Sitting of 12 February 1957

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 HOUSEHOLD (Mr. RICHARD THOMPSON) reported Her Majesty's Answer to the Address, as follows:
  I have received your Address praying that the Double Taxation Relief (Taxes on Income) (Netherlands Antilles) Order, 1956, be made in the form of the Draft laid before your House.
  I will comply with your request.

PRIVATE BUSINESS
  BARCLAYS BANK D.C.O. BILL (By Order)
  Second Reading deferred till Tomorrow.
BARRY CORPORATION BILL (By Order)
  BRITISH TRANSPORT COMMISSION BILL (By Order)
  Second Reading deferred till Monday next.
CATTEDOWN WHARVES BILL (By Order)
  CITY OF LONDON (VARIOUS POWERS) BILL (By Order)
  Second Reading deferred till Tomorrow.
  CROYDON CORPORATION BILL (By Order)
  Second Reading deferred till Monday next.
  DARTFORD TUNNEL BILL (By Order)
  Second Reading deferred till Tomorrow.
  GLOUCESTER CORPORATION BILL (By Order)
  Second Reading deferred till Monday next.
  MARINE SOCIETY BILL (By Order)
  Second Reading deferred till Tomorrow.
  PEOPLE'S DISPENSARY FOR SICK ANIMALS BILL (By Order)
  Second Reading deferred till Monday next.
PORTSLADE AND SOUTHWICK OUTFALL
  SEWERAGE BOARD BILL (By Order)
  Second Reading deferred till Tomorrow.
  STOCKTON-ON-TEES CORPORATION BILL (By Order)
  Second Reading deferred till Monday next.
SUNDERLAND CORPORATION BILL (By Order)
  TAMAR BRIDGE BILL (By Order)

    UNIVERSITY OF EXETER BILL (By Order)
    WHITSTABLE HARBOUR BILL (By Order)
    WORKINGTON HARBOUR AND DOCK (TRANSFER) BILL (By Order)
    Second Reading deferred till Tomorrow.

ORAL ANSWERS TO QUESTIONS
  MINISTRY OF WORKS

    Cripplegate Fort, Falcon Street (Preservation)
    Mr. E. Fletcherasked the Minister of Works what steps he is taking to ensure the preservation of the West Gate of the Cripplegate Roman fort in Falcon Street.
    The Minister of Works (Mr. Hugh Molson): I am glad to say that the Corporation of the City of London, which owns the wall at this point, has already arranged for the preservation of the remains of the West Gate of the Cripplegate fort, and for access for inspection.
    Mr. Fletcher: Whilst thanking the Minister for that welcome reply, and tendering our best wishes to him on his first appearance at the Dispatch Box as Minister of Works, may I say that the decision will be particularly welcomed, because this gateway is the most outstanding structural symbol of London's strategic significance in the first centuries of her existence?
    Mr. Anthony Greenwood: Will the access for inspection be permanent?
    Mr. Molson: Yes, Sir, it will be. It will be in an underground room, under Route 11, and there will be access for the public.

    Oil Fuel Saving
    Sir W. Anstruther-Grayasked the Minister of Works how much fuel has been saved by restricting the number of taps in the Palace of Westminster from which hot water may be obtained; whether similar economy is practised in other buildings under his control; and the overall saving of fuel.
    The Parliamentary Secretary to the Ministry of Works (Mr. Harmar Nicholls): It is not possible to measure the saving of oil fuel resulting solely from economy in use of hot water in the Palace of Westminster and in other buildings under the control of my right hon. Friend. The consumption of oil in the Palace of Westminster during the twelve weeks to 4th February, 1957, shows a saving of 191 tons as compared with the same period last year. Similar economies regarding hot water for washing are made in all oil-heated office buildings under the Ministry's control and the total saving of oil fuel over the same twelve week period in all buildings is estimated to be at present equivalent to 11,000 tons a year.
    Sir W. Anstruther-Gray: Whilst it is always desirable to set a good example, is my hon. Friend satisfied that this example is awakening sufficient response to make it worth while?
    Mr. Nicholls: The actual saving is, as I said, 191 tons, and the estimate over the year is 11,000 tons. I should have thought that was very worth while.

    Hyde Park (Amenities)
    Mr. Liptonasked the Minister of Works what plans he has made to improve the amenities of Hyde Park.
    Mr. Molson: I am naturally anxious to improve the amenities of all the Royal Parks but I have no specific proposals to announce at present.
    Mr. Lipton: Will the right hon. Gentleman include in his list of planned improvements the removal of that horrible eyesore, Knightsbridge Barracks, which at present completely spoils the
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    whole appearance of the southern boundary of Hyde Park?
    Mr. Molson: My responsibility for the amenities of Hyde Park does not warrant my destroying all ugly buildings in the neighbourhood, and more particularly those that are under the care of my right hon. Friend the Secretary of State for War.
    Mr. G. Longden: Would my right hon. Friend consider reinstating some kind of aesthetic railing upon either side of Rotten Row, because at the moment most horse riders appear to be rather fonder of the ground than of their saddles, and many loose horses are causing alarm and despondency among the perambulators, dog-exercisers and sun-worshippers?
    Mr. Molson: I had thought that the amenities of the park had been increased by the fact that there are no boundaries along the side of Rotton Row, but obviously one has to take safety considerations into account, and I will certainly bear in mind what my hon. Friend has said.

  SCIENTIFIC AND INDUSTRIAL RESEARCH

    D.S.I.R. (Staff)
    Mr. Willeyasked the Parliamentary Secretary to the Ministry of Works, as representing the Lord President of the Council, what was the total staff of the Department of Scientific and Industrial Research at the latest available date.
    Mr. H. Nicholls: On 1st January, 1957, the total staff was 4,575.
    Mr. Willey: Whilst congratulating the hon. Gentleman on the improvement in the staff of the D.S.I.R., may I ask whether he will assure us that he will keep up this progress and will recognise the vital importance of getting an adequate staff for it?
    Mr. Nicholls: Yes, Sir, my noble Friend is well aware of the importance of this matter, and he will do his best to recruit the right sort of staff at the greatest speed possible.

    Projects (D.S.I.R. and O.E.E.C.)
    Mr. Willeyasked the Parliamentary Secretary to the Ministry of Works, as representing the Lord President of the

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    Council, what research projects are being carried out by the Department of Scientific and Industrial Research in cooperation with the Organisation for European Economic Co-operation.
    Mr. H. Nicholls: The D.S.I.R. is in direct collaboration with the European Productivity Agency of the O.E.E.C. on five projects connected with aspects of building practice and in the preparation of material for conferences on automation and adaptation of the job to the worker. In addition, the Department is collaborating with seven other countries in a research project on the preparation of fresh water from salt water.
    Mr. Willey: Again, whilst appreciating the steps that have been taken, may I ask the hon. Gentleman whether he will encourage this form of co-operation, which is one of the most effective forms of European co-operation?
    Mr. Nicholls: There again my noble Friend is at one with the hon. Gentleman. In addition to the Answer which I have given, which is the reply to the specific Question, there are many other projects with which we are associated, but which were initiated by O.E.E.C., that have the same result.
    Mr. Partridge: My hon. Friend mentioned five projects connected with building. Would he be good enough to indicate what these cover?
    Mr. Nicholls: I can do that. No. 1 is modular co-ordination; No. 2, prefabrication in house building; No. 3, methods of organisation on building sites; No. 4, mechanisation of certain building operations; No. 5, production and distribution of concrete on building sites. I should require notice of any supplementary questions arising under those heads.

  BRITISH ARMY

    Reservists, Scottish Units (Release)
    Mr. Hector Hughesasked the Secretary of State for War how many Reservists in Scottish units have been released from emergency service up to the latest convenient date; and which units are affected.
    The Under-Secretary of State for War (Mr. Julian Amery): Five hundred and fifty belonging to the nine battalions listed in a Written Answer which my right hon. Friend gave to a Question by the hon. and learned Member on 11th December.
    Mr. Hughes: Is the Minister in a position to issue a list indicating the priorities of those still to be released, and the units to which they refer, so that their relations can make appropriate arrangements?
    Mr. Amery: All have been released except 13.

    Troops, Cyprus (Feeding Complaints)
    Mr. E. Fletcherasked the Secretary of State for War what complaints he has received about the feeding of our troops in Cyprus.
    The Secretary of State for War (Mr. John Hare): Including the recent one by the hon. Member, there have been five complaints about feeding in Cyprus during the last twelve months, all relating to the difficult period after the Suez operation began.
    Mr. Fletcher: May we take it that those complaints have now been satisfactorily dealt with?
    Mr. Hare: Yes, Sir, they have, and I can assure the hon. Gentleman that I saw a lot of cookhouses myself when I was in Cyprus recently.

    Land, Bearsden (Road Repairs)
    Mr. Benceasked the Secretary of State for War what steps he is taking either to dispose of land which fronts Dumgoyne, Bearsden, or to accept liability for necessary road repairs as other owners of property have to do.
    Mr. J. Amery: I am now satisfied that a contribution towards the cost of road repairs is justified. This will be paid.
    Mr. Bence: I thank the hon. Gentleman very much for at last conceding what was a very important point to the people concerned. They felt that the War Office should undertake the same obligations as private citizens.
    Mr. Nabarro: A Tory Minister—that is the answer.

    National Service
    Mr. Allaunasked the Secretary of State for War if he has considered the view of the Wolfenden Report that three civil servants can do the work of five National Service men; and if he now intends to take steps towards the ending of National Service.
    Mr. Hare: As explained in paragraph 13 of the Army Council Memorandum to the Report, it is our policy to employ a civilian where he can do the job as well as a man in uniform. It is our intention to press on with civilianisation to the greatest extent possible consistent with the need for uniformed manpower, but it must not be thought that these steps would alone remove the need for National Service.
    Mr. Allaun: Then will the Minister deal in particular with Army pay offices, where in many hundreds of cases teams of five young and fit National Service men are doing the work of three girls or older workers? Could not the right hon. Gentleman, by civilianisation[HON. MEMBERS: "Horrible word."]—secure a net saving of approximately 40,000 posts?
    Mr. Hare: I should like to tell the hon. Gentleman that I am personally taking the greatest interest in the possible use of electronic methods in connection with the Royal Army Pay Corps, and I think there may be a considerable saving of manpower possible when we have been able to develop our plans in that connection.
    Mr. Wigg: Would the right hon. Gentleman consult the Minister of Defence to see how far it is practicable to get a simplification of the pay code, not only of the Army but of all the three Services, in order to cut overheads in that sphere?
    Mr. Hare: I will certainly draw the attention of the Minister of Defence to what the hon. Gentleman has suggested.
    Mr. Allaunasked the Secretary of State for War if he has considered the view of the Wolfenden Committee that it does not take two years to train a National Service man; and if he now intends to take action to reduce the burden of National Service.
    Mr. Hare: As is stated in paragraph 10 of the Army Council Memorandum
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    attached to the Report of the Committee, the present period of service is designed to help provide sufficient fully trained soldiers to meet the Army's commitments and not merely to produce fully trained soldiers.
    Mr. Allaun: Does the Minister appreciate that unless he cuts, or ends, National Service now, from December of next year, instead of having fewer conscripts, he will have nearly twice as many as now; first, because the age of call-up will by then have been raised to its maximum of 20 and, secondly, because of the bulge in the birth rate?
    Mr. Hare: I think the hon. Gentleman is trying to put to me a general question on the future of National Service. As he knows perfectly well, that affects all three Services, and the Minister of Defence said only last week that he had no statement to make on the subject at the moment.

    Territorial and Auxiliary Forces Associations
    Air Commodore Harveyasked the Secretary of State for War if he will make a statement on the future of the Territorial Army and Air Force Associations.
    Mr. Hare: As my hon. and gallant Friend no doubt remembers, the Committee on the Administration of the Territorial Army, whose report, Cmd. 9523, was presented in 1955, said that Territorial and Auxiliary Forces Associations played a valuable part in administering the Territorial Army and should continue. The Army Council accepted this recommendation, and nothing has since happened to change the position.
    Air Commodore Harvey: Will my right hon. Friend say, as the Royal Auxiliary Air Force squadrons are being disbanded, what part the associations will play in administering units which are not there? Also will he bear in mind that there is a great feeling in this country that these Territorial Air Force associations ought to be kept in being to some extent in order to make full use of the voluntary movement which is available, and which may not want to volunteer for the Army?
    Mr. Hare: Yes, Sir, I have great sympathy with what my hon. and gallant Friend says, but that question ought to be addressed to the Secretary of State for Air. So far as the Army is concerned, we shall continue to make use of

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    these territorial associations, and if members of the Royal Auxiliary Air Force choose to swell the numbers of the Territorial Army, we shall be only too glad to have them.
    Mr. Beswick: Does not the Secretary of State for War realise the contradiction between the Answer which he has given and his Answer to the previous Question? On the one hand, he says that we are having to conscript men because we cannot get enough Regulars, and on the other hand we are discouraging the voluntary associations which are available in this country?
    Mr. Hare: I assure the hon. Gentleman that is not what I have said. I do not want in any way to discourage volunteers. I want as many volunteers as possible.

    British and Colonial Forces (Disposition)
    Mr. Bellengerasked the Secretary of State for War whether he will attach a map to his memorandum accompanying the Army Estimates showing the disposition of British and Colonial Forces.
    Mr. Hare: Yes, Sir. But the right hon. Gentleman will realise that in doing so we shall have to bear in mind security considerations.
    Mr. Bellenger: I am much obliged to the right hon. Gentleman, but may I ask him not to fall below the standard set by his predecessor, who did publish a map showing roughly the disposition of our forces? I therefore hope that he will not do less than his predecessor did a few years ago?
    Mr. Hare: I have got the map, and, as I have said, I will certainly try to do all I can on the lines which my predecessor set, but I must be advised by my experts on how far I can go, in view of security considerations.

    Egyptian Officers, Middle East ("Mein Kampf")
    Mr. R. Bellasked the Secretary of State for War how many copies of Adolf Hitler's "Mein Kampf" recently printed in Arabic were found in the possession of Egyptian officers and other ranks during the recent operations under British command in the Middle East.
    Mr. J. Amery: None were found by our forces. I understand, however, that the Israelis captured considerable numbers of "Mein Kampf" in Arabic during the Sinai operation. The book seems to have been in fairly general circulation amongst officers of the Egyptian Army.
    Mr. Bell: Can my hon. Friend say whether the circumstances in which these documents were captured did not indicate clearly that they were distributed to officers by the Egyptian Government, and will he ensure that this fact is given adequate publicity in the Middle East?
    Mr. Amery: I think that the first part of that supplementary question represents a fair conclusion. I will draw the attention of my colleagues in the Foreign Office to the second one.
    Mr. Emrys Hughes: In view of the fact that the Germans are now in Cairo holding a trade exhibition there, and that we are out, does not the hon. Gentleman consider that "Mein Kampf" has won?
    Mr. Wigg: Will the hon. Gentleman bear in mind that the copies of "Mein Kampf" found in the possession of the Egyptian Forces had, in fact, been printed in the Lebanon?

    Territorial Army Divisions (Training and Organisation)
    Mr. Wiggasked the Secretary of State for War whether he will make a statement on the future training and organisation of the 43rd (Wessex) and 53rd (Welsh) Infantry Divisions of the Territorial Army at present earmarked for the North Atlantic Treaty Organisation.
    Mr. Hare: It has already been announced that National Service men including those in these divisions will not be called up for part-time training this year. I have no other change to report in the training, organisation or rôle of the Territorial Army.
    Mr. Wigg: Surely, the right hon. Gentleman realises that these two divisions had been earmarked to reinforce N.A.T.O.? If, in fact, they are not to get a stream of fit young men with a high degree of training and efficiency, what is the use of earmarking them, because they will be valueless?
    Mr. Hare: I think that the hon. Gentleman knows that National Service men are fully trained when they start their part-time service. Although we are not calling up National Service men who have finished their full-time service and who are being posted to divisions this year, the state of readiness of the latter will not be seriously affected.
    Mr. Strachey: Will the right hon. Gentleman make clear whether, when he talks about not having called up part-time Service men, that refers to the camps and the weekly drills, or only to the camps?
    Mr. Hare: It refers to both.

    Stored Tanks and Vehicles, Yorkshire
    Mr. Shinwellasked the Secretary of State for War the number of tanks and Army vehicles stored in the open between Doncaster and York and for what purpose they are being maintained.
    Mr. Hare: About 8,000. Over 3,000 of these are being disposed of. The balance are working stocks and Army reserves.
    Mr. Shinwell: Is the right hon. Gentleman aware that most of this junk has been lying there for the last five or six years, and that what is happening is that many of these vehicles have been sent away for repair and brought back to that depot again? Is he also aware that the manpower used in that depot is far in excess of what is required, and that the whole thing is a positive scandal? Why does he not put a stop to it?
    Mr. Hare: The right hon. Gentleman has said it has been there for five or six years. I think that probably it was there even in his time. I can assure him that I am certainly not satisfied with the general position. I am going into all this, and hope to be able to take steps in respect of disposals, and to see that as far as possible no unnecessary stocks are retained.
    Mr. Chetwynd: Can the right hon. Gentleman say how these vehicles are being disposed of and for what purpose? Are they treated as scrap, or are they disposed of for some military purpose?
    Mr. Hare: The Ministry of Supply is responsible for the actual technique of disposal, which is left to its judgment.

    Service Men, Cyprus (Leave Travel)
    Mr. J. Hyndasked the Secretary of State for War whether he will consider enabling members of Her Majesty's forces serving in Cyprus to be given home leave with free transport at some stage before the completion of eighteen months' service abroad.
    Mr. Hare: Married Regular soldiers, whose families have had to remain at home because of the emergency in Cyprus, are already allowed free leave travel to this country provided that they are serving on an overseas tour of at least two years and have been overseas apart from their families for at least nine months. Any more general scheme covering married men, who have their families with them, and single men, would in fairness have to apply to all overseas theatres, and this is ruled out by practical difficulties and cost.
    Mr. Hynd: As the Minister must be aware of the fact that these men do obtain leave in Cyprus, as there are no facilities for enjoying that leave in Cyprus, and as it is quite impossible for most of the men to be able to afford the air fare home, would he not consider some concession being made to enable these men to enjoy their leave at home, at least once in the two years?
    Mr. Hare: The hon. Gentleman is not quite fair in saying that there are no leave facilities. I am not satisfied that, at the end of last year, owing to the Suez emergency, there were adequate leave facilities, and following my recent visit there I personally went into this problem. I am determined to ensure that accommodation in suitable leave centres will be available for all men who can be allowed leave.

    Linzee Court-Martial (Greek Cypriot Witnesses)
    Sir W. Anstruther-Grayasked the Secretary of State for War how many of the Greek or Cypriot witnesses in the Linzee court-martial have since been implicated in terrorist activities.
    Mr. J. Amery: None, Sir. My hon. and gallant Friend may have seen that out of the 29 witnesses, 4 Greek Cypriots were at one time suspected of sympathy with terrorists, but this is no longer so.
    Mr. Hector Hughes: Can the Minister say what effect, if any, subsequent events had on the convictions at the courtmartial—were any convictions reversed, or what effect had they?
    Mr. Amery: I think that that raises another question.

    General Sir Richard Gale (Press Article)
    Mr. Shinwellasked the Secretary of State for War whether it was with his authority that Sir Richard Gale, ex-commander of our forces in Germany, stated that a reduction of 30,000 men in the Army is a practical proposition; and whether he will make a statement.
    Mr. Hare: No, Sir, I did not authorise General Gale to make the statement attributed to him, and the article makes it clear that the views are not official policy. General Gale did not give his authority for his name to be affixed to the article. He thought the views would appear as those of the correspondent, who saw him as a friend, but the correspondent apparently thought he was free to use General Gale's name. It is in the interest of the Army that on appropriate occasions senior officers should talk to the Press on matters within their sphere of responsibility. In this case I think General Gale should not have spoken as he did, and I have told him so.
    Mr. Emrys Hughes: Tell Montgomery that.
    Mr. Shinwell: While not in any way criticising General Gale for having communicated his views to the Press, because, after all, this is a free country and even ex-commanders of our forces are entitled to express their views, may I ask the Minister whether it is not strange that an ex-commander of our forces in Germany should suggest that we can reduce our forces in that area by 30,000 men, when General Norstad, the Supreme Allied Commander, is demanding that there should be no reduction at all? Who are we to believe, and what are the views of the right hon. Gentleman?
    Mr. Hare: In answer to the right hon. Gentleman, may I say that so far as I know General Gale did not give any figures to the journalist concerned, and, therefore, I do not think that I can very well answer that question. If he did, they
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    were probably his own personal opinion, and all matters dealing with the numbers of men who could or could not be removed from Germany are purely matters of speculation, because the Government are working on the problem at the moment and no decision has been made.
    Mr. Strachey: Is it not the case that this article was actually signed by General Gale, and is it now suggested, not merely that these views were wrongly attributed to General Gale, but that he did not authorise the article to be signed as being by him at all? If that is the case, ought not some very clear action to be taken to make the position clear, because it was not a mere attribution this was a signed article by the general?
    Mr. Hare: As I said in my Answer, I think that the journalist in question thought that he was at liberty to use General Gale's name. In fact, General Gale never signed the article. Although the journalist, as I have said, thought he had permission to use General Gale's name, that permission, in fact, was not given. So far as the figures are concerned, General Gale did not give figures.
    Mr. Shinwell: Leaving aside the question whether or not General Gale intended that the article should be published and what the journalist in question did or did not do, is it not remarkable that the ex-commander of our forces, having just returned from Germany, should suggest a reduction of 30,000 men, and yet those views apparently should not have percolated through to the War Office. What are the right hon. Gentleman's views about it?
    Mr. Hare: I am not saying what views have percolated to the War Office. I am trying to answer the Question, which has nothing to do with how many men there should be in B.A.O.R.
    Mr. John Hall: Can my right hon. Friend say whether General Gale did or did not give any figures to the Press, because that seems to be a very important matter?
    Mr. Hare: So far as I know, General Gale did not give figures to the Press, but he corrected a figure and gave an approximate alternative.
    Mr. Bellenger: As General Gale is an ex-commander who has only recently retired, a statement made by him to the Press is surely of considerable importance to the War Office. Will the right hon. Gentleman say whether General Gale, when actively serving in command of our forces, made to the War Office any representations approximating to those made in the article, and, if so, what action the War Office took?
    Mr. Hare: That is an entirely different question. I have been asked whether I gave authority to General Gale to make this statement. I did not give him authority and, as I have told the House, I do not think that he should have allowed the Press interview to take place.

    Reservists (Recall)
    Mr. Stracheyasked the Secretary of State for War whether he is satisfied that three weeks is an acceptable period for the embodiment of reservists in their units; and his plans for shortening this period in any future emergencies.
    Mr. Hare: The programme for the recall of reservists for the Suez operation was spread over three weeks because some units were not required as early as others. The process of calling up the individual reservist and equipping him ready for operations took approximately seven days.
    Mr. Strachey: The seven-day period is certainly more acceptable than three weeks, but can the Secretary of State assure us that it would be possible to embody reservists in a period of seven days or less, because three weeks appears to be an unacceptably long period?
    Mr. Hare: I tried to be fair in giving the period. I said that the whole process took three weeks. That was because certain units were not called up at the same time as others. In the case of individuals, seven days is an approximate figure and covers the man receiving notice and being equipped and ready in his unit. If I had wished to be a little more optimistic, I might have said that it could be done in five or six days, but seven days is a fair estimate.
    Mr. Stracheyasked the Secretary of State for War why in the recent emergency reservists were called up on the
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    basis of five men per tank crew notwithstanding that Centurion tanks have a crew of four.
    Mr. Hare: Only enough reservists were recalled to provide four-man crews for the higher establishment of tanks in the armoured regiments concerned. I think that possibly the right hon. Gentleman's informant must have based his calculation on the lower establishment.
    Mr. Strachey: Were not excessive numbers of reservists called up for the purpose?
    Mr. Hare: I think I might be able to help the right hon. Gentleman here. There are 60 tanks on the higher establishment, and 240 men are required to man them. On the lower establishment there are only 48 tanks. I think that the right hon. Gentleman's informant was probably working on the basis of the lower establishment.
    Mr. Stracheyasked the Secretary of State for War why in the recent emergency it was ruled that all reservists called up must proceed overseas with their unit: and whether he is aware that owing to the excessive number of reservists called up, this ruling resulted in men who were already serving with the Colours being retained in this country in order to make room for reservists.
    Mr. Hare: Only sufficient reservists were called up to fill vacancies in units required for possible operations. Most of these units went overseas. These men could not have been withdrawn without impairing the operational efficiency of units. It is true that some Regular recruits completing their training were in some cases retained in the United Kingdom. These men were needed as frontline reinforcements in the event of casualties.
    Mr. Strachey: Would it not have been better to take the Regulars out in the first instance and keep the reservists as the replacements?
    Mr. Hare: The Regulars were recruits who were just completing training. Meanwhile, the reservists had been posted overseas. If there had been cross-postings, that would very much have affected the efficiency of the units.

    Overseas Death (Burial)
    Mr. Chapmanasked the Secretary of State for War why his Department quoted £400 to £450 as the cost of bringing home from Gibraltar the body of 23178973 Private G. Elvins, 245 Alwold Road, Birmingham; in what circumstances this figure was reduced to £270; why the revised figure has never been quoted to the parents; whether he is aware that a reputable firm has submitted quotations which should result in a further substantial cut in this figure; whether he is aware of the distress caused to the parents by the handling of this matter by his Department; and whether he will make an immediate investigation into the whole matter.
    Mr. J. Amery: I apologise for the length of the Answer, but the Question is a long one.
    The original estimates quoted to the parents on 26th January were between £180 and £200 by sea and £240 and £260 by air. At the request of Mr. Elvins we asked Gibraltar to confirm this estimate. They quoted a figure of £400 to £450, which proved to be excessive on detailed examination. The correct figure was close to the original estimates.
    Mr. Elvins informed the Record Office concerned that the funeral should take place in Gibraltar as he could not obtain the necessary money. At this stage the hon. Member took up the case, and he has since been kept fully informed by telephone. I now understand that instructions have been given for the repatriation of the body.
    Mr. Chapman: Is it not unsatisfactory that in each of these cases the War Office should turn ad hoc to private firms to get the figures for the repatriations, figures for which it has no standards of judgment and which result in totally exorbitant estimates? For example, the cost of embalming is given as £50 when it should be three or five guineas, the cost of a special coffin as £70 when it should be £25, and the cost of transport as £120£140 when it should be £60. Is not all that totally unsatisfactory and misleading?
    Mr. Amery: I do not know whether the hon. Gentleman is suggesting that we should go into the undertaking business ourselves, but, short of that, I do not see
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    how we can do other than rely on professional advisers?
    Mr. Chapmanasked the Secretary of State for War whether he will now give the exact total cost to the parents of exhuming the body of 23178973 Private G. Elvins, preparing it for transport by air from Gibraltar, and delivering the body to the representative of the firm of Birmingham undertakers which estimates the air costs of transport to Birmingham to be about £75.
    Mr. J. Amery: I doubt the estimate of £75, since we estimate the standard charge from Gibraltar by air to Birmingham to be about £100. On that basis and assuming that crating was necessary, total cost would be about £270.
    In practice I understand that crating will probably not be necessary, in which case the cost will be about £220.
    Mr. Chapman: Will the hon. Gentleman say whether in these figures he is still including the inflated estimates by which he has previously stood, such rubbishy figures as £70 for a coffin which should cost £25? Will he supply a breakdown of the figures which will enable us to know whether these costs are likely to be reasonable or not?
    Mr. Amery: These are the best estimates that we have been able to get. If the hon. Gentleman would care to table a Question asking for a breakdown, I will certainly look into it.
    Mr. S. Silverman: Will the hon. Gentleman say what effect it might have on our defence policy if it cost as much to send out a live soldier as it apparently costs to bring home a dead one?
    Mr. Chapman: In view of the unsatisfactory nature of the reply, I give notice that I shall raise the matter again at the earliest possible opportunity.

    Barracks, Central London
    26 and 30. Mr. Liptonasked the Secretary of State for War (1) whether, for reasons of economy, he will reduce the number of Army barracks in the West End of London;
    (2) whether, in order to improve the appearance of the southern boundary of Hyde Park, he will arrange for the demolition of Knightsbridge Barracks.
    Mr. Hare: Barracks in central London are provided only for troops who are employed in central London and must be near to their work. Much of the accommodation, including Hyde Park Barracks in Knightsbridge, is out of date, and plans to replace some of it are already going ahead. I have the problem of Hyde Park Barracks very much in mind but I cannot say anything about its future at this stage.
    Mr. Lipton: Does the Minister's Answer mean that what appears to be a rather excessive number of barracks in the West End of London is to be reduced? Has he come to the conclusion that it is not really necessary to have the Wellington, Chelsea and Knightsbridge barracks and those at Regent's Park? Could we not do without one or two of them?
    Mr. Hare: As I have told the hon. Gentleman, I am studying the matter. What I am convinced about is that most of the barracks accommodation in central London is very much out of date.

    Royal Citadel, Plymouth
    Miss Vickersasked the Secretary of State for War what decision he has made in regard to the future of the Royal Citadel at Plymouth.
    Mr. J. Amery: This is under consideration and I hope that an early decision will be reached.
    Miss Vickers: Will my hon. Friend consider the matter quickly? There has been considerable unemployment among the civilian employees, and they are finding it extremely difficult to get other employment.
    Mr. Amery: Yes, Sir. I hope that we shall have the decision very soon.

    Drake's Island, Plymouth
    Miss Vickersasked the Secretary of State for War what plans he is making in regard to Drake's Island, Plymouth.
    Mr. J. Amery: We have now decided that the Army no longer requires Drake's Island.
    Miss Vickers: While thanking my hon. Friend for his reply, may I ask him to consider removing some of the military installations before he vacates the island,
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    because it will be very expensive for the local authority to do so, in order to make it a pleasant island for the inhabitants?
    Mr. Amery: I will certainly look into that.

    R.A.S.C. Water Transport Companies
    Miss Vickersasked the Secretary of State for War his policy in regard to the Royal. Army Service Corps water transport companies and in particular to No. 23 Company, Royal Army Service Corps Water Transport.
    Mr. J. Amery: Because of the abolition of Coast Artillery we shall in future need only two civilian-staffed R.A.S.C. water transport companies in the United Kingdom instead of five. The number of civilian-manned vessels to be operated by these two companies is still under consideration. As part of the process of reduction, the disbandment of 23 Company R.A.S.C. (Water Transport) will be completed by the end of this month.
    Miss Vickers: Will my hon. Friend look into the conditions under which this unit is being disbanded? As he may know, the men are being sent to various parts of the country and are not always receiving their subsistence allowance. Some have to pay out £4 a week. One man has nine children. Others have not received a subsistence allowance since November last year. This matter is very urgent and I hope that my hon. Friend will look into it.
    Mr. Amery: I will certainly look into the matter raised by my hon. Friend, and at any other point which she cares to put to me.

  TRADE AND COMMERCE

    Steel (Export Licences)
    Mr. J. Hyndasked the President of the Board of Trade whether he will now re-examine the provisions for licensing of steel for export with a view to excluding such steels as are in sufficient supply to render unnecessary such licences.
    The Minister of State, Board of Trade (Mr. Derek Walker-Smith): It is true that some types of steel, which are neither scarce nor of strategic significance, require export licences. It is quicker and more

    1067
    convenient for the steel industry to have them licensed to avoid the risk of delay which might occur through exports being challenged by Customs officers at the time of shipment.
    Nonetheless we shall of course keep the licensing provisions under constant review in consultation with my noble Friend the Minister of Power.
    Mr. Hynd: Is not the Minister aware of the confusion and consternation which this Order has caused in Sheffield, the exports of which are desired by the Government, but which are being hampered as a result of the Order? Does he not agree that the Government have proceeded with this sweeping Order, aimed at certain qualities of steel but omitting others, in defiance of the opinion of the Iron and Steel Federation? Will he consult the Federation again to see whether some arrangement cannot be made to enable steel which we want to export to go through?
    Mr. Walker-Smith: No, Sir; the assumption of the hon. Member is incorrect. The definition of types of steel to be included was worked out by the Government in full consultation and agreement both with the Iron and Steel Board and the British Iron and Steel Federation; so, if there is consternation in Sheffield, it appears to be based on a misapprehension which I am sure the hon. Member will assist in removing.
    Sir P. Roberts: Is it not a fact that this method has been adopted mainly out of consideration for civil servants—the Customs officials at the ports? Will not my right hon. and learned Friend look at this matter again to see whether the expediting of the export of steel cannot be done more easily?
    Mr. Walker-Smith: No, Sir. This has not been done for the convenience of Customs officials. It is for the convenience of the industry so that shipments are not delayed. Presumably the British Iron and Steel Federation had that consideration in mind when it agreed the procedure.
    Mr. Hynd: My point was not whether the types and grades were agreed with the Federation. Does the Federation agree that this blanket method of operation should be the method by which to try to check the exports of the other steels?
    Mr. Walker-Smith: I do not know whether the term "blanket method" is appropriate; but the formulation of the Order in this form was done in consultation with the bodies to which I have referred.

    Electric Lamp Manufacturers Association
    Mr. G. Jegerasked the President of the Board of Trade whether he is aware of the decision of the Electric Lamp Manufacturers Association to dissolve itself; and whether he intends to take action to induce similar associations to take the same step.
    Mr. Walker-Smith: I have seen reports that the Electric Lamp Manufacturers Association is to be dissolved. One of the objects of the registration procedures of the Restrictive Trade Practices Act is to induce industry to review their restrictive trading arrangements.

    Railways (Tourist Services)
    Sir I. Fraserasked the President of the Board of Trade what discussions he has had with the British Travel and Holidays Association to ascertain whether passenger rail services during the coming summer will be adequate to meet the demand; and if he will make a statement.
    The Parliamentary Secretary to the Board of Trade (Mr. F. J. Erroll): There is no occasion for my right hon. Friend to take any special initiative, as the British Travel and Holidays Association is now as always in close touch with the British Transport Commission about train services for tourists.
    Sir I. Fraser: Train services to seaside resorts are always important, but will my hon. Friend bear in mind that this year they may be even more important if there is likely to be a petrol shortage? Will he invoke the aid of the Minister in this matter, which is extremely important to seaside resorts?
    Mr. Erroll: It is, of course, a little too early to forecast what the petrol position will be in the summer, but the Minister of Power appreciates the importance of the point put by my hon. Friend. I should, however, point out that so long as holiday travel is concentrated on certain peak dates during the summer, passenger travel facilities on the railways are bound to be severely strained.

    Pottery
    Dr. Strossasked the President of the President of the Board of Trade the value of exports of pottery of an ornamental nature and tableware to Western Germany during 1956; and the value of imports of these commodities from this area.
    Mr. Walker-Smith: These goods are not separately specified in the Trade Returns.

    Strathleven Industrial Estate
    Mr. Steeleasked the President of the Board of Trade if, in view of the increase of unemployment in the Dunbarton and Vale of Leven area, he is giving consideration to further development of the Strathleven Industrial Estate.
    Mr. Erroll: So far as the need for economy in Government expenditure permits, my right hon. Friend will consider suitable applications for the provision of factory space on Strathleven Industrial Estate.
    Mr. Steele: The Parliamentary Secretary will, through his previous experience in the Ministry of Supply, know of what is happening in the Clyde area, for instance at Dalmuir, Scotstoun, and at the Blackburn aircraft factory. Will he take what steps he can to ensure that new applications are forthcoming for new works in Strathleven?
    Mr. Erroll: Both the President of the Board of Trade and I appreciate the special situation in the district, and I am hoping to get in touch with my hon. Friend the Parliamentary Secretary to the Ministry of Supply to learn at first hand about his visit to the Dunbarton area last week.
    Mr. John MacLeod: Instead of over-concentrating in the industrial belt of Scotland, will my hon. Friend try to get some of the industry distributed further north, where it is badly needed?
    Mr. Erroll: I will certainly not overlook the claims of other parts of Scotland.

    Granite Quarrying, Caernarvonshire
    Mr. G. Robertsasked the President of the Board of Trade if he will state the numbers now unemployed in the granite quarrying districts of Caernarvonshire, particularly the village of Trevor and
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    what steps he proposes to take to alleviate the position.
    Mr. Erroll: On 14th January, the latest date for which figures are available, the numbers unemployed in the Penmaenmawr and Pwllheli employment exchange areas, in which the principal granite quarrying districts are situated, were 132 and 698 respectively. Twenty-seven of these, all in the Pwllheli area, were ex-quarrymen. We are continuing to do all we can to attract new industry to North-West Wales.
    Mr. Roberts: Is the Minister aware that the situation in the granite quarrying areas is far more serious than these figures indicate? Will he consider approaching the Treasury with a view to the early implementation of the Agriculture (Improvement of Roads) Act, 1955, which was passed with the consent of all parties two years ago, and which is still a dead letter?
    Mr. Erroll: I will certainly look into the suggestion of the hon. Member.

    Sterling Area Tobacco
    Mr. Langford-Holtasked the President of the Board of Trade whether, in view of the fears of United Kingdom tobacco manufacturers that any increased percentage of Commonwealth tobacco in their tobacco products would affect adversely their tobacco sales, he will take the initiative to consult with United Kingdom tobacco manufacturers with a view to obtaining a voluntary increasing uniform percentage of Commonwealth and Empire tobaccos in all tobacco products.
    Mr. Walker-Smith: Officials have discussed with manufacturers the possibility of using more sterling area tobacco. I understand that the manufacturers' fear is not so much directed to the impact on individual concerns as that their total sales would fall. We are, of course, considering this question in the general context of the public interest.
    Mr. Langford-Holt: Will my right hon. and learned Friend please have a look at this matter again, because in the broadest sense the national interest would be best served by a higher percentage of better quality of tobacco being available and used?
    Mr. Walker-Smith: My hon. Friend will appreciate that there are a good many considerations, some of a technical nature, involved in this, all of which have to be borne in mind and given their due weight in relation to other considerations.
    Mr. Gordon Walker: Will the right hon. and learned Gentleman face this question with a little more enthusiasm and vigour? These problems have been faced in the past and solved, and can be faced and solved now.
    Mr. Walker-Smith: There is no lack of enthusiasm or vigour, but I must ask the right hon. Gentleman to believe that we shall not be content with his standard of performance in the targets which we set for our own.
    Mr. Dugdale: Will the right hon. and learned Gentleman at least inform the House that he himself does not agree with the views of the manufacturers that their sales will suffer if this admirable tobacco is used?
    Mr. Walker-Smith: I do not think that it is for me to agree or disagree with their opinion, at any rate on the evidence now before me.

  NATIONAL FINANCE

    Premium Savings Bonds (Cost of Administration)
    Mr. H. Hyndasked the Chancellor of the Exchequer the estimated cost for the first year of administration, including advertising, of the Premium Bonds Scheme.
    The Financial Secretary to the Treasury (Mr. J. Enoch Powell): I would refer the hon. Member to the reply given to the right hon. Member for Huyton (Mr. H. Wilson) on 5th February.
    Mr. Hynd: As that answer revealed that the cost of administering this scheme is now about £1½ million a year, is the Minister satisfied that the number of Premium Bonds being sold justifies this very great expense? If the Government are looking for administrative economy, should not the Minister try to persuade the new Prime Minister to over-rule the scheme of the former Chancellor of the Exchequer?
    Mr. Powell: It was inevitable and obvious that the administrative expenses would be higher at the inception of a new scheme of this sort. The fact remains that the savings being obtained by these means are of great value to the nation.

    Government Expenditure (Economies)
    Mr. H. Wilsonasked the Chancellor of the Exchequer if he will make a statement on the progress achieved in realising the cuts of £100 million in Government expenditure foreshadowed by his predecessor in April last.
    Mr. Powell: I would refer the right hon. Gentleman to the reply which my right hon. Friend gave to the hon. Member for Govan (Mr. Rankin) on 29th January.
    Mr. Wilson: Is not the simple fact that the whole operation to save £100 million of Government expenditure broke down, as we from the start told the House it would? Has it not now been replaced by an increase in Government expenditure of more than £100 million?
    Mr. Powell: No; in fact, savings of over £93 million were attained. Had they not been attained, the supplementary requirements would have been so much higher.
    Mr. Wilson: To take only one example, since the intended War Office savings of very considerable sums were never achieved at all—as the Secretary of State for War explained to us last week—because deliveries came along faster than he expected, are we to assume that any of the other claimed savings are any more real?
    Mr. Powell: No, Sir—[Laughter.]—the vast majority of these savings, with the exception of £5 million in connection with the Suez operation, to which my right hon. Friend referred earlier, have actually been to our credit in the present financial year.
    Mr. Jay: Can the Financial Secretary put the matter a little more simply and tell us how much more the Government have so far spent in this financial year than in the last?
    Mr. Powell: If the right hon. Gentleman will look at the Supplementary

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    Estimates he will see not only an answer to his question but also the effect of the savings to which I have referred.
    Mr. Wilson: Instead of the hon. Member trying to cook up some more figures, will he inform my right hon. Friend that the increase this year over last year so far—in ten months—is £285 million?
    Hon. Members: Answer.
    Mr. Speaker: We are to debate this question later.

    Egypt (Sterling Balances)
    Mr. Remnantasked the Chancellor of the Exchequer the value of Egyptian Government assets in the United Kingdom which he is holding as security for British stores and equipment in Egypt.
    The Economic Secretary to the Treasury (Mr. Nigel Birch): I would refer my hon. Friend to the replies which I gave on 31st January to my hon. Friend the Member for Blackley (Mr. E. Johnson) and to the hon. Member for Islington, East (Mr. E. Fletcher).
    Mr. Remnant: Is not that Answer very inconclusive, and is my right hon. Friend quite content to see Egyptian assets leaving this country, so that the British taxpayer will be left with the burden to bear, as usual?
    Mr. Birch: Of course, the situation itself is rather inconclusive at the moment.

  AMPHIBIOUS WARFARE CRAFT AND VESSELS
  Major Wallasked the Prime Minister whether he will give consideration to the proposal that the provision of amphibious warfare craft and vessels be made the direct responsibility of the Ministry of Defence.
  The Prime Minister (Mr. Harold Macmillan): I recognise the importance of ensuring that tasks which are the responsibility of more than one Service are properly discharged. But I am not persuaded that for this purpose it is necessary to make this change.
  Major Wall: Does not my right hon. Friend agree that one of the best ways of attaining co-ordination, and possibly in the future the integration of the Services, is
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  by strengthening the Ministry of Defence? Would not one way of achieving that be by making provision of amphibious warfare craft and helicopters which are used in common by all Services the financial responsibility of that Ministry?
  The Prime Minister: At present the amphibious war headquarters, which is under the control of the Minister of Defence, is a technical and co-ordinating body and not a supply body. The future organisation and functions of the Ministry of Defence involve very large issues, which should await our final defence policy.

  MINISTERS (NAMES TO MOTIONS)
  Mr. Lewisasked the Prime Minister what instructions he has given to Ministers to withdraw their names from Motions standing on the Order Paper making attacks and adverse comment upon our American allies.
  The Prime Minister: None, Sir.
  Mr. Lewis: Whilst welcoming the fact that the Under-Secretary of State for Air and the Under-Secretary of State for War have now withdrawn their names, may I ask the Prime Minister whether he does not think that it would be better if he could persuade his hon. Friends to withdraw this Motion before he goes to see the President of the United States of America in March?
  The Prime Minister: The Question refers to Ministers' names. I understand that those, like the Snark, have slowly and silently vanished away. With regard to the rights of private Members, I should certainly be unwilling to interfere with their right to put down what Motions they wish to.
  Mr. Gaitskell: Yes, but in view of the obvious desire of the right hon. Gentleman for closer and more friendly Anglo-American relations, will not he make an appeal to his hon. and right hon. Friends to withdraw the Motion altogether?
  The Prime Minister: I am very hopeful that the best possible Anglo-American relations will take place; but I am bound to add that on the whole I have more control over my private Members than the right hon. Gentleman has over his.
  Mr. Gaitskell: In view of the somewhat boastful attitude adopted by the Prime Minister and the obvious desirability of his doing something to show that he really does want better Anglo-American relations, why does he not induce his hon. and right hon. Friends to withdraw the Motion?
  The Prime Minister: The right hon. Gentleman is making rather too much of this. Let him search his own conscience over the last few years.
  Mr. Nicholson: Is my right hon. Friend aware that it was not the Snark who slowly and silently vanished away but the people who saw it? There was only one variety of Snark, and that was the Boojum. Is he a Boojum?

  CHANCELLOR OF THE DUCHY OF LANCASTER (DUTIES)
  Mr. Woodburnasked the Prime Minister whether, in order to make the distinction clear between Government information and party propaganda, he will arrange for the Chancellor of the Duchy of Lancaster to confine himself to the field of information.
  The Prime Minister: There has never been any question of the Chancellor of the Duchy in his official capacity dealing with party propaganda.
  Mr. Woodburn: Is the right hon. Gentleman not aware that it is rather difficult, when the Chancellor of the Duchy comes out as a propagandist, for the public to decide whether he is giving information or cooking it?
  The Prime Minister: The distinction between the two duties is very easy to draw. I do not recall that even the right hon. Member for Lewisham, South (Mr. H. Morrison), when charged with similar functions as Lord President of the Council, was altogether able to insulate himself from some tinge or flavour of party interest.
  Mr. S. Silverman: Can the Prime Minister tell the House who will look after the Duchy of Lancaster while the Chancellor of the Duchy is engaged upon these other duties?
  The Prime Minister: The Chancellor of the Duchy will devote that part of his time which is necessary to carry out the duties of the Chancellor, and will carry them out very efficiently.

  PRIME MINISTER (PUBLIC RELATIONS ADVISER)
  Mr. G. M. Thomsonasked the Prime Minister what changes he contemplates in the status and functions of his public relations officer when the post is filled.
  The Prime Minister: None, Sir; but my public relations adviser will also act as the chief official advising the Chancellor of the Duchy of Lancaster on information matters.
  Mr. Thomson: Can the Prime Minister say if his new public relations adviser will continue to have regular and direct access to himself, as was previously arranged, and not be compelled to operate through the Chancellor of the Duchy of Lancaster in obtaining the Prime Minister's personal views?
  The Prime Minister: Of course he will have access to me.

  ROCKETS AND BALLISTIC MISSILES
  Mr. Beswickasked the Prime Minister if he will give an assurance that, before an agreement is made by Her Majesty's Government with any other nation which involves the stationing in the United Kingdom by such other nation of medium or long-range rockets or ballistic missiles, he will first inform the House of Commons.
  The Prime Minister: No, Sir; it is impossible in logic or in practice to inform the House of Commons of an agreement before it is made. The normal procedure will be followed.
  Mr. Beswick: Ignoring the cleverness, in which I am sure the Prime Minister does not want to engage unduly, may I ask him two questions? First, is not he aware that if we are once committed to the stationing in these islands of these missiles, owned and operated by a foreign Power, we shall be in any war in which that foreign Power may itself

  1077
  engage? Secondly, will he recall that when, nine years ago, we agreed to the stationing here of United States bombers, there was then no other operational alternative in under-developed or less populated countries? Does not he think, therefore, that now is the time—before committing ourselves to this final step—to consider clearing the heart of the Commonwealth of these inevitably provocative units?
  The Prime Minister: The Question asked was purely hypothetical. I know of no such agreement as is envisaged in it. But my answer is that the procedure followed by Lord Attlee when he was Prime Minister will be followed again if any such agreement is made. That is to say, the prerogative will be preserved and, if it be a matter of a treaty, the Ponsonby Rule will be followed. The precise procedures followed by every Government of whatever complexion will be followed again.

LOCAL GOVERNMENT FINANCE (GOVERNMENT'S PROPOSALS)
The following Questions stood upon the Order Paper:
MR. E. FLETCHERasked the Minister of Housing and Local Government whether the Government have now completed their review of local authority finances; and if he is now able to make a statement.
LIEUTENANT-COLONEL CORDEAUXasked the Minister of Housing and Local Government whether the Government have yet completed its review of local government finance; and whether he will make a statement.
MR. COOPERasked the Minister of Housing and Local Government if he will make a statement concerning the reform of local government finance.
SIR F. MEDLICOTTasked the Minister of Housing and Local Government how soon he anticipates completing his review of the finances of local government and if he will make a statement.
The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke): With permission, I will answer Questions Nos. 67. 69. 70 and 73.
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The Government have completed their review of local government finance; and my right hon. Friend the Secretary of State for Scotland and I are now ready to enter into discussions with the representatives of local authorities. In making this announcement of the broad conclusions which we propose to put before the local authorities I am, at the request of the Secretary of State, referring to Scotland as well as England and Wales.
The Government's proposals for the reorganisation of local government in England and Wales, which I hope will be discussed by the House as soon as possible, are designed to strengthen the local government system. In doing this it is essential to improve the financial relationship between the central Government anti local authorities. The ratio between Exchequer grants to local authorities and their revenue from local rates, which thirty years ago was 1 to 2, is now 6 to 5. Not only has this remarkable shift reduced the financial independence of local authorities and their degree of direct responsibility to their own ratepayers; in addition, much of this Exchequer aid is on a percentage basis towards the expenditure incurred on specific services. Percentage grants, whatever their merits, carry two disadvantages. First, there may be danger of an excessive degree of detailed central supervision over the spending of the money. Secondly, there is no certainty from year to year what the Exchequer may be called upon to contribute.
I am sure that the greater the independence of local authorities in the raising and the spending of their money, the better for the good health of local government. The Government, after a thorough investigation, do not think it practicable to devise a satisfactory new source of local revenue. Nor do they believe it right to earmark for the direct benefit of local authorities any tax that is now levied nationally. Rates are in this country a well-established instrument of local taxation. There are still some difficulties to be overcome in the rate system, but it provides a sound basis for local finance, and no better system of local taxation has been propounded.
In 1929, when unemployment was widespread, it was decided, in the light of economic conditions as they then were, to derate industry and freight transport

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from 100 per cent, to 25 per cent. of net annual value. Against the radically different economic background of the present day the Government have thoroughly re-examined this matter, taking into account all the arguments in both directions, and have decided that it is now right to raise the rate contribution of industry and freight transport from 25 per cent. to 50 per cent. In addition, further changes will be made in the system of pool payments to local authorities by the nationalised industries, including the direct rating of electricity properties and the separate assessment of electricity and gas showrooms used as shops, so that all payments now included in the pool are taken into account as rates in Scotland, the necessity for changes on these lines will not arise during the period up to 1961 for which the existing valuations are frozen.
At the same time, the Government intend a major recasting of the financial relationship between the Exchequer and local authorities. This will entail a radical revision of the structure of Exchequer grants, as well as some reduction of the grants to take account of the new rate income. With a few exceptions, where technical considerations make it not possible or desirable, specific grants will be replaced by a general grant of an amount fixed in advance for a short period of years, though not necessarily at the same level for each year of the period. This general grant will be distributed to all county and county borough councils in England and Wales, and to county and town councils in Scotland, by reference to objective factors (mainly of weighted population) which are readily ascertainable and afford a fair and reasonable measure of the relative needs of each authority.
With this change, local authorities will acquire a great increase of responsibility in determining the money to be spent on the various services, in accordance with local needs. Local government will become more truly local. Our aim is to foster and stimulate a vigorous and independent local government, and to give members of councils a greater incentive to take a lively interest in their local expenditure by placing much more of it under their own control. Under the proposals the Government have in mind, the amount of general grant-in-aid, not tied in any
1080
way to individual services, will, at present levels of expenditure, rise from less than one-sixth to close on two-thirds of the total Exchequer grants to local authorities.
It is also proposed to revise the system of equalisation grants, on the basis of recommendations made in 1953, including the payment of grants direct to county district councils. In Scotland, the arrangements for equalisation grants were amended by the Act of 1954 and also by last year's Act, which provides that a further review must be held before 1963.
My right hon. Friends the Secretary of State for Scotland and the Minister of Transport and Civil Aviation intend also to review the present system of highway grants.
As far as practicable, it is the Government's intention to bring all these changes into operation on a single date. Some transitional grant arrangements for a period thereafter will naturally be needed.
These proposals will be discussed with other organisations affected by them, in addition to the discussions to be held with representatives of local authorities. The intention of the Government is to introduce legislation as soon as practicable when these necessary discussions have been completed.
Mr. Mitchison: Would the right hon. Gentleman confirm that this is the statement of the Government's local government finance policy that his predecessor promised by the end of last year after a discussion with the local authorities? Is the right hon. Gentleman aware that on this side of the House we regard half the hog, with reference to the rerating of industry, as a very poor, unworkable animal and that we think that the only right course is to rerate industry in full?
While welcoming the right hon. Gentleman's recognition of the fact that these proposals must be fully debated by the House, may I ask him whether he will lay a White Paper setting them out in much more detail than he has been able to do today? Is the right hon. Gentleman aware that there are dangerous implications in the large block grant system, particularly in relation to education, health and welfare, so far as they are a matter of concern for local authorities—that is Part III of the Act in substance—and, of course, the housing

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subsidies in relation to slum clearance, new towns and overspill, that is to say, so far as they are at present given?
Will the right hon. Gentleman, in the White Paper, if he cannot do it today, give us details showing how he arrives at the new figure of two-thirds, that is to say, what it is that is to be left out and whether it is two-thirds of the total grant or two-thirds of that part of the total grant which is not Exchequer equalisation grant? I think that the right hon. Gentleman sees the point I have in mind.
Mr. Brooke: I will do my best to answer that series of questions.
This is the statement which my right hon. Friend promised to make. It seemed to me more courteous to the House to make the announcement to the House in advance of discussing it with the local authorities. At the same time, I am exceedingly anxious that there shall be full discussions with the local authorities. and if the hon. and learned Gentleman presses me to crystallise the Government's precise proposals at all points before I meet them, the local authorities may well regard those consultations as being of negligible value. I wish to act fairly towards both Parliament and the local authorities.
Mr. Cooper: Would it not be better from the point of view of these discussions if the House could have the earliest opportunity of debating my right hon. Friend's statement, that is, before the discussions take place? Are we to understand that my right hon. Friend intends to introduce legislation during this Session of Parliament?
Mr. Brooke: The question of a debate does not lie in my hands. At the beginning of my statement I said that the White Paper on local government reorganisation, which has been in the hands of hon. Members for quite a long time, has not yet been debated. I hope that it will be debated by the House as soon as possible. The date when we can introduce any legislation depends upon the progress we can make in these consultations, with which I am anxious to press forward.
Mr. Mitchison: While recognising what the right hon. Gentleman has said about his consultations with local authorities, may I ask whether he appreciates that
1082
he has given some specific figures about the effect of his proposals—I quoted one to him If these are to be debated, he must tell the House more than he has been able, or we should expect, in a statement of this kind. Therefore, there must be a White Paper. Will the right hon. Gentleman please meet what is a perfectly reasonable request in this matter and give us information so that we may debate his proposals properly?
Mr. Brooke: I will certainly consider what the hon. and learned Member has said. The House will recollect that on frequent occasions matters of considerable magnitude have been the subject of confidential consultations between the Minister in charge—one of my predecessors—and local authority associations before anything has been said to the House. On this occasion the matters were of such importance that I thought I ought to make a statement in broad terms to the House at the outset.
Mr. Mitchison: With respect to the right hon. Gentleman, we have had a White Paper on the areas and status of local authorities and there is precious little in it. There is a great deal in these proposals, and it is not fair to the House, or to the Opposition, to ask us to debate this statement without giving us the necessary information and details in the form of a White Paper. Will the right hon. Gentleman please undertake to produce a White Paper?
Mr. Brooke: I am grateful to the hon. and learned Member for saying that there is a great deal in these proposals. Before he asked his last question I had already said that I would consider his proposal.
Commander Maitland: Will my right hon. Friend say whether his remarks refer to other types of local government, such as river boards, which also raise their finances by grant and by levying rates, or whether those are taken into the general survey which he is proposing?
Mr. Brooke: It is not suggested that we should bring into the general grant specific grants available only to small groups of local authorities. My statement refers only to local authority activities.
Mr. Woodburn: Is the right hon. Gentleman aware that his statement will cause considerable alarm by its vagueness? Since he is speaking on behalf of

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the Secretary of State for Scotland, may I ask whether we are to assume that an attempt will be made to assimilate local government in Scotland with local government in England? Is there to be any interference with the system of local government which has so far existed in Scotland? If a Bill is to be introduced, will there be one Bill for the United Kingdom to bring about this assimilation?
If the Government have that in mind, will the right hon. Gentleman recall the confusion arising from the introduction of a single Rent Bill? If such legislation be introduced, there should be separate Bills to deal with the separate subjects. Is the right hon. Gentleman further aware that his statement appears to contain a great threat to lower the standard of contributions from the Government to local authorities? Are we to understand that that is the intention of the Government?
The Secretary of State for Scotland (Mr. John Maclay): There has, of course, been the closest consultation throughout between myself and my right hon. Friend on all matters contained in this statement which affect Scotland. There is no intention of assimilating Scottish local government with English local government. I do not think that I need say more than that. The idea has never been mentioned or thought of.
The question whether there shall be one Bill will have to be carefully considered. I am aware of all the issues involved in that decision, and I can assure the right hon. Gentleman that I shall carefully consider whether it is in the interests of everyone that there should be one Bill or a separate Bill to deal with Scotland.
I do not think that the right hon. Gentleman should draw the conclusion from the statement that he implied in his third question.
Mr. Woodburn: Will there be any interference with the Goschen formula?
Mr. Maclay: I can see no possible reason why the Goschen formula should be affected.
Mr. Ramsdell: Is my right hon. Friend aware that among the local authorities most affected by the new rating legislation there are a number who will receive
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no benefit from the rerating of industry. Will he bear their claims in mind?
Mr. Brooke: I shall seek to bear everything in mind. I am sure that we should press on as rapidly as possible with the Rating and Valuation Bill in order to remedy the clear injustice existing at present to certain classes of ratepayers.
Mr. Glenvil Hall: When these discussions with the local authorities take place, will it be open to them to press for re-rating at 100 per cent. or have the Government entirely closed their mind to that?
Mr. Brooke: My experience of consultations with local authority associations, in which previously I have generally been on the other side of the table, is that the local authorities press for all kinds of things.
Mr. F. Harris: Would my right hon. Friend be prepared to make adjustments for the rerating of industry by way of Amendment to the present Rating and Valuation Bill?
Mr. Brooke: It would be quite impossible to make so large a change by means of the present Bill—[HON. MEMBERS: "Why?"]—find time for consultation with all those concerned, and take the necessary legislative action, in time to give local authorities a firm basis for their 1957–58 budgets which they are drawing up at this very moment.
Mr. E. Fletcher: Is the right hon. Gentleman aware that, in so far as the professed object of his statement is to strengthen the independence and financial position of local authorities, he is taking a course which has been repeatedly pressed upon him for many years from this side of the House of Commons? Is he aware, also, that as far as one can judge from his statement the measures announced will be totally inadequate unless there is complete rerating of industry up to 100 per cent.?
Mr. Brooke: I am grateful for the hon. Member's support for the general purpose of these proposals. I am not quite sure whether he appreciates how enormous would be the jolt to the whole financial system of the local authorities if what the hon. Gentleman advocates, the immediate rerating of industry at 100 per cent., were given effect to.
Major Legge-Bourke: With reference to the intention to increase autonomy in connection with grants for county district councils, may I ask my right hon. Friend for an assurance that, in the use of the word "industry" in the rerating of industry, agriculture is not included?
Mr. Brooke: These proposals do not extend to agriculture.
Mr. Wade: Could not the Minister arrange for this increase in the rate contribution of industry to coincide with the provisions in the Rating and Valuation Bill? If Clause 1 could be introduced speedily, this change in the rate burden could be introduced with equal speed.
Mr. Brooke: I did examine that matter, and I explained on Second Reading of the Rating and Valuation Bill that it would not be possible.
Mr. Monslow: Is not the purpose of the Government's proposals to reduce taxation for the Government by transferring the burden to local authorities?
Mr. Brooke: The purpose, as I sought to explain, was to give local authorities greater financial independence. They will gain an additional source of rate revenue. It is important that the claims of both taxpayers and ratepayers should be taken into account in that event because, as I explained, the contribution of the taxpayers to local expenditure is at present higher than that of the ratepayers.

