Sitting of 27 January 1958

Preamble
The House met at half-past Two o' clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  FORTH ROAD BRIDGE ORDER CONFIRMATION
  Bill to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1936, relating to the Forth Road Bridge, presented by Mr. John Maclay; and ordered (under Section 7 of the Act) to be considered Tomorrow, and to be printed. [Bill 58.]
ORAL ANSWERS TO QUESTIONS

  KOREA (ARMISTICE AGREEMENT)
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs whether he will make a statement on the present situation in Korea in relation to the 1953 Armistice Agreement.
  The Joint Under-Secretary of State for Foreign Affairs (Mr. Ian Harvey): The objective of the United Nations in Korea—to bring about by peaceful means the
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  establishment of a unified, independent and democratic Korea—remains unchanged. Following the Armistice of 1953, it was hoped to reach a settlement by the negotiation of a political agreement at the Geneva Conference of 1954. This hope was frustrated by the Communist refusal to accept the authority of the United Nations or their proposals for a settlement, including genuinely free elections. Unfortunately, there has been no indication since that date of any change in the Communist attitude.
  Mr. Henderson: Can the Minister say whether the Armistice Commission is still functioning?
  Mr. Harvey: Yes, Sir.
  Mr. Teeling: Does my hon. Friend realise that there is considerable worry at the moment in Southern Korea at the presumed large increase in forces north of the border, and can he make it quite clear that the British Government would never tolerate any further attack on Southern Korea?
  Mr. Harvey: That is essentially a United Nations matter, which does not strictly arise out of this Question.

  MIDDLE EAST
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs whether, in view of the present state of tension on the Arab-Israel borders, he will state the present policy of Her Majesty's Government with regard to the maintenance of the existing Arab-Israel borders.
  Mr. Liptonasked the Secretary of State for Foreign Affairs how far, in deciding to support the independence and sovereignty of States in the Middle East, as agreed by the North Atlantic Treaty Organisation Council meeting in Paris, Her Majesty's Government also support their territorial integrity.
  The Minister of State for Foreign Affairs (Commander Allan Noble): I am happy to say that as a result of Mr. Hammarskjold' s recent visit to the area there has been a noticeable reduction of tension. The policy of Her Majesty's Government in regard to existing Arab-Israel borders is still governed by the principles of the Tripartite Declaration of 1950, as was stated by my right hon. and learned Friend on 1st April last.
  Her Majesty's Government support the territorial integrity of States in the Middle East and their existing frontiers where these may be considered as final and internationally accepted.
  Mr. HendersonCan the Minister say whether there is any truth in the recent reports published in the Press that Her Majesty's Government now favour an imposed settlement based on the so-called Eden-Guildhall plan?
  Commander Noble: There is no change in Her Majesty's Government's policy.
  Mr. Lipton: Does the Minister's Answer mean that Her Majesty's Government no longer intend to bring any pressure to bear upon the Government of Israel to agree to any major modification of Israeli's existing boundaries?
  Commander Noble: I do not think it serves the interests of this country, of the Arabs or of Israel to try continually to twist, as I think the hon. Member was doing, the Guildhall speech, because it pointed out that there were two sides to this question.
  Mr. Grimond: May I ask the Minister of State if, under the Tripartite Declaration, it is still part of Her Majesty's Government's policy to keep a parity of arms between the Arabs and the Israelis, and, if so, would it not be better to make a move towards disarmament in the Middle East?
  Commander Noble: In answer to the first part of the hon. Gentleman's supple-
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  mentary question, it is still the policy of Her Majesty's Government, and we would welcome any proposals for disarmament in the Middle East.
  Mr. Bevan: Is that not an astonishing answer to make in view of the facts? is it not true that offers of disarmament in the Middle East have been made for some time by the Soviet Union and that over and over again it has been suggested to Her Majesty's Government, as far back as the visit of Mr. Bulganin and Mr. Khrushchev, that no arms should be supplied to the Middle East? Is it not the fact that we cannot agree because of our obligations under the Bagdad Pact?
  Commander Noble: The answer to the last part of the right hon. Gentleman's supplementary is, of course, "No". With regard to the first part of the right hon. Gentleman's supplementary, I would suggest that he await my right hon. Friend the Prime Minister's reply to Mr. Bulganin' s last letter, in which, I think, these proposals were mentioned, and also the discussions which might take place in the future.
  Mr. Bevan: Is the Minister of State suggesting to the House that Her Majesty's Government have no continuing obligation to supply arms to the nations of the Bagdad Pact?
  Commander Noble: I did not say that at all.
  Mr. Bevan: That is exactly what the right hon. Gentleman did say.
  Commander Noble: Perhaps I misunderstood the right hon. Gentleman's supplementary, but I do not think I did. I thought the right hon. Gentleman said that the reason we did not come to any arrangement for discontinuing the supply of arms to the Middle East was because of our commitments under the Bagdad Pact.

  CENTRAL EUROPE (NUCLEAR-FREE ZONE)
  Mr. Swinglerasked the Secretary of State for Foreign Affairs what reply he has made to the proposal of the Polish Government to prevent the spread of the nuclear arms race to Central Europe.
  Commander Noble: The suggestion originally made by the Polish Government in the United Nations General Assembly for the creation of a nuclear-free zone in Central Europe was included in the various proposals made by Mr. Bulganin in his letter of 11th December to the Prime Minister. As the Prime Minister stated in his reply to this letter, the proposal is being studied, and the Polish Government have been so informed.
  Mr. Swingler: Is not this one of the most hopeful proposals which have been made in these discussions so far, in that it might well benefit both sides? As this approach was made direct by the Polish Government to a number of Western Governments, will not Her Majesty's Government immediately indicate on this proposal their willingness to enter into discussions?
  Commander Noble: As I have said, this was put forward in the United Nations, and, as the Prime Minister said, the matter is being studied.

  SPAIN
  Mr. Swinglerasked the Secretary of State for Foreign Affairs what political and military arrangements exist between Her Majesty's Government and the Spanish Government in connection with the defence of Western Europe.
  Mr. Ian Harvey: None, Sir.
  Mr. Swingler: In that case, would the Joint Under-Secretary of State explain why confidential information about N.A.T.O. discussions is being revealed to General Franco? Is it with Her Majesty's Government's consent that General Franco is being consulted and is being given confidential information?
  Mr. Harvey: I assume that the hon. Member is referring to the statements made by Mr. Dulles, which are the subject of other Questions this afternoon. There is no evidence that any confidential information was conveyed.
  Mr. Allaunasked the Secretary of State for Foreign Affairs why he gave prior consent to the United States Government to divulge confidential information concerning British defence matters to the Spanish Government.
  Mr. Ian Harvey: I assume that the hon. Gentleman is referring to the conversation which Mr. Dulles had with General Franco after the North Atlantic Treaty Organisation Ministerial meeting in December.
  I have no reason to suppose that confidential information of the sort to which the hon. Member refers was divulged in that conversation. The question of my right hon. and learned Friend's consent being either asked or given did not arise.
  Mr. Allaun: If the information was not confidential, why did Mr. Dulles in the United Nations Embassy Bulletin of 24th December imply that it was? Further, why should it be necessary to tell General Franco privately what he could have earlier read in the Press? Does not this latest diplomatic blunder by Mr. Dulles call for some protest by our Government to Washington?
  Mr. Harvey: I do not accept the hon. Gentleman's inference that the conversation was confidential or that information which should not be passed was passed. I would draw his attention to the fact that the United States of America and Spain have certain military arrangements, which Mr. Dulles is perfectly entitled to discuss.
  Mr. Bevan: Is it not a fact that Mr. Dulles visited General Franco in the latter's capacity as a pillar of the free world?
  Mr. Harvey: That may be so, but it does not seem to me in any way to affect the answer I have given.

  U.S.S.R. (EXCHANGES OF STUDENTS AND TEACHERS)
  Mr. Swinglerasked the Secretary of State for Foreign Affairs what exchange arrangements for students and teachers at present exist between the United Kingdom and the Union of Soviet Socialist Republics; on whose initiative these arrangements were made; and what steps are being taken to extend them.
  Mr. Ian Harvey: There is a growing number of interchanges of visits by students and teachers between this country and the Union of Soviet Socialist Republics, many of which are organised on the initiative, and with the support, of the Soviet Relations Committee of the British Council.

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  This Committee has, in particular, invited, in partnership with the British youth organisations concerned, three hundred Russian students and young people to visit this country for short periods. The Committee has also offered to the Soviet authorities an annual exchange of twenty students of the Russian and English languages, as well as two British Council scholarships for a full academic year and short courses for teachers, both on a reciprocal basis. The Soviet Government are now considering these proposals. Her Majesty's Government look forward to additional programmes if those at present under discussion are successfully concluded.
  Mr. Swingler: While thanking the Joint Under-Secretary of State very much for that very encouraging answer, may I ask whether he would encourage his right hon. Friend the Minister of Education to consider making an official approach to his counterpart in the Soviet Union, from whom on this matter he may get a favourable response, in order to see whether by discussions between Ministries on both sides they might be able to improve on the very encouraging developments?
  Mr. Harvey: These questions of cultural exchanges are at present very much under consideration, and I think that the hon. Member should await further developments.
  Mr. Mayhew: Is the Minister aware of the very helpful co-operation in these exchanges given by universities and training colleges, and will he make it clear that if an expansion of these facilities is required these institutions will be helping towards understanding between the countries in a manner acceptable both to the British and to the Soviet Government.
  Mr. Harvey: Yes, Sir. I agree with both points.

  SUMMIT CONFERENCE
  Mr. Brockwayasked the Secretary of State for Foreign Affairs what reply Her Majesty's Government have made to the letter from Mr. Bulganin making certain proposals regarding disarmament and peace.
  Mr. Zilliacusasked the Secretary of State for Foreign Affairs (1) whether he will propose fixing a date by which the preparations for the Summit Conference should be completed and assist in preparing for it by tabling proposals for disarmament and political settlements designed to bridge the gap between the respective positions of the United States of America and the Union of Soviet Socialist Republics and safeguard British interests;
  (2) whether, as part of the preparations for the Summit Conference, he will put forward, as a basis of negotiations, proposals for uniting Germany outside the rival alliances but within the United Nations and an all-European treaty, accompanied by an agreement to reduce and control armaments and progressively to withdraw foreign forces from the territories of Germany and her neighbours;
  (3) whether he will include in the preparations for the Summit Conference proposals to serve as a basis of negotiation, whereby the Western powers would undertake to co-operate with the Union of Soviet Socialist Republics in the Middle East, through the United Nations and on terms consistent with the Charter, in keeping the peace, controlling the traffic in arms and giving economic and technical aid to Middle Eastern nations.
  Mr. Frank Allaunasked the Secretary of State for Foreign Affairs (1) if he will prepare for a Summit Conference by making proposals for keeping Germany and Eastern Europe free of nuclear weapons and for withdrawal of foreign forces from these countries;
  (2) whether he will propose that the Summit Conference should discuss withdrawal of opposition to the People's Republic of China taking its seat as a permanent member of the Security Council.
  Commander Noble: We would, of course, like to see suitable preparations put in hand without delay, but think it would be premature to suggest now a date for their completion. With regard to the suggestion that particular proposals should be made before a conference takes place, I would ask hon. Members to await the Prime Minister's reply to Mr. Bulganin' s letter of 8th January.
  Mr. Brockway: Is the right hon. Gentleman aware that a large number of people in this country are becoming impatient with the negative attitude of the spokesmen of the Foreign Office and of America whenever Mr. Bulganin' s proposals are made, and that we urgently desire that these summit talks shall be preceded by preparations making for a definite date?
  Commander Noble: I quite agree with the hon. Member that many people desire these talks, and Her Majesty's Government are certainly agreeable to a Summit meeting, but we think that suitable preparations must be put in hand and that there must be some agreement on what is to be discussed, where it is to be discussed, when it is to be discussed and by whom it is to be discussed. That, I think, is agreed by the Leader of the Opposition.
  Mr. Bevan: Is it not a fact that we are having a series of and repetitions from the Government spokesmen week after week? Is it not a fact that there is no disagreement between both sides of the House on the necessity to make preparations? Was there ever an international conference without preparations beforehand? It is beside the point here. Is it not a fact that the last letter but one from Marshal Bulganin itself contained sufficient proposals for an agenda for a conference, sufficiently concrete and sufficiently numerous? Is it not a fact that if we go on for some time without fixing a date, all kinds of recriminations will take place as to who is responsible for the continued delay?
  Commander Noble: I am very glad to hear the right hon. Gentleman say that both sides of the House are relatively close together on this point, but I disagree with him when he says that Mr. Bulganin in his last letter but one put forward an appropriate agenda.
  Mr. Bevan: A proposed agenda.
  Commander Noble: It is only right that we should put forward our own proposals. The right hon. Gentleman knows perfectly well that we are preparing the reply to Mr. Bulganin' s most recent letter, and I would ask the House to await that.
  Mr. Zilliacus: Does the right hon. Gentleman agree that preparations for the conference include putting forward proposals as the basis of negotiation? Does
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  he further agree that if the Government cling to the policy of trying to make the Russians accept a United Germany and N.A.T.O., or cling to the policy of building anti-Soviet alliances in the Middle East, they will be responsible for the failure of the summit talks before they have begun? Will they accept the need for making a fresh approach and putting forward proposals which give some chance of agreement by negotiation?
  Commander Noble: I think the House agrees it is very important that there should be an agreed agenda.
  Mr. Bevan: The right hon. Gentleman answered a very large number of Questions. Will he give us any idea when the reply will be ready?
  Commander Noble: I cannot say exactly when it will be ready, but it will be produced as soon as possible.
  Mr. Bevan: Approximately when?
  Commander Noble: In the next week or So.
  Mr. Bevan: In 1958?
  Commander Noble: In 1958, I am glad to be able to reassure the right hon. Gentleman.
  Mr. Frank Allaun: Is it not contradictory to hold a Summit Conference and at the same time to extend the nuclear arms race into the most explosive part of Europe? Would not a nuclear-free area be the most likely point of agreement, seeing that it is for the benefit of both sides?
  Commander Noble: The hon. Member has perhaps forgotten that in the four-Power proposals for disarmament, which were approved by 57 countries of the United Nations, there were very broad proposals for inspection, both in the air and on the ground.
  Mr. Warbeyasked the Secretary of State for Foreign Affairs whether he will make arrangements to return from Ankara via Moscow in order to initiate preparations for an early Summit Conference on Europe and the Middle East.
  Commander Noble: No, Sir.
  Mr. Warbey: Are we always to have that answer from the Government? Can they not think of a new one? Since the

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  Prime Minister has already stated that he favours in principle a Summit Conference, provided there is adequate preparation, could not the Foreign Secretary start preparations now by flying from Ankara to Moscow—or is there any reason to doubt that he would be welcome in Moscow?
  Commander Noble: The hon. Gentleman complains that he always gets the answer "No" to his questions. Of course, it really depends on the sort of questions he asks.

  UNITED NATIONS

    Special Fund
    Mr. Brockwayasked the Secretary of State for Foreign Affairs what decision Her Majesty's Government have reached on the proposal of the United Nations Economic Committee that the plan to set up a Special United Nations Fund for Economic Development should be deferred indefinitely and that in its place the scope of the technical assistance programme should be extended.
    Commander Noble: The United Kingdom representative supported the Resolution adopted unanimously by the United Nations General Assembly on 14th December, 1957, to establish a separate Special Fund. This Fund is intended to provide systematic and sustained assistance in fields essential to the integrated technical, economic and social development of the less-developed countries, beyond that provided by the existing technical assistance and development activities of the United Nations and the Specialised Agencies. In the same Resolution, the Assembly decided to review the scope and activities of the Special Fund when resources prospectively available are considered sufficient to enter into the field of capital development.
    The Resolution thus embodies the proposals made earlier in the Assembly by the United States delegation for the establishment of a Special Projects Fund, and keeps the door open for the establishment of a United Nations multilateral capital development fund when sufficient and continuing resources are seen to be available. Her Majesty's Government welcome this outcome, and are confident that the new Fund, which should come
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    into existence on 1st January, 1959, can perform a useful function in furthering economic development in many parts of the world.
    Mr. Brockway: Whilst welcoming the extended scope of technical assistance and the general tone of the reply, may I ask the right hon. Gentleman whether it is not especially necessary to endorse and implement the Special United Nations Fund for Economic Development, as it would deal with the poverty of the people in these areas, the social services, education and health, which, at the present time, are being neglected by every international fund?
    Commander Noble: Perhaps I may, first of all, apologise to the House for the length of that reply, but as it was the first time, I think, that this matter had been raised in the House, I thought the House would like the full information. In answer to the hon. Member, the Resolution that was passed gives ample scope for the proposals he has in mind.
    Mr. Bevan: Again, I am sorry to pursue this, but it is necessary. Is it a sensible thing for the national policies of the United Nations and the West to go one way and for the declarations in the United Nations to go another? Has the Minister seen, in the last few days, that a new oil agreement has been reached with Kuwait, under which larger sums of money will be made available? Kuwait already has far more money than it needs—some Arab States have no money from oil—and if there had been collaboration between the various nations of the West it might have been possible for some of this money to have been paid into the Fund—not to swell fat people while leaving lean people leaner than ever.
    Commander Noble: I think the right hon. Gentleman's supplementary is a little far from the Question asked by his hon. Friend. If he studies the reply given to his hon. Friend, I think he will see that his question is answered.
    Mr. Biggs-Davison: However laudable or otherwise this Fund may be, is it not a fact that the resources of the United Kingdom are not unlimited; and have not Her Majesty's Government a broader duty to provide economic and technical assistance required by parts of the Commonwealth?
    Commander Noble: Yes. And I think that one must not forget that this country does provide something like £75 million a year in this sort of assistance.

    Africa
    Mr. J. Johnsonasked the Secretary of State for Foreign Affairs how the United Kingdom delegate to the Second Committee of the United Nations, on Thursday, 24th October, 1957, voted upon the Draft Resolution that the General Assembly would recommend that, for the purpose of giving aid to the countries and territories of Africa, and in accordance with Article 68 of the Charter, the Economic and Social Council, at its next session, give prompt and favourable consideration to the establishment of an Economic Commission for Africa.
    Commander Noble: The United Kingdom representative abstained in Committee because Her Majesty's Government needed time to consider whether the Resolution might commit the Economic and Social Council to certain action and thus infringe their freedom of decision. In the light of the views expressed during the debate, Her Majesty's Government were able to cast a favourable vote in Plenary, as the House was informed on 16th December.
    Mr. Johnson: While welcoming this answer, may I ask the Minister of State whether he can confirm that the voting was 70–0 and that the only nations voting against the Resolution or abstaining were ourselves and Belgium, which caused a bad impression at the time? Would it not be a very good thing if we changed our minds about this and supported the Resolution wholeheartedly in the Council?
    Commander Noble: It is quite normal United Nations procedure for a delegate to explain his vote, and the United Kingdom delegate on that occasion explained why he abstained. I think it was quite understood by the members of the United Nations. May I say how glad I was to see the hon. Member present on that occasion.

    Emergency Force
    Sir F. Medlicottasked the Secretary of State for Foreign Affairs if he will take the opportunity of paying some appropriate tribute to the contribution made by the United Nations Force in
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    helping to stabilise the position on the frontiers between Israel and the nearby Arab countries; and if he will take all possible steps to press for the placing of this United Nations Force on a permanent and extended basis, so that an international force will at all times be readily available for use in areas where hostilities or war are threatened.
    Commander Noble: I am glad of this opportunity to say that Her Majesty's Government consider that the work of the Emergency Force has been of great value in helping to stabilise the position in the Middle East, and to increase the authority of the United Nations in that area. We believe that the Force should be maintained in being at least until its mission has been completely fulfilled.
    With regard to the second part of the Question, the House will recall that my right hon. and learned Friend on many occasions expressed the hope that something of a permanent nature might develop from the Force. That is still his view, but this is a complicated matter, and I think we should do well to await the study of this question which the Secretary-General of the United Nations has in hand, and which I welcomed in my speech of 22nd November in the General Assembly.
    Sir F. Medlicott: While thanking my right hon. and gallant Friend for his understanding and helpful reply, may I ask him to bear in mind that this is the first, probably the best and, perhaps, the last, opportunity we may have in our lifetime of establishing a really effective international force? Will he also bear particularly in mind the fact that this approach to the problem is one which has the advantage of appealing equally to idealists and realists?
    Commander Noble: I am grateful to my hon. Friend.

  VIETNAM (GENEVA AGREEMENTS)
  Mr. Brockwayasked the Secretary of State for Foreign Affairs what action Her Majesty's Government propose to take on the request, made by the International Commission for Supervision and Control in Vietnam, that the members of the Geneva Conference should take measures to facilitate the effective fulfilment of the Geneva Agreements.
  Mr. Warbeyasked the Secretary of State for Foreign Affairs what action he proposes to take, as Co-Chairman of the Geneva Conference on Indo-China, on the matters referred to in paragraphs 11–17 of the Report, dated 12th July, 1957, of the International Commission for Supervision and Control in Vietnam, with particular reference to freedom of movement for Vietnamese civilians within the demilitarised zone.
  Mr. Ian Harvey: Her Majesty's Government have noted these various recommendations and requests. The Co-Chairmen have, of course, no power to force either side in Vietnam to accept a particular suggestion. Her Majesty's Government do not believe that there is any initiative which they could effectively or appropriately take in the matter at the moment. In regard to the specific point about freedom of movement in the demilitarised zone, I have no doubt that the attitude of the Government of the Republic of Vietnam is dictated by their determination to prevent the entry of subversive or terrorist agents from the Communist North.
  Mr. Brockway: Is the Joint Under-Secretary aware that that reply will be received with very great disappointment? Is it not a fact that the work of this Commission, which was established by the Geneva Conference to which we are a party, has, in many important respects, been absolutely suspended; that there are no free united elections—our influence on this is opposite to that in Germany; and that the Republic of Vietnam is declining to answer letters from the Com- mission, particularly about military aid from America? Surely, it is our duty to take some action on this matter.
  Mr. Harvey: I think that a good deal of the information the hon. Gentleman has put over does not arise from his Question. Her Majesty's Government value the good work being done by the Commission in keeping down tension in Vietnam. The situation is, quite contrary to the hon. Gentleman's expression, much more satisfactory than it might have been.
  Mr. Warbey: Has the hon. Gentleman really studied the Seventh Report of the International Commission? Has he looked at page 30 of that Report, in
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  which the Commission unanimously comes to the conclusion that responsibility for the violation of Article 14 (c) of the Geneva Agreement—that dealing with the guarantee of democratic liberties—must be placed fairly and squarely on the shoulders of the South Vietnam authorities?
  Mr. Harvey: Yes, I have studied the Report, but it does not make any difference to the Answer I have given.

  ALBANIA (BRITISH CLAIM)
  Mr. P. Williamsasked the Secretary of State for Foreign Affairs what action he is taking to secure compensation from Albania for the sinking of British destroyers in 1946.
  Mr. Ian Harvey: I have nothing to add to my rely of 12th November to my hon. Friend the Member for Oxford (Mr. Turner).
  Mr. Williams: Would my hon. Friend not agree that there has been very little progress in the last twelve years, and that this is a most unsatisfactory state of affairs? What does he propose to do in terms of getting financial compensation, either at the United Nations, The Hague Court or anywhere else?
  Mr. Harvey: As my hon. Friend knows, this is a complicated issue which requires the co-operation of a number of organisations and countries, and it is not possible for Her Majesty's Government to take an individual initiative in this matter.

  EGYPT

    Detained British Subjects
    Mr. P. Williamsasked the Secretary of State for Foreign Affairs what success has attended his efforts to secure the release of British subjects imprisoned by the authorities in Egypt.
    Commander Noble: As my right hon. Friend informed my hon. Friend on 30th October, Her Majesty's Government have pressed, and will continue to press, the Egyptian Government to release Mr. Zarb and Mr. Swinburn. I have nothing to add to that statement at present.
    Mr. Williams: Will my right hon. Friend give an assurance that there will be no official recognition of the Government of Egypt in any further negotiations on financial matters until these two gentlemen are released?
    Commander Noble: I have nothing further to add to the statement I have just made. I think it would be a pity if the discussions that are going on on finance were confused with this issue.

