon. Member on a point of order. That certainly is not one.
Major Legge-Bourke: On a point of order. I rise to a point of order to call your attention, Mr. Speaker, to the observation of the hon. Member for Dudley (Mr. Wigg), who suggested that the Prime Minister had not been telling the truth. Has it not long been a tradition of the House that an imputation of that kind against a Member, whether he be a right hon. Gentleman or an ordinary back-bencher, is an imputation of motive which is out of order? I would ask you, Sir, to rule the hon. Member for Dudley out of order.
Mr. Speaker: I heard the hon. Member for Dudley say that he thought an inquiry would establish whether the Prime Minister was telling the truth. [HON. MEMBERS: "Or not."] That is capable of merely saying whether the account of the facts given by the Prime Minister was correct. Anyone can make a misstatement without meaning to do so, but I do not think that the hon. Member for Dudley went as far as to suggest that the Prime Minister was not telling the truth, otherwise I should have checked him.
Mr. Wigg: I should like to make it quite plain, Sir, that I did not, for a single second, rule out the possibility that the Prime Minister was telling the truth. All I asked—and I questioned the Prime Minister on this before his very regrettable illness—was whether he would appoint a Select Committee or a Royal Commission.
Mr. Speaker: We have had that. Will somebody say whether there is to be a Select Committee or not?
Hon. Members: Answer.
Mr. Speaker: If there is no answer, we must pass on. Mr. Sandys.
The Minister of Housing and Local Government (Mr. Duncan Sandys)rose—
Mr. Speaker: Order. I am afraid that I have got rather wrong in time myself. Mr. Gaitskell. Business question.

BUSINESS OF THE HOUSE
Mr. Gaitskell: Will the right hon. Gentleman the Lord Privy Seal announce the business for the first week after the Christmas Recess?
The Lord Privy Seal (Mr. R. A. Butler): Yes, Sir. The business for the first week after the Christmas Recess will be as follows:
TUESDAY, 22ND JANUARY—Second Reading of the Customs Duties (Dumping and Subsidies) Bill, which it is hoped to obtain by about 7 o'clock.
Afterwards, Report and Third Reading of the Transport (Railway Finances) Bill.
WEDNESDAY, 23RD JANUARY AND THURSDAY, 24TH JANUARY—Committee stage of the Homicide Bill.
FRIDAY, 25TH JANUARY—Second Reading of the Empire Settlement Bill.
Committee stage of the necessary Money Resolution.
Second Reading of the Occupiers' Liability Bill.
Mr. Speaker: Mr. Sandys.
Mr. C. Pannell: Are there no questions arising from business?
Mr. Speaker: We have finished with business. I did not see any hon. Member rise.
Mr. Sandys: With permission, I should like to make an interim statement on local government finance.
Mr. C. Pannell: You may not have seen me rise, Mr. Speaker, but I put this as a point of order. Bearing in mind the tardiness and the procrastination in other cases, I should like to know whether we are to have a report from the Committee of Privileges before we rise for the Christmas Recess.
Mr. Speaker: I did not see the hon. Member or any other hon. Member rise to ask a question and I do not know whether anything can be said about that. Let us have Mr. Sandys's statement first.

LOCAL GOVERNMENT FINANCE (INTERIM STATEMENT)
The Minister of Housing and Local Government (Mr. Duncan Sandys): With permission, Sir, I should like to make an interim statement on local government finance. The Government's review of local authority finance is now far advanced, and I shall be making a full statement after the Recess. Meanwhile, there are, among the problems examined, three which require immediate attention.
The first is the need to adjust the rate contributions from the State-owned gas, electricity and transport industries, so as to offset the loss of revenue which would otherwise be suffered by local authorities as a result of the recent revaluation.
The second problem arises from the fact that the present method of calculating Exchequer equalisation grant takes no account of the relief from rates given to charitable and educational bodies, under the Rating and Valuation Act of 1955. The result has been that certain areas, like Cambridgeshire, where the property occupied by these bodies forms an appreciable proportion of the total rateable value, have been losing substantial amounts of grant to which they would otherwise be entitled.
The third matter concerns the rating of commercial and certain other classes of property.
In December, 1954, I gave an assurance that, as soon as the effects of the revaluation could be fully measured, the Government would review the position and consider whether any changes were necessary.
It is still too soon to get a full and final picture. In any case, since there exists no present-day valuation of houses, it is impossible to say precisely what is a fair distribution of the rate burden between the various classes of property. Nevertheless, sufficient information is now available to show beyond doubt that the recent revaluation has placed an unduly heavy share of the burden upon the occupiers of shops and other commercial property.
In these circumstances, the Government do not feel that it would be equitable to leave the position as it is. They accord-
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ingly propose, that, in the current valuation lists, the rateable value of shops, offices and certain miscellaneous property should be reduced by 20 per cent.
A short Bill to deal with the three matters to which I have referred will be introduced tomorrow, and it is proposed that its provisions should take effect as from 1st April next.
Mr. Mitchison: Is the right hon. Gentleman aware that after effect has been given to the present proposals, industry will be derated by 75 per cent. and shops and so forth by 20 per cent., and that the result will be a heavier burden for local authorities, which will ultimately have to be borne by the domestic ratepayers, who have other troubles under the Rent Bill? Does the right hon. Gentleman not regard the rerating of industry as a matter quite as urgent as the one which he is now putting forward?
Secondly, is the right hon. Gentleman aware that the finances of local authorities sorely need strengthening and not weakening and that, notwithstanding the small concessions he mentioned at the beginning, they are already in grevious difficulties, having regard to the elimination of housing subsidies and the high and increasing rates of interest which they are having to pay on all their borrowings?
If I may give an instance, is the right hon. Gentleman aware that Bristol is now having to halve the number of council houses to be built, to stop altogether mortgages for private buyers, and to reduce, or stop, any improvement grants? Is the Minister not going to make any concession either in regard to housing subsidies or to the rates of interest on corporation borrowing?
Mr. Sandys: I will certainly study the statement made by the hon. and learned Gentleman. The major question he raised, that of the derating of industry, is one of the large issues which will be dealt with in the full statement that I have promised after the Christmas Recess.
Mr. Page: Is my right hon. Friend aware that many of us will be grateful that he has carried out his undertaking to review the position of the shopkeepers, and that the shopkeepers themselves will be grateful for the reduction of 20 per cent.? My right hon. Friend mentioned

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what was to happen to the rate contributions under the pooling schemes. May I ask him whether he has any plan for the proper rating of premises, showrooms, and so on, of the nationalised industries, which have caused us considerable concern as being perhaps unfairly rated?
Mr. Sandys: The Government recognise the need for various improvements in the methods of rating the nationalised industries, including the question of the separate rating of showrooms. Since, however, these changes could not reasonably be brought into effect between now and 1st April, they will not be included in this interim Measure, and I shall have more to say about them when I make my full statement after the Recess.
Mr. Gibson: May I ask the Minister whether, in view of the proposed reduction of 20 per cent. in the rateable values of shops and business premises, and also because of the fact that the local authorities will still need the same amount of money to run their affairs, he does not agree that this means that a larger share of the local rates will be borne by the householders? In view of that, does he not think it is time that the Government gave serious consideration to providing new sources of revenue for the local authorities, one of which, I suggest, might be a tax on local land values?
Will the Minister make sure that some provision can be made for meeting the difficulties of local authorities in the cost of running their affairs and for relieving the householder a little, instead of imposing on him, as the right hon. Gentleman has been doing recently?
Mr. Sandys: The effect of this remission for commercial property will be to reduce the total rateable value in England and Wales by about 7 per cent. When Crown property is revalued, which is going on at the moment, that figure should be about halved. The remaining 3 per cent. or 4 per cent. will be spread over all classes of property.
Mr. Lindgren: Can the Minister give us some information about the effect on the rate poundage? May I say, with great respect, that we are getting tired of what seem to us to be attempts to mislead the House? This will increase the rates of the domestic ratepayer by well over one-third.
Hon. Members: Nonsense.
Mr. Sandys: I cannot follow the arithmetic of the hon. Member for Wellingborough (Mr. Lindgren).
Mr. Elliot: Can my right hon. Friend say what the position of Scotland is with respect to the forthcoming legislation?
Mr. Sandys: This will not affect Scotland at all.
Mr. Bellenger: Is it not a fact that the amount of rates in the £ has been fixed? If a reduction of 20 per cent. is made in the rateable value, will not the local authorities have less revenue, and will they, therefore, not have to make a supplementary rate to meet their current expenditure?
Mr. Sandys: No, Sir. The right hon. Gentleman has evidently not understood me. I said that these changes, if the House approves of the Bill, will take effect as from 1st April next. The rate poundages for next year have not yet been fixed.
Sir P. Spens: May I ask my right hon. Friend exactly what are the proposals for charitable and educational establishments? I gather that he is to assist charitable and educational establishments such as colleges and schools. Although I am more interested in those—not in Cambridgeshire, but elsewhere—I know that there are serious difficulties for both. Does it mean that the present enormous additional rate burden on colleges and schools will be mitigated by some form of grant or by some other scheme? Whatever it is, it will be more than gratefully received.
Mr. Sandys: The purpose of the proposed change is to help to make good to local authorities the losses on equalisation grant which they have suffered as a result of making remissions of rates to charitable organisations.
Mr. Wade: While welcoming the statement of the Minister as far as it goes, and noting that he recognises that an unduly heavy share of the burden of rates has fallen on the occupiers of shops and certain other properties, will he say whether any relief will be granted for the current year, in view of the fact that the unfairness of the burden has been admitted?

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Secondly, as the Minister referred to the fact that there was no present-day valuation of dwelling-houses, are we to assume that rerating will not be dealt with until there is a new valuation, in which case we should have to wait until the end of the quinquennial period?
Mr. Sandys: I did not follow the last part of the hon. Member's question. So far as the first part is concerned, I think that the question put by the right hon. Gentleman the Member for Bassetlaw (Mr. Bellenger) to some extent answered the hon. Member. It is not really practicable, when dealing with a redistribution of the rate burden as between various classes of property owners, to make any change operate retrospectively.
Mr. Wade: May I clarify my second question, Mr. Speaker? The Minister referred to the fact that there was no present-day valuation of dwelling-houses. May we have an assurance that the rerating of industry will be dealt with in his statement in the New Year, and will not be held up until there is a new valuation of dwelling-houses?
Mr. Sandys: I thought I had made it clear that the question of the derating of industry would be among the major points with which I propose to deal in my statement after the Recess.
Mr. Langford-Holt: The three plans which my right hon. Friend has mentioned conform, generally speaking, to the present pattern of local government finance. Do we understand that the inquiry which, as he has said, is now far advanced, will envisage a major departure from that present pattern? Are these interim measures, or will they form part of the pattern after that general inquiry has been completed?
Mr. Sandys: The Bill which I am to introduce tomorrow deals with three urgent matters within a limited field. I would not like to anticipate the statement which I shall make later on the broad issues of local government finance.
Mr. S. Silverman: Would the right hon. Gentleman bear in mind that while many of us appreciate the object of the change with regard to business premises—shops and offices, and so on—we cannot understand why the additional burden should be left to be borne by the
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householder? Could not the right hon. Gentleman, in the same operation, have added to the contribution made by industrial premises the amount by which he is relieving the shops and offices?
While I appreciate that the right hon. Gentleman will be dealing with the general problem of derating later, it is obvious that that will take some time, so why, in the meantime, should the additional burden be borne by people who are already being asked to bear more than they can reasonably bear?
Mr. Sandys: I have already explained that any reduction in the rates paid by commercial properties will, of course, be spread over the whole field, over all classes of property and not merely over householders, as was suggested by the hon. Gentleman. The Measure will not add to the financial burden on local authorities. It merely involves some ratification of a maldistribution of the rate burden.
Several Hon. Members rose—
Mr. Speaker: Order. I think that we had better wait to see the Bill when it is introduced, and we may then get some answers to these questions. There is yet another long statement to come. Mr. Birch.

VULCAN AIRCRAFT CRASH (REPORT)
The Secretary of State for Air (Mr. Nigel Birch): With your permission, Mr. Speaker, and that of the House, I wish to make a statement on the Vulcan accident.
The Vulcan which crashed at London Airport on 1st October was returning from a highly successful flight to Australia and New Zealand. In addition to the pilot, it carried Air Marshal Sir Harry Broadhurst, Air Officer Commanding-in-Chief, Bomber Command, as copilot, a crew of three R.A.F. officers, and a representative of Messrs. A. V. Roe.
It had left Aden at 0250 hours Greenwich Mean Time where the captain had been given forecasts of landing weather at London Airport and certain other airfields to which he might need to divert. He obtained later information en route, including further forecasts for London Airport. The last of these was given to him when he was over Epsom.

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This forecast, which indicated broken low cloud, heavy rain and little wind, with visibility at 1,100 yards, proved an accurate description of the weather actually experienced.
The aircraft had ample fuel to divert, and Air Marshal Broadhurst emphasised to the captain that he should divert if he was dissatisfied with the weather conditions prevailing. The captain decided to make one attempt to land at London Airport. At about 1004 hours, at a height of 1,500 feet and about five nautical miles from touchdown, and with both altimeters correctly set, the aircraft began its descent under the control of the Talkdown Controller at London Airport.
The captain set his "break-off height" at 300 feet, that is to say, he intended to come down under the talkdown control until his altimeter stood at 300 feet, and if he then found that it was not possible to make the landing, to over shoot at that height. The G.C.A. talkdown instructions were followed, with some undulation relative to the glide path and some corrections in azimuth, up to a point about three-quarters of a mile from touch-down, when the pilot was informed that he was 80 feet above the glide path.
At this point, the weather was at its worst. The pilot received no further information on elevation, and, at a point about 1,000 yards from the touchdown point and 700 yards from the threshold of the runway, the aircraft struck the ground. Both main undercarriage units were removed, and the elevator controls were damaged. Subsequently, the aircraft rose sharply to a height of 200–300 feet, when it was found to be out of control.
The captain then gave the order to abandon the aircraft and himself used his ejector seat. The co-pilot repeated the order and, after trying the controls, also ejected. Within seconds of the order being given, the nose and starboard wing of the aircraft dropped and the aircraft crashed to the ground. The remaining three members of the crew and the passenger were killed instantaneously on impact.
The Royal Air Force Court of Inquiry, which assembled the following day, found nothing to suggest any technical failure in the aircraft which could have contributed to the accident. It concluded that the captain of the aircraft was justified in deciding to make an attempt to land
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at London Airport, but it considered that, in the circumstances, he made an error of judgment in setting himself a break-off height of 300 feet and also in going below that height.
The court drew attention, however, to the facts that, though the G.C.A. controller informed the pilot about seven seconds before the aircraft first hit the ground that he was 80 feet above the glide path, he did not subsequently advise him that he was below it, and that after the aircraft had hit the ground he continued his talkdown as if the approach had been normal. The court concluded that, since the aircraft was under G.C.A. control, the failure to warn the captain that he was going below the glide path was the principal cause of the accident.
On receipt of the Report, I referred the passages relating to the G.C.A. aspect to my right hon. Friend the Minister of Transport and Civil Aviation, who immediately arranged for an inquiry into the operation of the G.C.A. system to be undertaken by Dr. A. G. Touch, the Director of Electronic Research and Development at the Ministry of Supply.
In a Report which he submitted last week, Dr. Touch concluded that there was no evidence of technical failure or malfunctioning in the G.C.A. equipment. His investigation confirmed that the pilot was not warned by the G.C.A. unit of his closeness to the ground, but, despite a detailed and exhaustive examination of various possibilities, Dr. Touch was unable to establish the reason with certainty. He thought that the most likely explanation was that throughout the approach the Controller concentrated too much on azimuth at the expense of information on elevation.
He felt, however, that there were extenuating circumstances connected with the unusual speed of the aircraft and the number of corrections in azimuth. He also considered that even if a warning had been given in the final five or six seconds of the ten seconds which, in his opinion, elapsed after the pilot was told that he was 80 feet above the glide path, it would have been too late.
My right hon. Friend the Minister of Transport and Civil Aviation and I have given most careful consideration to these findings. We are agreed that there was an error of judgment on the part of the pilot in selecting a break-off height of

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300 feet and in going below it, and also that the G.C.A. controller did not give adequate guidance on elevation during the descent, and, in particular, that he was at fault in the concluding stages in not warning the pilot that he was below the glide path and, therefore, dangerously close to the ground. The apportionment of responsibility is difficult. I accept the conclusions of the Royal Air Force court, but neither I nor my right hon. Friend feel able to define the degree of responsibility precisely.
It would be unjust to the pilot and co-pilot were I not to make it clear, in conclusion, that it was their duty to eject from the aircraft when they did. I am satisfied that there could have been no hope of controlling the aircraft after the initial impact. In these circumstances, it was the duty of the captain to give the order to abandon the aircraft and of all those who were on board to obey it if they were able to do so. Both the pilot and co-pilot realised when they gave their orders that, owing to the low altitude, the other occupants had no chance of escape, and they considered that their own chances were negligible.
The House will wish to join with me in expressing regret that so successful a flight should have ended so tragically, and in tendering sympathy to the bereaved.
Mr. de Freitas: My right hon. and hon. Friends and I join with the Secretary of State in his expressions of sorrow and sympathy.
I have three questions to put to the right hon. Gentleman. First, was there not a monitor covering the height radar who could say whether it indicated that the aircraft was below break-off height?
Secondly, how could it be that the controller continued his talkdown after the aircraft had actually hit the ground? Was there an echo on the screen? If so, what is the explanation for an echo being there in the circumstances?
Thirdly, although we must, naturally, all have every sympathy with the controller, should we not go further and establish definitely whether he was responsible? Is it not of the greatest importance to know whether we should retain confidence in the equipment used at London Airport?
Mr. Birch: I am not absolutely certain what the hon. Gentleman means by "monitor". There is, of course, a team of two. There are the tracker and the actual controller, and the talkdown is recorded, but there is no immediate monitor.
On the question whether there could have been a special echo from the Vulcan, that matter was gone into exhaustively by Dr. Touch, whose Report, incidentally, will be published in due course, and he concluded that there was no question of that at all. Further, he concluded that one could have full confidence in the equipment at London Airport and that there was no fault whatever in it.
Mr. C. I. Orr-Ewing: Will my right hon. Friend consider very carefully whether it is wise to have these very heavy and somewhat unusual military aircraft landing at a busy international airport? Would it not perhaps be wiser to divert them to aerodromes which are less busy and where there is more scope should a mistake be made? Will he also consider, and perhaps let the House know, whether the controller on duty had got full information on the optimum glide path of the Vulcan, or was he informed only of the optimum glide path of civil aircraft with which he was more normally concerned?
Mr. Birch: There is nothing new about military aircraft using London Airport. Since London Airport was opened, there have been some hundreds of landings by these aircraft and, of course, the system of control at London Airport is extraordinarily good. Canberras and Comets have landed there. There is nothing unusual about it. The whole question of whether it would be wise to make a change in policy is now under review. If we decide to make that change in policy, I will certainly inform the House. I think that perhaps my hon. Friend ought to address his question about the glide path to the Minister of Transport and Civil Aviation. The controller certainly knew that he was controlling a Vulcan and notice of that was given many days beforehand.
Mr. Beswick: Does not the Secretary of State think that this is a most unsatisfactory Report on what was a most regrettable accident? Is he not also aware that

1481
he has left the position about the ground controller somewhat vague? I had a Question down about this aspect of the matter and Dr. Touch's Report. Can we have an assurance that we shall have a full statement about the inquiry made into the ground control side of the accident?
Is the right hon. Gentleman aware that in civil aviation, where there has been a good deal more experience in ground controlled approaches than on the military side, it has been found necessary to fix a minimum ceiling below which the pilot of any aircraft shall not come, and that this ceiling is fixed in relation to the experience of the pilot and his familiarity with a particular aircraft type as well as the airport conditions? Will he not admit that the most important factors about the experience of the two pilots concerned have been left out of the Report? In view of their comparative inexperience of this type—which was inevitable—and in view of the new type that was involved, was it not really an awful tragedy that the decision to come in at London Airport in those conditions was made? Was not that decision made partly in view of the reception committee which was waiting at the airport? Is not this an aspect of the whole matter which must be considered very carefully for the future?
Mr. Birch: As for the first part of the question about G.C.A., Dr. Touch's Report will be published in full and the hon. Member will be able to go into all that.
On the question of the experience of the pilot, it is perfectly true that the Vulcan had been in service for only a short time. On the other hand, the pilot had what is called a master green instrument rating, which is the highest one can get in the Royal Air Force. The system of tracking for height is exactly the same in the Royal Air Force as in civil aviation.
On the question whether the pilot should have come in there and what the hon. Member described as the "reception committee", London Airport was being used throughout the period—during the hour before the crash took place there were eight landings and there were six landings in the half-hour succeeding it. Therefore, I do not think that one can say—and this was what the court itself
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found—that the pilot was wrong in attempting to land.
Mr. Beswick: The right hon. Gentleman has avoided the real question. It is a question not of whether the pilot had a green ticket, but of what experience he had of this particular type of aircraft in G.C.A. approach. The Secretary of State has not told us what experience the pilot had, or what experience the copilot had, which is probably more important.
Mr. Birch: The pilot had not done a full G.C.A. landing in a Vulcan. Of course, he had done it hundreds of times in other aircraft, and he had done the talkdown until just before touching down. He had practised that, but he had not done a complete one on a Vulcan. He had the highest rating. There have been very many G.C.A. landings on Vulcans. I think that between 20 and 30 were carried out at Boscombe Down. There is nothing special about a Vulcan G.C.A.
Mr. Geoffrey Lloyd: Will my right hon. Friend bear in mind, in further consideration of this matter, that the great virtue of the wartime system of fog dispersal—F.I.D.O.—was that even if an aircraft was brought down by electronic means to within near to the airfield the pilot was able to make a visual approach during the last vital few hundred feet?
Mr. Birch: Yes, Sir. My right hon. Friend will be aware that there is no F.I.D.O. at London Airport. But it is not really a question for me. Perhaps he will address it to my right hon. Friend the Minister of Transport and Civil Aviation.
Mr. Hunter: Will the right hon. Gentleman bear in mind that there is a very large residential area around London Airport—at Cranford, Bedfont and Feltham—and that this very regrettable accident has caused some alarm among the civilian population? There is a school only 400 yards from London Airport, which shows that there are many thousands of people who live in the district. Does not the statement that the pilot had the choice of seven airfields indicate that some instruction should be issued to officers in the Royal Air Force that when they have the choice of seven airfields, and are in difficulties, it would

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be better to use an isolated airfield than one in a crowded area such as that which surrounds London Airport?
Mr. Birch: Naturally, any accident causes alarm. London Airport is not the only airfield which is in a built-up area and has many houses around it. The record at London Airport is extremely good. I sympathise, of course, with the people who live in the area.
Several Hon. Members rose—
Mr. Deputy-Speaker (Sir Charles MacAndrew): Order. We have spent a long time on this statement.

BILLS PRESENTED
  COAL MINING (SUBSIDENCE)
  Bill to provide for the execution of remedial works and the making of payments in respect of damage caused by subsidence resulting from the working and getting of coal or of coal and other minerals worked therewith; for the execution of works to prevent or reduce such damage; for the carrying out of remedial or preventive measures in connection with land drainage affected or likely to be affected by such damage; and for purposes connected with the matters aforesaid, presented by Mr. Aubrey Jones; supported by Mr. James Stuart, Mr. Heathcoat Amory, Mr. Sandys, Mr. Henry Brooke, and Mr. Renton; read the First time; to be read a Second time upon Tuesday, 22nd January, and to be printed. [Bill 41.]
  OCCUPIERS' LIABILITY
  Bill to amend the law of England and Wales as to the liability of occupiers and others for injury or damage resulting to persons or goods lawfully on any land or other property from dangers due to the state of the property or to things done or omitted to be done there, to make provision as to the operation in relation to the Crown of laws made by the Parliament of Northern Ireland for similar purposes or otherwise amending the law of tort, and for purposes connected therewith, presented by the Attorney-General; supported by the Solicitor-General; read the First time; to be read a Second time upon Tuesday, 22nd January, and to be printed. [Bill 42.]

ADJOURNMENT (CHRISTMAS)
Motion made, and Question proposed,
That this House, at its rising Tomorrow, do adjourn till Tuesday, 22nd January.—[Mr. R. A. Butler.]
4.40 p.m.
Mr. Hugh Gaitskell: While we do not desire to debate this Motion at any great length, we feel that it would not be right that the House should approve the decision to rise for the Christmas Adjournment tomorrow until 22nd January, until we have had some further statement from the Government about the Anglo-French discussions which preceded the recent crisis in Suez.
Mr. R. A. Butler: If I may interrupt, I must make a personal explanation in order not to be discourteous to the right hon. Gentleman or the House. I have to preside over the Committee of Privileges at 5 o'clock, and I shall, therefore, be obliged to leave the Chamber. My right hon. Friend the Prime Minister is returning to the Chamber. I would also say that we have had no notice of this subject—[HON. MEMBERS: "Oh."]—I hope the House will accept this statement in the spirit in which I make it—but we shall do our best to meet the right hon. Gentleman's requests. I simply mention that, being on the Committee of Privileges, I have no alternative but to attend the Committee.
Mr. Gaitskell: I appreciate what the right hon. Gentleman has said. I know that he is taking the Chair at the Committee of Privileges and has to go there at 5 o'clock. It may be that we can clear this matter up before then. In any case, I am glad to see the Prime Minister back in the Chamber—I appreciate the fact that he has returned—and he may perhaps give us some further information on this matter.
Mr. Speaker suggested that we should return to this matter on the Motion for the Adjournment, and I therefore think we are particularly entitled to do so this afternoon.
Mr. Deputy-Speaker (Sir Charles MacAndrew): I was under the impression, although I have not been in the Chamber all the time, that the Motion for

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the Adjournment to which Mr. Speaker referred was that to be moved shortly by the Government.
Mr. Gaitskell: I do not think that was the case. In any event, Mr. Deputy-Speaker, I do not think you will quarrel with my argument, as I have put it, that we ought not to agree to this Motion until we have had a further statement from the Government.
Mr. Deputy-Speaker: This is a very simple Motion—simply that at the rising tomorrow we adjourn to 22nd January. The right hon. Member is entitled to say that he is against it but—[HON. MEMBERS: "More than that."] May I be allowed to give my Ruling? It is perfectly simple. Hon. Members may say why they are against the Motion and why they would prefer not to accept it, but they cannot go into too great detail.
Mr. Gaitskell: I naturally accept that point. I put the matter rather clumsily, but I had the same idea in mind. We are against this Motion for the moment and until we have heard something further from the Government on the matter to which I have just referred.
We have this situation. Originally, the Government's point of view was that everything had to be done on 30th October in a tremendous hurry and that that was the reason that we could not even wait for the United Nations Security Council to consider the matter, and, further, that no consultations with the United States were possible. The whole impression created, therefore, was that on 29th October, the night before, when the Israeli troops attacked Egypt, it came as a complete surprise to Her Majesty's Government.
The only other original comment made in this matter was the answer to a question which nobody had ever put, namely, did we, Great Britain, incite Israel to make this attack? The answer given was, "No." We never put that question. That was not what we asked and not what we are asking now. What we asked, and what we continue to ask, was what prior discussions took place between the British and French Governments on the possibility of an Israeli attack on Egypt? What plans were jointly made for Anglo-French action?
Mr. Godfrey Nicholson: On a point of order. Surely the Question before the House is not directly related to this subject. The Question before the House is the date of our reassembly and the period of our Adjournment. [An HON. MEMBER: "What is the hon. Member trying to hush up?"] There is nothing to hush up. I am raising a point of order. Surely this is a proper subject for a debate on the Adjournment and not on this Question.
Mr. Deputy-Speaker: I was just on the point of rising myself. I gave my Ruling and the right hon. Gentleman said he would keep to it. I wonder whether he will keep to it.
Mr. Gaitskell: I entirely agree. I am explaining our reasons for opposing this Motion. I think I am entitled to do that. You have not ruled me out of order on it, Mr. Deputy-Speaker. If hon. Members will allow me to continue I will do so, because I think this is a matter of some importance.
Before the hon. Member for Farnham (Mr. Nicholson) interrupted me, I was saying that we have been told by the Government that there was no incitement to Israel to attack Egypt. I have said that that was not a question which we have ever posed to the Government at all. What we were concerned with was the question, what prior discussions took place about the possibility of an Israeli attack on Egypt and what plans were laid by Britain and France together in the event of such an attack taking place? I do not propose to go over all the details and I have no desire to keep the House for any length of time, but since the events which I have outlined we have had an extremely important statement by the French Foreign Minister.
Mr. Nicholson: On a point of order. Am I to understand that any right hon. or hon. Member can raise on this occasion any question which may be agitating or disquieting him? If so, it could be a very long debate.
Mr. Deputy-Speaker: It is perfectly clear what Motion is before the House. Going back to what happened in October or in the year before last has nothing to do with whether the House should reassemble on 22nd January. That is my view.
Mr. Gaitskell: You told me, Mr. Deputy-Speaker, that it was perfectly in order to explain the reasons why we are opposing the Motion. With all respect, it would not have been possible for me to do this adequately without making a brief reference to what happened on 29th and 30th October. Before I was interrupted for a second time by the hon. Member for Farnham, I was about to come to something which was said yesterday. Perhaps you would prefer that, and, if so, perhaps I could continue with my explanation.
Yesterday the French Foreign Minister made the rather interesting and important statement which I quoted at Question Time, that France and Britain had for long realised Israel's predicament and had therefore decided together what action they would take if Israel began a preventive war. That is quite categorical.
The first question which I put to the Prime Minister, therefore, is whether, in fact, such decisions were taken. Does the Prime Minister agree with M. Pineau and does he agree that decisions of this nature were taken? Were they taken on 16th October or 23rd October at those secret meetings to which references have so frequently been made?
Assuming that M. Pineau was telling the truth on this matter, as I am sure we must assume, there are only two serious possibilities: either Israel's preventive war to which he referred was a preventive war against Jordan or it was a preventive war against Egypt. As far as Jordan is concerned, the Prime Minister has told us this afternoon that that subject was discussed with the French. He also told us, or his colleagues have told us on other occasions, that we gave the Israel Government a warning against attacking Jordan. I do not propose to pursue that matter any further except to say once again that under the Tripartite Declaration any such warning should also have been addressed to Israel in respect of the possibility of an attack on Egypt.
The question which I want to ask the Prime Minister is whether discussions with the French also took place about the possibility of a preventive war against Egypt.
Mr. H. A. Price: On a point of order. Surely it cannot
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be in order for the right hon. Gentleman the Leader of the Opposition to address any such question to the Prime Minister on the Motion which we are now discussing. Surely such a question might be relevant to a debate on Suez, but cannot be relevant to this Motion.
Mr. Deputy-Speaker: That is perfectly true, and I think that if we go into too great detail about why there should be a different date in the Motion it would be going beyond the Motion.
Several Hon. Members rose—
Mr. Deputy-Speaker: May I finish? I can answer only one point of order at a time. I am in rather a difficult position and I ask the right hon. Gentleman for his kind assistance.
Mr. Gaitskell: If hon. Members opposite would not interrupt me so frequently I would conclude my remarks quite quickly. With all respect, I do not think that I am going into too great detail.
Mr. Anthony Fell: On a point of order—
Mr. Deputy-Speaker: I have dealt with that point of order.
Mr. Gaitskell: What we are asking is what discussions took place with the French about the possibility, to which M. Pineau's statement certainly may refer and I believe does refer, that Israel would begin a preventive war against Egypt? What plans were made? Were these plans in fact the plans which were carried out in the ultimatum of 30th October and the succeeding days? Were they plans for the invasion of the Canal Zone of Egypt in the event of an Israeli attack upon Egypt? That is the question which I want to put to the Prime Minister.
Mr. Fell: On a point of order, Mr. Deputy-Speaker. I crave your indulgence for rising again on another point of order. On at least four occasions there have been points of order put to you, asking for your guidance on this matter, and on four occasions you have upheld those points of order and appealed to the Leader of the Opposition to keep his points short. On each occasion the right hon. Gentleman has gone on in exactly the same way.
Mr. George Wigg: Further to that point of order. Surely—
Mr. Deputy-Speaker: Order. I can reply to only one hon. Member at a time. If hon. Members wish to oppose this Motion or to support it, they should remember that it is to do with the date of 22nd January, and I hope that hon. Gentlemen will try to keep to the point.
Mr. Wigg: Surely my right hon. Friend is perfectly in order—[HON. MEMBERS: "Oh."] With respect, my right hon. Friend is perfectly in order in asking that this Motion should not be accepted by the House and that the House should remain in continuous session until we have got to the bottom of this matter? In fact, my right hon. Friend is arguing that the House should not adjourn for the Christmas Recess and that, if necessary, it should continue to debate this matter—if not by the ordinary process of sitting, then by a Select Committee or a Royal Commission, or some such other device known to the House—in order to get to the bottom of it. My right hon. Friend is not, as it were, discussing the merits; the point he is making is that the House should not adjourn.
Mr. Deputy-Speaker: The right hon. Gentleman the Leader of the Opposition has not said that up to now—
Mr. Gaitskell: With respect, Mr. Deputy-Speaker, I said it more than once. If I refrained—
Mr. Deputy-Speaker: I beg the pardon of the right hon. Gentleman. I did not hear him say that. I gathered that that was what he was going to say, but I did not hear him say it.
Mr. Gaitskell: If I refrained from saying it sufficiently frequently, it was only because I wished to get on to the other part of what I had to say in asking the Prime Minister—and this is the reason, or one of the reasons, why we are opposing this Motion—whether, in the discussions with France plans were laid before 29th October for joint Anglo-French action against Egypt in the event of an Israeli attack upon Egypt, following upon the ultimatum that was, in fact, eventually dispatched to Egypt?
The further question which I wish to put to the Prime Minister is this. These consultations, which he admits took place, apparently took place without the knowledge of the United
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States. I should like to ask why that was so. After all, the United States was a signatory to the Tripartite Declaration. What was there that we had in common with the French in this matter that we did not have in common with the United States? What was the reason for excluding the Americans, for keeping them in the dark, about what we were intending to do? Is the Prime Minister of the same opinion—
Mr. H. A. Price: Mr. Deputy-Speaker, will you please be good enough to give a definite Ruling on whether or not it is in order for the right hon. Gentleman to put to the Prime Minister, or to anybody else, the kind of questions he is now asking on the Motion which we are discussing?
Mr. Deputy-Speaker: The rules of order are perfectly simple. Hon. Members can give their reasons why they oppose or support the Motion to adjourn until 22nd January, but, as I have said before, I do not think it is right to go into lengthy details of what has happened in the past. That is going beyond the rules of order, and I think that the right hon. Gentleman should realise it.
Mr. Gaitskell: With respect, Mr. Deputy-Speaker, that is not what I have done at all. [HON. MEMBERS: "Oh."] If I had wished to do that, it would have been perfectly possible for us to have raised this matter on the Motion for the Adjournment of the House. But I did not wish to do that; I wished to make only a short statement—that is what I should be doing were it not that hon. Members opposite were interrupting me—about why we do not think it would be right to adjourn for the Christmas Recess until we have had an answer.
I come now to the last point I wish to put. I wish to ask the Prime Minister whether he accepts the statement of M. Mollet that the reason why the United States was kept out of these discussions, kept in the dark, and not made aware of any plans or intentions of the British and French Governments, was that the British and French Governments felt convinced that the United States would disapprove of those plans and would do everything to prevent them from being carried out.
Those are the essential questions. We have sought to put them on many

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occasions and we have never had an adequate answer. The Prime Minister now has a last opportunity to answer those questions, and to do something to rescue the reputation of this country.
4.55 p.m.
The Prime Minister (Sir Anthony Eden): I should like to speak at once on this matter.
First of all, regarding the last observation of the right hon. Gentleman about whether I agreed with what M. Mollet has said about the United States, naturally, I suppose, the House has not entirely in its mind what I myself said at the beginning of the whole of this business, on this very subject, on 31st October. I am sorry to have to quote myself, but I did say this which, as I think the House will see, is not, shall we say, irrelevant to what M. Mollet said the other day. I was referring to the United States economy not being dependent upon the Canal. I said that was true and that their position was different from ours. I went on to say:
"If anyone says that on that account we should have held up action until agreement could be reached with the United States as to what to do, I can only say that this would have been to ignore what everyone here and in the United States knows to have been different approaches to some of these vital Middle Eastern questions. They know it. We know it. Of course, we deplore it"—
And here is the point—
"but I do not think that it can carry with it this corollary, that we must in all circumstances secure agreement from our American ally before we can act ourselves in what we know to be our own vital interests."—[OFFICIAL REPORT, 31st October, 1956; Vol. 558, c. 1453.]
I am bound to say to the House that the list of the charges has changed in character. [HON. MEMBERS: "Hear, hear."] I want the House to note that. I want to try to tick off those charges which are not, shall I say, now made. Some may say that they were never made. They have not been made by the right hon. Gentleman the Leader of the Opposition, but at any rate they were made by others. There is no charge of incitement—[HON. MEMBERS: "There never was."] That is very interesting. I am merely readjusting the list. Nor is there a charge of any prior agreement with Israel or foreknowledge. [HON. MEMBERS: "Yes."] I do not know about that. Last weekend the right hon. Gentle-
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man himself said that we had a "shrewd idea." That is quite a different matter from "collusion" or "incitement." To have a "shrewd idea" of what may happen in the Middle East seems to me the minimum which could be expected of a Government—the very minimum. To have a shrewd idea of what is likely to happen is quite a different thing from "collusion".
I want to come to the last question, which is, "Did we have plans with the French, and discussions about plans with them?" Most certainly we had discussions about plans with the French. We have had them, roughly, from the beginning of August in one form or another—military discussions of some kind. They had been going on in various forms also in the tripartite discussions. What was different from the beginning of August and any earlier time was that we were moving out reinforcements to the Eastern Mediterranean, and so were the French. We both had forces there and, as a result, it was only proper—it would have been mad if we had not—to have some form of discussion with each other.
The right hon. Gentleman made a previous reference to Jordan and wrote that off quite quickly. I think he will understand, and I think I am entitled to say to the House, that although it is quite easy to write that one off quickly now, that was, in fact, by far and away the greatest anxiety we had at that period—by far and away—because it seemed to us—[HON. MEMBERS: "Why?"]. I will say that it seemed to us, particularly when the staff talks were made between Egypt and the two Arab States of Jordan and Syria that—and Israel could see it—it was tightening the noose round Israel's neck. That being so, which of the three countries—supposing Israel reacted at all—was she most likely to react against?
Mr. Denis Healey: rose—
The Prime Minister: I cannot give way. I am trying not to trespass upon the time of the House. I think that I am entitled to put this view. Looking at the matter from a military point of view, it seemed possible, to put it no higher—I would put it higher than that, and say probable—that, feeling the noose tightening—
An Hon. Member: It is all in order now.
Mr. Deputy-Speaker: Order. An hon. Member said, "It is all in order now." The Prime Minister is answering questions which the Leader of the Opposition put to him. That is why I am allowing him to continue.
The Prime Minister: If anybody had been in Tel Aviv at that time, and if they were concerned with what had happened, they would have known that Israel would strike out before she was strangled. Jordan was a possibility upon the list, and a possibility in a different category from Egypt, from our point of view, because we had a Treaty with Jordan. Not only had we a treaty with her, but nobody else had. If there is anybody in the House who thinks that France or the United States would have acted in a military sense if Israel had taken military action there they are entitled to their belief; it is a belief about which I would have some doubts.
The position is more difficult than that, because we had the only air arm and armour in Jordan. I can tell the House that there was an occasion, in one of these raids, when it seemed that we would actually be called upon to put the Royal Air Force into operation, because it was thought that Israeli aeroplanes were in action. If they had been, it would have been a very grave matter indeed. If we had put the Royal Air Force into action against Israel's air force it would have been a matter of the utmost gravity. I do not know what it would have led to. We should have been involved in the actual fighting. [An HON. MEMBER: "We all agree about that."] All I am saying is that this fact cannot be left out of our discussion.
The right hon. Gentleman said that I told the House recently—in fact, we told the country publicly at the time—that we issued warning after warning. I give that as one example of the matters which we raised. I do not deny that this was a matter which we discussed with our allies. I do not deny that it was a matter about which we warned Israel. There were no plans got together to attack Egypt; there were military discussions of various kinds and finally the decision was taken on that day.
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I am not going to say what our military plans were, but I say that we were right to make those preparations. Otherwise, I cannot conceive the point of having troops in the Eastern Mediterranean at all. The decision to put them into operation was taken here on the day I gave.
Mr. J. Grimond: I am sure that the House will have listened to the Prime Minister with great attention and with sympathy on the point he made about Jordan. But the point which has been made again and again in this country and abroad is not about Jordan, but that the Government are alleged to have had information that Israel was going to attack Egypt. Some people say that that information came from the French; others may say that it came in other ways, but it is said that there was information before 29th October that Israel was planning an attack upon Egypt, and that that information was known to the Government. That is the allegation to which we are very anxious to have a categorical denial.
Mr. Nicholson: There are two comments upon which I should like answers before I can agree to the Motion. First, is my right hon. Friend aware that the whole nature of the charge of collusion has fundamentally changed, partly owing to confusion as to the dictionary definition of "collusion" which I have now looked up? The word "collusion" was first used by right hon. Gentlemen opposite in the sense of connivance and incitement; now it has come down to mean intelligent anticipation. That most important change should be registered.
Secondly, is the Prime Minister aware that many statements, which I am sure he would agree to be definitely misleading—and that is a moderate way of expressing them—have come from an individual who was employed very closely under the Prime Minister and has now left his post? He has been spreading widely around statements which I believe to be untrue.
Mr. Deputy-Speaker: The hon. Member was rather particular in raising his point of order a short time ago. He had the right idea then, but he has not got it now.
Mr. James Griffiths: On a point of order. The hon. Member has been attacking an unnamed person who was in the employ of the Prime Minister