MESSRS. BRIGGS (DISPUTE)
Mr. Parker(by Private Notice) asked the Minister of Labour and National Service what action he now proposes to take in view of the complete breakdown of negotiations yesterday over the dispute at Messrs. Briggs?
The Minister of Labour and National Service (Mr. lain Macleod): I understand that, following the failure to reach agreement with the employers yesterday, the trade unions are considering the situation, The Executive of the Amalgamated Engineering Union is to meet this afternoon and there will be a meeting of all the unions concerned next Friday.
As I have already told the House, I do not rule out the possibility of an inquiry into this dispute, but before reaching a
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decision I would wish to see whether my Department could help by conciliation or other ways. I have today reminded both the employers and the trade unions that the services of my officers are available at any time.
Mr. Parker: While thanking the right hon. Gentleman for that answer, may I ask whether he is aware of the strong sense of frustration among many workers at Briggs's at the long time taken to deal with their grievances? Will he consider setting up an inquiry to go into the whole cause of the many disputes that have taken place at this works over the last few years?
Mr. Macleod: I hope that the House will forgive me if I do not comment in detail, because there is a very explosive situation there. There is the double problem both of the dispute which has arisen and of the long history of unhappy labour relations there which we should all like to see brought to an end. I am not certain that an inquiry at this stage is right. I do not rule it out. I have today put the services of my Department at the disposal of both employers and the unions.
Mr. Lee: From this side of the House we wish the right hon. Gentleman very well indeed in his efforts at conciliation in this dispute. Is he aware that the trade unions have already done a first-class job of work in getting a resumption of work at Ford's? There is great excitement because the men feel that there is a clear case of victimisation of a shop steward.
Is the right hon. Gentleman further aware that one of the difficulties is the memory that we had a hard job to get Ford's to accept trade unions at all, and that the feeling is that because there is slackness in the industry Ford's are taking advantage of it to victimise those who are doing work on behalf of the unions? If this sort of thing is to happen there can be no hope of real peace in the industry.
Mr. Macleod: I am aware of the feelings on both sides, but I am sure that it would not help if I commented upon the situation beyond what I have already said.

ORDERS OF THE DAY

  CONSOLIDATED FUND BILL
  Read a Second time and committed to a Committee of the whole House.
  Committee Tomorrow.

ECONOMIC AFFAIRS
3.56 p.m.
Mr. Harold Wilson: I beg to move,
That this House, realising that the policy of Her Majesty's Government has forced up prices and rents, endangered the maintenance of full employment and depleted the nation's gold and dollar reserves, calls upon Her Majesty's Ministers to formulate new and appropriate policies designed to rebuild our reserves, increase production and capital investment, assure full employment, stabilise prices and improve the position of old-age pensioners and others living on small fixed incomes.
The House will observe that the Chancellor of the Exchequer is not here. I, for one, would have liked to congratulate him on his appointment and to sympathise with him on the legacy he has inherited from his predecessor. He is, of course. in Paris, and the President of the Board of Trade is with him. I am sure that we all regret this absence.
A year ago I promised the previous Chancellor, in response to an appeal he made to us, that we would not treat him as his party treated Sir Stafford Cripps. In view of that pledge I will not regale hon. Members with all the lectures that the right hon. Member for Woodford (Sir W. Churchill) used to give Sir Stafford Cripps on similar occasions, about his first duty being to the House of Commons.
Certainly, the treatment by the Government of recent debates—the very perfunctory speech we had from the Prime Minister in the economic debate in November, and the much greater enthusiasm the Government showed for debating the European common market—suggests that the Government attach much more importance to a proposal which will not be implemented for ten to seventeen years than to a discussion of the economic problems and the survival of this country in the next ten to seventeen months.
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It is a year ago this week—it was, in fact, just two days after certain hon. Members scraped in for Taunton, Gains-borough and Hereford—that the then Chancellor of the Exchequer made a very grave statement on the economic situation, in the course of which he summarised the records of his predecessor the Lord Privy Seal in those imperishable words which by now are well known to the House, that inflation in 1955 had
"… held back our exports, swollen our imports, forced us into balance of payments deficit, helped to reduce our reserves by a quarter, and driven up our domestic price level."—[OFFICIAL REPORT, 17th February, 1956; Vol. 548, c. 2666–7.]
That was what the late Chancellor said about the Lord Privy Seal. As the present Chancellor is not here to give us an equally frank verdict on his predecessor it falls to my lot to attempt one.
The Prime Minister was not, of course, Chancellor of the Exchequer for very long. We were told, on his selection as Prime Minister, that he was well fitted to be Prime Minister because he had held so many high offices of State. The trouble is that he has hardly held any of his recent ones long enough for us completely to find him out. In banking terms, the right hon. Gentleman has a very high velocity of circulation.
But twelve months at the Treasury is long enough for us to form a judgment, and perhaps it might help the House if I went over one or two of the salient facts. First, gold reserves. The former Chancellor said that under the Lord Privy Seal our gold reserves declined by a quarter. Under the present Prime Minister, when he was Chancellor, ignoring his borrowings, they fell over a third in a year. At the end of January, a year ago, the reserves were 2,149 million dollars. Today, they are 2,084 million dollars, 65 million dollars down; but, of course, in that year we had the special help of 177 million dollars from the former Chancellor's master stroke, when he sold the Trinidad Oil Company; and then he borrowed and placed in the reserves no less than 561 million dollars from the much-maligned International Monetary Fund, as well as 30 million dollars from the sale of United States Government bonds in November, making a total of special aid to the reserves of 768 million dollars in a year. Even then they fell by 65 million dollars.

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It will, therefore, be clear to hon. Members that but for this special aid and special borrowing and the sale of the Trinidad Oil assets, the gold reserves today would be 1,316 million dollars, which is less than they were at the time of the 1949 devaluation and is a fall of nearly 40 per cent. over a year.
What about production? Under the right hon. Gentleman production remained completely stagnant, as it has been now for eighteen months. It was constant for so long that some observers feared that rigor mortis was beginning to set in. In the past two or three months, however, it has shown some movement—downwards; and it has been below that for the same period of 1955. With production booming all over the world, Britain, under Toryism, continues to lag behind.
Exports are up by 6 per cent. by volume over last year, but we are still a very long way behind our industrial rivals. I should like to remind the House of the figures for 1955 compared with those for 1950. Over that period, West Germany increased her exports by 158 per cent.; the Netherlands by 80 per cent.; France by 37 per cent.; Italy by 35 per cent.; and Britain under Toryism by 6 per cent.
I grant the right hon. Gentleman that imports were held fairly steady for the greater part of last year. At a price, At the price of stagnation in production. The country is being given the impression under the present Government that the only way in which exports and imports can be brought into anything like balance is by holding down production. We must ask them what happens if we get the long-awaited increase in production. Is there to be another upsurge of imports of raw materials and semi-manufactures, such as we had under the Lord Privy Seal in 1955, and another payments crisis?
Yesterday, we had the January trade figures, which I think the whole House will agree were very alarming. The trade gap of last month's visible trading between imports and exports rose to £1036 million in a single month. Those are the worst figures since July, 1955, when, as we know, there was a big pile-up of imports following the dock strikes of that year. They are the worst figures for eighteen months.
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I know that no hon. Member would want to base any argument, particularly a gloomy one, on the figures for a single month, although since right hon. Gentlemen opposite have been getting very complacent about the gold and dollar figures for a single month in January, I hope they will realise that, taking the three months as a whole, November, December and January, the balance of our trade has worsened very considerably indeed.
What about capital investment? When he was Chancellor of the Exchequer the Prime Minister succeeded in this objective: he lowered the nation's capital investment. He set out to do it and he achieved it. United Nations figures show that in the second quarter of last year new industrial building authorisation fell by 52 per cent. in this country compared with the same period of the previous year, whereas in Western Germany the figures rose by 20 per cent. It was, I think, the Prime Minister himself who, at the N.A.T.O. conference in December, said that capital investment in this country was the lowest of all the N.A.T.O. countries. Is that another thing about which the Prime Minister is proud?
What about capital investment abroad? The Treasury Bulletin last week, referring to the closure of the Canal and of the pipeline and the economic effects of those events, said:
"… instead of the desired surplus of £300 to £350 million a year, the most realistic forecast at the moment is a rough balance in the twelve months to mid-1957."
There we have the cost of Suez; instead of a surplus of £300 million we have just a rough balance in the twelve months.
I know that hon. Members opposite are trying to tell us that the cost-of-living index is stationary. Even if it is, it is about the only thing which is. In fact, it rose by 3½ per cent. over the year. If that lady in the Minister of Housing's constituency had gone shopping last Saturday morning, and if he had asked her what she thought of food prices, then what she said and what he said and what they both said would have been most instructive. It is true that some prices are falling, at any rate in certain shops, but in the main they are not the prices which mainly affect the least well-to-do families. There are falls in the prices of buttter, bacon, eggs and poultry. How much butter and poultry and how many

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eggs can the average old-age pensioner afford in this country—or how much bacon for that matter?
The prices of those goods which were in the Chancellor's control he forced up—bread, milk and council house rents. We say to him that he missed a very great chance, at a time when world prices are favourable, to bring real stability into the cost of living in this country. At the time of his announcement in December, when I said that we should support the Government in any appropriate measures to strengthen sterling, I suggested to him, I must admit not with very great hope, that the first appropriate measure would be to withdraw the Rent Bill. The Government are, however, pushing on with that,' and they must realise the effects on the cost of living and ultimately on the wage-price spiral of this decision.
Since we are still examining the former Chancellor's record, what about his Budget prospects? Last April he budgeted for the biggest-ever Budget surplus—£460 million. He then told us that this must be increased, and he said he proposed to fortify it. He said:
"With the full approval of my right hon. Friend the Prime Minister and of my colleagues, I can say that we are determined that this economy drive should bring us, over the whole field, savings amounting to not less than £100 million in this current year …"— [OFFICIAL REPORT, 17th April, 1956; Vol. 551. c. 883.]
That would have raised his Budget surplus to £560 million in all.
The House will remember that in the Budget debate we on this side of the House were very dubious about the Chancellor's prospects. We were very doubtful whether he would succeed where, as he made it all too plain, he thought the Lord Privy Seal had failed.
In June we had the first slice of the economies, and in the debate which followed we showed that they were a complete "phoney," with the running-down of stocks, once-for-all savings and all the rest of it. We showed that such real decreases as could be shown were already outweighed by salary increases and by such increases as the German support costs.
Last week the speech of the Secretary of State for War on the Supplementary Estimates showed how right our
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suspicions were. He told us that the economies of the War Office were planned on the basis of slowing up the rate of delivery of certain military items, but that the manufacturers had let them down and delivered those items in the present financial year, so that the economies had disappeared. That is why I must throw a little doubt on what the Financial Secretary said this afternoon, that they had saved the whole £100 million and that if it had not been for the saving of the whole £100 million we should be even worse off than we are.
It is true, of course, that some savings were achieved by the running down of military stocks. That should not be too difficult as we can see from the Report of the Estimates Committee, issued last week. Apparently we have still in this country ten years' supply of blanco at the current rate of consumption; we have 347,000 chairs in the War Office in addition to those in use in military establishments—347,000 not in use. We have 7,000 heavy duty bicycles, bought for the Home Guard, no doubt, when the Prime Minister was Minister of Defence. Clearly, the military strategy in those days was based on middle-aged gentlemen riding round the country on heavy duty bicycles throwing chairs at the enemy.
Then, of course, we have enough aircraft spares to fight the last war all over again, provided that we can ensure that we stick to the types of aircraft that were used in the last war. This should have made economies not too difficult to achieve, but even with these aids to economy what has happened? The economy campaign has utterly failed. The £100 million cuts have given place to more than £100 million in the Supplementary Estimates. "Mac the Knife" has turned out to be a very blunt instrument. [An HON. MEMBER: "A boomerang."] I would not call him a "boomerang".
If we look at Government expenditure for the first ten months of this year we find that it has been running at about £337 million above the same period last year. The above-the-line position shows a worsening of £285 million. The former Chancellor of the Exchequer was planning for an increased surplus of about £63 million, but, instead of the surplus for which he was planning, there is now a worsening of about £285 million.

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Over the year as a whole it looks like being £300 million or £400 million. That is presumably what he means when he said in his Budget speech:
"It is easy to err—it is human to err; but I confess that I would rather err on the safe side. A misjudgment on the side of overoptimism might have the gravest results."—[OFFICIAL, REPORT, 17th April. 1956; Vol. 551. c. 873.]
I know that the right hon. Gentleman will tell us that the worsening above-the-line on income account was offset by improvement below-the-line on capital account. But I think that there is a danger of the right hon. Gentleman misleading himself here. There have been very serious cuts in public capital expenditure, especially by local authorities, but the saving below-the-line has not been saving of real resources; in the main, it has been a diversion, as local authorities have been driven to borrow at expensive rates, in the mortgage market, from insurance companies, and so on. It has not been a saving in terms of real resources.
There we have the record of the former Chancellor of the Exchequer: gold reserves down by over one-third; production stagnant; exports up less than our trading rivals; imports temporarily held at the price of industrial production; capital investment the lowest in N.A.T.O.; a prospective balance of payments surplus utterly destroyed by Suez; a golden opportunity missed to stabilise the cost of living; and a Budget prospect which suggests the most monumental miscalculations. I think that compared with that the record even of the Lord Privy Seal was a shining example. The trouble is, as we warned the last Chancellor of the Exchequer a year ago that he tried to solve the economic problems of the country not by principles or radical solutions, but by gimmicks and gadgets and stunts. I have referred to the stunt of the £100 million cuts.
What of Premium Savings Bonds? In November there was a mad scramble, by Surtax payers in the main, and we had £46 million invested in the bonds. In December, even including all the Christmas presents which, I am sure, hon. Members opposite gave so lavishly to their relatives, it was only £6 million. For the last full week of January, before the usual end-month up-turn, it was only £400,000: yet the administrative cost of
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this is running at 30,000 a week and, on top of this, we have the high tax-free interest percentage which is awarded. So if we are getting, as the Financial Secretary said, some very useful savings by these means we are certainly paying a very high price for getting them.
What is the economic position today? During the debate on the Gracious Speech, on 12th November, we debated the economic situation then. I gave what I thought were some fairly serious warnings about the economic effects of Suez. We had no information from the Government. The then Chancellor hardly took the trouble to reply at all, and the Minister of Supply, now the Paymaster-General, thought that I was too gloomy. But it soon became clear from the very-grave statement of the then Chancellor, on 4th December, that my forecasts had not been too gloomy at all; if anything, they had been rather on the rosy side. In fact, we lost 313 million dollars from our gold and dollar reserves in a single month. In December, it was a little better. In the five months we had lost 869 million dollars—there again we have the price of Suez.
There was talk of devaluation in the air and it was as well that we frankly faced it. The House will agree that if we had been forced into devaluation by all that was going on it would have been a tragedy not only for Britain, not only, indeed, for the sterling area, but for at least the half of the world that does its trade in sterling. I must repeat our view—and I am sure that it is the view of hon. Members in all parts of the House; and it must be repeated with all possible emphasis—that the £ is not overvalued: weaknesses in our trading position arise from quite other factors.
The former Chancellor mobilised these hidden reserves, especially the International Monetary Fund, and he was right to do that. We think—and I know that some hon. Members opposite think—that his appeal for the waiver of the Washington loan was a much more dubious procedure. So we had the 561 million dollars from the International Monetary Fund and we had an agreement with the Export-Import Bank for the loan of 500 million dollars and we had the right to make further drawings, and we had the sale of securities. This was

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enough to stop all talk of immediate devaluation. The bear speculators who had been very active ran for cover. The £ recovered. For a moment it just touched parity because the speculative tide had turned the other way.
I am sure that the House will agree that this is no ground at all for complacency, such as we saw in the speech of the new Chancellor to the United States Chamber of Commerce in January. I think that the position was well summed up by the Manchester Guardian soon after the Prime Minister's statement of 4th December, when it said:
"The Chancellor talked about 'measures' he was taking to save sterling. He has done nothing of the kind. He has merely been saved by an institution hitherto regarded as an enemy. He still has to adjust his financial policy to the realities of our economic position which have been shown up by the Suez affair … it would be too tragic if the opportunity were missed and the support fund was used up because the Government lacked the courage to draw conclusions."
These words are still as true today, two months afterwards, as they were when they were written.
The former Chancellor threw everything in. He pawned the silver; he pledged the family heirlooms; and by this means he stopped the run on sterling. But he cannot do it twice. The tragedy is that these national treasures had to go to pay for the follies of Suez, when they should have been kept as a reserve against a possible worsening of the world's economic climate which has been very favourable for some years.
I am not saying that in the disastrous position we were in he was wrong to pledge these hidden reserves. Of course he had to do it. He was in the position of a family man who has had a wild gamble and lost, and who can only avoid having his house and belongings sold over his head by throwing in the savings he was putting aside for his old age. Obviously, such a man has no choice. Where he went wrong was his reckless gamble, and the same is true of the Chancellor and the Government.
But even though the right hon. Gentleman did this, even though there has been this improvement in the rate of the £, there is certainly nothing in the foreign exchange position now to justify any complacency. In January, our gold and dollar reserves went down by
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another 33 million dollars—in what should have been the best period of the year. January is usually favourable. And this was at a time when sterling was being helped by a sharp reaction against the November-December speculation and the tide was coming in as far as it had gone out.
This was at a time when the rise in the sterling area surplus was favourable. For instance, Australia had a surplus of £100 million in the second half of last year, compared with a deficit of £27 million in the same period in 1955. All these things were helping the £. We were helped, too, by large sales of Russian gold. It is not the first time that this Government have been kept afloat with Red gold. I think it was Mr. Khrushchev who said, last April, that he would be a Conservative. I am sure that it will be agreed that there is no ground for any complacency.
Let us face the facts. The Chancellor avoided devalution by a once-for-all operation. We are living on borrowed time and, because it is borrowed, time is not on our side. Everything depends on using the time we have—perhaps a year, perhaps less—to put the country on a firm economic basis; to give us freedom from the crises that have still been dogging us nearly twelve years after the war and in the easiest world conditions we have known for a generation.
What does this mean? It means two things. It means, first, that we must not dissipate the resources we have borrowed either on sops to consumption and easier living—as in the Lord Privy Seal's Election Budget—or on economic frivolities such as were shown during that same period by the inessential building and expansion of totally inessential industries that was going on. Under the rule of right hon. Gentlemen opposite we have had available to us both increased production, such as it was, and a windfall in the terms of trade, yet nearly all of it has been thrown into consumption and far too little has gone to investment.
The second thing which we must do is to use this year to begin to restore the reserves and to build up our capital investment. That is why our Motion calls for
"… new and appropriate policies designed to rebuild our reserves, increase production and capital investment, assure full employment, stabilise prices and improve the position of old-age pensioners …"

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Do these priorities need any arguing? I think that the need for rebuilding our reserves is the obvious No. 1 priority. I have given the figures of increased production. The Chancellor recently said, of course, that since 1948 productivity had increased in Britain more than it had in the United States. He said that here there had been a bigger increase since 1938 than in any other European country. He forgot to point out that this happened mainly under a Labour Government. Under a Labour Government, production rose by an average of 6·9 per cent. per annum; under the Conservatives, it rose by an average of 3·4 per cent. per annum —less than one half.
Mr. David Price Mr. David Price (Eastleigh) rose—
Mr. Wilson: No, I know what the hon. Member will ask. He will ask whether it is not a fact that we started from a very low basic figure.
Mr. Price: No. I wanted to ask the right hon. Gentleman to clarify his distinction between production and productivity. My right hon. Friend dealt with productivity, but the right hon. Gentleman is giving us production figures.
Mr. Wilson: I was giving the production figures, yes, but the productivity figures show exactly the same thing. Productivity rose nearly twice as fast under the Labour Government as under Conservative Administration.
I hope that the Government will tell us what prospects there are for stopping this stagnation in production, with the very serious oil position affecting industry, but I do not think that there is any need to argue that objective any more. We all agree that we need more production.
The need for capital investment as well is accepted, but what about full employment? Is there complete unanimity in the House on the need for maintaining full employment? Over the past year the numbers of unemployed have increased by 80,000. That was up to December. On top of that, another 50,000 people have gone out of employment altogether. That is a worsening in employment of about 130,000.
We have not yet the figures for January, though I imagine that the Minister of Labour now has those figures. I hope
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that he will tell us frankly what they are, because there are a lot of rumours, which our own observation will confirm, that in January unemployment has shown an alarming increase over the December figures.
Mr. Donald Chapman: And under-employment.
Mr. Wilson: Yes, though it is difficult to get statistics of that. As I say, I hope that the Minister of Labour will give us those figures.
If the Chancellor were here, and not in Paris, I would ask him whether he was satisfied; if this increase in unemployment has gone as far as he wants it to. Does he want it to go further? We have every right to know this. Many of us saw the Chancellor stand aside when Lancashire was plunged into depression. We heard him on the car industry last year. He frankly admitted then that short-time working was, in part at least, the result of deliberate Government policy.
In the Budget debate he used some very ominous words. Referring to unemployment and short-time working, he said:
"… there is no case whatsoever for dropping or mitigating the measures which we have introduced. It is our belief that they are beginning to work, and we intend that they should do so. If men are to change from one job to another there must at some stage be some redundancy somewhere, and we should not be shocked at our own success in this aspect of economic policy."—[OFFICIAL REPORT, 18th April, 1956; Vol. 551, c. 1045.]
"We should not be shocked"—he sounded positively delighted. Is he satisfied with the success that he has had in achieving redundancies? Does he think of what it means in terms of the thousands of families affected? Is that what he means by the "Opportunity State"? I hope that the Ministers will tell the House—
Mr. Godfrey Lagden: Does the right hon. Gentleman really think that the last few minutes of his speech contribute anything to helping the people of the country at this time, and especially to helping the motor industry at a moment in its history when cool heads are required? The sort of thing that he is now saying can have only the opposite effect.
Mr. Wilson: I should like to think, Mr. Speaker, that any words of mine could help the motor car industry in its present plight. The only thing that can help the industry in its present plight is action by the Government, and that we have not had. Over a period of years we have warned the Government of the effects of their improvidence in allowing the motor car industry so lightly to lose its export markets.
Another of the objectives called for in our Motion is to
"… stabilise prices and improve the position of old-age pensioners …"
That; surely, needs no arguing here. The old-age pensioners, who had an increase in April, 1955, have since had nothing. They are the forgotten men and women of this Administration. Yet the Lord Privy Seal, at the Tory Party Conference at Bournemouth, in October. 1955, said:
"It will be, and must be, the first aim of our Government to look after those on fixed incomes."
What has the right hon Gentleman done for them since? What have the Government done for the old-age pensioners since that time? There has been no increase in the basic pension; there has been an increase of a measly 2s. 6d. in National Assistance. Since then, all we have had is the prescription charge—the meanest blow that even this Government have levelled at the old-age pensioners—to save £25 million. That does look like being one of the very few economies of the last Chancellor that will stick.
Here we have the big difference between the parties. The Tory attitude is that when things are tough everyone must take a step down the ladder, as in the famous Will Dyson cartoon. We, on this side, say that the harder things are, the tougher they get, the greater the need to help the old, the sick and those in greatest need. We therefore call for new policies to stabilise prices, and a quick and ready response to the needs of old-age pensioners.
When we ask for new and appropriate policies to do all these things, we accept as the Opposition, as the alternative Government, an obligation to put forward constructive alternatives. But first, of course, we must ask: what is the Government's objective? Are they aiming at expansion or at the grim restriction of
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the credit squeeze and stagnating production? Do they want higher production, or are they scared that if we get higher production once again there will be a new import crisis? Have they a policy for export?
We remember the success of the export drive under Sir Stafford Cripps, when Britain led Europe and did not lag behind it as it has done for the past few years. It meant, of course, control and priorities, but the Government's attitude is a rather general sort of control. By blunt, not selective, working of the credit squeeze they hope that if they squeeze industry tightly enough, somehow, somewhere, something will be squeezed out for export. They are treating British industry as if it were a tube of toothpaste.
We say that they should get back to the export drive. They should call industries together and give them targets and see that they are achieved. They should control, if necessary, the amount of materials sold on the home market, and certainly control scarce imports which cause problems for the country when there is a boom in the home market. This means selective controls. The issue between the parties is not between controls and no controls. We have controls today under the credit squeeze, only they are operated by the unfortunate bank managers.
Secondly, we say that we must use all available weapons to stimulate capital investment, not merely to expand its volume but to see that it expands in the industries where national interest requires it—in exports, in capital goods, and in basic industries, and not in the expanding industries that we have had for the last few years, advertising, soft drinks and petrol distribution.
Having said that, we must say what weapons must be used. First, there is the Budget. The Chancellor should be preparing his next Budget. Last year's calculations went badly wrong and all the Government's pledges in the last two Elections to reduce Government expenditure have, of course, been utterly falsified. Government expenditure from 1950 to 1955, we are told by the Treasury today—excluding payments out of the National Insurance Fund—has increased by £1,046 million a year, an increase of 30 per cent. The Government were

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elected on their pledges to cut out waste in Government expenditure. The President of the Board of Trade was telling the country how they were going to cut Government expenditure by £700 million and that no one would feel a thing.
The Chancellor of the Exchequer is framing his Estimates. He is facing a big rise in Government expenditure, and not only due to Suez. There are rumours that he will make slashing cuts in the social services, especially in the Health Service, and that he is going to introduce hospital charges. We must warn him very strongly against any policies of that kind. We are told that defence cuts are coming and that there is a fresh outlook in the matter of defence.
In one respect, perhaps, the Government are learning at long last and at heavy cost. The Prime Minister, we know, had a very expensive education—Eton and Suez. It cost the country £300 million or £400 million, but it is a small consolation to set against his expensive education that the Government have learned that we can no longer go it alone and that lavish spending does not of itself give efficient defence, and that there can be no military strength if the economic basis of the nation is weak.
What will be done with the savings achieved from defence? The first priority must be to strengthen capital investment. Is it Government policy that capital investment should go up or go down? We have asked that of them many times. In 1954, we had the investment allowances and the Lord Privy Seal's call to "Invest in Success". Then, when investment rose, we had panic cuts in essential investment and, a year ago, a suspension of the investment allowances. Now, capital investment is falling. Do the Government want it to go on falling, or do they want it to rise again? The Minister of State, Board of Trade, when he was Economic Secretary, had some very pertinent questions from us on this subject. We pressed him to say whether he wanted capital investment to go up or go down. His years of forensic experience enabled him to dodge the question, but in the debate on 20th December he committed himself. He used these words:
"… we wish to advance capital investment in industry, but we wish to advance it in a
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discriminating way and in those sectors which favour the country's balance of payments position."—[OFFICIAL REPORT. 20th December, 1956; Vol. 562, c. 1598.]
We agree, but what does that mean? It means controls. It means a selective policy, restoring investment allowances, with a positive bias in favour of essential investment.
The difference between the two parties seems to be that under the Conservatives the idea is that by a broad credit squeeze and the lurchings of the Bank Rate the whole economy is either pushed forward or held back. It is all either full-brake or full-throttle and no use of the steering wheel. We say that we should use all the weapons available—the Budget, monetary policy, physical controls, public industries and purposive public spending, to hold back the inessential so that we can give the green light to the essential. Exports, capital goods, atomic energy, the road programme, oil tankers, and the rest need to be expanded. All these should be pressed forward positively while holding back ruthlessly if necessary on less essential industries.
This means controls, but, of course, the Government have so far refused to use them. We have had a free for all in which the Chancellor said that anybody who wanted to build petrol stations should be free to do so. We asked him to hold them back. I hope that he is pleased with all his petrol stations today. There we have the difference between the two parties, the blunt, global control of the party opposite, hitting essential and inessential alike, and the selective purposive control that we advocate, holding back the inessential to clear the lines for the essential priority programme on which the fibre of the country depends.
I have stressed the rôle of the public sector which is much more amenable to Government policy than is the private sector. One of our arguments for public ownership is that the private-enterprise steel industry planned its capacity on far too cautious an estimate of what was required. I must refer to one part of the public sector which is facing the danger of heavy redundancies, that is the Royal ordance factories. We rejoice in the prospect of arms cuts, but do these things always mean a danger of unemployment? Must we always underline

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the doctrine that private-enterprise Toryism can achieve full employment only when we are at war, preparing for a war or recovering from a war?
The Tory attitude towards the Royal Ordnance factories, where there are 40,000 workers, is to dispose of them to private enterprise, or, if they cannot do that, close them down. The Minister said that there were no plans for their changing over to the manufacture of civil goods on a large scale. Why on earth not? We say, "Use them, on a basis of full employment, to make the essential tools of reconstruction, the investment goods which are needed at home and abroad."
Some years ago, my hon. Friend the Member for Oldham, West (Mr. Hale) and some of my hon. Friends produced a pamphlet called "Tanks into Tractors". This is the opportunity for the Government to follow this policy now. They should turn over the Royal Ordnance factories and any redundant aircraft factories, as we did, to make the munitions of peace, to make good the deficiencies in our essential industries, and to pour out investment goods for the Commonwealth and the under-developed areas of the world. We say to the Government that if they do this the nation can reap a dividend beyond all money and all price. These are the positive policies we should have been following, instead of the sterilities of Suez.
New and appropriate policies are needed in the world market to develop Commonwealth trade by bulk buying and long-term contracts. We need to look to East-West trade too, in particular by ending the senseless boycott on trade with China. We need new and appropriate policies—to introduce fair shares, and more positive policies for the social services, education—especially technical education. We need fair shares in our tax system, too, by ending the system of fiscal privilege on the lines we have advocated from these benches before, so that taxpayers are equal before the law, so that by widening the tax base, we can build a fairer and more orderly structure of taxes upon it.
These are some of the new and appropriate policies we call for, and we must ask what hope is there for them in this sterile and self-satisfied Government? All
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we have had from the Government so far is a series of pompous platitudes and slogans. In place of the Welfare State they seek to create, they tell us, the "Opportunity State." The first reaction of many of our fellow-countrymen to this was to take the opportunity to emigrate. Denied an Election, they are voting with their feet.
Mr. Cyril Osborne: The right hon. Gentleman's party did it last time. You complained of that. That is what Nye Bevan said.
Mr. Wilson: I will give the hon. Member our understanding of what this "Opportunity State" is, because we have had no clear account from the Government. The "Opportunity State" is very much like the Prime Minister's Premium Savings Bonds scheme—a few get the big prizes, rather more get smaller prizes and the rest of the community are lucky to hold on to what they came in with. And, too, like the Premium Savings Bonds scheme, it was specially designed to appeal to the Surtax payers. That seems to be the "Opportunity State."
Apart from stunts of that kind, we must ask whether this Government can give the lead that is required. In the debate on 12th November, I said:
"The Government have not only lost the right to govern … they have forfeited the power to govern. …"—[OFFICIAL REPORT, 12th November, 1956; Vol. 370, c. 589.]
—if only because they have wantonly thrown away the co-operation of the trade union movement in economic policy that has been the great asset of every Government in this country since the war. That is as true today, after the Government changes, as it was in November.
Since the new Government was formed its members have been busy, with the willing aid of large sections of the Press, putting across a gigantic confidence trick. The suggestion is that everything that has been bad and wrong and harmful in the past few years can be quietly and tacitly laid at the doors of those Ministers who have gone, and that all that is good will emerge from the words and the actions of the right hon. Gentleman and his reshuffled colleagues.
We have pressed in vain for a statement of policy. It is true that the Prime Minister told us that his defence policy will be one of trial and error, but has not that

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policy cost enough already? He was more forthcoming in his speech to his constituents. The right hon. Gentleman promised them power, authority and a real sense of inspiration. [An HON. MEMBER: "That is Charlie Hill."] No, this is the Prime Minister. He went on to say:
"It was not going to be at all easy, but there was something to be said for buying shares at the bottom of the market."
The Prime Minister has the endearing habit of always proclaiming what a mess he has inherited from whatever colleague he has just succeeded.
Then we had this positive lead from the Prime Minister:
"If things should improve, the party and the Government would get the credit. But if they got worse, well then we are done in anyway."
There, Sir, is "leadership and inspiration" for you. Only last week we read in the Press that the right hon. Gentleman addressed the 1922 Committee on their annual works outing to the Savoy. He had more oratorical pearls to cast before his supporters. Let us take this one. We read this in the Daily Express:
"On Suez, Mr. Macmillan urged the Tory back benchers to adopt his own policy of wait-and-see."
There we have it—a firm and masterly policy of decisively waiting upon events. Neither in international affairs nor in economic affairs can this country continue to wait upon events. Living, as I have said, on borrowed time, we have to use those borrowings of money and of time to work as we have never worked before to restore our economic strength. In our view, for over five years we have been wasting our substance in economic frivolities at home and a sterile imperialism abroad. Let us hope that this debate will begin the task of bringing forth those new and appropriate policies which alone can save this nation, and enable it once again to give to the world the lead it seeks—and, so far, seeks in vain.
4.46 p.m.
The Economic Secretary to the Treasury (Mr. Nigel Birch): The right hon. Gentleman the Member for Huyton (Mr. H. Wilson) started his speech by a reference to the actions of my right hon. Friend the Chancellor of the Exchequer. My right hon. Friend asked me to apologise for his absence. As the House knows, the present meeting of O.E.E.C.
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is a very important one, and it would have been wrong of my right hon. Friend not to attend it. Incidentally, if this debate had not come off, I should have been accompanying him to Paris. My loss was offset, at any rate partially, by hearing what was, I thought, a very competent and entertaining speech from the right hon. Gentleman.
Mr. Stan Awbery: An informative one.
Mr. Birch: Well, it had information of a kind in it.
It is rather unusual to have an economic debate at this time of year because it is so near Budget time, when the Treasury is necessarily in a state of gestation and very nervous indeed about anything premature happening.
I will start by saying a word about the background against which this debate is being held. The policy of restraint which we are now pursuing is the policy we have pursued for nearly two years, under both my right hon. Friend the Leader of the House and under the present Prime Minister. The reason they pursued that policy, as the right hon. Gentleman rightly said, was that we were running into difficulties over our balance of payments. There was very strong pressure in the labour market, we were short of coal and of steel, and both consumption and investment were rising rapidly at the same time. The pace had got too hot and, therefore, restraint had to be imposed.
I want to emphasise once again—and here I agree most strongly with what the right hon. Gentleman said—that the balance of payments is the most important consideration of all. Measures were taken, and these, of course, included the Bank rate, the credit squeeze, the more active use of the Capital Issues Committee, restrictions on hire-purchase, higher company taxation, higher indirect taxation, and so forth.
This debate and Motion deal mostly with the consequences of that policy, and I will attempt to answer all the points, or practically all, made by the right hon. Gentleman. However, there is one aspect of the policy itself on which I will say a word or two, because it has been so much in the news in these last few days. I refer to the monetary policy.

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We had the Bank Rate reduction last week and a funding issue announced yesterday evening. Monetary policy is not a very rewarding subject on which to speak, and I will not detain the House long, but I hope hon. Members will bear with me because there are one or two things worth saying about it.
Treasury Ministers at this Box have often said that our monetary policy must be flexible. It is a very popular bromide. The recent change in the Bank Rate has, I hope, corrected two common misconceptions. The first is that a change in Bank Rate must necessarily be a signal for a change in policy, and the second is that Bank Rate is the only method of monetary control. Of course, it is possible to have Bank Rate used as a signal, and I would say that the increase to 5½ per cent.—the near-crisis rate of 5½ per cent.—last year was a signal, and was intended to be a signal.
On the second point, the change in Bank Rate may be only a means to the more efficient use of the monetary weapon. The Leader of the Opposition, when my right hon. Friend announced the change in Bank Rate in this House last Thursday, asked how it could be thought that a lowering of Bank Rate would lead to tighter monetary control. As my right hon. Friend very correctly said, the rate is not the only thing that matters. There are the open market operations as well.
As the House knows, before we changed the Bank Rate, the Treasury Bill rate had gone down to 4½ per cent. and, therefore, the 5½ per cent. Bank Rate was ineffective. There were three courses open. First, we could have done nothing and gone on with an ineffective Bank Rate. Secondly, we could have made the Bank Rate effective by putting up the Bill rate again. This would have resulted in a fall of long-dated Government securities and we should have brought to an end the very satisfactory amount of funding which we have been able to carry out over the last few weeks and months. The third course was to reduce the Bank Rate, make it effective, and continue the active conditions in the gilt-edged market which have been of such benefit in reducing the liquidity ratio of the banks and in reducing the volume of Treasury Bills. It was the third course which was chosen by the Bank, and actually it was arrived at after con-
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sultation and after approval by my right hon. Friend.
I think it is necessary to realise how important this Government funding policy is. The Prime Minister, in his Budget speech when he was Chancellor of the Exchequer, laid it down that its purpose was that Government borrowing should be successfully absorbed by the public during the year; that is, it should draw in real savings and not depend on inflationary finance. This is particularly vital, and I would draw the attention of the House to it, because Government borrowing covers the raising of capital for all the nationalised industries, which do not finance themselves to any large extent by internal savings, as, of course, is done in private industry. I am not criticising, but merely stating the fact.
On the last full figures available for 1955, the fixed capital formation by the public corporations, including the nationalised industries, amounted to £575 million, and the amount of internal savings to set against that sum was only £187 million. This poses a fairly formidable problem at a time when so many investors, both private and institutional, are tending to put larger proportions of their funds into equities. The fact is that the Government is forced to borrow and should borrow on long-term a large sum every year, and that is why I have said that this funding is so necessary. Of course, it is not only Government funding that we can use, because there is the very valuable co-operation of the National Savings movement, but funding is vital.
Therefore, it is appropriate that at this moment a new Funding Loan has been announced of £300 million of Treasury 3½ per cent. stock, maturing in 2004—which is some time on. We believe that the measures we have taken in reducing Bank Rate will enable an active and profitable gilt-edged market to continue, and that we shall make progress in reducing the liquidity of the banks.
I shall not speculate about future interest rates. I think it would be highly inappropriate to do so, but I would end this passage on the monetary situation by quoting one remark made by my right hon. Friend when he announced the Bank Rate change. He said:
"… we intend to continue to make full use of interest rates to discourage spending and encourage savings."—[OFFICIAL REPORT, 7th February, 1957; Vol. 564, c. 606.]
Mr. Osborne: Before my right hon. Friend leaves that point, may I ask him this question, which I think is a fair one to him and an important one for the country. He has said that Bank Rate was reduced because the Bill rate had fallen so far and that in order to make Bank Rate effective it had to be brought down to the level to which the Bill rate had fallen. Is it fair to reason from that, without asking him to make any forecast or promise, that it will be general policy that if the Bill rate continues to fall substantially the Bank Rate will continue to follow?
Mr. Birch: I think my hon. Friend would be very unwise to draw any of these conclusions. The fact of the matter is that the Bill rate is not outside the realm of Government policy.
What I was about to talk about was our foreign exchange position. The most important reason for the squeeze was to help our foreign exchange position. I thought the right hon. Member for Huyton spoke very well indeed on our foreign exchange position. It is obviously vital for us to maintain that and to fortify our reserves. We are a great trading nation, and if we are to have stability and progress at home it is absolutely vital that we should have a stable medium of exchange. Not only is it vital internally, and not only are we a great trading nation, but we are also a great centre of finance, a great banking centre, and we hold balances for many countries all over the world, particularly for the Commonwealth. That reason is sufficient of itself to make us extremely sensitive to any threat to the strength of sterling.
What we want to have in order to obtain a sound position is not only a proper balance on our current trade, but a sufficient surplus, not only to cover long-term lending abroad, but also to build up our reserves or to repay our debts. A current surplus by itself is not sufficient. As the House is very well aware, the reserves of this country are now and have been ever since the war relatively small, compared with the structure of trade which they have to support. The purpose of our task is to build up these reserves. The purpose of the squeeze was to do that, and a great deal of progress has been made since 1955.
Mr. Chapman: Where?
Mr. Birch: As the figures for the first half of last year show, progress was made. Exports rose, imports remained stable and we were able to pay off a certain amount of debt. We have not got the full figures for the second half of the year yet, but I do not think there is very much doubt that our trading position remained basically sound. This, of course, is the difficult time of the year, and there were the beginnings of difficulty over oil during that period, but basically the trading position remained sound.
What we had to face in the second part of the year was a banking crisis caused by the events in the Middle East. We got over that, as the right hon. Gentleman said, by mobilising our reserves and putting them in the shop window, and we are very grateful indeed for the cooperation we had from both the International Monetary Fund and the United States of America in doing so. The effect of that was to put us on an even keel again.
However, the point—it is a very important one—is that we should not have weathered that storm so easily if our trading position had not been basically sound. I think it would have been impossible to face a commercial crisis and a banking crisis simultaneously. Fortunately, owing to the steps that had been taken, we were able to weather the storm.
The present Prime Minister said on 4th December that the best forecast he could make was that we should be in balance for the year ending 30th June. Now—two months later—we calculate that our position will be rather better than that. It is too early to make precise forecasts, but we think that we shall end with a small, but by no means unsubstantial, surplus rather than all square.
As I have said, we have built up the reserves and we have weathered the crisis. What we now have to do is to rebuild and earn a sufficient surplus not only to cover our trading balance and our loans abroad but to build up a stronger liquid position in the centre here.
The right hon. Gentleman mentioned the balance of trade figures for January. I entirely agree that they are not good. They are caused partially by the dislocations following the closing of the Canal and the various consequences to

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shipping following from that. In one respect his figures were not quite right. He said that if one averaged the last three months one would notice that there had been a considerable deterioration. I do not think that is true. If one compares the figures for the last three months with the figures for the preceding ten months, one sees that in the last three months both imports and exports were up about 2 per cent., and the gap in the last three months was £53 million whereas in the previous ten months it was £52 million. Consequently, there is no very great difference there. I think it is too early to suppose that this indicates any change in the trend.
Mr. Chapman: If, as we expect, the import figures continue to rise in February and March after the backlog arising from the delay, will not later import figures be shown to be much higher? Is the right hon. Gentleman allowing in his present calculation for the fact that he has several months of low imports and only one of high imports? Surely, if he takes the figures for three months hence, when he has several months with high imports, the picture will look different.
Mr. Birch: Naturally, these matters have been taken into account in making the calculations. The hon. Gentleman must wait and see how they turn out.
There are plenty of difficulties ahead, but there is no doubt that basically our trading position is better. The right hon. Gentleman said that it might be true that the basic trading position is better but that this has been purchased at the cost of lagging production and lagging investment. The right hon. Gentleman made that case strongly. I want now to try to answer his point.
The right hon. Gentleman talked about rigor mortis in the production index. The stability of the production index does not mean that everything is staying exactly as it was previously. The stability masks a number of changes. We know, for instance, that there has been a considerable fall in motor vehicle production. There has been a fall in the manufacture of motor accessories. There has been a fall in the production of certain consumer durable goods. On the other hand, there has been expansion in other industries.
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There has, on the whole, been expansion in the investment industries. There has been some recent expansion in textiles. There are still many industries under pressure. Steel is very short indeed, and we could well do with more of it. We are also short of many kinds of skilled men, such as technicians and draftsmen. I think it would be worth while to give the House one or two figures to illustrate what I mean.
I would again make the point that simply to say that production is static can be very misleading. The index of production is an aggregate composed of a lot of different parts, some expanding, some static and some contracting. The object of production is not to produce the largest possible quantity of things; it is to produce the kind of things that are needed. The best evidence of this is that we have been producing more for export.
Let us look at the internal changes. We all know that the vehicle industry has been the chief sufferer this year, and for the first ten months of 1956 its index of production was about 161 compared with 171 for the same period in 1955. In building and contracting, on the other hand, there was a very substantial increase between the same periods, from 114 to 122. We had fewer cars and lorries but more factories and office buildings, which is not altogether undesirable.
In the engineering, shipbuilding and electrical group there was a fall in total from 151 to 148, but this conceals an increase in output for home industry and for export, while there was a fall in the output of consumer durable goods. The chemical and allied trade group rose from 176 to 183, and textiles and clothing rose a little from 116 to 118. Therefore, it is perhaps a little inaccurate to describe this as rigor mortis. What has happened is that some very necessary adjustments have been made.
The export demand for our goods is still very good, and it would be the greatest possible mistake if we were to start stimulating home demand before we had satisfied export demand. As the right hon. Gentleman said, if we want to increase production here at home, we have to have more imports, and if we are to have more imports, we have to pay for them by exports. Therefore, I think we

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can say that it is most misleading simply to describe the stability of the production index as stagnation.
That brings me to the question of investment, on which the right hon. Gentleman spoke with great fire. It is easy to talk nonsense about investment. Hon. Gentlemen opposite should reflect on the fact that investment in this country is at the highest point in our history. It is estimated that investment in 1956 was no less than one-third higher than in 1951 when hon. Gentlemen opposite were in power. Investment as a proportion of the gross national product has been increasing steadily for a number of years. Fixed investment as a proportion of the gross national product was 14 per cent. in 1951 and 16 per cent. in 1956, and those figures can be compared with only 12 per cent. in 1938.
Mr. H. Wilson: Since the right hon. Gentleman has just said that we must look not at the overall picture but at the distribution, is it not a fact that the biggest single increase in investment since 1951 has been in the motor car industry? Has he not been telling us that that is one of those which he wants to contract?
Mr. Birch: It may possibly have occurred to the right hon. Gentleman that from time to time there are fluctuations in trade. One would have to be a very remarkable prophet to get all the answers right and, judged by the record of hon. Members opposite when in power, they are among the worst prophets ever known.
The increase in physical terms was very rapid. In 1954 it was 9 per cent., and in 1955 it was 8 per cent. It got too rapid and measures were taken to slow down the increase. We do not yet have full figures for 1956, but in the first nine months of 1956 investment was 3 per cent. higher than in the previous year. The point I want to make is that investment has been increasing all the time and is in fact still increasing. There is no question of it having been decreased, nor do we see any reason whatever to suppose that investment will decrease next year. As the House knows, we now get returns from a number of private industries in order to check their progress. Those returns indicate that there is not likely to be either a large increase or a large decrease in private capital formation next year.
Mr. Chapman: How does the right hon. Gentleman square that with what is in the Treasury Bulletin for Industry, which says that the rate of increase is expected to flatten out in 1957? It goes further and says that factory provision by area in the first nine months of 1956 was one-quarter lower than a year earlier. How will he get expanding investment with that sort of thing happening?
Mr. Birch: I have just said that it flattened out. I said that our researches in private industry show that there is no strong reason to suppose that in total there will be a big variation either way. There will be some decrease in housing, but all that will be more than compensated by increased capital expenditure on certain basic services and basic industries, for example, the building of power stations, including the starting of some atomic power stations, and the great re-equipment scheme for the railways which is just beginning to get under way.
We see no reason at all to suppose that there will be a decrease in investment next year. In fact, such signs as we have go to indicate that it is much more likely that there will be a slight increase in total investment. When talking about investment, it is worth remembering that if one tries to invest more than one's savings one gets into inflationary trouble again. Many of the capital goods industries are working near the limit of their capacity. There is, therefore, also a physical limit to the amount of investment which can be done.
That brings me to the topic of unemployment. My right hon. Friend the Minister of Labour will, of course, be dealing fully with this when he comes to wind up the debate, but I thought it would be only fair to the House—and he also thought so—if I gave the latest unemployment figures now so that they can be used, if anyone wishes to use them, in the subsequent debate. It is clear that the restrictions on supplies of oil and petrol were beginning to affect employment by the end of November. In the previous two months, unemployment had been increasing at about the usual seasonal rate and unfilled vacancies had been falling at rather more than the usual seasonal rate. From November to December, however, a time of the year when there is usually little change in the level

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of either, unemployment rose by 32,000 and vacancies fell by 21,000. Short-time working, which had fallen in the second half of the year, increased considerably, particularly in the motor vehicle industry.
My right hon. Friend the Minister of Labour said in the debate on 20th December that he expected some temporary increase in unemployment. In all the circumstances, it seemed inevitable. The figures which we now have show that the increase has, in fact, taken place. On 14th January, there were 383,000 registered unemployed, of whom 343,000 were wholly unemployed. That represents an increase of 75,000 in the number wholly unemployed over the previous month. Outstanding vacancies fell in the same period by 24,000 to a total of 255,000.
In considering these figures, it should be borne in mind that this is a time of the year when, for seasonal reasons, a substantial increase in unemployment of the order of 50,000 is to be expected. This year's increase is bigger than in previous years, but the January total is only slightly more than it was in the years 1949. 1950 and 1952, and is less than it was in 1947 and 1953. It is only 30,000 more than the average for the last five years, and the rate of unemployment is still only 1 8 per cent.
Mr. Douglas Jay: What was the corresponding rate of increase between December and January of last winter?
Mr. Birch: I have given the average figure of 50,000. My right hon. Friend does not recollect the figure. We will let the right hon. Gentleman know.
Mr. Frederick Lee: Is it not a fact that in the last two months, December and January, unemployment increased by 156,000?
Mr. Birch: It would be better if I left this subject to my right hon. Friend. He will deal with it. It is his Ministry and I do not have all these figures in my head. I am very sorry.
Having dealt with that, I should like to turn to the future, about which the right hon. Member for Huyton had many things to say. He talked about new and appropriate policies. The word "new" should be marked, because I should like to consider what his policies were. With these policies he wanted us to do a great many
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things, rebuild the reserves, increase investment, secure full employment, stabilise prices, and improve the lot of the old-age pensioners and those living on fixed incomes. Nothing could be more desirable than all those objectives, but, as the right hon. Gentleman knows very well indeed, in the short run they are conflicting.
For example, if we had an immediate and large increase in investment at home it would be prejudicial to our reserves. We could not both increase our reserves and have large new investment simultaneously. We cannot have everything at the same time. The question is to strike a balance. As the Prime Minister said in the Budget debate, we cannot afford to run our economy flat out with more jobs than men to fill them, easy profits at home and rising costs. To attempt to do what was implied by the right hon. Gentleman, to have our cake and eat it, is bound to result in a condition where we try to run our economy flat out and get into a complete mess. As I said, we have to strike a balance.
It is not an easy problem to solve. It is fair to say that no country in the free world has succeeded in having full employment—by that I mean employment at the sort of level I have just announced—without a constant threat and danger of inflation. As the right hon. Gentleman remembers very well, hon. Members opposite did not altogether succeed in solving the problem themselves. During the last year in which they were in, office, with all the controls in the world, including import controls, with food rationing and with bulk purchase and with exhortation—the right hon. Gentleman is very keen on exhortation—and austerity, prices went up far quicker than they have ever done under the Conservative Government and gold went pouring out. So we can all agree that there are certain difficulties in striking the balance perfectly correctly.
Mr. John Cronin: Surely, in fairness to the House, the right hon. Gentleman should give the whole picture. In those days world prices were rising; they are now falling.
Mr. Birch: Prices go up and down. I am saying that, with all these aids, the party opposite did not find it very easy to strike the correct balance. It is not a very easy problem.