    Financial Talks (Resumption)
    Mr. Wallasked the Secretary of State for Foreign Affairs what action he is taking to compensate British firms and individuals whose property the Egyptian Government are now nationalising.
    Mr. Youngerasked the Secretary of State for Foreign Affairs if he will make a statement on the progress of the current negotiations with Egypt.
    Mr. Teelingasked the Secretary of State for Foreign Affairs what is the present position concerning Maltese who have lost property and businesses in Egypt; whether they are included in the present negotiations; and if he will make a statement on the present position of such negotiations.
    Commander Noble: The Anglo-Egyptian financial talks, which were adjourned on 12th December, are due to be resumed in Rome on 30th January. These talks are concerned with the property of British subjects of Maltese origin no less than with other British property. They will, of course, cover the question of compensation for property nationalised by the Egyptians following the events of 1956.
    Mr. Wall: Is my right hon. and gallant Friend aware that while these talks have been going on property that was sequestered at the time of Suez is now being nationalised at a fraction of the true cost? Will my right hon. Friend instruct the negotiators to bear these facts in mind?
    Commander Noble: If my hon. Friend has any details of such nationalisation of property that has already been sequestered, I would be grateful if he would let me have them.
    Mr. Younger: While welcoming the fact that these negotiations are to be resumed, may I ask whether there is a
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    direct connection between these negotiations and the prospect of renewing relations with Egypt generally? Is the right hon. and gallant Gentleman aware that a lot of people think that these outstanding questions, including the question which was mentioned by an hon. Member opposite earlier, could be more easily solved if we were in diplomatic relationship?
    Commander Noble: Yes, I think it is common sense to say that these financial talks are a first step.
    Mr. Teeling: When my right hon. and gallant Friend says that the Maltese are included, can he say just where the Maltese who are involved are to get in touch with the Government? The British obviously do so here in London. Is there any organisation in Malta, or must the Maltese go to Rome?
    Commander Noble: I cannot give my hon. Friend that information now, but I will certainly let him have it.

  DISARMAMENT
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs what are the present intentions of Her Majesty's Government with regard to the furtherance of international negotiations for disarmament.
  Mr. Grimondasked the Secretary of State for Foreign Affairs what proposals he will make, either alone or with our allies, for a renewal of the disarmament discussions with Russia.
  Commander Noble: The North Atlantic Treaty Organisation Communiqué and my right hon. Friend's recent letter to Mr. Bulganin show that Her Majesty's Government, in consultation with their allies, are doing their best to find a way out of the deadlock caused by the refusal of the Soviet Government to attend the expanded Disarmament Commission.
  Mr. Henderson: Has there been any direct diplomatic discussion with the Soviet Government with a view to securing a resumption of the disarmament negotiations; or may we take it that the purpose of the coming visit of the United Nations Secretary-General to Moscow is to achieve that result?
  Commander Noble: I am afraid I cannot answer that part of the right hon. and learned Gentleman's question, but I think it is pretty obvious from the correspondence that is going on between the Prime Minister and Mr. Bulganin that these matters are included.
  Mr. Grimond: Is it the policy of the Government that the discussions should continue to take place only through the United Nations, or are the Government prepared to meet the Russians in some other way to talk about disarmament, other than, perhaps, the particular points about Eastern European disarmament—which, presumably, will not be discussed at the summit meeting?
  Commander Noble: Of course, the United Nations are responsible for disarmament matters, but, again, I would say that the correspondence between Mr. Bulganin and the Prime Minister does include disarmament, though I quite agree that the matter should come under the United Nations hat at some time.

  HORN OF AFRICA (FUTURE)
  Mr. J. Johnsonasked the Secretary of State for Foreign Affairs if he will consider holding exploratory talks with the Governments of Ethiopia, France, Italy and the United States of America regarding a conference to discuss the future of the Horn of Africa, with particular reference to the proposed state of Somalia after 1960.
  Mr. Ian Harvey: Her Majesty's Government fully recognise that the future of the Horn of Africa is a matter requiring frank and continuing discussion between the Powers with responsibilities in the area. Such discussion is, in fact, actively proceeding through diplomatic channels.
  Mr. Johnson: Is it not a fact that the Somalis feel that this Government are letting them down in this matter; and that they are stumbling from expediency to expediency? In view of the fact that this area will become a powder keg from 1960 onwards, will not the Government show a little more initiative in this matter and call a conference of all the Powers concerned?
  Mr. Harvey: I have explained that this matter is being discussed at the moment
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  in the normal way, and I think that better progress would be made in that fashion than in the way suggested by the hon. Gentleman.

  EMBASSY, ROME (EMPLOYEE)
  Mr. Ernest Daviesasked the Secretary of State for Foreign Affairs whether he is aware that Francesco Costantini, a former employee of the British Embassy at Rome, was responsible for serious leakages of confidential information over a long period; and what disciplinary action has been taken against the security officers responsible for supervising the security arrangements at that embassy during that period.
  Mr. Ian Harvey: Yes, Sir. The facts of this case have been known since 1944, when an investigation into suspected leakages was held in Rome and Costantini' s activities were revealed.
  The late Mr. Hector McNeil, then Minister of State for Foreign Affairs, gave the House an outline of the story in answer to a Question on 8th December, 1947.
  The events took place nearly twenty years ago or more, and the senior officers serving in the Embassy at the time have long since retired from Her Majesty's service. So far as I am aware, no disciplinary action was taken but, as a result of the investigation into this and other cases, security organisation in the Foreign Service was completely reconstituted and our defences greatly strengthened. The most stringent precautions are now taken to prevent any repetition of such leakages.
  Mr. Davies: I am well aware that this is now history, but is the hon. Gentleman aware that this gentleman has recently published a book concerning his activities, extracts from which have been widely syndicated in the world's Press? Would the hon. Gentleman accept the author's statement as being an accurate account of his activities in espionage, and does he not consider that it is very essential, in view of the harm that is being done to British prestige abroad, to make it quite clear that this could not occur again?
  Mr. Harvey: Yes, Sir. The statements bear close resemblance to the facts, although there are, naturally, some journalistic additions. Nevertheless, I

  21
  hope that my Answer to the hon. Gentleman will, in fact, achieve the result for which he has asked.

  SUEZ CANAL (CLEARANCE COSTS)
  Mr. Wallasked the Secretary of State for Foreign Affairs what is the total cost of clearing the Suez Canal; how far this includes the amount spent by the United Kingdom and French Governments in clearing the Port Said end of the canal; and how it is proposed that these costs be met.
  Commander Noble: The total cost of clearing the Suez Canal was approximately £3,401,000. This includes the costs incurred by the Anglo-French salvage fleet during the period in which it was solely responsible for clearance work and also the costs of its services when it formed part of the United Nations fleet after the United Nations took over responsibility on 22nd December. The costs of the United Nations fleet are to be met from the proceeds of a surcharge of three per cent. which is to be levied on the dues of all ships passing through the Suez Canal, while those incurred by the United Kingdom before 22nd December rank as a governmental claim against Egypt.
  Mr. Wall: While thanking my right hon. and gallant Friend for that reply, and appreciating how difficult it is to get an agreement on this subject, may I ask whether this solution is not rather unfair to shipowners? Could he say what happens to the fleets under flags of convenience, such as Liberia? Do they pay the same share as the bigger fleets of Britain and America?
  Commander Noble: To answer the second part of the supplementary first, as far as I am aware, all fleets pay the same surcharge. I agree with my hon. Friend that this was not an easy decision to take, as it means that British shipowners who have already suffered from the closing of the canal—[HON. MEMBERS: "Hear, hear."]—through the closing of the canal by the Egyptian Government—will have to pay a further sum, but we thought that it was the least unsatisfactory of the possible arrangements.

  NORTH ATLANTIC TREATY ORGANISATION (SCIENCE COMMITTEE)
  Sir J. Hutchisonasked the Secretary of State for Foreign Affairs who will represent this country on the Science Committee to be set up under paragraph 28 of the North Atlantic Treaty Organisation Communiqué of 19th December; when and how this House will learn of the reappraisal of support being given to scientific and technical education and to fundamental research, promised in the same Communiqué and whether he will make a statement.
  Mr. Ian Harvey: Her Majesty's Government have nominated Sir Solly Zuckerman. Deputy Chairman of the Advisory Council on Scientific Policy and a scientific adviser to the Lord President of the Council, to be the United Kingdom representative on the North Atlantic Treaty Organisation Science Committee.
  With regard to the second part of the Question, Her Majesty's Government have already made considerable progress in this process of reappraisal, as hon. Members will know from various reports that have been produced over the past two years. In the light of studies already made, the Government are aiming to double the output of scientists and engineers by 1970 as compared with 1954–55.
  Sir J. Hutchison: While what is being done by the present Government is appreciated, may I ask what sort of organisation there is to satisfy ourselves and N.A.T.O. that other member Governments of N.A.T.O. are doing something comparable or equivalent to what we are doing in the matter of support to scientific and fundamental research?
  Mr. Harvey: I think this Committee will help in that way, but if my hon. Friend has any suggestion in mind I shall be glad to discuss it with him further.

  CHINA

    Trade
    Mr. Collinsasked the Secretary of State for Foreign Affairs if he will review the present restrictions on trade with China; and if, in particular, he will lift the present restrictions on the sale of new and second-hand civilian aeroplanes.
    Mr. Ian Harvey: I would refer the hon. Member to the reply which I gave to the right hon. Member for Battersea, North (Mr. Jay) on 12th November, 1957.
    As to the second part of the Question, I have nothing to add to the reply which my right hon. Friend the President of the Board of Trade gave to the hon. Member on 12th December, 1957.
    Mr. Collins: Is the Joint Under-Secretary aware that the reply from the President of the Board of Trade, whilst admitting the charge, did not promise to do anything about it? Is he further aware that other N.A.T.O. countries are still selling prohibited goods to China and to other Communist countries? Does he not think it is time that he looked into the matter and took positive steps to see that British traders no longer suffer these handicaps as compared with our foreign competitors?
    Mr. Harvey: I do not admit that there is any question of a charge arising out of this. As I have already said, this is a question that is regularly reviewed, and that is the position at the moment.

    Diplomatic Representation
    Mr. Teelingasked the Secretary of State for Foreign Affairs when he expects to obtain permission from the Chinese People's Republic to send an ambassador to Pekin; and why the Chargé d' Affaires there is referred to as the negotiating representative and not as Chargé d' Affaires.
    Mr. Ian Harvey: The answer to the second part of the Question is that Her Majestys' Chargé d' Affaires in Peking is referred to by the Chinese authorities as such and not as a "negotiating representative." As regards the first part of the Question, Her Majesty's Government recognised the Chinese People's Government in January, 1950, sent a representative to Peking in February of that year and would have been prepared to exchange Ambassadors forthwith. The Chinese Government, however, did not appoint a representative to London until 1954, when they nominated a Chargé d' Affaires, making it clear that they did not for the time being want to raise the level of representation. There has been no change in this situation.
    Mr. Teeling: With regard to the second part of my Question, first answered, does my hon. Friend realise that he is slightly misinformed by whoever misinformed him on these matters, and that I personally received proof of this on my recent trip in the Far East? Secondly, does he realise that there is at the moment a fairly strong feeling in the Far East and elsewhere that, after eight years, it is about time, if we are to have an Ambassador, that we had one soon? There is such a thing as face in the Far East, and we are fast losing it.
    Mr. Harvey: I am not aware of what information or misinformation my hon. Friend may have obtained, but if he will give me details of what he saw I shall be glad to look into that part of the matter. I appreciate the point he makes with regard to the first part of the Question, but the situation remains at the moment as I stated it.

    British Property
    Mr. Teelingasked the Secretary of State for Foreign Affairs what steps have been taken to date to obtain compensation for British property seized on the Chinese mainland since 1949; and what is proposed to be done in the future.
    Mr. Ian Harvey: Representations have been made to the Chinese authorities in those cases in which the owners requested such action. When, as I am sorry to say has been the general rule, the reply received has been unsatisfactory, the full rights of the owners, where they so desire, have been reserved against the time when it may be possible to discuss the matter further with the Chinese authorities.
    Mr. Teeling: Does my hon. Friend realise that there is a certain feeling among those whom I would call the smaller sufferers in these matters that they are, perhaps, being overlooked in favour of the bigger ones who do not mind so much in the hope that they will get fresh trade with Red China?
    Mr. Harvey: I appreciate the hon. Gentleman's point. The fact that he has brought it out here will, I think, cover it; but if he wishes to give me any further information on the matter, I shall be glad to have it.

  PASSPORTS (COLOURED PHOTOGRAPHS)
  Mr. Draysonasked the Secretary of State for Foreign Affairs whether he will now permit coloured photographs to be used on passports.
  Mr. Ian Harvey: No, Sir. Until my right hon. and learned Friend can be satisfied that coloured photographs will retain their colour for ten years, the life of a British passport, he is not prepared to authorise their use.
  Mr. Drayson: is my hon. Friend aware that the authorities in the United States are to permit coloured photographs on passports as from 1st February this year? Does he not think that British travellers are entitled to the same concession?
  Mr. Harvey: While I appreciate my hon. Friend's desire to appear in glorious Technicolor, I would point out that American passports are valid, in the first instance, for two years and are renewable for a further two years, after which they finally expire: so the situation is quite different.

  GOVERNMENT INFORMATION SERVICES

    H.M. Forces (Recruitment Publicity)
    Mr. Emyrs Hughesasked the Chancellor of the Duchy of Lancaster to what extent he is now responsible for the publicity in connection with recruiting for Her Majesty's Forces.
    The Chancellor of the Duchy of Lancaster (Dr. Charles Hill): While I am responsible for the co-ordination of Government information services, individual Service Ministers remain responsible for their own information output, including recruitment publicity.
    Mr. Hughes: Does the right hon. Gentleman think that he could take some responsibility for the co-ordination of recruiting in Scotland? Is he aware that the Royal Scots Fusiliers succeeded in December in recruiting only four and the Highland Light Infantry only three?
    Dr. Hill: I am sure that the information the hon. Gentleman gives will be of interest to my right hon. Friend.

  AGRICULTURE, FISHERIES AND FOOD

    Meat (Inspection)
    Sir F. Medlicottasked the Minister of Agriculture, Fisheries and Food (1) what proportion of the total amount of meat passing through slaughterhouses is actually inspected; and
    (2) what proportion of meat inspected at slaughterhouses is found diseased and unfit for human consumption.
    The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber): It is estimated that the proportion of meat inspected is about four-fifths of the total, of which less than one per cent. is found unfit for human consumption.
    Sir F. Medlicott: Does my hon. Friend not feel that the position is rather unsatisfactory? Does it not follow from these figures that a certain amount of diseased meat must inevitably find its way into the shops, and can he not advance the date when all meat going into slaughterhouses is inspected?
    Mr. Godber: I entirely agree that we must try to get all meat inspected at the earliest possible date. We are doing all we can to that end, and at the moment we are having consultations with those concerned to see whether we can speed up this matter.
    Mr. Royle: Will the Minister take steps to have his hon. Friend the Member for Norfolk, Central (Sir F. Medlicott) put on the Slaughterhouses Bill Standing Committee so that he may obtain further information on that matter from Members of the Opposition?
    Mr. Godber: I have a great deal of valuable advice tendered to me on that Committee. I do not think I need more.
    Mr. Wiley: Will the Parliamentary Secretary press on his right hon. Friend that we are in real difficulties in the Standing Committee because we are boycotted by the Minister and that the sooner he becomes a member of it the better?
    Mr. Godber: I do not think that is really quite fair. The hon. Gentleman knows perfectly well the reasons why my

    27
    right hon. Friend is not on the Committee. I am doing my best to satisfy the hon. Gentleman and his Friends in that Committee, and I hope that, with their help, we shall soon reach the end of the Committee stage.
    Mr. Willey: I do not know the reasons.

    Agricultural Rents
    Mr. Willeyasked the Minister of Agriculture, Fisheries and Food what is the number of cases in which rent arbitrators have been appointed under the Agricultural Holdings Act, 1948, for the latest available 12-month period; and what is the average increased rent awarded.
    The Minister of Agriculture, Fisheries and Food (Mr. John Hare): In the year ended 28th February, 1957, my predecessor appointed arbitrators to deal with rent under Section 8 of the Agricultural Holdings Act, 1948, in 164 cases; in 25 of these agreement was later reached between the parties and there was no award. In the 133 cases for which full particulars are available, the average rent awarded (to the nearest shilling) was 41s. per acre, and that before arbitration was 29s. per acre, making an average increase of 41 per cent. No reliable figures are available for cases where the arbitrator was appointed by agreement between the parties.
    Mr. Willey: Though I appreciate the figures which the Minister has given us, I should be glad to know whether he shares the general satisfaction with these rent arbitrations?
    Mr. Hare: I am asked by the hon. Gentleman whether I share the general satisfaction. No; I think that these arbitrators are working under great difficulties and that their instructions are not really sufficiently clear.
    Mr. Willeyasked the Minister of Agriculture, Fisheries and Food when the survey of agricultural rents will be completed.
    Mr. John Hare: I am informed that the Department of Estate Management at Cambridge hopes to publish its Report this year.
    Mr. Willey: Will the Minister assure the House that the Government will not take any action in regard to rents until the Report is received, and that they will
    28
    reconsider their present proposals in the light of that Report?
    Mr. Hare: I am sure the hon. Gentleman knows perfectly well that the purpose of the survey is to collect information about the level of farm rents. This information cannot really affect the purpose of any amendents which we might be contemplating to clarify the statutory guidance to rental arbitrators.
    Mr. T. Williams: How can the right hon. Gentleman contemplate legislation on rents until he knows the actual result of the survey, which, he says, may be completed during this year, eleven months hence? Surely, the result of the survey ought to be had prior to the preparation of any legislation?
    Mr. Hare: No; as I tried to point out to the hon. Member for Sunderland, North (Mr. Willey), these are two different operations. The survey is to collect information about the level of rents. The amendments to the directions to arbitrators which we may have in mind are merely to clarify their statutory guidance.
    Mr. Willey: Will the right hon. Gentleman assure the House that the proposals he will make will not affect the level of rent?
    Mr. Hare: We had better talk about that when the House is in a position to see the proposals.

    Surplus Milk (Meat Production)
    Mr. de Freitasasked the Minister of Agriculture, Fisheries and Food if, in view of the importance of using surplus milk for the production of milk-fed veal, he will inquire into the possibility of a scheme by which farmers may receive payment for meat in monthly instalments on the lines of the present practice of the Milk Marketing Board in respect of milk.
    Mr. Godlier: My right hon. Friend recognises the importance of using surplus milk for veal production and for rearing calves for beef. So far as concerns schemes for advance payments on fat cattle, two small pilot co-operative ones are being launched under the auspices of the Agricultural Central Cooperative Association, and I believe that larger-scale arrangements operated on behalf of farmers are under consideration by a national organisation. But such

    29
    arrangements must be related to total returns, which come mainly of course from the market, rather than to subsidy payments. My right hon. Friend is satisfied that advance payments on guarantees alone are impracticable and that further inquiry into their possibilities would not he justified.
    Mr. de Freitas: Surely the Minister should have another look at this? Does he not want to encourage the small farmer to go into meat production, and is it not impossible for the small farmer to do so, in view of the little capital he has, unless there is some scheme of regular payments, even if they are small?
    Mr. Godber: I can certainly see the point the hon. Member makes, but there is nothing we can do about it. It may be possible for an organisation like the F.M.C. to give help, but I do not see that we can enter into that.

    Agricultural Holdings Act (Arbitrators)
    Mr. T. Williamsasked the Minister of Agriculture, Fisheries and Food why the names of the arbitrators appointed by him under the Agricultural Holdings Act, 1948, are not available to the public.
    Mr. John Hare: The panel is appointed by the Lord Chief Justice solely for the purposes of the Minister's own functions under the Act and publication would serve no practical purpose. I understand that the professional bodies concerned have always shared the view that the names should not be published. This practice is of long standing.
    Mr. Williams: Is the Minister aware that, rightly or wrongly, and I will not argue the point, there is a feeling in certain quarters that one or two of these professional organisations seem to be particularly favoured in these appointments?
    Mr. Hare: I do not think there is any truth in any such allegation, but I will certainly make inquiries if the right hon. Gentleman gives me further details. I would point out that this system worked to his satisfaction during the whole time he held my office.
    Mr. T. Williamsasked the Minister of Agriculture, Fisheries and Food on how many occasions any of the
    30
    six members of the Land Agents Society were appointed by him as arbitrators under the Agricultural Holdings Act, 1948, during the year ended 28th February, 1957; if he will give similar figures for the 48 members of the Royal Institute of Chartered Surveyors and the 18 members of both societies; and if he will state the maximum number of arbitrations undertaken by one individual appointed by him.
    Mr. John Hare: In that year, the six arbitrators who were members of the Land Agents Society were appointed by the Minister to deal with 9 cases similarly the 48 arbitrators who were members of the Royal Institution of Chartered Surveyors dealt with 89 cases and the 18 arbitrators who were members of both bodies dealt with 50 cases. The maximum number of arbitrations undertaken by any one arbitrator was 11.

    Pigs (Prices)
    Mr. Peytonasked the Minister of Agriculture, Fisheries and Food, in view of the recent drop in the price of grade A bacon, if he will make a statement on pig prices.
    Mr. John Hare: Recent developments in the bacon market have inevitably affected the price of pigs sold for bacon production, but up to the week ended 5th January the guarantees have brought the average return of pig producers as a whole for the current financial year to within 1d. per score of the standard price. The average return for pigs sold to bacon factories during that period was 1s. 5d. per score or about 3 per cent. below, and for other pigs 1s. 4d. per score above, the average for all pigs. I hope that the guarantee system will continue to protect producers from excessive fluctuations in their returns.
    Mr. Peyton: Whilst I fully appreciate the great difficulties of this problem, which are long-term and traditional, would my right hon. Friend appreciate the fact that there is anxiety at the lack of stability in the market, and would he consider any representations made to him on behalf of the pig producers?
    Mr. Hare: Certainly, Sir. I can assure my hon. Friend that I will consider any representations, though this does not

    31
    mean that I shall necessarily agree with those representations.
    Mr. Lipton: But have not the Government already decided to cut the guarantees for pig prices to the maximum possible extent in the forthcoming Price Review?
    Mr. Hare: It would be most improper if the Government had decided that, because the Price Review negotiations have not yet even begun.

  NUCLEAR POWER STATIONS (CONTRACTS)
  Mr. Palmerasked the Prime Minister by what principle particular firms or groupings of firms have been selected to collaborate with the Atomic Energy Authority and the Central Electricity Generating Board in nuclear energy development for commercial and export purposes; and what arrangements are made for new firms and companies to enter this field.
  The Paymaster-General (Mr. Reginald Maudling): I have been asked to reply.
  For technical reasons, the design and construction of a nuclear power station can best be undertaken at present by a group of companies operating under a single contract rather than by a large number of individual companies operating under separate contracts, as is usual for conventional power stations. Such groups need to have extensive scientific and engineering resources; and in the early stages of preparation for the nuclear programme, four consortia were formed and received training from the Atomic Energy Authority in collaboration with the Central Electricity Authority. Since then a fifth consortium has been formed and, at its own request, has been provided with similar training.
  Mr. Palmer: But is the right hon. Gentleman aware that there is a widespread feeling that the whole of this business is too much of a closed circle? If the fruits of public activity are to be made available to private industry, should they not be made available to all?
  Mr. Maudling: When the Authority makes available valuable information to these consortia, there are always terms in the contract providing for appropriate payment. No exclusive rights are granted
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  to the use of the Authority's information. I agree that in the long run this system is by no means perfect, and it will always be kept under review by the Authority. There is a possibility at a later date of returning to more conventional methods.

  ATOMIC ENERGY ESTABLISHMENTS (HEALTH AND SAFETY)
  Mr. Palmerasked the Prime Minister what action the Government proposes to take on the Reports of the Fleck Committees which have now investigated the organisation and the health and safety arrangements of the Atomic Energy Authority.
  Mr. Maudling: I have been asked to reply.
  With regard to the report on organisation, I would refer to the reply given on 24th January by my right hon. Friend the Lord Privy Seal to my hon. Friend the Member for Clitheroe (Mr. Fort). The Government and the Atomic Energy Authority are working out how best to implement the recommendations of the report on health and safety.
  Mr. Palmer: Whilst thanking the right hon. Gentleman for that answer, may I ask whether the Government are giving any consideration to the establishment of an independent inspectorate to check the safety of all nuclear establishments?
  Mr. Maudling: I think it is right that the Authority in the first instance should study this report on health and safety. Having completed its study, it will be consulting the Government about it.