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and was therefore a civil servant. I would ask you, Mr. Deputy-Speaker, whether, speaking in this House, an hon. Member is entitled to attack a civil servant without naming him or giving him any opportunity to reply.
Mr. Deputy-Speaker: That was not the point I was making. The point is that we are discussing whether or not we shall come back on 22nd January.
Mr. Griffiths: I am rising to a point of order about the statement made by the hon. Member. It is within the recollection of the House that he said that some unnamed person in the employment of the Prime Minister has been spreading rumours and making statements which the hon. Member apparently thinks are untrue. Is it in order for an hon. Member to make such statements in this House about an ex-civil servant, without naming that person?
Mr. Deputy-Speaker: As far as I can see, it was quite a reasonable debating point to make. The hon. Member was out of order for quite a different reason.
Mr. Griffiths: With respect, it is not a debating point. It is an allegation against a former employee of the Government that he has been spreading false rumours and, added to that, that he had been a former employee of the Government in the personal service of the Prime Minister. Is it in accordance with the rules of order and the traditions of the House that that should be said by an hon. Member?
Mr. Deputy-Speaker: Yes—I have already ruled that it is debating point.
Mr. Wigg: The charge made is not that the former employee was spreading false rumours, but that he had been telling the truth.
Mr. Nicholson: I have made my point and I will leave it, after saying that I very much hope that the Prime Minister will look into the matter.
Mr. Griffiths: Further to the point of order. If an employee of the Government has been spreading any knowledge that he learned whilst in the service of the Government, he is guilty of an offence under the Official Secrets Act. Is it, therefore, in accordance with the best traditions of the House that a charge of that kind should be made, affecting the
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honour of an ex-civil servant, without his being named and without his having any opportunity to reply?
Mr. Deputy-Speaker: Ministers are responsible for their civil servants. That is why, in this House, a Minister may be blamed for something which is not directly his responsibility. He is held responsible by us.
Mr. Nicholson: I do not ignore that. I have made that charge after careful consideration. I am very anxious to be in order and not to be hoist with my own petard. I will put myself in order by saying that I shall be reluctant to agree to the Motion unless I have some sort of an answer to these questions.
5.8 p.m.
Mr. R. H. S. Crossman: I should like to follow up the question asked by the Leader of the Liberal Party about foreknowledge. It seems to me that the Minister has two questions to answer in this connection. One concerns our foreknowledge of Israel's intentions and the other Israel's foreknowledge of our intentions. They are two specific questions. It is widely alleged in France, for instance, that there was foreknowledge by Israel that in the event of their attacking Egypt France would use her veto in the Security Council in order to enable the attack to continue.
I should like to know whether this is one of the decisions to which M. Pineau referred in his speech yesterday as something which had been decided between the British and French Governments. Was it known in advance by the Israelis that if they moved then they could be assured of the veto of the French Government? This would seem to be an important and relevant question which the Prime Minister has to answer.
My second question relates to the use of the French Air Force to protect Tel Aviv in the event of major bombing attacks by the Egyptians. Here I would disassociate myself entirely from the special correspondent of the Manchester Guardian about the use of French pilots in the Israeli offensive. This is a much more difficult question, as I can well understand. Here again, the French make no disguise about it. They say that Israel took the precaution to ensure that the French Air Force would be available for

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the defence of Tel Aviv if Ilyushin bombers were used by the Egyptians and that it was by that foreknowledge that they were able to stave off the use of those bombers.
I should like to know if that is another of the decisions, which—as the Leader of the Opposition mentioned—M. Pineau says had been taken well beforehand. M. Pineau said that he made decisions with the British on a number of matters. I suspect that these are two of the matters. I have no right to allege it. Categorically I only ask the Prime Minister those two specific questions.
There is one other point. The Prime Minister was careful to say, quite rightly, that we have a right to take decisions with the French without consulting the Americans. That is quite correct. On the other hand, we were fellow members of the Tripartite Declaration. The Prime Minister made speech after speech to us, and so did the Foreign Secretary, saying that the Tripartite Declaration was the vital thing. I remember going with the hon. Member for East Aberdeenshire (Sir R. Boothby) to Washington and reporting on three days of talks between the Prime Minister and President Eisenhower only last January, when he assured us afterwards that everything had been agreed between London and Washington on how the Tripartite Declaration would be implemented in the event of aggression.
It was not, therefore, unreasonable to expect that all decisions about what to do in the event of an Israeli or Arab attack, one or the other, would be tripartite decisions. What I want to understand from the Prime Minister is: was M. Pineau correct when he asserted yesterday that a whole series of decisions was taken by Britain and France about bipartite action to take place without America? If that is so, we have the basis for the inquiry which my hon. Friend the Member for Dudley (Mr. Wigg) has demanded. I do not think that we can get all that we want by this sort of question. I think that we want a Select Committee on this question of how the operation started and how it was conducted.
I think hon. Members opposite will agree with me in saying that when we move from how it began to how it was carried out this House has the right to answers to many questions. It was not the fault of the unfortunate Navy, Army
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and Air Force that they were given such ludicrous political directives which caused the operation to fail, and fail ignominously. [HON. MEMBERS: "Oh."] If hon. Gentlemen opposite do not know that that is true, then they have not been outside this country to find out what other people feel about our conduct in Egypt.
Mr. F. A. Burden: Perhaps the hon. Gentleman would care to explain to the House the part that he has taken in this unfortunate incident. During the debate in September, he said—
Mr. Deputy-Speaker: The debate is on whether or not we come back on 22nd January.
Mr. Burden: This is very relevant, because certain allegations are being made, and I am trying to show that we—and perhaps some hon. Members opposite are being a little over-vehement in their attacks on the Government today—are just dealing with the decision when we should come back. The hon. Member said in September that he had been to Israel and had been to Nasser. It is in the OFFICIAL REPORT—
Mr. Deputy-Speaker: Whatever he said, it has nothing to do with 22nd January.
Mr. Crossman: Does the Prime Minister agree with M. Pineau that, quite outside the tripartite discussions, dual discussions took place with the French and decisions were reached, some of which were imparted to the Israeli Government? I ask this because the Prime Minister must agree that, if the Israeli Government knew in advance of certain actions which we and the French would take, that was bound to influence their decisions. I do not blame them in the least. If I were an Israeli I would myself have made sure that I got firm support from Britain and France before I made an attack on Egypt. What I object to is that the Government, which had given those assurances to the Israelis, then tried to pretend that we went into Egypt to stop the war when, in fact, the actions of the Government did not stop the war but encouraged it.
Mr. Cyril Osborne: On a point of order. May I put a real question of order to you, Mr. Deputy-Speaker, on

1499
the question before the House, "That this House at its rising tomorrow do adjourn until Tuesday, 22nd January"? May I ask your guidance for the protection of certain hon. Members who have come to this House in order to discuss economic affairs. We have been waiting since half-past three. In view of the fact that we came here to take part in an important debate on economic affairs and that this discussion looks like going on unreasonably, would it be in order to ask "That the Question be now put" and that we vote on it?
Mr. Deputy-Speaker: Even if it were in order, I could not accept it. It is only Mr. Speaker who can do so.
Mr. Crossman: I am giving our reasons why we object to the Adjournment of the House now. I thought that the Prime Minister's explanation gave excellent reasons why we should not adjourn, and I am trying to find out what happened in those deplorable weeks.
I believe that the Israelis were wholly justified in seeking British and French guarantees of help in the event of their going into Egypt. That was a perfectly reasonable thing for them to do. What would not be reasonable—what would, in fact, be infamous—would be for a British Government which had given those guarantees to say that they sent our troops in there to divide the combatants and that they went in there to put out the forest fire.
Did these guarantees when they were given make the Israelis feel that it was safe to attack? I do not know. All I know is that these things are being said by M. Pineau—[HON. MEMBERS: "No"]. Certainly they are. M. Pineau has stated that the Anglo-French decisions were reached about what to do in the event of an Israeli attack on Egypt. We have a right to ask what those decisions were. I have been indicating certain suggestions as to what they might have been and those suggestions are widely held in Israel where French help was very useful to the Israelis for their attack.
I have pointed out that, from the Israeli point of view, these policies were wholly reasonable. And they would have been reasonable for our Government too if it had stated we were going into Egypt to knock out Nasser. What I object to
1500
is the thought of our Government going in and saying, "We are stopping a war" after encouraging a war by giving Israel assurances. If that were true, it would make our Government—I am sorry to say this Mr. Deputy-Speaker—guilty of lying, guilty of giving one reason for going to war when actually the real motive was another. I would love to have all this disproved by the Prime Minister. [Laughter.]
Mr. J. Griffiths: Why not have a Select Committee?
Mr. Crossman: Hon. Members opposite can laugh as much as they like. [Interruption.]
Mr. Charles Pannell: On a point of order, Mr. Deputy-Speaker. The hon. Member for Heston and Isleworth (Mr. R. Harris) is yelling, "Do not tell lies" and "Stop telling lies". May I ask that you will deal with him? It is being heard here. I do not think that the hon. Member will deny it.
Mr. Deputy-Speaker: I hope that the word "lies" will not be used. The hon. Member for Coventry, East (Mr. Crossman) used it in a way which I think is quite in order, but it is not a very nice word. It leads to trouble and I hope that it will not be used at all.
Mr. Crossman: Hon. Members opposite may laugh when I say that we would like to have this disproved, but I assure them that uncertainty is really doing this country no good in the world. If, on investigation, these charges were found to be true, the only way of saving the honour of this country would be to get rid of the Government guilty of doing these things.
Mr. Charles Ian Orr-Ewing: I wish to draw attention to another phrase reported in the Press as having been used by M. Pineau. I think it is a point of view which is very widely held in this country. If it does not satisfy the Opposition it certainly seems to satisfy many of the electorate. [HON. MEMBERS: "Oh."] M. Pineau said that if there had been collusion this operation would have been carried out far more quickly and that it would not have taken six days for the heavy armour to go from Malta to the scene of this operation.

1501
Surely it is evident that if this operation had been anticipated the heavy armour and L.S.T.s would have left Malta very much sooner. The whole operation would have been completed not in eight days, but two days. I think that that proves conclusively that there was no collusion and no anticipation. That phrase in M. Pineau's speech was completely overlooked by the Leader of the Opposition, but I believe that it is a point of view widely held in this country.
5.12 p.m.
Mr. George Wigg: The hon. Member for Hendon, North (Mr. C. I. Orr-Ewing) is an unconscious humorist, or he does not read HANSARD. I asked the Secretary of State for War the time at which the 6th Royal Tank Regiment and the L.S.T.s left Malta and the right hon. Gentleman was kind enough to tell me that the 6th Tank Regiment went on board at 10 p.m. on 30th October. I subsequently asked at what time the armoured fighting vehicles were put on board and the right hon. Gentleman told me that it was at 1 p.m. the same day.
If the ultimatum was not presented before 4 o'clock and the 6th Royal Tank Regiment and the 3rd Commando Brigade left the same night, the hon. Gentleman is asking for collusion, because he is wanting them to start before the Government had presented their ultimatum. [An HON. MEMBER: "It proves that there was not."] If the hon. Member does not see that armoured fighting vehicles and commandos were put on board ship before the ultimatum had expired, I am sorry for him. The hon. Member does not see that the 6th Royal Tank Regiment and the 3rd Commando Brigade could not have arrived before they did even though they heard the pistol at the start. [Laughter.] Of course they could not have arrived before they did. They could not have arrived before first light on the 6th.
Hon. Members opposite will notice that the paratroops went in 24 hours earlier than was intended, or would any hon. Member opposite who knows anything about it advocate putting paratroops into Port Said without any armour or any seaborne link-up? The fact is that that stage of the operation had to be undertaken at that time because the political reasons for going into Port Said—that is,
1502
separating Israel and Egypt—had expired and, therefore, the gigantic risk had to be taken of putting in the battalion parachute group from the 6th Royal Tank Regiment because that regiment could not get there one minute before, in fact, it did.
I argue that this House should not adjourn if the Government will not set up a Select Committee or a Royal Commission and that the House should remain in continuous session to establish the facts. My first argument is this. Twice today we have heard arguments from hon. Members opposite, one from a back bencher and another from an hon. Lady who is a Privy Councillor, contending that it was discreditable of the Opposition to make these allegations because that affected the honour of the country. In other words, hon. Members opposite cannot draw a distinction between themselves and the country. Of course, the constituents in Melton have drawn that distinction. They see that there is a difference.
We are not, in fact, attacking the country; we are attacking the Government. We are saying it is a prime requirement—a requirement which ought to be given first priority—to clear the name of this country from the charges which are being made against it. The first charge is of collusion. The detailed charges of collusion were not made by my right hon. Friend the Leader of the Opposition. They appeared in Time magazine, on 12th November. On 12th November, Time gave a detailed account of the link-up, the planning of the operation and supply of equipment by Britain and France.
I have never accepted that view. I wrote a letter to The Times, in which I made that point. I asked a Question of the Prime Minister weeks ago. I asked whether he would set up a Select Committee to gather the evidence—it would not be difficult—from the Prime Minister, the Foreign Secretary and the Minister of Defence on a quite narrow point, the point of what knowledge the Government had of the Israeli attack and of its scope.
Obviously, the case of the Prime Minister was that there was an Israeli attack which, so far as he took the country into his confidence, was in the nature of a surprise. The Israelis, in a matter of hours, found themselves within

1503
reach of the Canal and, had the Government not taken action to separate Israel and Egypt, the lives of British subjects would have been endangered and the passage of ships through the Canal would be stopped. "Therefore," the Government said, "there was no time to lose; we had to deliver that ultimatum on the afternoon of 30th October and, if in the time limit we were not satisfied, we were going to take action."
My evidence on this point does not depend upon Time, or stories told by the Prime Minister's former employee. My evidence is based on what has been said by the Minister of Defence. On 5th December, I asked the Minister of Defence
"the time and date on which he informed the General Officer Commanding, Middle East Forces, that the Israeli Government were preparing major operations against Egypt."
The right hon. Gentleman replied:
"On 26th October the Government were informed by Her Majesty's Ambassador at Tel Aviv that mobilisation of the Israeli forces had begun. During the next two days further information was received indicating that Israeli forces were concentrating in the Negev. The Commander-in-Chief Middle East Land Forces, who was in London at the time, was at all times kept informed."
Later, I asked:
"Does the right hon. Gentleman still say that neither he nor General Keightley knew that the Israeli operation was to begin, and also that neither knew of its scope?"
The Minister of Defence replied:
"The possibility of an Israeli attack on Egypt has been in the minds of the General Staff and of the Defence Committee and the Cabinet for some considerable time. Our first true knowledge that it was going to take place was when we were informed about the mobilisation."—[OFFICIAL REPORT, 5th December, 1956; Vol. 561, c. 1243–4.]
The Prime Minister, if he has any decency left at all, will go out and resign; because the Minister of Defence has said that on the afternoon of 26th October the Government knew that the Israeli attack was going to be made on Egypt. I will read now from HANSARD for 8th November.
Mr. Speaker: I cannot follow the drift of the hon. Gentleman's argument. The Question before the House is whether we should adjourn on the date specified in the Motion.
Mr. Wigg: I am much obliged, Mr. Speaker. Before you came in I said that the House should not adjourn, and that if the Government would not set up a Select Committee or a Royal Commission the House should remain in continuous session in order to establish the facts in this matter. It is a matter of the highest priority that the honour of this country should be cleared on this issue. I am doing my best to clear the honour of one or two right hon. Gentlemen opposite.
On 8th November, the Secretary of State for the Colonies, speaking in the debate on the Address, said:
"There was clearly no time whatever to consult the Commonwealth in advance if we were to take timely action to protect the Canal and to stop the conflict."—[OFFIGAL REPORT, 8th November, 1956; Vol. 560, c. 291.]
I looked at the Secretary of State for the Colonies when he was speaking, and I watched his eyes. They are always a good thing to watch. I am sure that he was telling the truth. I am sure that the Secretary of State for the Colonies honestly believed that there was no time in which to consult the Commonwealth.

ROYAL ASSENT
5.32 p.m.
Message to attend the Lords Commissioners.
The House went, and, having returned—
Mr. SPEAKER reported the Royal Assent to:

1. Hydrocarbon Oil Duties (Temporary Increase) Act, 1956.

2. Air Corporations Act, 1956.

3. Expiring Laws Continuance Act, 1956.

4. Agriculture (Silo Subsidies) Act, 1956.

ADJOURNMENT (CHRISTMAS)
Question again proposed.
Mr. Wigg: Mr. Speaker, I was arguing that this House should not adjourn, but that the Government should consider the setting up of either a Select Committee or a Royal Commission, or, failing that, that the House should stay in session until we have established the facts which led up to the Government presenting their ultimatum to Israel and to Egypt. I think that I have established, out of the mouth of the Minister of Defence, that the Government knew of the start of the Israeli operation at 4 p.m. on 26th October.
I think that I have also established that one of the Prime Minister's colleagues, namely, the Secretary of State for the Colonies, would never have made the statement that he did make had he himself been aware that there was ample time for the Government to have consulted the heads of the Dominion Governments and, indeed, President Eisenhower himself.
The other point which I have sought to establish, and which I think that the House should examine with very great care—
Mr. Speaker: Order. I must point out that on a Motion of this sort, which is a Motion to adjourn until a definite day, it is quite allowable and proper to urge that the House should not adjourn to that date because certain subjects are of considerable importance. On the other hand, it is not in order to go into those subjects in any detail. They can be advanced only as reasons for not adjourning. It seems to me, from the little that I have been privileged to hear of the hon. Member's speech, that he is going into this matter in some detail, which would not be in order.
Mr. Wigg: I was going on to refer to the argument of the hon. Member for Hendon, North that, had the Government had foreknowledge, the armoured fighting vehicles would have gone there before. He also argued, from what M. Pineau said, that the charge of collusion could not be true because, if it had been true, there would have been much more detail to the operation. The point I was
1506
making was that there ought to be an inquiry, and that the House should not adjourn until the Government either agree to an inquiry or, failing that, that the House itself should conduct an inquiry into the Government's foreknowledge.
The Prime Minister himself, in the course of his reply, made great play of the situation vis-à-vis Jordan, but what the Prime Minister failed to tell the House was that, in fact, the Government took one course of action about Jordan and another about Egypt. What was the ultimatum designed to do? Not to separate Israel and Egypt, but, at all costs, to get back on the Canal. I argue that there are reasons why the Government should set up an inquiry, and why the House itself should do the job if the Government will not.
The first is on the issue of foreknowledge—not collusion. I have never made the charge of collusion. I questioned the Prime Minister on the setting up of a Select Committee. I wrote a letter to The Times, and I have questioned the Minister of Defence, all the time seeking to establish that the Government knew well in advance the time of this operation, and that the story about the necessity for immediate and speedy action was untrue—
Major H. Legge-Bourke: On a point of order. The hon. Member is saying that he does not wish the House to adjourn until the Government have agreed to set up a Royal Commission, or some form of inquiry, into what happened. In his argument, Mr. Speaker, is he not trying to show that, should he be allowed to continue on his present line, such an inquiry will be quite unnecessary, because he already knows the answer?
Mr. Speaker: I think myself that the hon. Member for Dudley (Mr. Wigg) has sufficiently indicated the importance which this subject bears in his mind, and has expressed his desire that the House should not adjourn without a committee or an inquiry of some sort. I think that that is as far as he is entitled to go.
As I heard the hon. Member's last few sentences, he was arguing the merits of what the Prime Minister said, but that is for another occasion. In case the hon.

1507
Member misunderstood me after Question Time, when I said that this was a matter which could be debated on the Adjournment, I did not mean on this Question, but on the general Question, "That this House do now adjourn." It would be in order to raise it on that Question, but out of order to do so on this.
Mr. Wigg: With respect, Mr. Speaker, I did not misunderstand you—I understood perfectly well. If you rule that I have exhausted the reasons on that point, I will now, if I may, continue to give other reasons—of which I have a formidable list, although I do not want to detain the House too long.
I want to turn to another reason for the setting up of a Royal Commission—
Mr. Speaker: The House does not need to hear another reason for the setting up of a Royal Commission. I think that the hon. Member has explained his reasons for that with admirable clarity. What is before the House is whether or not the House should adjourn before a Commission is set up. That point, I think, is made. But if the hon. Member is going to argue the case all over again, I think that that would clearly be an abuse of the rules of the House.
Mr. Crossman: On a point of order, Mr. Speaker. Tht Prime Minister, in the course of arguing why we should adjourn, gave a most detailed account of his views about Jordan and our relations with Jordan. What baffles me is why the Prime Minister is allowed to argue that in support of the case that the House should adjourn, whereas, when my hon. Friend the Member for Dudley (Mr. Wigg) tries to argue on the same subject, he is told that he is out of order. Why is that?
Mr. Speaker: If the Prime Minister had tried to make a detailed case on this subject, he would have been out of order.
Mr. Crossman: He did make one.
Mr. Speaker: What the right hon. Gentleman did was to answer a Question which was put to him at Question Time. Then there was a supplementary question, which he answered. That was at Question Time. It was very different from the Question which is before the House now.
Mr. Healey: Further to that point of order, Mr. Speaker. If I may respectfully say so, I think that you are mistaken—
Mr. Speaker: Order. Perhaps I have been in error here. I understand that the Prime Minister did make a statement on the Question, "That this House, at its rising Tomorrow, do adjourn until Tuesday, 22nd January." [HON. MEMBERS: "Yes."] That is so. But I think that it would be more convenient to the House if we could dispose of the definite Question which is before us and then go on the general question of the Adjournment, when all this matter would not place the Chair in an embarrassing position and it would be easier for hon. Members.
Mr. H. A. Price: Further to that point of order, Mr. Speaker. As I was here at the time, may I be permitted to make clear that the statement which the Prime Minister made was in answer to a long string of questions put to him by the Leader of the Opposition?
Mr. Gaitskell: Further to that point of order, Mr. Speaker. It is quite correct, as the hon. Member says, that I rose on this Motion to put a series of questions to the Prime Minister, feeling that neither my right hon. Friends nor myself could really agree to the Motion until we had had a statement from him. I cannot say for one moment that the statement satisfied us in any way, but in all fairness I think I should make that plain. For my part, although I realise that a number of my hon. Friends would have preferred to have spoken on this Motion, I could not resist the proposition which you have made, that we should proceed now to the other business which has been set down for today.
Sir Robert Boothby: Further to that point of order. We have now had a partial debate in which a lot of speeches which some of us thought were largely out of order have been made, and a lot of charges have been made from the Opposition benches. They have not been answered in any way at all, because no opportunity has arisen to do so. With all respect, I think it is a very bad thing for the House that a debate of this gravity, upon an issue of this importance,

1509
should suddenly arise, quite impromptu, when no one is expecting it, on a Motion that this House should adjourn till 22nd January. Further, what has the question of setting up a committee of inquiry or a Royal Commission got to do with the Adjournment of the House?
Mr. Speaker: I think, if I may say so, that the Leader of the Opposition has made a very sensible suggestion which appeals to me. This is a limited Motion. If hon. Members wish to use for a wider debate the Motion, "That this House do now adjourn," that is no concern of mine, but I think it would be more in accordance with our practice if we were to adopt the course which the right hon. Gentleman suggested.
Mr. Wigg: Whatever procedure may be adopted, I think that the statement of the hon. Member for Aberdeenshire, East (Sir R. Boothby) should not be allowed to pass. He is suggesting that this debate "blew up." The Prime Minister came here and answered a Question—
Mr. Speaker: I think that is irrelevant to the subject.
Mr. Sydney Silverman: Mr. Speaker, may I put a point of order to you, in this way? It might very well have been better if this debate had not taken the course that it has taken, or gone on so long. To that extent, I would respectfully make my submission on the same lines as the submission which was made just now. But I want to submit to you that my hon. Friend's conclusion was not, perhaps, quite the right one, for two reasons.
One reason is that when the debate has gone so far on a matter which we all realise is of interest far outside the walls of this House, it would be a little unfortunate if it were left in its present state without any of the ends, as it were, being tied up.
The second point that I would put is that a debate on the Motion "That this House do now adjourn"—the other Motion—would inevitably be a much wider debate than the one on which we are now engaged, where the debate is limited to showing why the anxieties in hon. Members' minds, unless they can be quickly cleared up, or unless a promise of inquiry is made, would make
1510
many of us unwilling to go away for four weeks, with these questions being asked all over the world and not answered.
The Prime Minister: May I say a word? I do not want to argue about the actual order of the debate, but I would be sorry if I could not answer some of the questions that have been put to me. I will be as brief and as categorical as I can.
Mr. Gaitskell: I am sure that we all warmly welcome the proposal of the Prime Minister that he should speak again, and would be happy if you permitted him to do so, Mr. Speaker.
Mrs. E. M. Braddock: May I draw your attention, Mr. Speaker, to the fact, that I have been here since the beginning of business today? I have risen repeatedly for the purpose of asking a question, and putting to the Prime Minister something that has not been put to him before in any of the debates on the Suez position. Can you tell me how it is possible for a woman Member who is interested in this matter—and I happen to be the only woman Member in the House at the moment—[HON. MEMBERS: "No."] The hon. Member for Tynemouth (Dame Irene Ward) is not properly in the Chamber. She has only just come in. [An HON. MEMBER: "My right hon. Friend is here."] I am sorry; I did not see the right hon. Lady the Member for Moss Side (Dame Florence Horsbrugh) on the opposite side of the House. I want to know how it is possible for us, when there is so much criticism of women Members not taking part in important foreign affairs debates, to catch your eye to ask a question on important matters of this sort, Mr. Speaker.
Mr. Speaker: I cannot answer that in advance. I have not had an opportunity of observing the hon. Lady yet. Perhaps I shall have that chance later on.
Mrs. Braddock: I have repeatedly, stood up, Mr. Speaker.
Mr. Speaker: The debate has drifted somewhat. My only desire is to serve the House as well as I can. I have the feeling that as the debate has taken a course of which I was unaware, because I was out of the Chamber for a moment, it would be better to finish it in an

1511
orderly fashion. I had the pleasure of hearing only a part of the speech of the hon. Member for Dudley (Mr. Wigg), but in the part that I did hear, if I may judge the whole from the part, he was going into a lot of matters of detail to which I felt it my duty to draw his attention. If a lot of things have been said, the fair thing seems to be that something should be said in answer to some of the questions that have been put, but I hope that the House will then proceed to its next business.
May I say to the House that what is really in my mind, and what is on my conscience, is that a great number of hon. Members have written to me asking if they may speak on the economic matters which affect their constituents, and I see the time slipping by. That is what lends wings to my desire to bring this debate to a speedy and decorous conclusion.
The Prime Minister rose—
Mrs. Braddock: Before the Prime Minister answers, may I be permitted to put a question which will not take very many moments—
Mr. Speaker: Order. I think that that lies in the hands of the hon. Member for Dudley (Mr. Wigg), who has still got the Floor of the House and seems anxious to resume his speech.
Mr. Wigg: I do wish to resume my speech, Mr. Speaker, but I do not wish to be too long about it. [HON. MEMBERS: "Hear, hear."] I can understand hon. Gentlemen opposite welcoming that, but they will be disappointed for a short while yet.
The additional reasons why there should be an inquiry, and why the House should not adjourn, are to be found in the actual conduct of the operations themselves. Let me say, quite frankly, that I do not associate myself with the remarks of my hon. Friend the Member for Coventry, East (Mr. Crossman). There was evidence here of good planning. The operations were carried out with great restraint and certainly with great gallantry by all arms of the Services which were called upon to undertake them. But, that having been said, there is something else which must be added.
I am very sorry indeed that the right hon. and gallant Gentleman the Member
1512
for Leicester, South-East (Captain Waterhouse) is not present, for I wish to remind the House of what he said on 5th December. Speaking of the operations and of the Government's plans to undertake them, he said:
"The fact remains that when this crisis came we had no plan, no ships, no aeroplanes, and no men available in sufficient quantities to hit quickly."—[OFFICIAL REPORT, 5th December, 1956; Vol. 561, c. 1307.]
In other words, the Government, after having spent £6,000 million at the minimum since they took office, found themselves, on 1st August, with two tank landing ships, no plans, and no transport aircraft.
I suggest that for that reason, if for no other, the Government should undertake an inquiry along the lines of the Royal Commission which was set up to inquire into the operations in Mesopotamia and the Dardenelles—an admirable precedent, because there was on that occasion an inquiry into the inception, origin and conduct of the operations themselves. If that were done in a very limited period of time, the Government would be able to satisfy public opinion not only in this country but in the United States and in the Commonwealth as to the degree of guilt, the degree of prior knowledge that they had, which lays them open to the charge, which is believed universally, that they claimed to stop a fire which they themselves had started.
I do not believe all that. I believe that my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) was absolutely right; with him, I believe that the Government are not villains, but they are synthetic villains; they got caught up in a train of circumstances which was too powerful for them. They then found themselves faced with one small step of decision—and
"Oh what a tangled web we weave
When first we practise to deceive!"
The villains in this case are, in my judgment, M. Mollet and M. Pineau. They call themselves Socialists. If they are, I am not.
Mr. Speaker: Order. The hon. Member is really going into too much detail here, and I wish to give an opportunity to the hon. Lady the Member for Liverpool, Exchange (Mrs. Braddock) to ask a question. Mrs. Braddock.
Mrs. Braddock: Thank you very much, Mr. Speaker. It is a question—
Mr. Wigg: I think I have the Floor at the moment, Mr. Speaker; I did not give way. But I am quite willing to give way to the hon. Lady.
Mr. Speaker: I thought that the hon. Member had concluded his speech.
Mr. Wigg: No, Sir. If my hon. Friend the Member for Liverpool, Exchange (Mrs. Braddock) wants to ask a question—
Mr. Speaker: I cannot have the hon. Lady's question in the middle of a speech.
Mr. Wigg: I want to conclude my speech and put forward another argument for an inquiry.
Last week, I had the privilege of meeting the Rev. Russell Stevenson, who was flown to Egypt by the United States. He is the chairman of the American Emergency Committee for the relief of Egyptian war victims. He went, with the support of his ambassador, to Port Said. Last week he came to the House and gave me certain figures. They are not only his estimate, but they are the estimate of the American Consul in Port Said, Mr. Anthony Quomo.
He gave the number of killed as certainly not less than 1,000, but it is probably nearer 2,000. He also told me that there are in the Nile Delta a minimum of 60,000 homeless who are now being cared for by the Egyptian Government, and that about 4,000 housing units were destroyed.
I am not prepared to go away for the Christmas holidays, or any other holidays—[An HON. MEMBER: "Then the hon. Gentleman should stay here."]—with this on my conscience. The Government and hon. Gentlemen opposite might ponder this. This country will not get the oil it wants as a result of force. There were always only two policies. We could put a man at every yard along the Suez Canal and at every yard along the pipeline, and we could use force to get the oil. We have failed. If we fail to get it by force, the only thing we are driven back to is getting it by good will.
I mentioned that the Rev. Russell Stevenson was the chairman of an American committee.
Mr. Speaker: The hon. Gentleman really is going into much too much detail on this.
Mr. Wigg: With respect, Mr. Speaker, I am asking that the House should not adjourn.
Mr. Speaker: I understand that, and I believe that the House now understands that that is the hon. Member's view. I think that he has put it with great force and clarity. I do not want to criticise it as being rather over-elaborated in matters of detail, but, if I were him, I should rest on my laurels now. He has done his cause yeoman service.
Mr. Wigg: I am always prepared to accept the dictate of the Chair on matters of order. But I am not prepared to accept the dictate of the Chair on matters of opinion, Sir.
Mr. Speaker: I hope that the hon. Member did not mean to criticise what I have had to say. My opinion was not on the merits or otherwise of the hon. Member's argument, but my opinion is one which I am entitled to express, namely, that I think that he is abusing the practice of the House in going into a detailed argument on a Question which is limited. I have said that a reply can be given, because the debate has got into this condition. I hope that the hon. Member will not think I am trying to be unfair to him. That is not the case.
Mr. Wigg: Mr. Speaker, if you direct me that I am out of order, I will resume my seat. If I am in order, I propose to continue. I am as anxious as any hon. Member of the House to preserve all the forms and obey the rules of order; but there are limits to what the Chair can reasonably ask of an hon. Gentleman. Therefore, I propose to make my point.
Earlier, I had argued for an inquiry into the conduct of these operations, into their inception and origin. I am now arguing for something in addition. I am asking the Government to face the consequences of what they have done. The oil of the Middle East is essential to the economic well-being of this country. It can be got only on the basis of good will. I am asking the Minister, as the first act of retribution for what he has done, to admit that he has been wrong and to—[HON. MEMBERS: "Oh"] Yes, I say the first act of retribution, because if that

1515
act of retribution is not made the Government and the country will not get the oil they need.
Somehow or other we must establish a point of contact and a point of confidence with the Arab people. I am coming to the end of my speech, Mr. Speaker, and, provided, of course, that I remain in order, I am going to ask that the Government should use this Christmas time as the time of retribution and understanding. In the world in which we live, force has very limited uses, and we in this country, perhaps above all countries, need to establish our policy on the basis of integrity, understanding, and good will. Whatever the Prime Minister has got to say, I hope that at least he will accept that.
6.9 p.m.
Mrs. E. M. Braddock: This is the first time I have made any attempt to get into a debate of this sort or to ask a question. My purpose is to ask the Prime Minister to answer or, at any rate, to give me a reasoned explanation of the questions which I am about to put to him. I am very concerned at going home tomorrow and staying away for four weeks with this particular situation in mind.
When he comes to reply, will the Prime Minister tell the House whether the actual position is that the Government did know that the Israelis were going to attack Egypt, that they also knew that there was no possibility at all of their attacking Jordan, that they had said to the Government that they were going to start a war with Egypt, gave them information about what they were going to do and requested the Government not to take any action at all: but the Government did take action against the desires of Israel in this matter, jumping the gun as regards the action which Israel had taken and landing us into this situation because the Government desired to take the Suez Canal under their control on account of the action which had been taken by Colonel Nasser?
Will the right hon. Gentleman answer the question whether that actually is the position or whether that information is completely untrue. [An HON. MEMBER: "It is."] Some hon. Member over there knows it is untrue. I am asking the Prime Minister, because I desire to know;
1516
if he says it is quite untrue, then I shall pursue my investigations to see whether I can prove the accusations and the statements which I have made today.
6.10 p.m.
The Prime Minister: I should like first to deal with the questions asked by the hon. Member for Orkney and Shetland (Mr. Grimond) about dates and knowledge in respect of Tel Aviv. In a sense, that will meet also the point raised by the hon. Member for Dudley (Mr. Wigg). Whatever may or may not have been said in supplementaries in sharp quick answers, the facts are these. They have been said, and I want to make them absolutely clear in relation to dates.
On 26th October, we heard from our representative in Tel Aviv that Israel was mobilising. It was not then known whether it was a partial or total mobilisation. We sent instructions on the next day, 27th October, to our Ambassador at Tel Aviv to make representations to Israel on the matter. It is quite true that he pointed out once again, not for the first time, that if there were an Israeli attack on Jordan, the United Kingdom would be bound to intervene in accordance with the Anglo-Jordan Treaty. That is quite true.
Our Ambassador also urged restraint on Israel in other directions, amongst other reasons because it was quite obvious that if Israel attacked any of the other Arab countries, whichever it might be, there was the possibility of Jordan becoming involved and a difficult situation being created for the United Kingdom. That was quite apart—
Mr. S. Silverman rose—
Hon. Members: Sit down.
The Prime Minister: I am answering the hon. Gentleman behind the hon. Member, who put some specific questions to me. I have looked out these dates very carefully to make sure that I am getting the matter right. The hon. Member was not even in the House when this was going on.
Mr. Silverman: Yes, I was.
The Prime Minister: I beg the hon. Member's pardon.
That representation was quite apart from the risk of a general war which could have resulted from any such attack.

1517
On 29th October, our Minister in Tel Aviv saw the Israeli Minister for Foreign Affairs and she assured him that no further hostile move was intended against Jordan—[Interruption.]—that was in the morning. She also said that Israel was not seeking military adventures, and she explained the mobilisation on the ground that Israel had to be prepared against possible attack. That was the position on 29th October.
I want to answer—
Mr. Philip Noel-Baker rose—
Hon. Members: Sit down.
The Prime Minister: I want to answer that before I give way. I do not know how long Mr. Speaker will allow this debate to continue. I want to answer these questions, which were asked some time ago. I wish to make it clear that there was no joint decision in advance of hostilities about the use of a veto. There was no joint decision about the use of the French Air Force in advance of hostilities.
Mr. Crossman rose—
The Prime Minister: Let me finish my sentence. I want to say this on the question of foreknowledge, and to say it quite bluntly to the House, that there was not foreknowledge that Israel would attack Egypt—there was not. But there was something else. There was—we knew it perfectly well—a risk of it, and in the event of the risk of it certain discussions and conversations took place, as, I think, was absolutely right, and as, I think, anybody would do. So far from this being an act of retribution, I would be compelled—and I think my colleagues would agree—if I had the same very disagreeable decisions to take again, to repeat them. [HON. MEMBERS: "Hear, hear."]
Several Hon. Members rose—
The Parliamentary Secretary to the Treasury (Mr. Edward Heath)The Parliamentary Secretary to the Treasury (Mr. Edward Heath) rose in his place and claimed to move, That the Question be now put.
Question put, That the Question be now put:—
The House divided: Ayes 165, Noes 85.

Division No. 32.]

AYES

[6.16 p.m.

Agnew, Cmdr. P. G.

Erroll, F. J.

Kerr, H. W.

Allan, R. A. (Paddington, S.)

Farey-Jones, F. W.

Kimball, M.

Arbuthnot, John

Fell, A.

Kirk, P. M.

Ashton, H.

Fletcher-Cooke, C.

Lambert, Hon. G.

Atkins, H. E.

Freeth, D. K.

Lambton, Viscount

Baldwin, A. E.

Garner-Evans, E. H.

Leather, E. H. C.

Balniel, Lord

George, J. C. (Pollok)

Leavey, J. A.

Barlow, Sir John

Godber, J. B.

Leburn, W. G.

Barter, John

Gower, H. R.

Legge-Bourke, Maj. E. A. H.

Baxter, Sir Beverley

Grant-Ferris, Wg Cdr. R. (Nantwich)

Legh, Hon. Peter (Petersfield)

Bell, Ronald (Bucks, S.)

Green, A.

Linstead, Sir H. N.

Bennett, F. M. (Torquay)

Gresham Cooke, R.

Lloyd, Maj. Sir Guy (Renfrew, E.)

Bishop, F. P.

Grimston, Sir Robert (Westbury)

Lloyd, Rt. Hon. Selwyn (Wirral)

Body, R. F.

Gurden, Harold

Lloyd-George, Maj. Rt. Hon. G.

Bossom, Sir Alfred

Hall, John (Wycombe)

Longden, Gilbert

Boyd-Carpenter, Rt. Hon. J. A.

Harris, Reader (Heston)

Low, Rt. Hon. A. R. W.

Brooman-White, R. C.

Harrison, Col. J. H. (Eye)

Lucas-Tooth, Sir Hugh

Browne, J. Nixon (Craigton)

Head, Rt. Hon. A. H.

McAdden, S. J.

Bryan, P.

Heald, Rt. Hon. Sir Lionel

Mackie, J. H. (Calloway)

Buchan-Hepburn, Rt. Hon. P. G. T.

Heath, Rt. Hon. E. R. G.

Macleod, Rt. Hn. Iain (Enfield, W.)

Burden, F, F. A.

Hill, Rt. Hon. Charles (Luton)

Macmillan, Rt. Hn. Harold (Bromley)

Butcher, Sir Herbert

Hill, Mrs. E. (Wythenshawe)

Macpherson, Niall (Dumfries)

Butler, Rt. Hn. R. A.(Saffron Walden)

Hill, John (S. Norfolk)

Maddan, Martin

Cary, Sir Robert

Hirst, Geoffrey

Maitland, Hon. Patrick (Lanark)

Channon, H.

Holland-Martin, C. J.

Manningham-Buller, Rt. Hn. Sir R.

Chichester-Clark, R.

Hornby, R. P.

Mathew, R.

Clarke, Brig. Terence (Portsmth, W.)

Horsbrugh, Rt. Hon. Dame Florence

Maude, Angus

Craddook, Beresford (Spelthorne)

Howard, Hon. Greville (St. Ives)

Maudling, Rt. Hon. R.

Crouch, R. F.

Hughes Hallett, Vice-Admiral J.

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

Crowder, Sir John (Finchley)

Hurd, A. R.

Milligan, Rt. Hon. W. R.

Cunningham, Knox

Hyde, Montgomery

Molson, Rt. Hon. Hugh

Dance, J. C. G.

Iremonger, T. L.

Moore, Sir Thomas

Davidson, Viscountess

Irvine, Bryant Godman (Rye)

Nairn, D. L. S.