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The right hon. Gentleman once again rammed Western Germany down our throats. It is quite true that Western Germany has made a most remarkable recovery. She has been assisted by the fact that she has spent less than we have upon defence. The point is that the twin pillars of the German economic recovery have been no physical controls and very high money rates, and brilliant success has been achieved. It compares very favourably with what has been happening in Eastern Germany, whose economy is subject to all the controls in the world, but which appears to be approaching something like disaster. All I can say is that the methods by which Western Germany has achieved her success have been very different from those advocated by right hon. Gentlemen opposite.
The Motion refers to "new and appropriate policies". What we had from the right hon. Gentleman was a list of all the things his party did when it was in office—and they all failed. There was not a single new or appropriate idea among those he put forward. If we went back to those ideas they would fail again. All that the right hon. Gentleman is offering us is a return to the treadmill. I believe that our policies are appropriate and are working, because they are basically sound.
The credit squeeze and all that goes with it is unpleasant, unpopular and politically damaging, whereas the cures for too much disinflation, if it were to occur, would be simple and extremely pleasant. I should like to repeat some of the words which the right hon. Member quoted from the Prime Minister's Budget speech, when he said:
"… I would rather err on the safe side. A misjudgment on the side of over-optimism might have the gravest results."—[OFFICIAL REPORT, 17th April, 1956; Vol. 551, c. 873.]
He went on to point out that if we have too much disinflation, the cures are pleasant, easy and satisfying. We abandon the squeeze and lower the rate of taxation, both direct and indirect, and so forth. But the fatal thing would be to relax too soon. To do that would be to gamble with the future of our country and the employment of our people. We all want expansion, and if ever there was an expansionist it is my right hon. Friend the Chancellor of the Exchequer, but we
1118
cannot go faster than we can afford. To carry on with our policy may well be unpopular and unpleasant, but however unpopular and unpleasant it is, we intend to do our duty and carry on.
The Motion moved by the right hon Gentleman was a political exercise of a very familiar type. I ask the House to reject it and to accept the Amendment standing in the names of my right hon. Friends and myself, which reaffirms and supports the policy of Her Majesty's Government.
I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"affirms its confidence in the economic policies of Her Majesty's Government and its support for all necessary measures designed to deal with the economic problems facing the country".
5.24 p.m.
Mr. Desmond Donnelly: There were really three Economic Secretaries to the Treasury speaking this afternoon. First, we had the right hon. Gentleman reading us lectures on monetary policy. That, I felt, was part of the correspondence course which the right hon. Gentleman is now in the process of receiving. [An HON. MEMBER: "It is his subject."] I am most interested to hear that it is his subject, because, if so, I feel that it must have gone a little rusty. I was specially interested in his remarks about the Bank Rate and the Bill rate, and to know how the Bank Rate came down with the Bill rate. When his hon. Friend the Member for Louth (Mr. Osborne) asked the logical question, the right hon. Gentleman said that it did not follow that the Bank Rate would follow the Bill rate in future. If that is his subject, I hope that he has some better subjects in future.
The second Economic Secretary showed himself when the right hon. Gentleman was without a correspondence course and was seeking to give an answer to my right hon. Friend the Member for Huyton (Mr. H. Wilson). Then, finally, we had the Economic Secretary talking on the platform in his propagandist days, and using some of the old stuff which—if he does not mind my saying so—was below the level needed in any consideration of the problems facing us.
It is important, in looking at the very grave economic situation which is facing

1119
us, to consider it in its historical perspective. If we look back for thirty or forty years, we will see that during that time our economic position has shown a catastrophic decline. If we consider our economic and political position in 1918 and compare it with the situation today, we can appreciate that seldom in the history of any great people has there been a more rapid decline. There was an agricultural decline; the Sankey Commission's proposals in regard to the coal industry were shelved; the mining industry was dismantled, and coal miners left the pits; British industry languished and our skills declined. Those are years the British nation can never replace which we are having to pay for now. In those years the world passed us by.
Then, after all our efforts and our wealth had been expended in the Second World War and steps were taken to try to recapitalise our industrial society—when Sir Stafford Cripps was at the Treasury—no effort was spared by hon. Members opposite to denigrate his attempts to achieve this at a time when it was essential to do so. Ever since the Conservative Party have been in office there has been a consistent air of champagne complacency about the descriptions by right hon. Gentlemen opposite of our economic situation.
Mr. H. Wilson: The port and the pheasant.
Mr. Donnelly: Yes, as my right hon. Friend says, the port and the pheasant. There has been an air of unreality. The Lord Privy Seal boasts about the possibility of doubling our standard of living in twenty-five years. That is a relative term. The Americans are doubling it in eighteen or nineteen years. Even the French are doubling it in fifteen years. The Russians are doing so in eight or nine years, and Western Germany in seven or eight. While the Lord Privy Seal and the Government Front Bench have been asking us to admire ourselves in the shaving mirror, the world has been passing us by.
When we consider the historical perspective, the position is far more grave than any of us has attempted to evaluate in the House up to now. I urge the Minister of Labour to address himself to that point. The real position today has
1120
been acutely pointed by the Suez crisis, particularly because it has drawn attention to the degree to which our economy depends upon the fuel reserves of the Middle East, and how narrow is the balance between disaster and success for the British nation in the next ten or fifteen years.
After having inherited a preponderance of power in the last thirty or forty years, the Conservative Party has brought us to the situation where the British Empire as we knew it is now dead. The fact is that the British Tory Party has killed it. [HON. MEMBERS: "No."] Hon. Members may not like it, but they have to learn the contempt in which they will be held by history in the future. The real point is that we are now at the end of an epoch. Things will never be quite the same again.
Mr. Osborne: Surely, the hon. Gentleman is not being fair to himself or to his knowledge of history. He surely does not deny that nationalism throughout the world would in any case have grown in the last thirty years, and that, because of that, the shape of the old British Empire had to change and that it had nothing to do with the party in power. The hon. Gentleman is not denying. I am sure, that nationalism was an essential development in the second half of the nineteenth century.
Mr. Donnelly: I am much obliged to the hon. Gentleman for saying what we on this side of the House have often said in the past about India and Burma and the freedom of those countries. What I meant to say—and I ant sorry if I did not make myself clear—was that the economic influence of this country has declined so substantially that the old British imperial and economic power is now dead. Right hon. Gentlemen opposite have presided over its decline. We are now at the end of an epoch which, as I said, means that things are never going to be quite the same again.
In effect, we are seeing the death of the ruling class as it used to be. We are seeing almost the last Etonian administration that we are likely to see in this country unless it is an Etonian administration of descendants of the hard-faced men, as the hon. and gallant Member for Arundel and Shoreham (Captain Kerby) described them. I am not, like Malcolm

1121
Muggeridge, going to say that it perished on the beach at Golden Eye. It died because of death duties introduced by William Harcourt and an incredible series of political ineptitudes culminating in the Suez situation.
The second thing that has happened is that not only has the old ruling class died but the old working class is dissolved. People no longer regard themselves as members of the working class as they used to do. They are losing their veneration for what is virtually the moth-eaten squirearchy and are feeling a much greater sense of power. They expect a much greater return for their endeavours.
I believe that when historians come to look back, these changes will be evaluated as of equal importance as the ending of the feudal system and with effects no less far-reaching and profound. We have to realise that much of the apparent frustration and lethargy which appear to afflict our society at the moment arise from the fact that we are at the end of one epoch and have not yet started on the next, and that the people who are in the old society feel that they are in a rut. That is why they are seeking to emigrate. I think that the desire to emigrate and the restlessness that exists is a hopeful and helpful sign, because it shows that people are not going to be satisfied with the old rut. As I see it, there is hope in these stirrings.
The real question at the moment, in view of these profound social and political changes which are going on, is to what kind of society are we going to change in twenty or thirty years' time. Are we going to be another political and social democracy like Sweden? Are we to go snoring our way to Sweden with Heals furniture and Medici prints for the whole British nation? Or, alternatively, are we to cherish, like the Prime Minister, some illusions of mothball grandeur and to turn the nation into a taxidermist's shop window. Or is there some other function which we can fulfil in the economic society of the world? Can we make any other contribution?
These are the questions which, I think, make it essential for us to look far beyond the right hon. Gentleman's remarks this afternoon. It is essential for us to have people who can look over the top of our present difficulties. Our charge against this Administration is that it is
1122
still in the rut, is still thinking of the old epoch and cannot see beyond it.
I do not say that it is necessary for us to emigrate to get out of that rut. If I were in the Chancellor's shoes I would borrow an idea from Canada without emigrating to do so. Very recently there was an account in the Financial Times of the preliminary report of a body called the Gordon Royal Commission. That Commission was set up to look at the Canadian economy and to see where it is likely to be in twenty years' time and to report back to the Canadian Government. The Gordon Royal Commission has produced its first Report, which shows how it thinks things may be going.
We want something like that Commission in this country, because so many of our leaders are so busy going from one appointment to another that none of them seems to have time to think, and it is essential that someone should do some long-term thinking. The kind of questions that we should address to such a Royal Commission would be, first of all, what is likely to be the shape of our economy in the future and to what extent can we mould it. It may be that we cannot mould it very much, that events have gone too far or that it may be very difficult to do so. If that is the case, then let us look ahead and try to see how things are likely to be, so that we can make the best of them. I think that is a defeatist philosophy. If we can mould the future, how far can we mould it and what are likely to be the ways in which it can be done?
There are three facets to any society and to any Governmental approach. The first is the defence problem; the second is the political shape of the society, and the third is the economic shape of the society. If we save on defence we can expand somewhere else, but we have to look at the juxtaposition of all these three aspects of society to see where we are likely to go in the next twenty or thirty years. In particular, we need to assess the proportions of our people that we want to see engaged in defence, in industry, in education, in technology, in research and in the various aspects of Government.
The second question that we should address to any Royal Commission that might be set up is what external and

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political economic developments are likely to take place, the sort of thing about which the hon. Member for Louth spoke. What is going to be the possible economic and political development in Africa or Asia? What is likely to happen in Europe as well, and what is going to be our relationship to these areas and how are they going to effect us?
The third question is what technological advances are likely to take place—and not only the likely but the possible? And how these are going to affect our economy.
The fourth question we have to address our minds to is how we are going to get the new capital that is absolutely essential to us in order to finance these technological advances of the future.
There are only three sources of new capital. One is personal saving, the second is industrial saving, and the third is public saving. We have all to adopt a new attitude towards capital. Capital is a necessity, not a term of abuse. Capitalism, of course, is another thing, but we have all got to have capital. Personal savings, obviously, have their limitation. especially owing to the limited room for manœuvre available with our fiscal position as it is now. Industrial savings involve larger undistributed profits, and the Government must address their mind to seeing how these industrial savings are used to the best advantage in the national interest.
The third source is public savings. There was a very interesting article by Professor Arthur Lewis in the September issue of Socialist Commentary called "Public Saving versus Private Saving." I commend that article to the Economic Secretary in his future researches tonight, because it gives some idea of the possible use of public resources to expand the vital private industrial production and also to finance the nationalised industries' production as well.
These are the sort of things to which we must address our minds, but, ultimately, there is only one way in which we can increase our capital and that is by saying that in the short run we may have to do without so that in the long run we shall be better off. We must have the courage to say this constantly. There can be no argument about it. It is a question of priorities. As my right
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hon. Friend the Member for Ebbw Vale (Mr. Bevan) once said, the religion of Socialism is expressed in the language of priorities. That also has to be the religion of the Government Front Benches of the future, otherwise this country will find many of its resources frittered away yet further.
The final thing to which this Government must address themselves—I say this Government because, in my view, the transitory time is limited and room for manœuvre is very limited—is whether our existing institutions—financial institutions, governmental institutions, Civil Service institutions—are adequate for the degree of transitory change now taking place. These are the sort of problems which my right hon. Friend meant when he was talking about the need for new policies for the future. We have heard from the Economic Secretary some good jokes and some little information, but little else. What we require from the Minister of Labour and National Service, when he speaks at the end of the debate, is a sense of purpose and direction. We want to know where the Government are going.
I do not believe that the difficulties are so insurmountable and society in such a rut that we cannot get out of it. But I say to right hon. Gentlemen opposite—this is a feeling which goes far beyond party politics—that there is no evidence in the country that they have any clear idea of how we are to get out of this situation and what people have to do. People want to know what they have to do so that they may give of their best. I heartily endorse what my right hon. Friend had to say.
5.42 p.m.
Mr. Arthur Holt: I would say to the hon. Member for Pembroke (Mr. Donnelly) that what people have to do is to earn their own living and that the best thing the Government can do is to allow them to do that with as little restriction as possible. The less we have of exhortation by this Government, or any other, the better. But I do not wish at the start of my speech to create the impression that I am in disagreement with what has been said. I cannot remember any economic debate in which I found myself more in agreement with speakers from both Front Benches. We are getting along, I agree

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—perhaps the right hon. Gentlemen on both Front Benches are at last learning the value of sound Liberal doctrine.
I agreed with the right hon. Member for Huyton (Mr. H. Wilson) until about 4.30, and by that time I thought he had given a most entertaining and extremely accurate review of the past, without recourse to any of those figures which are apt to mislead and which, I am afraid, the right hon. Gentleman sometimes uses. It was a fair and extremely interesting review of the past. But, as was pointed out by the Economic Secretary, the right hon. Gentleman then sprang upon us the old, "corny" fallacy of Socialist selective controls which have been tried in the past and proved failures. I have a reference in my notes to the fact that in ten years, under Socialist and Tory Governments, Britain has staggered from one economic crisis to another. I was glad to notice that confirmed by the right hon. Member for Huyton. If I remember his words correctly, he said that we must take these steps which he recommended to free us from the crises which have been dogging us ever since the war. It is time that an end was put to this.
The House knows why we have had these crises and what is the answer. No one has yet been prepared to face it. As soon as someone starts to take serious steps to deal with the situation someone else looks at the unemployment figures and says, "This will lead to great unemployment, and we know we must not have more than 200,000 unemployed"—or 300,000, or whatever is the favourite figure of the speaker. That time is past. I do not pretend to know at what figure the economy is stabilised, whether it is at 300,000 unemployed or 400,000 or even more; or, if we became skilful in the handling of the economy for the first time since the war, whether it might be achieved at an even lower figure. It seems to me that it would be well to leave that out of the argument for the time being or, at any rate, to put it lower down in the scale.
Above all, it is important to stop inflation. This is the constant theme that prices are going up—it is in the Labour Party Amendment—that the situation is deplorable; that prices must not he allowed to go up, and that we cannot hold them until we have stopped inflation. I do not know whether we have
1126
actually stopped inflation yet or not. There are indications that we have gone some way towards doing so. But I think that the note issue must be a signal, for it is about £120 million higher than a year ago. Nevertheless, if we assume that we are somewhere near holding inflation now, it is obvious that we have to go through a transitional period where, in fact, we kill inflation for good, and great benefits will be obtained for the people of this country when that is done.
Most observers would agree that over the last twelve months the Government have practically halted inflation, not only by the use of monetary weapons, by the Bank Rate, but also by two or three more direct controls of a financial nature; the directives to the clearing banks against lending, the alterations regarding hire purchase and the directions to the Capital Issues Committee.
These have reduced the ability of people to get hold of the extra purchasing power still in the economy. It has been isolated in the banks, but as yet the bank deposits have not been reduced. I was interested when the Economic Secretary talked about recent funding activities. There may have been such activities through the open market operations of the Bank of England, but in fact the credit base is no smaller now than it was a year ago. Therefore, the chief job of the Government in the next twelve months is to reduce that credit base probably by £500 million. Then, without this extra purchasing power, these other financial directives may be done away with one by one. Interference with bank lending will no longer be necessary once the banks have not the surplus to lend. The same applies to hire-purchase restrictions in relation to cars and other things. They could be relaxed as the credit is mopped up by funding operations, and the same goes for those most objectionable controls of the Capital Issues Committee.
I was interested when the Economic Secretary, referring to funding operations, said that this type of thing, credit and monetary matters, was his subject. He will be busy this year. There is about £900 million of Government securities maturing this year which will have to be replaced. There is to be an overall deficit on the Budget which must be offset by long-term lending. There is also the

1127
Government funding of about £500 million of bank deposits. So this will be a considerable operation which I do not imagine can be done in less than a year.
This is going to be a year of transition. I suggest that what the Government have to do is to make up their mind that that is going to happen and that it is worth while, even if production stays as it is in a so-called stagnant condition—I do not agree with the use of that word —certainly the index of production figures are unlikely to go up if the Government pursue a policy of transition for this year. By the end of the year we shall have taken out of the economy any elements which would create inflation. I think that then the country would be ready for another spurt ahead in production based on a genuine increase of production and not on uneconomic increases due to excessive overtime, working on Sundays often at very high rates in a very uneconomical manner.
I do not take the view that we have any reason to worry about the size of our investment programme. Probably this year it will be slightly larger than it was last year, and last year, as Dr. Barna showed in a recent paper to the Royal Statistical Society, the gross capital formation increased in 1955 by 5 per cent., which he reckoned was the largest this century. People can prove so many things by figures, and I certainly am not in a position to question that, but, if it is so, it does not seem to me that at this moment we have any particular reason to be concerned about our capital investment programme.
So much for monetary policy. But what is the main object of all this? Here I entirely agree with the speeches made from the two Front Benches. The main object of all this must be to build up the balance of payments. We put everything in to back the £ last December. This position must be retrieved, and must be retrieved this year. I agree that we should have a target of something like £500 million for balance of payments. That overrides anything else we can afford in our home market.
Mr. Victor Collins: Just like that?
Mr. Holt: The hon. Member says, "Just like that?" Do we suggest that we
1128
cannot achieve this, that we are unable in a general sense to guide the economy in this way? I suggest that it can be done entirely by carrying out the processes I have indicated, and that we have to retain home consumption at something like its present level whilst more goods are sold abroad. Whether they are motor cars, generating sets, or anything else does not seem to me to be a matter of moment for the Government.
Mr. Collins: The hon. Member has indicated very clearly how this extra £500 million could be mopped up and then said that inflation could be disposed of, but he seemed to think that a £500 million surplus would be automatically earned. I should like to hear his views on how exports are to be increased.
Mr. Holt: If we mop up inflation in the home market so that people cannot buy goods, as there is still plenty of demand abroad those goods will be bought abroad. If the hon. Member were to say that there was a depression in the world outside and that people did not want to buy our goods, the problem would be quite different, but that problem does not exist; the world is crying out for our goods. Provided they are not drawn away to the home market, there should be no difficulty in getting the extra £200 million or £300 million required.
The second part of the policy must he in the Budget. Much as I should like to be able to recommend large cuts in taxation and so on, we have to face the fact that, if the policy is to act as a whole, any cuts in taxation must come only it there can be equivalent cuts in expenditure. Can that be? Basically, that would mean changes of policy. It would mean, for instance, changes of policy in regard to defence, about which we shall know later. Whether they can be of any substantial nature this year. I certainly am not in a position to say.
In the last few years the whole pressure has been for the Civil Estimates to go up. Are the Government to make any attempt to hold them at last year's level, or is it to be last year's original level plus the increase in Estimates we have had and something else added for next year? If that is the outlook, we must recognise that it is fairly black. We must recognise that some parts of the Civil Estimates— like education, if the building programme

1129
for new schools is to go on—are bound to rise, but there can be no hope of taxation reductions if the Civil Estimates as a whole are not going to be held at something like their present level. The Government have rather limited themselves on agriculture. They might have saved something there, but they have limited themselves by subscribing to a policy which is going to give high guarantees with very slight possible reductions every year. The main cut could only possibly be on defence and, perhaps, something on interest rates.
There is a general feeling that because the Budget figure is so large it is a little unrealistic to talk about cuts in administration, and that as we could only get such small amounts they are not really worth going for. That really seems a policy of despair. I would hope that changes would be made in policy to allow for substantial cuts. Whether that is done or not, in no way should it deter the Government from continuing something they have started, in a small way, I admit, in a much more determined way—making cuts in administrative expenditure. For instance, the Ministry of Agriculture has some 17,000 civil servants. That is about six times the pre-war number. The Board of Trade has 7.000-odd, which is nearly, but not quite, double the previous number. The Inland Revenue has about 50,000 civil servants, which is double the pre-war figure.
Mr. Douglas Houghton: In giving those figures, with which we are so familiar and with the conventional grounds of argument behind which we are so familiar, does the hon. Member take into full account the difference between the function and size of the undertakings of Government Departments today compared with before the war? What virtue is there in comparing the case as it is now with that before the war, when there was a vastly different governmental machine, and now, when there has been a wide extension of administrative activities?
Mr. Holt: The hon. Member probably does not think there is any point in doing that. He is entitled to that point of view, but personally I think there is point in the comparison. In a business, when saying what one is going to do this year it is very helpful to say what one did last year, in order to see why one should
1130
continue to do that this year, and to know why one did not do it in previous years. The fact remains that a whole lot of these Ministries were extended during the war. A whole lot of new policies were formed, and some of those policies have been continued with the idea that they are necessary. I dispute that necessity, as I have done on many occasions. Some of the policies are quite unnecessary.
Take the case of the Inland Revenue. A great burden was taken off the Inland Revenue by P.A.Y.E. It has cost every firm in the land many hundreds of pounds to collect tax for the Inland Revenue but, in spite of that, the Inland Revenue services have been doubled since pre-war. No doubt there are very good reasons for that. They have also been cut since the war ended. Most of these Departments are considerably less than they were seven or eight years ago. Cuts have been made. I would only say that strenuous efforts should be made to see whether further cuts can be made. If they can, a lot of other things will follow.
For example, in Manchester, as the hon. Member probably knows, a great new building is being put up at the moment only some hundred yards from Salford station. I understand that it is for the Inland Revenue and is to cost something like £4 million. I cannot see the need for that kind of thing. At the moment the staff is housed somewhere, and if it is crowded it would be far better to reduce the staff. If that cannot happen without taxation being cut, all right. I would cut that, too. It is a question of approach to the matter. If we stay here and say that large numbers of civil servants are a fine thing and that we want them to stay in their offices, we shall make no progress whatever.
Mr. W. R. Williams: Is the hon. Member aware that there is another large building not far from the Inland Revenue building and that it is being erected for the Post Office. Would he argue that the Post Office workers should be quite happy with the old building and with the conditions under which they are working now?
Mr. Holt: I should love to be able to answer that question, but I do not know to what building the hon. Member is referring.
Mr. Williams: Both the buildings are in Manchester.
Mr. Holt: Inflation can be controlled largely along the lines on which the Government have started and which, as indicated by the Economic Secretary, it appears that the Government intend to pursue. The economy must, during that process and by the end of this year, be further stimulated by cuts in direct taxation. That can only be soundly done if, before that, there have been cuts in Government expenditure. It is to that end that Her Majesty's Government should now direct their attention.
6.1 p.m.
Mr. William Shepherd: The House has listened to speeches from the hon. Members for Pembroke (Mr. Donnelly) and Bolton, West (Mr. Holt) which illustrate two distinctive approaches to the economic problems of the present day. I thought that the hon. Member for Pembroke was rather below his usual form. The only serious contribution that he made was to suggest a Commission such as the Gordon Royal Commission of Canada or the Paley Commission in the United States to peer ahead into the next quarter of a century.
I do not think there is an awful lot to be gained for the United Kingdom from enterprises of that kind. If anybody had started to peer even five years ahead in 1952 to determine, for instance, what the motor industry was going to be like, he might have arrived at conclusions which would now be quite useless to anybody. Our future cannot be charted like the future of nations that have within their boundaries nearly all the resources that they require for their development. Neither can it be said that a nation which has expanded so far as we have can plot its course in the same way as can young and expanding nations. There is not much to be gained from that point of view.
There was a conflict of view between the two hon. Members on how the economy should be run. The hon. Member for Pembroke said that we should have more detailed control of how things were to go, whereas the hon. Member for Bolton, West said that we should rely on sound Liberal doctrine and have no controls at all. He thought that what the Government had done was satisfactory but that in twelve months they should
1132
throw the whole lot overboard and change their policy.
I hope that we are not going to listen to the views of the hon. Member for Bolton, West. I want a free-enterprise society, but I want a viable free-enterprise society. I want to get away from the constant fear of a crisis round the corner. We shall not do that by harking back to Liberal laissez-faire doctrines on the one hand or by swallowing the nonsense of Socialism on the other. We shall get somewhere near where we want to go if we learn the lessons of the postwar era. There are lessons to be learned from it. The period of the last twelve months has not been without its merits in relation to our society.
I do not share the despair of the hon. Member for Pembroke. I do not think that we are a decadent society on the verge of a precipice. I do not think that our external position is as hopeless as he thinks it to be. We have made changes. Last year particularly has shown the way to control the economy in a manner which ought to be more carefully examined by this House and more carefully appreciated by people outside. It was a tremendous misfortune that we had the Suez affair.
Mr. Collins: Hear, hear.
Mr. Shepherd: I am not going to debate Suez tonight, but it is true that the economic picture was disturbed by the affair in the Middle East.
Last year was one of exceptional achievement in this country. It is no use the right hon. Member for Battersea, North (Mr. Jay) shaking his head. There were factors inherent in last year's economy which had a real lesson for us in the post-war era. We have done many things since the end of the war, more than many people realise, but we have always been faced with the bogy of rising prices. How to obtain higher production and the other desirable things consistent with maintaining stability of prices is the prime problem which this economy has to solve.
Last year we came nearer to finding the answer to that problem than at any time since the end of the war. We certainly had an expansion of exports, a remarkable expansion. We had a

1133
constant level of imports, something which we had been striving for. We had increased reserves for a good deal of the year, despite a later reduction of sterling balances. Investment was rising quite sharply for a while. There was an increase in factory building in one part of the year. Moreover, we had—we must have had—a rate of personal saving higher than at any period since the end of the war.
We achieved these things in 1956. We stabilised prices at the same time over a greater part of the year. We ought not to neglect the lessons which we can learn from that performance. How did we manage to do all that in 1956 and fail to do it in almost every previous year since the end of the war? We did it because, for the first time, we applied measures which were designed to control credit, not in order to attach to it a lot of physical controls, but in order to control the volume of credit and public consumption.
In addition to these effective controls we brought about a good deal of redeployment within particular industries. There is no doubt that in 1956 we saw a change from some of the frivolous and less necessary goods to goods absolutely necessary for our life overseas, in terms of export trade. We saw a real change in that direction. We must not and we cannot neglect the lesson that is to be learned from the results of 1956, which I say was the most important year in Britain's economic history.
Let me deal for a moment with what has been said about physical and monetary controls. I do not really care a tinker's cuss what the controls are. If physical controls are necessary for the well-being of British economy I believe in having them, but if we can get our results without recourse to detailed physical controls that is a very desirable thing to do.
We have seen that in 1956 we succeeded in getting control of the British economy for the first time without recourse to physical controls, but—we ought to be very clear about this—there were some drastic controls in existence. A C.I.C. limit of £10,000 is a formidable affair. If one is talking about controlling the economy, a weapon of that kind is about the most decisive that one can have.
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The hire-purchase restrictions were serious and cut the activities of many firms materially. Certainly, the credit restrictions bore very heavily upon the community.
What we have really got are physical financial controls. We are not relying upon automatic processes which are laid down by the outworn doctrines of the hon. Member for Bolton, West. We are relying on physical financial controls.
Mr. Holt: Is the hon. Gentleman now leading up to the idea that Conservative Governments should maintain something like the financial control of the Capital Issues Committee upon borrowing which is as low as £10,000? Is this new Conservative doctrine or merely crisis doctrine?
Mr. Shepherd: What I am saying is that the security of our economy is more important than any doctrinaire opinion. I am not prepared to say at what point of time or in what circumstances we should relax the physical financial controls that we have on the economy. All I say is that no risk can be taken with our economy, because, having put most of the goods in the shop window, and some of them in pawn, we cannot afford further mistakes of any kind.
I said that we had learned something. I think we have learned something of a negative character, and that is that interest rates are not what they were cracked up to be by the pundits. Generals are not the only people who try to fight the current war with the weapons and ideas of previous wars. I am sure that many economists, bankers and others really believed that the interest rate was a potent factor in controlling the economy. It is a potent factor if one is prepared to go up to a really effective rate, perhaps 10 per cent. I have no doubt that a 10 per cent, rate would cut a lot of activity, but we should also impose on the country an intolerable burden in respect of not only internal funds but external ones.
However, there is no doubt at all that in an expansionist economy a businessman looking at interest rates is not deterred by one between 5 and 6 per cent. Therefore, we must say that the classic concept of the interest rate does not apply in present conditions, and I hope we shall proceed to a moderating of the rate while at the same time maintaining the restrictions upon credit.

1135
Some hon. Gentlemen opposite have said that production was very good in 1946—they cannot deny it—but that we did not raise production that year. That is something to be regretted, of course. However, if one lets the economy get out of hand so that the sum total of demands is greater than one can meet by one's resources, one has to make some hiatus in production in order to get into a position where one can go ahead again. It is no good hon. Gentlemen asking for more of this, that and the other and imagining that we can have a great increase in consumption, investment and export and get away with it. We just cannot do it.
Consequently, the lesson that we have learned is that if we are to have the sort of increase in exports that we need, we must have a regulation of the economy, and restriction of domestic consumption is one of the most important methods. There are one or two things that the Government ought to do, and they have already indicated that they are going to do them.
One is to reduce defence expenditure. I hope there will be no weakening upon that. I know that an eminent gentleman has come over to tell us that we ought not to reduce our expenditure very much, but the fact is that we are spending nearly 9 per cent. of our national income on defence, whereas the average Western European nation spends about 4 per cent. We cannot afford a rate of military expenditure of 9 per cent.
I hope also that in the next few months we shall concentrate upon increasing the rate of investment, and in saying that I mean that it has to be done at the expense of consumption. Neither party should tell the country that easier times are coming for this nation and that everybody will be able to enjoy a larger share than previously. We must of necessity increase our rate of investment. On that depends not only our security but the security of those who come after us.
Today the industrial balance is a very severe one. By its very technique, industry demands an exceptional level of investment. On the whole, our investment, though growing, has not yet been enough. We must urge upon people the need even to sacrifice to obtain the level of investment necessary to preserve our future. I
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am prepared to stand up to the doctrinaire, whether he be the hon. Member for Bolton, West or one of my hon. Friends, because if we make any mistakes at this juncture the economy of the country will be in jeopardy.
There is perhaps too much disparaging talk about what we have done. Perhaps the inter-war years were the nadir of the British economy. Since the war our achievements have been really worth while. In face of very considerable difficulties we have produced many goods and improved the equipment of our industries. The Chancellor has said that, although our population is about the same as that of Western Germany, we produce half as much wealth here. Nevertheless, we are not so much behind as people imagine.
We have the great asset of having the finest collection of skilled workers in the world, and in many instances we have very fine equipment. Although our motor industry is in an unfortunate situation, where else in the whole of Europe can we find an engineering set-up as good as the British Motor Corporation? There is none as good as it.
Mr. Chapman: Is not the hon. Gentleman being rather extravagant in his claims?
Mr. Shepherd: I have a close interest in the motor industry. If the hon. Gentleman knows of a better engineering set-up —I am not talking about design, and certainly not about body design—than the B.M.C., I shall be interested to know where it is.
Mr. Osborne: If our motor engineering set-up is so much finer than any in the rest of the world, why do we require a 33⅓ per cent. duty to keep out imports?
Mr. Shepherd: I always took the view that it was not very necessary for us to have a 33⅓ per cent. duty on motor imports.
I have no fear about the future of this country. We have still a great Commonwealth; we enjoy a great deal of good will; and we can play a prominent part in the European common market. We are not down as a nation. We are not a second-rate nation, because no longer is the world judging a nation by the size of its army—armies are largely at a discount under modern conditions. But we

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must be a nation which has a sound economy.
One does not necessarily need the largest army in the world to lead the world, but one does need a sound economy. One cannot be a leader and a beggar at the same time. Therefore, I hope that we shall—I make this appeal to my right hon. Friends on the Front Bench—stand firm upon the principle that, however unpopular it might be in the next few months or so to deny reliefs which would increase consumption, there should be that denial. We should focus our attention upon improving investment in this country and through it the ultimate security of the nation. I think that if we were to attempt in these circumstances to win popularity by any inducements, we should be doing so at the risk of our economy.
I feel sure that my right hon. Friend the Chancellor of the Exchequer will be mindful of this fact that in the next twelve months we can, by means of controls, achieve the results which were obtained in 1956. I urge the House to realise that 1956 had some very potent lessons for the community. I believe that it showed the way in which we could control the economy and get the changes and the progress that we desired without increasing price levels. That is the battle against inflation, and I think that we can win it in that way.
6.23 p.m.
Mr. John Parker: I should like to say something about the industrial problems affecting my own constituency in south-east Essex and then something about the motor car industry as a whole.
First as regards the Dagenham area, the motor car industry, as hon. Members will realise, is suffering from being in a depressed state at present following the Suez crisis. I do not want to go into details about the industrial troubles at the present time, but I should like to make this point because it goes rather further than the immediate trouble. In that area we are suffering from being dominated by one very large firm, the Ford combine, and its power and influence is so great in the area that it produces a. reaction not merely among
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its own employees but also among the population in the area.
There is a feeling that it is unhealthy to have too many eggs in one basket and to have one industry and one firm in that industry too dominant in the area. It is obvious that not only the ordinary workers in the area but also the other firms in the area feel that that large combine is not particularly co-operative or helpful in relation to other industries now trying to solve the general industrial problems of the district.
The main criticism of the firm and its outlook is that, being of American origin, it has not really got used to British conditions. It looks on things too much from the American point of view. The town of Dagenham has felt that that firm has not been co-operative with the town council in working out plans for dealing with the problems of the area, whether we are dealing with industrial expansion, which of course the firm is going in for in a big way, or whether we are dealing with the social problems that arise from that particular industry—the housing problem, the transport problem of getting workers to and from their work, and so on.
We have had scarcely any co-operation from the firm. In many American towns a particular large firm largely runs the town. We do not want that in Dagenham, and there is a feeling that there is too much of that in the attitude of the Ford firm. There is a general feeling that individuals are just cogs in the machine, and that no attempt is made to treat individuals as real, live men and women but to think of them as just industrial units. In the long run, the ordinary Englishman resents being treated as a cog. He wants to be treated as a human being and he wants to have a reasoned case put to him when asked to do something, and not be dictated to. That applies not only to employees of the firm but to people in the area as a whole.
I hope that, arising out of these present troubles and difficulties, there will be a revision of outlook in the firm in its approach to the problems of the area, as well as to the problems affecting its own employees. I do not want to say more on that, except to say that, with regard to the expansion programme being carried through by the Ford company at the

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present time, I raised on the Adjournment on 7th December, 1954, when this programme was first announced, the question of possible difficulties that might arise in Dagenham through the carrying out of that programme.
I reflected the views of many people locally in pressing on the Government that they should give a lead to that firm and suggest that not all the expansion and employment which it wanted to go in for should take place in that area but that it should be spread. The firm ultimately limited its expansion in Dagenham. New developments have taken place at Woolwich Arsenal, Basildon, Aveley, Doncaster, Southampton and elsewhere.
After a good deal of discussion, the firm said that as a result of the big development programme which it was carrying out there would not be an appreciable difference in the number of people employed in the area and that it would at any rate keep employment roughly stable in the district. That was the firm's argument, and I think that on the whole it was a sensible decision to which it came. Following those decisions, the firm began to specialise in producing particular products at the different factories under its control. For example, it is intended that the whole of the manufacture of commercial vehicles shall be moved to Southampton, and that the Ford set-up in Dagenham shall be mainly concerned with producing passenger vehicles.
That may well be advantageous from an economic point of view with regard to the lay-out of the different factories belonging to the firm, but from our point of view in Dagenham there are social problems likely to arise from that kind of planning. People working in the industry feel that the passenger side is more likely to be liable to depression and to boom than possibly the commercial side, and therefore that they may well be in the years to come more susceptible to unemployment in the district than if they had a much bigger variety of products produced in that factory.
That is the sort of problem which ought to be looked at by the Government and the firm itself when considering how it should plan its production in future. I should like, therefore, to suggest that there should be greater variety of produc-
1140
tion in a big works employing several thousand people than there appears to be allowed for in Ford's planning for the immediate future.
Other industries in that area have their problems. With this very big expansion of the motor industry it has proved impossible for other industries to expand because of lack of labour. Many small firms have had to go elsewhere for that reason. We have the big chemical works of Messrs. May and Baker but because of this lack of labour that firm's big new expansion is taking place in Norwich. A firm making telephone cables is in the same position; it has not till now been able to get labour for expansion in the district.
I make this immediate suggestion to the Government. They should adopt a more flexible policy in regard to Development Areas. In Dagenham there is at present a good deal of unemployment or short-time working, and we should like the district to have the advantages of being considered as a Development Area. I understand that the Government are considering the abolition of the whole idea of Development Areas. I hope that they will not pursue that idea.
There is a strong case for keeping in being that machinery and employing it as necessary in districts where there is an increase in unemployment. Other places, originally classified as Development Areas, have had such an increase in employment that their problem scarcely exists. Areas like that should no longer rank as Development Areas and should be removed from the list. As I say, the machinery should be made flexible. Such a procedure would mean that, at the present time, the telephone cable company, for example, would be able to have the advantage of quoting for Government contracts on the same terms as others in Development Areas.
I should like to turn from the position in south Essex, and consider the motor car industry generally.
Mr. Jack Jones: As one who is vitally interested in the question of good relationships between labour and employers, I have followed my hon. Friend's argument very carefully. It seems that this huge combine is not cooperative with the local authority, and

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does not treat its workpeople as being other than mere numbers. Despite that, he says that other firms cannot get labour in the district, so it would seem that this combine does attract the labour. Is that the position?
Mr. Parker: When there has been good employment, earnings there have been high. Despite that, however, there is still the feeling that the employees are treated merely as numbers. That feeling is the more striking because in the past the earnings there have been high.
How do the Government see the future development of the motor car industry as a whole? In the last few days the Vauxhall firm has announced a big development scheme which will enormously increase its production. All the other big motor combines have either announced similar schemes or are well advanced with them. When all these development schemes are completed, and all the big firms are putting their cars on the market, do the Government see a market here and overseas for all that production? If all these schemes are carried through, I imagine that neither at present nor in the immediate year or two ahead will there be a market for their products.
If that is so, it will mean that, as a result of these large firms competing with each other, there will have been an enormous waste of capital resources which might have been used for other important industries. This seems to be a case in which there should be some Government control of capital expenditure in the industry. There should be some kind of national plan. The Government should take the lead in sitting down with these firms and working out what are the likely markets here and overseas and ensuring that there is some relationship between the likely markets and the car production. So far, nothing on those lines seems to have been done at all.
That means, as I see the position, that all the big firms will experience a series of slumps and booms successively. In Dagenham we were lucky in that, in the summer, when the motor industry in Coventry and Birmingham was hard hit, we had full employment, because the Ford company had produced a number of new models which met the needs of both the home and the overseas market. Those models sold very well.
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The coming of the Suez crisis hit Dagenham, of course, but when the petrol shortage is over there will no doubt be a revival of some of those sales. Recently we have seen Morris and some of the other firms producing smaller models which are selling well, in contrast with the Dagenham products. I believe that even if the Suez crisis had not occurred there would have been, in the months ahead, an unemployment problem even in Dagenham. Other firms would have been producing new models which would have cut into the sales of the Dagenham firm and, even in Ford's, there would have been some kind of a slump.
The Ford firm denies that. It thinks that it can so organise production that it will always have the right models coming along at the right time. No doubt the other big firms take the same view, but sooner or later there will be a slump affecting particular works and particular employees unless the problems of the industry as a whole and its production programme as a whole are looked at to try to see that production bears some relationship to possible home and overseas markets. It is for the Government to get the firms together to plan their future production.
I think that it will be very difficult to keep up a steady volume of sales overseas. Of this, I can give an interesting example. I went to the Dagenham works with a delegation from the Sudan. The leader was a very able man. He said to the Ford management, "I find that at the moment the imports of your firm's products into the Sudan amount to over £ 1 million a year. We should like to see a factory opened in the Sudan in the next year or two where the components can be assembled, and in five years' time you could have a factory producing for our growing consumption. We should like you to put up half the capital and we will put up the other half. Will you send someone to us to talk it over?"
That is the sort of thing that is happening, and which will happen in many of our markets, both in the Commonwealth and overseas. It means that the export market for cars will always be a rather difficult one, in which one cannot plan for a lot of years ahead, and in which one cannot imagine an enormous future expansion. It means also that the industry's products will have to vary

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in order to meet the requirements of the various markets, and when new production is set up in a particular country we shall find the market there disappearing, and will need to replace it by another.
At present there seems to be a number of markets which could be tackled rather more adequately. My right hon. Friend the Member for Huyton (Mr. H. Wilson) mentioned exports to China. I think that it is true that there and in many of the backward countries, in South America, in Spain, in the Far East, there are markets that can be developed for tractors, commercial vehicles, cars like Land Rovers and so on, and I do not think that there we are getting as big a share of those markets as we might. In the Middle East, there certainly ought to be more activity, with Government backing, to try at least to exchange oil for cars. That is another important area where a market has not been developed as much as it should have been.
As to the United States and Canada, we continually receive reports in Dagenham about the great success of the Volkswagen in American markets, mainly because it is easy to buy spares and have servicing done in that country. I suggest that the main British exporters to the American and Canadian markets should get together to try to set up a sales organisation of a better kind than that which they run individually at the moment, and particularly to see that spares are available for all the main British makes right through Canada and the United States. The Government should take the lead in trying to get the firms together either to set up a joint organisation or at least to work together. The important thing is to have a servicing organisation and spares always easily available for all makes of British cars sold in Canada and the United States.
During the petrol shortage, at all events, there seems to be a strong case for removing Purchase Tax in the home market, because unless there is a certain size of home market it is difficult for firms to push sales of their cars overseas. I do not ask for a permanent removal but a temporary one, perhaps tied up with the petrol-rationing system.
This is an industry in which there is great competition between the big combines. Some hon. Members opposite, from a doctrinaire point of view, may
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think that that is a good thing. I do not. It seems to me that great resources are being lost, and that we may have many sections of workers going through a period of boom conditions at one time and of depressed conditions at another. Many other industries, such as cotton and rayon manufacture, have experienced over-capitalisation at one time and have suffered for it afterwards. It would be a great tragedy if the motor car industry had over-capitalisation and were handicapped afterwards as a result in attaining a reasonable expansion at home or overseas. It is, therefore, the duty of the Government to give a lead to the industry and, if necessary, to exercise control over it to see that it does not make the mistakes that other industries have made in the past.
6.45 p.m.
Mr. Godfrey Lagden: It would be my great pleasure to congratulate the hon. Member for Dagenham (Mr. Parker) on his speech if it had been in any way accurate, but of course the majority of the things that he said were absolutely inaccurate. He painted a picture of the Ford Motor Company as almost a new arrival in the district and as an American concern that did not understand our ways. That is quite wrong. The company has been here since 1931, and that cannot be considered as yesterday.
The hon. Member said that the conditions in which the employees of Ford's work are not good at all. That is quite stupid. The conditions are splendid. If he would take the trouble to obtain a copy of their weekly magazine from the workers in his constituency who are employed there he would find pages and pages of photographs of people who have just retired after 25 years' service and more. Apparently they have been very happy there, otherwise I can think of no reason why they should have stayed there. The point which the hon. Member for Rotherham (Mr. Jack Jones) made, which may have passed over the head of the hon. Member for Dagenham, was to the effect that many people wish to get into those works of which the hon. Member for Dagenham seems to think so little.
Mr. Ellis Smith: My hon. Friend the Member for Dagenham (Mr. Parker) did not say all that.
Mr. Parker: Can the hon. Member for Hornchurch (Mr. Lagden) explain why there have been so many disputes at Briggs in the last few years and so much discontent among the workers there?
Mr. Lagden: I am obliged to the hon. Member for making that point. I had intended to refer to it.
This debate, instigated by the Opposition, may be of some use if it is a sincere attempt to improve our economic position, if an assurance can be obtained from the Government that industry will receive assistance to increase and enlarge, and if it ensures that the trade unions will know that they have the Government behind them if they now intend to be masters in their own house. They are not at the moment.
We have learned in the House in the last few days that the Government are giving very careful consideration to what can be done in connection with Purchase Tax and the embargo on foreign trade. The hon. Member for Dagenham referred to the possibility of markets in China. Workers at Ford's never lose an opportunity to bring that to the notice of those who represent them. I think that we would all agree that, as soon as possible, the embargo should be removed and that trade should flow to this country. We must be careful to see that it does not escape this country and go to others.
Mr. Sydney Silverman: It has gone already.
Mr. Lagden: The trade unions today are in greater danger than they have ever been. The danger is that their authority is likely to slip away from them if they allow the hot-heads and the shop stewards, who are in no way interested in the trade union movement itself, to take control. At Briggs, which is part of the Ford motor organisation at Dagenham, there is an above-the-average unfortunate collection of shop stewards who are practically Communists.
Mr. Ellis Smith: People used to say that about us.
Mr. Lagden: It is a fact that those shop stewards have been leading the men out on unofficial strike after unofficial strike. They have not had the backing of the unions in the majority of the strikes that they have engineered, and I regret to say that there are people in high
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places, who ought to know better, who have not only encouraged them but have given them help in these strikes. It makes it extremely difficult for the honest trade union leader to negotiate with a large firm if he knows that the negotiations and agreements at which he arrives will not be honoured because of the influence of those who are not authorised officials of the union. That is a very serious matter indeed. The trade unions realise that there will be a complete breakdown of their authority if they allow that state of affairs to continue.
Hon. Members: Nonsense.
Mr. Lagden: if hon. Members will take a little time off to talk to trade unionists and the heads of the trade union movement they will refrain from saying "Nonsense."
Mr. Charles Grey Mr. Charles Grey (Durham) rose—
Mr. Lagden: No, I will not give way for the moment.
I should like to quote a few figures to the hon. Member for Dagenham, who apparently knows so little about his own constituency and the works situated therein.
Mr. Grey Mr. Grey rose—
Mr. Lagden: No, I am not giving way for the moment.
Mr. Grey: The hon. Member said that before.
Mr. Lagden: In 1931, Ford's had 3.368 employees, in 1939 it had 8,000, in 1946, 15,000, in 1953, 21,910 and in 1956, 24,305. They are honest, hard-working men. Those 24.305 men employed at Dagenham wish to continue in employment, they wish to negotiate with their employers through the trade union, and the majority of them do not wish to be brought out continually on unofficial strikes by the shop stewards who only have their own axe to grind.
Mr. Ellis Smith: Why did they come out then?
Mr. Lagden: That is a question which I had hoped would be asked. I will tell hon. Gentlemen opposite one thing which no doubt will bring a roar of laughter from the ignorant. The reason why they come out is that such is the state of affairs

1147
in Briggs that it is extremely dangerous not to come out when they ring the bell. It is extremely dangerous to go back if they think a man has not supported the shop stewards. [HON. MEMBERS: "Rubbish."] If anyone opposite says "Rubbish" again, I will give a fact.
Mr. S. Silverman: Well it is.
Mr. Lagden: Within the last few months the workers in a certain department in those motor works refused to come out. The power was cut off elsewhere in the works and there were very nearly serious accidents as a result.
Mr. Grey: On a point of order, Mr. Speaker. The hon. Gentleman is making some serious charges. Can we ask, through you, that he should prove those charges and give the names?
Mr. Speaker: That is not a point of order. I should hate to have the onus put upon me of securing proof of every statement which I hear in this House. A certain amount has been said by the hon. Member for Dagenham (Mr. Parker) and this appears to be the other side of the question. I think the House should listen to both sides.
Mr. Lagden: Thank you, Mr. Speaker.
If the hon. Member for Dagenham is in any doubt, I recommend him to make inquiries from his constituents who work there, when he will find that what I have said is accurate.
Mr. Parker: They take a very different view.
Mr. Lagden: There is one more fact concerning the Ford motor works to which I will refer. The value of the shipments of cars, vans, tractors and parts to North America last year reached 20 million dollars. Is the argument that this firm is being too successful? Is the argument that it is making too many dollars for us? Or is the argument the one which we have heard when the hon. Member for Dagenham stands up at the town meeting, where he is not so shy, and where he says, "We do not want this highly successful firm here; we want it nationalised. We want the whole motor trade nationalised." Is that the argument? If so, why did he not use it? Or does the hon. Gentleman realise that nationalisation elsewhere is no advertisement—
Mr. Parker: Is the hon. Gentleman aware that Renault in France and the Volkswagen in Germany are both nationalised, and that both are very successful in selling in the foreign market?
Mr. Lagden: I thought that the present argument concerned the Ford motor works at Dagenham, and I should have thought that the highly successful figures, and the high wages which the constituents of the hon. Gentleman have been drawing from that organisation, would have been a sufficient answer to him; certainly it is for me.
The hon. Gentleman is not doing his constituents a good turn by continually attacking, and endeavouring to have an attack made against, that firm in his constituency. One of two things might happen. The firm might easily decide to close the works there and transfer it to Cork—
Mr. Parker: After spending £65 million?
Mr. Lagden: Yes, that could easily happen. Then the hon. Member for Dagenham could stand on what used to be marshes before this factory was built there, and he could look around and say, "This is what I have achieved on behalf of my constituents in Dagenham". All I ask him to do is not to achieve that for the people of Hornchurch, which is my constituency. I can tell him firsthand that the people who work in Ford's motor works are satisfied, by and large. They only want to be allowed to earn their living in a peaceful manner, in happiness with their neighbours and with the management.
Mr. Parker: Before the hon. Gentleman sits down, does he really believe that there would have been all these strikes in the last few years if there was a really good management in Briggs works? Does he really believe that people would continually come out unless they were dissatisfied?
Mr. Lagden: Not only do I believe that, but I would go a step further. If, as a result of the outcome of the present disturbances, there were an inquiry, and if the management got rid of a handful of agitators, there would be peace there in the future, as there might have been in the past.
6.56 p.m.
Mr. Frederick Lee: I do not intend to enter this private row for long, Sir, but I would assure the hon. Member for Hornchurch (Mr. Lagden) that if he believes that 20,000 people in a plant of that type can be led by the nose by a few agitators, he is revealing that he has no knowledge of workshop organisation. I came straight to this House from being the convenor and chairman of the works committee of one of the biggest engineering works in Britain, and my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) had the same background before he came here. I can say without any doubt that where there is intelligent management, able and prepared to meet the employees in a reasonable and proper way, there can never be the record of strikes that there has been in Briggs and Ford's in the last few years. It is doing no service to the cause of peace in industry in Britain to suggest that, on the one hand, irresponsible people are trying to foment disputes while, on the other hand, a blameless management is trying to get a proper basis of cooperation. It does not work that way.
Mr. Ellis Smith: So that is the hon. Gentleman finished.
Mr. Lee: The right hon. Gentleman the Economic Secretary to the Treasury gave us some figures of employment in opening the debate for the Government, and we are grateful to the Minister of Labour for putting those figures before us at the earliest possible moment in the debate. They reveal a serious worsening of the situation. As the Economic Secretary pointed out, in December unemployment was running at 297,000 which showed an increase of 81,000 over the year. Incidentally, in an intervention I think I said it was in two months, but it was in the twelve months ending December, 1956.
We have since heard that unemployment has risen from 297,000 in December last to 383,000 as at 14th January. Also vacancies dropped to 279,000 in December, which was a reduction of over 100,000 in the twelve months prior to that date. Vacancies are now down to 255,000. If the Minister of Labour can tell us when he speaks later how many people are on part-time work, we shall be grateful.
The Minister of Labour and National Service (Mr. Iain Macleod)The Minister of Labour and National Service (Mr. Iain Macleod) indicated assent.
Mr. Lee: Those figures represent a marked deterioration over a twelve-month period, and they cannot be viewed complacently by the Government or by any hon. Member of this House.
I am not convinced that Suez has made all that difference by itself. I have tried to show that prior to Suez there had been a marked deterioration, and that whether the Suez situation had occurred or not we would have been faced with a very difficult position. None of us can estimate what the figures would have been, but obviously we would have been faced with a difficult situation.
When one can hear the Economic Secretary informing us that the base of Britain's economic position is quite sound, against a background of that type and with current figures of a £103 million deficit in the balance of payments position, one really wonders whether the right hon. Gentleman is living in a sort of Alice in Wonderland conception of what this nation in fact requires.
I believe that the Suez crisis itself was not a major contributor to that deficit. I think that rather it is the fact that Government policy—and, of course, Suez itself was Government policy, but that was their foreign policy, and I am referring to internal policy—the Government's own internal policy has had a very great deal to do with bringing about this serious situation. Indeed, when one thinks of the background of international policy in this conception, if it were not for the fact that the Government's action in Suez was so very dangerous, I would almost begin to believe that the Government had come to the Shakespearean remedy for our domestic ills represented by the quotation—
"Let us busy their giddy minds with foreign quarrels."
While we have been so concerned about the issues of Suez, much needed criticism and much needed thought which this House should have given to these matters has not in fact been given to them.
As I see it, the industrial policy of the Government stands upon two points—the deliberate increasing of the cost of living and an attempt to stabilise wages at the

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same time. Quite candidly, no Government can get away with that one for long. Again, the Economic Secretary was so complacent about productive standards. It is the fact, I believe, that we have now completed our fifth consecutive year in which our share of world trade has diminished. It is the fact that our competitors are now actually increasing their productivity while ours is now actually falling. No matter from which side of the House we speak, none of us can really believe that there is a healthy economic background to a position of that sort.
Mr. Osborne: Surely, the hon. Gentleman will agree that as other parts of the world are industrialised, which is a natural expectation and development, so the proportion of world trade enjoyed by this country must automatically fall, and that brings no blame on the Government for the time being?
Mr. Lee: The hon. Member, who takes these matters very seriously, must answer the point that very great industrial nations, such as the United States and Germany, are not losing their share of world trade, but are in fact vastly increasing it, and that it is they who are increasing their share of world trade which previously came to us. I know the point which the hon. Member makes. Coming from Lancashire with a cotton industry background, one knows that the hon. Gentleman is right in pointing out that, when we see established great textile industries in countries which previously were our customers, we could not hope to get as much trade as before. But, in the general picture I am pointing out, it is the fact that our principal competitors are taking from us that which previously was our share of world trade, and, therefore, there can be no real health in our economy while that position continues to obtain.
I believe that one of the reasons for the fall in production about which I have been speaking is that the Government have never yet thought out the problem of how to get workers into the right type of industry. There has been no attempt to encourage vital industries to expand in what I would describe as the proper places. We were at one time promised a three yearly survey of the operation of the Distribution of Industry Act, and the
1152
previous President of the Board of Trade, who is now at the Exchequer, never really attempted to do that.
We have seen during the last few years that the control of industrial building has gone. Industrial building has been going up in precisely the wrong places. Some of my hon. Friends who represent Wales were yesterday discussing this serious position as it affects Wales, and North-West Wales was mentioned. When I had something to do with the distribution of industry policy, I realised the background of what happened once we got rid of industrial building control.
Firms with parent factories in the London area or in other big cities did not like the idea of having small factories in a Development Area. They agreed to go there, because we would not allow them to expand in the parent factory area. The moment we get rid of control of industrial building, they begin to bring back their work from the Development Areas into the parent factory, and they will enlarge that factory, creating unemployment and part-time working in the Development Area. I should have thought that the lesson of the mal-distribution of labour which we now see is one of the principal reasons why we should go back to the control of industrial building.
As I see the pattern now emerging, we are experiencing heavy shortages of skilled and indeed other workers in some areas where the vacancy lists have become bigger, with increasing unemployment and part-time working in other areas, with no alternative employment in those areas. This emerges in the statistics of the Ministry of Labour every month now.
When we have tried to point out this type of thing, we have had what I would look upon as the theory of the total numbers employed against the number of vacancies, which is the theory which we have had for so long. When the present Leader of the House was Chancellor of the Exchequer, it almost seemed to him that so long as there was a large number of vacancies he was afraid of it. He said it alarmed him very much. I get very alarmed when the situation is the reverse of that, when there are far more unemployed than we have vacancies for. We have in fact reached the point where-by what I believe is the negation of the planning of productivity has been

1153
achieved. It is this business of believing that if we have 30,000 vacancies and 25,000 unemployed we are all right and there is nothing to worry about. That has now been proved to be completely inadequate in the conditions in which we are living.
Again, the Economic Secretary was telling us that there has been a movement of workers into some very desirable industries. Well, has there been so very much movement into the right type of industry? Whatever we think of the motor car industry, which is a huge exporter, it has lost about 47,000 people in the last year or two. When we look at what has happened, we find that some of the industries which have expanded more rapidly than others are not the type of industry on which we must depend for our livelihood. For instance, the food and drink industries have gained more workers than coal, iron and steel, engineering and shipbuilding combined. Is that a good thing? Can that possibly be defended as the successful culmination of the Government's policy in this direction?
Let us look at engineering. I know that there was an increase of over 7,000 people in engineering, but in the iron foundries, which are the genesis of so much of engineering products, they have lost over 6,000 workers, and, therefore, there has not been a proper redistribution in the way that the Economic Secretary was suggesting. Let us take iron and steel, which is surely an industry upon which everything now depends in its capacity to give us the raw materials upon which so much of our manufacturing industry depends. It is true that this industry has had an expansion of 6,800. My hon. Friend the Member for Rotherham (Mr. Jack Jones) is more conversant with the details of this industry than I am, but I am saying that if we are serious in wanting vastly to expand our production, that kind of thing will not improve the case at all. Therefore, I suggest that the whole basis on which the Government have conducted their policies with regard to manpower has been shown to be erroneous and ill-founded.
I wonder whether the right hon. Gentleman can tell us anything about the reduction in overtime working in manufacturing industries. It should not be thought that
1154
I am an advocate of overtime, especially continuous overtime, for I am not. I deplore some of the tendencies in that direction that one sees, perhaps among younger trade unionists. Nevertheless, while we are trying to assess the causes of decreasing productivity and precisely what returns we are getting from one industry compared with another, it would be useful if the Minister could give us an indication of the number of hours overtime worked in 1955 compared with 1956.
I do not believe that the real effects of unemployment in the car industry have yet been correlated to our economic problems. The initial strike at the Austin works some time ago was a new departure. It was caused by a declaration of redundancy. Prior to that time there had been a gentleman's agreement between employers and trade unions that where there was a slackening off there would be no declaration of redundancy but part-time work, four days a week or whatever it was, would be instituted. That suited the employers because they did not believe that the recession would be long drawn out and did not want to dispense with their trained staff. It also suited the trade unions to have part-time work instead of unemployment.
The real break came when at the Austin works men were dismissed instead of being put on a part-time basis. The men were dismissed for one reason, because the employers had introduced an automatic tractor line, which meant that the firm would never again require the services of those found to be redundant. I believe that to be the background to the change which has occurred in the car industry.
Until we have a proper assessment of the size of car industry necessary for our requirements and the population which can be employed within it, I do not believe we shall obtain an answer to the problems which Ford and the other car manufacturers now face. There is a basis of insecurity. There is the question of whether one will be the next to be slung on the scrap heap while buying a house at a 6 per cent. interest rate and so on. It is a problem which the Government must face. Some of us have on many occasions asked the Government to try to assess the size of car industry that we need. So far the Government have refused to face the issue.
Mr. S. Silverman: Perhaps my hon. Friend would take two minutes to point the exact parallel with the cotton trade, because for years we have been asking the Government what kind of cotton trade they want, how big they want it to be, and what they want the people who leave it to do.
Mr. Lee: HANSARD contains the record of the many fights which my hon. Friend and other hon. Members representing the Lancashire cotton industry have put up in the House on that issue.
Mr. Osborne: This is a very important point. I agree that the feeling of insecurity on the part of the workers is the cause of half our industrial troubles. The hon. Gentleman is asking the Government to fix the size of the motor industry that we shall require in future, just as the hon. Member for Nelson and Colne (Mr. S. Silverman) wants the Government to fix the size of the textile industry. But how can any Government fix the size of an industry when most of its goods are exported and the industry is, thus, subject to violent, inevitable fluctuations according to the growing competition of newly industrialised nations?
Mr. Lee: The size of an industry can be determined in large measure, as the hon. Member for Cheadle (Mr. Shepherd) said, by the capital investment programme which the Government permit it. The motor industry still has a huge capital development programme. I do not know whether it proposes to go ahead with it. Those in it will be the greatest gamblers in the world if they do so now. Apparently there is still no leadership given by the Government as to whether the industry can safely go ahead with its vast development programme. Nevertheless, that is the way one can determine the size of an industry if one requires to do so.
I have previously said that Henry Ford's line production methods brought greater immobility to the worker than existed in the period when skilled men produced motor cars as a whole. Production line employees are specialists in a certain job. It is true that they obtain high wages. The alternative to assembly work in the motor industry is the old, safe and lowest paid industries of all. In using the word "safe" I refer to the industries which in pre-war days could
1156
provide 51 weeks' work a year, though in return the men received very low wages. Nevertheless, men sometimes deliberately chose a low but regular wage.
For a long time until recently most of our industries were safe, and there was no particular reason for men to take the bad conditions in the old, safe industries. Now, however, the only alternative the Government can give the men is to go from one of the higher paid industries to one of the very lowest paid industries. There again we are getting the background of unrest and insecurity. Dr. Bronowski made practically the same point in Reynolds News recently with regard to the white-collared workers whose jobs are now threatened by automation. In a great degree, they are more immobile than most other types of workers. The Government must take that type of thing into consideration, and, until they do so, they will not get industrial harmony in the way we desire.
Since the war this nation has spent vast sums of money in training workers for certain types of work. Merely to force them to take any type of job which happens to be offered to them at the employment exchange is to waste practically the whole of the money which the country has laid out in training them to do certain types of work.
Mr. Osborne: Would the hon. Gentleman direct the workers?
Mr. Lee: I should have thought that from that point of view alone a Conservative Government, of all Governments, should decide that it was not good enough, first, to expend the national income in that way, and, secondly, to allow it to go down the drain. Much good training is being dissipated, and the nation is not getting a proper return for its money.
Just now I mentioned the Distribution of Industry Act. I hope the Minister will look at this point. The Development Areas themselves are shining examples of the success of the policy of the distribution of industry. One can say, broadly, that the policy is that of taking jobs to workers and not workers to jobs. I believe we must expand and enlarge that theory. I appreciate that one can say that there may be only 2 per cent. unemployment in Birmingham, 'Coventry or elsewhere and, therefore, that there is

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no need for any special arrangements. That would be a very short-sighted policy.
I hope that we shall try to give to certain types of employers who have the type of industry which would fit in to Birmingham, Coventry and other towns, the more favoured terms to go there which we give to employers who go into Development Areas. I should refuse those advantages to industries which we do not want to go into those areas. By that method we would not merely solve the problem of today of a few hundred thousand unemployed, but begin to set the pattern of industry which will stand for years and do very well in the years to come.
I have one or two questions about the oil position. I believe that the House has been treated rather scurvily in this matter. Many weeks ago some of us suggested that it would be a good idea to have a priority scheme, especially for fuel oils for various industries. Since then we have had hints that the supplies of fuel oil are by no means as high as consumption and that therefore our reserves are going. We have been told that there will be no alteration until the end of March.
During the coming weeks much of our fuel oil may well be used by industries which do not need as much as they are now getting. When we come to the end of March it may be that there will have been such a reduction in our stocks that the really key industries of Britain may not be able to run at the levels required. If that happens, unemployment running into millions and not hundreds of thousands may come about. I therefore again ask the Government, in the period before the end of March, to make a reassessment to see whether the fuel oil now being used could not be better conserved against the day when we may have to make some more drastic cuts in those key industries upon which we depend so heavily.
I believe that we now have the situation in which labour unrest in general is very serious. I said earlier that a policy which depends upon trying to raise the cost of living and stabilising wages cannot continue very long. When, as I think, the Government accepted the dictates of the Employers' Confederation and forced the nationalised industries into a position
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where they could not increase their prices, they were obviously doing so to make sure that the nationalised boards could not pay wage increases. Once that sort of position obtains, what the Government are doing is trying to break down the very principles upon which collective security revolves.
I have tried in letters to The Times and other newspapers to get answers to certain questions. In a letter to The Times on 9th July last year, I said:
"Collective bargaining has been built up on the premise that each side has the power to respond to a convincing and adequate argument presented by the other party to the existing agreements within a given industry. To take the sort of action which is deliberately designed to preclude managements from paying increases is to ensure that there is no point in negotiating. … In the event of a wage claim being turned down because of the ban on price rises, against which body does the trade union concerned proceed? … In the event of an official strike taking place in one of these industries, will it be construed as political action against the Government?"
We are getting very near to that position. The Government are interfering with the basis upon which agreements have been reached, while at the same time provoking industrial workers into requiring higher wages because of the increased cost of living which we are now seeing.
I believe that in industry we are now in a serious position. I hope that even now the Government will see that very much of what has been said about strikes can be traced to the policies for which they are responsible. I believe that that is one of the reasons why we have a somewhat defensive attitude in the thinking of the trade unions now as distinct from the attitude which many of us would like to see them able to take. There is precious little hope for a Government who pursue policies as represented by the present Rent Bill, while believing that we can have industrial peace.
I believe that the workers, including their official leadership, are in increasing measure being faced with the alternatives of a supine surrender to a squalid endeavour to re-create a past that is dead, or a fight for a future for the nation and for themselves. That they are placed in that position is the greatest indictment against the Government which one can ever level.
7.25 p.m.
Mr. H. A. Price: I want to devote the time available to me to one aspect of our economic problem which has been exercising a good deal of my attention during recent months and which is of the utmost importance to the whole of our national economy. I refer to the plight of that section of our community which is usually referred to as the middle classes, and I use that phrase in its widest interpretation to include the two categories to which the Opposition Motion today referred—pensioners and those living on small fixed incomes.
I do not feel the need to devote very much time to proving the existence of this problem, as it has already been admitted by no less a personage than my right hon. Friend the Prime Minister, who in a speech last year—I think that it was the speech which he made in Leeds, in June—said:
"The Government has undeniably done well by the nation as a whole. There is, however, a growing campaign which argues that they have dealt less kindly with the middle classes. There is no doubt about the relative deterioration in the position of the middle classes, and as a Conservative I feel strongly about this. I know that many of them are much worse off than before the war. I know too that they have seen the prosperity of the wage earner increase rapidly."
Not long ago the Conservative publication, the Weekly Newsletter, said that the middle classes had good reason to feel that they had not obtained their proportionate share of increased prosperity. I know from my own experience that that feeling is very widespread, and in my view it is fully justified by the evidence.
The middle classes are far too diverse to be covered adequately in one short speech, so I will limit my comments to two small categories, and I shall use two groups of figures which are so graphic as to go a very long way towards proving my general submission. I am indebted to the Economist for the first group of figures, quoted rather more than a year ago, in January last year. I have taken the precaution of bringing them up to date.
They show that a chief executive officer in the Civil Service in 1939 started at a salary of £900 per annum. Today, as a result of continuous inflation and increasing taxation, he would need about £3,200 per annum to be as well off. In fact, he receives about £1,635. I have
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asked a Question, due for answer on Thursday, which will confirm the exact figures, but I do not think that I am far out. In other words, his standard of living has been slashed by 50 per cent. Is there anybody in this Chamber who will seek to defend that? I think not.
An assistant medical officer in the school health service in 1939 commenced at £500 per annum. In order to be as well off today he would have to earn about £1,500 a year. In fact, he receives two-thirds of that amount. His standard of living has been slashed by one-third. How is that to be defended?
In answer to a Question which I put to him last Thursday the Financial Secretary to the Treasury gave me some figures in respect of a higher executive officer. In 1939, such an officer's commencing salary was £550 per annum. Today he would need £1,733 to have an equivalent salary, and he gets £1,055. His standard of living has been cut by about 40 per cent.
Mr. Holt: I am very interested in the case which the hon. Member is putting, but it would be rather a pity if he were not fully accurate about it. Does not he think that in making these comparisons he should take into consideration the fact that he is dealing with a class which is receiving benefit from many of the national welfare schemes—for instance, the free Health Service? Has he made any computation of what that is worth in lieu of salary?
Mr. Price: The figures that I have quoted from the Economist take that factor into account. They allowed, I think, a figure of 7 per cent. in respect of it. I am open to question upon that, and my memory may be wrong, but the factor is certainly taken into account in those calculations. The hon. Member can find them in the Economist of 21st and 28th January of last year. They are in two extremely interesting tables.
The figures which I have quoted are not exceptional; they apply to every grade of the Civil Service and to local government officers, in varying degrees. Not long ago the teachers were in open revolt because they applied to them.
For the other set of figures I am indebted to the Prime Minister who, speaking in his constituency last September, revealed that over the past five years the

