Sitting of 20 June 1956

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
MESSAGE FROM THE QUEEN

  DOUBLE TAXATION RELIEF
  The VICE-CHAMBERLAIN OF THE HOUSE-HOLD reported Her Majesty's Answer to the Address, as follows:
  I have received your Address praying that the Double Taxation Relief (Estate Duty) (India) Order, 1956, be made in the form of the draft laid before your House.
  I will comply with your request.

ORAL ANSWERS TO QUESTIONS

  ICELANDIC FISHERIES DISPUTE
  Mr. Hector Hughesasked the Secretary of State for Foreign Affairs if he will make a statement on the present position of the talks in which Her Majesty's Government recently engaged under the auspices of the Organisation for European Economic Co-operation on the subject of the Icelandic fisheries dispute; which talks were treated as private although they affect the British fishing industry and consumers; and if he will now inform the House of their scope, purpose and result.
  The Secretary of State for Foreign Affairs (Mr. Selwyn Lloyd): The discussions are in suspense at present because Iceland has a caretaker Government until after the elections on 24th June. I earnestly hope that with the co-operation of the new Icelandic Government we shall be able to settle this unfortunate dispute without further delay.
  Mr. Hughes: While thanking the Secretary of State for the hope expressed at the end of his Answer, may I ask him whether he does not agree that the relevant problems are of great public importance; that these talks should not be
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  conducted in a hole-and-corner way, and that industry and consumers generally should be aware of what is being discussed?
  Mr. Lloyd: I think the right thing to do is to conduct the talks in such a way as to try to get results. The negotiations were going well, I think, until the caretaker Government was formed, which enforced a compulsory halt in the negotiations, but we intend to press on with them as quickly as we can afterwards.

  GERMANY

    Captured Documents (Publication)
    Mr. Ellis Smithasked the Secretary of State for Foreign Affairs if he will have published the original German Nazi foreign policy documents, the German military records and other documents in his possession which will enable historians to compile an accurate history of the German Nazi record; and if he will ensure that all documents held by members of the inter-Allied scheme shall be microfilmed before being returned or destroyed.
    The Joint Under-Secretary of State for Foreign Affairs (Mr. Douglas Dodds-Parker): As my noble Friend informed the hon. Member for Oldham, West (Mr. Hale) on 6th June, the principal documents of the German Ministry of Foreign Affairs relating to the outbreak of the last war have already been published both in the original and in English translation by Her Majesty's Government, together with the United States and French Governments. It is our intention to extend the publication of translations of these documents to cover at least the pre-war years of the National Socialist regime in Germany, and this will in itself provide historians with material for a record of Nazi policy. Microfilms have been or will be made of all the principal files of the German Ministry of Foreign Affairs on which the inter-Allied publication scheme is based, before their return to Germany.
    Mr. Elwyn Jones: Can the Under-Secretary say whether it is now possible for historians to have access to the mass of German documents which are retained in the Pentagon Building in Washington, or is there still some sort of alleged security ban upon such access?
    Mr. Dodds-Parker: Of course, I have no responsibility for the documents kept there, but if the hon. and learned Member has any particular point he would like me to look into, I will certainly take it up.
    Dame Irene Ward: May I ask for an assurance that microfilms of the German Admiralty documents and the German Army documents will be made available to our historians so that we may have these in the records as well?
    Mr. Dodds-Parker: It is hoped ultimately to make microfilms of the principal files available to historians.
    Dame Irene Ward: Yes, but may I have an assurance?
    Mr. Dodds-Parker: I will do my best, but without notice I cannot go into the details of the point which my hon. Friend is inquiring about.
    Mr. Ellis Smithasked the Secretary of State for Foreign Affairs if he will arrange for a cheap edition to be published of the Documents on German Foreign Policy, 1918-1945, Series D, Volume VI.
    Mr. Dodds-Parker: No, Sir. There appears to be little public interest in this specialised publication and a cheap edition would involve Her Majesty's Government in additional expense which I would not regard as justified.
    Mr. Ellis Smith: Is the Under-Secretary aware that it was the article which appeared in the Manchester Guardian, together with a leading article, which stimulated great interest in this matter and also interested me? Will he consult his right hon. and learned Friend with a view to reconsidering his reply?
    Mr. Dodds-Parker: No, Sir. I am afraid I cannot give an assurance that I will do that. Copies of Volume VI and others in Series D are, of course, available in public libraries.

    Field Marshal Von Manstein (Appointment)
    Mr. Jannerasked the Secretary of State for Foreign Affairs whether he is aware that Field Marshal Von Manstein has been appointed to an important office in the German Defence Ministry; and, in view of his previous war record, what
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    steps will be taken by Her Majesty's Government to prevent his obtaining information through the North Atlantic Treaty Organisation of allied planning.
    Mr. Selwyn Lloyd: The answer to the first part of the Question is that Von Manstein is not an official of the Federal Defence Ministry. I understand that, together with other former high officers, he was appointed by the Bundestag Defence Committee to give the Committee professional advice on military legislation at present before the Federal Parliament, and that in that capacity he neither requires nor sees classified North Atlantic Treaty Organisation documents. The second part of the Question does not therefore arise.
    Mr. Janner: Will the right hon. Gentleman make further inquiries? Is he aware that a report in a responsible newspaper stated that this war criminal was to have the task of preparing a defence report for Germany? Is it not essential for him to have access to N.A.T.O. documents for that purpose? What steps will the right hon. Gentleman take, if that is the case, to see that he does not have access to those documents in view of his previous record?
    Mr. Lloyd: If the hon. Gentleman will give me particulars of the allegation which he mentions. I will certainly look into it.

  DISARMAMENT (NATIONAL SERVICE)
  Mr. F. M. Bennettasked the Secretary of State for Foreign Affairs what Soviet proposals for a reciprocal reduction in the present two-year period of national service in the Union of Soviet Socialist Republics and Great Britain were included in the recent disarmament talks in London.
  Mr. Selwyn Lloyd: Recent Soviet disarmament proposals, including the letter of Marshal Bulganin of 6th June to my right hon. Friend the Prime Minister, have not suggested any "reciprocal reductions" in present periods of national service.
  Mr. Bennett: Would not the Foreign Secretary agree that the Soviet's continued maintenance of universal military conscription in their country is a factor

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  well worth taking into account in considering the pressure from certain quarters of the benches opposite for a further cut in or the ending of our own period of National Service in response to unspecified, uncorroborated and uncheckable Soviet assertions of reductions in their armed forces?
  Mr. Lloyd: I think the period of service in the Soviet forces is two years but that the majority serve for three years.
  Mr. Robens: Has not the Minister of Defence already indicated that he hopes to abolish conscription before the Government's term of office is over?
  Mr. Lloyd: Questions of that nature should be addressed to the Minister of Defence himself.

  SUDAN (MISSION SCHOOLS)
  Major Wallasked the Secretary of State for Foreign Affairs to what degree the work of mission schools staffed by British subjects in the Southern Sudan has suffered through discrimination since the transference of power.
  Mr. Dodds-Parker: I am not aware of any instance of such discrimination. I understand that good working relations have been established between the missions and the Central Government and local authorities in the Southern Sudan.
  Major Wall: Is my hon. Friend aware of the fact that the Sudanese Ministry of Education stated recently that their Government intended to take over all mission schools, that recently a group of missionaries was expelled from the Sudan without notice, and that there is a growing fear, particularly in the South, of discrimination against Christians?
  Mr. Dodds-Parker: I will certainly look into that point and let my hon. Friend know.

  NUCLEAR WEAPON TESTS
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs whether, following the publication of the White Paper on the Hazards to Man of Nuclear and other Radiations, Her Majesty's Government would be willing to enter into separate discussions now with the
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  Governments of the United States of America and the Union of Soviet Socialist Republics to secure the limitation and control of nuclear explosions without waiting for the conclusion of a comprehensive disarmament agreement.
  Mr. Selwyn Lloyd: I have nothing to add to the reply given yesterday by the Prime Minister to the hon. Member for Newcastle-under-Lyme (Mr. Swingler).
  Mr. Henderson: Is it not a fact that the Prime Minister's reply did not touch upon the suggestion contained in the Question? Did not the Prime Minister merely indicate that steps would be taken to discuss the proposal in the Anglo-French Memorandum for limiting tests at the forthcoming discussions? What I am asking the Foreign Secretary is whether he will be prepared to discuss a special agreement to limit tests, in view of the fact that, in the proposals contained in the Anglo-French Memorandum, it is stated that tests could not be limited for anything up to two years after the agreement is signed?
  Mr. Lloyd: The position of the Government in regard to limiting nuclear tests was stated by my right hon. Friend the Prime Minister last December, and that is the position by which we stand. On the question of a new separate approach on that matter, I think we had better wait and see how the Disarmament Commission progresses. After all, it is meeting on 3rd July, which is quite soon.
  Viscount Hinchingbrooke: How can the view of Her Majesty's Government, which is widely shared in the country and by certain members on the Front Bench opposite, that the hydrogen weapon is a unique deterrent against war, possibly be consistent with the demand of hon. Gentlemen opposite to secure the limitation of test explosions?
  Mr. Lloyd: What my noble Friend has said certainly would go, in so far as the banning of tests is concerned. I do not think it would be inconsistent with our present ideas on the deterrent to have some plans for limitation and control.
  Mr. Younger: Would the Foreign Secretary agree that the White Paper referred to in the Question and the corresponding medical reports of a similar nature which have been published in the United States are of a rather alarming

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  nature, indicating, in particular, that scientists have very little idea what the medical effects are likely to be? There is a great lack of precise knowledge. Does not that indicate that some action rather more urgent than that contained in the Anglo-French proposals is now required?
  Mr. Lloyd: One must form an individual judgment as to these reports. I should have thought that, on the whole, the reports were rather reassuring.

  MIDDLE EAST (SUPPLY OF ARMS)
  Mr. Philips Priceasked the Secretary of State for Foreign Affairs whether, in view of the relative balance of forces now existing between Israel and the neighbouring Arab States, he will call a conference of the signatories of the tripartite declaration, the Union of Soviet Socialist Republics, Poland, and Czechoslovakia, in order to secure that no further arms are sent to either side and that any military assistance sent to Iraq shall be sent on condition that it will be used only for strengthening Iraqi forces to meet possible disturbances in tribal areas to the north of her borders.
  Mr. Selwyn Lloyd: The hon. Gentleman has suggested what would certainly be an interesting conference. But I doubt very much whether his ingenious proposals for its terms of reference would find acceptance amongst the suggested participants.
  Mr. Price: Will the Foreign Secretary give an assurance that, in any arrangements made in future in connection with armaments in the Middle East, Iraq will continue to receive some military assistance?
  Mr. Lloyd: I think I can certainly give that undertaking.
  Mr. S. Silverman: Will the right hon. and learned Gentleman say why he is so pessimistic about the idea that all the parties interested who want a fair balance to be attained might well be interested in the cessation of any further arms race between them?
  Mr. Lloyd: I think the difficulty about the hon. Gentleman's supplementary question is that of attaining a fair balance. The point of my comment relates to the latter part of the Question.

  CIVIL USES OF ATOMIC ENERGY (ANGLO-UNITED STATES AGREEMENT)
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs whether he will make a statement on the new Anglo-United States atom agreement.
  Mr. Selwyn Lloyd: I am grateful to the right hon. and learned Gentleman for giving me this opportunity of welcoming the signature of this Agreement. The text will be issued as a White Paper later today. It will not enter into force until the appropriate Instruments have been exchanged.
  This is one of the results of the closer co-operation between this country and the United States foreshadowed in the Communiqué issued last February after the talks which the Prime Minister and I had with President Eisenhower and Mr. Dulles.
  This amendment extends the Agreement signed last year between the United States and United Kingdom for Co-operation on the Civil Uses of Atomic Energy, to make provision for a broader exchange of materials used in the atomic energy programmes of the two countries. It will also provide for the exchange of information concerning military package power reactors and other military reactors for the propulsion of naval vessels, aircraft. and land vehicles.
  Mr. Henderson: Is it the case that the Agreement does not cover the exchange of information on nuclear test explosions, in view of the duplication of financial expenditure, manpower and scientific effort which now characterises the present situation?
  Mr. Lloyd: No, Sir. It does not cover that. I think that that really is another question.
  Sir J. Hutchison: Is my right hon. and learned Friend aware that this Agreement will be generally welcomed as marking a stage of advancement in the possibilities of research and in the economies that can be derived by both the participants in the matter of research?
  Mr. Lloyd: I certainly agree with what my hon. Friend has said.

  EGYPT (ASWAN DAM)
  Sir D. Gammansasked the Secretary of State for Foreign Affairs the total British commitment towards the cost of the Aswan Dam.
  Mr. Selwyn Lloyd: The question of a British contribution towards the cost of the Aswan Dam is still under discussion and no final commitment has yet been made.
  Sir D. Gammans: Can my right hon. and learned Friend say that any advances made to the Egyptian Government will come from their blocked sterling balances and will not affect in any way the amount of capital that we are able to invest in any part of the Commonwealth?
  Mr. Lloyd: I should like my hon. Friend to give me notice of that question.
  Mr. Shinwell: Will the Foreign Secretary give an assurance that, before any final commitment which may involve expenditure by Her Majesty's Government is made, the House might be consulted on the propriety of expenditure of this sort?
  Mr. Lloyd: I should certainly like to consider the right hon. Gentleman's suggestion.

  JORDAN

    Arab Legion (Grants)
    Lieut.-Colonel Liptonasked the Secretary of State for Foreign Affairs what requests have been made by him to the Jordan Government for certified accounts in respect of grants in aid to the Arab Legion; and when these accounts were last received.
    Mr. Dodds-Parker: The normal procedure is for audited accounts of expenditure from the Arab Legion subsidy to be given to Her Majesty's Government as soon as they are available. The audited accounts for the year 1953–54 were received at the end of March, 1955, and the accounts for 1954–55 are expected shortly.
    Lieut.-Colonel Lipton: May we have an assurance that, from now on, there will be rather more energy shown by the Foreign Office in getting these accounts much more quickly than they have been
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    received in the past? Is it not a fact that we are spending £8 or £9 million on this very unreliable force, and should at least know as quickly as possible how this money is being spent?
    Mr. Dodds-Parker: I cannot accept what the hon. and gallant Gentleman said about the Arab Legion. Of course, we use all expedition in order to see that these accounts are received.
    Mr. Hoy: Are these accounts audited by the Comptroller and Auditor General in the usual way?
    Mr. Dodds-Parker: No, Sir. I should like notice of that question.

    Riots (Claims)
    Lieut.-Colonel Liptonasked the Secretary of State for Foreign Affairs what compensation has been paid by the Jordan Government for damage to British property during the riots in December and January last.
    Mr. Dodds-Parker: So far, none, Sir. Detailed claims have been sent to the Jordan Government who now have them under study.
    Lieut.-Colonel Lipton: Can the Minister say how much is being claimed from the Jordan Government, and whether, in this particular instance, there will not be a continuance of the spineless grovelling which the Foreign Office has shown to such an extent in its dealing with Middle East countries?
    Mr. Dodds-Parker: I do not know if the hon. and gallant Member regards himself as an expert on spineless grovelling, but certainly we have made our best attempts to clear up the matter of this claim, which is for some £520.

  GIBRALTAR

    Shipping Lines
    Major Wallasked the Secretary of State for the Colonies how far there has been a decrease in the number of passenger lines calling at Gibraltar during the past three years.
    The Minister of State for Colonial Affairs (Mr. John Hare): There has been no decrease. One line has transferred from Gibraltar during the past three years, but six others have started to call there.

  KENYA

    Agricultural Development
    Mr. Rankinasked the Secretary of State for the Colonies what provision is made in the budget of the Kenya Government for grants to assist agricultural development in the European and African areas, respectively.
    Mr. Hare: For the financial year 1956–57, total provision for agricultural and veterinary services amounts to £3·58 million, of which £1·75 million is for African and £155,000 for European agricultural development. The balance is for purposes common to all agricultural development, such as research and field services.

    Teachers (Supply)
    Mr. Philips Priceasked the Secretary of State for the Colonies what steps he is taking to improve the supply of teachers, both African and European, in Kenya for primary, secondary and technical education.
    Mr. Hare: I have recently approved a grant of £45,000 from colonial development and welfare funds to meet half the cost of a new teacher training college for 240 women in Kenya. This is only a part of the expansion scheme now in progress for which the Kenya Government have allocated £200,000 for capital expenditure during the current financial year.
    The number of primary and intermediate teachers in training has arisen from 538 in 1945 and 1,098 in 1950 to 2,459 in 1955. In addition, there are 26 Kenya students in the Faculty of Education of the University College of East Africa, and it is hoped that many of the students at the newly opened Royal Technical College in Nairobi will take up teaching. Recruitment of teachers from the United Kingdom is difficult owing to the shortage here, but 80 were recruited last year.

    Kikuyu Prisoners (Kamiti Prison)
    Mr. J. Johnsonasked the Secretary of State for the Colonies the dates when the prisoners No. 13222/J, Kikuyu/ Nanyuki, No. 12795/J, Kikuyu/Kiambu, and No. 7966/J, Kikuyu/Fort Hall, now in Kamiti Prison, were sentenced respectively in court; where the court was held; and what were the ages of these Kikuyu girls then and there given.
    The Secretary of State for the Colonies (Mr. Alan Lennox-Boyd): I must apologise for the length of this answer.
    The first prisoner was sentenced at Nanyuki on the 21st September, 1954, on a plea of guilty to two counts of taking illegal oaths, to two years and five years imprisonment, the sentences to run consecutively. Her age as recorded in the court proceedings was "adult," i.e., 18 or over. Her age as recorded on the prison record on admission was 18, subsequently altered on that record to 11, and how and by whom is still being investigated. Her actual age then, as deduced from the assessment by experienced Kikuyu women on 8th June this year, would have been 16¼.
    The second prisoner was sentenced at Nairobi on the 20th September, 1954, on the capital charge of consorting with armed persons, to be detained during the Governor's pleasure. Her age as recorded in the court proceedings was "under 18". The Governor directed that she be detained in Kamiti Prison where, as a juvenile, she would be placed in a special compound, and her age as recorded on the prison record on admission was 12. This record was not altered. Her actual age then, as deduced from the assessment by experienced Kikuyu women on 8th June, would have been 16.
    The third prisoner was sentenced at Thika on the 12th June, 1954, on the capital charge of consorting with armed persons, to be detained during the Governor's pleasure. It is recorded in the court proceedings that a medical officer estimated her age to be about 12¼. The Governor directed that she be detained in Kamiti Prison where, as a juvenile, she also was placed in the special compound and her age as recorded on admission was 12. This record was not altered. Her actual age then, as deduced on 8th June, would have been 18.
    As I stated in reply to a Question last week a person under the age of 18 who is convicted by a court on a capital charge must be sentenced to be detained during the Governor's pleasure and such detention may be in prison.
    The courts are not concerned with the exact establishment of age but with the age category of an accused person. On a capital charge the court must satisfy itself whether the accused is under 18.

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    On a non-capital charge it must satisfy itself whether the accused is a young person, i.e., within the age range of 14 to 17 inclusive, or a child, i.e., under the age of 14. It is some indication of the difficulty of assessing the ages of young Africans that doctors who, as a result of research, have established a tentative standard (mainly by X-ray tests) indicating a minimum age of 17½ or thereabouts are not prepared, even in cases in which that standard can be applied, to commit themselves beyond a margin of error of six months either way. In court proceedings, of course, the benefit of any doubt as to age is given to the accused person.
    Mr. Johnson: In the light of these facts, given openly by him, will the Minister agree that the charges made by Miss Fletcher now call into question, for possibly the first time, the impartial administration of justice by a British magistrate in a British Colony? Further, if the job of the magistrates in the courts was to settle whether these young Kikuyu girls were over or under 14 years, why could there not have been medical examinations in the first place, without waiting until the Minister himself sent out a cable and there was a hullabaloo in the House of Commons about it?
    Mr. Lennox-Boyd: I certainly do not think it can be said that this in any way calls into question the administration of justice. I have told the House that certain of the statements made by Miss Fletcher are being examined by her in consultation with my officers and with the Attorney-General of Kenya, who is now over here, and this afternoon, now that Mr. Dingle Foot has returned, they are actually having consultations. Copies of certain documents, including those to which Miss Fletcher referred in the articles at the end of last week, are now being flown from Kenya. It will take a little time to consider the results of the talks and to study the rest of the papers. When I have done this, I shall be glad to make available to the House all the information at my disposal, and I would venture to think that that might be the best way of resolving all the contradictions and, in many cases, undoubtedly, disagreements as to the facts.
    Mr. Bevan: Is not the Minister aware that, whatever may be the differences as
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    to the actual facts, sufficient has already been admitted by the Minister himself to show that there is something very seriously wrong with the administration of justice? Surely, would not the Minister agree that, after this lapse of time, to keep a child under 18 years of age in prison on a capital charge of consorting with persons carrying arms—the con-sorting being in most cases involuntary —that, in such circumstances, to keep that child in prison—in life imprisonment—
    Mr. Lennox-Boyd indicated dissent.
    Mr. Bevan: Yes, certainly—if the right hon. Gentleman will listen. This was established. They are called in the prison documents "lifers", and life sentences are reviewed by the Governor every four years. This is a monstrous perversion of British justice.
    Mr. Lennox-Boyd: The right hon. Gentleman's supplementary question shows the danger and, may I add, the mischief that can come from sweeping charges unrelated to the facts. The right hon. Gentleman calmly used the word "lifers" as applying to three people, not one of whom was sentenced to life imprisonment.
    The first was sentenced to two periods of imprisonment, terms of two years and five years to run concurrently.
    The next two were sentenced to be detained during the Governor's pleasure, which is an obligatory sentence in the case of people found guilty on a capital charge and who are under 18 years of age. It does not mean a life sentence. It means that they are detained for as long as the Governor thinks it desirable, and I think that it needs little imagination to realise that in applying his discretion to cases of this or a similar kind the Governor would be actuated by due regard to the general state of the emergency and by normal humane considerations.
    Mr. Peyton: Is my right hon. Friend aware that his policy in this matter has the entire support of this side of the House and that we support him entirely in repudiating the unworthy and shameful suggestions which are habitually made by the right hon. Member for Ebbw Vale (Mr. Bevan)?
    Mr. Bevan: Is not the right hon. Gentleman aware that in the prison documents which have been quoted in the House a person detained at the Governor's pleasure is classified as a "lifer"? Is he not also aware that these children's sentences are reviewed every four years and is he not of the opinion that he and the Governor should be ashamed of themselves for keeping children in prison all this time?
    Mr. Lennox-Boyd: Once more the right hon. Gentleman enters the lists without having troubled to ascertain the facts. [Interruption.] These matters are so serious that I will try to retain my poise and deal with what the right hon. Gentleman has said. The four-year re-examination—if the right hon. Gentleman would listen—takes place in all cases of people sentenced to seven years' imprisonment or more. In addition to that, there is a special review procedure, about which a Question appears later in the Order Paper. In addition to that, in the case of those detained at the Governor's discretion, it is up to the Governor, at any time he likes—and without, of course, waiting for four years to elapse—to look at every case in the light of the circumstances. And I wish that the right hon. Gentleman would trouble to ascertain the facts before he lends his oratory to the mischievous continuance of untruths.
    Mr. Shinwell: In view of the allegations and denials and contradictions that are inherent in statements made on both sides, would not the right hon. Gentleman agree that, in all the circumstances, and in order to remove suspicions that may exist in various quarters, it would be desirable to have a judicial inquiry into the matter? Would he consider that?
    Mr. Lennox-Boyd: No, Sir. I do not believe that that is necessary or desirable. What I am proposing to do is to assemble all the information, which is being most carefully gathered—and my asking the Attorney-General of Kenya to come was an indication that I intended to take any such suggestions very seriously—to assemble this information and then find the appropriate means of letting hon Members have access to all the information to which I have access myself.
    Several Hon. Members—
    Mr. Speaker: Order. It seems to me that there is material here for a debate, which we cannot carry on at Question Time.
    Mr. Fenner Brockway: On a point of order. With your permission, Mr. Speaker, I will transfer the subject of my Adjournment debate on Monday to the subject of these child prisoners in Kenya.
    Mr. Speaker: We shall see about that.

    Constitution
    Mrs. Castleasked the Secretary of State for the Colonies if he will make a statement on the constitutional reforms proposed by the European Elected Members of the Kenya Legislative Council.
    Mr. Lennox-Boyd: I have nothing to add to the reply my right hon. Friend gave to the Member for Eton and Slough. (Mr. Fenner Brockway) on 25th April.
    Mrs. Castle: Is the right hon. Gentleman aware that African opinion in Kenya has been gravely disturbed by the nature of these proposals which have been put forward from the European representatives' side? If any such proposals are put to him, will he not insist that the prime need in the Kenya Legislative Council at the moment is for a relative increase in African representation and not merely an absolute one which is offset by an equal increase in European representation?
    Mr. Lennox-Boyd: I have all through made it clear that I do not propose to comment on the proposals put forward by any one section of the Legislative Council representatives, but I am prepared to consider agreed proposals, and only agreed proposals, put forward by representatives of all races on the Legislative Council. If such proposals are put forward, I will of course consider them.

    Mau Mau Offences (Review of Sentences)
    Mr. Elwyn Jonesasked the Secretary of State for the Colonies who are the members of the committee which is to examine and review the sentences of persons convicted in Kenya of Mau Mau offences; what are their qualifications; and what are the powers of the committee.
    Mr. Lennox-Boyd: The members are: Lieutenant-Colonel S. H. La Fontaine, D.S.O., O.B.E., M.C., formerly Provincial Commissioner of the Central Province and Acting Chief Native Commissioner; Mr. Desmond Ryland, formerly Officer in Charge of Nairobi Extra Provincial District; and Mr. J. Sinclair Lockhart, District Commissioner. All have served in Kenya for many years and have considerable knowledge of the Kikuyu peoples.
    The Committee is empowered to examine all sentences of imprisonment for Mau Mau offences and to recommend in each case whether the law should take its course or whether the Governor should be invited to consider the use of his prerogative powers to remit the residue of prison sentences and transfer the prisoner to a detention order for the purpose of rehabilitation in a works camp with a view to release thereafter.
    Mr. Elwyn Jones: Although these gentlemen may be experienced in Kenya itself, in view of the grave public disquiet with regard to the administration of justice in Kenya generally, is there not now an overwhelming case for the appointment of a high-powered tribunal presided over, if possible, by a High Court judge of this country which will look into this whole question? Is the Secretary of State aware that this assurance that he is going to have conversations with the Attorney-General in Kenya is not enough, and that the Attorney-General is a party involved in this matter? The decision of the committee of inquiry may well satisfy public opinion, but I ask for consideration to be given to this question.
    Mr. Lennox-Boyd: No, I think this is much the best way to set about this work. Already over 500 cases have been considered by the committee; remission has been recommended in 354 cases, and release orders have been signed in 164 cases. The committee hopes to speed up its work very soon.
    Mr. Bevan: Would not the right hon. Gentleman reconsider his reply? Would he not appreciate that there might be on both sides of the House a considerable volume of opinion that it would be a very good thing indeed to have some fresh blood on this committee from outside so that we might be satisfied not only that justice was done in the old way but that
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    it was seen to be done? It is not seen to be done only by having persons drawn from the Colony itself on this committee. Furthermore, will the right hon. Gentleman recognise that great mischief has been done already to public opinion in Kenya by virtue of the fact that some of his followers in the last debate urged the Government not to hurry up the release of these prisoners?
    Mr. Lennox-Boyd: That was in very different circumstances. Justice is not only done but is seen to be done by those people of many differing political persuasions and backgrounds who are now working to help the Government of Kenya.

    Education
    Mr. J. Johnsonasked the Secretary of State for the Colonies what estimate he has made of the cost to the Kenya Government, and how many additional teachers would be needed, to introduce free compulsory primary education for all children in that Colony.
    Mr. Hare: Primary education is already compulsory for European children and, in some of the larger towns, for Asian children. The demand for primary education by the Arab community is being satisfied. As regards African education, the objective is to provide, as soon as possible, an eight year course of education for every African child; the immediate target is to provide by 1960 a four-year primary course for every African child whose parents wish the child to go to school.
    On present population figures, and without taking into account substantial capital costs, it is estimated that more than £12 million per annum and 41,000 additional teachers would be needed to provide an eight-year course of education for every African child.
    Mr. Johnson: Is the Minister aware that this question of education is now perhaps the most important political and social issue in Kenya, now that the emergency is coming to an end? Would he consider a loan of something like £5 million for African education, because, if nothing or little is done, this will be almost dynamite in the Colony?
    Mr. Hare: The hon. Gentleman knows the Colony much too well to say that nothing or little has been done. I believe

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    he knows perfectly well that the figures laid down in the Beecher Report have already been exceeded. For instance, there are in existence 2,287 primary schools and 337 intermediate schools, as opposed to the Beecher recommendation of only 2,000 primary schools and 270 intermediate schools.

    Royal Technical College of East Africa
    Mr. G. M. Thomsonasked the Secretary of State for the Colonies to what extent segregation of students is practised at the Royal Technical College of East Africa, either in respect of tuition or of living and recreational facilities.
    Mr. Hare: All students, irrespective of race, receive tuition and enjoy recreational facilities together. Students of all races live together in the men's hall of residence. There is at present one women's hostel which is open to women of all races. There is now under construction a second women's hostel which was planned some years ago before the incorporation of the Royal Technical College.
    This hostel was intended for European women only, as it formed part of a comprehensive scheme initiated by the Government of Kenya for the training of women, the African and Asian portions of which had already been completed. The authorities concerned are considering whether it is now appropriate that that intention should be carried out.
    Mr. Thomson: In view of the position in relation to racial segregation in the Colonies of East Africa, why on earth cannot the same kind of thing be done in the new university in Central Africa?
    Mr. Hare: That is not a question which the hon. Gentleman can put to me.

  NORTHERN RHODESIA

    Hotels (Colour Bar)
    Mr. Dugdaleasked the Secretary of State for the Colonies whether he will ask the Government of Northern Rhodesia to bring to the notice of hotel keepers the obligation imposed on them by common law to receive in their hotels all who are bona fide travellers, regardless of race.
    Mr. Hare: A statement emphasising this obligation was made in the Northern Rhodesia Legislative Council on 24th March, 1955. This was given wide publicity in the local Press.

    Government Offices, Kitwe and Mufulira
    Mr. J. Johnsonasked the Secretary of State for the Colonies what extensions to Government offices at Kitwe and Mufulira in Northern Rhodesia have been asked for by the District Commissioners for these places; and whether he will expedite these schemes, bearing in mind the fact that racial discrimination is still practised in these places and in various Government post offices owing to the inadequacy of office accommodation.
    Mr. Hare: The District Commissioner, Kitwe, has asked for seventeen offices and a room for use as a conference room or courtroom. The District Commissioner, Mufulira, has asked for four additional offices and a conference room and verandah. Efforts are being made to provide this additional accommodation and the Protectorate Government expect that it will be ready at Mufulira by February, 1957, and at Kitwe by January, 1958.
    Mr. Johnson: Is the right hon. Gentleman aware that an official Government inquiry in Northern Rhodesia condemned discrimination of all kinds in shops, post offices and Government buildings? Will he be good enough to ensure that all plans of Government buildings and post offices are in future vetted by him personally so that there shall be no segregation and no scope whatever for discrimination in the way of queues, hatches or any other means in Government buildings?
    Mr. Hare: I am not aware of any racial discrimination in district offices in Northern Rhodesia. If the hon. Gentleman has any instances that he would care to bring to my attention, I will certainly look into them.

    Mining Regulations
    Mr. Wilfred Palingasked the Secretary of State for the Colonies why the Commissioner of Mines was granted, under Northern Rhodesia Government Notice No. 55 of 1956, powers to grant

    1419
    exemptions to mines from those Mining Regulations which deal with reports on dangerous and defective places and equipment, Regulations 7, 23, and 60, removal of safety arrangements, Regulation 13, reporting injuries and deaths, Regulations 15 and 16, the provision of means for treating injuries, Regulations 18 and 19, and the employment underground of youths and females under 16 years of age, Regulation 26; and what experiments or tests are to be tried which require exemptions from these regulations, or in what circumstances such regulations are inapplicable or unduly onerous.
    Mr. Hare: Some very small mines and quarries are unable to maintain the high standard of the Mining Regulations and would have to close down if exemptions could not be granted where reasonable. No exemptions would be granted, however, in respect of the Regulations mentioned in the Question. At present no experiments or tests are contemplated which would require exemption from any of the Mining Regulations.
    Mr. Paling: If it is desirable that in any case some exemption should be given, is it not possible for application for exemption to be made to another responsible body before it is granted?
    Mr. Hare: The hon. Gentleman can rest assured that no exemptions are granted which involve a lowering of the standard of safety or an increase in the mining hazards. These exemptions are sometimes necessary during the introduction of new machinery or new mining methods pending the introduction of new legislation.

    Shops (African Boycott)
    Sir L. Plummerasked the Secretary of State for the Colonies if he will make a statement on the boycott by Africans of shops in Northern Rhodesia which practise the colour bar.
    Mr. Hare: Extensive boycotts of European. Asian and, in a few cases, African-owned shops have been organised by the African National Congress during the last two months in the main urban centres. These have not been directed specifically against shops which are alleged to practise a colour bar. Indeed, the shops most affected are those which cater mainly for the African population.
    Sir L. Plummer: Is the Minister of State aware that the Prime Minister of the Federation has expressed his concern about this grave boycott and that reporters on the spot are saying that it results from the colour bar in shops? Will the Minister consult his right hon. Friend and ensure that, while we are insisting that American oil companies do not practise the colour bar in Trinidad, British firms do not practise the colour bar in other Colonial Dependencies?
    Mr. Hare: Both my right hon. Friend and I will pay heed to what the hon. Gentleman has said, but I would point out that, according to my information, Congress leaders themselves as late as April attributed these boycott activities to higher prices and not to the alleged colour bar.

  COLONIAL TERRITORIES

    Multi-racial Universities
    Mr. Dugdaleasked the Secretary of State for the Colonies in respect of which of those universities in the Commonwealth towards the cost of which contributions have been made by Her Majesty's Government it has been made a condition of the grant that there shall be no separate living accommodation and dining halls for white and coloured students.
    Mr. Lennox-Boyd: None, Sir.
    Mr. Dugdale: Is this because it has been found possible to have universities throughout the Colonies where men of all races live together in the same quarters? If this is so, and if there has been no trouble over this, will the right hon. Gentleman convey that information to his colleague, the Secretary of State for Commonwealth Relations, when he is considering the question of a university for Salisbury?
    Mr. Lennox-Boyd: The question of race has never been made a condition for a grant to any of the university institutions with which my Department is concerned because it has always been taken for granted that they would be open to people of all races. I would most earnestly draw the right hon. Gentleman's attention to an article by Professor Walter Adams, published in The Times last

    1421
    month, on the bold experiment in race relations, dealing with the New Rhodesian University, and I would urge him not, by attempting to do overnight what may take a longer time, to prejudice a really valuable experiment.
    Mr. Nairn: Is my right hon. Friend aware that the Federal Government are not only anxious but determined to create a multi-racial university for the Federation? Does he not consider that ill-considered pressures and advice from the House might only make their task more difficult and might even make it almost impossible to bring the project to successful maturity?
    Mr. Lennox-Boyd: I fully agree with my hon. Friend. That there should be no segregation of any kind in academic work, sport or social intercourse is the first great thing, and I think it is remarkable considering the views which prevailed in certain quarters such a short while ago.
    Mr. Dugdale: Is the right hon. Gentleman aware that I saw the article by Dr. Adams, and that I wrote a reply to it, but The Times found that it had not sufficient space to print my answer? I replied particularly to his point about the Africans being polygamous and, therefore, having to have separate accommodation.
    Mr. Lennox-Boyd: Perhaps I might find it easier if I received a letter.

    Co-operative Societies
    Mr. Owenasked the Secretary of State for the Colonies what provision is made for the encouragement of cooperative services in the Colonies and Dependencies; and if he will make a statement on Government policy.
    Mr. Hare: My right hon. Friend attaches much importance to the development of co-operative societies in the Colonies.
    Thirty-two territories now have registrars of co-operative societies, and 23 of these have separately organised cooperative departments. Registered societies which totalled 1,885 in 1945 have increased to nearly five times that number. My adviser on co-operation pays frequent
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    visits to Colonial Territories and personally directed training courses in 1955 and 1956 for officers employed in departments of co-operation in Africa. The salaries of registrars and other members of cooperative departments are borne on local funds.

  ADEN

    Constitution
    Mr. Philips Priceasked the Secretary of State for the Colonies what representations he has received from the Aden Association concerning a constitution for the Aden territory; and whether he will make a statement.
    Mr. Lennox-Boyd: A letter presented by the Aden Association to my noble Friend the Parliamentary Under-Secretary of State during his recent visit to Aden included various proposals for constitutional advance both in the short and the long term. My noble Friend discussed these proposals in Aden and left it for the Governor to have further talks regarding the next constitutional steps with the leaders of the association and other members of Legislative Council, who are not yet in complete agreement on the proposals to be made to Her Majesty's Government, but I hope that following on discussions which are continuing the new Governor may be in a position to submit proposals, within a reasonable time after he has assumed office.
    Mr. Price: In view of our large oil refining interests in the Aden territories, would it not be desirable to take the relatively moderate, if not entirely practicable, proposals of the Aden Association very seriously in order to obviate the danger of the Aden people listening to the poisonous propaganda of Colonel Nasser and his agents?
    Mr. Lennox-Boyd: I am very conscious of the value of what the hon. Gentleman says.
    Mr. Janner: When considering the matter, will the right hon. Gentleman keep in mind the fact that the minorities should be looked after when any council is set up under the new constitution? May we be assured that in future we shall not again have the unhappy experience of a small community which has been

    1423
    considerably reduced in numbers in consequence of pogroms not being represented on a legislative council, if such a council exists?
    Mr. Lennox-Boyd: Perhaps the hon. Gentleman would like to speak to me about that.

    Land and Air Forces
    Major Wallasked the Secretary of State for the Colonies whether he is satisfied that adequate forces exist in Aden to support adjacent allied sheikhs against marauding tribesmen armed and encouraged by foreign Powers; and if he will make a statement.
    Mr. Lennox-Boyd: Yes, Sir. I am satisfied that the land and air forces in Aden Colony and Protectorates which have been strengthened during the last year, are adequate.
    Major Wall: While thanking my right hon. Friend for that satisfactory reply, may I ask if he will confirm that in the event of aggression these forces would be available to support our allies in that part of the Aden Peninsula?
    Mr. Lennox-Boyd: Most certainly, Sir.

    Future
    Mr. Rankinasked the Secretary of State for the Colonies his plans for the future political development of Aden Colony and the Protectorate.
    Mr. Lennox-Boyd: I would refer the hon. Member to the reply I gave on 6th June to the hon. Member for Leyton (Mr. Sorensen), to which I have nothing to add.
    Mr. Rankin: In that reply, the Secretary of State has committed himself to a measure of internal self-government for Aden. Can he tell me what that means? Will it mean the creation of Ministerial posts in which the local people can take part in government? Will it mean an increase in the number of elected members of the Legislative Council, and will it mean the appointment of a trade union adviser to assist these people in the ways of a democracy?
    Mr. Lennox-Boyd: It means what I said in reply to an earlier Question today, that I am awaiting certain recommendations.

  NYASALAND

    African Congress Secretary (Fine)
    Mr. Dugdaleasked the Secretary of State for the Colonies what were the contents of the publication on account of which Mr. Banda, Secretary of the Nyasaland African Congress, was sentenced to pay a fine of £10.
    Mr. Lennox-Boyd: I am arranging to have copies of the document placed in the Library.

  TANGANYIKA

    Land (Sugar Project)
    Mr. Rankinasked the Secretary of State for the Colonies if he will make a statement on the plan of the Government of Tanganyika to lease 70,000 acres of land in Kilombero Valley, Morgoro District, to a South African company; and if he is aware of African objections to South Africans entering Tanganyika.
    Mr. Lennox-Boyd: Negotiations are proceeding for the formation in Tanganyika of a public company registered and operating under Tanganyika law to establish a large scale sugar project in the territory.
    The scheme would involve the grant by the Tanganyika Government to the company of a right of occupancy for 99 years over an area of approximately 60,000 acres in the Kiberege area in the vicinity of the Kilombero Valley. Investigations have indicated that this area is particularly suitable for sugar cane cultivation.
    If negotiations were successful, a large part of the capital required would be provided by a company at present domiciled in South Africa. Any undertakings given by the Tanganyika Government would be subject to prior approval by the Legislative Council, where any African objections could be voiced. Entry of non-Africans to the territory is governed by the immigration law.
    Mr. Rankin: Will the Secretary of State remember that the Africans in Tanganyika object to this scheme because of the vicious segregation policies pursued by the South African Government? Will the right hon. Gentleman take that fact

    1425
    into consideration and use his influence to ensure that there is no colour bar created in Tanganyika by this company?
    Mr. Lennox-Boyd: No such bar would be tolerated, but I must make it clear that we welcome outside investment in Tanganyika where, quite apart from our duty under the Trusteeship agreement, we recognise our obligation to see the country developed.

  MALAYA

    Rubber Industry (Dispute)
    Mr. Awberyasked the Secretary of State for the Colonies if the joint consultative committee for the Malayan rubber estates has yet met to consider the dispute on the rubber estates which has involved a complete day's stoppage of work each week for the past five weeks; what were the recommendations; and if the principle of arbitration has yet been agreed upon to change the system by which the scale of wages is pegged to the price of rubber.
    Mr. Hare: A working party of the Joint Consultative Council of the rubber industry met on 15th and 16th June to consider this dispute, and a meeting of the Joint Council itself is to be held today. I cannot anticipate the outcome of these negotiations.
    Mr. Awbery: Is the Minister aware that this dispute has been going on, on one day each week, for several weeks and that the delays in dealing with these problems lead to serious trouble? Is he further aware that the tying up of wages to the price of rubber, which fluctuates so violently, causes a feeling of instability among the workers? Will the right hon. Gentleman get his Department to deal with this problem and encourage the principle of arbitration among the workers and employers?
    Mr. Hare: I am sure the hon. Gentleman is the last person who would wish to embarrass these negotiations which are now going on between the two sides. We can derive some comfort from the fact that both parties have agreed to refer their disputes to this joint council.

  SINGAPORE

    Constitution (Talks)
    Mr. Awberyasked the Secretary of State for the Colonies if he is aware that Mr. Lim Yew Hock, the new Chief Minister of Singapore, is willing to come back to London for more talks with the Government on the Constitution; and if he will, with a view to breaking the present deadlock, invite Mr. Lim to meet him again.
    Sir R. Robinsonasked the Secretary of State for the Colonies if he now proposes to reopen the discussions on the constitution with the new Chief Minister of Singapore.
    Mr. Lennox-Boyd: Yes, Sir. Mr. Lim Yew Hock has indicated in public pronouncements he has made since becoming Chief Minister that he is aware that the door remains open for further negotiations. I hope that in due course we shall be able to arrange a meeting.
    Mr. Awbery: Is the right hon. Gentleman aware that a settlement must be arrived at in Singapore by negotiation sooner or later, and that a settlement will depend as much upon London as it will upon Singapore? Is the Secretary of State further aware that now is the time for the negotiations to take place, before tragedy raises its ugly head as it has done in Cyprus?
    Mr. Lennox-Boyd: I do not think it would help if I added anything to my answer.

  CYPRUS

    Phrenaros (Investigation)
    Mrs. Jegerasked the Secretary of State for the Colonies when he expects a report regarding the complaints of ill-treatment in the village of Phrenaros to be available.
    Mr. Lennox-Boyd: Police investigations have been completed and reveal no sufficient grounds for proceedings against either members of the security forces or the several persons who appear to have made false allegations of ill-treatment. Apart from the investigation of certain complaints in a letter forwarded to me by the hon. Member and now under reference to Cyprus, the inquiry into this incident has been closed.

    Archbishop Makarios
    Mr. F. Noel-Bakerasked the Secretary of State for the Colonies what restrictions he has imposed on the correspondence of Archbishop Makarios of Cyprus; how long his mail takes in transit between Mahé and Cyprus and the United Kingdom; where and by whom examination of his mail is conducted; and whether he is allowed to read newspapers and other publications.
    Mr. Lennox-Boyd: Inward and outward mail is examined in Cyprus by the Cyprus Government. The normal mail takes between two to four weeks in transit. The answer to the last part of the Question is: Yes, Sir.
    Mr. Noel-Baker: Will the right hon. Gentleman say, first, what the purposes of these restrictions are, and second, will he give an assurance that the Archbishop's mail with people in this country and, in particular, with Members of this House will not be interfered with?
    Mr. Lennox-Boyd: The purpose of the restrictions is that the Archbishop—who. were he not Archbishop, would be detained in Cyprus rather than in the Seychelles, and be subject to the same controls—shall not, through the medium of letters and through the mail, carry on his propaganda campaign or issue instructions to his followers. I do not believe that Members of Parliament who wish, or expect, to receive letters from him would themselves wish to be exempt from the ordinary rules in the case.
    Mr. F. Noel-Bakerasked the Secretary of State for the Colonies how many rooms are available at "Sans Souci" villa at Mahé to Archbishop Makarios of Cyprus; how many servants attend him; how many persons are responsible for guarding him, and what are their ranks; and what protest has been made by His Beatitude about the conditions in which he is detained.
    Mr. Lennox-Boyd: The house has a sitting room, three bedrooms and a verandah. There are four servants. There is a police guard of non-commissioned officers and constables commanded by two assistant superintendents of Police. The last part of the question was covered by my replies to the hon. Member on the 13th June and to the hon. and learned
    1428
    Member for Aberdeen, North (Mr. Hector Hughes) on 6th June.
    Mr. Noel-Baker: With great respect, may I ask the right hon. Gentleman whether he is aware that the last part of the Question was not covered? Is he aware that the Archbishop went on hunger strike, with his colleagues, for three days because of the unsatisfactory conditions; and would he not agree that, whatever the wisdom or otherwise of departing these people, it really is folly not to make them as comfortable as possible while they are in deportation?
    Mr. Lennox-Boyd: I think they certainly are as comfortable as possible, and since the Archbishop offered his parole, which was accepted, things have been made easier still.
    Mr. Smithers: If there are any funds available for comforts, may they, please, be devoted to our troops in Cyprus?

    Expenditure
    Mr. Emrys Hughesasked the Secretary of State for the Colonies his estimate of the weekly sum now being spent on restoring law and order in Cyprus.
    Mr. Hare: The total estimated weekly cost is of the order of £130,000.
    Mr. Hughes: Does that include the cost of military occupation as well? Is it not time that the Government realised that this is a running sore from the point of view of expenditure and of everything else?
    Mr. Hare: The hon. Gentleman certainly should not think there is any pleasure from the point of view of Her Majesty's Government that this money has to be spent in restoring law and order; but as long as law and order has not been restored this money must be expended.
    Mr. Bevan: Is this figure of announced expenditure the total figure, or is it a figure which falls to be spent by the Colonial Office, or does it include all expenses of the Services as well?
    Mr. Hare: No, the figure I have given is the total weekly figure which will fall on the Cyprus Government, less a grant which will be given by Her Majesty's Government.
    Mr. Bevan: Can we have the total cost? Is it the cost falling upon the Cyprus Government and on the Colonial Vote, or is it the cost of that Vote, including the additional cost of the Services themselves?
    Mr. Hare: I will try to give the right hon. Gentleman more detailed figures. I was asked what is my estimate of the weekly sum now being spent on restoring law and order in Cyprus.
    Viscount Hinchingbrooke: Since we may not reach Question No. 50, may I ask my right hon. Friend whether a general statement on Cyprus may be made this week, or next week, in view of the fact that there is a number of anxious Questions put down on that subject?
    Mr. Speaker: That is not in order now.
    Mr. Emrys Hughesasked the Secretary of State for the Colonies what expenditure was incurred in Cyprus from January to May this year; and how it compared with the expenditure from January to May, 1955.
    Mr. Hare: Expenditure from the funds of the Cyprus Government was about £5·31 million from January to May last and £3·77 million for the same period of 1955; these figures exclude Service and development expenditure, which are not readily available in respect of the periods concerned.
    Mr. Hughes: Is it possible for the Minister to give us an estimate of the total sum which has been spent in Cyprus? Does he think that Cyprus is on the plateau which is talked about by his right hon. Friend?
    Mr. Hare: No, if the hon. Gentleman would like to know the estimated total expenditure in Cyprus in 1956, it is around £16 million. Of that sum, the emergency represents something like 14 per cent., the rest being social services, 23 per cent., development, 33 per cent., administration and so on, 30 per cent.

  BRITISH GUIANA

    Air Services
    Sir R. Robinsonasked the Secretary of State for the Colonies what steps are being taken to ensure the main-
    1430
    tenance and subsequent expansion of the air services in British Guiana.
    Mr. Hare: The British Guiana Government, who have recently acquired the ownership and control of British Guiana Airways, have appointed British West Indian Airways to act as their managing agents and advisers in the operation and development of air transport services in the Colony. Arrangements are being made for British West Indian Airways, after a year's experience in this capacity, to provide the Government with a report on the operation and future development of the air services in the Colony.
    Sir R. Robinson: Is the Minister aware that at the present time the air services of British Guiana are very much undermanned? Will he urge upon the Government of the Colony the need for securing adequate flying personnel so that these services may be continued?
    Mr. Hare: I certainly will bear in mind what the hon. Gentleman has said. I should like to repeat that, in a year's time, the various lessons which will have been brought forward in this report by the British West Indian Airways will be available for the study of the British Guiana Government.

  ATOMIC ENERGY

    Radio-active Particles (Fall-out)
    Mr. Masonasked the Lord Privy Seal what research is being conducted into the possibilities of controlling radioactive fall-out over the United Kingdom.
    The Lord Privy Seal (Mr. R. A. Butler): If the hon. Member has in mind possibilities of preventing or controlling the rate of fall-out of radio-active particles which already exist in the upper atmosphere, the answer is that there are, so far as is known, no means.
    Mr. Mason: Is the right hon. Gentleman not aware that this is a very disturbing reply indeed? We have already received a traceable amount of radio-strontium. There is a concentration of radio-activity in the atmosphere 200 times greater than what has already fallen. Does the right hon. Gentleman not agree that, without any more atom or hydrogen bomb tests over the next few years, because of that much which

    1431
    is already falling, we shall already have received a high percentage, I think a dangerously high percentage, of radio-strontium?
    Mr. Butler: That raises rather a different issue, because that is set out in the Medical Research Council's Report which has just been published. I have to give the hon. Gentleman an answer which the best scientists in this country say is true, namely, that there is no method, so far as is known, of controlling radio-active fall-out in the manner suggested by the hon. Gentleman.
    Mr. Mason: Will the right hon. Gentleman not state clearly and emphatically whether he thinks that there is real danger? Is he not aware that this radioactivity is bound to fall and that the radio-strontium, with all its dangers and after-effects, will cause some grave concern in the near future?
    Mr. Butler: The words chosen by the Medical Research Council were very carefully chosen, and it would not be right for me to enlarge upon them. There is, of course, a degree of danger set out in the Report.
    At the end of Questions—

    QUESTIONS TO MINISTERS
    Mr. Bevan: May I ask the right hon. Gentleman the Secretary of State for the Colonies whether he proposes to ask the permission of the House to answer Question No. 50 today?
    Mr. Speaker: The right hon. Gentleman has not given me notice that he wants to answer it, and that is what counts.

BUSINESS OF THE HOUSE
Proceedings on Government business exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House) for One hour after Ten o'clock.—[Mr. R. A. Butler.]
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Heath.]