Deedes, w. F.

Jenkins, Robert (Dulwich)

Nicholls, Harmar

Doughty, C. J. A.

Jennings, J. C. (Burton)

Nicholson, Godfrey (Farnham)

Drayson, G. B.

Johnson, Dr. Donald (Carlisle)

Nicolson N. (B'n'm'th, E. & Chr'ch)

Eden, Rt. Hn. Sir A.(Warwick&L'm'tn)

Johnson, Eric (Blackley)

Nugent, G. R. H.

Eden, J. B. (Bournemouth, West)

Joseph, Sir Keith

O'Neill, Hn. Phelim (Co. Antrim, N.)

Elliot, Rt. Hon. W. E.

Joynson-Hicks, Hon. Sir Lancelot

Ormsby-Gore, Hon. W. D.

Emmet, Hon. Mrs. Evelyn

Keegan, D.

Osborne, C.

Page, R. G.

Sharples, R. C.

Vane, W. M. F.

Panned, N. A. (Kirkdale)

Shepherd, William

Vickers, Miss J. H.

Partridge, E,

Simon, J. E. S. (Middlesbrough, W.)

Vosper, D. F.

Peyton, J. W. W.

Smithers, Peter (Winchester)

Walker-Smith, D. C.

Pitt, Miss E. M.

Soames, Capt. C.

Wall, Major Patrick

Powell, J. Enoch

Spearman, Sir Alexander

Ward, Hon. George (Worcester)

Price, Henry (Lewisham, W.)

Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

Ward, Dame Irene (Tynemouth)

Prof unto, J. D.

Stevens, Geoffrey

Waterhouse, Capt. Rt. Hon. C.

Raikes, Sir Victor

Steward, Sir William (Woolwich, W.)

Whitelaw, W.S.I.(Penrith & Border)

Redmayne, M.

Stewart, Henderson (Fife, E.)

Williams, Paul (Sunderland, S.)

Remnant, Hon. P.

Storey, S.

Williams, R. Dudley (Exeter)

Renton, D. L. M.

Studholme, Sir Henry

Wills, G. (Bridgwater)

Ridsdale, J. E.

Taylor, Sir Charles (Eastbourne)

Wilson, Geoffrey (Truro)

Robertson, Sir David

Temple, J. M.

Rodgers, john (Sevenoaks)

Thompson, Lt.-Cdr. R. (Croydon, S.)

TELLERS FOR THE AYES:

Russell, R. S.

Thorneycroft, Rt. Hon. P.

Mr. Oaksbott and Mr. Barber.

NOES

Beswick, F.

Hayman, F. H.

Moyle, A.

Blackburn, F.

Healey, Denis

Noel-Baker, Rt. Hon. P. (Derby, S.)

Bowden, H. w. (Leicester, S. W.)

Herbison, Miss M.

Oliver, G. H.

Bowles, F. C.

Hobson, C. R.

Oram, A. E.

Boyd, T. C.

Holman, P,

Pannell, Charles (Leeds, W.)

Braddock, Mrs. Elizabeth

Holmes, Horace

Parker, J.

Brookway, A. F.

Holt, A. F.

Peart, T. F.

Brown, Rt. Hon. George (Belper)

Houghton, Douglas

Plummer, Sir Leslie

Callaghan, L. J.

Howell, Denis (All Saints)

Proctor, W. T.

Castle, Mrs. B. A.

Hughes, Emrys (S. Ayrshire)

Rankin, John

Crossman, R. H. S.

Hynd, H. (Accrington)

Rhodes, H.

Davies, Ernest (Enfield, E.)

Irving, S. (Dartford)

Robinson, Kenneth (St. Pancras, N.)

Davies, Stephen (Merthyr)

Jay, Rt. Hon. D. P. T.

Ross, William

Delargy, H. J.

Jeger, George (Goole)

Silverman, Sydney (Nelson)

Dodds, N. N.

Jenkins, Roy (Stechford)

Skeffington, A. M.

Donnelly, D. L.

Jones, David (The Hartlepools)

Snow, J. W.

Ede, Rt. Hon. J. C.

Jones, Elwyn (W. Ham, S.)

Sparks, J. A.

Edelman, M.

Kenyon, C.

Stewart, Michael (Fulham)

Edwards, Rt. Hon. John (Brighouse)

King, Dr. H. M.

Thomas, George (Cardiff)

Edwards, Robert (Bilston)

Lawson, G. M.

Wells, Percy (Faversham)

Fraser, Thomas (Hamilton)

Lindgren, G. S.

Wigg, George

Gaitskell, Rt. Hon. H. T. N.

Lipton, Lt.-Col. M.

Willey, Frederick

Gibson, C. w.

MacColl, J. E.

Williams, W. R. (Openshaw)

Greenwood, Anthony

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

Williams, W. T. (Barons Court)

Griffiths, Rt. Hon. James (Llanelly)

Mann, Mrs. Jean

Wilson, Rt. Hon. Harold (Huyton)

Grimond, J.

Marquand, Rt. Hon. H. A.

Younger, Rt. Hon. K.

Hall, Rt. Hn. Glenvil (Colne Valley)

Mason, Roy

Zilliacus, K.

Hamilton, W. W.

Mellish, R. J.

Hastings, S.

Mitchison, G. R.

TELLERS FOR THE NOES:

Mr. John Taylor and Mr. Deer

Question put accordingly and agreed to.
Resolved,
That this House, at its rising Tomorrow, do adjourn till Tuesday. 22nd January.

ECONOMIC SITUATION
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Heath.]
6.24 p.m.
The Minister of Labour and National Service (Mr. Iain Macleod): This speech has been a long time hatching, and it would be surprising if it were not somewhat addled by this time. I thought, however, that it would be convenient if I spoke first and gave as quickly as possible our up-to-date impressions of the impact of recent events on our economy, on our price levels, and especially on the employment position. There are also some references I should like to make to the Government's attitude towards representations which have been made to us by leaders in the motor car industry.
There are two prefatory remarks I would make. First, it is particularly difficult at the present time—it is always difficult in economic affairs, but particularly difficult now—to forecast, when so many of the factors, for example, the length of time required to open the Canal, are unknown, but if the House will bear with me I shall be glad to do what crystal-gazing I can. The second is this. I should say in fairness to the House that, during the discussions which have been going on here today, I have tried to compress as much as possible what I should like to say to the House because I know that there are a great number of constituency matters which hon. Members want to raise. I hope, therefore, that the House will be lenient with me if I go fairly quickly over some matters on which normally I should rather like to dwell.
Instead of a review of the economic position, I should like to make two points. As the House knows, we earned in the first half of this year a balance of payments surplus on current account of £144 million, compared with a surplus of only £18 million in the first half of last year. The main reason for that improvement was the very large improvement indeed in our exports. Although we have to make many allowances for the differences in the timing and the scope of the trade and balance of payments statistics, and although it is probable that there has been a deterioration in the invisible balance since hostilities broke out in the
1522
Middle East, the trade figures suggest the likelihood of a continuing surplus in the third quarter of the year.
The second point is this. The House will have seen that imports in October rose fairly sharply, when we had an all-time record level of exports, and we had then a very narrow trade gap. In November we had the dramatically low trade gap of £13 million. There is one thing which should be said for and one thing which should be said against the figures. The thing which can be said against them is that of course imports were lower because the arrival of ships from the East was delayed by the blocking of the Canal, while on the other hand exports were fairly high because the ships to carry them were at or near British ports. The thing one can say in favour of those figures is that the continuing strength of our export position is shown by the fact that, on a daily rate basis, the level for November was even higher than that of October, and it seems clear, therefore, that whatever allowances we have to make for the special circumstances which undoubtedly exist, our trading position has been and continues to be sound. That is a factor of first importance in our discussion today.
In a statement to the House on 4th December, the Chancellor of the Exchequer said:
"The most realistic forecast which I can at present give the House is that over the year 1st July, 1956, to 30th June, 1957, our external current trading account will be roughly in balance."—[OFFICIAL REPORT, 4th December, 1956; Vol. 561, c. 1052.]
I have no reason today to alter that forecast, and I do not believe even that it was an unduly optimistic one, because it did make a substantial allowance for the extra cost of dollar oil and also for the disturbance to our exports, particularly to the Middle East.
However, everybody will agree that just to be roughly in balance on current account is nothing like good enough and that we must try to earn a continuing surplus year in year out to meet our commitments and the need for investment, particularly in the Commonwealth, and to rebuild the reserves.
I should like to say a few words about the strengthening of the position of sterling on which we have embarked. As the Chancellor of the Exchequer said, the

1523
immediate task was to repel an attack on the £ sterling. The House will agree that the measures taken have been both impressive and quite remarkably swift. We have been able to show that we can bring forward at immediate call reserves very nearly as large as the central gold and dollar reserves. We are not committing this second line of reserves. It is a better expression to say that we are "parading" them. As a Government, we do not think it right that the country should try to get out of our difficulties by borrowing alone. It is mainly for that reason that we have proposed the additional taxation about which the House knows. We have sought to demonstrate to foreign opinion that the maintenance of sterling is not in doubt. I am very grateful to the right hon. Member for Huyton (Mr. H. Wilson) for making it clear, as he did, that it is not a party issue either.
I should like to give some conclusions on the likely course of prices over the next few months. The stability of our economy has been reflected also in these past few months in the trends of prices and of wages. In mid-November the retail prices index stood at 103, which was exactly the same figure as it was in mid-April, and that steadiness over that period compared with an increase in prices of nearly 5 per cent. in the comparable period in 1955.
The index for December and for later months, of course, will begin to show the effects of the Suez crisis. As far as the direct effect is concerned, the increase in petrol and oil prices adds about one-quarter of one point to the December index on private motoring account. Although we have tried to do it, it is almost impossible to calculate the indirect effects, but the best available estimates that we have suggest that the price level of production as a whole should not rise by more than than 1 per cent. Taking direct and indirect effects together, that is a little more than one point.
There will, of course, be some price increases in December and January, quite apart from the effect of Suez. There is the increase in the charge for prescriptions. There is the rise in the price of milk, and there are other smaller matters of which the House knows; but these should have only a small effect on the index. My conclusion would be that,
1524
looking further ahead and leaving aside temporary seasonal fluctuations, I have no reason to think that the retail prices index over the next four or five months will show any very different trend from that of last year.
A good deal of publicity has been given in the Press to the effect that Suez has had upon employment and particularly upon short-time working. These are the figures. Even before the restrictions were introduced, the number of workers on short time was about 70,000. The figure fell a little at the end of November and rose sharply to about 90,000 in the first week in December, and that is where it is now. As far as I can calculate from the latest available figures, about 46,000 workers were on short time in the week ending 15th December because of these restrictions, and the vast majority of these were engaged in the manufacture of motor cars and accessories.
Mr. Frank Tomney: Is the right hon. Gentleman aware that there is a statement on the tape at this moment that Vauxhall Motors of Luton are dismissing another 1,000 employees in the New Year?
Mr. Macleod: I am quite aware of that. That is one of the reasons why I am going to make special announcements of the Government's policy in relation to the motor car industry. I am quite aware that there is serious danger of a break in employment early in the New Year in the motor car industry. I know that what the hon. Member says is true, and it is also true of other motor car centres in the country. I am keeping the very closest watch on this position, and I get regular reports from my regional officers.
As for the future, I do not doubt that there will be some temporary increases in unemployment, and more particularly probably in short-time, as a result of these difficulties. The position of the motor car industry gives very real cause for anxiety, but I am sure that the country's basic trading position, as shown by the figures which I gave quickly to the House a few moments ago, is sound. If that is so, it follows that the long-term prospects for full employment are as good as ever.
There has been some slackening in the demand for labour this year, but the

1525
figures for unemployment, at the moment standing at 1·2 per cent., are very near an all-time record, and the level of employment is only a few thousand below the highest figure that it has reached since the war. This slight slackening in the demands for labour has been of very considerable help to many of the industries that need labour most. I mention tonight only two with special manpower difficulties which have benefited from this situation. The railways have increased their labour force by 7,000 in the first ten months of this year, compared with a decline of 11,700 in the corresponding period last year. That is a very remarkable change indeed in the employment position on the railways. Coal mining has secured a modest increase of 1,500 in this period, and that compares with a decrease of no fewer than 6,400 the year before.
The resilience of the economy is very well shown by its ability to absorb even very large displacements, as we saw in the case of the B.M.C. dismissals early this year, because on 19th November no more than 75 of the 6,000 were still signing the unemployment register. In our last debate on this subject, the right hon. Member for Belper (Mr. G. Brown) asked why my special report on these matters had not appeared. I think that there is some little confusion here. I attach great importance to this matter, and therefore perhaps I may be allowed to explain it to the House.
I have given the House from time to time, particularly in response to questions by hon. Members representing Coventry and the hon. Member for Northfield (Mr. Chapman) and others, the details of what has happened, in so far as they are available at the employment exchanges, to the men who registered after the B.M.C. dismissals. I have given an analysis of the figures in HANSARD on several occasions showing what particular industries these people went to. But as the figure is now 75 and, I hope, will be considerably less, I do not think I need pursue that inquiry any further.
There is, however, another matter which has always concerned me very much. It is that it does not seem enough to write a line under a man's name when one has found him a job. There is a great gap here in our social knowledge which it is very important we should fill.
1526
When large-scale redundancy takes place, we do not know whether the jobs which are found for those concerned create housing problems for them and education problems for their children, and whether they are able to meet hire-purchase and other commitments on which they have embarked. It would be of great value to Governments in deciding social policy to know those facts. That is why, when I knew about this very large-scale redundancy, I set out to try to make special arrangements for such a study.
Those arrangements have been made. It is a study that will be undertaken by Professor Madge of Birmingham University, and I think it will be a document of considerable social importance. I want to make it clear that this will take a long time. It is intended to follow a large sample of these people for a period of eighteen months or so in order that we can be certain that their skills are, or perhaps are not, being utilised in the succession of jobs to which they go. So the House must realise that the second inquiry, which is a very important one, will take a long time.
That inquiry arose out of the troubles in the motor car industry. Here there are many factors at work, not least the actions of Governments both in this country and in other countries, in what they do about import restrictions. I have expressed my concern in this House that, while the general employment situation remains sound, the motor car and the accessories manufacturing industry gives cause for anxiety. There can be little doubt that the immediate difficulties of the motor industry have been caused by the necessity for petrol rationing. It is also true, and I say this frankly, that these difficulties have, in part at least, been accentuated by the general measures which the Government have had to take as part of their policy of counteracting the inflationary tendency in our country.
Mr. Tomney: Surely that is not correct, because in the American motor car market alone, which takes approximately 60,000 cars a year from all sources, we sold 10,000 last year.
Mr. Macleod: I did not intend to go into the details of export performance, because my hon. and learned Friend the Economic Secretary to the Treasury will take up the point when he winds up the

1527
debate; but I will make two points briefly to the hon. Gentleman. First, the percentage devoted to exports is now beginning to climb, although I agree that is within a reduced volume of production. Secondly, somewhere about 90 per cent. of the fall in exports has been due to the fall in the Australian and New Zealand markets because of the special restrictions put on there.
However that may be, these measures we believe, and always have thought, are vital for the steadiness of the price level, and we have no intention of modifying our policy in that respect. At the same time, the Government recognise that this industry has been hit harder than any other by the shortage of petrol. So we have considered very carefully whether, without prejudicing what we believe to be our essential anti-inflationary policy, we can do anything to assist this industry to overcome its present difficulties.
The industry has asked us, in the first place, for a temporary reduction in the present rate of Purchase Tax. My right hon. Friend the Financial Secretary stated in the House that the Government cannot accept this suggestion. Although it is difficult to calculate, there would certainly be a very large loss of revenue, and the Chancellor of the Exchequer is not satisfied that the results which might follow would justify him in accepting this loss.
We have also considered the hire-purchase restrictions. My right hon. Friend the President of the Board of Trade proposes to relax the hire-purchase restrictions on cars, light vans and motor cycles, both new and secondhand. An Order has been made and laid before Parliament, and it will come into force tomorrow, which will reduce the minimum down payment on these vehicles from 50 per cent. to 20 per cent. The maximum period of repayment will remain unchanged at two years. At the same time, the corresponding Order imposing restrictions on the terms for the hiring of vehicles has been revoked.
There is another matter that has been put to us by the motor car industry, which is a by-product of petrol rationing. That is that some of our tourist friends will be deterred by our petrol difficulties from
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visiting this country. So my right hon. Friend the Minister of Fuel and Power has decided that these visitors should receive a single comprehensive allowance which will be large enough to meet their reasonable motoring needs in full while they are in this country, and that this arrangement should also apply in the case of overseas visitors who bring, or have bought, their own vehicles with them under an international circulation permit.
Lastly—and this again has been put to us strongly by the industry—it is essential in the widest interests of the country that we should do everything we can to increase the sale of cars overseas, and we have considered whether the Export Credits Guarantee Department can do anything more to help. The Department has been evolving new techniques specially designed to support and encourage aggressive sales campaigns, and to help in such matters as financing the holding of fairly large stocks abroad. It is ready to place all its facilities at the disposal of the manufacturers. These new techniques are very flexible and adaptable to a great variety of circumstances. I hope very much that they will be widely used in the motor car industry, and I hope that manufacturers will get into touch with the Department direct.
The Minister of Fuel and Power has already told the House—and it is a matter of great interest—the restrictions which the Government have had to impose on deliveries of petrol and oils. I have only one comment to make on one aspect of them, namely, the arrangements which have been made to deal with cases where it is claimed that the 20 per cent. cut causes exceptional hardship. This will arise particularly after 1st January.
Clearly we must make this oil saving, and therefore it will be necessary to limit very strictly the cases in which exceptional treatment can be given. Claims for such treatment will be considered by committees consisting of regional representatives of the Production Departments and of my Department, with the Regional Director of the Ministry of Fuel and Power in the chair. The main criterion for any exception will be that the cut has a wholly disproportionate effect on production and employment, or on the production of a product vital to many industries, all of whose final output would suffer.

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Now two or three quick points on some special manpower problems in my own sphere, first in the realm of National Service. The deployment of manpower is of the greatest importance to our country. I need not underline to the House—we are all very conscious of it—the desperate shortage that there is of scientific and engineering manpower.
The Federation of British Industries has made representations to me about increasing the number of science and engineering graduates who are granted deferment of National Service, so that more can take up employment in industry and thus alleviate, to some extent, the immediate shortage. On the advice of the Technical Personnel Committee, I have decided that university graduates who complete courses of study or training in 1957, and who have first-class honours degrees in one of the main branches of science or engineering, shall he granted indefinite deferment of National Service if they take employment in this country for which a science or engineering qualification of degree standard is required. I will review that position towards the end of next year.
Mr. Arthur Moyle: In connection with what the Minister has just said, and stepping down a little lower in the scale of the problem of securing the necessary people for technical and scientific purposes, why not use the Youth Service in conjunction with the Ministry of Education to secure the cooperation of the local authorities in relation to the very large number of young people between the ages of 15 and 18 who are entirely lost to education of any kind?
Mr. Macleod: The hon. Gentleman is very astute. That is the point I am coming to next, and I entirely agree with what he has said.
Mr. Charles Ian Orr-Ewing: I am sorry to interrupt my right hon. Friend, but he has made an extremely important announcement, which will be widely welcomed in industry. Could he give us some indication of the numbers which might be affected in a year? Could he also consider whether it might not be extended to the second-class honours men? Very often, the first-class honours man is engaged on research, whereas the second-class honours man carries out the development work and is
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particularly valuable in our industrial organisations.
Mr. Macleod: There is much truth in that. We have considered the point about the second-class honours man—it was part of the request from the F.B.I.—but we felt that at this stage in advance of a general settlement about the future of National Service, that was going too far. As to the numbers, I think it would be better if, instead of my hazarding a guess—although I know the brackets within which the figures lie—the Economic Secretary gave the information at the end of the debate. I believe that this measure will be of some help not only to industry but also to the universities and to employments which have not been included in the existing deferment scheme.
Secondly, I have been considering—I mentioned this to the House in the debate just before the Summer Recess—whether I could apply rather more generous standards in regard to the cases of severe personal hardship caused by the call-up for National Service. The principles governing the grant of certificates of postponement are laid down in Regulations under the 1948 Act. I have no power to grant exemption on grounds of personal hardship, but I believe as a result of my study that it will be possible to help the most difficult cases by amendment of these Regulations, and I hope to lay new regulations before the House shortly after the Christmas Recess
Mrs. Jean Mann: Will the right hon. Gentleman particularly remember the only son of a widowed mother?
Mr. Macleod: That is, indeed, one of the categories that I have very much in mind.
The House also knows from the announcement of the Minister of Transport and Civil Aviation recently that key railwaymen have had their call-up for National Service suspended for the duration of the present emergency.
As regards the future of National Service, I expressed my view in the debate to which I have referred that the right thing to do is to have consultations with our allies and then reach our decisions. As the House also knows, only last week at an important meeting of the N.A.T.O. Council some of these matters were discussed.

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My last main manpower point concerns the subject which was raised just now. While we must do everything we can to mobilise our manpower, we should not forget what we might call our "girlpower" and "boypower" as well. I wonder whether the country realises what an enormous opportunity is coming to us now. In the next few years the number of those reaching school-leaving age, rising to a peak in 1962, will be no less than 50 per cent. higher than it is this year. This year there are 613,000 in that age group. In 1962 the number will be 930,000.
This has always been a problem for the House of Commons, and it has been a problem for successive Ministers of Education. Now is the time when it is becoming an opportunity for us all. No doubt there will still be problems, but we have this immense potential of young people whom we must try to recruit into, particularly, the various skills and professions of the country. It is an opportunity which will not come to us again. I am deeply concerned to emphasise whenever I possibly can to the country, to the trade unions and to the employers, who have been very understanding about it, what a chance there is for us now to make good to some extent the shortages of skilled and trained men which have hampered our recovery ever since the end of the war.
Mr. Cyril Osborne: How big will the bulge be, how long will it last, and shall we come right back to where we are now?
Mr. Macleod: I have done a lot of crystal-gazing this afternoon, but I will not prophesy future birthrate trends in this country. However, the number of those of school-leaving age in 1962 will be 50 per cent. higher than it is today.
Might I conclude—I shall take the good wishes and the many happy returns of the Opposition for granted—by saying that I have been Minister of Labour for one year today. [HON. MEMBERS: "Hear, hear."] As I am sure hon. Members know, because they know the Ministry well, I have found it a very satisfying and, indeed, inspiring experience. One of the clearest impressions remaining with me is how solid and responsible is the leadership given by both sides of industry.
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That does not apply to every speech and every resolution at every conference, nor to every single instance of petty tyranny which may happen, again on both sides of industry, but I do not think that we in this country make anything like enough of our successes in the industrial system. We have a very remarkable record which compares favourably, thanks to the trade unions and the employers, with almost any other industrial country in the world, and, although we have a long way to go, the advance goes forward.
I want to read to the House, because the subject has great relevance to what I have said and to the present position, some extracts from a joint statement agreed between the trade unions and the employers on the National Joint Industrial Council of the Hosiery Trade. After indicating the position in the light of the fuel restrictions, it says:
"In these circumstances the trade union has agreed that, wherever jointly consulted, they will do all in their power to make such arrangements as to prevent loss of production, whether within or outside the terms of the existing Agreement on Wages and Conditions of Employment. That is to say that, for example, where firms have to concentrate production into four days instead of five, every effort will be made to co-operate, although this will mean working outside the hours permitted in the Agreement. This offer, which has been made after consultation with us, is to be very much appreciated, but it is made on the understanding that the following provisos apply:—

1) That any relaxation of agreements is for the period of emergency only.

2) That no such relaxation shall be used to prejudice future negotiations or relationships between ourselves and the trade union.

3) That work right through the night shall be avoided wherever possible.

These three provisos are reasonable safeguards, and do not detract from the statesmanlike attitude of the trade union with regard to present difficulties. In view of this joint statement any company that finds itself in difficulty due to fuel rationing should take steps to consult jointly with the appropriate trade union officials in order to seek the best solution."
That is the quotation from an agreement reached between the two sides of industry in the hosiery trade. It is a splendid tribute to the way negotiations are carried on in this country. I do not think it needs any comment from me at all, except just to say this. There are, of course, and there are going to be, very substantial difficulties in this country, and I have not tried in any way to hide them, but if all of us—Government, trade

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unions and employers—are prepared to tackle the difficulties and to have consultations in the spirit of that agreement, we shall find our difficulties easier to surmount and perhaps even more temporary than we have thought.
6.58 p.m.
Mr. Douglas Jay: The Minister of Labour and National Service, although he attempted to finish on a cheerful note, has celebrated his birthday with a rather gloomy and, in some ways, rather disturbing statement. He told us that there was danger of a serious break in employment in the motor industry and that we were likely to see an increase in unemployment over the coming months. I cannot feel that his statement as a whole did justice to the magnitude of the difficulties now facing the country, and still less do I feel that the practical measures which he has announced will be very much comfort to those now threatened with unemployment and short-time working.
The right hon. Gentleman has decided on some measure of relaxation of the hire-purchase restrictions, after prolonged pressure from this side of the House upon the Government to do something. So far as it goes, we welcome it. But I should like to ask the right hon. Gentleman and the President of the Board of Trade straight away why what is being done for the motor industry is not also being done in, for instance, the furniture industry as well, because the President of the Board of Trade knows that it has also suffered great difficulties in recent months. I am sure that hon. Friends of mine will have other questions of that kind to put.
It seems to me that the present economic crisis may be about the last chance for this country to recover as an economic great power. We shall do no great service to the country by glossing over the grimness either of the facts or the tasks which face us. On the whole, the Minister of Labour did not attempt to gloss it over, at any rate to any great extent. One of the reasons why the country is in its present plight is that, in the past five years, the public has been so often misled into thinking that there is some easy way out of our difficulties.
Before coming to the immediate chaos caused by the oil shortage, there are two
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even more lamentable facts which the Government have to face if we are to take the strenuous action necessary. First, the gold reserve is now pitifully low—lower in relation to the sterling area's needs than at any time since the war. Second, production in this country—total production—for almost the first time since 1945 has been stagnating all this year, and was already actually falling before the oil crisis occurred.
Briefly, since we have been deprived of some time, let us look at the gold reserve. It seems to me that the gold and dollar reserve is still the heart of the economic problem, because we are still, unhappily, heavily dependent on essential dollar imports. It is a pity that the present Chancellor never makes that sufficiently clear to the country. Indeed, the right hon. Gentleman today, like the Chancellor on 4th December, merely spoke about the balance of trade and the balance of payments of the United Kingdom. He would have given the impression to many people that the future of our gold and dollar reserve depends only on the activities of this country and not, as of course is the fact, on the sterling area as a whole. It is a pity to allow that misconception to prevail.
Sir John Barlow: The right hon. Member said that the gold reserve at the moment was the lowest at any time since the war.
Mr. Jay: No. I said in relation to the sterling area's trade and needs. I intended to give the figures. Today, eleven and a half years after the war, we are left with a reserve of £120 million less than it was in October, 1955, and £350 million, or 30 per cent., less than it was in October, 1951, and that, of course, is after the Chancellor has counted into the reserve about £63 million worth of dollars on account of the Trinidad oil deal this autumn and a bit extra for some United States securities as well.
Mr. John Arbuthnot: Would the right hon. Gentleman care to give the comparable figure for 1949?
Mr. Jay: It was very much the same as it is now, seven years longer after the war. I ant giving only facts which, I think the country should know, hon. Members cannot deny.

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Throughout the last few years, while the sterling reserve has been going down, almost everybody else's has been going up. Germany's reserve since 1951 has actually increased five-fold, and even France's reserve has doubled. Germany's reserve was half ours in 1951 and is double ours today, and yet we are both living in the same economic world. In addition, the present reserve is ludicrously low in relation to either the present total of sterling balances owned by overseas holders, or the present volume of trade done by the sterling area with the outside world.
On 4th December, the Chancellor took some credit for the fact that the sterling balances—in plain English, our debts had fallen by £22 million in the first half of the year. But he did not mention that the total of these balances is £4,022 million, or more than five times the total of the reserve at the moment. If the reserve today were equal, even to the same proportion of the United Kingdom's imports, or the sterling area's imports from the outside world, as it was in 1938, it would have to be nearly six times the present figure.
That is the real measure of the plight we are in and the task which is now facing us. The truth is that we have used up a large part of our reserve since 1952 in lucky years, the years when it should have increased, and are now facing the bad years without it. What has the Chancellor done in this new extremity? The Minister said that he had brought forward swift and impressive reinforcements to the reserve. That is rather a queer way of describing it. What he has really done is to borrow 1,300 million dollars from the International Monetary Fund to bolster up the reserve, and is now apparently borrowing another 500 million dollars from the Export-Import Bank. Perhaps the Economic Secretary will give us some more information about the latter transaction tonight.
We should certainly be grateful to the United States for again baling us out on this scale, and it is rather surprising, since all this money comes indirectly from the United States Treasury, that on 4th December the Chancellor did not say a single word of thanks to the United States authorities about it. Of course,
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this transaction does not mean that the reserve has been increased. It simply means that a large part of it is now publicly mortgaged. As we earn a dollar surplus in future, if indeed we do, we shall have to pay off these loans, borrowings, lines of credit, whatever the Government prefer to call them, for a number of years ahead.
Why is it that the reserve has been falling ever since June, 1954—I give the exact date—and is now 30 per cent. less than it was in 1951? It is because our gold reserve began this phased withdrawal long before the Prime Minister's great diplomatic and military victory in Egypt a few weeks ago. The real reason for the fall over the last five years—
Mr. Osborne: We have passed that debate.
Mr. Jay: If the hon. Member thinks that we are through with the effects of recent events in Egypt economically, he is sadly mistaken.
Mr. Osborne: I did not say that.
Mr. Jay: The reason for the dwindling of the reserve is that it can be built up only with great national effort, with leadership and policy at the centre. There has not been that leadership and policy. Indeed, on the contrary the Government have been steadily relaxing their vigilance and their defences over all the last few years. I will give only a few examples of those relaxations. Firstly, in 1952, the Government entirely abandoned the joint programming of dollar imports among the various sterling countries, so that now each sterling country is left simply to import what dollar goods it pleases. Secondly, the Lord Privy Seal, as the House will remember, weakly agreed to payment of debts as to 75 per cent. in gold to the European Payments Union. Perhaps the Economic Secretary can tell us how much gold we have lost this year on account of payments to the E.P.U.
Thirdly, in 1955 the Lord Privy Seal, without plan or forethought, agreed to the Bank of England supporting the transferable sterling rate with gold from the reserve, thus making sterling virtually convertible at the worst possible moment. Has not that cost us a large part of the £100 million of gold which we lost during November?

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Fourthly, the whole drive to substitute Commonwealth for dollar goods has been pathetically relaxed in the last few years. For the sake of brevity, I will take only one example, that of tobacco. During the Labour Government the percentage of dollar tobacco was steadily reduced from about 90 per cent. at the end of the war towards 60 per cent. According to my memory, we nearly reached the figure of 60 per cent. in 1951. Year by year we took a higher proportion from Rhodesia.
Now the Minister of State tells us that we cannot go below this figure of 61 per cent. because—to quote his words—
"… a further reduction would change the character and flavour of the cigarettes and that would almost certainly result in a reduction in the smoking of cigarettes."
The Minister of State, Board of Trade (Mr. A. R. W. Low): The right hon. Gentleman is not quoting my exact words. I said:
"The dollar content still stands at 61 per cent. and the dollar allocations are given on that basis. There is nothing sacrosanct about the figure of 61 per cent., but there is a strong risk that …"
I then went on to use the words which the right hon. Gentleman quoted.
Mr. Jay: I do not want to read the whole of the right hon. Gentleman's speech. I have made a perfectly fair statement. He gave as his reason for not taking further measures that
"a further reduction would change the character and flavour of the cigarettes and that that would almost certainly result in a reduction in the smoking of cigarettes."—[OFFICIAL REPORT, 5th December, 1956; Vol. 561, c. 1419.]
His objection to cutting down the percentage further, as had been recommended to him by his hon. Friend the Member for Reigate (Mr. Vaughan-Morgan) was that we should run into difficulties over the public's taste in smoking one type of tobacco as opposed to another. That was the substantial objection which he put forward.
Of course the tobacco firms said that to the Board of Trade in 1945 and 1946 when the figure was 90 per cent., and if we had accepted it quite as easily then as he is accepting it now, we should never have brought the figure down below 90 per cent. If I have encouraged the right hon. Gentleman to say that he will now
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do something about it, I shall be only too pleased, for that is my purpose in referring to tobacco.
I turn to the question of production. It is surely lamentable that total production in this country is falling. In Russia it is rising by 10 per cent. a year and in the United States it is rising by 3 to 4 per cent. a year. Here, after stagnating throughout the year, in August, September and October—before all these great triumphs of the Government in Egypt—production as a whole was down; and in October it was 2 per cent. below that for October, 1955, a month in which the Lord Privy Seal was not supposed to be doing very well.
Mr. Osborne: How are we to raise it?
Mr. Jay: I will come to that later if the hon. Member does not mind my continuing a little longer.
Worse still, industrial production has fallen by this amount at a time when it ought to be 4 to 5 per cent. higher than last year, if the economy were functioning properly. That means that our national output is nearly £1,000 million less than it should be. Think what we could do in terms of exports, investment, consumption or defence with an extra £1,000 million at this time. The Chancellor of the Exchequer pointed out what we could do with £700 million taken from defence, but we could do even more with £1,000 million extra production which we have not got.
Why is it that production had already fallen substantially this year before the oil shortage began to affect us at all? The Economic Secretary told me candidly, in answer to a Question on 5th December, that
"Some fall in production for the home market by certain industries was the necessary consequence of the measures taken to restrain home demand earlier this year."—[OFFICIAL REPORT, 5th December, 1956; Vol. 561, c. 144.]
That is perfectly true. By deciding to check the balance of payments crisis by a general credit squeeze, by the blind man using a bludgeon, as the hon. Member for East Aberdeenshire (Sir R. Boothby) described it recently, and not by any selective controls, the Chancellor of the Exchequer made it inevitable that production would go down and that investment would flag.
The Economic Secretary to the Treasury (Mr. Derek Walker-Smith): The right hon. Gentleman keeps saying that industrial production has gone down. In fact the figure shows an increase of 1 per cent. and under that there are material increases of the sort of production which assists the balance of payments and which I will give to the House a little later, if I may.
Mr. Jay: The Economic Secretary will not deny that in October, as far as we now know, production was lower by 2 per cent. than in October the year before. It is true that in the earlier months of the year it was stagnating, but we cannot dispute the distressing fact that in October, and incidentally also in August and September, it was lower than a year previously.
We warned the Chancellor of the Exchequer in the Budget debate that if he accepted this method of getting out of our balance of trade difficulties there would be a fall in production and employment. Let us at least learn the lesson now, which I suggest is this: if we will not use controls, then only a drop in production can check imports and get us out of a balance of payments difficulty. If the Government will not check some things rather than checking others, they will have to check everything in order to check anything. That has been the Government's policy in the last year.
Indeed, the Treasury Bulletin for October—and I am sure the Economic Secretary would not contradict that—said that it was partly because production has not been rising that imports have not risen. What has happened this year is that the Chancellor has had to forgo about £1,000 million of production in order even to stop a rise in the value of imports. He has not cut down the total value of imports materially. That is what it has cost in order to achieve an increase in exports which in volume is only a very few per cent.
The Minister of Labour spoke about the large rise in exports which has been taking place this year. But I think I am right in saying that even at this moment the volume of British exports is not more than about 10 to 12 per cent. above what it was in 1950. That is in a year when German exports are 150 per cent. higher in volume.
Mr. Osborne: That is not a fair comparison.
Mr. Jay: If the hon. Member does not think Germany is a fair comparison, I would point out to him that Holland's exports are 80 per cent. up and that the exports of both France and Italy are from 35 to 40 per cent. up.
This wretched defeatist policy of deliberately damping down production is not very likely to double the standard of living in 25 years, a target which I see Lord Chandos has described as political vapourings. In addition—and this should appeal to the Minister of Labour—it can very quickly undo all the work of the past 10 years in persuading workers in the name of full employment to abandon restrictive practices. What is the good of talking theoretical stuff about productivity to a worker in the Midlands today who, even if he can get to work at all, will reply, "But I have been on a four-day week for the past three months, and my pal is out of a job altogether"? I do not think such a man is likely to listen very much to lectures about productivity.
In fact, the Chancellor has brought back bit by bit this year the old restrictionist doctrine of overcoming our difficulties by producing less. I believe that that must be wrong. It was a good principle before the war that any financial policy which produced heavy unemployment must be wrong. And I believe that any economic policy which now results in a fall of production must also be wrong.
We are entitled to ask how far the Government intend to depress employment and production, is it true, as the Economist said a fortnight ago, that the Government are prepared to accept any level of unemployment to avoid devaluation? The Minister of Labour today made the very odd remark that the employment outlook was safe because the balance of trade was sound. He seemed to me to be looking at it the wrong way round. Of course it is easier to protect the balance of payments if we do not mind incurring a certain amount of unemployment. The difficulty is to achieve full employment and a surplus on the balance of payments at the same time; and therefore I was not in the least reassured by what the Minister said on that point.