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industrial worker had received increases of 45 per cent, in his income in order to compensate him for a 25 per cent. increase in the cost of living. He was thus better off by 20 per cent. net. In the same speech the Prime Minister quoted two examples, one of a widow living upon an annuity of £300 per annum and another of an elderly couple with an investment income of £600 per annum who, as a result of tax concessions from this Government, were left with a net spendable income, after taxation, of 11 per cent. more.
My right hon. Friend forgot to mention that that widow and this elderly couple have had to face the same 25 per cent. increase in the cost of living as everybody else, so that they are really worse off by 14 per cent. net. That represents 15s. a week for the widow and 30s. for the elderly couple.
Incidentally, during the same five-year period doctors in the National Health Service have had no increase at all, although they have had to face the same 25 per cent. increase in the cost of living, and dentists have merely had restored to them a previous cut of 10 per cent. Even our own junior Ministers have had nothing at all.
Mr. S. Silverman: And Members of Parliament.
Mr. Price: The hon. Gentleman is wrong about that. Two years ago they had a 28·8 per cent. increase. Junior Ministers have received nothing, although they were given a clear promise.
Mr. Silverman: The hon. Member was interrupted by me, and what he said in reply may have been my fault, but I am sure that he does not wish to convey the impression that Members of Parliament are 28·8 per cent. better off than they were in 1939. Some people may think that that was what he meant.
Mr. Price: No. For this part of my argument I am comparing the last five years, during which time there has been an increase of 25 per cent. in the cost of living.
The middle classes concerned in industry have fared a little better, but I have been unable to find any section of the middle classes which has had even a 25 per cent. increase. I have been unable
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to find a single section which has not been made poorer during the last five years as a result of the increased cost of living.
My comparison, therefore, shows the industrial worker becoming steadily more prosperous—to which I do not object—and the middle classes becoming steadily poorer—to which I object very strongly. This is Socialistic egalitarianism under a Conservative Administration. It is not what the electorate voted for five years ago, and it is not what they will vote for at the next Election.
Mr. Shepherd: My hon. Friend will know that the total amount of increased consumption available per head of the population since 1938 is 7 per cent. Bearing in mind the existing defence needs, how does he propose to give the workers what he feels to be their due and, at the same time, maintain the former standard of living of the middle classes? I believe that such a standard is unmaintainable at present.
Mr. Price: I shall come to that point towards the end of my remarks.
Many people—of whom my hon. Friend appears to be one—say "This is inevitable; there is little or nothing that we can do about it". That is not my view. Not only do I regard that as not inevitable, but as unjust, unfair and, what is more, highly undesirable, if not dangerous, in the national interest.
I want to deal, first, with the unfairness of the position. Reference has been made to the increases in productivity achieved under different Administrations since the end of the war. I would refer hon. Members to an article appearing in the Daily Telegraph last year, written by a very eminent trade union leader.
Mr. Ellis Smith: What was his name?
Mr. Price: He was Mr. J. Crawford, President of the National Union of Boot and Shoe Operatives.
I apologise for the fact that it is rather a long quotation, but it is rather important to my case. He said:
"Despite occasional instances of resistance to new equipment and techniques, those with great experience in industrial and human relations agree that the physical and mental approach of the worker to the job is constant. The variables are the machinery and equipment provided and the standard of management itself, which too often fails to use modern

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techniques In no other way can we explain the fact of our annual production increase. The alternative is to believe that year by year workers are producing that little bit more by their own extra effort. In fact, the same physical and mental effort as before is producing, sometimes with better equipment, often without, but with modern tools of management, very substantial improvements in productivity."
In other words, that increase in productivity is due in no way at all to extra physical or mental effort on the part of the industrial worker, but entirely to improved techniques, better management, modern machinery, etc., all provided by middle-class brains. Yet the statistics prove that the rewards have been distributed in exactly the opposite direction. I should not think that any hon. Members opposite would quarrel with me about that part of my argument.
According to the broadsheet being distributed by the Socialist candidate in the North Lewisham by-election, the following phrase is part of the constitution of the Labour Party.
"To secure for the producers by hand or by brain, the full fruits of their industry."
That is what I am asking for.
Mr. Herbert Butler: Good luck to the hon. Member.
Mr. Price: I now want to turn to the question of the undesirable nature of the trend to which I have been referring. I believe it is undesirable for two reasons. In the first place, it is undesirable in a healthy democracy, and, secondly, it is undesirable in a nation such as ours which is facing the technical and scientific era that is opening up before the whole world. I will deal, first, with the question of a healthy democracy and will quote in aid no less a person than the Pope himself who, speaking to the International Institute of Middle Classes in Rome this year, said:
"It has been found that the countries where the middle classes were too small and too weak were exposed to the gravest and most violent political excesses."
I believe that to be true. A strong and thriving middle class is essential to a healthy democracy. But, even more important, at any rate in the minds of some people, is the fact that it is the section of the community that produces the kind of brains that this country is going to need more and more in the months and years ahead.
My right hon. Friend the Economic Secretary to the Treasury referred to that
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matter in his speech today. The previous Minister of Education announced an ambitious plan, the aim of which was to provide the scientific and technical brains which we are going to need. But how can we provide them when the families which produce this type of brains are being more and more depressed? [HON. MEMBERS: "Nonsense."] I have here a letter from a constituent of mine whose son is at the moment following a technical course at a very well-known educational institution. It is not a public school as quoted by the Evening Standard a short while ago, but the Polytechnic. Although this is only one letter, I do not think that the problem is confined to this one case at all. The letter says:
"My son has a friend at the Poly, who has the makings of a gifted scientist, but every so often he has to absent himself from lectures in order to try and earn a little money towards his keep. There are others who cannot even afford to buy themselves a midday meal. I think you will agree this is a sad state of affairs. Many students last term had to give up owing to lack of funds, and it really does seem a loss to the community, quite apart from the disappointment to the boy concerned."
I suggest that this is an important national problem. [HON. MEMBERS: "Hear hear."] It is almost entirely a middle-class problem. The country needs more and more scientists and technicians, and we must have them if we are to hold our own in this new scientific world which is developing around us. The Government must see to it that the parents who are willing to make sacrifices in order that their sons can play their part in this field are not so burdened—[HON. MEMBERS: "Hear, hear."] If hon. Members opposite cheer me too much, I shall have to stop saying these things—that the sacrifices are impossible to bear. What is more, the Government must see that when the boys themselves have completed their course of instruction they receive rewards which match their endeavours. That is why I say that this process is unfair, unjust and undesirable.
Mr. Osborne: Will not the hon. Gentleman also stress the fact that it is terribly wasteful from the national point of view that we should sacrifice in order to train technicians and then proceed to tax them so heavily that they go to America and Canada in order to be able to keep more of the money which they earn, because that is why they leave this country?
Mr. Price: I am grateful to my hon. Friend for his support, but I will not weary the House with a repetition of the argument.
Mr. David Llewellyn: Would the hon. Gentleman also bear in mind that the type of brains to which he refers comes from all classes of the community?
Mr. Price: It is true that they come from all classes of the community, but they come in far greater numbers from that section of the community which is usually referred to as the middle classes.
Mr. H. Wilson: If all this is true, why is it that in the Lewisham by-election the hon. Gentleman himself is being trundled round the division and very much used by the Conservative Party to show what a democratic party it is because, it says, he does not come from middle-class origins?
Mr. Price: It is perfectly true that I do not come from middle-class origins, but, unlike hon. Members opposite, that does not blind me to the difficulties of that section of the community from which I do not come. I have no prejudice.
To get back to the theme of my speech, I believe that the Government are well aware of the nature of these problems, although I have been mystified by the replies which they have so far given when questioned about them. The replies fall into two categories. First, the Government say, "We must defeat inflation. That is our first duty." Secondly, they say, "We cannot do anything which would appear to favour one class as against another. We are a national party."
I will deal first with the inflation argument. I entirely agree that the Government's first task must be to cure inflation, but I hope it will not be overlooked that that is of equal benefit to everyone. It does nothing to redress the balance. It does nothing to give back to those sections of the community to which I have referred the standard of living which they have lost over the past eighteen years. It still leaves that problem untouched.
I now come to the argument about the Conservative Party being a national party and not being able even to appear to favour one class as against another. If
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that is so, how are we to explain the figures which I have quoted? Is it not obvious from those figures that that is exactly what has been happening over the past five years? We have been favouring the industrial worker as against the other sections of the community. The middle classes are now saying to the Government, "We do not want favouritism; all we are asking for is equal treatment. The industrial workers have had a 45 per cent. increase over the last five years to counterbalance a 25 per cent. increase in the cost of living. Give us a 45 per cent. increase and we shall be perfectly happy."
Mr. S. Silverman: Does not the hon. Gentleman's argument rest on the quite unjustifiable assumption that all this began in perfect equality and justice, and that the movement has been one from justice towards injustice because the shares have altered in the way in which he says? But does not the argument disappear altogether when we realise that this began not in equality, but with what one might call the working classes getting far less than their share of the communal cake? That balance could only be redressed by giving other people less.
Mr. Osborne: Or by having a bigger cake.
Mr. Price: That is exactly my point.
All this to which I have been referring does not sound very much like the sort of Conservatism in which I believe and which I expected to get from this Government, and, indeed, which I still hope to get from them.
Mr. Arthur Lewis: Even after five years?
Mr. Price: Yes, even after five years.
We believe in house ownership, yet one result of the Government's policy has been to make house ownership more expensive and more difficult. I believe it would be more in keeping with Conservative philosophy if, instead of paying £1,500 to £3,000 in subsidies spread over sixty years in order to enable a man with a reasonable income to have the doubtful privilege of being a local authority tenant all his life, we gave him £250 or 10 per cent. of the purchase price in order to enable him to purchase the house for himself. That, I believe, is the proper approach for a Conservative Government.

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We believe in private enterprise and especially in the small businessman. But it is precisely that poor devil who is feeling most the credit squeeze. We call for greater productivity, yet we do nothing about restrictive practices which hold down productivity and force up prices in every sector of industry against the rest of the community. We have tackled restrictive practices on the part of the producer, but we shy like a frightened horse every time anyone suggests some action against restrictive practices on the part of the trade unions.
Mr. Ellis Smith: Give an example.
Mr. Price: The hon. Gentleman should look at a speech which I made in this House last April, where he will find plenty of examples. I will quote only one. In a television programme put on by a friend of the hon. Gentleman not so long ago—
Mr. Ellis Smith: Is the hon. Gentleman sure he was a friend of mine? Let us hear who he is.
Mr. Price: He is a member of the same party—
Mr. Ellis Smith: That is not good enough. Let us hear who he is.
Mr. Price: It was a television programme in which he was investigating restrictive practices in industry—
Mr. Ellis Smith: Then he is no friend of mine.
Mr. Price: In that programme he was dealing with demarcation disputes.
Mr. Ellis Smith: The hon. Member should withdraw what he said. It was no friend of mine.
Mr. Price: The hon. Gentleman is only taking up the time of the next speaker.
In that programme he was dealing with demarcation disputes, particularly the one at Cammell Laird. The representative of the employers—I do not know his name—was asked to estimate the loss in production resulting from these demarcation disputes. His reply staggered even me. He said it was 33· per cent. I should have settled for 10 per cent. I believe it would be possible to increase productivity by 10 per cent. throughout industry today with the machinery and equipment we have, if only we settle down
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to the job—and I do not put all the blame on one side of industry.
When that is done, we can begin to give their fair return to the people about whom I have been speaking. If this country is to win back its pre-war prosperity we must recreate—
Mr. H. Wilson: Which war?
Mr. Price: I am grateful to the right hon. Gentleman. I have used that phrase so often that I used it without thinking. I meant to say our proper place in the world—I hope that hon. Gentlemen opposite will agree on that. If we are to win back our proper place in the world, we must create an economy in which success is encouraged and rewarded and not frustrated by suspicion and jealousy.
The country needs extra productivity, and we must reward those who produce it. The country needs a greater volume of exports, and we must reward those who achieve that. Only in that way will it be possible to give to the middle classes that to which they are entitled, along with everyone else—their fair share of the national wealth.
7.54 p.m.
Mr. Donald Chapman: The hon. Member for Lewisham, West (Mr. H. A. Price) must forgive me if I do not follow him. I would merely join with his hon. Friend the Member for Cheadle (Mr. Shepherd) in saying that most of us, in the final analysis, if we look back would be certain that it was quite impossible to maintain middle-class standards if we were going to have a re-distribution of income which the injustices of pre-war years forced on to all our consciences. Although the hon. Gentleman will do very well at the head of his Middle Class Alliance, I am afraid that he will not get a great deal of support in this House.
I mention the hon. Member for Cheadle because, not for the first time, I am indebted to him for some of the things he said, in an intervention as well as in his speech. The hon. Gentleman was right about what we must look for in the future of our economy and about the great danger of letting up, as we might call it, that may face us in about six months' time. I will come to that in a moment.

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I am sure the Economic Secretary was right too when he said that today's debate is mainly about the need to maintain a proper surplus in our balance of payments. This debate is interesting because we are now having an inquest on the attempt by this Government, by their own methods during the last two years, to obtain that surplus. That is the interesting historical function of this debate, an inquest on the attempt to pull into shape this surpreme factor in our economic life.
The Government can claim that they have had some successes. I am not afraid to list some of them. The Government might say that by next June there will be an overall balance in our balance of payments. It would be true for them to claim that exports are up 6 per cent. in volume. I do not think the value matters so much, but they are up in volume by 6 per cent. In the dollar area they are up by 25 per cent., and that is not an inconsiderable achievement.
It would also be fair to say that imports have been curbed and that on the whole the total cost of imports has been fairly steady compared with the previous year. We have had a year of steadier prices. Consumption has been held fairly steady. In the last quarter of last year it was held for the first time since I can remember for some years. One thing which has not been noted as widely as it ought is the fact that in the last quarter of last year we began to get something which we have wanted for a long time, a fall in industrial profits. Per £ invested in industry profits were falling in the latter part of last year. This is not an inconsiderable achievement in securing disinflation.
Having been as fair as I can in summing-up some of the successes of this Government, I wish now to look at the other side of the picture and list some of the failures which must be put against the successes. First there is the fact that all this has taken from eighteen months to two years to bring about. The whole process has been extremely slow. Indeed, had the crisis of eighteen months ago been bigger than it was, we should never have weathered it by these methods, so slow are they in operation.
We have a very shaky balance. We are nowhere near the £350 million surplus in our balance of payments that this Govern-
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ment, and I think my right hon. Friends as well, would agree is our only possible objective for the coming years. So it is not very much to have brought forth after all this travail, all this insecurity, all this feeling of fear which has been created in the community, and the disruption of our industrial life. It is a shaky balance, when what we want is a very substantial surplus. Let us not be too complacent, or even satisfied, with the level of exports which has been registered.
We have been told that dollar exports are up by 25 per cent. but has it been noticed that this has been achieved at a time when everyone's dollar exports are up by that figure, and that the North American Continent is going through a period of inflation, a period of boom, in which everyone's goods are being sucked in? So we can claim no laurels for our achievement in the dollar market in the last 12 months, because we have done only what everyone else has been doing. It is not the result of some superb effort on our part.
If we look at our world trade in metal manufactures, we find that world trading has been going up much faster than our own exports. After all, these are the goods on which we depend more than anything else for our livelihood. I should not like to feel satisfied that just because they are going up, they are going up as fast as they ought to do.
Let us look at the import figures. It is true that they have been held. I have given that on the credit side as I was trying to be as fair as I could be, but the January figures, which have just been released, are very disheartening. I say to the right hon. Gentleman who is to reply that it is not so much that they might go up now that the Suez crisis is passing a little and some of the held-up imports come in. The fact is that our economy in imports has been largely maintained because of economies in stocks and someone soon will start stock-building all over again. There is no certainty that we shall be able to hold the import position. My feeling is that imports are going up substantially because we cannot live on stocks much longer.
On the debit side, we should look at what has been happening to the movement of industrial workers. My hon. Friend the Member for Newton (Mr. Lee) mentioned his doubts about distribution

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of labour. We were told that in the motor car industry, to which I make only passing reference tonight, the transfer was in order that workers could be shuttled from the making of motor cars into the exporting industries. I ask the right hon. Gentleman to tell us in what way that has happened. I have no evidence of it whatever.
The right hon. Gentleman gave some figures to the House some time ago about what happened to 1,400 workers for whom he found jobs when they left the British Motor Corporation. We found that of those workers 220 went into building and contracting, 67 to the railways, 65 to other transport, 101 to the postal services, 86 into distribution and 82 into public administration and other services plus 55 others. Something like 50 per cent., at the very least, of those went into totally unproductive work that is, in terms of exports. They certainly did not go into the sort of job the Minister of Labour destined them for when he began the squeeze. He told us that they would be all in exporting industries within a matter of months, but soon the figures showed that they did not go into those industries at all. A large number went into home services, some of which needed manning up, but certainly the whole object of the operation never came to fruition.
We should look at what we are paying for this in the employment figures. In the Midlands it is definitely the case that any more sackings can only mean an increase in the pool of unemployment. The jobs which are left vacant will be for those with the rarer skills and they will he vacant for many years because of certain gaps in the skills of our people. Jobs are now well below the number of men waiting to fill them.
Those things on the debit side are even less important than the two things to which my right hon. Friend the Member for Huyton (Mr. H. Wilson) referred in the opening of the debate. There is, first, the question of production. My right hon. Friend was quite right in pointing to the fact that production as a whole is stagnating. I did not think it was an adequate answer for the Economic Secretary to say that it is expanding in some particular industries. The reason I did not think that adequate is this. We can all get a surplus in our balance of payments, as we have always agreed, if
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we deflate to the sort of level at which we will get that surplus. When we reach that point the problem comes of how to get the upward swing to start again without creating inflation all over again.
We are concerned about the general level of production because until that begins to rise as a whole we shall have no chance of allowing increased consumption and investment or anything else in our community. We shall be stuck with a surplus, but at a much lower level of activity in the community.
Mr. Shepherd: Does the hon. Member seriously tell the House that he thinks the redistribution of labour which has taken place—the obvious and also the not so obvious redistribution—has been against or for the public interest?
Mr. Chapman: I take the point very well. I am not saying that it is against the public interest, but this was supposed to be a purposive reshifting of our labour into the export trades, yet nothing of that kind occurred. The Government slashed and cut, and squeezed, but with this result and the figures bear me out very substantially.
Lastly, investment is expected to level out in 1957. As the hon. Member for Cheadle said, no one can be satisfied with the level of investment we have now, but the hon. Member ought to be even more worried about the fact that everyone accepts that it is going actually to decline compared with 1956, or at least to level out in 1957.
To sum up, on one side we have a surplus in our balance of payments and certain things which are useful in that respect, but when we look at the other side of the picture we see that we are paying the price of achieving the balance by a lower level with no real hope for the future for expanding production and the very grave danger of stagnating investment. What are the lessons we can learn about this? I ask the right hon. Gentleman what his reflections are and how we are to get on once the Suez crisis is over and we are back to the normalcy which the Government were trying to create by the credit squeeze.
How are we to maintain the disinflation we have achieved? Pressures are now being put up throughout the economy. Every manufacturer is demanding that as soon as the oil crisis is over and we are

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through the misadventure of Suez we should get back to a reduction of the credit squeeze, that we must reduce the Bank rate and that all that has to be behind us so that we can begin to let up. I believe that is very dangerous. I believe with my right hon. Friend the Member for Huyton that we cannot allow that to happen. I want to know how the Government are to prevent it once they have accepted that it ought not to happen.
As the hon. Member for Cheadle said, interest rates are not so effective in the long run. The monetary weapon is useful for the short term as a danger signal for holding something back when it has got out of hand, but not as something permanent, not only to keep us on the present level in our balance of payments but to help us towards a £350 million surplus. How are we to carry on once the mood in the country is that we ought to begin to let up? I predict that in the final quarter of this year every manufacturer will be clamouring—as they are already beginning to clamour—for tax cuts, which is the only sort of incentive to investment they know. They will clamour for relaxation of the credit squeeze, the withdrawal of directives to bank managers and all those things.
In my view we cannot maintain those things beyond the danger period, we cannot have them as a permanent system, yet how are we to be able to stop using them? So far the measures taken by the Government are only producing a precarious balance, yet we have to go on to a £350 million surplus. If we once begin to relax we shall be in danger of inflation reappearing and the balance of payments again getting out of hand. Then we shall have to start tightening up on credit all over again.
We must know, for a start, what we can have as a permanency in these matters as opposed to the temporary measures of the last two years. I have a feeling that these measures will not be effective any longer once it is felt, in the latter part of this year, that the immediate crisis is passed and that there ought to be some let up. How are we to achieve that? If the Government give way, as I believe they will, how can we keep up the export drive on the Government's present policy? How can we prevent an exporter saying, "The Government have let up on the
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home front. I will allow more of my goods to go into the home market because it is much easier to sell them there without having all this sweat in the export trade."
How are we to do it? The question must be answered, because if the Government cannot do it we shall be in a permanent period of monetary control and credit squeeze. We must have a compromise between the methods of my Government in their day and the methods of the present Government. There has to be a compromise between the pure monetary control of the present Government and the physical controls that we had in the previous Administration. Only in that way shall we move towards anything that will be like permanency.
What exactly do we mean by that? I do not mean that we are back to steel rationing and to making everybody apply for a building licence to put an extra bedroom on the house. I am not going to be sidetracked into all the political rubbish of electioneering about what we mean by rationing. I am sure that it does not involve that, although it means several things. It first of all means that the Government must have a sense of purpose in what they do and an interest in what happens in particular industries.
The Government have to say, as Sir Stafford Cripps did in his time, "We think it is for the good of the country that such and such an industry should expand by so much." We must make estimates. Of course they will go wrong, as did the Chancellor's estimate of the Budget surplus this year, but at least they will be coherent and we shall be trying to move towards something with a sense of purpose. Then we can help to get labour into those industries instead of doing what the right hon. Gentleman has done, cut first and hope for the best as to where the people will go.
We have to have a certain control over building and in the export trade a certain exhortation procedure that my right hon. Friend has mentioned. We must get manufacturers together and tell them, "If we once begin to relax the credit squeeze you must not allow your goods to come on the home market. We believe from our investigations that you can expand your exports in such and such an area by roughly so much. We believe that you must set yourselves a target of that extra

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percentage." In other words, when this period of emergency is over we must try to marry some relaxation of the credit squeeze—which there must be because industry and the population as a whole will not stand it forever—with the sort of physical controls and exhortations of the kind that Sir Stafford Cripps tried to carry out.
Once this period of Suez crisis is over we must try to get, as a major feature of our longer-term policy, a greater level of savings in general and a higher level of investment. I do not see and I am sure other hon. Members do not, how we can get a higher level of investment unless we get a much higher level of saving. If once we let up the credit squeeze, any tendency to increase consumption must be diverted into increased savings. That is vital for our economy but how are we to do it?
I do not know. It is a problem that faces every Chancellor of the Exchequer. I will say three things. One thing we must do is to extend, as far below into the ranks of society as possible, superannuation schemes such as now apply to the middle class and better-off people. Superannuation must become as soon as possible an accepted practice so that we do not just have retirement pensions. granted by the State, of a minimum amount. There must be a universal superannuation scheme. I do not say that one scheme should apply to everybody but that there should be superannuation schemes covering every member of the community That will be one of the greatest aids to personal savings and a means of moving towards industrial re-equipment through investment of those savings.
Secondly—I am not sure how we can do this because it is one of the greatest problems of all—we have to encourage an even greater emphasis on home purchase. One of the best forms of saving up is to buy your own home. I do not know how we can do it, on the Government's present policy. If we have penal rates of interest, home purchase is not attractive. I do not know how we can do it, but we must find some way of insulating the building societies against high rates of interest and of helping the home purchaser to save his money. He must have every encouragement to buy his own home.
The one other point on saving I do not expect will be universally popular.
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My right hon. Friend the Member for Huyton is not very fond of the Prime Minister because of the gimmicks that the right hon. Gentleman, when Chancellor, put into his last Budget, and particularly the Premium Bonds. I have no love for Premium Bonds at all. The failure of the Premium Bond is not because of its basic idea but because of the fainthearted way it was done. I would like something much more thoroughgoing in the way of channelling into investment some of the money that goes into gambling every year.
I will be quite blunt about it. I would like to see some form of national lottery attached to the savings movement. It may sound like heresy to Non-conformists, but we shall not get out of our future problems by mere orthodoxy. We want one or two bold men to have a go at channelling into savings some of the money now frittered away in other directions.
When all is said and done, and looking at the post-Suez era, when all the clamour to reduce the credit squeeze begins and the Government begin to give the concessions that we all have to fight to resist, we must keep down consumption, increase savings and keep the investment rate up. The Government will not do any of these things, and particularly will not do anything in getting peoples energies and enthusiasm behind them, unless they have a sense of purpose in what they are doing in the economy and unless they say to people, "We have a sensible plan in what we are trying to do. We are trying to get certain industries to expand; and we shall prevent people squandering wealth on things, because wealth gives them the right to have things that the rest of the people are restrained from having." I refer to building of petrol stations, reconstruction of public houses and other inessential forms of activity in the community.
If we go into the post-Suez era wanting a sense of restraint and of harnessing energy and enthusiasm to a very difficult period of restraint in consumption, these things will be done only if the Government adopt a compromise between their methods and our methods. That will give a sense of purpose to the economy and a feeling in the ordinary people which does not apply when those who have the riches can always have what they want while the rest have to practise restraint. Our only

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hope of survival is for the two parties to meet to that extent in trying to plan the salvation of our economy.
8.20 p.m.
Mr. Charles Fletcher-Cooke: The hon. Member for Northfield (Mr. Chapman) made a most interesting plea for a bipartisan economic policy for the country. I think we should wish to examine that rather carefully, but at any rate he has done the service to the debate of bringing it back to the real issue, which is that of the overseas trade gap, from the North Lewisham by-election, upon which it seemed to be in danger of foundering.
I was very interested to hear him confirm what my hon. Friend the Member for Cheadle (Mr. Shepherd) said—and both are right—that the object of Government policy must for a long time be the restraint of consumption and the stimulation of savings. Indeed. I thought all the hon. Member's suggestions very good. but I did not think it was quite fair on his part, nor on the part of the hon. Member for Pembroke (Mr. Donnelly), to suggest that the Government, in the latter's phrase, were in a rut, and in the hon. Member for Northfield's phrase, had no sense of purpose in this matter; because in the last two or three weeks the Government, in their White Paper on a European Free Trade Area, have given a tremendous lead and initiative which has received very little attention in the debate and which, whether hon. Members like it or not, will put in a completely different perspective all the troubles which have been worrying us for the last four hours.
For example, various palliatives have been used to deal with the trade gap in previous years. Sometimes it narrows, sometimes it widens. Sometimes people try to dismiss it by saying that our problems are only marginal, as if by using that phrase they mean "trivial". Nevertheless, marginal or not, it has been with us, for better or worse, for much too long. That being so, it seems to me irrelevant for some hon. Members to say that it is not as bad as hon. Members opposite suggest, and vice versa. Of course it is bad, and it is wrong to draw any hope from monthly figures which may look a little less bad than those of the previous month.
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What I should like to know from the Government is how they think this permanent emergency which afflicts us will be affected by the United Kingdom joining a free trade area in Europe; because I regard the conjunction of those two items as a key to our economic future. I am a supporter of economic union with Europe, although many of my constituents in the cotton trade in Lancashire have grave fears about it. What they are frightened of is the fact that there will not be equality of burden upon them and their European competitors. It will be no good in the future for us to compare our tax burdens with those we have endured or will have to endure in the future. That is a comparison which should no longer be made. The tax burden on the firms and individuals in this country should no longer be compared with what happened in 1953–54 or 1954–55 but should be compared with what their competitors and their colleagues in Europe have to bear.
I have noticed recently that in higher economic circles there is a dangerous attempt to get away from comparing the tax burden with that of previous years because the comparison is rather odious and shows that the reduction in the tax burden has not been as great as many of us had hoped to see. The fashionable comparison now made is that between the relative burden of the taxes expressed as a percentage of the gross national product. That, of course, masks the fact that there has been very little reduction, not in real terms but in monetary terms; and I do not like that fact being masked, because masking it accepts almost as an axiom that the currency depreciates, and it is only by making the comparisons with the monetary figures of previous years that we see the full measure of the depreciation.
Even so, I think none of those comparisons will be the right comparison for the future. The comparisons which we shall have to make are those with our European competitors; how much tax does a Frenchman or a German or an Italian have to bear? It is only if there is some equality in this burden that we can hope to enter and to win this great struggle for the markets of Europe. That brings great point to the desire of all my hon. Friends to see, even in these difficult times, another determined effort made to reduce the taxation on industry

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in this country, which I believe to be still heavier than that anywhere else in the world.
Not only shall we have competition in the reduction of taxation in the European market but we shall also, even more strongly, have what we have already had to a lesser extent—competition in what I might describe as economic aggression. That is not a very nice phrase, but it describes what the world outside is very much like. I very much fear that although on social and moral grounds the character which is regarded in this country as the most admirable—and probably in many ways rightly—is the character which does not push and shove and believes in fair shares, that is unfortunately not the sort of character which is economically aggressive in its dealings in foreign markets.
I do not know the answer to this dilemma. We cannot breed a race of two-faced men—men who are kind and gentle at home but who go out with the determination to do down the other fellow, which is not necessarily based on financial gain but which is an aspect of character, when they get abroad. Unfortunately, living as we do in an island which is not self-supporting, we cannot afford to encourage or to breed the sort of character which otherwise one might admire.
I should like to know how we as a nation are to overcome that problem. I beg hon. Members not to take this in a light spirit, because I believe it is a very real social and psychological problem. The sort of people who beat us in the markets of the world are no doubt very disagreeable and very unworthy, but they beat us because they have the aggressive spirit. If we discourage that sort of character because of our ethical beliefs, then, despite all the credit squeezes and all our self-denial, I do not see how we shall ever get the markets which we must have.
Mr. Arthur Moyle: I have been following the hon. Gentleman's argument with very great interest, and I am most grateful to him for giving way. I wish he would clear up one point: where does he want the aggression—in the individual or in the goods?
Mr. Fletcher-Cooke: I do not think we can separate the two. If one goes abroad
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and sees the different ways by which people sell their goods, one finds that, although our goods are often better, they are not in fact pushed because the process of pushing is a very ungentlemanly, disagreeable one and one which, except in the very highest quality of salesmanship, we are not very good at. I do not know what the answer is. It may be said that it would be folly and disreputable to alter our ideals in order to get our markets. Unfortunately, we live in a world the nature of which has been predisposed by our forefathers, in which we, more than anyone else, cannot afford to force our ideas, our ideals, or our methods upon the foreigner because we are more dependent on the foreigner than he is on us.
I say that because I know that hon. Members may well feel that forcefulness in people's lives is somehow wrong, that one should never jump the queue but should always wait one's turn. Those are characteristics we all admire, but it is very difficult to reconcile them with breeding a race of salesmen such as is always being encouraged in speech both inside and outside the House of Commons.
After that digression, may I return to discuss what was said by the hon. Gentleman the Member for Northfield? He suggested, though not quite so strongly as did his hon. Friend the Member for Newton (Mr. Lee), but with, I think, the same spirit, that more could be done if the Government would plan the future of various industries and, in the words of the hon. Member for Nelson and Colne (Mr. S. Silverman), which he never tires of repeating, tell the industry—in his case, usually the cotton industry—what sort of size they want it to be. We had an interesting interchange at that point, because when the hon. Member for Newton was asked how he knew or how anybody could know what size an industry could or should be, he replied that of course one could do it; it could be done by using the weapon of capital limitation.
Of course, one can take even more weapons if one likes, but however many weapons one takes, however many powers one takes, they do not give one the answer. One can take as many weapons as one likes, but one does not know the size of the piece of wood one is to cut with them. I am strongly of opinion that the Government are less likely to know than anybody else.
Mr. Chapman: This is an argument we have had across the Floor of the Chamber for a long time, and it is about time it came to something like a conclusion. If I may say so, the hon. Member for Darwen (Mr. Fletcher-Cooke) ought really to face this fact, that there are many indications which a Government can adopt. They can give to the motor car industry some advice about what level of consumption of motor cars they think can be allowed having regard to our road programme, and what people are likely to buy if the standard of living goes up. The Government can generally give some very good idea of what the future level of home consumption could be. Then, in the export market, they could look to our competitors in the world, relating their performance to our performance, and make some recommendations. The motor car manufacturers will do none of that, because the industry is so competitive. Those are some of the ways open to the Government to give an indication of size.
Mr. Fletcher-Cooke: I suppose they could give their forecast by some means or other, which I cannot at the moment imagine, of the sort of purchasing power or amount of purchasing power which people in these islands were likely to possess in two or three years' time, though how any Government could know how public taste or the way the public will spend its money is going to shift I do not know. How on earth any Government are to be expected also to know how public taste and public laws in Brazil, Australia, Sweden, and all the other places, are going to fluctuate in two or three years' time, I just cannot imagine; and I believe that any such indication they might try to give would be a fraud on the motor car industry.
I really do ask the hon. Member for Northfield to believe that I most sincerely feel that any such indication would be positively misleading because it would almost inevitably be wrong, so many and so complicated are the factors which would bear upon it. The same considerations apply to other industries not so closely involved in the export business. If by being purposive the hon. Gentleman means that, then we cannot agree with him in his otherwise very sincere plea for a bipartisan economic policy.
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We cannot go as far as was hinted at by the hon. Gentleman the Member for Newton either, who said that the Government were not getting the workers into the right places. He coupled that, unintentionally I am sure, but significantly as a subconscious association, with a desire for the reimposition of building controls. The conjunction of the idea of building controls with getting workers into the right places struck one as sinister. I am sure the hon. Gentleman did not mean it so, but, if he were here, I should like to ask him an important question on this topic.
I see that the hon. Member for Newton has just taken his place in the Chamber, so perhaps I might put my question to him. In what way does he think that one can get the workers into the right places, which we all want? As I see it, it can be done in one of two ways: first of all, by directing them, which I am sure he does not want, or, secondly, by a wages policy by which the Government purposely and specifically attract workers into a particular industry. That would amount to interfering with the method of collective bargaining, and that is just what, in a later part of his speech the hon. Member said he particularly disliked and particularly blamed the Government for doing in regard to the nationalised industries. If he could explain any third method of getting the workers into what he regards as the right places, he would be doing us a very great service.
Mr. Lee: I did not, as a matter of fact, discuss the need for a wages policy. I believe that there is a great need for it, but I did not discuss it today. What I was saying on the question of the workers being in the right places was that I believed we had reached the point when we must deliberately take the type of work required by certain workers to them. I did not mean that we should direct labour or force labour to go into other parts of the country. I believe that, having created a body of workers with certain training and skill, it is our job to ensure that industry is moved into proximity with them.
Mr. Fletcher-Cooke: I understand that we should design our economy around whatever skill there happens to be in it, and that not only should the over-all pattern of our economy be, as it were,

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tailored for that purpose but that, geographically speaking, it should be shifted to the places where these particular workers happen to be. But, that, again, suffers from the vice of looking upon this country as self-supporting. There would be a great deal to be said for that if we were not going to be in hot or even hotter competition than ever before with other countries which do not believe in that. Undoubtedly, that is uneconomic, although possibly socially desirable, when we are in competition with countries which are placing their factories where it is most economic in regard to ports and raw material, irrespective of where the workers are. They, of course, are siting their factories not to suit the skill of the men who happen to be there but to make the products that the man overseas really wants.
Mr. Lee: We are now siting our factories and important industries because of raw materials, allocation and supplies and railways. Surely once we get rid of industrial control, as in the building industry, we have no chance of doing that.
Mr. Fletcher-Cooke: They are being sited by the people who are building them according to what those people, hoping to make a profit out them, think are the most economical places. Sociologically that may be undesirable, but from the point of view of the cheapness of the products in a competitive world it has its advantages.
In conclusion, I think these cold winds from Europe which are going to blow upon us all, and must blow upon us all. will involve a radical alteration even within the context of the questions that will be asked, not to mention the answers, I think that that gives us an opportunity of getting away from this terrible trade gap which dogs us year after year in one way or another, although, in its turn, it may produce another sort of gap which will require completely different thinking and completely different treatment.
8.40 p.m.
Mr. Iorwerth Thomas: I have no desire to follow the argument advanced by the hon. Member for Darwen (Mr. Fletcher-Cooke), but I should like to make this comment. He seemed to enumerate the difficulties and the very serious consequences which would result from any effort made by
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the Government to bring about limitations of capital development and investment in industry. I do not see how he can advance that argument, particularly in the light of the experience which we have had in analysing the operation of very large monopolies in this country which are exercising their freedom and their right to determine the size of their industry both for the purposes of internal trade and particularly in regard to exports. The difficulties are not, therefore, insurmountable. We could learn a great deal from the past practices of the monopolies.
My first point concerns the Development Areas. We are all well aware of the very great achievements that have resulted from the planned economy flowing from the operation of the Distribution of Industry Act, which transformed depressed areas and special areas into Development Areas, and planned their industries in a way which has been very much welcomed by their communities.
I realise that there is a desire in all parts of the House to remedy the present economic position. We have today heard lengthy arguments by those best qualified to speak. They have adopted quite a tutorial and professorial approach to these matters. When discussing deflation or inflation, I think that everyone will agree that those parts of the economy likely to be most affected by stresses and strains are the industries located in the Development Areas. What steps are the Government prepared to take to mitigate and minimise the effects of their policy of deflation?
The name of the Rhondda is, of course, synonymous with depressed areas, special areas and the rest and, in the main, what applies to the Rhondda would apply to all our Development Areas. In the Rhondda there are fears of the possibility of a retrogression to what we call the bad old days. For example, one very large factory in the Rhondda had at one time 1,000 employees. As a result of the operation of the credit squeeze and of the Government's present financial policy it has now only 300 personnel.
In that factory there is floor space available for all the original trained labour, but that trained labour has now been scattered. Some of the men have found employment in factories ten and twelve miles away, but the situation now

1185
is that the neighbouring factories and trading estates cannot absorb any more men. That has occurred in the very heart of a Development Area. What steps are the Government taking to see that that available floor space and trained labour are used to the best advantage of our economy?
I have a second example of the effect upon the Development Areas of the monetary policy of the Government. Some industries and industrialists in the Development Areas who have their own financial resources are able to proceed with a policy of capital investment by drawing upon their own private resources and thus have freedom to build and to extend their factories. At the same time, a substantial number of industrialists in the Development Areas who are housed in Government-financed factories are prevented from expanding by the monetary policy of the Government. They have to apply to the Board of Trade before they can expand their industries, but because of the credit squeeze the Board of Trade has rejected applications.
The industrialists in Government-financed factories therefore suffer an injustice in comparison with those who have been able to establish their factories from their own financial resources. That is an aspect to which the Government should give serious consideration. In my constituency, application has been made for the extension of an existing Government-financed factory, which would mean the employment of more than 400 additional people, 90 of whom would be men, but again we have seen the effect of the unfair, unbalanced and unjust operation of the Government's restrictive policy in the financing of factories.
There is another serious difficulty, which applies not only in the Development Area, but throughout the Principality. We all boast and are proud that the contribution of Wales to the nation's steel production is of the magnitude of 28 or 29 per cent., and a further expansion of the steel industry in Wales is envisaged at a capital cost involving hundreds of millions of pounds. The irony of the situation is that although Wales is producing such great quantities of steel, there are industries, both in South Wales and in the Principality as a whole, the expansion of which has been curbed by the lack of steel. This matter
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has been receiving the attention of many varied organisations in the Principality for many years. The Welsh Board of Industry, an organisation representing all the industrialists in Wales, has from time to time made representations imploring the Government to bring their influence to bear upon the steel makers in Wales to provide a section rolling mill in South Wales.
I have in my possession a document which shows that there are twelve well-established steel users in Wales who have not been able to accept contracts and to expand, and who have had to create redundancy and have lost their skilled operatives because they have been unable to obtain the proper quality and quantity of steel. Why should that state of affairs have existed for so many years? If the President of the Board of Trade made inquiries and took their opinion and advice, those industrialists would impress upon his mind the necessity for the establishment of a section rolling mill in South Wales.
It is true that at present the shortage of this steel has been considerably eased by the crisis in the motor car industry. The quantities of steel which are now available in the market are due not to any foresight on the part of the Government or even on the part of the steel makers but simply to the economic accident that the motor car industry has been experiencing a recession for quite a time now.
There are in my constituency steel users who recently had to dismiss 150 men because they could not obtain steel. There were plenty of contracts available but they would not accept them because they had not the steel. They have had to complete their existing contracts by purchasing the necessary quality and quantities of steel from the Continent and paying for it as much as £20 to £30 in excess of the home market price. It is a very serious state of affairs, when one considers the steel potential in the country, that steel users have to go to the Continent and increase the importation of steel at that increased cost in order to carry out their existing contracts.
Whilst the Government are wrestling with inflation, I urge them to bear in mind that the Development Areas of the country are vulnerable to the slightest change in the economy. They are the first

1187
to feel the cold breeze of any economic storm that comes along. They are so sensitive to the stresses and strains on our economy that there is a possibility of a great deal of unemployment being created.
I trust, therefore, that the Minister will give the three points which I have dealt with his serious consideration. I hope that he will be able to reassure the Development Areas in particular that they will receive the Government's constant care, and that they shall not suffer the indignities of the past but even in this slight economic recession can look to the strong arm of the Government to protect their interests.
8.54 p.m.
Mr. David Price: In the very short time available to me I cannot take up all the arguments which have been deployed on the other side of the House, Basically, the argument of the right hon. Member for Huyton (Mr. H. Wilson) was rather like that of the famous American comedian, Will Rogers, who said.
"I do not make jokes. I just watch the Government and report the facts."
That seems to me the burden of the argument from the other side of the House.
On the external side of our economy—and I have no time to do more than touch upon the external aspect—we did rather well on exports last year. There was a 10 per cent, increase in value and a 6 per cent. increase in volume. We saw a satisfactory change in the pattern of commodities. We saw a considerable increase in engineering products from 37£6 per cent. of all manufactured exports in 1953 to 40£5 per cent. in 1956. Textiles declined relatively from 12£6 per cent. in 1953 to 9£4 per cent. last year, although wool held its own. Thus the long-term trend towards exports of high, rather than low, conversion margin products continued. That trend is essential to a country with few indigenous raw materials. Equally we saw considerable improvements in the relative importance of the areas to which our exports were going. There was a 25 per cent. increase in dollar exports.
However, the crisis which we met last autumn was mainly a crisis of confidence. It was not a crisis based on basic trading conditions. I calculate that the gold and dollar reserves between the end
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of July and the end of December fell by 845 million dollars when adjusted for special credit and payments. We have to look rather deeper for the causes of that crisis because those causes remain. I hope that when my right hon. Friend replies to the debate he will be able to confirm that the crisis arose, above all, from movement on capital account. As I understand it, India drew £150 million of her sterling balances which she had intended to draw upon over the whole of her second five-year plan. Japan reduced her balance from £130 million to £20 million, and China, which seems to operate like the famous mythical Swiss bankers, moved £100 million out of the country. There was also a parallel movement out of sterling by the Arab countries. That may have been a backwash of Suez; I do not know. These figures alone would account for the considerable drain on our short-term reserves.
I emphasise that our gold and dollar reserves are only our short-term reserves. One has to look at the whole balance sheet of our assets and our liabilities. The real problem is the future of the sterling balances. I hope, therefore, that in the next few months we will get from the Government an idea of their general intention towards the sterling balances. Obviously, as bankers for the Commonwealth, it is a good thing to have reasonably high sterling balances. However, it is a bad thing to have large sterling balances if they are going to be drawn on suddenly, and so put great and unpredicted pressure upon our current gold and dollar reserves and therefore upon sterling, requiring large-scale official support to maintain the parity of the pound.
When one remembers that we have given independence to Ghana and that the problem of Malaya will be coming up, the question of the sterling balances becomes urgent politically, if not economically, so I hope that we shall get an indication from the Government of how they intend to deal with it.
Our total balance sheet, according to an economic study which I made last year, revealed—if my figures are correct, and I do not think they have been challenged—that whereas before the war every man, woman and child in this country was owed £75 from abroad, a year ago each one of us owed £59 abroad.

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Such is our changing position. Time does not allow me to develop the basis of my figures further.
I ask all my right hon. Friends on the Treasury Bench to consider a review of monetary policy and the monetary techniques. I am in favour of the monetary form of managing the economy, but what is evident from recent experience is that the really important matter is to control the total aggregate of liquidity, and not merely short-term interest rates. As I have said, time forbids me from entering on all the arguments about monetary policy that I had prepared— perhaps they will be reserved for an article in some learned, but obscure, journal.
I conclude by saying that I agree entirely with the necessity for establishing priorities in our economic objectives. The first priority must be to improve our external balance of payments and to build up our external reserves. I suggest that our priorities at home must be twofold. We must have more savings and more investment. It is no use having investment without saving. Savings come first. We must also give "a bit of lolly" to the people who produce the wealth. I am not referring only to the group mentioned by my hon. Friend the Member for Lewisham, West (Mr. H. A. Price), but to all the people who actually produce the wealth.
I know that my right hon. Friends have not had a chance, since going to the Treasury, to work out the details of their reappraisal of defence and the changes in the structure of Government expenditure. [An HON. MEMBER: "They did."] Not the present Treasury Ministers. Therefore, I know that it would be too much to expect great things in April this year. I should like to feel that their Budget is going to be rather like a trailer to a great epic, like one of Sam Goldwyn's "trailers," because all good "trailers" have this characteristic. They give you a little bit of the punch which two weeks later you get in very much greater detail when the main feature is shown. I hope that my right hon. Friend will allow us in his Budget to linger for a moment in the lush embraces of tax reduction, although we may have to wait until April, 1958, for the economies which will make art honest woman of her.
9.0 p.m.
Mr. Douglas Jay: I make no complaint about the absence of the Chancellor of the Exchequer and the President of the Board of Trade from this debate. I fully accept the explanation of this Government that two, if not three, Ministers are now required to represent us at O.E.E.C. whereas one was quite enough under the Labour Government.
Our charge against the Government in this debate is quite simple. Under their economic policy in the last two years, the cost of living and unemployment have gone up, and production and the gold reserves have gone down. I should have thought that that is exactly the opposite of what economic policy was intended to achieve.
The Economic Secretary to the Treasury this afternoon made the rather surprising statement that progress had been made in building the reserves since 1955. The reserve today is actually £240 million less than it was in January, 1955. To be perfectly fair to present Ministers, while the present Lord Privy Seal was Chancellor we lost £300 million worth of gold. While the present Prime Minister was Chancellor, not counting in the £200 million borrowed in December, we lost over £200 million in thirteen months. While the new Chancellor of the Exchequer was at the Board of Trade, and admittedly that was five years, we lost £500 million worth of gold from the reserve. And during the few months when the present Minister of State, Board of Trade, was in the Treasury—and he held the record for the speed of losses—we actually lost, again not counting the borrowed dollars, £250 million worth in that short period. I do not know whether those exploits were what the Tory Party election manifesto of 1955 was predicting when it said:
"The future beckons this generation with a golden finger."
I expect the present Ministers to do better. Indeed, if they do not, we shall have no gold left at all at the end of six months.
In view of the bromide—I use the Economic Secretary's own word—with which he referred to the question of the reserve today, I do in alt seriousness ask the House to face the gravity of the gold reserve situation, which, after all, is absolutely cardinal if we as a nation are

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to regain our independence and our influence. I wish to put these brief points to the House.
First of all, and I think the hon. Member for Eastleigh (Mr. D. Price) would agree, that the reserve is fantastically too low for the volume of sterling area trade, even if we count in the £200 million "mobilised," in the Economic Secretary's phrase, but in plain English, borrowed, from the International Monetary Fund. Secondly, if we do not count in these borrowed dollars which we have to repay, the reserve today is just about at the lowest point it has touched since the war, and far lower than it was in December, 1945. Thirdly, for the next few months, of course, we have to go on paying dollars for oil. Ministers keep on talking as if the only factor relevant to the movement of the reserve was the United Kingdom balance of payments, and that if we got a surplus there, which goodness knows is desirable, the reserve could automatically be expected to rise.
However, quite apart from the question of the sterling balances, we cannot build up the reserve even with a surplus on the United Kingdom balance of payments, so long as we are having to pay for a large part of our oil supplies in dollars. I thought the Economic Secretary was telling us only half the story today when he said he thought that the United Kingdom balance of payments was in a much sounder position. Do not let us forget either that by the time the Suez Canal is cleared—let us hope that that will be by May—the sterling area will again be entering its normal summer period of strain.
Why has the reserve fallen so low in the last few years? The present position is partly, as we know, the consequence of the Suez disaster. But the real reason is that over those years there has never been any Government policy for building it up. Priority has always been given by Ministers in the present Government and the previous Government to doctrinaire irrelevancies, such as the getting rid of controls, and electioneering pressure to give tax concessions to friends of the Tory Party.
Is there really any new policy now? I do not think we heard any from the Economic Secretary this afternoon. I know that the Prime Minister said in
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his constituency that he felt exhilarated by the present situation, but I do not find a ½ per cent. reduction in the Bank rate, with an explanation by the Chancellor that it does not mean anything, particularly exhilarating as a policy.
Let us examine the reduction in the Bank rate. In February a year ago, when the reserve stood at £789 million, the present Prime Minister came along, as Chancellor, with what was supposed to be a bold, stern stroke and raised the Bank rate by 1 per cent. He then protested his determination to build up the reserve, using the same solemn language with which he had promised us £100 million economies in Budget expenditure. But last week, when the reserve was far lower than last February, even if one includes the borrowed dollars, the new Chancellor lowers the Bank rate. We really cannot complain if the public is more mystified and puzzled about the country's real economic situation than it has been for a long time.
I hope, and suspect that the real reason for the reduction in the Bank rate last week is that the Chancellor has at last realised, or his advisers have, two disastrous effects, which my hon. Friends and I have long been pointing out, of our relying on the Bank rate almost alone for checking the loss of reserves.
Those effects are, first, the colossal expense of a 5 per cent. Treasury bill rate to both the Budget and the balance of payments. Secondly, and most important of all, there is the fact that dear money corrects the balance of payments only by stopping the rise in production. Consequently, by that policy one is forced into the dilemma that one can only square one's balance of payments by cutting down production.
Let us first look at the debt interest. Does the House realise that by 31st December in this Budget year the Government have already spent £570 million on debt interest and management, or £65 million more than in the previous year, and that total debt interest spending this year will be close on £700 million, which, incidentally, is seven times the whole Exchequer contribution to the National Insurance Fund? It is not only the Welfare State which is keeping Government expenditure and taxation high. I am not greatly encouraged to learn this

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morning that the Government are now funding £240 million of Government debt for 50 years at 4½ per cent.
Secondly, the most disastrous feature of the Government's economic policy in the last eighteen months has been the deliberate damping down of production to check imports. The present Minister of State, Board of Trade, candidly admitted to me in reply to a Question on 5th December that some fall in production was a necessary consequence of the measures taken to restrain home demand. So the Government admit quite clearly that they sought to reduce production to restrain home demand. I agreed with much of what was said this afternoon by the hon. Member for Cheadle (Mr. Shepherd). But I do not think that he faced the fact that such small hopeful signs as he enumerated in the story of 1956 were bought at the price of an actual fall in total production. Everybody knew that those advantages could be gained at that price.
The Minister of State, Board of Trade (Mr. Derek Walker-Smith): The right hon. Gentleman will recall that in fact I made the same point as was made by my right hon. Friend the Economic Secretary earlier today; that is to say, the overall figures for production masked a great deal of change within them whereby the production of consumer products had fallen and that for capital goods had, on the whole, increased.
Mr. Jay: Yes, and it is no better a point now than when the right hon. and learned Gentleman made it before Christmas.
The facts are that in all the last four months of last year, total production was lower than in the corresponding months of 1955. In the last quarter of 1956, production was 2 per cent, down and in December it was more than 2 per cent. down. We cannot solve our economic problems, let alone double the standard of living in 25 years, by producing less and less. It is not good enough for the Minister of State or the Economic Secretary solemnly to protest that production of some things went up and that of some things went down. The Economic Secretary knows as well as I, even if the Minister of State does not, that an economy is not functioning properly unless both a rise in total production, and changes within the total, take place at the same time.
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Of course, it is true that if one refuses to exercise virtually any physical controls and operates solely or mainly by the Bank rate, one dare not have full production, because one would not be able to pay for the extra imports. If one will not use the steering wheel for theological reasons, of course one has to keep jamming on the brake. The only reason why the Government have lowered the Bank rate merely by ½ per cent. is that the Chancellor himself knows that on present policy we cannot pay for the imports which are required for full production and full employment.
This seems to me the new restrictionism. One slows down the whole economy because one has a theoretical dislike of a little more restraint and selectivity. If the hon. Member for Louth (Mr. Osborne) does not believe me, let him read the first leader in the Economist this week. The Economist points out, quite fairly, that we lost £750 million worth of potential production last year as a result of the Government's deliberate deflation. It argues the issue, quite fairly, between the expansionists, who want full production first and foremost, with enough import restraint and selection to make it possible, and the restrictionists, who want to hold back production and employment to the level at which any more physical controls can be avoided. That is the real issue.
Hon. Members on this side of the House are on the side of expansion. The right policy is to aim at the highest possible production and exports and accept the minimum of restraint necessary to make that possible. This stagnation policy, which the Economic Secretary politely called a policy of restraint of the last two years, is disastrous defeatism.
If there were time I could quote any number of figures to show that in the last few years Britain's record, in the volume of exports, investment and production, compares lamentably with that of almost any other similar industrial nation. I will quote only two facts. It is quite true that, at the cost which I have mentioned, our exports rose in volume by 6 per cent. in 1956. But in that year they were still less than 20 per cent. above the 1950 level, and that is a smaller rise than has occurred in any other industrial nation in Europe.