  HOUSE OF COMMONS CATERING
  Mr. Ernest Daviesasked the hon. Member for Woolwich, West, as Chairman of the Kitchen Committee, if reconsideration has now been given to the opening of the Members' Cafeteria to guests between 12.30 and 5.30 p.m.; and what decision has been reached.
  Sir William Steward: This matter was most carefully considered by the Kitchen Committee at its meeting held on 18th December last, when it was unanimously resolved that the present arrangements by

  33
  which Members may introduce up to three guests in the Members' Cafeteria between the hours of 12.30 and 5.30 p.m. be continued, subject to review at the beginning of next Session.
  Mr. Davies: Why is it that the Kitchen Committee takes this decision without consulting the wishes of Members of the House? Does the hon. Gentleman appreciate that a considerable body of opinion among Members would prefer to have the Members' Cafeteria at lunchtime free from strangers so that they can talk as they wish?
  Sir W. Steward: The Committee is composed of an equal number of Members from both sides of the House. So far as it has been able, it has also sought the opinions of hon. Members, and, it is not clear that the wish expressed by the hon. Member is the wish of the majority of hon. Members.
  Mr. Bevan: As a rather old Member of the House, may I ask whether it is not desirable that, having regard to the restricted facilities already available, hon. Members should have the opportunity of having lunch to themselves without their conversation being always overheard by strangers?
  Sir W. Steward: I do not think that that really arises. [HON. MEMBERS: "Oh."] There are plenty of places whore such conversations can take place. I should like to point out that a census was taken of the number of people patronising this part of the House for the three days Wednesday, Thursday and Friday, 4th, 5th and 6th December. Between 12.30 and 1.30 p.m. on 4th December only 25 were present, on the Thursday only 18 and on the Friday only 12. Between 1.30 p.m. and 2.30 p.m. on the Wednesday there were only 10, on the Thursday 13, and on the Friday three. Between 2.30 p.m. and 3.30 p.m. there were only two present on the Wednesday, four on Thursday and none on the Friday.
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  Between 3.30 p.m. and 4.30 p.m. on the Wednesday there were 36, on the Thursday 15, and none on the Friday. Between 4.30 p.m. and 5.30 p.m. there were 13 on the Wednesday, 13 on the Thursday, and none on the Friday. My Committee feels justified in the steps it has taken and considers that this arrangement should at least be given a run to see whether it is popular or not.
  Mr. Gower: Is my hon. Friend aware that there is also a large body of hon. Members who want to see the Kitchen Committee run its affairs economically and that if this arrangement conduces to that end he will have their support?
  Mr. Bevan: Is the hon. Gentleman aware that, on that basis, if he takes a statistical survey of the Members' Dining Room on certain days he could also admit the public there to luncheon and, before very long, he will have reduced the whole House to a rather squalid situation?
  Sir W. Steward: The position there is rather different. The Members' Dining Room has been for the exclusive use of Members for many years. This particular part of the House is a comparatively new innovation as a Members' Cafeteria. Up to three years ago it was part of the Strangers' Bar.
  Mr. Shinwell: In view of the decision of the Kitchen Committee about the Members' Cafeteria, will the hon. Member now make a recommendation to his colleagues on the Committee that the Members' Smoking Room, otherwise known for many years as the Tory smoking room, should also be made available to strangers so that they might be permitted to listen to the conversation of hon. Members there?
  Hon. Members: Answer.
  Mr. Speaker: Order. I think we have spent enough time on a domestic matter.

AIRWAYS CORPORATIONS (REPORTS AND ACCOUNTS)
3.31 p.m.
The Minister of Transport and Civil Aviation (Mr. Harold Watkinson): I beg to move,
That this House, in reviewing the progress of Civil Aviation, takes note of the Reports and Accounts of the British Overseas Airways Corporation and the British European Airways Corporation for the year ended 31st March, 1957.
I genuinely welcome this debate, because it is not often that we debate these matters in the House. Perhaps I might say that I sometimes think that this House spends too much time in examining affairs in the abstract rather than in the concrete, and that we might more readily convince the nation that we are not all smitten in this House with what Matthew Arnold called
"…this strange disease of modern life. With its sick hurry, its divided aims…"
if we dealt more with the practical facts that condition our lives and our future.
The House certainly has an opportunity to do that today. My problem in opening this debate is how to compress the vast range of new and challenging facts within the compass of what I hope will be a short speech. Perhaps, therefore, the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) will accept that I must deal with broad outlines only, and that my hon. Friend the Joint Parliamentary Secretary will be only too pleased to fill in any of the details when he winds up the debate, because there is a vast field to cover and there is much that is new to put to the House in almost every aspect of civil aviation.
The first thing I want to deal with is something on which I am sure I will carry the House with me, namely, that the freedom of the air will be as vital to us as a nation in the future as the freedom of the seas was in the past and is today. So I thought the House might like to now a little about some of the current talks that are going on in an effort to secure a freer and more expansive position for British civil aviation in the world.
I am glad to say that we reached a bilateral agreement with Malaya, within two months of her independence, covering the air matters between us. I hope
36
very much that soon I shall be signing an agreement with the Australian Government, and I am sure all hon. Members will welcome the visit of Senator Paltridge, the Austalian Minister for Civil Aviation, who is coming over here in a few days to sign this new agreement with the Australian Government. This is the first formal air services agreement to be signed on behalf of both Governments. It is interesting in that it provides for a most comprehensive exchange of routes between the United Kingdom and Australia, in addition to the Kangaroo route. which I think most hon. Members know, and the new Southern Cross route.
The two countries will have a pooling arrangement operating through Canada, Mexico, South America and Africa. There is also provision for routes via the Arctic and Antarctic, so it will be possible for the existing partnership arrangements between B.O.A.C. and Qantas, which have worked so well over the years, to be extended to any of these new routes. That is a promising and interesting development which I think the House will welcome.
As hon. Members know, we recently signed an air agreement with a Soviet delegation. That agreement provided for the operation of air services between London and Moscow, with a stop in Copenhagen in each direction, run by Aeroflot, the Soviet airline, and British European Airways. That agreement does not come into force at once because there are many technical details to be cleared on both sides, but the work is going on.
There is also a Polish air agreement, recently signed, which we hope will be valuable to both countries. A Czech delegation is expected in London next week to discuss an air services agreement, and there are talks going on with Ghana, the Sudan and Ethiopia, and I hope that, before long, there will be talks with other countries as well.
I thought that on this occasion the House should know that we are doing our best to secure the maximum freedom not only for airlines and air corporations operating from this country, but for all airlines, to traverse the sky as freely and with as much service to the travelling public of the world as can possibly be arranged. That is the policy of Her

37
Majesty's Government and in those agreements I think we show that we intend to carry it out.
Obviously, my Department, and any Minister, in my position, must take a great interest in the safety aspect. Safety in the air is vital to the future of air travel, particularly as we move more and more into the tourist trade and, therefore, people have a greater option to travel either by air or by some other form of transport. The businessman and the politician must travel by air, whether he likes it or not, because his schedule is hitched to an air route schedule, but as we move into the mass carrying trade of the world it is important that safety should be carefully considered by all the Governments concerned and that the technical aspect of safety should not be neglected.
We have seen in the United States and other countries what can happen if there is a very high density of traffic round major airports. There are long periods of stacking, and in bad weather there are very great difficulties. So one of the most important factors in the near future that we must consider for our own airports is the question of handling dense air traffics, particularly in the vicinity of airports.
One of the most important requirements which vie hope will help to meet that is a completely improved type of radar which will enable the controller in the control tower to see on a screen all the aircraft under his control, and, therefore, to have a complete picture of the traffic surrounding the airport. Plans are now being made to build a number of new, long-range radar stations to give this kind of cover to the controller. We are also examining urgently the possibility of supplying him with electronic computers, which will make the calculation of the traffic problem for him, rather than have it presented to him in the form of a written message, as is done now.
There are, therefore, new and fascinating developments there. I am sure that they are essential if we are to maintain our lead, which I think we can claim at the moment, as being the safest country for the general control and technical arrangements of our airports. I am certain that we must maintain this, but the House should know that it will be an expensive business.
Another matter which has been concerning the House, particularly one or
38
two hon. Members who, like the hon. Member for Feltham (Mr. Hunter), live near airports, is the problem which arose after the Viscount crash at Manchester last year. I said at that time that we would study the problem of danger caused to people living near airports by aircraft accidents. Officials of my Ministry and the other Ministries concerned have been studying the problem.
I would begin by saying that the record during the past eleven years shows that the risk of an aircraft crashing on a house near a runway is, fortunately, very remote. Still, over half the aircraft crashes on the approaches to airports occur within 4,500 ft. of the end of runways, and I think that the House was right to display concern about the problem.
The House should know that I have reached an agreement, in conjunction with my right hon. Friends the Secretary of State for Scotland and the Minister of Housing and Local Government and the Government of Northern Ireland, that we should now extend the present arrangements under which local planning authorities must consult my Department before granting permission for building within aerodrome approach areas. I will not go into the detailed arrangements, but, in general, the purpose is to secure that my Department is consulted about all new proposals for construction within the first 4,500 ft. of the approaches to the main runways of certain busy civil airports.
I understand that similar action will be taken by the Government of Northern Ireland. This will affect the civil airports under the control of my Ministry, and I am consulting the owners of other civil airports to try to obtain the same arrangements there. I should add that it is not intended to revoke planning consents already given, but what I propose will, I hope, make a contribution to the solution of the problem in the future.
The last subject which I wish to mention while dealing with the general amenity aspect is noise. Hon. Members have been right to take very considerable interest in the problem of the noise that will arise when we move into the jet era. I have been in contact with the New York Port Authority which operates Idlewild Airport, and I find that for the purpose of fixing its standard—I should be interested to hear what hon. Members

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think about this—it considers that the maximum tolerable level of noise has been reached with the Super-Constellation and it would like to keep the noise down below or to that level.
I am not suggesting that over here we should set any arbitrary level as our standard, but I would remind the House—it is only fair to both aircraft manufacturers and those who operate aircraft to do so—that I said on 12th July last year, and also in October and December, that I should have to take into very serious consideration the degree of success in reducing the noise from these big new jet aircraft before such aircraft could be permitted to use major civil airports under my Ministry's control. I say that quite firmly and seriously.
The New York Port Authority is taking a similar line. In fact, it is taking a set of circumstances which is a little more rigid. It is at the moment examining the noise level of the Comet III, and I do not think that it is yet prepared to say whether or not it will let that aircraft in. We shall adopt a similar principle in respect of the Boeing, and all other jet aircraft, not excluding the T.U.104 which the Russians may want to use if they open the proposed Aeroflot service. The Russians know this and have agreed to it.
We must measure the noise and be reasonably satisfied that it does not impose an intolerable burden on those who happen to live round airports. We may have to carry out some practical tests at the airports, and so on. Hon. Members know that there are consultative committees at these places, and no doubt they will have a right to be consulted and brought into the matter.
I would merely add that we have been successfully operating Comets from London Airport for some time, without complaint I think, but they have a slightly lower rated engine than the Comet IV and a very much lower rated engine than the Boeing and other bigger aircraft. I think it right that close measurement should be made and that we should be satisfied that aircraft designers and manufacturers have made every possible effort to silence the aircraft as far as it can humanly be done.
I wish to say a word about the problems in connection with the building of
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airport facilities. As we move forward into this new and very exciting air age it is worth thinking for a moment of what we are trying to do. We are trying to create the kind of port and transit facilities which it has taken generations to build up in our docks and harbours. I have some figures which may interest the House as showing the measure of the problem that we face.
The following are figures in respect of air passengers handled in the London area alone at intervals of ten years. In 1938, the number was 178,000. By 1948, it was 834,000. This year the number will be 4,500,000, and I am confidently informed that by 1968 the number will be 13 million. That is an example of the growth that we have to face. Aircraft movements were 29,000 in 1938 and they are expected to amount to more than 250,000 by 1968.
That is the measure of the problem which has to be faced by those who build airports. It is a fascinating problem, because all sorts of factors enter into it. One has to obtain views about vertical lift, take-off length, and other things, even how to handle aircraft on the airport, whether to tow them or taxi them. Consequently, I am sure that my right hon. Friend, the present Minister of Pensions and National Insurance, was absolutely right to set up the Millbourn Committee to examine London Airport. Equally, I am sure we are right to press on with Gatwick Airport as London's first alternate airport. I think it right to tell the House that if we are to keep pace with the kind of traffic increase that I have shown—it goes for freight as well as passengers—we shall have to face a further very big development programme in the next few years.
I want to say a word about Gatwick, which will be the next big addition to the airport facilities of London or the South of England. I think the House knows that Her Majesty the Queen has graciously consented to inaugurate it on 9th June. This will be the first airport in the world to combine air, rail and road transport in one unit. Therefore, passengers will be able to travel directly to and from the airport by road or rail, and there will not need to be a town terminal.
In the present wet weather Gatwick Airport is still in places a sea of mud,

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but if any right hon. or hon. Gentlemen would like to look at it a little nearer the time of opening I shall be delighted to provide facilities. I am sure that they will find it a very interesting visit.
Many new things are to be found at Gatwick Airport. Not only has it a railway station incorporated in the terminal, but it has a proper run-in off the road. I certainly accept the criticisms of my hon. Friend the Member for Horsham (Mr. Gough) and the right hon. Member for Vauxhall that the road ought to be double-tracked and not single-tracked where it runs under the building site. I gladly give an assurance that I hope it will be double-tracked before the opening. At all events, it will be very soon afterwards. What has happened arose from a mistake in the design. The road will certainly be made into a double-tracked road throughout. At the moment, it has a double track at each end but a single track where it runs underneath the airport building.
Mr. G. R. Strauss: I do not see how it is possible to make it a double-tracked road. The building is now being erected in such a way that it is not possible to widen the road.
Mr. Watkinson: It is possible to widen it. I have been there to look at it myself. Fortunately, there is room to do it between the pillars which hold the overpass. The work is now going on.
I want to mention one other interesting thing about the terminal building. We shall carry out some experiments in it. We shall try the Orly system, which will, I hope, get passengers more quickly and perhaps more individually from their train or motor car to the aircraft. Also, we are trying, for the first time in this country, what is called the "finger and gate" system. This is much easier to understand if I say that we are starting to build piers, like ordinary dockside piers, against which aircraft will pull up so that passengers can walk down a pier and step into their aircraft, as in the passenger terminal at Southampton Docks or similar docks.
It will be interesting to see how the pier system works. The Millbourn Committee has proposed that at London Airport piers should be tried out for the long-haul and short-haul buildings. We shall get valuable experience from
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that and see whether the pier idea works well, as I think it will.
My Department is in consultation with architects who are now preparing plans for the long-haul building in the central terminal area of London Airport. That will take the place of the greatly overcrowded buildings in the old London Airport North on the Bath Road, which we want to vacate as soon as we can. I am always considering how long it takes to get from London to its airport and as aircraft get faster so the delay looks worse and worse. I think that the House would like to know that with various experts my Department is considering three possibilities.
At the top of the list is a new road which will link the airport to the Chiswick fly-over now being built as part of the Cromwell Road extension and which, I hope, will be a double-decker road at least for some of the way from Chiswick fly-over to the airport. That might save knocking down some hundreds of houses—which I am anxious to avoid knocking down—and give us a fascinating new double-decker road, a principle which it might be possible to use elsewhere. The new road which continues Cromwell Road extension towards the airport and which forms the first part of the South Wales radial motor road is an important first priority and that is what we are now urgently examining.
Mr. John Rankin: When does the Minister expect that first suggestion to be in operation?
Mr. Watkinson: I cannot say at the moment. If the hon. Member will put down a Question, I will try to answer it. I am now examining the technical problems and the balance between knocked down houses and building a double-decker road. I have to consult all the local authorities, and so on, and I have to do it quickly. I agree that the matter is urgent.
We are examining the fascinating project of a monorail, but I cannot give any views about that until the Chief Inspecting Officer of Railways has pronounced on whether he feels that it is a safe form of passenger carrying at the very high speeds which we shall require, and which will be a good deal higher than those in Germany; so that the German model will not necessarily be

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the answer for this country. We shall also require a bus which can be taken off the monorail and motored round the airport so that we do not have to build a tunnel underneath the airport. This is a fascinating project, but it would not be right to lead the House to believe that it will or will not work. I have to await technical advice, but I shall be very glad if the technical advice says that it will work.
The third possibility is a rail link which has been surveyed and details of which I now have before me. That is a very expensive project, because it involves a deep tunnel under the airport runways. It would cost about £20 million—or not very much less—and is, therefore, a heavy capital commitment. Those are the three projects which I am examining and about two of which, anyway, I hope to come to a conclusion before long.
That deals with the airport side of things, except to say that I was impressed with the Report of the Select Committee on Estimates in the Session 1955–56, which recommended that municipalities should be encouraged to own and operate their own airports. I think that that is absolutely right, and I should like to see more municipalities going into the airport business and my Department getting out of it, because it is not really our business.
I am, therefore, glad to be able to tell the House that discussions are proceeding with Birmingham and Southampton to that end. Liverpool is now holding exploratory talks with my Department and we will do all we can to encourage them to take over and operate their airports if they wish to do so, subject only to one thing, that we must keep overriding safety control in our own hands, because we could not have different systems of safety at different airports. Subject to that, I should be delighted if local authorities took airports off my hands—and paid for them.
At this stage, I must refer to the second half of the Motion which deals with the accounts and future of the two Corporations. I shall also refer to the independent operators, because I want to make it plain that I regard this air business today more as a merchant air service than as a kind of Department of the Government. We should never have built up our shipping fleets if shipping had been
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regarded entirely as a Department of the Government. Although I leave the independent operators until last, for reasons which will become obvious, that is not to be taken to mean that I think they are last in importance. I do not think that they are.
No doubt hon. Members have read the accounts of British European Airways and B.O.A.C., so I will not go through them in detail. But there are one or two things which I want to point out. B. E. A.' s results last year were down. The net profit was £217,000 compared with roughly £600,000 the previous year. That was for obvious reasons. There was a lower revenue rate, resulting from a higher proportion of traffic carried at cheap off-peak fares, while unit costs went up. However, load-ton-miles increased by 14 per cent., which is very good, while freight-ton-miles—to which the House should pay some attention; I am a great believer in air freight carrying which, I think, will become more important—went up by 22 per cent. against an increase in world freight-ton-mileage of 13 per cent. That is a very good situation.
While I do not intend to go through all the figures, because I am sure that hon. Members will have read them, I am very glad to say that at the moment this year appears to be a good deal better than last year. Both traffic and financial results are better—traffic is up by 16 per cent. and the estimated profit for the calendar year 1957 exceeded £1 million.
That is very satisfactory and shows what enlightened private enterprise methods will do for a State airline when people get down to it, as they have done. Of course, we all agree that this is a highly competitive business and the industry must adopt this kind of method if it is to survive.
I am sure that the House will want me to say something about B. E. A.' s aircraft. It is very difficult to discuss this matter at Question Time and, as the House is the right place for these matters to be discussed, I hope that hon. Members will bear with me if I give a short history of B. E. A.' s jet requirements. In the autumn of last year, the Chairman of B.E.A. told me that the Corporation had now to consider a requirement for a medium-range jet aircraft. This was only to supplement the turbo-prop aircraft which were to continue to be the main carriers

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for B.E.A. and the main basis for its services. However, it was rightly felt that B.E.A. would, in time, meet competition from jet aircraft in Europe and should have some answer to it.
It appeared to me and the Minister of Supply, quite independently of the view which Lord Douglas of Kirtleside and his colleagues formed, that there might well be a market in the world, perhaps a large one, for this kind of aircraft. B.E.A. produced its design requirements, with all support and encouragement from me and my right hon. Friend, and submitted them to the aircraft industry.
As a result, three firms initially displayed an interest in the project—Avros, Bristols and de Havillands. The first difficulty that arises—it always arises—is that any order which B.E.A. might place could not possibly be large enough to justify any firm's putting down a production line for this aircraft. I am advised that 60, 70, or 80 aircraft of this type would have to be sold to make the manufacture of them worth while.
B. E. A.' s order is, of course, for 20 to 25 aircraft. That is a problem, and it was not surprising to find that all the firms initially concerned felt that they would need a great deal of support from the Ministry of Supply to help to develop this new aircraft. However, B.O.A.C. has succeeded in ordering the V.C.10 as a private venture, and I think that B.E.A. could do the same.
If there has been delay—and I do not accept that six months is a long time in which to consider a completely new type of aircraft—it has certainly been profitably spent, because it has ensured that the aircraft offered to B.E.A. are now on a private venture basis, which is a good thing. If firms take the risk they will be the keener to make this project a success.
The discussions which my right hon. Friend and the Ministry of Supply had with a view to seeing that all this happened, and to make this aircraft a genuine private venture, led, naturally, to negotiations within the industry to see what joint effort, financially and technically, could be harnessed to this project. B.E.A. gave thought to this matter, and I think that the history of its attitude was, to begin with, that the Corporation rather favoured the Bristol design concept, but, after discussion and technical
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examination, the final decision of its board was in favour of the de Havilland design concept.
At all times B.E.A. was and is willing that the construction of the aircraft should be shared as widely as desirable among any number of reputable firms. I will not trouble the House with the detailed course of the various negotiations. In the later stages B.E.A. joined in the talks and, latterly, B.E.A. has been having talks with the industry on its own, as a customer should. I am very grateful to B.E.A., particularly Lord Douglas of Kirtleside and Sir John Keeling, Deputy Chairman of B.E.A., for putting in a lot of work in these discussions, which are obviously difficult and highly technical.
I do not think that there is now any aircraft manufacturer who has not had the chance of associating himself with this order if he wants to, bearing in mind all the difficulties. That, I think, was the right way in which to approach the matter. There is no compulsion, but my right hon. Friend and I wanted to ensure that we gave firms a chance to participate if they wished and if they could meet B. E. A.' s requirements as the customer.
For the moment, this is the last major civil aircraft order to be placed. Then we shall have new and interesting developments. However, they are some years away. Therefore, an opportunity is provided for a concentration of resources which will be of great importance to the future of the industry. As I have said, there is no compulsion.
The House would like to know what is the present position. The Bristol Company and the Hawker Siddeley Company have formed a joint company which is offering a medium jet aircraft conforming to the general design specifications set out by B.E.A. At present, this group has a sales team in America testing out the possibilities of this project. I am told that they have at least one inquiry that they are discussing in America. De Havilland' s have also set up an association of companies.
Associated with them are the Fairey Aviation Company and Hunting Aircraft. The Rolls-Royce Company has agreed to supply and finance the complete power plant for the de Havilland concept or any other aircraft. They make engines and are willing to supply them to any firm.