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The unhappy efforts of the Lord Privy Seal have proved that if we try to preserve full employment, and get rid of controls, we get inflation and lose gold. The present Chancellor has discovered this year that, if we try to stop inflation without controls or without any understanding with the trade unions, we get under-employment and under-production. Most people knew those things already. I can only hope that hon. Members opposite will now draw the obvious conclusion that we cannot have full employment, and stop inflation, and get a balance of payments surplus, without some controls and priorities of some kind. Apart from anything else, I hope that the Government will make all these facts clear to the public.
Mr. Osborne: Sir Stafford Cripps did not do it.
Mr. Jay: Since the hon. Member mentions Sir Stafford Cripps, I will say this, that I think this country has made the greatest efforts over recent years when it was told the unvarnished truth and given a fair distribution of sacrifices. The right hon. Member for Woodford (Sir W Churchill) did that, and so did Sir Stafford Cripps. Now, apparently, we are to have the Postmaster-General. I am not much encouraged about the sort of economic enlightenment we shall get from him by the sort of propaganda we have had in recent years from the party opposite. In its 1955 Election Manifesto—I do not know how many hon. Members opposite remember this, but it was called, "United for Peace and Progress"—I will quote only these two passages to show the sort of predictions which were made to the public. This was said in May, 1955, to be the sort of world which would be achieved under a Tory Government:
"We have broken away at long last from the regular cycle of crises. We have proved, by re-establishing confidence in our currency … that Conservative freedom works."
Then, in the manifesto, it was stated what would happen under a Labour Government:
"… the perpetuation of shortage and queues, ration-books and black markets, snoopers and spivs. All these things will inevitably come back if the Socialists get their way."
Mr. Osborne: That is historically true.
Mr. Jay: Speaking, presumably, about the gold and dollar reserves, the manifesto stated:
"The future beckons to this generation with a golden finger."
No doubt, in a sense, it did—downwards. The Chancellor himself—I recall only this one pronouncement—since we have not much time—among all the quotations from Dickens in his Budget speech this year, made one confident economic prophesy. He said:
"Oil earnings will go on increasing …"—[OFFICIAL REPORT, 17th April, 1956; Vol. 551,. c. 870.]
What have we to do to restore our economy and achieve independence of the United States of America? First, we have to get out of the immediate chaos, due to the shortage of oil. I hope that the Government will give us a little more information about the oil to be available for commercial transport. All sorts of stories are reaching us about the vital transference of materials being held up even from the factories to the railway depots in industrial areas.
But for the longer term we still have a chance, even though it may be the last chance, with dollar earnings mortgaged for years ahead, to avoid becoming an economic satellite of North America—which is something that no one on either side of the House would wish us to become. So I will put these practical points to the Government.
First, we must make it a first priority to build up adequate gold reserves. We cannot leave that as a second aim to follow on from the Government's other cherished ideas about cutting, down direct taxation, and one thing and another. This is the only way in which we shall ever achieve real independence of the United States. Gold will give us independence, not childish Motions about America on the Order Paper, and still less babyish speeches by the First Lord of the Admiralty.
Secondly, we must have some real Commonwealth planning again. Incidentally, could not we link that with some sort of Colombo Plan for the Commonwealth area? Are we not to have some Commonwealth conference of Ministers to consider this present dollar crisis at any time in the coming months? Is there to be any Commonwealth planning to make dollar economies? Whatever it was

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that the Minister of State, Board of Trade, said the other night, may I appeal to him to stop talking like the mouthpiece of the tobacco firms, and make it his job to see that the tobacco industry now puts the national interest first? Why not have a long-term guaranteed contract for Rhodesian tobacco? Since the right hon. Gentleman spoke, the Rhodesian producers have made a public statement flatly contradicting him, and offering to produce more tobacco, if we are willing to take it.
Thirdly, this country must establish—the Minister paid lip-service to this tonight, but said nothing about how it was to be done—a regular balance of payments surplus and a higher rate of investment. Surely, we must have big-scale investment in atomic energy, in giant tankers and in the coal industry as well as a good many other things? Might not we consider building up a strategic reserve of oil in this country? Perhaps the Economic Secretary will tell us whether, in the course of his £100 million Budget economies—which mainly consisted of running down strategic reserves—the Chancellor has been running down strategic stocks of oil, among other commodities, in the early months of this year.
All that makes it necessary—this is my fourth point—for us to get back to full production, full employment and rising productivity. That, in turn, means some selective restraints on luxury and inessential activities. How can we get the necessary investment in atomic energy, tankers, etc., without any restraint on frivolous building, or spending by those with enough already and to spare, and on unnecessary dollar imports?
Ministers are utterly wrong—I say this in particular to the President of the Board of Trade—when they say—I think they honestly believe this, though they are wrong—that some deliberate import limitation—incidentally, they practise it all the time while denying it—in order to have full production at home, means less imports and less international trade than under their deflation policy. It does not necessarily. It probably means more. It means balancing trade at a higher level, the achieving of the level of imports we can afford by deliberate measures rather than by general deflation.
Next the Government must at least have some policy for the cost of living
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and some sort of understanding with the trade union movement. Tonight the Minister made some rather sketchy prophecies about how far prices would rise and paid a well-deserved tribute to the trade unions. Unfortunately, the Government have not been acting in that spirit in these recent months. They have been deliberately neglecting virtually all the advice they get on economic policy from the trade union movement. Will the Minister of Labour, or someone from the benches opposite, start to repent tonight and tell us, in response to the request of the T.U.C., that the Government will proceed no further with the Rent Bill which nobody wants? If the Minister will not do that, will he tell us what is the Government's policy about the cost of living?
Does their approval last week of a 6 per cent. rise in iron and steel prices, beyond what is necessary for higher costs, mean that they want prices to go up? Or does the fact that railway charges and coal prices are held down mean that they want prices to stay down? Have they really any economic policy at all about the cost of living? We have thought in recent weeks that Boyle's law had been repealed; but has it? Do Ministers realise that, in the absence of any cost-of-living policy, and any understanding on these matters with the trade unions, before very long the chaos and conflict in industry will be as great as the chaos and conflict in Downing Street?
I have mentioned a few of the things we ought to do if the country is to regain its economic independence. What we are doing is to borrow lavishly from the United States, mortgage our gold reserves, and virtually default on our old United States debt, in order to go on smoking just that blend of tobacco that the trade and the Minister of State for the Board of Trade say we should like, and in order to avoid licensing even the more frivolous types of building. Would it not have been better to cut out at least some of these frills before begging all these extra dollars from the United States?
In December, 1951, even the Lord Privy Seal preferred to limit dollar imports and to continue control of building rather than to default on the interest on the United States loan. Why do the Government take a different decision on

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this matter today in precisely the same dilemma? They are really sacrificing our economic independence as a nation in order to build a few more lavish shops and offices and more garages to sell less petrol and in order to smoke a little more Virginian tobacco.
That is what the Government are doing. In assuming that the public also puts these trivialities first, the Government are once again showing that they are, in the words of Lord Tedder, utterly out of touch with the feeling of the British people.
7.32 p.m.
Sir Herbert Butcher: The right hon. Member for Battersea, North (Mr. Jay) put forward six lines of action which he thinks we must follow if we are to restore the economic health of our country. I took a note of them as he enunciated them and I hoped that I may be allowed, in the short time that I shall trespass upon the time of the House, to comment upon them.
To the first of those suggestions one can raise no possible exception. We all agree that we must do all that we can to establish a gold reserve. It is the same kind of platitude as saying that one must make sure of having a handkerchief in one's pocket before going out to work. One only has to say it to realise how obvious it is.
The right hon. Gentleman turned to the need for Commonwealth planning. There is a great deal of Commonwealth planning going on. The kind of planning which is done at conferences of Government officials in London is not the only kind of Commonwealth planning that goes on. There is an enormous amount of intercourse and increasing trade taking place between all parts of the Commonwealth. There is finance from the City of London. Perhaps it is not very obvious on the surface, but the activity is there. It is taking place underneath, though not always obvious to the people here.
The right hon. Gentleman's third point was that we must have much greater investment in nuclear energy, tankers and the other matters that he enumerated. Each of them is entirely desirable, but I am at a loss to know where he would suggest that the money is to come from. One of the reasons we are lagging behind on the points to which the right hon.
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Gentleman drew attention—and I agree with him as to the need for them—is that the Government are taking so much money from the people in taxation that no margin is left for replacing the ordinary equipment, let alone for moving into the fields of far more expensive and advanced equipment that we need if we are to hold our place in the commerce of the world.
High taxation not only prevents us from spending money on investment on these necessary things; it has an equally evil effect in slowly but steadily sapping the spirit and energy of our people. In the course of a television programme one evening recently, I heard it suggested that people were leaving this country in larger numbers than ever before. The facts bear out the argument. From what I have heard, one of the causes is the high rate of taxation. Because of taxation, children are not likely to get the same opportunities in this country as in countries overseas. The argument is that of all the spenders in this country the Government are the worst, and that it is on Government spending alone that the largest cuts should fall.
Mr. Charles Pannell: I saw the same programme and I took the question of Government spending and taxation as a secondary consideration. The first inference from that programme was that the increased emigration started as the result of the Government's antics on Suez.
Sir H. Butcher: Many other hon. Members wish to take part in the debate, so I will discuss television programmes with the hon. Gentleman elsewhere.
The fourth point stated by the right hon. Member for Battersea, North, related to full production and full employment. Everybody regards that as right; but what is full employment? What would the right hon. Gentleman regard as a desirable percentage of unemployment? Is it that which we have at present and which the Minister of Labour told us is the lowest figure we have ever had? Or would the right hon. Gentleman prefer the figure of Lord Beveridge, which some people think is more realistic as giving a margin for transferring from position to position and from job to job? What is the right hon. Gentleman's definition of full employment?
Mr. Jay: Does the hon. Gentleman realise that tens of thousands of workers in the engineering industry are on a four-day or three-day week? My definition of a full week is at least five days.
Sir H. Butcher: I entirely agree with the right hon. Gentleman. Both trade unions and employers are cowardly in preferring to waste a man's time and waste money as well. True full employment is not simply being on the books of the firm, but putting in a reasonable working week over the whole period of the year. It would be far better for us to accept a higher level of people registering at the employment exchanges and fewer people engaged on part-time work. It is called "part employment", but it was regarded as partial unemployment before the war. In 1956, we like to use a more agreeable phrase.
The right hon. Gentleman passed along to his desire to restrain luxury expenditure. Who is to define luxury expenditure? It is not wrong in this connection to remember—it would be wrong to allow the right hon. Gentleman to forget—that "the gentleman in Whitehall knows best". The right hon. Gentleman was the author of that phrase and he sincerely believed it and held that belief for a long time. Does he really believe that the amount of luxury building taking place at the moment can be defined? Can the right hon. Gentleman define luxury building at the moment?
Mr. Jay: I am more willing to forgo a lot of the office building now going on in London than to contract an enormous new dollar loan from the United States at this stage.
Sir H. Butcher: I happen to know something about office building now going on in London. I am connected with it. What is the right hon. Gentleman's alternative? He says that we must have new equipment, new tankers, and new nuclear power stations, but the draughtsmen, the clerks and the accountants who look after these things must work in derelict and ancient buildings in which there is not adequate accommodation.
Who is to decide whether or not an office building is essential? I did not know that the right hon. Gentleman took "luxury building" as far as that, and wishes to license that kind of construction. I thought that the only luxury
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building to which he was opposed was the odd petrol filling station—of which he and his right hon. Friend the Member for Huyton (Mr. H. Wilson) have made so much play in the past—or the odd cinema. But who is to define whether a petrol station fulfils a useful need, or whether a cinema is of service to the people on, say, a new housing estate? Rather than set up all the paraphernalia of controls and licensing, with pressure groups on Members of Parliament, the pressure of chambers of commerce and all the various trades brought to bear upon them, I say that it is better to let the market, by and large, find its own level.
Finally, the right hon. Gentleman mentioned the need for the stabilisation of the cost of living. We are all in entire agreement. Nothing is more pathetic at the present time than the way in which wages and pensions are always trying to keep up with the cost of living, and always failing. I very much doubt, however, whether the policies which the right hon. Gentleman put forward in his earlier proposals will meet the case.
I was surprised to hear him say that he was in agreement with the surprising announcement of my right hon. Friend the Minister of Labour that he was going to relax hire-purchase restrictions on the motor trade. I say to my right hon. Friends that I really cannot understand why, at a time when petrol is being brought here only with difficulty, and when the need is for economy, we should make it easier for people to buy new and second-hand cars, and so use more of that petrol. There may be an answer to that which, as a simple back bencher, I do not know, and I hope that my hon. and learned Friend the Economic Secretary will explain it later.
I fail to see why we should be eternally cossetting and pampering the motor trade, which is largely responsible for much of our present difficulties. It has drawn from more useful sections of industry—the railways and the coal mining industry, for instance—large numbers of workers to its great factories by the attraction of high wages and now finds itself in difficulties, some of which are under its own control, and I cannot understand why the Government have rushed to its rescue in this strange manner.

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I know how late this debate started and that the sooner I sit down at least one person will be grateful, but I do say that the answer to the problem is not on the lines advanced by the Front Bench opposite. Those lines certainly did not work from 1945 to 1951, when we staggered from crisis to crisis. I am quite sure that we are now on the right lines. After all, the present difficulty is only an incident in our history. I believe that a return to the old principles of reducing Government expenditure and allowing free choice to the consumer—who has been so much neglected for so many years—will lead us more easily and more swiftly out of this situation.
7.44 p.m.
Mr. Maurice Edelman: It is not often nowadays that we in this House hear such a full-blooded laissez-faire Tory speech as that which we have just had from the hon. Member for Holland with Boston (Sir H. Butcher). I must say that I am obliged to him for his frankness. When he talks about the motor industry and asks why it has, as he puts it, been cossetted, the answer is shown in the history of the industry under the Labour Government. since 1948, because of the high con factor of steel when applied to motor cars, the industry has been able to play a splendid part in our exports and, in fact, did a great deal towards our post-war rehabilitation, and its present difficulties are an added reason for that further examination which I am about to urge.
In the meantime, however, I am obliged to the hon. Gentleman for drawing the attention of the House to that most important fact that the figure of 1·2 per cent., which the Minister of Labour gave as representing the percentage of unemployed, masks the very harsh reality that there is a great deal of hidden unemployment in Great Britain. He was perfectly right when he spoke about partial unemployment; that partial unemployment which is now given the euphemism of short-time working. In a few moments I will develop that, to show that in the Midlands today there is a very serious crisis, which will get worse as the winter proceeds.
I was interested to hear the Minister of Labour recall that today is the first anniversary of his assumption of office.
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I must say that it has seemed much longer than one year. Whoever else is satisfied with his performance, I am certain that it is not the workers in the Midlands. The Minister of Labour, having already congratulated himself on his performance during the past year, will need no further congratulations from me. So far from offering him congratulations, I say that it is because of his advocacy of laissez-faire, and his rejection of planning, that the industry is facing some of its difficulties.
I hope that it will not be dreadful to hon. Gentlemen opposite if I quote Lord Tedder. His views on the motor industry will be as little acceptable to them as have been his views on Suez. I must quote Lord Tedder, because not only is he distinguished in his own right but he also has a close association with the Standard Motor Company, one of the biggest of its type in the country. He has already warned that a dangerous crisis is looming ahead for the industry, and that unless drastic action is now taken we might see a crumbling both of productivity and the total production, and of the industry's labour force. The results will be disaster, locally and regionally, and possibly nationally. I will briefly develop those points.
It is well known that, for a variety of reasons, the motor industry has suffered greatly during the past year or so. There were, of course, the wilful actions of the Chancellor—the restriction of credit, the imposition of a severe Purchase Tax, and then, on top, came Suez, and petrol restriction. All these accumulating blows have so weakened the industry that today it is running at approximately two-thirds of its 1955 output, although its productive capacity has increased.
There is one further circumstance which the right hon. Gentleman did not mention, but to which perhaps the Government spokesman will refer later. That circumstance is the defence review being undertaken by the Government. Great anxiety must be caused in the Midlands generally if it is a fact that we are to move the emphasis from conventional weapons and the logistical equipment that goes with them. If we are to cut down the transport which we now use for our Armed Forces it will hit the industry very severely. I have been surprised that in recent company reports, when company

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chairmen like Sir Leonard Lord and Lord Tedder have dwelt on the industry's difficulties, they have not, apparently, looked ahead to what might happen if Government contracts are restricted and that difficulty is added to the others.
These are very serious matters. If one includes those engaged in the ancillary industries and in the manufacture of spare parts, the employment figure is 400,000—that is the figure usually given, I think—of which approximately 100,000 men are not being used to their full capacity. As the Minister rightly said—and he is fully alive to the problem—this is a very serious matter, because it is easy to concede that within the next few months 100,000 men who today are partially unemployed may well, if the situation deteriorates, be fully unemployed.
Mr. Osborne: Before the hon. Gentleman leaves the defence aspect of the matter—and it is very important to his constituency—may I ask whether he is arguing that the Government ought to continue to buy military equipment which they do not really require in order to create employment?
Mr. Edelman: No, that is not part of my case. On the contrary, I think that it would be highly wasteful if the Government were to continue to undertake defence contracts merely to sustain employment. All I am saying is that instead of adopting a laissez faire attitude to the motor industry, we must revert to the principles of planning, which have constantly been urged from this side of the House.
My plea is that the motor industry should be treated as a national industry, like the agricultural industry, and that there should be a long-term programme for the motor industry just as there is for other national industries in this country.
It may be asked, what do I mean by a long-term programme? First, we have to decide what is approximately the absorptive capacity of our own domestic market and of our traditional markets. We know that almost overnight our West European markets, on which we have been concentrating to a great extent, have suddenly been obliged to shut down because they are suffering from the petrol shortage just as acutely as we are in this country. But because continental motor manufacturers have been able to
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adapt themselves more readily and more flexibly to the demands of consumers who, in the past, have been obliged to conform to petrol limitations, and because our continental competitors, who, in the past, have had a rise in their total exports, have been able to produce small cars, mini-cars, motor scooters and that sort of thing, they will do rather better in the European markets than can we, who have not hitherto successfully adapted ourselves to the demands of the Western European market.
That is something that we must consider. Because of the laissez faire attitude which has existed specifically under the Conservative Government, our manufacturers, accepting the easy benefits of the home market, have not gone out in an organised way to adapt themselves both to our continental markets and to other overseas markets in which our competitors have been more successful than they have.
The first step, therefore, is for the Government, in conjunction with the motor manufacturers, to look ahead, to come to a conclusion about the size of the industry and about what they can do to meet the competition from abroad, and produce products which will be acceptable be in old and new markets. That is a slightly longer-term policy than the immediate prices required.
The hon. Member for Holland with Boston made a very proper point. He asked—and he was critical of the Government—what is the use of the Government providing extra facilities for the purchase of cars on the home market in Britain today when there is no petrol to run them? I can understand that point. From his point of view—and I am arguing against him—he is saying that we might as well dig holes and set men to fill them in order to maintain employment.
My reply is this. I agree with the Minister of Labour. I do not believe that the demand in Europe and in the Commonwealth—the world demand in general—for motor cars is saturated. I believe that when the petrol flows again, there will be a renewed demand for motor cars both at home and abroad which will be well justified. Therefore, I welcome the measures of relaxation which the Minister announced today, which will encourage people to buy cars in the meantime. But

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I feel that as a palliative to the crisis which is developing, those measures which he has announced are not enough. We must have a greater stimulus to the industry than he has offered to tide us over the present difficulties.
Sir H. Butcher: Does not the hon. Gentleman think that it might be better for the motor car industry to use this period of difficulty in terms of redesign and retooling, rather than continuing to make designs which are at least not particularly modern and selling them on the home market?
Mr. Edelman: The two actions are inconsistent with each other. It is possible to proceed with production and to develop new designs fitted for new markets, but my point is that the measures which the right hon. Gentleman has proposed will not be enough to maintain production at a level sufficient to avoid mass unemployment in the motor industry, in the Midlands, in the Dagenham area, and in Luton.
What is required now is a positive incentive to reluctant purchasers to go out and buy cars with the full knowledge that they will have difficulty in getting the petrol to run those cars. I want to advocate—and I do so in conjunction with my hon. Friend the Member for Coventry, East (Mr. Crossman)—that the Government should seriously consider temporarily removing Purchase Tax on motor cars until such time as petrol rationing is abolished. I urge that that should be done, and the prospective purchaser will know that, in compensation for the difficulties which he will undoubtedly have in running his car, he will have had the benefit of a reduction in the Purchase Tax which will make it worth his while to buy a motor car.
I believe that it is only by some positive action of that kind that the Government will be able to stimulate sales of motor cars in this country. As everyone knows from his own experience and that of friends, there is a great resistance to buying cars in present conditions. Yet if there were this element of compensation introduced into the purchase of motor cars, if prospective purchasers felt that they were getting this substantial relaxation of Purchase Tax as an encouragement to buy, even with the recognition that ultimately when ration-
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ing was abolished Purchase Tax would be reintroduced, or perhaps particularly—
Mr. Deputy-Speaker (Sir Gordon Touche): I am sorry to interrupt the hon. Gentleman, but it is not in order for him to discuss Purchase Tax legislation on the Motion for the Adjournment.
Mr. Edelman: I will comply with your Ruling, Mr. Deputy-Speaker. I will not use the term "Purchase Tax," but I believe that there should be a concession of the kind that I have suggested, which might encourage prospective purchasers of motor cars during these difficult times.
Let me turn to the major question of the motor industry and of its size, because that matter concerns us all. It is quite clear that the British motor industry—this may sound platitudinous, but it is necessary to say it—is not likely again to be what it was. In other words, the easy markets have disappeared and there must be a readaptation to the new conditions of the new markets.
The motor manufacturers have already shown an interest in the development, for example, of tractors, and that is all to the good. But that, again, will not be enough to absorb the great accumulation of engineering skill in the motor industry which, if we are to allow the industry to run down, will be dispersed and diluted into semi-skilled occupations.
The right hon. Gentleman mentioned that he was making a social survey to find out what happened to men who had been made redundant at the British Motor Corporation. Without any knowledge of exactly what happened, I venture to forecast that a very large proportion of those men are today engaged in occupations in which their skill is not fully employed.
If we consider the future of British engineering and the future of British skill, which, after all, is the greatest asset our country has, it is plainly not in the national interest to allow the skill of engineers to be dispersed and diluted merely because the motor industry cannot find work for it. Accordingly, I have one specific suggestion which I wish to make to the Economic Secretary before I conclude.
There is throughout the world a rising demand for machine tools. As the hon. and learned Gentleman well knows, we

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ourselves are making machine tools. I am quite certain, however, that our own machine tool industry is not developed adequately to the potential capacity of overseas markets to absorb the product. I would ask the Economic Secretary to deal with this specific suggestion. In view of the known requirements, particularly in under-developed countries, Colombo Plan countries, and the new States of Africa and the Middle East, there will be a rising demand for machine tools.
Would it not be possible for us to plan the resources of the motor industry so that, taking a slightly longer view, some of its skill and some of its already existing technical capacity might be diverted to the development of a national machine tool industry, on a scale commensurate with the needs of our own country and our potential markets overseas?
Mr. Macleod: When I was talking about the important industries in this country which have managed to gain from a certain redeployment of labour this year, I mentioned only two, to save the time of the House. I entirely agree with the hon. Member about the importance of this particular industry. The machine tool industry has, I know, gained by about 2,700 men during the last few months, in part at least as a result of the redeployment to which I referred.
Mr. Edelman: I welcome that fact, and I congratulate the right hon. Gentleman on his success. I am very glad to hear it. I hope that hon. Members, who are rightly impatient to make their own contributions to the debate, will bear with me for a few moments more while I make my final observations.
It is natural that manufacturers in the motor industry, seeing their difficulties enlarged by countries such as Australia and New Zealand raising barriers against the import of motor cars, should feel anxious and should try to leap those barriers by setting up plant in the countries to which they formerly have exported. I do not blame them for doing it, but the fact is that when they do it they export employment to those countries. They cease to export motor cars and they export employment.
For example, we know that the British Motor Corporation will shortly be producing in Australia about 1,000 motor
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cars a week. These 1,000 motor cars will be produced by local plants; for instance, Fisher and Ludlow, the panel makers, have set up an establishment in Australia. Those organisations, under the present arrangements, will take work away from the Midlands, from Oxford, and, ultimately, from Dagenham, Luton and all the other centres in this country where cars are made. In other words, we have a situation in which employment is being exported.
I give this warning. The motor industry faces a very grave crisis. The measures announced by the right hon. Gentleman, valuable in themselves, are inadequate. He must do much more. Although I shall not again refer to taxation, I hope that the Government, during the Christmas Recess, will not be content merely to sit back and allow the employment exchanges to redistribute labour. They must work out a satisfactory scheme for the motor industry if massive unemployment is to be avoided.
8.5 p.m.
Mr. Cyril Osborne: The hon. Gentleman the Member for Coventry, North (Mr. Edelman) has, in his charming way, made a wonderful plea that Coventry should be "feather-bedded". The motor industry, he says, is exporting employment to other countries where other people will start to produce their own motor cars.
In the textile industry we have faced this sort of thing for fifty years. Textile machinery has been sent abroad for years, and we have had to face the same problem. The Coventry motor industry must realise that its days of ultra-prosperity are over. The manufacturers, designers and workers have got to put their backs into their jobs as they have never done before.
I wish to turn to an aspect of the subject to which reference was made in The Times in its editorial this morning, under the heading "First things First". The article reads:
"Today's economic debate in the Commons is expected to concentrate less closely than the debate a fortnight ago on the gold reserves and the balance of payments and to range more widely over the home industrial scene. If so, it still should not be allowed to obscure the fact that the main issue is the defence of sterling."
Putting first things first does not, in my opinion, mean putting the defence of

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sterling first. The defence of our country and the battle for our economic survival will be fought and won on the factory floor. What is involved in the expression "The defence of sterling" may be understood by Oxford dons, if I may be allowed to say that, and by the Treasury officials—though sometimes I doubt it—but it certainly is not understood by the ordinary workers.
The first thing the Government must do is this. Someone must be appointed to explain in the simplest of terms to industrial workers and managements what the jobs are which we have got to do, why we have got to do them, and what will happen to us all if we fail. It is almost a Minister of Propaganda for Economic Affairs who is needed, someone who will work closely with the T.U.C. economic committee and will put over to the people who have really to produce the wealth why it is we are in this position, what the problems are, and what each one must do.
I hope my right hon. Friend will forgive me if I say that I regard the situation as much darker than he painted it. This country faces the darkest winter since the days of Dunkirk, in 1940, when we stood alone. The tragedy, I feel, is that then we were a united nation but now we are divided. Then, the people of this country were willing to work, serve and sacrifice. Whereas today far too many in the country seem to be "hell-bent" on pleasure.
I do not believe that the nation as a whole really understands the gravity of the economic consequences of the Suez blockade. There are far heavier burdens ahead, and we ought to tell our people. I fear that the petrol shortage and all that goes with it may last a good deal longer than is at present realised.
Few hon. Members, I imagine, unless they have gone carefully into the figures, really appreciate how dependent on oil this country has become. Eighty per cent. of our requirements come from the Middle East, and of those about 80 per cent. came through the Canal and 20 per cent. came through the pipelines. With a bit of luck, we may have the Canal open by Easter, though I sometimes doubt it. The pipelines will take a year to repair. We must, therefore, face this situation
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industrially, that we shall be short of between one-quarter and one-third of our oil requirements for from anything from six to twelve months.
As I say, unless hon. Members have looked at these figures, they may well find it startling how our imports have increased over the last two years. In 1946 our imports of crude oil were just over 2 million tons. Last year, they were 28 million tons—14 times as great in nine years. Last year, of the general consumption of about 20 million tons, we burnt about 5 million tons in our industrial furnaces, we used about 2¼ million tons for industrial power and we used about 10 million tons for transport. Therefore, if, as I can gather from the oil companies and from the calculations I make myself, we are to be short of 5 or 6 million tons in the difficult months ahead, it seems to me obvious that agriculture and the export trades, the most vital of our industries, must have the first and biggest share of what is going and that the secondary industries—that means the one in which I am engaged—must be prepared to take much greater cuts than we have already had and that pleasure and sport must take drastic reductions, To me, the rather alarming and depressing side is that the people had not realised how perilous was our economic situation before these additional difficulties arose.
Here, in a country with 50 million people, producing food only for 30 million—or food for 50 million people for only four days a week—with no raw materials, living at a higher standard than anybody in the world except the North American Continent and living at a standard that we have not earned since 1945, we are faced now with a new problem from the peoples of the undeveloped countries, people from whom we get our oil, rubber, tin, lead and all the commodities with which we keep ourselves employed and earn our living. They are asking us the simple question why they should allow us to go into their countries and exploit their raw materials to give us a standard of living ten times higher than that which they themselves enjoy. If we are to face that, it means either that we must increase our productivity enormously or that there will be a colossal fall in our standard of living.

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We often plead on both sides of the House, including the hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann), whom I see present, with great sincerity the case of the old-age pensioner. Old-age pensioners in this country do not realise that poor as they are they are many times better off than nine-tenths of the human race. And the rest of the human race is asking why the white man—the English people—should enjoy this much higher standard of life than they do from the raw materials which come from their country.
The rest of the human race will not put up with it any longer and we must tell our people that it is not a question of doubling our standard of living, but of maintaining our standard of living. We have got to say to our people that the standard we have enjoyed for so long is in grave danger and that if we are to maintain it, we have all got to take off our coats in a way we have never done before and earn it.
Mrs. Jean Mann: I was wondering whether these remarks, instead of being addressed to me, should not have been directed to the Lord Privy Seal. It was he who promised to double the standard of living. That was his Election promise. Where is it now?
Mr. Osborne: I am not playing party politics. We have had far too much party politics in this House in the last few weeks. I am trying to take a national point of view of the problem which faces us.
If the hon. Lady wants to play a little party politics, she has probably read "Towards Equality", a very good pamphlet and well written by the right hon. Member for Huyton (Mr. H. Wilson). Since the hon. Lady provokes me, I must give her this one hack. On page 5, the right hon. Gentleman wrote:
"Immense differences in living standards are as intolerable between nations as they are between the classes inside one nation."
Let us face it. If the wages of the whole world were pooled and everybody had the same, the British worker would have less than £2 a week. If that is the equality that hon. Members opposite want, they should go and tell that to the supporters. That is the ultimate logic of their belief.
Mr. Harold Wilson: The hon. Member now, and in a letter which, I think, he wrote to the Daily Telegraph in the first week of October, credits me with the authorship of that document. I should like to assure him that although I stand by it all and have defended it at my party conference and have spoken to it, I was not myself the author of it. It was the work of a committee. We do not believe in the cult of the individual to quite the same extent as some other parties.
Mr. Osborne: It was so well reasoned and certain phrases came out so easily that I could almost hear the right hon. Gentleman saying it.
All I am trying to put to the House is that our problems are much graver than is generally realised in the country. In fairness to our people, the first thing we ought to do, on both sides of the House and on both sides of industry, is to set the facts before our people and say, "These are the difficulties. We have got to surmount them. If we do not, heaven help us."
There are two or three things that the Government should do. My right hon. Friend might well consider appointing a new Beveridge Committee to see how far the Welfare State has affected the willingness of our people to work and their willingness to serve. It is no good the hon. Member for Northfield (Mr. Chapman) shaking his head—
Mr. Donald Chapman rose—
Mr. Osborne: I am sorry, my time is short. The problem before us is not only to get increased production, but it must be at lower prices and with better quality goods if we are to sell them abroad. Although it is unwise to generalise about industry, because some trades are doing much better than others—incidentally, I would say to the hon. Lady the Member for Coatbridge and Airdrie that in British industry women are on the whole doing a better job than men—it is fair to say that in industry generally the men and women who are working alongside machinery and have the pace set by machines are doing a very good day's work, but some industries could do a great deal more. And so an inquiry ought to be made. That is the first thing that the Government ought to do.

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Secondly, there must be heavy cuts in our defence programme. Something like one-third of what we are spending must be cut. Before 1914 this country, which was then immensely richer than it is today, had only a two standard Navy, we had a contemptible little Army and we had no Air Force. Today, we are trying to keep three Fighting Services and we cannot afford it. We should make up our mind which we can afford, and we should scrap the rest and be drastic about it; and with that, we should say that within a very short time we will end conscription altogether. With that, however, both sides have to make up their minds that we must stop pretending that we are any longer a great world military Power.
I do not want the £500 million which I want saved in this way to be put back into social services. It has got to be real net saving so that taxation can be reduced to the same extent. Next, I want the Chancellor to take a calculated risk. I want him really to slash taxation for a period of two years. If he is to get greater production, which is our only hope and salvation, he must encourage the scientist, the technician and management to work harder. He will only encourage them to do so if they are allowed to keep what they earn. Therefore, I should like to see my right hon. Friend the Chancellor double the earned income allowance, reduce Income Tax—
Mr. Deputy-Speaker: The hon. Member is not in order in suggesting legislation.
Mr. Osborne: I beg pardon, Mr. Deputy-Speaker. The Chancellor must make a reduction in taxation and encourage those who make the production, both on the shop floor and in the management office, to do the extra work of which I think they are capable.
The Government ought to consider whether the time has not arrived to end the credit squeeze. I should like to see the Bank Rate down to 4 per cent. quickly. The Bank Rate is no longer effective for doing the job which, traditionally, it is supposed to do, because political fears have caused money to go from the sterling area, and a higher Bank Rate cannot bring it back. There is no doubt that the higher Bank Rate is
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causing increased costs at home. Instead of keeping the Bank Rate high, the Government should reduce the volume of money.
If, as a part of this policy, they are necessary, I should not myself be afraid of more physical controls. We already have many. We have the dollar control, we have controls in agriculture, we have them in the strategic list of goods. To have some more physical controls would be a price well worth paying if we could get rid of this dear money policy, which, I begin to think, is doing more harm than good.
If the Government will tell our people of the immense difficulties which are facing us, and explain to them in the simplest terms so that they can understand them, then I believe that we shall surmount the hurdles before us, high and many though they be. I believe the British character is just as good now as ever it was, and that the people of this country will respond today as they did in 1940.
8.27 p.m.
Mr. Frank Tomney: I have listened to the hon. Gentleman the Member for Louth (Mr. Osborne) with great care. He has stated his case with great clarity, but in his strictures of the Government I think that he only half stated it. I intend to state it, if I can, more fully.
In politics, in commerce and in economics, there is a price to be paid. In a country which exists on the basis of political democracy, with Government and Opposition parties, the Government of the day must be responsible for its successes and for its failures, and it is politically that the criminal folly which the Government have displayed in their Suez policy will be judged by the people of this country in the very near future.
The hon. Member for Louth fairly asked the Government to put the economic issue to the nation in the simplest possible terms so that the ordinary men and women in the factories and workshops can understand it. The Government's Suez policy has not yet been put in that way to the people. There have been evasions, double-talk, understatement and over-statement, as the occasion seemed to warrant, by the Government, backed by a powerful Press which has deliberately hidden from the

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people the real state of affairs which gave rise to Suez.
There is a price to be paid for it, and that is the economic price which is now beginning to be paid. When the people, through their own simple, home economics, begin to feel the pinch, they will decide who were to blame for this state of affairs, and they will pass judgment through the ballot box. That is when it will come home to those responsible.
The Minister of Labour, in his speech today, dealt in the usual way with percentages and the figures of the cost of living, the balance of payments, and employment. Personally, I was very glad that he quickly left that and said, in effect, "What we are concerned with now are the homes, the mortgages, the hire purchase, the comforts and the happiness of the people." That is perfectly true. We have enjoyed for seventeen years a sellers' market. The Government should have known, any Government should have known, as we on this side of the House knew, that gradually, as in all countries a higher standard of mechanical production was developed, Great Britain's position would be endangered.
In 1945, the Labour Party put to the country a policy of social benefits, which the people voted for, but for social benefits there is an economic price to be paid in the export price of every single exported item. Having voted for that policy, the people have a right to expect that policy to be carried out and to be effective for all time, and that policy includes the policy of full employment. The Labour Government received very little consideration, indeed no sympathy at all, in the difficulties in which we found ourselves when we went from crisis to crisis in very difficult circumstances. We were referred to by the right hon. Gentleman the Member for Woodford (Sir W. Churchill) as "Weary Willies" and "Tired Tims," when men like the late Sir Stafford Cripps and his colleagues were struggling against tremendous odds for a country which came out of the war devastated and bankrupt. They struggled to restore the economy, but they received no sympathy from the Tories for the efforts they made.
However, we struggled on in face of the difficulties. It was difficult, and it
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always will be difficult for Britain from now on—let us understand that—because other nations, as the hon. Gentleman the Member for Louth said, are now themselves becoming producing and consuming nations. We have to decide what we as a nation are to do about it. What can we do about it? We have heard discussed today the engineering industry, the motor car industry, the export trade, the changing face of British commerce and industry, the investment programme, and taxation. All these impinge with tremendous force upon our economic system. That is why the arguments on this side of the House, and on the other side, too, have been so bitter in condemnation of the Government's embarking on their Suez adventure, and why we have said that that was so terribly wrong.
We have been living from year to year and week to week on the productive capacity of the nation. I know that the Labour Government had dollar aid from America, but since 1945 we have had to build up the sterling area where our main markets lie, and we have been exporting as much as we could into the valuable dollar markets, and we have been changing and rechanging our industry and devoting more capital to industry through special tax concessions. I can understand our doing that for specialised industries such as the aircraft industry and some of the newer industries. I can understand making tax allowances for recapitalisation and ploughing back. Only by that method will we succeed in our vast engineering industry, and that problem will be with us forever.
We are now faced with great German competition. Germany is now on her feet. The events of the past few weeks have brought in their train a political sequence which has to be followed through to its logical end. I do not think that the Prime Minister or the Cabinet envisaged, when the Suez adventure was embarked upon, what it really involved—the shortage of oil, the running down of British industry, the unemployment, which is gradually growing, the position of British exports in face of Germany outselling us in almost every market, and the competition of Japan in the Far East. And if the China market is not opened to us, there is no relief to the British textile industry. The

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sooner we get there the better, whether the United States likes it or not. There must be real talks on that subject before long.
Mr. C. Pannell: Will my hon. Friend please mind adding to his chronicle that, except in rubber and tin. Russia is forging ahead and will soon be completely self-supporting? She is forging ahead as fast as any N.A.T.O. country.
Mr. Tomney: Russia, too, will be competitive in the world market before long, especially if she gets rid of her great arms burden.
Mr. Raymond Gower: Is the hon. Member suggesting that Germany is not affected by the shortage of oil?
Mr. Tomney: She is not affected to the extent that we are, because German wages are lower than ours, German factories were devastated in the war and now she has new factories with new machinery and recapitalisation. She is exporting a tremendous amount to America and other countries where she is taking credit, although she would prefer to have the cash. She as spending in South America which, in turn, deals on a dollar basis and, therefore, in a roundabout way the benefits go back to her. That is why we could not and should not, by all the advice available have gone on this Suez adventure at any time, but especially at this juncture.
I know the trouble that Nasser has given to this country and I know our dependence on oil. About 80 per cent. of our industrial force turns on oil. We are not on the gold standard. We, like the rest of the world, are on an oil standard. The Americans have the bulk and we have some. Nasser, with his poor peasant population, has no oil but he has the waterway and he tries to "muscle in" on the net profits of the oil industry.
However, the adventure has been embarked upon and now we are paying the price in terms of unemployment. Our economy is so finely balanced on a knife-edge and our consumer standard, in common with many other parts of the world, is so great that there is an insatiable demand for goods. What is the way cut? It is difficult to say in this situation.
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Some of us on this side of the House have been very conscious of the position of Great Britain in world politics. I still take the view that Great Britain is a considerable power in the world. I shall not, by any means, denigrate my country and its position in the world. It is a considerable power in moral leadership and in other things. We must decide how we shall get out of this morass into which we are sinking deeper week by week.
The Government can appeal to the country and put the position to the workers but, as I have said, a political price must be paid if they do that. The trade unions are responsible bodies in their own right. They are just as responsible for the country's economy and the future of their membership and the employment of their members as anybody in the country. They have a great stake in all this and they have acted with remarkable fortitude and reticence in the past few years. They have the right to demand a place in the higher councils of the Government when any measures are taken for the realignment and redeployment of British trade throughout the world.
It is striking that while we are arguing about defence programmes, about N.A.T.O. and about foreign policy—and we have had some bitter quarrels about our defence commitments and the policies that are to be carried out—world events in the economic sphere have caught up with us. Now, whether we like it or not, we shall be forced to prune and cut our defence programme considerably if we are to remain alive economically. That is the first thing to which the Government have to look, and to look at closely.
Mention has been made tonight of the specialised industries, and there has been a certain amount of criticism of the motor industry, some of it justified and some unjustified. I was recently in the United States, where there is a vast commercial market which has not yet been touched by Great Britain. Most British salesmen never seem to get farther than New York and Chicago. The great Middle West basin, with its teeming millions, hardly sees British goods. I hardly saw British cars in America. I began to make a survey and to estimate the reason for that because, when all is said and done, the question of cars in relation to

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our dollar earnings has been very important these last few years. Cars have produced us quite a lot of dollars.
What did I find after making that survey? This is something at which the motor car industry must look. In an interjection I made in the Minister's speech I said that Germany is fast creeping up on us in the American car market. How fast is not appreciated until the figures are seen, so I will give comparative figures for 1952 and 1955.
The total number of British cars sold in the United States in 1952 was 27,800. In 1955, that figure had dropped to 18,800. The number of German cars sold in the United States in 1952 was 790. In 1955, the figure was 32,050. Those are remarkable figures and they prove conclusively that there is in the United States a market for cars of the small type manufactured by Great Britain and by Germany.
The difference in price, type, make and styling is something which the experts can go into, but I have one or two suggestions to offer to the Minister of Labour for consideration by the motor car industry, because that is the one which has taken the first knock in the economic debacle now facing the country.
The United States market can absorb at least 60,000 foreign cars a year. That seems a lot of cars until we bear in mind that the productive capacity of the United States is 8 million American motor cars a year. So the total production of foreign cars is only three-quarters of 1 per cent. The Americans like to have cars serviced They want spare parts, quick repairs, quick delivery, ready access to markets where they can find these facilities provided. That is one of the reasons why the German Volkswagen has been outselling all British motor cars in the United States during 1955 and 1956.
British shortcomings have helped the Volkswagen considerably and I will list one or two of them. There are far too many British makes competing for the American market. There are 28 British makes competing for it as against six big American motor car organisations and five from Germany, including the popular and sturdy German Volkswagen. B.M.C. and Rootes insist upon exclusive dealerships and, as a result, their spare parts and service depots are too far apart and
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too few in number. In many cases, parts have to be shipped from New York to California, a distance of 3,000 miles. This means a wait of several days, or a week, before repairs can be done.
"Lame ducks." such as A.C., Alvis or Jowitt, which threw their cars on the American market without any provisions for repairs or for spare parts, have spoiled Britain's name for reliability. Singers established a depôt in Montreal, over 3,000 miles from the Californian coast, to which money has to be remitted first, and 42½ per cent. additional customs dues paid, before replacements can be sent at heavy cost by air.
Distributors and dealers are finding it hard to make a good living on a single make. B.M.C., Rootes, British Ford and Triumph have lost their initial sales. As a result British cars of late have lost to Volkswagen a number of their best British salesmen. That is something to contemplate, that our best British salesmen in America are being forced to sell German cars in competition with our own. These things must be looked at by the Minister of Labour with the motor car industry. I still have great faith in our motor car industry to earn for Britain the dollars she so solely needs and to lift us over the initial difficulties due to Suez.
What is the way out? One remedy is the formation of a British export corporation to which the "Big Four" of the British motor car industry—B.M.C., Rootes, Ford and Standard—would guarantee to sell whatever the corporation found it could sell in the American market, supplying vehicles as and when the need arose and not months later as in the case of the M.G. and other redesigned cars. The vehicles would have to be supplied in the quantities ordered within a reasonable period of time.
Spare parts and stocks could be organised on the same system as that for the Volkswagen. The arrangements in this respect would have to be completed before the scheme was announced to the American public. This would provide an indication of Britain's ability and determination to compete with Germany on an equal basis in the small car market.
The Minister of Labour, or the Chancellor of the Exchequer, should appoint a committee to assemble the facts relating to the British motor industry and its

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future, and should weigh the consequences of the situation in the light of our gold and dollar export needs. Then the Government should summon Her Majesty's representatives abroad to give expert evidence at home without delay. Once the results of the investigation have been accepted, they should be laid before the B.M.C., Rootes, Ford and Standard, and also Jaguars, and perhaps also Hennessey, and any other interested persons, calling upon them privately and in the interests of the industry and of the country as a whole to implement the findings of that co-operative action without delay.
If these people should refuse to be co-operative, what should the Minister do? He should lay the matter before Parliament as being one of urgency and the allocations of steel and other materials to the individual firms should be based entirely on their export drive and their readiness to co-operate in the national interest and to help to stabilise the British motor car industry.
I appreciate that it is not easy to shift directly from production lines as such to the finer branches of engineering, such as tool making, for a different kind of labour is required, but we ought also to look very seriously at that sphere. Germany is now exporting 60 per cent. of her machine tool production all over the world, and we are exporting 20 per cent. of ours. In any event, for decades to come, whatever the conditions are and whatever political parties may be in power, Germany will be Britain's biggest competitor in engineering industry exports.
If the Minister w ill bear in mind some of the points which I have raised and make a real effort to lead the people of Great Britain, on a basis of equity and equal sacrifice, out of the morass into which the Government's Suez policy has forced them, he can be assured that the Trades Union Congress will be prepared to play its part.
8.44 p.m.
Mr. John Arbuthnot: We have all listened with great interest to the speech—
Mrs. Mann: On a point of order, Mr. Deputy-Speaker. It looks as if Scotland will not have a chance to take part in
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the debate. I wish to register a protest. Unemployment in Scotland is double that in England.
Mr. Deputy-Speaker: I am sorry to interrupt the hon. Lady, but that is not a point of order.
Mrs. Mann: We have been listening to English hon. Members airing the deplorable conditions in their country when the conditions in Scotland are twice as bad I really must protest.
Mr. Deputy-Speaker: I am sorry to interrupt the hon. Lady, but she is not in order.
Mrs. Mann: It is not worth while attending this House as a Scottish Member of Parliament.
Mr. Arbuthnot: The hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann), who is now leaving the Chamber, will hae to watch hersel', because at the moment a Scot is speaking.
We were all very much interested in the speech of the hon. Member for Hammersmith, North (Mr. Tomney). He will not expect me to follow him into the controversial political part of it, but, as to its constructive side, it was a contribution to which we all listened with the greatest attention. The important thing in circumstances as we find them today is that we should all realise that we are in the same boat together, that we should all pull together to try to get out of the difficulties. The economic position presents both a challenge and an opportunity.
Recent events in the Middle East have brought home to us as a nation that we could be rendered ineffective through one of two reasons. Either through insufficient military strength, or through spending so much on military strength that the moment we try to exert it the flight from the £ threatens the country with bankruptcy. The latter position applies as I read the position. I therefore find myself in substantial agreement with the hon. Member for Hammersmith, North who said that one of the urgent tasks facing the Government was a drastic review of our defence expenditure. I know full well that the Government have that very much in mind and that that review is taking place at the moment.