TRINIDAD OIL COMPANY
3.31 p.m.
The Chancellor of the Exchequer (Mr. Harold Macmillan): The transaction which we are discussing today was first brought to the attention of the Treasury on 5th June. On that day Lord Baillieu and Mr. Vos saw officials of the Treasury and submitted their proposals. This matter was reported to me on the same evening. Of course, it was apparent from the first that this was not one of the routine applications which come before the Treasury under the Exchange Control Act, 1947. Wider issues were clearly involved and I will be frank about my first instinctive reaction.
It was no doubt much the same as that of many hon. Members and the general public. I felt a sense of regret, even dismay, at the thought that an important asset of this kind, hitherto owned and managed by British interests, should pass out of our immediate control. Nevertheless, I believe that my experience in studying this matter has been the same as that of many hon. Members on both sides of the House. The more I looked into the details and possible alternatives, the more clear it became to me that the Government could have no option but to give their assent in principle. The only question was what should be the conditions.
Those conditions must guarantee two vital interests, first, the over-riding interest we have in strengthening sterling both in the short and long run, for which the United Kingdom has direct responsibility and for which we are the trustees of the whole sterling area, including Trinidad. The second was the life and prosperity of the people of the Island of Trinidad. For this the Government of Trinidad, of course, have primary responsibility, but they have the right to look to us for the strongest support. I think I should add that we should also bear in mind, at this crucial stage, the general interests of the peoples of the Caribbean.
Before coming to those major issues, I should like to say a word about the purely legal question. The assent of the Treasury is required to any transaction of this kind under the Exchange Control Act. The object of this legislation is primarily the protection of sterling. We are all familiar with one aspect of exchange control when we want foreign

1433
currency for any purpose. That is when a loss of foreign exchange is involved, but it is equally important that there shall also be control over the sale by British subjects of assets to foreigners, that is, even when the immediate result is a gain of foreign exchange. In such cases it is necessary to ensure that the sum received and the conditions of sale are such as to make the transaction a sound one.
I think that the House will agree that the effective exercise of such powers depends upon the tradition of fair and equitable administration. If the authorities are to command the confidence of citizens and traders, these powers, which are passed for one purpose, must not be used for another. In this case, however, after careful thought I would certainly not have hesitated to have used them had I reached the conclusion that in the broadest national and imperial interest this particular transaction ought to have been prevented.
There is, in addition to these general powers, a more technical power under Section 468 of the Income Tax Act, 1952. There, as the House knows, the consent of the Treasury has to be obtained if a company wishes to transfer its central management and control from the United Kingdom, so that the company ceases to be resident in the United Kingdom for tax purposes. The purpose of that, of course, it to protect the Revenue. Here again, it is necessary to operate the power in a reasonable manner weighing any prospective loss of tax against the other factors in each case.
Now I come to the major issues in this affair. I make no apology for the Government having taken a week to make up their minds. It is a curious thing that if Governments reach a rapid decision on this kind of thing, then they are accused of rash and ill-considered action. If they pause for a little thought, they are accused of dillying, dallying and dithering. Indeed, in one section of the Press it appears to be the view of some people that it is dilatory action to think at all.
Apart from the very highly technical questions involved, the larger questions also require a good deal of consideration and a good deal of discussion, first, and
1434
above all, with the Government of Trinidad. I also thought it right to communicate with the Government of Canada. There were two questions to be settled. Was the transaction contrary to the interests of the people of Trinidad? Was it contrary to the interests of the people of the United Kingdom? We have a responsibility, although in different degree, for both.
Let me deal, first, with the question of Trinidad. The Trinidad Oil Company has had a long life in that area. The oil supplies and even the probable oil reserves of Trinidad are not important in terms of modern oil production. They have no broad strategic, and little economic, significance, judged by the scale of world considerations. They have. however, a great value and a great importance to the life of the people of Trinidad. The fact that they are small in total makes them, in a sense, more precious and perhaps more precarious.
For a number of reasons the oil business is one where very large amounts of capital are required today. The Trinidad Oil Company has not been able to develop its business on a sufficient scale out of its own reserves, or to obtain sufficient capital for its own development from any other source, in such a way as to keep pace with modern requirements. The supreme interests of the people of Trinidad are the two following considerations: first, that the business should go on in all its different aspects, that is, with exploration and with the production and the refining of Trinidad oil, and also with the refining of such oil as can easily be brought to the island; and, secondly, that capital should be available for the development of all these activities.
On the purely economic aspect, it is clear to us, after consultation with the Government of Trinidad, that if the sale were to go through on the conditions which I set out in my statement last Thursday they would welcome that development and would have general opinion in Trinidad behind them. I think they would be right in this view, for it would assure to them and to their people the backing of a wealthy and powerful group of oil producers who would take the place of an organisation that has not the resources fully to develop those assets. That is the economic aspect from the Trinidad point of view.

1435
The political and social aspects are equally important, and the Government of Trinidad, as the House remembers, very rightly reached a conclusion as to the undertakings which they would regard as essential for the control of the present company were it to pass to new and non-British ownership and management. They communicated those to us, and they also—I think, very prudently—published Them for their people and the whole world to understand.
I think that those undertakings have generally been regarded as satisfactory. The precise form which they are to be given will, of course, have to be discussed between the two Governments and the Company. There should thus be little difficulty in securing that these undertakings are effectively guaranteed when formal consent is given. So much for the interests of the people of Trinidad.
Mr. John Dugdale: What sanctions are there if the conditions are not carried out?
Mr. Macmillan: There are very great powers. because, of course, all this is under the control of the Government and the Governor of Trinidad. I do not think that there is any difficulty about that.
Mr. Frank Tomney: There is another important aspect of the matter. In areas where American, capital has been invested is it not the case that the American trade unions have been inhibited by the Governments of those areas from organising the workers there?
Mr. Macmillan: I do not know what the answer to that is, but I observe that that is covered in the conditions which are included among the undertakings which the Government I Trinidad require, and which are printed in the White Paper.
I think that what I have said covers the interests and the view of the people of Trinidad. I go further and say that what we want to do is to make sure that a bouyant and developing business, so far as the resources of the area allow, is working to the economic advantage of Trinidad and of the Caribbean; and, indeed, it can well be argued that the larger command of oil resources in general in the hands of the new Company will tend to the maintenance and the
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growth of the refinery as well as of the extraction part of the enterprise, and that, from the point of view of the people of Trinidad, is a very important part of the future.
I would go further and say that, unless a very direct and vital British interest were involved, we should have no right to refuse a transaction clearly in the interests of Trinidad, so long as it was subject to proper conditions and while it was favoured by the Government of Trinidad. To do so would, I think, be in the spirit of the "old colonialism"—in the pejorative sense in which this sense is nowadays used or misused. It would certainly be contrary to the principles and practice of the Colonial Empire and Commonwealth of today. So much for the position of Trinidad.
Let me now turn to the interests of the people of the United Kingdom. First, I should like to deal with the economics of the deal itself. It is clear that the price paid is a satisfactory one judged by ordinary business standards. It is also clear that the immediate increase in the dollar reserves which will accrue from the transaction will not be unwelcome and may well be fruitful. Indeed, the price has seemed so high that some people have wondered whether it is explained by a hidden asset or a mysterious, undisclosed Eldorado.
I should like to examine that. Apart from the present development, what are the future possibilities of this business? On the production side, there are two assets, one in Trinidad and one in Canada. In Trinidad, the main hope for new production is in the unexplored areas, mainly submarine, and the rights over those are held by the Company called Trinidad Northern Areas. This asset is shared by the present Company, and will be shared, of course, by its successors, in equal parts with British Petroleum and Shell; each holds one-third of this exploration company. Therefore, whatever the potential importance of those sources of supply may be—I do not know whether they will be great or not, but they cannot be very significant—two-thirds of them are owned by Shell and British Petroleum. So much for the resources of the oil in Trinidad.
Now I come to the asset in Canada. There is a refinery business there belonging to the Trinidad Oil Company. There

1437
is also a distribution business. Neither of those is a very big affair. So far as the production of oil is concerned, apart from those two, the Trinidad Oil Company has done some small exploratory work and holds certain concessions, but, as I told the House last Thursday, of the 100-odd million dollars which have been spent by British interests in the last few years in obtaining concessions or developing potential resources in Canada, by far the largest sums have been spent by the two companies, Shell and British Petroleum. The Trinidad Oil Company's expenditure has been very small indeed in comparison. Therefore, so far as production in Canada is concerned, we are not parting with any substantial or significant part of British interests.
Now, of course, it may be that the particular concession, the particular work that has been done, which, as I said, was about one-tenth of what the others have done in Canada, may prove to be of special value. No one can know. It may be exceptionally lucky, but there is no difficulty at all, except, of course, enough Canadian dollars, in British companies getting concessions for oil exploration in Canada, and they are doing it all the time on a substantial scale; and I hope that we shall be able to give them even greater assistance in their efforts in the future. So there is really nothing, I think, in that part, the possible asset of exploration for oil in Canada.
Then, the House will ask, what is it that has induced the Texas Oil Company to make this large bid? I do not think I shall be committing any indiscretion if I say that it appears to me, at any rate, that one of the objects of the purchase is to develop business in the British market through the Trinidad Oil Company's moiety in the distributive business known as Regent. I think that that is the main purpose of the deal.
This business is already half owned by a company belonging to the Texas and California oil interests. The other half belongs to the Trinidad Oil Company. It is the purchase of this moiety which may, I think, be the chief attraction. Personally, I see no harm in that, unless we are opposed to all competition in the distribution of petroleum. [Laughter.]
Mr. Cyril Bence: There is competition in advertising, that is all.
Mr. Macmillan: If monopoly in oil distribution is to be part of the new programme of the Labour Party, we can understand this reaction on the part of hon. Members opposite.
Seriously, however, what is it proposed to do if we refuse permission for this transaction? The Trinidad Oil Company could not, I think, raise the money on the market. It has not the resources, and could not command the resources, it needs. One of its main difficulties, as is pointed out in its Memorandum which is Appendix A of the White Paper, is that it has no source of cheap Middle East crude with which to support its business. This means that it cannot hold out a promise of a proper return on further capital investments and yet very large sums are required for the full development of its business in Trinidad or elsewhere.
I see that it has been suggested that the British Government should have put up this money and themselves entered this business on a large scale. I personally think that that would be a very dangerous decision, and certainly very unwise if taken precipitately as the result of a sudden situation like this. Even with careful thought and preparation as part of a general plan, I think it would be very imprudent. That is not a practical policy.
One of the large corporations might have come along and taken it over and, of course, this possibility immediately occurred to me. I, therefore, asked the chairmen of both the British Petroleum and the Shell Company to consult with me frankly on this matter. They pointed out to me, in no uncertain terms, that, apart from anything else, they had no interest in purchasing half the Regent business in this country. In the first place, they would be going into a business on a fifty-fifty basis with one of their main competitors. That would not be a very workable partnership. The Regent share of distribution of petroleum products in this country is running at about 6 per cent. Another large supplier, Esso, is controlled by another American group.

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Shell and B.P. together supply far the larger part of our market. For what purpose would they want to buy Regent? Why should they buy a half-interest in a set of petrol stations and in a distributive machinery? To close it down? Surely that would be a very unwise action and contrary to the whole view of the House against monopoly. To go on running it? But they have built up their business over a much longer period than Regent. They have far greater expertise and, if they wish to increase their business, they have no desire and no need to do so by purchasing this distributive business.
Therefore, the main assets, and the main attraction to the Texas Company in its offer for the Trinidad Oil Company's share is something which has practically no value to the only possible United Kingdom purchasers, that is, either B.P. or Shell. As to the new exploratory areas in Trinidad, if we regard them as an asset, we retain two-thirds of them. As for Canada, Shell and B.P. have singly and together far greater developments and possibilities. They have spent and are spending far more on concessions in Canada. It would be of no particular value to them to add this small amount to what they already possess. And if they were able to make fresh developments in Canada and we are able, as I hope, to agree to the provision of the necessary currency, there is no difficulty in doing so. There is no need to buy Trinidad Oil shares in order to invest in oil in Canada.
There are, however, two conditions on which Her Majesty's Government must insist, partly in the interests of the United Kingdom and the whole sterling area, and partly in the interests of Trinidad. These are in addition to the specific undertakings to the Government of Trinidad which I mentioned earlier. They are the two conditions in paragraphs 28 to 30 of the White Paper.
The first is that the marketing operations should be carried out in such a way as is already agreed with other American companies for the protection of sterling. There has already been developed quite a technique on this matter, and it is essential that the new proprietors should conform to the practice—a practice which we have been able to negotiate successfully with other
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American interests. It is, of course, true that we shall have to provide the dollars for any dividends that may be paid, but that is nothing like as important a consideration as the marketing operations. That is vital.
It has been suggested that our industry will lose business because the new owners will buy all their equipment in the United States. In fact, American oil companies buy a great deal of their equipment here. Last year, they spent no less than £23 million with us on equipment, apart from invisible payments such as tanker freights.
The second condition is that the production and refining operations in Trinidad are to be carried out by a company registered in Trinidad. That is to protect the point which the hon. Member for Hammersmith, North (Mr. Tomney) has just raised. It will mean, of course, some tax loss to us, but it will mean a tax advantage as well as an economic and social advantage to Trinidad. With these provisos I feel that the financial and economic advantages of this deal are decisively in favour of acceptance, and I so advise the House. Any dollar loss in dividends or sterling loss in taxation will, I believe, be more than recouped by the dollar proceeds of capital investment by the new owners in the sterling area.
It has been suggested that I should have added a condition requiring the Texas Company to finance the purchase by selling to a United Kingdom interest some part of their holding in the company usually called Aramco in such a way that this country would be represented on the board of Aramco. I do not think that that condition would have been advisable, partly because Aramco is itself formed of three interests, holding exactly one-third each.
In any event, if we want closer relations with the Texas Company and its associates in Aramco, a far better way will be to let the present transaction go through. I believe that it will increase our common interest in the well-being of the international oil industry, and, up to a point, the more our interests and those of the Americans are mixed up, to use a famous phrase, the better it will be.
I have already referred to the strategic interests, but the contribution of oil production in Trinidad either now or in the future cannot be more than of the tiniest dimensions in relation to our vast needs.

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Moreover, the Governor of Trinidad has a right, and will retain it in an emergency, to full control over the product and over the refinery.
We are, therefore, left with the argument which, I have frankly admitted, was my first impression—what I would call the argument of political tradition or, if the House likes, of sentiment. We certainly cannot hide from ourselves that it is at first sight something of a blow to see a great asset passing out of our hands. This is natural, but if we look at this matter more dispassionately and from a wider view, especially remembering that we are a country dependent on world trade and overseas investments, I have no doubt at all where the balance of advantage lies.
What should be our policy towards mutual investment, that is, foreign investment in the sterling area and sterling investment abroad? Our policy surely must be to welcome foreign investment where it brings no positive disadvantage to the United Kingdom economy or to the economy of a country in the sterling area. This means that in considering an application for investment, including the transfer of ownership, we should give permission where the proposal promises to a significant extent to save imports, to promote exports, and to introduce valuable new techniques; and we should allow investment in a sterling area country outside the United Kingdom if it promises to contribute to the economic well-being of that country.
Broadly speaking, I think that it has been for a long time an advantage to us to have any foreign investments, especially American investments, flowing into the United Kingdom and the rest of the sterling area. In the United Kingdom we have gained in many branches of industry. We have gained in oil refineries and equipment in the motor industry, tractors and chemicals—to name only a few. The rest of the sterling area, for whom we are trustees, has gained from American, sometimes associated with Canadian, investment; for instance, in the development of bauxite mining in British Guiana and Jamaica, in copper mining in Africa, and in other ways.
All this investment coming from non-sterling area sources into the United Kingdom, or into the sterling area, is to our advantage. But, of course, we also
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need to be exporters of capital on an ever-increasing scale, and that is our great aim in trying to earn a surplus with which to do it. Our investment outside the sterling area is being steadily renewed. Special permission is being given for the purchase of the necessary foreign exchange, and this has made possible notable developments in Canada, and, to a lesser extent, in the United States. I will not mention all of them, but there have been some remarkable investments of British capital in the United States during recent months, sometimes in developing new businesses and sometimes in buying back old ones with which we had parted.
In the sterling Commonwealth we are making a great effort. Long-term lending there in the last four years has been at the rate of well over £100 million a year. and that is a great deal. As a percentage of national income it is unrivalled in any country in the world. It also, of course, represents a considerable strain on our reserves and on our balance of payments, but that is sometimes forgotten by the opponents of this transaction. It would be a serious blow to our long-term interests if we were to set up a bar against anything like a two-way traffic in investment.
There is one point I must mention, because it has been mentioned in the House and in the Press. I would like to deal with the suggestions made yesterday at Question Time—and they are very natural suggestions—that the proceeds of this sale should somehow be segregated into a separate account for Common-wealth development. I explained then that this is not really practicable. The dollars accrue to the reserves and we cannot isolate them. Similarly, the sterling counterpart of those dollars is distributed to the shareholders, but this does not mean that the sale does not help us to do more to finance sound development in the Commonwealth.
Of course it will. The healthier the reserves the more we shall be able to allow. This is the object of our policy. But as dollars for investment are made available from the reserves, so it is only right that dollar earnings, whether from the sale of investments or otherwise, should come into the reserves. If we were to adopt any different course I am sure that right hon. and hon. Members

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on both sides of the House would realise that we would impose a serious strain upon the continuing operation of the sterling area. We could not act independently in this way.
In the last week, among other activities, I have had a little time to read some of the Press comments on this question. Naturally, I have observed that as the details of this matter became more widely known, the Press as a whole came to the conclusion to which I was forced when I examined the facts dispassionately. There have, of course, been some notable exceptions. By a strange conjunction the three newspapers which have specially opposed this have been the Daily Worker, the Daily Herald and the Daily Express.
It would be indelicate for me to inquire into the spiritual affinity that ties this group together, but there is one extract from the Daily Express of last Friday to which I would call the attention of the House, because it sums up exactly the point of view that I believe to be so dangerous and ill-judged. In part of the leading article, under the sub-heading "Shameful, sordid," there is this statement:
"Resources like oil and water power are a vital portion of a nation's patrimony. To keep them out of foreign control is an elementary act of self-preservation. Failure to give that measure of defence is irresponsible."
To keep oil out of foreign control—[HON. MEMBERS: "Oh."'] Yes, the article states that water and oil power are a vital portion of a nation's patrimony and that to keep them out of foreign control is an elementary act of self-preservation.
I could hardly imagine a doctrine so dangerous to us. The people of this island, 50 million of them, live in a country with very few resources of raw materials. What would be our position if this doctrine were rigidly enforced by all the countries of the world? What would be our position in the field of oil? I should have thought that no nation had a greater interest than our nation in opposing the narrow, exclusionist point of view. We have learned that from bitter exeprience, and I should have thought that we had enough trouble with Mossadeqs abroad not to wish to encourage them at home.
Outbreaks of xenophobia are sometimes epidemic and sometimes endemic
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diseases. Sometimes it attacks great continents and sometimes small countries. It may be a symptom of a sense of inferiority in declining nations or in young and growing nations. In an island like ours, however, with its splendid and historic past, and, I do not doubt, its still more powerful future, I think that we should be immune from these prejudices. Economic nationalism or isolationism is the last thing in the world which can suit us. We ought, of all people, to be moved to resist these tendencies, for we have so much to lose and so much to protect.
It is easy. of course, to play upon emotions of this kind. It is easy to make appeals, to appeal to different sections of a community, but I think we ould have regard to our larger and our more permanent interests. By our investment abroad we have secured for ourselves access to many of the most important supplies of raw material on which we depend for our livelihood. Sometimes these are threatened—and they are threatened today—by political or by racial prejudices, but they are certainly not in our interests, and we should not encourage them. Still less ought we to fall victim to them ourselves. We should hold on to our policy of trying to increase the total volume of world trade, for by this means alone in the long run can we maintain the standard of living and the economic life and future of our people.
4.8 p.m.
Mr. Harold Wilson: We must congratulate the Chancellor on starting the day, at any rate, in a better mood than he was in yesterday. There were two parts of his speech which greatly entertained the House. One was when the right hon. Gentleman tried to indicate the virtues of free competition in the distribution of petrol in this country, a point to which I will refer in a few minutes. The second was towards the end of his speech, when he decided to pick a quarrel with Lord Beaverbrcok and, in particular, to take to task the Daily Express for the leading article it produced at the end of last week.
I am bound to say for my part that when the Chancellor was reading his lecture to the Daily Express he might just as well, when he was talking about our oil and all that, have been delivering the same lecture to the Prime Minister in respect of a speech that he made at

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Norwich a fortnight ago. At any rate it is a change to feel that the Chancellor's quarrel is not with this side of the House so far as that argument is concerned, but with his own Leader and with his own Press supporters.
I must tell the Chancellor that neither his speech nor the White Paper which we had on Monday in any way shakes our view that this is a regrettable transaction which has caused dismay—the Chancellor himself used the word—and despondency throughout the country, and, I believe, in more than one quarter of the House.
I must make clear at the outset what our line is. To use two of the words which the Chancellor has just used, it is neither sentimental nor xenophobic, We feel that this take-over bid should not be the signal for an outburst either of anti-Americanism or economic nationalism. So far we agree with the right hon. Gentleman.
But our case, which we shall take into the Division Lobby on a clear vote of no confidence in the Government on this issue, is twofold. [Interruption.] We shall have with us very many hon. Members opposite if they vote according to their convictions and not in accordance with party discipline. First, and in its widest aspects, we believe that the deal is due to the admitted fact that after four and a half years of Conservative Administration we have not the capital available for an essential project of Commonwealth development. That was the broad point which stood out a mile from the Chancellor's statement.
Our second point is that, even against that background, even accepting the Chancellor's analysis of the economic situation, we believe that a constructive and workable alternative could have been produced if the Chancellor and the Government had had the will to do it.
The Chancellor has ranged over the history. He tells us that the Treasury first heard of this business on 5th June. Yet the offer was made public by the interests concerned that night, the very day when the Chancellor heard about it for the first time. We know what the reaction of the Stock Exchange was at its opening next morning, and from that moment the Government had a pistol held at their head.
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I suggest to the Chancellor that he has not taken the right line in what appears to have been his first encounter with these rather slick oil financiers. I suggest that he should have made clear that this was an intolerable approach on the part of the oil companies concerned and that the Treasury should have been approached at a much earlier point in the negotiations so that a coherent line could have been worked out.
I hope we may be told whether there was at any time an approach by the Trinidad Oil Company of Mr. Vos and his associates to the Government of Trinidad. If so, how long ago was it? If it is confirmed that neither the Government of the United Kingdom nor the Government of Trinidad knew anything about the deal until it had practically broken in the Press and the whole matter had come to pistol range, it suggests very bad faith on the part of those responsible for the deal knowing, as they must have known, that from the start it required Government approval.
When the news broke in the Press, the first result throughout the country, except in the City, was consternation. My hon. Friends and I opposed it. The 1922 Committee went on record against it. The mighty Beaverbrook Wurlitzer pulled out every stop it had on the question. Where are these brave souls today? [HON. MEMBERS: "Ascot."] The 1922 Committee has turned tail. In three hours' time we shall see all Lord Beaverbrook's chocolate crusaders trooping through the Lobby in support of the deal. Why will they be doing that?
Personally, I discount the view that hon. Gentlemen opposite have succumbed to pressure from the City, though the pressure has, in fact, been formidable, but I do not think it was that. I do not think it really is that hon. Gentlemen opposite have been converted by the persuasive arguments of Mr. Vos whom some of them met last evening. I think it is simply that hon Gentlemen opposite suddenly realised that their professed love of the Commonwealth was in conflict with their doctrinaire belief of non-intervention in economic affairs. Year after year we have had that. We have had the same conflict about bulk purchase. Commonwealth development and free speculative markets do not mix, and on this occasion,

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as before, the free speculative markets have won.
Also, I think hon. Gentlemen opposite are a little worried to find that the only powers that the Government could have used to stop this deal were the products of hotly contested Socialist legislation. The Chancellor made clear that he could have stopped the deal by the Exchange Control Act, 1947, which hon. Gentlemen opposite bitterly opposed. The other power is the residence provision in Section 468 of the Income Tax Act, 1952, also a Labour Measure.
Mr. Beresford Craddock: The 1952 Act?
Mr. Wilson: Certainly. The hon. Gentleman must realise that the 1952 Income Tax Act was a consolidation Measure and Section 468 simply swept up into it Section 36 of the Finance Act, 1951. Hon. Gentlemen opposite kept us up all night opposing Section 36 of the 1951 Act. I should not like to feel after all these years that hon. Gentlemen opposite were trooping through the Division Lobby during a Finance Bill not knowing what they were voting about. That, I think, perhaps explains the attitude of hon. Gentlemen opposite.
I want to tell the Chancellor that our line is not a narrow, still less a peevish, one. It is not the one that encroachment into Commonwealth territories must at all cost be resisted. As the Chancellor fairly said this afternoon and last week, it has been the policy of both parties in this country since the war to encourage American investment in this country and in the Colonial Territories where a clear advantage could be shown. The House will be familiar with the kind of tests that have been applied to projects. Do they bring know-how to the country? Do they bring knowledge of new processes? Do they make possible the creation of some new export industry or export outlet? Do they provide some means of saving imports, especially dollar imports?
We have welcomed very many of these investments. In the Development Areas there are scores, if not hundreds, of factories controlled by American companies which both the Labour Party and the Conservative Party have welcomed into the country since the war. Many of them are playing a big part in our export trade.
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Import saving, too. I remember opening an American-controlled factory to produce carbon black. The result of welcoming it here is that it has made us practically self-sufficient in carbon black so that we do not have to import so much of the American product,
The Chancellor has not shown what advantage accrues, to the United Kingdom, at any rate, from this deal. None of those tests has been applied here. Are we going to get some new know-how from the American companies in the marketing, distribution and refining of petrol? Surely that is not possible. Regent advertisements are plastered all over the country with the slogan, "It is British. It is best." If that is true, I do not think it is possible for American know-how to improve upon it. Are we going to get any new exports? Are we going to save imports? The Chancellor stated that it would cost us something in dollars in transmitting the profits.
The Chancellor suggested a week ago that we should welcome the American entry into the domestic market. He has been talking about expertise. I think it is the view of most hon. Members that there is enough expertise already in oil distribution in this country. Too many resources are already being wasted in the phoney, costly oil war going on at present on the high roads of Great Britain.
Consequently, we must ask what really lies behind the deal. What is the motive of the interests concerned? Does the Texas Oil Company want or need Trinidad oil or the refinery? The figures given by the Chancellor make it clear that this is not the bait. Is it Canada? The Chancellor says it is not. He does not seem to think there is much prospect of development in Canada, or, to put it more fairly, perhaps, he rather played it down. He said that there might be a lucky strike, but he could not say anything about it.
Mr. H. Macmillan: I did not say there were no prospects of development for oil in Canada. I said that at least ten times as many prospects were already held by British companies
Mr. Wilson: Certainly, that is quite right. I did not say that the Chancellor said there were no prospects. I said that he played it down; there was little prospect and that was not the bait.

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I think the Chancellor will agree that in his speech today he indicated that there was another attraction far greater than Trinidad or Canada that caused these American interests to want to come into this business, although I am glad that the Chancellor, from his intervention, does not entirely discount the Canadian prospects even of this company. The fact that they are worth only £5 million or something of that order will strike a chord, for, I believe, we sold a considerable share of the Kuwait interests for something like £5 million many years ago whereas today it would be worth a great deal more.
The Chancellor was quite right: the motive is clear. Texas Oil wanted a share in the expanding British petrol market. The figures show that consumption of petrol in this country last year was 11 per cent. up on the previous year, whereas the United States domestic market went up by only 6 per cent. I have referred to the artificial war between the petrol companies. We are all familiar with the costly advertising that goes on, for which the motorist pays. We read advertisements about the mysterious additives which are supposed to improve our petrol. I am fairly certain that there is not a single hon. Member who drives a car who could say exactly what his petrol has in it. much less what additive has been put in by the petrol company.
We are all only too familiar—it came up again at Question Time yesterday—with the unnecessary and wasteful expenditure on unsightly new petrol stations. We are well aware that in the last two or three years private garage owners have been blackmailed and bought up by the oil firms all over the country, all in the name of Tory freedom. I warn the House and the Chancellor that this deal, extending the power of the Texas Oil Company, will add to the already tangled web of restrictive practices in oil distribution in this country.
I do not know whether it is within the knowledge of all hon. Members that the Texas Company has been denounced by the United States Government for its exclusive dealings and the illegitimate pressure that it has put on garages in the United States in respect of the sale of accessories which have nothing whatever to do with petrol. In 1953, for instance—I am taking this from an American Gov-
1450
ernment Report—2¾ million dollars was paid in backhanders by the Texas Oil Company in respect of sales of the products of a certain tyre company. I hope, therefore, that the Government realise the risk they are running in this deal.
Having asked what is the motive of the company, I should like to ask what is the Government's motive in accepting this transaction. I fully accept the Chancellor's statement that on first hearing of this case it filled him with dismay, but I think the first factor in his decision was the Government's unwillingness to interfere with a takeover bid. They do not interfere with Mr. Clore—they have let him pursue his interest quite untrammelled, rejecting all our proposals that such capital gains should be taxed; and so they say, "Why interfere with the Texas bid?"
As I said the other afternoon, this is the Windfall State. Fortunes were made in those first ten minutes after trading began on the morning of 6th June. I saw no evidence in the Press of any appeals for restraint outside the Stock Exchange—I do not know whether the Prime Minister is meeting its representatives in his 10, Downing Street meetings—and no evidence of any plateau of stability on that occasion.
The fact is that a stockholder holding £1,000 nominal of Trinidad oil stock made £6,000, tax-free, in those 10 minutes. To earn that amount—
Mr. Peter Remnant: It depends what he paid for it.
Mr. Wilson: I said "£1,000 nominal." which he would have bought, perhaps, the week before for about £8,000. He still made £6,000 tax-free in 10 minutes. To earn that amount in twelve months, after tax, a person would have to earn at the rate of £50,000 a year to make as much gain as that. If hon. Members do not find the contrast invidious, if we were to take, for example, a coal face worker earning average wages today, to earn that amount after tax he would have to work for ten years at the coal face to earn what such a stockholder could, and did, gain in ten minutes. These are the protégés of the Chancellor.
The Chancellor was obviously tempted by another prospect—and I can sympathise with him in this respect—the prospect of 180 million dollars for his-depleted gold and dollar reserves, those

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gold and dollar reserves which fell by a quarter last year under the Lord Privy Seal, as the Chancellor never tires of telling us. There was a background to this. Sterling was weak at the time of this bid. It had fallen ever since the Chancellor's disastrous and expensive speech at Newcastle. That speech of economic abdication—unfortunately, not resignation—cost the country millions upon millions of dollars.
So what better tonic and what better answer could there be to evilly disposed persons in the City and abroad who were forecasting devaluation this summer than a windfall gain to our reserves of 180 million dollars? We have had, as the Chancellor has told us, some increase in our dollar reserves this year at the seasonally most favourable time of the year, but the increase has been much too slow for real safety. Well might the Chancellor have said to himself:
"the gold reserves climb slow, how slowly,
But westward, look, the land is bright."
It was obviously a strong argument to the Chancellor, and the sterling exchange rate began to pick up from the very moment that this deal was announced.
I must ask the Chancellor whether this is to be the pattern from now on. Are we to be faced with the position that every time we make a speech, we have to sell another important Commonwealth interest—
Major H. Legge-Bourke Major H. Legge-Bourke (Isle of Ely) rose—
Mr. Wilson: Wait—in order to pay for it? While it may fairly be said that the Chancellor's speeches are silver, truly his silence, if we could have it, would be golden.
Major Legge-Bourke: How can the right hon. Gentleman use this argument when he was a Member of a Government which ate the Argentine Railway proceeds? What did his Government do with the Canadian dollars that they got by loan and and how much of that was reinvested in Canada?
Mr. Wilson: I was not entirely unaware that that point might be raised, and if the hon. Gentleman can bear with me in patience a little longer, I shall be very happy to come to it in a moment. [HON. MEMBERS: "Not too long."] No, not
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too long. I know that it is rather painful for hon. Gentlemen opposite to be reminded of the great financial cost to the country of the Chancellor of the Exchequer, and lest any of them should think that my remarks are in any way overdrawn, which they are not, perhaps I may quote from The Times of last Friday, which bears out what I am saying
"… there is no doubt that the prospect of the oil deal going through has brought some support for the pound over the past few days. This is perhaps all the more remarkable in that only a week ago sterling was under considerable pressure largely as a result of certain Ministerial statements."
I think that these reasons were pretty decisive with the Chancellor, although they are not the reasons which the Chancellor has given.
The Chancellor justified his decision on two grounds: first, the need to encourage two-way investment; and, second, the need to find capital for essential development in Trinidad. I have already said that we support and welcome American investment when it fulfils the conditions which have been laid down by successive Governments. The conditions currently operated by the present Government are set out in paragraph 19 of the White Paper which refers to
"… the promotion of exports, the saving of imports, the introduction of new and worthwhile techniques and, in the case of a company operating in a Sterling Area country outside the United Kingdom, the economic development of the country concerned."
I have already shown that this deal fulfils none of those conditions, although the Chancellor rests his case on "the economic development of the country concerned," in this case Trinidad.
No one doubts the vital part played by oil in Trinidad's economic life, and that, although oil production has declined there—it has fallen by 20 per cent. since 1946—there is a very great need—I concede this to the Chancellor—for new capital and new development there, especially exploration, including off-shore drilling, which is a very expensive form of exploration, as well as a need, of course, for adequate supplies of crude oil. if the Chancellor's case is that this country, dizzy with Tory success, "Prosperity Plus" and all that, cannot find the few millions which are needed for the purpose, I must remind the House that the Lord Privy Seal, whom we are missing from this debate, committed this country

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in 1953 to the task of building up a permanent surplus, year in and year out, of £300 million a year for Commonwealth development. At present prices that £300 million would be £400 million or £450 million.
Now the Chancellor of the Exchequer, faced with the test, has to admit total failure and just as the abolition of the investment allowance marks the end of the Lord Privy Seal's "Invest in Success" dream, so this Trinidad oil deal marks the death of another of his cherished hopes. That is the main lesson of this deal. As a nation, we have failed to provide the surplus needed to discharge our solemn responsibilities.
Mr. Bernard Braine: In order to get this matter into perspective, can the right hon. Gentleman inform the House of the total amount in dollars which this Government has had to find since 1951 in order to repay the money borrowed from the United States and squandered by the Government of the day?
Mr. Wilson: The hon. Gentleman has always been something of a misnomer, but I did at least think from his previous interventions that his interest in this oil deal was such that if I gave way to him he would make a remark which was relevant to the subject of the oil deal and not raise another question, which I should be very happy indeed to debate with him any time here or anywhere else. [HON. MEMBERS: "Answer."]
Mr. Braine Mr. Braine rose—
Mr. Wilson: I have just said that as a nation we have failed to provide this surplus eleven years after the war. Not one year, not twelve months, but eleven years after the war we have failed to achieve—
Mr. Braine Mr. Braine rose—
Mr. Wilson: If the hon. Gentleman is genuinely seeking information, I shall be very glad to give him all the facts that are needed on the point, but one thing which I think he will recognise is that when lease-lend came to a premature end, which President Truman afterwards said he regretted, it was essential to borrow that money in order to keep people alive in India and elsewhere.
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Newspapers which support the Government have made this point very clearly. I quote the Financial Times:
"This sale was symptomatic of a real and serious economic failure. In the last decade Britain has been unable to make adequate investment in the Commonwealth."
Going on, it said:
"The only alternative is for Britain to provide a large enough surplus to be able to make an adequate investment in the Commonwealth."
The Daily Telegraph last week said:
"The whole reason for the sale is that the Americans have the resources to finance the development that is possible while the British company has not. This is a symptom of the underlying weakness of this country which is generally concealed."
It was certainly concealed at the election in May, 1955.
"The price which the American company is willing to pay is an unmistakable reflection of the incipient capital starvation which is attacking the roots of our prosperity. If the critics would turn their attention"—
this is a crack at us—
"to the real cause of the sale and shout as loudly for the changes in domestic policy which are necessary before adequate capital can be made available to British companies then the noise they are making might be to some purpose."
We fully accept that. We shall, at every possible opportunity press for the Chancellor's answer in regard to domestic policy.
The same line is taken in The Times in an article called "Bitter Pill," and in the Observer and Sunday Times. Therefore, I claim that this is no party point. I believe that many hon. Members opposite who opposed this scheme at the outset, have reluctantly come to acquiesce in it—I think that the word is "reluctant"— and with a heavy heart because they felt that, however bitter the pill, we could not provide the capital, and they felt, as we do, that this essential development in Trinidad must go on. I should be going wider than the scope of this debate if I were to discuss the general economic policy of the Government and the measures needed to create this surplus. I am sure that we shall agree that this is the essential part of this debate.
The Financial Times, on Monday, had an interesting analysis showing—and this is its conclusion—
"The net new investment in the Commonwealth last year financed out of current income was just £4 million"

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in conditions which the Government, in the Economic Survey, described as highly favourable, £4 million against the Lord Privy Seal's programme of £300 million.
The second question that I said I would answer was, even admitting the tight position of the country in regard to investment capital, was there any alternative? We believe that there was. We believe that the Government should have provided the capital for the Trinidad Oil Company, either by enabling the Trinidad Government to finance the developments or by taking shares in the company. Because this transaction was rushed through with so much haste by the interests concerned there has been no proper consideration of the matter. I do not complain at all about the Chancellor's statement that it took them a week. If it had taken them a month and they had got the right answer we should have been more pleased.
Mr. H. Macmillan: That is not what the right hon. Gentleman said last week.
Mr. Wilson: I was then pressing the Chancellor for a quick decision—because I wanted a quick, right decision. The Chancellor could easily have said "No" as soon as he heard about it. I am sorry that he took a whole week and then said "Yes."
Because of this haste the other alternatives were not considered at all. For example, was any proposition put forward that the Trinidad Company for developments in Trinidad should have had the use of Colonial Development and Welfare funds for developments in Trinidad? Was there any consultation with the Colonial Development Corporation? Did Mr. Vos see the Finance Corporation for Industry, the chairman of which, Lord Bruce, is passionately keen about Commonwealth development? Did he go to the new Commonwealth Finance Corporation about which we heard so much a year or two ago? Did he go to any of these bodies, or to the Trinidad Government? These are things that I hope we shall be told.
What about Canada? Did Mr. Vos seek to get any of the money he needed in Canada? The Chancellor has not told us this, but I see from the last annual report of the Trinidad Company that to finance developments in Canada the Trinidad Company last year raised 13
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million dollars, through issues of debentures and equity stock. They had no difficulty in raising money in Canada for these developments. Was this possibility considered? Of course not, because no capital gain was involved. That is the real point.
It is not good enough for the Government to say that they could not raise the money or that the money could not be raised on the private capital market of this country. If Shell or B.P. had wanted to raise this money they could have got it all right. If they had wanted to raise an equivalent amount of money on the Stock Exchange, or in the City, they could have raised it. The money is there if it is wanted. The Chancellor may, of course, be concerned about the small part of the investment which must be found in dollars, for dollar equipment in Trinidad, but if he could not have found that from our reserves there was a clear case for borrowing it from the International Bank for Reconstruction and Development. That is what the World Bank exists for.
Is there anything revolutionary or shocking in suggesting that the Government should have stepped in on this important development? The right hon. Member for Woodford (Sir W. Churchill) did it before the First World War when he took shares in B.P., or Anglo-Persian as it was then called. The £2 million that he paid for them has been a great and most successful investment. Disraeli has been almost deified by the party opposite for his brilliant opportunism in buying Suez Canal shares, but these tired and unimaginative followers of his—these drooping primroses—have tamely let the initiative fall from their palsied hands.
Another possible alternative was suggested by my hon. Friend the Member for Wednesbury (Mr. S. N. Evans). Had this question been properly considered, and had there been time to go into all the ins and outs, the Government might have come to some satisfactory arrangement which would have permitted the Texas Company to increase its participation on the only terms that would have made sense, namely, by bringing in the Middle East. The Texas Company is, as to 30 per cent., in Aramco. I do not need to stress the importance of Aramco, not only in its economic but its political aspects of conditioning—one might

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almost say poisoning—our relations with Arab countries. If that company had come in under such terms—the price they would have had to pay would not have been a windfall gain for the shareholders and a large tax-free pay-off for Mr. Vos, but a reasonable exchange of interests between the Caribbean and the Middle East. Here again, the national interest has been sacrificed for purely financial considerations.
As we propose to divide the House upon this matter I do not think that it falls to us to comment in any detail upon the safeguards and conditions set out in the White Paper. History is not concerned with the safeguards which Ethelred the Unready insisted upon in his dealings with the Danes, and I do not think that we are very much concerned with them here. We welcome the conditions designed to protect the vital interests of Trinidad, so far as they go, but we should have preferred the Government to leave to the new Caribbean Federation the decision both upon the deal itself and the conditions to be attached thereto. I hope that the Colonial Secretary will tell us what sanctions will be used if the colour bar is introduced by this company in, say, five or 10 years' time.
I agree with what the Chancellor said about the reserves. This cannot go into a separate fund. But I hope that the Chancellor will feel that the acquisition of these dollars, which we deplore, enables him to go in for dollar developments of a kind that he might otherwise have felt prevented from undertaking.
Hon. and right hon. Gentlemen opposite have been shouting about the Argentine and Abadan. I do not intend to take up much time in dealing with those matters, because it is obvious that hon. Members opposite are not aware of the facts. If they were—and they can find them if they read the report of the debate in the OFFICIAL REPORT for 11th March, 1947—they would know that, in the first place, the deal was made at the request of the shareholders, who found that their earnings were a diminishing asset because of Argentine's State control over railway charges. As for the suggestion of the hon. and gallant Member for The Isle of Ely (Major Legge-Bourke) that we ate the railway proceeds, I would inform him that all the money except £25 million
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came out of sterling balances accumulated during the war, and which we had to redeem under the terms of Article 10 of the Mutual Aid Agreement. In other words, it was not my right hon. Friend the Member for Dundee, West (Mr. Strachey), as Minister of Food, who ate the railway proceeds; it was Lord Woolton, during the war.
Major Legge-Bourke: I hope that the right hon. Gentleman will remember that Lord Woolton, at any rate, did not have to ration potatoes. Will the right hon. Gentleman now answer the second part of my question? How much of the Canadian loan in dollars was spent by the Government of which he was a Member in British investments in Canada?
Mr. Wilson: I am sorry if I am forcing the hon. and gallant Member to draw so deeply upon the material of the 1950 General Election. I would remind him that we have had two or three elections since then. I should have thought that he would at least have used the questions put in 1955. [HON. MEMBERS: "Answer."] I have answered the question. The hon. and gallant Member and, I believe, the Chancellor, referred to Abadan.
Major Legge-Bourke: What about the Canadian dollars?
Mr. Wilson: I can assure the hon. and gallant Gentleman that there is nothing in his point. He referred to Abadan. In that case the action was that of the Persian Government, however short-sighted and wrongly conceived. It was within the sovereign jurisdiction of the Persian Government, and it could have been stopped only at the point of the bayonet. The deal which we are debating this afternoon is within our sovereign jurisdiction, and can be stopped without bayonets, by recourse to Sections 9 and 30 of the Exchange Control Act, 1947.
The main point about this deal is the failure to produce the surplus required. I do not need to remind the House—because I am sure that this is common ground between hon. Members of all parties—of the need to be able to play our part in world development, especially colonial dvelopment. I do not think it too much to say that not only our economic survival, but the survival of the free world as we know it is dependent on the advanced nations devoting a sufficient

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proportion of wealth and resources to the task of helping the backward areas to raise their living standards. Let us be frank about this. It will mean sacrifices in our standard of living, not necessarily a reduction in our standard of living, but certainly it will mean the sacrifice of part of the increase which we ought to enjoy as production increases, if and when production does increase again.
We should all be prepared to face this sacrifice, but that is not all. In the wider sense, the work we are able to do in the backward areas of the earth is our answer to the Communist challenge in those areas. But at the very first test, for reasons which we consider inadequate and unworthy, the Government have failed to meet that challenge and that is why we shall divide against them in the Lobbies this evening.
4.51 p.m.
Sir Henry Studholme: I do not think that even my worst enemy would accuse me of having bored the House with long speeches for these last ten years. As hon. Members know, I have been a Whip, and, as such, condemned by custom to an almost Trappist silence. I do not propose to abuse my new-found liberty by making a long speech this afternoon.
I hope that the right hon. Member for Huyton (Mr. H. Wilson) will forgive me if I do not refer to his speech, which was partly a lecture to the Government and partly a knock-about act and very amusing. Nor shall I refer to my right hon. Friend the Chancellor's very able and convincing arguments, except to say that I have come to the reluctant conclusion that the Government have taken the right decision. It may be a decision which is very galling to our national pride but, nevertheless, I maintain that it is an inevitable decision. On Monday, there was an interesting letter—a very sensible letter, if I may say so—in the Daily Telegraph from my hon. Friend the Member for Hornsey (Sir D. Gammans), in which he put the matter in a nutshell. He said:
"… the Americans have the capital to invest in under-developed countries and we have not"
He continued:
"Until the people of this country decide what they are prepared to do without in order
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to develop the Commonwealth, we must not object if the Americans offer to do the job for us."
My hon. Friend went on to ask:
"Can we combine a high standard of living, shorter working hours and the Welfare State with large-scale assistance to our British subjects in overseas territories?"
That is a challenge which we have to meet, and I think that the real point at issue here is what is in the best interests of this country and the Commonwealth. It is incongruous, to say the least, to see Members opposite appearing in the role of champions of the Commonwealth—[HON. MEMBERS: "Why not?"] In the old days, when the Liberal Party were in power, they were bored with the Empire. They regarded it as rather tiresome appendage and the Socialists have constantly said that they were ashamed of the British Empire—
Mr. J. Grimond: In the happy days when there was a Liberal Government we added to the Empire. Since Conservative Governments have come to power, the Empire has been steadily reduced.
Sir H. Studholme: I seem to remember that Disraeli did a great deal to help the Empire. I seem to remember, also, a speech by the late Sir Stafford Cripps, in which he said that when he thought of the British Empire he bowed his head in shame.
Mr. F. Blackburn: There is a difference between the Empire and the Commonwealth.
Sir H. Studholme: When the Chancellor spoke of the greatness of our country in the past there was derisive laughter from hon. Members opposite. I speak with some feeling about this, because quite a number of my forebears went out into the Empire and helped to build it and defend it. I am very proud of that.
I recently put my name to a Motion, in the name of my hon. Friend the Member for Harrow, West (Sir A. Braithwaite), asking the Government to make still further cuts in expenditure, beyond the £100 million already planned, in order that the money saved may be invested in Commonwealth development. I quite appreciate that it is no easy matter and that unless we can earn more abroad we cannot invest more abroad. But I also know that this is one of the main objects

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of the Government's financial policy, and, therefore, I support that policy.
Any saving in Government expenditure will help to relieve taxation and make money available for investment in industry and enterprise, both at home and in the Commonwealth. Unfortunately, the moment the Government announce any economies, except in the realm of defence, there are squeals from the Opposition and, to my mind, hon. Gentlemen opposite are very unconvincing champions of colonial development.
To refer again to what was said by my hon. Friend the Member for Hornsey, what are we prepared to do? If hon. Members opposite were to say, "Let every trade unionist, for, say, one year, give 1 per cent. of his wages; let every Member of Parliament, for one year, give 1 per cent. of his salary and, if necessary, let every company put aside 1 per cent. of its dividends; and let all that money be devoted to the development of the Commonwealth," then hon. Members of the party opposite would be talking, and I should applaud them.
4.58 p.m.
Mr. S. N. Evans: I will not enter into a party political wrangle with the hon. Member for Tavistock (Sir H. Studholme), because this matter is far too serious. This transaction really is a national disgrace. I do not oppose the sale on principle. After all, in the absence of exertion, frugality and thrift, we cannot pay our way in the world and, therefore, the sale of capital assets every now and then becomes inevitable. That is the brutal truth. It is Trinidad oil today, it may be Rhodesian copper tomorrow, and so it will go on until someone succeeds in inducing this nation to live within its income.
I pass from this melancholy aspect of the matter, which is the only one that matters, to something a little less disturbing but only slightly so. But, first, I would emphasise the point that it is a national disgrace by pointing to Holland. Look at what has been done by a little country like Holland. All through the adversities brought about by war and with all the changes, including the loss of Indonesia, Holland still manages to hang on to 60 per cent. of Shell and its vast interests here and in the United States; still manages to hang
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on to 50 per cent. of Unilever, and having done those two things, still has enough money to take up a 14 per cent. allocation in the Persian Consortium, when the Abadan settlement was made. When we think of these things which that small nation has done, and when we consider what we are doing today, I feel ashamed. This nation really must pull itself together.
I do not oppose the sale in principle, as I have said, but I am afraid that we are not getting enough out of it. The price may be a generous one, but I should like to know the extent of the American shareholding in this Company at the moment; because, of course, that American shareholding will have to be deducted from the net amount of dollars to be made available to the Chancellor of the Exchequer. The American shareholders will keep their dollars at home and I should like, if possible, to be told the extent of the American shareholding in Trinidad oil.
We ought to examine the political aspects of this matter with great care. We have had very considerable trouble with the Texas Oil Company and its partner, Standard of California, and that trouble still persists. I wish to ask the Government what assurances they have received from the Texas Oil Company that their good will in the matter of the Buraimi Oasis dispute will now be at our disposal. As the House knows, Texas and Standard of California are very close partners and soon they will be trading in this country under their trade name, used throughout the world, of "Caltex". They are to join our family and British motorists will be asked to buy their products.
I think it important that we should get the future attitude of Texas Oil Company to British interests in the Persian Gulf established before this deal goes through, because I should not like there to be a repetition of the boycott which took place in this country between the two wars. Hon. Members will recall that there was a campaign to boycott R.O.P. sales in this country. If the British people got an impression that the money they were paying for Caltex oil was being used in part to finance propaganda and activities inimical to their interests, they might feel tempted to restore the kind of ban or boycott on Caltex products in this

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country which characterised the attitude to R.O.P. between the wars.
That would do untold harm to Anglo-American relations. I am not anti-American; I am devoted to the Anglo-American partnership. But I think that the partnership is a bit one-sided and that our American friends are a little nearsighted about what is due to a partner. Even so, I am dedicated to the Anglo American partnership. Therefore, I should like the Colonial Secretary to tell us what approach has been made to the Texas Oil company about its future attitude to the Buraimi Oasis dispute. Buraimi has been British protected territory for 136 years and Aramco has been infiltrating into the Buraimi Oasis. To his eternal credit, the Prime Minister threw them out, but we do not want that sort of business going on, because it does damage to harmony between the two great English-speaking nations.
I ask whether this assurance has been sought because all down the 600 mile long Persian Gulf we are getting anti-British propaganda which, of course, is financed out of moneys put at the disposal of King Ibn Saud by Aramco royalties. I could not accept that the Americans are not in a position to say, "You must not use this money in a manner which does harm to our loyal allies." I could not accept that our American friends, the most powerful nation the world has ever known, could not say that to Aramco and that the message would not be passed on to King Ibn Saud. When the Buraimi Oasis dispute blew up it was followed by the dispatch of 18 25-ton tanks to Saudi Arabia, and in the Middle East that was interpreted as a kick in the teeth for Britain.
I spent the month of March in the Middle East talking to Nasser, Feisal and Hussein, and there is no doubt that the dispatch of those tanks was regarded as a kick in the teeth for the British by their American friends. That is the kind of thing we have to avoid. Therefore, I ask the Colonial Secretary whether any assurances have been received from Texas Oil Company that in future it will have a high regard for British interests throughout the Middle East and stop financing anti-British propaganda.
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We have heard a lot about Nasser lately. I talked to him for an hour and a half and complained about anti-British propaganda. I went to his Foreign Secretary, Mahmoud Fawzy, who said to me, "Mr. Evans, I wish you would settle your dispute with Saudi Arabia over the Buraimi Oasis. Neither Colonel Nasser nor I care what the terms are so long as they are mutually acceptable." This was a cry from the heart because every time Ibn Saud and Aramco have a row with the British, Nasser has to put his propaganda machine to work to villify the British. He cannot help himself because the capital for development for the last few years has come from Saudi Arabia.
I ask that these Texas people should be asked for a declaration as to their future attitude to this country and to British interests in that part of the world, because these are the roughest, toughest people in the game. These are the people who threw us out of Abadan. It would be wrong for anyone to think that that was a dispute between the Persian Government and the British Government, or between the Persian people and the British people—nothing of the kind.
It was a dispute between the American companies and Anglo-Iranian Oil Company. Abadan was the pay-off for the 1948 Andes Agreement when we sold 2½ million cubic metres of oil in return for Argentine farm products. The British had to be taught a lesson and, by heaven, we were. The notoriously anti-British Captain Rieber, a dominating personality in Texas oil, was sent to Teheran and from that moment we were on our way out.
These are the kind of people we are dealing with. I make no complaint because I was brought up in a rough, tough world. I understand these things. What I complain of is the continued timidity of British Governments in dealing with these people. In this Trinidad Oil deal we have cards in our hands. Why should we not have a share in Aramco? If a consortium was good for Persia, why should it not be good for Saudi Arabia? It was said that the Persians resented colonialism. I do not know which is the worst, a benevolent colonialism which results in Nigeria and the Gold Coast

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having freedom, or this economic imperialism in Saudi Arabia, because there there is the most decadent, sordid, regime in the world, backed by the Americans.
The point is that we were outed from Abadan. Abadan was built with British sweat, tears and capital and engineering ingenuity. It was a marvellous monument to the British people. At the time there was talk about the Russians. On 21st June, 1951, I said in this House that I discounted this fear of the Russians; what I feared was that when the dust over Abadan had settled it would he found that it was our friends who have taken our place, not our enemies. How right I was.
These were the boys, these Caltex people, who are now coming to sell us their petrol, I do not mind. Let them come. I will meet them at Liverpool, if necessary. But I want to know that the money paid by British motorists for Caltex products is not going to contribute to profits which are, in turn, used to the detriment of my countrymen's interests. That is what I want to know, and this is the time to find out.
We are dealing with very weighty matters. There can be no doubt that the dangerously disordered state of the Middle East today is largely due to the failure of us and the Americans to find a common policy, and that, in turn, is very largely due to the conflicting claims of the oil companies. I agree with what the Chancellor said today. I agree that the more these companies and our affairs can get mixed up the better for both of us. If the capitalists are going to destroy each other then, of course. the Kremlin has no struggle to win; it is in the bag.
Therefore, I come back to the proposal that I made that payment for Trinidad oil should be in the form of a transfer of shares from the Texas Company's holdings in Aramco. An hon. Member opposite says that they would not agree. Has it ever been put to them? How do we know that they would not agree if they are hungry enough? If they want a footing in the market here, and that is what they do want because they cannot get rid of their Middle East oil—I know why they want to come here—if they are hungry, we do not know what price they would have paid or in what form.
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My complaint is that not all aspects of the matter have been thoroughly gone into. This transaction has very considerable political connotations as well as economic and financial. My complaint is that there has been no serious study of all the implications and possibilities of this deal. I said earlier that these are rough, tough, people, but they respect people who are equally rough and tough. This was an occasion when we should have laid down the terms upon which this Commonwealth asset was to be transferred to the Texas people.
I will not say any more except that there can be no doubt at all that unless we and the Americans can hammer out a common policy for the Middle East, a policy designed to achieve sensible and realisable goals, a policy based on a 100 per cent. recognition of each other's interests, the Anglo-American partnership will be subjected to very great strains. I hope that the occasion of this deal will be taken to put that point of view to our American friends.
5.15 p.m.
Mr. Walter Elliot (Glasgow, Kelvin-grove): The House has listened to one of the characteristic speeches of the hon. Member for Wednesbury (Mr. S. N. Evans) bringing a breath of fresh air into the discussion which we are having, and saying many things which should have been said from his Front Bench when this debate was opened. Like him, I spent the earlier part of this year in the Middle East, and I had the opportunity to look at some of these developments, both economic and political, to which he made reference. I can confirm many of the comments which he made.
In this country we do not realise the importance of the oil struggle which is going on in the Middle East, the injury which it is doing to all the hopes and aspirations of the West, and the potential peril which it involves. I do not think that any of us has fully grasped the implications of the fact that from now on this country will have to import 1 million tons of fuel a week, and the figure is rising. Nearly all that fuel will have to be in the form of oil, a great deal of which will have to come from the Middle East. It does not appear to have been grasped that around the shores of the Persian Gulf there is being produced now more fuel than is produced in the whole of the collieries of the United Kingdom.