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Secondly, we are now forgoing total possible production to the extent of about £1,000 million a year, which we should have if the annual rise in our production was the same as it was before 1951, and the same as is being achieved in other countries. What could not we do with an extra £1,000 million, or even the £750 million which the Economist says that we should have had last year?
As the hon. Member for Cheadle said, we have done a lot of investment since the war but I think that he will agree that, as a proportion of our national income, it is woefully small compared with the situation in most other great industrial nations. This stagnation policy has a deplorable effect upon productivity. Deflation is the enemy of productivity. Again, according to the Economist, labour costs per unit of output rose faster than ever last year, as a result of the Government's deliberate deflation.
What is the use of asking a redundant motor worker, or even his luckier pal on a four-day week, to listen to a lecture on productivity? Deflation and short time have destroyed much of the good work done since the war. They tend to bring back the urge for security at all costs, and cause restrictive practices on both sides of industry.
What should the Government do in these circumstances in encouraging productivity? First and foremost, they should forsake devaluation and stagnation and go all out for expansion again. Over and above that, however, I should like to put one or two concrete suggestions to the Minister. I suggest that in the April Budget—I think that we shall have it in April, as usual, although we can never be sure with this Government—priority in concessions should be given to restoring the investment allowance, if possible upon a selective basis. We really must expand investment this time. We must not start a spending spree, as we did under the Lord Privy Seal's régime.
If the Chancellor is to take the advice of the hon. Member for Lewisham, West (Mr. H. A. Price) and do something to help the skilled executive and professional workers, I suggest that he looks at the scheme advocated in the Minority Report of the Royal Commission on Taxation of Profits and Income, for combining a
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better children's allowance with a variation in the £2,000 limit for Surtax. I hope that the Treasury will think that point over.
I hope that the Chancellor will also prepare a plan now to see that cuts in defence expenditure are made so as to release labour where it is needed and not to cause unemployment. I am sure that the Minister of Labour knows that that was done with great success both during the war and afterwards. I hope that he is in consultation with the other economic Ministers and will see that the cuts which are made are not just reckless and haphazard ones which will merely increase unemployment.
Next, the President of the Board of Trade should do something positive to increase our proportion of Commonwealth tobacco imports to save dollars. This point has been continuously raised in the House, and it is not good enough for the President, as he did in answering a Question last week, simply to say, feebly, that tobacco imports are on open general licence, implying that he cannot do any more about it. He must know that a huge proportion of our tobacco imports are bought by the Imperial Tobacco Company, and that for ten years before 1951, anyway, the proportion was agreed year by year between the tobacco companies, the Treasury and the Board of Trade. By that means we brought the dollar proportion steadily down.
It is extraordinary that the Government go on wasting dollars in this way on dollar tobacco and yet borrow 560 million dollars from the International Monetary Fund. And in order to get these dollars—they never told us this—they were compelled to give pledges to the Fund about British credit and fiscal policies such as had never been given since the war. If the Minister denies that, I can read out statements by the Chairman of the International Monetary Fund in which he says that that has been done. [HON. MEMBERS: "Read it out".] Very well. The Chairman of the Fund, after the loan had been granted, said:
"The United Kingdom Government has announced that it will follow fiscal, credit and other policies designed to strengthen the economy both internally and externally."
Mr. Osborne: Surely the right hon. Gentleman does not object to that?
Mr. Jay: The Chairman then went on to say:
"For this reason the Fund has approved a transaction of this magnitude."
This means that before the loan was granted some assurances about our fiscal policy must have been given to the International Monetary Fund.
Mr. Walker-Smith: Is it not obvious that that passage is taken from the statement of 4th December made in this House by the then Chancellor of the Exchequer?
Mr. Jay: No. If the Minister of State looks at it he will see that the discussions must have taken place before 4th December because it was on that date that the loan was announced.
Next, the Government really ought now to end the embargo on British exports to China. I hope that the Minister will note that the hon. Member for Horn-church (Mr. Lagden), who I am sure is no Communist, supports this point of view. The Korean armistice was signed as long ago as July, 1953, and it really is imbecile to be continuing this embargo in 1957.
Finally, and this in my view is among the most urgent tasks confronting the Government today, the Government must this winter radically relieve the present deplorable plight of the old-age pensioners in this country. [HON. MEMBERS: "Hear, hear."] It really is a scandal and a blot on our society that 4 million or 5 million old people should now be actually worse off than when they first got the 26s. pension in 1946. They are now getting 40s. and it would need 41s. to 43s., according to which index one uses, to give them even the purchasing power of the 26s. in 1946.
Last December there were 1,079,000 old people in receipt of National Assistance. By now even that figure must have risen still further. It is surely intolerable that in Britain in 1957 nearly 1¼ million old people should be suffering a means test. I do not believe that a mere restoration of the 1946 purchasing power is good enough today, eleven years after the end of the war.
Mr. Osborne: Will the right hon. Gentleman remind himself and his hon. Friends that this is exactly what the right hon. Member for Ebbw Vale (Mr. Bevan) said on 24th April, 1951, about his own colleagues? He said that after they had
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had five years of planning they had completely failed and had let down the old-age pensioners by giving them a miserable shilling or two with one hand and taking it away with the other.
Mr. Jay: The hon. Gentleman should know that during the period of the Labour Government after 1945 the old-age pension was trebled from 10s. to 30s. But I believe that very soon we shall have to reorganise drastically our whole pension system so as to get rid of the present class distinction between a niggardly State pension on the one hand and lavish private pensions on the other. People now want a decent pension in their old age, with self-respect and without conditions. In other countries they are getting it, and I believe that people in this country are willing to pay a contribution in order to get it.
The Labour Party, which has long been studying the fundamentals of this problem, will soon lay its long-term plan before the country for ending this pension discrimination. Meanwhile some important improvement has to be made this winter in a State pension which is becoming a disgrace to the country. In our considered view such an increase should not merely give the pensioners what they have lost since 1946, but should add a generous share over and above that out of the increased national income of the past eleven years which they themselves by their efforts have helped to make possible. I urge the Government to announce such an increase as that tonight, and I promise the support of every hon. Member on this side of the House in making it law with the greatest possible speed.
9.27 p.m.
The Minister of Labour and National Service (Mr. Iain Macleod): For the second time in a little over a month I find myself—I apologise to the House for it—acting as a stand-in during an economic debate. This time both the Chancellor of the Exchequer and the President of the Board of Trade are abroad, and I find myself again voyaging in these strange seas.
Probably the safest place to begin is where I left off last time. If the House will forgive me, I will take up a couple of points from the speech I made immediately before Christmas when we had the

1199
last economic debate. I think I should say that, in the main, I intend to deal with the problems relating to home and social policy which have been raised in many speeches, although there were a number of speeches which dealt very well with the problems of overseas trade and the balance of payments. I hope, in particular that my hon. Friend the Member for Eastleigh (Mr. D. Price) will send me a copy of the obscure journal in which he threatened to extend the remarks which he had to cut short tonight.
In the debate before Christmas, when we were discussing the deployment of manpower which is an essential part of our economic policy—this is relevant both to today's debate and to the debate to be held tomorrow—I told the House that, whatever might be the final decision about National Service, I thought that one might move quickly in relation to hardship. As the House knows, the Regulations have been virtually unchanged since 1939, that is, the Regulations which govern the issue of postponement certificates. But I have today laid amending Regulations before the House.
As hon. Members know very well, because it is a frequent subject in their postbags, the most difficult cases generally arise not in connection with the initial application but on application for renewal. Under the old Regulations the certificate could be granted only for six months. Under the new Regulations I am extending that maximum to two years for an initial application and one year for the subsequent ones and also laying down, where it is not reasonable to make alternative arrangements, that the period granted should be related to the probable duration of the circumstances of hardship. I think it also important that we should change the Regulations that may have been appropriate in the past in relation to business hardship. Previously postponement could only be granted to enable other arrangements to be made for the carrying on or disposal of a business. I do not think we should go on with that provision in present circumstances, and I am amending that Regulation.
There are a number of changes in connection with domestic hardship. I shall not go through those now, but I should inform the House that I have sent special instructions to all my officers to
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say that all those cases are to be considered with the fullest sympathy. I have emphasised again to them the importance I attach to the most human approach to what is a very human problem that affects many of our constituents.
Mr. H. Hynd: Will the right hon. Gentleman say whether those Regulations are in the Vote Office?
Mr. Macleod: I think the hon. Member will find that they are now in the Vote Office. I think and hope that these changes will get rid of many of the cases which have caused all of us much anxiety and will reduce the amount of correspondence between hon. Members and myself, which is something we can all bear with fortitude.
I should like to come straight away to the problems of the motor car industry, which have been a recurring theme in economic debates ever since I became Minister of Labour. I do not suggest there is any connection. [Laughter.] I started thinking half way through that sentence whether I could substitute another end to it, but I could not think of another in time. As the House knows, all through 1956 there was a serious problem of short time working in the motor car and motor accessories industries. Although it recovered a considerable amount in the autumn, it rose again sharply when petrol rationing was imposed, or when it was imminent. At the end of December it ran something like 80,000. I have been asked for the figures. The latest figure I have is that throughout the first part of January it was about 60,000, and the most recent indication—only a day or so old, on 8,th February—is that the figure has fallen to about 50,000. As the House knows, with Vauxhall and Jaguar there has been some welcome return to full-time working, but these figures are very unpredictable because the units in the industry are so large that a single change in a component can alter the whole balance of the figures.
I was pressed by the hon. Member for Dagenham (Mr. Parker) to give further help to the motor vehicle industry. The House will remember that in the debate just before Christmas, to which I have referred, I announced relaxations of the hire-purchase restrictions. Those were rather scornfully greeted by hon. Members who thought they would have very little

1201
effect on the situation, but as a matter of fact the sales of new private cars bought on hire purchase in January were 70 per cent. more than in December, although still rather less than in previous months, and those of used cars were 140 per cent. more and above the figures for earlier months. The sales of commercial vehicles were up by about 60 per cent. I am bound to say that I did not think the reaction would be quite so swift, but it is unquestionably true that the concession has been of very real value to the industry.
Mr. Arthur Lewis: Cut Purchase Tax.
Mr. Macleod: We are now pressed to go further and, as the hon. Member for West Ham, North (Mr. Lewis) says, the most popular solution would be a cut in Purchase Tax. It was suggested that it should be a temporary affair linked to petrol rationing, but if hon. Members reflect they will see that a proposition like that would be a very difficult one to support. The President of the Board of Trade has said that the Government do not contemplate a further concession in this matter, but it is a question mainly for the Chancellor of the Exchequer to consider in his annual review of taxation.
For my part—I know that many hon. Members have a more close knowledge of the motor car industry than I have I do not think that it really is the Purchase Tax element which is the main difficulty the industry is having at present. Indeed, I think that most of the difficulties that they are facing are caused by restrictions on the supply of fuel and the inevitable anxieties that those restrictions must cause in people's minds. Those difficulties will disappear with the removal of the restrictions.
The part of the Opposition Motion that concerns me most and also causes me most concern is the suggestion that we have
"endangered the maintenance of full employment,"
and that new policies are required in order to assure it. I shall use as few figures as I can. The latest figures were given by my right hon. Friend this afternoon. It is important to realise, as I have reminded the House, that January is normally a seasonal peak of unemployment. I say "normally" quite deliberately, because I have been most anxious
1202
about this matter for some time. I shall not assert that this January will be a seasonal peak because the position is too fluid for one to make as confident a prophecy as that. When I spoke in the House on 20th December, I said:
"As for the future, I do not doubt that there will be some temporary increases in unemployment, and more particularly probably in short-time, as a result of these difficulties. The position of the motor car industry gives very real cause for anxiety."—[OFFICIAL REPORT, 20th December, 1956; Vol. 562, c. 1528.]
There can be no complacency about this. I gave firm warning to the House then, but it is only fair to say that the position now is substantially better than I thought it would be or than I predicted to the House it would be. The right hon. Member for Huyton (Mr. H. Wilson) talked about the numbers who had left civil employment in the last year. I do not know whether he used the same figure, but I have the actual figure, which is that those in civil employment fell last year by 64,000. In the three years prior to 1956, that number had grown by almost 1 million and the drop last year was no more than 64,000.
The hon. Member for Northfield (Mr. Chapman) made a speech—a good Tory speech, a lot of it. I will not say that I agreed with it. That would be going too far. I disagreed with it less than with any other speech I have heard him make. Either he is coming on or I am. I thought the arguments of my hon. Friend the Member for Darwen (Mr. Fletcher-Cooke) about the mobility of labour were both unanswered and unanswerable. I will not go into the details of the matter, but it is true that there has been an important shift in the last year. It was not as much as one would like, I am prepared to concede, or planned exactly in the detailed way that the Opposition like to think, although I believe wrongly, one can plan these matters.
I will give one example. In 1955, the coal mining industry lost 5,000 men. In 1956 it gained 3,500. That is a very remarkable and important change from the point of view of this country. I do not say for one second that people went straight from jobs, say with B.M.C., into the coal mining industry, yet the slackening of labour demand in many industries where it had been fierce obviously contributed to that result.

1203
The hon. Member for Newton (Mr. Lee) said—this is an important point—that the new figures which were announced this afternoon were not wholly caused by what we may briefly call, as a sort of shorthand, "Suez" or by the different restrictions that have arisen from it. I am sure he is right. All the reports I get from my regional controllers tell me that he is right. As my hon. Friend the Member for Cheadle (Mr. Shepherd) said in an excellent speech, many of these figures are the result of Government policy—the credit policy and other policies—working over the year.
The hon. Member for Newton asked whether I would give the short-time figures, and very quickly I will give the main figures to the House. I get them specially at very short intervals, and these are for 8th February. In all, there were 125,000 on short-time. Of that 125,000, around 50,000 were in the car and accessories industries. Included in that 125,000 were about 10,000 in other industries where short-time is directly attributed to fuel restrictions of one sort or another.
Mr. Osborne: How short is short time?
Mr. Macleod: The definition of short time for the purpose of the returns is any time less than that which the man normally works in his normal week, whatever that may be.
The hon. Member for Newton also made an important point, which he has pursued on many occasions, about priorities in fuel oil allocations. With a fuel cut as small as it is at the moment, it would be most burdensome and quite wrong to try to establish an elaborate system of priorities. An overall cut of 10 per cent. is clearly not only the simplest but, I am sure, the best way of doing it. Naturally, as a matter of ordinary prudence for the future, the sort of examination for which he was asking has taken place.
I want to try to give the whole picture, and I would say that these figures of unemployment, at 383,000, which is 1·8 per cent., might well have been worse, particularly in the building industry, if we had not been rather fortunate with the weather in January, at any rate until
1204
the last few days. However we look at these figures—and I have tried to make every qualification—surely a figure of 1·8 per cent. at what is normally the seasonal peak is full employment by any conceivable standard, and it certainly does not merit the extravagant censure which is implied in the Motion. Indeed, our record in preserving full employment over the years has been noticeably better than that of the party opposite.
The right hon. Member for Huyton asked whether we were getting apart now in what we think about full employment. That is an important matter. I should like to reply, "I hope not and I do not think so." If the right hon. Gentleman would like me to do so, I will declare again that to this Government full employment remains one of the first objectives of home and social policy. But one has always to say that full employment is not a gift of Governments; it is something which has to be earned, and which can be earned only by industries and can be achieved only if our basic position is sound.
Mr. H. Wilson: No one doubts the right hon. Gentleman's sincerity when he makes a statement of that kind. The reason I expressed a doubt this afternoon was the statement made by the present Chancellor of the Exchequer, then President of the Board of Trade, in the Budget debate on 18th April last year. I wondered whether the right hon. Gentleman's statement extended to the Chancellor of the Exchequer, because the latter's views sounded very dubious to those of us on this side of the House who heard what he said.
Mr. Macleod: I am certain that what I have said would be subscribed to by every member of the Government.
I should like to turn to what is said in the Motion about prices and to say a word, if I may, about the much-maligned Retail Prices Index. Of course, we all know that nobody ever believes the Index unless it happens to be soaring upwards, and of course it is true that it is much easier to find families whose spending differs from the average than to find those whose spending conforms to it. In addition, we have had something like ten years or more now of general, steady pressure on prices, and it is inevitable, as we all know, that people remember the

1205
prices, food prices in particular, which go up and never remember or take any notice of those which go down. [An HON. MEMBER: "Will the right hon. Gentleman tell us of some which have come down?"] The hon. Member for Bristol, South (Mr. Wilkins) will know the well known ballad:
"The farmer's daughter hath soft brown hair;
(Butter and eggs and a pound of cheese) …"
If he cares to ask the farmer's daughter or his own wife, he will be told that butter and eggs and a pound of cheese have all come down.
Mr. W. A. Wilkins: I did not say anything of the sort. All I said was that the Tory Party did not say this in 1951.
Mr. Macleod: It is important to establish, as far as one can, the accuracy of the Index. The wages of 3 million people in this country are linked to it in one way or another, and it is a vital element in all, or nearly all, wage claims and discussions. I therefore feel that it ought to be recorded that every month something like 125,000 separate price quotations are taken and used, 90,000 of those being for food. No country in the world, I believe, has so up-to-date or so accurate a measure of the changes in retail prices as we have in this country.
May I give just two illustrations of that? The first one is something of a variation on the theme of the "lady who went shopping." I will tell the House what this says. On 23rd January, the News Chronicle printed an article showing a long shopping list taken from an impeccable source no doubt, the London Co-operative Society, to show how much prices have gone up over the year, as against the claims made for the accuracy of the index. What, apparently, did not occur to the News Chronicle, which is strange, was to work out the percentage increase in the price of the goods in the very basket it presented to its readers in this article. It presented a basket of goods costing in all £8 16s. 6d., and showed that the total price had gone up by 4s. 11½d. over the past year. That is 2·8 per cent., and an exact justification, from an independent source, of the accuracy of the Index.
There was a good deal of scoffing in the House when my right hon. Friend the
1206
Chancellor and I, and other members of the Government, gave the estimates of what the increases in petrol prices, direct and indirect, would be as a result of the Suez restrictions. But the recently published figures in the Ministry of Labour Gazette show quite clearly that those prophecies were accurate. They are not, of course, our prophecies there is machinery for carrying out these investigations.
I can, therefore, base my claim against this Motion on prices and on the Retail Prices Index. I do it in these words. In 1956, the Retail Prices Index went up 3 points. I wish it had been less. But what I am entitled to point out, particularly since this is a Motion of censure, is that only in 1953 was there a better result than that, and in no single year under the Socialists did prices rise less than they did last year.
Mr. Lewis: What about world prices?
Mr. Macleod: I should like to take up now what has been said by both the opening speaker and the last speaker about old-age pensioners. This is something to which direct reference is made in the Motion.
Mr. H. Wilson: Since the right hon. Gentleman has made that assertion, is he aware that in the Statistical Digest, published by the Government, despite the fact that world prices were rising in the years to which he referred, the Index figures for 1948, 1949 and 1950 were 108, 111 and 114, respectively?
Mr. Macleod: If the right hon. Gentleman likes to look into the Index of Retail Prices, he will find that the year in which the Socialists got nearest to our figures was in 1950, and even in that year the percentage increase was higher than in last year. I assure the right hon. Gentleman that I am right in that.
Mr. Jay: Yes, but does the right hon. Member, in view of what he has said, deny that these are the figures in the Statistical Digest for 1948, 1949 and 1950 —the monthly averages—108, 111 and 114?
Mr. Macleod: Of course I do not, but the monthly averages are not the rise in the cost over the year, which is the figure I have been giving. [Interruption.] If

1207
the right hon. Gentleman will accept my challenge and put a Question down to me on this figure, he will find that I am right.
Mr. Jay Mr. Jay rose—
Mr. Macleod: I have given the right hon. Gentleman the answer.
In relation to old-age pensioners, the position is that the present rates—I hope that the House will allow me to develop this point, because it is a most important one—were established in April, 1955. Since then, prices have risen by 8 per cent. It is perfectly true, as the right hon. Gentleman said, that the pension is slightly lower in value now than it was in 1946, but it is substantially higher than it was in 1948 when the social service schemes came in, and substantially higher than it was in October, 1951, when the Opposition were in office and were defeated at the Election. These rates were raised in April, 1955, which is less than two years ago, and there has been an 8 per cent. rise since then. The Socialist Government raised the pensions—only for some pensioners—in 1951, five years after the previous increase, after a 28 per cent. rise.
If the right hon. Gentleman the Member for Huyton says that the pensioners are "forgotten men" under the Tory Government, what term would the right hon. Gentleman use for their experience under the Socialist Government? I will give the right hon. Gentleman a word, if he likes to use it, although it is stronger than I would use myself, but it is from an article by the hon. Member for Coventry, East (Mr. Crossman) in the Sunday Pictorial of 7th November, 1954:
"Whilst prices, profits and wages all soared under the Labour Government, the standard of living of our old people went down and they were cheated even of the modest slice of the national cake which they had been promised."
That term "cheated" has been used by a Member of his own party about the conduct of his own Government in relation to their treatment of old-age pensioners. I say that I myself think that it is too strong a term. [Laughter.] Yes, I do. I think both sides of the House would dearly like to give the best possible treatment they can to old-age pensioners. There is nothing between us on that, but our record here, as in prices, is incomparably better than that of the Opposition.
1208
From the names that head it, I take it that this is a Motion of censure—
Mr. Percy Shurmer Mr. Percy Shurmer (Birmingham, Sparkbrook) rose—
Mr. Macleod: I am sorry, but I have only a few minutes left.
As I say, it is a Motion of censure. We have had a very good debate, really, in spite of the Motion that had been put on the Order Paper because, if this is a Motion of censure—and I suppose it is —I must say that, like the weather in the Thames Estuary last week, it is the windiest and wettest since records have been kept.
We are to have another Motion of censure tomorrow—
Hon. Members: Lewisham.
Mr. Macleod: After that, we are to have a respite for a day or two from this sham—this "Lewi-sham"—fighting. The Opposition has had five years—six years come Michaelmas—of opposition. They should be settling down to it nicely by now.
We on this side had expected a real announcement of policy. Here is it, …new and appropriate policies.…" We were very excited when the right hon. Gentleman the Member for Huyton said that he accepted the obligation and intended to tell us what those policies were. He did not of course. He gave us, not policies but slogans. And that is not surprising, because, of course, there is no policy. Mind, there is always going to be a policy. It has always been trailed. There is always jam tomorrow. But there is no policy at the present time. It is only a short time ago that everybody knew what Socialist policy was. Now nobody knows. That is a very remarkable achievement in only a few months for the Leader of the Opposition.
I hope that the right hon. Gentleman reads Tribune—I am sure that he does. There was a very good article in it last week which shows him clearly to have no claim to an alternative Government; that his party has utterly failed to make an appeal either to the electorate or to the youth of this country. It is an ageing party, without purpose and without policy. This Motion now before the

1209
House is not a Motion of censure. It is not even a peg on which to hang an argument. It is a very nice piece of political sky-writing, and I suggest that with our votes we rub it out.
Question put, That the words proposed to be left out stand part of the Question:—
The House divided: Ayes 249. Noes 312.

Division No. 57.]

AYES

[9.59 p.m.

Ainsley, J. W.

Gordon Walker, Rt. Hon. P. C.

Mitchison, G. R.

Allaun, Frank (Salford, E.)

Greenwood, Anthony

Monslow, W.

Allen, Arthur (Bosworth)

Grenfell, Rt. Hon. D. R.

Moody, A. S.

Allen, Scholefield (Crewe)

Grey, C. F.

Morris, Percy (Swansea, W.)

Awbery, S. S.

Griffiths, William (Exchange)

Mort, D. L.

Baoon, Miss Alice

Hale, Leslie

Moss, R.

Baird, J.

Hall, Rt. Hn. Glenvil (Colne Valley)

Moyle, A.

Balfour, A.

Hamilton, W. W.

Mulley, F. W.

Bellenger, Rt. Hon. F. J.

Hannan, W.

Neal, Harold (Bolsover)

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

Harrison, J. (Nottingham, N.)

Noel-Baker, Francis (Swindon)

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

Hayman, F. H.

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

Benson, G.

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

O'Brien, Sir Thomas

Beswick, Frank

Hewitson, Capt. M.

Oliver, G. H.

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

Hobson, C. R.

Oram, A. E.

Blackburn, F.

Holman, P.

Orbach, M.

Blenkinsop, A.

Holmes, Horace

Oswald, T.

Blyton, W. R.

Houghton, Douglas

Owen, W. J.

Boardman, H.

Howell, Charles (Perry Barr)

Padley, W. E.

Bottomley, Rt. Hon. A. G.

Howell, Denis (All Saints)

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

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

Hoy, J. H.

Palmer, A. M. F.

Bowles, F. G.

Hubbard, T. F.

Pannell, Charles (Leeds, W.)

Boyd, T. C.

Hughes, Cledwyn (Anglesey)

Pargiter, G. A.

Braddock, Mrs. Elizabeth

Hughes, Emrys (S. Ayrshire)

Parker, J.

Brockway, A. F.

Hughes, Hector (Aberdeen, N.)

Parkin, B. T.

Broughton, Dr. A. D. D.

Hunter, A. E.

Paton, John

Brown, Rt. Hon. George (Belper)

Hynd, H. (Accrington)

Peart, T. F.

Brown, Thomas (Ince)

Hynd, J. B. (Attercliffe)

Pentland, N.

Burke, W. A.

Irvine, A. J. (Edge Hill)

Plummer, Sir Leslie

Burton, Miss F. E.

Irving, Sydney (Dartford)

Price, J. T. (Westhoughton)

Butler, Herbert (Haokney, C.)

Isaacs, Rt. Hon. G. A.

Price, Philips (Gloucestershire, W.)

Butler, Mrs. Joyce (Wood Green)

Janner, B.

Probert, A. R.

Callaghan, L. J.

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

Prootor, W. T.

Carmichael, J.

Jeger, George (Goole)

Pryde, D. J.

Champion, A. J.

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

Pursey, Cmdr. H.

Chapman, W. D.

Chetwynd, G. R.

Jenkins, Roy (Stechford)

Randall, H. E.

Clunie, J.

Johnson, James (Rugby)

Rankin, John

Coldrlok, W.

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

Redhead, E. C.

Collick P. H. (Birkenhead)

Jones, David (The Hartlepools)

Reeves, J.

Collins,V. J. (Shoreditch & Finsbury)

Jones, Elwyn (W. Ham, S.)

Reid, William

Corbet, Mrs. Freda

Jones, Jack (Rotherham)

Rhodes, H.

Cove, W. G.

Jones, T. W. (Merioneth)

Roberts, Albert (Normanton)

Craddock, George (Bradford, S.)

Kenyon, C.

Roberts, Goronwy (Caernarvon)

Cronin, J. D.

Key, Rt. Hon. C. W.

Robinson, Kenneth (St. Pancras, N.)

Crossman, R. H. S.

King, Dr. H. M.

Rogers, George (Kensington, N.)

Cullen, Mrs. A.

Lawson, G. M.

Ross, William

Daines, P.

Ledger, R. J.

Royle, C.

Dalton, Rt. Hon. H.

Lee, Frederick (Newton)

Shawcross, Rt. Hon. Sir Hartley

Darling, George (Hillsborough)

Lee, Miss Jennie (Cannock)

Shinwell, Rt. Hon. E.

Davies, Ernest (Enfield, E.)

Lever, Harold (Cheetham)

Short, E. W.

Davies, Harold (Leek)

Lever, Leslie (Ardwiek)

Shurmer, P. L. E.

Davies, Stephen (Merthyr)

Lewis, Arthur

Silverman, Julius (Aston)

de Freltas, Geoffrey

Lindgren, G. S.

Silverman, Sydney (Nelson)

Delargy, H. J.

Lipton, Marcus

Simmons, C. J. (Brierley Hill)

Dodds, N. N.

Logan, D. G.

Skeffington, A. M.

Donnelly, D. L.

Mabon, Dr. J. Dickson

Smith, Ellis (Stoke, S.)

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

MacColl, J. E.

Snow, J. W.

Dye, S.

McGhee, H. G.

Sorensen, R. W.

Ede, Rt. Hon. J. C.

McGovern, J.

Soskice, Rt. Hon. Sir Frank

Edelman, M.

Mclnnes, J.

Sparks, J. A.

Edwards, Rt. Hon. John (Brighouse)

McKay, John (Wallsend)

Steele, T.

Edwards, Rt. Hon. Ness (Caerphilly)

McLeavy, Frank

Stewart, Michael (Fulham)

Edwards, Robert (Bilston)

MacMillan, M. K. (Western Isles)

Stones, W. (Consett)

Edwards, W. J. (Stepney)

MacPherson, Malcolm (Stirling)

Straohey, Rt. Hon. J.

Evans, Albert (Islington, S.W.)

Mahon, Simon

Strauss, Rt. Hon. George (Vauxhall)

Evans, Edward (Lowestoft)

Malnwaring, W. H.

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

Fernyhough, E.

Mallalieu, E. L. (Brigg)

Summerskill, Rt. Hon. E.

Fienburgh, W.

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

Swingler, S. T.

Finch, H. J.

Marquand, Rt. Hon. H. A.

Sylvester, G. O.

Fletoher, Eric

Mason, Roy

Taylor, Bernard (Mansfield)

Forman, J. C.

Mayhew, C. P.

Taylor, John (West Lothian)

Fraser, Thomas (Hamilton)

Mellish, R. J.

Thomas, George (Cardiff)

Caitskell, Rt. Hon. H. T. N.

Messer, Sir F.

Thomas, Jorwerth (Rhondda, W.)

Gibson, C. W.

Mikardo, Ian

Thomson, George (Dundee, E.)

Thornton, E.

West, D. G.

Willis, Eustace (Edinburgh, E.)

Timmons, J.

Wheeldon, W. E.

Wilson, Rt. Hon. Harold (Huyton)

Tomney, F.

White, Mrs. Eirene (E. Flint)

Winterbottom, Richard

Turner-Samuels, M.

Wigg, George

Woodburn, Rt. Hon. A.

Ungoed-Thomas, Sir Lynn

Wilcock, Group Capt. C. A. B.

Yates, V. (Ladywood)

Usborne, H. C.

Wilkins, W. A.

Younger, Rt. Hon. K.

Viant, S. P.

Willey, Frederick

Zilliacus, K.

Warbey, W. N.

Williams, David (Neath)

Weitzman, D.

Williams, Ronald (Wigan)

TELLERS FOR THE AYES:

Wells, Peroy (Faversham)

Williams, W. R. (Openshaw)

Mr. Popplewell and Mr. Pearson.

Wells, William (Walsall, N.)

Williams, W. T. (Barons Court)

NOES

Agnew, Sir Peter

Dodds-Parker, A. D.

Hurd, A. R.

Aitken, W. T.

Donaldson, Cmdr. C. E. McA.

Hutchison, Sir James (Scotstoun)

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

Doughty, C. J. A.

Hyde, Montgomery

Alport, C. J. M.

Drayson, G. B.

Hylton-Foster, Rt. Hon. Sir Harry

Amery, Julian (Preston, N.)

du Cann, E. D. L.

Iremonger, T. L.

Amory, Rt. Hn. Heathcoat (Tiverton)

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

Irvine, Bryant Codman (Rye)

Anstruther-Gray, Major Sir William

Duncan, Capt. J. A. L.

Jenkins, Robert (Dulwich)

Arbuthnot, John

Duthie, W. S.

Jennings, J. C. (Burton)

Armstrong, C. W.

Eden, J. B. (Bournemouth, West)

Jennings, Sir Roland (Hallam)

Ashton, H.

Emmet, Hon. Mrs. Evelyn

Johnson, Dr. Donald (Carlisle)

Astor, Hon. J. J.

Errington, Sir Eric

Johnson, Eric (Blackley)

Atkins, H. E.

Erroll, F. J.

Johnson, Howard (Kemptown)

Baldook, Lt.-Cmdr. J. M.

Farey-Jones, F. W.

Jones, Rt. Hon. Aubrey (Hall Green)

Baldwin, A. E.

Fell, A.

Joseph, Sir Keith

Balniel, Lord

Finlay, Graeme

Kaberry, D.

Barber, Anthony

Fisher, Nigel

Keegan, D.

Barlow, Sir John

Fietcher-Cooke, C.

Kerby, Capt. H. B.

Barter, John

Fort, R.

Kerr, H. W.

Baiter, Sir Beverley

Foster, John

Kimball, M.

Beamish, Maj. Tufton

Fraser, Hon. Hugh (Stone)

Kirk, P. M.

Bell, Philip (Bolton, E.)

Fraser, Sir Ian (M'cmbe & Lonsdale)

Lagden, G. W.

Bell, Ronald (Bucks, S.)

Freeth, Denzil

Lambert, Hon. G.

Bennett, F. M. (Torquay)

Galbraith, Hon. T. G. D.

Lambton, Viscount

Bennett, Dr. Reginald

Garner-Evans, E. H.

Lancaster, Col. C. G.

Bevins, J. R. (Toxteth)

Gibson-Watt, D.

Langford-Holt, J. A.

Bidgood, J. C.

Clover, D.

Leather, E. H. C.

Biggs-Oavison, J. A.

Godber, J. B.

Leavey, J. A.

Birch, Rt. Hon. Nigel

Gomme-Dunoan, Col. Sir Alan

Leburn, W. G.

Bishop, F. P.

Gough, C. F. H.

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

Black, C. W.

Gower, H. R.

Legh, Hon. Peter (Petersfield)

Body, R. F.

Graham, Sir Fergus

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

Boothby, Sir Robert

Grant, W. (Woodside)

Lindsay, Hon. James (Devon, N.)

Bossom, Sir Alfred

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

Linstead, Sir H. N.

Bowen, E. R. (Cardigan)

Green, A.

Llewellyn, D. T.

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

Cresham Cooke, R.

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

Boyle, Sir Edward

Grimston, Sir Robert (Westbury)

Lloyd, Rt. Hon. Selwyn (Wirral)

Braine, B. R.

Grosvenor, Lt.-Col. R. G.

Longden, Gilbert

Braithwaite, Sir Albert (Harrow, W.)

Hall, John (Wycombe)

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

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

Hare, Rt. Hon. J. H.

Lucas. Sir Jocelyn (Portsmouth, S.)

Brooke, Rt. Hon. Henry

Harris, Frederic (Croydon, N.W.)

Luoas, P. B. (Brentford & Chiswick)

Brooman-White, R. C.

Harris, Reader (Heston)

Lucas-Tooth, Sir Hugh

Browne, J. Nixon (Craigton)

Harrison, A. B. C. (Maldon)

McAdden, S. J.

Bryan, P.

Harrison, Col. J. H. (Eye)

Macdonald, Sir Peter

Bullus, Wing Commander E. E.

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

Mackeson, Brig. Sir Harry

Burden, F. F. A.

Harvey, Ian (Harrow, E.)

McKibbin, A. J.

Butcher, Sir Herbert

Harvey, John (Walthamstow. E.)

Mackie, J. H. (Galloway)

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

Harvie-Watt, Sir George

McLaughlin, Mrs. P.

Campbell, Sir David

Heald, Rt. Hon. Sir Lionel

Maclay, Rt. Hon. John

Carr, Robert

Henderson, John (Cathcart)

Maclean, Fitzroy (Lancaster)

Cary, Sir Robert

Hesketh, R. F.

McLean, Neil (Inverness)

Channon, Sir Henry

Hicks-Beach, Maj. W. W.

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

Chichester-Clark, R.

Hill, Rt. Hon. Charles (Luton)

MacLeod, John (Ross & Cromarty)

Clarke, Brig. Terence (Portsmth, W.)

Hill, Mrs. E. (Wythenshawe)

Macmillan, Rt.Hn, Harold (Bromley)

Cole, Norman

Hill, John (S. Norfolk)

Macmillan, Maurice (Hatifax)

Conant, Maj. Sir Roger

Hinchingbrooke, Viscount

Macpherson, Niall (Dumfries)

Cooper, A. E.

Holland-Martin, C. J.

Maddan, Martin

Cooper-Key, E. M.

Holt, A. F.

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

Cordeaux, Lt.-Col. J. K.

Hope, Lord John

Maitland, Hon. Patrick (Lanark)

Corfield, Capt. F. V.

Manningham-Bulier, Rt. Hn. Sir R.

Craddock, Beresford (Spelthorne)

Hornby, R. P.

Markham, Major Sir Frank

Crosthwaite-Eyre, Col. O. E.

Hornsby-Smith, Miss M. P.

Marlowe, A. A. H.

Crouch, R. F.

Crowder, Sir John (Finchley)

Horobin, Sir Ian

Marples, Rt. Hon. A. E.

Crowder, Petre (Ruislip — Northwood)

Horsbrugh, Rt. Hon. Dame Florence

Marshall, Douglas

Cunningham, Knox

Howard, Gerald (Cambridgeshire)

Mathew, R.

Currie, G. B. H.

Howard, Hon. Greville (St. Ives)

Maude, Angus

Dance, J. C. G.

Howard, John (Test)

Maudling, Rt. Hon. R.

Davidson, Viscountess

Hudson, W. R. A. (Hull, N.)

Mawby, R. L.

D'Avigdor-Goldsmid, Sir Henry

Hughes Hallett, Vice-Admiral J.

Medlicott, Sir Frank

Deedes, W. F.

Hughes-Young, M. H. C.

Milligan, Rt. Hon. W. R.

Digby, Simon Wingfield

Hulbert, Sir Norman

Molson, Rt. Hon. Hugh

1212

1213

Morrison, John (Salisbury)

Ridsdale, J. E.

Thomas, Leslie (Canterbury)

Mott-Radclyfte, Sir Charles

Rippon, A. G. F.

Thomas, P. J. M. (Conway)

Nabarro, C. D. N.

Roberts, Sir Peter (Heeley)

Thompson, Kenneth (Walton)

Nairn, D. L. S.

Robertson, Sir David

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

Neave, Airey

Robinson, Sir Roland (Blackpool, S.)

Thornton-Kemsley, C. N.

Nicholls, Harmar

Robson-Brown, W.

Tiley, A. (Bradford, W.)

Nicholson, Godfrey (Farnham)

Rodgers, John (SevenoakS)

Tilney, John (Wavertree)

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

Roper, Sir Harold

Turner, H. F. L.

Nugent, C. R. H.

Ropner, col. Sir Leonard

Turton, Rt. Hon. R. H.

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

Russell, R. S.

Tweedsmuir, Lady

Ormsby-Gore, Rt. Hon. W. D.

Sandys, Rt. Hon. D.

Vane, W. M. F.

Orr, Capt. L. P. S.

Schofield, Lt. -Col. W.

Vaughan-Morgan, J. K.

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

Scott-Milter, Cmdr. R.

Viokers, Miss J. H.

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

Sharpies, R. C.

Vosper, Rt. Hon. D. F.

Osborne, C.

Shepherd, William

Wade, D. W.

Page, R. G.

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

Wakefield, Edward (Derbyshire, W.)

Pannell, N. A. (Kirkdale)

Smyth, Brig. Sir John (Norwood)

Wakefield, Sir Wavell (St. M'lebone)

Partridge, E.

Soames, Capt. C.

Walker-Smith, Rt. Hon. D. C.

Peyton, J. W. W.

Spearman, Sir Alexander

Wall, Major Patrick

Pickthorn, K. W. M.

Speir, R. M.

Ward, Rt. Hon. C. R. (Worcester)

Pike, Miss Mervyn

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

Ward, Dame Irene (Tynemouth)

Pilkington, Capt. R. A.

Stevens, Geoffrey

Waterhouse, Capt. Rt. Hon. C.

Pitman, I. J.

Steward, Harold (Stockport, S.)

Watkinson, Rt. Hon. Harold

Pitt, Miss E. M.

Steward, Sir William (Woolwich, W.)

Webbe, Sir H.

Pott, H. P.

Stewart, Henderson (Fife, E.)

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

Powell, J. Enoch

Stoddart-Scott, Col. M.

Williams, Paul (Sunderland, S.)

Price, David (Eastleigh)

Storey, S.

Williams, R. Dudley (Exeter)

Prior-Palmer, Brig. O. L.

Stuart, Rt. Hon. James (Moray)

Wills, C. (Bridgwater)

Profumo, J. D.

Studholme, Sir Henry

Wilson, Geoffrey (Truro)

Ramsden, J. E.

Summers, Sir Spenoer

Wood, Hon. R.

Rawlinson, Peter

Sumner, W. D. M. (Orpington)

Woollam, John Victor

Redmayne, M.

Taylor, Sir Charles (Eastbourne)

Yates, William (The Wrekin)

Rees-Davies, W. R.

Taylor, William (Bradford, N.)

Remnant, Hon. P.

Teeling, W.

TELLERS FOR THE NOES:

Renton, D. L. M.

Temple, J. M.

Mr. Heath and Mr. Oakshott.

Question put, That the proposed words be there added:—
The House divided: Ayes 309, Noes 249.

Division No. 58.]

AYES

[10.11 p.m.

Agnew, Sir Peter

Bullus, Wing Commander E. E.

Fell, A.

Altken, W. T.

Burden, F. F. A.

Finlay, Graeme

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

Butcher, Sir Herbert

Fisher, Nigel

Alport, C. J. M.

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

Fletcher-Cooke, C.

Amery, Julian (Preston, N.)

Campbell, Sir David

Fort, R.

Amory, Rt. Hn. Heathcoat (Tiverton)

Carr, Robert

Foster, John

Anstruther-Gray, Major Sir William

Cary, Sir Robert

Fraser, Hon. Hugh (Stone)

Arbuthnot, John

Channon, Sir Henry

Fraser, Sir Ian (M'cmbe & Lonsdale)

Armstrong, C. W.

Chichester-Clark, R.

Freeth, Denzil

Ashton, H.

Clarke, Brig. Terence (Portsmth, W.)

Galbraith, Hon. T. G. D.

Astor, Hon. J. J.

Cole, Norman

Garner-Evans, E. H.

Atkins, H. E.

Conant, Maj. Sir Roger

George, J. C. (Pollock)

Baldock, Lt.-Cmdr. J. M.

Cooper, A. E.

Gibson-Watt, D.

Baldwin, A. E.

Cooper-Key, E. M.

Glover, D.

Balniel, Lord

Cordeaux, Lt.-Col. J. K.

Godber, J. B.

Barber, Anthony

Corfield, Capt. F. V.

Gomme-Duncan, Col. Sir Alan

Barter, John

Craddock, Beresford (Spelthorne)

Cough, C. F. H.

Baxter, Sir Beverley

Crosthwaite-Eyre, Col. O. E.

Gower, H. R.

Beamish, Mai. Tufton

Crouch, R. F.

Graham, Sir Fergus

Bell, Philip (Bolton, E.)

Crowder, Sir John (Finchley)

Grant, W. (Woodside)

Bell, Ronald (Bucks, S.)

Crowder, Petre (Ruislip—Northwood)

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

Bennett, F. M. (Torquay)

Cunningham, Knox

Green, A.

Bennett, Dr. Reginald

Currie, G. B. H.

Gresham Cooke, R.

Bevins, J. R. (Toxteth)

Dance, J. C. G.

Grimston, Sir Robert (Westbury)

Bidgood, J. C.

Daildson, viscountess

Crosvenor, Lt.-Col. R. G.

Biggs-Davison, J. A.

D'Avigdor-Coldsmid, Sir Henry

Hall, John (Wycombe)

Birch, Rt. Hon. Nigel

Deedes, W. F.

Hare, Rt. Hon. J. H.

Bishop, F. P.

Digby, Simon Wingfield

Harris, Frederic (Croydon. N. W.)

Black, C. W.

Dodds-Parker, A. D.

Harris, Reader (Heston)

Body, R. F.

Donaldson, Cmdr. C. E. McA.

Harrison, A. B. C. (Maldon)

Boothby, Sir Robert

Doughty, C. J. A.

Harrison, Col. J. H. (Eye)

Bossom, Sir Alfred

Drayton, G. B.

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

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

du Cann, E. D. L.

Harvey, Ian (Harrow, E.)

Boyle, Sir Edward

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

Harvey, John (Walthamstow, E.)

Braine, B. R.

Duncan, Capt. J. A. L.

Harvie-Watt, Sir George

Braithwaite, Sir Albert (Harrow, W.)

Duthie, W. S.

Heald, Rt. Hon. Sir Lionel

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

Eden, J. B. (Bournemouth, West)

Henderson, John (Cathcart)

Brooke, Rt. Hon. Henry

Emmet, Hon. Mrs. Evelyn

Hesketh, R. F.

Brooman-White, R. C.

Errington, Sir Eric

Hicks-Beach, Maj. W. W.

Browne, J. Nixon (Craigton)

Erroll, F. J.

Hill, Rt. Hon. Charles (Luton)

Bryan, P.

Farey-Jones, F. W

Hill, Mrs. E. (Wythenshawe)

Hill, John (S. Norfolk)

Maclean, Fitzroy (Lancaster)

Rodgers, John (Sevenoaks)

Hinchingbrooke, Viscount

McLean, Neil (Inverness)

Roper, Sir Harold

Holland-Martin, C. J.

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

Ropner, Col. Sir Leonard

Hope, Lord John

MacLeod, John (Ross & Cromarty)

Russell, R. S.

Hornby, R. P.

Macmlllan, Rt. Hn. Harold(Bromley)

Sandys, Rt. Hon. D.

Hornsby-Smith, Miss M. P.

Macmillan, Maurice (Halifax)

Schofleld, Lt.-Col. W.

Horobin, Sir Ian

Macpherson, Niall (Dumfries)

Scott-Miller, Cmdr. R.

Horsbrugh, Rt. Hon. Dame Florence

Maddan, Martin

Sharpies, R. C.

Howard, Gerald (Cambridgeshire)

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

Shepherd, William

Howard, Hon. Greville (St. Ives)

Maltland, Hon. Patrick (Lanark)

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

Howard, John (Test)

Manningham-Buller, Rt. Hn. Sir R

Smyth, Brig. Sir John (Norwood)

Hudson, W. R. A. (Hull, N.)

Markham, Major Sir Frank

Soames, Capt. C.

Hughes Hallet, Vise-Admiral J.

Marlowe, A. A. H.

Spearman, Sir Alexander

Hughes-Young, M. H. C.

Marples, Rt. Hon. A. E.

Speir, R. M.

Hulbert, Sir Norman

Marshall, Douglas

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

Hurd, A. R.

Mathew, R.

Stevens, Geoffrey

Hutchison, Sir James (Scotstoun)

Maude, Angus

Steward, Harold (Stockport, S.)

Hyde, Montgomery

Maudling, Rt. Hon. R.

Steward, Sir William (W'lwich, W.)

Hylton-Foster, Sir H. B. H.

Mawby, R. L.

Stewart, Henderson (Fife, E.)

Iremonger, T. L.

Medlicott, Sir Frank

Stoddart-Scott, Col. M.

Irvine, Bryant Godman (Rye)

Milligan, Rt. Hon. W. R.

Storey, S.

Jenkins, Robert (Dulwich)

Molson, Rt. Hon. Hugh

Stuart, Rt. Hon. James (Moray)

Jennings, J. C. (Burton)

Morrison, John (Salisbury)

Studholme, Sir Henry

Jennings, Sir Roland (Hallam)

Mott-Radclyffe, Sir Charles

Summers, Sir Spencer

Johnson, Dr. Donald (Carlisle)

Nabarro, G. D. N.

Sumner, W. D. M. (Orpington)

Johnson, Erie (Blackley)

Nairn, D. L. S.

Taylor, Sir Charles (Eastbourne)

Johnson, Howard (Kemptown)

Neave, Airey

Taylor, William (Bradford, N.)

Jones, Rt. Hon. Aubrey (Hall Green)

Nioholls, Harmar

Teeling, W.

Joseph, Sir Keith

Nicholson, Godfrey (Farnham)

Temple, J. M.

Kaberry, D.

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

Thomas, Leslie (Canterbury)

Keegan, D.

Nugent, C. R. H.

Thomas, P. J. M. (Conway)

Kerby, Capt. H. B.

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

Thompson, Kenneth (Walton)

Kerr, H. W.

Ormsby-Gore, Rt. Hon. W. D.

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

Kimball, M.

Orr, Capt. L. P. S.

Thornton-Kemsley, C. N.

Kirk, P. M.

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

Tiley, A. (Bradford, W.)

Lagden, G. W.

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

Tilney, John (Wavertree)

Lambert, Hon. G.

Osborne, C.

Turner, H. F. L.

Lambton, Viscount

Page, R. G.

Turton, Rt. Hon. H.

Lancaster, Col. C. G.

Pannell, N. A. (Kirkdale)

Tweedsmuir, Lady

Langford-Holt, J. A.

Partridge, E.

Vane, W. M. F.

Leather, E. H. C.

Peyton, J. W. W.

Vaughan-Morgan, J. K.

Leavey, J. A.

Pickthorn, K. W. M.

Vickers, Miss J. H.

Leburn, W. G.

Pike, Miss Mervyn

Vosper, Rt. Hon. D. F.

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

Pilkington, Capt. R. A.

Wakefield, Edward (Derbyshire, W.)

Legh, Hon. Peter (Petersffeld)

Pitman, I. J.

Wakefield, Sir Wavell (S. M'lebone)

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

Pitt, Miss E. M.

Walker-Smith, Rt. Hon. D. C.

Wall, Major Patrick

Lindsay, Hon. James (Devon, N.)

Pott, H. P.

Ward, Rt. Hon. G. R. (Worcester)

Linstead, Sir H. N.

Powell, J. Enoch

Ward, Dame Irene (Tynemouth)

Llewellyn, D. T.

Price, David (Eastleigh)

Waterhouse, Capt. Rt. Hon. C.

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

Prior-Palmer, Brig. O. L.

Watkinson, Rt. Hon. Harold

Lloyd, Rt. Hon. Selwyn (Wirral)

Profumo, J. D.

Webbe, Sir H.

Longden, Gilbert

Ramsden, J. E.

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

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

Rawlinson, Peter

Williams, Paul (Sunderland, S.)

Lucas, Sir Jocelyn (Portsmouth, S.)

Redmayne, M.

Williams, R. Dudley (Exeter)

Lucas, P. B. (Brentford & Chiswick)

Rees-Davies, W. R.

Wills, G. (Bridgwater)

Lucas-Tooth, Sir Hugh

Remnant, Hon. P.

Wilson, Geoffrey (Truro)

McAdden, S. J.

Ronton, D. L. M.

Wood, Hon. R.

Macdonald, Sir Peter

Ridsdale, J. E.

Woollam, John Victor

Mackeson, Brig. Sir Harry

Rippon, A. G. F.

Yates, William (The Wrekin)

McKibbin, A. J.

Roberts, Sir Peter (Heeley)

Mackie, J. H. (Galloway)

Robertson, Sir David

TELLERS FOR THE AYES:

McLaughlin, Mrs. P.

Robinson, Sir Roland (Blackpool, S.)

Mr. Heath and Mr. Oaksbott

Maclay, Rt. Hon. John

Robson-Brown, W.

NOES

Ainsley, J. W.

Boardman, H.

Chapman, W. D.

Allaun, Frank (Salford, E.)

Bottomley, Rt. Hon. A. G.

Chetwynd, G. R.

Allen, Arthur (Bosworth)

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

Clunie, J.

Allen, Scholefield (Crewe)

Bowles, F. G.

Coldrick, W.

Awbery, S. S.

Boyd, T. C.

Collick, P. H. (Birkenhead)

Bacon, Miss Alice

Braddock, Mrs. Elizabeth

Collins, V. J. (Shoreditch & Finsnury)

Baird, J.

Brockway, A. F.

Corbet, Mrs. Freda

Balfour, A.

Broughton, Dr. A. D. D.

Cove, W. G.

Bellenger, Rt. Hon. F. J.

Brown, Rt. Hon. George (Belper)

Craddock, George (Bradford, S.)

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

Brown, Thomas (Ince)

Cronin, J. D.

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

Burke, W. A.

Crossman, R. H. S.

Benson, G.

Burton, Miss P. E.

Cullen, Mrs. A.

Beswick, Frank

Butler, Herbert (Hackney, C.)

Dalnes, P.

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

Butler, Mrs. Joyce (Wood Green)

Dalton, Rt. Hon. H.

Blackburn, F.

Callaghan, L. A.

Darling, George (Hillsborough)

Blenkinsop, A.

Carmiohael, J.

Davies, Ernest (Enfield, E.)

Blyton, W. R.

Chamnlon. A. J.

Davies, Harold (Leek)

1216

1217

Davies, Stephen (Merthyr)

Lawson, G. M.

Reid, William

de Freitas, Geoffrey

Ledger, R. J.

Rhodes, H.

Delargy, H. J.

Lee, Frederlok (Newton)

Roberts, Albert (Normanton)

Dodds, N. N.

Lee, Miss Jennie (Cannook)

Roberts, Goronwy (Caernarvon)

Donnelly, D. L.

Lever, Harold (Cheetham)

Robinson, Kenneth (St. Pancras, N.)

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

Lever, Leslie (Ardwick)

Rogers, George (Kensington, N.)

Dye, S.

Lewis, Arthur

Ross, William

Ede, Rt. Hon. J. C.

Llndgren, G. S.

Royle, C.

Edelman, M.

Lipton, Marcus

Shawcross, Rt. Hon. Sir Hartley

Edwards, Rt. Hon. John (Brighouse)

Logan, D. G.

Shlnwell, Rt. Hon. E.

Edwards, Rt. Hon. Ness (Caerphilly)

Mabon, Dr. J. Dickson

Short, E. W.

Edwards, Robert (Bilston)

MacColl, J. E.

Shurmer, P. L. E.

Edwards, W. J. (Stepney)

MoGhee, H. G.

Silverman, Julius (Aston)

Evani, Albert (Islington, S.W.)

MoGovern, J.

Silverman, Sydney (Nelson)

Evans, Edward (Lowestoft)

Molnnes, J.

Simmons, C. J. (Brierley Hill)

Femyhough, E.

McKay, John (Wallsend)

Skeffington, A. M.

Fienburgh, W.

McLeavy, Frank

Smith, Ellis (Stoke, S.)

Finch, H. J.

MacMillan, M. K. (Western Isles)

Snow, J. W.

Fletcher, Eric

MaoPherson, Malcolm (Stirling)

Sorensen, R. W.

Forman, J. C.

Mahon, Simon

Soskice, Rt. Hon. Sir Frank

Fraser, Thomas (Hamilton)

Mainwaring, W. H.

Sparks, J. A.

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

Mallalieu, E. L. (Brigg)

Steele, T.

Gibson, C. W.

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

Stewart, Michael (Fulham)

Gordon Walker, Rt. Hon. P. C.

Marquand, Rt. Hon. H. A.

Stones, W. (Consett)

Greenwood, Anthony

Mason, Roy

Strachey, Rt. Hon. J.

Grenfell, Rt. Hon. D. R.

Mayhew, C. P.

Strauss, Rt. Hon. George (Vauxhall)

Grey, C. F.

Mellish, R. J.

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

Griffiths, William (Exchange)

Messer, Sir F.

Summerskill, Rt. Hon. E.

Hale, Leslie

Mikardo, Ian

Swingler, S. T.

Hall, Rt. Hn. Glenvil (Colne Valley)

Mltohison, G. R.

Sylvester, G. O.

Hamilton, W. W.

Monsiow, W.

Taylor, Bernard (Mansfield)

Hartnan, W.

Moody, A. S.

Taylor, John (West Lothian)

Harrison, J. (Nottingham, N.)

Morris, Percy (Swansea, W.)

Thomas, George (Cardiff)

Hayman, F. H.

Mort, D. L.

Thomas, Iorwerth (Rhondda, W.)

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

Moss, R.

Thomson, George (Dundee, E.)

Hewitson, Capt. M.

Moyle, A.

Thornton, E.

Hobson, C. R.

Mulley, F. W.

Timmons, J.

Holman, P.

Neal, Harold (Bolsover)

Tomney, F.

Holmes, Horace

Noel-Baker, Francis (Swindon)

Turner-Samuels, M.

Houghton, Douglas

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

Ungoed-Thomas, Sir Lynn

Howell, Charles (Perry Barr)

O'Brien, Sir Thomas

Usborne, H. C.

Howell, Denis (All Saints)

Oliver, C. H.

Viant, S. P.

Hoy, J. H.

Oram, A. E.

Warbey, W. N.

Hubbard, T. F.

Orbach, M.

Weitzman, D.

Hughes, Cledwyn (Anglesey)

Oswald, T.

Weils, Percy (Faversham)

Hughes, Emrys (S. Ayrshire)

Owen, W. J.

Wells, William (Walsall, N.)

Hughes, Hector (Aberdeen, N.)

Padley, W. E.

West, D. C.

Hunter, A. E.

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

Wheeldon, W. E.

Hynd, H. (Accrington)

Palmer, A. M. F.

White, Mrs. Eirene (E. Flint)

Hynd, J. B. (Attercliffe)

Pannell, Charles (Leeds, W.)

Wlgg, George

Irvine, A. J. (Edge Hill)

Pargiter, G. A.

Wiloock, Group Capt. C. A. B.

Irving, Sydney (Dartford)

Parker, J.

Wilklns, W. A.

Isaacs, Rt. Hon. G. A.

Parkin, B. T.

Willey, Frederick

Janner, B.

Paton, John

Williams, David (Neath)

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

Peart, T. F.

Williams, Ronald (Wigan)

Jeger, George (Goole)

Pentland, N.

Williams, W. R. (Openshaw)

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

Plummer, sir Leslie

Williams, W. T. (Barons Court)

Jenkins, Roy (Stechford)

Price, J. T. (Westhoughton)

Willis, Eustace (Edinburgh, E.)

Johnson, James (Rugby)

Price, Philips, (Gloucestershire, W.)

Wilson, Rt. Hon. Harold (Huyton)

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

Probert, A. R.

Winterbottom, Richard

Jones, David (The Hartlepools)

Proctor, W. T.

Woodburn, Rt. Hon. A.

Jones, Elwyn (W. Ham. S.)

Pryde, D. J.

Yates, V. (Ladywood).

Jones, Jack (Rotherham)

Pursey, Cmdr. H.

Younger, Rt. Hon. K.

Jones, T. W. (Merioneth)

Randall, H. E.

Zilliaous, K.

Kenyon, C.

Rankin, John

Key, Rt. Hon. C. W.

Redhead, E. C.

TELLERS FOR THE NOES:

King, Dr. H. M.

Reeves, J.

Mr. Popplewell and Mr. Pearson.

Main Question, as amended, put and agreed to.
Resolved,
That this House affirms its confidence in the economic policies of Her Majesty's Government and its support for all necessary measures designed to deal with the economic problems facing the country.

SUNDAY CINEMATOGRAPH ENTERTAINMENTS
Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Urban District of Stourporton-Severn [copy laid before the House, 7th February] approved.—[Mr. Simon.]
Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Urban District of Swaffham [copy laid before the House, 7th February] approved.—[Mr. Simon.]
Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Rural District of Lichfield [copy laid before the House, 7th February] approved.—[Mr. Simon.]