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It may not be generally realised that the amount we spend on defence at present represents 6s. 3d. in every £ of Government expenditure. It is therefore essential and urgent that we should have a drastic reduction as the first lesson of the recent events in the Middle East. A corollary to a drastic reduction in defence expenditure is to see to it that we make mum more efficient use of the remaining resources. We are today spending £1500 million on defence. I want to see that reduced straight away to £1,000 million.
My right hon. Friend the Minister of Labour gave a welcome assurance that we are consulting our allies and that consideration will then be given to the whole problem of the abolition of National Service. Not only would the reduction and abolition of National Service reduce the amount we are spending on defence, but it would also mean that the nation would gain in productivity. The expenditure per man on keeping him fed, paid, equipped and so on is about £ 1,000 a year. If after these discussions we find it possible to abolish National Service, that will be a material factor in helping us in our economic problems.
We should curtail our expenditure in Germany, where we are spending enormous sums of money. More of the burden should be shouldered by Germany herself. It is also important that we should shift from conventional or obsolete weapons to those which are more in keeping with this day and age so that a relatively smaller number of people will be able to keep the country adequately defended.
My last suggestion about the defence programme is that we should expand N.A.T.O. so that it will cover the area of the Bagdad Pact, because N.A.T.O. will be ineffective if it can be turned on the southern flank. It is therefore just as important to all the countries which are members of N.A.T.O. to see that the southern flank is adequately protected and to take their part in doing the job of work in which we have so far taken so large a share. We have, in short, to trim our military coat to conform with our economic cloth. I am sure that the Government will be the first to realise that this is an occasion of great opportunity and an occasion on which there should be no half-measures.
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I want to turn to another aspect of our economic problem, the sums which we are borrowing from the United States. I feel gravely disturbed that we should find it necesary further to borrow from the United States. This may be necessary as a temporary measure, but we must bear in mind that, when we borrow, the money has always to be repaid. The fact of further indebtedness as such is a millstone round our necks, and it cannot be a source of additional confidence in the £ that we have to resort to the moneylender once again, using that term in no derogatory sense. Borrowing is no source of strength. In fact, it is the reverse unless it is accompanied by stringent pruning of our dollar expenditure.
In this respect, I found myself in a considerable measure of agreement with the right hon. Member for Battersea, North (Mr. Jay) when he spoke about tobacco. Of the £86 million which we as a nation are spending on importing tobacco, £46 million is spent on tobacco from the United States. In my opinion, we can go a great deal further to reduce this particular dollar expenditure. I am not impressed by the argument that the Chancellor of the Exchequer must have Virginian tobacco in order to maintain the yield of the Tobacco Duty at the £668 million, which is the sum received at the moment.
It might well be that there would be a reduction in the yield of the Tobacco Duty, but I do not think it would be great if good Rhodesian tobacco were blended satisfactorily. It used to be the case that no tobacco other than Turkish or Egyptian was allowed to be smoked—
Mr. Gordon Walker: In good society.
Mr. Arbuthnot:—as the right hon. Gentleman says, in good society.
Mr. William Ross: Society is not so good now.
Mr. Arbuthnot: I am convinced that the taste in tobacco could be re-educated, and could probably be re-educated to the public advantage, if we gave an opportunity to our good friends in Turkey and to the members of the Commonwealth family in Rhodesia to send more tobacco to this country rather than our importing it from America. Even if the Chancellor were to lose revenue from tobacco, it

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would, in my view, do no great harm, if we smoked less. Particularly if we made a substantial saving on defence, the Chancellor should be able to afford a slight loss in revenue from tobacco.
I now turn to American films, where the sum involved is nothing like as great. The total amount spent on American films is about £9 million a year, which excludes the profits which, under the Anglo-American Film Agreement, cannot be remitted to the United States.
Another source of possible dollar saving is to cut out the import of Canadian apples. The sum involved here is £1 million. As Member for a constituency in East Kent, I can say that it would be very welcome to apple growers there if fewer Canadian apples were brought to this country and if local fruit growers were given a greater opportunity of selling their British apples. They are perfectly prepared to put them into appropriate storage for the purpose.
The last facet of our position which I should like to consider is the action which we must take in order to restore an expansionist outlook to our economy. In the long run the value of the £ depends upon production—producing things which are wanted in the world and producing them at the right price. We have therefore to concentrate on encouraging industry to modernise. We must also give further encouragement to those sections of the community whose brainwork is the mainspring of our industrial effort. Particularly if we are to go into the European Common Market, we must be competitive. Even if, eventually, we do not go into the European Common Market, we cannot survive economically as a nation if our industry is not fully competitive.
This is not the place to talk about budgetary proposals, and I do not propose to do so. That can be done another time. But we may be able to assist in cutting down Government expenditure, and public expenditure of all kinds—it is essential that we do so—if, instead of spending quite so much time in this House going into the details of how money is to be spent by this Department or that, we take the line that business would take if faced with similar difficulties. We must decide basically what proportion of our national income should go into increasing industrial efficiency and increasing its
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competitive power. We should decide what proportion should go to the Government in taxation to create those conditions in which private enterprise and nationalised industries can increase the national wealth. That is the job and the only job of the Government—to create those conditions in which industry, whether private or nationalised, can add to the wealth of the nation.
We should decide basically what proportion of our money we can afford to spend on defence, and what proportion we can afford to spend on the social services. Having so decided, we should as a subsequent and subsidiary stage make sure that Government Departments make the best use of the money available. In a business each department would be told what money was available for spending and that it must do its best on the budget provided. But somehow in our public expenditure it seems to work the other way on. Government Departments say what they require and the miserable taxpayer is squeezed to provide that money until the pips squeak.
If anyone is in doubt about that, let him look at what happens to a company which tries to distribute all it can. I do not wish to go into the question of whether that is a good thing to do, but if a company tries to distribute up to the hilt, the shareholders get 30 per cent, only and the Chancellor 70 per cent. If, in order to avoid the full rigours of taxation, a company ploughs back its profits, it may well in due course become the subject of a take-over bid. In my opinion, it is a fallacy—that exists in the minds of many people at the Treasury—to suggest that to distribute is wrong and to plough back is right. I believe that fresh savings—the proceeds of dividends—which come from private individuals into industry are often more fruitful than savings ploughed back, because they often give more satisfactory and imaginative employment.
I therefore find myself in disagreement with my hon. Friend the Member for Louth (Mr. Osborne), who said that the credit squeeze should cease and that the Bank Rate and interest rates generally should be reduced. I believe that, in present circumstances, it is essential that added impetus be given to saving. The events of recent weeks have shown how badly out of balance some of our

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expenditure has been. We have now the opportunity to recast the whole of our economic approach. Instead of clapping on fresh taxes as a panacea for all our economic ills, we must recognise that Governments and local authorities are spending far too much.
There is only one way out for this country, and that is to limit public spending to a ceiling to give industry the opportunity and incentive to make itself competitive and to produce the goods on which our very survival depends.
9.0 p.m.
Mr. Roy Jenkins: I am sorry that throughout the whole of this debate we have not caught even a glimpse of the Chancellor of the Exchequer. We on this side of the House know that it may well be that he would not wish to speak in this debate, but we should have liked to have seen something of him here. I think one must place on record the fact that throughout this fresh burst of economic difficulty recently we have received remarkably little from the right hon. Gentleman in the way of general economic guidance. We have on general economic subjects had one statement and one very short speech from the right hon. Gentleman.
The statement occasioned a certain amount of favourable comment because it was remarkable that among recent Government statements it contained no obvious misstatements of fact and comparatively little tendentious matter. The speech was extremely short. It began at twenty minutes to ten and finished at five minutes to ten on one day during the debate on the Address. It was much more of a fragment of autobiography than an exposé of the economic situation. We should like to see a little more of the Chancellor and hear a little more from him of these very difficult economic circumstances in which the policy of himself, or perhaps to a greater extent of his right hon. Friend the Prime Minister, has placed us at the present time.
I will begin by saying a few words bout the subject of our gold reserves on which my right hon. Friend the Member for Battersea, North (Mr. Jay) spoke earlier in the debate. I think there are four points about the present position of the reserves with which one must deal.
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The first is, of course, that what we are suffering from at the present time is not merely the fact that we had a very rapid drain on our reserves during November, but also the fact that that drain began with the reserves extremely low—quite unjustifiably low—because we had previously been through a period of eighteen months—from June, 1954—in which our reserves fell by 900 million dollars while the reserves of the other O.E.E.C. countries went up in aggregate by 2,400 million dollars, a very sharp contrast between the position elsewhere and the position in this country. Of course, it was in the middle of this period of eighteen months when our reserves were falling so disturbingly in sharp contrast to what they should have been doing, that is, moving in accordance with the general pattern of Western Europe, that we had the Lord Privy Seal's famous Budget of 1955.
The second point which I think must be made is that, without question, the drain on our reserves during November and, indeed, recent drains generally have been greatly increased by the Government's decision taken about eighteen months ago, I think, to maintain the rate for transferable sterling at only a small discount compared with the official rate. In other words, to introduce very quietly convertibility of sterling for everybody except the residents of the United Kingdom.
There is no doubt at all that we have recently been paying a very heavy price indeed for that decision and that a very large part of the drain during November is to be attributed to our attempt to maintain that transferable rate. A few days ago, on 15th December, there was a very remarkable leading article in the Financial Times from which I should like to give the House a short quotation. The Financial Times said:
"There are two questions"—
about the future of sterling—
"which have to be settled The first is whether the extent of Britain's banking commitments through sterling is not excessive in comparison to the country's real economic power and resources. The second is whether British economic policy is not now too much influenced by attempts to calculate the reactions of foreign exchange dealers to British policy. For instance, the increase in the petrol tax was defended by some by the need to impress those who are referred to collectively as 'the bankers of Zurich.'"

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That is a very remarkable quotation from a leading article in the leading financial paper of this country. Whose fault is it that this is so? It is the fault very largely of Her Majesty's Government for paying excessive attention to the demands of the City of London.
Without question, part of our difficulty at the present time is the policy which has been pursued for many years, to a greater extent under the Lord Privy Seal than under the present Chancellor, of progressively dismantling exchange control and making it far mere vulnerable to the shifts of opinion taking place in Zurich and other financial centres about the future of sterling. We undoubtedly last month paid a very heavy price for this position. The Financial Times went on quite rightly to say that what was much more important for the future of this country than the opinions of the bankers of Zurich was the rate of investment. I will come back to that point a little later on.
The third point about the reserves is that, in so far as the strength of sterling has imporved since the Chancellor's statement of a fortnight ago, it is because he has been able to borrow on a massive scale. Let there be no doubt about that at all. I would hazard the guess that the Government "lave been able to borrow, largely through the good offices of the United States Secretary to the Treasury, from the Monetary Fund on a larger scale than the Chancellor believed possible when he made the statement. From that point of view, the position is temporarily satisfactory. But whether the solution is compatible with the dignity of Conservative Members, in view of the attitude which large sections of them have recently taken up towards the United States, is another matter.
I would ask Government supporters—I wish there were more of them here to ask, but I will ask this of those who are here to be asked—what they think would be the state of sterling on world markets today, and the prospect of avoiding devaluation, if the United States had persisted in being as unfriendly as some Government supporters try to pretend it was being, towards this country? I know there are some hon. Members who take the view that we would have been much better off economically and in very way if, on 6th November, we had gone on to
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occupy the whole Canal. Where do they think sterling would be today if we had gone on and not subsequently withdrawn? There is no doubt that what has improved sterling has been the changed attitude of the United States in giving us massive aid and enabling us to borrow on a massive scale. That was dependent upon certain political decisions that the Government took very reluctantly.
What is the future? We have to remember that the recent crisis in our reserves, as the Government has quite rightly reminded us, was accompanied by a moderately healthy underlying balance of payments position. That balance of payments position, even on the Chancellor's own estimate, will get worse. It will be rather worse in the first six months of 1957 than in either the first or the second six months of the current. Therefore, we are in the position that, having had a reserves crisis with comparatively healthy underlying trade figures, we are now moving into a half-year in which we are certainly to have rather worse trade figures. We should not therefore be too complacent about the prospects.
The Minister of Labour, in opening the debate, had some things to say about the motor industry, which is not alone among British industries in being very hard hit by recent economic developments, but which certainly stands out as one of those in the greatest difficulty. He announced a small concession, in itself welcome, but certainly not adequate to solve all the problems. I thought that in general he was rather complacent about this industry.
The Minister of Labour combines a, rather gloomy manner with an occasional ability to make extraordinarily complacent statements. At one stage I understood him to say that one of the bright spots in the industry's present position is that the export proportion was rising, although within a falling total of production. I take it that this, in fact, means that we have now reached a position in which home sales are falling even faster than export sales. It is not a position from which one can draw a great deal of comfort, or, indeed, any comfort at all, about the future of the industry.
While I certainly would not, for ore moment, take the view that our motor industry itself has not committed many faults and is not to blame for some of

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its own difficulties, I think that it has really been treated pretty badly in the last few years by Her Majesty's Government. It has been allowed, indeed encouraged, to engage in a vast programme of expansion. Of course, one must have investment in this industry as in others, but what it needs is intensive rather than extensive investment.
The motor industry needed and still needs investment to make it able more efficiently to produce a limited number of cars, not a vast programme of general expansion of productive capacity. However, as I say, this industry was allowed—encouraged—to go ahead with a very large programme of expansion, and has since been badly hit by a series of measures under Government control, and has not, as far as I know, at any stage been given any guidance whatever as to what the Government consider to be its future reasonable size.
During one of the Chancellor's appearances in the House, not on a general economic question but on a more specific question, he made a speech about the European common market and our proposed attachment to it. That is a proposal with which, in general, I agree, but it is clear that if this proposal goes through the motor industry will then be one of those most affected by these changes.
I do not think that the Government have set a very good example of how they will help and guide industries which will be adversely affected by this general change in trading conditions over the next twelve years in the European common market by the way in which they have treated this industry. They have not made it any easier for that or any of the other industries to accept the sort of changes which it is desirable that they should accept.
I turn next to what, I think, is, and has been for some time, the crux of our economic problem; that is, the rate of investment. Last week we had a very frank statement on this from the Chancellor of the Exchequer at the N.A.T.O. meeting in Paris. He said that we have the lowest rate of internal investment of all the N.A.T.O. countries. He might have added that, in comparison with most of the non-N.A.T.O. countries in Europe, it would be lower still.
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Undoubtedly, the position is, as the Chancellor there recognises, that our rate of investment is low and unsatisfactory. That point of view which the Chancellor put forward in Paris contrasts with that sometimes put forward by Government spokesmen in this House. It contrasts somewhat with that of the Economic Secretary who, at Question Time the other day, was not able to tell us whether he wanted the rate to go up or whether he wanted it to go down at the present time. There is a certain amount of conflict between what the Chancellor and his predecessor have been saying in this House about the rate of investment, and what the Chancellor said in Paris last week.
Indeed, I think that one of the most engaging things about the Chancellor is that, even more than most people, he regards facts not so much as statements of objective reality but as weapons to be used in the particular dialectical battle in which he is currently engaged. When we were urging upon him the undesirability of abolishing the investment allowance, we had painted for us by the Government Front Bench a picture of an investment boom in this country which was bearly controllable, but when in Paris it is a question—and a worthy question—of frying to get the Germans to pay some more defence costs, we are told that we are down at the bottom of the investment table.
Unfortunately, the truth lies with the latter statement and not with the former, or even between the two. The rate of investment is appallingly and disturbingly low in this country, and indeed even the much publicised—by the Government—1955 investment boom was really of very modest proportions. Fixed investment went up in 1955 by £150 million over the figure at which it was in the previous year. But that was a smaller increase than the rate of increase in stock building, and of course a very much smaller rate of increase than the increase in consumption during that period. Yet it was investment which received the major portion of the blame for the inflationary situation which had developed by last winter, and it was investment which had the main punitive measures taken against it.
What is the outlook in this investment field? I do not doubt that the Government, by a combination of the credit

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squeeze, by the abolition of investment allowances, by the general atmosphere of gloom and uncertainty in industry which their Suez policy produced, have knocked the investment boom of 1955 pretty thoroughly on the head. I do not say that the rate of investment is suddenly going to collapse in the next month or so, but I think that without doubt the fatal blow has been delivered, even though it may be some time before it is fully effective. We can already see in the figures for new factory building approvals that there is a prospect of a pretty sharp decline in the future.
Of course, the damaging thing about doing anything to limit the rate of investment—because we are in a particularly difficult situation—is that in the first place measures only become fully effective a year or two later, so that they are not effective from the point of view of dealing with the crisis but they are effective and dangerous from the point of view of damaging our prospects of a better rate of investment several years in the future.
The danger at the present time is that we are damaging not merely the rate of investment for 1957 but that for 1958 and 1959 by the measures which we have taken and by the policy which is being pursued at the present time. We are certainly losing all prospect for some time to come under present Government policy of effecting that transition from a low to a high investment economy which is absolutely essential for this country's economic future.
What ought to be done about this? What ought to be done on the investment front? There is, first of all, the sector of the economy which from an investment and other points of view is under Government control. I am very glad that that sector exists. I am glad that it covers, for instance, the field of nuclear energy at the present time. I am bound to say that, in view of recent announcements, I wish that it still covered the steel industry, because in view of the Government's alleged anti-inflationary policy, we have had a most extraordinary announcement about steel prices during the last week.
What is the position? The position is that the steel industry has announced an increase in prices over and above that which would be justified by any increase in costs, in order deliberately to increase
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the profitability of the industry in the hope of attracting more funds into the industry and thus possibly getting the expansion in investment which is obviously and clearly necessary.
Is this a very sensible way of running an investment programme in an industry like the steel industry, particularly if one is trying at the same time to introduce a little stability into British costs and prices? The steel industry was not a notably unprofitable industry even before this increase. The average yield on steel ordinary shares was about 6½ per cent., and the dividend in most cases was covered four or five times.
It really is an extraordinary example of the sort of bribes which the Government consider have to be given to private industry in order to get it to invest if profitability has to be increased over and above those figures, even though, by so doing, we gravely damage our export and competitive position in the hope of getting a little additional investment in the future. That is the position in the part of industry which, at any rate, ought to be under Government control.
As regards the private sector of industry, I have no doubt that, paradoxically as it may seem to certain hon. Members opposite, we can effectively move to a much higher rate of investment in private industry only by means of some controls, by means of building licencing accompanied by the re-introduction of an investment allowance on a discriminatory basis. These measures would be, and would be intended to be, discriminatory. Why are they needed?
I do not myself take the view that investment in what are generally regarded as frivolous activities—coffee bars, petrol stations or cinemas, for instance—is in itself necessarily undesirable. It is very desirable to make coffee bars and the distribution of petrol, when there is petrol, and the showing of films more efficient. I am not against investment of that sort. On the other hand, one must have discriminatory measures, for this reason. There is no doubt at all that one can effectively change the rate of investment only if, at a certain stage when one has the rate of investment going forward in an upsurge, as we hope may be possible in a year or two, and when one has

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the beginnings of an inflationary situation, one is then prepared to let consumption take the brunt of the burden and not investment.
One can do that and present it to people in a tolerable form only if the investment for which they are being asked to make sacrifices is obviously essential. It is impossible for any Government effectively to ask people to restrict their consumption for frivolous investment. That is the argument in favour of a discriminatory approach to the investment problem.
Mr. Osborne: It depends who wields the power and how wise they are in wielding it.
Mr. Jenkins: The transition from a low to a high investment economy is, I think, a difficult transition for any Government to effect. It is a transition which cannot be carried through entirely painlessly, because one gets the burst of investment only when one is using one's resources very fully anyhow. It is not really possible, even if hon. Members wished such a solution, to make room for investment, for instance, by having a situation in which wage demands were not coming along because there was a pool of unemployment and the trade unions were in a weak position. In that situation, one does not get a strong investment demand coming along either.
Mr. Osborne: Nobody wants that.
Mr. Jenkins: The hon. Gentleman then need take no time in saying so.
Mr. Osborne: Assume it.
Mr. James Griffiths: The hon. Member need not be so fierce.
Mr. Jenkins: One would get one's investment burst only at a time when there is a strain on resources and when the trade unions are in a strong position. In order to effect this transition, it is, therefore, absolutely essential for any Government to have a working arrangement on economic policy with the trade unions based on something much more real than the little expression of mutual good will which the Minister of Labour gave us this afternoon. One really cannot hope to achieve such a result if the
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Government consistently, as they have done for several years now, ignore and flout every piece of economic advice given to them by the Trades Union Congress. A change here is something further which must be done to effect this all-important transition from a low investment economy to a high investment economy.
We had only three back bench speakers from the Government side during the debate. One of them—perhaps not the hon. Member for Dover (Mr. Arbuthnot) and perhaps not the hon. Member for Louth (Mr. Osborne), although he is always such a prophet of gloom that one never takes his gloom too seriously, even when it is well justified, as on the present occasion, but certainly the hon. Member for Holland with Boston (Sir H. Butcher)—showed very little realisation of the seriousness of the position with which we are at present confronted. The hon. Member might really have been making his speech saying that it was best to go on with the well-tried methods of the heyday of the Lord Privy Seal, and not at a time when not merely has the Lord Privy Seal's policy collapsed, but when, under the difficulties arising from Suez, the policy of the present Chancellor of the Exchequer is also in a state of collapse.
What have been the economic results so far of the Prime Minister's adventure? The first is that the gold reserve, which was previously far lower than it ought to have been for the healthy economic future of the country, has plunged downwards. Production, which was already a little worse than stagnant—I hope that the Economic Secretary will not deny that, as he was inclined to do during my right hon. Friend's speech, because there is no doubt that production has been falling somewhat since the beginning of August—has been dealt a heavy blow. The balance of payments position, which was previously just all right, although certainly nowhere near the target which the Lord Privy Seal set many years ago and which has never been attained, is certainly worse. The fourth feature is that the jobs of many people are threatened.
What is the prospect? The worst immediate prospect is that sterling will have to be devalued, and at a time when

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this would be even more than usually disastrous, because there would be no possible advantage to be gained from such a course. I hope and believe that that may have been avoided, but by a comparatively narrow margin. At the best, we shall have borrowed an enormous number of dollars and we shall have missed yet another chance—there will not be many more chances—of making the vitally important step for our economy of getting on to a higher rate of investment. We shall have missed yet another chance and the prospect is that we shall go on, as the Chancellor of the Exchequer put the position in Paris, with the worst rate of investment of any N.A.T.O. country. If that is not the prospect, I should like the Economic Secretary to say how he is going to change the prospect and what he sees for the future of the rate of investment of this country.
Therefore, it is no good, as the hon. Member for Holland with Boston suggested, saying that existing methods and existing economic policies are satisfactory. They were proving themselves hopelessly inadequate even before Suez. They are now liable to be disastrous. I hope that the Economic Secretary, in the absence of the Chancellor, will not merely defend the actions which have been taken, but will put forward positive proposals to tell us how, in the view of the Government, we can face a better prospect than we have any right to do on present assumptions.
9.28 p.m.
The Economic Secretary to the Treasury (Mr. Derek Walker-Smith): During the last Session, I heard many speeches from the hon. Member for Stechford (Mr. Roy Jenkins) on the subject of the Restrictive Trade Practices Bill and the Copyright Bill, but in those days he was speaking from the back benches. I am not sure whether this is the first time that he has graced the Opposition Front Bench, but whether it is or not I am sure that all my hon. Friends will join me in wishing him a very long and uninterrupted tenure of that Bench.
The hon. Member has been more temperate in his approach than his right hon. Friend the Member for Battersea, North (Mr. Jay), who seemed to be rather infected by the vigour of the previous
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exchanges which, unfortunately, delayed the start of this economic debate. The right hon. Gentleman attacked on a very wide front and expended a very great deal of ammunition, but it is fair to say that he registered very few hits.
The debate has ranged over a diversity of topics. Both the right hon. Gentleman the Member for Battersea, North and the hon. Member for Stechford dealt at some length with the external position, the state of the gold and dollar reserves, and I think it would be wrong of me to leave unanswered any criticisms which go to this root question, because, as my hon. Friend the Member for Louth (Mr. Osborne), in his characteristically thoughtful and interesting speech, reminded us, The Times leader of this morning said that the basic thing in this debate was the question of the defence of sterling.
Having regard to what the hon. Member for Stechford said in the concluding sentence of his speech, I would recall his attention to what the Chancellor of the Exchequer said on 4th December in categorical terms:
"First, we will maintain the rate for the £ sterling at its present parity."—[OFFICIAL REPORT, 4th December, 1956; Vol. 561, c. 1053.]
It is right that I should reiterate that straight away, in view of some of the observations made.
I do not want in any way to minimise the seriousness of the economic problems with which the country is faced. I think that my hon. Friend the Member for Louth painted the picture in rather too sombre colours; and I shall in a minute or two cite the evidence of an objective witness, whom, I am sure, he will respect, in support of that contention.
The problems with which we are faced are really two. We have a prospective adverse swing in our current balance of payments and an actual adverse swing in our position as a banker. On the second of these matters, at the end of July our gold and dollar reserves stood at 2,405 million dollars. At the end of November they had been reduced to 1,965 million dollars, the adverse trend having set in at the end of July after the seizure of the Canal by Colonel Nasser, and following, I would remind the House, a period of increase in our gold and dollar reserves during the early months of the year.

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Faced with that position, we took prompt action to bring into play massive support for the reserves in the shape of the three-pronged approach with which the House is familiar: the drawing on the International Monetary Fund; the application for the waiver of the interest on the United States and Canadian loans, arising out of our feeling that we had satisfied the contractual conditions entitling us to it; and the initiation of a loan in the United States of America.
Those were criticised rather freely by the right hon. Gentleman the Member for Battersea, North. I am coming to the speech of my hon. Friend the Member for Dover (Mr. Arbuthnot) in a moment. If the House views objectively the effects of the policy so far, it will, I think, find it reassuring. So far, only the arrangements with the International Monetary Fund are an accomplished fact: but I am glad to say that since the announcement of the decision of the Fund to grant to the United Kingdom drawings and stand-by facilities totalling 1,300 million dollars there has been a substantial easing of the speculative pressure on sterling.
The success of this policy to date is recorded in the columns of the Economist. The Economist was quoted in another context by the right hon. Gentleman, and it is a fact that members of the Opposition Front Bench draw the more respectable parts of their arguments from its columns. That is perhaps why these quotations are relatively scarce in the content of their speeches. The Economist had this to say about the action which Her Majesty's Government have taken:
"An article in Business World"—
that is one of the column features of the Economist—
"draws attention to the remarkable speed with which the Treasury has mobilised additional backing for the gold reserves; the departmental expedition that has been displayed both in London and Washington in these last ten days has been one of the great administrative achievements of financial history."
I put that evidence against the ill-founded strictures of the right hon. Gentleman the Member for Battersea, North about the measures we have taken.
Mr. Jay: In view of that, could the hon. and learned Member do what the Chancellor of the Exchequer did not—say a word of gratitude to the American authorities?
Mr. Walker-Smith: Certainly, part of the passage that I have read out said
… displayed both in London and in Washington …".
I am citing evidence which is praising Washington, and, of course, it has been a very quick, effective and helpful exercise. I am very happy to say so, but the right hon. Gentleman did misconceive the position about these actions.
The right hon. Gentleman followed his right hon. Friend the Member for Huyton (Mr. H. Wilson) in error in describing it as a borrowing of 1,300 million dollars. He did that with the less excuse, because I drew the attention of the right hon. Member for Huyton to his mistake a week or so ago and I think that he accepted the correction. A large part of the 1,300 million dollars is simply a stand-by, and not a drawing or borrowing at the present time. The drawing has to be repaid in three years and has the advantage of carrying a very moderate overall interest.
The right hon. Gentleman asked whether I could give a further report on the negotiations for a loan. I can only say that the negotiations are in progress and are continuing as speedily as possible. He will understand that I cannot give a more precise report at this stage, in these circumstances. As my right hon. Friend the Minister of Labour pointed out in opening the debate, what we have done by these measures is to mobilise the reserves, if I may again quote the phraseology of the Economist, and not commit them. It is not in any way a throwing in of the old guard in a desperate effort to avoid defeat. On the contrary, it is a prudent deployment of reserves to consolidate the position and to prepare the way for a renewed and sustained advance.
If the right hon. Gentleman, who seems to seek to disparage the position, does not accept my evidence, I am sure that he will accept the evidence of Mr. Jacobsson, the Chairman and Managing Director of the International Monetary Fund, who is a great deal more objective, more accurate, and more sympathetic to the position than the right hon. Gentleman has shown himself to be. Mr. Jacobsson says this:
"For this reason, and in view of the special importance of sterling as a worldwide reserve and trading currency, the Fund has approved a transaction of this magnitude. It has done so in the firm belief that the action taken will

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permit the policies and measures of the United Kingdom to continue to operate and thus effectively contribute to the restoration of the strong balance-of-payments position which had been emerging in the first half of 1956."
I will leave the subject of the gold and dollar reserves with the following final comment. The right hon. Gentleman the Member for Battersea, North made criticisms which have been echoed by the hon. Gentleman the Member for Stechford about the gold and dollar reserve position. The right hon. Gentleman was at the Treasury in 1949 when the gold and dollar reserves sank to 1,340 million dollars compared with the 1,965 million dollars which he is now so vigorous in criticising. Right hon. and hon. Gentlemen opposite come into this contest, if they wish to make it a contest, with very dubious battle honours on their standard—the convertibility crisis in 1947, devaluation in 1949, and a balance of payments crisis in 1951. That is the record with which they advanced to the Dispatch Box today to make the criticisms that we have heard.
Mr. Jay: If the hon. and learned Gentleman is trying to take this argument seriously, does it not show that eleven and a half years after the war we ought to be rather better off than we were four, five or six years after it?
Mr. Walker-Smith: I do not know about taking the argument seriously. I came to this debate in the hope that we would have a temperate and objective exchange of views and was sadly disappointed, as no doubt were others of my hon. Friends, at the intemperate note with which the right hon. Gentleman chose to initiate the debate. So far as the relative position is concerned, he cannot have been attending when one of his hon. Friends very fairly pointed to the greater present-day difficulties owing to the resurgence of competition in Germany and Japan.
Mr. Gordon Walker rose—
Mr. Walker-Smith: I cannot, in the course of an hour, seek to teach the right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker) the elements of economics.
Mr. Gordon Walker: I taught the hon. and learned Gentleman at Oxford.
Mr. Walker-Smith: I now come to the question of the dollar imports, which was referred to not only by right hon. and hon. Gentlemen opposite but by my hon. Friend the Member for Dover, to whom I must apologise for missing the pleasure of listening to his speech which I will, as always, study with great interest.
To start with the oil position, it is obvious to the House that the only alternative sources of oil to make up for the shortfall from the Middle East must come from dollar sources, because supplies can only come from the United States and Venezuela. That being so, the House will agree, I think, that we must seek to have more dollars at the present time and in the future in order to get our supplementary quantities of oil.
We are then faced with the question whether we should do what is recommended by some right hon. and hon. Gentlemen, and cut our dollar imports There are strong arguments in general trading principle against seeking action of this kind, because, clearly, it is in our interests, as a country, to foster a high and expanding level of world trade, since that is the only context in which the United Kingdom is likely to be able to prosper.
Exchange and import restrictions lead to a descending spiral of trade. Resort to restrictions on our side would not only be a bad example, but would provoke retaliation, and would also, in our present position, be apt to add to pressures on the £ through confidence factors.
The right hon. Member for Battersea, North rather begged the question by talking about the cutting out of frills, though he must be aware that an objective analysis of these imports does not lead to the conclusion that there is much, if anything, deserving of that description.
Mr. Jay: How about tobacco?
Mr. Walker-Smith: I was about to come to that subject, because it was also raised by my hon. Friend the Member for Dover. I would say that that has no relevance in the context of the immediate temporary, though urgent, situation in which we now find ourselves, because the greater part of the allocation for the current year has already been used. Consequently no revision of policy in this

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context could, in any case, affect the position until the late summer.
We are told that the 61 per cent. content of American tobacco could properly and beneficially be reduced. It is, I think, a fact that each 1 per cent. is equal to about 1,700,000 dollars. On that, I do not think I can add to what was said the other night by my right hon. Friend the Minister of State, Board of Trade, who pointed out that there was nothing sacrosanct about that proportion. We shall, of course, consider the general situation, but I would repeat to the House that there is no short-term remedy here which is relevant in the immediate context of our present difficulties.
Mr. H. Wilson: Think of the future.
Mr. Walker-Smith: The right hon. Member for Huyton urges me to think of the future. He has apparently abandoned the effort to face the future to which he was so unequal on a previous occasion.
Mr. Wilson: The hon. and learned Gentleman may recall that in every one of the economic crises of the last 18 months, every suggestion that has been made has been rejected on the grounds that it could not operate for more than six or seven months. Had hon. Gentlemen opposite listened to the arguments which we advanced two years ago about import licences, building licences, and so on, we should be in a much stronger position than we are today. Having regard to this fact, might I ask the hon. and learned Gentleman to study what we did in the matter of the long-term contract for Rhodesian tobacco? We did not accept everything that the tobacco companies told us about the impossibility of substituting Rhodesian tobacco for tobacco of the American type.
Mr. Osborne: But right hon. Gentlemen opposite still had crises.
Mr. Walker-Smith: In the ordinary way, when I give way to the right hon. Gentleman I expect a very interesting and valuable contribution. I have been a little disappointed on this occasion. It is, of course, common knowledge that there has been a substantial reduction in the non-dollar percentage of tobacco. That is the situation in that respect in its short-term and longer-term context.
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Before I go on to the very interesting part of the speech of the right hon. Member for Battersea, North about investment and production—I certainly want to deal with that—I should like to say a few words about the motor industry. That has, of course, loomed fairly large in the debate. I intended to make some comments on the speech of the hon. Member for Coventry, North (Mr. Edelman), who made some suggestions, but as he has not returned to the House I think that I can do that on some other occasion.
With regard to the generality of the position of the motor industry, my right hon. Friend announced the relaxation of the hire-purchase restriction from 50 per cent. to 20 per cent. The right hon. Member for Battersea, North asked why we did not do the same for furniture. The very simple answer to that is that furniture already has a 20 per cent. deposit on hire purchase.
Mr. Jay: The Economic Secretary knows quite well that that is not what we meant. What we meant was that he should relax the special restrictions on hire purchase, which is what counts in the furniture industry.
Mr. Walker-Smith: I will be careful in future about paying the right hon. Gentleman the compliment of assuming that he means what he says.
My right hon. Friend the Minister of Labour quite correctly said that the position of the motor car industry in recent months was that a higher percentage of overall production had gone to export, although that was an actual drop in figures. He made it quite clear that he did not say that in any spirit of complacency or self-congratulation. However, it is right to recall a figure which I gave to the House on 12th March, 1956, to get the matter into perspective.
In the years 1953 to 1955 production of passenger cars expanded by 303,000 and 80 per cent, of that expansion went on the home market. So though it is right that we should take this measure to assist the motor car industry, it is in the hope that it is in the export markets that it will be ready to make its greatest effort.
The right hon. Member for Battersea, North made some observations about exports as a whole. I remind the House that this year, to date, our exports have increased by 10½ per cent. in value and

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our imports only by less than 1 per cent. Our visible monthly average trade deficit is only £48 million against a corresponding figure of £72 million last year.
Production and investment loomed large in the speeches of various hon. Members, especially the hon. Member for Stechford. It is really not right, on the evidence of isolated months or weeks, to say that industrial production is stagnating. Taking the position of the year as a whole, the trend has shown an increase of 1 per cent., compared with last year, in industrial production. Of course, that is not a lot, looked at like that, but it is a gross over-simplification to look at the matter simply as if all production were to be equated in similar terms in the interests of the national economy. In fact, that figure conceals an appreciable movement of production in the desired direction.
Capital goods production has gone up and production of consumer goods has gone down, which is precisely what I understand the hon. Member for Stechford was contending for. Passenger cars are down by 18 per cent.—consumer goods; T.V. sets are down by 20 per cent.—consumer goods; radio sets are down by 17 per cent—consumer goods; but steel is up by 4½ per cent. and plant and machinery are up. The capital goods are up and the consumer goods down.
Now to the question of investment—
Mr. Jay rose—
Mr. Walker-Smith: I have frequently given way. I want to deal with the issues which the right hon. Member and his hon. Friend so interestingly made and I think the House would wish me to deal with what they said about investment.
The right hon. Member rightly said that we want to increase our investment and become a high investment country and I am sure that he has in mind the difficulties which a heavy defence burden expenditure has imposed on the country in this context. The fact is that fixed investment at home, in 1955, equalled £2,865 million, 17 per cent. of our gross national product. If right hon. and hon. Members opposite want comparisons, that is 31 per cent. over 1950, when right hon. Gentlemen opposite were in office.
Following on the 1950 position, capital investment remained fairly static in 1951
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and 1952. Why? Because of two legacies inherited from the Labour Administration—the rearmament legacy, on which the right hon. Member for Huyton split from his right hon. and hon. Friends, and the balance of payments crisis, which united them all in an attitude of retreat. Those two things kept capital investment static over those two years, but afterwards it resumed its forward advance. Initial allowances, suspended by the Finance Act, 1951, of a Labour Chancellor of the Exchequer, were restored in 1953. Investment allowances, never introduced by a Labour Government, were introduced, albeit only temporarily, for most industries in 1954.
Right hon. and hon. Members opposite sought to chide me on a previous occasion, and again tonight, for not answering their question with a monosyllable, "up" or "down". It seems a little unreasonable to expect somebody with nearly a quarter-of-a-century's experience in the courts to be so readily impaled on the horns of this elementary dilemma. It is precisely like asking, "Have you stopped beating your wife?" I answered the question and I will answer it again in terms of which the hon. Member for Stechford, from the tenor of his speech, should approve: we wish to advance capital investment in industry, but we wish to advance it in a discriminating way and in those sectors which favour the country's balance of payments position.
Investment in the manufacturing sector is of prime importance for the expansion of exports and also for the future maintenance of a high level of investment. That is the type of investment which we wish primarily to see, and that was the point of my answer in the House.
I can tell the House that capital investment in the manufacturing sector is, in fact, rising. As to 1956, the Board of Trade inquiry shows that capital expenditure by the manufacturing industry in the first half of this year as against the first half of last year shows an increase of 26 per cent. It is certain that the manufacturers' share of total investment will again increase.
Our debate started late, but a great number of very interesting questions have arisen and I have done my best, within the limits of time, to deal faithfully and

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fairly with them. The debate has necessarily been focussed on the immediate situation on which so much of our present effort and attention is necessarily directed, but, though the difficulties which have been brought forward are real enough, they are not insurmountable and they should be seen in the context of past achievement and future potential.
I agree with the hon. Member for Stechford that complacency would obviously be very wrong in this context, but I believe that a solid and sober confidence is both seemly and appropriate. I believe that the traditional skill and ingenuity of the British people will get us over the hill of our present difficulties and that, on the far side, the pace of our forward movement will be soon and successfully resumed.
I beg to ask leave to withdraw the Motion.
Motion, by leave, withdrawn.