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These are the new factors to which we have to become accustomed.
I must say that at least some of the references of the right hon. Member for Huyton (Mr. H. Wilson) were not up to the level of the debate upon which we have embarked. However, time is short, and I do not intend to speak for long and I cannot discuss his speech at length. I am sorry that we have to discuss this enormous subject in so short a period. It is perhaps one of the most important subjects which we shall have to discuss in the whole of the course of this Parliament—not merely this particular transaction, but all that it means and implies.
It is true, as the hon. Member for Wednesbury said, that this debate reflects the fact that we are not able to find enough capital to carry out the development of the Trinidad area. But I do not think that it is possible to deal with that problem by merely diverting money from one part of our resources to another. We are faced with a general capital shortage. We have to accustom ourselves to the fact that this country, which during the whole of the nineteenth century was a capital exporting country, is now the centre of a large developing area which it is impossible to finance solely from the savings of this country, however great they may be.
Therefore, we have to accept, on what terms have been mutually negotiated, capital resources from outside. I am sure that the xenophobic argument that we should never allow any of the resources inside the Commonwealth area to be invested in by anybody outside the Commonwealth area is a purely fallacious argument. That has been said in the course of these arguments—[Horn. MEMBERS: "Only by the right hon. Gentleman's side of the House."] No, it has been said from the other side of the House as well. I was listening to the comments made from the bench below the Gangway, and the xenophobia was sizzling with fury as it came across to us. Xenophobia is not confined to the ill-educated on one side of the House only.
The fact of the matter is that we have to consider first whether this transaction is necessary, and then whether the terms upon which it is offered are satisfactory. I think that the Chancellor made out the case that the transaction was necessary.
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I think that his main argument, that we had no right to forbid a transaction which was of benefit to one portion of the Commonwealth, unless it was clearly to the great disadvantage of another portion of the Commonwealth—in this case, ourselves—was a sound argument. I think that the onus of proof that this was going to produce a great disadvantage to the United Kingdom lay, and lies, on those who oppose the transaction, and I do not think that that case was made out.
I do not think that we should accept the dog-in-the-manger attitude that if we cannot develop some portion of the Empire nobody else shall. We certainly have to deal with a switch from time to time, and I would simply ask if this transaction is a switch or simply the dissipation of our capital resources. I think it ought to be firmly insisted upon by every speaker in the debate that this must be a switch, and not merely consumption of foreign capital for current need.
There are many great transactions in which we shall have to embark in developing other portions of the Empire, for which we have found even greater difficulties in raising capital, and to which we should give our attention. I have spoken more than once of the important schemes like the Volta River scheme in West Africa—the first of the great developing schemes in West Africa—which is now assuming the most formidable proportions in respect of capital requirements—maybe about £300 million, and more. It may well be that, since it is a more unknown area than the Caribbean, it will be correspondingly more difficult to raise capital for it, and we shall need to raise both pounds and dollars in very large sums if such schemes are to go through. I can see every reason for such a switch as is proposed, if foreign investment in the Caribbean area results in giving us greater freedom to develop the less developed portions of the Empire, of which I have given one example.
I am sure that although, as the Chancellor quite rightly says, he cannot simply earmark every dollar that is received with a little tab stating that it is to be used only for capital development within the Commonwealth, there is a moral obligation on him to say that these resources which are now being made available

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should be used for capital development elsewhere, and not squandered on everyday requirements. I listened throughout with very great attention to the right hon. Member for Huyton, but I could not feel that when he came to his constructive alternative proposals he had brought forward anything at all. The right hon. Gentleman quoted with great admiration extracts from the Daily Telegraph indicating that the real danger was the shortage of capital, and saying that measures ought to be taken by which greater amounts of capital could be made available. He said that he went all the way with the Daily Telegraph on that. If he did, he went all the way with his tongue in his cheek.
I do not believe that any of the remedies which commend themselves to the Daily Telegraph would also commend themselves to his right hon. and hon. Friends, not, at least, judging by the adumbrations of financial policy which we have been able to read in the newspapers in recent days. The right hon. Gentleman's remedy for the shortage of savings is to assault savings in every possible way, and to tell everyone who saves that, if he is mug enough to save, the Chancellor will take it from him in death duties in the end, or alternatively, if he tries to spend it, the Chancellor will tax him out of existence while he is still alive. That seems to me to be a poor way of encouraging anybody to save.
I do not think that the two quotations which he gave to justify the policy of nationalisation, his only constructive remedy, were very attractive ones. He quoted the investment of my right hon. Friend the Member for Woodford (Sir W. Churchill) in Anglo-Persian oil and the buying by Disraeli of the Suez Canal shares. I do not think that the history of our relations with Egypt is such as to show that that is an infallible way to produce friendship and co-operation with the country in which we invest. Government investment is not one of the surest ways to international friendship.
The other reference to Anglo-Persian oil was by the hon. Member—I almost called him my hon. Friend—for Wednesbury. It was about the case of Abadan. He said that we were outed, squeezed and elbowed out by American oil companies as a piece of vengeance for some sales which we had carried on
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in an area which they had regarded as their private territory. It was not all due to that. A great deal of it was due to the financial policy of the Anglo-Persian Oil Company, which was really the financial policy of the Chancellor of the Exchequer of the day, who refused to allow reasonably high dividends to be paid, because dividends were an accursed thing and should be kept as low as possible. Consequently, the Persian Government found themselves faced with a very small return from the Anglo-Persian oil development and determined to get their hands on that money by hook or by crook, and did so. The impetus behind that was the attitude towards dividends of the Chancellor of the Exchequer of the day.
Mr. S. N. Evans: I do not accept what the right hon. Gentleman is saying, but may I put this point to him? After this policy of undermining the British in Persia was started, they soon slung Mossadeq overboard. Once the object for which he had been brought to power had been achieved, he was thrown off like a discarded shoe. If the right hon. Gentleman says that the sole motive of the Abadan business was that the Persian Government wanted to get more money for their people, how does he explain that phenomenon?
Mr. Elliot: I do not go the whole way with the hon. Gentleman in this cloak-and-dagger attitude to international affairs. I like to hear his romantic imaginings, but they go a little too far. They recall the fascinating romances of the late E. Phillips Oppenheim a little too closely to be serious contributions to the debate. If the hon. Gentleman thinks that nationalism in Persia and the Middle East is entirely evoked by the Texas Oil Company, he is in pursuit of a phantom which will lead him a long, long way from reality. Nationalism and a desire for money is quite as strong among Persians as the Texas Oil Company. If he feels that Texas Oil tycoons are rough, tough people, believe me, some Middle East gangsters are pretty rough and tough, too.
We come back to this question of the shortage of investment capital from which undoubtedly this country is suffering. In his closing sentences, the right hon. Member for Huyton made use of a phrase to

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the effect that we should have to subject ourselves to an arrest, and maybe a diminution, of our standard of living in this country. If he is willing to go on a platform and preach that, he will find that he will receive a very interesting response, but I cannot promise him that it will be universally favourable. If he is holding out for a standstill in this country of the continually rising wage demands so that money may be available for investment overseas, he will find a great deal of co-operation, not only inside but outside this House, but not in quarters which usually support him and his party.
This is a question which we have not yet begun to tackle. We are the centre of this great area which is crying out for development. We know that there is in addition a great deal of development to be conducted here at home. Much of our equipment and our processes are worn out and need replacement. That will demand capital development on a very large scale here, too. I do not think that we have grasped these facts fully. That is why it seems to me that this debate is so important, and why I wish it had been possible to continue it for the whole day, instead of only half a day being devoted to it.
5.28 p.m.
Mr. E. L. Mallalieu: The right hon. Member for Kelvingrove (Mr. Elliot) has followed a very usual line or argument. If one really has no case, or only a case that may be and has been successfully attacked, one must put up some Aunt Sallies, or say that something has been said against oneself which, in fact, never has been said. The right hon. Gentleman spent a considerable part of his speech in saying that we on this side of the House were unfavourably disposed towards foreign investment in the Commonwealth. He is quite wrong. We have never said anything of the sort. On the contrary, we want to see the Commonwealth developed, and we are very glad to have the assistance of outside capital when sufficient of our own is not forthcoming. We are very keen indeed to welcome outside investment in the Commonwealth in proper cases.
The whole question we are debating today comes to this. What is this case? Is it a proper case? I must confess to having derived a good deal of quiet fun
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from the antics of hon. Members opposite in the last week or ten days. At first almost all of them were genuinely, obviously and sincerely against this proposal. I believe that privately they still are against it, but of course in the meantime the City has got busy on them. I am not so generous as my right hon. Friend the Member for Huyton (Mr. H. Wilson) in this matter; I believe that the City influence has been busy on them, on all of them individually.
Mr. Elliot: The hon. and learned Member has made an accusation against me individually. Does he dare to repeat that? Does he say that the City has got after me individually, because that is what he just said.
Mr. Mallalieu: I say that the City has been brought to bear on the hon. Member opposite.
Mr. Elliot: Which hon. Member?
Mr. A. E. Cooper: The hon. and learned Member has made a most infamous suggestion, Mr. Deputy-Speaker, and since it is completely devoid of truth, is it not in the tradition of the House for him to withdraw it or substantiate it?
Mr. Deputy-Speaker (Sir Charles MacAndrew): I thought it was an ordinary debating point.
Mr. Mallalieu: If I had said that hon. Members opposite, having directorships in the City, had been told by the City or some mysterious people that their directorships were in jeopardy, then the hon. Member would have had some justification for his intervention. What I meant to say, and what I said, was that the City, in defence of its own interests, has always made it perfectly clear that there are very many other interests more important than the national interests—and one is the interest of private profit.
Mr. Elliot: That is not what the hon. and learned Member said. He said that the City had got after each individual Member; he said "individually." I ask him whether he applies that to me; and if he does, I demand that he withdraws it.
Hon. Members: Withdraw.
Mr. Mallalieu: The right hon. Gentleman is a little too clever. I said nothing

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of the kind; I did not say that any individual had been persuaded by direct pressure to take a certain point of view, but I do say that the whole of the influence of the City, from which he is probably not immune, has always stood for private profit, even when, as some of us think, that private profit was against the national interest.
Mr. Elliot: The hon. and learned Gentleman has repeated the accusation. It was in specific terms applying to myself. I say that I am absolutely immune, that I have no shares or stocks of any kind, that I have no acquaintanceship with anybody in the City who has come to me in any way and that I am absolutely untouched by any suggestion such as that which he has made. It is a most unworthy suggestion, and if I had made it against him I should have expected him to rise, as I do now, and ask that it should be withdrawn.
Mr. Mallalieu: I will rise to tell the right hon. Gentleman that I am quite sure that he is immune from all the things he has said, in the sense that no amount of possession of shares by him in this instance has had the slightest effect.
Mr. F. M. Bennett: On a point of order. I am not trying to be obstructive here, but this is not a matter which concerns only my right hon. Friend the Member for Glasgow, Kelvingrove (Mr. Elliot), sympathetic though we may all be towards him. Irrespective of my right hon. Friend, who made out his own case and with whom we are naturally sympathetic, the important point is that the hon. and learned Member for Brigg (Mr. E. L. Mallalieu) said in these words—and my hon. Friend will bear me out—that the City had got at each one of us individually. That is an imputation on our motives in changing our minds. I must press on you, Mr. Deputy-Speaker, that that is a point of order which we are legitimately entitled to make.
Mr. Deputy-Speaker: I have already ruled on that point of order. I think it is a reasonable debating point.
Mr. Braine: Further to that point of order. There is an additional aspect of the matter. This debate—most unfortunately, having regard to the subject—is scheduled to end at seven o'clock. The
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right hon. Member for Huyton (Mr. H. Wilson), for reasons best known to himself, took an inordinate length of time to make his speech and—
Mr. Deputy-Speaker: Is this a point of order? Up to now it has nothing to do with a point of order.
Mr. Braine: Further to the point of order raised by my hon. Friend the Member for Torquay (Mr. F. M. Bennett). The charge made by the hon. and learned Member for Brigg (Mr. E. L. Mallalieu) was directed—and he used a gesture in order to emphasise the point—
Mr. Deputy-Speaker: I have already ruled on that point of order.
Mr. H. Wilson: On a new point of order. The hon. Member for Essex, South-East (Mr. Braine) has accused me, as he said, for reasons best known to myself, of taking an inordinate amount of time to make my speech. The reasons are indeed known to me—because I spent so much time dealing with footling interruptions from the hon. Member which had nothing to do with the subject.
Mr. Braine Mr. Braine rose—
Mr. Deputy-Speaker: Is this a point of order?
Mr. Braine: Yes, indeed.
Mr. Deputy-Speaker: I do not see how it can be.
Mr. Braine: While I bow respectfully to what you said a little earlier. Mr. Deputy-Speaker, when charges are flung across the House it is usual to allow time for those against whom the charges are made to reply. In this instance, owing to the short time allowed for the debate, that is quite impossible. I ask you whether in those circumstances the most unwarranted charge made by the hon.and learned Member—
Mr. Deputy-Speaker: Order. I have already given my Ruling on that point, and I hope it will be accepted.
Mr. Mallalieu: I will go through the points which I have to make as quickly as I can and I will certainly keep very carefully to the rules of courtesy generally shown in the House. I am not one of those who generally go beyond them, and I shall certainly not do so on this occasion.

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I believe that the influence of financial quarters in this country has been definitely in favour of private gain—for good reasons or bad reasons. Hon. Members opposite believe in them. Some of us do not. The sort of private interests which must in this instance have helped to shape opinion are the interests, for instance, of the egregious Simon Vos, because he is not only getting his £50,000 free of tax out of this, but for many years he has been edging towards an influence in the interstices of United States oil-magnatedom. He will get good things out of that, and it would not surprise me one bit if in the very near future he came out as a fully fledged director of Caltex. That is all right for him. It is part of the spoils of the free-for-all game in which hon. Members opposite believe.
There are, too, the interests of the very many speculators who have bought Trinidad Oil Company shares lately and, having made capital gains, tax-free, have to have their interests guarded now. I believe that the result of the Government's policy is to guard the interests of those people. Whether they are doing it for that reason or not I leave hon. Members opposite to say. All I submit is that the effect of the Government's policy is to give great protection to the interests of these people.
Why? Because hon. Members opposite, and presumably right hon. Members on the Front Bench, believe that the taxation in this country at present is very much too high and that it prevents people from earning sufficient money. They therefore believe—does not the Chancellor believe this?—that capital gains of this sort are the kind of thing one has to leave to the boys in a system of high taxation like ours. They all believe that, and they therefore follow such policies as this.
Mr. Elliot: I must demur from everything the hon. and learned Gentleman has said, and we will leave it at that. Everything he has said is wrong, but some of it is "wronger" than the rest.
Mr. Mallalieu: That desire on the part of right hon. and hon. Gentlemen opposite to safeguard such interests as these prepared the way for the Chancellor's speech the other day when he announced the complete sell-out—the speech from
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which he has not much departed today, since he has largely repeated what he said earlier. He made some unexceptional remarks, in my submission, about the necessity to defend the interests of Trinidad and the people of that Colony. Of course we agree that their interests have to be defended, but it is a complete red herring to suggest that that consideration is relevant, when dealing with the question whether this company should be American-controlled or otherwise. What has happened is that this matter has been dragged as a red herring across the track when we all know that, whether this takeover bid succeeds or not, we all have to defend the interests of the people of Trinidad.
The Chancellor of the Exchequer, when he made his original statement in the House, laid a great barrage to try to show how very complicated this deal was. This deal is not really very complicated. It is perfectly true that there are wonderful ramifications, with one company owning part of this company and another company owning part of another. It is very complicated from that point of view, but that does not happen to be the point of view that matters in deciding whether or not this deal should be allowed to go through. The fact is that, as the Chancellor and all right hon. and hon. Gentlemen who have already spoken today have shown, there are, roughly speaking, three interests. They are the interests in Trinidad itself, with which we are concerned, the Canadian interests and the Regent interest here in Britain. Of course, it is the Regent interest here that is really at the core of the whole matter. That is the whole thing.
It may be that it would be possible to transfer one or two parts of these activities of the Trinidad Oil Company to the American or to any other company. Those activities can quite easily be split up; even though the shareholdings are somewhat tortuous from one company to another, it could be done. There is not the slightest doubt of that. I just do not believe that it is impossible for the Trinidad Oil Company to obtain in Canada the capital it needs for its Canadian undertakings.
It could be done by a transfer to Canada. As far as the Canadian interests are concerned, the whole business could be transferred to Canadian interests—if it

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were still desired that the Trinidad Oil Company should get rid of them. It is possible also to give the Trinidad interests —the particular ones situated in Trinidad itself—to the American company provided, which I do not accept, that the Trinidad people really want those interests to go there. It would be possible to split up the deal in that way. But what I submit would be very wrong indeed would be to allow the Regent end, this end, to go.
It is said that the Trinidad Oil Company cannot get enough capital to carry on at this end. What is the present position? The position, of course, is that it has half the holding in Regent and the other half is with Caltex. The position also is that if it remains allied to Caltex in this way it will have a half share in the new refinery now to be built in the Southampton area. The planned output from that refinery is to be in the neighbourhood of 5 million tons per annum.
If this Regent distribution service and all it stands for goes over to Caltex, the oil that is to come through that new refinery in the Southampton area will not come from Trinidad or from any other non-dollar source, but from Saudi Arabia. The result will be, as my hon. Friend the Member for Wednesbury (Mr. S. N. Evans) pointed out so much more forcibly than I can, that—since the Saudi Arabian Government derives a "50–50" share on the profits of crude oil taken from its territory—on the distribution of Caltex oil in this country there will be a £10 million per annum gift to the King of Saudi Arabia to build his palaces and to conduct his anti-British propaganda.
Does the Chancellor of the Exchequer want that to happen? I do not believe that he can. There is a very good way by which he can avoid it. One way has already been suggested by my right hon. Friend the Member for Huyton (Mr. H. Wilson). There is another way which, in my submission, is even simpler. Supposing he, with his interest in B.P.—and no one suggests that he has not an interest—were to say to B.P., "The Trinidad Oil Company is to keep Regent in this country and will, therefore, have a half share in this new refinery that is coming. Now, B.P., you must supply the crude oil that Regent will require for that refinery and share the profits with Regent." If Regent were able to go to the City
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with that assured income it could get all the capital it wanted.
That is a very easy way, but nothing was said about that possibility by the Chancellor. He is not interested in finding other ways but interested only in selling out, merely because he is imbued with this spirit of private property. It shows just how far he will go. Frankly, it will surprise me if he accepts either my suggestion or that put forward by my right hon. Friend the Member for Huyton, but if he turns those suggestions down at least he will show to what extent he is ready to go in defence of private property, even when it conflicts with the national interest.
5.45 p.m.
Mr. A. E. Cooper: For a long time the hon. and learned Member for Brigg (Mr. E. L. Mallalieu) has, I think, had the respect of all hon. Members on this side. He has not been one of those hon. Members with whom we associate vituperation or mud-slinging, but after the quite disgraceful and un-warranted attacks which he has made tonight on my right hon. and hon. Friends it will be some time before we have our previous feelings of respect for him. I challenge him to make the same statements outside this House, where he does not enjoy Privilege. Some of us on this side of the House who are not very happy about this deal have been accused of having made a complete turnabout. I do not know how hon. Members opposite can know that, because none of us has had much opportunity this last week to make speeches on the subject. I want to put one or two points to my right hon. Friend the Chancellor which I hope he may consider with some sympathy before this debate finishes.
Not unnaturally, hon. Members opposite will use this occasion to make a few party political points. I do not complain about that at all, but I find it a little hard to accept criticism from them on this subject when they agreed to bring and, indeed, were among the prime movers in bringing, American capital to this country in the first place. Nevertheless, I feel, and I know that a number of my hon. Friends also feel, that this is a sorry day for us. It is tantamount to selling the seed corn, but the responsibility for this rests fairly and squarely on the shoulders of all Governments in this country since the end of the war which have imposed

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such a swingeing level of taxation as has made it impossible for private individuals to accumulate capital, for industry to accumulate capital, or for our gold and dollar reserves to be at a level which would enable us to invest in the way that we ought to in our own Commonwealth.
I think that the case which was put forward by my right hon. Friend on economic grounds was pretty well unassailable, and if this decision were judged on economic grounds alone I think that all of us in the House, and probably in the country as well, would admit that a pretty good deal had been done. The implications are much wider than that, however, and we really must consider the full political consequences of the action which it is now proposed to take, and there, I submit, there is room for honest doubt as to whether the decision taken is in the best interests of the Commonwealth at this present time.
Whether we like the words or not, we are still a great colonial Power, with very considerable responsibilities and obligations to develop parts of the Common-wealth which are at present in need of very great assistance. It is our duty and our responsibility to see that we discharge these obligations, and it really becomes very churlish of anybody in the country to argue that if we cannot provide the funds to do it ourselves we must prevent anybody else from doing so.
We are at fault in not having built up our own reserves in these past years, and this has resulted in the present situation. It is possible to exaggerate the importance of this incident, but a great point of principle is at stake, and I join with my right hon. Friend the Member for Kelvin-grove (Mr. Elliot) in deploring the fact that we have been allowed only half a day for this debate. We should have had a full day in which to debate this subject.
What we have to consider, in addition to the question of building up our own reserves in order that we may discharge our obligations, is whether we can continue to permit unrestricted foreign investment in the British Commonwealth. I should like my right hon. Friend to realise that in practically every country in Europe, in India and in certain of the South American countries it is not possible to acquire more than 49 per cent. of the equity of any industrial organisation.
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It may well be argued that if we were to impose any such restriction here, it might have serious repercussions upon us from the point of view of our own overseas investment. Of course, there are dangers of that sort and there are risks which we have to accept, but so long as the sterling area remains economically weak and we try to insist upon a high and rising standard of living in all sections of the Commonwealth, and if at the same time we permit unrestricted investment within the Empire, in the long run it will be much more difficult to find the dividends in foreign currency with which to pay the necessary return on the capital invested here.
If we have to develop in the Commonwealth, which is our responsibility and obligation, we must make the necessary sacrifice here at home to provide funds to fulfil that obligation. Hon. Members should bear in mind that if the position were exactly reversed—in other words, had this country been the U.S.A. and had we been established in Trinidad as a foreign Power—this deal would not have gone through. It could not have gone through under the existing American law. Therefore, it seems to me that if the American Government are prepared to legislate to prevent their own assets going out of their country, it is only just that we should take similar action to defend our own life blood.
Mr. Deputy-Speaker: Order. On the Adjournment one should not suggest legislation, which is what the hon. Gentleman appears to be doing.
Mr. J. T. Price Mr. J. T. Price (Westhoughton) rose—
Mr. Cooper: We have so little time.
Mr. Price: This is a valid point. I am agreeing with the hon. Gentleman's argument. He said that if the position were reversed, the deal could not have gone through. I agree. But if the political complexions in this House were reversed, would the hon. Gentleman consider what hon. Members on the benches opposite would be saying about the action of the Labour Government?
Mr. Cooper: I do not think it is necessary to deal with a hypothetical situation which is not likely to happen in this country for a very long time.

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I should like to ask my right hon. Friend a question, the answer to which many of us attach great importance. Indeed, reference has already been made to it by certain hon. Members opposite. The Government have imposed certain conditions which have to be fulfilled by the Texas Oil Company as a matter of principle before this deal can go through. We have not yet had a satisfactory answer from the Government as to what they can do if any one of these conditions is not fulfilled by the Texas Oil Company.
It seems to me that if any one of these conditions is not fulfilled, the Government will be in an exceedingly awkward position because somebody will have to find the money to keep the Trinidad Oil Company going. I am advised that in about two or three years' time, unless this extra capital is forthcoming, the Trinidad Oil Company will be seriously financially embarrassed. It is important to us to know precisely what the Government have in mind if any one of these conditions is not fulfilled.
My final point deals solely with the economic situation within the Caribbean Federation, and Trinidad in particular. Of course, we all know that for many years there has been a considerable investment of American capital within the Caribbean. It seems to me that this step will in due course virtually close the Trinidad market to British exporters, because obviously and naturally when American personnel get on the island they will want their own magazines, food, and so forth; they will want their way of life to be established. The result will be that considerable exports will flow from the United States to Trinidad to the detriment of our own exporters.
There is a matter which causes me to have grave doubts about this decision. What is going to be the ultimate decision of the Caribbean Federation when it can be shown quite clearly that Great Britain is not able to find the capital to develop the Caribbean area and that the money for such development has to come from the United States? I submit that the knowledge of that fact among peoples in that part of the world must have a serious effect upon our position there.
5.57 p.m.
Mr. W. T. Proctor: The right hon. Member for Kelvingrove (Mr. Elliot) said that we do not understand the peril in which we stand. I do not
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think that anybody who listened to my hon. Friend the Member for Wednesbury (Mr. S. N. Evans), who put this matter into the correct perspective, could misunderstand the peril in which the country stands at present.
I hope that the Colonial Secretary will call the attention of the Prime Minister to the weighty words which he used, and which were reported in The Times on 2nd June, when he said:
"No Cyprus, no certain facilities to protect our supply of oil. No oil, unemployment and hunger in Britain. It is as simple as that today … The United Kingdom's vital interest in Cyprus is not confined to its N.A.T.O. aspect. Our country's industrial life and that of western Europe depends today, and must depend for many years to come, on oil supplies from the Middle East. If ever our oil supplies were in peril, we should be compelled to defend them. The facilities we need in Cyprus are part of that defence. We cannot, therefore, accept any doubt about their availability."
That is one of the most serious statements that any British Prime Minister has ever made, because it indicates that if our oil resources are interfered with in the Middle East we are ready to embark upon unilateral war. This whole matter of oil is one which should concern the British House of Commons as well as everybody in Western Europe —indeed, the whole world—because it may be the trigger that sets off the third world war if we are foolish enough to allow the oil companies, instead of the democratic Governments of the world, to make the decisions. Therefore, I say that this occasion should not pass without the House using the opportunity to raise the question of the oil situation as a whole.
For the present Government, in the course of a week, to agree to hand over a tangible asset of the British Common-wealth to an American oil company without more consideration and thought on the subject than has been given to it, is one of the most irresponsible acts which I have ever known any Government to commit. I beg the House of Commons to realise that this is an important matter. I would ask the Government and those who are considering it not to consider the matter this evening as one which is decided. Let them take the opinion of the House, and let them think it over again.
I believe that the only real solution for the oil problem of the world is public ownership. I am not foolish enough to

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think that, in the capitalist world in which we live, that is going to be brought about overnight; but I believe that the Government of this country should take effective steps to be represented, and effectively represented, on the boards of the great oil companies. We should be justified in asking the American Government to do likewise; we never know what American policy is in the Middle East unless we get it from the oil companies, not from Washington itself. It is of supreme importance that this matter should be dealt with in a manner quite different from that which the Government propose, in order that we might feel a certain security and safety as to our oil supplies for the future.
The Government should have, to consider the matter, a commission, a Select Committee, or some special consideration by the House of Commons, so that we might consider the whole oil situation whilst there is yet time. It is a matter of life and death for Western Europe industrially, and it may literally mean the latter if this system is to be allowed to poison the relationships between the countries of the world.
There is plenty of oil in the world for everyone, if it is properly used. The great sorrow of humanity at the present time is that so much is being wasted in tanks instead of being used in tractors. There must be a grand gesture of going to the United States Government and asking them to sit down and consider the oil situation of the whole world. Let us have the courage to go to the Soviet Union also and say the same thing. The fate of Western Europe may depend on oil. Indeed, the fate of humanity itself may be decided by oil, unless we take steps to settle the problem now.
It is stupid, when there is plenty of oil for everyone, not to take the necessary measures to deal with the problem. It is alarming to think of what the great resources which Western civilisation is pouring into the Middle East are being used for at the present time. I am sure that if we had the best minds of America, the best minds of Western Europe and of Britain, and, if there were good feeling, the best minds from the Soviet Union itself. considering the oil situation, we could lift the standard of life of the ordinary Arab peoples and not engage in
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exploiting their nationalism to the detriment of us all.
I beg the Government to review this question, to read very carefully what my right hon. Friend the Member for Huyton (Mr. H. Wilson) said about this problem, and to think again before they make any final decision.
6.4 p.m.
Sir Alexander Spearman: The right hon. Gentleman the Member for Huyton (Mr. H. Wilson), in opening this debate, described this sale as a very regrettable transaction. I know that there are hon. Members on both sides of the House who are unhappy about it. I do not share their dismay, and I should like to say why.
I believe that this transaction will facilitate investments in the Common-wealth more profitable to this country. In fact, I believe that there are as good, or better, fish in the sea as any which have come out. I do not think this fish is a particularly attractive one from our point of view. First, to develop these resources it would be necessary to make an investment which is far beyond our ability at the present time, or, indeed, what the balance of payments position at any time in the last 10 years would justify. If we cannot provide the development resources, then, clearly, it would be very unfair to Trinidad to deny to them the chance of obtaining them elsewhere. Secondly, this Company, at present, I believe, spends a good deal more in buying dollar oil than the value of the oil which it produces.
The price seemed to me to be a satisfactory one. I know there are those who will say that if this Company is worth so much to the Americans, then it must be worth that much to us. But, in fact, properties very often are of much more value to the buyer than they are to the seller; otherwise many transactions would not take place. In this case, the Chancellor has told us of some of the reasons why this concern is worth much more to the Americans than to us. There is another reason to which he did not refer, namely, the method by which in this country we tax companies operating abroad. I hope that my right hon. Friend will read the very clear letter from my hon. and learned Friend the Member for Northwich (Mr. J. Foster) in yesterday's

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Daily Telegraph, showing how desirable it is that there should be a reform of taxation in this respect.
This transaction must materially improve our facilities for investing in the Commonwealth. Surely the limiting factor to what we can do is not the projects which are available for investment, but our resources with which to invest. If anyone has any doubts about that, or has any feeling that because this concern is in the sterling area we could afford investment, he might well read the leading article in the Financial Times of Monday, 18th June. I should like to quote one sentence from that article which sums up the argument very clearly.
"The truth is that last year there was nothing available to invest in the Sterling area beyond what was borrowed from it or from other countries."
In conclusion, I would just like for a moment to discuss the broader aspect. The repercussions which might have occurred if the Government had taken a different decision with regard to this transaction. It would seem to me that this country, of all countries, which has benefited so much from investment abroad, would be inviting disastrous discrimination against it if we had put a veto upon the investment of other countries. Secondly, we have benefited a great deal from the flow of capital from the United States, for example, from what General Motors has been spending at Luton and what the Standard Oil Company has been spending at Fawley. Could it be wise to discourage that flow of capital?
In the present disturbed and threatening state of the world, I just do not believe that we can afford a policy of narrow economic nationalism. Today, the savings of this country are totally inadequate for all the investment we want to make and should make here and in the Commonwealth. Surely we must welcome capital from the United States. It will develop Commonwealth projects, to our mutual benefit, and bind us closer together in a partnership on which so much depends.
6.10 p.m.
Mr. J. Grimond: If we were asked tonight to pass a Motion of censure on the Government for their failure over past years to make
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room in the economy for adequate savings, the Government would be very hard put to defend themselves. Presumably, their answer would be a counterattack upon the Opposition. There is no doubt that the policy put forward at the last Election for the Opposition would have led to more consumption and not to more savings.
What we are asked to do today, however, is to say to the Government that they should have stopped this oil deal. I find that difficult to justify, and I noticed that the right hon. Member for Huyton (Mr. H. Wilson), when speaking for the Opposition, did not deal with the point made by the Chancellor of the Exchequer that the people of Trinidad, through their Government, have asked that this deal should go through. That, it seems to me, is the vital point.
Mr. E. L. Mallalieu: Is it not a fact that the Parliament of Trinidad is at present dissolved? In addition to there being no Parliament, one of the big opposition parties is completely against the deal and there has been much opposition to it in trade union circles.
Mr. Grimond: All that may be true, but the best evidence we have had is that of the Governor and his Government.
As the hon. and learned Member for Scarborough and Whitby (Sir A. Spearman) has said, it is surely fatal for us, of all countries, to set the cry that we cannot tolerate foreign capital. In any event, we cannot supply the capital ourselves, and it would be a dog-in-the manger attitude to deny anyone else the opportunity to provide it.
I want to direct my few remarks chiefly to the problem of savings and of savings for risk investment. I rather regret that the Government have not used this opportunity, when public interest is focussed on what I regard as the deplorable event of the sale of this oil company, to stir up public opinion in the matter of adequate savings for development, both at home and in the Commonwealth. I do not regard it as the vital point that we will have a considerable gain for our dollar reserves, agreeable though that is. Incidentally, if Mr. Vos falls out of a job, it might be a good thing to persuade him to join the Treasury, for he has done more to add to our dollar reserves in the last five or six

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years than anyone else. We shall soon dissipate this gain, however, unless we put our house in order quickly.
The real message to go out from this debate today should be that all sides of the House are united in saying that we must have more savings. Nevertheless, we do not get the savings. It is a sign of the impotence of the Government and of Parliament that we should all come forward to stress the necessity for savings but must, nevertheless, admit that savings are totally inadequate.
We should draw a clear distinction between savings which can be used for production and development and those which are not available for these purposes. In fact, one-third of our savings has been applied to things like housing and capital expenditure in welfare services, which are necessary and agreeable, but in the meantime we are starving private industry, on which we depend for our livelihood.
Private industry gets about 25 per cent. of our savings while it is responsible for 40 per cent. of our output and 94 per cent. of our exports. We have been told by successive Chancellors of the Exchequer that we need a surplus of £300 million for the Commonwealth alone, quite apart from the extra savings we need for investment at home. As yet, however, we have not begun to come anywhere near that figure.
I do not believe that there is any single solution to the position in which we find ourselves. Surely we must all face the fact that in the Welfare State, of which I, like all Members of the House, am a supporter, we have created a gigantic organisation for consumption. We should say that we cannot further extend the Welfare State until we have built up production and, built up the investment savings which are necessary for higher production. I believe, too, that we may have to adapt our Welfare State to the new conditions with a view to solving the difficulties of getting extra production and extra productivity in the age in which we live.
A great deal of the Welfare State has been built up on the thinking of the 'thirties, when mass unemployment and the need to pump extra purchasing power into the economy were what was wanted. We cannot afford to go on fighting inflation simply by damping down the
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economy. We must find a method of encouraging people to move about from industry to industry as automation demands. Unemployment pay might well include a lump sum payment for this purpose. We must find a way of holding inflation in check without damping down productive investment in industry and in Commonwealth development, but so far we have seen no sign that any new thinking has been effective in these directions.
Once again, it is surely beyond doubt that we must cut Government expenditure to make room in our resources for the type of investment we want to undertake. The obvious field for cuts is defence. We should say urgently to the Government that they must get on, as a matter of the greatest importance, with cutting down what might be called the conventional armed services.
Then, in spite of the findings of the Royal Commission, I believe that a reduction in taxation would give some incentive to production and would result in extra savings. It is, however, necessary to maintain a sense of proportion over the figures. If we were totally to abolish Surtax, for instance, and the resultant sum were saved, it would add only £133 million to our savings which, as a total, run at about £3,000 million a year. Company savings alone account for over £1,200 million a year, Profits Tax for under £200 million, while the Shell Company proposes to invest about £300 million a year. We are dealing in astronomical figures and I am afraid that we cannot look for a reduction in taxation alone to make good the gap.
There is, however, the question of taxation on companies working overseas and most of us were extremely glad at what the Chancellor said yesterday in reply to the hon. Member for Somerset, North (Mr. Leather) on this vital subject. We are only sorry that it may be some time before anything is done, but as the concession is to be backdated, presumably the effect will be felt fairly soon.
It would be inappropriate to discuss in detail today proposals directed to encouraging productivity, but all this throws into sharper relief the need for technical education, which we are soon to discuss, and the need for a review of the workings of the City in its mobilisation of savings into the right channels. Although I do not intend to go into

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that now, I do not believe that we have explored fully the possibility of mobilising savings through trust companies, and so on, and getting them away from non-productive and into productive channels.
None of these things alone will do the job, but surely the result of this debate must be to say that it is no good trying to get round the difficulties that face us and no good saying that the Government should have provided the money, for that would be merely to shift the savings from one sector to another. Nor could the British Petroleum Company have provided the money, because, the Chancellor has told us, it is not in that company's interest or that of the country that it should do so. What we must do is to increase the amount of savings available for that type of investment. Even then we must encourage and not discourage American participation.
It has been stressed this afternoon that we are becoming more and more dependent on oil. Two-thirds of the world's known proved resources of oil are in the Middle East. I support what has been said on the vital importance to this country of that area of the world. Like the right hon. Gentleman the Member for Kelvingrove (Mr. Elliot), I do not believe in the full panoply of cloak and dagger work as expounded by the hon. Member for Wednesbury (Mr. S. N. Evans), but there is no doubt that we cannot afford friction between the oil interests in that part of the world. There was. I know, such friction over the Redline agreement and over other matters. We should strive to use our influence in the Middle Eastern countries with a view to forming them into a larger federation and giving them greater stability, and on the oil companies to impress upon them that co-operation is necessary between them.
While all this interest is focused on the deal in Trinidad, it is of interest to note that the Gulf Company has acquired a controlling interest in British American Petrol, in Canada, the second biggest integrated concern in the Dominion. I do not object to that—I do not suggest it is an exact parallel of the Trinidad case—but it has aroused no interest whatever in this country. It is largely a matter of luck whether these affairs come into prominence.
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I am certain that this Trinidad deal may not prove as sorry an affair as it might at first sight appear, if it means that a real effort will be made to mobilise savings and if it impresses upon the country its increasing and inevitable dependence on oil in general and on Middle Eastern oil in particular.
6.19 p.m.
Mr. F. M. Bennett (Torquay): I understand that the right hon. Member for Llanelly (Mr. J. Griffiths), who is to wind up for the Opposition wishes to speak at 6.25, so I shall compress the remarks I had intended to make and direct them to one single aspect of the debate; but an aspect which, I think, is of the utmost importance, even if not controversial. It follows the question asked by my right hon. Friend the Member for Kelvingrove (Mr. Elliot) about the subsequent use of the dollars which will accrue to this country.
I would, first, assure hon. Members opposite, especially the hon. and learned Member for Brigg (Mr. E. L. Mallalieu), that there is no covert or secret influence by the City upon me in my views on this question. As my right hon. Friend the Member for Kelvingrove said—and I fully agree with him—whether this deal will be ultimately acceptable, certainly to most of us on this side of the House, entirely depends on whether or not the subsequent use of the funds is for Commonwealth investment purposes in the future. I know the arguments about earmarking, and I am not running into that difficulty.
First, either this Administration or the one preceding it at some stage must have given to the Trinidad Oil Company permission to invest a certain number of dollars, 8 million or 10 million dollars, in Canada, and as a consequence of this deal we are to lose that Canadian investment. Quite apart from any question of future earmarking or future devotion of those dollar funds as a whole, there is the immediate, primary, moral duty upon the Chancellor to permit the reinvestment of at least an amount which is equal to the net loss of this country of Trinidad's dollar investments in Canada.
For good reasons we are not told, although we have made inquiries about it. what the sum invested may be, because I understand that it is not the practice to disclose such facts. It is, however, possible to make an intelligent guess. and my estimate is that the amount is, as I have

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said, between 8 million and 10 million dollars. That is the existing investment of this concern in Canada, and our total investment in Canada will be reduced by that amount as a result of this deal for which we are to be paid dollars in cash. Our first duty, therefore, is to see that that amount is replaced.
Turning to the dollar payment as a whole, yesterday I asked the Chancellor about our existing rate of investment in Canada, and I got the answer that last year it was 35 million dollars and that it is 18 million dollars so far this year. Provided that the same trend is maintained, it means that the annual rate should be again over 30 million dollars this year.
Now, however much we may blink at what has happened it is the fact that we are now selling out a Commonwealth capital asset, and if we are to sell out a Commonwealth capital asset it is the plain duty of this House, irrespective of party, to insist that the funds dollars or sterling resulting from the deal are reinvested. It may be that we cannot do so by earmarking because of the regulations and because of the accepted pattern of behaviour of the sterling area, but the Chancellor has within his absolute discretion the right markedly to relax the rate of dollar investment, as he ought to do in permitting this deal.
As I understood him, my right hon. Friend said today that this accrual of dollars would give us an opportunity of strengthening our reserves, and that later it might well be possible for us to make more Canadian and other investment. I would point out to him that there is a distinction between what he has said so far and for what most of us are pressing. There is a very big distinction, as one can illustrate from the point of view of the individual, and I ask my right hon. Friend to bear it in mind.
If I am a shareholder in this company I shall be paid 80s. 3d. a share when the funds are paid out. There are two things I can do with that money. One is to reinvest it immediately in Government or other securities, and that, I have no doubt, my right hon. Friend would welcome. There is something else I can do with it. If I have a temporary overdraft, or am facing temporary financial strain, I can pay it into my deposit or current account.
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I can then say, "Provided things look up a bit in a year or so, or provided my income goes up a bit, then I will buy some Government or other shares." [HON. MEMBERS: "Premium Bonds."]
I am asking the Government to make sure that it is the former of these courses that they follow and by their example encourage others to follow, for I feel sure that that is exactly the sort of conduct my right hon. Friend would wish in the individual shareholder when he receives his cash, when the payment on the shares is made.
The hon. Member for Wednesbury (Mr. S. N. Evans) has suggested that the Government ought to have insisted that part of the payment for the deal should be made in Aramco shares. As that is not possible, I throw out the idea, too, that the Government should use some of these dollars to buy shares on the market in that company. Then, if they buy enough of them, they will get a seat on the board and accomplish by another method what the hon. Member suggested.
6.24 p.m.
Mr. James Griffiths (Llanelly): The case against this deal has been put so cogently and convincingly by my right hon. Friend the Member for Huyton (Mr. H. Wilson), supported by a number of notable speeches by my hon. Friends, that I do not intend in the short time at my disposal before we hear the Colonial Secretary reply for the Government, to range over the same subjects. I desire to ask a number of questions about the position in Trinidad and about the relationship of Trinidad and the Caribbean to this deal, and to the decision which we have to make in the House tonight.
We are discussing this matter, and will shortly declare by our vote our views upon it, at a time when two important constitutional developments are taking place in Trinidad and the Caribbean. A new constitution is to come into operation in Trinidad in the autumn. It will extend the range of self-government, enlarge its Legislature, and increase the power of the democratically elected representatives on the Executive.
Very shortly we shall be discussing a Bill which, curiously enough, has come out upon the very day that we are discussing this deal. It is the British Caribbean Federation Bill. What a send-off to

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the new Caribbean Federation, that when we launch one of the most ambitious and exciting ventures in the history of our Commonwealth, when we are bringing together those scattered islands into a Dominion, we should be discussing this deal!
The Chancellor told us that the Government consulted the Government of Trinidad and that the Government of Trinidad have approved the decision of the Government here. I want to ask some questions about this, and I hope that the Colonial Secretary will reply. At present, there is no Legislature in existence in Trinidad. The old Legislature, set up under the Constitution of 1950, has been dissolved. There will be elections in September, and after the elections there will be a new Legislature and a new Government. I put it to the Colonial Secretary and to the House, because it is important to bear it in mind, that at the moment there is no body in Trinidad which can represent the views of the people of Trinidad on this matter.
I ask the right hon. Gentleman this question. Does he think it is right, or wise, for us to make a decision on this matter before the autumn when the new Legislature and new Government of Trinidad will have an opportunity of declaring their views upon it? It is true that, constitutionally, Trinidad being a Colony, the Government and this House can decide, but I put this view, which ought to be seriously considered by every hon. Member of the House and by our country. To take this decision at this time, as we can but when the representatives of the people of Trinidad have no opportunity of doing so, is mistaken, and we ought to postpone a decision until the new constitution comes into operation.
Trinidad will be one of the important partners in the new Federation. It will, with all its resources, become part of this new Dominion. Among the most important of its resources is the oil industry. What happens to the oil industry in Trinidad is of importance not only to Trinidad itself but to the Caribbean. I raised this question earlier with the Chancellor of the Exchequer and I raise it now with the Colonial Secretary. Has he consulted other Governments in the British Caribbean whose territories will
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form part of the new Federation, and. if so, what are their views about it?
Does he think that we ought to wait—I believe that we should—until both Trinidad and the Caribbean have an opportunity of deciding upon this matter? It is quite clear that the future prospects both of the island and the Federation will be vitally affected by what happens to the oil industry in Trinidad, whose future in part, and in a very important part, we are deciding today.
The second point concerns the proposal that was made by my right hon. Friend the Member for Huyton when he indicated that in our view the Government should have stepped in and acquired this property for the nation. What a splendid gesture it would be if we vested one-half of the property in the Government of Trinidad and the new Government of the Federation. What a gesture from this country to this very great venture of federation, and what a real security to the people of the Caribbean and of Trinidad that this oil industry should be developed in their interest and that they should have an effective voice in its control and really participate in the wealth that would be derived from it.
In view of their prejudice against nationalisation generally, the Government will no doubt turn down that suggestion. If they do, will the Secretary of State for the Colonies consider another suggestion? At this important stage in the political development of the whole of this area, is it not desirable and essential that the Governments of the territory should have an effective voice in the future control of this industry? Even if Her Majesty's Government reject the proposal to acquire the whole of this property for the nation, has any consideration been given to acquiring an interest in the property?
Has any consultation taken place with the Colonial Development Corporation and has the suggestion been made that that Corporation should have an interest in this industry? As I understand from the present policy of Her Majesty's Government, the Corporation seems to be under an obligation to the Government not to invest in any project in the Colonies unless it is in partnership with private enterprise. Will the Government apply that principle the other way round

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and arrange that the Corporation, acting for the Government and the nation, shall acquire an interest in this enterprise, together with the right to nominate members on the board of directors to represent this country, Trinidad and the Caribbean Federation? I believe that that is an important suggestion.
We on this side of the House welcome the assurances required in paragraphs 30 and 31 of the White Paper as far as they go, but I understand from the White Paper and from what the Chancellor of the Exchequer has said today that the precise form in which these undertakings will be embodied in an agreement with the Texas Company are still under consideration. I hope that the Secretary of State for the Colonies will tell us what he has in mind in this respect. If he rejects the proposals that we have put forward, I should like to ask him a question which has already been asked but which has not yet been answered. If, at any time in the future, the new company does not carry out these undertakings, what sanctions and safeguards has the right hon. Gentleman in mind to to ensure that the company can be compelled to carry them out?
The Trinidad enterprise has been a fairly important part of the activities of the Triniday Oil Company. When the company is sold and it becomes a part of a new company, the Trinidad interest will become a very small part of the new company's total interests. It will become a minor subsidiary. I have seen some of these amalgamations in my own industry in my time. It is a kind of historical process that when big companies swallow small ones the whole tendency is for the smaller subsidiary, particularly if it is relatively uneconomic, to be abandoned.
Will the Secretary of State tell us how he proposes to ensure in the agreements which he makes not only that the undertakings are carried out fully, but that there are sanctions which will enable Her Majesty's Government and the Government of Trinidad to take action if the agreements are broken? On the assumption that the right hon. Gentleman accepts the view that we must have sanctions and have some power to intervene if the undertakings are broken, are we to understand that there will be a clause in the
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agreements by which the Government will have a right to buy the industry back? Unless that is the case, how are we to ensure that all or any of these undertakings are carried out?
I should like to put another point to the House. I echo what was said by my right hon. Friend the Member for Huyton. Quite frankly, it is shabby treatment of the House, of Trinidad and of the Caribbean, that a matter of this kind has to be decided within about ten days. The offer was made on 5th June and on 6th June it was announced in the House, and here we are today deciding this matter and, it may be, the fate of the island, without a Parliament or an effective Government in Trinidad, on the eve of the advent of the new Federation.
Here is an industry which employs 17,000 workers in Trinidad, half of whom are employed by this Company. The industry is responsible for one-third of the revenue of the Trinidad Government and for 75 per cent. of its exports. Here is the life-blood of the people of Trinidad, and they have no opportunity of deciding this issue. It is their land, their wealth, their future and their prosperity. I urge upon the House, as one of the many reasons for voting against this deal, the reason that we have not the moral right to take this decision without allowing the people in the Caribbean, and particularly in Trinidad, to voice their opinion upon it.
If there were a free vote in the House, the Government would be defeated. Every supporter of the Government who has taken part in the debate has said, "We accept this with reluctance." The feeling is widespread in the House and among the public generally that by what we are doing today we are failing in our responsibilities to Trinidad and to the people in the Caribbean, to the Commonwealth and to this country. I believe that when we vote against the Government this evening we shall be speaking for the vast majority of our people.
6.39 p.m.
The Secretary of State for the Colonies (Mr. Alan Lennox-Boyd): Despite the brotherly tribute which the right hon. Member for Llanelly (Mr. J. Griffiths) paid to his right hon. Friend the Member for Huyton (Mr. H. Wilson), I hope that I shall be forgiven for saying that the speech of the right hon. Member for

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Huyton, in opening the debate, was scarcely a serious contribution to this discussion.
The right hon. Member moved from one charge to the other—quite irreconcilable charges with very gay rapidity. At one moment he said that after four and a half years of Conservative rule there was no capital available which could be invested. A quarter of an hour later he said that the money, of course, could quite easily have been found had Shell or B.P. wanted it, or had the Government been serious about it.
The right hon. Gentleman made little effort to relate these proposals to the real problems of the United Kingdom or of Trinidad. I recognise, however, that in his speech the right hon. Gentleman the Member for Llanelly did deal with aspects of this matter which are of close interest to the people of Trinidad.
I must confess that throughout the speech of the right hon. Gentleman the Member for Huyton I found it difficult to regard it as the first speech on what is a Motion of censure on the Government, which was designed to bring together many different elements in the House. Throughout his speech the right hon. Gentleman seemed to forget that this is an offer by a foreign company to buy a whole concern, and that the Government would not be in a position to pick out bits and pieces, to approve or to refuse.
The right hon. Gentleman asked me some questions in the sphere for which I am primarily responsible, which it may be convenient if I deal with now. For instance, he asked me whether it would be possible, and whether any approach had been made, to the Colonial Development Corporation for that Corporation to take a share in this project. The right hon. Gentleman the Member for Llanelly made the same point.
Leaving out of account altogether the argument of my right hon. Friend the Chancellor of the Exchequer about the wisdom of this deal, there are statutory upper limits for the Colonial Development Corporation which cannot be exceeded without new legislation. It would only have been possible—even had it been right, which I do not for a moment accept—for the Colonial Development Corporation to have embarked on an undertaking of this kind if all its other schemes for the 70 million people who
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live in the Colonial Territories were either totally abandoned or very heavily slashed. Clearly, it would have been an absurd use of this power to have diverted to this acquisition, all the money of the Corporation for a period of years at a time when, from many quarters of the Commonwealth, we hear constant pleas about the need to attract foreign investments and foreign capital.
Foreign investment and foreign capital are most unlikely to be attracted into the sphere of the Colonial Development Corporation. Indeed, the Corporation was set up to bridge the gap between schemes which were likely to attract outside investment and those which were not. So to have diverted the whole of the funds of the Corporation for this purpose, which would have had to be on a huge scale, and then to hope that other activities within the Colonies would have been financed from outside sources, presumably foreign sources, would have been an ill-planned way to tackle the big problem of colonial development.
I understand the difficulties of the right hon. Gentleman. It must be singularly embarrassing for a speaker from the Opposition to deal in serious vein with the question of oil interests and the sources from which we draw our oil strength. The right hon. Gentleman paid a tribute to my right hon. Friend the Member for Woodford (Sir W. Churchill) for his great investment in Middle Eastern oil. The right hon. Gentleman spoke of Middle Eastern oil as if he had a right to talk about it as one who had added to our strength and authority in that part of the world.
The right hon. Gentleman did his utmost in his speech—and this is my main complaint against him—to try to create prejudice against this arrangement, and to remove the subject from the realm of serious discussion. One of the illustrations he called in aid was an attempt to estimate what each miner would need to have earned, and over how many years, in order to acquire the same amount of net gain as certain people may have made on the Stock Exchange from share movements. What the right hon. Gentleman did not bear in mind, or remind the House of, was not only what faced the miners, and many other men all over this country as well, over the shocking business at Abadan but