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Handley Page Ltd. has offered technical assistance to the de Havilland Company because of its special experience with high-speed aircraft and tail design. I am told that an endeavour will be made to pass on to Saunders-Roe Limited, by subcontracting any work that the group cannot undertake itself.
All these final detailed proposals from the de Havilland group and its associates reached my right hon. Friend and myself only this morning. They are being urgently examined. I hope that in the next few days we shall know how the Bristol-Hawker Siddeley group has got on in America, which will show us the world's reaction to this kind of aircraft, and we shall have a clearer knowledge of the basis on which the de Havilland offer is made. We shall have the benefit of the technical examination which B.E.A. is making into that project, both as to finance and production capacity. As I said in the House last week, as soon as those two matters are clear a decision will be taken and it will be announced.
Sir Arthur Vere Harvey: I want to be quite fair in this matter. My right hon. Friend has explained that the Hawker-Bristol group is exploring the market in the United States. May we be assured that equal facilities are available to the de Havilland group, or is it tied in not being able to offer its aircraft overseas?
Mr. Watkinson: I am glad that my hon. Friend has asked that question. Of course, when I make these statements I do not make them on behalf of the aircraft industry, but, to some extent, only as the customer. It is the view of de Havilland' s and their associates that they would prefer to do their selling overseas when they are a little further forward, first, with their combination of companies, which they have now finalised, and, secondly, I think they want to try to obtain the B.E.A. order first. As it is only today that they have sent their propositions to my right hon. Friend and me, they may well decide now to do what Bristol's have decided to do. It is a free world, and, of course, they can do what they like.
Lord Balniel: Surely the de Havilland organisation has a kind of gentleman's agreement with B.E.A. that
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it will not divulge its specifications or seek outside orders until a contract has either been signed or rejected with B.E.A.
Mr. Watkinson: Relationships between customers and suppliers are not for me. It is a private venture, but I think my hon. Friend is quite right.
I do not express my opinion on its merits, but there is a view that it is sometimes a mistake to tell possible competitors—of course, the Americans are competitors with us in this sphere—too much about a new kind of aircraft that you propose to produce. There are conflicting interests. My own view, however, is that the Government should try to stick to presenting the facts and to getting the best backing for whatever aircraft is eventually put on the stocks. That is the limit of our responsibility.
I have tried to tell the House frankly and clearly what is the present position. No doubt the right hon. Member for Vauxhall will express his views. I shall listen to them with great interest.
May I now say a word about B.O.A.C. The story here at the moment is not so encouraging. Last year the Corporation fared better, as can be seen from the current accounts that we are examining. A profit of £303,000 was made, compared with £118,000 the year before. This is why it is right to pay enormous attention to trying to get these aircraft right and, if necessary, wait a little time to be sure that they are right, because with B.O.A.C. one sees clearly the disadvantages of not having the right tools for the job at the right moment.
In saying that, I am not criticising anybody, but it is a hard fact that the Corporation's position, as shown in the accounts which we are examining and the year in which we now are, has been much affected by the fact that it has been operating obsolescent aircraft. In the modern world that is done only at one's peril. Therefore, it is only fair to say that in the year 1956–57 the Corporation's increase of profit would have been a good deal greater if the Britannia 102 had entered service on time. Nobody regrets the fact that it did not do so more than the Bristol Aircraft Company, but it is my duty to the Corporation to explain the reason for its financial result.
Because of this fact the Corporation's unit costs rose to 39.9d. per capacity ton

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mile, and although it did well in some ways we have to recognise that the number of passengers carried increased by only 7 per cent., as compared with the world increase of 15 per cent.
As to the current year, I must tell the House that we still suffer from the same problem. I must not lead the House to believe that the Corporation will have a good financial year, because it will not. I cannot tell what the result will be, but I had talks with the Chairman, before he left for his Canadian and American visit, to ascertain what new business can be done out there, and we agreed that the Corporation must now make a great attempt to cut down its internal costs. They are very high and if it is to put its financial position right a constructive effort must be made to do it.
To sum up, all I would say is that the Corporation has suffered from not having the right aircraft at the right time. The proof is that since the DC7C and the Britannia have been in service on the North Atlantic the Corporation's position has completely changed. In October, 1957, its share of the traffic was back to 40 per cent. having been below 30 per cent., and this rise was entirely due to having the right aircraft. I think that any hon. Members who have travelled in its aircraft will agree that the Corporation gives better service than any other airline in the world.
It should not be thought that I am criticising the airline; I am not. It has suffered great difficulties. I am thankful that it is now getting the right aircraft, and I am satisfied that with the right aircraft its position in the world will be completely changed, and that it will attain the target which it has set itself of being the leading long-distance airline in the world.
The Corporation has now got its ten DC7Cs, which, to some extent, fill the gap on the North Atlantic route, and 15 Britannia 102s, besides five of the long-range Britannia 312s. All these air developments become so publicised nowadays that it is nice to discuss them in the more factual and calmer atmosphere of the House of Commons.
I should like to say a word about the Britannia's icing difficulties. Here, there has been a real triumph for our back-room boys, and I say that with complete
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sincerity. A really fine job of work has been done by men from the R.A.E., and personnel of B.O.A.C. and Bristols. This work has received little notice; there has been plenty of criticism when things have gone wrong, but not so much praise for the scientists and others who have been working night and day, for seven days a week, to get things put right.
We always seem to have to pay the penalty for being first with a new project. We paid the penalty with the Comet because we were ahead of the world and did not quite understand enough about stresses and strains of flight at 40,000 feet. We have had it with the Britannia, because this was the first big turbo-prop aircraft to fly through intense monsoon conditions. The ordinary icing conditions which we expected and were known in advance were cured in advance but, particularly when the aircraft flew through heavy monsoon conditions over India and some parts of Africa, it experienced a completely new kind of icing—a dry ice which heat made worse instead of better, and also a mixture of dry and wet ice, the cures for which inter-acted upon each other, so to speak, and made the position worse. This was something that no aircraft had met before, and it was made worse by the U-shaped design of the inlet of the Proteus engine. That was another thing which nobody could have foreseen.
The House will not want a technical dissertation from me about the icing difficulties of the Britannia, but I want to pay tribute to the men who put it right. They made test rigs and subjected them to all sorts of icing conditions. They were working under great difficulties for seven days a week—men from B.O.A.C., the R.A.E. and other Government establishments, such as the National Gas Turbine Establishment and Bristol's. I know that on that job they did everything that man could do to get this right—and I believe that they have got it right.
They have found a system of injecting air into the intake whereby a certain turbulence is created, which seems to have cured both kinds of icing. But they have not left it at that. They have carried out experiments with increased cowl heat and a multi-duct power plant—the "rabbit warren"—which is a completely redesigned intake. Beyond that there is the N.A.C.A. intake, which shields the

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engine and prevents the entry of ice. I mention that to show that we are trying to over-insure against any more difficulties. If any new difficulty should arise there are at least two more new devices being produced by Bristol's for B.O.A.C. which should meet it. Thanks to the devoted work of the men whom I have mentioned we have, I believe, cured this problem. Good luck to the Britannia, which is undoubtedly a world-beating aircraft.
Mr. A. E. Hunter: The Minister will be glad to know that the Britannia is also a very quiet aircraft.
Mr. Watkinson: As a satisfied customer, I certainly agree with the hon. Member. It is a very fine aircraft, and we are all sorry that it was late. I do not blame anybody about it. I have been assured by B.O.A.C. that it will do its best to publicise the machine and fill it with passengers. I wish good luck to the Corporation, because its future depends upon its having the right aircraft at the right time.
Mr. Rankin: Is the Minister now leaving the B.O.A.C. Report?
Mr. Watkinson: No, Sir.
Mr. Rankin: I am concerned with the second paragraph in the general remarks in page 8. The Minister has said that the coming year may not be a good one for the Corporation. That second paragraph indicates the same thing, but it also implies that the Corporation will not have a free hand in putting into effect the necessary remedial measures.
Mr. Watkinson: I am just coming to that point. The Corporation's future depends upon the aircraft position. We have the Britannia ready and it will be capitalised. B.O.A.C. has bought a certain number of Boeing aircraft, largely as a stop-gap operation to preserve its position on the North Atlantic route. When the big Britannias start meeting the competition of the Boeing 707s nobody knows which will win. Some say that the turbo-prop will maintain its position against the big jet, and others say that the big jet will have a great deal of trouble through noise, the high landing speeds required, and many other problems which have to be resolved. It was right
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for the Corporation to back itself both ways.
Beyond that we must look, for the last big conventional jet aircraft, to the V.C.10. This country has not taken much notice of the fact that a contract has been signed with B.O.A.C. for 35 of these aircraft, and I believe that it has an option for another 20. B.O.A.C. regard this aircraft as a world beater. It is faster than the Boeing 707 and has completely different characteristics. It can be operated from almost any type of runway, in almost any kind of conditions. It is able to fly the North Atlantic and the Eastern routes, and fly into airports which the Boeing 707 could not use at present. The Corporation has received the support of the Government and myself in trying to insure a profitable future, and I wish good luck to it.
I wish now to refer to the independent companies. I have always thought it odd that my Ministry should be called the Ministry of Transport and Civil Aviation. Aviation, in my opinion, is not civil and, again in my opinion, aviation is transport. More and more we must look upon it as transport, and as we regard civil aviation as a sort of merchant air service—I hope that that concept is coming—it will remove this awkward and anomalous distinction between airlines which are Government owned and those which are privately owned airlines.
Both publicly and privately-owned airlines are trying to do the same job and some are working under great handicaps. They all deserve the support of my Ministry, and of the Minister, regardless of ownership. I do not wish the House, particulary hon. Members opposite, to doubt that I intend to go on doing all that I can to help the privately-owned airlines. That is my duty and I intend to carry it out.
It is interesting to see that in many Ways these airlines are doing well. I have often heard grumbles from B.E.A. that the independents are cutting its throat. But B.E.A. is doing well and so are the independent companies. In many ways both are helping one another, and that is the kind of economy we wish to see. In the inclusive tour and air car-ferry services, and also in other ways, they have done remarkably well. Neither the Corporations nor the independent companies have harmed one another and I shall

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support any way in which they may get together to their mutual advantage, a tendency which, I hope, will develop over the next year or so.
In 1956–57, the independent companies carried 733,000 passengers, which does not seem a bad record. Their total traffic of 25 million load-ton miles compares with B.E.A.'s figure of 89 million and a great tribute is due to them.
Mr. Rankin: The right hon. Gentleman has given the passenger figure of the independent operators for 1956–57. Will he compare that figure with the figure for 1953–54?
Mr. Watkinson: I will ask my hon. Friend to do so, because I think that I have delayed the House long enough.
Sir Ian Clark Hutchison: Will my right hon. Friend say something about the development at Prestwick?
Mr. Watkinson: Yes. I left out Prestwick and to do that would be to do something for which I should never be forgiven.
The Government reaffirm that this is, so to speak, our second international airport. The jet era presents great problems and we had to think up a new plan for Prestwick to take account of the new jet developments. That we are doing, so there is no doubt that Prestwick will be able to cope with the problems.
Mr. F. A. Burden: I hope that my right hon. Friend will not allow his interest in Prestwick to sabotage his references to the independent companies.
Mr. Watkinson: Prestwick has certainly not been left out of the airport plans.
I do not wish to conclude by talking exclusively about the independent companies, but I regard them as part of the merchant air service which to our children, if not to us, may mean much more than we can imagine today. We should do all we can to prepare for the future and to harness every kind of help—whether provided by shipping companies or the Government, or by anybody else—to this end.
We hear too much from right hon. and hon. Members—like the right hon.
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Member for Huyton (Mr. H. Wilson), for example—who pontificate about our stagnant economy and state that we are not getting anywhere and that we do not know what to do. But here is an example of a new and vigorous industry which is quite prepared to face a challenging and difficult future, and which realises that on its success depends much of the prosperity of our country.
The Government will do all they can to support this industry. They will do so not by going into the business and trying to teach the industry how to do its job, but by encouraging, as I said before—I know that hon. Members opposite do not like these words—the adoption of the most enlightened principles of private enterprise. That is the only way in which this industry will succeed and in that spirit I commend the Motion to the House.
4.26 p.m.
Mr. G. R. Strauss: The Minister has given us a full, informative and interesting survey of the civil aviation situation in this country. We are grateful to him for doing so and sympathise with him in his difficult task of trying to concentrate into a short time observations on so many of the problems affecting this industry.
The right hon. Gentleman did so very well but he said some things with which we disagree and some things which puzzled us and are unable to understand. His constant emphasis on the enlightened private enterprise which, he says, has characterised the nationalised industries, seems to us to be complete nonsense. Either we have an efficient and imaginative enterprise, or we have a bad enterprise. Whether it is operated as a private enterprise or as a national enterprise is something different. Obviously, it is the object of all enterprise, to be enlightened. To suggest that private enterprise is necessarily good, and public bad, is meaningless. This part of the right hon. Gentleman's speech fell well below the standard of the rest.
Today, the House is in the happy position of considering two success stories, the Reports of the two Corporations, and also in having the same Minister as we had last year to explain them to us. In view of the constant reshuffling of posts which has been a feature of this Government, due to resignations and other

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causes, it is gratifying that we have had a comparative measure of stability in the occupation of this most important post. I am not sure whether I would express the same view about some of the right hon. Gentleman's predecessors.
We are considering the highly satisfactory record of these two Corporations. The Minister was a little ungenerous and unfair in his comments about B.O.A.C. when he suggested that the Corporation was not as successful as it might have been.
Mr. Watkinson: I said—I am sure that the right hon. Gentleman will not disagree—that it was not for want of trying on the part of the Corporations. I said several times that no Corporation can succeed unless it has the right aircraft at the right time.
Mr. Strauss: We all agree with that. We all know—the Minister has admitted this—that the difficulty which has affected B.O.A.C. has been the long delays over the Britannia. I am not blaming the Bristol Aircraft Company, though I suppose one could say, if one wished to make a political point, that it is private enterprise on the one hand and public enterprise on the other. But I think it unfair to say that B.O.A.C. has not such a good story to tell because it has not had the right aeroplanes, when the absence of the right aircraft was in no way the responsibility or the fault of the Corporation.
Mr. Watkinson Mr. Watkinson indicated assent.
Mr. Strauss: In spite of that, and many other difficulties which beset them during the year, the Corporations have a remarkable record of achievement. I do not wish to read out the many figures that one could select to prove that point, but I will mention two which I consider are important and symbolic. British European Airways Corporation increased its operating revenue by 11 per cent. and B.O.A.C., in spite of its difficulties, by 14·5 per cent. The number of passengers the latter carried increased by 19 per cent.
Perhaps the best indication of the success of the Corporations is contained in a sentence in page 11 of the B.E.A. Report. The paragraph states:
"Whereas world air traffic in the past five years has increased by 93 per cent., B.E.A.'s traffic has increased by 144 per cent. Thus B.E.A.'s rate of expansion has been 55 per cent. greater than the overall world average."
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That is a very striking achievement. In view of that statement, which is unquestionable, it is just worth while reminding the House for a moment—
Mr. Burden: As the right hon. Gentleman is drawing that parallel between the two Corporations it is only right that I should point out to him that, as he criticised the Bristol Aeroplane Company because it did not provide the right aircraft for B.O.A.C., so he should give credit, when mentioning the growth of B.E.A., to the manufacturers of the Viscount, which has been largely responsible for that growth.
Mr. Strauss: Certainly. I give credit to the British aircraft industry as a whole. It is a very good industry. Some parts are not as good as others, but, on the whole, it is excellent. I was not criticising the Bristol Company because of its difficulties, which may have been unavoidable. I hope that that statement satisfies the hon. Member for Gillingham (Mr. Burden). In view of the great achievement embodied in the quotation I have just made, let me recall a comment made some years ago by the right hon. Gentleman who is now Secretary of State for the Colonies. In March, 1949, he said:
"The evils of bureaucracy, centralisation and monopoly will always prevent us having our proper position in the air."—[OFFICIAL REPORT, 1st March, 1949; Vol. 462, c. 313.]
I mention that quotation not to embarrass the Secretary of State, but because it is very similar to the sentiments which are being expressed today by some of the leaders of the steel industry at the annual meetings of their companies.
Before I deal with wider issues affecting the Corporations, and, in particular, with the problem of new aircraft which the British European Airways Corporation wants to order, I want to make one or two comments and ask a few questions about the Reports. They show, as they have shown in previous years, that there is an extraordinary and continual growth in the popularity of air travel all over the world. It comes out particularly in the Report of the B.E.A. It is truly remarkable that, in the year with which the Report is dealing, one-third of the travellers from this country to the Continent went by air in the summer and more than half in the winter. Particularly revealing is the fact that the great

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increase in the passenger service of B.O.A.C. has been in the tourist class, which accounts for 57 per cent. of the traffic it carries.
I am pleased that B.O.A.C. is budgeting for a very substantial increase indeed in the amount of its carrying capacity in coming years. Its Report says that in ten years it hopes to quadruple its present capacity. It is clear and praiseworthy that it is looking ahead in such a bold way. The growth of the tourist traffic endorses the view held by many people, including myself and it may be the Minister, that the future of civil aviation depends far more on providing seats in aeroplanes which are cheap rather than in providing aeroplanes which are fast. Those who put the emphasis on speed—on getting to New York an hour or two sooner—are few. What is really important is to provide aeroplanes in which accommodation can be sold by the thousand at cheap rates. The operating companies that will succeed in doing that to the greatest extent will lead the world in civil aviation.
It is for that reason that I regretted to read in today's newspapers that many of the fares for civil aviation will go up in the course of the year. That may be inevitable. I am pleased to see though that a new "economy" class is to be introduced at fares substantially below the existing tourist fares. Even if there is a measure of discomfort for the passengers who travel in that way I have no doubt that there will be a big increase in the number of people who will take advantage of that facility.
Another matter, after the cheapness of fares, which is of immense importance—this opinion is confirmed for me by what I have been told in parts of the world where I have been travelling—is the quality of the service which is rendered by the competing aircraft companies. There is no doubt that our two Corporations have given a fine lead in this matter. I have been informed everywhere that the service rendered by the people who man our aircraft is outstandingly better than that of any other, and is much appreciated.
It might be proper if congratulations went out from both sides of this House on this occasion to all those who are responsible and who operate that service. My own experience is that the friendly,
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helpful, patient, good-tempered and, with it all, highly efficient service rendered by the officials who meet passengers, and the stewards on the aeroplanes, is beyond praise. It puts all passengers at their ease and makes them feel comfortable and at home.
I desire to put a few questions to the Parliamentary Secretary, and I hope that he will be able to reply to them later. May I take it that there will be no cuts whatsoever, as a result of the Government's new economy measures, during the present year, which will have any harmful effect, however indirect, upon our airlines? I am not aware that the cuts will damage them in any way, but I would like an assurance about this.
We have been told by the Minister that agreement has been reached with Soviet Russia about interchange air services between this country and Moscow. We are all pleased to hear it. The Minister did not say when they were likely to start. Perhaps he does not know and, therefore, cannot tell us, but if he can the information will be interesting and much appreciated. He has told us, further, about the new organisation of London Airport and of the improvements which will take place there. Plans are now being made—they appear to be rather late—for building new reception and departure halls for long-distance aircraft. Everyone who knows the present ones must think they are rather antiquated. Nevertheless, in spite of the very bad facilities, it is remarkable how well things have been managed there. It will be interesting to know when the new facilities will be built and will be available to passengers.
Another point concerns the costs of sales and advertising. One of the advantages of having two Corporations which issue their Reports at the same time is that one can compare their costs and expenses. There is a big discrepancy here. According to the B.E.A. Report, the Corporation's costs for sales, advertising and publicity went up last year by 12·8 per cent., which is understandable in view of the increased costs of the increased services. On the other hand, according to the tables submitted to us by B.O.A.C., its costs went up by 28 per cent. There is an increase of £500,000 in advertising. There may be a good explanation for the difference. It may

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be justifiable, but it is striking. Whereas B.E.A.'s total costs for these services went up by £250,000, those of the B.O.A.C. went up by £1 million. The difference is such that an explanation is called for, and I hope that it will be forthcoming.
The only other question arising directly out of the Reports is one closely related to the statement of the Minister about the independent operators. The right hon. Gentleman has told us that the independent operators are doing a fine job, that they are part of British civil aviation for which he is responsible, and that he intends to give them every encouragement. He does not pay any attention at all to the comments in the Reports, of B.E.A. in particular, where it is alleged that, in fact, the operations of the independent companies are doing damage—may be, serious damage—to British Europen Airways.
It has never been our view that the independent companies are not rendering a service to civil aviation. We have always felt that there is a place for them and that they can usefully supplement the work done by the Corporations. It has been our strongly held view, and is today, that it would be wrong for civil aviation as a whole if, by competition or other means, they were allowed to erode each other's powers and position. The end of it would be a weakened civil aviation organisation in this country and the prospect for British aviation would be damaged.
Mr. Burden: Would not the right hon. Member agree that we do not want to get this out of balance? There is a case here both for the Corporations and the independents, but the measure of how much independents have been eroding B.E.A. business is surely made clear by the enormous figures of increased traffic which B.E.A. has acquired recently and which he himself gave. There is no erosion at all; there is plenty of room for both.
Mr. Strauss: That is not my view, and it is not the view of the British European Airways Corporation. Because of the importance of this matter, I want to quote one or two comments made in the Report and to ask the Minister whether he thinks the Corporation is talking nonsense or
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that those comments are correct. In page 26 the Report talks about the work of the independent operators and has some comments to make about the inclusive tour services. There, it is said:
"The volume of these services to the main Continental holiday centres has, however, now grown far beyond the scale which could be regarded as economically helpful in dealing with peak traffic demands."
Further, the Report states:
"In our view these operations have caused material diversion of traffic from B.E.A.' s services."
It goes on, in a paragraph headed "Colonial Coach Services," to talk about the independent airlines services to Cyprus and Gibraltar, and there the Report says:
"We doubt whether this type of service has, in its actual operation, met those requirements…"
Those are requirements the Minister previously laid down—
"at any rate, so far as services to Cyprus and Gibraltar are concerned… In fact, we believe diversion of traffic from our own services has resulted."
Those statements were put forward, no doubt, after due consideration by this national airline and cannot be dismissed as nonsense. The question which arises, and which the Government of the day have to decide, is, to what extent it is right to allow independent operators to interfere with the traffic of British European Airways Corporation, and so to weaken it and make it less able in the long run to meet the competition of the many other lines which run over its routes?
Mr. Paul Williams: What the right hon. Member is saying, surely, is that A.T.A.C., in the past, has been sanctioning inclusive tours and other operations of that nature and has behaved in a totally irresponsible way.
Mr. Strauss: I say nothing of the sort. I say that A.T.A.C. has behaved perfectly correctly, following directives given it by the Minister. The Minister has given certain directives and A.T.A.C. is carrying out those directives. It is not the responsibility of A.T.A.C., but of the Minister.
Either the statements in this Report are untrue, in which case the Minister ought to say that he denies them completely, or they are correct, in which case the Minister ought to take some action. It

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may be that no serious damage has been done so far, although the Corporation says it has. If the situation is allowed to continue, serious damage might be done in future. In this matter, I and my colleagues are not just concerned about B.E.A. because it is a publicly-owned undertaking. We want a strong British civil aviation instrument, or instruments, and do not want anything to be done which will weaken those instruments.
As probably hon. Members are aware, similar problems arise in the United States of America. There, a Civil Aeronautics Board stops this kind of thing happening. It makes no difference whether it is a privately-owned or publicly-owned company, it is stopped if it is against the interests of civil aviation generally. In one year that Board turned down 350 applications from potential operators because, if they had been allowed to operate—although obviously that might have been of some convenience to some people—it would weaken American Civil Aviation as a whole.
Sir A. V. Harvey: Assuming that the right hon. Member is correct, to take one example, B.E.A. has a route from London to Manchester where, more often than not, it is impossbile to get a seat and very few additional aircraft are provided. Does he think that the consumers' interests would be protected if independents were given an opportunity to operate besides the Corporation?
Mr. Strauss: I cannot give an answer on a proposal of that sort—I am not technically equipped and one would want to know all sorts of facts—but the Corporation alleges that it is being economically damaged. When the Minister gave a directive to A.T.A.C. he did so on the understanding that such damage would not take place. The Corporation says that it has taken place. It may be right or wrong, but the Minister must either controvert this statement and say that the Corporation is talking nonsense, or, if the argument is correct, he should modify his instructions so that this erosion will not continue, with harmful results to British aviation in years to come.
We believe that to some extent in the directives he gives to A.T.A.C. the Minister is prejudiced, maybe as a result of the views of hon. Members sitting behind him, in favour of private enterprise as against national enterprise, and
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he should not have that prejudice. He should look at this British service as a whole and, from wherever it comes, he should look at a threat to British civil aviation as a whole. If that threat is what B.E.A. says it is, he should take some action to counteract it.
Mr. Farey-Jones: In view of the last two sentences of the right hon. Member's speech, may I ask how, in his general desire to create a civil aviation instrument, he proposes to give room for expansion of independent airlines if the views of hon. Members behind him are that a B.E.A. monopoly should be created and expanded?
Mr. Strauss: I do not want to create a monopoly. As I have said, the independents can render a service. I want to protect the future of civil airlines in this country just as in America the Civil Aeronautics Board protects civil aviation against erosion.
Mr. Farey-Jones: Ever since it was created, the Civil Aeronautics Board has given a sphere of influence to every single airline operating in or outside the United States. That is what we should do to the independents here.
Mr. Strauss: I really cannot pursue that. I do not know if what the hon. Member says is really related to the situation in this country. Time is pressing and I have given way many times, and I do not want to say anything further on that subject.
I want to come to the part of the Minister's speech dealing with the present requirements of B.E.A. for a number of jet planes which will travel at about 600 miles per hour. The value of the contract is likely to be about £30 million, and it is obviously exceedingly important to all the companies concerned, as well as the Corporation, to know which way the decision is going and which group of companies will get the order.
Speaking as one who always believes everything I see in the Press, I had hoped that the right hon. Gentleman would tell us today the final outcome of all these deliberations, but we were disappointed. The Minister says he hopes to be able to make some announcement before long, and, therefore, we will have to wait. But I want to make one or two comments on this problem.