NATIONALISED INDUSTRIES (SELECT COMMITTEE)
Motion made, and Question proposed,
That Mr. Albu, Sir John Barlow, Mr. Blyton, Mr. Ernest Davies, Sir Ian Horobin. Sir James Hutchison, Colonel Lancaster, Mr. Palmer, Mr. Robens, Sir Patrick Spens, Mr. Wade, Dame Irene Ward, and Mr. Geoffrey Wilson be Members of the Select Committee on Nationalised Industries (Reports and Accounts):
That the Committee have power to send for persons, papers and records:
That the Committee have power to report from time to time:
That Five be the Quorum.—[Mr. R. A. Butler.]
Mr. Harold Wilson: Since this matter is not clear to the House, although it has been on the Order Paper, may I ask you, Mr. Speaker, whether this Motion is debatable?
Mr. Speaker: It is debatable, but it is nearly ten o'clock and it cannot be proceeded with after that hour.
Mr. Wilson: Very well, Mr. Speaker.
Question put and agreed to.

CROWN PRIVILEGE (DOCUMENTS)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Redmayne.]
10.0 p.m.
Mr. J. E. S. Simon: I wish to draw attention to the question of Executive intervention in the case that is particularly happily named "Whitehall against Whitehall." The question of Executive intervention in any court of law, particularly in a suit between private individuals, must be a serious one.
In this case, the two parties, a husband and wife, were pursuing a matrimonial difference and submitting it to the arbitriment of the court. Both parties desired to adduce certain evidence, to rely on certain written evidence in the form of communications between "S.S.A.F.A.", as it is called—the Soldiers. Sailors, and Airmen's Families Association—and the wife. Both parties desired to rely on that evidence. My right hon. Friend the Secretary of State for War instructed the Lord Advocate, whom we are pleased to see on the Government Front Bench tonight, to intervene in that suit and to argue that the Crown had the right to intervene in order to borrow the letters so that they could be seen by my right hon. Friend to enable him to certify whether their production would be contrary to the public interest.
This is a completely novel procedure, that the Crown should intervene to claim the right to see material in the hands of the parties in order to exclude it from the consideration of the court. It is sufficiently novel, sufficiently momentous, that I am quite sure my right hon. Friend would agree that it is a matter demanding the attention of Parliament. Indeed, this whole question of Crown privilege means that the only forum in which the rights of the individual can be vindicated is this House. The claim of the Crown in this country is a conclusive one on Crown privilege and, therefore, the only way in which the action of the Executive can be questioned is in this House.
I appreciate that it should be my right hon. Friend himself who comes forward to vindicate and justify the action of his

1597
Department. That, in fact, is quite right, since it is his personal decision which is in question. I appreciate also that on the Front Bench there should be my right hon. and learned Friend the Lord Advocate who took the action in the Scottish courts and my right hon. and learned Friend the Attorney-General, who is here, I take it, out of academic interest in this subject.
We debated the question of Crown privilege in October, when we had a notable speech from my right hon. and learned Friend the Attorney-General and an explanation from him of the attitude of the Government.
The Economist commenting at that date said that the debate
"brought into the healthy light of day the repressions and complications in Whitehall which prevent a more liberal approach to the production of official documents in court cases."
It went on to say:
"It is clear that departmental convenience is still an important factor in deciding whether any particular document may he used as evidence."
This latest action of the Executive shows that, although that debate revealed an almost unanimous feeling, at any rate on this side of the House—indeed, it is fair to say that it was by no means confined to this side of the House—that the Crown was usurping functions which were by no means justified and which were serious infringements of the rights of individuals before the courts of law, nevertheless, the Executive have not learned their lesson and there has been this new aggrandisement which we saw before the Scottish courts.
Fortunately, the claim of the Executive received very short shrift indeed. The claim of the Crown to exclude the evidence in question was referred by the judge before whom it came to the full court of the First Division of the Court of Session on the ground of the importance of the principle which was in question. The matter came before the First Division of the Court of Session presided over by a learned judge, Lord Clyde, who is well known and who was highly respected in this House when he was the predecessor of my right hon. and learned Friend. His Lordship was supported by three eminent judges of the Court of Session, Lord Carmont, Lord Russell and Lord Sorn. They were unanimous in their decision and they rejected out of
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hand the claim of the Crown in this case. The Lord President, Lord Clyde, said:
"It would be a quite intolerable extension of this privilege were he able"—
That is, the Minister—
"where no question of national safety was involved to intervene in litigation between private individuals and impound documents which did not come from a servant or agent of the Crown and were quite legitimately in possession of parties to the litigation who desired in that litigation to found on their own documents."
He went on to say:
"For the proposition so widely stated, there was admittedly no precedent."
His Lordship the Lord President
"could find no justification for it. Its effect would go far along the road of subordinating the courts of justice to the policy of the Executive."
The first question that I respectfully ask my right hon. Friend is whether he accepts that judgment given by the highest court of one of the kingdoms of Great Britain, a court composed of learned judges of the greatest eminence. Does my right hon. Friend accept that this would be an intolerable extension of the privilege and that to vindicate it
"would go far along the road of subordinating the courts of justice to the policy of the executive."?
We know already the doctrine of privilege in this sort of dispute. The courts and the law look forward favourably upon efforts at reconciling spouses who are in dispute, and rightly so, and they will grant privilege and refuse disclosure of evidence which comes into existence in the course of these efforts at reconciliation. That is the normal type of privilege which exists between private citizens. But, if the parties themselves wish to submit that sort of evidence to the arbitriment of the courts they are justified in doing so. It is their affair. It is a matter of individual right. In that way the law in its wisdom reconciles the claim of individuals to justice with the policy of the State, which is that spouses if possible should be reconciled and that every encouragement should be given to reconciliation.
So far as I can see, there is no difference in that respect between civilians and soldiers. The interest is precisely the same between the efforts of a probation officer, for example, to reconcile civilians and the efforts of S.S.A.F.A. to reconcile a serving soldier

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and his wife. I would ask my right hon. and learned Friend to say, if he thinks there is a difference, where it lies in principle. If there is no difference, it is clear that this claim of the Crown to intervene to deprive the court against wishes of both parties of matter on which it can form a proper judgment of the rights of the case between the parties is completely unjustified.
I notice that The Times, in a leading article immediately after this decision of the Court of Session, said:
"Many who are uneasy about the frequency with which Government Departments claim the privilege of withholding documents from from the scrunity of the courts will be gratified by the episode of the matrimonial proceedings in Edinburgh."
Does my right hon. and learned Friend accept that as a correct judgment? It says:
"The claim of the Crown was received with astonishment and dismissed with unanimous disdain."
That feeling is reciprocated in widespread circles in this country, and not only in this country.
The Attorney-General (Sir Reginald Manningham-Buller)The Attorney-General (Sir Reginald Manningham-Buller) indicated dissent.
Mr. Simon: It is said that the claim by my right hon. and learned Friend had clearly nothing to do with the two grounds on which the Lord Chancellor defended Crown privilege in Parliament last June: national security and the efficient functioning of the public service. I dislike to cause my right hon. and learned Friend any pain. He knows that I have the very highest respect for him, but reference was made to the "lame plea of the Lord Advocate." I ask my right hon. and learned Friend whether he accepts that as a fair judgment on the claim of the Crown put forward here.
The matter goes further. Unfortunately, the law of England is less liberal than the law of Scotland in this respect, and it may be that a claim which was rightly rejected with contumely by the courts in Scotland might be accepted by the courts of this country.
Will my right hon. Friend not only accept the judgment of the Court of Session so far as Scotland is concerned—as he is bound to do—but seek to obtain a different ruling from the English courts? Is he prepared to argue
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that there should be one rule of public policy north of the Border and a different rule of public policy south of it? Or does he not accept the ruling of the Court of Session, supported, as I have ventured to point out, by judges of the highest eminence, and expressed in language which has received widespread support. Will he not accept that so far as our practice in this country is concerned?
All these matters are a question of balance of interest. Does he not recognise that it is here important to weigh the interests of litigants seeking justice against the interests of the Armed Forces as a whole? Does he not recognise that, although it is possible, in theory, to adumbrate some injury to the public service if evidence of this sort were adduced, the injury to the administration of justice in withholding evidence, far outweighs any conceivable injury to the public interest? Will he now say that he regrets the action which he took, and that he will not seek to pursue this line of policy?
10.17 p.m.
The Secretary of State for War (Mr. John Hare): My hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon) has put his case with skill—it would be surprising if he had not—with charm, and with his usual ability. I think that he may, perhaps, have expected that one of the Law Officers would answer him, but I am glad that he feels that I was right in answering him myself, as I am the Minister responsible for the intervention in the case of Whitehall v. Whitehall, which is the subject of this debate.
He will not get as learned an answer as he would have received from my right hon. and learned Friends sitting on either side of me, but as this case deals with human beings—Whitehall and Whitehall are not Government Departments, but a man and a woman—I think that the layman's view should be heard. My hon. and learned Friend who is, as I know personally, the most human of people, will not, perhaps, resent it too much if I say that members of his profession are, maybe unfairly, considered to concentrate very often on the purist legal, rather than on the human, aspect of a particular problem. I think that my hon. and learned Friend has, in fact, neglected the

1601
human aspect which is mainly my concern.
Experience has shown that the welfare and efficiency of troops, especially those who are serving overseas or engaged in operations, is much affected by their domestic affairs. I personally believe that if we are to have a sound, efficient and contented Army we have an inescapable duty all the time to watch over the human problems of Service men and their families.
The Soldiers, Sailors and Airmen's Families Association has over 15,000 representatives, spread all over the United Kingdom and overseas. The Association acts in a variety of ways. For instance, in certain circumstances, part of a soldier's allowance may be paid through S.S.A.F.A. to ensure that the money is used on behalf of the children. Again, under Army regulations, commanding officers are instructed to refer to S.S.A.F.A. cases where a soldier asks for the withdrawal of marriage allowance from his wife when divorce proceedings are not pending.
Commanding officers frequently approach S.S.A.F.A with a view to help or advice being given or inquiries being made in cases where a soldier, sailor or airman has consulted them about domestic troubles. The approach to S.S.A.F.A. is, however, sometimes made by the wife herself, or even by the serving man. Other cases where S.S.A.F.A. is requested to assist cover a very wide range, including the care and custody of children, dealings with landlords, and housekeeping problems.
An important type of case is that in which a soldier and his wife have become estranged. The soldier goes to his C.O. and tells of his worries. The C.O. then asks S.S.A.F.A. to try to effect a reconciliation and very often it succeeds in removing the cause of the soldier's anxiety, whose peace of mind and efficiency are thus restored. These successes would not be achieved unless the soldiers and their wives believed that their confidence would be respected.
I cannot rate too highly the valuable services rendered by S.S.A.F.A. in this way. If they did not undertake it on behalf of the Army, it would not have been done at all because it is not possible
1602
in these days of financial stringency to provide officers or officials to do the job. Nor, if these officers or officials were available, do I think they would do it as effectively as the local S.S.A.F.A. workers have shown that they can do it.
Sometimes S.S.A.F.A. fails to achieve a permanent reconciliation, and matrimonial proceedings are brought in the courts. When that happens, the litigant is naturally concerned to secure the success of the legal proceedings and he, or perhaps she, requires documents to support the case, whether or not the documents which they seek to use in the proceedings came into existence, perhaps years before, in the course of a confidential relationship and, but for that relationship, might never have come into existence.
It is my duty to take a broad view and look at the question from the point of view of public interest. If S.S.A.F.A. representatives have to produce documents or give evidence on matters communicated in confidence, two results may follow. First, soldiers and their families will be unwilling to use this welfare service or to give information in confidence. Secondly, the S.S.A.F.A. representatives themselves will be reluctant to continue to do this work, which they now undertake to do on the understanding that they will not be called upon to disclose information communicated to them in confidence. This invaluable work might then stop.
This, as I have already indicated, would, in my opinion, adversely affect the efficiency and morale of the forces.
Mr. Simon rose—
Mr. Hare: I have a lot to say in a short time.
Mr. Simon: I am sure that my right hon. Friend will deal with this point, but I should just like to mention it. I have had a family connection with S.S.A.F.A. for many years, but can he say how he thinks that S.S.A.F.A. representatives differ from ordinary reconciliation officers, such as probation officers, in any of the respects with which he has dealt?
Mr. Hare: I am trying to cover most of the points which my hon. and learned Friend has raised, and I will continue to do so. As I have just said, it would be

1603
a most serious matter if the splendid work done by S.S.A.F.A. should stop or be much reduced, and I feel bound to avoid that if I can conceivably do so.
It is for these reasons that the Lord Advocate intervened on my behalf in this case of Whitehall v. Whitehall, a case which was pending in the Court of Session. A claim for privilege was not made, but that court was asked to release certain documents known to be in the possession of the court, so that I might consider whether a claim for privilege should be made.
I have studied the opinions of the Lord Ordinary and of the First Division, from which it is clear that the Scottish courts would deprecate a claim for Crown privilege being made in relation to those documents which were letters written by S.S.A.F.A. to one of the parties. In deference to the views expressed by the Scottish judges, I have consulted my colleagues and I have come to the conclusion that the circumstances of this particular case would not justify me in appealing against the decision of those courts concerning the documents already "in process"; nor would I propose to intervene with reference to the production of two letters written by one of the parties to S.S.A.F.A. included in a specification which has been served upon S.S.A.F.A. Further, I feel that I cannot, consistently with this decision, claim privilege for documents in future cases of a like nature.
My hon. and learned Friend asked me whether I accepted the opinions of the Lord Ordinary and of the First Division. I have already made myself clear on that point. Naturally, I would not propose to treat the English courts in a different manner. I would like to point out, also, that there was nothing untoward in the S.S.A.F.A. documents in the case of Broome v. Broome being in the possession of the War Office. The reason was nothing more nor less than that given by my right hon. and learned Friend the Attorney-General in the debate on 26th October last, when he informed my hon. and learned Friend that they were sent to the War Office so that the Secretary of State, my predecessor, could decide whether a claim for privilege could be made. I think it is only reasonable and
1604
natural that any Minister would wish to see the documents before coming to a decision.
As hon. Members must be aware, the decision I have reached in relation to documents written by S.S.A.F.A. to parties to the litigation, and by those parties to S.S.A.F.A., may make considerable inroads in the confidential character of the reconciliation work carried out by that body. It is, in my opinion, bound to result in the weakening of this welfare service. I have no doubt at all that something really valuable will, in fact, now be lost, though I hope that it may be possible to retain some degree of confidentiality for communications made to S.S.A.F.A. representatives by means of the ordinary law relating to privileged communications made in contemplation of proceedings.
Mr. Simon: Hear, hear.
Mr. Hare: I am glad that my hon. and learned Friend agrees with me. It is a most important safeguard. I recognise, however, that this rule does not apply to Scotland.
I must point out to the House that the decision which I have reached does not extend to the confidential reports made by welfare workers for the use of the War Office, or for commanding officers, or to the correspondence between the War Office or commanding officers and S.S.A.F.A. or its representatives. This is an important part of what I have to say.
The specification, that is to say, the Scottish equivalent of a claim for a discovery of documents, which was served upon S.S.A.F.A. in the case of Whitehall v. Whitehall, included the actual case sheets and other records prepared by S.S.A.F.A. But it was after the Lord Advocate had intervened on my behalf that it came to his notice that the specification had been amended, actually at the instance of the two people concerned in the case we are now discussing. It was they who decided to exclude them.
I wish to make it absolutely clear to the House that I must continue to claim Crown privilege in respect of such documents. I emphasise that. It is of the greatest importance that this should be made absolutely clear to all who are interested in these matters. I must continue to claim Crown privilege in respect

1605
of these documents which it may be necessary for me or my colleagues, in the general public interest, to protect disclosure.
Mr. Simon: May I say that my right hon. Friend's reply was a much more liberal one than I expected, although he
1606
did not go the whole way. I should, therefore, like to take this opportunity of from wishing him a merry Christmas.
Question put and agreed to.
Adjourned accordingly at twenty-nine minutes past Ten o'clock.

HOME DEPARTMENT
  Police (Motor Patrol Duties)
  Police (Motor Patrol Duties)
  Hungarian Refugees
  Hungarian Refugees
  Motor Vehicles (Return of Offences)
  Motor Vehicles (Return of Offences)
EDUCATION
  School Uniforms
  School Uniforms
  Selection Procedures (11-Plus)
  Selection Procedures (11-Plus)
  Student Population
  Student Population
  Grammar Schools (Early Leavers)
  Grammar Schools (Early Leavers)
TRADE AND COMMERCE
  Exports to China
  Exports to China
  Tobacco Stocks
  Tobacco Stocks
  Dehydrated Vegetables (Imports)
  Dehydrated Vegetables (Imports)
  SUEZ CANAL
  SUEZ CANAL
  PRIME MINISTER (PUBLIC RELATIONS OFFICER)
  PRIME MINISTER (PUBLIC RELATIONS OFFICER)
  ANGLO-FRENCH DISCUSSIONS
  ANGLO-FRENCH DISCUSSIONS
AGRICULTURE, FISHERIES AND FOOD
  Experimental Husbandry Farms (Departmental Expenditure)
  Experimental Husbandry Farms (Departmental Expenditure)
  Agricultural Buildings (Improvement and Provision Scheme)
  Agricultural Buildings (Improvement and Provision Scheme)
  Foot-and-Mouth Disease
  Foot-and-Mouth Disease
  Milk Production (Survey)
  Milk Production (Survey)
  Cereals (Deficiency Payments)
  Cereals (Deficiency Payments)
  Potato Marketing Board (Administrative Expenses)
  Potato Marketing Board (Administrative Expenses)
  Woodland Societies, Wales
  Woodland Societies, Wales
  Marketing of Horticultural Produce (Report)
  Marketing of Horticultural Produce (Report)
  Credit Restrictions
  Credit Restrictions
FUEL AND POWER
  Oil Supplies (U.S.S.R.)
  Oil Supplies (U.S.S.R.)
  Motor Fuel Rationing
  Motor Fuel Rationing
  Nuclear Energy (Ghana)
  Nuclear Energy (Ghana)
COAL
  Mining (Foreign Workers)
  Mining (Foreign Workers)
MINISTRY OF DEFENCE
  Anglo-French Forces, Egypt (Commanders)
  Anglo-French Forces, Egypt (Commanders)
  Road and Rail Transport, Ulster
  Road and Rail Transport, Ulster
  EGYPT (MILITARY OPERATIONS)
  EGYPT (MILITARY OPERATIONS)
  ISRAEL (HOLY PLACES)
  ISRAEL (HOLY PLACES)
  ABOLITION OF SLAVERY (CONVENTION)
  ABOLITION OF SLAVERY (CONVENTION)
  TRIPARTITE DECLARATION
  TRIPARTITE DECLARATION
  CENTRAL OFFICE OF INFORMATION (LONDON PRESS SERVICE)
  CENTRAL OFFICE OF INFORMATION (LONDON PRESS SERVICE)
ROYAL NAVY
  First Lord of the Admiralty (Mediterranean Visit)
  First Lord of the Admiralty (Mediterranean Visit)
  Royal Fleet Auxiliary "Retainer"
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BRITISH ARMY
  Personal Case
  Personal Case
SHIPPING
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  Owners' Liability (Proposed International Conference)
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  Navigating Officers (Radar Observer Courses)
ROADS
  Toll Bridge, Selby (Replacement)
  Toll Bridge, Selby (Replacement)
CIVIL AVIATION
  Vulcan Aircraft Crash (Report)
  Vulcan Aircraft Crash (Report)
CYPRUS
  Lord Radcliffe's Proposals
  Lord Radcliffe's Proposals
MINISTRY OF HEALTH
  Poliomyelitis
  Poliomyelitis
POST OFFICE
  Forces Mail, Egypt (Delivery)
  Forces Mail, Egypt (Delivery)
TELEPHONE SERVICE
  Weather Forecasts
  Weather Forecasts
NATIONAL FINANCE
  Gross National Product (Output and Wages)
  Gross National Product (Output and Wages)
  Whisky
  Whisky
  Czechoslovakia (Compensation Payments)
  Czechoslovakia (Compensation Payments)

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

HOUSE REMOVALS AND PETROL RATION
3.5 p.m.
LORD PETHICK-LAWRENCE: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are aware of the great hardship inflicted on persons who have to move to new houses, owing to the small rations of petrol that are being allowed to furniture-removal firms, and what steps they propose to take to remedy this hardship.]
THE CHANCELLOR OF THE DUCHY OF LANCASTER (THE EARL OF SELKIRK): My Lords, to save petrol at the present time we must ask all those who need transport to use the railways whenever possible. British Railways have special facilities for this type of work and it forms part of their normal services. If, however, the distance involved is very short, or if, for some reason, rail transport is impracticable, furniture removal firms can do the work, using their basic ration and any supplementary ration they may receive. My right honourable friend the Minister of Transport and Civil Aviation has issued general instructions to regional transport commissioners concerning supplementary rations, and these include an instruction that special consideration should be given to traffics which require the use of specially constructed vehicles and which cannot be transferred to other forms of transport.
LORD PETHICK-LAWRENCE: My Lords, while thanking the noble Earl for his Answer, do the Government not realise that, in cases of large masses of furniture, it is really impracticable to use the railways? Would it not be possible in certain cases, to grant to the householder a special permit which he could hand over to the furniture removal agency?
THE EARL OF SELKIRK: My Lords, I think that where the use of the railways is impracticable, there is no reason why the regional transport commissioners, on the instructions which have been issued, should not be in a position to give supplementary rations in certain cases, but I must not under-emphasise that in all cases where the traffic can conceivably be carried in a practical way by the railways, we have to give all encouragement that it should be so carried.
LORD LUCAS OF CHILWORTH: My Lords, may I ask the noble Earl whether the House is to take it that the sole arbiter as to whether a firm is to move its goods, either furniture or any other type of goods, by rail—whether it is inconvenient or not—will be the regional transport commissioner?
THE EARL OF SELKIRK: My Lords, the regional transport commissioner has been charged with the task of issuing supplementary rations in this matter. Whilst I hesitate to use the word "sole" in that matter, he is certainly the arbiter in the first place. I presume that the application might come from the operator of the service concerned.
LORD LUCAS OF CHILWORTH: My Lords, I am grateful to the noble Earl for his reply, because there is great confusion in the country over this matter. May I ask this further question? If the noble Earl says that, although the regional transport commissioner may be the first arbiter he is not the final one, who is the final one? Is there an appeal to the Minister and, if so, to which Minister—the Minister of Transport and Civil Aviation or the Minister of Fuel and Power?
THE EARL OF SELKIRK: My Lords, I do not think I can carry that matter any further at the present time. I said that I did not want to use the word "sole" arbiter, but the Commissioner will certainly give a decision in the first place. I am not prepared to say that, in certain circumstances, the Minister might not review his instructions, but at the present juncture the decision is made by the regional transport commissioners, and I am not in a position to say that there is any system of appeal existing now.
LORD LUCAS OF CHILWORTH: My Lords, this is the last day, until January 22,

1315
on which your Lordships' House, at least, will have the opportunity of asking for information, and during that time a lot can happen. Would the noble Earl give an assurance that either the Minister of Transport and Civil Aviation or the Minister of Fuel and Power will issue a statement as to which Ministry, after the regional transport commissioner has used his powers to decide whether certain goods have to go by rail or by road, an appeal is to be made, so that the hundreds and thousands of haulage people and industrialists throughout the country will know precisely what the procedure is?
THE EARL OF SELKIRK: My Lords, I will certainly consider the point. I should not like to carry it any further at the moment, but I appreciate the point the noble Lord has in mind.
LORD PETHICK-LAWRENCE: My Lords, if the noble Earl is letting my noble friend know which Minister is concerned, perhaps he will kindly let me know at the same time.

PUBLIC TRUSTEE (FEES) BILL [H.L.]
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I beg leave to introduce a Bill to make further provision as to the fees chargeable by the Public Trustee; and for purposes connected therewith. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1ª.—(The Lord Chancellor.)
On Question. Bill read 1ª; and to be printed.

SOLICITORS BILL [H.L.]
THE LORD CHANCELLOR: My Lords, I beg leave to introduce a Bill to consolidate the Solicitors Acts, 1932 to 1956, and certain other enactments relating to solicitors, with corrections and improvements made under the Consolidation of Enactments (Procedure) Act, 1949. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1ª— (The Lord Chancellor.)
On Question. Bill read 1ª; and to be printed.

BUSINESS OF THE HOUSE
LORD HAWKE: My Lords, I have been asked to inform your Lordships that the Motion standing in the name of the noble Earl, Lord Lucan, relating to the revised rules for television broadcasting, will not be moved by him to-day.

BRITISH EGG MARKETING SCHEME, 1956
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN)THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL ST. ALDWYN) rose to move, That the Draft Egg Marketing Scheme, 1956, reported from the Special Orders Committee on November 28 be approved. The noble Earl said: My Lords, this Scheme for the marketing of eggs in the United Kingdom has been promoted by the three farmers' unions and was submitted by them in October, 1955, under the Agricultural Marketing Acts. Since then it has been going through the procedures laid down by those Acts. During the very exhaustive public discussions which have been held recently, a great deal was said about the desirability of direct sales from farmers to consumers and from farmers to retailers. I accept the desirability of these two forms of sale, and the Scheme now allows for them. But the fact remains that by far the greater part of the 10,000 million eggs produced in this country every year have to be marketed: in other words, they have to be collected and taken, sometimes long distances, to where they are w anted. The majority of the eggs are not eaten in the locality in which they are produced.
If these eggs are to be marketed efficiently, it is necessary, first of all, to ensure at the start that they are fresh; secondly, that they are graded so that the buyers know what sort of egg they are buying, without having to look at every individual one. Thirdly, the eggs have to be packed, and, finally, transported. A major difficulty to be overcome is due to the inescapable fact that hens do not lay the same number of eggs every week.
LORD LUCAS OF CHILWORTH: Shame!
EARL ST. ALDWYN: We have not yet succeeded in controlling them to that extent. Supplies fluctuate widely; unfortunately, demands fluctuate as well, and equally unfortunately, not at the same time or in the same direction as the production. Somehow, these fluctuations have to be reconciled, and we believe that a central authority would have a useful part to play in this. However, that is not to say that everybody should be organised into one inflexible system, and I hope your Lordships will agree that this Scheme gives all the flexibility that is needed.
The Scheme's main feature is that it provides for the setting up of a Board with full trading powers. The Board will be able to require by far the great majority of eggs produced for the wholesale market to be sold by producers only to the Board. In practice, the Board will employ packing stations as its agents to collect the eggs and to grade, test, and stamp them. The Board will have no power to control wholesale or retail distribution, and normal competitive market forces will continue to rule. The demand for eggs is highly sensitive, and housewives have shown clearly that they just will not pay prices which they think are too high. So the Board will have to pay careful attention to their trading activities.
During the talks which we had with the farmers' unions in 1954, the Government agreed with them on the form which the guarantee arrangements would take if a Marketing Board with full trading powers were to be established under the Acts. These guarantee arrangements will not be part of the scheme, but if the scheme goes through we propose that they should be the subject of a financial agreement: between the Government and the Board. The guarantee under the Agriculture Act would be to the Board as representing the procedure. Similar arrangements to these are already operating for milk and wool. The general form of the guarantee would be a flat rate subsidy on all eggs of first quality passing through packing stations. This would be determined at the Annual Review. The prices to be paid to producers would be for the Board to decide subject to the financial agreement between the Government and the Board. There would also be, however, a profit and loss sharing
1318
arrangement which would give the Board an incentive to efficiency.
We have been anxious to ensure that this scheme should be both workable and widely acceptable. Like the commissioner who conducted the public inquiry into the scheme, we thought that in the form in which it was submitted it was rather too restrictive, particularly as regards sales to consumers arid to retail shops. We have therefore made a number of important changes which I think have gone a long way towards meeting the great weight of the Objections which were put forward at the inquiry.
We have modified the scheme so as to raise the qualification for exemption from 25 birds to 50 birds. This will exclude most of the backyard and domestic poultry keepers who are more concerned with supplying their own or their neighbours' households.
All producers who want to sell direct to consumers will be entitled to a producer's "A" licence, which will enable them to do so. They will not have to grade, test, or stamp their eggs. A producer who wants to sell direct to retail shops will be able to get a producer's "B" licence, provided that he honours the conditions which may be attached. No condition is to be attached requiring the eggs to be graded and tested, but the producer can be required to mark them so as to identify them as his eggs.
I know that there have been some who object to this scheme in principle. They feel that it is wrong for producers to be given statutory powers of this kind they fear that the Board will use its powers to hold other sections of the community to ransom. But that is a criticism rot of this Scheme in particular, but of the Agricultural Marketing Acts in general. By those Acts Parliament has giver, producers the right to promote this particular form of co-operative enterprise, which is designed to enable producers to help themselves to improve their efficiency in production and marketing. I see no reason why they should not be allowed to exercise that right.
The Acts themselves recognise the possibility that sectional interests may conflict, and that is why there are a number of checks and balances to safeguard the interests likely to be affected—such as the consumers of eggs, trade

1319
interests, the producers themselves, and the public interest generally.
My Lords, as I see it, this Scheme represents a landmark in the field of agricultural co-operation. I believe the fact that it has been put forward by the producers shows that they are very much alive to the vital need to help themselves to improve their efficiency. The Government have considered the Scheme in all its aspects with great care, and we are sure that, as modified, it should lead to greater efficiency in the production and marketing of eggs. We are also sure that the Scheme maintains a fair balance between all the interests concerned. Egg producers themselves have yet to have their final say on the Scheme at the initial poll, which will be held if your Lordships approve the Scheme. Only when that poll has been held shall we know whether the Scheme in its present form is generally acceptable to the producers. I myself am quite sure that, if and when it comes into operation, the Board will be able to achieve much for this very important section of our home agriculture and for the consumers and others who depend upon it for their supplies. I beg to move.
Moved, That the Draft Egg Marketing Scheme, 1956, reported from the Special Orders Committee on the 28th of November, be approved.—(Earl St. Aldwyn.)
3.13 p.m.
THE EARL OF LISTOWEL: My Lords, we are all grateful to the noble Earl for his very clear exposition of an extremely long and complicated Scheme, which is far more difficult to understand than the average Bill. I shall certainly try to follow his example of brevity. I think that this particular marketing scheme for eggs deserves specially careful attention from your Lordships—perhaps even more careful attention than other marketing schemes we have considered—on account of the exceptionally large number of objections. Most of the 702 objections (the number is given in the Report) were lodged by the Society of Objectors to Compulsory Egg Marketing—commonly known by the curiously appropriate abbreviation "S.O.C.E.M." These objections were all dealt with, at great length and very patiently, at the public inquiry,
1320
and the answers are given in Mr. Baker's quite admirable, wise and valuable Report. I am sure that the noble Earl and everyone else all appreciate this admirable and excellent Report.
It seems to me that there are two classes of objectors to the Scheme. One of them—I am not sure whether both—was certainly mentioned by the noble Earl. There were the laissez faire economists and the Liberal Party, who are still opposed, root and branch, in principle to interference with the free play of supply and demand. No doubt we shall soon hear from the noble Lord, Lord Grantchester, on these somewhat doctrinal objections to the present Scheme. There were also a second class of objectors—namely, the large middlemen, the co-operative societies and the multiple grocers who, not unnaturally, would prefer to be able to bargain with the producers.
Both these classes of objectors, in spite of their different approach to the Scheme, were opposed, in the main, to two features of it. They disliked the marketing monopoly of the producers' Board, which they thought would keep up the price of eggs against the consumers. The noble Lord referred to this as "holding the consumer up to ransom." They equally disliked the compulsion on egg producers to sell their eggs to packing stations once the Scheme has been adopted. They regard this as an infringement of the freedom of the producer to sell his eggs where he likes. I like this Scheme very much—I am not going to disguise my view about it.
The peculiar merits of the Scheme that Her Majesty's Government are now putting forward, with the assent of the promoters, is that it has taken all these objections fully into account. It has been modified in the light of the objections, and makes important alterations in the original Scheme so as to carry out and carry further the recommendations of Mr. Baker's Report. The present Scheme is a compromise between free enterprise and Government control. It gives the producers, as well as the consumers, as much freedom of choice, and submits them to as little compulsion—and we all dislike compulsion—as is compatible with any plan for the organised marketing of eggs.

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For instance, the exemption which the noble Earl referred to, of poultry keepers with less than fifty birds, will mean, if I am right, that more than half of the total number of poultry keepers in this country (I think they amount to between 700,000 and 1 million) will be able to sell their eggs to their neighbours, if they so desire. As the noble Earl also pointed out, there is this additional freedom for the producer: that poultry keepers will be allowed to sell by licence to retailers in their neighbourhood. It is true, as the objectors have said, that if this Scheme is approved by two-thirds of the producers the rest will have to come in whether they like it or not; it becomes compulsory. But surely, in a democracy, it is not altogether unreasonable that a minority should conform to the decision of the majority. It should not be forgotten, in this context that a minority of egg producers could completely wreck this Scheme by selling to consumers when eggs are scarce and expensive and to the packing stations when they are plentiful and cheap.
There are, in fact, only two alternatives for the marketing of eggs. One is a return to the old pre-war free market, in which people sell at the highest price they can get and buy at the lowest. This "free-for-all" was objected to most strongly, even by those who do not like this Scheme at all. No one wanted a return to the pre-war system of putting eggs on the market. Even the most violent objectors to the compulsory marketing did not want to go back to that chaos of pre-war marketing. But that would happen, I am sure, if we had a voluntary marketing scheme, because the poultry keepers who refused to join the voluntary Scheme would very soon break the packing stations. The other alternative, the one put forward by the Government, is a compulsory marketing scheme. We had such a scheme during the war under the Ministry of Food. The present Scheme, under the proposed Egg Marketing Board, will give much more freedom to producers and consumers than they had during the war. I strongly commend this Scheme to your Lordships, and I very much hope that when the producers are asked to express their views about it, when they vote on it, as they should, they will also approve it, so that the Board can be set up and the Scheme got under way.
3.25 p.m.
LORD GRANTCHESTER: My Lords, I will endeavour to be as brief as the previous speakers. At the risk of being called "doctrinaire" by the noble Earl who has just sat down, and I expect out-moded in the best Socialist terminology of modern Conservatism by the noble Earl who is to reply, I cannot refrain from making a protest against this Order. And I think the protest is more than justified by the admission by the commissioner who conducted the public inquiry that "the case in favour of competition was overwhelming."
Orderly marketing is an admirable conception, within limits, and subject to safeguards. Her Majesty's Government have recently taken strong measures to prevent manufacturers from combining together for the orderly marketing of their products. The Government have made manufacturers' private courts illegal; their private courts of enforcement are now illegal. I would ask on what grounds can the same Govern vent come forward with a Scheme like this, practically constituting a producers' monopoly with coercive powers which are exercisable, if desired, apparently in secret, greatly in excess of any powers given to the courts for similar offences, and with powers to the inspectors of the Board which are greatly in excess of those given to the police, as they can go on their inspections without a warrant? I ask Her Majesty's Government—I am sure it will not be any good—to take this Order back, and to study it in the light of their own expressed views when dealing with manufacturers.
Vast sums are to be collected by this new Board and, as with some other Boards, expensive posts will be created. And large sums, no doubt, will be spent on advertising. I suppose; on ways of preparing egg dishes, with the object of selling or trying to see more eggs. My Lords, let those who will spend their money like this, but none should be compelled to do so, compelled to contribute to such expenditure; and least of all the taxpayer. In this connection, the accounts of the Potato Marketing Board to the June 30, 1956, are perhaps significant. I have managed to get a copy. These reports and accounts are published by the Boards, and so attention is not drawn to them in your Lordships' House, which I think is a pity. These

1323
accounts to June 30, 1956, by the Potato Marketing Board show that producers contributed something like £687,000 and the taxpayer, via the contribution from the Ministry, £458,000. That means a total which the Board has had to play with of £1,145,000. Of this sum, about £500,000 was spent on administration.
This is not the end of the story, for there is a little note in the accounts about a contingent liability under which the taxpayer is responsible for 95 per cent. of a trading loss suffered by the Potato Marketing Board, which is estimated to work out at something like £450,000. Perhaps the Minister, when he replies, will be able to give us some idea of what this Scheme is likely to cost the taxpayer? He spoke of concluding a financial agreement. Could we have a little information on what the financial agreement will be and under what sort of liability the taxpayer is going to be?
Even with all these powers I understand that the promoters are not very partial to the Scheme. They think that it is not sufficiently watertight, but they are willing to accept in the hope that they can amend it at a later date. Finally, if Her Majesty's Government do insist on going on with this Scheme, may we observe that this is an Egg Marketing Scheme and express the hope, for the guidance of the Board's inspectors and "snoopers." that "domestic fowls," as mentioned in the Order, will be interpreted only as hens and will not include cocks and cockerels, and that "domestic ducks" will be interpreted strictly as ducks and will not include drakes.
3.30 p.m.
LORD WISE: My Lords, with the permission of the House I wish to say a few words about this particular Scheme. Having advocated properly planned and orderly marketing in agriculture for the last thirty years or more, I think it right for me to welcome the Scheme in principle, and to express the hope that, at long last we are to have some orderly marketing system in connection not only with egg production but also with other activities in agriculture. There are just a few points upon which I should like to ask the noble Earl, Lord St. Aldwyn, questions. It probably will not be necessary to amend this particular Scheme in
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respect of the matters which I am going to mention, but in future, when any later representations or later arrangements with regard to the Scheme are under consideration, perhaps what we say in your Lordships' House now will be taken into consideration.
In the first place, I see that in the stencilled report by the Minister of Agriculture, Fisheries and Food and some of his colleagues it is stated that the organisations concerned in the submission of the Scheme were substantially representative of the producers of eggs. I notice that in the formation of this Scheme the only organisations which were consulted were the farmers' unions. Now the farmers' unions are not representative of quite half of the producers of eggs in this country, and I should have thought that there must have been some poultry keepers' organisations which would have been able to speak or to give information to the Minister in regard to this Scheme. Members of the farmers' unions who produce eggs number 223,000, whereas a total of 500,000 producers of eggs come under the Scheme.
With regard to the Scheme itself, I am not quite happy as to the composition of the Board. It is to be composed entirely of producers from various regions, special membership, and members nominated by the Minister. I should have preferred that some consumer interest were represented in the membership of the Board. The Board's agents who are running the packing stations might also be considered for membership, and the distributors. I believe that these producer marketing boards are better if their membership is not concerned solely with the producing end of the business, but includes also representatives of those who either distribute or sell the product of the producers. On the question of special membership, I note that the special members are elected by large producers of eggs. It seems to me that there is no possibility, either in regard to the regional members or the special members of the Board, for a small producer to be nominated and elected to the Board. I think that is a mistake. If special membership of the Board is provided for large producers. I suggest that one place, at any rate,

1325
might be left for representation of the small producers.
Again, I note that there are fourteen regions, and that the regional members will be elected by producers within the regions. Have these regions yet been apportioned? Does the Minister know exactly the boundaries of these fourteen regions, or will that be a matter to be determined later? In regard to the licences to sell eggs, can the present sellers of eggs and the present owners of packing stations be certain that they will be licensed? Will the new Board give an undertaking that existing sellers of eggs will receive licences? Further, will the producers of eggs who are now supporting particular packing stations still have the right to send their eggs to those same packing stations? To enlarge, for a moment, upon that subject, I may say that I have at the back of my mind the fact that there are certain packing stations run by the Co-operative Wholesale Society, and no doubt those stations are used by their members for the sale of their eggs. My doubt is whether or not the co-operative packing stations will still be able not only to collect eggs but to distribute eggs to their shops or sell them as they do in existing circumstances. With respect to "A" and "B" licences in the Scheme before us, it seems to me that the procedure is highly complicated. It is difficult to understand exactly how one obtains "A" licences and "B" licences, or whether one is entitled to have such licences. Possibly in a later scheme there might be simplification in some way or another.
My two final questions are these. First, as to the disciplinary committee. I am not at all in favour of a very strict disciplinary committee in connection with any marketing board. In years gone by, I used to send my milk to the Milk Marketing Board, and I. received month by month their journals. From a study of these, it appeared to me that small penalties which were imposed on producers month by month were in many cases most unnecessary and must have been very irksome indeed. I hope that, whatever disciplinary committee is set up by the Board, the small and trifling troubles which arise between producers and the board will not result in the imposition of heavy penalties. There is one point in this Scheme which arises in connection with paragraph 85. That deals with the question of the arbitrator and
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the award. From that paragraph, as it is published at the moment, it seems to me that the Board assume that if they go to arbitration they will always be right and that the award will be granted in their favour. To me, it seems that there is no provision whatever to protect the producer who may win his arbitration in regard to his costs or otherwise. I think, therefore, that some new clause should be drawn up, or some new arrangement of some kind should be made and published, to show to the producer that if he goes to arbitration it is not inevitable that he will lose the award and be subject to costs. In general, I support the Scheme and wish it a happy life in future. I hope that it may benefit all producers of eggs and that by the carrying out of this scheme and by the protection which producers will receive under it, we shall be able to produce all the eggs we require.
3.40 p.m.
LORD REA: My Lords. I had not intended to address your Lordships on this matter but I am stung to my feet, if I may use that expression, by the epithet used by the noble Earl, Lord Listowel, to describe the opposition from this quarter of the House. The noble Earl spoke of our policy as being "doctrinal". If to be liberal is to be doctrinal we accept the epithet with pleasure, but I cannot help feeling that this measure is definitely illiberal, and I rise for one moment to underline, if I may, the points put by my noble friend Lord Grantchester.
In the first place, the very essence of the Scheme seems to contrast totally with the principle of the Monopolies Act which the present Government have put forward. It is indeed a monopoly, and I am rather surprised that noble Lords on my left should be backing this measure so wholeheartedly. If I may allude to the Potato Marketing scheme, to which my noble friend Lord Grantchester referred, it is, if I may say so, most relevant. If anybody—for instance one of your Lordships—has a small amount of land, he is perfectly at liberty to plant potatoes and to grow them and lift them; but if he tries to sell them in the open market, he is committing an offence. That is exactly similar to what is being done now by the Egg Marketing Scheme. I personally resent not being able to grow and sell potatoes if I wish, whether in large or in small quantities, and I equally

1327
resent not only the fact that the small poultry keeper is arbitrarily stopped from selling his or her eggs if he or she keeps not more than twenty-nine birds, including cocks, but also the fact that one cannot go to a farm gate and say, "Please can I have three eggs?" The farmer might reply, "Had you come yesterday I would have given you them with pleasure, because then I had only forty-nine birds including cocks, but to-day I have fifty-one including cocks"—or "not including cocks"—"so you cannot have any eggs." I think that that is inherently contrary to liberalism and liberty, and for that perfectly commonsense reason we on these Benches object to the measure which is before your Lordships.
3.43 p.m.
EARL ST. ALDWYN: My Lords, I am grateful for the support I have had from noble Lords opposite. I cannot pretend that I anticipated that I should get much support from noble Lords who sit immediately on the left of the Woolsack. The noble Lords who spoke raised a number of points and I will try to deal with as many of them as I can. If I may say so, the noble Lord, Lord Rea, does not appear to have listened to what I said in my opening remarks. I pointed out that we had raised the limit from 25 to 50.
LORD REA: My Lords, may I apologise for a slip of the tongue; when I said 29 I meant 49.
EARL ST. ALDWYN: The producer who wishes to sell retail can apply for an "A" licence, as I said in my opening remarks. He will receive this licence automatically and will be able to sell retail to anybody who comes to him, and also to deliver direct to consumers if he wishes to do so. The noble Lord, Lord Grantchester, raised the question of the disciplinary committee. I would point out that this committee will meet in public, unless there are special reasons, and there is the right of appeal from their decisions to the arbitrator. Perhaps I can also deal with the point of the noble Lord, Lord Wise, here, and add
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that the arbitrator will determine what the penalty should be. He also has the right to award costs.
The noble Lord, Lord Wise, asked me about existing packing stations. The Board are under an obligation to employ as agents all those who can show that they can do the job of grading and packing eggs efficiently. Packers can go to arbitration if the Board do not agree to employ them. So I can give the noble Lord that assurance. He also asked me about the regions under the scheme. If the noble Lord will turn to the second Schedule he will find the regions set out there. On the question of the membership of the Board, I would say that it is now necessary to have only ten producers to nominate a candidate for election to the Board. The noble Lord, Lord Grantchester, asked about matters of finance. I would point out to the noble Lord that the financial agreement will be coming up for debate in your Lordships' House when an order is made under the Agriculture Act authorising the payment of money for the guarantee arrangements. Perhaps we may discuss questions of finance more fully then. I think I have dealt with most of the points that have been raised, and I thank noble Lords opposite for their assistance.
LORD GRANTCHESTER: My Lords, may I ask whether the noble Earl is satisfied that these drastic powers are really necessary, and whether it is not possible to modify the powers given to inspectors and to these private courts, which are in excess of those given to the normal courts of this country?
EARL ST. ALDWYN: My Lords, these powers are similar to those given under all the schemes made under the Marketing Acts. Inspectors will have right of entry only in the case of large-scale producers who come under the scheme; they will not have the right to enter the property of small producers. In effect, it will only be where they are satisfied that there has been some serious infringement that inspection will be likely to take place at all. We are perfectly satisfied that these powers are reasonable.
On Question, Motion agreed to.