SUGAR (PRICES)
10.23 p.m.
Mr. Frederick Willey: I beg to move,
That an humble Address be presented to Her Majesty praying that the Sugar and Molasses (Rates of Surcharge) Order, 1956 (S.I., 1956. No. 2058), dated 21st December, 1956, a copy of which was laid before this House on 28th December, be annulled.
The Joint Parliamentary Secretary will probably agree that, in the circumstances, this is an unexpected Order. Last week we were discussing milk prices, and I pointed out that the price of milk at the time of the Labour Government was 5½d. per pint but today is 8d. The price of sugar at the time of the Labour Government was 6d. per lb., but now it is 9½d. to 10½d. per lb. There have been steep increases in price in the last two months. The retail price increased by ½d. in December and by Id. in January. In part, these price increases are related to the present Order. The first price increase immediately preceded the coming into operation of the Sugar Act. 1956, and the second immediately followed the setting up of the Sugar Board, confirming the complaint we repeatedly made in discussions on the Bill, that the Government were following a high price policy.
We regard the Order as quite unnecessary, and I call the attention of the Joint Parliamentary Secretary to the fact that the chairman of Tate and Lyle has admitted that the increase imposed by this surcharge has been directly borne on the retail price. What is the position and why is the Order so surprising? During the past few months there has been a very sharp increase in the world price of sugar. In fact, it doubled between the months of October and January. It is admittedly not as high as it was in 1951, when under a Labour Government we were selling sugar at 6d. a 1b.
The sharp increase is partly due to circumstances which have been operating over a period. Consumption per head in Asia, the Middle East and Africa has considerably increased in the past few years. It is partly due to more current circumstances, that there has been a fall in the production of sugar beet in Europe over the past year. The Suez conflict has had its impact upon world prices, and

1221
the Sugar Act itself has had a direct effect on world prices by throwing open the British market to world sugar.
The result of all this is that quite unexpectedly the price of world sugar is considerably higher than the fixed price we are paying for Commonwealth sugar. We now have this absolutely ludicrous position. In this country we import only about 10 per cent. of our sugar at a free world price, and yet our refiners are having to pay for all the sugar—not only 10 per cent., but the other 90 per cent. which comes from Commonwealth and home sources—at world prices.
If only the Ministry had continued buying we should have occupied a sheltered position and we could have avoided any retail price increase. The Ministry must have held the stocks and we can assume that the Government would have been able to safeguard the consumer during this period of high world prices. As the Sugar Board is obliged to sell at world prices, we can assume—it must be a fact, and I should like the Parliamentary Secretary to give us the figures—that the Sugar Board is making a very substantial profit on the sale of Commonwealth sugar and building up very substantial reserves.
The Order adds insult to injury. Not only is the retail price forced up because the refiners have to buy all their sugar at world prices, although we are importing only 10 per cent. of our sugar at that price, but the Minister is imposing a further surcharge on all sugar. When we discussed the surcharge in considering the Sugar Act, it was made quite clear that a surcharge would be imposed only to provide an element of equalisation when the Commonwealth price was above the world price, but today a different position obtains, a position in which distribution payments should have been made.
Our complaint about the Order is that, in a situation in which the consumer, the housewife and the manufacturer are being unfairly prejudiced in any event by the high price policy of the Government, contemporaneously the Sugar Board is imposing a surcharge and further forcing up the retail price, the price not only of sugar but of all manufactures including sugar, particularly jam and preserves. I appeal to the Parliamentary Secretary to
1222
assure us that this Order will be withdrawn, that appropriate steps will be taken to see that this ludicrous, stupid action is stopped forthwith and that the consumer will be given some relief.
We must protest that here in the very beginning of the operations of the Sugar Board all our forecasts have been borne out. The Chairman of Tate and Lyle talks about the Board playing for safety. The Board, the sugar trade and the Government are relying upon a high-price policy. In those circumstances, it is absolutely unjustifiable to impose in addition to that a surcharge which, as the Chairman of Tate and Lyle has explained, is being borne at present on the retail price. I hope that we shall have an assurance from the Parliamentary Secretary that the Order will be withdrawn.
10.31 p.m.
Mr. Sidney Dye: I beg to second the Motion.
It will be no doubt a matter of discomfort to the new Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food that he has to come here tonight to defend an Order which, because of the surcharge, raises the retail price of sugar to housewives, manufacturers and everybody else, when his was the party which so enthusiastically claimed throughout the country that they were the people who knew how to bring down the price of food.
They had a specially designed Sugar Act to control the marketing of sugar, because they feared that it would be necessary at times to control the price against the possibility either of a slump, and therefore a low price, or a rise in world prices. They thought that this policy which they favoured, which they thought was going back to freedom and therefore greater competition, would lead to lower prices. In fact, we find that world prices have gone up, and we are now being made to increase our prices at home to be in accord with world prices.
This is the result of the policy which the Government have pursued and which they thought would lead to lower prices. This makes us wonder whether the whole idea is sound or not. Quite clearly, more and more of this kind of policy will lead to conditions in which prices at home will have to be adjusted upwards. But for

1223
the fact that farmers in this country and in the Commonwealth have produced as much sugar as they have, prices would have gone very much higher.
What we said when we discussed the Bill in its various stages was that we should rely far more on the planned production of sugar here and in the Commonwealth rather than upon the world market and adjustment of our prices accordingly. It looks as if this Order is an indication of the failure of the whole principle of the Sugar Act which we spent such a long time discussing—
Mr. Deputy-Speaker (Sir Charles MacAndrew): We cannot discuss it now, of course.
Mr. Dye: —in Committee, when we tried to persuade the Government that their policy was wrong and that it would be better to organise and plan the production of sugar in this country and the Commonwealth rather than rely on a mechanism such as this to adjust our prices according to world prices.
10.35 p.m.
Mr. A. E. Oram: Those of us who took part in the work of the Standing Committee on the Sugar Bill about a year ago can, perhaps, be excused if tonight we think that we are looking at this question of sugar prices and this surcharge through a looking-glass, and a looking-glass, moreover, which distorts the picture, at least one aspect of it. My hon. Friends the Member for Sunderland, North (Mr. Willey) and the Member for Norfolk, South-West (Mr. Dye) have reminded us that then we were discussing the surcharge in a situation in which the world price of sugar was well below that of the Commonwealth Sugar Agreement. We expected, therefore, that when the Sugar Board began its operations it would make a loss and that, as a consequence, the surcharge would become necessary. Instead, the situation now is the reverse of that. The picture is distorted in that we have a surcharge when the world price is distinctly above that of the Commonwealth Sugar Agreement.
I have been looking up the words of the Minister when he explained what he had in mind about the surcharge. He said:
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"I repeat that the object of the levy is a very simple one, to recoup the Sugar Board for the difference in the price at which it buys Commonwealth negotiated sugar and the price at which it sells it; to recoup it for any deficiency that it may have to make good to the British Sugar Corporation; and to cover its own modest administrative expenses. Those I believe to be the only objects of the levy. If the price works out the other way, if the Board recovers a profit from the British Sugar Corporation and if the price it pays for Commonwealth sugar is less than the world price, then, of course, there will be a surplus, which will be disposed of in the way which we shall come to later in this Bill."—[OFFICIAL REPORT, Standing Committee A, 31st January, 1956: c. 350.]
The Minister's "if" in the latter part of that passage is now an established fact. The folly of this Order is that we have now a surcharge in circumstances the very reverse of those which were anticipated as make the surcharge necessary.
If one puts oneself in the position of the members of the Sugar Board one can, perhaps, understand their "playing for safety," as the Chairman of Tate and Lyle has put it. After all, they are newly launched on a new function in life, and they are anxious not to make a hash of things; therefore, they are anxious to build reserves. They are, however, receiving from the price structure of the sugar market today quite unexpected windfalls. Yet here they are making doubly sure by putting on this surcharge.
Of course, it is not only the Board which is playing safe. Everyone all along the lines plays safe. The person who pays the price of everyone's playing safe all along the line is the domestic consumer, the housewife, who pays the final retail price. The refiners have already admitted that they pass on the surcharge to the consumer. They have passed on the increased prices that they paid for the raw sugar. One can perhaps understand that, but it seems to me that they have shown a little indecent haste in passing on the increase, and it will be interesting to see whether they are just as quick and sensitive to the market if prices take the opposite trend and start to come down.
There is only one person in this business who is not able to play safe, and that is the housewife. According to the trade Press, she did what she could a few weeks ago by laying up modest stocks

1225
in her larder because of rumours of increased prices and shortages, but she cannot do much in that respect. As a consumer she is pretty powerless in this world, faced with a powerful monopoly organisation in sugar, and a Government whose sugar policy is giving added freedom to that monopoly organisation.
The particular part of the Government's sugar policy that we are discussing is the surcharge, and the amount of the surcharge works out at only a small fraction of a penny per pound. In itself it may not be considered a terrible imposition, but we have to remember that it is part and parcel of the Government's policy, as contained in the Sugar Act of last year. During the debates on that Measure hon. Members on this side of the House did their best to warn the country that the Government's new policy in sugar was throwing away recklessly the safeguards which the country had. It was throwing away the means which the Government had of protecting both the consumer at home and the producer in Colonial Territories.
We did what we could, but we were unsuccessful in changing the Government's mind. We were assured by the Minister and by the Parliamentary Secretary's predecessor in office that all was well; that the consumer would not be adversely affected by the changes which were going to take place; that it was only a question of a new method of accountancy being instituted and that when the Sugar Board came into operation the consumer would still be in the same position.
Is it not a strange coincidence that at the very time when the Sugar Board comes into operation the housewife is faced with this increase in retail prices. She is feeling the full blast of the increased prices in the world market and the present Joint Parliamentary Secretary —if he has caught up with the ramifications of the sugar trade in the short time in which he has been in his present office—will have to exercise a great deal of skill if he is to be successful in convincing her that she is not having a raw deal, and that the prices she is being called upon to pay week by week are not a direct result of the policy which the Government have been pursuing in this connection.
10.44 p.m.
The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber): I am very glad to have the opportunity of dealing with the points raised in the Prayer, because I think that there is a little misconception which should be cleared up. I have had an opportunity of studying something of this rather involved subject, Which probably few hon. Members would claim to have a complete knowledge of, but having read some of the debates which have taken place on it I am a trifle disappointed that we have not with us tonight the hon. and learned Member for Kettering (Mr. Mitchison) who moved the previous Prayer dealing with sugar, and who made a quite remarkable speech, managing to bring in all sorts of things, including Cavendish and Negro-head tobacco—but he said very little in regard to sugar, so far as I can find out.
The hon. Member for Sunderland, North (Mr. Willey) has put forward some points to which I shall endeavour to reply to the best of my ability. I feel that I shall have to take him up on one or two claims which he made. In one of them he said that all the Opposition's forecasts in this matter were borne out.
The hon. Member has a remarkable record in the forecasts which he makes about food. I will not take him back over a lot of them, but in this case I looked specifically at the remarks he made at the opening sitting of the Committee stage of the Bill. There on the very first Amendment, which he called a wrecking Amendment with a candour which I appreciate, he gave three reasons which he called the three fundamental reasons why the Opposition was opposing the Bill. The first of these fundamental reasons was, he said—
Mr. Willey: I do not want to discourage the hon. Gentleman, but I think that this is a little unfortunate, because. I would have dealt with the matter in moving the Prayer—
Mr. Deputy-Speaker: I do not want to discourage anybody. but we can only deal with the Order.
Mr. Godber: I am very sorry indeed, because I would rather have liked to bring this point to the hon. Gentleman's notice. The hon. Gentleman opposite quoted from a rather similar document, also about the Committee stage.
Mr. Deputy-Speaker: I stopped him.
Mr. Godber: I will not pursue that matter any further, but I hope that the hon. Gentleman will in his spare time study again the remarks which he made on that occasion, when he will see that not quite all his forecasts in this matter have been borne out.
To come more closely to the Order against which the Opposition is praying tonight, I should like to point out that it imposes a surcharge at the rate of 1s. 2d. a cwt. on refined sugar. This works out at, approximately, one-eighth of a penny per lb. No one can pretend, therefore, that this Order of itself has had an appreciable effect on the retail price of sugar in the shops. I think that the hon. Member for East Ham, South (Mr. Oram) acknowledged that fact in the course of his remarks.
It is important to get that fact clear. This surcharge, whatever it does, does not have a substantial effect on the retail price. That being so, the next point to deal with is why, in fact, there is a surcharge at all. That was the gravamen of the charge made by the hon. Member for Sunderland, North—that we should not have had a surcharge because the world price has risen so sharply that, as he claimed, it was not necessary.
I think that I must take the hon. Gentleman back to a point which is very strictly relevant because, although it was made during the passage of the Bill, it relates particularly to this Order. During the course of the Bill, the hon. Gentleman and his colleagues were at great pains to urge the need for a definite period to be written into the Bill which would be the period during which an Order such as this would remain in force. Eventually a period of six months was written into the Bill as the length of time during which one must be able to see clearly ahead before deciding what to do. That was done in Clauses 13 and 14 of the Bill, and it was done at the instigation of the hon. Gentleman and his colleagues.
Mr. Willey: I think that the hon. Gentleman would agree—and we are obliged to the Government for meeting our point of view—that our point was that we should not legislate for an indefinite period. We wanted to ensure that this matter would come up continually for review by the Board. and not for the reason given by the hon. Gentleman.
Mr. Godber: For a definite period. In other words, the hon. Gentleman would have preferred a shorter period, but I think the right hon. Member for Rochester and Chatham (Mr. Bottomley) suggested a limit of three years.
Mr. Wiley: The Parliamentary Secretary must face up to the point that this was a suggestion as against an indefinite period, which is a period without finity. We were limiting the period. The Government wished to make it indefinite. We said that we ought to ensure that this matter was reviewed and that we could not agree to an indefinite period and to the Board imposing a surcharge indefinitely.
Mr. Godber: I accept that that is the position. Having got a figure, whatever it is, into the Act, it is surely wrong at the very first opportunity for hon. Gentlemen to seek to alter it, when neither have we had six months' experience of it nor can we envisage—I certainly could not—what the position will be six months from now. The world price of sugar has fluctuated very sharply. Indeed, following its movement during recent weeks it has not come to rest even at this moment.
I have the latest figures for the world price. Using the normal basis of the price free alongside ship Cuba in United States cents per lb. the price has varied over the last four years. At first it was almost completely static. In 1953 it was an average of 3·41 cents, in 1954 3·26 and in 1955 3·24. Towards the end of last year it started to go up very sharply. In early November it was 3·55, at the end of November 4·65. In December it was up to 4·90 and at the beginning of January 5·15. It rose to a peak in the middle of January, when it was 6·37. Since then it has dropped to 5, but has now risen again. The latest figure is about 5·60.
With such wide fluctuations of price, how can anyone look six months ahead at this moment and say what should be the right level? At the moment it may appear that there should be a substantial distribution payment. Who can say what it should be in six months' time? Surely it is essential, by the very terms of the Amendment that the hon. Gentleman pressed us to put into the Bill, not to

1229
press us to make this change. I say that with absolute conviction. I am sure that is the position to-day. We know that the Board is accumulating substantial sums of money and that in due course, if the price remains above the guaranteed price for any period of time, we shall eventually have a distribution payment in which this money will be returned to consumers in some form or other. It is not being absorbed by the refiners or anybody else. It will be refunded, and the housewife may well get the advantage later on.
I am all for seeing that this is returned at the earliest moment possible. All I am saying is that the state of the market today is so widely fluctuating that it is unreasonable to try to strike a balance at this stage. That is the general answer to the Prayer.
Much of the fluctuation in the world price is due to world climatic conditions, which may change again. We have had the difficulty of the sugar beet crop in Europe, and in Cuba production has been affected by a certain amount of drought.
Also, of course, there is the difficulty, which was mentioned, I think, by the hon. Member for East Ham, South, of stocking up by housewives and others. Housewives have stocked up to a certain extent, and who can blame them for it? That is a factor which has had, I think, an influence not only in this country but, perhaps to a far greater extent, in other countries. Sugar is probably the easiest commodity in the world for people to stock up, and that has, I am sure, had its effect. I remember very clearly that when sugar was derationed sales went down because the amounts which had been stocked up were dissipated. I think that the opposite has taken place now, and that does to some extent explain what has happened.
I will not attempt to deal with the points quoted from previous debates, because I am told that I should be out of order if I were to do so. I would sum up the present position in this way.
Mr. Wiley: Before the hon. Gentleman goes on, would he just deal with this one point, which would, I think, be in order? Why are we imposing the surcharge at all?
Mr. Godber: I am sorry if I have not made it clear. Clearly, a decision had to
1230
be taken before the Act came into force. It was taken in December, I think; and the Order was published about the middle of December. I spoke a few moments ago about prices, and around the time when the Order was published the world price stood at about 4·65 cents, which was very similar to the Commonwealth Agreement price. Since then, it has risen very considerably, but that was the moment of time when the decision was taken, and the price was just about at parity. It was rising, but who was to know how much it was going to rise?
Mr. Willey: I am sorry to intervene again, but this Order did not come into force until 1st January. It is a very bureaucratic explanation to give to the House, that some bureaucrats or accounting agencies had taken the decision when circumstances were different from those obtaining on 1st January. What I am asking is, why allow the Order to come into force, imposing a surcharge at a time when we are trying to hold the cost of living, and say, by way of consolation, that later the housewife will get the money back—perhaps a few months before a General Election; I do not know?
Mr. Godber: I shall not go into the point about a General Election. This particular Order shows the date of 21st December as the date when it was made, and that is only a few days after the date for which I have just quoted the price. Once an Order has been printed and laid before the House, surely the hon. Gentleman would not expect us to take it back forthwith? Quite honestly, I do not think he is being reasonable in making this point.
The price had risen a certain amount, but there was no indication that it was going to rise to the extent that it did. Those who took the decision to put on merely one-eighth of a penny per pound were showing very remarkable business acumen, in that they did not put a much larger surcharge on, which is what everyone would have expected only a week or two before. If the hon. Gentleman now claims to know that the price was going to rise, I doubt very much whether he would have made that claim at the beginning of December. There is ample reason for the surcharge being put at this level, and I make no apology for it. I

1231
believe that when hon. Members think fairly over this matter, they will accept that.
I was about to sum up by saying that the world price at New York last night closed at 5·60 cents, which is a figure that it has stood at now for about a week; but nobody knows how it is going to move. Last night's price is in fact about 80 points less than it was four weeks ago, and it is still some 100 points above parity with the Commonwealth negotiated price.
There is no certainty that this novel situation will be maintained, but if the world price remains at its present level, or something like it, for some period, the House can rest assured that the machinery —provided in the Act to ensure, by means of distribution payments, that the British housewife will receive the full benefit of a situation in which the fixed prices which we pay the Commonwealth and the cost of beet sugar produced at home are below world prices—will be brought into operation.
That is the situation as we must leave it now. I have endeavoured to give the reasons, and I hope that the House is satisfied with them. I think that we have been right to follow this course, and I have no hesitation whatever in asking the House to reject the Prayer.
11.0 p.m.
Mr. Willey: I think that the House is far from satisfied. I think that hon. Members on both sides are thoroughly dissatisfied—[HON. MEMBERS: "No."]—but we hope that the fact that our arguments have been heard and are recorded will bear weight with the Sugar Board. We also hope that the Joint Parliamentary Secretary will now realise that we were right in saying that the members of the Board should have commercial experience and not be mere accountants.
In view, however, of the courtesy of the hon. Gentleman's reply, in spite of its lack of convincing reason, I think that it would be proper to ask leave to withdraw the Prayer and give the Sugar Board time to think again.
Motion, by leave, withdrawn.

EXPLOSIONS, SHOEBURYNESS AND FOULNESS (DAMAGE)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wills.]
11.1 p.m.
Mr. Julian Ridsdale: Ever since I became Member of Parliament for Harwich in 1954, just three years ago, I have been troubled by complaints about damage to property caused by explosions from Shoeburyness and Foulness Island. I have asked several Parliamentary Questions about those explosions and have had considerable correspondence, not only with the Ministry of Supply but with the Atomic Energy Authority also.
There are two establishments in the area, one at Shoeburyness under the Ministry of Supply and one at Foulness Island under the Atomic Energy Authority. Sir Edwin Plowden, writing to me on 11th March, 1955, informed me that those ranges are shared by the Atomic Energy Authority and the Ministry of Supply, and are used for essential tests and experiments with ordinary weapons, ammunition and explosives.
In view of the continued trouble that we are having, I ask my hon. Friend the Parliamentary Secretary, when he replies, to assure me that that slightly ambiguous statement "and are used for essential tests" does not include atomic explosions, however small. I know that an assurance was given by the Lord President of the Council in the House of Lords on 7th April, 1954, that no nuclear explosions were taking place, but in view of the continued use of the ranges by the Atomic Energy Authority and the damage that is being done on the north-east Essex coast, I should like an assurance on that point from my hon. Friend.
Nevertheless, nuclear explosions or not, my constituents are being continually worried by explosions coming from either Shoeburyness or its vicinity. They are certainly more than just explosions coming from 6 in. guns using ordinary ammunition. Sometimes no immediate effect whatever is felt. Sometimes a ceiling falls down, a wall is cracked, a picture falls down, as one did in my house the other day, or glass is broken or a roof damaged; but in the end, over a considerable period, harm is being done to property in my constituency. I thank

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the Parliamentary Secretary for the trouble that his predecessors have taken to send inspectors to inquire about the effect of the explosions, but although compensation has been given, in the opinion of those who suffer it by no means fully compensates them.
I know the Ministry's case. Its technical advisers have said that it is unlikely that the defects covered by the claims were originally due to vibrations from explosions. I would point out, however, that if a building is on a site of clay or clay mixture and has stood for many years solid and sound, but since the beginning of violent explosive vibrations in the area has become fractured and has suffered as a result of these vibrations, such damage should be repaired. In such a case compensation should be paid by the Department responsible for the damage, to enable repairs to be carried out.
We do not ask for much—only no explosions without full and speedy compensation. I hope that the Parliamentary Secretary will look into this question of compensation again. The surveyor acting for some of my constituents advised them to accept the amount of compensation, under protest, there being no alternative. Unfortunately, the damage from explosions still continues. Now we are having complaints again, and it seems that we shall begin a paper war, upon which the consciences of the secretaries at the Ministry of Supply seem to thrive, but which, alas, does not help the claimants very much. I doubt whether some of them wish to go through again the tedious business that we have had with the Ministry of Supply in the past. Indeed, I do not see why they should do so.
Damage, nevertheless, is being done and I have no doubt that while some people are complaining others are suffering in silence, despairing of getting anything done but yet feeling much aggrieved by the attitude adopted by the technicians and advisers of the Ministry of Supply. The Parliamentary Secretary will probably shrug off the question of compensation that I have raised by asserting that the victims were adequately and speedily compensated. In the majority of cases that is not so, but even if compensation
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has been adequate in a few cases, I suggest that that is now not the chief point of contention. A situation has arisen in which I must demand the immediate cessation of these explosions. When the Parliamentary Secretary looks through his files he will see that over the last year these explosions have been causing a great deal of public nuisance, to say the least.
In view of the increasing power of modern explosives, these explosions should either be stopped forthwith or should be transferred to an area where they do no damage to property. We do not want the islands off the mouth of the Thames to be turned into minor Christmas Islands. If the explosions are allowed to continue and to increase, they will, from the structural damage that will be caused, certainly hurt the amenities of the north-east Essex coast. I ask the Minister to consider these points very carefully. His decision will mean a great deal to the people living on that coast.
11.8 p.m.
Mr. Brian Harrison: I am very grateful to my hon. Friend the Member for Harwich (Mr. Ridsdale) for raising this matter, because it is one that has been worrying me and my constituents for a very considerable time. We live closer to Foulness and Shoeburyness than do his constituents. Though I must admit that we have not suffered quite as severe damage as have people who live in Clacton, Frinton, and St. Osyth, probably because our houses are not built on sand, these explosions have caused a great deal of nuisance and trouble to people who live at Latchingdon and Burnham.
I ask the Ministry to consider most carefully whether it is essential that it should continue to use these two islands as a testing range. In any event, I hope that the Ministry will try very hard to limit the size of the explosions. We had an example the other day where a mine that had been found in one of the docks was taken away and exploded just off that area. There have been other very large explosions that have shaken the whole of the area, not only opposite Shoeburyness and Foulness but farther away in the Harwich area, as we have already been told.

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If it is absolutely essential that this testing range should continue, I hope that some simplified method of claiming for damage will be possible. There comes to my mind one case in particular where it has been extremely difficult to allocate to the Department concerned responsibility for certain explosions. It is extremely difficult for the small householder who has suffered damage and who may not wish to worry his Member of Parliament with details of it to try to ascertain which is the Department responsible for the cracking of the ceiling or the walls or supports of his house.
My main reason for intervening is to express the hope that the Department will, first, try to limit the size of the explosions. If these wretched disturbances must continue, I ask that at least the procedure for claiming damages should be simplified, and that the Department will be deeply sympathetic with those people living in that beautiful and remote part of Essex, who did not dream when they first went there that they were going to find themselves in the midst of an area which was subject to high explosions, shattering the peace of that lovely area.
11.12 p.m.
The Parliamentary Secretary to the Ministry of Supply (Mr. W. J. Taylor): First, I should like to express my gratitude to my hon. Friends the Members for Harwich (Mr. Ridsdale) and for Maldon (Mr. B. Harrison) for giving me notice of the main points that they intended to raise in the Adjournment debate.
I can well understand why they wish to raise the matter, because for several years the constituents of my hon. Friend the Member for Harwich have pressed him to bring to the notice of the Ministry of Supply their complaints relating to the activities of the Atomic Energy Authority and the Ministry of Supply on the ranges at Shoeburyness and Foulness. As I shall explain later, I do not think that our activities there have caused serious damage or nuisance, but nevertheless it is understandable that people in the vicinity should from time to time be anxious about these explosions and that sometimes they feel irritated that they should be subject to such disturbances.
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I should say at once that we cannot carry out much of the essential development and testing required by the defence programme without causing some disturbance to some members of the community. It is well known, for example, that with the advent of supersonic aircraft, problems have been caused by the so-called supersonic bangs, although the Ministry has, I think, striven successfully to reduce disturbance from that particular source.
It is worth pointing out that it is not only defence work which produces inconvenience for the citizens. Many civil activities produce noise and nuisance to the ordinary public. For example, when we develop a new airport there is much disturbance for those living in the vicinity of the new airfield. Yet I am sure that my hon. Friends, and their constituents, will appreciate how important it is to continue with the type of testing which is undertaken on these ranges, providing that we take all reasonable measures to reduce disturbance by paying —and I emphasise this—satisfactory compensation, whenever real damage is caused to property. I am sure that they would not wish, nor would their constituents, to hamper the essential work of our defence programme.
It has been suggested this evening that the Government should put a stop to work at Shoeburyness and find an alternative site. But I must point out that the Shoeburyness and Foulness ranges are really irreplaceable. There is no other area in the country where the natural facilities are better, and over the years a considerable amount of money has been expended on the development of those sites. The Shoeburyness range has been there for generations, and it cannot be replaced within the United Kingdom. At the same time, I can assure my hon. Friends that when we are contemplating new facilities, in addition to those which already exist, we do consider whether they can be efficiently provided on other ranges. On some occasions, they have been set up elsewhere; but a large amount of important work must be done by the Atomic Energy Authority and by the Ministry of Supply on these two ranges.
Having said that, I should like to make it quite clear that the explosions are not

1237
made indiscriminately. It is normal practice to pay attention to the direction of the wind and general meteorological conditions so that the risk of damage is reduced to the absolute minimum. On the rare occasions when night firing takes place, the local police and other bodies are warned so that they may reassure people who inquire. In addition, notices are placed in certain local post offices.
While talking of the precautions taken, I would give this further assurance. I have been asked about the type of the tests and I can say that there are no nuclear explosions from these ranges.
Mr. Ridsdale: That includes atomic explosions?
Mr. Taylor: By nuclear explosions. I mean explosions which would release fissile material into the atmosphere. All the explosions are of the conventional type and gun ammunition, and in this connection reference has been made to the reply given in another place by the Lord President of the Council on 7th April. 1954. The Lord President then said:
"The Foulness Range has been used over some years by the Atomic Weapons Research Establishment, for experimental work with ordinary conventional high explosives. The work is an essential step in the development of atomic weapons. The explosions are also used to study the effects on model structures and so provide valuable data for those forms for Civil Defence. I can say definitely that no nuclear explosions have been or will be made, nor will experiments be made with fission products or any other hazardous radioactive material."—[OFFICIAL REPORT, House of Lords, 7th April, 1954; Vol. 186, c. 1134–5.]
I will now turn to the question of compensation and make a few comments on the number of claims received. I think that I can show that our activities have not resulted in any major disturbance to the local public. In 1956, for example, the number of claims was only 33, of which 17 were found to be unsubstantiated. Since April, 1955, claims for damage have been handled by the War Office land agent at Colchester on behalf of both the Ministry of Supply and the Atomic Energy Authority.
With regard to procedure in the case of claims, normally the aggrieved party writes to the superintendent of the
1238
Shoeburyness range making his complaint. The superintendent maintains a detailed record of firings and explosions, and when he receives a complaint he sends it, together with the firing programme for the day in question, to the local War Office land agent. An inspection is carried out and. if it is established that damage is wholly or partly due to our activities or to those of the Authority, an offer of an ex gratia payment is made.
Every effort has been made to treat each case on its merits. The inspections which are made often show that many of the defects which are alleged to result from our activities are probably the consequence of the type of construction or are caused by land settlement. As my hon. Friends will realise, it is often difficult to judge how much of the alleged damage can fairly be assumed to be the result of our activities.
I have looked into the history of these cases over the last two years, and I find that there has not been a great deal of dissatisfaction expressed over the way in which the War Office and my Department treat the claims. I acknowledge that sometimes it has taken several months before a decision has been reached on a particular claim, but that is more or less inevitable in view of the inspections and inquiries which have to be made.
I readily accept the contention that we should pay fair compensation when it has been proved that the damage has resulted from our activities, and I am quite willing to make arrangements for the examination of any cases where dissatisfaction has been expressed. I can assure my hon. Friend the Member for Harwich that it is our policy to try to settle all claims fairly and that if he will let me have further details we will look at them in that light. Of course, we must bear in mind that it is public money that is being paid out, and there must be reasonable proof that the damage has been caused by explosions on the ranges.
I hope that I have been able to reassure my hon. Friends that everything possible will continue to be done to minimise disturbance from the activities on the ranges at Shoeburyness and Foulness. I am unable to contemplate ceasing this work or moving it elsewhere. It would be an enormous undertaking so to do. I cannot in this reply give my hon. Friend

1239
details of the expenditure, even recent expenditure, on these ranges, but if he would like to speak to me about the matter later, I could convince him, I think, without any doubt, that to attempt to remove the ranges to another site or sites is absolutely out of the question.
1240
However, we shall continue to do our best to treat such claims as come from the constituencies of my hon. Friends with strict fairness. I hope that they will cooperate with my Department to that end.
Question put and agreed to.
Adjourned accordingly at twenty-four minutes past Eleven o'clock.

SCIENTIFIC AND INDUSTRIAL RESEARCH
  Mineral Resources
  Mineral Resources
  Geological Survey (Staff)
  Geological Survey (Staff)
BRITISH ARMY
  Range, Weybourne
  Range, Weybourne
MINISTRY OF WORKS
  Office Building, London
  Office Building, London
TRADE AND COMMERCE
  Exports to China (Motor Vehicles)
  Exports to China (Motor Vehicles)
  Anglo-Polish Trade
  Anglo-Polish Trade
  Grant-aided Bodies (Salaries and Pensions)
  Grant-aided Bodies (Salaries and Pensions)
  Cinematograph Films (Quotas)
  Cinematograph Films (Quotas)
  "Target"
  "Target"
NATIONAL FINANCE
  Interest, Profits and Dividends (Dollar Earnings)
  Interest, Profits and Dividends (Dollar Earnings)
  Invisible Trade
  Invisible Trade
  Old-Age Pensioners (Milk)
  Old-Age Pensioners (Milk)
  Imported Bacon (Tariff Receipts)
  Imported Bacon (Tariff Receipts)
  Government Expenditure
  Government Expenditure
  Monetary and Credit System
  Monetary and Credit System
GOVERNMENT DEPARTMENTS
  Security
  Security
LOCAL GOVERNMENT
  Private Street Works
  Private Street Works
  Rating Valuation (Amateur Sports Clubs)
  Rating Valuation (Amateur Sports Clubs)
  Tree Planting
  Tree Planting
HOUSING
  Rent Bill
  Rent Bill
  Rented Properties, Thorne
  Rented Properties, Thorne
  Rent Tribunals
  Rent Tribunals
EMPLOYMENT
  Gateshead
  Gateshead
  Southampton Remploy
  Southampton Remploy
  Box-Making Industry, Aberdeen
  Box-Making Industry, Aberdeen
  Macclesfield and Congleton
  Macclesfield and Congleton
  Borough, Southwark
  Borough, Southwark
  Lewisham
  Lewisham
SCOTLAND
  Glen Roy (Afforestation)
  Glen Roy (Afforestation)
  Hydro-Electric Schemes and Works
  Hydro-Electric Schemes and Works
  Committee on Diligence (Report)
  Committee on Diligence (Report)
  Hill Cattle Subsidy
  Hill Cattle Subsidy
  POLAND (TRADE GUARANTEES)
  POLAND (TRADE GUARANTEES)
AGRICULTURE, FISHERIES AND FOOD
  Land Drainage (Report)
  Land Drainage (Report)
  Farm Improvement Scheme
  Farm Improvement Scheme
ROYAL NAVY
  Admiralty Lands and Properties, Gosport
  Admiralty Lands and Properties, Gosport
ROYAL AIR FORCE
  Maldive Islands (Airfield)
  Maldive Islands (Airfield)
MAURITIUS
  Constitution
  Constitution
KENYA
  Nairobi City Council (Administration Report)
  Nairobi City Council (Administration Report)
NORTHERN RHODESIA
  Mazabuka District Chief
  Mazabuka District Chief
  Rehabilitation and Welfare Funds
  Rehabilitation and Welfare Funds
COMMONWEALTH RELATIONS
  Buchuanaland (Development and Welfare)
  Buchuanaland (Development and Welfare)
MINISTRY OF DEFENCE
  Defence Costs (U.S.A. and German Contributions)
  Defence Costs (U.S.A. and German Contributions)
EDUCATION
  Berkeley School, Cranford (New Classrooms)
  Berkeley School, Cranford (New Classrooms)
  Ministry's Staff (Statistical Section)
  Ministry's Staff (Statistical Section)
  Redruth Secondary Grammar School
  Redruth Secondary Grammar School
MINISTRY OF HEALTH
  Prescription Charge
  Prescription Charge
TELEPHONE SERVICE
  Wembley
  Wembley
POST OFFICE
  Commemorative Stamps
  Commemorative Stamps

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

UNEMPLOYMENT IN MOTOR CAR CENTRES
2.35 p.m.
LORD LUCAS OF CHILWORTH: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will state the numbers of persons registered as (a) totally unemployed and (b) temporarily stopped: and the amounts paid in unemployment benefits for the months of November and December, 1956, and January. 1957, in the following areas:

Area

Date

Number of persons registered

Totally Unemployed

Temporarily Stopped

Birmingham

…

12th November, 1956

…

…

6,221

566

10th December, 1956

…

…

6,341

261

14th January, 1957

…

…

8,705

857

Coventry

…

12th November, 1956

…

…

2,350

135

10th December, 1956

…

…

2,022

206

14th January, 1957

…

…

2,933

133

Luton (including Dunstable)

…

12th November, 1956

…

…

261

29

10th December, 1956

…

…

281

123

14th January, 1957

…

…

750

121

Oxford

…

12th November, 1956

…

…

236

—

10th December, 1956

…

…

754

—

14th January, 1957

…

…

827

10

Dagenham

…

12th November, 1956

…

…

482

5

10th December, 1956

…

…

469

15,210

14th January, 1957

…

…

684

16,324

Birmingham, Coventry, Luton, Oxford, and Dagenham.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF DEFENCE (LORD MANCROFT): My Lords, as the Answer to the noble Lord's Question of necessity contains a large number of figures, I will, with his permission and that of the House, circulate a table in the OFFICIAL REPORT.
LORD LUCAS OF CHILWORTH: My Lords, will the noble Lord accept my thanks for the trouble he has gone to in providing all the figures that I think, of necessity, he must give me to find a full answer? The method he suggests of conveying the information to your Lordships' House is quite acceptable to me.
EARL HOWE: My Lords, I should like to ask whether the figures contained in the table will include the number of people thrown out of work by unofficial strikes.
LORD MANCROFT: No, my Lords.
Following is the table:

Area

Month

Total Amount Paid in Unemployment Benefit

£

Birmingham

…

November, 1956

…

…

…

39,725

December, 1956

…

…

…

33,792

January, 1957

…

…

…

45,614

Coventry

…

November, 1956

…

…

…

23,840

December, 1956

…

…

…

19,322

January, 1957

…

…

…

27,081

Luton (including Dunstable)

…

November, 1956

…

…

…

6,307

December, 1956

…

…

…

14,221

January, 1957

…

…

…

20,488

Oxford

…

November, 1956

…

…

…

1,630

December, 1956

…

…

…

5,001

January, 1957

…

…

…

6,685

Dagenham

…

November, 1956

…

…

…

3,178

December, 1956

…

…

…

8,960

January, 1957

…

…

…

85,961

Note.—The figures in respect of workers temporarily stopped relate to persons working short-time or otherwise stood off who registered at Employment Exchanges and were not at work on the dates when the count was made.

MR. SANDYS' VISIT TO AMERICA
VISCOUNT STONEHAVEN: 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, to allay the widespread anxiety expressed by our Continental Allies, they can give art assurance that the visit of the Minister of Defence to Washington implies no unilateral action taken without consultation with our Allies.]
LORD MANCROFT: My Lords, I can assure my noble friend that the visit of my right honourable friend the Minister of Defence to Washington most certainly does not imply that action affecting our Allies in N.A.T.O. will be taken without proper consultation with them.
LORD LAYTON: My Lords, may I ask whether the noble Lord appreciates the importance of giving the maximum publicity and emphasis to the Answer he has just given, in view of the many rumours and suggestions to the contrary which are current, not only in this country but abroad? For example, there was a statement in one of our national newspapers this morning, in connection with the visit of the Minister of Defence, in which it was categorically asserted that
662
American Defence Chiefs have been told that, whatever objections they may raise, Britain intends to cut her ground and air forces stationed in Germany, an action which, as your Lordships know, would be directly contrary to the specific undertakings that have been given in the Paris Agreement.
LORD MANCROFT: My Lords, I have seen the statement to which the noble Lord refers, and others a good deal wilder than that. I hope that the most categorical assurance that I have just been able to give to my noble friend Lord Stonehaven will put the noble Lord's mind at rest.
VISCOUNT STONEHAVEN: My Lords, I thank the noble Lord for his Answer, which is entirely satisfactory.

EGYPT: RUMOURED THREAT OF AMERICAN SANCTIONS
LORD HATHERTON: 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, on November 6, 1956, the British Ambassador in Washington was officially informed that if Great Britain did not immediately end her military action in Egypt, the United States

663
would impose economic sanctions, either in whole or in part, against the United Kingdom.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF GOSFORD): My Lords, I can assure the noble Lord that neither Her Majesty's Ambassador, who was on the high seas on the date in question. nor Her Majesty's Chargé d' Affaires in Washington received any communication to the effect that if Her Majesty's Government did not immediately end the military action in Egypt the United States would impose economic sanctions on the United Kingdom. This story, which has been widely disseminated, is a complete fabrication.
LORD HATHERTON: My Lords, I thank the noble Earl for his reply.

LOCAL GOVERNMENT FINANCE
LORD PETIHCK-LAWRENCE: My Lords, I beg leave to ask Her Majesty's Government the following Question, of which I have given them private notice: Are they in a position to make a statement on local government finance?
THE MINISTER WITHOUT PORT-FOLIO (THE EARL OF MUNSTER): My Lords, with your Lordships' permission, I hope to make such a statement at about half-past three this afternoon.

SUNDAY ENTERTAINMENTS ACT, 1932
THE MINISTER OF EDUCATION (VISCOUNT HAILSHAM): My Lords, this is the first of three Orders to be moved under the Sunday Entertainments Act, 1932. All three of them are in the usual form, and my remarks only the other day are so fresh in your Lordships' minds that I will not weary you by repeating them. In none of these cases was a poll even necessary. I beg to move the first Order.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Urban District of Stourport-on-Severn, be approved.—(Viscount Hailsham.)
On Question, Motion agreed to.
VISCOUNT HAILSHAM: My Lords, I beg to move the second Order.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Urban District of Swaffham, be approved.—(Viscount Hailsham.)
On Question, Motion agreed to.
VISCOUNT HAILSHAM: My Lords, I beg to move the third Order.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Rural District of Lichfield, be approved.—(Viscount Hailsham.)
On Question, Motion agreed to.

TRANSPORT (RAILWAY FINANCES) BILL
House in Committee (according to Order): Bill reported without amendment.
COMMONWEALTH SETTLEMENT BILL
Read 3a(according to Order), and passed.

SHOPS BILL [H.L.]
2.43 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Viscount Hailsham.)
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, on the Motion that the House do resolve itself into Committee, I should like to ask the noble Viscount in charge of the Bill a question of which I have given him notice. It is strongly rumoured (I know that rumour is sometimes a "lying jade") that it is the intention of the Government to withdraw this Bill. Before we go further with any of the stages of this Bill, as this is the initiatory House in this case, I should like to know whether there is any substance or fact in that suggestion, because it would be convenient for us to know at this stage.
VISCOUNT HAILSHAM: No. my Lords: we intend to go on with our business.
LORD LUCAS OF CHILWORTH: My Lords, following upon the question asked by my noble friend and the noble Viscount's answer, my information is that the Government do not intend to bring this Bill into force, if it should pass all the necessary stages in Parliament, until 1959. The reason, I understand, is that by that time the Government may have made up their mind as to the reorientation and, very likely, the disbanding of some local authorities' functions and duties. This Bill transfers the functions of enforcement to the district councils, which may or may not have their boundaries altered, and may or may not be in existence upon that date, and leaves some functions unrepealed by the 1950 Act with the county councils. As the noble Viscount will have seen, I have down some Amendments to try to bring order into what I think may be chaos, and I should not like the Committee to proceed upon the very lengthy consideration of this Bill without the knowledge that it is the Government's intention to implement this Bill before 1959.
VISCOUNT HAILSHAM: My Lords, the noble Lord's information does not accord with mine.
LORD LUCAS OF CHILWORTH: My Lords, that is a brief and, perhaps, to the noble Viscount, a satisfactory answer. But it was published in the Press the other day that, as a result of the consultations between various interested parties and the Government Department for whom the noble Viscount will be speaking when he conducts the passage of the Bill, this Bill would not, if it received the Royal Assent, come into force under Clause 76 until January, 1959.
VISCOUNT HAILSHAM: My Lords, I can only say that if the noble Lord wants any further information he must put a Question down. He did not give me notice of this.
On Question, Motion agreed to; House in Committee accordingly.
[THE EARL OF DROGHEDA in the Chair]
Clause 1:
Weekday closing times.
1.—(1) Subject to the provisions of this section and to the following provisions of this Act, every shop shall be closed—

(a) on each of the weekdays (except one) of each week, not later than seven o'clock
666
in the evening or such earlier time as may be fixed by order of the local authority within whose area the shop is situate; and

(bon the remaining weekday of each week (which shall be ascertained in accordance with the following provisions of this Part of this Act and is therein referred to as the "late day"), not later than eight o'clock in the evening or such earlier time as may be fixed as aforesaid:

Provided that on any weekday which by this Part of this Act is required to be observed as respects a shop as an early closing day the shop shall be closed not later than one o'clock in the afternoon.
(2) An order under this section may be so framed as to extend to the whole of the area of the authority by whom it is made or to part only of that area, as to have effect as respects the generality of shops within the area to which it extends (either without exception or subject to an exception for shops where a particular trade or business is carried on) or as respects shops within that area where a particular trade or business is carried on, and as to have effect either at all times or at particular periods of the year, and different times may be fixed by order under this section—

(a) for the purposes of different trades or businesses;

(b) as respects different parts of the area of the authority;

(c) on different days in the same week or the same day in different weeks;

but the fixing, by an order under this section, of a time for the purposes of a particular trade or business shall not, in the case of a shop where that trade or business is carried on, operate so as to require it to be closed not later than that time for the purposes of any other trade at business carried on therein.
(3) The power conferred on a local authority by paragraph (a) of subsection (1) of this section shall not be so exercised as to fix a time earlier than six o'clock in the evening, and the power conferred on a local authority by paragraph (b) of that subsection shall trot be so exercised as to result in a shop's being required to be closed on the late day in any week for the purposes or trade or business of any kind earlier than one hour after the latest of the times at which it must, by virtue of paragraph (a) of that subsection, be closed on other weekdays of that week for the purposes of trade or business of that kind.
VISCOUNT ALEXANDER OF HILLSBOROUGH VISCOUNT ALEXANDER OF HILLSBOROUGH moved, in subsection (1) (a) to leave oat "seven" and insert "six". The noble Viscount said: Before I come to this Amendment, perhaps your Lordships will permit me to say that I welcome the general fact that this Bill has been introduced, and that it makes some progress in the struggle in which trade union, co-operative and labour organisations have been engaged for a long number of years (I have been in it myself for

667
nearly forty years), although in the view of some of us it does not go far enough. I do not want it to be thought that, with regard to any Amendments that I may move or support, I do not welcome the fact that, after nearly ten years, many, if not all, the recommendations of the Gowers Committee will be found in this Bill.
When I come to deal with Clause 1, I find that in their Report the Gowers Committee did not see fit to bring into statutory proposal the basis of the case so well delivered to the Gowers Committee, both by the representatives of trade unions and by the co-operative societies. In both cases a very large and powerful membership were unanimous in the view that, in order to continue the progress which had been made on the general question of shorter hours for the workers, yet still providing reasonable facilities for the consumers, it was essential to move towards the kind of hours which I have laid down in my Amendment. So I beg formally at the start to move the substitution on page 1, line 13, of the word "six" for "seven", which would involve the general provisions of the Bill providing for a closure of shops at 6 o'clock.
It is our view, at any rate in the trade union concerned with the organisation of labour defence in shops, the Union of Shop, Distributive and Allied Workers. that the proposed hour of 7 o'clock as the latest general closing hour is not in accordance with the need for progress in this matter, and is not, in fact, an hour which is in general observance in the country at the present time. I should say—and I shall be interested to hear what the noble Viscount has to say in reply to this point—that it is the practice to-day for the overwhelming majority of shops to close at 6 o'clock or earlier. This has obtained right through the post-war years, ever since 1945, and in that period the trade union concerned has periodically made inquiries into which are the current closing hours throughout the country. The latest of these inquiries was carried out as recently as November of last year. The position certainly has not changed since then.
This inquiry covered the London area; it covered most of the provincial towns and cities and, in addition, almost half
668
of the co-operative societies in the whole of the country, and so it represented a reliable and substantial cross-section of the retail trade. The results showed that closing times on the ordinary nights of the week—that is to say, other than the late day which is provided for in the same clause—varied in most cases from 5 p.m. to 6 p.m. In only a very small proportion of shops did the closing hour go beyond 6 o'clock, and that proportion varied, in the different districts which were inquired into, from between 1½ per cent. to 3 per cent. of the total. The only exception to this pattern was the newsagency, tobacco and confectionery trade, where between 20 per cent. and 30 per cent. of the shops closed after 6 o'clock.
It is noteworthy that, again with the exception of the newsagency, tobacco and confectionery trade, between 67 per cent. and 77 per cent. did not observe any late day of opening at all during the week. Even where a late day was observed, it did not necessarily mean that the shops kept open an extra hour.
It will therefore be seen that, in urging that the new Act should lay down a general closing hour of 6 o'clock, with one late day allowed at 7 o'clock, the people who desire this Amendment which I am moving ask only what is now the majority established practice. When I look back at all the struggles which I have seen carried on in another place for the last forty years, in connection both with shops legislation and with carrying out the wishes of the Early Closing Association, which were always supported by Members of all Parties, I find it difficult to understand upon what grounds, with regard to present-day facts, the Gowers Committee went no further than they did in their recommendation in this respect. Where there is considered to be a good reason for a later closing hour—and I can see that there may be some good reason in a few cases like the newsagency, tobacco and confectionery trades, where need can be proved—then I think one ought to be willing to accommodate these exceptions by enabling the local authorities, where necessary, to fix a later hour, up to 7 p.m. If the Government will be good enough to accept my present Amendment, we could arrange to deal with that point later in the proceedings.
In recommending a general closing hour of 7 o'clock, the Gowers Committee justified their proposal on the ground that the public would not be content to accept a 6 o'clock closing hour when circumstances changed, when there were plenty of things to buy and no ration books or coupons. But that Report is ten years old, and the situation to-day, as I have indicated and as shown by the inquiries of the promoters of this suggested Amendment, has entirely changed. Ration books and coupons now have disappeared for years and to-day, when the shops are full of goods, the facts do not bear out the conclusions of the Gowers Committee.
Will a general 6 o'clock closing hour amount to unreasonable curtailment of shopping facilities for the customer? Apart from the evidence to the contrary about present closing hours that I have already indicated, there is other telling evidence to show that this would not be the case. In all these matters, I consider that we need to place considerable emphasis upon the views of the Trades Union Congress, as well as on the views of the Co-operative Congress. The T.U.C. (as we call represents more than 8 million workers, including 1½ million women employed in industry and commerce. In its evidence to the Gowers Committee, the T.U.C. said that it was concerned to ensure, on the one hand, that reasonable shopping facilities are provided for the consumer and, on the other, that reasonable hours are worked by those employed in the distributive trades. It believed that those conditions could be met by a general closing hour of 6 o'clock, with the power to fix earlier or later hours by a local order.
What of the point of view of women working in factories and offices? The Standing Joint Committee of Working Women's Organisations, by far the most representative organisation in the country of housewives and women in industry, came down on the side of a 6 o'clock closing hour in the views which they presented to the Gowers Committee in 1946. The views of the T.U.C. and of the Standing Joint Committee of Working Women's Organisations remain the same to-day as they were in 1946.
The Co-operative Movement, which I have mentioned, with a membership of between 11 million and 12 million, and
670
with its own women's organisation in the Women's Co-operative Guild, can also, I think, be claimed to be a reasonable and reliable barometer of what are consumers' views, particularly on closing hours. A member of a co-operative society can, if he or she likes—and I wish more of them did like—attend at any time a quarterly meeting of his or her society of member shareholders and register his or her dissatisfaction with the board of management if they do not meet them, not merely in regard to price but also in regard to service and service facilities. Yet it is the Co-operative Movement which has associated itself throughout with the demands for a general statutory closing hour of 6 o'clock, with the qualification of a late day of 7 p.m. closing.
I come next to the organisation which I said just now had been supported at all sages of its history by members of all Parties—the Early Closing Association, long identified with the problems of the shopping closing hour. To-day, that Association stands strongly in support of 6 o'clock as the general closing hour on which new legislation should be based. A number of important national traders and employers' organisations vitally concerned with the question have also been pressing for a general closing time of 6 o'clock, with a late day of 7 p.m.
I think it would be a good thing to put on record here what trades are covered by these employers' organisations. There are the National Federation of Grocers' and Provision Dealers' Associations, the Scottish Grocers' and Provision Merchants' Association, the National Federation of Fishmongers, including poultry and game traders, the National Federation of Meat Traders' Associations, the National Dairymen's Associations, the Incorporated National Federation of Boot Trades Associations, the Stationers' Association of Great Britain, the Booksellers' Association of Great Britain, as well as the central body, the Co-operative Union of the vast Co-operative Movement in this country. That is an extraordinary gathering of people on the side of the trade unions and the consumers' organisation in regard to the Amendment which I am now moving. It can hardly be said that in moving it from a trade union point of view I am therefore moving it in a class sense. It is a general provision that is not only desired by the

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workers in the organisation but also supported by the working women housewives of the country. It is also supported by this formidable list of distributive trade employers' association.
So far as I am concerned, I still feel strongly that any provision for a general closing hour in a new Act of Parliament which went beyond 6 o'clock would be a grave weakness. Longer shopping hours must mean longer working hours for shops staffs, involving regular overtime working. It has been suggested that longer working hours can be avoided, either by a staggering of hours or a system of shift working. I wonder whether any of your Lordships happened recently to see and hear on television the arguments upon this particular question from different points of view. For example, someone who spoke on behalf of the newest kind of retail distribution to be found, the super-market, argued strongly in favour of having these markets open almost all round the clock. He contemplated anything up to 10 o'clock, or even later, and said that they could quite easily find organised labour to work on a shift system. But when the argument was put from the other kind of trader, what a different story, was told! Then we had the story put by the individual grocer—not entirely the one-man shopkeeper but the person with two or three assistants only—who said he would find it impossible to contemplate the expense even of wide staggering of hours or to operate a shift system. In order to maintain anything like a competitive basis between the small trader of that kind and the big super-market of the future, the small trader would have to work his assistants longer, whatever overtime he paid them. What a weary time these people would have! Every item of the extra cost would go on to the cost to the consumer.
We looked into the figures and found that, according to a census of distribution in 1950, the total number of retail shops in Great Britain, including the service trades, was 551,214, of which no fewer than 355,157, or 64 per cent., were shops in which three persons or under were engaged. What sort of chance have those people of dealing with staggered hours? What sort of chance have they of getting anything like leisure if, as one would think from some of the Amendments I see upon the Marshalled List, longer
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hours than even the Government suggest are inserted in the Bill? What sort of chance have those people to get a decent outlook upon life, or any reasonable leisure, or any real share in the social progress that the nation has been demanding for the last seventy or eighty years? It seems to me to be an extraordinary view to take.
It is, therefore, quite clear that shift systems and rota working would be practicable only through a big increase in manpower in the distributive trades. I am quite sure the noble Viscount who is going to answer will remember the controversy there was during the between-war years about the constant and steady increase of employment in the distributive trades, sometimes said to be to the detriment of our general productive expansion. There has already been, in the last year or two, a slight increase in that direction. I think that that needs to be taken into consideration. Either way, as I have said, the cost involved, whether by additional staff or by overtime payments, would be very large indeed—a cost which must always, in the final reckoning, be reflected in the price at which the goods are sold.
At present, the normal working week of shop workers—that is, before they become entitled to overtime pay—is from 44 to 46 hours. Advocates of the advantages of longer shopping hours pay little regard to the consequences—the cost in terms of longer hours for the shop worker, higher prices for the goods in the shops, and the unnecessary and undesirable burden upon the shopkeeper who would be bound by the pressure of competition to conform to later closing hours. He knows from experience during the last fifteen years, year after year, that this 7 p.m. closing is entirely unnecessary. I think it is the responsibility of Parliament to bear that important consideration in mind. I hope, therefore, that the Committee will give serious consideration to the Amendment which I move, and, most of all, will bear in mind that what I am asking should go into the legislation is no more than the general practice of the majority of shops to-day. I beg to move.
Amendment moved—
Page 1, line 13, leave out ("seven") and insert ("six").—(Viscount Alexander of Hillsborough)
3.8 p.m.
VISCOUNT HAILSHAM: May I first of all thank the noble Viscount for the general support which he proposes to offer to the Government in the passage of this Bill. We welcome support from whatever quarter it comes, and the noble Viscount is undoubtedly a doughty supporter to number in the phalanx which, if one cannot at least command, one can rely upon as allies in debate. I am afraid that I shall have to ask for a good deal of his indulgence as we get on. This is the first Bill of any kind that I have attempted to pilot through either House of Parliament as a member of the Government. It may be that I shall speak too much; it may be that I shall speak too little but I am sure that I can rely on the noble Viscount to point out the particular trap into which I fall on any given occasion. I hope he will do so compassionately; I will endeavour to learn as I go along.
I think, if he will allow me to say so, that some of the noble Viscount's last remarks were not so much shafts directed against the Government for the purpose of causing them to accept this Amendment as Parthian arrows directed to the noble Lord below the gangway, who is about to move an Amendment in directly the opposite sense; because of course it is no part of this Bill to prolong hours or to advocate shift systems or staggerings of hours at all. On the contrary, I must reiterate that the effect of the clause in the Bill as it stands unamended is to reduce the number of hours for which, by and large, the shops are open, day by day and week by week. At the moment, broadly speaking, it is eight hours normally, and nine on the late day. The Bill proposes seven and, late day, eight. The effect of the noble Viscount's Amendment, were it to be passed, would be to reduce the number of hours still further, from the present eight to six, instead of seven, and from the present nine, to seven, instead of eight. It is a two-hour reduction and not a one-hour reduction which the noble Viscount is proposing. In addition, unless I am mistaken, the Amendment would make the early closing hour 12 noon, instead of 1 o'clock.
I am glad that the noble Viscount made the speech he did straight away, because, quite clearly, he establishes the strength
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of public opinion which he could muster in support of a reduction in hours. And when we come to consider, as we shall have to do later on, proposals in quite the opposite direction—to remove all restriction or to increase the number of hours—my noble friends would do well to bear in mind that public opinion on this subject can be mobilised in quite considerable strength in either direction. It is, of course, the case that the noble Viscount can command a very responsible body of organised public opinion not confined to one class or one Party, and still less to a single interest, which has pressed for many years for a reduction in shopping hours. So far as he does that, I should not complain if, in supporting this Bill, he should put forward those arguments. On the contrary, I shall myself be employing some of them at a later stage, and therefore it would ill become me to complain of them. On the other hand, when the noble Viscount proposes to reduce the hours still further than the Bill at present does, I suggest to the Committee that he is really going too far, and that the Bill has struck the happy mean in this matter much more than has the noble Viscount. Who, in this particular debate, is right out on the Left Wing.
The Gowers Committee reported in favour of the solution which the Bill, on the whole, has adopted. The noble Viscount, having admitted that this was so, says however that the Gowers Committee Report is ten years old. That, of course, is a very powerful argument. It is so powerful that it is precisely the argument which is propounded in the opposite direction by those who want to prolong the hours. "Backward Government!", they say: "insensitive to modern trends. Anybody who has an eye to the future can see that shift working, staggered hours and all-night opening are the way of progress and expansion. Why bother to deal with a fusty old document like the Cowers Report?" A very powerful argument, but one which cannot be right in both directions. If it be true, as some critics of the Bill say, that the Report is out of date because it proposes too great a diminution in hours, it cannot, at the same time, be true that it is out of date because the diminution of hours which it proposes is too small. On this

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occasion, therefore, though I shall propose to enlist the noble Viscount on the next Amendment in my support, I now enlist against him my friends behind me who, on Second Reading, proposed the other argument.
VISCOUNT ALEXANDER OF HILLS BOROUGH: If the noble Viscount will forgive my interrupting him, the argument I was making was that not only was the Report of the Gowers Committee ten years old but that one of the main reasons why they brought forward their recommendations had been disproved by experience since then in the trades concerned.
VISCOUNT HAILSHAM: I followed what the noble Viscount was saying, and he said it very well. The only thing I was remarking upon was that critics in the opposite direction say that it has been disproved in exactly the opposite way. I did not profess to choose between these doughty protagonists of entirely opposed points of view, but ventured only to assert that on this they were inconsistent. I should have thought that that proposition was almost self-evident.
One has to ask oneself seriously what are the real criteria for which one looks in a Bill of this kind. I believe that one of the overriding questions, though perhaps not the only overriding question, is the convenience of the public. Whilst, on the whole, I agree with the noble Viscount that the facts and figures he has produced establish a strong prima facie case for the reduction of hours to the level which the Bill proposes, he has not established a case for the reduction of hours in excess of what is proposed in the Bill. It is perfectly true that a very large proportion of housewives can be shown to shop before 6 o'clock. They have to, of course, because most shops shut at 6 o'clock. If the shops were to stay open, I daresay that a large proportion of housewives would shop at a different hour. It is also true, of course, that many shopkeepers are quite satisfied to shut their shops at 6 o'clock, some of them no doubt, because they know that the public have to shop when the shops are open and cannot do their shopping when the shops are shut; so that in a sense, if it suits shopkeepers to shut at six, they can do so with perfect impunity. These are only ways of illustrating the obvious.
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The point I wish to make is that, after reviewing the whole of the evidence, the Gowers Committee found as a fact that many people would not be able to complete their shopping by 6 o'clock. It may be that those people are in a majority, though I myself should think they are quite a small minority. But at any rate, to my way of thinking—and I invite my noble friends and noble Lords on all sides of the Committee to agree with me—the mark of a free society and of a democracy, in matters of this kind, in obtaining the necessities, comforts and decencies of life, does not consist only in catering for the majority, but in catering for everybody—including minorities; and if it can be shown, as the Gowers Committee claim to show (and I still believe that their Report is the most impartial and reliable guide on this matter), that many people would not be able to complete their shopping by 6 o'clock, then I should hold that to be a strong argument against accepting the noble Viscount's Amendment. The Gowers Committee went on to say that many people had stated that they would find 6 p.m. closing much too early. Again, such people may not constitute the majority, but this is a free society, and in matters of this kind we should consult the convenience and interests of minorities, as well as that of majorities. I believe we should be mistaken to disregard the opinion of any shopkeepers in this respect.
There is another argument to which I also pay a certain amount of attention. As noble Lords will realise, there is, at the tail end of the Bill—which I hope ultimately we shall reach—a long list of exemptions. I believe that most of us, simply as amateur legislators, prefer, in principle, to see exemptions made as few as possible. I am advised that if the noble Viscount were to have his way, and the number of hours was reduced, we should be under strong pressure to make other, and numerous, exemptions from closing hours, altogether or partially; and this would complicate the Bill. So I venture to suggest to the Committee that this Amendment, which I hope the noble Viscount will think I have treated both courteously and carefully, although it is supported, as I do not deny, by a very responsible and respectable body of public opinion coming from

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many sources, is not calculated to improve the Bill. On the contrary, I should have thought that it was just the way to exacerbate criticism of the Bill in the opposite direction, and so prevent its passage into law. For this reason I ask the Committee to reject the Amendment.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I make no complaint at all as to the manner in which the noble Viscount has replied. I would only suggest to him, despite the fervency with which he has argued against my Amendment, that he might have recalled something of the work of his famous grandfather, who was such a great advocate of social, reforms. I should have thought that we might have heard from the noble Viscount more of the human element, more about the workers who are concerned in this industry. Nearly all the arguments which the noble Viscount has so carefully deployed are arguments which I have heard at every stage of my fight over the years for reducing shop hours. And they have all been disproved by forty years of gradual change in the other direction. In that time, we have succeeded in gradually giving a little better life, providing a little more time for recreation and relaxation, and generally improving the conditions of shop workers who, when I was a boy, used to work from 8 o'clock in the morning until as late as 10 p.m., 11 p.m. or even midnight. I should have thought that in reasonable legislation now there could have been incorporated what in the last ten years since the war has proved to be the general practice of the majority of branches of the industry. So in that respect I am disappointed at the answer of the noble Viscount.
On Question, Amendment negatived.
3.23 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH VISCOUNT ALEXANDER OF HILLSBOROUGH moved in paragraph 1 (a), after "time" to insert "or later time". The noble Viscount said: I have obviously an important matter to consider here—that is, what is fair to your Lordships' House, in view of the attitude which the Government are obviously taking on Amendments to this clause in the direction which I desire. The more I look at the relation of these other Amendments to the first one, which has just been negatived, the more I think it would be unfair to deploy to your
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Lordships—as I could deploy—arguments on each of these Amendments. Therefore, I would ask to be given the privilege of moving these Amendments formally, and then, if your Lordships are so unwise as to negative them, I leave the matter to you. I beg to move.
Amendment moved—
Page 1, tine 14, after ("time") insert ("or later time").—(Viscount Alexander of Hills borough.)
On Question, Amendment negatived.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: I beg to move the next Amendment.
Amendment moved—
Page 2, line 4, leave out ("eight") and insert ("seven").—(Viscount Alexander of Hillsborough.)
On Question, Amendment negatived.
VISCOUNT ALEXANDER OF HILLS-
BOROUGH: I beg to move the next Amendment.
Amendment moved—
Page 2, line 5, after ("time") insert ("or later time").—(Viscount Alexander of Hillsborough.)
On Question, Amendment negatived.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I should perhaps just say a brief word upon the next Amendment. The noble Viscount, Lord Hailsham, I thought, seemed rather shocked about introducing "twelve noon" into this clause. Just think of the distributive workers for a moment or two, before you negative the Amendment. In a large part of industry to-day the workers have a five-day week. A very large proportion of others certainly finish their tasks in yard or factory at 12 noon on closing day. They can go to athletic sports, a football match or to any other diversion they fancy. But there are thousands of shop workers who, because of their hours, have not that opportunity. Why should not the shops close at 12 noon? After all, there are masses of workers who are walking about on Saturday mornings with time free for shopping. I beg to move.
Amendment moved—
Page 2, line 9, leave out ("one o'clock in the afternoon") and insert ("twelve noon").—(Viscount Alexander of Hillsborough.)
VISCOUNT HAILSHAM: I think that these matters are to be decided by reference to the balance of convenience. We think of the distributive worker and we

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think also of the people who want to shop. Undoubtedly many of the latter do not get free until 12 noon. They come out of factories and workshops at that time and they have only until 1 o'clock to do their shopping. Not all these workers have a whole morning free to walk about like the noble Viscount's friends. They may want to shop between 12 noon and 1 o'clock. I think the balance of convenience is exactly as we propose in the Bill.
On Question, Amendment negatived.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I beg to move the next Amendment.
Amendment moved—
Page 2, line 32, leave out ("earlier than six") and insert ("later than seven").—(Viscount Alexander of Hillsborough.)
On Question, Amendment negatived.