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what would have happened if there had not been a change of Government[HON. MEMBERS: "Oh."]—here, which certainly had useful results elsewhere.
The right hon. Gentleman said that the Socialist Government were confronted with the demands by a sovereign State which could not have been stopped without bayonets, but we managed, not long afterwards, to get back again into a very strong position in the Persian oilfields. Therefore, when hon. and right hon. Gentlemen opposite talk as if the arrangement made ultimately at Abadan involved a sacrifice of British to American interests, they conveniently leave out of account the fact that the American and other foreign companies paid Anglo-Iranian £214 million for their share in the consortium, in part to be paid by an original lump sum and the rest over a period. So I can most certainly understand that the right hon. Gentleman may have a little hesitation in dealing seriously with the problems of oil.
Mr. H. Wilson: The right hon. Gentleman knows perfectly well that, despite all their promises in 1951, the Conservative Government were unable to do anything in Iran until there was a change of Government there. Are the Government now claiming credit for that change of Government in Iran?
Mr. Lennox-Boyd: There were long negotiations in which the firm attitude of Her Majesty's Government, firm and patient diplomacy, yield a very rich reward.
The speech that should have started the debate for the Opposition was the serious contribution made by the hon. Gentleman the Member for Wednesbury (Mr. S. N. Evans). I have considerable sympathy with nearly all that he said. I have much sympathy with his views on the outrageous propaganda against the United Kingdom, the British people and the British Commonwealth in general which is prevalent in certain areas of the Middle East. I share his acute resentment at all who encourage it and, still more, who help to finance it.
In the course of his speech the hon. Gentleman made some comments on Aramco and suggested that the United Kingdom Government should have demanded, as a condition of approving this arrangement, a seat on that board. On
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reflection, I do not think that he would regard a single seat on that board, even if it had been possible, as being a really effective control. My right hon. Friend explained how, as the Texas Oil Company had only a one-third interest in Aramco, that would have been virtually impossible without disturbing the balance of their arrangements. I would seriously commend to the hon. Gentleman the view that the real way to influence people in the areas where we have to influence them is to strengthen the solidarity of all oil interests throughout the world, as the hon. Member for Orkney and Shetland (Mr. Grimond) said a short time ago in his most interesting speech.
At the beginning of the debate the hon. Member for Wednesbury also asked me whether it was not a fact that the dollar gain would be greatly reduced if there was a substantial American holding in the company. There is no reason to believe that American citizens have a substantial holding. In any case, the shareholders are being paid for their shares in sterling and, as my right hon. Friend said, the dollars go to the reserves.
As was natural, the debate has ranged over three different interests, all closely linked with this project, and this project itself has, quite rightly, focussed attention on the question of colonial investment. The first interest was the interest of Trinidad. The second was the interest of the United Kingdom. The third was the United Kingdom investment in the Commonwealth as a whole.
I share with the right hon. Gentleman the Member for Llanelly the view that this is a matter of very great concern to Trinidad, and throughout our discussions the Government have been particularly conscious of our duties to its people. I am most grateful for the recognition by the Government, by all my colleagues, of the fact that we have very considerable responsibilities in Trinidad which, though they take a different form constitutionally from those of our own people in the United Kingdom, are none the less important and in effect than our relations with our people in the United Kingdom.
I began my personal examination of this proposal with considerable scepticism, and I was afraid that it might be shown to be to the disadvantage of the people

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of Trinidad, but I can assure hon. Members on both sides of the House that I am absolutely convinced that this arrangement is in the best interests of the people of Trinidad and that we ourselves would have been very answerable in the future had we refused permission and taken another line.
The right hon. Gentleman said that there is to be a new constitution in Trinidad in the autumn and that at the moment the Trinidad Legislature has been dissolved. But, as he knows, there is an Executive Council, and the government of Trinidad, like the government of any other country, is carried on during the period of the dissolution of Parliament. On the Executive Council are the Governor, the Colonial Secretary, the Financial Secretary, one nominated member and five elected ministers.
I do not know precisely how they arrive at their conclusions. Like most Governments and Cabinets, they do not, I imagine, take votes. However, when I see that the elected ministers are in a majority on the Executive Council, and when I am assured that the Executive Council of Trinidad is behind the proposal and hopes that Her Majesty's Government will give the proposal their support and recognise the value of it, then I think that I should be in a very difficult position vis-è-vis the people of Trinidad if I did not pay serious attention to what the Executive Council says.
I dare say that the right hon. Gentleman would ask why we do not wait until the General Election which will take place in September this year. Apart from the fact that this is a business arrangement with certain firm dates in the offer, of which note must be taken, however much hon. Gentlemen opposite may dislike the idea of definite offers and definite closing dates, I do not believe that it would have been in the interests of anybody if the deal had become a matter of violent political controversy in September.
Had the Legislature been sitting, there would, of course, have been a discussion on it, but it did not appear to Her Majesty's Government or to the Government of Trinidad, who, after all, are responsible in matters of this kind, to be in any way necessary that a decision, even if it could have been postponed, should be postponed until after next
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September. At no point whatever in my discussions with the Government of Trinidad did I ever have the slightest indication that the Executive Council would like a decision postponed until after the General Election.
Mr. J. Griffiths: This is an important matter. The last thing that I or any of us would desire would be that a matter of this kind should become a subject of controversy during the September General Election. Would not the best way to prevent that happening be to give a firm undertaking now that the final act in this deal will not take place until the new Legislature has had an opportunity to discuss it?
Mr. Lennox-Boyd: No, Sir. I cannot imagine anything which would be less in the interests of the people of Trinidad and more resented by the Executive Council of Trinidad, which has tendered its advice to Her Majesty's Government, and which, not only before Her Majesty's Government made their decision, but since, in communications with me after the decision was made, has said that it absolutely approves of the action which Her Majesty's Government have taken. I am sure that any other action on our part would have been inconsistent with our duties to the people of Trinidad.
The right hon. Gentleman asked me whether there had been any discussion with other Caribbean territories on this matter. The answer is that there have been no other discussions. The other territories have, of course, known of the proposal, and, if they had cared to do so, could have submitted their views. But this is a matter concerning the Government of Trinidad, and I have to be exceedingly careful in matters of this kind not to go round asking the opinion of other territories on a matter which the Government of Trinidad, quite rightly, regard as their concern.
The right hon. Gentleman drew attention to the fact that the Caribbean Federation Bill was formally introduced in the House of Commons yesterday. He said that these proposals, 24 hours later, were a sorry send-off for it. However, I would ask him seriously to consider what a really disastrous send-off it would have been for the Bill, and, later, for the Caribbean Federation, if Her Majesty's Government had completely

1503
disregarded the views of the Executive Council of Trinidad on a matter concerning it mainly, with the United Kingdom, and at a time when the Caribbean Federation, though we see it coming along, is not likely to take proper shape until 1958.
I attach the greatest possible importance, of course, to the safeguards which are spelt out in the White Paper. We have every intention of negotiating with the representatives of the Texas Company on these safeguards and the form that they should take. I think it is better that the precise form should await those discussions.
I deprecate the approach of the right hon. Gentleman and the assumption underlying some of his questions that these demands or insistences on our part are likely to be signed by the Texas Company and then broken at some period shortly afterwards. The right hon. Gentleman is entitled to ask what would happen if these conditions are refused. If they are refused before the agreement is completely approved, then, naturally, the agreement will not take place. If the arrangement is broken after the agreement has been signed, then the action to be taken would depend on what undertaking has been breached.
Some action, for example, might be offences against the Trinidad law, such as in regard to industrial relations, and the provisions could be enforced through the courts of law. In the case of other actions, such as not pursuing a sufficiently forthright development policy, the matter can only be resolved by negotiation and cannot be made subject to legal requirement.
However, in matters of this kind I see no reason whatever to anticipate that, as between a company from a great ally like the United States, and the Governments of Trinidad and the United Kingdom, statements of intention solemnly entered into will not be scrupulously fulfilled. Of course, formally, the leases could be withdrawn or the Government of Trinidad could take over, but, as I say, I have no reason to anticipate that any such serious action would be necessary.
With regard to the feelings of the people of Trinidad, other than those of the Executive Council, there have been one or two statements made by trade
1504
union leaders in Trinidad. I do not think that those can seriously be taken as representing the views either of the oil workers or of a very considerable body of people in Trinidad. The comments were not made until the decision had been reached. It was open for those comments [HON. EMBERS: "0h."] The trade union leaders knew about this from the date of the publication of the proposals, and had it been intended seriously to put forward any comments, the proper time to have put them forward would have been then.
I must confess to a feeling that in an Election year in Trinidad certain political considerations enter into comments of this kind, and we should have been much more subject to criticism, possibly from the same source, had we taken a different view.
The next aspect of the matter upon which attention has properly been focussed is the interests of the United Kingdom. I will not deal with this in the same detail because the Chancellor dealt with it very considerably. However, I should like to put to the House one or two general considerations based on my experience as Colonial Secretary and my knowledge of how much colonial development is in the interest of both the Colonies and the United Kingdom.
If we seek to exclude American or other foreign ownership of mineral or oil ventures in the British Commonwealth we must not be surprised if doors are closed against British mining and British oil houses in foreign countries. Mining is a two-way traffic. If we are to continue to develop the mining and oil industries anywhere in the world, we must allow others to do the same in our own territories. If the Trinidad oil deal had been blocked, it would have been a big blow to British mining houses and British mining activities operating in many parts of the world.
Nothing could be more fatal to the interests for which I feel a great personal responsibility than if we were to lay it down that Empire raw materials could be operated only by British companies. If we did that, the mining world itself would be divided into two camps with the consequence that we would either have to rely exclusively on our own financial resources to develop the minerals and oil of the British Empire—which, in my

1505
view, is out of the question—or we might find the British Commonwealth short of certain essential minerals.
If we were excluded from looking for those in foreign countries, we might set up very serious strategic and other deficiencies for our own people. I can see no surer way of discouraging American and other investment in our own mining enterprises than blocking a transaction such as this. I am most deeply conscious of the need to strengthen and increase investment wherever we can.
The right hon. Member for Huyton and the right hon. Member for Llanelly and other hon. Members asked about the attitude of American companies to labour problems in the territories where they operate. I have very carefully looked at that, for I am fully conscious of the very great need to make sure that no hint of racial discrimination or other improper practice is allowed to enter into any British Colonial Territory with our knowledge.
As no doubt many hon. Members know, the Rhodesian Selection Trust has lately been doing a most admirable task in labour relations in Central Africa. The Trust has a large shareholding and a considerable amount of that shareholding was acquired not by a direct and sudden American purchase as is now proposed, but by steady purchases over a number of years. At present, about 65 per cent. of the Trust shares are in American hands. Yet from where is it that the imagination and drive has come in Northern Rhodesia in the policy of giving Africans a chance to undertake jobs which have hitherto been confined exclusively to white miners?
All those who know the work which Sir Ronald Prain has done in Northern Rhodesia, with the Rhodesian Selection Trust, can regard that as a fair indication of what the best American companies can be relied upon to do. I have no fears whatever that the agreements which we intend to negotiate will not be scrupulously fulfilled, and that the personnel and others introduced into Trinidad will not observe them, although, of course, a considerable number of people who will work in Trinidad will be the same as those who have worked for Trinidad Leaseholds.
The last aspect of this problem to which attention has been properly directed is that of United Kingdom invest-
1506
ment in the Commonwealth. No doubt one of the chance consequences of this transaction—and a very good consequence at that—will be to focus attention still more on the need to get more and more money invested in the British Commonwealth and to use our imagination in every way to see that that is brought about.
This transaction is in no sense a retrograde policy, if, as a result, our capacity to reinvest and reinvest more strongly is thereby encouraged. Nothing is more sure than that our first contribution to being able to play our part in Imperial development will come from putting our own house properly in order here. "You cannot invest a deficit" was the constant observation of my predecessor, Lord Chandos, and nothing is more true than that. The Government's policy, which the Chancellor has recently outlined, is designed to enable us so to strengthen ourselves that we can play our proper part.
I recognise the natural anxiety of many hon. Members—like my hon. Friend the Member for Tavistock (Sir H. Studholme) whose almost maiden speech after so many years as a Whip we all heard with the greatest interest—that we should ourselves be able to play an ever-growing part in investment. We have done a considerable amount of investment, and I am at a loss to know how the right hon. Member for Huyton drew some of the figures and some of the inferences in his speech.
In the course of the last few years, we have invested very considerably in our Commonwealth, but I agree that we still have a long way to go. We have done that despite the most considerable difficulties in our balance of payments position, caused by a war which, at its start saw us with £3,500 million surplus and, at its end, a debt of £2,500 million, a swing of more than £6,000 million in six years. Right hon. and hon. Gentlemen should try to draw a moral from that, but this issue is far too serious to attempt to make purely party points.
Despite these difficulties, no less than £600 million have flowed into the Colonies since 1949 and, of that figure, by far the largest part has come from the United Kingdom. Last year, we estimate that about £90 million were provided by the United Kingdom for the Colonies despite

1507
many other difficulties. The figures quoted by the right hon. Member for Huyton give a rather misleading view of the story. Of the figure of £600 million, about £30 million—if we include United States investment in the copper companies in Central Africa—have been provided from United States sources—only about £30 million out of £600 million.
Gross capital formation in the Colonies in 1951 was at the rate of £300 million a year. By last year it had risen to £450 million, an increase of 50 per cent. in money terms and perhaps one-third in real terms. Those of us who are really anxious about colonial investment will, I hope, not give currency to the view that virtually nothing has been done. Quite the contrary is the case, but I recognise that we have still a considerable way to go.
The work we have done has enabled us in the last few years to see the total value of exports from Colonial Territories increase from £615 million in 1948 to £1,360 million last year, and the value of imports over the same period from £660 million to nearly £1,500 million. The result of that transformation in their trading balance has been a steady improvement in their standards of living and social services.
Those are facts which we would do well to remember when, as we all do, we see whether it will be possible to find still more capital for our current responsibilities. I am particularly glad that yesterday in Committee on the Finance Bill the Chancellor of the Exchequer was able to give an assurance that if circumstances from the budgetary or balance of payments point of view are such that we cannot next year go the whole way towards meeting the recommendations of the Royal Commission on the Taxation of Profits and Income, he will, nevertheless, bring forward legislation next year to deal with the matter of frustration of pioneer industry reliefs. I know what satisfaction that will give to all classes of people and investors and to the Territories themselves who will stand to gain from this almost more than from any other single act.
I commend these proposals to the House and venture to say that if the right hon. Member for Llanelly had, in fact, been Colonial Secretary today, he could not possibly have asked the House to reject these proposals and go into the Lobby against them.
Question put, That this House do now adjourn:—
The House divided: —Ayes 247, Noes 315.

Division No. 227.]

AYES

[7.10 p.m.

Ainsley, J. W.

Champion, A. J.

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

Albu, A. H.

Chapman, W. D.

Gibson, C. W.

Allaun, Frank (Salford, E.)

Chetwynd, G. R.

Gooch, E. G.

Allen, Arthur (Bosworth)

Clunie, J.

Greenwood, Anthony

Allen, Scholefield (Crewe)

Coldrick, W.

Grenfell, Rt. Hon. D. R.

Anderson, Frank

Collick, P. H. (Birkenhead)

Grey, C. F.

Awbery, S. S.

Collins, V.J. (Shoreditch & Finsbury)

Griffiths, David (Rother Valley)

Bacon, Miss Alice

Corbel, Mrs. Freda

Griffiths, Rt. Hon. James (Llanelly)

Baird, J.

Cove, W. G.

Griffiths, William (Exchange)

Balfour, A.

Craddock, George (Bradford, S.)

Hale, Leslie

Ballenger, Rt. Hon. F. J.

Cronin, J. D.

Hall, Rt. Hn. Glenvil (Colne Valley)

Bence, C. R. (Dunbartonshire, E.)

Crossman, R. H. S.

Hamilton, W. W.

Benn, Hn. Wedgwood (Bristol, S.E.)

Cullen, Mrs. A.

Hannan, W.

Benson, G.

Dalton, Rt. Hon. H.

Harrison, J. (Nottingham, N.)

Beswick, F.

Darling, George (Hillsborough)

Hastings, S.

Bevan, Rt. Hon. A. (Ebbw Vale)

Davies, Ernest (Enfield, E.)

Hayman, F. H.

Blackburn, F.

Davies, Harold (Leek)

Healey, Denis

Blenkinsop, A.

Deer, G.

Henderson, Rt. Hn. A. (Rwly Regis)

Blyton, W. R.

Delargy, H. J.

Hewitson, Capt. M.

Boardman, H.

Dodds, N. N.

Hobson, C. R.

Bottomley, Rt. Hon. A. G.

Dugdale, Rt. Hn. John (W. Brmwch)

Holman, P.

Bowles, F. G.

Dye, S.

Holmes, Horace

Boyd, T. C.

Ede, Rt. Hon. J. C.

Howell, Charles (Perry Barr)

Braddock, Mrs. Elizabeth

Edwards, Rt. Hon. John (Brighouse)

Howell, Denis (All Saints)

Brockway, A. F.

Edwards, W. J. (Stepney)

Hoy, J. H.

Broughton, Dr. A. D. D.

Evans, Albert (Islington, S.W.)

Hubbard, T. F.

Brown, Rt. Hon. George (Belper)

Evans, Edward (Lowestoft)

Hughes, Cledwyn (Anglesey)

Brown, Thomas (Ince)

Evans, Stanley (Wednesbury)

Hughes, Emrys (S. Ayrshire)

Burke, W. A.

Fernyhough, E.

Hughes, Hector (Aberdeen, N.)

Burton, Miss F. E.

Fienburgh, W.

Hunter, A. E.

Butler, Herbert (Hackney, C.)

Fletcher, Eric

Irvine, A. J. (Edge Hill)

Butler, Mrs. Joyce (Wood Green)

Forman, J. C.

Irving, S. (Dartford)

Callaghan, L. J.

Fraser, Thomas (Hamilton)

Isaacs, Rt. Hon. G. A.

Castle, Mrs. B. A.

Janner, B.

Moyle, A.

Sparks, J. A.

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

Mulley, F. W.

Steele, T.

Jeger, George (Goole)

Neal, Harold (Bolsover)

Stewart, Michael (Fulham)

Jeger, Mrs. Lena(Holbn & St.Pncs.S.)

Noel-Baker, Francis (Swindon)

Stokes, Rt. Hon. R. R. (Ipswich)

Jenkins, Roy (Stechford)

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

Stones, W. (Consett)

Johnson, James (Rugby)

O'Brien, Sir Thomas

Strachey, Rt. Hon. J.

Jones, Fit. Hon. A. Creech(Wakefield)

Oliver, G. H.

Strauss, Rt. Hon. George (Vauxhall)

Jones, David (The Hartlepools)

Oram, A. E.

Stross, Dr.Barnett(Stoke-on-Trent,C.)

Jones, Elwyn (W. Ham, S.)

Orbach, M.

Summerskill, Rt. Hon. E.

Jones, Jack (Rotherham)

Oswald, T.

Swingler, S. T.

Jones, J. Idwal (Wrexham)

Owen, W. J.

Sylvester, G. O.

Jones, T. W. (Merioneth)

Padley, W. E.

Taylor, Bernard (Mansfield)

Kenyon, C.

Paling, Rt. Hon. W. (Dearne Valley)

Taylor, John (West Lothian)

Key, Rt. Hon. C. W.

Paling, Will T. (Dewsbury)

Thomas, George (Cardiff)

King, Dr. H. M.

Palmer, A. M. F.

Thomas, Iorwerth (Rhondda, W.)

Lawson, G. M.

Pargiter, G. A.

Thomson, George (Dundee, E.)

Ledger, R. J.

Parker, J.

Thornton, E.

Lee, Frederick (Newton)

Parkin, B. T.

Timmons, J.

Lee, Miss Jennie (Cannock)

Paton, John

Tomney, F.

Lever, Harold (Cheetham)

Pearson, A.

Turner Samuels, M.

Lever, Leslie (Ardwick)

Peart, T. F.

Ungoed-Thornas, Sir Lynn

Lewis, Arthur

Plummer, Sir Leslie

Usborne, H. C.

Lindgren, G. S.

Popplewell, E.

Viant, S. P.

Lipton, Lt.-Col. M.

Price, Philips (Gloucestershire, W.)

Warbey, W. N.

Logan, D. G.

Probert, A, R.

Weitzman, D.

Mabon, Dr. J. Dickson

Proctor, W. T.

Wells, William (Walsall, N.)

MacColl, J. E.

Pryde, D. J.

West, D. G.

McGhee, H. G.

Pursey, Cmdr. H.

Wheeldon, W. E.

McGovern, J.

Randall, H. E.

White, Mrs. Eirene (E. Flint)

McInnes, J.

Rankin, John

White, Henry (Derbyshire, N.E.)

McKay, John (Wallsend)

Redhead, E. C.

Wigg, George

McLeavy, Frank

Reid, William

Wilcock, Group Capt. C. A. B.

MacPherson, Malcolm (Stirling)

Robens, Rt. Hon. A.

Wilkins, W. A.

Mahon, Simon

Roberts, Albert (Normanton)

Willey, Frederick

Mainwaring, W. H.

Roberts, Goronwy (Caernarvon)

Williams, David (Neath)

Mallalieu, E. L. (Brigg)

Robinson, Kenneth (St. Pancras, N.)

Williams, Rev. Llywelyn (Ab'tillery)

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

Rogers, George (Kensington, N.)

Williams, Rt. Hon. T. (Don Valley)

Mann, Mrs. Jean

Ross, William

Williams, W. R. (Openshaw)

Marquand, Rt. Hon. H. A.

Shawcross, Rt. Hon. Sir Hartley

Williams, W. T. (Barons Court)

Mason, Roy

Shinwell, Rt. Hon. E.

Willis, Eustace (Edinburgh, E.)

Mayhew, C. P.

Short, E. W.

Wilson, Rt. Hon. Harold (Huyton)

Messer, Sir F.

Silverman, Julius (Aston)

Winterbottom, Richard

Mikardo, Ian

Silverman, Sydney (Nelson)

Woodburn, Rt. Hon. A.

Mitchison, G. R.

Simmons, C. J. (Brierley Hill)

Woof, R. E.

Monslow, W.

Skeffington, A. M.

Yates, V. (Ladywood)

Moody, A. S.

Slater, Mrs. H. (Stoke, N.)

Younger, Rt. Hon. K.

Morrison,Rt.Hn.Herbert(Lewis'm,S.)

Slater, J. (Sedgefield)

Zilliacus, K.

Mort, D. L.

Smith, Ellis (Stoke, S.)

Moss, R.

Snow, J. W.

TELLERS FOR THE AYES:

Sorensen, R. W.

Mr. Bowden and Mr. J. T. Price.

NOES

Agnew, Cmdr. P. G.

Bowen, E. R. (Cardigan)

Davidson, Viscountess

Aitken, W. T.

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

Davies,Rt.Hon.Clement(Montgomery)

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

Boyle, Sir Edward

D'Avigdor-Goldsmid, Sir Henry

Alport, C. J. M.

Braine, B. R.

Deedes, W. F.

Amery, Julian (Preston, N.)

Braithwaite, Sir Albert (Harrow, W.)

Digby, Simon Wingfield

Anstruther-Gray, Major Sir William

Bromley-Davenport, Lt.-Col. W. H.

Dodds-Parker, A. D.

Arbuthnot, John

Brooke, Rt. Hon. Henry

Donaldson, Cmdr. C. E. McA.

Armstrong, C. W.

Brooman-White, R. C.

Doughty, C. J. A.

Ashton, H.

Browne, J. Nixon (Craigton)

Drayson, G. B.

Astor, Hon. J. J.

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

du Cann, E. D. L.

Atkins, H. E.

Bullus, Wing Commander E. E.

Dugdale, Rt. Hn. Sir T. (Richmond)

Baldock, Lt.-Cmdr. J. M.

Burden, F. F. A.

Duncan, Capt. J. A. L.

Baldwin, A. E.

Butcher, Sir Herbert

Eccles, Rt. Hon. Sir David

Balniel, Lord

Butler,Rt.Hn.R.A.(SaffronWalden)

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

Banks, Col. C.

Campbell, Sir David

Eden, J. B. (Bournemouth, West)

Barber, Anthony

Carr, Robert

Elliot, Rt. Hon. W. E.

Barlow, Sir John

Cary, Sir Robert

Emmet, Hon. Mrs. Evelyn

Barter, John

Channon, H.

Errington, Sir Eric

Baxter, Sir Beverley

Chichester-Clarke, R.

Erroll, F. J.

Beamish, Maj. Tufton

Churchill, Rt. Hon. Sir Winston

Farey-Jones, F. W.

Bell, Philip (Bolton, E.)

Cole, Norman

Fell, A.

Bell, Ronald (Bucks, S.)

Conant, MaJ. Sir Roger

Finlay, Graeme

Bennett, F. M. (Torquay)

Cooper, Sqn. Ldr. Albert

Fisher, Nigel

Bennett, Dr. Reginald

Cooper-Key, E. M.

Fleetwood-Hesketh, R. F.

Bevins, J. R. (Toxteth)

Cordeaux, Lt.-Col. J. K.

Fletcher-Cooke, C.

Bidgood, J. C.

Corfield, Capt. F. V.

Fort, R.

Birch, Rt. Hon. Nigel

Craddock, Beresford (Spelthorne)

Foster, John

Bishop, F. P.

Crowder, Sir John (Finchley)

Fraser, Sir Ian (M'cmhe & Lonsdale)

Black, C. W.

Crowder, Petre (Ruislip—Northwood)

Freeth, D. K.

Body, R. F.

Cunningham, Knox

Garner-Evans, E. H.

Boothby, Sir Robert

Currie, G. B. H.

George, J. C. (Pollok)

Bossom, Sir A. C.

Dance, J. C. G.

1510

1511

Gibson-Watt, D.

Leavey, J. A.

Raikes, Sir Victor

Glover, D.

Leburn, W. G.

Ramsden, J. E.

Godber, J. B.

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

Rawlinson, Peter

Gomme-Duncan, Col. Sir Alan

Legh, Hon. Peter (Petersfield)

Redmayne, M.

Gough, C. F. H.

Lennox-Boyd, Rt. Hon. A. T.

Rees-Davies, W. R.

Gower, H. R.

Lindsay, Hon. James (Devon, N.)

Remnant, Hon. P.

Graham, Sir Fergus

Lindsay, Martin (Solihull)

Renton, D. L. M.

Grant, W. (Woodside)

Linstcad, Sir H. N.

Ridsdale, J. E.

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

Llewellyn, D. T.

Rippon, A. G. F.

Green, A.

Lloyd, Rt. Hon. G. (Sutton Goldfield)

Roberts, Sir Peter (Heeley)

Gresham Cooke, R.

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

Robertson, Sir David

Grimond, J.

Lloyd, Rt. Hon. Selwyn (Wirral)

Robinson, Sir Roland (Blackpool, S.)

Grimston, Hon. John (St. Albans)

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

Robson-Brown, W.

Grimston, Sir Robert (Westbury)

Longden, Gilbert

Rodgers, John (Sevenoaks)

Hall, John (Wycombe)

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

Roper, Sir Harold

Hare, Rt. Hon. J. H.

Lucas, Sir Jocelyn (Portsmouth, S.)

Russell, R. S.

Harris, Frederic (Croydon, N.W.)

Lucas, P. B. (Brantford & Chiswick)

Schofield, Lt.-Col. W.

Harris, Reader (Heston)

Lucas-Tooth, Sir Hugh

Scott-Miller, Comdr. R.

Harrison, A. B. C. (Maldon)

McAdden, S. J.

Sharpies, R. C.

Harrison, Col. J. H. (Eye)

McCallum, Major Sir Duncan

Shepherd, William

Harvey, Air Cdre. A. V. (Macclesfd)

Macdonald, Sir Peter

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

Harvey, Ian (Harrow, E.)

McKibbin, A.

Smithers, Peter (Winchester)

Harvey, John (Walthamstow, E.)

Mackie, J. H. (Galloway)

Smyth, Brig. Sir John (Norwood)

Harvie-Watt, Sir George

McLaughlin, Mrs. P.

Soames, Capt. C.

Hay, John

Maclay, Rt. Hon. John

Spearman, Sir Alexander

Head, Rt. Hon. A. H.

Maclean, Fitzroy (Lancaster)

Spence, H. R. (Aberdeen, W.)

Heald, Rt. Hon. Sir Lionel

Macmillan,Rt.Hn.Harold(Bromley)

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

Henderson, John (Cathcart)

Maddan, Martin

Stanley, Capt. Hon. Richard

Hicks-Beach, Maj. W, W.

Maitland, Cdr. J. F. W. (Horncastle)

Stevens, Geoffrey

Hill, Rt. Hon. Charles (Luton)

Maitland, Hon. Patrick (Lanark)

Steward, Harold (Stockport, S.)

Hill, Mrs. E. (Wythenshawe)

Manningham-Buller, Rt. Hn. Sir R.

Steward, Sir William (Woolwich, W.)

Hill, John (S. Norfolk)

Markham, Major Sir Frank

Stewart, Henderson (Fife, E.)

Hinchingbrooke, Viscount

Marlowe, A. A. H.

Stoddart-Scott, Col. M.

Hirst, Geoffrey

Marples, A. E.

Stuart, Rt. Hon. James (Moray)

Holland-Martin, C. J.

Marshall, Douglas

Studholme, Sir Henry

Holt, A. F.

Mathew, R.

Summers, Sir Spencer (Aylesbury)

Hope, Lord John

Maude, Angus

Sumner, W. D. M. (Orpington)

Hornby, R. P.

Maudling, Rt. Hon. R.

Taylor, Sir Charles (Eastbourne)

Hornsby-Smith, Miss M. P.

Mawhy, R. L.

Taylor, William (Bradford, N.)

Horobin, Sir Ian

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

Teeling, W.

Horsbrugh, Rt. Hon. Dame Florence

Medlicott, Sir Frank

Thomas, Leslie (Canterbury)

Howard, Gerald (Cambridgeshire)

Molson, Rt. Hon. Hugh

Thomas, P. J. M. (Conway)

Howard, Hon. Greville (St. Ives)

Monckton, Rt. Hon. Sir Walter

Thompson, Kenneth (Walton)

Howard, John (Test)

Moore, Sir Thomas

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

Hudson, Sir Austin (Lewisham, N.)

Morrison, John (Salisbury)

Thorneycroft, Rt. Hon. P.

Hughes Hallett, Vice-Admiral J.

Mott-Radclyffe, C. E.

Thornton-Kemsley, C. N.

Hughes-Young, M. H. C.

Nabarro, G. D. N.

Tiley, A. (Bradford, W.)

Hulbert, Sir Norman

Nairn, D. L. S.

Tilney, John (Wavertree)

Hurd, A. R.

Neave, Airey

Touche, Sir Gordon

Hutchison, Sir Ian Clark (E'b'gh, W.)

Nicholls, Harmar

Tweedsmuir, Lady

Hutchison, Sir James (Scotstoun)

Nicholson, Godfrey (Farnham)

Vane, W. M. F.

Hyde, Montgomery

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

Vaughan-Morgan, J. K.

Hylton-Foster, Sir H. B. H.

Nield, Basil (Chester)

Vickers, Miss J. H.

Iremonger, T. L.

Noble, Comdr. A. H. P.

Vosper, D. F.

Irvine, Bryant Godman (Rye)

Nutting, Rt. Hon. Anthony

Wade, D. W.

Jenkins, Robert (Dulwich)

Oakshott, H. D.

Wakefield, Edward (Derbyshire, W.)

Jennings, J. C. (Burton)

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

Wakefield, Sir Wavell (St. M'lebone)

Jennings, Sir Roland (Hallam)

Ormsby-Gore, Hon. W. D.

Walker-Smith, D. C.

Johnson, Dr. Donald (Carlisle)

Orr, Capt. L. P. S.

Wall, Major Patrick

Johnson, Eric (Blackley)

Orr-Ewing, Charles Ian (Hendon, N.)

Ward, Hon. George (Worcester)

Johnson, Howard (Kemptown)

Orr-Ewing, Sir Ian (Weston-S-Mare)

Ward, Dame Irene (Tynemouth)

Joseph, Sir Keith

Osborne, C.

Waterhouse, Capt. Rt. Hon. C.

Joynson-Hicks, Hon. Sir Lancelot

Page, R. G.

Watkinson, Rt. Hon. Harold

Kaberry, D.

Pannell, N. A. (Kirkdale)

Webbe, Sir H.

Keegan, D.

Partridge, E.

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

Kerr, H. W.

Pickthorn, K. W. M.

Williams, Paul (Sunderland, S.)

Kershaw, J. A.

Pilkington, Capt. R. A.

Williams, R. Dudley (Exeter)

Kimball, M.

Pitman, I. J.

Wills, G. (Bridgwater)

Kirk, P. M.

Pitt, Miss E. M.

Wilson, Geoffrey (Truro)

Lagden, G. W.

Pott, H. P.

Wood, Hon. R.

Lambert, Hon. G.

Powell, J. Enoch

Woollam, John Victor

Lambton, Viscount

Price, Henry (Lewisham, W.)

Yates, William (The Wrekin)

Lancaster, Col. C. G.

Prior-Palmer, Brig. O. L.

Langford-Holt, J. A.

Profumo, J. D.

TELLERS FOR THE NOES:

Mr. Heath and

Mr. T. G. D. Galbraith.

Question put and agreed to.

ORDERS OF THE DAY

  DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH BILL [Lords]
  Order for Second Reading read.
  7.20 p.m.
  The Parliamentary Secretary to the Ministry of Works (Mr. J. R. Bevins): I beg to move, That the Bill be now read a Second time.
  This Bill has already passed through all its stages in another place, and it now falls to me to bring it before this House for Second Reading. I gather, from a recent skirmish in which the hon. Member for Cardiff, South-East (Mr. Callaghan)—who I am glad to see in his place —was engaged, that he may be a little sensitive about a junior Minister speaking upon scientific matters in the House on behalf of a senior Minister. When I first came to the House, in 1950,Icongratulated the hon. Member upon one of his Admiralty speeches, which he delivered from this Box. It was a very good speech, and the fact that he was a junior Minister, speaking for his noble Friend who was in another place, impaired neither his performance nor my appreciation of his speech.
  It may suit the convenience of the House if I begin by giving a little of the background to this quite uncomplicated Bill. I hope that the House will not take this as a signal that it is about to hear a long-winded dissertation on the past. Many hon. Members wish to speak in this debate and I wish to be as succinct as I can.
  The idea of establishing the Department of Scientific and Industrial Research was first conceived as long ago as 1915. In that year an Order in Council was made, setting up a Privy Council committee, under the chairmanship of the Lord President of the Council, with power to spend moneys voted by Parliament upon the organisation and development of scientific and industrial research.
  By the same Order an Advisory Council was to be established. The role of that Council was advisory, and has remained so throughout the last 41 years. In particular, that Council was to advise the Privy Council committee upon proposals, first, for starting particular researches;
  1514
  second, for starting or developing special institutions for the scientific study of problems affecting particular industries, and, third, upon proposals for the establishment and award of research studentships and fellowships.
  In the last four decades the sweep of the Department's activities has widened enormously. Starting from scratch in the First World War, its gross expenditure rose to more than £6½ million in 1954-55, and its net expenditure to nearly £6 million. For the present financial year the corresponding figures will be a good deal higher—over £8 million and £7 million respectively. The margin between the gross and the net figure in every case is largely accounted for by payments to the Department either by Government Departments and by industry for services rendered, and the receipt of American financial aid for the promotion of productivity, the study of human relations in industry, etc.
  Today we have 14 principal research stations and laboratories, which are concerned with applied scientific research. These stations are under the direct control of the Department, and the largest is the National Physical Laboratory at Teddington, which costs approximately £1 million a year.
  The Annual Reports of the Department, which, as the House knows, are published, give an interesting, although necessarily sketchy, picture of the work which is going on inside the Department. They describe hundreds of researches—some of which I can understand and some of which, I confess, I do not—ranging from the discovery, through boring by the Geological Survey, of quite substantial deposits of coal near Newton-le-Willows in Lancashire, to the design of more efficient domestic heating appliances, and also from the discovery that egg breakages of the accidental kind may be due to a low magnesium content in the shell, to work on electronic computors and the study of automation.
  In addition to these directly controlled research stations there are about 40 research associations which are allied to certain industries. Their task is the encouragement of research and its application to their respective industries. These are not Government organisations; they are autonomous bodies, controlled and

  1515
  mainly financed by the industries themselves, although the Department makes quite substantial contributions towards their work. The work of these research associations ranges from fundamental science to the most practical of applied technology.
  Perhaps I may give the House one or two examples of the sort of work which they are doing at the present time. A new burner for open-hearth steel furnaces has been devised, which effects substantial economies in steel production; gas turbines are being worked out for use in merchant ships; and work is being done to lessen the noise caused by internal combustion engines. The sooner that work reaches fruition the better. In the iron and steel, pottery, cotton and similar industries, dust can, as we know, be such a menace to the health of workers. One of the research associations has been successful in devising an efficient dust extraction plant which should be beneficial to the health of the workers in those industries.
  Finally, within the Department, we have the encouragement of fundamental research, chiefly at universities, and the maintenance of an adequate supply of trained research workers. This involves the paying of grants to post-graduate students for training in research, and grants for research work and equipment, at universities and elsewhere.
  That, very broadly and very rapidly, sums up the present position in the barest of outlines. It may seem curious that, in spite of the growth of the Department during the last 41 years, and in spite of the immense diversification of its activities which has taken place during that time, there has been no formal change in the pattern of its organisation. Accordingly my noble Friend decided, about a year ago, that the time had come to look at the situation afresh. He therefore appointed a Committee of Inquiry with Sir Harry Jephcott, the Chairman of Glaxo Laboratories, as its Chairman; Sir Hugh Beaver, the then Chairman of the Advisory Council; Sir Alexander Todd, Chairman of the Advisory Council on Scientific Policy, and also two senior officials from the Treasury and the Board of Trade.
  All politicians know that some committees are good and others are not so good. But one is bound to admit that
  1516
  that was a strong Committee which, as I hope will emerge during this debate, has done valuable work. I should like at this stage to pay my tribute to Sir Harry Jephcott and his colleagues for the most valuable work which they have done.
  Hon. and right hon. Members will have had an opportunity to read the first Report of the Jephcott Committee. That Report has been accepted by the Government. Its principal recommendation, now embodied in the Bill before the House, was that this Department, like the Medical Research Council and Agricultural Research Council, should be in the charge of a research council, which should be executive in function and not advisory. The Committee considered that the present organisations puts too great a burden on the Secretary of the Department; and that such a new council would achieve better direction of all research activities and be in a much better position to make sure that the right research was being undertaken.
  I wish to emphasise that the proposal to make this somewhat radical change in no sense implies that there is anything seriously wrong with the Department, but rather that the time has now come to make its organisation more suited to its vastly increased responsibilities.
  Mr. J. A. Sparks: Can the hon. Gentleman tell the House whether the new organisation will have any responsibility for atomic research in any of its phases?
  Mr. Bevins: No, it will have nothing whatever to do with atomic research, which is a matter for the Atomic Energy Authority.
  It may be helpful if at this point, I tried to give to hon. and right hon. Members some idea of how the new organisation will approach its task. Subject to over-riding Ministerial control, the Research Council will determine policy. It will decide the broad order of priorities in research and what resources they merit. That applies not only to the starting of new research, but also to the stopping of research which can no longer justify itself. All researches are important but some are more important than others. If a research becomes urgent and vitally important to industry then it should be developed and stepped up, even if in the process some other work has to suffer.

  1517
  The Council will see that programmes are not too thinly spread and not so diffuse as to be ineffective. It may consider where to draw the line afresh between the work of the stations and the research associations; and whether perhaps certain industries ought not to shoulder more responsibility than at present.
  As the Jephcott Committee envisaged it, this Council will have to act largely through committees, which will examine the various programmes of the stations with the directors of the stations, but, as now, the directors will enjoy freedom in the execution of their programmes. I can give the House a categorical assurance that there need be no fears on that score. The directors will not be cramped in their independence in carrying out the programmes at their respective stations. What we desire, and what my noble Friend believes we shall achieve as a result of this Measure and what will stem from it, is the right strategic planning at headquarters, allied to tactical latitude in the field.
  My noble Friend has received a further Report from the Jephcott Committee which it is not proposed to publish. The House respects candour, and I wish to be frank about this. I have examined this matter carefully, in consultation with my noble Friend, and I hope hon. Members will agree that in the circumstances the decision not to publish is a right one. It is as well that we should understand that the Bill now before the House already gives effect to the one proposal of the Committee which requires legislation, that is the setting up of the Research Council. Moreover—and this is important—the final Report was drafted in the full knowledge that the Government were in agreement with the recommendation for a Research Council. Knowing that, the Committee liberally threw up ideas and suggestions in the express belief—I have confirmed this—that they would be treated as suggestions for the consideration of the new council, and not as hard and fast recommendations for action by the Lord President or the Department at this moment. I think it follows that it would be wrong to make these ideas public before the new council has had a chance to consider them, as indeed the Jephcott Committee intended.
  Mr. Eric Fletcher: Would the hon. Gentleman say why this Report cannot be published? Are not Members of Parliament just as much interested in knowing about these ideas and suggestions as is the new Council? I take it that there is no question of secrecy about the contents of the Report. Is the Minister prepared to put a copy in the Library so that hon. Members who are interested can see what are these ideas? It is obvious, from what the Minister has said, that these suggestions are a matter of great public importance.
  Mr. Bevins: That may be so, but the fact is that the only recommendation made by the Jephcott Committee which requires any sort of positive action by this House is the suggestion about the Research Council, and that is embodied in this Bill. I ask hon. Members to believe me when I say that the second Report of the Committee deals exclusively with domestic Departmental matters.
  Mr. James Callaghan: The annual reports of D.S.I.R. deal with Departmental domestic matters, and do not necessarily require legislation to be passed in this House. What is the difference?
  Mr. Bevins: There is a difference, in that the annual reports of D.S.I.R. are published each twelve months and deal with the work and achievements of the Department during the previous year. This is a different proposition.
  This is a Report which deals with the domestic internal workings of the Department, and what is most important is that in drafting this second Report the Jephcott Committee made it explicitly clear that it regarded its suggestions and ideas, not as something to be bandied about and discussed publicly at the moment, but for the consideration of the Research Council after it is set up.
  Mr. Herbert Morrison Mr. Herbert Morrison (Lewisham, South) rose—
  Mr. Bevins: May I add this? I think that the House will see that if the second Report, with the innumerable ideas it contains, were published now, there would be a great deal of comment and criticism about the various ideas of the Committee. To that extent it would be rather unfair to the new Research Council—
  Mr. Callaghan: No.
  Mr. Bevins: —which will go into them, probably later in the year.
  Mr. Morrison: Does not the hon. Gentleman realise that the observations contained in the second Report are material to the consideration of the Bill which raises the question of the organisation of D.S.I.R.? The hon. Gentleman appears to be laying down a doctrine—which strikes me as extraordinary—that if legislation is not required, this House need know nothing about the matter. Does not he realise that this House has functions far beyond the passing of legislation; and that it is rather rude to tell the House of Commons that where it is possible to act administratively and legislation is not needed, the House of Commons need not be told about it? That is not treating the House with respect.
  Sir Hugh Linstead: Further to that question, am I not right in thinking that in compiling its second Report the Jephcott Committee did so on the basis that it was not to be published, and that if the Committee had realised that it was going to be published it would not have put it into the form of a report at all? For that reason it was essential that the Report should be compiled on the basis that there would be no publication.
  Mr. Speaker: We had better get on with the debate.
  Mr. Bevins: I am much obliged to my hon. Friend the Member for Putney (Sir H. Linstead). I had so many reasons to advance to the House, but they were all interrupted, one by one, by hon. Members opposite. What my hon. Friend has said is perfectly true. No discourtesy to the House was intended, but the simple fact was that the Jephcott Committee prepared the second Report with a view to it being considered by the Research Council when it is set up. It is as simple as that.
  If I may now turn to the provisions of the Bill itself, Clause I provides that the Department is to be in charge of a Research Council whose members will be appointed by my noble Friend after consultation with the President of the Royal Society. It provides for a reserve power of Ministerial control over the Research Council by my noble Friend and the
  1520
  Privy Council Committee. It also leaves the appointment of the secretary of the Department in the hands of my noble Friend after consultation with the Research Council. I am informed by my noble Friend that he will also consult the Royal Society in making any such appointment.
  Clause 2 sets out the provisions governing the Research Council itself, and requires the council to submit an annual report to my noble Friend for presentation to Parliament.
  Mr. Frederick Willey: Could the hon. Gentleman deal with one point as a matter of information? The Jephcott Committee suggests that the Research Council should consist of a number of distinguished scientists and industrialists. Is that the view of the Government, or do the Government envisage a Research Council appointed on wider grounds than those?
  Mr. Bevins: No, the Government are in agreement with the recommendation of the Jephcott Committee on that point, notably that the Council should consist of a number—probably 11 or 12—of eminent scientists and industrialists.
  Clause 3 deals with the second main purpose of the Bill, which is substantially provision for the expenditure of the Department to be met out of moneys provided by Parliament. So far our authority for expenditure is derived from the original Order in Council, and statutory authority for the provision of public funds has rested on the Appropriation Acts. However impeccable that may be in the constitutional sense, the Public Accounts Committee has nevertheless taken the view that where continuing functions are to be exercised by a Government Department it is proper that the powers and duties should be defined by specific statutes, particularly where the functions carry financial responsibilities which go beyond a given financial year.
  Clauses 4 and 5 do not, I think, call for any comment at this stage.
  Mr. H. Morrison: I am sorry to interrupt the hon. Gentleman again, but Clauses 2 and 3 deal with the remuneration of the council. Surely the Parliamentary Secretary is going to tell us if these gentlemen are to be full-time or part-time members, and what their scale

  1521
  of remuneration is to be? I think that that is essential information in relation to those Clauses.
  Mr. Bevins: I think I can give the right hon. Member a broad answer to that question. The chairman and members of the Research Council will work in a part-time capacity, but obviously in the early stages of reorganisation certainly the chairman and probably a number of members of the council will devote a great deal of time to the work. As to remuneration, the intention, I understand, is that payment should be on the basis of very modest fees.
  Mr. Callaghan: What does that mean?
  Mr. Bevins: It is a very small point. I think it is a Committee point rather than a question for Second Reading.
  Mrs. Lena Jeger: This is not a small point but something which will affect the willingness of scientists and industrialists to serve in this way. If the Minister is telling the House that the remuneration will be just a matter of small fees, that would seem to have a great bearing on the willingness of people to serve on this Council. Can he not tell us a little more frankly what the Government have in mind?
  Mr. Bevins: I thought I had been frank with the House.
  I think hon. Members understand perfectly well that the Department of Scientific and Industrial Research has never had any difficulty in recruiting people to serve on its Advisory Council in the past, even though the remuneration has been on the most modest scale. The House can understand that my noble Friend has a sufficient understanding of the ways of the scientific world to do the right thing in a matter of this sort.
  Although the Department is responsible for only one sector of our civil research, that sector, nevertheless, is very important. So long as our resources, both in finance and scientific manpower, are limited we are under a special responsibility to use them wisely so that their work makes the very maximum impact on British industry. In the second half of this century our greatest source of wealth lies in the skills of our scientists, our technicians, and our workpeople. To
  1522
  develop those skills and strengthen the alliance between science and industry are matters of the highest urgency at the present time. If, as I believe, and Her Majesty's Government believes, this Bill and what flows from it, in the way of reorganisation, will contribute to that end, it will have been a worthwhile Measure.
  I know that the House would wish me to pay tribute to the recently retired Secretary of the Department, Sir Ben Lockspeiser, who has done so much for the Department over the years, and also to the very loyal and zealous staff at headquarters and the various stations in the country. We hope that their opportunities to contribute more and more to our national well-being will be enhanced by the reorganisation which this Bill seeks to promote.
  7.47 p.m.
  Mr. James Callaghan: This Bill embodies some unusual and novel features. We are to have a Research Council which is to be a part-time executive body made up of non-civil servants. It is to be drawn from distinguished men in industry and science, we understand. It will have the duty of supervising civil servants. That, I say straight away, is a constitutional curiosity. It may not be any the worse for that, but it certainly needs a little more explanation than the gloss which the Parliamentary Secretary to the Ministry of Works gave the Bill.
  I understand from a reading of the Bill that, broadly, this part-time executive Research Council is to work under the directions of the Lord President of the Council. Presumably, therefore, it will have some general directive from the Lord President as to the terms on which it is to work. We did not hear from the Parliamentary Secretary what that directive was, and before we conclude this debate we on this side of the House certainly wish to have a better explanation from the Government of the terms of the directive under which non-civil servants are to work when controlling, at another stage lower down, civil servants who are paid out of the public purse.
  We do not know whether the transformation of a part-time advisory research body into a part-time executive Research Council will make a tremen-

  1523
  dous difference, partly because we are being asked to take on trust a Report that we have not been allowed to see. I am bound to say that the very reason which was given by the hon. Member for Putney (Sir H. Linstead) when he sprang to the defence of the Parliamentary Secretary, who, he thought, was getting into difficult waters—that this Report was drawn with a view to its non-publication—is a very strong reason why Parliament should see it.
  If, in this Report, there are matters which are supposed to be hidden away behind the Departmental silken curtains, I must say that I very much suspect what is expurgated and brought to the House of Commons for us to judge upon. I repeat the suggestion that was made by my hon. Friend the Member for Islington, East (Mr. E. Fletcher). If there is an objection to publication, what is the objection to putting this in the Library of the House, so that hon. Members may see what is in it? I understand there is nothing secret about it.
  Of course, it may be inconvenient to the Government to have it examined, but I hope the Parliamentary Secretary will not assume that we are here to help him in his inconvenience. Our objective is to examine what is the right organisation of a Department that is now spending about £6 million; and frankly, I do not care twopence, and no Opposition worth its salt would care twopence, about the inconvenience of publishing a Report of this sort, especially when the House is being asked to give its blessing to an arrangement which is at best a constitutional curiosity and at worst a monstrosity. We do not know; we are not in a position to judge.
  Therefore, I repeat the request that has been made during the course of the Parliamentary Secretary's speech that before we give a Second Reading to the Bill we should hear from the Government whether they are prepared in some form or other to place at the disposal of hon. Members this Report, upon which they are basing so much of the future work of D.S.I.R.
  I understand that the Chairman of the Committee which drew up the Report is to be the new Chairman of the Advisory Research Council. That may be very desirable. Certainly, he is a most distinguished
  1524
  industrialist who has done a great deal of valuable service. Is it going to embarrass him if the recommendations which he has made in his capacity as an inquirer after the truth are published? When he has to translate them into executive action, what is the reason for suggesting that it might be embarrassing to him that when he becomes executively responsible he will not carry out what he recommended when he was merely inquiring into it? These matters of convenience and administrative difficulty will not convince the House, and I assure the hon. Gentleman that they will not convince the public outside when a matter of such moment as the future organisation of our scientific effort in this country is being considered.
  I am very glad that the Parliamentary Secretary did not conclude without paying a tribute to the work of Sir Ben Lockspeiser. Many of us in this House were enthralled when he came here about two years ago and talked about our scientific future. He opened new vistas and horizons to us and I think that the D.S.I.R., in the present state which it has reached, owes a great deal to his wisdom and foresight. I am very glad to associate myself and my hon. Friends with the tribute that the Parliamentary Secretary paid to him.
  It is odd, however, on the one hand, to pay tribute to him and, on the other hand, to use as the principal reason for carrying out a reorganisation the suggestion, in the words of the Parliamentary Secretary, that the Department cannot any longer carry the range of its activities. Therefore, I think it is important to emphasise that, so far as those of us who are outside can judge, Sir Ben Lockspeiser's work in that Department has increased its range and has certainly widened its authority and responsibility.
  We are asked to take a lot of this Bill on trust and I tell the hon. Gentleman that there are many doubts in our minds. In their Lordships' House, of course, I have no doubt they take a good many things on trust. The Lord President of the Council, who is responsible, got away with it there by saying, in a Ministerial statement:
  "It is easy to criticise any new scheme, but this one, I submit, has been produced by a Committee with practically unrivalled qualifications for the job."—[OFFICIAL REPORT, House of Lords, 10th April, 1956; Vol. 196, c. 936.]

  1525
  That may well be true, but I am not prepared to give up the opportunity and the right to judge that statement for myself. Therefore, we ask that before this debate concludes there should be a statement from the Government on the policy and the character of D.S.I.R. under the new regime.
  What are the Government's intentions about the research establishments to which the Parliamentary Secretary referred? We have these different main groups of activities—the research establishments which are financed directly and wholly from the Department's own votes; and, secondly, the research associations which are financed, as the Parliamentary Secretary explained, partly by a block grant, partly by industry itself and partly from grants for students. The policy on these matters, in the view of the Opposition, should not initially be left to this new Council. The policy and the broad directive on these matters should be laid down for the Council by the Government.
  The new chairman is a businessman. He is a man of great integrity, but once we give executive control to a body which is made up, not of Ministers and civil servants but of businessmen, scientists and trade unionists—and, of course, we have not heard who is to be on this Research Council—then the character of the organisation becomes changed.
  What I should like to know is what happens if there is a conflict between private and public interest in this field. It can happen. Has the Parliamentary Secretary read the recent Report of the Department of Scientific and Industrial Research? In page 15 there is a cryptic paragraph dealing with the chemical research laboratory's work on what are called semi-permeable membranes, which, I understand, is something to do with polymers—at any rate, man-made fibres which we hear so much about and which we are told by the scientists will create a revolution in our life in the next few years. I invite the Parliamentary Secretary to read this paragraph, because it is very significant indeed.
  As I understand the paragraph—and this is the Report made by the Research Council—what is happening is this. At present, D.S.I.R. is investigating the question of polymers. So, of course, is industry. It is investigating this question in
  1526
  a big way. The frontiers of knowledge are being pushed back, I understand. What the Advisory Council says is that the chemical research laboratory is working in the same field as private industry, that the effort which it is making is small, and would it not be right to stop this effort and leave it to private industry?
  We all know that there is fierce competition in the chemical industry. I understand that firms are fiercely competitive and that they have security arrangements which leave the security arrangements of the Government almost standing. I understand that if one tries to get into some of these firms today one meets with very short shrift indeed, and it extends almost to the point where a man who seeks a job at a sufficiently high level has his background investigated to ascertain whether he is a dismissed employee from some other organisation who might be a spy. Such is the fierceness of the competitive set-up in the chemical industry.
  The Parliamentary Secretary has said that where research is vital to industry, it must be stepped up. But in this case there was a possibility that it might have been cut out altogether. There really is a possibility here that public knowledge and private interest can conflict in the field of research. I say, therefore, that before we give a blessing-to the Bill, we should like to hear much more about what are the Government's broad directives which they are laying down for a Council which will not be made up of persons who are directly responsible, in the sense that Ministers are responsible to this House, but who are non-civil servants.
  We should like to have much more information about the composition of the Council. The Parliamentary Secretary told us he was being frank when he said we could be quite sure that the Lord President of the Council had sufficient knowledge of the ways of the scientific world to fix a proper remuneration. When I reflect on how mean is the Government's behaviour about the salaries of Members of Parliament, how can I be sure that the Government's behaviour will not be equally mean, and display just as little sense of responsibility, in the remuneration of persons who are being invited to serve on this Council?