COASTAL FLOODING (ACREAGE PAYMENTS) SCHEME, 1957
EARL ST. ALDWYN: My Lords, I beg to move that this Order be approved.
Moved, That the Draft Coastal Flooding (Acreage Payments) Scheme, 1957, reported from the Special Orders Committee on the 12th December, be approved. —(Earl St. Aldwyn.)
THE EARL OF LISTOWEL: My Lords, I do not propose to comment on the scheme, which is uncontroversial, but I should like to ask the noble Earl one question. Can he say how soon the land that was flooded in the winter of 1953 will be completely rehabilitated?
EARL ST. ALDWYN: My Lords, we anticipate that by the end of the period of this scheme practically all of this land will have been rehabilitated. Maybe a few acres will be left, and they will be assisted, if necessary, under the marginal production scheme. This is the last of the schemes under the present Bill.
THE EARL OF LISTOWEL: My Lords, I am obliged to the noble Earl.
On Question, Motion agreed to.

POLICE PENSIONS (No. 3) REGULATIONS, 1956
3.48 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT)THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT) rose to move, That the Draft Police Pensions (No. 3) Regulations, 1956, reported from the Special Orders Committee on Wednesday, the 12th instant, be approved. The noble Lord said: My Lords, these Regulations have been prepared to take account of changes in the National Insurance Scheme introduced by the Family Allowances and National Insurance Act. 1956. Since July. 1948, the widows and children of certain police officers who are not eligible to receive the benefits of the National Insurance Scheme direct have been able to qualify for equivalent awards under the Police Pensions Scheme. The rates of these awards, and the conditions on which they can be granted, are related to those prescribed for the corresponding benefits
1330
under the National Insurance scheme itself.
As your Lordships will recall, the Family Allowances and National Insurance Act, 1956, has increased the rates of allowance in respect of children, and has extended the conditions on which certain benefits are payable. The present Regulations take account of these improvements. I should perhaps add that my right honourable friend the Secretary of State for the Home Department has consulted the Police Council in accordance with the provisions of the Police Pensions Act, and the Council have endorsed the proposed changes. As have explained, the purpose of these Regulations is to assist the widows and children of deceased police officers, and I commend them to the House. I beg to moved.
Moved, That the Draft Police Pensions (No. 3) Regulations, 1956, reported from the Special Orders Committee on Wednesday, the 12th instant, be approved.—(Lord Mancroft.)
On Question, Motion agreed to.

POLICE PENSIONS (SCOTLAND) (No. 3) REGULATIONS, 1956
THE MINISTER OF STATE, SCOTTISH OFFICE (LORD STRATHCLYDE): My Lords, I rise to move that the Police Pensions (Scotland) (No. 3) Regulations, 1956, a copy of which was laid before your Lordships on November 29, be approved. These draft Regulations are in precisely similar terms to those which have just been described by my noble friend the Under-Secretary of State for the Home Department, and their effect is identical. There are, therefore, no special Scottish points arising from them to which the attention of your Lordships should be drawn. The form of the Regulations has been approved by the Statutory Scottish Police Council. I beg to move.
Moved, That the Draft Police Pensions (Scotland) (No. 3) Regulations, 1956, reported from the Special Orders Committee on Wednesday, the 12th instant, be approved.—(Lord Strathclyde.)
On Question, Motion agreed to.

SUNDAY ENTERTAINMENTS ACT, 1932
LORD MANCROFT: My Lords, this Order is in the usual form and of the usual content, and there is nothing in it to which I need draw your Lordships' attention. I beg to move.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Urban District of Milford Haven, be approved.—(Lord Mancroft.)
On Question, Motion agreed to.

CINEMATOGRAPH FILMS BILL [H.L.]
3.52 p.m.
Order of the Day for the Second Reading read.
LORD MANCROFT: My Lords, it is some time now since we last discussed the film industry in your Lordships' House and certain noble Lords opposite have suggested that it might be desirable to extend the scope of the debate this afternoon to cover a little wider field than might normally be the case in discussing the Cinematograph Films Bill itself. I think this will be an agreeable course to your Lordships. In any case, it is almost impossible to discuss this Bill without covering the fortunes or misfortunes of the film industry. Therefore I will take advantage of the suggestion which the noble Lord, Lord Lucas of Chilworth, and his friends have made, and open the debate by covering a little wider ground than I would normally do in introducing such a Bill.
The film production industry, despite the ever-present competition from overseas and the increased competition from other forms of entertainment in this country, is, I am glad to say, pursuing a fairly steady course, steadied, of course, by the supports which have been available to it. In this respect, we meet perhaps in a slightly easier atmosphere than when we last discussed films in your Lordships' House. We are not met to discuss a film production crisis, but how best to maintain and strengthen those supports which have proved their worth and enabled the industry to cope with the difficulties which beset it and to enable
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it to face the future with confidence. Complete confidence, of course, can be enjoyed only by an industry which stands completely on its own feet, and the Government hope that over the next decade the industry will achieve this.
Let me begin by discussing production and distribution. In an industry which has the nature of a creative art and in which the production of a feature film takes a full year, it is not to be expected that the flow of production would be as steady as in some other industries where the output is governed by more mechanical considerations. None the less, the number of British films registered in any particular year remains something of a yardstick by which to measure the health of production. The number of feature-length films—that is to say, major films registered for the year ended September 30, 1956, is 82, and that is very close to the average for the past five years, which is, I believe, about 84. That figure should be borne in mind in comparison with the equivalent American figure, which is more like 250.
Another modestly encouraging feature of the situation is that the National Film Finance Corporation was able to record for the year to March 31, 1956, a modest surplus of about £80,000. I do not attach too much significance to this, as the fluctuation in the fortunes of those who finance films are both spectacular and notorious; but, at least, it does not suggest a deteriorating situation. The Corporation, your Lordships will remember, was restricted in its lending powers to companies who were not able to obtain adequate financial facilities on reasonable terms elsewhere, and it is significant that, at a time when, as I say, film production is proceeding on a fairly steady course, the number of films which have been partially financed by the Corporation has shown a marked reduction. But this does not mean that the work of the Corporation has become superfluous. Film production is by no means on so secure a footing as that, and the Corporation recorded in its last report that of the 33 major films released in 1955, which it had helped to finance, the latest revenue estimates indicated that only 15 were likely to be profitable, even with the aid of the Eady levy. Your Lordships will remember that the Eady levy is the present trade-operated levy on the

1333
number of seats sold—but more of that anon. Without the support of the Eady levy, only 7 films were likely to be profitable. It is clear that, so long as that state of affairs continues, the industry is not able to rely on attracting from the normal financial sources the capital it requires to maintain production.
I would now say a word or two about the British Film Production Fund, more familiarly known as the Eady levy. The Eady levy plays a big part in enabling films to recover their cost. At present, some 20 per cent. of the film producers' revenues comes from this fund, and it is not surprising, therefore, that the Bill which we are considering this afternoon provides statutory form for a device which, in its trade-operated form, has proved so valuable a pillar of production. Without the third leg of the stool on which film production rests—and I refer, of course, to the quota leg—production would he most precariously balanced. Chronologically, this was the first leg of the stool; tit was, I believe, introduced by the Act of 1927. This method of protecting the domestic market has now been recognised in international agreements as the proper method for the film industry.
While there will be agreement on all sides that the quota leg should be retained as a guarantee that British films will receive a fair showing, I am glad to say that experience indicates that British films are taking their place, not only here, but overseas, as the equal of any in the world. Your Lordships will have seen that the film, Reach for the Sky, which is based on Douglas Bader's adventures, has topped the box office poll in the United Kingdom and is earning prestige for British films round the world, as well as Valuable foreign currency. Renewed efforts are being made to enlarge our foreign markets with some success. Your Lordships will welcome the news that producers are looking to their own efforts to an increasing degree to maintain their financial stability, rather than relying on supports at home. The enterprise showed by the J. Arthur Rank Organisation in North America is particularly welcome in this connection. The number of exhibitors who, with or without due cause, have failed to show the prescribed quotas of British films has dropped rapidly during the past few years, and this, too, is an
1334
indication that British films can fully hold their own.
Perhaps during the last two years public attention has been directed less towards the plight of producers and more towards that of exhibitors. Public references to the closure of cinemas have been more numerous, and the reasons for these have been variously ascribed to a change in the habits of cinema patrons, the competition from T.V. programmes, the scarcity of good films and, your Lordships will not be surprised to hear, the incidence of entertainments duty. In many localities, the curious phenomenon has been observed of what I may describe as deflationary spirals caused by too many cinema seats chasing too few cinema patrols. Perhaps this is even an example of economic phenomena—a disinflationary parabola.
The number of cinema seats per 1,000 inhabitants in the United Kingdom is about eighty as compared with only fifty-five in America, sixty-two in France and seventy-three in Italy. We all know places in which there seem to he competing cinemas on every corner, and it is little wonder that in times of declining cinema attendance some of these must of necessity close their doors. But it would be quite wrong, I think, to see in this a calamitous situation. Cinema attendances at 1,100 million a year are still much higher than they were pre-war, when the number of cinemas was even larger—4,900 then, as against 4,400 today and more visits to the cinema are paid per head of the population in this country than anywhere else in the world.
It was in this climate in which producers, whilst optimistic, were concerned about the continuation of existing arrangements, and exhibitors were anxious about falling attendance, that the Government invited earlier this year the views of the various sections of the film industry on future film policy. Your Lordships will not, I imagine, be surprised to know that the consensus of opinion expressed to the Board of Trade from many quarters was that the three measures of support I have described already, and which are dealt with in the Bill before us this afternoon, should continue to be made available to film producers.
Let me turn to Part 1, the provisions relating to the exhibitors' levy. I think I am safe in taking it for granted that for

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prestige, balance of payments and social reasons, we all consider it important that our cinema screens should not be monopolised by foreign products. But the question that presents itself is why should producers be given the help they need by means of a statutory levy on exhibitors. It has been suggested that a more convenient and equitable method of giving the producers more assistance would be by way of a straight subsidy. This would certainly have administrative advantages, but noble Lords, certainly on this side of the House, and, I think, the public at large, would, I believe, give a very old-fashioned look at a subsidy for film producers. Certainly, many other candidates and aspirants for subsidy would find it hard to understand how an industry which could provide all the glitter and glamour, the swimming baths and the mink bathing suits, that have conic to be associated with the film industry, could be more worthy of help than they themselves.
On the other hand, the Eady levy offered an alternative solution which was not open to the objections of a subsidy. Here was a scheme, operated with considerable success by the trade for a number of years, and which had proved well adapted to the peculiarities of the industry. I know it has been said that to take money from retailers and give it to producers might form an undesirable precedent which would spread to other industries. To this, I can only turn upon the film industry its own well known slogan, "There's no business like show business"—and it is a very remarkable business indeed. This scheme, then is not an innovation or some new imposition on the exhibitors, but rather the statutory form of a well-tried expedient.
Turning now to the details of the Bill, your Lordships will observe that it is an enabling measure designed to give flexibility to the methods of collection and distribution of the levy in order to meet the changing needs of the industry. The regulations are, of course, subject to Affirmative Resolution procedure, which will safeguard the interests of all concerned. Clause 2 provides that in the first year the levy shall be fixed at a rate estimated to yield £3¾million, and subsequently not less than £2 million nor more than £5 million per year. This, I appreciate, is a higher figure than under
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the voluntary scheme, but not much higher than the one-time target figure of £3½ million under that scheme. I do not pretend for one moment that the figure of £.3¾ million is a precise calculation. No one can provide a standard measurement of what a film should cost, not even expert noble Lords like the two who are to follow me in this debate. We all know examples of films that have been made on a shoe string and have proved world beaters, and we all know films that have cost £1 million or 1 million dollars and proved cataclysmic flops. Certainly there is no reason why, if the film is a failure, the Government should guarantee to film producers the return of their costs. The figure represents the amount by which Her Majesty's Government consider it would be sensible to increase the revenues of producers to maintain production at a reasonable rate. The figures, based on the experience of the National Film Finance Corporation, to which I have already referred, show the financial difficulties which still exist.
Now we come to a very important point. Exhibitors, naturally, are asking how they are to be expected to pay £3¾ million when, even with the levy at its present lower rate, some cinemas are having to close their doors. This, not surprisingly, has led to renewed references to the burdens of entertainments duty. Your Lordships will, I hope, not expect me to say much on a taxation point of this kind, but I can and do say that the provisions of the Cinematograph Films Bill are amongst the various factors which are being taken into consideration in the review of entertainments duty which has been promised by Her Majesty's Government and which is now in active progress.
LORD LUCAS OF CHILWORTH: My Lords, would the noble Lord repeat his last sentence about entertainments duty as I could not quite understand it?
LORD MANCROFT: What I was saying to the noble Lord was that I hoped he would not press me too hard on a pure taxation point of this kind. What I was saying was that the Government have made a promise that they will review the entertainments duty, and they will take this particular grievance into consideration when carrying out the review which has been promised and which is, in fact, actually in progress.
LORD LUCAS OF CHILWORTH: I am grateful to the noble Lord.
LORD MANCROFT: My Lords, I should like also to reassure your Lordships that, under the regulations to be made in accordance with Clause 2 of the Bill, there will be provision to exempt exhibitors, in suitable cases, from the burden of the levy.
Turning now to outgoing payments, the intention is to depart as little as possible from the present arrangements, whereby the fund is distributed in proportion to the box office success of the films concerned in the, home market. This is administratively simple. It has been worked already under the voluntary scheme. Few of your Lordships will quarrel with the general concept that the levy should go to support the successful producer, rather than the less successful. Payments will, of course, be made only to British films, tile definition of which is set out in the Act of 1938, which, I expect, is familiar to most of your Lordships. I feel sure that there will be a general welcome for the Government's decision to continue payments out of the levy to the Children's Film Foundation. These were made with the approval of the exhibitors, and the Children's Film Foundation was an experiment which has achieved, and rightly so, I think, wide acclaim.
Your Lordships will expect me to say a word about the new British Film Fund Agency. This is to be a small independent body, without any direct interest in the film industry. It has been suggested, I know, that the trade should be represented on the Agency, but I think your Lordships will recognise that the Agency is not a policy-making body, and it will be to the Board of Trade, who will make the regulations, that the film industry should make their representations.
I must say a word about the extension of the powers of the National Film Finance Corporation. Clause 10 of the Bill not only extends the life of the Corporation for ten years, but will enable the Corporation to assist any persons who have reasonable expectation of being able to produce or distribute cinematograph films on a commercially successful basis, and not merely those who cannot get finance elsewhere. This will, I
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hope, commend itself to your Lordships as a measure calculated to assist the Corporation to avoid further erosion of their loan capital which, your Lordships will note, there is no intention to increase. It should also go a little way to help the Corporation to shoulder the obligation now explicitly laid upon them in Clause 11, to operate in such a way as appears to them best calculated to avoid losses.
The power sought in Clause 12 of the Bill to dispose of the Corporation to a person willing and able to provide similar facilities to those of the Corporation may possibly have caught your Lordships' eyes. I am able to assure the House that there are no immediate plans in mind for the disposal of the Corporation. It was, nevertheless, thought prudent to make provision for the possibility than with the aid of the three measures proposed in the Bill, film production might improve to the point where financing film production would become a fully commercial proposition. Should that stage be reached, there would be no justification for leaving public funds committed in this way.
Part III of the Bill deals with the extension of the quota provisions of the 1948 Act. I do not doubt that the proposal to continue the quota protection for British film production for a further ten years will command general approval, though I understand that the film industry is disappointed that no immediate opportunity is to be afforded to overhaul the 1948 Act. I believe that I shall find amongst your Lordships this afternoon a. ready acceptance of the broad principle that the British film industry will continue for sonic time to need the sure support which this Bill will give. But one thing is certain: no amount of Government aid will turn bad films into good ones. The long-term salvation for producer and exhibitor alike is that more good films should be available—and by "good films" I mean better entertainment on ordinary commercial terms. I commend this Bill to your Lordships as a sensible, straightforward measure which offers a reasonable method of putting British film producers in the financial position to make the sort of films which will bring back the cash customers, in their old numbers and with their old

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enthusiasm. I beg to move that this Bill be read a second time.
Moved, That the Bill be now read 2ª.—(Lord Mancroft.)
4.12 p.m.
LORD LUCAS OF CHILWORTH: My Lords, I feel sure that all your Lordships are grateful to the noble Lord for the comprehensive review he has given us of the provisions of this Bill. Before I come to the direct provisions of the Bill, upon which I shall have some criticism to make, I should like to take the opportunity of following his lead, and of making some general observations on the British film industry, because in my view the British film industry to-day is in a far healthier state than it has been for many years. In fairness, I think that must be said to be due to the influence of the legislation which was passed by a Labour Government and which, in point of fact, is being followed in this Bill by the present Government, to their credit.
One of the reasons for the health of the British film industry is that it has gone in for quality and not quantity. I think—and I agree with the noble Lord—that what I call "well-acted" British films of good stories are as good as any in this world, and better than most. That is because we got away from that terrible era of the British film industry which the noble Lord will remember, the era of the "quota quickie" when any rubbish was good enough so long as it could scramble into the quota. To-day, the British film industry, in good pictures, leads the world. That was brought home to me during a recent visit that I paid to America, when I had the opportunity of discussing films in Hollywood with some of the foremost film producers there. I am delighted to think that the British film industry has not followed the unfortunate course of the American film industry, although the British film industry has had the same conditions—it has had to fight a very powerful competitor in television.
In my view, where the American industry went wrong and the British industry were right is that the American film industry attempted to meet vulgarity with vulgarity. I consider that some of the television programmes presented as entertainment are beneath contempt and consideration, whereas the British film
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industry sought to meet their competition with quality. There is a lot in this, because to-day the noble Lord has mentioned the cinema attendances. The British public are discerning; they do not just "go to the pictures"; they go to see a picture. And unless it is a good picture they will not go. That is one great mark in favour of the ultimate discrimination of the British public. The had entertainment that the British public will put up with for a certain length of time, if it is cheap, has always surprised me. To-day, they sit with their eyes glued to a television screen absorbing a mass of advertising with a nonsense background just because they imagine that it is cheap. Thank goodness! that phase will soon go, and I think there is great advantage going to come to the British cinema industry, if only it will pursue its present policy.
I should like to say one thing which your Lordships may think is a slight digression. I feel that the British film industry needs to do something—I have no "bright idea" to give it. One of the sad things is that it has not attracted what I may call first-class script-writers in sufficient number. In my view, stories are the basis of the British film industry's future success. I remember, when I was in America, talking to the chief production executive of Paramount Studios in Hollywood. I had lunch with him there. He said to me, "Do you know, for the first time in our history we are not at the present time making a picture?" There was not one. He said, "The reason is that we cannot get the good scriptwriters: there are not the stories worth the huge amount of capital that we have to find." From then onwards, I could see that the lack of good stories and the desperate efforts made by some of the American producers to produce films have led to a very sharp decline in the quality.
I want to say a word to the noble Lord on that particular subject before I come to this Bill. I am sorry that the noble Earl the Chancellor of the Duchy of Lancaster is not here, although he listened to the noble Lord's speech, because we have had debates recently in this House, and it has been borne in on us that one of our greatest problems as a country in this next month or two—perhaps a year—will be the question of dollars. I am going to ask the noble Lord whether he

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will convey to his right honourable friend the President of the Board of Trade the advantage of reviewing some of the dollar expenditure that we make on the imports of American films. The Chancellor of the Exchequer has said that the import of American films into this country cost us 20 million dollars in the last nine months of 1955, and some of these films are really not fit to be shown on the screens of any country.
My Lords, there is a poster being plastered over the West End of London today which is supposed to advertise a film which has not yet been shown, but the premiere of which is expected shortly, In my view, this poster is bordering on the obscene. It is the reclining figure, so scantily clad as really to be vulgar, of a lady named Miss Anita Ekberg, an American film star. I do not know whether your Lordships have seen this particular poster, but if that is the kind of entertainment, and if that is the kind of poster that is advertising that entertainment, which is causing us to spend our very short dollars, then I think we might do something better. If the noble Lord cannot persuade his right honourable friend the President of the Board of Trade to take remedial action by stopping dollars for such purchases, perhaps he might consult his immediate superior at the Home Office as to whether the Home Secretary has net the power, on grounds of public taste and public decency, to have these posters removed. I am delighted to be able to say, here and now, as I have in the past criticised the publicity methods of the British film industry, that I think their publicity on films in recent years has been beyond reproach. It is to their great credit that they consider us a country with at least some moral standards.
I come now to the Bill. The noble Lord, in his introduction, said (I noted his words) that it was an enabling measure. That is the first of my complaints. In this Bill there is far too much legislation by regulation. It is one of those exercises in modern legislation which is to be deplored. Nearly everything in this Bill is subject to regulations being made by the President of the Board of Trade. I might tell the noble Lord that on the Committee stage we shall attempt to write some of the more important matters into this Bill, instead of leaving them to be dealt
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with by regulations which will come before the House. Most of the regulations will be subject to the Affirmative Resolution procedure. That is an advance; it is generally the Negative Resolution procedure that is adopted. But even with the Affirmative Resolution procedure the noble Lord knows that there is no chance, either in your Lordships' House or in another place, of altering any one of these regulations—they have to be either accepted or rejected as they stand. I thought it only fair to tell the noble Lord that on the Committee stage we shall attempt to put down some Amendments which will remedy that unfortunate state of affairs.
In Part I of the Bill the principal matter is, of course, the levy, or what is known as the Production. Fund. I would ask your Lordships to bear in mind that in all my criticism of this Bill I. have this background—I was going to say before me, but at least to look forward to; namely, that in this Bill we are legislating for the next decade of one of the most important industries in this country. It is not only one of the main industries from the point of view of entertainment, it is one of the main industries from an employment angle; and it is one of the main industries from the point of view of showing, what is so important, the British way of life, as far over the world as we possibly can. Therefore it is in no light manner that I approach the task of criticism. But I noticed that the noble Lord put on his skates and skated away with that delightful ease with which I knew he would, when, having given us some figures, he said: "I cannot say much about it, of course, owing to considerations that are operating in the minds of the Treasury experts at the present time."
I should like to put a few figures to the noble Lord, and I hope that when he comes to reply he will give the answers to my questions. The simple arithmetic of the proposals in this Bill is this The present levy is producing £2½ million a year on a voluntary basis. The minimum sum aimed at under this Bill for the first year is £3¾ million. That means an increase of £l¼ million, which has to be found from the box office takings of the cinemas of this country. I should like the noble Lord to give us some more

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precise details of just how that figure of £3¾ million was arrived at—by what method of calculation? How did they arrive at that figure, in view of the fact that it has never been reached in the past? The noble Lord said that "everything in the garden is going to be quite nice" when this Bill comes into operation. I cannot really see anything in this Bill that is going to increase the earning capacity of the cinema industry. I can see only that it will take more money out of the pockets of those who go to cinemas.
The other figures are these: that the minimum in subsequent years is £2 million and the maximum is £5 million. I should like to know how those figures have been arrived at. Have the Board of Trade made any calculations upon this £5 million based upon the all-industry representations that were made to them some time ago—that the right amount of levy which would be any use to the producers of this country would be £5 million per annum? Therefore, is the £3¾ million enough? Even if the £3¾ million is enough, can it be found out of the existing prices paid at the box offices of the cinemas? I believe that 142 cinemas in this country have closed in the last twelve months. Can the box offices find £1¼: million out of the pockets of their present patrons?
The noble Lord has said that there will be exemptions or reductions in regard to the payment of levy. But the more the number who will contribute to the levy is reduced, the more it increases the amount the others have to find. Let us be realistic about this matter. Is not this proposal for a £3¾ million levy inextricably tied to an alleviation of entertainments duty? Do not let us burke the issue on this. Do not forget that the Chancellor of the Exchequer takes £30 million a year in entertainments duty through the box offices of the cinema industry in this country, which I understand is computed to be 30 per cent. of their total takings. One of the unfortunate things about this matter (though I have not the slightest doubt that the noble Lord, Lord Mancroft, said this in all good faith) is that while the Treasury are experts, after they have finished with the arithmetic of the petrol tax and its inflationary tendencies, in giving their attention to see if they can implement the
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undertaking given by the Chancellor of the Exchequer that something will be done about the entertainments duty in the cinemas in this country, if we pass this Bill it will become law before the Finance Bill comes into force. The result, of course, is that we shall have saddled the cinemas of this country with an extra levy payment and a total disbursement of £3¾ million without knowing whether or not the Chancellor of the Exchequer is going to do anything. Not even he would say that he would do this before the Budget has been announced.
The noble Lord must consider that fact. I should like him to tell us, when he replies, how these calculations have been made. Have they been made upon the assumption that there will be no alleviation of entertainments duty, because it seems to me that they must have been? If they have, how does he think that this £3¾ million can be found from the patrons and from the box offices without increasing the admission charges to the cinemas of this country? If they are increased shall we not then have arrived at that delightful stage of "diminishing returns." If you cannot, upon this basis, collect even your £3¾ million what are you going to do?
Now, my Lords, this is where I raise my second serious point. In Part Clause 8 gives the word "film" the interpretation adopted in the 1948 Act. Subsection (1) says:
"In this Part of this Act the expression 'film' means a cinematograph film"
as defined in the 1948 Act, which is the subject of Part III in that Act. If that Act is to continue in force, since it also gives the definition of what constitutes a British film, it gives a definition of the participants of the proceeds of the levy. It is in this regard that I think the cinematograph industry as a whole has a very just complaint about this matter and against the Government. In spite of implied assurances, and in spite of the fact that Her Majesty's Government knew the film industry as a whole had some very serious representations to make regarding the definition of a British film, which governs who is to be the beneficiary of this levy, this matter has not been discussed with the film industry at all.
I am going to put this point to the noble Lord, Lord Mancroft, so that he

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can have it in his mind. The matter must be very closely argued, and I should have thought it would have been far better to argue it with experts of the Board of Trade and the film industry than to argue it across the Floor of a House of Parliament. The definition of a British film could mean that the American-financed and owned company which operates in this country is a participator in the levy. If there is one place where the British film industry is fighting—not an unavailing fight but a bitter fight—it is in the markets of the world and in the markets of South America and North America. Under the present definition, a film produced in this country, admittedly employing 80 per cent. British labour and British studio facilities, but American financed and owned, can have part of this Fund to cover its expenses, and can find an easy access into America, owing to its American connections, where a British film can hardly get in at all. That is one case which I think is due for consideration.
Take another case of the same type—let us call it the Anglo-American film. That is financed in this way and goes into the quota for export as a British film; but when it goes abroad, having displaced a 100 per cent. British film in the export quota, it comes out in all its glory as an American film with no British credit at all. That is another case.
We see in subsection (2) of Clause 3 the regulations which the Board of Trade may make under the clause. They can
"define the class of British film in respect of which payments may be made."
There is one class of film which I should think the cinema industry would vehemently protest should not participate in this levy, and that is the film made essentially for its chief competitor, television. When one looks at some of these really serious objections, I think the noble Lord will have to express regret that the cinematograph industry, in all its branches, was not consulted more than they have been about the provisions of the Bill.
I want now to come to this Film Fund Agency. What does it do? The noble Lord said that it will be drawn on an independent basis, but would he mind telling the House what are the precise
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qualifications? Is it just an academic body to do what a few accountants and a clerk could do? It has no powers. It is told precisely what to do by regulations made by the Board of Trade. Cannot the Board of Trade themselves do it? Then, of course, the Agency will cost something, and I suppose the cost will come out of the levy. The levy is to be collected by the Customs and Excise, and the Customs and Excise will charge for collecting the levy. At the present time, the levy is collected on a very small cost basis by the industry itself. Would the noble Lord think it highly improper, or not quite "playing the game," if, on the Committee stage, I put down an Amendment to say that, since the Customs and Excise are to make a charge for collecting the levy, the industry itself should make a charge for collecting the entertainments tax? It appears to me that that would be a fair thing to do. An industry collects, or the box offices of the exhibitors collect, entertainments tax, but as soon as the Customs and Excise have to collect something they are going to make a charge against this fund for so doing. What is the cost going to be? What is the inroad that is going to be made? Will it be so much per cent. on the money collected, or what will it be?
I come now to Part II of the Bill, which think is good. I believe we can say that the National Film Finance Corporation has done a remarkably good job of work. I am very glad that it is to continue. There are two questions I should like to ask about Part II. One relates to Clause 11, and concerns a matter which is rather dear to my heart. We are now going to have a statutory definition of how to make a profit. I hope that the noble Lord can enlarge upon this. We are now going to have it made a duty of the National Film Finance Corporation to pay its way. What has it been trying to do all these years? What was its object? I suppose that it has done its best to pay its way. But if it does not make a profit, what are you going to do? Is this just a pious hope, or is there anything behind it? Now a word on Clause 12. The noble Lord, Lord Mancroft, has said that the National Film Finance Corporation can sell itself to any person. The noble Lord will forgive me for saying so, but I am rather sceptical; I am very

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suspicious when a Government wants to sell taxpayers' assets. Our experience in that direction has not been very encouraging. Can the Corporation sell itself to an American concern, or what? Perhaps the noble Lord will tell us something about that.
I now come to Part III. Here, in my view, we have to do something quite serious. What are we doing by this Part of the Bill? We are perpetuating the Act of 1948 for ten years and—mark these words—in its present form. I think that the quota is good, but we have to see that the quota provisions are maintained. I have no grumble about the quota provisions relating to the home showing. I consider that thirty is a very fair quota, and I do not think I should wish for any alteration to be made in that connection. But I certainly do wish to see the definition of what is a British film lined up more to modern requirements. We shall try to see that no foreign film (I use the word "foreign" in no offensive sense) is carried to success in the markets of this world on the backs of the British producers. I believe that if the provisions of the Bill go through unchanged, then in the next ten years that may be something we shall regret. So we shall give this Bill a Second Reading, but, on the Committee stage, we shall attempt to make, by amendment, those alterations that I have outlined.
4.44 p.m.
THE EARL OF ROSEBERY: My Lords, I have listened with the greatest interest to the speeches of the two noble Lords who have already spoken. Lord Mancroft, in a very able speech, told us of benefits that would be received by the film industry, but he skated over—or, at any rate, I could not have heard him if he did not—what would have been the great benefits to the cinema industry. I listened to the speech of the noble Lord, Lord Lucas of Chilworth, with great interest because of the accounts he gave of the films. I am ashamed to say that I never go to see a film, so the noble Lord educated me to a considerable extent. And may I add that I have no interest at all in cinemas. But I feel great apprehension about the policy of this Bill in its present form, for various reasons, and unless it is considerably amended I, for one, would feel strongly
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inclined to oppose it. I do not intend this evening to occupy much of your Lordships' time. There are several points on which I am in cordial agreement with Lord Lucas of Chilworth and he has expounded them much more ably than I could do; but there are one or two facts which I feel I should bring forward.
The first, and to my mind the most important, objection to this Bill is that it introduces a thoroughly unsound and unjust principle. It is absolutely wrong to force one trade by law to pay a levy to another, and this proposal is totally opposed to this country's ideas of justice and trading freedom. We have, I know, been told that the cinema industry has made a voluntary contribution so far; but we were never told that this voluntary contribution was almost exacted and that there was a quid pro quo from the Chancellor of the Exchequer before the cinema industry accepted the voluntary proposal. What is to happen now is that this voluntary proposal is to be made an Act of Parliament, and the word "voluntary" is taken out for the next ten years. You all know as well as I do that when a tax is put on for ten years it is put on for ever. I do not remember a tax which was put on for ten years ever being taken off. Indeed I cannot think, off hand, of a tax put on for two years that has been taken off. So, in my opinion, this is a tax that is going on for ever.
It is not for that reason, however, that I object to the tax. I object to it for the reason I have given—that it is making one trade pay a levy to another. It means that the Government are benefiting one trade at the financial expense of another. We are told that a very large sum, starting with £3,750,000 a year and ending with £5 million, is being taken for the benefit of the film producers. Those are two sums out of the blue and they are very considerable. Lord Lucas of Chilworth has already asked Lord Mancroft to explain this matter in his subsequent speech, and I hope that he will do so. But this money is being taken from the cinematograph exhibitors for the entire benefit of the film producers. The Government is, in fact, robbing Peter to pay Paul, and I do not think that anyone can controvert that statement, even if I have put it somewhat bluntly. I am not suggesting that there is not good

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cause why the film industry should have this money. As I just said, I never go to the films, but I understand from Lord Lucas of Chilworth that some of them are not very good, and no doubt £3 million to £5 million would benefit them very much indeed. But, if that is the case, if there is to be a statutory benefit to the films, it should be made by the Government and not by another trade.
At the present moment the Government take £30 million-odd from the cinemas. If they wish film production to benefit by £3 million to £4 million, surely They could get that from entertainments tax. They have chosen a most unfortunate moment for this increased levy, when the cinemas are going through a time of hard competition with television. I understand that approximately 200 cinemas have been closed this year. The noble Lord, Lord Mancroft, gave me the impression that he thought there was no harm in that; but I take it that the owners of those cinemas are not best pleased. I understand that more cinemas are being closed every week. They are not closed for fun, but because the owners cannot afford to go on. And on top of their hardships is placed this additional and very large burden by an Act of Parliament.
Moreover, so far as I can make out, the film producing industry have not to prove the need for this money. They do not have to prove that they need assistance, and, so far as I can see in the Bill, after they have received it, there is no necessity for them to give an account of how they have spent the money. I think that a Bill of such a controversial nature as this should be referred to a Select Committee after the Second Reading has been taken to-day. I think that it would be only fair to the public, to the cinema owners and to the film producers, to go into the Bill with greater thoroughness than would be done on an ordinary Committee stage.
4.52 p.m.
LORD WESTWOOD: My Lords, it is with considerable diffidence that I arise to address your Lordships for the first time, but as this Bill is of intense importance to me, I would ask your Lordships to bear with me in a spirit of patience and forbearance. May I say at the outset
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that I have a personal interest in this Bill, as I have been associated with the cinematograph industry for over twenty-five years, and I should like to submit some practical points to my noble friend Lord Mancroft, not with a view of criticising but of helping, or trying to help, him. I thank him for his clear explanation of the Bill this afternoon and also the noble Lord, Lord Lucas of Chilworth, for the points which he mentioned, because they simplify my task enormously.
For the benefit of noble Lords who may not be fully conversant with the different branches of the cinema industry, may I say that the industry is operated on similar lines to those of any other industry. First, we have the producer, who is the manufacturer of the product; secondly, there is the film renter, who corresponds with the wholesaler; and thirdly, we have the cinema exhibitor, who is the retailer of the product. It is his job to show the finished product to the public. Like all forms of business or trade, each branch is fully dependent on the other two branches. The producer, when he completes his film, passes it over to the renter, who in turn hires it out to the exhibitor on a percentage basis. The exhibitor then shows the film to the public, with some varying degrees of success and in many cases, I am sorry to say, at some financial loss. That is the method by which the cinema industry carries on its trade, and this should be borne in mind during the passage of the Bill through your Lordships' House.
My noble friend Lord Mancroft touched on the Eady levy, which started in 1950, but there was one important point which he omitted to tell your Lordships—that was, that the British Film Production Fund has received the sum of £14,790,451 up to July 23, 1956. That is a very large sum of money, and it all came from the cinema exhibitors of this country. In addition, the cinema owners in Britain paid out over £33 million in entertainments duty last year—a duty, incidentally, which was shouldered by the industry in 1916, when a promise was given that it would be abolished at the end of the First World War. During the six years of this levy, the highest amount collected in any one year was £2,971,910, in the year ended August 2, 1952. This

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sum was a great deal less than the £3¾million which it is intended shall be collected under the Bill which is before your Lordships' House to-day.
The cinema exhibitors in this country realise and appreciate the need for a healthy British film production industry, and they will do all in their power to help and support such production, as has been amply proved by the vast amount of money which they have paid into the present British Film Production Fund during the past six years. The Government, too, realise that we must have a healthy and prosperous production. But, my Lords, we cannot have a healthy and prosperous production unless we have a healthy and prosperous exhibition, too. If there has to be a levy, the cinema exhibitors must be put into a position to pay it to help subsidise production, although I am not aware of any other trade or industry in the country where a levy or tax is imposed on the retailer in order to subsidise the manufacturer. In my opinion, the principle is bad. My noble friend Lord Mancroft mentioned the old saying, "There's no business like show business". The way things are going on it will be "There's no business" —full stop.
There is a solution, and only one solution, to the problem, and that is, a drastic slashing of the present heavy and crippling entertainments duty as it applies to cinemas. Unless some very substantial relief is given to cinemas by the Chancellor of the Exchequer in his next Budget, this industry, which brings so much happiness and enjoyment to so many of our people, is heading for disaster and destruction—it cannot survive. It is common knowledge that cinemas are closing down all over the country—25 closed down in 1954, 53 shut down in the year 1955, and there will be approximately between 250 and 300 closed during this year. There are hundreds of owners of small cinemas who are just hanging on to learn what their fate is going to be when the next Budget is presented. I mention all these dismal facts to your Lordships to enable you to appreciate the present position of the cinema owners who, by this Bill, are being asked to find £3¾ million a year, a figure which can be increased, if need be, to £5 million a year, within the next ten years. Practically every cinema in
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the country to-day needs money to be spent on it. Exhibitors have been faced with ever-increasing costs—increased wages, increased rates, higher charges for heating, lighting, and so on. Refurnishing of cinemas has been kept to the absolute minimum, due to the economic position and the high costs and to the fact that most of the exhibitors' bank accounts are in the red.
It is against this background that the Government has introduced the Cinematograph Films Bill which proposes that a statutory levy be imposed on exhibitors for the next ten years. I can say quite emphatically that unless the entertainments duty is drastically slashed, there will be very few cinemas open in the year 1967, when the period of this Bill ends. There are hundreds of little fellows who have sunk all their capital into their village or small town cinema, and although I am aware that exemption has been promised for them in this Bill, the prospects for them are far from bright.
I now turn to the Bill itself, to deal with some of the provisions in it. In Part I of the Bill it is stated that a British Film Fund Agency will be established; that the members of that Agency shall be appointed by the Board of Trade and shall be not less than three nor more than five in number, and the members so appointed shall have no financial or industrial interest in the cinema trade. This Agency will be dealing with a complex and involved industry, and I suggest to my noble friend that perhaps he should look into the possibility of increasing the number of Agency members from five to seven, and that the two additional members be cinema trade representatives. The Cinematograph Films Council, which advises the Board of Trade, has cinema representatives on it, and I think that the people who have to make this levy work should be allowed to have some representation in an advisory capacity. I am confident that the non-trade members of the Agency would welcome their presence and advice.
In Clause 2 of the Bill it is stated that provisions for exemption will be made. Can my noble friend say what the exemption will be? Will a cinema which is losing money be exempt from paying the levy? Will the present exemption of £150 gross per week be increased to help the small owner pay his way and make some

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profit, as he is entitled to do? Throughout the whole of Part I of this Bill there is a definite obligation for the exhibitors to pay whatever levy is imposed, but there is no obligation whatsoever on the producers to make the films. Surely there should be some obligation on the film makers to produce the films which the exhibitors need and which they have helped to subsidise. Have we any guarantee that producers will now increase production of good British pictures; or will they decrease output in order to obtain a larger return from each film they make? I suggest that some obligation should be inserted in the Bill to cover this point.
In Clause 3 it is stated that the regulations
"may define the classes of British films in respect of which payments may be made."
I sincerely trust that financial help will not be given to a British film producer who makes films for the television media, and I would therefore ask that some form of wording be inserted whereby financial aid would be given only to films exclusively made for commercial cinemas. I am also presuming, I hope rightly, that there will be no discrimination whatsoever against films which are made in this country by American producers. The exhibitors in Britain are already far too short of product, and they want good pictures, no matter where they come from.
Clause 4, in Part I states that the Customs and Excise authorities will be given power to require exhibitors to supply information and keep records as may he required, and the Customs and Excise officials may enter an exhibitor's premises and call for the books. Failure to comply with this requirement can involve a fine not exceeding £100. My Lords, the exhibitors are not afraid of this clause, as most of the cinemas are visited regularly by Customs officers when checking entertainments duty records. But should not the books and records of the film producers, as well, be open for inspection? How can the Agency assess and verify the needs of the producers? How can the producers prove their need for a subsidy from the Agency? Why cannot the exhibitor who is losing money participate in the subsidy too? Regarding Part II of the Bill, the exhibitors welcome any provision which will assist
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film production in this country and will ensure an adequate supply of good British films.
I now come to Part III of the Bill, and by Clause 14 it is intended to extend the existing quota obligations of the exhibitors by which they must exhibit a percentage of British films each year. The clause extends the quota obligations for a period of ten years from the present Quota Act, which does not expire until 1958. This clause has come as a great surprise to the whole of the film industry, as the various sections were given to understand by the Board of Trade that they would have consultations with them and would consider the matter at matter date. The trade welcomed this assurance, and it was felt that it would afford an opportunity to submit suggestions to obviate many of the problems and anomalies now existing. The present Quota Act is most unsatisfactory, and the number of defaulters grows year by year. Out of some 4,500 cinemas, the defaults number approximately 1,000 per year. I hope that my noble friend will make representations to the President of the Board of Trade with a view to the holding of early consultations, as I am informed that all the information has been collated with this in view.
Finally, my Lords, in Clause 15 it is the exhibitor who is again in trouble. The licence fee is increased from two guineas to five guineas. Up to 1948 the fee was only one guinea per year, and it is now proposed that it should go up to five guineas, an increase of 400 per cent. In addition to the Board of Trade licence, however, the exhibitor must pay for his Sunday licence, his cinematograph licence, his music, singing and dancing licence, and his children's matinee licence; and if he opens his cinema on Good Friday and Christmas Day, as many exhibitors do, then another licence has to be obtained and paid for. It also seems to me to be unfair that the small cinema which seats 300 patrons pays the same licence fees as a theatre which can hold 3,000 patrons and upwards. The increase of three guineas per year may appear a small item to your Lordships, but unless the Government can give some help to all branches of the cinema industry, and not only the producers, then I am afraid that the number of applications for licences will diminish.