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I believe that the Minister has the right, and that it is his duty, when a big order of this sort is to be placed, to have a say. After surveying the aircraft industry as a whole and considering its future, the Government may have some view as to where an order of this sort is going. There may well be a conflict between the desires of the Corporation and the interests of the aircraft industry, and no one can complain—I certainly do not—if the Government step in and say that they want to have a look at this and may want to offer strong advice to the Corporation before making a final decision. The responsibility of doing so must be that of the Minister. It is not his responsibility to say what type of plane the Corporation wants to buy. The Corporation has decided to buy a jet plane. No doubt the technical advice which it had before coming to that decision was strong and correct.
There are a few laymen, and I am among them, who are rather doubtful whether, in fact, a jet plane is the most suitable for B.E.A., and we wonder whether the Corporation has not been influenced in making its decision by the fact that its competitors are ordering jet planes, particularly Caravel, the French plane; and whether, as jet planes are only economic at distances of 800 miles or more, they are really suitable for this Corporation's services. It is a technical problem, and I can only express an amateur's view. The fact is that the Corporation has decided that it wants a jet plane, and the problem now is where the order is to be placed.
Again, it is impossible for a layman to do more than express tentative comments about the relative potential of the firms tendering for this job. I have no doubt at all that the designs of both groups are very good, probably equally good. The designers, after all, have worked on the specifications laid down by B.E.A., and there is probably not very much between them. But I know very well from my own experience as Minister of Supply—and the present Minister of Supply, who is here today, knows it very well—that what is all important when such an order is being given is to take account of the ability of the firms concerned to carry out that order and to deliver the plane on the date promised and that the aircraft, when
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delivered, will come up to this specification. This is just as important as, or may be more important than, the qualities of the design.
In this case, what is happening? I only know what has been stated in the Press. On the one side, we have Bristol's and Hawker's, both companies with great reputations and resources, which have produced marvellous planes in the past. They are to set up a joint company to carry out this project. I am doubtful about joint companies. They mean joint control and joint responsibility, and I do not like it. I gather that, in this company which is proposed, the chief engineer will come from Hawker's and the chief designer from Bristol's.
Once we have a joint company carrying out a project there is always the danger of blurred responsibility and loyalties, and it is often, though not always, not satisfactory. I am sure that every care will be taken by both companies to have a satisfactory arrangement, but, prima facie, it is not a prospect which attracts me. I think, further, that it is not necessarily a step towards that concentration of the industry which the Government desire and which must take place. To set up a joint company to carry out some particular project does not bring us any nearer to that complete concentration which means amalgamation of companies, under one leadership and control. That is not taking place here.
On the other side, there is de Havillands, the only firm which has experience in producing a jet aircraft, and in whose team—and it is the team in control of the project which is all important—B.E.A. presumably has full confidence. I understand, and this was confirmed by what the Minister said, that the B.E.A. prefer at present the de Havilland project.
Sir A. V. Harvey: May I qualify what the right hon. Gentleman has just said? De Havilland' s are not the only company producing jet aircraft, as the Avro Company has produced a military jet plane.
Mr. Strauss: I thought I made it clear that I was speaking about civil planes.
Sir A. V. Harvey: No.
Mr. Strauss: If I did not, I meant to do so, and I apologise.

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The Government say that they want a company which can do this work out of its own resources, and which will have sufficient not only for building the aeroplane but for meeting all emergencies and difficulties should there be a failure. I understand, though I do not know, that both contending parties maintain that they have ample resources for any possibilities which may occur, and I understand further that de Havilland' s has organised a group of companies to which it is to sub-contract a great deal of its work.
In view of these facts, and unless there are other facts entirely unknown to me and the public, it seems that the Minister will have to have a very strong case, supported by convincing facts, if he is to insist upon the Corporation giving the order to a group other than that which it wants. The Minister is entitled to take such a decision in certain circumstances, but, in the present case I do not see how he could be right in doing so.
There is a point which he mentioned about the Bristol and Hawker group having a team in the United States trying to sell this plane, and, of course, it is true that no planes built for the Corporation can be economic propositions without big sales abroad. I do not think that the sending of this team to the United States is relevant to the situation at all. De Havilland' s could also, if it wanted, send out a selling team to the United States.
All experience shows that air corporations in other parts of the world will only put in an order for a particular plane when it has been accepted by one of the existing corporations, and maybe not even at that stage, but later, when it is evident that it will be a success. Just because one group has rushed in and sent a selling team to the United States, where we know they will undoubtedly receive a friendly response—because the Americans are very friendly and hospitable—the Government should not be in any way biased in its favour.
If one can judge by the expressions on the faces of hon. Members while I have been expressing these views, they have met with a fair amount of support from both sides of the House. Unless the Government have very much stronger reasons than those about which we now know for turning down B.E.A., they ought not to do so; and if they do they
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will be severely questioned on their reasons. We hope that the decision, one way or another, will be taken before long, as it is undesirable that the Corporation or the two companies—the one that loses the order is likely to suffer severely—should be left in doubt any longer than is necessary.
Before sitting down I wish to say something about the broader aspects of the aircraft industry, because one cannot talk about the Reports of the Corporations and civil aviation generally in the country without making some reference to the aircraft industry. The Corporations not succeed as great operators of airlines unless they had behind them a firm base in a successful aircraft industry. There is no doubt that the present capacity of the aircraft industry has to be reduced substantially and that this is going to be an extraordinarily painful process. It is one which faced the Labour Government just prior to the Korean conflict, and it was a very difficult problem. But something has got to be done about it.
Two things seem to me to be essential. The first is that the requirements of civil aviation and military aviation should De decided and pronounced as quickly as possible. I know that an aircraft requirements committee has been established for this purpose. I hope that its decision will not be long delayed, although, plainly, it cannot answer all the important questions involved in a week or two.
The second thing is that if the British aircraft industry is to maintain its present position and lead, there must be no significant cut in development and research. We have all been worried about this. Forecasts of cuts in research and development were made in the Defence White Paper. We should like to be assured that nothing is going to be done to reduce the amount of research and development in British aviation even if that costs money, for if that happens there is no doubt that the position of the aircraft industry in the coming years will be immensely weakened and that it will no longer be able to maintain its present strong competitive position.
I apologise for having spoken longer than I intended as I know that many hon. Members wish to participate in the debate. However, I hope to be forgiven because on each occasion when an hon.

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Member wanted to ask a question I gave way. The comments of some hon. Members who will speak after me may be rather more critical about the Corporations than were mine, but I think all will agree that, in spite of grave difficulties beyond their control, these two corporations have during the year we are considering done a fine job. They present to us today a record of steady and, in many ways, spectacular progress.
I am sure that we would all agree, too, that the Corporations have proved that they possess capable and imaginative leadership and that throughout their staff there is a fine spirit of loyalty and service. I do not think that any hon. Member on either side of the House has any reason to doubt that their future, as their past, will redound throughout the world to the credit of this nation's skill, enterprise, vigour and vitality.
5.4 p.m.
Lord Balniel: I feel rather diffident about entering this debate, because I realise very well that civil aviation debates are usually conducted by hon. Members who are rather expert in civil aviation. I must disclaim straight away, before it becomes too obvious to the House, that I have no particular expertese in this matter. None the less, I make no apology for speaking in the debate because there are many thousands of my constituents whose well-being and livelihood depend on the health of civil aviation in this country and, more particularly, upon the health and strength of the aircraft companies.
I, in common with my constituents, have been extremely perturbed by reading a whole flood of Press comments, inspired from what source I do not know—though one would have thought them justified in view of my right hon. Friend's remarks today—to the effect that B.E.A. has reached a decision in favour of purchasing the DH121 jet airliner whereas the Government have reached a contrary decision and are opposing its purchase.
I must confess that I join with the right hon. Member for Vauxhall (Mr. G. R. Strauss) in expressing my disappointment that a decision on these very protracted and delicate negotiations was not announced today. I am sure that my right hon. Friend will be the first to agree
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that this delay is having a serious and prejudicial effect on the export potential of the aircraft industry.
Mr. Watkinson: I am not sure that my hon. Friend heard me when I said that it was only this morning that my right hon. Friend and I received de Havilland' s final proposals.
Lord Balniel: Yes, I heard my right hon. Friend say that. I was merely going to say that I hoped that, as it was in July last year that Lord Douglas of Kirtleside said he hoped shortly to order an aircraft, it will not be long before a definite decision is reached.
I would also agree with the right hon. Member for Vauxhall in saying that I feel that my right hon. Friend skirted very delicately round this question of negotiations. So far as I understand, we have not been given any explanation at all as to what lies at the bottom of this dispute between the Government Departments and B.E.A. We have not been told why the Government are apparently intervening in favour of one company and not on behalf of others.
When one remembers that the total cost of producing this aircraft, developing it and manufacturing it, is to be borne by private finance, irrespective of which company is involved, whether it be the Bristol Hawker group or the de Havilland, Fairey, Hunting group in association with Rolls-Royce, I think that one must question the matter. I think that the ethical position in which the Government find themselves intervening in support of one group of companies as opposed to another when, in fact, the Government have no financial interest at all in the matter is something which, while understandable, should be explained very fully to the House and justified to the House. To a layman, it appears that the Government are trying to bring indirect pressure to bear, perhaps by means of refusing sanction to B.E.A. to raise the £20 million or £30 million which it needs. It would appear that the Government are trying to call the tune without paying the piper.
Mr. Frederick Gough: In the interests of fairness, I think it should be pointed out that the Government are eventually going to pay for this aircraft.
Members: No.
Lord Balniel: I must disagree with my hon. Friend. The Government, in the shape of the customer, are paying for the aircraft, but the Government are having no financial interest whatsoever in the cost of producing it, and, indeed, is having no financial interest in the risk involved.
Of course, I would agree—perhaps I might quote the Aeronautical Correspondent of The Times—that the Government have an indirect interest in the well-being of the aircraft companies. The Aeronautical Correspondent of The Times says:
"The organisation receiving the order will have had to satisfy the Ministries that they have ample financial, technical and production facilities to carry the project through without any risk of the Government having to come to the rescue at any stage."
Presumably, the Government's interest lies either in the production facilities or in the financial strength of the companies, but, equally presumably, these very matters have already been looked at by B.E.A. Presumably, before reaching a decision B.E.A. sent its auditors to the various companies to see their financial structure. It must also have sent its engineers to the Bristol-Hawker Group and the de Havilland group to see whether the necessary production facilities are available.
In winding up the debate, will my hon. Friend say whether B.E.A. is completely satisfied with the production facilities of the new de Havilland organisation—production facilities which are available in the constituency of my hon. Friend the Member for East Bournemouth and Christchurch (Mr. N. Nicolson) at Christchurch, at Hatfield, at Chester, and at Portsmouth; production facilities which are available through Hunting and Fairey at Luton and Hayes? Is not B.E.A. completely satisfied that those production facilities are quite adequate? Is not B.E.A. equally satisfied that the financial strength of the company is completely adequate?
What is wrong with a financial structure in which 67½ per cent. of the financial risk is borne by de Havilland, 22½ per cent. is borne by Hunting, 10 per cent. is borne by Fairey and the total cost of the installation and the total cost of the development of the engines is being borne by Rolls-Royce? I hope that my hon. Friend will be able to confirm that B.E.A.
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is completely satisfied with the production facilities and the financial facilities of this organisation of companies.
I think that in spheres other than those who earn their living in civil aviation, many of the ordinary public would be very disturbed if B.E.A. were ordered to buy an aircraft other than of its own choosing. I think that many people would regard it as a very serious matter indeed if, having chosen an aircraft on grounds of its efficiency, its economic operation, its safety and also because of the confidence which it has in the company making it, B.E.A. were then over-ruled by Government Departments for reasons entirely unrelated to the efficiency of the aircraft and were ordered to buy another aircraft.
If that happened, I feel that it would be extremely difficult for B.E.A. to inspire among its staff the confidence in the aircraft which is so necessary. While my right hon. Friend perhaps has the power to force B.E.A. to buy an aircraft which it would not choose of its own will, he certainly has not the power to force operators of overseas airlines to buy the same aircraft and it would not commend an aircraft to overseas airline operators if it were known that B.E.A. were forced to buy it against its wish.
I should like to ask my hon. Friend whether he can give a categorical assurance to the House that B.E.A. will not be directed to purchase any aircraft other than that which it itself has chosen.
5.14 p.m.
Mr. A. E. Hunter: I have already questioned the Minister about the future aircraft requirements of B.E.A., I have a number of matters to raise on the Annual Report, I know that a number of other hon. Members wish to take part in the debate and I therefore will not follow the noble Lord the Member for Hertford (Lord Balniel) in his line of argument except to say that I have sympathy with him in the subject that he has raised and that I hope the Minister will take a careful note of the important points which he has made.
The Minister has made an interesting statement today. I have often disagreed with him on high policy and other policies, but I feel that he brings a modern mind to this great subject. He sees the vast possibilities of air transport for Britain in the future and he brings a

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young modern mind to a policy of expansion. He sees the great field ahead. When he mentioned that by 1968 13 million passengers would pass through London Airport each year, he revealed that air travel, for Britain and the world, will expand in the years ahead.
Despite a difficult year, the Annual Report and Accounts of the airline Corporations for the year ending March, 1957, show a surplus of trading profits and report progress and expansion. We are still in the early days of air transit and there are many difficult days ahead, but I am confident that air travel will continue to grow and that the Corporations in this country will continue to expand. This is an important part of British industry. The tourist trade is worth a good deal to this country in foreign currency, and it is, therefore, in our interest to encourage air travel and to encourage foreign visitors. It is also important to the aircraft industry, if wisely directed by the Government.
The noble Lord the Member for Hertford said he was a layman in these matters. So am I. My interest has grown from a constituency point of view. I do not know whether the Minister took an interest in civil flying before he became Minister of Transport and Civil Aviation, but he certainly takes an interest in it now. Like him, I find civil transport fascinating and absorbing. Although I take a great interest in London Airport and the airline Corporations initially from a constituency point of view, I have found the study interesting and well worth while.
The Corporations have brought to south-west Middlesex problems such as those mentioned by the Minister and others which I shall mention. We have the problem of noise and of travel and of the pressure on housing accommodation. In addition, however, the Corporations have brought great benefits to south-west Middlesex in that they are very large employers of labour. The Corporations employ about 20,000 people in the United Kingdom and altogether about 30,000 work at London Airport. This has brought problems, but it has also brought great benefit through the Corporations being such large employers of labour in south-west Middlesex.
Among the problems confronting air transport is that mentioned by my right
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hon. Friend the Member for Vauxhall (Mr. Strauss). He rightly said that cheaper fares were as important as more speed. If we are to expand air travel so that people from all classes of the community can use it, we must offer cheaper fares. I am sorry that an increase has been announced by B.O.A.C. in the Press today, and I hope that the Corporations will pursue a policy of endeavouring to offer much cheaper fares in the future, and that they will seek international cooperation for this policy.
We can see great progress in B.E.A., and the opening this summer of Gatwick Airport will help that Corporation very much. I understand that it is to operate on Channel Islands traffic during the holiday season. Here I should like to congratulate B.E.A. on its advertising. Those who have seen its advertisements on television of the all-in holiday will know that it is very effective and well done. I am very glad to be able to give that word of praise.
The Minister spoke of the problem of travel to London Airport. As hon. Members know, the Bath Road is very crowded, and if either the B.E.A. or the B.O.A.C. coaches are delayed as a consequence, the aircraft also are often delayed. There is need to take some of the traffic off that road, and off the upper length of the road leading to the airport, so I am very pleased that the right hon. Gentleman is considering the monorail system, or a railway link between Central London and the airport. In that way, I hope, this problem will be solved in the very near future.
Reference has also been made to the aircraft industry. I believe that the success of the Corporations is now of paramount importance to that industry. The alterations in defence policy and the cancelling of military contracts means that, in future, the industry will have to depend on supplying the needs of civil aviation. The Minister of Supply, in a recent interview with trade union representatives, when told that redundancy was taking place, pressed on the union representatives that, in future, orders must be sought amongst the civil aircraft companies. We have the independent operators, but I think that all hon. Members will agree that the two Corporations will now be the main source of the industry's orders.

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The success of B.E.A. and B.O.A.C. cart also help the British aircraft export industry. On the last occasion that this matter was mentioned, the House was told that that export trade of aircraft and aircraft parts amounted to over £100 million. Therefore, with an expanding industry, and with more people travelling by air, the industry's exports to India and to Asia, for instance, can be most important, especially when many employees are unfortunately facing the prospect of redundancy.
I know that the Minister has taken an interest in the noise problem, and from his Answers to Questions that I have put to him in the House I know that he is consulting the international airports, and has warned aircraft manufacturers to pay attention to this matter. In addition to noise, there are many other problems connected with air transport, that are not confined to this country. Could not the Minister take a lead in trying to bring about an international conference of the leading air Powers, so as to secure co-operation with other countries on such things as safety of travel, noise, vibration and damage, and cheaper fares?
It is not clear who is legally responsible for damage caused by aircraft, and this is a matter which worries not only householders living near international airports but local authorities as well. Is the Minister, as owner of London Airport, responsible for such damage, or are the operators? This point was put by my hon. Friend the Member for Uxbridge (Mr. Beswick) in a recent debate concerning alleged damages to houses in my constituency. I am sorry that my hon. Friend is unable to be here today to take part in this discussion. He always takes a great interest in the work and progress of the Corporations. Could not the Minister attempt to get standardisation of liability or procedures for damage? As, even now, we are only on the eve of man's discovery of the skies—after all, it is only a matter of thirty or forty years since man began to fly—could we not try to get international co-operation on some of the matters I have mentioned? Let us trust that the bomber aircraft will disappear, and that the civil aircraft will take its place.
There was once a song called either "The Skies are Free to Everyone", or
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"The Air is Free to Everyone". The Minister spoke of the freedom of the skies being needed for our civil aircraft in much the same way as the British Merchant Fleet needs the freedom of the seas. With the great technical and scientific advances being made, could not the Minister take the lead in getting an international conference such as I suggest to discuss subjects such as I have mentioned? It might be much easier to get agreement on civil flying than on disarmament. I very much hope that the Minister will give consideration to my suggestion.
I take a great interest in the Corporations, because so many thousands of my constituents work for them. My right hon. Friend the Member for Vauxhall referred, quite rightly, to the keenness of the staff. I find that all employees at London Airport, whether crew or ground staff, are very keen indeed to makes the Corporations a great success. I welcome this debate, therefore, as I feel that the future and success of the B.E.A. and B.O.A.C. is linked with the future and success of Britain as a great civil flying Power for peace and progress.
5.29 p.m.
Sir Arthur Vere Harvey: I am sure we have all listened with great interest to the views of the hon. Member for Feltham (Mr. Hunter). In the years since the war we have had many interesting debates on this subject, and I have noticed that there has always been at least some degree of unanimity on the main issues as they affect this country. In those debates I have, I think, invariably declared my interest in the aircraft industry, but I am now on the eve of leaving it completely—a decision I took some eighteen months ago. My efforts in business will take me, I hope, into a less controversial, though, perhaps, not less interesting a sphere.
The revolutionary development that is taking place in the missile field has brought the aircraft industry up against a major dilemma in the last twelve months or so. Almost overnight, the demand for military and civil aircraft has rapidly decreased, and the same applies in the United States. That can be compared with the situation in 1950, when there were 50 different aircraft projects under consideration. If I might say so, the Labour Government of that day, through

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the Ministry of Supply, initiated rather too many different aircraft projects.
I want to say a word about supersonic aircraft. We have got aeronautics with us for good. Whatever form or shape or size they may take, they are with us. Undoubtedly civilian supersonic aircraft will come, and I am concerned at the very little we are doing in the investigation into the future of supersonic aircraft. So far as I know, no suitable engines are being developed, and if Britain is to do her part it is essential that the engine-makers be given encouragement to go ahead. If we started now with the engine and the airframe, we should not have an aircraft ready until 1970. It would take from 10 to 12 years to get a civilian supersonic aircraft flying.
Looking at the world traffic in the next ten years, Mr. Raymond of the Douglas Company in America estimated that by 1967 the world cargo volume will be 11 billion ton miles, which is tremendous. It shows the prize there is if we go out and grasp it. But this demands special new aircraft, and it should be linked with aircraft which are capable of carrying bulk cargo. Very little is said these days about the freight business, and I believe that there is a tremendous future if only we concentrate upon it. The freight figures of B.E.A. have gone up considerably because of the larger hold in the Viscount; but, even so, that is not nearly enough. We want special cargo-carrying aircraft operating at night. They could earn revenue carrying bulk equipment not only on the Continent, but over the Atlantic as well. Ordinary airliners are quite unsuitable for that task.
Mr. Burden: Would my right hon. Friend agree that it is absolutely imperative that the Government and the aircraft companies should look into this problem, in view of the enormous freightage which will come about with the inception of the European Free Trade Area?
Sir A. V. Harvey: Yes, I quite agree. That will enhance the possibilities. I think one should mention that the Armstrong Whitworth Company and the Hawker-Siddeley Group are building the Type 650, a freight carrier, which is a private enterprise effort with no Government finance involved. I should like to know if the Corporations are seriously
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looking into this. Airwork had a go at it across the Atlantic. They failed because they had little or no Government support. They had to fly the Atlantic with freight that they were able to pick up and watch American aircraft carrying British mail.
Mr. Ian Mikardo: The Corporation was prevented by the Government from offering this service.
Sir A. V. Harvey: No attempt has been made to do it since Airwork failed, and there has been nothing in the Report about it. I should like to know if the Corporations are looking into it and whether the independent companies are being encouraged.
Taking an area of the globe enclosed by a circle of 6,400 statute miles with its radius centred on London, this would encompass nearly all the main cities in the world. In this area lies 58 per cent. of the world's land area, 50 per cent. of its population and 90 per cent. of its commerce. Here, as I see it, civil aviation is going ahead much faster than any of us realise. In the years since the war, passenger traffic has gone up on the average from 16 per cent. to 20 per cent. each year. As soon as prices come down for the individual, as they will with faster aircraft—not immediately, but in the years to come—great things will happen. It will be possible to connect London with any capital city in the world in less than a single day's flying.
The present position is not an easy one, as the right hon. Member for Vauxhall (Mr. G. R. Strauss) said. One has to consider the aircraft industry in the context of the problem we are discussing. It is not an easy situation either for the operators or for the aircraft industry. Tremendous sums of money are involved; things can go wrong, and the risk is tremendous. The industry is obviously going to be cut even more, and I should like to see the development carried out sensibly. I should like the industry to be taken into the confidence of the Government and to be told in more detail what are their intentions in the military field. If it were possible to build civil aircraft in the same plant as is used for military aircraft, the overheads in connection with building civil aircraft could be kept down.