LOCAL GOVERNMENT FINANCE
3.27 p.m.
THE EARL OF MUNSTER: For the purpose of making a statement to the House on local government finance, I should like at this stage to move that the House do now resume.
Moved, That the House do now resume.—(The Earl of Munster.)
On Question, Motion agreed to, and House resumed accordingly.
THE EARL OF MUNSTER: My Lords, the statement which I shall make to the House now is similar to that which is being made in another place by my right honourable friend the Minister of Housing and Local Government. The statement is as follows:
Her Majesty's Government have completed their review of local government finance: and my right honourable friend the Secretary of State for Scotland and the Minister of Housing and Local Government are now ready to enter into discussions with the representatives of local authorities. In making this announcement of the broad conclusions which we propose to put before the local authorities I am, at the request of the Secretary of State, referring to Scotland as well as England and Wales.
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The Government's proposals for the reorganisation of local government in England and Wales, which I hope will be discussed by the House as soon as possible, are designed to strengthen the local government system. In doing this it is essential to improve the financial relationship between the central government and local authorities. The ratio between Exchequer grants to local authorities and their revenue from local rates, which thirty years ago was 1 to 2, is now 6 to 5. Not only has this remarkable shift reduced the financial independence of local authorities and their degree of direct responsibility to their own ratepayers; in addition, much of this Exchequer aid is on a percentage basis towards the expenditure incurred on specific services, Percentage grants, whatever their merits, carry two disadvantages. First, there may be danger of an excessive degree of detailed central supervision over the spending of the money. Secondly, there is no certainty from year to year what the Exchequer may be called upon to contribute.
My right honourable friend is sure that the greater the independence of local authorities in the raising and the spending of their money, the better for the good health of local government. The Government, after a thorough investigation, do not think it practicable to devise a satisfactory new source of local revenue. Nor do they believe it right to earmark for the direct benefit of local authorities any tax that is now levied nationally. Rates are in this country a well-established instrument of local taxation. There are some difficulties to be overcome in the rate system, but it provides a sound basis for local finance and no better system of local taxation has been propounded.
In 1929, when unemployment was widespread, it was decided in the light of economic conditions as they then were to de-rate industry and freight-transport from 100 per cent. to 25 per cent. of net annual value. Against the radically different economic background of the present day the Government have thoroughly re-examined this matter, taking into account all the arguments in both directions, and have decided that it is now right to raise

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the rate contribution of industry and freight transport from 25 per cent. to 50 per cent. In addition, further changes will be made in the system of pool payments to local authorities by the nationalised industries, including the direct rating of electricity properties and the separate assessment of electricity and gas show-rooms used as shops, so that all payments now included in the pool are taken into account as rates. In Scotland, the necessity for changes on these lines will not arise during the period up to 1961 for which the existing valuations are frozen.
At the same time the Government intend a major recasting of the financial relationship between the Exchequer and local authorities. This will entail a radical revision of the structure of Exchequer grants, as well as some reduction of the grants to take account of the new rate income. With a few exceptions, where technical considerations make it not possible or desirable, specific grants will be replaced by a general grant of an amount fixed in advance for a short period of years, though not necessarily at the same level for each year of the period This general grant will be distributed to all county and county borough councils in England and Wales, and to county and town councils in Scotland, by reference to objective factors (mainly of weighted population) which are readily ascertainable and afford a fair and reasonable measure of the relative needs of each authority.
With this change, local authorities will acquire a great increase of responsibility in determining the money to be spent on the various services, in accordance with local needs. Local government will become more truly local. Our aim is to foster and stimulate a vigorous and independent local government, and to give members of councils a greater incentive to take a lively interest in their local expenditure by placing much more of it under their own control. Under the proposals the Government have in mind, the amount of general grant-in-aid, not tied in any way to individual services, will, at present levels of expenditure, rise from
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less than one-sixth to close on two-thirds of the total Exchequer grants to local authorities.
It is also proposed to revise the system of Equalisation grants, on the basis of recommendations made in 1953, including the payment of grants direct to county district councils. In Scotland the arrangements for Equalisation grants were amended by the Act of 1954 and also by last year's Act, which provides that a further review must be held before 1963. My right honourable friends the Secretary of State for Scotland and the Minister of Transport intend also to review the present system of Highway grants.
So far as practicable, it is the Government's intention to bring all these changes into operation on a single date. Some transitional grant arrangements for a period thereafter will naturally be needed. These proposals will be discussed with other organisations affected by them, in addition to the discussions to be held with representatives of local authorities. The intention of the Government is to introduce legislation as soon as practicable when these necessary discussions have been completed.
I apologise to your Lordships for making so long a statement, but I thought that it was of such importance that your Lordships should hear it.
LORD PETHICK-LAWRENCE: My Lords, the statement made by the noble Earl on behalf of the Government is an exceedingly important one, and it will affect everybody throughout the country financially to a very large extent. Though there have been certain vague rumours that the Government were going to take this course, there has been no definite indication, and to a certain extent the statement is a new one. Since it deals with a large number of separate issues, the noble Earl will not expect me to have followed his statement fully and completely at first hearing. Nevertheless, it is a very interesting statement, and no doubt we shall want to debate it in time to come.
I would only remark: on two aspects of it. So far as the derating of industrial premises is concerned, I remember that being introduced by Mr. Winston Churchill (as he then was) in another place something over twenty years ago.
THE EARL OF MUNSTER: Twenty-nine years ago.
LORD PETHICK-LAWRENCE: Yes; just under thirty years ago. It was done at a time of great depression and deflation and to-day the circumstances are quite different. We have been suffering from inflation, from too great a boom for the actual finance and economy of the country to carry. Therefore it is understandable that the Government are taking a different view to-day from that which was taken by Mr. Winston Churchill at the time of the depression. I always thought that he went a great deal too far in his original proposal, which threw a tremendously heavy burden on enterprises which did not come under the strict terms of the reduction and caused a great deal of unfairness through particular enterprises coming on one side of the line or the other. It made a tremendous difference whether a business was charged full rates or one quarter of the rates. I have never been a supporter of the scheme as it stands, and therefore start with sympathy towards the proposals which the Government are making at the present time.
If I understood the noble Earl aright (and I am not quite sure that I did), it is proposed to alter the method by which grants to individual local authorities are passed. I remember that, when these were introduced and explained, no one in another place understood it, not even after they had seen it on paper. An honourable lady who bore my name asked that an algebraic formula should be put down and one was produced. A very complicated algebraic formula it was, but it enabled us to get, for the first time, an idea of the system that the Government were introducing. It may be that when we have gone into this a little further. I shall ask for a similar algebraic formula to be put down in this case. I think that that is as far as I ought to go at this moment, because until my colleagues and I have studied the statement we cannot judge or express any ultimate opinion of what view we shall take of the Government's proposals.
THE EARL OF MUNSTER: My Lords, I am sure that if the noble Lord sees fit to put down a Motion, or a Question, we shall be able to have the matter debated. The noble Lord will probably agree with me that the derating of industry, while it
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lasted, has been beneficial to all industries throughout the country. As regards his remarks on grant to local authorities, I have the deepest sympathy with the lady in question, because I have never understood the formula, but I shall endeavour to give your Lordships a clear definition when we debate this subject in due course.
LORD SILKIN: My Lords, I do not wish to continue the debate, but I should like to ask the noble Earl whether I am right in inferring that it is not the Government's intention to introduce any measure for the reorganisation of local government. As the noble Earl will remember, there have been a good many discussions on the subject. Indeed, I am under the impression that it has been referred to in one or more of the gracious Speeches. If it was intended to reorganise local government, would it not have been better to enter into discussions on the present proposals contemporaneously with those on reorganisation? Otherwise, if it is still the intention, it would appear that there will have to be two different sets of discussion. Could the noble Earl say, broadly, whether the effect of these proposals will be not merely to make more logical the system of financing local government expenditure out of the Exchequer, but actually to reduce the amount of assistance which local authorities will get from the Exchequer? Is that not an important factor in the proposals which the noble Earl has read out to us?
THE EARL OF MUNSTER: My Lords, the statement I made to the House this afternoon dealt entirely with local government finance. If the noble Lord, Lord Silkin, has any question to raise on the reorganisation of local government, I would much rather he put down a separate Question dealing with that particular issue. As to the noble Lord's second question, I can give no categorical assurance that this will mean a reduction. However, as I said in the course of my remarks, no doubt the House will wish to debate this matter as soon as possible, and I am sure that all these matters will come up for review during that discussion.
LORD SILKIN: My Lords, merely for the purpose of getting the record right, of course, I do not know what are the Government's intentions about the

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reorganisation of local government. I was merely suggesting that if it is still their intention to pursue this matter, it might be wiser to do the two things together. On the second point, I did not ask for an assurance that there would be a reduction in Government expenditure. On the contrary, I was hoping that I might get some reassurance from the noble Earl that there would be no overall reduction in the contributions which are being given to local authorities at the present time, and that this is not an indirect way of cutting down the grants given to local authorities.
VISCOUNT HAILSHAM: My Lords, if the noble Lord will allow me, although I am not very good at financial questions, I will try to help him on this point. The matter will be discussed with the local authorities. The first proposal, the re-rating of industry, will put a large sum of money into the pockets of local authorities. Obviously, the Exchequer will be the loser as a result of that, because a great deal will be lost in income tax due to the re-rating of industry. The financial consequences of that will not necessarily at this stage be either a reduction or an increase in what the local authorities get. Obviously there will be a large increase, from the re-rating, and presumably the Exchequer will want to discuss an adjustment of the grant in the light of that increase. The net result ought not to be a loss to the local authorities.
LORD SILKIN: My Lords, I hope the local authorities will take note of the noble Viscount's statement.
LORD PETHICK-LAWRENCE: My Lords, what I understand is that there will be a considerable readjustment between one local authority and another. If the formula in which they get the grant is considerably changed, some local authorities will gain by it and others will lose. Is that not the case?
VISCOUNT HAILSHAM: My Lords, I understand from my noble friend that there will be a good deal during the transitional period to which transitional provisions will apply. I think my noble friend's statement said that the equalisation grants would be affected.

SHOPS BILL [H.L.]
3.45 p.m.
House again in Committee.
LORD GRANTCHESTER LORD GRANTCHESTER moved to delete Clause 1. The noble Lord said: My first reaction on seeing this Bill was one of surprise that the time of Ministers, in a day when they are preoccupied with much more important matters, should be taken up in an endeavour to alter the existing closing hours of shops. But perhaps it is because they are so preoccupied with other matters, and therefore have not had sufficient time to give this matter full consideration, not only from the point of view of those who have a special interest but from the point of view of everybody, that they make this proposal to shorten the hours of opening. Unlike the noble Viscount, Lord Alexander of Hillsborough, who spoke in favour of shortening the hours, mainly on behalf of shopkeeping interests, I speak quite unashamedly for the consumers, their customers.
In order to get this matter into the right perspective, I think I must repeat that this Bill has nothing to do with the hours of work of employees. With all due respect to the noble Viscount, Lord Alexander of Hillsborough, it is quite beside the point to introduce a suggestion that any kind of social reform is endangered by the Amendment that I am now moving, if it is old-fashioned to think that a man should be free to work in his shop if he wishes to do so, then I gladly plead guilty. But I think the words of the noble Lord, Lord Strathclyde, in replying to me in the debate on Second Reading would have caused great amusement if they could have been repeated either across the Channel or across the Atlantic, where shopkeepers enjoy the freedom to serve their, customers, which the noble Lord, if I remember rightly, dubbed conditions of "near slavery". I suppose that, if this clause is approved, we may expect some other Department of State, in the interests of protecting allotment holders, to introduce a Bill to see that they do not stay too late on their allotments. And as for the poor slaves who call in the evening on behalf of the Saving Movement to collect those savings which are so important to the national economy, and the many others who have to do their work in the evenings

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to suit their clients' convenience, I suppose some Department of State will not rest until they have interfered with the service that these good people render.
Surely, service to the public is the raison d'être of any shopkeeper; to meet the convenience and requirements of his customers should be the primary object in which he should glory. Surely, a time when everyone in this country should be thinking of new and improved methods is no time for restrictive legislation of this kind. As one responsible journal described this clause last week;
"It is nothing but an attempt to enact a barefaced restrictive practice designed to compel the consumer to shop at hours which suit not his, but the shopkeeper's convenience."
This restriction ill fits in with the appeals for initiative and enterprise, to which we are so often exhorted. I repeat that no more inappropriate time could have been chosen for legislation of this restrictive character. New and promising experiments are being tried to meet the greater convenience of the public as to form and method in retail trading which should help to check increasing costs of distribution. This clause is an attempt to stultify and to prevent change. Having, in the manufacturing section of the economy, attacked restrictive practices, the Government now come forward and foster restriction in the retail section. Perhaps some of the officials in the Ministry responsible have been listening to those economists who are always talking of "balancing the economy ", and are trying to achieve it in this way. Take away a restrictive practice and put on a restriction: take away a restrictive practice in the manufacturing industry and put on a restriction in the retail trade.
Let us be clear. There is one reason only for opening a shop, and that is to serve customers, and the more the shopkeeper studies his customers the better he should do. By deleting Clause 1, as I beg to move, no shopkeeper is compelled to stay open one minute longer than he wishes. I quite understand and realise that there is a division of opinion among shopkeepers, and many will wish to keep their present hours. But every shopkeeper would, and should, be free to choose his hours so that he can open, say, in the afternoon if he wishes, and close later in the evening. If he did so, there would be fewer complaints from the staff in the offices and the factories
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who have to ask for time off from their work in order to do their shopping, or who have to bring it in in the morning and let it go bad before they can take it home in the evening, or who have to go without their meals, or have a very short time for lunch, in order to do some shopping to take home with them in the evening. Let us remember that they are the people for whom the shopkeeper exists, and it is the overriding consideration of the consumer which should be the deciding factor in a matter like this.
I ask that we should have no half measures, and I think it is really fantastic that we should have to argue a case of this kind at all. A desire for administrative tidiness is no excuse for taking away a freedom of this kind. Nor should we be told that the Government's proposals are a compromise between what the noble Viscount has asked for and what I have asked for; nor that it is part of the policy of "the middle way" which appears to be so popular with some modern Conservatives—a compromise between freedom and control. You cannot have a compromise between freedom and control. The law can restrict freedom in a proper case. If it does, however, there must be good reason for it; there must be some damage which would be caused by not restricting that freedom, or there must be a balance of advantage, or a balance of damage which would be greater if the freedom were not restricted. It is not possible in this case to show any such damage. Therefore, I suggest that there is no valid reason why freedom should not be given to shopkeepers to fix their opening and closing hours so as to perform the services that they are out to give. I should like to appeal to Her Majesty's Government to withdraw this clause altogether, and if they will not do so I would ask your Lordships to say, in no uncertain way, that this attempt to frustrate and strangle enterprise shall not have the sanction of this Committee. I beg to move.
Amendment moved—
Leave out Clause 1.—(Lord Grantchester.)
3.55 p.m.
LORD LUCAS OF CHILWORTH: It is evident to anybody who has taken the trouble to read, not only the Bill, but the Amendments which have been put down, that the debates we shall have

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are not going to follow strictly Party lines. Therefore, I will underwrite my insurance premium straight away by saying that any comments I make upon this Bill are my own only and are not to be taken to implicate anybody else. Others may, or may not, agree with me.
The noble Lord, Lord Grantchester, has made a speech upon the liberty of the subject, but it is evident to me that he has never spent one day of his life in retail trade or in service to the public. I quite agree with him that the retail trade exists for one purpose and one purpose only, which is, to serve the public. But "serving the public" is slightly different from keeping open all night on the off-chance that somebody may want something. Between the two extremes of the pendulum that will swing constantly in the debates in your Lordships' House, the responsibility which rests upon Parliament to-day is to determine what is a reasonable requirement in all the circumstances of service to the public. What is "reasonable"? If he will forgive my saying so, I believe the noble Lord is wrong when he says that this Bill has been brought in to suit the shopkeepers' convenience. My noble friend read out a list of respectable organisations who do not quite agree with the hours set out in the Bill. So far as I can gather, the most responsible trade organisations in the country appear to think that the hours written in Clause 1 effect a reasonable balance, with the exception that perhaps there should be exemptions here and there. I do not think we should ever serve the interests of the public in the widest sense, in the best possible way, by having rigidity. There is a world of difference betwen a slavish consistency and the wide-open licence which the noble Lord has mentioned.
I have had a good deal of experience in the distributing trades, and I can remember when we used to be shanghaied into staying open all hours of the day or night. The reason was because somebody else did it—competition. The real reason why people stay open at night—they have to close up in the end, because the cost factor nearly breaks them—is because their competitor down the street stays open. Ninety per cent. of the money that is thrown away on advertising in this country is spent only because competitors
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advertise. The only reason why many shops keep open very late at night is to try to prevent their competitor from getting the odd piece of custom. If the shops were kept open all night there would not be any more goods sold in the aggregate. So what is a reasonable balance? As I say, with one or two exemptions where I think, perhaps, this Bill errs upon the mean side, I would be against its being thrown wide open.
It is a specious argument to talk about the liberty of the small, individual shopkeeper. Remember that when we were discussing the Catering Wages Bill, there was always the same argument about the small hotel and the small boarding house. There is no sweated labour in this country like the father and the mother who employ their children in a shop, a hoarding house or a small hotel. There is no sweated labour like it, outside any real. organised effort to improve conditions. I know that the little shop round the corner is very useful when you have forgotten something late at night or want to get a "tip" for the winner of the 2.30. The shopkeeper has generally got it. But we cannot go back to the old conditions. I do not particularly like the expression "the law of the jungle" and I am not enamoured of the argument about the impact upon the very large shop that a multiplicity of small men will have. When is it reasonable to expect—except in matters of life and death, when there has to be pharmaceutical trade on hand—shops to be open? With one or two exemptions, about which I shall take the liberty of expressing a few personal opinions later on, I think that to pass this Amendment would put the clock back and would be a bad thing for the consumers of the country, who would, in the last analysis, have to pay a terriffic increase in cost; because unless you are going to reimburse the employee, what are you going to do?
After all, we must not think that the only shop that would enjoy the liberty which the noble Lord so much wants would be the small shop round the corner. The medium shop would stay open, the competition would grow, and the cost of the article would go up. Eventually, this wonderful liberty would redound against the interests of the public. That has been my experience of over thirty-five years in the retail trade. There is an optimum

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hour up to which it is, in all the circumstances, right and proper to offer a service to the public. And do not forget that service to the public does not begin and end with the opening and closing hours. Cost comes into it as well. I suggest that it would be setting the clock back years and years to say that every shop and every retail establishment in this country should be able to open at any hour that suits, not the demand of the public, but the whim of the shopkeepers, who are afraid that, if they close their doors, their competitors may get one other sale that they themselves will lose. So I hope the Government will resist, and that your Lordships will support the resistance of, this Amendment.
4.3 p.m.
LORD McCORQUODALE OF NEWTON: I am one of those who are sorry that any changes such as are suggested in this clause are being brought about at the present time, for other reasons than those which have been mentioned by the noble Lords who have spoken. It is a truism to say these days that we live in times of grave economic difficulty. It is a truism, but none the less true, and I believe that the bringing in at this time of this Bill tends to produce a climate in industry as a whole which is bad—which is bad at this time, at any rate, when we have all to make a tremendous effort if we are to maintain and improve our standard of life in this country. The urge to produce more, to sell more abroad, is the theme song of every Minister and others when they go to the country. We have to produce more and sell more abroad of what our customers overseas require. Time after time one hears in most important speeches that it is what the customer overseas wants that we have to supply, and that the customer is not interested in our system of life or welfare or whatever it is here. All he is interested in is what are the prices, when can he have the goods, and is the quality right?
If that is so, surely this is an odd Bill and an odd clause to produce at the present time; for those individuals whom the Government are urging to produce more are not only producers but are also consumers. They are told that the customer overseas is always right; but,
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when they become customers, they are told that they do not matter very much. I would suggest that it is difficult for the ordinary person to equate those two. If the customer overseas is always right, the customer at home should have some measure of attention paid to his needs. It seems to me that the cutting down of shop hours—I am not asking for them to be raised, or anything of that sort, as the noble Lord on the Liberal Benches asked—just at this moment must tend to impress upon people over here the view that, "Oh, all is so right that we need not bother". They will think that the convenience of the salesman and of the shopkeeper is of more importance than the demands of the consumer when he is a consumer at home, although we are always trying to tell them that, when he is the consumer abroad, his requirements are of paramount importance. That is why I cannot help feeling that a psychological error has been made in producing this Bill at this moment.
I am not criticising the Bill as such, but it seems to me an extraordinary measure, and especially the bringing in of this clause just at the time when industry is responding to the calls made upon it. I have personal reason to know how well that industry is responding, because I have the privilege of being Chairman of the Productivity Council in this country now and we get reports from all over the country. When people in industry are, in the main, responding splendidly to the demands made for productivity, it would appear to me that this beaurocratic measure, which might have been delayed for five years or ten years without any harm to anybody, just deadens the enthusiasm of the people of this country. Therefore I must say that I regret that it was brought in at this time.
4.9 p.m.
LORD CONESFORD: I think the noble Lord, Lord Grantchester, has performed a very useful service in moving this Amendment. I await with great interest my noble friend's reply. I want to give him some of the reasons why I have a good deal of sympathy with the case put by the noble Lord, Lord Grantchester, though I shall certainly delay my decision until I know the Government's reply. I listened with the greatest interest to the noble Viscount the Leader of the Opposition, whose attitude to this Amendment

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was sufficiently indicated in the vigorous speech lie made in support of his own earlier Amendment. We all know the noble Viscount's lifelong concern with the interests of the distributive workers. I should like to assure him—I think he will accept it from me—that I do not believe that this clause in the Bill is necessary for the interests of the distributive workers, and I shall endeavour briefly to say why.
Here, as the mover of the Amendment said, we are not discussing what hours shops shall be open, or what are to be the terms of employment of any employee. The terms of the employment of the employee are surely legitimate questions to be settled in negotiation between the employers and the trade unions. What we are here considering are the provisions of the criminal law. It does not in the least follow, because it may be a good thing, from the point of view of the terms of employment, that a worker shall not work more than a certain number of hours, or because it may be a good thing that shops should close generally at a particular time, that it is right to make it a criminal offence for anybody, whatever his wishes, to open a shop at a different hour. That does not follow in the least.
I know that the noble Lord, Lord Lucas of Chilworth, will be able to say, with perfect truth, that I have not spent any of my life in retail trade, but I have spent a great deal of my life in the law. I have formed, as my noble friend who has charge of the Bill has formed, views on what are the conditions that make it desirable to make a particular thing a criminal offence, and I find it most difficult to see what it is that makes it desirable to provide by criminal law that, irrespective of the terms of the employment of the employee, irrespective of the wishes of the owner of a one-man shop, a man shall be bound to close his shop at a certain hour and that, if he does not, he will commit an offence.
The noble Lord, Lord Lucas of Chilworth, interested me greatly when he mentioned the Catering Wages Act. Let me tell him my view on that. I remember, as a junior member of the Government, which I think I was at that time, when the late Mr. Bevin introduced the Bill which is now the Catering Wages Act, supporting it; and I remember why
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I supported it. I remember the argument of Mr. Bevin that then impressed me. At that time, the Ministry of Labour—I do not remember the exact technical term—was directing workers into certain trades, and Mr. Bevin said, "How can I direct a worker into this particular trade unless I am satisfied that there is a good wages structure in that trade?" That seemed to me a good argument, and if there were any question of forcing a worker into the distributive trade, then, of course, we should have to be satisfied on a number of subjects as to what the law should be But in conditions of full employment, when a worker is not bound to go into a trade unless he likes the terms of employment it that trade, why we should think it necessary to have this elaborate provision of the criminal law is by no means so clear to me.
LORD LUCAS OF CHILWORTH: Would the noble Lord forgive me for interrupting him? I do so only the better to follow his argument. Would he not agree with me that shops cannot keep open unless they employ labour; that the longer a shop is open, the higher the labour cost per unit sold must be, because of overtime and this, that and the other condition; and, therefore, that it costs more, in the long run, to the purchaser? Would the noble Lord agree with me on that point? I would not attempt to argue the legal point with him.
LORD CONESFORD: No, I would emphatically disagree. I was coming to that later.
As regards the cost, both noble Lords stated, as a reason for having this provision in the Bill and their support of it, that without it there would be great competition which would cause shops to be open later. If there were great competition, what would that mean?—that there were members of the public who demanded it. Does the noble Lord really suppose that members of the public would be indifferent to questions of price? My answer to the noble Lord, Lord Lucas of Chilworth, is that I disagree with the two points he has made. First he asked: is it not true that every shopkeeper has employees? The answer to that is: no, it is not true; there is such a thing as a one-man shop. The second point is: is it not hound to put up the price? The answer to that is that that is not the

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experience in those countries where there is not this limitation.
My own quarrel with the whole approach of this Bill—here, as a Tory, I think that I am in agreement with an argument put forward by a Liberal—is that it is entirely wrong to spread the idea that industries, shops or anything of the kind, are run solely in the interests of the particular people engaged in them, ignoring the general public. I know the sincerity of the noble Viscount the Leader of the Opposition when he says that there are some consumers' organisations which are not against these restrictions. I accept that from him. But I also know that there are many consumers who greatly resent this lack of liberty. I know, too, that there are many shopkeepers who see no reason why they should be subjected to the criminal law if they wish to work a little harder.
I entirely disagreed with the noble Lord. Lord Lucas of Chilworth (I may have misunderstood him), in one passage where he seemed to imply that, if this Amendment were carried, a great number of shops would remain open all night. I do not believe that for one moment. What they would do would depend on their own wishes. I entirely agree with the general proposition that liberty should be restricted where a good reason is shown, but I believe that the burden of proof is always on those who wish to restrict liberty. I say that there is nothing naturally immoral or obnoxious to the conscience in a shop remaining open after a particular hour. If people wish it to close at that hour, it is for them to prove that it is necessary. It is not for those who object to the restriction to prove that some great evil is done by the restriction. After all, it is possible to believe in liberty for its own sake; it is even possible to believe in the virtues of competition. In fact, I thought that noble Lords on the Front Opposition Bench, at the time of the monopoly legislation, were, on various occasions, most conscious of the virtues of competition, but the scorn which they have thrown at competition in dealing with Clause I of the Bill contrasts rather oddly with their attitude on the other occasion.
To put the matter rather more philosophically, I would express my astonishment at how far we are moving from a
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doctrine which will be familiar to my noble friend who is in charge of the Bill—the great doctrine enunciated in that classic of the law, Mayne's Ancient Law, when he describes the progress from status to contract—the progress in human affairs from the time when people's rights were decided for them by the status into which they were born to the state of affairs where things were decided by the contracts into which they chose voluntarily to enter. We have now reached the stage when we seem to be steadily progressing not from status to contract, but from contract back to status. People are not given, as they should be given, increasing rights to form their own contracts—in the case of workers, with the aid of their trade union, so that they can negotiate from equal strength. Freedom of contract is more and more restricted, and rights are more and more imposed by one's status—as a shopkeeper, as a landlord or in numerous other ways. I believe that, on the whole, the greater advance was in going from status to contract. I believe in freedom of contract, and that that freedom should be interfered with only where it can be shown that, if not interfered with, it would result in notable evils. I very much doubt whether that is the case here. For those reasons, speaking, perhaps, a little more from the point of view of political science and with the approach of a lawyer, I have a good deal of sympathy with the Amendment put forward from the Liberal benches this afternoon and I await with interest my noble friend's reply.
LORD PETHICK-LAWRENCE: I had not intended to rise at this stage of the debate but wish to answer the speech of the noble Lord who has just sat down. He said it would be charged against him that he had not much knowledge of the retail trade, but that he thought that was counterbalanced by the fact that he had a good deal of knowledge of the law. His argument seemed to be that what applied to the law could, with necessary changes, apply to retail trade. If the noble Lord does not mean that, I do not know what his argument was.
LORD CONESFORD: I am sorry if I did not make myself clear. I thought my devotion, for a considerable part of my life, to the practice of law, perhaps gave me some knowledge of the legal theory which defined the conditions that should

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be satisfied before a particular thing was made a crime. The noble Lord will find it all set out in an early chapter of Kenny's Criminal Law.
LORD PETHICK-LAWRENCE: The point I was going to make before the noble Lord intervened, was that he seemed not to have realised the fundamental difference between the position of a lawyer and that of a retail trader. The difference is that the law of the country makes a monopoly in the hands of the lawyer. The lawyer may make contracts with his clients, and with solicitors working for his clients, under a system which is supported by the law of the land; and a "blackleg" cannot come in and work for a client, because the law forbids it. A man who is not a lawyer cannot don cap and gown and go into court to plead a case: he is not allowed to do so unless he is a member of one of the Inns of Court, and has properly been made a barrister-at-law according to the law of the land.
A shopkeeper is in an entirely different position. The great bulk of shopkeepers may make a contract. I agree with the noble Lord that contract to-day is a better plan than status. A band of shopkeepers can get together and make a contract with trade unionists who are going to be their employees; but they can be thwarted in their purpose by a "blackleg" who works his own people in a shop round the corner at an entirely different rate—a "sweated" rate. That cannot happen in the trade of the law, because the law of the land steps in to give to authorised solicitors and barristers a certain prerogative. That is where the difference comes in, and I suggest that that destroys the whole point of the noble Lord's speech.
LORD COLERAINE: I find myself so often and on so many points in agreement with the noble Lord, Lord Grantchester, that I sometimes fear there may be a Liberal taint in my blood against which I must continually be on my guard. After listening to my noble friend, Lord Conesford, I believe lie stands in something of the same deadly peril. Like the noble Lord, Lord Grantchester, I was surprised that Her Majesty's Government introduced this Bill. It seemed to me that Her Majesty's Ministers had many other preoccupations. With my noble friend Lord McCorquodale of Newton, I have a pre-
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dilection for that poor creature who has such a rough time in the modern world—the consumer; and, like him, I hold that we already suffer from many restrictions and controls. I see no great advantage in adding to them, even in a minor way. Nevertheless, I do not think I can go so far as the noble Lord in asking for the deletion of Clause 1. Rightly or wrongly, we have given the Bill a Second Reading, and it would seem to me to be unreasonable to delete that clause—which I suppose is the most important clause in the Bill. Nevertheless, I believe that Her Majesty's Government might give some consideration to the deletion of that part of Clause 1 which deals with the preservation of the power of local authorities to decree even earlier closing hours than Clause I lays down.
Before I develop my argument, I ought to declare that I have a private and particular interest in these matters in that, although I am in no sense speaking for that company, I am a director of a company which through its subsidiaries, operates well over 1,000 retail shops throughout the country. It seems to me that some argument can be made against the existing practice under the Shops Acts whereby local authorities have power to vary the 8 o'clock closing hour to an earlier hour. In contiguous areas, that situation leads to anomalies; it gives advantage to one trader as against another, and does, to some extent, prejudice the customer. Further, from the point of view of large-scale retail organisation, which is very economical organisation, it becomes difficult if, in fairly narrowly defined geographical areas, there is a great variation of practice between one street and another, or between one side of a street and the other.
I believe, therefore, that a case can be made even against the law as it stands. I find it difficult to believe that it is desirable in this new Bill to extend that practice to compelling closing at an earlier hour. My noble friend the Minister in charge of the Bill cited, at an earlier stage, the Gowers Report, particularly that part of it which laid down that, from the point of view of the customer, 6 o'clock was too early an hour for closing t and though the noble Viscount, Lord Alexander of Hillsborough, says that the Cowers Report is out of date, that is evidently not the view of the Government

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in this particular respect. There is no doubt that for, I would say, a very considerable minority of shoppers, 6 o'clock, which might be the hour of closing in various areas, is far too early. A great many married women working in offices or in industry are probably not free until half past five in the evening. It seems to me that it will make life very difficult for them if they are compelled, through the vagary of a particular local authority, to make a long detour in order to find a shop that is open until 7 o'clock.
There is the further point, I think, that it enormously increases the difficulties of enforcement if there are varying practices as between one local authority and another. For these reasons, I hope that the Government will give consideration to the arguments which I have tried to put before them. I had thought of putting down an Amendment on the point, but on consideration I decided that it would be better if I raised it on the clause, so that the Government could consider it at their leisure, and then, if they thought fit, either introduce an Amendment at a later stage or consider favourably an Amendment if it should be moved in another place.
4.31 p.m.
LORD TEVIOT: I shall not detain your Lordships for more than a few moments, but I should like to align myself very strongly with what the two noble Lords, Lord McCorquodale of Newton and Lord Coleraine, have just said. I fail to see the reason for this provision at the present time. A great deal has been said about customers and the public. Lord Coleraine just touched on what I had in mind. There are a great many customers of shops—I am not now speaking of shops where sweets are sold—who get away from work only a little before 6 o'clock. I feel that these people represent a very large proportion of the shopping public to which such frequent references have been made. The noble Lord, Lord Lucas of Chilworth, I thought made a very good point when he said that what we want is a reasonable hour at which people in all walks of life would find it convenient to do their shopping. In my view, there is no question that 6 o'clock closing is too early.
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I hope that the Government will do what they do not seem to have done at the moment, that is, consider the convenience of those to whom other noble Lords and I have just referred. They have been spoken of as the public and as consumers. To a great many of us here as consumers, this hour does not matter very much. But it is a different matter from the point of view of people working for their living in businesses, in factories or in big multiple stores. I am sure that they must find this 6 o'clock closing too early. I have yet to hear much grumbling on the part of the people one meets in going about on the question of shops being kept open late. I have heard a certain amount of criticism of the terms of the Bill so far as they mean earlier closing, for the reasons which I have given, which are quite simple reasons. I feel quite sure that if the Government will reconsider these points, they will find that there really is something in what other noble Lords and I have said.
One other thing I should like to say in regard to the whole of this question is this. A shopkeeper is not going to keep open unless he has customers regularly coming to his establishment and buying his goods. Presumably, if that is going on now, then quite definitely the customer is being suited by the hours at which shops are open, and particularly the smaller shops, which may keep open a little longer than the big multiple stores, selling various commodities which perhaps are not sought by the public who are buying consumer goods in the shops. I hope that the Government will consider the ramifications and the probable effects of this particular clause.
VISCOUNT THURSO: I wish to say just a few words, if the noble Viscount, Lord Alexander of Hillsborough, will be kind enough to allow me to precede him. In the first place, I should like to express my agreement with the admirable speeches we have heard from Lord Grantchester and Lord Teviot. It is not people like the noble Lords and myself who are mainly affected by the hours of opening of shops. I think they suit us very well as they are. But I believe that people should have a certain freedom in their lives to enable them to adjust their times for shopping and so forth. It is comparatively easy for us. I often go to a shop at what might be unusual hours in

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the eyes of people engaged in industry. I like it very much. I do not go for the purpose which the noble Lord, Lord Lucas of Chilworth, has told us that he goes. I do not go to a shop in the evening to ask about the winner of the 2.30.
LORD LUCAS OF CHILWORTH: I do not go to shops at 2.30 in the afternoon: I go at 12 noon.
VISCOUNT THURSO: I thought the noble Lord said he went in the evening.
I agree with what the noble Lord opposite said about people who are working hard all clay. There are many such people—perhaps one might say that to-day they are by far the great majority of our population. If I look round among my neighbours in Twickenham, I note a great number of cases in which husband and wife are both working, so that their opportunities for shopping are limited. A great many of them have no motor cars, and very few have servants. Consequently, they find it difficult to fit time for shopping into their busy days. I think, therefore, that there is a strong case for doing what my noble friend has suggested and retaining a measure of freedom as to hours of opening and closing.
The noble Lord, Lord Lucas of Chilworth, has suggested that people are ruining themselves by keeping their shops open just to meet competition, just for the sake of snatching an occasional order from someone who might want to shop at a late hour. I cannot believe that people are so foolish as to go on ruining themselves for such small motives. I am sure that matters will adjust themselves satisfactorily in the light of experience. People will not keep open their shops on unreal grounds, at unremunerative times. They will keep them open only when they find that it is good business to do so, and that there is a real demand for it on the part of the population around them.
The noble Lord also said he had heard this sort of argument in the old days, when the Catering Wages Act was under consideration. He said that he had heard all about the difficulties which would be met with at country hotels, and how difficult it would be for the tourist industry Where has the noble Lord been in recent years? Has he not heard of the
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terrible difficulties which have arisen, particularly in the Highlands of Scotland, in small fishing hotels and places of that sort, as a result of the passing of the Catering Wages Act? Has the noble Lord not noted how one inquiry after another has had to be held, with a view to finding out how these difficulties can be overcome? There have been great difficulties, which have brought great threats to the prosperity of these hotels and to the tourist industry in Scotland. I should regret it if the noble Viscount. Lord Hailsham, and the Government were to lead us into similar difficulties in the retail trade of this country. I beg that we should follow the lines suggested by my noble friend Lord Grantchester and retain the freedom and free play of supply and demand between the consumers and shopkeepers of this country.
LORD REA: I should like to raise one point relevant to what has been said by the noble Lord, Lord McCorquodale of Newton, who seemed to imply that if my noble friend's Amendment went through there would be complete freedom for all shops to be open day and night. That is an ideal state of affairs which, for reasons put particularly by my noble friend. Lord Thurso, seem to me to be desirable. I think that I should be entitled to go out and buy anything I want, at any time of the day and night, if there is a shopkeeper willing to serve me and anxious to do so. But I would say that, as I interpret it, my noble friend's Amendment would not have that effect. If we leave out this clause, we should presumably go back to the hours as they now exist—namely, that shops can be open until 8 p.m., or 9 p.m. on late nights, instead of, as proposed, 7 p.m., and up to 8 p.m. on late nights.
The noble Viscount who leads the Opposition pointed out that, although the present closing hour is 8 p.m., with a late hour of 9 p.m., the vast majority of shops, in fact, shut at about 5.30 p.m. or 6 p.m. I concede that that is so, but the fact that they do that is no argument for saying that nobody should open up to 8 or 9 p.m. We think that we should allow for shopkeepers who may wish to open until 8 o'clock. Nobody can force a shopkeeper to stay open until 8 o'clock, and most of them close at 5.30 or 6 p.m. That is not complete freedom, but it is more freedom than is given under the

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present Bill. My noble friend Lord Grantchester informs me that he has no intention of increasing the hours of work by his Amendment. They will not be affected in any way. The hours of opening should not be put back so that they would be an inconvenience to the public, for whom, after all, the shops exist. They are not the property of trade unions or manufacturers; and they do not necessarily exist to give occupation to shopkeepers or employment to shop assistants.
4.43 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I should not like this Amendment to be decided without somebody from this side saying a few words about it. We have had a most interesting debate. Three noble Lords from the Liberal Benches and three from the Benches supporting the Government have spoken, and I have been amazed at what I have listened to, especially from the Liberals. What passed across my mind was that here was one of the reasons for the decline and fall of the Liberal Party. Now we can understand how it was that at least 75 per cent. of the members of the Liberal Party up to 1914 gradually passed into other ranks, either to the Left or to the Right.
LORD GRANTCHESTER: May I interrupt the noble Viscount to say that the reason for the decline in numbers of the Liberal Party is that some have departed to the Labour Party to advocate restrictions, and the revival of the Liberal Party will come when we choose for freedom, as we are doing on this occasion.
VISCOUNT ALEXANDER OF HILLSBOROUGH: That argument used to work very well when the working classes had only a small modicum of education. That used to work very well in the early days of the Industrial Revolution, when almost every one of the arguments used to-day were used to show why the workers should go on and on, working for longer hours, and why boys should go down the mines before the age of ten and work for long hours. It was argued that that must be done in order to have the cheapest possible coal for the consumer, and that, by getting the cheapest possible coal, we should be able to increase exports overseas.
LORD GRANTCHESTER: The noble Viscount really should not indulge in remarks of that kind, because he knows that the question of working hours has nothing to do with this Amendment, nor even the hours of opening. My Amendment would enable a shopkeeper to open at two in the afternoon and keep open until nine, no longer than he opens now; but he should have freedom to choose the hours. I do not want him to work one minute longer than he wishes, or to employ a person one minute longer than he is willing to be employed.
VISCOUNT ALEXANDER OF HILLSBOROUGH: The noble Lord may express that view, but anybody with experience of legislation on this matter and of working for reforms in this matter, and with knowledge of the Early Closing Association and the struggle of the trade unions, knows perfectly well that unless there is protection of this kind under the Shops Act, as well as by other methods, the employees of shops are bound in the end to be exploited. And they have been so exploited. Do noble Lords know what it is for those who have grown up in the working class? I can see my own mother now going out to work—a widow with four children; my father died before I was old enough to be able to remember him. At what hour did she go to work?—at 7.30 in the morning. And at what hour did she return?—at 10 o'clock at night, day after day, week after week. Do you think that we hold these rebellious views because we are stupid? We have rebellious views because of what we have seen and because we know what workers have to be saved from. Your Lordships ought to be aware of the ordinary lives of the ordinary families in this country. That is why we plead for decent hours of work. My mother worked for a shop in those days. At different times in the last seventy years people in all Parties have co-operated to reduce the hours of work. Apparently, the noble Lords who have spoken to-day are going against the stream of progress. That is what is the matter with the views expressed this afternoon.
It has been said that if this clause is left out we shall retain the status quo. Why should we retain the status quo? Almost every other section of workers in this country have had the advantage in the last thirty years of steadily improving their hours of employment and

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their remuneration. Generally speaking, none have been so far behind as the distributive workers. I have told your Lordships before, on another issue altogether, that even to-day not more than 10 per cent. of employees in the distributive trades are in a trade union, largely because of the number of shops with one, two or three assistants, who are almost incapable of being organised. Those people have to put up with conditions to an even worse degree, except in so far as the large trade union section have gained improvements and they can crawl up behind them and take advantage of benefits for which they have not been able to organise themselves. What nonsense it is to say that there is no connection between this Bill and the hours and remuneration of the people employed in shops! There is every connection between the two. The longer the shops are kept open, the worse, in the long run, will be the conditions in general for those who are employed in them.
We have heard from noble Lords opposite this afternoon that they are speaking especially for the consumer. They were not speaking for the consumer in the "hungry forties" of last century, when the consumers' movement really began. There is only one really great consumers' movement in the country: there are nearly 12 million of us, and we are behind not only the clause, as it stands, but the further progress that we have failed to get. Those are the people who speak for the consumers. Let me say this to those who sit on the Liberal Benches. Sidney Webb once said in one of his books—I cannot remember at the moment which one it was—that the people who talk about setting everything free must also remember this: that freedom to compete must involve freedom to combine. And if freedom achieves such conditions as the people will revolt against, they have every right to combine to secure their interests.
VISCOUNT THURSO: Hear, hear! Why not?
EARL FERRERS: Perhaps I may interrupt the noble Viscount. I do not wish to distract him from his enthusiasm, but would he not agree that if one was employed in a shop that kept open long hours, which made one revolt against that kind of employment, one would then take
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employment with one of those progressive shops that shut at 6 o'clock?
VISCOUNT ALEXANDER OF HILLS-BOROUGH: A man may at the present time; but under the system of "free for", and of not having an ordered and planned economy, who knows how long full employment will last? What will be the choice left to the workers who will be thrown out, as some are being thrown out to-day? It all depends on what one can get when one is out of work, and there is every reason to see that the conditions of the worker are reasonably protected by the action of their representatives in the Houses of Parliament who make the laws.
LORD REA: Perhaps the noble Viscount will allow me to interrupt. He seems to suggest that there have been criticisms from some parts of the Committee thaw hours should be longer, that conditions should not be good and that the worker should not be in such a good state. I have failed to notice anything like that in the debate.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: At any rate, we will go this far: that the Amendment moved by the noble Lord, Lord Grantchester, if it were carried, would mean that the kind of hours they would work would be longer than are stipulated in the Bill.
LORD GRANTCHESTER: Certainly not. I want shopkeepers to have freedom to choose what hours they will open. I do not necessarily mean longer hours they may tie shorter hours. I know of one shopkeeper who wants to close for the next three months, because it suits his tax position. If he wants to do that, I want him to be able to do it.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: He must be a fortunate retailer to be in that position. But what I am interested to know is what will happen to his employees for those three months. Are they put on the dole? What sort of protection is there for them? We do get some extraordinary arguments advanced when we deal with this sort of subject.
I was interested in the speech of the noble Lord, Lord Conesford, and especially his remarks about the change from status to contract. There is little in the idea of contract to the distributive workers. In the days before the reforms

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brought about by law, before the passing of the Minimum Wages Act of 1924 there were very poor conditions in the rural areas of our country, some of which the noble Lord knows so well, for the agricultural worker. And even to-day, when you revert to the sacred argument of contract, you see farm workers having to go, because of the practice of a particular county, once a year to be hired in public under a new contract. There are fewer than there used to be, because there is a chance of getting reasonable conditions while there is a Statute on our law-books like the 1924 Act. But I would not emphasise the great advantages coming from the movement from status to contract, because some of us have watched that and studied it carefully. We are here claiming that an Amendment of this kind would be reactionary and reversionary, and would not give even the conditions which the Government are willing to give in their presentation of the Bill. I hope that the Government will be reassured that, if they resist this extraordinary Amendment, the Opposition will go into the Lobby to support them.
LORD DERWENT: I would make the plea to my noble friend, when he comes to reply, that out of his legal knowledge he will tell us what this Amendment means. When the debate started, thought that I knew, but since listening to all the speeches with great care I do not know whether it means the status quo, or what it was in 1840, or what. I should be grateful if he would deal with that.
4.56 p.m.
VISCOUNT HAILSHAM: We have had an interesting and rather wide-ranging debate on this Amendment. We have had philosophy, Mayne's Ancient Law and the Catering Wages Act; psychology, economics and freedom, wage slavery and goodness knows what else! The more profound and deep-thinking my noble friends on all sides of the Committee become, the more pragmatical I feel myself getting. I start from the proposition that we are in Committee on the Shops Bill dealing with an Amendment. The House has committed itself to giving the Bill a Second Reading, and is now engaged in trying to make it a better Bill. There are seventy-nine clauses in the Bill, and we have reached only the first clause.
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The proposal made is that we should leave out the first clause, which in some ways is the most important clause of the Bill. That is what we are discussing. My noble friend Lord Derwent expressed a certain amount of doubt as to what the effect would be, and in fact it is not easy to see. I can tell noble Lords what would be the result of accepting the Amendment and nothing more; that would be quite clear. I must say that, right up to the time when the noble Lord, Lord Rea, spoke, I was under the impression that that is what the noble Lord who moved the Amendment intended; but when the noble Lord. Lord Rea, spoke, with all the authority of his Party, I realised that he intended the opposite. The effect of the Amendment, if it were accepted, and nothing more was done, would be. clearly, to take away the restriction on hours of opening of shops altogether. It would not leave the status quo in operation, but would destroy the restriction on the closing hours of shops altogether. The reason why it would have that effect is because, later on in the Bill, your Lordships will find a repeal clause, and that repeals all the existing restrictions. Clause 1 inserts a new set of restrictions. It follows, therefore, that if you simply do that which the noble Lord, Lord Grantchester, proposes—that is, remove Clause 1 and leave in the repeal clause—you do away with all types of shop legislation affecting the hours of opening. There can be no doubt that that is the effect of the Amendment, as it stands.
LORD GRANTCHESTER: Perhaps I may interrupt the noble Viscount. I think my noble Leader misunderstood. My intention in moving the deletion of Clause 1 was to leave complete freedom—I realised that there was a repeal clause to the Schedule—so that it would leave the matter completely open. One noble Lord who spoke appealed to the noble Viscount, Lord Hailsham, to leave it as it is; but that was a different suggestion.
VISCOUNT HAILSHAM: I am glad that the noble Lord has made the position plain. He had in fact made it plain to me when he first spoke, but from what was said by the noble Lord, Lord Rea who, I understood, was the Leader of a united Party on this occasion, I supposed that I had been in error in construing the noble Lord's intention. I thought that I was right

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and that the Leader of the Liberal Party was not correct on this occasion.
It is, therefore. to the Amendment as it is now intended to be that I will address myself, first of all, although I hope to fit in, in the course of my remarks, both the views of my noble friend, Lord McCorquodale of Newton, who I think argued for the status quo, and my noble friend Lord Coleraine, who argued for a modified form of the Bill—that is to say, a form of the Bill in which the various local options provided for by part of subsection (1), and parts of subsection (2) and (3) of Clause 1, would go. I start, therefore, from this proposition: Is it desirable to omit Clause I with the effect intended? As I have said, the effect, of course, would be to destroy the Bill altogether, apart from certain subsidiary projects which I doubt would be worth retaining. It would have been, therefore, in some ways better to debate this question on Second Reading, but I do not complain that it has been debated now, because, quite clearly, it is a matter which has to be threshed out.
I start, without, I think, very profound philosophical preconceptions either way. I believe this is the sort of thing which comes to be dealt with by balancing one consideration against another, considering the evidence on both sides, and seeking to obtain that rather elusive thing, justice. It is quite true, in a sense—and I think the Government have given effect to it in this Bill—that the interest of the consumer is paramount. It is quite wrong to suggest, as my noble friend, Lord McCorquodale of Newton, did, that we say the consumer does not matter so much. On the contrary, if he will forgive me, the whole burden of my song in resisting the first Amendment was exactly that he mattered more than anybody else. But he is not the only person who matters. The shop assistant matters, and flatters a great deal. The noble Viscount, in his natural disappointment because I would not accept the first Amendment, twitted me with not having made the kind of fervent speech which, for some reason, he anticipated my grandfather would have made, had he anticipated my father's action in accepting a Peerage. I will do my best on this occasion to satisfy the noble Viscount, because I think there is a great deal in what he says on this occasion.
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It is perfectly true, of course, that the general rule in a free society is freedom of contract. Mayne's Ancient Law,, widely known to most of us, not in the course of practice but in the somewhat earlier and more spacious days of student-hood, does lay down this general rule, and there is a great deal in it. But when freedom of contract reached its apogee, at about the forties of the last century, it gave rise to what the leader of my Party described as the intolerable weight of serfage. Did not Disraeli refer to it in one of the most notable of his novels? One of the corollaries of the move from status to contract is the fact that socially vulnerable groups do, from time to time, require the protection of legislation. What groups do when they require it, and what degree of protection they should be afforded, is not, with due respect to my noble friends on both sides of the House, a question requiring primarily profound philosophical thought; it is pre-eminently a matter for the practical legislator to observe in the light of what actually goes on in the world as he sees it. That is why we have legislation limiting the Factories Acts.
In the 19th century my Party was largely kept alive by defending the cause of the socially vulnerable groups who were employed in factories in various ways, and limiting the freedom of the individual—as it was then put by the Liberals, and as it has been put now—to work as he liked, for how long he liked and for whomever he liked. it was the intolerable weight of serfage created by the absolute freedom of contract which led to social legislation under the great Lord Shaftesbury. I personally support this Bill, and the form in which it appears in Clause 1, on precisely the same theoretical and practical grounds as those on which Lord Shaftesbury put forward his Factories Acts—that is to say, that there is a real hardship upon the employee and upon the entrepreneur if they are left to the unbridled effect of competition. I think I would go all the way with my noble friend Lord McCorquodale of Newton in saying that in this matter freedom and the individual interest must be paramount. I shall endeavour to show the Committee that it is precisely that interest to which we have given effect by this particular form of legislation which we have adopted.

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There is no evidence at all of any substantial movement, anywhere in the country, against the hours we propose. To hear the noble Lord, Lord Grantchester, make his speech, one would suppose one was debating this question de novo—indeed, in the time of my grandfather. We never had a glimpse of the rather obvious fact that we have been living under restricted hours of shop opening, at any rate since I have been an adult—since the end of the First World War, which is since my quite early childhood. There never has been, so far as I know, any important organised complaint on the part of the consumer that he has been maltreated by the limitations imposed upon him.
LORD GRANTCHESTER: The noble Viscount is quite right that there is no organised opposition, but he has only to go into any of the big offices of the City and hear what the stall think about the present position.
VISCOUNT HAILSHAM: I am not so sure that the offices in the City have been really so seething with indignation for the last forty-five years on this matter as one would suppose. If they had been, I cannot believe that the great offices in the City would not have managed, in one way or another, in one House of Parliament or the other, to make their views known. The more subjective observations which one overhears in conversation in private life are not always a reliable guide to public opinion. I am bound to say, therefore, that I am not impressed with the evidence of a supposed indignation on the part of consumers.
On the contrary, as the noble Viscount, Lord Alexander of Hillsborough, said in the debate we had on his Amendment, the evidence is that by far the greatest number of consumers would be satisfied with 6 o'clock, and that by far the greatest number of shopkeepers already shut at that hour. I resisted the Amendment of the noble Viscount only because I pointed out that there was a marginal number of shopkeepers and shop users who were not satisfied with 6 o'clock closing. But extend it to 7 o'clock, and the number is so small that the evidence is that it is infinitesimal except in relation to particular trades. I know that the noble Lord, Lord Mackintosh of Halifax, proposes to raise in a separate Amendment the question of the sweet and tobacco trade. I
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therefore do not refer to it particularly, except to say that, so far as I am aware, the only people I have ever heard complain of the existing restrictions, which have been on for forty years, are those who belong to that particular kind of trade, and the kind of trade to which the noble Viscount, Lord Thurso, referred, which is already dealt with. The tourist centre is already dealt with by way of exception in another clause of the Bill. Therefore, I would venture to say that this indignation is misplaced. It bears no relation to truth except in regard to two individual cases, one of which is an exception and one of which is open to discussion for the purpose of making it an exception.
On the other hand, there is very strong evidence, such as has been brought forward by the noble Viscount, of a strong organised movement of opinion in favour of early closing. The noble Lord refers to the trade unions, the co-operative societies and the Early Closing Association. They are powerful bodies of opinion. I sometimes wish that they were more fully represented in this House, although what they lack in quantity is sometimes made up in quality with protagonists like the noble Viscount. The fact is that that trade union opinion is behind the principle of the Bill and would, if any thing, like to go further with it. Your Lordships can say, if you like, that the trade unions do not represent the views of the workers. It may be that they do not, but I do not know why anyone else should represent them or know them any better. It is certainly true that the shop assistants are not particularly well organised into trade unions, because, of course, the distributive trade is a trade which it is particularly difficult to organise into trade unionism. It is, so one would think, precisely for the reason that trade unionism in the trade is relatively weak that one must at any rate contemplate without misgiving the possibility of legislation to protect them. It is all very well for my noble friend Lord Conesford to say that we are not discussing the interests of the distributive worker, or for the noble Lord who proposed this Amendment to say that we are not discussing the interests of the distributive worker. I know that these things are said in good faith, and with every sincerity, but I happen to disagree with them.