  1527
  This is still the House of Commons. We are entitled to know what is proposed in the way of remuneration to these gentlemen who are to serve on this Council. The salaries of Members of Parliament are known; the salaries of Ministers, and of civil servants, from top to bottom, are known. There is no reason at all why these gentlemen, who are to place their services on a part-time basis at the disposal of the nation, should not have their salaries also made public.
  Let us, therefore, be given an answer to three questions. First, what is the Government's policy directive to the Council? Secondly, what is the composition of the Council to be? Thirdly, what is the remuneration to be paid to its members? When we have that information, we shall be in some better position to judge whether it is a useful minor reform or whether it is something which could develop along lines which might be harmful in the long run to the public interest.
  I do not deny that there is plenty of work for the new research executive body to do. From what I understand, the work of the research establishments is very uneven. There is the case of one famous name, which has had in the past a very high reputation for its work, about whose present work doubts are becoming very widespread. I shall not give the name, because it would not be fair at this stage; I have no means of judging. I merely say that there is a big research establishment in the D.S.I.R. of which it is said that the quality of its work has become stagnant and there is much which ought to be put right.
  By contrast, I could name another of the research establishments where, I am told—one can only judge these things from what one is told and from a consensus of opinion which one derives from talking to responsible people who know about these matters—the work is going ahead really well and a first-class job is being done.
  Subject to those statements being made by the Government, we would not challenge the decision to reorganise the Department along these lines. Indeed, we would wish the enterprise well. But we do not feel at present that we have had sufficient information to enable us to judge what type of reform is envisaged
  1528
  by the Government. We certainly do not consider that the Parliamentary Secretary's brief gave us the information we ask for on that.
  Turning to the broader issue, our major complaint is that the Government are playing this scientific symphony in a minor key. What is needed is a tremendous extension of our scientific effort. On this question, we shall link up today's debate with tomorrow's, without transgressing the bounds of order, Mr. Deputy-Speaker, since they do tie in one with the other, as all will see. I would say that we feel, both on the subject now under discussion and on the matters we shall consider tomorrow, that the Government's intentions, however good they may be, are simply not good enough to deal with the situation which the nation faces.
  To justify what I am saying, I will quote from page 13 of the same D.S.I.R. Report, where it is said:
  " During the year there have been brought to our notice from almost every corner of the Department pleas that the resources available for particular purposes are in fact inadequate or likely soon to be inadequate. Our Committees—the Industrial Grants Committee, the Scientific Grants Committee, and the Nuclear Physics Committee—have all pleaded for more money for the particular object on which they advise and for priority of claim on Departmental reserves, and most of the Research Boards have in their reports or in meetings with us made similar representations."
  There is the situation in which we are today. It really does not encourage me to know that the Financial Secretary to the Treasury is to wind up the debate, because, traditionally, it is the task of the Financial Secretary to cut down and not to grant more money. How well it will succeed in doing so, of course, is a matter for debate, but, at the moment, it is his Department which is seeking to make economies. We should certainly want an assurance from him—it is one which he can give because it falls within his responsibility—that there will not be any economy here. Indeed, our complaint is the reverse—that there is not enough effort being put into this work.
  The inadequate resources, to which the D.S.I.R. refers, are being eroded by inflation. In page 25 of the Report we are told that between 1950 and 1954 there has been a decline of about 10 per cent. in the real value of the Government grants to the research associations. Once again, the

  1529
  failure of the Government's policy to keep the cost of living down and to maintain a stable level of prices is reflected in the fact that D.S.I.R., and the general scientific effort of the country, is suffering because the real resources devoted to it are lessened.
  I aver, without fear of contradiction, that Britain is lagging behind other advanced industrial nations, both in the application of our scientific knowledge to industry and in the training of persons to enter this field and increase the effort. We shall deal with the second point tomorrow. This evening, we must have some words to say about the first.
  It is quite clear, I think, from what is said by persons who have investigated the situation in the U.S.S.R., in the United States, and in Western Germany today, that the scientific application of those countries is outrunning ours. It is, apparently, a well-known criticism that although our fundamental research produces a number of first-class materials and products, it is left to the Americans to market them. Dacron and penicillin are just two examples. As the sixth Report of the Government's Advisory Council on Scientific Policy made clear, industry in the United States today is employing more scientists and technologists per head than British industry.
  This is not a situation which the Government can view with complacency. But we have heard nothing at all about this from the Government over the last few months, and attempts by some of us to prise open the oyster by a few Questions have received very little success.
  The D.S.I.R. is spending about £6 million a year on research, while the United States' effort is growing at least twice as quickly as Britain's. The other day, some of us met Mr. Clyde Williams, of Battelles, which is a well-known research organisation in the United States. I do not think that I should be betraying any secrets by saying that there were also Ministers present at this tiny gathering. Mr. Williams told us—I have not heard the statement challenged—that in the United States research, in real terms, is doubling every four years.
  Let us look at the position in Great Britain as revealed here and as revealed in the analysis made of the situation in the Government's Advisory Council's Report. I refer, first, to Appendix II of
  1530
  the seventh Annual Report of the Advisory Council. If we take the four years from 1950–51 to 1954–55, we find that there has been a 50 per cent. increase in the monetary resources devoted by Her Majesty's Government to scientific research. I do not know what that means in terms of real resources, but let us put it at one-third. On that basis, we shall double research in this country every 12 years, whereas we are assured by someone who is a great authority in research that the United States is doubling its research effort in real terms every four years. Can we accept such a situation with complacency?
  A very distinguished scientist—one who is not unknown to members of the Government—said the other day that if the present effort of this nation in research continues at its present rate, within a generation this country will be reduced to the level of Portugal. It is to that situation that the Opposition ask the Government to address their minds. That is why, frankly, we think that if this tiny Bill, plus what they say tomorrow, is the measure of the Government's effort in this field, it is not good enough; they will be letting Britain down unless this effort is increased.
  We know comparatively little of the facts. During the last day or two I have had an interesting exercise listing all the Questions I have asked and seeing the lack of success which I have had in my attempts to get information. We do not yet know where the graduates in science and technology go when they leave the universities and colleges. We do not know how much British industry is spending on scientific research. We do not know how many graduates in technology and science are working in British industry at all.
  I could make a list of half-a-dozen other Questions which have been asked in the House over the last two or three months, about which the Government's information is negligible. In some cases they do not look as if they want to get any information, or are trying to get any although I must add that in others they have recently reformed and are endeavouring to get information. The Financial Secretary to the Treasury has asked for the co-operation of industrialists in an effort to find out how much money is spent on research by British industry, but, as I pointed out to him

  1531
  earlier, he is now starting on this task, whereas not long ago the Stationery Office published an account of science and technology in industry in Western Germany and was able to give us an estimate that Western German industry was spending £50 million a year on it. Apparently we know what Western Germany is doing but we do not yet know what we are doing. I hope that that defect will soon be remedied.
  I want to suggest one or two things which the Government ought to do. First, they should make a survey of the research projects which people wish to undertake, which ought to be undertaken but which are not being undertaken either by the universities or by other institutions because of lack of money, materials, equipment or men. I understand from those with whom I have talked in the last few months that such a survey would reveal a surprising lack of knowledge on our part of techniques about which we and industry ought to know.
  I therefore ask the Financial Secretary to tell us what the Government will do in this connection because, as one of the Reports of the Scientific Advisory Council said two or three years ago, the trouble with parts of British industry—not all—is not merely that they are complacent, but that they do not know what they ought to be looking for; they do not know the problems which exist and which ought to be solved. In my view, a survey of this sort would reveal information which would be of very great value to the nation in assessing how far the Government's present scientific effort is matching the needs of the situation.
  Next, I ask the Government to undertake a review of the organisation of our scientific effort and its application to industry. At present, it is piecemeal; it has grown up by accident. My right hon. Friend the Member for Edmonton (Mr. Albu), who was Chairman of a Sub-Committee of the Estimates Committee, some three or four years ago, made an investigation into the Agricultural Research Council's working, and his Committee was able to produce to the House a Report upon which the Government acted two or three years later and in which it was shown that the historical growth of that Department was of such a character that it ought to be overhauled; like Topsy, it had "just growed,"
  1532
  and it needed very much to be pulled together.
  Let us look at the present situation. On all hands we hear stories of duplication in research in this country. It would not be surprising if they were true. Think how many institutions are at the moment undertaking fundamental research—and I am not saying that they should not undertake it: the D.S.I.R. itself, the Agricultural Research Council, the Medical Research Committee, universities and industry itself undertaking some parts of fundamental research. If we turn to applied research the situation is even worse, for we must add the Ministry of Supply and the Admiralty.
  There are a number of spheres—and I hope the Parliamentary Secretary knows about them—in which duplication is alleged. There are very strong grounds for saying that in this period in which we live, with the great tightness and shortage of scientific manpower, coordination might remove some duplication of effort which is taking place.
  Let us see how we try to prevent duplication at the moment The Lord President of the Council does not co-ordinate all the efforts about which I have been talking I am delighted to see my right hon Friend the Member for Lewisham, South (Mr H. Morrison) here; he is a former Lord President of the Council and one who, during the later years of the war and the early years after 1945, did a very great deal to stimulate that Department. Everyone knows the great work which he did, and I should like to hear his views. I should like him to say whether he thinks the Lord President of the Council in this Government is capable of coordinating the whole of the activities of the Departments which are now engaged in fundamental and applied research.
  The Scientific Advisory Committee is supposed to advise the Lord President. For all the attention which is paid to the Reports of these gentlemen, they might as well go away and, in the words of my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), play tiddly-winks. If I were in a menacing mood—which I am not, because I do not feel that the Parliamentary Secretary is responsible for this and I hit only at the man who is responsible—I should list and confront the Lord President of the Council, if he

  1533
  sat in this House, with all the recommendations of this Committee which have not only been ignored or rejected but have not even been answered. Why these gentlemen continue to go on making these Reports which are ignored by the Government I do not know; but I would say to them, "Please go on doing it, because you are exposing a situation for the benefit of the nation as a whole".
  Mr. Bevins: With great respect, I suppose the hon. Gentleman realises that the argument which he has been advancing is an argument for the new organisation contained in the Bill and for an Executive Council.
  Mr. Callaghan: I hope I have said nothing which led the hon. Gentleman to think that I was opposed to the Bill. Indeed, I said the contrary; I said that we would give it a doubting blessing, because we have not enough facts upon which to base our judgment. We certainly wish it well. But surely the hon. Member does not think that what is happening in D.S.I.R., even under this proposal for a part-time Executive Council, will achieve the co-ordination of scientific effort which I am suggesting. If he does, then, with great respect, he does not begin to understand the problem.
  Mr. Bevins: The hon. Member must not misrepresent what has been said. This Research Council will be concerned with D.S.I.R. and not with the whole of the country's scientific effort.
  Mr. Callaghan: I understand that and I am not misrepresenting what the hon. Gentleman said. In so far as we can make some effort at co-ordination and at cutting out duplication inside D.S.I.R.—if it exists; I do not know—I am in favour of it. I am making the point that if we are being asked to reorganise this Department this evening, then this is a tupenny-ha'penny proposal by comparison with what is needed in the Governmental co-ordination of our scientific effort.
  The Parliamentary Secretary said that the absence of a Minister does not matter; he demanded the right to speak here. Certainly, I am on the side of Parliamentary Secretaries, since I have never been more than one myself and I am a member of the Parliamentary Secretaries' trade union. It is no use his
  1534
  comparing his position in this debate with the position he said I occupied when I used to speak here on behalf of the Admiralty. I was a member of the Board of Admiralty. Every Parliamentary Secretary to the Admiralty is. At the Admiralty we sat around the table solemnly every Thursday, and everybody had his say. We all made our contributions, and there were decisions reached in common.
  Does the Parliamentary Secretary to the Ministry of Works meet the Lord President regularly every week to discuss matters concerning D.S.I.R. and to thresh them out on terms of equality? No. The positions do not begin to be comparable. I could speak for the Admiralty with conviction because I was taking part in the shaping of the decisions which were reached. With no disrespect to the hon. Gentleman, we say we want to see at that Box a Minister who can do that. The hon. Gentleman certainly cannot. His responsibility is for the Ministry of Works, not the D.S.I.R. or any part of the Government's scientific effort.
  I am aware that I am taking up rather a long time, and I promise my hon. Friends who, I know, want to speak in the debate that I shall take only three or four minutes longer, but I must raise the question of defence expenditure. An Answer which the Financial Secretary to the Treasury gave me recently showed that of the total Governmental expenditure of £235 million for Government scientific research and development £204 million is going on military and defence expenditure, £31 million on civil research; seven-eighths of the total Governmental expenditure is today being devoted to our defence research and development.
  This will not do. There is duplication in the Service Departments today. I notice that there is no one here from the Service Departments, and it is a pity. They ought to be represented here, and the Minister of Supply ought to be here, and we ought to have here, also, the Parliamentary and Financial Secretary to the Admiralty. Everyone knows of the Departmental battles which go on over the allotment of money between one Department and another. I fear that there are no battles between the civilian side and the military side. The defence side wins hands down. It is time we

  1535
  shifted our weight from one foot to the other and increased the amount of civilian expenditure on research and development and decreased the expenditure on defence.
  I can say with a fair degree of confidence that there are fewer than 10,000 scientists in the Government's employment altogether, and that about 7,500 of them are engaged on defence research and development. The proportion engaged on the defence scientific effort, is against civil scientific research is three to one at least, I should say. I shall not try to estimate it any nearer than that. I wonder whether this is not a Korean War hangover. It is high time we adjusted the balance, because the effort on the civilian side is vital for Britain during the next decade.
  To sum up, we ask the Financial Secretary to the Treasury for a statement of Government policy. We ask what is to be the directive to be given to these part-time gentlemen who are to serve on the Council, and who they are to be, what sort of persons are to be appointed, and what their remuneration is to be. We ask that the total effort devoted to scientific research and development should be increased. We ask that as part of that programme, or in addition to it, there should be a change in the balance of our military effort and our civilian effort.
  We ask that the organisation and coordination of scientific effort in this country should be reviewed by the Government. We ask that there should be a survey made of research projects, so that the nation can see what needs to be done. We ask that there should be a Minister in this House responsible for this business, and able to answer Questions upon it because he helps to make the decisions, and not because he is the mouthpiece of others, however eloquent and however agreeable he may be.
  We feel that what is at stake here is the future of Britain. I have no hesitation at all in saying that the Governmental effort during the next decade in this matter will determine the future of our nation, and that unless there is a vast increase in that effort, over what is being proposed by the Government at the present, the future of Britain as a first-class industrial nation is very grim.
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  Contrariwise, although we are short of raw materials, we have a highly skilled population. Our best raw material today is brains. I believe that the discoveries in science over the last decade offer this country a second chance. With due deference to the Financial Secretary, I would say that in the long run the solution of our balance of payments problem does not lie with him or with the Chancellor of the Exchequer. I believe that it lies in the application of our scientists' discoveries, in our industrial research. By that means I believe that we can escape from our balance of payments crises, and that they can, in the long run, become things of the past.
  It is because I feel strongly that the Government have not yet fully realised that, and are not facing it, that I warn them that we intend to press this subject upon them on as many occasions as we are able to do.
  8.26 p.m.
  Sir Hugh Linstead: I should like to join in the compliment which the hon. Member for Cardiff, South-East (Mr. Callaghan) paid at the beginning of his speech to Sir Ben Lockspeiser for his work in the Department of Scientific and Industrial Research for so many years. There is in the last Report of the D.S.I.R. a graph showing the great increase in the resources devoted to the Department's work by both the Government and industry, and that remarkable graph is a testimony to the work which Sir Ben Lockspeiser has done, because it shows in graphic form the immense increase in the activities of the Department during his secretaryship.
  Before coming to the main part of my speech I want to make a brief comment upon the unpublished Report, about which, I have no doubt, we shall hear again tonight. I have not seen that Report. I suspect that if we did see it we should discover it to be only the proverbial mouse, although at the moment it may be feared by some to be a mountain.
  The point of my intervention earlier was that if the doctrine is to be preached in the House that every report which a Departmental committee or a committee of inquiry sends to the Government is to be made available to the House—whether it is placed in the Library or published as a White Paper—I have little doubt that

  1537
  the Government will be depriving themselves of important or interesting information which from time to time they ought to have and which they certainly would not have if the authors of that information knew that it was automatically to be published.
  It is a dangerous doctrine to lay down, because the result will simply be to discourage information coming to the Government which they might be very glad to have. I accept the view of the Lord President of the Council and of the Parliamentary Secretary to the Ministry of Works that the contents of the Report which has been mentioned are neither peculiarly important nor such as to be suitable for publication.
  The main theme of my own contribution to the debate is that which the hon. Member for Cardiff, South-East introduced towards the end of his speech. It is a commonplace for us all nowadays to talk about the need for scientific development in this country, both research and production, but if it is a commonplace it does not make it any the less true or less necessary for us to urge that point of view whenever we have the opportunity.
  I very much agree with the hon. Member for Cardiff, South-East that the country as a whole still does not realise on what a slender thread our industrial leadership in the world and our ability to maintain our exports as against our imports at present hangs. We have little to live on in the future except our scientific wits. We can no longer do what we did in Victorian days. We have to export the men, the materials and the know-how which are in the very forefront of scientific development. If we do not, our standard of life win be most gravely affected.
  The spearhead of all that is research, pure and applied. It is easy, when talking about research, to do so as though it were something which can be turned on at will, like water coming through a tap. But research is no longer carried out as it was in the first chapter of Genesis. We cannot say today, "Let there be light" and there is light at once. I thought that the hon. Member for Cardiff, South-East was grossly over-simplifying the problem when he gave the impression that more money and more men automatically mean that we shall turn out more worth-while knowledge. It is far more difficult to
  1538
  organise research than to organise production, because scientists with a bent for research do not grow on every tree, and the conditions in which they work are not conditions which can be readily determined on a sort of Civil Service basis.
  Another problem with which the D.S.I.R. should be particularly concerned is the rate at which research is going on and at which research papers are being poured out all over the world. One of the major problems of Government in this country and of the D.S.I.R. must be to delve into this mass of original work that is being brought out in order to discover where our resources must be applied with the greatest likelihood of achieving something. We have only limited resources of capital and manpower in the country, and we have to apply those at the growing points of science and not by a general drive along the whole scientific front.
  Another practical problem shows itself in Appendix VI of the latest Report of the D.S.I.R. Virtually it is no longer possible for major research to be undertaken without Government direction and support. When it is found, for example, that the University of Birmingham has to be given a grant of £230,000 for the building of a synchroton, Glasgow £354,000 and Liverpool £600,000, it will be realised that modern research is now getting to a stage where the Government, whether they like it or not, are bound to take a much closer interest in what is going on and to have an increasing say in the selection of the subjects, the places and the men who are to do the work.
  The hon. Gentleman the Member for Cardiff, South-East spoke about the variety of agencies through which research is being undertaken in this country, and dealt with the important point of the necessity for co-ordination. He mentioned some of these agencies, and I have some listed in my notes. In industry the General Electric Company spends £2 million a year on one research establishment, which gives an idea of the massive character of research nowadays. Then there are the research associations, the D.S.I.R. establishments, the Ministry of Supply, the Atomic Energy Authority, the nationalised industries, the universities and the technical colleges, the Admiralty, M.R.C., the Agricultural Research Committee—all these are under-
  1539
  taking various kinds of research more or less in co-ordination. And, of course, in turn, there are six or seven Ministers interested in this effort.
  Here I tend to part company with the hon. Member for Cardiff, South-East. I am not certain that undue co-ordination of research activities under direct Government supervision is necessarily a good thing. In this type of work variety is desirable, and even if it leads to a minimal amount of overlapping, that should not be stopped entirely by the automatic operation of some Governmental machine.
  Mr. Willey: Would the hon. Gentleman agree that that is just what research is subject to now? All Government research at present is subject to the ultimate control of the Treasury. The question is what kind of control there should be.
  Sir H. Linstead: It is subject to the ultimate control of the Treasury to the extent that its total volume may be limited by the amount of money which can be devoted to it, but not in the sense that the actual pieces of research undertaken are Government-directed. Of course that is true in the case of the Government research establishments, but it is not true as regards the research associations, and it is not the case in private industry or in the universities. So that at the moment we have—I think the hon. Member for Cardiff, South-East would say too little—at any rate we have a very limited Governmental control over what is being done.
  Mr. Sparks: Does the hon. Gentleman not agree, too, that the serious shortage of scientific personnel has a marked influence on what we are now talking about?
  Sir H. Linstead: Yes, I agree. In this House we tend to concentrate on the financial aspect, but it may well be that in the scientific and technological spheres the limiting factor may not be finance but may well be men. So I would not disagree with that intervention. That is linked with our debate tomorrow, and it will be no use the Government opening the gates of finance unless at the same time they provide the manpower to take advantage of that finance.
  1540
  Turning more particularly to the Bill, and to the constitution of the Research Council, I do not see that there is here any substantial question of principle. There is a constitutional question, but I think that the Report of the Jephcott Committee was right in saying that there could be increased contact between the Research Council and the research establishments either through strengthening the Advisory Council or by creating an Executive Council. An advisory council will not continue long if its advice is not accepted, nor is an executive council able to do its job properly if orders are perpetually issued by it. Whichever is the constitutional basis, the practical effect of an effective council would be the same whether it was called executive or advisory.
  I am sure that the governing factor is the one emphasised in paragraph 6 of the Jephcott Report which states that—
  "A change of substance is often helped by a change of form."
  They are making the change of form in order, I believe and I hope, to emphasise the change of substance. The change of substance that I hope to see is a change to relieve the Secretary of the D.S.I.R. of part at least of the very heavy burden of responsibility which he is carrying at present, responsibility which has obviously grown as a result of his energy and success in his work. The Committee is forced to say that the Secretary, as the permanent head of the organisation, is faced with an impossible task.
  The only way to relieve him of the impossible task is to share it among other people. One assumes that the change of substance which will follow the change of form will be some departmentalisation which will allow individual members of the new Executive Council to take a personal responsibility for some sections of the work. There are 14 major research divisions, some with a number of research institutions under them, and presumably these will be divided up among the members of the Executive Council in such a way that each member will have direct responsibility for some of the institutions.
  It was rather discouraging to read in the last Annual Report of the D.S.I.R. that only two research institutions were

  1541
  visited by the Advisory Council in the course of a year. At that rate, it looks as if the turn of the research institutions comes round once every seven years or even less frequently. There is obviously room for improvement.
  I would say—here I am in agreement with the hon. Member for Cardiff, SouthEast—that the great test of the Council will be the quality of the men appointed to serve on it. I am not sure that the fee paid to them is a matter of substantial importance. The type of man needed will be the type of man, who, if he is interested in the work and has something to contribute to it, is likely to serve for the honour of doing the work, and the likelihood of £200 or £300 one way or the other affecting his decision is not, with taxation at its present rate, a substantial possibility.
  I believe that a great deal of the co-ordination that we all want to see will be achieved through the personal qualities of the men appointed to the Executive Council. I doubt if it will come as a result of vast reorganisation schemes. It will come because these men will get to know personally the people who are working in the fields for which they have a particular responsibility. In that way they will get to know what work is being done, where it is being done and who is doing it. We are likely to get much more effective co-ordination by that rather unorganised type of supervision than we are, I suspect, if I may refer to the point made by the hon. Gentleman, by having people sitting every Thursday round a table. I am not certain whether it was supposed to be a Mad Hatter's tea party, with them all moving on. I noticed that the hon. Gentleman's hand was moving round all the time.
  Mr. Callaghan: The Board of Admiralty had better be abolished.
  Sir H. Linstead: We cannot do that under the Bill.
  I want, finally, to offer one or two suggestions about the problems which it seems to me the new Council will have to face. There is the problem of co-ordination, a very difficult one, not, I think, necessarily to be solved by purely mechanical means. There is the problem of finding the manpower and ensuring that it is used at the growing points of science and not dissipated in continuing
  1542
  work which is either being done elsewhere or is not producing results.
  The Council will, I think, have to turn its attention to a problem referred to in the Report of the D.S.I.R.—how much of the energy and resources of the Department are to be devoted respectively to basic research, applied research and disseminating the results of research? At the moment the percentages are 30 for basic research, 45 for applied research and 25 for advisory or propaganda activities. Twenty-five per cent. for those activities seems to be a very high proportion.— One wonders whether trade associations and A.S.L.I.B. and organisations of that kind cannot take some of the responsibility for disseminating information, thereby leaving more resources for direct research work.
  Then there is the question still not sufficiently studied by the D.S.I.R., which I would call the application of the social sciences to industry and the problems which arise in the proper utilisation of men and women in industry, including such things as work measurement and automation, which is nowadays a magic word which one has to utter on these occasions, although it existed a good many centuries before the word was invented.
  The Research Council must turn its attention more to research in the technical colleges. The grant for special research to technical colleges is only £10,000, while about £300,000 goes to universities. That suggests either that the resources of technical colleges are not being sufficiently developed, or—and I suspect that this is true—that a number of the technical colleges need upgrading in order that they can tackle research of a higher standard. We tend to pay rather easy compliments to research in technical colleges, not realising that they require more resources than they have at the moment if they are to do it properly.
  Those represent some of my hopes of the Bill; and once again I emphasise that the Bill itself is of secondary importance. It is merely a machinery Bill. I hope that what will come out of it is a fresh drive under a most energetic Chairman and a most energetic and respected Secretary. If that can be done, and the members of the Council take real responsibility for the development of the sections in which they are interested, we

  1543
  shall see the Council making a substantial contribution to the maintenance of the standard of living of the people of this country.
  8.48 p.m.
  Mr. Herbert Morrison: I apologise in advance if I am not able to be present for the whole of the debate. As one who was Lord President of the Council for five or six years, I want to say a few words about the Bill and, within limits, about some of its associated problems. I have been glad to hear the hon. Member for Putney (Sir H. Linstead), who does very valuable work as Chairman of the Parliamentary and Scientific Committee over which he presides with great impartiality and ability. I do not agree with everything he said, but I was very glad to hear him taking part in the debate.
  I agree with him and with the Parliamentary Secretary, however, that the country is greatly indebted to Sir Ben Lockspeiser not only for his work as Secretary of the Department for Scientific and Industrial Research, to which I appointed him, but for the work he did before that with the Ministry of Supply. I would also mention Sir Edward Appleton, who preceded Sir Ben as secretary of the D.S.I.R., and who is now Principal of Edinburgh University. Both men did fine work.
  I am not convinced that the Bill is necessary, or that it adds anything to the capacity of work of the Department of Scientific and Industrial Research, but I will return to that when I have tried to describe the existing machinery for running these things. The Lord President of the Council in the Labour Government—and so far as I know, it is still the case— was the Minister in charge, in a general, co-ordinating way, of civil scientific matters. It is useful to have such a Minister.
  It is not practical for him to be putting his finger into the works every day and trying to control the Government's scientific work in detail. In the first place, he probably is not a scientist, except possibly a political scientist, and, therefore, he would not be competent to take that degree of what one might call interfering executive responsibility for the work of the scientific organisations of Government. Secondly, if he were a scientist it
  1544
  would be no better, because he would be a scientist with particular ideas from his particular scientific angle, which might well be in conflict with those of other people and lead to more friction than co-ordination.
  On the other hand, the old idea that the Lord President held a sort of honorific office with nothing to do—about the same as that of the Lord Privy Seal, who has literally nothing to do and that is why he is given other work— [HON. MEMBERS: "Where is he?]" He left with a word of regret to me that he had another engagement. But in his case there is literally nothing attaching to the office and that is why he is used as a co-ordinating Minister or Leader of the House of Commons or in other ways.
  It was a mistake, I think, to assume, as it often was assumed, that the Lord President was, so to speak, in a nice-sounding office of the Government which it was useful to be able to confer on the No. 2 in the Government. Mr. Baldwin did it under Mr. Ramsay Macdonald and when Mr. Macdonald went and Mr. Baldwin became Prime Minister there was a switch about of those two gentlemen and Mr. Macdonald became Lord President of the Council. How much interest they took in these scientific activities I do not know. My impression i, that they were not expected to. It was assumed that this was an honorific office for statesmen of certain status.
  I remember when I started pushing scientists around, summoning them to the office and cross-examining them. I got on with them very well. I remember one case, however, where a high officer of one of the research organisations was in an awful state when he left my office. He said to someone in the outer office, "This is a fine Lord President. It is the first time that I have been called up like this and put through the third degree. Hitherto, what happened was that I paid my annual visit to the Lord President, we had a nice ceremonial talk for about ten minutes, and that was the end of it until next year."
  That was a wrong impression of the Lord President's office, just as it would be if he were to interfere too much. When there is a request for more money and more subjects of research, by all

  1545
  means give them sympathetic consideration, and, indeed, sometimes encouragement to come along and make applications for more money if there are subjects for research which are particularly urgent.
  The Report of the Committee is right in implying, as I think it does, that a situation may arise in which research on a given subject goes on and on over the decades until it becomes a sheer habit. A man may be employed upon a given piece of research for years and years until his brain becomes utterly stale, because he has narrowed himself within that subject.
  As I said to the scientists when I was Lord President, "If you want me to give you more money for a new subject of research, I shall expect you to tell me what subjects you can stop research into, in compensation for the money for which you are asking. If you cannot do so, give me your reasons and we will go through the process of cross-examination." They should be told that if they want more money for new subjects of research, they should provide a report stating what other subjects of research can be dropped in favour of the new ones. It is not good that some men should be engaged upon one piece of research for too long. That is mentally suffocating and stifling. They should be moved around.
  The Lord President should also take a lively interest in the composition of the Research Council, looking out for possible changes and improvements. I do not think that it was always the case that trade unionists sat upon the Advisory Council. I do not know whether l started the practice; I rather think I did. It is a very good thing for trade unionists to sit upon the Council. I found that some of the industrial research associations had no trade unionists among their members. That sort of thing is exceedingly foolish, because it is necessary to encourage the trade unions to take an interest in science and research.
  I believe that even the establishment at Manchester, which does very fine research work in connection with the textile industry, at one time had no trade union representation. The trade unions thought that it was nothing to do with them. The view which I took when I held the office of Lord President was that this matter was very much to do with them.
  1546
  They have a right to know about it and, if necessary, to use the knowledge they derive from it to push the employers on in the matter of the modernisation of their undertakings. Trade unionists should be represented upon both the central body and the research associations.
  The Lord President, or whoever is in charge of this matter, can also keep in touch—in an adequate if somewhat loose way—with the research associations. He should certainly visit research stations during his years of office—and he should visit more than just one or two. This should be done, because it encourages the associations and gives the Lord President information about the situation.
  The Bill raises the question whether the existing machinery is, broadly, right, or whether there is a case for some change. The next question is, does the Bill represent a change, or is it window dressing and nonsense? I believe that it is sheer nonsense and a waste of Parliamentary time. I do not believe that it is necessary. It will not make two-pennyworth of difference to the work of the Department. The Bill will change what was an advisory body into an executive body. Apparently this body is an advisory one, while the other two, in connection with agriculture and medicine, are executive—although I did not notice any difference between any one of these three research bodies when I was Lord President. I do not think that it really matters.
  This body is to become an executive body. What does that mean? I understand that the Bill provides that its members may be paid remuneration. I do not think that they should be paid substantial sums of money in order to encourage them to work. The most we could give them is £500 a year, which I do not think necessary in this case, as we give the part-time members of the boards of the nationalised industries. That is jolly good pay compared with the pay of Members of Parliament.
  We are treated very badly. After a free vote in the House of Commons we were cheated by the Government; but I must not develop that point. These people are very well treated compared with the Chairman of the Education Committee or the Housing Committee of the London County Council. We should be

  1547
  a little careful, in our public administration, not to create too many bodies the members of which are paid salaries which are too high for the part-time service they give.
  They should not be paid really high salaries unless it is necessary. In a good many cases it is, but I do not think that it is in this case. As has been said, there is a real competition among scientists and men of distinction to get on to this body. They want to be on. It would be easy to find industrialists who are interested in this matter. I did not find any difficulty over the money question. I think they got out-of-pocket expenses, which was also the case with the local authorities, and I do not understand the Clause about remuneration. The Parliamentary Secretary referred to modest fees. Does that mean a fee for each attendance in addition to expenses? We should be told.
  I doubt whether the Bill will have the effect of improving the quality of the Council. Is it thought that this Measure will enable the Council to take on responsibility for the administration of individual research stations? I doubt that, too. There are a lot of them and I am not sure that it is right that one member of the Council should be responsible for one or more of them. That may, or may not, be a suitable arrangement, but I think it would be better to have a small committee—if such an organisation does not already exist—formed for each station. There would be plenty of people who would be happy to serve on such committees. Therefore, I do not feel that the Bill effects any material change.
  It has been stressed that the Secretary of the Department cannot keep various matters under control. Again, I do not see how this Bill will enable him to do that any better in the new circumstances. But I doubt whether the Bill is worth voting against. My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) indicated that we shall not divide the House. It is my experience that when one is sitting on the back benches—quite apart from any obligation to my hon. Friend—any Division which one starts up is a miserable one, because people like to go home. In any case, I do not think this Bill worth voting against. I consider it a waste of Parlia-
  1548
  mentary time and unnecessary. If the Government badly want it, well and good, though I do not think it will make any difference.
  9.2 p.m.
  Mr. Airey Neave: The right hon. Member for Lewisham, South (Mr. H. Morrison) gave rather grudging support to some aspects of this Bill, but in other respects he said it was quite colourless and hardly worth debating. I think that we should hear something from the Government about the directives to be given to the Research Council which is to be created under the Bill. I agree with the right hon. Gentleman that it is most important we should know something about that matter, because of the need to select particular subjects for research from time to time. Surely it is essential to have a fairly continuous review of subjects for research when we are considering how much money to spend on them. In my opinion, that should be one of the main functions of this body.
  The hon. Member for Cardiff, South-East (Mr. Callaghan) said that we are not spending enough money. It is true that, according to the D.S.I.R. Report last year, many departments took that view, in particular, the Nuclear Physics Committee, about which I wish to say something in a moment. The hon. Gentleman did not go on to say on which particular subjects he would like to see more money spent. I consider it important that some more specific criticism should be made than merely to say that we ought to spend more money on research.
  Mr. Callaghan: May I recall that I asked the Government to undertake a survey of research projects which ought to be tackled, and that people were suggesting should be dealt with, and to determine and assess their cost in terms of men and equipment? Then we should know where the money ought to be spent. Surely that is a reasonable criticism.
  Mr. Neave: I grant that point to the hon. Gentleman. But, in advance, he said that the Government were not doing enough. I think it fair to say that the grant-aided research associations which come under D.S.I.R. have been receiving more money annually ever since the war, and it is not right to say that we ought to spend more money on research, until

  1549
  we have had the survey which the hon. Member suggested. I think that the Government must have that point in mind. In explaining the purposes of this Bill, I hope the Financial Secretary will therefore say something about the directives in regard to the particular types of research which it is intended this Research Council shall receive.
  At one stage an hon. Member opposite asked the Parliamentary Secretary whether the D.S.I.R. would have any responsibility for atomic energy research, and I understood the Parliamentary Secretary to say "No." Of course, in the strict sense, that may be true. Responsibility of the D.S.I.R., as I understand it, is for fundamental research into nuclear physics and not for the atomic energy programme as a whole, which is the responsibility of the Atomic Energy Authority, set up two years ago. I wanted to mention that matter because it might have created misunderstanding, and it is a point which I think is worth clarifying.
  The D.S.I.R. has done some very good work through its Nuclear Physics Committee, whose Chairman is Sir John Cockcroft. One important work which it has been doing through powers which will be continued under this Bill is to make grants to various universities for nuclear research. One supposes that that will be continued, and I should like to hear whether there is any intention to increase the grants in future in regard to nuclear energy research. By that I mean —in order to make the point quite clear —fundamental research on nuclear physics as distinct from the application of industrial atomic energy.
  During the past few years grants for the installation of different types of equipment suitable for the study of nuclear energy have been made to many universities, including Birmingham, Liverpool and Oxford. I think that the actual amount due to be earmarked this year is £250,000. That seems to be a very important function of the D.S.I.R., and it raises the whole question of the need to have a clear system of priorities for its functions in the field of research. That is a point made by others with which I thoroughly agree, and I am sure that the Government will take it into account in considering future functions of the Department.
  1550
  There is another aspect of this matter which I think is very important, and which to a certain extent concerns nuclear energy. Up to now the D.S.I.R., through various channels, has been contributing to international organisations, in particular to the European Organisation for Nuclear Research. This year it is due to contribute a very considerable sum, about £500,000, I understand from the D.S.I.R. Report for last year. That is to say, its estimates will provide for a contribution of that size. Very impressive progress has been made in that field. I suggest that that is certainly one of the functions which should be carried on by the D.S.I.R. after reorganisation, and is one of the matters to which special attention should be given.
  Another matter—and here the distinction between the functions of the Atomic Energy Authority and the D.S.I.R. become extremely important—is the search for mineral raw materials. The search for uranium is at the moment being carried out in various parts of the world and is conducted by the Geological Survey division of the D.S.I.R. and not as a responsibility of the Atomic Energy Authority. There is need for the closest collaboration in this field. I am sure the Government will take into account the need for strengthening the organisation in view of the fact that, whilst it is said that we have sufficient uranium for some years for civil use, large-scale search for this valuable mineral to be used as fuel in nuclear power stations will have to continue for many years to come. That is one of the aspects of the work to which I want to draw especial attention, but there are one or two other matters.
  The hon. Member for Cardiff, South-East said that we are lagging behind the United States and other countries, though he did not say which other countries—
  Mr. Callaghan: I did.
  Mr. Neave: I did not understand the hon. Gentleman to say what other countries, but if he says that he did, then, of course, I accept that statement —in the application of scientific research, particularly, I presume industrial research. The hon. Gentleman said that Russia and the United States are training more scientists than we are. This

  1551
  is becoming a very familiar, but significant, argument for the expenditure of more money on research in this country. But the survey which the hon. Gentleman himself suggests is also vitally important. We should not be concerned merely with the training of a large number of scientists in order to get ahead of other countries in the application of nuclear energy, particularly for peaceful use, but with the quality of the research undertaken and the quality of the training.
  It is sometimes a little dangerous—although it is quite right to draw attention to it—to say that the quantity of scientists is the main matter which we are here considering. It is not. There is also the question of the value of the research in terms of its successful application in the future. Therefore, there is a very big argument in favour of the D.S.I.R. developing the closest possible collaboration with industry—even more than it has done hitherto—through its industrial research associations.
  It is perfectly proper for hon. Members on both sides of the House to point out that far more publicity and information regarding the need for research in special fields is required. I agree that the way to do that is to have a regular survey in order that we may review the finances of the whole of our research system.
  To my mind, the reorganisation in the Bill is not quite as ill-timed or as unimportant as the right hon. Member for Lewisham, South makes out. It would give opportunities for more executive powers to be given to the D.S.I.R., and it could solve many of the fundamental problems with which we are faced in regard to our national research in the scientific and industrial field.
  9.13 p.m.
  Mr. Eric Fletcher: My right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) suggested in the course of his very interesting speech that the Bill was really a waste of Parliamentary time. I am bound to say that I disagree with him in that respect because, if it has done nothing else, it has at any rate provided the House with one of its very rare opportunities for considering the subject
  1552
  of scientific research which is of such vital importance to our national life today. It has, indeed, provided a notable debate in which by no means the least valuable contribution was that of my right hon. Friend.
  My right hon. Friend told us something of his experience when he was Lord President of the Council and when he had to deal with scientific and industrial research. Listening to my right hon. Friend, I could not help feeling how very much better these important matters were regulated when he was Lord President than they are now. I also realised how important it is that we should have in this House the Minister charged with this tremendously important responsibility.
  I agree with what has already been said about the vital necessity for having a senior Cabinet representative in this House charged with the responsibility of industrial and scientific research, so that the House can have further opportunities to debate the matter and raise points which, as this debate has shown, are of great interest to Members on this side.
  Whatever may have been the situation when my right hon. Friend the Member for Lewisham, South was Lord President of the Council, I think it is obvious from the interim Jephcott Report, which either inspired or, at any rate, endorsed the introduction of this Bill in the House of Lords, that at present something is fundamentally wrong with the way in which industrial and scientific research in this country is carried out. It may well be —and I agree with my right hon. Friend —that the Bill itself is merely a piece of camouflage.
  The interim Jephcott Report which has been published and which has inspired this Bill—and I imagine that the one which has not been published is far more serious in its condemnation—shows that something is alarmingly wrong in the way in which scientific and industrial research is at present conducted, organised, financed, encouraged and co-ordinated. Shortly after the publication of the Report, the Manchester Guardian of 5th April said—and I agree with this:
  "The committee of inquiry which has looked into the affairs of the Department of Scientific and Industrial Research has come out with a damning interim report. It paints a picture of muddled thinking, of waste, and of valuable effort uselessly employed."

  1553
  That is strong language, but it is language which is justified by the interim Report, which says, in no ambiguous language, that the Committee
  "reached the conclusion that the central direction, under the present organisation, of the scientific effort at the stations … is inevitably inadequate to secure the most effective use of the resources in the national interest."
  I would be the last in any way to minimise what has already been done in certain fields of research in recent years. We all acknowledge, for example, the great strides that have been made in atomic research and nuclear energy, to which reference was made by the hon. Member for Abingdon (Mr. Neave), in whose constituency Harwell is situated. In fact, I think we would all acknowledge that the developments at Harwell, under the leadership of Sir John Cockcroft, in recent years have been quite outstanding.
  The criticism that is made of the work of the D.S.I.R. is that there are many other fields of scientific inquiry and effort which have not made such great progress. One of the criticisms I hear about the whole subject of scientific research is a lack of balance. In fact, I think this is obvious from the last Report of the Department. The Report itself contains some of the justification for the condemnation which was expressed in the interim Jephcott Report.
  There has been—and it is no secret—in scientific and industrial circles during recent years a feeling of grave disturbance and disquiet at the neglect of opportunities for making the greatest possible use of our scientific manpower and for developing to the utmost the potentialities of fundamental research and the practical application of that fundamental research to the needs of industrial, commercial and domestic life.
  The Report itself is evidence of a lack of balance. Considerable sums were expended in some directions; very limited sums are spent in other directions. My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) has pointed out the apparent neglect of the potential advances which can be made by the Chemical Research Laboratory, the grant to which is very niggardly compared with the grants made, for example, in respect of physical research, fuel research, and
  1554
  other departments of scientific knowledge. Why this should be, I do not know.
  Another matter causing disquiet is the apparent conflict of interest between science and industry. Whereas scientists and persons of academic training tend to be interested in pursuing research for its own sake, and, whereas, looking back, it is obvious to us that none of the great strides in science would have been possible had it not been for the quite disinterested efforts of those engaged—as Rutherford was—in fundamental research, there are, on the other hand, the interests of industrialists whose chief concern, not unnaturally perhaps, is with the application of a scientific discovery to some immediate commercial purpose.
  My hon. Friend the Member for Cardiff, South-East referred to the notorious neglect in recent years of isotatic polymers. We live in an age in which the resources and potentialities of plastics can be extended very considerably, but development in that respect was held up for a very long time. Whether it is right or not, I do not know; but I fear that the view is commonly expressed that that delay was due to lack of proper coordination between industrialists and scientists. Research in plastics was quite unaccountably held up.
  Again, a Report published only five years ago by the D.S.I.R. made the curious statement that the claims of electronics were quite exaggerated. Anyone familiar with the immense developments which have since taken place in electronics, not only in electronic computers but in the whole range of electronic science, would say today that it is quite impossible to exaggerate the claims of research in electronics or the extent to which, if such research is pursued, tremendous advantages to the nation will accrue. To give another illustration, it is very curious to find in the Report of the D.S.I.R. that one laboratory apparently expresses great pride in its research into the use of automatic stokers on railway steam locomotives without realising that those inefficient machines are quite obviously on the way out.
  I agree with what other hon. Members have said to the effect that it will be the duty of this Research Council not only to encourage some research, but to stop some research. There are instances in which certain research has gone on

  1555
  too long. There are many other departments of research in which effort has been frustrated through lack of financial support and the effect of parsimonious Treasury control.
  I agree with my right hon. Friend; I do not believe that this Bill will by itself make very much difference, and it will certainly not make very much difference unless Parliament has much more information than the Parliamentary Secretary was prepared to give. He is making not only a great political mistake but a serious national error, I believe, in not making available to hon. Members the final Report of the Jephcott Committee. It is now conceded that it does not contain any matters in which national security is involved. Fortunately, we have emerged from the situation prevalent 10 years ago when it could be said with some justification that there were reasons of secrecy which, on security grounds, should guard some scientific inquiries.
  As my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) pointed out the other day, now that Russia has advanced to a degree of scientific knowledge which in many ways outstrips our own, and now that the United States is prepared to share many more secrets than in the past, there can be no solid argument based on national security or the interests of peace which justify the concealment of relevant facts about basic research not only from the people of this country but from other nations. Indeed, I gather that it is not even suggested that a question of security is involved in this Bill.
  What has emerged—and here I want to reinforce what my hon. Friend the Member for Cardiff, South-East said so effectively—is that in the country, largely due to the great interest being taken in the subject by hon. Members on this side of the House, there is growing—and there will continue to grow—an increasing demand for the dissemination to the public of all possible knowledge on these subjects. If we are to realise the possibilities which my hon. Friend mentioned, and if we are to derive the full benefits which can be obtained by pursuing to the uttermost all avenues of scientific research, I believe that the first essential is that more knowledge on this
  1556
  subject should be freely available to the public. I believe it to be completely wrong for the Government to wrap it up in secrecy, as they are at present.
  The situation is even more disturbing, because, damning as the interim Jephcott Report was, we cannot help having a suspicion that some of the observations made in the final Report must have been even more serious. Thus we have reached a state of affairs in this most vital part of our national life in which the House and the public are not only denied the information which they are entitled to have, but are deprived of the opportunity of putting forward suggestions for improving the machinery by which scientific research is carried on. We are hampered by this lack of knowledge, and I add my plea to those of my hon. Friends that before we have finished with the Bill this information should be made available to hon. Members in the Library.
  Even that will not be sufficient. I think it is essential that we should have a Minister in the House who is able to answer Questions through his intimate personal knowledge of the activities of this Department. Personally, I would like to see the appointment of a Minister of Science, because I do not believe that the necessary drive and energy will be injected into this work unless we have a Minister of Cabinet rank, charged with the responsibility of seeing that our national resources, both in scientific manpower and in all the research being carried on, are properly co-ordinated and kept continually under review in the House. Experience in this as in other matters has shown that publicity and the dissemination of knowledge is the first requisite in getting mistakes mended, and in putting an end to muddles in Government Departments and in making the progress that is essential.
  I can quite understand that it may not always be possible for it to be arranged for the Lord President to sit in this House. I should have thought it desirable, and I should have thought that, if the Lord President sat in another place, some other Minister should have been charged with this responsibility. If the Lord President had to sit in another place —I say this without any disrespect to the Parliamentary Secretary—I should have hoped that arrangements could have been made by the Government for a Minister

  1557
  of senior rank, such as the Lord Privy Seal, to have been entrusted with the responsibility for answering Questions in this House on this subject. That duty has already been entrusted to him in the matter of nuclear energy.
  It is no less important, in my submission, that someone of the status of the Lord Privy Seal, able to speak from personal knowledge, and occupying the second position in the Government, should be able to deal with this matter, because it is our intention to keep it under constant review and to maintain the utmost pressure to see that none of the opportunities which lie ahead of us are any longer neglected and wasted, as they have been in the past few years.
  9.32 p.m.
  Mr. M. Philips Price: I agree with the hon. Member for Abingdon (Mr. Neave) that it is not always wise to argue that money is the most important factor in scientific research, although it is certainly disturbing that we are not spending so much money as certain other countries are. That is a matter we have to look into, but I think one ought not to over-emphasise that, but bear in mind that scientific research is very much a matter of quality, very much a matter of getting the right scientists on to the right jobs and of applying their abilities in the right way.
  Like some of my hon. Friends on this side of the House, I do not altogether agree with my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) that the Bill has no value. It is not a Bill about which one can be very enthusiastic, I agree. I should say it is a Bill which oils the existing wheels, but does not add any new wheels. I think that it has value because, up to now, the work of the Department of Scientific and Industrial Research has very largely depended on one man. Others have paid great tribute to him, and I should like to add my little tribute also to Sir Ben Lockspeiser, whom I have had the honour of knowing for many years, for the work he has done. I hope that whatever happens in the future good use will be made of his abilities and knowledge, and that, although he is retiring from this work, he will be found some other work.
  However, I do not think it is right that the success of the Department of
  1558
  Scientific and Industrial Research should depend entirely or even mainly on one man, and I think that the value of this Bill is just this, that it creates a Research Council of executive members who will have the job of sharing this work so that it will not rest with one man only.
  There is also something to be said for giving a moderate remuneration to those members, because that gives the Lord President some hold over their services. It is true, of course, that many eminent scientists are only too glad to give the benefit of their abilities for nothing, just for the honour of the thing, but, at the same time, I think that some remuneration is desirable. Therefore, I think that this modest Bill has some value in that respect.
  The D.S.I.R. is one of those bodies which require elasticity in its work and independence from bureaucratic control otherwise it will not function. However, as it is run with money provided by Parliament there must be some Parliamentary control as well. Therefore, one has the job in a Bill of this kind of balancing the desire for independence, so that scientific ability can find its proper scope, with, at the same time, giving powers to the House to pull up or provide more funds if it is necessary. The same thing goes on to some extent in nationalised industries, where the House does not interfere in detail in administration but holds the purse-strings and controls the general line of policy. Something like that, in a slightly different sphere, should be worked out in a case like this of bodies engaged in scientific research.
  It has been mentioned on both sides of the House that it is very important today to see that there is no waste and that research in some dead-end should be stopped. My right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) referred especially to that and gave instances from his personal knowledge. Research goes on in departments where, obviously, nothing much further can be got. It must also be borne in mind that scientific activity changes. Something may be extremely important one year but the following year something else is discovered and the kind of research that has been going on up to then is rendered of less value or even of no importance and it is necessary to switch from the one to the other quickly.