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The Ministry of Supply has far exceeded its powers in dealing with this problem. I recognise that the Treasury has got to give consent to B.E.A. to make the investment, but, after all, it is private money which is backing the venture. My right hon. Friend the Minister of Transport is quite right to ask the Minister of Supply to look into this matter, but I think he has got out of his depth in the last two months. I wish he had left it a little more to the companies and to the Corporations to determine their own affairs. I am sure he has done his best, but I think he has been influenced by the civil servants who surround him at Shell Mex House. My experience of them does not lead me to say that they are the most efficient people in this business. There are some very good people there, but there are also a great number of third-raters.
If we consider the question of B.E.A. jet aircraft, it seems that one firm was prepared to carry the financial responsibility and brought the others into line in saying that they would do so. So it seems that some good was done in that direction. I recognise that the Treasury and my right hon. Friend have got a weapon in dealing with contracts. But what is the result? There has been squabbling and bickering and, I would go so far as to say, some double-dealing [HON. MEMBERS: "Oh."] That is my information. Although I am within the privilege of the House, I am not going to give the facts. The plan to bring three firms together, which was the intention three weeks ago, is quite impossible. It does not work out in practice. Imagine throwing together design teams who have been built up over a period of years. Imagine them suddenly being told that they have got to work with another team eighty miles away. They would be looking over their shoulders for the first two years. I am sure it would not work. It would not help the industry or the project.
Mr. Mikardo: I do not disagree substantially with the argument which the hon. Gentleman is putting forward, but I would draw attention to the very strong and serious allegation that he has made of double-dealing. It is the problem of the Government, not mine, but I hope that if that allegation stands on the record the Joint Parliamentary Secretary will have something to say about it when he winds up.
Sir A. V. Harvey: I do not want to modify what I have said, but I think it ought to be put into its correct perspective. There have been firms desperate to get this order, and I think that they have gone beyond the ordinary bounds of business in trying to do so. I will perhaps put it that way.
Mr. Gough: I seldom agree with the hon. Member for Reading (Mr. Mikardo), but I find myself in complete agreement with him on this matter. We are speaking within the privilege of this House, and if there is double-dealing it is our duty to say so. If my hon. Friend is not going to give details, he is casting a slur on both sides of the House. We do not know if the double-dealing has been in my hon. Friend's constituency or in other constituencies where the Hawker-Siddeley and Bristol groups are situated. Will my hon. Friend say where the double-dealing lies?
Sir A. V. Harvey: I do not want to become involved in personalities, because I do not think it would help, but I did modify what I said. What I was getting at was that the original agreements between the Bristol Company and de Havilland's were torn up in the middle of the negotiations and then the other two got together. I think it is probably best to leave it at that.
I am quite unbiased in this matter. All I want to see happen is that B.E.A. should have the best aircraft that can be built for it. One has to take into account past successes, and even past failures. de Havilland' s has something like 45,000 flying hours behind it with various types of Comets, on flights to Woomera, Christmas Island, across the Atlantic, and 15 times a week to Beirut. This is a great deal of experience of fully pressurised fuselages. One cannot ignore it in weighing up the merits of these two propositions.
Avro, of course, has successfully built the V-bomber, which is pressurised only in the nose. That is a subtle difference; but there is great experience behind that group, including Bristol's, which is now happily operating the Britannia as a very successful aircraft. It will take a great deal of careful thought and consideration to decide which proposition is the better.
If the three firms could have been brought together as a consortium it might have been the ideal thing, but we must be guided by B.E.A. I have been highly

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critical of B.E.A. at times when it has needed a jerk, but in the last few years Lord Douglas has built a very fine team of men around him, together with technicians who decide upon the equipment which he wants to operate. He has done a far better job for B.E.A. than has been done for B.O.A.C. in these past years. He has a more efficient airline. He has technical men to help and advise him, and I hate to think what will happen if that advice is not taken. I leave that to the imagination of hon. Members. I hope that at any rate a decision will be taken very soon and that we shall get on with the job.
B.O.A.C. last year, and the year before, bought some DC7 aircraft with dollars, and we were told at the time that if British aircraft came along those would be replaced and sold. As the Britannia has proved a successful aircraft, will the DC7s be sold for dollars and further Britannias ordered from Bristol's? It would be logical to do so if the industry is short of work, and I think that the DC7s could be sold in a very ready market. In deciding these matters, we must take into account the fact that the airlines of the world combined make 1·5 per cent. net profit. This is very small, and there may be difficulty in obtaining capital for world airlines. This is why prices go up, but perhaps we shall soon reach a standstill for a period so that we may consolidate what has been done in the past ten years, both in design and in the amenities offered to passengers.
I was horrified in September and October at the bad publicity put out by B.O.A.C. about the Britannia. It became world news and denigrated British efforts. When similar things happen in America, we are the last to hear about them. The Americans keep very quiet about their failures. Their Stratocruiser was frequently grounded a few years ago, and it was often described as the best three-engined aircraft in the world. The Americans never told us their troubles, and the aircraft went on selling. I hope that B.O.A.C. will handle these matters at a better level in the future.
Reference has been made in the debate to research and development, and I beg my right hon. Friend, who is in the Cabinet, not to cut the Estimates on this account at all. Last year about £200
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million was spent. If the figure is cut it will be the death-knell of the aircraft industry in Britain; but for heaven's sake let the Government see that the money is properly spent. I should like to see all aircraft when built tried out at Boscombe Down and there get through their teething troubles away from the public eye. I should also like to see a good deal of the money that is devoted to research and development spent on accessories. It is not the aircraft frames that fail but the bits and pieces which go into them untried in service. The Americans have the advantage that their accessories are tried out in military aircraft before being installed, as in the Boeing 707s, where they give a satisfactory performance. We do not do that. There is a lack of co-operation between the military and civil authorities.
Although I have been connected with a firm concerned, perhaps I might be allowed to mention laminar flow, which sucks air into the wing and improves performance by as much as 38 per cent. It would be a revolutionary event if this device were developed, but the difficulty of persuading civil servants even about the prospects in this field involves years of hard work and effort. We require a clear policy for military and civil aircraft. I hope that the Minister of Defence will soon come to a conclusion on matters which have been outstanding since the White Paper was published. There should be decisions on both the military and civil side, because the two go together and these decisions affect not only defence but our own airlines and our export trade.
I ask my right hon. Friend to consider seriously setting up an air policy tribunal, a body of men quite independent of the industry. It should be composed of men like Lord Hives, now retired, who got to the top the hard way. Somebody like him as chairman, if he would serve, could do a tremendous job for the country. In America, the Findletter Commission does a great work in this respect. A body such as this could inquire into the Corporations, the independent airlines and Fighting Services, and into any branch of the industry and advise the Government. In view of the changes in Ministerial appointments, it is necessary that some such body should be in being.
Britain is not lagging behind at the moment. It undoubtedly leads the world

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in engines, although the lead has been shortened in recent years. In the Britannia we have what the Americans have not got, whatever they care to say about it. We have the best airliner in the world. We have also some remarkable heavy bombers. We must maintain this lead. Our whole economy revolves round the country putting its efforts and brains in such things as nuclear energy, about which we heard such good news last week, and the aircraft industry. The only way to success is to spend money in the early days on research and development. We shall never reap dividends unless we do that. I urge my right hon. Friend to do these things for all he is worth, to see that the money is wisely spent and to ensure that clear-cut guidance on policy is given to the industry and to the airlines. If those things are done, we shall hold our own.
5.50 p.m.
Mr. Cledwyn Hughes: The hon. Member for Macclesfield (Sir A. V. Harvey) has great experience in civil aviation. As a result, he is listened to with great respect when he makes his contributions to these debates. It is all the more unfortunate that he made his allegation of double dealing without any shred of real evidence to support him. It was unworthy of him. I also thought his reference to third-raters in the Ministry was uncalled for. He gave no reasons for making the statement, and I do not think that he should have made it.
In common with previous speakers, I was gratified to learn that, despite great difficulties, B.E.A. was able to increase its total traffic in the year under review by as much as 14 per cent., and also to show a net profit of over £200,000. The rate of expansion of B.E.A. has been remarkable—55 per cent.—greater than the overall world average. It is all the more noteworthy when we consider that it was achieved in the year of the conflict with Egypt and of general unrest in the Middle East. There is no doubt that the two British Corporations carry a reputation for reliability and efficiency of service in all the countries in which they operate which is second to none, and the House of Commons should be proud that this is so. But having praised these achievements, as a member representing a Welsh
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constituency, it is now my duty to criticise B.E.A. for its complete lack of initiative in Wales.
There is a growing body of opinion in Wales which is resentful of the continued neglect of the Principality by B.E.A. I would remind the House that Wales is the only country in Europe this side of the Iron Curtain which is not served by the Corporation. I have said before during these debates, and I say again, that when B.E.A. was sustaining losses Wales, through taxation, was bearing a share of those losses. Since, however, B.E.A. has been making profits Wales has derived no benefit. Hon. Members on both sides of the House must accept that this is grossly unfair, so I hope the Minister will make the strongest representations to the Corporation to ensure that a start is made shortly in providing regular services in Wales.
Many of us had hoped that Wales would have derived some benefit from the new Anglo-Irish Air Agreement of 1956. We felt that the monopoly previously enjoyed by Aer Lingus was hampering developments in Wales, but in the event we are no further ahead, as the Minister knows. The Schedule to the new Agreement included four new Welsh routes, but three of the routes were to and from Haverfordwest, which had been closed by the time the Agreement was concluded, and so we did not derive any significant benefit from the new Agreement.
Page 49 of the Report before us states:
"B.E.A. is keenly aware of its responsibility to the British public, and the Corporation welcomes constructive criticism."
Up to the present the Welsh section of the British public is non-existent as regards B.E.A. The Report deals at length on pages 16 and 17 with domestic services and states that it is the intention to continue the expansion which has been so marked a feature of the domestic routes in recent years. It goes on to say:
"With the co-operation of the regional Advisory Councils, we believe that considerable progress to this end can be made in the next two years."
When the Minister winds up the debate, will he say whether Wales is to share in part of this progress during the next two or three years? I know the Minister knows that the Welsh Advisory Council

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on Civil Aviation has been urging some modest development for years without any noticeable result.
I want to make the following suggestions to the Minister. First, a regular service from Haverfordwest to London via Swansea and Cardiff should be given serious consideration by B.E.A. Haverfordwest serves a large catchment area in South-West Wales and will become increasingly important as the development of Milford Haven as a great oil port gets under way. Swansea and Cardiff are the centres of a great industrial area, and the argument which the Report advances on page 16 in relation to Manchester and Birmingham as important feeder links with the Corporation's international network is equally applicable to Cardiff and Swansea.
Secondly, I would refer to the three daily services to Dublin operated by B.E.A. during the summer. Is it not practicable to include an airfield in North Wales on one of these routes? The Minister knows that there are airfields in Wrexham and that there are first-line airfields in Anglesey; so it should not be beyond the bounds of possibility to include some position in North Wales on the route from London to Dublin.
These are modest suggestions, and I hope that the Minister will put them forward to the Corporation. It may well answer that it can hardly add to its difficulties when it is already running the domestic services at a loss. My argument is that our demands are reasonable and that the Corporation cannot leave Wales out of the picture indefinitely. I do not underestimate the contribution made by Cambrian Airways which, as the House knows, is an independent air company operating in South Wales. It has made a contribution since the end of the war which should be praised, but I have come to the conclusion that when B.E.A. entered into its agreement with this company on 9th May, 1956, the Corporation shrugged off its responsibilities towards Wales, and this is unworthy of a public corporation. I do not know the financial position of Cambrian Airways, but I am sure it could not afford to operate a service with the risk of any loss.
What if, for example, B.E.A. discontinued the present Isle of Man route? Could that be run profitably by a private
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company? Cambrian Airways deserves every encouragement, but we need two basic, regular services in Wales—one in South Wales and one in North Wales—run by the public Corporation. Here I draw the attention of the Minister to the maps at the end of the Report, and I would remind the right hon. Gentleman again that the Corporation is not leaving a city or a region out of its programme but is neglecting a whole country which, through its industry and its tourist trade, is making a vital contribution to the economy of these islands.
5.58 p.m.
Mr. Farey-Jones: I shall confine my remarks to as few minutes as possible. First, I congratulate the Ministry of Civil Aviation on the extraordinary wisdom of its direction since we were last discussing the problem we are discussing today. I want to place on record that I have the gravest fear of the shotgun marriages that apparently are taking place behind the scenes at the present time, because therein lies a menace to the future of civil aviation and to a number of other industries. I deprecate it when I hear anyone in the House say that any board of directors, however they are or were created, should be dictated to by the gentlemen in Whitehall about the machinery or instruments they should use. That is a vital principle of civil aviation from which this House must never depart.
If rumour is true in this case these shotgun weddings are apparently being directed by the Ministry of Supply. In civil and military aviation the Ministry of Supply has been for years the biggest barnacle on the keel of efficiency that ever was. [Laughter.] That is mixing my metaphors, but I hope very much that the practice will not be allowed to continue. I say that because, when it conies to discussing the efficiency of firms like de Havilland's or the Bristol Aeroplane Company, that is not what is really at the heart of this matter.
There are thousands of people in my constituency who are directly or indirectly engaged in the consideration of aviation problems, just as there are in the divisions of many other hon. Members. But, good heavens, what a terrific mistake this House would be guilty of if we said to a nationalised Corporation or to a private enterprise concern that it

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must use the equipment which a buffoon—I said "buffoon" not "boffin"—in Whitehall said it should use. I hope my hon. Friends will never be a party to that.
I should like to know whether either of the Corporations has a far-seeing plan for what is becoming a growing menace in civil aviation—the shortage of pilots. All engaged in the aircraft industry know that within three years from now there will be a desperate shortage. Most hon. Members know the reason for it. I should like a scheme to be organised to provide a pool of pilots for the Corporations and any other companies which may be engaged in aviation.
I should also like to know whether the Department is playing any part in a vital development, the development of atomic-powered flying-boats. Is there any scheme for equipping the Princess flying-boats with atomic power, thus starting a competely new venture in aviation?
I want the Minister to tell me whether the Government would regard with favour the development of a helicopter corporation to serve the remote parts of Wales and Scotland? We already know that helicopter services can be made to pay. I should also like to know whether the Prestwick Pioneer will be developed in various parts of the world. We know that the late managing director of the company did a wonderful job with the aircraft, and we should like something done about it.
Both Corporations have, in the last year, done a better job than they have done for many years previously. However—let us make no mistake about it—even foals could provide additional passenger services with flying developing as it is today. Only wise men realise that ten years from now the traffic will be fantastic, so much so that neither a developed nor an extended London Airport or, Gatwick Airport will be able to deal with its. In the light of my experience in air transport, I am convinced that this country' must synchronise with its land plane development the development of atomic flying-boats, and I hope that the Minister will have something to say on that subject tonight or on some future occasion.
Because air transport is so seldom discussed in this House, I feel that tonight a very great tribute should be paid to the
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pilots of the Corporations who have performed a fantastic and wonderful job in the last five years. I hope that the House will support me in that tribute.
The Deputy-Speaker (Sir Charles MacAndrew): Mr. Mikardo.
Mr. Mikardo rose—
Mr. Rankin: On a point of order, Mr. Deputy-Speaker. Are we to understand that with the intervention of my hon. Friend the Member for Reading (Mr. Mikardo) the debate is now concluding?
The Deputy-Speaker: I understand that the arrangement made through the usual channels was that the debate should finish at about 7 p.m. and that we should then proceed with the debate on the Report and Accounts of the North of Scotland Hydro-Electric Board.
Mr. Rankin: May I point out to you, Mr. Deputy-Speaker, that I was given to understand that the arrangement to close the debate at 7 p.m. was a flexible one and that those who desired to participate in the debate would not be excluded? Is that now not the case?
The Deputy-Speaker: So far as the Chair is concerned, this debate could continue until 10 p.m.
Mr. Rankin: May I take it, then, Mr. Deputy-Speaker, that hon. Members on both sides of the House who still desire to contribute to the debate will have a right to do so when the Front Bench speakers have finished?
The Deputy-Speaker: When this debate comes to an end it will be wound up by two Front Bench speakers, one from each side, and they will be followed by two more Front Bench speakers opening another debate, the one on the Report and Accounts of the North of Scotland Hydro-Electric Board.
6.7 p.m.
Mr. Ian Mikardo: I think that, in the light of what you have just said, Mr. Deputy-Speaker, we are approaching the end of a debate which, in common with most of the debates that we have on civil aviation, has been characterised by an absolute minimum of heat and controversy and by a series of constructive speeches from both sides. In case the—
Mr. Rankin: I am sure that my hon. Friend will realise that certain rights have been abused this evening. The whole thing is a swindle.
Mr. Mikardo: I was about to say, when interrupted by my hon. Friend the Member for Govan (Mr. Rankin), who is now leaving the Chamber, that, in case the Joint Parliamentary Secretary is in a state of palpitation, I want at once to assure him that the report which appeared on the front page of the Daily Express this morning to the effect that the Opposition intended to divide the House on this Motion was characterised by the same level of inaccuracy as characterises almost all that appears in the Daily Express except the football scores.
My only regret about the debate—I say this as one whose occupancy of a seat on the Opposition Front Bench is highly temporary and transient, and, indeed, fleeting—is that there has not been time for more back bench Members to take part.
I wish, first, to comment on a number of points arising out of the Reports of the two Corporations. Secondly, following the excellent example set by the Minister, I wish to direct the attention of the House to some of the long-term problems which face the industry, and, in particular, some which arise out of the structure of the industry.
I shall deal, first, with four points in the Reports which seem to me to be worthy of particular comment. The first, which has so far escaped attention, is the fact that the two Corporations, like all other enterprises, both publicly-owned and privately-owned, are being seriously and adversely affected by the high cost of money resulting from the Government's economic policies.
The fact is, and it is a great pity, that the more enterprising an organisation is—I repeat that this is true whether it be a public or a private one—and the more it seeks to make its equipment and methods the best and most up to date, the more it is penalised by the high interest policy. There is evidence in the Reports of both Corporations that they have not escaped from this.
The accounts in page 84 of the B.E.A. Report show that during the year the Corporation's bank loan rose from £500,000 to £1½ million. I should very
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much like to know what rate of interest the Corporation has to pay on that. The bank balance of B.O.A.C. is shown in the Report at no less than £10,800,000. I have gone closely through the accounts and supporting statements, but nowhere can I find anything which indicates what the Corporation has to pay in interest on its loan; but it is, clearly, a very substantial amount. These seem to me to represent unnecessary burdens, created entirely by Government financial policy, to place upon two Corporations in an industry in which, as everybody readily admits, the financial margin within which one works is very narrow indeed.
Secondly, I want to refer to the section of the Report—in page 39—which deals with airport planning. The right hon. Gentleman directed a good deal of his speech—and I am sure that we are all very grateful for what he said and for the information he gave—to the many problems which arise in airport development. I am sorry to have to introduce a critical note and I do so only because I draw attention to past mistakes in order to do what I can to ensure that the same mistakes are not repeated.
We have recently had, with a great flourish of trumpets, the opening and bringing into use of the Queen's Building, at London Airport. I am sorry to have to say that the Queen's Building is one of the most inefficient institutions for its purpose which I have ever come across in a very long career. In some respects it is an absolute mess and the right hon. Gentleman and his Department are responsible for it. In some parts it is impossible to do the work which is supposed to be done there.
That illustrates the folly of designing work places and working spaces without consulting the chaps, or their representatives, who will have to work in them. Intricate work has to be done in parts of the Queen's Building which have no access to the outside and where there is no natural light and no ventilation. The conditions make it impossible—not difficult, not embarrassing, not uncomfortable, but impossible—for the personnel who have to work there.
What the Ministry now has to do, after the building has been finished and made to look so pretty-pretty and opened with a great flourish of trumpets, is to rip out the walls and rip up floors in order to install air conditioning for the middle of

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the building. That would have been much cheaper if it had been done when the building was being erected in the first place. It might not have been necessary at all if the Ministry had taken the simple precaution of asking some of the people who were to work there what it would be like.
Many people have to work in the building. Many said that they would not work there. If they had carried out that threat—and they would have been quite justified, because conditions are appalling—that would have been most embarrassing and damaging to British European Airways. They finally said that they would be willing to work there if the Minister undertook that by the time the hot temperatures of the summer came along, when the place would become a bakehouse, the air conditioning would be installed.
That promise was given, but I understand that not only has no start been made with the installation of the air conditioning—and it should have been started by now if the work was to be finished by the summer—but, after much "hoo-hah" and haggling, the Ministry has not yet placed the contract for the air conditioning work, so that it is virtually certain that the building will not have civilised working conditions by the summer.
The Minister has said that there is to be a new long-haul building to replace the present somewhat unsatisfactory facilities—we all know why they are unsatisfactory—at the northern end of the airport. I suggest that he should ensure that the silly and thoughtless errors made with the Queen's Building are not made in this new building. The best way to ensure that is by seeing that before designing gets too far the people who will have to work in the building, or their representatives, are consulted about the design and the conditions of the workers.
Thirdly, I stress that each Report contains an excellent example of the value to the Corporations of the advice which they get from the trade union side of the National Joint Council. If any justification of the value to management of using the knowledge, sense and experience of the representatives of the people who work for it were required, it is provided by the two Reports.
The example in the Report of B.O.A.C. concerns the engine and propeller repair
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establishment at Treforest. It is not so long ago that the Corporation was seriously thinking about shutting down that establishment. Even more recently it was talking about running it down, if not shutting it down, to a small fraction of its present capacity. It was only because the trade unions did a serious job of examining the potential forward load for Treforest and arguing it until they were black and blue in the face that the management of the Corporation was finally persuaded that there was a permanent job for Treforest to do.
The Corporation is now clearly very glad that it took the advice of the unions, because in page 5 of the Report it says:
"The question was carefully studied and it was considered that the balance of advantage rested with overhauling these engines at the Treforest factory"—
instead of sending them back to the manufacturers—
"which is accordingly being equipped for its new tasks."
That is an excellent example of the way in which workers' participation in management is of great value to both sides.
The measure of that value is to be found in page 36 of the Report, where the accounts of the Treforest establishment appear. They show that profits in the year under review nearly doubled compared with the previous year. That, I repeat, is an establishment which might well have been shut down, but for the insistence of the workers and their representatives.
In page 42 of the Report of B.E.A. is a paragraph headed "Base expansion." I have seen the new hangar of British European Airways and I think that it will be a magnificent job, but I smile a little wryly when I remember that two or three years ago, when we were arguing about the closing down of the Renfrew base, the representatives of the workers said that Renfrew base ought to be retained and the Corporation said that it did not want to retain it. The management said that the workers were wrong in thinking that any extra capital expenditure would be needed to do the Renfrew work at London. The management said that all the Renfrew work and all the other work which could be reasonably foreseen could be handled in the Corporation's existing building. How very quickly the Corporation has been proved wrong!

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The fourth and final point arising immediately out of the Reports is one about which we have heard a good deal. That is about the way in which and the extent to which the airline operators—and, for that matter, the independent operators, too, although to a lesser extent—have been let down by the British aircraft manufacturing industry. As the House knows, I have said one or two hard things about that industry—nothing which I did not believe—but I am bound to say that I have never been so tough as was the hon. Member for Macclesfield (Sir A. V. Harvey) this afternoon.
I have said that the industry was incompetent; I have said that it was badly organised; I have said that is was very greedy; I have said that its particular efficiency has been in the design, development and production of sales baloney, but I have never said, as the hon. Member did, that it was guilty of double-dealing. We now have this evidence about ethical standards among British aircraft manufacturers from a director of an aircraft manufacturing company. I hope that the Minister of Supply, whom I am happy to see listening to the debate, will take cognisance of that and find out more and tell us more about it.
I was glad that the Minister said what he did about how much British Overseas Airways has been handicapped by the delay in delivery of the Britannia. I would say to the hon. Member for Macclesfield that it is no good talking about our publicity. There cannot be good publicity about bad things or bad publicity about good things.
For my sins, I have spent much time flying during the last twelve months. A great deal of that time was taken up in sitting in airports waiting for things to come and things to happen. When people all round the world are sitting around for a long time because an aircraft is supposed to depart at a certain time, and does not, and they are told that it did not depart because its engine did not function, then we cannot, by any amount of publicity, change their minds from thinking that they have been let down. The best way to get publicity about an aircraft is to deliver it when you say you will deliver it and deliver it up to specification.
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Nobody disputes the accuracy of what B.O.A.C. says about its new aircraft, but if one looks at the Report there is a contrast which is very unflattering to us in this House and to people in this country. I quote from page 5 of the B.O.A.C. Report:
"In view of the delays in bringing the aircraft into service—"
that is, the Britannia—
"the Corporation was obliged to disband temporarily the personnel of the Britannia fleet."
Do hon. Gentlemen appreciate what that involves? It means that there has been a building up of a fleet of personnel with different skills. They have been trained and are working, and then they are told, "Chaps, go home; we have no aeroplanes for you to work on now that you have been trained."
The Report goes on:
"The disruption caused by the postponement of Britannia services resulted in substantial expenditure. The delays also partly account for the lower percentage increase of capacity produced compared with the percentage for the preceding year."
If one looks at the previous page, there appears this sentence
"The DC7Cs—"
which, as hon. Gentlemen know, is an American aircraft—
"which had been ordered by the Corporation in March, 1955, were all delivered on or before the delivery dates provided in the contract…"
Of course, that, too, has its effect, because if hon. Gentlemen will turn to the accounts in page 34, where we find the account for technical training, preoperational, and development costs, we find that the expenditure ascribed to the Britannia in the two years 1955–56 and 1956–57 was almost exactly £2 million. The expenditure ascribed to the DC7C was about £600,000. The Britannia costs three times as much as the DC7C because of the delay in bringing the Britannia into service.
That is only the delay factor. In addition, there is the point which B.O.A.C. did not mention in its Report because I can think that it was only too charitable to do so. Whereas the DC7C was up to specification, the Britannia was well down on performance compared with its specification. It does not surprise me at all that B.O.A.C., faced with this problem of selecting a new aircraft upon which its future may depend, hesitate