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year by year, as the neon signs of the cinemas are switched off, one by one, for the very last time.
5.8 p.m.
LORD JESSEL: My Lords, it is my pleasant task to congratulate the noble Lord, Lord Westwood, on his maiden speech. He is obviously a master of the subject, and he has presented his views with clarity and force. The only thing I have against him is that he has completely ruined my own speech. Many noble Lords will remember his father, who was a popular Member of this House and who sat on the other side. I am sure the noble Lord, Lord Westwood, sitting on this side, if he comes here more often, will be an equally popular Member of the House.
Before turning to the Bill itself, may I say that I was glad to hear the noble Lord, Lord Lucas of Chilworth, make the comment that he thought things were rosy in the cinema industry now, because he is usually a prophet of gloom. It was a nice change. I must also take up the noble Lord on one point, because he is a stickler for accuracy. When referring to Miss Anita Ekberg, whose figure he so much admires, he said she was an American actress. I do not think she is. In the film in which I saw her the other day, she speaks with a strong Swedish accent, and I believe she is married to an Englishman.
LORD LUCAS OF CHILWORTH: The noble Lord is quite right technically. The lady was born in Sweden, but she is an American actress.
LORD JESSEL: That depends on what you mean by "American". To turn to the Bill, I think it is fair to say that this is a producers' Bill at the expense of the exhibitors. The noble Lord, Lord Westwood, has brought that out in all his arguments, although he admitted that he was interested chiefly from the exhibitors' point of view. I think it is arguable, looking at the industry as a whole, that the exhibitors, if they want films and in present circumstances films cannot be produced economically, should be called upon to pay something towards the production. The only question is: what is the figure they can reasonably be asked to contribute? They have their difficulties, and we have heard a great many of
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them. In regard to entertainments duty, I think a good way of looking at the burden of the duty is to take just one instance. A seat that sells for 2s. 9d. pays a duty of just over 1s.; therefore the exhibitor is getting only 1s. 9d., although the public pay 2s. 9d. As the noble Lord, Lord Lucas of Chilworth, said, the levy is producing approximately £2½ million a year. That was in the first year of the levy. Under this Bill £3¾ million has to be raised. Where is it coming from? My noble friend Lord Westwood talked about television. Television is a dead loss to the exhibitors, but it is a considerable help to the producers.
LORD LUCAS OF CHILWORTH: Would the noble Lord forgive me for one moment, because I know he likes accuracy as much as I do? Would he not agree with me that to say that the exhibitors pay this levy is wrong? It is the cinema-going public who pay it. Admittedly, if the exhibitors have to increase the price of the seats, that may have a deleterious effect upon their attendances. But it comes out of the pockets of those who go to the cinema, like the entertainments tax.
LORD JESSEL: I see the noble Lord's point, but my point is that, with cinemas closing at the rate they are, it is a little difficult for them to get it back. That is all I said.
May I return to the subject of the competition of television? Film corn-panics make films for television screens, so that is new business for the producers. They are also able to sell old films for television screens. One or two actors have told me that they have had great pleasure in seeing themselves once again in their old films, which they had thought were dead and buried for years.
LORD LUCAS OF CHILWORTH: Ought to have been dead and buried.
LORD JESSEL: Maybe. Dealing with Part I of the Bill, again I must refer to my noble friend Lord Westwood. As he said, under this Bill the exhibitors are asked to make payments and supply information; yet the film producers, who have the benefit of this money, seem to be under no obligation actually to produce the films. Finally, turning to Part III, Clause 14, I may say that this came as a tremendous shock to the film

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trade, because they had no hint that this quota arrangement, without consultation, was going to be prolonged as it is for another ten years. The exhibitors feel that the existing quota procedure is working unsatisfactorily. For some time they have had suggestions ready for some amendment of the 1948 Act, yet they have not been consulted at all, and this Bill is suddenly presented, giving the impression that Her Majesty's Government are going to rush it through with indecent haste. The exhibitors would prefer a separate Bill to be presented later on this aspect, which deals solely with the problem of quota. But if Her Majesty's Government cannot see their way to fall in with this suggestion, it leaves the exhibitors no other alternative but to try to get their suggestions for alteration put right by Amendment on the Committee stage.
5.15 p.m.
LORD STRABOLGI: My Lords, on behalf of my noble friends on this side of the House, I should like to add my congratulations to the noble Lord, Lord Westwood, for his most interesting maiden speech. He has spoken with a most profound knowledge of his subject. Indeed, as the noble Lord, Lord Jessel, has said, he has taken most of the points that subsequent speakers would have made. We on this side of the House hope very much that we shall have the pleasure of hearing the noble Lord on many future occasions.
Practically every noble Lord who has spoken has voiced his grave disquiet about this Bill. On the other hand, as the noble Lord, Lord Lucas of Chilworth, has said, we do not propose to oppose the Second Reading, although we shall try to amend it in Committee. I should therefore like to mention one or two matters on which I should be glad to hear the reply of the noble Lord, Lord Mancroft. First of all, in Clause 2 (2) (a) and (b) the regulations may provide for the exemption of any exhibitor or classes of exhibitor, and may make different provisions in relation to different exhibitors. I should like to ask the noble Lord whether this implies that an exhibitor who is not a producer may be exempt. I am thinking particularly of the independent exhibitor who does not himself produce films and yet is contributing to this levy and is not able to get the films which are produced
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because they are going into the big circuit houses owned by the main producers of films in this country. In actual fact, the effect is that the independent exhibitor is being made to contribute to making films which he will not have a chance to show. I shall be glad to know from the noble Lord whether such an exhibitor may be exempt under this clause.
Under Clause 4, the Customs and Excise have the right to enter premises and demand books for examination. As the noble Earl, Lord Rosebery, said, why are not similar powers taken vis-á-vis the producers? After all, they are benefiting from the money which is being given to them under this levy, and which is coming from the exhibitors. I cannot see any reason why the same powers should not be taken ?vis-á-vis the film producers. In the past, of course, there was a great deal of extravagance in the film industry. I do not think that is so to-day, although the noble Lord, Lord Mancroft, with his customary wit, referred to swimming baths and mink bathing dresses. Possibly the noble Lord did not intend his remarks to be taken seriously, and they were possibly an exaggeration. At any rate, I can see no reason why, in fairness, under this Bill the producers also should not be required to have their books available for examination. Perusing Part I of the Bill, I note there is no obligation on the producers to make the films that the exhibitors want and need—indeed, so far as I can see, there is no obligation on the producers to produce any films at all. There is also no indication whatsoever of the level of production that is contemplated.
Another point is the question of the figure of £3¾ million for the first year and a sum of from £2 million to £5 million in any subsequent year. On the other hand, there appears to be no provision in the Bill to reduce the levy to below £2 million if the existing production gap can be met from the exports, say, of British films to the United States, a point which the noble Lord, Lord Mancroft, mentioned. I shall be glad to hear from the noble Lord whether any provision can be made for this clause to be amended at the Committee stage so that the sum may be less than £2 million if, in some future year, a lesser sum is adequate. After all, we are passing legislation for a period of ten years.

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Another question I would ask is whether these exhibitors are being asked to contribute to making films that will be shown on television, and Independent Television too, in rivalry with their own cinema houses? What protection will there be in this Bill for exhibitors against this growing menace to their trade? There is also the question of the quota system and the extension for ten years, which the noble Lord, Lord Westwood, mentioned. I must say that the exhibitors feel that there has been a breach of faith on the part of the Board of Trade. We very much hope that some amendment will be made at the Committee stage.
I should also like to refer briefly to the question of entertainments tax. I admit that in 1954 the Chancellor of the Exchequer gave concessions amounting to £3½ million. On the other hand, as other noble Lords have pointed out, these concessions have been largely nullified by decreased attendances and rising overhead costs. As the noble Lord, Lord Lucas of Chilworth, has pointed out, cinema admissions have declined by, I think, 22 per cent. since 1946. During this year, nearly 150 cinemas have closed, and 10 per cent. of all cinemas are making trading losses. This voluntary levy produced in the past, I think, £2½ million a year. Under this Bill, this sum is now to be increased to £3¾ million. The old voluntary levy was heavy enough, but this vastly increased sum will be acceptable only if it is balanced by the Government by some very substantial—and I underline the word "very"—relief on entertainments tax. Otherwise, I feel sure that the figure will not be attained. It will defeat its own object as more and more cinemas will close.
The noble Lord, Lord Mancroft, said that the matter was being gone into by the Treasury. We on this side of the House are glad to hear that. I know that the noble Lord will not be able to anticipate the Budget—it always seems
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to be the case of either not being able to anticipate the Budget or of recovering from the Budget. But, as we are now at a period of not being able to anticipate the Budget, I hope that, when the Budget itself is presented, we shall not be disappointed in this respect. As your Lordships are no doubt aware, this entertainments tax is taking, I think, 32 per cent. of the gross takings and 50 per cent. of the net admission receipts. It totals nearly £33 million a year. I hope that in the next Budget there will be some substantial relief amounting to at least a half of this sum, and not just one or two million pounds. There are also one or two suggestions that I should like to make about the whole question of this levy collection.
THE EARL OF ONSLOW: My Lords, may I intervene? Of course, the noble Lord is fully entitled to continue speaking later, but I would point out to your Lordships' House that there is to be a Royal Commission at 5.30 p.m. As your Lordships know, it takes a minute or two to assemble, so I would suggest that the House do now adjourn the debate during pleasure for the Royal Commission at 5.30 p.m. and then carry on afterwards.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION
5.30 p.m.
The following Bills received the Royal Assent:
Hydrocarbon Oil Duties (Temporary Increase),
Air Corporations,
Expiring Laws Continuance,
Agriculture (Silo Subsidies).
House adjourned during pleasure.
House resumed.

CINEMATOGRAPH FILMS BILL [H.L.]
5.44 p.m.
Debate on Second Reading continued.
LORD STRABOLGI: My Lords, to resume my speech, there is also the question of the Government payment into the production fund, which was touched on by the noble Lord, who spoke earlier. I have a great deal of sympathy with this suggestion, and I cannot quite understand why the noble Lord, Lord Mancroft, sounded, if I understood him aright, somewhat disapproving of it. It seems to me that, instead of imposing a levy of this kind on the exhibitors, it would be far better if the Government paid a certain sum annually to the producers which could come out of the entertainments tax. It seems to me that it would make for greater stabilisation, greater simplicity in administration—it would be much simpler than this levy collection—and it would also help the exhibitors. I cannot myself see why it is necessary to have an entertainments tax at all. It is really the most unfair of all taxes, because it is paid at the same rate whether you sell a few seats or you have a full house. I cannot we why cinemas, and indeed theatres, should not be treated like any other business and pay a tax on their profits.
A great deal has been said this afternoon about this levy, which will now amount to £3¾ million for the first year, and also about the entertainments tax, which totals nearly £33 million per annum. But of course these are not the only taxes which the unfortunate exhibitor has to bear. I should like to deal for a few moments with the Sunday entertainments tax (its exact terminology is "Sunday charity contribution"), which now amounts to £500,000 and is in addition, of course, to the other two. Two out of three cinemas in England and Wales are open on Sundays, and I believe that about 2½ million people visit the cinema on Sundays during the year. Cinemas are open under the Sunday Entertainments Act, 1932, which allows a cinema to be open in an area where a majority of the electorate desire it. Agreement, of course, has to be given by Parliament—indeed, earlier this afternoon your Lordships approved an Order
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under this Act relating to a certain urban district.
The Act of 1932 gibes the local authority the right to levy on the exhibitor a Sunday charity contribution which the local authority applies at its discretion for certain charitable purposes. No amount is laid down, except that it is stipulated that the amount must not exceed the amount of the Sunday opening profits; apart from that it is left entirely to the local authority. As I said, the sum collected amounts to nearly half a million pounds a year. It seems to me a very unfair form of discrimination. No other kind of Sunday trading—television, newspapers and so on—is subjected to this tax. I am not suggesting that they should be, but rather that the cinemas should be brought into line with the rest of Sunday entertainment.
I know that there are a great many people who feel very strongly about Sunday entertainment; indeed, I myself do not care to go to the cinema on Sundays. But if an Act allows the cinema to be open, provided that a majority of the local electorate wish it, why, if it is wicked to go to the cinema on Sunday, does the payment of "conscience money" make it less wicked —particularly as that money is not paid by the people who go to the cinema, the so-called "wicked sinners," but by the cinema owners? Furthermore, as I have said, the amount of these charity contributions is left to the local authority to-decide, and they also decide the way the money shall be applied. The cinema exhibitor has no control at all—in fact, in many cases he does not know to whom the payment has been made. I feel, my Lords, and I should like to suggest to the noble Lord, Lord Mancroft, that this question of the Sunday charity contribution should receive the serious attention of the Government. If I may use a phrase which Disraeli used in another place arid about another subject, it seems to me to be an organised hypocrisy, and I hope that it will be abolished in the near future.
5.50 p.m.
LORD ARCHIBALD: My Lords, the subject of the Bill which we are considering this afternoon is certainly not one on which the House is likely to divide on Party lines. It is not by any

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means a Party subject, and for that reason I think no one will be surprised if there are differences of opinion, or perhaps differences of emphasis, on these Benches and on the Benches on the other side of the House, because this is essentially the type of Bill to which we have to bring our individual and particular experience and attention to bear. When in past debates in your Lordships' House we have been dealing with the cinematograph industry as a whole, I have generally felt it necessary, even though my main interest was with the producer, to try to put also the exhibitor's point of view. I shall no longer feel that compulsion, because we have now in the House a most able and gifted expositor of the exhibitor's point of view, and I should like to join with earlier speakers in congratulating the noble Lord, Lord Westwood, on his excellent maiden speech.
But though we may have differences of emphasis, perhaps only on aspects of this Bill, I do not think there will be any difference in any part of the House about the desirability of maintaining a healthy and vigorous film production industry. It was so well put in the 1955 Report of the National Film Finance Corporation that I do not think I can do better than quote:
"The maintenance of a prosperous film production industry is of national importance. It limits the necessity for imports, contributes to exports and provides valuable overseas propaganda for the United Kingdom."
That opinion, I think, is something to which we might all subscribe. So, as there is no argument about the necessity for the industry, we have to look at why it is necessary in this, as in previous Bills, to provide some support for it.
I should like to direct, or perhaps re-direct, the attention of the House to what I regard as the background considerations that we have to keep in mind when considering British film production. In any manufacturing industry it is generally accepted that the size of the domestic market is of great importance, and it is of importance to the film industry that the domestic market for the British producer is only 15 per cent. of the world market. His American competitor starts off with a domestic market which is estimated to be 65 per cent. of the world market, and the difference in size of the domestic market is a measure
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of the handicap under which the British producer works. It makes it impossible for him, for example, to recover from the home market the costs of any large, lavish and spectacular film. In the remaining 20 per cent. of the world market the British film and the American film have, of course, to compete, the one with the other and with native production where that exists.
When we come to look at the native market, I think we should have regard for a moment to what happens to the money that is taken in at the box offices of the cinemas throughout the country. There is an excellent compilation of the relevant statistics in the last annual report of the Rank Organisation, and for convenience I am taking the figures from that because they are very well stated. They show that in 1955 total box office receipts were £105·8 million. From that entertainments tax took £33·4 million. and the British Film Production Fund (the so-called voluntary levy) took £2·6 million, making the receipts from the exhibitors' point of view £69·8 million. Of that £69·8 million, £9·3 million went to the distributors, whom the noble Lord, Lord Westwood, correctly described as wholesalers, for their costs and cost of prints and so on. The exhibitors' share was £45·3 million the producers' share was £15·2 million.
These are very important figures because what they show is that the makers of all the films shown in the cinemas—and we must bear in mind that without films there would not be any cinemas and there would not be any audiences, for they are the providers of the basic element in the whole set-up—out of £105 million got £15 million. One seventh of all that was paid by the public to see films went to the makers of the films. It seems to me that there is something very seriously wrong with the proportions there. In view of what Lord Westwood has told us of the plight of the small exhibitor, I am not going to suggest that the exhibitors' share of £45·3 million is too big. Even if there could be some pruning of the distributors' share of £9·3 million, there is not enough in it to make a substantial difference. So I am afraid we are driven back to a conclusion from which there is no escaping, that it is the £33·4 million going in entertainments tax which is an undue proportion—too big a slice of that particular cake.

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I want to narrow these figures down a shade further, because calculation has been made of what proportion of the £15·2 million went to British films in that year. It has been estimated that including contribution from the voluntary levy, from the production fund, the British producers got a total of £6·8 million. I think that no one will suggest that £6·8 million, as a total, out of £105 million taken at the box offices, is an adequate amount to ensure a sufficient supply of worthwhile British films. That is the second great handicap under which they suffer.
Let us then look to see what is the result. The result is to be found in the report of the National Film Finance Corporation, Lord Mancroft was, I thought, painting the picture in colours that were a trifle rosy when, speaking of the situation of the production side of the industry, he said that it is going on very steadily. It would have been more accurate if he had said it is going on very steadily losing money. If we look at the National Film Finance Corporation's report to March of this year, we find on page 4 a table giving the results of the films released in the years 1952, 1953, 1954 and 1955. I will take the total in order not to worry your Lordships with too many figures. The number of films released was 152. The number likely to be profitable was 62. The number thought to have been likely to be profitable without the Eady Fund was only 34. My point is that, even with the so-called voluntary levy, as the result of the two big handicaps to which I have referred—the small domestic market and the fact that, from the takings at the box offices only a very little to-day comes eventually to the producer, who is the basis of the whole structure—only 62 films out of 152 released in those four years were likely to be profitable, even after receiving about £2,500,000 a year from the production fund. That is the background against which we come to consider this Bill.
First of all, we come naturally to consider the statutory levy. May I say straight away that I regard the statutory levy as being an extraordinarily clumsy instrument for the purpose for which it is intended. I am completely at one with its intention of putting British production in a better financial condition, but I think that this is an extremely awkward way of
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doing it. Let us look back for a moment to the inception of the voluntary levy. I believe that the argument at that time (the noble Lord, Lord Mancroft, will correct me if I am wrong) was that we cannot make a direct subsidy to British film production out of entertainments tax or out of the Consolidated Fund in general, because it would be contrary to our obligations under G.A.T.T. So what did we do?—a typically ingenious bit of British manipulation. The exhibitors were persuaded to agree to what was called a voluntary levy in return for a deal on entertainments tax. That was the original small levy.
A little later, when I think the Chancellor of the Exchequer was proposing to increase entertainments tax by a considerable amount, he made a deal again with the exhibitors, that he would increase the tax by less than the amount proposed if they would agree to increasing the levy by a certain amount. If I can strip aside the words with which this is clothed, what does it boil down to? It boils down to a subsidy which until now has been paid out of entertainments tax by the exhibitors under a tax arrangement with the Chancellor of the Exchequer.
Now it is going to be a statutory levy. One appreciates that the noble Lord, Lord Mancroft, had to be extremely guarded in his reference to what the Chancellor of the Exchequer may do, and that entertainments tax is under review at, the moment; but surely (if I may put it in the vernacular) we are "kidding" ourselves in considering this Bill if we are not working on the assumption that there is going to be a concession to the exhibitors to make up for the extra £1¼ million which they are going to be called upon to pay. If that is not implicit in the situation, then this Bill is most savagely unfair to the exhibitors; and I do not think that that is the intention of the Government at all. So that we are having in another form, however it may be clouded or denied, a subsidy paid out of entertainments tax; and I think that it would be much better if the Government could find some means of giving notice under G.A.T.T. that, notwithstanding the arrangement made under that Treaty, we intend to pay a subsidy direct to British film production out of the Consolidated Fund, and mentally mark the fact that it

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is coming out of the undue proportion that the Chancellor of the Exchequer takes of the box office takings of British cinemas. I hope that even at this late day the Government will reconsider getting rid of this befogging and beclouding method of doing it, and put the whole thing on a straightforward basis.
May I say a word about the Agency? Like my noble friend Lord Lucas of Chilworth, I do not see what the Agency is to do except to rubber stamp the decisions made by the Board of Trade. Furthermore, I cannot see what is wrong with the present set-up. Under it, exhibitors, distributors and producers all together appoint certain representatives to a board, of which the chairman is, I think, a chartered accountant. Let the Government take the power to appoint that chairman. It would be much cheaper to appoint a chairman than have a paid board of three or five. Let the board of representatives from the exhibitors, distributors and producers be retained as an advisory panel to advise the chairman, and let the chairman alone be the Agency.
LORD LUCAS OF CHILWORTH: With pensions and superannuation.
LORD ARCHIBALD: If there were to be pensions and superannuation, as my noble friend suggests, I would rather that there should be only one person eligible, and that would be the paid chairman. I think that if the Government are wedded to the Agency, at least they should agree to setting up an advisory panel from the industry to help the Agency to deal with a very complex situation.
With regard to the proposed yield, I do not want to go over the ground, but I hope that we shall get some explanation of how the figure of £3¾ million was arrived at, for I believe I am right in saying that the industry committee presented the Government with ample evidence that £5 million was needed. It looks as though the Government have followed a very old practice. They were getting £2½ million; they needed £5 million; they split the difference, and £3¾ million was the result—and that was the figure they put in the Bill. If there was any other method by which it was arrived at, I think we might be told. Then, in further years, this figure is to be not less than £2 million nor more than
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£5 million. But why have a maximum and minimum at all? There does not seem to be any reason for it.
The Board of Trade are to make the regulations, and they will not, I am sure, make regulations to put it up to £5 million without getting the approval of the Treasury—and they should be sufficient of a watchdog for anyone, without putting figures in the Bill which appear to me to be quite meaningless. Eight or ten years from now, before this Bill expires, £5 million may be a completely inadequate amount, having regard to the number of British films which may be made or to the rise in costs in the intervening period. If costs go on rising as they have been in all departments of life in the country during the eight or ten years from now £5 million may be copletely inadequate; and I suggest that consideration be given to leaving out this figure altogether.
I come to Clause 3 of the Bill. Looking at subsection (2) (a), I am inclined to agree with previous speakers who say that it is not good enough simply to leave this to regulations. We must be told what the Government have in mind when the Bill says:
"define the classes of British films in respect of which payments may be made;"
Are they going to exclude films made solely for television? If so, why not put it in the Bill? I am reminded of what the father of legislation on the cinematograph film industry, the noble Earl, Lord Swinton, used to say, when we were on the other side of the House: "If that is the Minister's intention, put it in the Bill." I say, "All right; what are your intentions on this matter? Tell us what they are and put them in the Bill. Do not have it all done by regulation."
Another possible class that may be defined as either coming in or being excluded has been referred to by my noble friend Lord Lucas of Chilworth—namely, films made by American-owned companies. I think we may be on rather dangerous ground here. I would remind your Lordships, as has been referred to in another connection, that American film companies operating in this country are not allowed to remit the whole of their earnings to America. As a result, they pile up here certain amounts of non-remittable sterling, for which there are

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certain permitted uses: they are, in fact, encouraged to use their non-remittable sterling for the production of British films. I think it would be a regrettable situation if, having blocked their sterling and encouraged them to make British films, you then introduced some definition which said: "That is a British film only for certain purposes." I believe that that type of discrimination would be most unfortunate. If you once start with the concept that a company is an American-owned or American-controlled company, it is difficult to know where you would draw the line between that and the company that was not American-owned but was American-financed. I think it would be much better if we could have some statement in regard to the definitions intended here, and an assurance that there will be no discrimination in this connection against American-financed films. I will say a word or two about that matter in another connection when I come to deal with the quota section of the Bill.
I want now to turn to Part II of the Bill, about which not a great deal has so far been said but about which I am not entirely happy. The first section of Part II takes from the Film Finance Corporation the restriction which has been on it in the past: that the Corporation should make loans only to producers who were unable to find their finance elsewhere. It seems to be a liberal and expanding thing to say that that limitation is removed, but I would suggest that it has its dangers. The finances at the disposal of the Film Finance Corporation are not limitless; they are strictly limited. It could well happen —I put a hypothetical case, I agree—that producers who could have obtained their finance elsewhere would come to the Film Finance Corporation to borrow from them; that halfway through the year the Film Finance Corporation would find that it had lent all its available resources, and that, later in the year, producers who could not get their finance elsewhere, and for whose benefit the Corporation was originally set up, would come along and find that there was no money available for them. I feel that we must have some explanation which we have not had yet as to why this limitation is being removed, and whether there is not some danger in it such as I have pointed out.
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Then I am bound to say that I think the effect of Clause 11 will be to stultify altogether the work of the Film Finance Corporation. If I were the managing director of the Film Finance Corporation, and Parliament passed this Bill in this form, with Clause 11 as it now reads, I should regard it as being rather in the nature of a directive to me that I must not lend any money for any film unless I had an almost gilt-edged certainty of getting my money back on the film. It is impossible to run film production on a "no risk" basis. If the Government are determined to have some limitation, I would suggest that it should be more along the lines that are to be found in some of the Acts dealing with the nationalised industries: that it should' be the purpose of the Film Finance Corporation so to conduct their business that, taking one year with another, their accounts will be in balance. This would not be quite so restrictive as the form which appears in Clause 11 of the Bill, and would be less likely to make the managing director of the Film Finance Corporation in future years play the role of the hard bank manager, which is not intended to he his function.
I would point out, further, that if you look at the Report of the Film Finance Corporation, whilst admittedly they have made big losses, if you segregate these losses and divide them into their compartments they do not amount to a large sum. If you take out the £3 million British Lion losses, which are something separate and apart; the loss that was made, quite properly, I think, on encouraging new talent under Group 3, and subsequently the Beconsfield Group, and one or two other special losses, you find that the total loss in seven and a half years of general film operation is just over £1,200,000, which over the period, having regard to the number of films involved, is not a great amount. And this amount would have been less, of course, if the Eady Plan had been in operation throughout the whole of that period. The losses in the future are likely to be lower, and therefore I do not think it is necessarily a good time for tightening up unduly on the attitude which the Film Finance Corporation is to take in dealing with applicants for loans.
Turning now for a moment to Part III of the Bill, I am bound to say that, in

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my view, the Government would be well advised to delete Part III altogether, and to let us have, at a later date, a full Bill amending the Cinematograph Films Act, 1948. There is no urgency: the present Act does not expire until 1958. It is difficult to see why Part III has been tacked on to this Bill at all. I do not want to take advantage of the noble Lord, Lord Mancroft, but I do not know whether he is aware of a reply which the President of the Board of Trade gave in another place this afternoon. He was asked if there was any intention of varying the definition of British films, to which he replied:
"There is no intention to introduce in the present Session detailed Amendments to the Cinematograph Films Act, 1948, but that does not mean that I shall not be discussing with the industry possible Amendments which might be introduced at some future time."
My Lords, why not have these discussions, get some agreement and bring in a proper Bill, and in the meantime delete Part III from this Bill? In conclusion, I would say that, although I may have sounded unduly critical of the Bill, in so far as it is the intention of the Bill to improve the position of British film production, I am entirely in agreement with it; and on the Committee stage, the efforts that I shall make, with my noble friends, will be directed towards improving the Bill and not in any way towards destroying it.
6.19 p.m.
LORD MANCROFT: My Lords, I am obliged to your Lordships for the careful and detailed, if not wholly uncritical, examination which you have given to this Bill. Your Lordships have asked a number of questions, one or two of which I will attempt to answer. A large number of them were, I think it is fair to say, Committee stage points which we will deal with carefully at the proper time. If some of the points which have arisen this afternoon are of a critical and slightly controversial nature, I can at least begin with one matter that is neither, and that is to join your Lordships in congratulating my noble friend Lord Westwood on one of the most knowledgeable and expert maiden speeches which we have heard for a long time. We always say in your Lordships' House that it is rash to speak on any technical subject because somebody
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will always "pop up" with a greater technical knowledge than yourself. None of us in future will dare speak on the film industry when the noble Lord, Lord Westwood, is in his place, because we know that if we talk rubbish we shall be put in ours at once. We look forward to hearing the noble Lord again, next time possibly in support of a Government measure.
The noble Lord raised one point which I should like to take up. I should have interrupted him were it not for the proper convention that one does not do so during a maiden speech. I think he is wrong when he says that the quota defaulters are increasing year by year. My information is not to that effect, but I will check up to make certain that I am not wrong. I was glad to hear the noble Lord's view that the exhibitors wish to see more films made in association with American firms, because I know that there are divergent views on that subject.
The noble Lord, Lord Westwood, like everybody else, talked about entertainments duty and its effect upon the industry. The noble Lord, Lord Archibald, emphasised this with many data to support his case, and I do not think any single speech was made this afternoon without a reference to it. As your Lordships will appreciate I cannot go further than the remarks I made in my opening speech. I chose my words carefully, and I then repeated them—I hope accurately —for the benefit of the noble Lord, Lord Lucas of Chilworth. All I will say now is that I will make certain that the fears which your Lordships have voiced this afternoon are brought to the notice of my right honourable friend the Chancellor of the Exchequer and those who are with him conducting these investigations which I told your Lordships are going on at the moment. I do not think I can do more than that.
I must say at once to the noble Earl, Lord Rosebery, that I am afraid I cannot agree with his request for a Select Committee. He is perfectly entitled to put upon the Order Paper a Motion that the House should agree to a Select Committee on this Bill at the same time as I put a Motion for the Committee stage. That he will do if so advised. But I am afraid that, if he does, I shall have to suggest

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to your Lordships that this is not a suitable case for a Select Committee. Most of the information that a Committee may need to find out is already well known to Members of your Lordships' House. We are perfectly able, as has been demonstrated this afternoon, to give the most careful and expert scrutiny to this Bill in a normal Committee of the Whole House. We are in a hurry for this Bill, and I am afraid that a Select Committee would add considerably to the delay. But that is a matter for the noble Earl to decide; he must make his decision when the time comes. I thought it only fair to him to tell him at once what I think the Government's reaction will be.
The noble Lord, Lord Lucas of Chilworth, had several points to make. Can we get Miss Anita Ekberg out of the way first, because she does not come within the Long Title. The quarrel is not, I may explain to the noble Lord, Lord Jessel, whether she is American, British or Swedish born. The quarrel is whether or not her picture on the hoardings is indecent. I have had the opportunity during our short adjournment to inquire from other noble Lords what they thought of the picture. One agreed with the noble Lord, Lord Lucas of Chilworth, but thought he was a spoilsport; three liked it very much, and seven said, "Who is Miss Ekberg?"
The Home Office have a certain responsibility in this matter, but that responsibility is delegated to the local authorities —in this case the London County Council who, I understand, do occasionally, on representations being made to them, suggest to the film people concerned that their poster has gone beyond the bounds of decency and good taste. But, after all, it is always difficult to account for matters of taste—one man's meat is another man's Ekberg; and who are your Lordships to decide? As I have not seen the poster myself, and therefore am not able to express any personal opinion, I will draw the attention of the London County Council to this matter to see whether we can unruffle Lord Lucas of Chilworth's susceptibilities. May I now come back to the Long Title of the Bill?
LORD LUCAS OF CHILWORTH: Before the noble Lord leaves that point he will appreciate the real reason why raised it. This is a good example of the dollar expenditure we have to make. I know that the noble Lord will agree with
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me when I say that if I had to choose between the bulk of the poster and a similar bulk of oil from America I know which I should choose.
LORD MANCROFT: I take the noble Lord's point fully, but I think he must also remember that two or three posters erected to which objection has been taken have been English posters.
A point which the noble Lord made, and which I think has caused most questioning from your Lordships, is this question of how the figure of £3¾ million was arrived at. I think the noble Lord, Lord Lucas of Chilworth, and every other noble Lord who spoke raised that point. Let me repeat what I said in my opening remarks. This is not a term of art: it is not a precise figure which can be justified mathematically. It was, quite frankly, as I said, an attempt at a happy medium. There were two or three factors we had in mind which your Lordships might like to know. We thought that the amount by which it would be reasonable to increase the revenues of producers cannot, in any case, be arrived at by an exact formula but must be an estimate of what is necessary to keep production in reasonable health.
The present fund runs at about £2½ million annually, as your Lordships know, and not more than 45 per cent. of films are profitable. On the other hand, it is hoped—and your Lordships have joined in this hope—that the figure of export earnings will continue to increase. The payments of exhibitors and their costs and overheads are rising, and obviously cannot be unlimited. In present economic circumstances, everybody, including film producers, must learn to exercise the utmost economy. I mentioned the point about the swimming baths which was referred to by the noble Lord, Lord Strabolgi, not lightheartedly but because I think the film industry has in the past done itself much harm in the eyes of the taxpayer and the cinema-goer by unnecessarily lavish displays of extravagance. I believe that the industry has realised that and has changed its ways.
The noble Lord, Lord Lucas of Chilworth, then turned, as did the noble Lord, Lord Archibald, and two or three other noble Lords, to the question of imported films. I know that it has been sometimes suggested in one way or another that the number of foreign films reaching this market should be reduced

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or, in other words, that there should be a fourth leg to our support for British films. This view, however, is often advanced with the reduction of American film earnings here in mind. Mere reduction in numbers does not fit the bill, since a smaller number of films might still mean equally high earnings shared between the remainder. This would not provide a fourth leg or assist our balance of payments. What is more important to watch than the number of films imported is the proportion of the American film earnings which is sent back to America in dollars. This is limited by the Anglo-American Film Agreement, which I think the noble Lord, Lord Archibald, would agree is a sensible and valuable compromise.
LORD ARCHIBALD: The noble Lord has attributed this argument to me, but I was not a party to it.
LORD MANCROFT: I beg the noble Lord's pardon. I am glad then that he agrees with me. As for the stimulation of the domestic industry by these methods, we must recognise that our resources for film-making are not unlimited and the quota legislation guarantees a definite proportion of screen time for British films.
The noble Earl, Lord Rosebery, took the point that he was opposed to the whole principle of one industry, as he called it, supporting another. I do not think that is quite accurate. I made the point that the film industry is unique in its complication and ramifications. What will happen here is for the benefit of the industry as a whole by getting more profit from more and better British films. That was the point of view which the noble Lord, Lord Jessel, supported. I do not like the idea of a subsidy which I think the noble Earl had in mind.
THE EARL OF ROSEBERY: Am I to understand that the noble Lord thinks that the cinema industry would profit to the extent of £5 million a year of which they are now being mulcted? They are being fined £5 million.
LORD MANCROFT: I do not think to describe it as a "fine" is the right word at all.
THE EARL OF ROSEBERY: A levy.
LORD MANCROFT: What we are trying to do is to bring money into the right
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place so that good films can be turned out to get more money. The reason why I object to siphoning off money from entertainment duty receipts for the benefit of producers, is partly that this would be a subsidy under a thin disguise, and partly that it would be closely analogous to a hypothecated tax, which I think is undesirable in principle.
I have already dealt with one point made by the noble Lord, Lord Jessel. He mentioned the question of the quota, as did the noble Lord, Lord Archibald. It was decided to take the opportunity presented by this Bill to extend the quota provision of the Act of 1948 for ten years —I say this quite frankly—in case it should prove difficult to find Parliamentary time for another Film Bill in this Session or in the near future. That is the reason for it. I have heard what your Lordships have said about this matter. I will bring your Lordships' remarks, naturally, to the attention of my right honourable friends the Chancellor of the Exchequer and the President of the Board of Trade.
I think I have dealt with the major points that have arisen in the course of this debate, and I can be justified at this late hour in not going into greater detail. However, I do not want to shirk any of, the issues raised or to dodge the points put to me. I will go carefully through what has been said and let your Lordships have individual answers to the more detailed points. I have already dealt, I think, with the bigger ones. I am grateful for the help of the House. If your Lordships have appeared slightly critical, I would only say this. It often happens that when you are looking at a new Bill you pass over the good parts, taking it for granted that the Government spokesman will accentuate them, and you yourself pick out the bits which you do not particularly like and you accentuate them in debate. No Bill is perfect, even from this Government. I hope that those who read this debate will not think from your Lordships' slightly hostile remarks that I am unjustified in suggesting that your Lordships approve generally of this Bill or that the Government are doing well by giving this important industry the security and the opportunity to carry on the excellent work they are doing.
On Question, Bill read 2ª; and committed to a Committee of the Whole House.

NURSES BILL [H.L.]
Read 3ª (according to Order), and passed, arid sent to the Commons.
NURSES AGENCIES BILL [H.L.]
Read 3ª (according to Order), and passed, arid sent to the Commons.

B.P. TRADING BILL [H.L.]
BLYTH HARBOUR BILL [H.L.]
BUCKINGHAMSHIRE COUNTY COUNCIL BILL [H.L.]
DURHAM COUNTY COUNCIL(BARMSTON-COXGREEN FOOTBRIDGE) BILL [H.L.]
EAST HAM CORPORATION BILL [H.L.]
HASTINGS TRAMWAYS BILL [H.L.]
LIVERPOOL HYDRAULIC POWER BILL [H.L.]
LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [H.L.]
MILFORD DOCKS BILL [H.L.]
NEWPORT CORPORATION (WATER) BILL [H.L.]
PORT OF LONDON BILL [H.L.]
WAKEFIELD CORPORATION BILL [H.L.]
Presented, and read 1ª.

  GOVERNMENT EXPENDITURE AND NEW FUEL DUTIES
  GOVERNMENT EXPENDITURE AND NEW FUEL DUTIES