  1559
  The scientists engaged in the job might not see it. It is the job of the Lord President and his advisers to see that and to prevent waste and overlapping.
  On the subject of overlapping, my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) referred to the reply made to his Question the other day in which he was given figures showing that civil scientific research accounts for a little over £30 million, but that defence research is costing over £200 million. That suggests that there is a good deal of overlapping. I know that this Bill cannot deal with that, nor can the Lord President of the Council, but I feel sure that the whole question of overlapping of research in civil Departments, in atomic energy and in the Service Departments should be investigated.
  The Admiralty is notoriously very much a law unto itself. I remember that very well from the time when I served on the Select Committee on National Expenditure, before which representatives of Departments of the Admiralty appeared. I remember how much they resented any interference with what was happening in their Department. I suspect strongly that the same kind of thing is going on to this day. Therefore, there is a strong case for urging rationalisation in the undertaking of scientific research.
  In view of the comments which have been made from both sides of the House, I hope that the Bill will prove to be of some use, if not of great use, and that as a result, it will be possible for the vital work of the D.S.I.R. not only to continue but to branch out into new lines. I hope, also, that the Bill will help to abolish unnecessary overlapping and dead ends.
  9.41 p.m.
  Mr. Frederick Willey: In the matter of the difference of opinion between my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) and my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), on balance I am inclined to agree with my right hon. Friend that this Bill is a bit of nonsense and will not make much difference. I say to the Parliamentary Secretary, I hope not unfairly, that he did not speak with any ebullience, and he did not betray any enthusiasm for his subject. I do not know whether that is because, as Parliamentary Secretary to
  1560
  the Ministry of Works, he thinks it a "bit thick" that he should be saddled with those responsibilities, or because the hon. Gentleman is really interested in science and does not think that he has a fair chance to do what he wishes to.
  It is clear, however, from what has been said in this debate, even from the opposite side of the House, that what is the matter here is that there is not proper political responsibility for science and scientific research, and that that is becoming an increasingly urgent need. I want to make one or two brief points about some aspects of that matter. If we all, on both sides of the House, stress the importance of science and scientific research, we must also realise that it is our responsibility—and this is a political, Governmental responsibility—to see that there is the right climate for the encouragement of science and scientific research.
  The Government have much to do in this matter, and the first step they must take is to make it clear within the Government that the importance of science is recognised. It is plain to us all that that is not obtaining today. We shall not get that recognition of the importance of science in the schools, in the colleges, in the universities and amongst the people at large until the Government themselves make it clear that they realise it is essential to our economic survival to pay a high regard to science.
  The second problem has been traversed time and time again during this short debate. This again is a political matter. It is clear that there must be better machinery for the co-ordination of research. I do not criticise the different forms which scientific research takes. I do not urge unification, because that would be disastrous. I intervened when the hon. Member for Putney (Sir H. Linstead) was speaking, to mention Treasury control merely because there is some form of control. It is not a desirable form, and it is unfortunate that when we are discussing science the Financial Secretary is to wind up the debate.
  There has to be elementary control in the sense of financial control, but we want more constructive control than that. We want what I would regard as a political control, a public recognition of the different responsibilities for the different branches of science and their different degrees of importance. At present I do not think that we have that. All we are

  1561
  discussing tonight is a fragment of scientific research.
  What is more important is an assurance that we are making the best use of the different branches of research which are Government-sponsored. It has been made clear that these take different forms. We are not satisfied that there is sufficient political direct responsibility for the allocation of resources between the different branches of research. Reference has been made to the allocation as between civil and defence research. I offer no criticism of the allocation because I do not know enough about it, but I feel that in this critical and essential allocation that must be made sufficient attention is not paid to our broad national needs in research.
  While I am not able to express an opinion about the merits of the allocation, I feel that the defence Ministries, because of their direct political pressure and voice, have been able to ensure that they have a better proportion of the total allocation than that to which in present circumstances they are entitled.
  Mr. F. Blackburn: Would my hon. Friend agree that scientific research, whatever kind it is, is part of the defence programme, now that the cold war has spread more into the economic sphere?
  Mr. Willey: I was about to make the point. I will express it another way. I am not satisfied that the civilian side obtains sufficient information from the research done for purely military purposes. The Parliamentary Secretary will concede that there is a good deal of research which can be beneficial both on defence and national economic grounds. The Parliamentary Secretary is obviously worried. There is another ground on which he realises that he ought to be doing far more than he is allowed to do —that anyone with political responsibility for research ought to have a far wider sphere of responsibility than he has.
  I now turn to the provisions of the Bill which does two things: it deals not only with the Council but with the financial side of the D.S.I.R. The Parliamentary Secretary did not deal with the second aspect, and I do not know whether the Financial Secretary will do so. It is at any rate doubtful whether that is a good solution. It is certainly paying due and proper regard to the Public Accounts
  1562
  Committee, but there is a lot to be said—I am surprised that the point has not been emphasised—for giving research bodies much more security.
  Mr. Sparks: Would my hon. Friend agree that there is a lot to be said for encouraging the boys of poor parents to take scientific courses at universities, and that the Services are losing large numbers of them for that reason?
  Mr. Willey: I certainly accept that. I am obliged to my hon. Friend, who has made a commendably short speech.
  I should have thought that there was a case for a quinquennial grant. It is bad for research generally to be on a year-to-year accounting basis. I should have thought that the Government's duty was to pay regard to the Public Accounts Committee but at the same time to devise a formula to meet the situation. In another instance the Government have done it by giving an expressed undertaking to a body that, although it will be given a grant on a year-to-year basis, over a five-year period the money will not be less than the sum assured. I should have thought it was undesirable that bodies undertaking research—this is why, with "economy" in the air, some apprehension has been expressed—should feel that at any moment their work might be prejudiced.
  Mr. Bevins: The hon. Member is rather overlooking the "gentleman's agreement" about five-year expenditure which exists between the Treasury and the D.S.I.R.
  Mr. Willey: I am much obliged to the Parliamentary Secretary for making that clear. Whether this gentleman's agreement, particularly in an atmosphere of general economy, is sufficient, and whether it would not have been better to have regarded this as a body which needed some assurance that strict accounting might be changed in the light of its particular needs, are matters which should have been further considered.
  I want to say a few words about the Jephcott Report. I entirely disagree with my hon. Friend the Member for Islington, East (Mr. E. Fletcher). I could turn to the Report and, with equal research, make a case the other way. What has discouraged me is that my hon. Friend has come to a natural conclusion on his reading of the interim Report, and that may be unfair. The Parliamentary Secretary

  1563
  has said that there is no reflection on the D.S.I.R., but the fact remains that the interim Report is being considered as a reflection on D.S.I.R., and we have to consider what has happened in the light of the Report. In the interest of the D.S.I.R. the further Report should be published.
  There is here a very anomalous position. The Parliamentary Secretary has said that after all the distinguished Chairman of the Committee of the Inquiry is now the Chairman of the D.S.I.R. and we can leave it to him to implement his own Report and avoid a great deal of publicity, which may excite comment and argument. However, that is not good enough, because the Report has in fact been construed as being critical. I could quote parts of it which clearly seem to reflect on the past work of the Department. In the interests of those who by implication appear to be criticised, further publication is required.
  Quite apart from that, it is not good enough, in respect of a body like this, to say that, provided we can be assured that the organisation itself will effect the recommendations which have been made, we can rest satisfied with that. We are entitled to know more. The lessons of the inquiry could be applied to other organisations. Hon. Members should have access at all events to parts of the Report to satisfy themselves that the action which will be taken is properly taken, and that the lessons to be drawn from the Report are applied in other circumstances.
  Finally, I want to say a word about the Research Council. For clarification I asked the Parliamentary Secretary about it and I understand his reply to be that the Council will consist of scientists and industrialists. I assume that by industrialists he will not include trade unionists. I gather that he meant industrialists in the ordinary sense of the term.
  Mr. Bevies: I used the expression "scientists and industrialists". If a trade unionist or a trade union leader had the necessary industrial or scientific qualifications, obviously he would be considered, but we certainly do not want a Research Council consisting of delegates from various bodies or associations. We want the best men we can get.
  Mr. Willey: I ask the Parliamentary Secretary to look at this point again. This is a body with responsibilities wider than those of agricultural or medical councils. There is a place in such a council, not only for trade unionists, but for people with wide general public interests. I hope that when we reach the Committee stage of the Bill, the Parliamentary Secretary will look carefully at this matter again, and consider whether it would not be better not to limit the Council to specialists, but to bring in some people who would look primarily to the national interest.
  9.55 p.m.
  Mr. J. Idwal Jones: The conditions which led up to the establishment of the Department of Scientific and Industrial Research in 1915 were more or less the same as they are today. We can recall the time, in 1915, when we were rather shocked to realise that we had fallen so far behind Germany in the application of science to industry. The relevant White Paper of that period states that situation very clearly. It says:
  "It is well known that many of our industries have … suffered through our inability to produce at home certain articles and materials required in trade processes, the manufacture of which has become localised abroad, and particularly in Germany, because Science has there been more thoroughly and effectively applied to the solution of scientific problems bearing on trade and industry … it appears incontrovertible that if we are to advance, or even maintain our industrial position, we must as a nation aim at such a development of scientific industrial research as will place us in a position to expand and strengthen our industries."
  Those words were written in 1915, but they are as true today as they were then.
  In 1915 we had fallen behind Germany in our industrial and scientific research, and today the position is rather worse. We now find the United States of America and the U.S.S.R. galloping towards the winning post, while we are losing ground behind them. It is true that we awoke in 1915, but we slumbered and slept between 1918 and 1939, and we now find ourselves at the rear in the matter of technical education. That is a matter which can be discussed in more detail tomorrow.
  If we are to advance, or even to hold our position, we must have a more thorough-going policy of scientific integration with industry. Now that the Bill is

  1565
  being introduced, the House should seriously consider whether it is not time to make a thorough investigation into the question of scientific research in industry. The whole structure should be re-examined, as has not happened since 1915. It is true that four research establishments have increased to 14 in 41 years, and that 21 research associations have increased to 40. We are also spending £8½ million, but are we sure that this Measure, which has as its principal object the changing of the Advisory Council into an Executive Council, will meet the requirements of the present situation?
  We must co-ordinate the research resources of the nation. There is a danger of isolated groups working upon parallel researches unknown to each other, resulting in a waste of scientific ability when we have insufficient to spare. It has been stated tonight that £31 million has been spent on civil research and £204 million upon defence. It is obvious that our future must ultimately rest upon our industry. However important defence is at the moment, this is a temporary phase, which we hope will pass in a very short time.
  I conclude with this suggestion. We are passing through a very important stage in our industrial life. We shall be having a discussion tomorrow on technical education. We have our universities, more or less independent, where we have graduates and postgraduates; and new technical and technological colleges will be set up. I am suggesting that the time has arrived when we should have, over and above this whole system, another type of institution—independent centres of research fed by students and post-graduates from the universities and technological colleges, which will distil their influence down into our industries. By a comprehensive scheme of that kind, we may have some hope for the future.
  10.0 p.m.
  Mrs. Lena Jeger: I hope that the Parliamentary Secretary does not feel that it is a matter for reproach that the debate has ranged so far beyond the content of the Bill which is now before the House for Second Reading, because I am sure he will agree that it has been a useful and valuable debate. I want to intervene
  1566
  briefly, and to confine myself to one or two points which arise directly from the Bill, and on which I hope that we will be able to get some further information from the Financial Secretary when he winds up the debate.
  I think that the main anxiety of all of us is that whatever machinery is set up for this purpose, the national interest must be safeguarded, and not any industrial or commercial interest. I foresee that there is some danger, unless we can have certain assurances from the Government, that this machinery might be used in a way that would allocate to the national cost some of the least immediately rewarding research, in the financial meaning of the word "rewarding." While private industry would work with greater concentration on those branches of research which produce quicker results.
  It may be that that is the Government's deliberate policy, and if that is in fact the case, it should be stated. There have been one or two references to stopping research projects. I am sure that a case can often be made out for stopping research which has become almost automatic, but what we want to be sure about is that no research is ever stopped or diverted because of any clash, real or potential, with private interests in the same field.
  We know that there is fierce competition at the present time between the various pieces of private research which are going on. That brings me to the question of the personnel who are to form the new Research Council. I support my hon. Friends who had asked that there should be some trade union representation on that body. I think it is a great mistake if the Government take the view that only scientists of the highest calibre in their own fields are fitted to co-ordinate and plan the scientific investment of this country. Surely we should try to take at least the scientific workers along with us in what we are trying to do. It is most appropriate that direct representatives of the men and women who have to carry out these policies should have an opportunity of sharing in the planning and organisation of the work.
  I appreciate that the Parliamentary Secretary said that he did not want a collection of delegates. But I think it unfair to suggest that workers, by reason of calibre, would be unable to contribute

  1567
  constructively and usefully in their own right to this kind of work. I do not see why there should not also be one or two people representing the general public interest, the "consumer interest" as it were. After all, in deciding the expenditure of a limited budget and which projects may be undertaken and which may not, there are many considerations which are non-scientific ones, but social, economic and often humanitarian, all of which should be weighed when these competing claims are decided.
  My second point concerns the position of the staff. It seems an extraordinary innovation that here we have a group of private individuals, to be selected by the Lord President of the Council in consultation with the President of the Royal Society, who will be paid a modest fee and who will employ civil servants. I think that the House should know what is the position of those civil servants. For example, who can sack them? Can this group of individuals sack a civil servant employed in one of those departments? These are serious questions which must be answered. What chance have these civil servants of promotion and transfer? Are they interchangeable with the scientific civil servants directly employed by the Department? I hope that we may receive an answer to those questions.
  The third point which I wish to raise concerns the question of committees which the Council has power to appoint. Has consideration been given to a wider range of people being brought in to serve, or will they merely be a faculty of specialists?
  My fourth point concerns the universities, and I appreciate that it can be considered only in a general review of our financing of fundamental research. As a member of the governing body of more than one college in this country, I am convinced that we have not begun to work out the most economical and useful way to finance research in the universities. I am certain that it is not always most helpful for heads of departments to be going to different sources in a search for money. I should like to see more co-ordination with the University Grants Committee, which never has enough money to spend. There seems to
  1568
  be a certain amount of waste of administrative time when applications have to be sent by the head of one department to the D.S.I.R. in the hope that some money will be forthcoming, while an Academic Board is trying to get money from the University Grants Committee and other members of the staff are seeking help from private industry for sponsored projects, which takes up a lot of university time.
  I do not agree with my hon. Friends who have stressed the shortage of scientific manpower. We are short of the ability to use our scientific manpower to the best advantage. Six of the most brilliant scientists in my own year at college have gone to the United States, and there is a continual drain of such people from this country to the United States which we simply cannot afford. We are getting an inferiority complex about this shortage of scientific manpower, and I consider that if we made suitable use of our existing manpower, such a shortage would be eliminated.
  Not only do we lose many of our best brains to the United States because we do not pay our scientists sufficient, but we are losing money as a result of their work. May I quote a very eminent scientist, who said:
  "For every £ which has been spent in this country on pure research we have, sooner or later, been obliged to spend £3 in dollars in the United States on the products, or on licences to manufacture, the very goods which were based on fundamental research done in this country."
  In saying that I know that I am going beyond the terms of the Bill, but it is one of the results of the present position which deserves urgent attention from the Government. I hope that we shall soon be given an opportunity to debate fully the whole question of scientific research, and not be limited as we are tonight.
  10.10 p.m.
  Mr. Austen Albu: The Financial Secretary will, I think, agree that although we have not had a very full House this has certainly been an extremely interesting and valuable debate. He, at any rate, has had to go out and get himself briefed on the subject. I think I would be justified in drawing attention to the very much greater interest displayed on this side of the House on this extremely important subject than among hon. Members opposite.

  1569
  We were very glad that my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), who had such experience in this matter—and who is, as he hinted, a distinguished political scientist—should have thought it worth while to give us his advice.
  The Parliamentary Secretary to the Ministry of Works referred to the foundation of the Department of Scientific and Industrial Research in 1915. The hon. Gentleman, however, did not refer, as my hon. Friend the Member for Wrexham (Mr. Idwal Jones) did, to the White Paper produced at that time over the signature of Mr. Arthur Henderson. I think that for that we on this side of the House can take a certain amount of credit. I think, also, that the hon. Gentleman might have given some credit to the real founder of Governmental research in this country, Lord Haldane He, in fact, was the originator of all Governmental research in this country, research for defence and civil research. On his advice the chemical research department was added to Woolwich Arsenal.
  Perhaps I might quote from a speech he made at that time. He said:
  "I would, in the first place, begin by adding, in the interests of economy, £1,000,000 to our estimates for higher education…"
  Of course, in those days money had a different value—
  " I would take every step that would interest the manufacturer in the application of science to industry."
  Lord Haldane and Sidney Webb, later Lord Passfield, were also responsible for the foundation of the Imperial College of Science and Technology.
  I add my praise to that of other hon. Members for the great efforts of Sir Ben Lockspeiser in the very substantial extension of the Department which went on after the war. The Department is still, in spite of its growth in size and function, responsible for only a tiny fraction of the research work done in this country. Several hon. Members have referred to the extraordinary disparity between research done for civil purposes and defence purposes. It has been estimated that the total amount spent on research of every type and everywhere, including industry, is not much more than £300 million, although about £235 million is spent on military and defence research in
  1570
  addition to the work done by the Atomic Energy Authority.
  It is very difficult to obtain figures of the amount of money spent by industry on research in its own establishments, although attempts have been made by the Federation of British Industries, recently by the Manchester Research Council, and I believe that the Department is trying to find out by inquiry of its own. The general estimate is between £50 million and £70 million a year. As was pointed out by my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), who opened the debate for the Opposition, that amount is very much less than the amount spent in the United States of America.
  Some hon. Members may have seen an extremely interesting article in the District Bank Review by Mr. John Dunning, who estimated that the average United States firm spends 2½ to 3½ times as much as the comparable British firm on research, after allowing for the difference in money values. I should like to emphasise the importance of encouraging research in individual firms and not only in cooperative, industrial research associations.
  It is important that firms should conduct their own research and have their own research establishments. This is not only the case in the new industries. I think that it was my hon. Friend the Member for Gloucestershire, West (Mr. Philips Price) who referred to the necessity for pressing on with what was called the "expanding front of science." That, of course, is the case with the most advanced work, but it is very necessary also to carry out research in many of our traditional industries.
  In a recent very interesting lecture, Sir John Cockcroft estimated that the annual expenditure on research and development by the railway, shipbuilding and motorcar industries in this country was, respectively, £350,000, £200,000 and £3 million. These, of course, are appallingly low figures, and I doubt whether the figure given for the motor car industry can be correct. I should have thought that it was much less, but, of course, it may include the ancillary industries, which provide materials and components. It is still an appallingly small figure for an industry with a turnover of something like £500 million.

  1571
  Hon. Members may have seen in the Financial Times an article dealing with the great technical centre which has been set up in Detroit, where they employ several thousand scientists, engineers and research workers on work for their main and ancillary industries. But it is not only these industries which are backward in this country. Some of them are in the field of mechanical engineering—for instance, the machine tool industry.
  The hon. Member for Putney (Sir H. Linstead) and one or two other hon. Members referred to the increasing difficulty, to which a lot of attention has been paid in recent years, of getting to industry the results of research carried out either in universities or in research associations —the problem of communication and getting the results applied. This, of course, is one of the very important functions of the Department. Clause 1(3) of the Bill deals with the dissemination of the results of research which is the responsibility of the Intelligence Division. I think that it was the hon. Member for Putney who gave some rather extraordinary figures—I do not know where he got them—about the proportion of money being spent in various activities, and the figure for this particular work seemed very high. I imagine that his figure included the moneys spent by the Industrial Research Associations.
  The amount actually in the Estimates for the Intelligence Division is not very high. The Division has a very important function in addition to disseminating the results of research in this country. It has the function of collecting the results of research carried out in other countries and of disseminating it in this country to research bodies and industries. We certainly need to benefit from the research done in other countries, especially on processes and manufacturing techniques. We might also as well wake up to the fact that we are no longer the main country in the world doing fundamental research Other countries are catching up with us in these matters, and we might as well take advantage of the work they are doing and here very valuable work can be done by the Intelligence Division in the collection and dissemination of this sort of information.
  I wish to pay credit to the extremely valuable work done by the small number
  1572
  of scientific attaches which we now have in a few countries abroad. Reference has been made to the report on the revival of German science and research by the scientific attaché in Bonn, which was very valuable. I am wondering whether it is not time for us to have a scientific attaché in Moscow. I do not know who fulfils that very important function. I was surprised to see in the list of countries in which we have scientific attaches that Switzerland is not included, because I should have thought that certainly in certain applied fields Switzerland was a very important country.
  There has not been a great deal of expansion in the staff of the Division. This is a matter very closely related to the National Reference Library and to the National Library of Science Inventions, which was one of the planks in the Conservative Party programme of the last Election. My hon. Friend the Member for Sunderland, North (Mr. Willey) asked a Question about this on 8th May, but the reply which he received did not show that this very important matter was being pursued with any very great activity.
  A good deal of doubt has been expressed about the responsibilities of the new Research Council, particularly with reference to its relations with the Minister responsible for the Department. It certainly has an enormously wide field to cover, as has already been pointed out. It is responsible for the distribution of funds for scientific research; it has to distinguish between fundamental and applied research; in applied research it has to distinguish between its own associations and the industrial research associations.
  A number of hon. Members have referred to the danger of overlapping. The Council has, in addition to watching other forms of overlapping, to be careful to see that there is no overlapping between work done in the stations and work done in industry itself. Industry must be encouraged to do its own work where possible, and when it is backward in research there should be no hesitation on the part of D.S.J.R. to do this work at its own stations and, if necessary, to set up a station for this purpose.
  Many industries benefit from these research stations, yet make no contribution towards them. For example, the building industry gets a great deal of benefit from

  1573
  the building research station yet contributes nothing towards the maintenance of that station. I imagine that the radio industry obtains considerable benefit from the radio research station.
  I suggest, also, that there may be a further case for setting up industrial research associations with a compulsory levy, as was done in the case of some of the development councils—for instance, in the cotton industry—and it is a fact that the forms of contribution paid vary enormously. Sometimes the contribution comes from trade associations; sometimes it is a compulsory levy, and sometimes it is a voluntary contribution from an individual firm. There is a case, where an industry is backward, for having a compulsory levy for the purpose of setting up a research association.
  There are various possibilities of overlap in research, and I am talking mostly of applied research. There can be an overlap between two research associations, one of which receives subscriptions from the manufacturers of a product, and the other from the users of the product. I should like to refer to the danger of a conflict between the Cotton Industry Research Association and the Rayon Research Association. The Rayon Research Association is largely supported by the two manufacturers of rayon in this country. They provide the results of research to the users of rayon. As a consequence, these users, who are also often cotton textile manufacturers, do not need to join the Shirley Institute; yet the Shirley Institute, which has been built up as a large textile institute, is doing a large amount of very valuable work.
  The important thing is that a research institute such as this should be impartial in its research into the raw materials. There are many problems involved in the mixtures and the use of fibres, and so on, and the work done at these institutes should be carried out impartially for the industry as a whole. There is here a danger of overlap, and possibly of lack of funds for the main industry research association, which is, of course, the Shirley Institute.
  The Department is to have increasing responsibility for fundamental research, through grants to universities, and I support those hon. Members who have said
  1574
  that they hope this will include the colleges of advanced technology which are to be set up by the Government. There will always be arguments as to where the balance should lie as between applied and fundamental research. In recent years it has been felt in this country that we need to have more applied research. My hon. Friend the Member for Holborn and St. Pancras, South (Mrs. L. Jeger) referred to the fact that we very often produce the fundamental work in this country and have to pay dollars for licences to manufacture the resulting product because we are unable to carry out the rest of the development.
  Before the war, expenditure on applied research was 1·1 times expenditure on pure research in this country; in the United States it was 2·5, but Sir John Cockcroft tells us we are now spending less than 5 per cent. of our total on pure research, and in the United States the figure is 7 per cent. No doubt, this is very largely the result of the enormous expenditure we are now making on research for defence purposes, most, if not all, of which is applied.
  I am not against using the result of other people's pure research; we certainly need more of both. I am reminded of what a distinguished industrial scientist said happened to him in the United States. He was approached by a very worried American who said, "We hope you are going on with your fundamental research." When asked why, he replied, "We depend on it". I think it is about time that we took advantage of other people's expenditure in this field.
  The Bill gives to the Department, in addition to the powers to make grants for research, power to make grants for bursaries for post-graduate instruction. This is very important indeed. I know that industry is worried and does not want men to remain too long in the universities; but most modern technologies are becoming more and more complicated, and it will not be possible to give a young man a full knowledge of many modern techniques and technologies in the ordinary three years for a first degree. Mr. Oriel, President of the Institute of Chemical Engineers, in his presidential address called for an "All Souls of Technology", where men straight from the universities and from a variety of industries could rub shoulders with one another.

  1575
  I hope that the Imperial College of Science and Technology, whose expansion is entirely in the post-graduate field, will fulfil this function; but it is impossible for it to do so if students do not receive grants. At present, they do not get enough British post-graduate students. For instance, there is a great need for advanced education in reinforced concrete design. Much of the advanced teaching in the post-graduate course comes in the fifth year of a degree course at a Technische Hochschule on the Continent. At present, there are more Commonwealth and foreign students, including Americans, doing this post-graduate work at the Imperial College than British students. This is one of the reasons why we are falling behind.
  I shall not cite the great lists of departments for whose research work the Government is responsible. Many hon. Members have dealt with that. I want to reinforce what has been said by all hon. Members, I think, about the need not for greater detailed control, but for greater general oversight and coordination. The hon. Member for Abingdon (Mr. Neave) referred to the number of bodies working on nuclear physics. When one realises the enormous expense involved and the cost of equipment required, one can see how important is this matter of co-ordination.
  Finally, I come to the problem of whether there is a substantial change or not. I agree with those who cannot see that this Research Council will really make a great deal of difference. My right hon. Friend the Member for Lewisham, South expressed very great doubts about this. It is very difficult to see what it will be able to do. Hon. Members have made suggestions for membership of the Council. I am sure it must be a balanced one—pure scientists, industrial scientists, and so on. There should, I think, be an economist member with special interest in technological change, and certainly a leading trade unionist who is interested in these matters.
  It is of the greatest importance that the workers should he taken along with us in these problems of change. All this new scientific work means change in industry, and it is very important indeed that the trade unions should be carried along with all these new develop-
  1576
  ments. For that reason, I am quite certain that we must have a trade unionist on the Council, as on the Industrial Research Associations themselves. The appointment of Professor Melville as Secretary has been generally welcomed, but I think it is unfortunate that there was a six months' interregnum before he was able to take up office.
  Apart from all that, we must remember that it is not the Council which will do the job, unless some of its members become full-time members, and then they will be civil servants. The job will be done by the staff. If there is a criticism in the Jephcott Report, the criticism is that the Government has starved the D.S.I.R. of adequate scientific staff to carry out the programming at headquarters. It is quite inadequate at the present time.
  There is one division, responsible, I think, for spending two-thirds of the whole Vote, and responsible for looking after not only D.S.I.R.'s own stations, but also responsible for grants to individuals for research, which is headed by one man who is lower in rank than most of his colleagues, including, of course, the establishment officer and the directors of the stations whose work he is supposed to control. That is the sort of petty parsimony which I draw to the attention of the Financial Secretary, because no doubt it comes from the Treasury; but it is not really an economy and it is the sort of thing which can and does lead to overlapping within the Department itself.
  This part-time Council, the members getting £500 a year or various bits and pieces, will not run D.S.I.R.; it cannot possibly do the necessary programming and planning work which will be required. There must be a staff which is adequately paid and adequately provided with junior staff; and it must itself be of an adequately high level. There must be senior scientific officers—and I am not using the term in the technical Civil Service sense but meaning men capable of scientific administration—in the Department, whole-time, who are able to do the programming; much of the trouble which the Jephcott Committee mentions arises from this parsimony in the staffing of the Department in the programming branches.

  1577
  As some hon. Members have said, whether the new Council is to have any effect at all must depend on the quality of the men who serve on it. By and large, it will succeed or fail not, I think, in so far as it is able to do this detailed job, which can be done only by staff within the Department, but according to the extent to which it is able to develop a real feeling of leadership in the organisation—and I mean scientific leadership—and not bureaucratic administration. The members will have to devote their attention to the question of staffing, I am certain.
  One of the most important points is that they must see that there are adequate opportunities for promotion for the staff within the Department, because many of them today are neither scientists nor general administrators; once they are in the Department it is very difficult for them to find avenues of promotion within the Civil Service. We do not want a situation in which the best men enter the Department and then have to leave to find their promotion outside.
  I believe that for the very great expansion in Government support of research of every kind which we need we must have a first-class staff of high morale, given every sort of opportunity inside the Department. They are the people who will do the work, not the Executive Council. The part-time Council will be unable to prevent the overlapping or deal with the problems which we have been discussing today—and, goodness knows, its responsibilities are manifold enough —if it does not have a first-class staff to support it.
  Like my hon. Friends, I doubt whether we can have confidence in the Government's intentions until there is a senior Member in this House responsible for the co-ordination of all scientific research and, I would say, for technical education. I have nothing against the present Lord President of the Council, who, I am certain, has done his best; after all, his distinguished grandfather very nearly burned down his ancestral mansion by carrying on experiments with electric lighting in the early days of electricity. But that does not necessarily make him the man for this job. In view of the amount of public money which is spent, I think that the House which controls the spending of public money should have a
  1578
  senior Minister here, responsible for the subject, when it discusses these matters.
  In a recent article in the magazine Discovery, a Cambridge scientist attempted to find a scientific law for the rate of growth of science itself. He did it by measuring the growth in the number of scientific publications, in expenditure on science, in the number of scientists, in the number of scientific patents, and so on. They all pointed to the same conclusion doubling in numbers in a period of 10 to 15 years, much faster than the growth of the population; and that, no doubt, accounts for the shortage of scientific manpower.
  The problem of increasing specialisation and the amount of knowledge which the researcher must absorb is becoming a frightening problem, so that every new major advance requires more and more lower level support. This emphasises the task which, in the opinion of my right hon. Friends, hon. Friends, and myself, the Government have to face in the allocating of resources for a race in which we cannot afford to be left behind.
  10.35 p.m.
  The Financial Secretary to the Treasury (Mr. Henry Brooke): A point on which I entirely agree with the hon. Member for Islington, East (Mr. E. Fletcher) is that it was well worth while having this short Bill in order to provide an occasion for the House to debate this supremely important subject of scientific research. I think it was the hon. Member for Cardiff, South-East (Mr. Callaghan) who said that here the future of Britain is at stake. The future of Britain is at stake in more than one direction, and I have no question whatever that this is one of the main directions in which we, as Members of Parliament, have to look, with all those others who can help, because though we cannot save the future for our children and the world by scientific research alone, nevertheless, we could ruin the future if we were to neglect it.
  The need for this Bill is, despite the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison), real and twofold. We have the first Report of the Jephcott Committee, which recommends—and I hope it is unanimously agreed that the recommendation is a sound one—that the existing advisory body should be transmuted into a body with executive responsibilities. We

  1579
  also have the recommendation from the Public Accounts Committee, dating as far back as 1947, that there ought to be a specific statutory provision for the expenditure of the D.S.I.R. to be met out of moneys provided by Parliament. If any hon. Member suggests that this Bill is unnecessary and useless and trivial, I suggest that I certainly, as a Treasury Minister, and the whole House, too, should have regard to our own Select Committee, the Select Committee on Public Accounts, and not continue to disregard its clear recommendation on this matter. We should all wish to provide a proper statutory foundation for this body, which is fed with moneys provided by Parliament.
  One hon. Member—I think it was the hon. Member for Islington, East—suggested that the first Report of the Jephcott Committee was a damning document. Other hon. Members opposite seemed in the debate to be confused over the actual difference that the Jephcott recommendation, which has been accepted by the Government, would make. If there is anybody who is not by now clear in his mind as to the essential difference between an executive body and an advisory body, then he cannot possibly have studied the first Report of the Jephcott Committee with sufficient care to entitle him to make any comment whatever about its contents. The change, to my mind, as I shall seek to show, is a fundamental one, and is a considerable part of the answer to a number of the allegations made by the hon. Member for Cardiff, South-East. When I am speaking of the new Research Council let me say at once, as, I think, the Parliamentary Secretary to the Ministry of Works said, that the general intention of the Government is that it should be a body of about the same size and character as the present one, and that it should also, like the other, be of the very highest quality. The present Advisory Council is composed of men distinguished in science and in industry. There are two representatives of organised labour on it at present. We think that that is just about the right size and just about the right character, and there is no intention of making radical changes.
  We are also exceedingly anxious to secure the services at all times of the best people we can get. I do not know
  1580
  whether the hon. Member for Cardiff, South-East wishes to press his question about the precise fees to be paid?
  Mr. Callaghan indicated assent.
  Mr. Brooke: The present fees paid to the advisory body are £350 to the Chairman and £150 to the individual members. We are examining the fees that would be appropriate to be paid to the new Research Council. I should not be surprised if they were higher than those figures. The essential point—and I hope that I carry the whole House with me in this—is to get the new Research Council appointed and operating, and that we cannot do until we have this Bill on the Statute Book.
  The hon. Lady the Member for Holborn and St. Pancras, South (Mrs. L. Jeger) inquired particularly about the position of the civil servants who would be working under a Research Council that did not itself consist of civil servants. Let me assure her that the civil servants there will be in exactly the same position, as to terms and conditions of service and security, obligation to mobility, and so forth, as if they were working in any other Government Department. She may possibly not be aware that we already have the same situation, with statutory authority also behind it, in bodies such as the National Assistance Board. I do not think, therefore, that there need be any misapprehensions on that score.
  A number of hon. Members have inquired about the second Report of the Jephcott Committee, and I want to deal with that matter, and to reinforce what my hon. Friend the Parliamentary Secretary to the Ministry of Works said about it—and, indeed, what was said in his valuable speech by my hon. Friend the Member for Putney (Sir H. Linstead). The second Report of the Jephcott Committee, which I have here, was specifically written in the form, not of recommendations, but suggestions about lines of thought which, in the opinion of Sir Harry Jephcott and his colleagues, the new Research Council, which they had recommended, would do well to pursue.
  I do not want to conceal from hon. Members that when I read the second Report it was with a certain excitement, to see whether I would find anything sensational or melodramatic, but I was entirely disappointed in that respect. I must put to the House, however, the point

  1581
  that, bearing in mind the intention with which this Report was written and presented to my noble Friend the Lord President of the Council; bearing in mind also that we shall be getting annual reports from the new Research Council, on the work that it has done and is doing and the conclusions it has reached, in exactly the same way as we have annual reports from the existing advisory body, it really would be the best plan to get this new Research Council set up so that it can reach its own considered conclusions on the lines of thought which the Jephcott Committee, in its second Report, has suggested. Then the Council will be able to tell us in respect of the whole area what conclusions it has reached after necessarily much closer and more thorough consideration than the Jephcott Committee, an external body, could give, and report to the House.
  Mr. E. Fletcher: Could the Financial Secretary explain why he does not think that the new Research Council could not equally well do that if the final Report of the Jephcott Committee were published, and if the Council also had the benefit of any comments which hon. Members here, or persons outside, might wish to contribute to those recommendations?
  Mr. Brooke: I can answer that question, because the second Report is of a tentative character. The Jephcott Committee said explicitly that these were not recommendations. These were suggestions as to lines of thought which should be followed up. I believe that in any organisation there are times when documents of that kind ought to be written and when they ought not to be given to the whole world until those to whom the suggestions are addressed have had time to assimilate and to consider them and reach their own conclusions.
  I can but ask the House to accept my assurance on this. I give an absolute assurance that there are no skeletons in this cupboard; that nothing of a dramatic nature is being concealed. Were I a member of the new Research Council—a post for which I certainly would not be qualified—I should consider this second Report valuable material, but certainly, I should wish to consider it
  1582
  myself and reach my own final conclusions on it.
  Mr. Willey: I know that the time of Financial Secretary is limited, but would he appreciate this point? We are setting up a new piece of constitutional machinery which is quite anomalous on the basis of the Jephcott Committee Report. For that reason I think we should know something more of the reasons which have led to this course.
  Mr. Brooke: I can assure the hon. Member that there is nothing further in the second Report which deals with the recommendation regarding organisation.
  I was asked whether my hon. Friend would give a directive to the Research Council. The Council will consist of very eminent and able people. I am sure that they are not the kind of people who, at the first meeting, will expect to have a short piece of typescript in front of them before they can start. I visualise that they will settle down to the work, and there will be a considerable measure of continuity because they are taking over from the existing body. Having gone a certain way, the Council may desire to communicate with the Lord President and to consult with him. It may be that then the position will arise that he may desire to give a direction or an informal directive so that the Council may know that it is acting in accordance with the desires of the Government. But to give a directive at the outset, before the new body has started its work, and when there will be a considerable amount of continuity, would be putting the cart before the horse.
  I do not wish to import party politics into this matter—I think too much of that has been imported into the debate already —but it is fair to make the point that the aggregate net expenditure provided for in Estimates this year is more than 50 per cent, higher than it was in the last year when right hon. and hon. Gentlemen opposite were responsible for the affairs of this country. We are working to a five-year plan which runs up to March, 1959, and I should judge that it would be one of the early duties of the new Research Council to formulate its own ideas for the financial pattern following March, 1959.
  My hon. Friend the Member for Abingdon (Mr. Neave), who also made a

  1583
  very constructive contribution to the debate, asked whether there was any intention to strengthen grants for research in nuclear physics. I do not think it would be right for me at this moment to lay down in any way how future grants are likely to be allocated as between different purposes. He was perfectly right in saying that the D.S.I.R. is responsible for supporting research into nuclear physics, that is, the fundamental work which lies behind the practical utilisation of the energy within atoms. Research on the methods of utilising that energy is the responsibility of the Atomic Energy Authority.
  I trust that the hon. Member for Cardiff, South-East will not press his allegations that Treasury Ministers are interested in nothing but short-term economy. He knows that the Treasury could not discharge its vast responsibilities if it were not constantly seeking to look ahead to achieve long-term economy by wise decisions which may involve greater expenditure. I think any suggestion that Treasury Ministers are parsimonious towards science is a little unfair. I congratulate myself that I have made some contribution towards the expansion of the Imperial College at South Kensington.
  A great part of the importance of the work of the D.S.I.R. lies in the assistance and stimulus which it gives to the industrial research associations. We can all congratulate ourselves on the fact that industry's growing interest in all this is shown by the fact that, whereas five years ago the contribution of industry was to the contribution of the Government as 16 to 10, now the ratio is about 20 to 10. I really do not fear that conflicts between public and private interests as the hon. Member suggested are going to arise. Perhaps he will bear in mind that henceforth there is going to be a Research Council in a very much stronger position than any advisory body could be if its members think that something is going wrong somewhere. This body has to carry responsibility. It must report to the Minister if it is dissatisfied about anything, and its members are to be individuals of great distinction who, if individually they are not satisfied about the way in which things are going, will be in a position to resign, and the public will want to know the reason they have resigned. That is very different from an
  1584
  advisory body which in itself carries no responsibility.
  In conclusion, I come to what seems to me to be fundamental. That is that, as a nation having limited resources of technical manpower, materials and money, it is imperative that we should seek to use those limited resources in the finest way and to the best advantage. The suggestion is that there are grave gaps and much overlapping. It would not worry me if there was some overlapping because from my knowledge of scientific research it is desirable to have scientists working on neighbouring problems. They help one another. This is not a tidy field and can never be a tidy field. If there are serious gaps it will certainly be a duty of the Research Council to call attention to them if by its own efforts it cannot see any means of closing them.
  Its main duty, unquestionably, will be to stimulate scientific research because, surely it is accepted on both sides of the House, it cannot possibly do all the research itself. I have a feeling that some hon. Members wanted a kind of scientific totalitarianism, that the Minister responsible to Parliament should have everything in his own hands, should arrange everything and do almost everything. The right hon. Member for Lewisham, South dealt faithfully with that idea. He deprecated the idea of a Minister, who was going to seek to do everything and perhaps meddle in everything.
  I am quite sure that in the whole of this country no individual could be found better qualified by his own personality, capacity and intense interest in this subject to carry the Governmental responsibility for it than my noble Friend the Lord President of the Council. So far as I am acquainted with the views of scientists, they are proud indeed that there should be someone of his quality and his deep concern to be their representative in Parliament.
  When we hear suggestions that the Government should do the whole thing themselves and should take a direct responsibility for everything that is done. I then ask myself how that could possibly be squared with the freedom of the universities—another principle which we prize in this House. The two are incompatible. What we have to do is to seek a system which will preserve

  1585
  university freedom, the freedom of the scientists throughout, and which will apply the resources of the Government so as to fill the gaps and stimulate the best possible work in the wisest directions for the whole of the industrial and scientific field.
  Bill accordingly read a Second time.

  DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH [MONEY]
  Considered in Committee under Standing Order No. 84 (Money Committees).—[Queens Recommendation signified.]
  [Sir CHARLES MACANDREW in the Chair]
  Motion made, and Question proposed,
  That, for the purposes of any Act of the present Session to make provision with respect to the Department of Scientific and Industrial Research, it is expedient to authorise the payment out of moneys provided by Parliament of the remuneration of the members of any Research Council established by the said Act of the present Session or of any committee appointed by that Council, the salaries and allowances of the Secretary of that Council and of the other officers and servants of the Department of Scientific and Industrial Research, and any expenditure incurred by the said Council under the said Act of the present Session.—[Mr. H. Brooke.]
  10.58 p.m.
  Mr. James Callaghan: I am sure that we can dispose of this Question by 11 o'clock, but I just want to say that no one suggested that the Minister who should take responsi-
  1586
  bility for the money to be spent should have a totalitarian control over science. What we are asking for is that there should be a senior Minister in this House responsible for answering Questions on this matter. That is the point I developed, and the point that the Financial Secretary did not answer. We are not referring to totalitarian control. I did not hear that argument advanced. It is on that point that we should like the right hon. Gentleman's views.
  One further point on which we should like the right hon. Gentleman's views. At the moment, certain research is being financed from American counterpart funds, particularly in relation to automation. Can we be assured that that finance will go on and that research into automation will continue to be financed when these counterpart funds come to an end in November?
  The Financial Secretary to the Treasury (Mr. Henry Brooke): I am not sure whether it is in order for me to discuss Ministerial responsibility here. All I can say is that everything that has been said in the debate will be examined by the Government. I trust that the hon. Gentleman is not suggesting that there is anyone either in the House of Commons or in the country at large who could fulfil the major responsibility better than my noble Friend the Lord President of the Council.
  Resolution to be reported Tomorrow.

  ESTIMATES
  Sub-Committee D of the Select Committee to have leave to hold sittings in Malta.—[Mr. Nicholson.]

  PROPERTY REVALUATION, CAERNARVONSHIRE
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Oakshott.]
  11.1 p.m.
  Mr. Goronwy Roberts: The subject which I wish to raise tonight is one which is causing very great anxiety to millions of ratepayers and to scores of local authorities all over the country. I refer to the recent revaluation of properties. For the reasons which I propose to give, the effects of this in Caernarvonshire are particularly alarming.
  It is the small businessman, the shopkeeper, the hotelier, the small restaurateur and the owners or tenants of what the Treasury calls "miscellaneous properties" who are being hit the hardest. These people are among the most industrious element in the country, and are certainly so in Caernarvon. Many operate on a surprisingly narrow financial margin. Another class to which the new demand notes constitute a major catastrophe are elderly people, of whom we have a remarkably high number in our county, who have retired on small, fixed pensions to small cottages.
  Their assessments may now have been raised by 200 per cent., 400 per cent., or even to 600 per cent. Throughout the country property has been revalued upwards by about 70 per cent. compared with last year. In Caernarvonshire, the increase is 114 per cent. It may be argued that, on the other hand, the rate precept will go down so that the net increase in the rates payable will not be intolerable. In fact, one finds that in some areas that this has happened. But it has not happened in Caernarvonshire. In my county the rate precept is down by only 24 per cent. The reason for this is that the appreciated valuation has been used to depreciate a certain Government grant.
  The result is that while we would be receiving this year £492,000 grant if the conditions of 1955 obtained, we will, in fact, receive only £215,000. In addition, we shall lose this year a special education grant of £20,000, and the total loss to the county is equivalent to a rate of 4s. 5d. in the £. In consequence, Caernarvonshire ratepayers will pay this
  1588
  year, or do their best to pay, £150 for every £100 they paid last year.
  On whom will this burden largely fall? It will mainly be borne by the class of ratepayer I mentioned earlier—the small businessman, shopkeeper and hotelier. The proportion of the total rateable value attributable to these "miscellaneous properties" in my county has now risen from 20·55 per cent. to 30·7 per cent. That is to say, this class of ratepayer in my county is called upon to bear almost one-third of the total rate burden of the county. Put in another way, it means that while the percentage increase in the rate burden on this class throughout England and Wales is 29·7 per cent., in Caernarvonshire it is 49·4 per cent.
  I would like to give a few instances of how this additional heavy burden threatens the livelihood of many of these people. I have here a letter from the Criccieth Chamber of Trade. Most of its members belong to this class of small business people. The letter protests agents the new valuations as
  "Unfair, unjust. uneconomic, and out of all proportion to the economic circumstances of the town."
  This protest goes on to say that
  "The valuation, by increasing the value of some properties by as much as 400 per cent. may, and probably will, force people to close down their businesses."
  In fact, that is already happening. A constituent of mine only this week has sent word to me that he has been forced to dispose of his business solely because of this additional heavy burden. This man was disabled 100 per cent. while serving with the R.A.F. during the war; so that it is the weakest and the most deserving, as in this case, who are driven to the wall by this arbitrary demand.
  The tourist trade, and its ancillaries, as my hon. Friend the Member for Conway (Mr. P. Thomas) will undoubtedly say, is a major industry for our part of the United Kingdom; but although in every sense an industry it does not qualify for the derating concessions under the 1929 Act. Furthermore, it is very easy to forget that the people depending on tourism for their livelihood, as they often do in Caernarvonshire, have only a short season in which to collect a full year's income. In Wales, the summer is not long; it is of no greater length than in England, and while a wet season may

  1589
  spell disaster to small shopkeepers or boarding houses, the rate demand is inexorable. It is there. rain or shine.
  We in Caernarvonshire have the second highest unemployment rate in Great Britain. The highest place is taken by our neighbour, the Isle of Anglesey, where the figure is more than 8 per cent. of the insured population; our own figure last winter was 6·3 per cent., while the general average for the United Kingdom is only 1 per cent. In other words, the figure for Caernarvonshire is more than six times as great as for the rest of the Kingdom; and perhaps because of that, our county is not an area of high wages. We are not a prosperous county.
  Many of our shopkeepers, restaurateurs. and hoteliers are "marginal", as I have said, but they are assessed as though they were in the prosperous Midlands, in the boom towns. For instance, a small shop in the village of Rhosgadfan, where about a quarter of the male population is out of work, has had its valuation increased from £6 to £36—a sixfold increase. There are similar excruciating examples in the Nantlle Valley, where a factory, formerly employing about 200 workers, has been closed for the past three months; and in Llanberis, where an Air Ministry maintenance unit is now declaring redundant about 500 men.
  Mention of Llanberis reminds me of the case of the Snowdon Mountain Railway, whose assessment has been increased from £141 to £3,505. This must surely be, literally, the highest peak to which the new valuation has climbed! All this is happening against a background of depression and unemployment, and not only are our assessments substantially higher than the average, but our precept is the second highest in England and Wales. The highest is in Cambridgeshire, with a precept of 17s. 6d. in the £. We follow with 15s. 3d.
  At the same time, really prosperous areas like Cheshire, Derbyshire, Lancashire, Leicestershire, Northamptonshire. Nottinghamshire, Wiltshire and the North and West Ridings have precepts ranging between 10s. 9d. and 1ls. 6d. The precept for Surrey is 9s. 6d. and for Durham 9s.—both very prosperous counties. But in Caernarvonshire, which has almost the highest rate of unemployment in the United Kingdom, the precept is almost double that.
  1590
  I always thought that the object of this revaluation was to extinguish some of the more glaring anomalies of our rating system, but here they are again, only bigger. There must be something wrong with the administration of this valuation when such anomalies occur. We are told that in parts of Shropshire they have to do the job all over again. I think that there is a case for reassessing the whole of Caernarvonshire.
  It may be said that there is ample provision for appeal. This is the point to which I want mostly to direct the mind and sympathy of the Financial Secretary to the Treasury. It really depends on the manner and spirit in which these appeals are conducted. People are appealing in very large numbers in Caernarvonshire but, so far, we have not got beyond a few negotiated cases with the valuation officers. From what I hear, these officers—able men, all of them—are extremely cautious, and I do not blame them. It depends on the directives and instructions they have received or are receiving from above. It is an administrative point susceptible of helpful treatment by the Minister.
  In view of all the circumstances in Caernarvonshire, the valuation officers might well be directed to show the greatest possible sympathy in negotiating with appellants, and the same applies to local valuation panels or courts. They, too, should be directed to bear in mind the peculiarly disadvantageous position of the kind of appellant I have described, and who is so common in the county. Pending a radical reorganisation of local government finance on workable lines, this is really our only hope in counties like Caernarvonshire, namely, the operation of the appellate machinery with due regard for the true facts of the situation in the county. I hope that the Minister will deal with these people sympathetically.
  11.12 p.m.
  Mr. Peter Thomas: What the hon. Member for Caernarvon (Mr. G. Roberts) said about the extremely high new assessments of rating in the county of Caernarvon is true. In fact, these assessments have exceeded the most pessimistic forebodings of the ratepayers, and have caused great distress.

  1591
  Particular attention, to which I subscribe, was paid by the hon. Gentleman to those small businessmen who work on a small margin of profit and depend to a great extent on a short tourist season. He mentioned in passing, however, another section of the community, and to these I would like to pay particular attention, for many of them live in my constituency. They are the people who exist on small fixed incomes and pensions, people who are retired and who are, in the main, elderly.
  The new rating assessments, particularly in the area of Llandudno, have had the cruellest impact on this section of the community. Very few people expected, when it was known that dwelling houses would be assessed on their 1939 value, that the new assessment would be so high. I could give my right hon. Friend, indeed, I have given the Minister of Housing and Local Government, many examples of small bungalows in the Llandudno area, in particular in Penrhyn Bay, occupied by retired persons, where the rateable value has gone up three times and over.
  These elderly people living on small fixed incomes, who, in the past, paid about £15 yearly in rates, are now faced with demand notes for £35 and £40. They just cannot afford to pay. These people have no organisation to champion them. They have no trade association or trade union to come to their aid. They are just people who have been good members of the community all their working lives, who have conserved their resources, possibly at great sacrifice, and who have retired. They do not wish the community to assist them, as they have never in the past asked for assistance. But now they find themselves, with incomes probably far less than those of the average unskilled worker, faced with demands wholly out of proportion to the net value of their houses in 1939 and having to bear an unjust proportion of the burden of the rates.
  I have mentioned these people in particular—though I could go through all sections of the ratepayers in Caernarvonshire—because I think that they deserve special attention. I trust that my right hon. Friend, when he considers the impact of the new rating assessments in Caernarvonshire, and the loss to the ratepayers
  1592
  through these new rating valuations of £300,000 in Government grants, will bear in mind the hardship on this section of the community.
  Mr. Speaker: I have had great doubt how far the last two speeches were in order. In so far as the hardship complained of arises out of the operation of a Statute, and can only be remedied by legislation, it is out of order to discuss it on the Motion for the Adjournment. If it can be said that there is a point of administration in this under the existing law, that would be in order; but I am bound to say that my doubts were increasing as I heard the speeches.
  Mr. G. Roberts: The whole point of our appeal, Sir, is that the Minister, through administrative action, should see that the negotiations and the appeals are administered as sympathetically as possible. It is purely an administrative point that we are raising.
  11.18 p.m.
  Mr. T. W. Jones: I would like briefly to support the appeal concerning this administration, especially in the case of a town like Barmouth, in my constituency. The people there are groaning under the rates. Llandudno has been mentioned, but what is happening there is not comparable to what is happening in Barmouth, where there is a heavy incidence of sea-defence rates. The season at Barmouth is only a few weeks, at the most, so there is no margin of profit to enable these people to meet the increased rates, which vary from 33 per cent. to 395 per cent.
  I would like to say more, but it would not be fair to the Financial Secretary, who is to reply to the debate. I shall perhaps enlarge on my appeal for the people of Barmouth by writing to my right hon. Friend.
  11.19 p.m.
  The Financial Secretary to the Treasury (Mr. Henry Brooke):It is true that the revaluation in Caernarvonshire has produced an increase of 112 per cent. in the total rateable value. I am sorry to have to say that parts of the county were heavily under-assessed in the past. That is what has brought the ratepayers up against what must be an extremely unpleasant increase in a number of cases. I would assure all the hon. Members who have spoken in this debate—and this is entirely a matter of

  1593
  administration—that there is no evidence in these Welsh counties of a breakdown of the valuation system.
  Reference was made to Shropshire. It has been admitted in the House that errors were committed there and the whole list is to be looked at again, but there is no similar evidence from these Welsh counties. Indeed, there have been few complaints or general criticism and the number of appeals so far made in Caernarvon against assessments is under 2 per cent.
  The county is suffering—I quite recognise this, and I am sorry that it is happening--from the sudden withdrawal of the Exchequer equalisation grant, as some big English cities, which were previously under-assessed, are suffering. It is suffering through the increased rateable value. The average rate in Caernarvon-shire has gone down, as, a result, from 28s. 5d. in the £ to 19s. 11d, in the £, which compares with a figure of 18s. 5d. for the whole of Wales and 15s. 8d. for England and Wales together.
  I assure hon. Members that my right hon. Friend the Minister of Housing and Local Government is unable to determine grants otherwise than in accordance with the provisions of the 1948 Act. As the House knows, the Government are now carrying out a thorough-going review of the whole problem of local government finance. I cannot say at this stage what the issue will be, and even if I could, and it involved fresh legislation, I might be out of order in referring to it.
  I want to stress that anyone in the County of Caernarvon or elsewhere who feels that he has been unfairly assessed should, if he is wise, in the first instance seek a discussion with the valuation officer. This is quite informal. It may be that that conversation will clear away a lot of doubts and difficulties. I do not say that that will necessarily happen, but it would be worth trying. If they cannot be so cleared away, there is the statutory right of appeal. It is only the local valuation court, as a court of appeal, which can give a final answer, but, nevertheless, the preliminary discussion with the valuation officer may be helpful.
  I hope that hon. Members will forgive me if I do not go into the question of the new assessment of the Snowdon
  1594
  Mountain Railway, because I understand that the Company is challenging the assessment by way of appeal. In a sense the question is, therefore, sub judice and it would be wrong for me to prejudice the hearing of the appeal. I must assure hon. Members, however, that throughout these counties the valuation officers who have done the reassessment have sought scrupulously to follow the basis laid down in the statutes and have sought to base the assessments on the evidence of rents payable, in 1939 in the case of houses and currently for other classes of property. Rents payable in any area are affected by the general level of prosperity in the area and, in the case of seaside resorts, by the fact that profits are earned only in the holiday season.
  It is often said that it is tenants who fix rents and not the valuation officers. I do not want to press that too far, but the valuation officer, in basing his assessment on the rental evidence, will thereby be having to give weight both to the length of the holiday season and the profitability of trade in the area.
  The question which the hon. Member for Caernarvon (Mr. G. Roberts) put to me was whether the local valuation panels would be sympathetic. These panels have been operating for a number of years and I do not think there has been any suggestion in any part of the country that they are operating unsympathetically towards the ratepayers appearing before them. I agree that they are just about to face their biggest test, with all the appeals coming to them from the revaluation. I am certain that they will do their best to secure justice. What they cannot do, and what it would be wrong for anyone to ask them to do, is to grant favours to an individual ratepayer, because by so doing they might do an injustice to the other ratepayers.
  These local valuation courts are local courts—that is implicit in their name—with local personnel. It is, therefore, most unlikely that they would be ignorant of or would overlook the local conditions. The hon. Member asked me whether the Government could send an instruction or message to the panels in Caernarvonshire or North Wales generally to treat appeals sympathetically. I certainly do not want to be hard-hearted towards him or the constituents of the

  1595
  hon. Members who have spoken. Nevertheless, it might be fatal to people's confidence in these courts if the idea grew up that they were merely instruments of the Inland Revenue or agents of the local authorities. It is most essential that they should be independent bodies, and if the Government were to purport to give them advice, or even to make any suggestions, that might create a risk of jeopardising their independence. That is what I want to safeguard them against.
  The hon. Member suggested, I believe. that I might give some kind of indication to the valuation officers themselves. They are professional people. I think that they should be encouraged at all times to act in an objective, professional way in the light of the accepted principles which are well understood by the local authorities and by professional practitioners who are outside Government service. I am quite sure that they will show every consideration towards dissatisfied ratepayers or prospective appellants insofar as it is possible for them to do so, but I am sure that what they ought not to do is in any way to infringe their professional integrity.
  Mr. G. Roberts: I really must insist that nothing of the sort has been suggested. What has been suggested is that, administratively, it could be brought officially to the notice of these officers—nobody wants to impinge on their integrity—and the valuation courts that there are special, peculiar circumstances affecting the ratepayers of a county like Caernarvonshire, the reasons for which I
  1596
  have tried to give as temperately as possible, and that they should bear these things in mind and not simply follow the broad lines of the directive which applies to the entire country.
  Mr. Brooke: I said earlier in my speech that no valuation officer can do his duty according to the principles of his own profession unless he bears in mind the levels of rents in the area, and those rents must necessarily reflect the economic conditions and other things, such as the shortness of the holiday season.
  The hon. Member for Caernarvon and my hon. Friend the Member for Conway (Mr. P. Thomas) are entirely within their rights in raising this matter. It is right that Parliament should be informed if there are people in any part of the United Kingdom who feel that they are being unfairly treated, but I am equally sure that the right course is for those people, in the first place, to have a talk with their valuation officer, to see whether that helps to clear away their difficulties. If it does not they should then exercise their right of appeal to the local valuation panel.
  As I say, while it would be quite wrong for the Government to give local valuation panels any suggestions or advice how they should operate, nevertheless they are staffed by local people who should thoroughly understand.
  Adjourned accordingly at half-past Eleven o'clock.