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very much to adopt one in which the manufacturers of the Britannia will have a very significant part.
Sir A. V. Harvey: The hon. Gentleman has said that the Britannia was well down on specification. That is a very serious thing to say, when we are negotiating at present for overseas orders. Perhaps my hon. Friend the Joint Parliamentary Secretary will verify that statement, but my understanding was that the first flight of a prototype over the Atlantic was down on specification. However, I understand that that has now been corrected and the aircraft is now up to specification. It is wrong for the hon. Gentleman to make a statement which is not accurate.
Mr. Mikardo: The hon. Member ought to know that I would not have said that if I did not know that it was accurate. He ought not to use my time to ask questions of his hon. Friend. I shall be very happy to hear what the Parliamentary Secretary has to say about it. The fact that negotiations for sale have been carried out elsewhere is quite irrelevant, because overseas customers know all the facts and figures. The fact is that B.O.A.C. has a large claim on the Bristol Company over this aircraft. There must be something not quite right, because one cannot claim for nothing.
On the question of delay on the B.E.A. jet, it seemed to me that the Minister was very defensive. It is not quite as simple as he would have us believe. There have been really serious effects because of the delay. It is now more than six months since the Report was presented. Art that time the Corporation said that it was shortly expecting to make its decision and to place an order. Page 52 of the B.E.A. Report reads:
"The Corporation expects shortly to make a decision on the project considered most suitable, and to place an order…"
That is in respect of the new B.E.A. aircraft. The Chairman's covering letter at the beginning of the Report is dated 30th July. The Corporation was clearly expecting to place an order months ago, and it has not been able to do so.
I want to say one or two words, very shortly, about two long-term problems of the industry arising out of its structure. I think that this is a suitable moment to have a look at this question. The post-war structure of British civil aviation
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grew out of the Act of 1946. Although the intervening years have seen certain changes in the original pattern that the Act laid down—for instance, the reduction in the number of corporations from three to two, the elimination of a separate Ministry of Civil Aviation, and changes in the relations between the Corporations and the private operators—the basic structure still remains.
Now we have reached a time when—with the dislocation of the immediate post-war years behind us, with the teething troubles of the industry over, with a full decade of experience to guide us and reasonably reliable forecasts of future traffic potential available—it is possible to have a better-informed forward look at this question.
The first problem of structure in the industry regards the relations between the two Corporations. There was a time when many knowledgeable people considered that there was a case for the two Corporations to be merged. Most people now accept that it is better to keep two separate corporations. Nevertheless, I believe that there ought to be a modification of the degree of separation. I believe that those two bodies, although they should remain completely separate entities as they are now, can and ought to work more closely together than at present. There have been examples—I know some of them at first hand—of efficiency being lowered and public money being wasted through a too fierce passion in each Corporation for independence and self-sufficiency, and even empire-building.
The first post-war White Paper on Civil Aviation—I well remember the debate on it—argued that the Corporations should have common instruments to exercise certain functions. It listed a number of aspects of the Corporations' work to which that method might apply. The only common instruments of any significance which have been set up between the two Corporations are the Employers' Secretariat and the pensions fund. I believe that there is a prima facie case—I do not put it higher at the moment—for saying that there are much greater possibilities of more action along these lines than the Corporations now take. I have in mind some aspects of provisioning and storekeeping, where there are common stores; personnel

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recruitment, training, seconding and exchange; medical services; surface transport—where there is a little common working, but not much—and sales—where there is a good deal of common working, but not enough.
My experience of the two Corporations leads me to believe that if we want to examine the position properly the examination must be carried out by a body independent of the vested interests, namely, the managements of the two Corporations. Whether it should be the Ministry or some ad hoc body I will not pontificate about.
The most thorny internal problem facing the industry is the fixing of the line of demarcation between the industry's private and public sectors. I have said before—and I am bound to say again—that some of the changes of Government policy in this matter have been motivated by considerations other than those of the overall welfare of the industry, and have resulted in some overall damage to it. The only ultimate benefactors from a constant state of civil war between the two sectors of the industry are our foreign competitors.
As my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss) pointed out, B.E.A., for the first time—it has been rather timid about it in the past—says in its Report what hon. Members on this side of the House have been saying for a very long time in respect of its relations with independent operators. I suggest that we can end this civil war between the two sectors only on the basis of the acceptance of some broad principles.
To my mind they are these: First, that there is a rôle in the industry for both a public and a private sector; secondly, that the external inhibitions which have been placed upon the Corporations' offering capacity for the carrying of troops and freight, and for Colonial Coach Services, ought to be withdrawn; thirdly, that the demarcation line between the two sectors, and the relations between them, ought to be arranged so that they can work together in harmony; fourthly, we should give public support to those private companies which have shown themselves to be willing to work amicably with the Corporations and withdraw public support from any private company
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which, as some do, mistakes buccaneering for enterprise.
We should encourage joint arrangements between the companies—either permanent or ad hoc—which are freely entered into, but I share with the hon. Member for Watford (Mr. Farey-Jones) an active dislike for shotgun weddings. He spoke of those between the aircraft manufacturers, but I do not like the shotgun weddings between the Corporations and private operators. I have never yet heard of any couple, married in a shotgun wedding, who lived happily ever after. As my fifth and final principle, I believe that we should restore the monopoly of scheduled services to the Corporations.
We have talked about a success story today—a story in which, irrespective of ideological differences, we should all take pride. As politicians, we ought to direct our future efforts to setting a political background for this industry in which its successes will not only be maintained but greatly increased.
Mr. Burden: Will the hon. Gentleman tell us what is the difference between buccaneering and enterprise on the part of the independents?
Mr. Mikardo: Not in the very short time which is available—but I am sure that any of the hon. Member's Friends, most of whom know the industry better than he does, will be willing to enlighten him.
6.34 p.m.
The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Airey Neave): This has been an excellent and constructive debate, and it has left me with a formidable number of points to answer. If I miss some of the points owing to time, I hope that those hon. Members who have raised them will forgive me. I certainly undertake to let them have the replies by other means.
My right hon. Friend and the hon. Member for Reading (Mr. Mikardo)—and I agree with a great deal of what he said; it was important, and I shall certainly consider a number of his points—both referred to this as a success story. It is a success story, in spite of the difficulties that both the Corporations and the independents have been suffering in

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several ways. This year's Reports indicate very great advances in British aviation. One of the best things about this debate has been that we have all been concerning ourselves with the future of British civil aviation and have not been too partisan about it. That being so, I shall not be, either.
First, I should like to congratulate the two Corporations, and all those who are employed by them who have made these successes possible, upon achieving net profits for 1956–57 in the face of great difficulties. For B.O.A.C. the great problem has been the continuing shortage of suitable aircraft, resulting from the Comet disasters of 1954. For B.E.A., which for the time being has solved its aircraft problems—although I shall come to the question of its jet aircraft later—because it has the highly successful Viscount, the difficulties have been rather different; they have been more of the general economic kind associated with short-haul operations and highly seasonal traffic: it also has to operate the social services, to the Scottish Islands, for example, on which it inevitably incurs a loss.
In view of those circumstances and the intensive competition on most of the international routes, the achievement of both Corporations in being able to declare net profits of £303,000 odd and nearly £217,000, for B.O.A.C. and B.E.A., respectively, is a very fine performance.
I want to mention something which has not been brought out in the debate. We have all mentioned the expansion of the services of the Corporations. At the moment, B.O.A.C. is considering the resumption of its services to South America. It has now decided to return to those routes, and hopes to make a beginning, to Caracas, in the autumn of this year. That point has not been mentioned. I thought that it was of importance and that I should mention it, because I know that many hon. Members are interested.
As to the future aircraft position of B.O.A.C., I need not add to what my right hon. Friend has said about the Britannia, except to say that I shall look immediately at the point made by the hon. Member for Reading, about the Britannia not being up to specification. As I understand the position, that charge applied to the prototype of the 300 series, but it does
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not apply in the case of the production models. However, I shall obtain the exact details and let the hon. Member know. I hope that nothing further will be said by me or by anyone else which does not make it quite clear to the world, and especially our potential customers, that this aircraft is one of the finest of its kind, as was pointed out by my hon. Friend the Member for Macclesfield (Sir A. V. Harvey).
My right hon. Friend has also stated the factual position with regard to B.E.A.' s order of the jet aircraft. Some of the wider implications with regard to the aircraft industry are matters for my right hon. Friend the Minister of Supply—who has been sitting here throughout the debate and who, I am sure, has taken a great interest in it and a note of what has been said about his Department and the industry in general—but it is important for me to repeat what my right hon. Friend said about this potential order, because I have been pressed to give certain assurances.
The fact is that the detailed proposals of the de Havilland Company and those associated with it were received by my right hon. Friend only this morning. In those circumstances, while we in my Department, and particularly my right hon. Friend, are most anxious to ensure that B.E.A. gets the best possible aircraft for the job, I do not think that we should be forced to go further than that at this stage. My right hon. Friend has promised the House a statement at the earliest possible moment. He pointed out that the ordering of a new aircraft of this type is a complex affair, and when one considers that it will not be delivered until the middle of the next decade, the delay is not really a very serious one. What is important is that B.E.A. should get the right aircraft.
Dr. Reginald Bennett: May I ask, when this is being considered, that proper weight should be given to the Ministry of Supply end of things and the industry end of things in order that in any appropriate amalgamation or merger they get the work, which they can carry out, and that there is not some ringing of the changes on a system of sub-contracting?
Mr. Neave: I can assure my hon. Friend that we have been listening to the comments which have been made about

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shotgun weddings and so forth, and—the different types of bodies, and the amalgamation of firms which have been discussed. Perhaps the House will permit me to repeat the words of my right hon. Friend, who said that B.E.A. was at all times perfectly willing that the construction of the aircraft should be shared as widely as desirable among any number of reputable firms, and that that is the position. We shall make a statement to the House as soon as possible.
I was asked to deal with a great many other matters, one being the situation of the independent airlines and their relations with the Corporations. I have always shared the view held by hon. Members on this side of the House, and by some hon. Members opposite, that it is perfectly possible for the independent companies to work with the Corporations and that there is room for both. In the present case there is a success story so far as concerns both the Corporations and the independent companies. B.E.A. carried 52 per cent. of the normal scheduled traffic on its European routes in 1956–57, and there was a great increase in the numbers carried on the inclusive tours by the independent companies. We should be satisfied that there is room for both.
I was asked whether the comments by B.E.A. on page 26 of its Report was something I ought to confirm or deny. It is fair to say that B.E.A. does not give any details of the material diversions of traffic which it alleges. It also says, as hon. Members know, that these matters are dealt with by the Air Transport Advisory Council, which makes recommendations to my right hon. Friend in accordance with its terms of reference. Regarding the inclusive tours, in which B.E.A. is itself interested, the last paragraph on page 27 says that:
"…no criticism is implied or intended of the way they have carried it out."
That being the position, and Parliament having set up the Air Transport Advisory Council as an impartial body, I do not see what I have to answer. There are, in fact, no details of what is said to be the damage.
Mr. Strauss: Is it not the fact that the A.T.A.C. work under broad directions given by the Minister of Transport and Civil Aviation? No one has suggested that the A.T.A.C. has acted improperly
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or incompetently. Our criticism is that the directions are wrong, not the actual detailed work of A.T.A.C.
Mr. Neave: Of course the Minister prescribes the terms of reference. The A.T.A.C. is an impartial body and judges each case on its merits—I do not think we ought to imply anything further than that—within its terms of reference which are laid down by the Minister under the legislation. The position is that both sides are doing well, and I hope they will do better next year.
The right hon. Member for Vauxhall (Mr. Strauss), in a very detailed and interesting speech, asked a lot of questions with which I should like to deal as briefly as possible. He asked about the sales, advertising and publicity expenditure of B.O.A.C. It is true that in 1956–57 B.O.A.C. increased its expenditure on sales and advertising by about 28 per cent. over the figure for 1955–56. The main reason is that B.O.A.C. planned a much increased advertising campaign to build up the traffic which it expected to need to fill the large increase in capacity for the ensuing year, and to rebuild the traffic after the Comet disaster. That is the explanation. However, I will get more information about it and will let the right hon. Gentleman know further details.
The right hon. Member for Vauxhall put another point of some importance, namely, whether any future cuts in expenditure, as the result of Government policy, would affect the operating of the airlines. I am informed that none of the cuts in expenditure which has been proposed will hamper the operations of the airlines.
The right hon. Gentleman asked a number of questions about London Airport and its facilities, as indeed did several of my hon. Friends and hon. Members opposite. The Government are still considering the proposals contained in the Millbourn Committee. A lot of this is bound up with the important proposal for a rail link or monorail, whichever the case may be. The recommendations of the Millbourn Committee are still being considered; I am sorry I cannot say more about that at the moment.
What I can say which will interest the House is something about the new fares and freight rates about which I was questioned, particularly international fares.

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The most important development of the international services is a proposal by the International Air Transport Association, at present awaiting the approval of Governments to introduce a new low fares service on the North Atlantic. This service, to be known as the economy class, is to be introduced from April, and the London—New York fare will be £90 single compared with the present tourist fare of £103 12s. Tourist fares will be increased so that the differential between the new economy fare and the tourist fare will be 20 per cent. B.O.A.C. will be offering nearly half of its trans-Atlantic capacity in the new class. The decision to introduce this new service was taken after long discussions between the airlines which stretched over two conferences.
At the same time as these economy services are introduced, fares on the North Atlantic tourist, first-class and deluxe services, will be increased by about 8 per cent. to 9 per cent. The new single fares will be £112 10s. tourist; £115 8s. first-class and £173 5s. deluxe. I thought I should give these details since the subject was mentioned, so that it will be seen what are the actual figures for the fares which were mentioned by the right hon. Gentleman.
Since we are talking of the economies by the Corporations, may I say that both my right hon. Friend and I will give serious consideration to the point made by the hon. Member for Reading that we should look at the possibility of new services and economies. We shall certainly follow up the suggestion of the hon. Member, as it is one of considerable importance.
I now turn to points made by individual hon. Members. The hon. Member for Reading mentioned the air-conditioning plant in the Queen's Building, a subject with which I have had a good deal to do since I have been at the Ministry. We are doing everything we can to speed up the air-conditioning plant. The hon. Member mentioned that there was an error; the design at Gatwick will not involve us in a situation of that kind. The hon. Member can be satisfied upon that point.
The Millbourn Committee recommended that a new terminal building with a hall should be built on the southwest face of the central area. The Ministry is giving urgent consideration to
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this recommendation in the hope that at least part of the building will be ready for service by 1960. That is one of our jobs.
The hon. Member for Anglesey (Mr. C. Hughes) asked me about Welsh services. I have recently been down to his part of the world and to Haverfordwest, and I have studied the problem with Cambrian Airways representatives. I will take up all his points, particularly in respect of the service from Rhoose.
I was asked about noise. I have nothing further to add to what my right hon. Friend said about noise. It concerns all Governments. Conferences are going on about it. My Department has already discussed the subject with several other countries, and although the discussions have been informal it is understood that we all take the matter very seriously. The hon. Member for Uxbridge (Mr. Beswick) raised the question a short time ago on an Adjournment debate on the Tupolev 104. As a result of the debate we have been studying the problem of possible damage. At the moment no one can give any legal interpretation of the position. The Government are not in a position to accept liability, especially in view of the type of evidence that came out of that particular case.
I have not been able to answer every question, but I have taken note of all these matters. I thank hon. Gentlemen for the interest which they have shown in the problem of civil aviation and for the way in which they have put their points this evening. My hon. Friend the Member for Watford (Mr. Farey-Jones) ended his speech by paying a tribute to the pilots. I should like to do the same and join in a tribute to the pilots who have helped to make the recent year such a success for the Corporations and for the independents. For that reason, I will end my speech by telling the hon. Gentleman something—since he asked a question—about the Government's position with regard to pilot recruitment. It is a subject of great interest.
Towards the end of 1956, a pronounced shortage of pilots was expected in the following year, but an increased supply from the Services, following new manning policies, met the further demand. No difficulties are foreseen by B.E.A. for the next few years, but B.O.A.C. and some of the independent operators are doubtful

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whether their needs can be met from Service sources for very much longer. Our own estimate is that the new demand for pilots cannot continue to be met from Service sources for more than a year or two.
As hon. Gentlemen will be aware, Air Service training Limited has recently announced a scheme under which pilot training can be financed on a repayment basis, backed by the United Dominions Trust. Any boy of adequate educational and medical standards should be able to train by this means. The scheme is very important and interesting as a general air-training scheme. It is a bit early to estimate its actual effect on the whole problem. The Government's interest in the future training of pilots is still being considered by the Corporations and by my Department.
I am sure that we all look forward to greater successes in civil aviation and that we wish well to all those who work in it.
Question put and agreed to.
Resolved,
That this House, in reviewing the progress of Civil Aviation, takes note of the Reports and Accounts of the British Overseas Airways Corporation and the British European Airways Corporation for the year ended 31st March, 1957.

NORTH OF SCOTLAND HYDROELECTRIC BOARD (REPORT AND ACCOUNTS)
6.56 p.m.
The Secretary of State for Scotland (Mr. John Maclay): I beg to move,
That this House takes note of the Report and Accounts of the North of Scotland Hydro-Electric Board for 1956.
I confess that I found myself in rather a dilemma in deciding what type of speech to make. There are many points I should like to cover and might reasonably have expected to cover, but the time available is not very long. It is extremely important that the maximum number of hon. Members on both sides should have an opportunity of contributing to the debate, so I have erred on the side of keeping my speech short. I hope that I will, none the less, be able to cover points of interest and importance.
This debate affords a welcome opportunity to discuss the operations of the
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North of Scotland Hydro-Electric Board. The latest published Report and Accounts of the Board relate to the year 1956. They were published in February last year; but even though we do not have before us the Board's Report for 1957, which is already in the printer's hands, we have the advantage of the first Report of the Select Committee on Nationalised Industries published, in October. This gives us a fairly recent commentary on the Board's activities and should undoubtedly help the debate.
The House will no doubt wish to express its gratitude to the Committee for the thorough work it has done in presenting its first Report. The general conclusion of the Select Committee is favourable to the Board and to its members and this conclusion must have given heartening encouragement to the Chairman of the Board, Mr. Tom Johnston, to his fellow members and to all the employees of the Board, whatever other comments may be made on the Board's work.
The Board's Report for 1956 showed that it made steady progress both in developing water-power resources and in extending its distribution system. Seven generating stations were brought into commission, with a total capacity of 102,000 kilowatts. In 1957 further progress has been made: another four stations with a capacity of 69,000 kilowatts were commissioned, bringing the Board's total hydro-electric capacity at the end of 1957 up to 729,000 kilowatts. In 1957 the Board also commissioned a steam set of 30,000 kilowatts in Dundee.
On the distribution side, the Board in 1956 connected 13,382 consumers, and in 1957 it added 12,433 consumers to the supply, bringing the total number of consumers in its area up to 364,202, to be precise. As a result of difficulties in 1955 and 1956, including the drought, it started 1957 with a debit balance of £612,577. I am glad to tell the House, however, that its operations in 1957 have broken even and that it is hopeful that in the coming year it will be able to make a significant inroad on its debit balance. I think we can all regard this progress as satisfactory. This does not mean to say that there are no criticisms, and I should like now to deal with some of the principal ones which have been voiced in this House and before the Select Committee.

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As I have said, on distribution the Board has made real progress in territory of unusual difficulty for an electricity authority. Almost everywhere in the Highlands one sees its distribution lines, but of course I know well that not everyone is likely to be satisfied. Let us look at the Board's record. In the whole of its district 86 per cent. of potential consumers have been connected. Indeed, in the Highland part of its area—the seven crofting counties—the figure is 88 per cent. The figures for farms and crofts by themselves are admittedly lower than these, but at the end of 1957 the Board had connected 61 per cent. of the farms and 60 per cent. of the crofts in its area—some of them in very remote situations. Against this record two questions can be asked—how quickly will the remainder of the population be given supplies, and what charges will the Board ask for new connections?
In the end both of these matters are determined by finance. The Board, like all the others, has a statutory responsibility to balance its budget. It is also subject to the same kind of restrictions on capital expenditure which must apply at present to other nationalised industries and to the Government themselves. One or other of these factors may influence the speed at which the Board can carry out the rest of its work. It is not, therefore, able to give a time-table for the completion of the electrification of its district, but in 1958 I know that it hopes to connect over 10,000 consumers.
Another matter on which there is concern is the connection charges levied by the Board. The Board is, of course, entitled to make such charges. Every electricity board does so. At the beginning of its work it was its declared intention to give connections without charge or guarantee to premises within reasonable distance of main transmission lines. Under the 1947 Act the Board's area of distribution was greatly extended and it has been faced with steeply rising costs. Much against its wishes, it has been forced to alter its policy of free connections and to ask new consumers in the outlying areas where the connection charge is high to make some contribution to the cost of bringing the lines to their doors.
Between 1953 and 1956, therefore, it introduced the present arrangements,
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which require distant consumers in most cases to pay a capital contribution and to guarantee a minimum revenue. The Board regrets that this change in policy was necessary, but it is worth pointing out that the Select Committee found no fault with its decision. I should like to make it clear, however, that where the Board has signed agreements to provide supplies for no connection charge or on more favourable terms than obtain today, it will of course honour those obligations, even though it may be some little time before it does so.
Next I come to the question, or rather group of questions, concerning the cost and economics of the Board's programme. The first question might be put thus: "The Hydro-Electric Board was allowed to spend many millions in 1957. Granted that the schemes were desirable, can we as a country afford them?" The answer is that the Board's annual capital investment programme is scrutinised by the Government with the greatest of care in relation to the total amount of capital investment that we can afford. We have this year asked the Board to limit its capital expenditure to £18 million in 1958 and £15,500,000 in 1959. This will still allow the Board to continue the constructional schemes now in progress and should permit a start being made on other major schemes if they are approved. It will also permit distribution work at approximately the same rate as in 1956.
At this point it may be appropriate to deal with the general question of acquisition of land and compensation. The Board has, of course, power to buy land it requires and other rights by agreement; it can also acquire them—land and other rights—compulsorily under the authority of constructional schemes. The settlement of terms—including what is technically known as compensation for injurious affection—is a matter for agreement in the first place, for the Act provides for arbitration only if the parties fail to agree. The Board's practice is to avoid compulsory proceedings wherever possible. Therefore, when it is preparing a constructional scheme—that is, before it has finally adjusted its terms or reached the stage of formal publication—it seeks at the earliest possible stage to inform the owners and others likely to be affected so as, if possible, to agree with them

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on the land required for the scheme and the arrangements for any payment of compensation. Such arrangements are, of course, conditional on the scheme being authorised and entitlement to compensation does not arise till then.
Since all these matters are to be settled either by agreement or by statutory machinery, the Secretary of State has always taken the view that it would be improper for him to intervene or to seek to exercise any control which might be held to prejudice the discretion given to the Board or the rights of an owner to have his compensation settled impartially, For the same reason the Board is not asked to disclose the amount of payments or compensation made in any particular case; but of course if it chooses to do so in agreement with an owner it is free to do so.
It would not be proper for me to enter into a discussion about questions connected with any scheme which has not yet been approved. I think, however, that the general line taken hitherto is the right one.
The second question is, "Will these schemes pay their way?" The Board has to balance its budget and naturally its tariffs must not in practice be out of scale with the level of charges in other parts of the country. That means that it does not pay the Board to promote schemes which are not likely to be economic; apart from this, however, the Secretary of State, before confirming any hydro-electric scheme, examines among other things the economic aspects of the scheme. If any hon. Member is interested in this procedure, I suggest that it is well worth while looking at the Select Committee Report and, in page 71, at the evidence given by the then Secretary to the Scottish Home Department, Sir Charles Cunningham, who went into it very fully.
Knowing the way in which costs have risen, how can we be sure that new schemes will be based on sound estimates? The Select Committee noted in paragraph 55 of its Report the discrepancy between estimated costs and the final costs. This, it says, has been partly due to the rise in the price of materials and labour, and partly because of faulty estimating. The Board agrees that some inaccurate estimating had taken place in
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the early days before the necessary experience of post-war conditions had been gained. The Board is confident, however, that the estimates for current schemes will prove to be much closer to the final cost, and in its future reports the Board will give information as recommended by the Committee so that the House will be able to keep a check on this. I might mention that the Board tells me that some of these which cost more than estimated are in fact also producing more revenue than was expected.
Mr. Arthur Palmer: Would the right hon. Gentleman care to deal with the other point made by the Select Committee, as to whether the Board should in future look more closely at other sources of energy and not confine itself exclusively to water power?
Mr. Maclay: I will deal with that in the rest of my speech, but before I do so there are one or two other points I want to make.
On another specific recommendation of the Committee the Board agrees to continue its efforts to obtain "fixed price" contracts and to invite competitive tenders for all contracts. Those who have read the Reports will know that the exceptions previously were water wheels and turbine alternators are the only exception at present.
There is also concern with the general question—this is the point raised by the hon. Member for Cleveland (Mr. Palmer)—of whether hydro-electric schemes are economic compared with other forms of generation. The Select Committee wondered, though it did not attempt to form a judgment on the question, whether the Board might not build more steam stations and fewer hydro stations in future.
The initial capital outlay of hydroelectric schemes is admittedly high, but this is offset by two factors in favour of these schemes, namely, their long life and low running costs. The effect of these counter-balancing factors is seen in the comparison of unit costs, which in the last resort must be the criterion. The average cost of producing electricity at existing hydro schemes was 0·59d. per unit in 1957—and I would mention that this was 7½ per cent. lower than the corresponding cost in 1956 and brought it back to the 1955 level. At existing