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The fact is that those who represent the distributive worker think otherwise. The fact is that the Gowers Committee's Report, which embodied a careful review of the subject, even, if it is ten years old, thinks otherwise; and it happens to be, for the little that it is worth, that I think otherwise too, because I believe, quite sincerely, that if we did away with restrictions in the hours of shop opening, we should find a deterioration in the conditions of employment. It is perfectly true, of course, that in an ideal world it would be possible to invent legislation which achieved the same result by a different route—I do not deny it. You could, of course, introduce a Bill for five, six, eight or twelve hours a day for shop assistants and office workers and achieve your result by that kind of method. I myself fancy that shop owners would find it a great deal more onerous than the method which is now proposed, and I fancy that the consumers would not like it any better.
I also venture to point out—because this is not really a matter of opinion: it is a matter of certainty—that, although theoretically it would be possible to invent such legislation, if the Amendment proposed by the noble Lord were carried and became the law the shop assistant and the distributive worker would be left without any protection at all, because, whatever may be done in theory, such legislation does not exist in practice. I say quite frankly to the noble Lord, Lord Conesford, that I do not believe that the trade union method of negotiation, much as I respect it in much better organised industries, and much as I recognise its efficacy, would be sufficient in an industry of this kind to give protection were all forms of restriction to be taken away. Therefore, I cannot accept the view either that this is not a social reform or that in a world in which all the restrictions were swept away there would be anything like the freedom or justice or that kind of balance between the interests of different sections of the community—between the consumer, in this case, and the shopkeeper and the worker—that I am sure, despite all theoretical statements to the contrary, every noble Lord in this House is trying to achieve.
Nor am I prepared to accept that this is an Amendment which would benefit the small shopkeeper. It is, of course,
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the case that there is quite a strong movement inside the sweet and tobacco trade for exemption; that comes from the small shopkeeper. That point we can consider separately. But, generally speaking, I believe it true that the small shopkeepers are behind the Bill rather than the Amendment. At any rate, that is the view of the National Chamber of Trade, whose representative came to see the Government in the last few weeks and pressed the Government to go on with the Bill, precisely because they regarded it as in the interests of the small shopkeeper. Your Lordships may say that that is a restrictive practice. In a sense, all social legislation and all legislation is a restrictive practice. But on this matter one cannot have it both ways. One cannot claim that one's Amendment is in the interests of the freedom of the small shopkeeper and then, when it turns out that the small shopkeeper does not want it, abuse tile small shopkeeper because he is guilty of wanting a restrictive practice. Although each situation is rational in itself, those are not rational situations to hold together.
The noble Lord who moved this Amendment and certain other noble Lords have spoken in glowing terms of a coming era of shift working and staggered hours: that that is the great future of the distributive trade. I wonder. One thing I am quite certain of is that, if it is, it spells the end of the small shopkeeper, because he cannot afford to work in shifts or compete with the staggered hours of a multiple store or modern bazaar against workers working in shifts against him, his wife and his children. He is apt to look at it as if the removal of the restriction against himself means, in the long run, that he is bound to be a drudge, with his wife a drudge and his children drudges, working in a shop because he cannot afford to employ assistants in order to compete with the multiple stores which can employ assistants on eight-hour shifts. That may be open to argument, but, again, you cannot have it both ways. This thing which is alleged to be done out of pity and compassion for the small shopkeeper cannot, at the same time, he run as a great enterprising Amendment which is going to open the way to the shift working of the multiple store, because the two are antagonist interests. I am afraid that on that ground I could not accept it

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Now it is said: "Of course, psychologically this is so bad. It is true that we have had shops legislation for forty years"—perhaps we had forgotten that. "We are now going to upset the tourist trade; we are going to break up the export drive and we are going to turn our backs on the expanding economy because it is proposed to reduce the late hour from 8 o'clock to 7 o'clock." I am bound to tell your Lordships that I do not, in fact, share the anxieties which are expressed in that direction. I cannot see another ounce of goods not being sold abroad because the shops in Bond Street are closed at 7 o'clock. I do not see anything inconsistent in a modern society with the drive for an expanding economy and the regulation of the distributive trade being regulated in this way, whilst factories are regulated by law according to hours and conditions. Moses is the man tile noble Lord ought to be attacking: he started this business with the Fourth Commandment. He was not talking about freedom on that occasion. He recognised a very simple fact. He recognised that, if it was socially desirable to have periods of rest, it had to be organised socially, by means of legislation—and I am rasher surprised to hear the noble Lord, who is such a pillar of the Evangelical Church, suggesting that there is something slightly immoral about supporting restrictions of this kind.
The evidence is that people who do not have to work too long often work harder in the hours during which they work. I have always insisted, when I have had hard periods of work, in fighting, both for myself and for my employees, to see that they get off for an adequate time. I do not believe it is in the spirit of enterprise to go drudging on for hour after hour; I do not think it is in the spirit of freedom; and, for that matter, where it can be shown that hardship would result from doing it, I do not think it is in the spirit of the Conservative Party.
I come now to the suggestion of my noble friend Lord Coleraine—and I must say that I was attracted by it. I agree with him that the variation between locality and locality can cause anomalies and even injustice. In one respect, I would go further than he does. Clause
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1 (2), which provides an elaborate series of differentials for the local option, seems to me to complicate the clause a great deal without adding noticeably to its efficacy. I will, if he will allow me to say so, report to my right honourable friend what he has said about the matter. I feel sure that what he said will be considered sympathetically. I should not like to go further—I speak as one of the scribes and not with authority, but I hope that I may win his sympathy by telling him that I will mention what he said; it seemed to me to correspond with a possible change in the Bill.
That, I think, more or less concludes what I have to say. I sincerely believe that the Committee would be making a great mistake in passing this Amendment. I do not believe that the Committee yet realise, even having heard the noble Viscount opposite, quite what stormy passions, or quite what organised opposition, the Amendment would rouse in the community if it were passed. I have yet to hear a tittle of evidence that the Committee which reported favourably on this change, were wrong yin their judgment of the case, which was that the hours proposed were, if anything, conservative from the point of view of the consuming public; that there was no real evidence of a substantial demand for shopping outside these hours, but that there was real evidence that, if these hours were not adhered to, the marginal demand might be such as to give rise to considerable hardship and injustice, not only on the part of those who were employed, but also on the part of those who work for themselves.
LORD GRANTCHESTER: I should like to thank the noble Viscount for what he has said, with much of which I agree most heartily. I should also like to thank other noble Lords who have either supported, in whole or in part, the idea that I tried to put forward. I am not at all convinced that there is any unnecessarily competive element between the new and developing methods—the new big bazaar which might employ a shift, or open for a limited number of hours to suit its customers—and the small shopkeeper. I look upon the role of the small shopkeeper as a specialised rôle. If the noble Viscount will go across the Channel and see the owner sitting in his or her shop until 8 or 9 o'clock in the evening, willing to talk and pass the time with

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anyone who comes into the shop and likes to look around, he cannot talk about sweated labour.
LORD STRABOLGI: May I interrupt the noble Lord? Will he tell us why the Poujade movement is so strong in France?
A NOBLE LORD: Taxation.
LORD GRANTCHESTER: I do not think I need go into that. Anyhow, the noble Viscount thinks that sweets should be served at any time. I have no objection to sweets being served at odd hours if people are willing to serve sweets. No doubt the noble Lord, Lord Mackintosh of Halifax, will speak on that and give his reasons. But why sweets? Are sweets and tobacco to be a favoured trade? I object to this sort of discrimination for those who want sweets and tobacco. Why not for people who want bread? I will not press this matter any further to-day, but I hope that the noble Viscount will look at it again. If he feels then as he does now, all I can say is, why did he raise this question at all to alter the existing hours and attempt to cut them down? I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause I agreed to.
5.25 p.m.
LORD MACKINTOSH OF HALIFAX LORD MACKINTOSH OF HALIFAX moved, after Clause 1 to insert the following new Clause:
Special provision for confectionery
"Section one of this Act shall in its application to the trade or business of selling mineral waters or other non-intoxicating drinks, sweets, chocolates or other sugar confectionery, or ice-cream (with or without wafers or edible containers) have effect as if—

(a) in paragraph (a) of subsection (1) thereof for the reference to seven o'clock there were substituted a reference to nine o'clock.

(b) in paragraph (b) of that subsection for the reference to eight o'clock there were substituted a reference to ten o'clock; and

(c) in subsection (3) thereof for the reference to six o'clock there were substituted a reference to eight o'clock."

The noble Lord said: We have listened for over two hours to a lively, interesting and widespread debate on the main purposes of this Bill. But now, as the noble Viscount has said, We have got to get down to the job of trying to make it a better Bill. What I have to say will deal with only one aspect of this Bill. Before
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say anything else I feel that noble Lords will agree with me in congratulating the noble Viscount in charge of this Bill on the conduct of what he has admitted to be his first Bill. So far, I think he has done it magnificently.
When this Bill was before your Lordships' House on Second Reading, I intimated that on the Committee stage I should have something further to say on one aspect of the Bill which I think needs revision. It arises on Clause 1 and has to do with the hours of sale of chocolate and confectionery, together with soft drinks, ice-creams and tobacco lines. The Committee will, of course, be aware that the present legislation on shop hours has admitted the special case for these products, and has allowed them to be sold after the ordinary permitted hours. Under the present Act, shops generally have to close at 8 p.m. but chocolate, confectionery and tobacco, et cetera may be sold to 9.30 on an ordinary week-day and on what is called a late day, which is usually a Saturday, until 10 p.m. The present Bill seeks to bring forward the closing hours of shops generally to 7 p.m., but without any dispensation for the sweet shop, et cetera, thus depriving the industry of seventeen selling hours a week which they now enjoy—and moreover, the very hours which are the most important to many in this industry.
I am addressing your Lordships to-day at the express wish of all sections of the confectionery industry—the retailers, the wholesalers and the manufacturers: they are all unanimously behind what I have to say. I have also been asked to express the views of the cinema industry, which is also seriously affected by this Bill. The confectionery industry alone employs, in all its branches, over 300,000 people, and employs some —100 million worth of capital in the manufacturing side alone. I am sure the Committee are well aware of the reasons which have always been accepted for allowing sweetstuff shops and tobacco shops to be open longer than ordinary shops. People buy chocolates and sweets largely on the impulse of the moment. That is why the turnover of the confectionery trade is largely closely bound up with the hours at which the goods are on sale. If you are unable to buy that bar of chocolate or bag of sweets in the evening because the shop is closed, you do not buy two to-morrow; that

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sale is definitely lost. But if you need a pair of shoes and cannot get them today you will most certainly buy them to-morrow. The sale of confectionery, ice cream and tobacco is closely bound up with the public's hours of leisure and entertainment. That is why the evening hours, which this Bill proposes to cut off, are so important, both to the public and to the industry.
The confectionery industry of which I speak particularly, and with which my family have had connections for three generations, is a very important one, with total retail sales of upwards of —250 million a year; so that the loss of only a small percentage of those sales would amount, in total, to many millions of pounds over the year. The confectionery manufacturing industry is highly organised. Generally speaking, it is highly efficient and includes some of the most progressive firms in the country. That means that their overheads are closely watched and the loss of a substantial amount in turnover, with its consequent increased costs, might be damaging to the very considerable export trade, amounting to-day to over —20 million a year, much of it to dollar countries. I know from my own experience that this export business is done on very small margins and sometimes on no margin of profit at all; and any increase in costs might well affect those dollar sales.
The effect of cutting off sales of sweets in the evening hours would be even more serious to the retailer. We have had a recent survey, and find that nearly two-thirds of the sweet shops in the country now keep open during the evenings. That cutting off of evening sales would undoubtedly mean that large numbers of shopkeepers would have to close down. Those shops often pay very high rent because their premises are in the middle of a town near to the entertainment houses. To take away from them the best shopping hours of the day would mean that many of them would have to go out of business; the public would go without their sweets and the pleasure of evening entertainment would be lost—a sort of gloom for gloom's sake.
When, in 1947, the Gowers Committee made their Report, on which this Bill is largely based, conditions in the confectionery industry, as in many others, were quite different. I know that the
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Committee did all they could to say what would be right for normal conditions, but we must bear in mind that in the last ten years there have been major developments such as even people in the trade like myself would not have envisaged. In 1947, the public were rationed to four ounces of confectionery per week each. In the following year, this ration was reduced to three ounces, and shops could sell their meagre ration in a few hours each week. To-day, the picture is entirely the reverse. Manufacturers have modernised and enlarged their factories, and there is strenuous and healthy competition between them. The public, too, have a large choice of the best confectionery in the world—for this country leads all others in this industry. To-day the shopkeepers need more, not fewer, hours in which to serve the public adequately and to make a living. I am not pressing for longer hours, of course, but only for the same hours as at present.
I understand that the National Chamber of Trade, which is perhaps the chief protagonist for this Bill, has expressly stated, in its case to the Ministry, that it wholeheartedly supports the maintenance of late evening closure for the chocolate, confectionery and tobacco industry. I have talked the matter over with many people, including Members of this House, and everyone to whom I have spoken has agreed with the reasonableness of our case. Your Lordships may wonder why the promoters of the Bill seek to deprive the public and the confectionery trade of these particular trading hours. I believe the reason is difficulty of enforcement. It all boils down to the fact that a small percentage of shops, known as "mixed" shops, sell confectionery as a sideline to other things, like groceries or stationery. It is alleged that some of these shops take advantage of the position to stay open later, ostensibly to sell confectionery, but that in fact they sell a few other goods "on the sly." I believe that the difficulty of enforcement arising from the mixed shop has been greatly exaggerated, and that we are talking only of, say, one shop in a thousand. I would ask: is that sufficient reason to weigh against the legitimate claims of a large, efficient and important national industry, not to mention the convenience of the public and their right to enjoy their leisure unhampered by petty restrictions?
Her Majesty's Government appear to have accepted this point of view, for we appreciate that the Bill continues to allow confectionery and tobacco to be sold on early closing days and Sundays, when the same alleged difficulty of enforcement will apply. I sympathise with the enforcement authorities who wish to have everything nice and tidy, but I am reminded of a cartoon which I saw in Punch when I was a child. It showed a customer coming in to see a business man in his office. He had put in a new filing system, and all around there were beautiful filing, cabinets with men running up and clown ladders. The customer asked, "How is the new filing system going?" and the business man told him, "Magnificently; it is a perfect success." The customer said, "I am very glad, for you have put a Lot of thought into it." Then he asked, "And how is business?" and the businessman replied, "Business? Oh, we have given up business. We are busy filing now." I am anxious to keep business going, even if it is not neat and tidy for the authorities.
I need not remind the Committee, for everybody has mentioned the fact, that the hours of shop assistants are not affected by this Bill; nor are their terms and conditions of labour. I should mention that some shops now able to employ assistants would be so adversely affected by this Bill that they would no longer be able to do so. The Bill continues to permit the sale of confectionery in the evenings in cafés, restaurants and railway stations, which is quite right; but that only strengthens the case for retaining for the legitimate confectioner the right to remain open after 7 o'clock. To permit it for one and not the other would be unfair discrimination. For example, a sweetshop may be next door to a café The sweetshop would have to close at 7 o'clock, but the café could keep open a great deal longer. Somebody might come into the café to buy a bar of chocolate. He is supposed to eat it there, but can one imagine him standing at the counter until he has finished his bar of chocolate? No; he would put it in his pocket and eat it outside. Yet the shop next door has to close.
Finally, I should like to say a few words on the Bill as it affects cinemas and theatres. I have already mentioned that sales of chocolates, sweets, ice cream and
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tobacco are closely associated with the entertainments industry and are, in fact, all a part of show business. The cinema industry already carries a very heavy burden in the amount of entertainment tax, amounting, I believe, to some —30 million a year. This Bill would add further burdens. It is no secret that the cinema industry derives great financial assistance from the sales to its patrons of these products. I have seen it stated in recent years that the major part of the profit of quite large cinema circuits comes from their sales of these things. I am told that ninny small cinemas would have to close down without this ancillary source of income. True, the Bill purports to allow them and others to sell sweets and tobacco but only—and I quote the Bill:
"so long a the sale is effected in a part of the theatre to which no members of the public other than members of the audience have access."
I am informed that the great bulk of sales of confectionery, put by one large circuit as high as 80 per cent., is sold not in the auditorium but in the confectionery kiosk in the public foyer. It is sought to treat these sale points in cinemas as ordinary shops which must close at 7 o'clock. It would be quite unfair to make shops near the cinemas, shops which may be part of the cinema premises and for which a high rent is paid to the cinema, close at 7 o'clock while a shop round the corner remains open.
My suggested Amendment to the Bill would meet both objections at the same time. It would permit sales of confectionery in ordinary sweet-shops and places of entertainment and it would permit the public to be served. I have purposely suggested the hour of 9 p.m. on the ordinary evening, because I am informed that by that time the "last house" in cinemas and theatres will have assembled, so that everybody will be happy. I see that my noble friend Lord Lucas of Chilworth has a similar Amendment down on Clause 11. It may be that that is the better place for such an Amendment. I am not as experienced in these matters as is the noble Lord, Lord Lucas of Chilworth, but we are both trying to effect the same thing. The whole of the confectionery trade and the public seem to be unanimous in attaching importance to maintaining the right to sell sweets and other such things in the evening. This can be achieved without departing

723
in any way from the main provisions of the Bill, without causing any real difficulties in practice and without prejudicing the position of the shop assistants. The effect of my Amendment would be to allow confectionery shops to stay open for the sale of their products and tobacco, on ordinary days until 9 o'clock and on late days—usually Saturdays—until 10 o'clock. I beg to move.
Amendment moved—
After Clause 1, insert the said new clause.—(Lord Mackintosh of Halifax.)
5.42 p.m.
LORD LUCAS OF CHILWORTH: Having fixed, by Clause I, the basic principle, this is where we come, as the noble Viscount has said, to the exemptions. Exemptions have bedevilled shop legislation ever since shop legislation existed. I hope the noble Viscount, Lord Hailsham, will agree with me, when I say that what we have to do is to find a mean that is reasonable. "Reasonable to whom?" it might be asked. I would suggest—reasonable to the consumer in this particular case. I think that the noble Lord who moved this Amendment has gone too far. I think that the hours of 10 o'clock and 9 o'clock at night for the ordinary shop are too late. I am leaving out of account, for the moment, the aspect that the noble Lord brought in at the last part of his speech—the cinema and the theatre. I think that they are to be treated entirely separately and that on this question as it affects them a separate case is arguable.
I have in mind the ordinary man in the street—if I may use that expression—and his wife. I suppose that the noble Lord, who knows far more about the confectionery trade than I do, would admit that the peak hours of selling in sweet shops are somewhere in the region of 7 o'clock and 8 o'clock. People are then going to places of amusement such as the cinema, and I think it would be rather hard if a man were deprived of the opportunity of calling at his local confectionery shop on the way there and buying his wife a box of chocolates. I am not going so far as to say that the Government are heading for domestic trouble in denying husbands the pleasure of buying their wives boxes of chocolates, but I cannot see that it would do any harm whatever to allow that. I think it is right: I think
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it is calculated to meet the convenience of the public.
As Lord Mackintosh of Halifax has mentioned, I have an Amendment on this matter which I shall put forward at a later stage. I have tried, in that Amendment, to keep within what I thought was the scope of the Bill by bringing in permissive hours in precisely the same way as they are permitted now—in other words, the extra hour, and the early closing extra hour. I seek to apply them to the Clause I hours, thereby bringing the total permitted hours down by that amount. I think that is better than the noble Lord's Amendment. I do not like the hours which the noble Lord proposes. I would support the principle, however. In regard to the cinema or theatre I think the concession should apply only to places to which the general public do not have free access, places where only bona fide patrons of the theatre or cinema can purchase sweets and so forth. I believe that that is absolutely essential. I do not think that a cinema kiosk to which the ordinary public, not attending the cinema, has access should remain open longer than a shop. My Amendment seeks to confine purchases at such places to the bona fide members of the audience at the place of entertainment in question.
Where I find myself opposed to the noble Lord is that I think his hours are too long. I cannot see that the public generally need facilities for being served until ten o'clock. It may be that in certain areas at certain times of the year special provisions are called for. But we are dealing with the ordinary run. I have great sympathy for people at seaside resorts—not so much the shopkeeper as the people who are visitors at seaside resorts. They are on holiday, and why should they not be allowed to enjoy this amenity? But I fear I am getting away from this particular Amendment. I would not object to this Amendment if the hours were brought down by having the permissive extra hours that are enjoyed now added to the statutory hours for shops as provided in Clause 1. Apart from that, I have no objection to the noble Lord's Amendment.
5.47 p.m.
LORD BURDEN: My Lords, the noble Lord, Lord Mackintosh of Halifax, so rarely intervenes in debates in this House

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that I am sure that anything which he submits to your Lordships is worthy of careful consideration. Speaking entirely on my own responsibility, may I say that I agree with the noble Lord, Lord Lucas of Chilworth, that perhaps a 10 o'clock rule would go a little too far. I think, also, that one need not attach very much importance to the competition, shall we say, of the cinemas. But I would not intervene to say something in support of the principle of this Amendment if I were not sure that so far as the shop assistants are concerned they are adequately protected by their wages board and, I hope, in most instances, by their trade unions. But while one does not want to shelter behind the position, one cannot close one's eyes to the fact that there are literally thousands of shopkeepers in this country who do not employ assistants at all. I agree with the Cowers Report that these people cannot be, or ought not to be, excluded from any general legislation.
But what is the position of these people? Many of them have invested whatever small capital they may have in these shops, and they have been able to stay open later. I venture to say that if this restriction is imposed upon them, plus the fact of the heavy additional burden which is falling upon them in connection with the new rates which they have to pay (notwithstanding the measure of abatement which. I understand, may be forthcoming) many of them, if not the majority, may perforce be driven out of business. In summer, as we all know, owing to the working of the Summer Time regulations, in many cases people go out late in the evening and like to purchase ice-cream and so on. As your Lordships will realise, the weather last year made the summer one of the worst in recent memory for the sale of ice-cream. The ice-cream industry has to measure up one year with another. Last year was very bad and they are hoping that we may be blessed this year with a good summer from their point of view. Thousands of shopkeepers depend on the sale of ice-cream during the times proscribed in the clause. If it is passed, it will be one of the most severe blows yet levelled at the ice-cream industry in this country. My noble friend is right in saying that perhaps the Amendment goes a little too far, but in view of the plea
726
that has been put up, I would suggest that even if the Government cannot accept this Amendment, they might give the matter second thoughts, to see whether there cannot be some alleviation of the strict conditions laid down.
LORD LUKE: I should like to support my noble friend Lord Mackintosh of Halifax in his Amendment. I feel that no one speaks with greater authority than he on the confectionery trade and I have been considerably impressed by what he said. I was also glad to hear Lord Lucas of Chilworth's plea for a reasonable deal for the consumer, and I think there is a great deal in what he said. I was particularly impressed by what my noble friend said about the hours of closing. Seventeen hours in a week are a considerable number to be curtailed off your business, especially when they are during the peak hours of sales. The clause as it stands does not seem to be in the public interest or in the interest of shopkeepers, but merely in the interest of curtailment, and that dot's not seem to me to be right. Obviously, there will be hardship among retailers, especially among small family shops, and I think we ought to pay particular attention to that. With regard to cafés and restaurants in cinemas, it seems to me that if there is to be an exemption it should be allowed all round, and one section ought not to be curtailed without the others. I think it is unfair that certain units should be penalised. I wanted to say these few words in support of my noble friend because I think there is a great deal in what he said and in his Amendment.
VISCOUNT HAILSTIAM: I shall not detain the Committee very long. I hope that what I say may satisfy noble Lords who have spoken in support of this Amendment, and, if I may address my remarks not only to this Amendment but to that to another part of the Bill in the name of the noble Lord, Lord Lucas of Chilworth, I think I shall probably facilitate the discussion of the Committee. The Gowers Committee decided against differentiating in favour of the tobacco and confectionery trade because they were anxious to avoid the complications which are imposed if we start differentiating and because of the practice of selling confectionery and tobacco in common with other goods. If it is proposed to differentiate, that difficulty has

727
to be accepted and dealt with in one form or another. My right honourable friend and I feel that there is a strong case to be made for the confectionery and tobacco trade. I do not share the view of the noble Lord. Lord Grantchester, in his reply to the discussion on the last Amendment, that if we differentiate in favour of confectionery, then we have to differentiate in favour of, for instance, bread. The reason was adumbrated, I thought persuasively, by my noble friend Lord Mackintosh of Halifax in his excellent speech. May I, in parenthesis, thank him for his kind remarks about myself?
Though I had no idea of this before I began reading my "homework" in connection with this Bill, the confectionery trade is what is called an "impulse" trade. This is a phrase new to me. I gather that the same is true up to a point of tobacco. I can afford to look at this matter with a certain degree of detachment because I do not smoke and my wife will not allow me to eat too many sweets. But I realise that a great many people not blessed with so much flesh as I have, when they see a confectioner's shop, get an impulse which they simply cannot resist. When they pass a bread shop, fortunately, in this country where no-one is overcome by famine, they do not get an impulse to go and buy a loaf of bread, say, at 10 o'clock at night. The housewife is content to shop at normal hours to provide her family with its needs, but in confectionery much of the trade depends on impulse, which, as my noble friend said, is not necessarily repeated next morning at breakfast time. The result is—I am approaching this problem pragmatically rather than philosophically—that a case can be made for treating confectionery as different from bread, and my right honourable friend has authorised me to say that he intends, if he can, to find a way of giving effect to noble Lords' desires in this matter. The Parliamentary draftsmen, who in this respect are my masters as well as the Government's servants, tell me that neither of the Amendments will do because they do not fit into the structure of the Bill. I trust that the noble Lords will be satisfied to accept a rather indefinite but none the less sincere promise on the part of the Government
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that it is their intention to make an exception of the tobacco and confectionery trades, and will withdraw their two Amendments.
LORD LUCAS OF CHILWORTH: I am grateful to the noble Viscount and accept his offer straight away. I am glad that he has done this because, if I may say so in support of my noble friend Lord Burden, this is relevant to something said by the noble Viscount, Lord Thurso, who poured scorn upon my remark that these long hours of opening were bound to be to the financial ruin of small shopkeepers. When we had a universal 10 o'clock opening, the demise of retail businesses was 20 per cent. per annum—that was the rate of bankruptcy. The bad debts so accumulated had to be borne by the consumer. I agree with my noble friend Lord Burden that the small shopkeeper who relies upon this type of business is going to be badly hit, and I am grateful to the noble Viscount for his promise. When it comes to my part in this, I will not move my Amendment and will rely on his promise.
LORD MACKINTOSH OF HALIFAX: I gladly withdraw my Amendment and thank the noble Viscount and the Government for their promise.
Amendment, by leave, withdrawn.
Clause 2:
Late days
2.—(1) It shall be the duty of every local authority to make such orders under this section specifying pairs of weekdays as will enable effect to be given throughout their area to the provisions of paragraph (b) of subsection (1) of the foregoing section.
(2) An order under this section may be so framed as to extend to the whole of the area of the authority by whom it is made or to part only of that area and as to have effect as respects the generality of shops within the area to which it extends (either without exception or subject to an exception for shops where a particular trade or business is carried on) or as respects shops within that area where a particular trade or business is carried on, and different pairs of days may be specified by order under this section—

(a) for the purposes of different trades or businesses;

(b) as respects different parts of the area of the authority;

(c) as respects different weeks of the year;

and both or either of the days of a pair applicable to a shop by virtue of such an order may he the same as both or, as the case may be, either of the days of a pair applicable to that shop by virtue of an order under the next following section
(3) Of a pair of days specified by an order under this section, one shall be designated by the order as the principal day.
(4) Subject to the following provisions of this section, the late day as respects a shop shall be that one of the pair of days for the time being applicable to the shop by virtue of an order under this section which is designated by the order as the principal day, unless the occupier of the shop elects as the late day the other day of that pair, in which case the late day shall be that other day.
(8) An election under subsection (4) of this section, an election under subsection (6) thereof and a variation under subsection (7) thereof of an election under the said subsection (6) shall be of no effect unless signified by a notice in the prescribed form displayed in the prescribed manner in the shop to which it relates, and when such an election or variation is so signified—

(a) it shall, until revoked or, in the case of a variation, until the election to which it relates is again varied, have effect with respect to all weeks after that in which it is first so signified; and

(b) so long as it is effective, the notice evidencing it must continue to be displayed as aforesaid while the shop is open.

LORD DERWENT LORD DERWENT moved, in subsection (4), after "occupier of the shop" to insert, "shall have notified the local authority in writing that he". The noble Lord said: In moving this Amendment, may I say a word or two about all the Amendments standing in my name? Most of them, but not all of them, are designed to improve the administration of this Bill when it becomes an Act. In putting down these Amendments I have borne in mind certain things which have been told me by inspectors under the Act. They are the poor devils who have to try to see that it is enforced—and I say "poor devils" because they have found considerable difficulty under the present Act.
What they say is that the law must be easily understandable to the shopkeepers, to the shopping public and to them, the inspectors, because a great number of the prosecutions brought arise from the fact that nobody understands the law. Secondly, they say that where there is good administration, it is to the benefit of both the public and the shopkeeper; and they also tell me that it is impossible to enforce a Shops Act, or a regulation under the Act, which is resisted and disliked, either by shopkeepers as a whole—not necessarily individual shopkeepers—or by the public as a whole. So in these Amendments that I have put down I have tried to see that they are simple,
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to the benefit of good administration and unlikely to upset either the public or the shopkeeper.
The first Amendment is one of pure administration. It deals with the election by the occupier of the shop of his late day—"the other day of the pair" are, it think, the words used by the Act. There are two late days, and if he does not take one, he has to elect the other. All the Amendments say that when he so elects he shall do so in writing. The object of that is that, unless it is done in writing, it is almost impossible for the local authorities to prepare lists; and if there are no lists, it is almost equally impossible for those concerned to know whether a shop should or should not be open on a particular evening. I am advised that the large proportion of shopkeepers will have no objection to this Amendment, and that the only people who are likely to object are the very few who might wish to manipulate the law to their own advantage and to the disadvantage of their competitors. I beg to move.
Amendment moved—
Page 3, line 21, after ("shop") insert the said words.—(Lord Delivery.)
LORD BURDEN: Broadly speaking, I think this. Amendment is in line with the subsequent one. I think your Lordships will agree that if local authorities are to carry out the terms of this Bill, when it becomes an Act, they should not be faced with all sorts of complexities and difficulties which will arise if a man can, of his own volition and without any notification to anybody, jump from one early closing day to another. That, as I read it, it is possible for him to do under the terms of the clause as now drafted. I am sure it is the intention of the Government that the terms of the Act should be complied with, and, while we all know that the majority of shopkeepers are decent, law-abiding people who will honour its terms, there is another class, small, I agree, but difficult for the local authorities to deal with, who will take advantage of any possible loophole, not only breaking the law but acting to the disadvantage of their competitors who are loyally abiding by the law. In those circumstances, I hope that the noble Viscount will see his way to accept this Amendment, or to suggest phraseology which will meet the position.
VISCOUNT HAILSHAM: This is one of a number of Amendments the object of which, as my noble friend Lord Derwent has said, is to facilitate the enforcement of the Bill by making the shopkeeper who exercises one of the elections given him under this procedure notify the local authorities, instead of simply putting up a notice in his shop. I think there is a good deal to be said for these Amendments, and I do not deny that probably they would facilitate enforcement, at any rate, to a certain extent. The noble Lord who has just spoken is not quite right in thinking that the shopkeeper who puts up a notice can altogether escape from his obligations by taking it down, as he will see from the rather complicated phraseology of subsection (5).
My right honourable friend is disposed at the moment to resist this Amendment, although he recognises that it is a reasonable one and well worthy of consideration. The object of the framers of this Bill has been to reduce to the minimum the form-filling and red tape, and it is thought that the existing provisions of the Bill achieve that object. I think that is a very nice thing, whether one accepts that argument or the opposite one. The Committee, on the whole, have been pressing me to err on the side of freedom, rather than regulation, and so, to some extent, I am fortified in the attitude my right honourable friend has taken. I do not know whether noble Lords who have spoken to this Amendment will be satisfied if I say that my right honourable friend will take into account what they have said. He may want to take the opinion of another place, as well, because obviously it is a matter which will be discussed there. I would ask my noble friend Lord Derwent to withdraw the Amendment, but I do not close the door completely to the possibility that my right honourable friend might change his mind in the light of what noble Lords have said and what others may say.
LORD DERWENT: I am grateful to my noble friend for what he has said. I intend to ask leave to withdraw the Amendment, but I would go so far as to say that, without local authority lists, this clause will be unenforceable; and unless election is in writing, local authorities will be unable to prepare a list. I should
732
like that to be on the record. But, subject to the undertaking given by my noble friend, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD BURDEN LORD BURDEN moved, in subsection (8), after "unless" to insert "notified to the local authority in the prescribed form and." The noble Lord said: I will formally move this Amendment. In doing so, I would say that I agree with the noble and learned Viscount that freedom is a good thing, generally speaking. But the object of these Amendments is that freedom should not degenerate into licence, and from that point of view we should like this matter to be looked at. I formally move the Amendment and no doubt the same procedure as was followed with the other Amendment can be followed here. I move it in order to have it on the record. I beg to move.
Amendment moved—
Page 4, line 12, after ("unless") insert the said words.—(Lord Burden.)
LORD MILVERTON: As this Amendment is in my name, also, I should like to say that I fully support what my noble friend Lord Derwent said about the last Amendment. I do not believe that these regulations are properly enforceable without that notification. I, too, would press that point. I know that it is a sound (Government principle that one should endeavour to reduce these restrictions and requirements as much as possible, but one of the main objects of this Bill is to take shops legislation out of the disrepute into which it has fallen because it has been in many respects unenforceable; and it was solely with the idea of trying to help in making this Bill and its provisions enforceable, and of letting shops legislation gain the reputation that such laws should have, that this Amendment was drafted. It was entirely with a desire to help, and I hope the noble Viscount will bring that to his right honourable friend's attention.
VISCOUNT HAILSHAM: I am grateful for what has been said. I am very conscious of these arguments—indeed, I can assure noble Lords who have spoken that from the start my right honourable friend and I recognised the purpose behind these Amendments, and recognised what could be said, and what has been

733
said so forcibly, about the necessity for an adequate enforcement procedure. I have no authority to go further than I have gone to-day, but from what I have said I am hopeful that noble Lords will realise that what they have said will be conveyed to my right honourable friend.
LORD BURDEN: In the circumstances, and in view of the assurance that it will be looked at again, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
6.11 p.m.
THE EARL OF LISTOWEL THE EARL OF LISTOWEL moved to leave out Clause 2 and insert the following new clause:
Late days
"2. The late day referred to in the last foregoing section shall be Saturday unless the local authority by order fix some other day as the late day and any such order may fix the same day for all shops or may fix—

(a) different days for different classes of shops;

(b) different days for different parts of their area; or

(c) different days for different periods of the year;

Provided that where the local authority have under this Act made an order specifying a pair of days under section 3 of this Act for any class of shop, or for any part of their area, or for any period of the year, they shall, as respects that class, part or period, fix some other day as the late day."
The noble Earl said: The Amendments which stand in my name, like those of my noble relative. Lord Derwent, and the two noble Lords who spoke on the last Amendment, are put down with a view to facilitating the enforcement of this Bill, a duty that has been laid upon the local authorities. I have tabled a number of Amendments at the behest of the London County Council, who will be the largest single administrating authority under the Bill when it becomes law. The first of these Amendments in my name relates to Clause 2. It is essentially a conservative Amendment, and I hope for that reason it may appeal to the noble Viscount opposite and some of his friends on the Benches opposite. It is a plea for the status quo. What I am suggesting is that your Lordships should omit this clause, which proposes a new arrangement for the late day—the day on which shops can stay open from 7 to 8 o'clock
734
al night—and go back to the arrangement that exists at the moment under the Shops Act, 1950.
I should like to give your Lordships three arguments in favour of retaining the existing arrangement for the late day. The first of them is this. Clause 2, as it stands, is extremely complicated. What I think it does is to oblige local authorities to offer shopkeepers the choice of two days in the week, on one of which they can slay open late. One will be called the principal day, and if a shopkeeper chooses the principal day he will have no further bother. But if he chooses the other day, then he will have quite a lot of bother and a great deal to think about. What I am suggesting is that we should retain the simple arrangement of having one day fixed by the local authority as the late day for that area.
One of the most important recommendations of the Gowers Committee was that the law should be made more intelligible to the ordinary person—that it should he understood by shopkeepers and the shopkeepers public. What I should like to ask noble Lords to do is to regard themselves for a moment as a gathering of intelligent and conscientious shopkeepers, who wish to understand what their rights and obligations are under the law and to observe them; who want to keep open when they are allowed to keep open, and who do not wish inadvertently to stay open on the wrong night. I will read to your Lordships subsection (5) of this clause, which the noble Viscount opposite referred to as being complicated phraseology. I differ with him slightly in this matter, and would suggest that that was an understatement. Your Lordships will judge for yourselves when I have read the terms of this subsection. It says:
"An election made under the last foregoing subsection "—
that is to say, the choice of the other day, the day that is not the principal day—
"shall be revocable; but where such an election has been made in relation to a shop while a pair of days is applicable thereto by virtue of an order under this section, neither the right of revocation conferred by this subsection nor the right of election conferred by the last foregoing subsection shall, while that pair of days continues to be applicable to the shop, be so exercised in relation to the shop as to take effect with respect to a week earlier than the thirteenth after that with respect to which the

735
exercise, or the last exercise, of the other of those rights took effect in relation to the shop."
That is not all. If the shopkeeper understands this, he still does not know where he stands. He may well inadvertently break the law, and he has another particular right conferred by the proviso which qualifies the last paragraph. The proviso reads:
"Provided that where either of those rights is (otherwise than by virtue of this proviso) so exercised as to take effect with respect to a week, the other of those rights may be exercised so as to take effect with respect to the week next following."
After he has read that, the shopkeeper knows exactly where he stands! I did not understand it when I read it, and I still do not understand it—it is quite unintelligible to me—but I have had the advantage of having it explained to me by a legal expert whose business it is to understand the provisions of this Bill. I am told—the noble Viscount will correct me if I am not right—that what it amounts to simply is this: that if a shopkeeper wishes to change his mind about his late day he cannot do so for more than one week unless he waits for three months. I may be quite wrong, and that may not be the right interpretation, but that is what I understood it to be. Surely, it is a little unfair to expect shopkeepers to get legal advice in order to understand what their rights are. This all arises from the fact that the Government wish them to have a choice between the days on which they may stay open.
My second argument is this. I am told by one of the most important authorities that this clause will be extremely difficult to enforce, and for this reason. There will be a strong temptation to break the law, under the spur of competition. One shopkeeper, seeing his neighbour open on a late night when he is not allowed to be open, may say, "Well, I will take the risk and I will stay open, although in fact I have had the other late night earlier in the week, or shall have it later." There will be a strong temptation to break the law and, therefore, this provision makes the law more difficult for local authorities to enforce.
My third argument is this. The noble and learned Viscount invoked the authority of the Gowers Committee when
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he was answering the argument of my noble friend and Leader about Clause 1. We all respect the recommendations of the Gowers Committee. What I want to ask the noble Viscount, however, is this: why do the Government want to make an important change in the law which was not recommended by the Gowers Committee? The Committee heard all the evidence, and, surely, if there had been any considerable demand from shopkeepers for the choice of two days in the week instead of their late day, they would have embodied that demand in one of their recommendations. But the Gowers Committee said nothing on this subject. I hope that the noble and learned Viscount will say why, in this important respect, the Government wish to depart from the recommendations of the Gowers Committee. I beg to move.
Amendment moved—
Leave out Clause 2 and insert the said new clause.—(The Earl of Listowel.)
VISCOUNT HAILSHAM: I of course realise the attractions of an argument which is based on conservatism, and the noble Earl is perfectly correct in saying that this new clause is really "cribbed" out of the Act of 1950, which is the law as it is now. Indeed. I would say that it is not only conservatism; the word "reactionary" leaps to my lips in this connection. If he wants to put the clock back to 1950, I readily concede that there is something to be said for it, and I think he has said it very powerfully; but I would respectfully suggest to your Lordships that our attitude towards this particular Amendment ought to be a little harder than the one which I gave last time. My right honourable friend is disposed to reject it, although again this is not a matter which I would ever claim was finally closed or decided.
I will tell the noble Earl why it is that the Government resist it, and why, on the whole, they are disposed to ask your Lordships to reject it. It is this, In the first place, as regards the noble Earl's Amendment, the existing law makes Saturday the late day unless the local authority fixes another. This Amendment would abolish one of the important modernising and liberalising features of the Bill. All our information goes to show that the most convenient day is no longer Saturday, and yet Saturday is written into the law. For example,

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in the West End I gather it has been found to be Thursday, and probably it is different in different areas. That is the first criticism I make of it. It would be Saturday under the Amendment unless the local authority changed it by order.
Secondly, it would give no choice of late day to the shopkeeper. The Bill we have put before your Lordships gives him an option to choose between a pair of late days. That is not an accident. All this is really my answer to the last of the noble Earl's questions. It represents the rationale of the Bill and, to that extent, it differs from the Dowers Committee recommendations. The Government think that the feeling behind this Amendment is that, if you are going to bring down the evening closing hour to seven, which is the very point which has caused so much controversy this afternoon—and noble Lords opposite must admit that I was pressed hard from all sides of the House to give way, but I stood my ground on that, with their help—if you are going to impose that added restriction on hours, this late day provision ought to be a little more flexible than before because there is likely to be a greater wish to make use of it. This Amendment, which has the attraction of reverting to the status quo—and that is an attraction which can never be wholly lost on Conservatives—is not one which the Government feel at all disposed to accept at the present time.
I would concede that under the Amendment the law would be slightly more easily enforced. I think that that is quite a legitimate point to make. The question is whether, for the sake of a little greater ease in enforcement, we are going to abandon what we regard as an important liberalising measure. My judgment would be that it is not worth while doing that. I am not terribly afraid of the example of the possible abuse of the clause given by the noble Earl. I am afraid that my experience, both of the Bar and in the country, has led me to believe that neighbours are not such good neighbours as the noble Earl's neighbours obviously are. If I kept my shop open twice illegally during the week when my neighbour was observing the law, I think I know somebody who would inform the police, the enforcement inspector, or whoever it was; therefore I do not take the view that it
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would be quite so unenforceable as the noble Earl thinks.
Lastly, there is the question of phraseology. I agree that it looks very complicated—indeed, I said so, as he rightly pointed out, and I respectfully congratulate the noble Earl upon the use to which he put my unguarded admission. But I think he can overstate the complexity of it. By imposing a greater restriction on the shopkeeper, you can, of course, make the law mach more easy to be understood; but it is doubtful, to my mind, whether the shopkeeper will not prefer his freedom with a little difficulty in understanding what the law means, to restriction with complete certainty that he cannot do what he wants to do. That is, at any rate, my general approach to the problem. Moreover, I would say, again with respect to the noble Earl and recognising the force of much that he said, that he rather underestimates the ability of shopkeepers to understand complicated legislation. With due respect to his Party, shopkeepers are trained by such a long series of unintelligible regulations that they know pretty well what is what.
THE EARL OF LISTOWEL: I accept, of course, what the noble Viscount says about the important reasons for offering this choice of days for the shopkeeper in place of the single day, as it used to be, but my complaint is about subsection (5). I am sure that he will agree with me when I say that I found it impossible to understand before he admitted that he himself regarded it as being a piece of complex phraseology. I should like to ask the noble Viscount this. If he feels that the clause is desirable as it now stands, could he not—for, after all, he is himself a very distinguished lawyer and he has as clear a mind as anyone in his profession—go through it rather carefully, with or without his Parliamentary draftsman, and see whether this subsection could not be made a little simpler and clearer?
VISCOUNT HAILSHAM: I will say at once that this is a challenge which a professional man finds it difficult to resist. I do not offer any prospect of success. All that has been said will be considered before the Bill reaches another stage. I promise the noble Earl that if I see a way of making the draftsmanship plainer without affecting the sense of the Bill, I

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certainly will not hesitate to take it. It sometimes happens that quite a simple form of words will do, but I am advised that this legislation, oddly enough, although one starts with the idea that it can be made very simple, is one of the most delicately balanced pieces of Parliamentary draftsmanship that the Parliamentary draftsman has handled for many a long year.
THE EARL OF LISTOWEL: I am obliged to the noble Viscount for his undertaking to look at the drafting, because some of us have found this clause a little difficult. With those words, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Clause 3 agreed to.
Clause 4:
Power of local authority in sea-fishing centres and holiday resorts to permit later evening closing and dispense with observance of early closing days
4.—(1) A local authority whose area—

(a) includes a harbour used for the purposes of the sea-fishing industry, being a harbour whose use for those purposes is substantially greater during some seasons of the year than during others; or

(b) consists of, or includes, a place frequented (whether at all times or during certain seasons of the year) by tourists or holiday-makers;

may by order give either or both of the following directions, that is to say:—
(i) a direction that, as respects the weekdays in such weeks as may be specified in the order, there shall, in the case of shops situate within the area of the authority or within such part o that area as may be specified in the order or shops so situate where there is carried on retail trade or business of a class so specified, be substituted for subsection (1) of section one of this Act (other than the proviso thereto), a requirement that they shall be closed not later than such time as may be fixed by the order (being neither earlier than seven o'clock in the evening nor later than eight o'clock in the evening);
6.28 p.m.
LORD MILVERTON LORD MILVERTON moved, in subparagraph (i) of subsection (1), to leave out
"(being neither earlier than seven o'clock in the evening nor later than eight o'clock in the evening)."
The noble Lord said: This clause gives power to local authorities at holiday resorts to permit for twenty-two weeks in
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the year later evening closing than the Bill otherwise allows, but 8 p.m. is the latest time which may be specified. I have consulted various bodies who have every reason to be familiar with the circumstances to which this clause applies, and it is suggested that, the principle having been accepted of the need for special arrangements in holiday resorts, local authorities should be left to judge the extent of those needs and to make orders accordingly. There are other provisions in the Bill to ensure that shop assistants are not employed for excessive hours.
We all, I presume, know that there is a considerable traffic of "day trippers" to resorts. Many of them do not leave until ten o'clock at night, and a large amount of trade is done right up to the moment of their departure. It seems unreasonable to deny this trade to the shops, many of whom are, to a large extent, dependent upon it. It seems also unreasonable to deny their wares to the visitors. Other things apart, it would be almost impossible, I am informed, to enforce the 8 p.m. closing time. It is equally worth noting that there does not appear to be any reference in the Gowers Report upholding this proposal to increase control over the discretion of the local authorities. I beg to move.
Amendment moved—
Page 6, line 22, leave out the said words.—(Lord Milverton.)
LORD DERWENT: In supporting my noble friend, may I say that this is a most important Amendment. As the law stands at present, this matter is left to the local authority. It may well be—I have not studied all the resorts—that one resort, possibly Eastbourne, likes to close at 7 o'clock in the summer and finds that adequate. Perhaps Scarborough likes to close at 9 o'clock and finds that adequate; it is rather a place where families go. But we know perfectly well that Blackpool for a short period closes at midnight. Who are the men in Whitehall who think that they know what is the proper time for a seaside resort to close? I speak particularly on behalf of the Northern resorts, because they have a shorter season.
There are three classes of people who have to make their living in a space of three or four months, virtually for the

741
whole twelve months. They are the shopkeepers; those who provide the shops with goods such as local market gardeners and so on; and, what is often forgotten, the shop assistants. Many of them are technically unemployed in the winter—for seven or eight months of the year. In many cases that is how they like it. Except for occasional jobs, they make enough in four months to be all right for the rest of the year. I have asked about that in my own local town of Scarborough and they all tell me the same thing. The girls and the married women, who form the bulk of shop assistants in a seaside resort, make their money in those four months. Those who are in the minority, the men, are still employed in the winter.
Take Blackpool, which, in a way, is the extreme case. People go to Blackpool for the lights and everything that lights mean—and it means shops being open and people being able to pop into a shop to buy something. There are hundreds of thousands of people who go to Blackpool every year, but who do not spend a night there. In my own local village, all the male population, from, I think, sixteen to ninety-six (being mostly farm workers they do not take proper holidays, particularly 1n the summer) go off once a year early one morning to Blackpool, and they "beat it up," or whatever is the equivalent phrase, until midnight, while the shops are open till midnight The illuminations are on and everything is going on. At midnight these things shut down, and they get into their coach and they come back to the North Riding, arriving in the early morning of the next day, which is usually a holiday for other reasons.
There are hundreds of thousands of people who make trips like that, not only to Blackpool but to every kind of resort of that kind. It is their one holiday of the year. They come out of the mills they come out of the factories, and they go on this holiday. Are you going to say that, if they are late back from the beach in June or July, or whatever month it may be, and therefore do not finish their supper until nine o'clock, they shall find, to their horror, that the whole place is dark? That is what you are asking, and it is really absurd. The present system has worked all right up to now without any complaint. So far as one can find out—and I have tried to find
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out from the shop assistants—there have been no complaints. Nor have there been complaints from the shopkeepers. The proper people in places like this to know what time they need to shut the shops are the local authorities. That is the law now. Why suddenly in these special cases (as the Government admit they are), are we asking for the law to be changed?
LORD LUCAS OF CHILWORTH: May I add my plea to those made by other noble Lords. I should have thought that for this short period this was a matter which could be left quite safely with the local authority. As the noble Lord, Lord Derwent, has said, these folk have a very short time in which to make a living. They have to pay their rates all through the year, as well as their rents and everything else. Do the Government not think they could make an exception in this particular case, so that the local authorities can extend the hour to what they think would meet the circumstances of the case so well outlined by the noble Lord. Lord Derwent?
VISCOUNT HAILSHAM: This is a matter where my right honourable friend feels that there is a strong case to be made out for the Amendment proposed. Without actually accepting it, I think I can go a long way towards indicating that the Government will take a sympathetic attitude towards it. As my noble friend who proposed the Amendment pointed out, these words are a departure in the direction of greater restriction as distinct from Section 41 of the Shops Act, 1950. They were put in because we had increased the power of the local authorities to extend the hours for what I think is called the statutory season, from four months to five months, and there were some representations by the trade unions concerned that we ought to make some compensating allowance on the other hand by providing for the 8 p.m. closing.
As my noble friend and the noble Lord opposite have suggested, we have received a certain number of representations from some of the resorts concerned that much use was made of the greater freedom allowed under the Act of 1950, and my right honourable friend is, in fact, quite favourably disposed to the Amendment. He is anxious to take the opinion of another place on the matter as well, for reasons which I think will be acceptable both to my noble friend and to the noble

743
Lord opposite. It is essentially a matter in which local opinion and trade union opinion ought to be tested. I am therefore going to ask the noble Lord to withdraw the Amendment, and at the same time I am telling him that, as at present advised, my right honourable friend is very much disposed, at some stage before the Bill becomes Law, to accept it.
LORD MILVERTON: I thank the noble Viscount for the way in which he has received this Amendment and for his assurances, which naturally we find most gratifying. With the assurance which he has giver, I ask leave to withdraw the Amendment.
LORD DERWENT: Before my noble friend withdraws the Amendment may I ask this question. Supposing in another place this Amendment is not passed, we as a House have not been able to give our opinion on it. Is that right?
VISCOUNT HAILSHAM: That would be so. Of course, there are disadvantages in both courses, as I frankly concede. As I understand it—I see the noble Viscount, Lord Alexander of Hillsborough opposite—the Amendment has not met with any opposition here; but I think this is very much a question upon which it would be desirable for feeling to be tested in the way I propose in both Houses, especially as I have said that the only reason for the greater restriction was some representation from the trade unions, which might be represented in another place. However, I will convey to my right honourable friend that no voice was raised in opposition to what my noble friend has said.
LORD LUCAS OF CHILWORTH: So far as I am concerned, for all the reasons that the noble Viscount has stated, I think, if I may say so, that this is a most wise course for him to take, and he satisfies me.
Amendment, by leave, withdrawn.
LORD JESSEL LORD JESSEL moved, after subsection (2) to insert:
"(3) Where the occupier of any shop in any place in which a direction under paragraph (ii) of subsection (1) of this section is in force satisfies the local authority that it is the practice to allow all his shop assistants a holiday on full pay of not less than two weeks in every year and keeps affixed in his shop a notice to that effect, the requirement in this Act that in each week a shop assistant shall be allowed a half holiday on a business day shall not apply
744
to the shop during such weeks as may be specified in the direction as aforesaid."
The noble Lord said: This Amendment deals with the catering trade which the noble and learned Viscount charged with the Bill said a little earlier, if I heard him rightly, was deserving of special treatment. Under existing law, under Section 40 of the Act of 1950, permission is given to local authorities in holiday resorts to suspend for up to four months in the year the obligation to close shops on a weekly half-day; and, as a corollary to this, the weekly half-day need not be given to shop assistants while the suspension order is in force, provided that they are given two weeks' paid holiday in the year. This Bill preserves the first concession about the half-day on which the shop is allowed to be open, but not the second: it insists on a half-day for the shop assistants. The catering trade feel that this provision will make things difficult for them, with the great labour shortage they experience, and they would like to see the concession reinstated, at least so far as it is possible, for workers in the catering industry. Under the Catering Wages Regulations, staff are entitled to two weeks' paid holiday a year, and their interests are safeguarded by the regulations so far as payment of overtime is concerned. I am sure that this Amendment is in the interests of both overseas visitors and home holiday makers, to enable them to get decent service at the overcrowded restaurants. I beg to move.
Amendment moved—
Page 6, line 35, at end insert the said subsection.—(Lord Jessel.)
LORD DERWENT: I beg to support my noble friend Lord Jessel. Without going into the same detail, I may say that one of the great difficulties about this Bill is that it is, in effect, dealing with more than one industry; and what is suitable for a shop on a shop assistant is not necessarily suitable, in certain directions, for a catering establishment. The catering establishment has difficulties which do not apply to the shop. In addition, the catering establishment is controlled by the Catering Wages Act. I would therefore ask Her Majesty's Government, where they can give slight concessions in regard to catering establishments to which the Shops Regulations do not really apply, to do so.
VISCOUNT HAILSHAM: I understand the reasons which have led my noble friend to move this Amendment, but I ant afraid that this is one which I. am going to ask the Committee not to accept. Its object is to restore the position under the Act of 1950 whereby, if a local authority in a holiday resort have made an order abolishing the early closing day requirement during the season, the employer need not give his assistants weekly half-holidays, provided lie has satisfied the local authority that it is his practice to give a paid annual holiday of two weeks. At first sight that is a very reasonable proposition, and it was in the Act of 1950; but the Gowers Committee thought that, as time had gone on, and conditions improved, the compensation of two weeks' annual holiday, if it ever had any value—and here I am quoting:
"has now become quite illusory when this is so widely given as a normal term of employment."
I am hound to say that I agree with that judgment of the Committee, and I believe that legislation may be brought into contempt if it pretends to offer to assistants compensation which is, in truth and in fact, no real compensation at all because everybody gets it anyhow.
It may be said, of course, that employers might not be able to take advantage of being able to stay open on early closing day if they had to give their assistants a weekly half holiday. That again is an argument which is plausible but it is not one which Her Majesty's Government accept. There may be many other institutions, such as restaurants and garages, which are exempt from the early closing day requirement, but which, none the less, have to see that their assistants are given a weekly half-holiday; and I am bound to say that we have taken the view of the trade union on this matter. It is true that the trade union concerned is not very widely representative of the people employed, but Her Majesty's Government take the view that it does represent the views of the assistants so far as those views can be ascertained, and for the reasons I have given I must resist the Amendment.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I am much obliged to the noble and learned Viscount for that answer. If the attitude which the noble
746
and learned Viscount has taken is maintained throughout the passage of the Bill, I think he will be absolutely right, and therefore I should not wish to trouble the Committee with any lengthy speech. This kind of thing stems from the Act of 1912. I think it was because of that Act that the Gowers Committee, in 1946, felt, as the noble and learned Viscount has said, that we ought to keep strictly to the progress that has been going on and which has been productive of demands of the kind which trade unions make, even in ordinary statutory wages councils and the like. I am quite sure the Committee had that in mind in making this recommendation. I will not therefore trouble your Lordships with a long speech on the matter—though I am quite capable of doing so.
LORD JESSEL: I thank the noble and learned Viscount for his answer. In view of what he has said I ask permission to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clauses 5 and 6 agreed to.
Clause 7 [Modification. at Christmastide, of requirements with respect to early closing days]:
LORD COLERAINE LORD COLERAINE moved to add to the clause:
"(3) Where a shop is closed all day on Good Friday it shall not be necessary for a day to be observed as respects the shop as an early closing day in the week in which Good Friday falls."
The noble Lord said: I believe the argument for this Amendment to be sound—it is certainly simple. Clause 7 of the Bill represents an innovation in shops legislation inasmuch as it recognises that the Christmas holiday period is a special period bah from the business point of view and from the point of view of the customer. So it lays down that where the shop is closed on two of the holidays, two early closing days may be dispensed with. Where it is closed on one of the holidays, one early closing day may be dispensed with. In both cases care is taken of the employee and the shopkeeper by the provisions of Clause 37.
My Amendment proposes simply that the same procedure should be adopted in respect not of the Easter holiday as a whole bat of Good Friday. When I saw

747
the clause for the first time, I could not understand why Easter had been left out of it. Perhaps it was not realised that, generally speaking, from the point of view of retail business, no less for the trader than for the customer, Easter and the days immediately before it are next only to Christmas for trade. It would therefore seem reasonable that Good Friday, at any rate, should be put in the same position as a holiday as Christmas Day or Boxing Day. If my noble friend cares to accept this Amendment, as I hope he may do, I propose on Clause 37 to move a further Amendment to safeguard the position of the employee, just as it is at present safeguarded under the clause. I beg to move.
Amendment moved—
Page 7, line 30, at end insert the said subsection.—(Lord Coleraine.)
VISCOUNT HAILSHAM: I am afraid that this may be the last Amendment which we shall be able to reach tonight, so I am happy to say that this is one Amendment that I can accept in its entirety, without any further drafting whatever, though I hope the Committee will concede that we have given way on a number of others in principle.
On Question, Amendment agreed to.
House resumed.
House adjourned at eight minutes before seven o'clock.