  DISTRESSED BRITISH WEST INDIANS, FOREIGN COUNTRIES
  DISTRESSED BRITISH WEST INDIANS, FOREIGN COUNTRIES
  TANGIER (STATUTE)
  TANGIER (STATUTE)
COLONIAL TERRITORIES
  Departments of Co-operatives
  Departments of Co-operatives
  East Africa (Juvenile Delinquents) and Corporal Punishment)
  East Africa (Juvenile Delinquents) and Corporal Punishment)
KENYA
  Juvenile Prisoners
  Juvenile Prisoners
  Detention Camps (Unaccompanied Children)
  Detention Camps (Unaccompanied Children)
  Seychellois
  Seychellois
  Colonel Young (Resignation)
  Colonel Young (Resignation)
FIJI
  Meeting, Nandi Theatre (Police Action)
  Meeting, Nandi Theatre (Police Action)
WEST INDIES
  Comptroller of Development and Welfare (Advisory Posts)
  Comptroller of Development and Welfare (Advisory Posts)
  British Guiana (Constitution)
  British Guiana (Constitution)
CYPRUS
  Situation
  Situation
  United States Vice-Consul (Death)
  United States Vice-Consul (Death)
SEYCHELLES
  Government-Controlled Clubs (Profits)
  Government-Controlled Clubs (Profits)
MALAYA
  Mr. Gordon Charteris Wemyss (Death)
  Mr. Gordon Charteris Wemyss (Death)
ATOMIC ENERGY
  Peaceful Uses
  Peaceful Uses
ROYAL NAVY
  Installations, Orkneys
  Installations, Orkneys
  Port Dinorwic
  Port Dinorwic
  Shore Support (Review)
  Shore Support (Review)
  Solent
  Solent
SHIPBUILDING
  Steel Supplies, Sunderland
  Steel Supplies, Sunderland
WIRELESS AND TELEVISION
  Reception, Bexhill
  Reception, Bexhill
  Advertisement (Sir Bernard Docker)
  Advertisement (Sir Bernard Docker)
POST OFFICE
  Distant Mail (Transport)
  Distant Mail (Transport)
  Branch Office, Hartlepool (Name)
  Branch Office, Hartlepool (Name)
  Increased Charges (Publicity)
  Increased Charges (Publicity)
  Telephone Service, Feltham and Hounslow
  Telephone Service, Feltham and Hounslow
ROYAL AIR FORCE
  Married Quarters, Habbaniya
  Married Quarters, Habbaniya
  Aircraft Crash, Perak
  Aircraft Crash, Perak
TRANSPORT
  Transport Commission (Road Vehicles)
  Transport Commission (Road Vehicles)
  Goods Vehicles (Speed Limit)
  Goods Vehicles (Speed Limit)
  Housing Estate, Hereford (Traffic Conditions)
  Housing Estate, Hereford (Traffic Conditions)
  Railway Branch Lines (Closure)
  Railway Branch Lines (Closure)
ROADS
  A11
  A11
  Preston—Birmingham Motorway
  Preston—Birmingham Motorway
  River Don Bridge, Doncaster (Widening)
  River Don Bridge, Doncaster (Widening)
SCOTLAND
  River Tweed Pollution (Salmon)
  River Tweed Pollution (Salmon)
  Land (Compulsory Purchase)
  Land (Compulsory Purchase)
NATIONAL FINANCE
  Treasury Staff (Travel and Subsistence Allowances)
  Treasury Staff (Travel and Subsistence Allowances)
LOCAL GOVERNMENT
  Land (Compulsory Purchase)
  Land (Compulsory Purchase)
TRADE AND COMMERCE
  Unpatented Inventions, Defence Contracts (Report)
  Unpatented Inventions, Defence Contracts (Report)
BRITISH ARMY
  Surplus Stocks (Disposal)
  Surplus Stocks (Disposal)
Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
  THE LORD ARCHBISHOP OF YORK
  Arthur Michael, Lord Archbishop of York—Was (in the usual manner) introduced.
BEDFORD CORPORATION BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.
SCOTTISH UNION AND NATIONAL INSURANCE COMPANY BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.
CAMMELL LAIRD AND COMPANY BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
MERSEY DOCKS AND HARBOUR BOARD BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
GRAYSON, ROLLO AND CLOVER DOCKS BILL [H.L.]
Read 3a, and passed, and sent to the Commons.

DEPORTATION OF FATHER MACHERIOTIS
2.43 p.m.
THE LORD BISHOP OF CHICHESTER: 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 any complaints had been made to his ecclesiastical superiors with
1116
regard to the conduct of Father Macheriotis prior to his deportation; whether his ecclesiastical superiors had been asked to remove him as persona non grata; whether Her Majesty's Government have any evidence that funds collected under Father Macheriotis's direction have been used for any other purpose than the support of the families in Cyprus of those who have been detained; and whether the collection of funds for such a purpose is regarded by Her Majesty's Government as improper.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR THE HOME DEPARTMENT (LORD MANCROFT): My Lords, in order that your Lordships may be completely informed about the appeals for funds in connection with "the Cyprus national struggle", which, acting under an authority given by Archbishop Makarios, Mr. Macheriotis took a leading part in circulating among the Community attending his church in Camden Town, I have placed translations in the Library. Information was before my right honourable friend the Home Secretary that this church had been made a centre for the dissemination of anti-British propaganda. Complaints had been received from some loyal Cypriots and Greek nationals about the pressure that was being brought to bear on them. In these circumstances Her Majesty's Government decided that Mr. Macheriotis should be required to leave this country, and a deportation order was accordingly made by my right honourable friend.
No communication was addressed by Her Majesty's Government to Mr. Macheriotis's ecclesiastical superiors about this matter, and Her Majesty's Government could not accept any suggestion that action of this kind should not be taken against a person in Holy Orders without reference to his ecclesiastical superiors. It would have been inappropriate, in the view of Her Majesty's Government, to make any representation either to Mr. Macheriotis or to his ecclesiastical superiors, since in this country, at any rate, a foreigner who does not possess diplomatic immunity or status must be held personally responsible for his conduct. A foreigner cannot expect to be allowed to indulge in activities hostile to the country and to abuse the hospitality extended to him. If

1117
he does engage in conduct of this kind, the question arises whether it is conducive to the public good to allow him to remain here. Your Lordships will, I hope, he prepared to accept my assurance that my right honourable friend was satisfied that the activities of this priest were such as fully to justify the action taken against him.
As regards the funds collected under the direction of Mr. Macheriotis, your Lordships will be able to form your own conclusions as to the significance, in present circumstances, of the language of the appeals sent out by him. Whether or not these funds have left this country or have, in fact, been used would not appear to be of primary importance, and in any event my right honourable friend has no power to compel the production of accounts relating to them. In all these circumstances Her Majesty's Government do not feel called upon to express a view on the, point raised in the last part of the right reverend Prelate's Question.
THE LORD BISHOP OF CHICHESTER: My Lords, in thanking the noble Lord for his Answer to the Question, I should like to make a comment. The particular clergyman being in Holy Orders, it is rather a question of his responsibility to the authorities of the Greek Church—the Church of a country which is a very good friend and ally of this country. I know that the ecclesiastical authorities to whom Mr. Macheriotis is responsible are very sad about this matter. They speak of the great friendship existing between Greece and this country; they also speak of the length of time during which Father Macheriotis has been in this ceuntry—since 1952—and the fact that no complaints whatever have been made against him hitherto, either, so far as I know, to the Greek Embassy or to his ecclesiastical superiors.
A NOBLE LORD: Order, order !
THE LORD BISHOP OF CHICHESTER: I do not want to start a debate, but I should like most respectfully to express my regret that some other mode of representation did not at least accompany the course adopted by the Government.
EARL HOWE: My Lords, may I ask Her Majesty's Government whether this is not a fund for the dependants of those who shot our soldiers in the back and committed murder? Only the intercession
1118
of the Almighty prevented them from "doing in" an aeroplane with sixty-eight Service men, women and little children on board. I am surprised that the right reverend Prelate should get up as he has and ask such a Question, which must be of great comfort to our enemies.
LORD SALTOUN: My Lords, may I ask Her Majesty's Government whether it is not the first duty of Her Majesty's Government, and the peculiar duty of your Lordships, in the words we have just heard:
"to look to the safety and defence of the said Kingdom and Church"
and to act as rapidly as possible in that defence?
LORD MANCROFT: My Lords, I am sorry if the right reverend Prelate thinks that some, discourtesy was involved. I can assure him that no discourtesy was intended, but in view of the nature of the activities that led to Mr. Macheriotis's deportation, consultation with his superiors, which would inevitably have involved further delay, would not have been appropriate. After all, the nature of those activities invited some brusqueness.
VISCOUNT STANSCATE: My Lords, would it not be a good thing if we could have the words of this sermon—actually what was said by Father Macheriotis in his sermon? That is the first question. The second question is this: is it a fact that funds of this kind can be raised legally in Cyprus at the present time?
LORD MANCROFT: The words of the letters which form the substance of this Question are available to the noble Viscount in your Lordships' Library, in translation and in the original. If there is any further document which the noble Viscount lacks and which he would like, I will do my best to obtain it for him. With regard to his second question, I can say that collections in furtherance of the purposes of the terrorists would, I am certain, be illegal in Cyprus under emergency law. Collections for the sole purpose of helping dependants of detainees would probably not be illegal, though that point may not be beyond legal argument. However, the question of the legality or illegality of what Mr. Macheriotis was doing is not a point at issue. A conviction by a court of law is not a necessary condition precedent to

1119
the making of a deportation order. The view taken by Her Majesty's Government was that the activities of Mr. Macheriotis were intolerable in a foreigner who was enjoying the hospitality of this country, and he was therefore returned to the country of which he is a national.
VISCOUNT STANSGATE: My Lords, what is the good of the noble Lord making this speech again and again? He has first of all to prove that this money was to be used for killing our soldiers. That has never been shown. He does not deny that it is a fund for the dependants of these people, thousands of whom are innocent and who are being subjected to fines and to curfews. He does not deny that a collection of that kind would be legal in Cyprus. As regards what was said by the right reverend Prelate about the Church, may I ask the noble Lord whether he is aware that Archbishop Athinagoras, who is in Istanbul and is the head of this Church, has made a public protest? Though I do not want to ask a further question, I would ask the noble Lord whether he has observed the provisions of the Convention which we have with Greece in respect of the deportation of people. There is a Convention of 1953 in existence which governs these matters. Has the noble Lord ever read it and has he observed its conditions?
A NOBLE LORD: My Lords, the terrorists will be deliehted with the noble Viscount's question.
EARL DE LA WARR: My Lords, I wonder whether the noble Lord could inform the House what he thinks would happen if Britain were lent a church in Athens and if the British incumbent there then proceeded to use it for the purpose of raising funds hostile to Greek interests.
LORD MANCROFT: My Lords, I cannot answer the question of my noble friend Lord De La Warr, and I hope I never have to do so. As to the second, third and fourth questions asked by the noble Viscount, Lord Stansgate, I have knowledge of the Convention but I do not think that supplementary question arises directly out of the Question asked by the right reverend Prelate. As to the position of the superior officers of this priest, the noble Viscount may like to know that my right honourable friend the Home Secretary has invited Mr. Macheriotis's
1120
superior to come and see him and to discuss the whole subject with him. As to the third question, there is no necessity whatever for my right honourable friend to prove or attempt to prove allegations which the noble Viscount has put in issue, but I should like to remind the House of the words of the authority given by Archbishop Makarios to Mr. Macheriotis and which Lord Stansgate may like to confirm:
"We do hereby authorise"
and here follow names of various persons under the chairmanship of Mr. Macheriotis
"a committee in order to carry out collections in England for the Cyprus National struggle".
I should have thought that would suffice.
VISCOUNT STANSGATE: My Lords, obviously it must be the subject of further inquiry. I can see nothing harmful in those words. The question I ask the noble Lord—
SEVERAL NOBLE LORDS: Order, order!
VISCOUNT STANSGATE: My Lords, may I be allowed to read the terms of the Convention?
SEVERAL NOBLE LORDS: No.
VISCOUNT STANSGATE: "A consular officer shall be entitled"—
LORD MANCROFT: My Lords, would the noble Viscount allow me to interrupt him; he is always courteous. I want to answer his questions as fully as I possibly can and to hide nothing from him or the House. Her Majesty's Government have nothing to hide. I do not want to burke the issue for a moment, but as the noble Viscount is going far further than the terms of the Question and the information available to me at the moment, I think it would be preferable, in the interests of everybody, for him to put a question down and we will then consider the matter again carefully. I do not think casual questions and answers would serve anybody's purpose at this particular moment.
VISCOUNT STANSGATE: My Lords, this is not a matter of casual questions and answers at all. It is a question of obedience to the law by the Home Office—which is not an Office which has been notable in the past for obeying orders.

1121
My question was on the terms of the Convention:
"A consular officer shall he informed immediately either by the appropriate authorities of the territory when any national of the sending State is confined in prison or awaiting trial or is otherwise detained in custody within his district."
That was the case of Mr. Macheriotis. That is a Convention which we signed three years ago, and the noble Lord comes here to explain this case and has not even read the Convention. My question is as to that Convention—
SEVERAL NOBLE LORDS: Order, order!
VISCOUNT STANSGATE: My Lords, I can shout down the noble Earl if necessary, but it is not a decent thing to do. Has the Home Office complied with the terms of the Convention of 1953?
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, my noble friend could not have been more reasonable in his reply to the Question asked by the right reverend Prelate and the supplementaries, and he has placed certain documents in the Library. It would be very much better if, instead of asking questions which are really outside the scope of the original Question, the noble Viscount would put down any further Question he wishes to ask. There are letters from Archbishop Makarios to Mr. Macheriotis and letters from Mr. Macheriotis to the parishoners on whom he exercised pressure and they then complained. He was doing this under cover of the most respected profession in the United Kingdom, as a foreigner enjoying this country's hospitality, and I cannot believe your Lordships will feel that to send him back to his own country in these circumstances was an unjust punishment or that Her Majesty's Government were not right in that action. But if the noble Viscount has any more questions, would he put them down after studying the documents?
VISCOUNT STANSGATE: My Lords, I will put a Question, to ask whether Her Majesty's Government have ever read their own Treaty and complied with it.

EVICTIONS FROM FARM LANDS
2.56 p.m.
EARL FERRERS: 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, in view of the recent decision to evict Lady Garbett from her farm in Sussex, they will review the existing legislation to determine whether amendment of it would be feasible in order to avoid the recurrence of such hardships in the future.]
LORD CHESHAM: My Lords, the question of amending the existing legislation raises wide issues. I can assure the noble Earl that my right honourable friend the Minister of Agriculture, Fisheries and Food has these issues very much in mind at the present time.
EARL FERRERS: My Lords, I thank the noble Lord for the courtesy of this reply and I trust that the Minister will hold these points very close to him in the course of the next month or so.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, arising out of the last part of the noble Lord's Answer, when he said that the question of this amending legislation is very much in the Minister's mind at the present time, may I ask whether Her Majesty's Government will take great care, before denying their public pledges to the electorate that they would carry out the terms of the Act of 1947, that they will first consult the people of the country?
LORD CHESHAM: My Lords, I do not think the noble Viscount would wish me to endeavour to anticipate what reaction consideration of these issues might have on my right honourable friend's mind.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, surely if the noble Lord tells the House that amending legislation is already being considered, we, as the Opposition, have a right to point to the promises of Her Majesty's Government with regard to the 1947 Act and to ask them to pledge themselves not to an-tend it until they have been to the electorate.
LORD CHESHAM: My Lords, I did not think I had stated that my right I honourable friend proposed to amend

1123
any legislation whatsoever. My words were that he
"has these issues very much in mind at the present time."
I do not think I can anticipate. The best thing I can do is to convey the noble Viscount's words to my right honourable friend.
EARL WINTERTON: My Lords, is my noble friend aware that by the terms of his Answer he most distinctly gave the House the impression that the Minister had in mind the alteration of the Act? And is he aware that a number of noble Lords take an exactly opposite view to that of the noble Lord who asked the question? Surely he can give an undertaking—he can at least give that, even though he is only a Junior Minister—that there will be appropriate consultations between the Minister and authoritative bodies in agriculture—the Central Land Owners' Organisation, the National Farmers' Union and the National Union of Agricultural Workers—many of whom regard this matter as a very grave issue.
LORD CHESHAM: My Lords, as the noble Earl, has said, I am in a junior position myself and consequently not in a position personally to give any undertaking. What I will say is that I think it would be quite inconceivable that any such action should be taken without appropriate consultation with all concerned.
VISCOUNT ALEXANDER OF HILLSBOROUGH: And with the electorate?
LORD REA: My Lords, before we go on to the next business, with your Lordships' permission may I ask the noble Earl the Acting Leader of the House whether he would not agree that it is right that when any Member of your Lordships' House rises to ask what he considers to be a supplementary question, he should be allowed to do so without being ruled out of order before the question has been put?
THE EARL OF HOME: My Lords, I am not aware to what the noble Lord,
1124
Lord Rea, is referring. I do not think questions are ruled out of order in this House. I do not think supplementary questions arising out of Questions are ever ruled out of order, but anyone can judge whether a supplementary question is within the ambit of the original Question which was asked. That was all that I drew attention to just now. The supplementary question did not seem to me to be within the ambit of the original Question.
LORD REA: I agree with what the noble Earl has just said. I was not asking this in any critical sense. But I was referring to what happened in the last few minutes, when it was not possible to hear the supplementary question which was sought to be put because of the opposition which came from other quarters.
LORD MOYNE: I think there was a misunderstanding, because I understood the Minister to say that he had full knowledge of the Convention. Then I think Lord Stansgate, who must have missed that statement, desired to read the details of the Convention of which the Minister had already said he had full knowledge.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: I am sure there is no wish to contravene the recognised practice of the House. But where a Member is straying from the Question—I do not think my noble friend was straying—the procedure for stopping him should not be by a sort of loudly expressed opposition from the Government Front Bench.
THE EARL OF HOME: It depends on how supplementary questions are phrased what opposition they raise and what form it takes. No one would wish to prevent supplementary questions from being raised, but what we do not want—and I think everyone agrees in this—is to turn Question Time into a speechmaking time. A supplementary question should be limited and should be within the ambit of the original Question.

THE COLONIAL DEVELOPMENT CORPORATION
3.5 p.m.
LORD OGMORE LORD OGMORE rose to call attention to the Report of the Colonial Development Corporation for 1955, with special reference to the financial position of the Corporation and to move for Papers. The noble Lord said: My Lords, the Colonial Development Corporation is eight years old, and for the first time its activities show a surplus after paying all outgoings, and £307,000 for what it calls "Colonial Office interest." The profit is £409,233, and we on this side of the House should like to congratulate the noble Lord, Lord Reith, the Board of the Corporation, including my noble friend Lord Macdonald of Gwaenysgor, and the staff of the Corporation, at home and abroad, on this outstanding achievement. But I warn Lord Reith that he is in a dangerous position. Now that the Colonial Development Corporation has made a profit no doubt the Government will want to denationalise it, as they have in the case of other industries in that happy position.
Various important considerations arise from the Report, and I think it is our duty in this House to consider them. So far as my recollection goes, for most of the eight years—certainly the last five—of the Corporation's existence, we have had a debate here on the Report, and although nothing very apparent has happened as a result of those debates we always live in hope that some clay the words of wisdom which we offer the Government in regard to the Corporation will be listened to and bear fruit. Perhaps to-day will be the lucky day.
The purpose of the Corporation is defined as
"The duty of securing the investigation, formulation and carrying out of projects for developing resources of colonial territories with a view to the expansion of production therein of foodstuffs and raw materials, or for other agricultural, industrial or trade development therein."
Those are the words of Clause 1 (1) of the Overseas Resources Development Act, which set up the Corporation. Then follow the powers granted to the Corporation for the carrying out of this duty. These powers are couched in very' wide terms. Winding up the debate on the Second Reading of the original Bill in
1126
another place in 1948, I said [OFFICIAL REPORT, Commons, Vol. 443, col. 2115]:
"The purpose of the Colonial Development Corporation is to do anything necessary for the starting up of any legitimate productive enterprise which is likely to pay its way in the Colonies."
Those words were carefully considered, naturally, and I am quite sure that I am right in saying that they were the basic underlying impulse of the Government of that time headed by my noble friend who is now Lord Attlee.
The present trend, it seems to us, has departed front that wide and imaginative concept, and to-day there seems to be an unimaginative financial policy by the Government which seriously hampers the Corporation in the exercise of its functions. As Lord Reith has pointed out in his informative Report, during the years, and particularly in the early years, for a series of reasons into which I need not go this afternoon, the Corporation has lost on abandoned ventures a sum of roughly £8 million. Unfortunately, the Corporation has not now, and never had, anything in the shape of risk capital. It borrows from the Treasury, and whatever the risk of any of its ventures, and whatever may he the result of some highly speculative undertakings—and highly speculative undertakings have occasionally to be attempted in this field—the Corporation is under obligation to repay the loan with interest, and it has to pay its way, taking one year with another.
In respect of past losses, incurred mainly during the first few years of trial and error, when it was exploring an entirely new field, the Corporation has incurred what it calls "special losses" of £8,020,441. Some part of the "special loss" account no longer bears interest, but the capital load is still there. I think that we on this side of the House can claim that three or four years ago we pressed to remove interest from the special loss account. But the capital load is still there and some of it still bears interest. The Corporation pays interest at the rate at which the Treasury borrow. This makes it pay, on short-term loans, 4 per cent; on medium-term loans, 5 per cent., and on long-term loans, 4¾ per cent. These are high for the type of project with which the Corporation is expected to deal. The interest charge was £306,756 in 19.55, and will rise to over £1 million in 1960 and to upwards of £2 million in

1127
1964. This represents a pretty heavy burden on the Corporation.
I will make some suggestions in this field. First, I would suggest a bit of surgery. I would cut away the capital lost on projects started in the early years where those projects were abandoned, and also excess capital on projects partially salvaged and reconstituted. In other words, I think the "special loss" account of £8 million should be lopped off, and the Corporation excused repayment of this sum. The Government will never get it back so they might as well face the fact, and just clear it away. It will make matters much happier for the Corporation; and those concerned will be much more satisfied to go on with the work in hand. At the very least, £6.269,468 should go. This applies especially to projects which are absolutely dead and not just partially salvaged. We have to buy our experience, and we have had to buy in this field—as any other experience has to be bought—in a sellers' market.
Secondly, I suggest the cancellation of all interest on this "special loss" account, for the reasons that I have applied to the capital itself. Thirdly, I would suggest that the Government provide the Corporation with something in the nature of equity capital. As I have shown, the Corporation has to pay for all the money it borrows at mortgage rates; and, whatever happens to a project, however desirable it may be at the beginning and however unfortunate it may be, the capital and interest always have to be repaid. No private enterprise company would ever dream of operating in that way without risk capital. Starting off in a highly speculative field, and having an obligation to repay capital in the form of debentures, whatever might happen to the projects they have in hand, it is as if the Corporation were a company with all debenture holders and no shareholders. I have never yet heard of any private company in that unfortunate position, though the Corporation is.
So I would ask the Government this one important question: is it possible to treat a proportion of the advances as risk capital instead of as debenture capital? As a result of having no equity capital, the Corporation is becoming chary about taking on risky but desirable projects, and even projects which, though desirable, are
1128
not likely to yield a handsome return for some years to come. The making of a handsome return is not really the object of the Colonial Development Corporation. It is just in those fields where there is a certain amount of risk, or where other people are not very keen on taking the risks, that the Corporation can do its best work. In the fields in which the Corporation is supposed to employ its advances—agriculture, forestry, and fisheries—it is undoubtedly being prevented from assisting a number of projects because of the tight financial structure in which it is bound.
The fourth suggestion I would make is one on which we have argued with the Government for a couple of years and one which I put forward years before the noble Lord, Lord Lloyd, was sitting opposite to answer debates of this kind—namely, that an ideal method of solving this difficulty in cases where there is a good deal of risk is for the United Kingdom Government, either through Colonial Development and Welfare Funds or otherwise, or the colonial Governments or colonial municipalities to employ the Corporation as their agents. In such a case they would have the experience which the Corporation possesses in technical matters, the "know how," without, at the same time, expecting the Corporation to risk its own finances on projects where there may be a great deal of risk. It is obvious from the Report that to an ever-increasing extent the Corporation is becoming a partner with such bodies as I have mentioned, and also with the development corporations formed by Colonial Governments and with private enterprise. But, so far as I know—and certainly the Report does not make any mention of it—there has not been any development in this field of employing the Corporation as agent, which I think is very important.
The £100 million limit of the Corporation's finances will soon be reached, and I should like to know to-day what plans the Government have for extending the limit of the Corporation's activities. Presumably, fairly soon they will consider the preparation of the necessary legislation to extend this limit, and perhaps, when they do so, they may take into account some of the other points which I shall be making in a moment

1129
or two. In its Statement of Policy on Colonial Affairs, passed at the annual conference in 1954, the Labour Party said something on this question which I should like to quote. I am sorry that the public, and even legislators, have not studied this policy statement more closely, because it is very good and I constantly hear people making statements about Labour Party policy on colonial questions which have no basis in fact. The book is here for everybody to study, and an excellent discussion pamphlet was published at the same time which carries it forward a little and discusses the various problems that we may have to meet in the years ahead. This is what the Statement of Policy has to say:
"In 1947 the Labour Government set up the Colonial Development Corporation to undertake pioneering work and to promote the diversification of the economies of the Colonies. The rôle of the Corporation should he reexamined in the light of the experience gained. In particular we shall consider how the work of the Corporation can be made to combine more effectively with the Colonial Development and Welfare Schemes so that they complement and supplement each other."
I think that that is a most important statement of policy, and it reinforces in a most authoritative way the suggestions I have been making to your Lordships for some time on the use of the Corporation as an agent and in other ways, rather than having the Corporation always risk its own capital on projects.
Before passing to more weighty matters I should like to refer to a legal knot in which the Corporation seems to have become tied. The lawyers, the Law Officers and the Treasury and Colonial Office legal advisers have awakened, somewhat belatedly, it seems to us, and I imagine also to the Corporation's legal advisers, and have given a ruling that all the Corporation's projects relating to housing and roads, amounting to £7½ million under contract and more promised, were ultra vires. In other words, everything they have done in this field—and they have done a great deal in the last seven years—has been ultra vires. Why the Government lawyers have not discovered this before, I cannot understand; but they have not. I think that it is clear that the Corporation's lawyers do not agree with them. However, if there is a doubt, I am sure that we on this side should wish it to be
1130
cleared up as soon as possible. This type of development is very important for the preliminary development of a territory. I would ask the Government whether they will introduce legislation, at the earliest possible moment, to confirm any actions which have taken place in the past under this ruling, and also to permit the Corporation to take its part in development projects of this kind in future. We think that it is urgent that the position should be put right 'because a large number of these projects are in hand and a number of contracts are about to be prepared. We hope that the Government will not hold up legislation for any other amendment, but will get on with it at once.
There are other questions of interest referred to in the Report. Paragraph 10 says:
"C.D.C. terms of reference suggest expansion of foodstuffs and raw materials; its field of operation is mostly tropical."
And then it says:
"There is pressure from synthetic substitutes against raw materials traditionally grown in tropics; and of these C.D.C. is directly interested in rubber, hemp, ramie (now discontinued), lung oil, and (through tanning materials) leather; as to foodstuffs it has been found that by heavy capital applications (fertilisers, mechanical aids) production can be so stepped up in developed countries as to undercut producers in undeveloped and more remote lands."
Then, in paragraph 10 (5), we see these words:
"C.D.C. must assess what is saleable at a profit in 10–20 years' time, in competition with scientific ingenuity financed in industrialised countries (with high taxation) from capital allowances chargeable before assessment of profits…
The Report goes on to this devastating comment:
"People will continue to live and make a living in the tropics; C.D.C. helps to raise the living standard but assured markets for tropical produce efficiently grown are essential; U.K. decision to support banana and citrous growers in West Indies may help towards one solution."
These paragraphs are most important, and they show two things. They show first, that in modern conditions the industrial countries are tending to compete with the countries depending upon the production of raw materials in the latter's own field by synthetic substitutes for their products. We have long seen this happen in regard to Malaya, with rubber, and it

1131
is now extending to other primary producing countries. What then is to happen to these countries? If the industrial countries are going to undercut them by means of synthetic goods, in the only goods which they can produce, what are these unfortunate people to do? I think it is entirely humbug, at a time when probably more humbug is talked in the world than ever before in history, for the developed countries to talk about developing the under-developed nations when, at the same time, they, the industrial countries, are proceeding in the most ingenious way to drive them out of business and pauperise them. It must inevitably lead to a widening gap between the industrialised and the underdeveloped nations, with all that means in frustration, bitterness and strife.
Already, at the end of last year, the sterling holdings in this country for the Colonies amounted to £1,281 million, of which more than half was held by Malaya, Nigeria and the Gold Coast. Investments, grants and long-term loans from the United Kingdom to the Colonies over the past six years, according to the Chancellor of the Exchequer, amounted to £600 million, less than half the sterling balances. That is a yearly average of £100 million for 70 million people, and compares most unfavourably with our capital investment in this country for 50 million people. So at the presen: time it is obvious that it is not we who are developing the Colonies, but the Colonies who are developing us.
An indication of present trends may be seen in the Trinidad oil deal, and a striking example of our present difficulties may be seen in these developments over Trinidad oil. The objections to the transaction are said to be fourfold. First, American big business, oil business, obtains an increased hold over oil from Commonwealth sources, and, having tried to "jockey" us out of the Middle East, will no doubt do the same thing in the Caribbean. Secondly, they obtain control of a petrol-distributing company in the United Kingdom—namely, the Regent Company. Thirdly, they obtain considerable assets in Canada, where already our interests are dwindling at an alarming rate. Fourthly, and most important, American big, business, oil business, will exert an overwhelming influence in Trinidad, for, of course, the oil company in
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Trinidad is by far the biggest employer of labour.
On this point I would ask the Parliamentary Under-Secretary of State for the Colonies to look at the history of the United Fruit Company of Boston, Massachusetts, and what they were up to in Jamaica. When we were in office we did all we could to see that the Jamaica producers got fair play for their products, in the face of intense competition from this big American Company. This oil deal is not colonial development; it is exploitation of colonial resources already developed. Others have taken the risks in the past—British capital and colonial labour. The Americans come in and take off the cream, and the skimmed milk is left for the Colony.
The reason for our humiliation and impotence is not far to seek. We need go no further than the statement by the noble Earl, Lord Selkirk, in this House last Thursday, when he said [OFFICIAL REPORT, Vol. 197, col. 997]:
"If, on the other hand, we were to refuse permission for this transaction, we should, as I have said, he under a moral obligation to see that the necessary capital was forthcoming to expand the undertaking. The provision of this capital from private sources, even if it could be obtained, would represent a considerable burden on the resources of the United Kingdom, and since much of the expenditure would be overseas, an additional strain on the balance of payments. The same would apply if the capital came from public funds, and I do not think that this could be justified in the present circumstances."
There is the Nunc dimittis of colonial development. We can roll up the carpet, pull down the blinds, and close the shop. The British firm goes out of business, so far as colonial development is concerned, if this is the policy of Her Majesty's Government.
The second point that emerges from these paragraphs in the Report—and this again I would ask your Lordships to bear in mind—is that
"assured markets for tropical produce efficiently grown are essential".
Out of the mouths of Lord Reith and Mr. Hume, Sir John Hathorn Hall and Mr. Tyser, among others of the directors (I should have expected it out of the mouth of my noble friend Lord Macdonald of Gwaenysgor, but it is out of the mouths of these gentlemen, who one presumes are not Socialists—I do not know what is their political colour) comes this statement, which has been for years past one

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of the basic policies of our colonial policy and which, when the Conservatives came in, they shattered. It is exactly what we on these Benches have been telling the Government for years past: namely, that without assured markets in the United Kingdom for colonial products there can be no colonial development; and to that we would add what we think is an essential corollory, that there should be long-term contracts.
But the Government, seduced by the Whips and business interests, have been duped—they have been very willing dupes—and have taken away this great policy of colonial prosperity. No longer are there assured markets here for the Colonies, and no longer are there long-term contracts for their products. We feel that the Government and the people of this country must develop a realistic colonial policy—one which will benefit the Colonies and, in the long run, us, even though temporarily there may be some adverse financial and industrial repercussions in this country. It is difficult indeed to see where the savings are coming from in a time of inflation such as we are going through now, but this we are quite sure must be the fact: that the people of this country will have to sacrifice if they intend the colonial areas to be developed in the way that they should be. We know only too well that nothing can equal the applause in an audience if you talk about developing the under-developed countries; and, too, probably nothing would equal the fury of many of these people if they were told that it would mean considerable sacrifice on their part. But I think the British people will realise, particularly if it is put to them, that it is essential for the interests of the people of this country as much as for the interests of the colonial peoples that this should be so.
The situation is made even worse because, as a result of the war, many of the nations which have no tradition of overseas development, and no experience of it, are now the wealthy countries. I would particularly instance the case of Switzerland, to which I have paid two visits recently. There is a country where there is absolutely no experience of overseas development, particularly colonial development. They are as rich as Croesus, and they do not know what to do with their money; their finance houses and their banks am at their wits' end to
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know what to do with it. Into this vacuum—where we are finding it difficult to find the resources for overseas development—have come Russia and her satellites, with their barter arrangements and their offers of goods on credit. The first one on a large scale, of course, is with Burma, where, up to now, the circumstances have been difficult. But there it is. We are no longer by any means alone in this field, and if we and the other nations of the free world do not take steps to help these countries, then obviously Russia and her satellites will.
There is great need for public and private capital from such countries in the free world in the under-developed territories. In the 1954 Policy Statement, the Labour Party said, and I quote:
"Rapid economic development requires capital from private as well as public sources. Colonial Governments should he encouraged to define the conditions on which private investment would he welcomed,"
I would ask the Government whether they are taking any steps, in view of the difficulties of countries like Holland, France, Belgium, to sonic extent, and ourselves—the traditional countries from which, in the past, development funds have conic for colonial territories—to tap some of the great resources in countries like Switzerland and Sweden, countries which were enriched by the war, for the benefit of the under-developed countries.
Lastly, there are two points which I should like to put quite shortly to the Government. First of all, the name of the Corporation. Would it not be better for the Corporation to follow the example of other bodies, such as the Crown Agents and the Colonial Service, and change its title from "Colonial" to "Oversea" or "Commonwealth." Finally, I should like to see the possible field of operations of the Corporation extended to cover countries which at any time in the past have been in the Commonwealth, particularly in technical fields. This would enable many countries we could think of, to benefit greatly from the "know-how" which the Corporation would be able to afford them. In their case it is often a question not so much of finance as of technical assistance and help. I should like to ask whether the Government would consider an extension of the scheme. At the present moment, the

1135
Corporation is confined to activities in the Colonies.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR THE COLONIES: (LORD LLOYD): May I ask one question, for clarification? Is the noble Lord restricting that particular development purely to advice, or is he suggesting that money should come in as well?
LORD OGMORE: I realise that money is perhaps a little tighter, but I certainly think that, on the agency basis I have been talking about, we might extend it to them. As to the question of finance, it rather depends on where the country is. We are already helping several of the countries with finance in other ways, and it might be possible to use the Colonial Development Corporation in this respect. There is the Colombo Plan, for example, and there are other forms of financial assistance outside the scope of that Plan. I should like to hear what the noble Earl, Lord Home, has to say on this. I am sure that he would welcome the possibility, at all events, of the Corporation acting in this way with any country which either is now or has been in the past in the Commonwealth. In conclusion, I commend the Report to your Lordships. I beg the Minister to reply to the many important questions arising out of it that I have ventured to develop before your Lordships to-day. I beg to move for Papers.
3.35 p.m.
LORD COLYTON: My Lords, I feel certain that noble Lords in all parts of the House will be grateful to the noble Lord, Lord Ogmore, who speaks with such great experience and authority in this matter, for raising it this afternoon. There is one question that he has indicated upon which public interest, both in this country and elsewhere, is centred to-day, and that is the development of the backward overseas countries. Indeed, it is not untrue to say that this question has become a major factor in international politics, in the new economic cold war, or if you like, "peaceful coexistence" into which the West and the East have now entered.
So far as we are concerned, of course, sentiment and loyalty, as well as British material interests, alike dictate that we
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should focus our attention as far as possible on our own Commonwealth and, in particular, on our overseas dependent territories. In this matter, the Colonial Development Corporation operates as the chosen instrument of Her Majesty's Government, but that does not mean in 'any way that we should wish to restrict the activities of private enterprise. On the contrary, it is our view—certainly it is the view of those of us who sit on these Benches; and the noble Lord, Lord Ogmore, has indicated that it formed part of the Labour Party Policy Statement of 1954—that there should be the maximum flow of British investment capital into the overseas territories. But, of course, the difficulty of securing any great flow of money from this country at the present time, whether through the Colonial Development Corporation or through the Colonial Development and Welfare Funds by loans on the public market, or by direct investment, is great. It all represents a great drain on our financial resources. So long as we are experiencing balance of payments difficulties, so long as we are living in deficit, there must be a limit to what we can do. Here I would say to the noble Lord who moved the Motion that the best way he and members of Her Majesty's Opposition can help to ensure that more money for colonial purposes is available, is by helping in any way they can to control inflation in this country and using all their influence to that purpose.
I cannot pass on from this point without expressing satisfaction at the decision which the Chancellor of the Exchequer announced yesterday in another place to introduce measures next year for relieving the pioneer industries in the Colonial and Commonwealth countries. That is a proposal which many of us who have been concerned with colonial territories have for a long time advocated and have been most anxious to see introduced. My right honourable friend's announcement will certainly have been greeted with great satisfaction in those colonial territories which have already introduced pioneer industries relief schemes or may be contemplating doing so. I am thinking particularly of some of the West Indian Colonies where I know from personal experience that they have the feeling, on the one hand, that we in this country either have not been able to find the capital or, through our taxation, have

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been frustrating the advantages which they hoped would accrue to them through their pioneer industries relief legislation.
On the other hand—and I would venture to call the noble Lord's attention to this point: it is the view of Governments in the West Indies; it has been said to me personally by the chief Minister in Executive Council in Jamaica, and has been said to me in Trinidad as well—they feel (and I think they feel it quite wrongly) that Britain has been adopting a "dog in the manger" attitude towards them by not being ready to offer capital themselves but seeking to prevent the flow of investment capital from other countries, notably the United States. That view has been held in countries, it has been contradicted, but it is certainly the view of many people in the West Indies. That, in my view, is the supreme justification for the decision taken by the Government in regard to the Trinidad oilfields. That is the supreme justification, and I should have thought that, from the representatives of the Government which gave away the Abadan oilfields, the less said about Trinidad the better.
LORD OGMORE: Is this not Colonial exploitation—not Colonial development? The thing has already developed. They have the benefit of the work in the past.
LORD COLYTON: I was coming to that. The point is this. So far as the Trinidad oilfields are concerned I have no doubt, from what has been said by Mr. Gomes himself, that it is the view of public opinion in Trinidad generally. I have no doubt that, if we had sought to block this deal, it would have been the gravest blow we could have administered to the federation of the West Indies. The noble Lord said something about a Boston company, the United Fruit Company, but he seems to have forgotten about a certain Boston Tea Party. If we try to do this sort of thing in these constitutionally fully-developed territories today, we shall soon find that they are only too anxious to cut themselves adrift from us.
I know that some of my noble friends on this side of the House, and certainly some of my honourable friends in another place, have sometimes been hesitant in their support of the Colonial Development Corporation—indeed, on occasion some of them have shown active hostility—but I hope that the Report of the Cor-
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poration for 1955 will serve to dispel many of those doubts or antagonisms. For the first time the Corporation has made a net profit, and I join with the noble Lord in offering my best congratulations to the Chairman and his, associates, and also, perhaps even more, to all the members of the Corporation's staff in the field who have helped to bring their efforts to success. Moreover, not only have they made a profit for tire past year but they have, now that the tragic mistakes of the earlier years have been largely rectified and now that the dead wood has been cut away and the period of retrenchment and consolidation has been completed, introduced for the first time since 1950 a number of new projects which we hope will point the way to a still greater development of their work. As The Times newspaper of April 26 said in its leading article:
"The way is now clear for positive development work."
I think it is up to us in this country and in Parliament to see what we can do to help them.
Before I address myself to what I consider to be the most important point arising out of the Corporation's Report, I should like to deal with three points of detail also arising. First of all, there is the question of the name of the Corporation, to which the noble Lord referred. Certainly, in my view, the very wide field covered by the Corporation's activities, including some territories in a highly advanced state of constitutional development, appears to justify giving serious consideration to changing the name of the Colonial Development Corporation to that of the Overseas Development Corporation. As the noble Lord said, similar changes have already been made in regard to the Colonial Service and the Crown Agents, and I do not think that we should allow any unhappy memories that may still remain in our minds in connection with the old Overseas Food Corporation to deter us from reviving a similar name for the Colonial Development Corporation.
The second point I wanted to touch on was the position of the West Indies Navigation Company, to which reference is made in various places in the Report. This project is, of course, sponsored by the Colonial Development Corporation in conjunction with Messrs. Jardine

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Mathieson and the Indo-China Navigation Company. There is at present only one vessel, the "West Indian", which serves British Guiana, Trinidad, Jamaica, Barbados, the Windward Islands, the Leeward Islands and other territories. Your Lordships will remember that this service came into existence as the result of the unfortunate disappearance of the old "Lady" boats which were of such value to the economic life of the West Indies. I feel certain that all your Lordships, and especially those who have direct knowledge of the West Indies, will agree that the one vital factor in the success of the new Federation is the development and improvement of communications, and in that I would include sea communications just as much as air communications which B.W.I.A. have done so much already to improve and modernise.
In 1955, the "West Indian" vessel which is now owned by this Association made eleven round voyages, covering some 37,000 miles and carrying over 25,000 tons of cargo and over 7,000 passengers. I am informed that, in order to continue this service and to meet requirements there is an urgent need to increase it still further and, above all, to ensure that it continues beyond 1957. To do this and to ensure regular communication between the territories of the new Federation—and I would submit that this is a crucial time in the history of the West Indies—it will require at least two more ships. Of course, that in itself will entail further increases in subsidy and the provision of capital. As I understand it, the question of increased subsidy would have to be discussed, in present circumstances, with each of the individual Governments of the West Indies. That is bound to take time. It may be suggested that we should wait until the Federation comes into being. That again will take time, and I venture to say that time is what we do not want to lose in this case. I understand that the Corporation are in touch with the Colonial Office. I would venture to ask my noble friend to consider, if he can, the possibility of finding some means of bridging the gap between the consultation of these various Governments and the introduction of federation, so as to enable us to get on with the provision of the necessary additional services, whether it
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would be by means of a guarantee or a loan or some other method.
The third point I should like to refer to is that of hotels. I was delighted to see from the Report that the Fort George Hotel at Belize, British Honduras, has this year produced a trading profit of £3,512. There have been many criticisms of this hotel project in the past, and I can remember suggestions being made from time to time that this was an asset which the Corporation would do well to divest itself of. On the other hand, some of us who knew the hotel felt that, under its excellent management and by the appeal which can be made to the tourist industry, notably on account of the big game fishing which is some of the best in the Caribbean it could be made to pay. This profit has justified our hopes and we hope that it will continue. Certainly the building of the swimming pool for which some of us pressed has helped. I should like to suggest to the Government, or it may be to the Corporation, that a further increase in this important tourist traffic could be made if the hotel were provided with two well-equipped, up-to-date, big game fishing launches, such as one sees throughout the West Indies round the Bahamas. I know they are very expensive but I feel certain that after a year or two they would have paid for themselves.
In view of the success of this hotel project, I hope the Corporation will be encouraged to give further consideration to other propcsals which I understand have been made to them by the Government of Kenya for the building of hotels in Nairobi and Mombasa, in this case with the help of private enterprise. I agree with the principle that the Corporation ought not to be managing hotels. It ought not to be in the hotel business, but I think that any help it can give to private companies to construct hotels in these places which will assist in the economic development of the country should be given. But it does not detract from the credit which should go to the Corporation and to the management of the hotel in Belize for their success in the past year.
As regards the important issues affecting the Corporation's future which emerge from this Report and to which the noble Lord has referred, such as the provision of equity capital, the special losses account, the interest rates on loans and

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so on, in which I may say I have a good deal of sympathy with what the noble Lord said and a good deal of sympathy with the views of the Corporation, I feel that in these matters we have to be realistic, face the facts and do what we can, even if it means a somewhat unorthodox treatment, to help the Corporation and to provide them with the sort of structure that they need. But I should like to say a word or two about what I consider to be the most important and pressing of all these issues affecting the Corporation at the present time—I am referring to the need for the passage of legislation validating, for the past and for the future, the Corporation's housing and works activities which have 'low been held to be ultra vires. This point is dealt with in paragraph 12 of the Report, but I think it may be helpful to your Lordships if I were to go into rather greater detail on some of these matters because they are all of great importance.
As the Report says, the decision to suspend activities was the result of a new interpretation, with which the Corporation do not agree, of the Overseas Resources Development Act. Under this interpretation it was held that these activities, which had been approved and, indeed, encouraged by successive Secretaries of State, were ultra vires. As I understand it, there is no diminution of interest on the part of the Colonial Office in the continued activity of the Corporation in this field; it is merely a legal matter. It is a question of validating the Corporation's activities, and I submit to your Lordships that action is most urgent. The projects include a number of housing programmes in East Africa, Central Africa, West Africa and Jamaica, and also public works activities in West Africa. There is first of all the £2 million loan to the Kenya Government for improved housing programmes for Africans in urban districts of Kenya, and, in particular, Nairobi. I feel sure that your Lordships know very well how urgently African housing is required in Kenya—those who have seen the slums of Nairobi can testify to this. Undoubtedly the provision of good housing at this stage in Kenya can be a very real factor in restoring confidence and hope among the Africans, and in particular the Kikuyu, for the future, once the emergency has been terminated.
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Then, in Southern Rhodesia, there is a loan of £1 million which is being used to help housing schemes for Africans, most of whom come from our own Protectorates of Nyasaland and Northern Rhodesia. Incidentally, I understand that the Nyasaland Government are themselves now anxious for a loan of £1 million for housing, on which, of course, as in the case of Nairobi and Southern Rhodesia, all action has now been suspended. Then again, in Central and in East Africa discussions have been taking place about the establishment of building societies, like the society which has been such a tremendous success in Malaya—the Federation and Colonial Building Society. That, again, is held up. In Nigeria the Federation Government asked the Colonial Development Corporation to come in and help them with the provision of a building society like the one in Malaya. I feel sure that those of your Lordships who know Lagos will agree how vitally important better housing conditions are to the future of the capital of the Federation. All these things have had to be held up, and everywhere, and particularly in Nigeria, where Federal ministers have shown themselves to he in full agreement with the scheme, it has caused grave disappointment. And, it is not only there; it is so in Jamaica and elsewhere.
I would strongly urge upon the Government that this legislation validating what has been done in the past by the Corporation and what it desires to do in these matters of housing and contracts, including communications such as roads and even telecommunication, should be carried out as quickly as possible. I admit at once that communications, whether roads or telecommunications, are primarily matters for the Government of the territory concerned. The same is true of housing: it is among the projects of social welfare which a territory should undertake for itself. But if on account of the lack of resources of the country concerned or lack of technical staff, I suggest that the Colonial Development Corporation should come in and help. I suggest that they ought to be asked to do so and that we ought not to allow ourselves to be too rigid in these matters. From my own knowledge and experience I feel sure that, my right honourable friend the Colonial Secretary would be

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the first to sympathise with these proposals. I have no doubt whatsoever, as indeed he has said, that he is anxious to introduce validating legislation as soon as possible—indeed, in the present Session. I realise that perhaps, owing to pressure of other legislation, it may not be possible to introduce it in another place before the Summer Recess. But is it out of the question to introduce it in your Lordships' House? As I understand it, it is not a finance Bill, for it is simply to make provision for certain activities paid for out of funds already authorised by Parliament. I would ask my noble friend who is to reply whether he would consider the possibility of getting this Bill, which I know is difficult and is complicated to draft, introduced in this House before the Summer Recess.
My Lords, I apologise for taking so much of your Lordships' time this afternoon, but I venture to suggest that the importance of the topic we are discussing, with its relevance to so many other topics of a similar nature and the encouragement which the attention and the speeches in this House will give to colonial peoples all over the world, justify our spending as much time as we think we need on the matter. I know very well that to-day's debate, although it may not perhaps receive much publicity in the national Press here, will be fully reported throughout the colonial territories, and that what we say here will give great encouragement and hope.
3.58 p.m.
LORD GRANTCHESTER: My Lords, it is always very pleasant to see a loss turned into a profit, even if it is a meagre profit of only something like 1 per cent. on the capital employed. But the story which the Report and Accounts of the Colonial Development Corporation tell for 1955 is a welcome improvement, on which I should like to add our congratulations from these Benches to the directors and to the management. I think we need to remind ourselves that we are discussing the Report and Accounts of the Colonial Development Corporation and not the Report of schemes undertaken under the Colonial Development and Welfare Acts. I suggest that it might be for the convenience of the House, if, in future, we were to consider these two
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Reports together so as to get a better appreciation of the complementary yet distinctive nature of the respective operations of these two bodies. The Colonial Development Corporation have been commendably quick in getting out their Report and Accounts—a Report which covers so many projects round the world. But the Accounts of the Colonial Development and Welfare Fund are made up to March 31 of each year, and they are not yet available in printed form, This difference of date does not seem to me to be an insuperable difficulty, and perhaps the Minister would be good enough to consider my suggestion for another year.
I understand that something like £29 million has been expended for the year ended March 31, 1956, out of Colonial Development and Welfare funds, bringing the total expenditure since 1946 up to something over £160 million—I am referring to the expenditure under these Acts as this money is used for welfare in a narrow sense. This expenditure is money given and is not a payment made with any direct commercial purpose. But if these funds are intelligently used, the expenditure should be complementary, as the noble Lord, Lord Ogmore, has said, and helpful to the work of the Colonial Development Corporation. The Colonial Development Corporation was, in conception, something different. As I understand its constitution, born in the heyday of the Labour Government, it was something in the nature of a gigantic Premium Bond. The Colonial Development Corporation was entrusted with a capital fund by the taxpayer, and it was hoped that the taxpayer would not lose his capital but that the Corporation could do a "flutter" with any surplus earnings. In other words, they were not expected to increase the talents entrusted to them, except perhaps by accident.
LORD OGMORE: May I ask the noble Lord whether his racing analogy is not rather inaccurate. The Corporation were always expected to return the capital which was loaned to them, and still are. They are also expected to return interest on the capital right from the time the money was borrowed, so that I cannot see how that can possibly be a "flutter", even though my knowledge of racing is perhaps less than that of the noble Lord.
LORD GRANTCHESTER: My Lords, I did not say that they had not to pay interest on their capital. I particularly referred to surplus earnings. After all, if one borrows capital one expects to pay the interest and to make a profit on top of that; and I said that it was a "flutter" with the surplus earnings.
As one would expect with what I would call such lack of direction, the capital started to melt away and some £10 million (I believe it is £10 million, although the noble Lord, Lord Ogmore, referred to £8 million) of current and accumulated losses that is still carried in the balance sheet, rather ironically, among the assets—presumably still retained there and not written off so that it shall be a warning. This loss represents a very high proportion of the capital employed—something, like one-third—and even if it is not written off, in view of the "new look" which the Report and Accounts have taken this year we can accept the comment of the Report and let the "past be considered as passed." For in considering and studying this Report I am left with the impression that sound business sense has won through; that it is realised that making losses does no one any good—certainly not the British taxpayer who found the money; and certainly not the local workers who, after being diverted from their former employment, are left stranded in bankrupt and abandoned projects.
It cannot be too strongly emphasised that projects are, in general, detrimental to the economy unless they can become profitable. This is one of the lessons—part of the Western "know-how", if you will—which we are under an obligation to teach and demonstrate in less-developed territories. The essential for success is, of course, good management, both here and locally in the territories in which projects are sponsored. A great deal depends on the skill and ability of the six regional controllers. Men good in management are, as we all know, in short supply, even for work in this country. The best we can do for the less-developed countries is to supply good management. I am glad that the Colonial Development Corporation is now working less on direct operations and more through locally promoted enterprises, and in many cases through loans. No one should think that operating by loans is an avoidance of risk-taking. Whether help
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is given by loan or by providing equity capital, or by a combination of both, capital is put at risk and, if so staked, must earn its reward or melt away. One final observation I should like to make: the private investor in less-developed territories in recent years has had little or no assurance of security against confiscatory attacks. He is not the exploiter portrayed by malicious propaganda but too often the exploited party.
In principle, I should, of course, prefer to see the capital of the Colonial Development Corporation voluntarily subscribed out of individual savings, instead of being provided by a levy on the people of this country as a whole. But if this investment which is made on behalf of all taxpayers in this country brings home sound business principles to every British citizen, as well as to these who wield an increasing share of responsibility in local government in colonial territories, we should be grateful for the existence of this Corporation.
I should like to join the noble Lord, Lord Colyton, in expressing my satisfaction at the assurance given yesterday by the Chancellor of the Exchequer as regards subsidiary companies and pioneer enterprises in Commonwealth and Colonial territories. May I also express the hope that, in any discussions which take place between the Colonial Office and representatives of colonial territories regarding the transfer to the territory of additionL1 powers, the basic principles on which the standards of living have been raised will be adequately understood and safeguarded. These basic principles are security for capital invested and profitability from its employment. If this is not done, the material advance which these countries seek, and which we and other Western countries can bring, will be halted, to their detriment.
4.9 p.m.
LORD WINISTER: My Lords, I should like to congratulate my noble friend Lord Ogmore upon initiating this debate and also upon his admirable and most important speech. Perhaps I might also take this opportunity of congratulating him upon the fact that the Government of Burma have recognised his great merits. His speech was so full of weighty matter that it will require some studying. I think there was almost nothing in it

1147
with which I would disagree. One small point I did notice. That was (I think I got the noble Lord's words correctly) his suggestion about the Colonial Office and the Colonial Development and Welfare Fund using the Colonial Development Corporation as an agent. That suggestion certainly deserves consideration. The only point it raises in my mind at this juncture is whether it would not perhaps rather tend to minimise what I understand is the real pioneering function of the Corporation. Agents do not, as a rule, show great initiative. They are merely responsible for carrying out orders and instructions given to them, and I should fear that such a development might tend still further to reduce the pioneering element of the Corporation, a matter about which I shall have something to say later.
I should like to say, in considering the work of the Corporation, that I think the frequent changes in the executive posts of the Corporation during the past five years have been rather disturbing; and all the more on that account I should like to congratulate the noble Lord, Lord Reith, upon having had his appointment as chairman extended. Anything which makes for continuity in the work of this Corporation is a good thing; and on that account I am very glad to see that news. When the noble Lord took office in 1950 he practically scrapped the existing organisation and made a pretty clean sweep of his predecessor's executive staff. In fact, I think the only one left was the Director of Finance, Mr. R. F. Daly. He went in 1951, and since then I believe there have been three new controllers of finance. There have also been a great many changes in other posts. I venture to hope that the era of these changes is now at an end, and that there will be more continuity in office, as in the case of the noble Lord, Lord Reith himself, because frequent changes in the top posts in any organisation—and especially, may I say, in the accounting staff—tend to undermine confidence down below. And this prompts the question whether the methods of appointment in the Corporation are really the best possible.
I should like to ask another question also. What is the rôle and influence of these top executives? So far as I know, none of them now sits on the Board. I presume they are summoned and answer
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questions put to them, and then withdraw. But such a system must tend rather to undermine their confidence, and also their sense of security; and, of course, it leaves decisions in the hands of older men who serve on the Board only on a part-time basis, who have many interests outside the Corporation and who may not be readily accessible to the executives responsible for carrying out decisions. Another thing I notice is that there seems to be a preponderance of chartered accountants among head office controllers. Four out of seven of them, including the general manager, are chartered accountants. I find, on talking to them, that that is not a system which inspires great confidence amongst businessmen, who acknowledge and respect the proper rôle of accountants but. at the same time, have a very clear idea of what that rôle is. They certainly would agree that accountants seem to do rather too well in getting these appointments.
Meanwhile, in regard to appointments, the Secretary of State seems to continue to ignore Section 2 of the Overseas Resources Development Act by failing to appoint directors with experience in the Colonies, as well as the other section requiring local committees. These obligations are specifically laid upon the Secretary of State by the Act, but he seems for some time past to have ignored them, and continues to do so. Last year, of course (many previous speakers have mentioned it) the Corporation, as we have been delighted to notice, made a profit after paying Colonial Office interest. But to my mind, on examining this profit, certain rather disturbing features emerge. The profit reflects a fundamental change in the Board's interpretation of its functions. Successive Reports have shown alterations in the Corporation's own classification of its activities. The 1955 Report does, however, divide them, and it divides them into groups which are now intelligible to laymen—which they have not always been in the past. I hope that the Board will stick to this classification in future, so enabling us to follow from year to year changes in the direction of its capital outlays, and ending the confusion that has existed in the past.
It is clear, however, that nearly nine-tenths of the 1955 profit came from loans and investments, and only one-tenth from undertakings under the Board's direct

1149
control. So far as I can work out the figures, 58 per cent. of it came from interest on loans, 30 per cent. from revenue from investments in commercial enterprises, and only 12 per cent. from projects and subsidiary companies run by the Corporation. Of the near-£38 million capital outlay listed for 1955, half is in loans and investments—a complete change from the state of affairs which existed prior to 1951 when the Corporation was almost exclusively engaged in projects and investigations on its own account. My reading of these figures is that the Corporation is ceasing to be what I would call a "venture organisation" and is becoming merely a money-lending house.
This change of direction is very clearly seen if we examine the projects undertaken during the past two years. Seven new projects were listed for 1954, of which I would say four were loans and three were investments or referred to the provision of finance. Among the loans, I noticed, with some surprise (no doubt there is a good explanation of it), one of £500 million to Williamson Diamonds, Limited, in order to mechanise a mine. So it really comes to this: that private enterprise appears to have been unwilling or unable to finance what I have always understood is a very remarkable undertaking indeed. I wonder why there had to be resort to the Corporation. There was also, of course, the West Indies Navigation Company, to which the noble Lord, Lord Colyton, referred in his most interesting speech. The noble Lord spoke of the necessity of two new ships. I entirely agree that sea communications in the West Indies have been most inadequate and unsatisfactory for generations, but two new ships means putting down very big money at present shipbuilding prices, and I notice that the Corporation's investment in that navigation company is £15,000.
LORD COLYTON: My Lords, I understand that it is a question of ordering one or two ships necessary to give complete service. I did not mean that necessarily they would be brand new ships. Ships could be acquired for that purpose.
LORD WINSTER: I fully appreciate that point; nevertheless, at present prices big money would be involved, and this investment seems a drop in the water,
1150
if I am right in thinking that that is the amount of the investment.
On my reading of the seven new projects listed in the 1954 Report, I would say that they do not include one which involves constructive action by the Corporation, other than that of signing a cheque. They are really seven acts of lending money in order to promote activity. Now let us look at 1955. The 1955 Report lists ten new projects, and again I would say that these are not new projects. I have a list of them here. I fear that your Lordships would find it wearisome if I were to enumerate them, but I feel that I am right in saying that the ten projects listed as projects are not projects at all, but loans, investments or financial advances—such, for instance, as the £l million loan to the Southern Rhodesian African housing—a very worthy object indeed, but still not a project. So, if we take the Reports for 1954 and 1955, we find that of seventeen so-called projects enumerated, not one really represents pioneering enterprise; they are loans or investments.
In other words, the Corporation has changed the direction of its activity and is now primarily an investment and not a development corporation. I agree that this change of direction may be due in part to the financial structure of the 1948 Act, which has been referred to by previous speakers, and that the Corporation may have been felt driven to it in the difficulty it has found in the past of finding efficient managerial staff for a great variety of projects; but there it is. I fear that this change of direction has taken place. No doubt the noble Lord, Lord Lloyd, will he able to refute the view which I hold on this subject. May I tell him that nobody will be more delighted than I shall be if indeed he is able to refute this view, because I regard the pioneering side of this Corporation as the real justification for its creation.
In that respect, may I remind your Lordships that the Act of 1948 charged the Corporation
"…with the duty of securing the investigation, formulation and carrying out of projects"?
In other words, the Act laid the emphasis on what I have described as pioneering work—venture, enterprise. To my mind, the Act laid primary emphasis upon the power of the Corporation to carry out activities on its own account. That, I

1151
will say, was the dog. And only secondarily did it lay emphasis on those powers to promote activities by other bodies, by assistance, financial or other, by taking up share or loan capital or by grant alone. I would say that that was the tail. But the new state of affairs is that the tail is now wagging the dog.
I feel that over the past four or five years the board have shown a certain lack of perseverance. They have shown a certain readiness to abandon projects on encountering difficulties or not very satisfactory initial results. They have reported first of all favourably on projects—the noble Lord, Lord Reith, reported favourably on the projects which he inherited—and then closed them down when perseverance was called for. Perseverance is an essential in pioneering enterprises. I do not wish to speak at undue length, but I have made a note of six or seven enterprises which were closed down when I should have thought, at least in the case of some of them, that perseverance was called for and should have been shown. I will not enumerate those ventures. Probably something will be said about "rash enterprises", and about it being better to "cut the losses", but I would say that losses can arise from the precipitate sales of assets as well as from rash enterprises. To my mind, the sale of the Trinidad Oil Company, which has been referred to once or twice this afternoon, is a case in point.
There are many questions to weigh when disposing of assets, and I hope that the Minister and the Treasury examine with equal care the proposals for capital expenditure and the proposals for the sale of assets. The Corporation and the public can suffer just as much damage from the unwise sale of assets or from their sale at inadequate prices as from inconsidered capital investments. The Corporation's Reports give very little information about these sales of assets, although many large sales have been made during the past five years. I think that it would be right, and certainly it would be of value to those interested in these matters, if the Reports went into rather more detail about the closing down of a venture and the sale of assests.
In conclusion, I should like to say that it is not at all a grateful task to criticise this Corporation. I think we have had our fill of acrimony over it during the past
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five years and some of it in the Reports. I have endeavoured to criticise fairly and to quote facts to the best of my ability, as I understand them. I think there is great force in the suggestion which has been made this afternoon that the Treasury might hold an inquiry. I consider that it would be quite enough to hold it inside the Treasury. I am not suggesting an outside committee or commission or anything of that sort, but I think that the Treasury should hold an inquiry into the running of the Corporation and find ways of either making it fully efficient or more efficient or else closing it down.
But, of course, such an inquiry would certainly involve consideration of the financial provisions of the Act of 1948, and inquiry into whether that Act really gives the right financial structure for carrying out the work which the Corporation are enjoined by the Act to carry out. An inquiry of that sort would be reassuring to the public, and it would be valuable in its findings to the Corporation. If this is not to be done, and if the Corporation is to continue in its present form and on present lines, I hope that the Chairman, the noble Lord, Lord Reith, will to the best of his ability and power encourage constructive efforts to carry out the purposes for which the Corporation was established, which is the development of the economic resources of colonial territories. The scope and need for such development is just as great as ever.
4.31 p.m.
LORD DOUGLAS OF BARLOCH: My Lords, I agree with what my noble friend Lord Winster has said in his extremely interesting and informative speech. It does seem that the time has arrived when there ought to be some comprehensive and careful survey of the activities of the Colonial Development Corporation from the beginning. That is, obviously, something which could not be attempted in detail in the course of a debate in your Lordships' House. There have been, I suppose, some 50 to 100 different undertakings in which the Corporation have been interested from time to time. It is quite impossible, from the published Reports and Accounts of the Corporation, to arrive at an objective analysis of what has happened to every one of these undertakings or investments. The Reports lack continuity; they are not arranged

1153
upon the same basis from one year to another; comments which are contained in them are often not factual, but, merely opinionative. It is, therefore, extremely difficult to understand the detail of what has been happening.
However, I think it is clear that a change has taken place in the overall purposes and objectives which the Corporation have had in view. The original conception was, undoubtedly, that the Corporation were to be a trading concern, and that they would undertake things not attempted by private enterprise. That inevitably set before the Corporation an extremely difficult task. Private enterprise is always upon the look-out for those ventures in which it expects to be ale to make a profit. Therefore, those left for the Corporation to undertake were clearly of a more risky character, and the conduct of their undertaking must certainly require first-rate commercial judgment, and also, as my noble friend Lord Winster said, the energy and drive necessary to overcome the initial difficulties, reverses and troubles which so often occur in undertakings in a new venture and which are almost inevitable in commercial enterprises of a novel character.
Some losses were to be expected. It was never understood, at the time when the Colonial Development Corporation was formed, that every enterprise upon which they embarked would necessarily be successful; but it was hoped that, by and large, in the totality of their undertakings there would be a profit and not a loss, even if individual undertakings happened to suffer losses and not make profits. The conception by which the Corporation are governed at the present time appears to be of an entirely different character. It appears to be one of playing for safety and of investing in other people's enterprises, rather than in creating new ones. This, I think, is borne out clearly by the statement which is contained in the current year's Report, on page 18, showing the sources from which the various profits of the Corporation were obtained. If I understand this correctly, the profit obtained from direct projects, for which the Corporation were responsible and in which they took the risk and supplied the managerial ability, was £113,000: but the income which was derived from investments in other undertakings was £800,000—nearly eight times
1154
as much. That seems to me to be a clear indication that the purpose of the Corporation has been changed. It is a matter for earnest consideration whether that is fulfilling the purposes for the benefit of the colonial peoples, which was the primary object when the Corporation was established.
This is borne out, also, I think, by various observations made in the Report. There is, for example, the passage on page 9, in which an association is sought with Colonial Development and Welfare funds. But those, I have always understood, were intended to be devoted to purposes which in themselves were not expected to be profit-earning. Surely, the two things ought to be kept entirely separate, otherwise the commercial purpose of the one will become mixed up with the benevolent purpose of the other; and it may in time become quite impossible to determine whether the profits of the Colonial Development Corporation are being earned with the money which is devoted to this purpose, or being earned by a subsidiary use of Colonial Development and Welfare funds. I should have thought that the case for keeping these two things quite separate and distinct, and under separate management, was clear and incontrovertible. Similarly, on page 7 of this Report there is a passage, under the heading of "Association", which appears to make it perfectly clear that the present policy of the Corporation is merely to finance other undertakings and organisations, and not itself to be the primary instrument of colonial development. Incidentally, in this section of the Report there is a passage which says that the Colonial Development financial contribution given to other enterprises would spark a greater development. I am not so sure about that. Then the Report goes on to say:
"…recent examples are Federal and Colonial Building Society Limited…and Chilanga Cement Ltd…"
I do not know what they are recent examples of, because looking back over these Reports I find that both of these undertakings, which appear to have become profitable, were started as long ago as 1950.
Another question which arises out of the present and earlier Reports is: how long does it take before projects which are undertaken by the Corporation begin

1155
to fructify and yield profits? This year is the first in which it is claimed that a profit has been earned. When I look at the details which are given in the Report of the sources from which the profit is obtained, it seems that, so far as direct enterprises are concerned, out of £113,000 of profit, all except £9,000 arises out of enterprises which were initiated in 1950 or earlier. That is a remarkable fact. Out of the £800,000 profit derived from loans and investments, well over half—if I am correct, £450,000—also arises out of enterprises which were first initiated as long ago as 1950 or earlier. Incidentally, it seems extremely difficult to reconcile those figures with the allegation which is made on page 6 of the Report, that £8 million has been lost in respect of pre-1951 investments. I do not see how that can possibly be so, especially in view of the fact that, according to the table on page 3, the gross amount which was spent up to the end of 1950 was £10 million. If £8 million of that has been lost, it is rather surprising that £2 million is able to earn the major part of the profit which is claimed in this year's Report. I think that all needs a little examination, because in my view it does not make sense.
More than that, I think a little attention ought also to be paid, from another point of view, to the section which deals with what is called, "Special Losses Account", and which, as I have mentioned, purports to make out that these losses were all incurred in respect of projects which were initiated in 1950 or earlier. When we were considering the Report for 1950 I made an analysis of what was contained in it. It included a free and destructive criticism of everything which had been done up to that moment, but it appeared that all the things which were criticised as being ill-advised involved an expenditure of only £1,800,000, and the others were approved and continued. Therefore, it seems to me just a little unfair that the present management of the Colonial Development Corporation, having decided to continue a number of projects and to spend money upon them, and thereafter to abandon them, should write them all back to the year 1950 and disclaim any responsibility for what it has been doing. That does not seem to me to be quite the correct way in which to deal with a matter of this kind.
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I wish to say something more about the question of writing off capital losses. After all, this undertaking was intended to be conducted upon commercial principles, and it is not usual, in commercial enterprises, which have many irons in the fire, to adopt this procedure. Nor, on the other hand, do they usually write up capital appreciation. But if the one process takes place, the other process, of course, has to take place also. When, on November 16, 1954, we were dealing with the Overseas Resources Development Act, the noble Lord, Lord Lloyd, said that the Government had decided to waive interest upon certain sums, and that it had also offered a once-and-for-all writing down of the capital loss on any loss which had been inherited from the previous administration to August, 1952. I understand that the amount involved was under £4 million, but that apparently did not satisfy the Colonial Development Corporation, and they rejected the proposal. If I understand it correctly, they now want to write off £8 million. Upon that basis, of course, it would be easy to conduct this great undertaking so as always to show a profitable and comfortable financial position—when you write off the losses and accumulate the profits and the capital appreciation. I think the financial build-up of the accounts in the financial procedure of the Corporation calls for expert examination, as well as the question of what its real objective and purpose has become.
4.50 p.m.
THE EARL OF LISTOWEL: My Lords, this debate has been unique in one respect: it has attracted a larger number of speakers than any previous debate on the Annual Report of the Colonial Development Corporation. This shows not only an increasing Parliamentary interest in the work of the Corporation but an increasing appreciation of the value of the work that it has done and may still do for the Colonies. Speaking from my own recollection, I think I have attended every debate and inflicted many speeches on your Lordships on this subject. The speeches this afternoon have, to some extent, been repetitive because several noble Lords have made the same suggestions about what the Government should do to facilitate the work of the Corporation. The Government may disagree with me about this matter, but I think that that is a good thing, and I

1157
shall not apologise for being repetitive myself. I think it is a good thing because the very fact that the same suggestions have been made by several noble Lords from both sides of the House indicates that these suggestions have a good deal of Parliamentary support. Although there has been a certain amount of disagreement, there has been no disagreement about this: that the Colonial Development Corporation is to be warmly congratulated on the record of achievements shown in its latest Report.
The fact that it has now recovered from its earlier difficulties and for the first time is "out of the red" is a tribute to the efficiency of the Board and its Chairman and the excellent support they have received from the staff of the Corporation. To my mind, the real significance of this improvement is not its financial aspect—there I may differ from some of the previous speakers. The Corporation, after all, was rot set up by Parliament to make a profit. The test of its success is, therefore, not the test that would be applied to private enterprise. The significance of this financial improvement is surely that it will give the Corporation a better opportunity than it has ever had—certainly a better opportunity than it has had for many years—to get on with the job for which it was established by Parliament: that of expanding production and starting new projects in the Colonies. The opportunity which the Corporation now has to operate in the particular field for which it was chosen, that of marginal economic development, as a sort of layer between commercial enterprise and Government development, will, I am afraid, be lost unless the Government are prepared to give the Corporation much more help than it has hitherto received in modifying and improving its present financial structure. This is the answer to the criticisms that were expressed by the noble Lords, Lord Winster and Lord Douglas of Barloch, in relation to the lack of enterprise of the Corporation in starting new projects of its own.
LORD WINSTER: I expressed the hope that the financial provisions of the 1948 Act might be scrutinised with a view to enabling the Corporation more fully to fulfil its purposes.
THE EARL OF LISTOWEL: I agree entirely with that; I listened to the remarks towards the end of the noble Lord's speech. I am delighted that he agrees that the main handicap under which the Corporation has laboured and the main reason for its failure to operate to the extent that many of us would have wished in the field for which it was chosen has been the handicap of its financial structure. Unless a greater measure of help is forthcoming, I do not believe, though this may be taking a pessimistic view, that the Corporation, in spite of its present financial position, will be able to-make any real headway in developing the effective resources of tile Colonies. I hope that the Government will pay serious attention to the suggestions that have been made about ways and means of easing the financial position of the Corporation.
I shall not repeat in detail what has been said before, but I share the view that there ought to be some method of getting round the difficulty in which the Corporation has been placed because none of its capital is in the nature of risk capital. The 1948 Act really placed the Corporation in an impossible position by instructing it to take normal commercial risks without allowing it any method in its financial structure of dealing with bad risks—methods which private companies obviously possess.
The other financial difficulty of the Corporation, which has been dealt with at some length by other speakers, is that it has still to meet most of the losses that were made in its earlier years. Those have been set out in the special losses account. By the 1954 Act, the Government have assisted by releasing the Corporation from the obligation to pay interest on the capital in projects that have been completely abandoned as total losses, but I do not feel that this goes nearly far enough. I hope that the Government will be willing to discuss with the Corporation the possibility of relieving it of some part, at least, of the burden of capital debt and of interest owing, not only on schemes that have been abandoned as total losses, but also on schemes which are partial losses and are part of the capital, completely unretnunerative. I believe that in 1953 an offer to write off some of the capital loss was made, which shows that the Government accept in principle that the Corporation should be afforded

1159
some measure of relief. That being the case, and, provided that both sides are willing to accept something less than their full claim, I cannot see why if negotiations are begun there should not be an agreement to write off a substantial amount of this dead weight of lost capital and lost interest on capital.
A matter of greater immediate urgency is one which was alluded to by the noble Lord, Lord Ogmore, in his opening speech—namely, the validation of the Corporation's undertakings in the field of housing and public works, which are now the subject of legal doubt. I understand that this legal doubt about the Corporation's competence in this field is not only holding up useful development in the Colonies but is causing the Corporation financial loss, because it is not receiving interest on loans which would otherwise be in use by public authorities. I should like to ask the noble Lord whether a Bill has been already drafted for this purpose, because it is most important that this matter should be put right during the present Session of Parliament. If a Bill has not been drafted, I cannot see any conceivable way, although the noble Lord may be able to suggest one, of getting a measure passed before the end of the current Session. There surely cannot be any valid excuse for delaying a good deal of useful work that may otherwise be done in the Colonies as a result of what appears to have been an oversight in the drafting of the 1948 Act. I hope that if this Bill has not been drafted and if it is not going to be introduced in the present Session, the noble Lord will be able to give us a valid reason for the delay.
My final point, which I believe was also made by the noble Lord, Lord Colyton, is one of less urgency but is of some importance. I hope it will be considered by the Government when they consider long-term policy in relation to the Corporation. It may be said, and some people say it, that nomenclature is a matter of little importance and that the work of the Corporation will not be affected by its name or title. I believe that this is true so far as our own country is concerned—it does not matter in the least what we call the Corporation—but I am quite sure that it is
1160
far from true of the rest of the Commonwealth and of our dependencies. There, I think, the name of the Corporation matters a great deal. We are all fully aware that the words "colonial" and "colonialism" suggest to many minds inferiority and subordination, and are resented by many of the politically-concious inhabitants of our dependencies.
Again, although of course we believe in political freedom and our aim is self-government in all our dependencies, so long as we use the terminology of colonialism, as I might call it, our policy will be confused with that of other colonial Powers, and the organisations that carry it out will be stigmatised in the same way. Moreover, from the practical point of view, it is obviously inaccurate to describe as "colonial" a body that operates in Protectorates and trust territories. It is wrong that in the Protectorates in Africa, South East Asia and so on, the word "colonial" should be applied. I believe, indeed, that in order to avoid embarrassment in the Malay States the local organisation of the Corporation has been called Malay Developments Limited. In that way, the word "Colonial" has been omitted.
Another practical difficulty will arise when territories that are at present dependencies, such as the West Indies and the Gold Coast, become fully self governing The Colonial Development Corporation has projects in these territories and will clearly wish to continue operating them after the moment that self-government has come. Although technically it may be able to do so, yet obviously there may be some feeling on the part of the peoples and Government of those territories if a commercial body operating their territory still has a title that reminds them of the days of their colonial status. Changes are going on the whole time in the Commonwealth, and many changes have been taking place in this particular direction. The Colonial Service has become the Oversea Service, and the Crown Agents for the Colonies have become the Crown Agents for Oversea Governments and Administrations. There is no mention of the word "colonial" or "Colonies" in the Royal style and title. Why should not the Colonial Development Corporation become the Overseas Development Corporation? Let us not lose any opportunity we may have of altering the

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terminology of colonialism, which is undoubtedly offensive to many of our fellow citizens in different parts of the Commonwealth, whatever we here may think.
I hope that the noble Lord and his right honourable friend will address themselves to those matters of long-term policy—of course, this is not an immediate matter at all; I am not suggesting that it is—in relation to the future of the Corporation, as well as to the urgent issues to which I have directed the noble Lord's attention.
5.4 p.m.
LORD LLOYD: My Lords, this debate on colonial development is rapidly becoming an annual event in your Lordships' House, and over the last five years the match has been played with great regularity, the bowling usually coming from the noble Lord, Lord Ogmore, and the noble Earl, Lord Listowel, and the batting usually being performed by my noble friend Lord Munster, and myself. Indeed, I should have feared that something was seriously wrong if the noble Lord, Lord Ogmore, had not put this Motion on the Paper. It would have seemed almost as if the Derby were not being run, or Henley Regatta were not being held.
Inevitably, of course, once you get an annual event of this kind, some of the bowling becomes familiar. We have Lord Ogmore's slow leg-break about the writing off of the £8 million to the Colonial Development Corporation. We have his rather faster ball in regard to the equity capital, and to-day we have had also a "No ball" about Trinidad Oil—a "No ball" in the sense That even by the Rules of your Lordships' House, it had nothing to do with the Colonial Development Corporation; and I thought it was politically a "No ball" because it did not seem to me that any representatives of the Party on the other side were really in a position to talk about the abandonment of Imperial assets after Abadan or the failure to get into the oilfields in Canada immediately after the war.
LORD OGMORE: My Lords, to-day we have gone from racing and the Church to cricket, and may I say, in regard to the noble Lord's metaphor, that this subject was put into the game, as it were, and the ball comes from the statement by the noble Earl, Lord Selkirk, which specifically enlarged the area of dispute
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over Trinidad Oil to this question of the development of the Colonies and the finances for colonial development. I would say that it is absolutely germane to our discussions to-day. Of course, if the noble Earl had not referred in his statement to the difficulties of obtaining capital in regard to colonial development, then the noble Lord would have been perfectly right.
LORD LLOYD: In spite of the Rules of Order in this House, and since the noble and learned Viscount on the Woolsack is not an umpire, everybody can make his own decision as to what is a "No ball." I personally regard that subject as a "No ball," and I certainly am not going to deal with the question of Trinidad Oil this afternoon.
Having dealt with the preliminaries, I should like to say straight away that I think it most desirable that we should, at any rate once a year, debate in this House the whole problem of development in the colonial territories. Therefore, I am delighted that the noble Lord has put down his Motion. I think it is important that we should debate this, because as I have said before, not once but quite frequently, I am afraid, in your Lordships' House, it is the crises and the political developments which generally catch the headlines in the newspapers; nobody reads much of all the steady and unspectacular work that is continuously going on in the economic field. Yet I think the noble Lord will probably agree that, for the ordinary citizen in the Colonies, some new agricultural or industrial development probably means more, in terms of material wellbeing and happiness, than many of the more sensational political advances that we read so much about; and certainly of all that we do to promote the advance of the dependent peoples, probably what we do for them in the field of development is, in the last analysis, the most important thing of all.
Having delivered myself of what is perhaps one platitude, let me deliver myself of another. It will, I feel sure, be apparent to all your Lordships that if any development has taken place in the past, it is because this country has had the capital and the resources to carry it out; and certainly if colonial development is going to continue in the future, the first thing that we must logically look

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for is the capital to do the work. Therefore, I am glad that the noble Lord, Lord Ogmore, devoted a portion of his speech to this subject. I had rather hoped that he might devote a larger portion of his speech to it; it came in at the end, rather by a side wind, whereas in point of fact, as I see it, it is the first and foremost consideration of all. Without the capital and the savings to do the job, there can be no colonial development. Therefore, I make no apology for wasting a further moment of your Lordships' time in saying a word about this matter.
Before we look to the future, I should like to say a word about the past, because we have considerable advances to our credit. Since 1949, £600 million, much of it freely given as grant, has flowed into the Colonies, and by far the greater part of that has come from the United Kingdom. It is, in point of fact, an average of £100 million a year. Gross capital formation in the Colonies in 1951 was at the rate of an addition of £300 million a year. In 1955, it had risen to £450 million a year, an increase of 50 per cent. in money terms, and perhaps one-third in real value. The greater part of this is local investment, reflecting, of course, in the main, the favourable trading conditions of the Colonies. But it is perfectly fair to say that an important contribution to this rapid expansion has been made by long-term funds provided from this country.
We estimate that in 1955 alone some £90 million was provided by the United Kingdom for the Colonies, despite the unsettled condition on the London market which prevented the Colonies, in common with other borrowers, from issuing loans at the level reached in preceding years. For the period between 1955 and 1960 the Colonial Governments expect to spend some £600 to £700 million on their development plans. Of this total, £120 million has already been promised by Parliament, by its approval of the Government's Colonial Development and Welfare Act. Some considerable part will also undoubtedly come from loans raised in London and through the activities of institutions such as the Colonial Development Corporation. Further, as the Economic Secretary to the Treasury made clear in another place last month, Her Majesty's Government accept the
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responsibility, and are planning their policies accordingly, that Colonies with large reserves deposited as part of their sterling balances in London can utilise them, despite the burden on the United Kingdom economy. In all, a very considerable slice of the finance which the Colonies will need to fulfil their plans will come from London, quite apart from the steady stream of finance going to the Colonies on purely private account.
I am sorry to have wearied your Lordships with all those figures, though I do not think an apology is needed, because it is no bad thing that people should know exactly what is going, into the Colonies to-day from this country. Our past record is one of which we have no need to be ashamed. I should be the first to admit that if more money could be provided it could certainly be usefully spent: but whether this rate of investment can be expanded, or indeed whether it can even be maintained in the years to come, must depend upon the savings which we can make available for this purpose.
This question of savings is most important, and in any consideration of colonial development it is the first thing of which we have to think. Perhaps I might here deal with the suggestion made by the noble Lord that the scope of the Corporation's activities should be extended to countries which once had a Commonwealth connection. He had in mind such countries as Jordan or Iraq. I know the noble Lord forgave me for interrupting him, but I wanted to know whether he had in mind financial contributions or contributions purely in the form of advice and so forth. We do, of course, contribute to foreign countries through various international organisations to which we contribute, but I should certainly like to consider what the noble Lord has said in regard to contributing advice and similar help to these countries.
When it comes to contributing finance, however, we must consider a further point. I do not know quite what the noble Lord had in mind when he referred to countries which had a Commonwealth connection, because that would almost include the United States of America—and I do not think we are yet quite rich enough to be giving money to them. In any case I do not feel that that idea—if that is what the noble Lord has in mind, that we should include within the

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scope of the Corporation countries outside colonial territories—is really in accordance with the intentions of the Overseas Resources Development Act which was introduced by the noble Lord's own Party and which was designed especially to help those countries for which we have a direct responsibility.
LORD OGMORE: My Lords, very often it is not a question of any financial worry in these countries but of the fact that they have no one to do the sort of work which the Corporation is now experienced in doing. If they are prepared to pay for the services of the Corporation in helping them in some particular project, I see no reason why the Corporation should not be allowed to help them. At the present moment it cannot. Jordan, Iraq and other such countries are not now able to have the services of the Corporation, yet a very close Government agency like the Crown Agents, quite rightly, is able to act, and in fact does act, for such countries. When you, quite rightly, permit the Crown Agents to act for countries like Jordan, I see no objection in principle to permitting the Colonial Development Corporation to do the same.
LORD COLYTON: My Lords, may I ask my noble friend a question on a factual point in this connection? Under the Overseas Resources Development Act, certain scope is laid down for the activities of the Colonial Development Corporation. If, before we again discuss an Annual Report of the Colonial Development Corporation, the Gold Coast achieves Dominion status, which is very likely to happen, will the Corporation be able to continue its activities as heretofore, or shall we find that there is some legal flaw then discovered which will hold the whole thing up? Has that point been examined?
LORD LLOYD: If I may deal first with the point of the noble Lord, Lord Ogmore, I am grateful to him for developing his theme, and I should like to think about it. It is an interesting idea and I believe there is something in what the noble Lord says. In view of the point he made, I will not dwell on the financial side of the question. With regard to what my noble friend has said, obviously this is a matter which has to be con-
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sidered. At present it is being considered with the Commonwealth Relations Office, the Treasury and others concerned. I am afraid that at, present I cannot tell the noble Lord much more; but obviously it is a matter which must be considered before the Gold Coast achieve such status.
THE EARL OF LISTOWEL: My Lords, would the noble Lord answer this same point, which was put by the noble Lord, Lord Colyton? Is there any legal difficulty arising out of the Overseas Resources Development Act which would prevent the Corporation from continuing to operate in a dependency which became self-governing?
LORD LLOYD: I am afraid that I am not sufficiently legally expert to give an answer on that point. I should like to have notice of the question, but I will certainly inform the noble Earl in writing if he is interested.
THE EARL OF LISTOWEL: I am much obliged to the noble Lord.
LORD LLOYD: My Lords, the question of savings is of first importance and that encourgement of savings is the basic objective of the current economic and monetary policy of Her Majesty's Government; and, as I have already said, it is on the success of these policies that our ability to divert investment to the Colonies in the future will depend. Nevertheless, it is quite idle to pretend that we shall be able to do in the Colonies all the things we are urged to do, and all the things Her Majesty's Government are anxious to see done, unless the people of this country are prepared to make the necessary sacrifices. Because, after all, whether colonial investment takes place through a Government Corporation such as the Colonial Development Corporation, or whether it takes place through private enterprise, operating with money put up by the private investor, the savings and sacrifice which that involves still remain an essential basis. I have a feeling that this sacrifice is not perhaps sufficiently appreciated to-day in the country at large, and I hope that all those who have urged this afternoon that more colonial development should take place will also urge upon those who are primarily involved the necessity of making the sacrifices for which such development will inevitably call.

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Her Majesty's Government are determined to press on with these policies with the utmost vigour, for we believe that from their success the Colonies, as well as Britain, are bound to benefit, since the result will be an increase in funds available for investment and, equally, an increase in the capacity of this country to provide the goods and services for export to the Colonies as well as other overseas markets where the need for our exports is as great as our need to sell them. It is adequate savings here and in the Colonies (because I may remind your Lordships that a good deal of development is financed from savings in the Colonies as well) that is the basis of any policy of colonial development. Certainly I should be the first to agree that efficient use of the money available is of the first importance. It is a matter in which the Government, the Colonial Development Corporation and private enterprise all have their parts to play. In this connection the noble Lord, Lord Ogmore, I think, rather suggested—certainly the noble Lord, Lord Winster, did—that the task of the Corporation should be primarily that of undertaking schemes which are too speculative to be considered by the Government or private enterprise. Lord Winster, I believe, spoke of an adventure corporation.
LORD OGMORE: My whole thesis was that in the case of highly speculative ventures it is the Government who ought to operate them. The Corporation certainly cannot be expected to deal with many projects which are highly speculative while they have this present obligation to repay capital and interest. That is my point. The Corporation ought to indulge in projects which private enterprise is unwilling to indulge in because they are of a risky character.
LORD LLOYD: I apologise to the noble Lord if I have misrepresented him. I gather that the noble Lord, Lord Winster, will agree that what he wishes to see is more of the pioneer spirit in the Colonial Development Corporation. Both noble Lords, I think, felt that the Corporation were not fulfilling this function properly, and that too much of the Corporation's money was now invested in safe propositions which might well have been financed by some other agency. There may have been something in that.
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But I think we have to look at it in this way. To begin with, perhaps, the pioneer spirit was a little too strong in the Corporation. Certainly a great deal of that pioneer spirit was shown and it cost the taxpayer £8 million. I will not argue with the noble Lord about that I take note of his interesting speech and I take note of his figures. What I have just mentioned involved losses and it also involved something more serious: it tied up a large part of the Colonial Development Corporation's capital in long-term schemes, whereas the whole idea should be to some extent that of revolving credit.
I agree with Lord Winster that the Corporation should finance a reasonable proportion of speculative ventures. I think that that is right. When we talk about speculative ventures, I do not imagine that either of the noble Lords would suggest that the Corporation should engage in ventures where there was little reasonable chance that the enterprise would ever pay its way. The establishment in the colonial territories of enterprises which can exist only with the help of permanent subsidies would be something which would not in the long run be to the interest or to the advantage of the populations concerned. I do not think that that was suggested by either noble Lord. But there is a field where the prospect of ultimate reward is too distant to be attractive to private enterprise and where the Corporation have a function to perform. I see the noble Lord wishes to intervene; perhaps he will just allow me to finish this. I must remind your Lordships that the Corporation has a statutory duty to "break even" over a period. And I think that the Corporation needs some reasonably secure investments if it is to take risks in other directions. Equally, there must be some limit to these investments as well: otherwise all its capital becomes committed and no further "risk" development is possible. There must be some limit to the amount that the Corporation can have committed at any one time.
LORD WINSTER: I only wish to say that I hope the noble Lord will agree that there were bound to be mistakes and losses associated with the initiation of this completely novel scheme. This is a personal matter, and I must say that I think that perhaps the noble Lord charged with the initiation of the scheme has been

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rather harshly dealt with. Everything which has been wrong has been attributed to him, but nothing of what has happened since. I only ask the noble Lord to agree.
LORD LLOYD: I would not suggest otherwise. Perhaps we went a little too fast at first, and perhaps we are going a little slow now. Surely the answer is to try to keep some balance in the whole thing. Clearly, we have ultimately to come back to the idea of a revolving credit. The right policy must be that when the Corporation has brought some project to success it should hive it off to private enterprise in order that the capital may be re-invested. What amount of capital the Corporation should have committed in short-term as opposed to longterm projects, and how much it should have committed in safe as opposed to speculative projects, is a matter of very nice individual judgment; but I put it to your Lordships that clearly there must be some balance in the Corporation's portfolio, just as there must be balance in the portfolio of any other corporation. If either Lord Ogmore or Lord Winster have any particular schemes in mind which they consider the Corporation should undertake and which they are not undertaking, I suggest that the noble Lords should put the facts before the Corporation, whose job it is to go into them.
May I turn from the rôle of the Corporation in financing colonial development to the question of the management and administration of schemes, which has also been raised? It has for some years now been the policy both of the Corporation and of the Government that in principle the Corporation should, as a normal rule, work in partnership with some other interests, be it the colonial Government concerned or private enterprise, in any scheme which it undertook. I believe this policy is sound and that the experience, the responsibility and the risks of any particular scheme should be pooled in this way. Clearly—and I think again your Lordships will agree—where the Corporation is in partnership with private enterprise, it may often be better for the private enterprise firm to undertake the management, since they are usually experts in this particular field.
Where the partner is a colonial Government or a statutory corporation in one
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of the colonial territories, then it may indeed be found advantageous for the Corporation to make its contribution to the joint project by supplying management rather than capital. That was,I think, the noble Lore.'s idea, and may I say this on behalf of Her Majesty's Government: there would be no objection on the part of the Government to their so doing if that was what the Chairman and his Board thought right to propose. I must say that I still feel that it is for the Corporation to judge how best to run their schemes. The Government could not interfere in the day-to-day management. The Corporation have regional controllers throughout the Colonies to whom colonial Governments can put forward their ideas and through whom constant contact between the Governments and the Colonial Development Corporation is maintained. Many of them have been visited by the Chairman and members of his Board and staff—which I think is a very welcome arrangement.
May I again say that I am grateful for this debate? It will, I hope, draw the attention of Governments once again to this particular point. Lord Grantchester spoke about the relationship between operations carried out by the Corporation and work carried out by colonial Governments under the Colonial Development and Welfare Act. In paragraph 13 of this Report, the Corporation speaks of the connection between the two things and suggests that the initial unremunerative and experimental projects should be financed under Colonial Development and Welfare, the remainder of the work being done by the Corporation. I rather gather that the noble Lord had in mind not only that that should be done but also that the Report should be published simultaneously. This is an issue which has been raised in Parliament on more than one occasion, and there has been this suggestion of some sort of integration between Colonial Development and Welfare and the Corporation. With great respect to the noble Lord, I believe that what is called for is not integration, because, for reasons; which I will explain, this would be inappropriate, but good liaison. I say advisedly that integration would be inappropriate, since the purposes of the Corporation and of the Colonial Development and Welfare Acts, although to some extent complementary, are really different. The funds provided

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under the Colonial Development and Welfare Acts are administered by the Colonial Office or colonial Governments, and not by an individual agency comparable to the Corporation, and one must presume that Parliament, which itself created two separate systems with different purposes under two different Acts, did not intend that such integration should take place.
LORD GRANTCHESTER: My Lords, I did not suggest integration. The words I used were that we might appreciate the complementary and distinctive nature of these two bodies. I suggest that we might have two Reports together and be able to distinguish the different nature of their work. I agree that one is to give money away and that the other is to develop projects on a commercial basis, but I thought that we might have the two Reports together.
LORD LLOYD: I beg the noble Lord's pardon if I misrepresented him, but I think another noble Lord made the same suggestion, and I want to make it clear that I believe that a good deal can be done not merely by looking at the two Reports together but by good liaison. In practice, the Corporation, through its regional controllers, is aware of what the colonial Governments are doing, and the Governments also know what the Corporation is doing. There are a number of examples of the sort of co-operation which is taking place, with which I will not weary your Lordships. I shall certainly bear the noble Lord's suggestion in mind and see what more can be done about it.
May I turn to the financial position of the Corporation? Here I am in some difficulty, as I told the noble Lord, Lord Ogmore, privately. If I may return to the cricketing metaphor, I shall have to play back through most of the next over. As I told the noble Lord, and now tell the House, most of the financial points to which noble Lords have referred this afternoon have been raised recently by my noble friend Lord Reith, the Chairman of the Corporation, with my right honourable friend, and they are shortly going to be discussed. I am sure that your Lordships will appreciate that I am in a difficult position from the point of view of giving final answers on a number of questions, but, having made these
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initial reservations, I shall certainly do my best to give such answers as I can.
THE EARL OF LISTOWEL: My Lords, may I ask the noble Lord whether he can say at this stage what matters in relation to the finances of the Corporation are going to be discussed? I am not asking him to say anything if he wishes to regard it as confidential.
LORD LLOYD: My Lords, I will tell the noble Earl what I can about every point as I go through the list and point out those which are going to be discussed. The first question raised was the general financial structure of the Corporation. The general suggestion seems to be that the Corporation's capital should be provided as equity capital. May I say to the noble Earl that this is one of the matters which is going to be raised by the Chairman. All I should like to say on this matter, without prejudice to what my right honourable friend may think, is that in drawing this analogy with private enterprise there is a danger that you might find yourself misled. It is perfectly true that when private enterprise undertakes schemes of the kind undertaken by the Corporation, it raises part of its capital as equity, but the amount of capital it can raise in this way and the terms in which it can get it depend upon the prospects of earning a commercially attractive return. Few, if any, private enterprises engaging in risk ventures could expect to raise their capital on such favourable terms as the Corporation, which gets it at a rate corresponding to the cost of Government credit from time to time.
I do not pretend to be a great economist, but I must confess that I do not entirely understand the noble Lord's attempt to distinguish between equity capital and fixed interest bearing capital when the sole subscriber in each case is the public purse. I do not want to go too deeply into this point, but I think it is far-fetched. When it is sought to compare the Corporation and private enterprise, we are not comparing like with like, and I do not believe that any comparison is applicable. I do not wish to say any more on this point because that is one which is going to be discussed, and I do not want to say anything that will prejudice the discussion. I must leave the matter there.

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Another point which is going to be discussed is the present borrowing limit of £100 million, which will be reached before long, and I am afraid I cannot give the noble Lord an answer this afternoon. The next point is an old friend, a ball which my noble friend Lord Munster and I, have been playing back for some years—the writing off of the £8 million described in the Report as "special losses". I do not feel that I can say much more about this. The noble Lord and I discussed this matter fully in your Lordships' House on November 16, 1954. At that time I gave him a full explanation of the views of my right honourable friend on this issue, and at the moment there is nothing I can add to the explanation I gave him then. Again, this is one of the matters which my noble friend Lord Reith proposes to discuss with my right honourable friend, and, certainly, if there are any new arguments which the noble Lord, Lord Reith, is able to put to my right honourable friend, I am sure that the latter is prepared to consider them objectively. Therefore, I do not think that any useful purpose can be served by discussing the matter further this afternoon.
I will turn to the question of the legal position of certain of the Corporation's investments, which was raised by certain noble Lords. It is a fact that in relation to the Overseas Resources Development Act, 1948, my right honourable friend has been advised that certain of the Corporation's investments are ultra virus. I understand that this legal opinion is disputed by the Corporation. A point on which there is no dispute by anybody in any quarter of the House is that the activities in question are desirable from the point of view of the development of the colonial territories. In those circumstances, it seemed right to my right honourable friend that the issue should be put beyond legal doubt and he proposes to introduce legislation for this purpose. The noble Earl, Lord Listowel, asked me whether a Bill had been drafted. Let me give him the assurance that the Bill has been drafted, and it is the hope of the Government to introduce such legislation before the end of the Session, provided, as I hope it will, time permits. If the noble Earl will forgive me, I do not propose to enter into the details of this legal dispute, which is highly complicated, and which, in any case, can be discussed
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when the measure comes before your Lordships' House.
I should like to add only one point, A number of other matters have been raised which, if it were decided to take a different view from that at present taken—and I may add that these points all need consideration—would also involve legislation. I hope that your Lordships will agree that it would be wrong to let the possibility of such legislation, or even the consideration of it, hold up the legislation to validate the actions which have been taken by the Corporation and are assumed to be ultra virus. It is of first importance to the Corporation and their work that this legislation should go through speedily. Let me make it clear that the Government's view is that nothing should stand in the way of the urgent disposal of this particular matter.
The noble Lord, Lord Ogmore, raised one or two further issues of importance. He referred to paragraph 10 of the Report and, in particular, to the question of assured markets for colonial products. It is right that I should say a word or two on this subject before I close. In considering the question of markets for colonial products, it is only fair to remind the House, in the first place, that for certain products, notably tin, rubber, cocoa and coffee, an assured market in the United Kingdom is, in any case, impossible, since United Kingdom consumption falls short—sometimes very far short—of total colonial exports. Indeed, as colonial production of such items expands, it may be increasingly necessary to enlarge the traditional markets for these products outside the United Kingdom and to develop new ones. Apart from this particular difficulty, it is right to say that the only Way in which the provision of completely assured markets could be provided in this country for other primary products would be by bulk buying by Her Majesty's Government. I am bound to say frankly that, in the view of Her Majesty's Government, such a policy would induce an undue rigidity into the United Kingdom economy and might affect the competitive position of United Kingdom experts, on which so much of the well-being of the sterling area as a whole, including that of colonial territories, depends. It is our view that, in general, the interests of the Colonies are best served by maintaining healthy

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economic conditions, both here and in the field of international trade.
In connection with this matter of markets, the noble Lord touched upon the question of synthetics. I freely admit that the development of synthetics is bound in some cases to have an adverse effect upon the market for the natural product. Rubber is only one example—though, in point of fact, I am advised that in connection with rubber the probability is that world consumption is such that there will be room for an expansion both of the natural product and of the synthetic product. But it is no good disguising from ourselves the fact that for certain purposes synthetic rubber is not only cheaper but also better than the natural product. In a case such as this, I do not believe it is any good trying to stifle a technical improvement which, in the long run, is bound to win, whether one likes it or not.
But having said all this—and to that extent I admit that synthetics may make things more difficult for primary products, although this does not apply in all cases—I should like to emphasise that Her Majesty's Government have done a good deal to secure adequate markets for colonial products, especially where these products look primarily to the United Kingdom for a market. Obviously, the approach depends upon the circumstances which surround the production and sale of the particular commodity. But we have the colonial waiver and, as a result, have been able to increase the import duty on bananas and on lime oil. That is one example. Further, price assistance schemes have been generally agreed for Jamaica bananas and West Indian citrus. We have, of course, the Commonwealth Sugar Agreement, and we participate in international bodies such as the International Sugar Council, the International Tin and Rubber Study Groups and the International Cotton Advisory Committee, all of which concern themselves with commodities of particular interest to colonial territories. It is our policy to take our place in international discussions on a wide basis in order to try to avoid excessive fluctuations in the price of primary commodities.
The noble Lord, Lord Winster, mentioned the question of appointing directors with experience of the Colonies. The Secretary of State does his best to comply
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with that particular section, but I will certainly investigate the matter further to see whether the noble Lord has any reasonable cause for complaint. I hope that I have now dealt with most of the points.
THE EARL OF LISTOWEL: Before the noble Lord sits down, and in case he had not intended to mention it, could he say whether he and his right honourable friend will consider the question of altering the title of the Colonial Development Corporation? That matter has been raised by several noble Lords in the course of the debate, and I know that noble Lords who have raised it attach great importance to it.
LORD LLOYD: I beg your Lordships' pardon. Obviously I cannot this afternoon commit my right honourable friend to any particular course, but I will draw his attention to the matter and I am sure that it will be considered.
To conclude, I would return briefly to the Report of the Corporation. I agree with the noble Lord, Lord Winster, and other noble Lords who have said that it is encouraging that, for the first time in its eight years history, the Corporation has shown a profit, after paying interest on capital, of over £400,000. If I may say so, with due respect to the noble Lord, Lord Reith, this is a most satisfactory result, upon which he and his Board, and all concerned, are to be warmly congratulated. And I am sure I say that on behalf of all noble Lords. Nor do I take exception to the fact that a considerable part of this profit is derived from the more conservative investments which the Corporation has made—for reasons which I have already given.
I would only add that I hope that, before long, some of the longer-term and more speculative investments of the Corporation will begin to make good, and that we shall thus see restored the conception of the revolving credit which, despite the vicissitudes to which the Corporation has been exposed, is, I am sure, in principle, the right conception. In that connection, my noble friend Lord Colyton gave the example of the hotel in Belize, which only a few years ago was regarded as practically a hopeless project. That is now coming to fruition. It is an encouraging sign, and I hope that there will be many more.

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Finally, it is my hope that the Corporation may continue to consolidate and stabilise its financial position, and that in the years to come it may become one of the main pillars of our whole development policy. For, however much politicians in colonial territories may talk about independence, true independence must always mean standing upon one's own feet, not only politically but economically; and the best contribution that we can make to true independence is to provide, through development, the economic self-sufficiency that is so essential.
5.48 p.m.
LORD OGMORE: My Lords, I should like first of all to thank all noble Lords who have contributed to the debate this afternoon on this important subject. They have all taken a great deal of care in the preparation of their speeches, and have added much to our knowledge of this matter. In particular, I would thank the Minister, who has obviously taken a great deal of care in the preparation of his speech, and who did what he could, in the circumstances, to give us as much information as possible. We have been using cricketing metaphors to-day-except for the noble Lord, Lord Grantchester, with his knowledge of racing; and I think that we should have been using racing metaphors to-dayand I confess that I feel that the noble Lord, Lord Lloyd, has "stone-walled" a fair amount. He has hit balls to the
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boundary once or twice, but he has also been bowled or stumped.
I hope that there will be a happy outcome of the financial discussions which the noble Lord, Lord Reith, is to have with the Secretary of State, and I also hope that the Government will consider the matters other than financial to which we have referred to-day. As the noble Lord, Lord Winster, said, there is wide interest in the colonial territories in colonial debates in both Houses of Parliament, and colonial debates are widely reported in their Press. The Colonial Development Corporation is very important to them, and they take a keen interest in it. It is most important that we should have had this discussion to-day on the Corporation's Report. I feel that it would have been a black mark against us if we had not adopted our annual practice of discussing it. We on this side of the House—and I am sure noble Lords on all sides will join with me—wish every possible success to the Corporation in the years ahead. With that, I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

HOUSE OF LORDS OFFICES
Fourth Report from the Select Committee, made and to be printed.
House adjourned at nine minutes before six o'clock.