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steam stations, those in England and Wales for example, the average cost per unit went up to 0·86d. in 1956–57. This indicates the margin on which the Board relies to cover its less economic distribution.
The newest steam stations situated near coal fields may produce very cheaply, and more cheaply than hydro-electric stations that can be built now. That, however, is not a true comparison. The costs of a new steam station built in the Highlands and operating at the load factor of the Hydro-Electric Board's system would be very much higher and, I am assured, appreciably above the cost at which electricity will be produced at the schemes now under construction. Above all, hydro-electric stations are particularly fitted to provide peak load power, and the value of the peak load power produced from the hydro-electric schemes, as the Select Committee pointed out, is reflected in the price which the South of Scotland Board is prepared to pay for it. This advantage may well be enhanced if pumped storage schemes, which the Board is promoting, enable cheap base load power in the South of Scotland to be linked to cheap peak load power from hydro-electric stations.
The connection between nuclear stations and pumped storage is very important, and the Board is considering carefully this very important factor. This suggests the conclusion that any assessment of the hydro-electric schemes must be based on a consideration of the best way, not simply of producing electricity, but of bringing electricity to the Highlands, and, secondly, of producing peak load power for the needs of industry. So far no better method than hydroelectricity has been put forward. I repeat that the importance of the connection between nuclear and hydro-electric power stations is being very carefully studied.
Mr. Gerald Nabarro: My right hon. Friend will be aware that Sir Christopher Hinton published a paper a few months ago in which he stated that the cost of nuclear power would be·66d. per unit, based on 80 per cent. load factor, compared with a load factor in these hydro-electric stations of only 28 per cent.; and as my right hon. Friend has referred to the cost from hydroelectric stations of ·59d. per unit, would
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he now say something of the comparative costs of nuclear hydro-electric power?
Mr. Maclay: I think I had better not try to go into detailed figures of that kind at this stage of this debate, but I am very conscious of the importance of the whole nuclear issue in this matter, and so is the Board. One could give quite a lot of figures, but the crux of one of the problems is that we have to have pumped storage in relation to the site of the nuclear station, and the special requirements of nuclear stations of plentiful water supplies as well as special conditions for pumped storage, but all these things are very much under consideration by the Board, and I assure the hon. Gentleman that that is so.
I promised to be as short as I could, and I propose to sit down straight away, because I think I have covered some of the matters causing concern, and because I think that it is only right that the maximum number of interventions possible should be allowed in this relatively short debate. I entirely agree myself—even after discussing the various criticisms that have been made—with what the Select Committee said in its conclusions, and I quote:
"In the fourteen years of its existence the North of Scotland Hydro-Electric Board has impressively justified the faith of its progenitors."
I feel satisfied that, with careful attention to the several comments and criticisms that have been made, we will get equally good progress in the years to come.
7.15 p.m.
Mr. G. M. Thomson: First, I ought to apologise for the absence from this debate of my hon. Friend the Member for Hamilton (Mr. T. Fraser), who should have opened it. I am rather conscious that I have to begin this debate with the immortal but always disappointing words of the Lord Privy Seal—"I have been asked to reply".
Perhaps I ought to begin by getting rid of Lord Lovat right at the beginning. I have no intention of debating in detail the controversy that has arisen about this particular piece of compensation. My hon. Friend the Member for the Western Isles (Mr. Malcolm MacMillan), who will wind up the debate from this side of the House, has been intimately concerned with this controversy, and he will have studied the Secretary of State's statement

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and, no doubt, will deal with it more fully at the close of the debate. I will merely content myself with commenting that Lord Lovat' s arithmetic seems rather curious. To refer to £100,000 as "merely a fraction of £200,000" is a very odd sort of calculation.
In its way, this is an historic debate, because I think it is the first debate which this House has had on an Annual Report and Accounts of the North of Scotland Hydro-Electric Board, although the Board has now been in existence for fifteen years. There have been complaints, and they were voiced to the Select Committee, about this absence of debate on these Annual Reports. I think that in some ways it is rather strange that this sort of complaint should be made, because if one looks back to the original introduction of the Hydro-Electric Bill in this House, in 1943, we find that one of the major fears about this project was that it would be subject to far too much Parliamentary discussion and interference.
Indeed, there was an attempt to deny a Second Reading to the Bill, not on the ground that the project was not admirable, but on the ground that it would suffer too much Parliamentary discussion. This is one of the fears, together with the fear about damage to amenity in the Highlands, which has, in the event, proved to be quite groundless. The situation has, in fact, gone the other way. We have talked, perhaps, too little about the Hydro-Electric Board. I think it can be taken as certain that the absence of frequent Parliamentary debates on the affairs of the Hydro-Electric Board is a tribute to the excellent work which it has been doing. If the Board had been seriously wrong in any of its general policies, we may be sure that Parliament would have spent plenty of time discussing its affairs.
This, of course, is not the view that was expressed to the Select Committee by the hon. Member for Caithness and Sutherland (Sir D. Robertson) and some of his hon. Friends. In this House, we always respect the forthrightness of the hon. Gentleman on this matter, and, to judge from the information which he gave in his evidence to the Select Committee, he clearly considered that the Hydro-Electric Board had not been serving his
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constituents in the Highlands of Scotland as well as it might do. It may be a little presumptuous of me, but may I give him my own impressions of his constituency?
I served in the Caithness area in the early part of the war, and I then found the County of Caithness as near as one can get to a Russian tundra. It was bare, bleak, windswept and absolutely treeless. I went back to the hon. Member's constituency a few months ago, and I still found the County of Caithness bare, bleak and windswept, but, in one important way, it was not now altogether treeless, because everywhere I saw veritable forests of electric pylons. It was the biggest single change in that landscape, which now has a labyrinth of electric cables going on their poles out into the bare countryside and into the remote crofts.
I am sure that, as the hon. Member says, some of his constituents need electricity badly, and are finding it very difficult to get, but I think that this matter has to be seen in some sort of perspective. I am told that 85 per cent. of the households in Caithness have, in fact, been linked up by the Hydro-Electric Board, but I am also told, very greatly to my surprise, that there are 480 of the hon. Member's constituents who have had electricity laid on to them by the Board, but who, so far, have failed to provide their own electric wiring, under the terms of the agreement to use it.
That is one aspect of the problem there of which we have so far heard nothing. I am privileged to be able to tell the hon. Member for Caithness and Sutherland something about his own constituency. No one will deny that he is a very assiduous representative of that part of the country, but, in all humility, I suggest to him that in fighting for the rights of those of his constituents who have not yet got electricity perhaps he is in some danger of not seeing the wood for the electric poles.
The hon. Member is, or course, supported on this point by a number of other hon. Members representing Highland constituencies. We all understand their point of view, and sympathise with it. In fact, we find the kind of views that they expressed to the Select Committee singularly refreshing. It is very nice indeed to find Conservative Members criticising a nationalised industry, not

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because it is insufficiently private enterprise, not because it is insufficently profit making, but because it is insufficiently Socialist and provides insufficient services.
I would only say to them that in attacking the Hydro-Electric Board for inadequacy in linking up remote consumers, they make their criticisms to the wrong address, and I hope that those who have the good fortune to catch your eye, Mr. Speaker, will direct their attacks straight at their own Front Bench, because, undoubtedly, the immediate distribution difficulties that the Board has arise from the Government's own economic policies.
For some years there has been one credit squeeze after another; there has been the rise in interest rates, and the cuts in capital expenditure which the Government have imposed on their public boards. In 1956, according to the Annual Report, the increased interest rates amounted to £250,000 more than they would have done had there been no such increase. I am told that in 1957 this increase will amount to another £150,000. I would comment to hon. Members opposite from Highland constituences on the number of remote consumers who might have been connected had these sums of money been available to the Board for distribution purposes.
In this matter, the Government have turned down the advice of their most important Highland advisory body—the Highland Panel. At the start of the credit squeeze, the Panel pleaded with the Government to exempt the Highlands from the full impact of the Government's restrictive measures, and I should have thought that that was elementary economic planning. If the country is in economic difficulties, one does not expect equal sacrifices from everyone, but rather that we should share them according to ability to shoulder them. One would have thought the Highlands the kind of area where special treatment was deserved, but the Government turned down the recommendation of their own Panel absolutely flat.
We have had further evidence of it this evening from the Secretary of State. He has told us of the further cuts he is asking the Board to make in its capital expenditure programme. He tells us that the capital expenditure programme for 1958 is to be set at £18 million, and for 1959
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at £15½ million—a reduction of £2½ million in this vital national Scottish service. That, of course, is not the whole story. Capital expenditure in 1956—the last year for which we have figures—amounted to £22 million, so that the reduction over the years from 1956 to 1959 will be about £6½ million—
Mr. Nabarro: As the hon. Gentleman is making an attack on a Conservative Government for circumscribing capital investment in this Board, would he not give us a true comparison? Would he not give us the aggregate of the investment sanctioned by the Socialist Administration between 1945 and 1951, and compare that with the aggregation sanctioned by the Conservative Government between 1952 and 1957? He will then find that the aggregation, in real terms—that is, discounting the declining value of money—is far greater in the last six years than it was in the preceding six.
Mr. Thomson: Hon. Members opposite have a tendency to live in the past whenever figures are used. Normally, these comparisons are rather irrelevant, because the general economic conditions in the country are different now from what they were in the immediate post-war years. In the case of hydro-electricity the comparison is particularly irrelevant, because the scheme is in an utterly different stage of development now from that existing just after the war.
I do not think that there can be any doubt that the immediate burden of the difficulty that the Board faces is a direct result of the economic policy of Her Majesty's Government, and of the fact that they do not discriminate, as they should, in favour of the special problems of the Highlands.
However, it must be faced, I think, that even if the Government had not imposed these restrictions on expenditure, the Board would still have faced real difficulties in the matter of joining up the remoter consumers. These are difficulties that are both geographical and financial, and the hon. Member for Caithness and Sutherland is quite right when he says that they are difficulties that lie deeper than what, we hope, are the temporary problems of the credit squeeze and the financial restrictions—
Mr. Maclay: Just for the record, perhaps, I may point out that the figures that

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the hon. Gentleman was quoting for previous years were not the final out-turn of those years. He will realise that what was allowed for was not what was actually spent.
Mr. Thomson: I am grateful to the right hon. Gentleman for that correction. The fact remains that, from the figures he has given the House, it is a very substantial cut.
On the linking up of the remoter consumers, I think that the Secretary of State is perfectly right. The Hydro-Electric Board has done reasonably well considering that it has imposed on it the duty of balancing its budget. It is very significant that, as the right hon. Gentleman said, the percentage of connections to households in the crofting counties—much the most difficult area in Scotland—is higher than the percentage for the whole of the Board's area.
The Board continues to go ahead steadily, spending £1 million a year on linking up consumers in the remoter areas alone, and it is worth while understanding the kind of financial difficulty that is involved. I am told that to do this amount of distribution work in these remote areas involves a total cost, as investment, of £200,000 a year to pay off, and that the actual revenue that can be expected from these particular connections is only about £60,000 a year. Therefore, the balance to be made up—the subsidy, if hon. Members like to call it that—is £140,000 a year. This, of course, comes from the profits on the sales of electricity to the South of Scotland.
The hon. Member for Caithness and Sutherland, in his evidence to the Select Committee, urged that one solution of this difficult problem for the people in the Highlands was that the Board should suspend capital works and concentrate its energies much more on distribution. That, I think, is a misunderstanding of the realities of the situation. The figures that I have given show that if the Board is to go on connecting more and more of the remoter consumers it can get the necessary money only by generating more and more electricity to send to the south. It is only by making a profit in that way that the Board has the means to spread electricity to the remoter crofts and farms within the crofting counties.
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I suppose that the Board could meet this problem, partly at least, from its own resources by putting up its tariffs. I represent a lowland industrial city within the Board's area. I would have no hesitation at all in asking my constituents to dip into their pockets to help to subsidise the provision of electricity for the people in the Highland areas. I think that they face particular hardships. The Highland way of life is worth preserving. On any sort of basis of national planning it is worth doing. I wish the hon. Member for Kidderminster (Mr. Nabarro) would not make funny faces about the social conditions in the Highlands.
Mr. Nabarro: What the hon. Gentleman is saying is in direct contradiction to the best Report that we have had since the war on electricity economics. Sir Edwin Herbert made the point in his Report that the subsidising of sparsely populated areas by thickly populated areas was to be deprecated. Why should an exception be made in the case of the Highlands?
Mr. Thomson: The hon. Member, rather to my embarrassment, is starting to make my speech a little in advance of what I was going to say. I do not think the hon. Member has ever fully appreciated the social dividends of Highland hydro-electricity. My constituents are perfectly willing to help to subsidise Highland electricity, but I do not think that the constituents of a city like Dundee or Aberdeen should be expected to bear an unfair share of that subsidy on their own electricity accounts, while the citizens of Glasgow or Edinburgh or Kidderminster or Birmingham or London, who have much more populated areas in which to distribute electricity, do not bear that subsidy.
I think that the Herbert Committee, which the hon. Member mentioned, was perfectly right in the recommendations that it made. Where rural electrification requires a subsidy because it is uneconomic, it should be made as a national charge on the Exchequer and should not be carried out in an area with particular geographical problems like the North of Scotland area. I hope that the Government—and the Joint Under-Secretary should address himself to this point—will do more to make sure that people in the Highlands can get grants under

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such things as the Agriculture (Improvement of Roads) Act and the Crofters Act for the actual connecting up of electricity to their homes and that the whole matter shall not be paralysed because these people are expected to do all sorts of other things at the same time.
I have said that I think the Hydro-Electric Board has acted reasonably in this matter of the linking up of remote consumers, but it is not sufficient for a Board like the Hydro-Electric Board to act reasonably. It must manifestly appear to act reasonably. One of the impressions that I took from the evidence of the Select Committee was that the Committee was not too happy about that aspect of the work. In particular, it is quite certain that the Consumers Consultative Council of the Hydro-Electric Board faces the same, if not greater, difficulties as the consumers' committees of other nationalised industries. This is a very difficult problem, but it must be causing the Hydro-Electric Board particular difficulties.
I would refer the House to the interesting evidence that was given on this matter by the hon. Member for Caithness and Sutherland at page 106 of the Committee's Report. He was asked by the Chairman about the work of the Consultative Council, and the Chairman pointed out that in the council's report there was reference to only eleven complaints for delays in affording supplies during the year 1956. The hon. Member was asked by the Chairman what his experience was on this matter. He said:
"I think I would have no difficulty in giving you a couple of hundred in my own constituency who have actually written to me."
The Chairman of the Select Committee made this comment, which I commend to the Government:
"Then it is pretty obvious that the people are operating through their Members of Parliament?"
I do not think there is much doubt that the real consultative committee for the North of Scotland Hydro-Electric Board, certainly in the Highland area, consists of the Members of Parliament concerned.
I think that the Government, in consultation with the Board, might give some attention to this problem. I do not know the answer to it; it is very difficult. But one of the fascinating things about the working of this arrangement is to find out
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whom the Chairman of the Consultative Council actually represents. He sits on the Board. I ought to explain that I am not making any personal remarks about the person who is the chairman. I am talking about the machinery now. The Chairman of the Consultative Council sits on the Board by virtue of his office as Chairman of the Consultative Council. But, in practice, it is agreed that when one comes to particular problems it is difficult to find out whether the Chairman of the Consultative Council is influencing the Board in the interests of the consumers, or whether the member of the Board comes down to chair the Consultative Council and influence it in the interests of the Board.
This is a very difficult problem, but I hope that some more attention will be given to it in order to relieve hon. Members for the Highland constituencies from some of the heavy burdens that they have been taking—not because I want to relieve them of work, but because I do not think this is the most effective method of dealing with this kind of problem.
There are problems of the Board's own direct relationship with its own consumers, particularly with those who have made application, who have signed the preliminary contract and are waiting for long periods for a supply of electricity. It was indicated in the evidence that they had to await the distribution of leaflets rather haphazardly, or representations from particular bodies. I think it would be better if it were suggested to the Board that they ought from time to time to send out an individual circular signed by the Chairman of the Board, written in simple and plain terms, telling those who are waiting what the position is. It would work very much better if that were done.
I do not wish, any more than the Secretary of State, to stand between the House and this debate. We have waited a long time for it and we have only a short time ahead of us. I myself have read the Reports of the Hydro-Electric Board and the evidence of the Select Committee, which has done such excellent work on this subject, with great interest, and I have come to the same conclusion that the Secretary of State quoted, namely, that the Hydro-Electric Board has served Scotland well. I believe that its general achievement towers, like Ben Nevis, over

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all the various obstacles, geographical and administrative, that it has faced and will undoubtedly face in the future.
In one way I think that the achievement of the Hydro-Electric Board can be claimed as unique. Other nationalised industries took over existing private or local authority enterprises, but the Hydro-Electric Board has had to do the main part of its work—not all of it, but the main part of its pioneering work—in virgin territory. It has brought electricity to over 110,000 households in rural areas. No local authority or private enterprise had ever been able in the past to bring electricity to those places. If there had been no Central Electricity Authority today, if there were no South of Scotland Electricity Board today, no doubt the people in those areas would have their electricity, less efficiently than under the nationalised arrangements, but that is a matter for argument.
There can, however, be no argument about what would have happened if there had been no Hydro-Electric Board. People in great areas of the Highlands would never have had the modern amenities of electricity. There are crofters and farmers in the Highland area who are still unable to get electricity, and that is unfortunate. But it is important to see this matter in perspective, particularly in this debate. We must remember that there are many times more households which would never have had any electricity at all if it had not been for the Hydro-Electric Board. They would still have been living, working and cooking by oil—that is, if they had still been living in the Highlands.
No one can measure the Hydro-Electric Board's contribution in keeping in the Highlands people who would otherwise have left. The Highland problems of the drift south and of the lack of industry still remain very much with us, but that is not the fault of the North of Scotland Hydro-Electric Board. The answer lies in much more vigorous policies of Highland planning than we have had or are likely to get from the present Government.
7.40 p.m.
Sir David Robertson: The hon. Member for Dundee, East (Mr. G. M. Thomson) has proved a very worthy substitute for the
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hon. Member for Hamilton (Mr. T. Fraser). I am sure that when he reads the speech the hon. Member for Hamilton will realise that. I must deal very briefly with this gross libel on beautiful Caithness. I have seen pictures of the Russian tundra and of the ghastly wastes of Siberia, and I think that the picture of Caithness has been spoiled for the hon. Member for Dundee, East by the fact that he was a serving soldier there during the war. Wherever a soldier is stationed he grouses. It has been spoilt for him also by the fact that the next time he went there it was as a political campaigner. That also might have coloured his picture of the county. Any unprejudiced person who went to Caithness would greatly love the place and would hardly be patient until he returned there. The hon. Member must see the exiles from Caithness in various parts of the world, as I have done, to appreciate that point.
This is a historic night, as the hon. Member has said. It is also a rather shameful night when one thinks that both political parties have allowed fifteen years to elapse before arranging for public accountability for this the first of our nationalised industries. I have been pressing for a debate of this kind for a long time, and I do not apologise to anybody for that fact. The North of Scotland Hydro-Electric Board is rightly protected by Parliament against day-to-day interference, but a great many things have been going wrong in the Board's area and the Board has been at fault and in breach of the conditions imposed upon it.
I and my hon. Friends have not been able to question the Board on these matters, and for years we have been trying to get various subjects ventilated. We want to praise the Board where praise is due and to correct those matters which have gone wrong. The hon. Member for Dundee, East, referred to evidence given by Highland Members before the Select Committee. I should like to thank the Committee for receiving us and for helping us to secure this debate. If it had not been for the Select Committee, I do not think that we should have had this three hours' debate on a Monday night. The Select Committee went into matters very fully. Its views are just as much worth consideration as is my view.

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I took part in the debate which ultimately resulted in the creation of the North of Scotland Hydro-Electric Board. I was not in favour of creating a nationalised Board but, although I was then a London Member, I was in favour of securing power and light for the Highlands, because otherwise we should never be able to cure the depopulation, which is the greatest affliction of the Highlands. People leave the Highlands because they are compelled by circumstances to do so. Where they wish to leave we, of course, give them every assistance, but the great majority would be happy to stay in these lovely counties if they had work and wages. It has been a question in the past of either staying and starving or taking the high road to Australia and New Zealand.
When I went to the area in 1950, I came to the conclusion that 19 children out of 20 had no chance of staying there. That conclusion will give hon. Members opposite some impression of how deeply I felt on the subject. In the debate we had on the subject in those days—1942—the present Chairman of the North Scotland Hydro-Electric Board, who was then a distinguished Secretary of State for Scotland, pulled a rabbit out of the hat and in the last paragraph of his speech announced the birth of the Board. The Board has since undoubtedly done a good job, but it is subject to criticism.
I should like to justify a remark which I made off the cuff to the chairman of the Select Committee, and I am sure that it would interest the House to hear of one or two cases which support those remarks. The details are worth retailing. One of the earliest cases which I heard of was that of 40 landholders, who are bigger than crofters in Scotland. They are the tenants of a Government agricultural estate at Castletown, which is one of our largest communities. It is not a remote place in the glens and mountains. It is right on the main road between Wick and Thurso. These people were told that electric power was to be brought into the area. They had their homes wired at their own expense. After waiting some time for the electricity they asked why they could not be connected. They were told that the Board was waiting on the Air Ministry which objected to the power being brought there because it had an aerodrome nearby.
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After trying to get information at Wick they came to me. I went to the Ministry and asked whether it was true that it was objecting to the power being brought into the area. I said. "You have a derelict aerodrome there. It has not been operational since the war. How dare you deny electricity to these people?" The officials there said, "We have not denied it at all. We know nothing about it." When I referred the matter back to the Board I found that that was true.
It was the cost that worried the Board. It did not want to face the cost of taking the electricity to an agricultural area. But farms are never on main streets, and when light and power are taken to an agricultural area they must be taken far and wide by the very nature of the siting of the farms. After a great deal of trouble and delay, electricity was brought to these 40 landholders. They are producers of high-quality stock, and if anybody had the right to electricity they had.
Then there was the case at Bower of from 50 to 70 farmers and crofters who were denied electricity. In this case they were told that the Admiralty has a radar station near there and that the electric power lines would interfere with it. It was found later that the Admiralty knew nothing about that. Because the people realised that radar was important they did not like to say anything about it.
It is at this point that I was brought in. Other electricity undertakings lay all cables in towns, cities and even rural areas, underground. Every cable in London is underground, but because this Board is working largely in rural areas it can get away with erecting poles almost anywhere. One of the very few places in Caithness—and there is none at all in Sutherland—where this question of putting cables underground cropped up was Bower. When the Board was asked to pay the cost of digging the ditches and putting the cables underground it refused to do so, and it made that the excuse for leaving 50 to 70 of the best farmers in the North without electricity year after year.
Mr. G. M. Thomson: The hon. Member should tell the House that these people are now connected, by agreement

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with the Admiralty, at a saving of £8,000, which works out at £160 per consumer. Since the hon. Member is interested in saving money, so that more consumers may be connected with the mains, does he not now regret his opposition?
Sir D. Robertson: I am unable to accept the hon. Member's figure. A figure was supplied to me by the Board. As far as I can recollect, there was a saving of one-fifth of the cost. I helped the Board to get the Admiralty to make its conditions relating to underground cables less strict; but it was a statement of truth that these people were deprived of electricity for several years because the Board did not want to face the cost of digging the ditches. It is true that these people are now supplied with electricity.
At Newton Hill, within the small burgh of Wick, there are 15 householders who are denied electricity. Their houses have been wired for years, but up to now there has been no hope of their getting a supply. Once again it is a question of underground cables. They were told that the Post Office objected to the supply because it would interfere with the important radio station at Wick, which does valuable work for the fishing fleet and the Merchant Navy. It would not interfere if they put the cables underground.
Hon. Members must agree with me that there is something radically wrong when this can happen. If it happened here there would be an outcry, and those 15 householders are just as much entitled to electricity as any other citizens. All the other people in Wick have it. Of course, the electricity will cost more than carrying it on poles above the ground, but the Board must take the rough with the smooth. The justification for its formation was that it was better for a nationalised board to deal with the difficult conditions in the Highland area. As the House knows, the Act imposes on the Board the duty to take electricity to consumers in rural areas. There are the controlling words "where practicable," but I have never known it not to be practicable unless it is argued that it is impracticable because it would cost more.
It was argued in the debate in 1942 that private enterprise would not undertake this difficult work. Yet the late George Balfour performed a miracle. He
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harnessed the Loch Rannoch, Loch Tummel, and Loch Ericht, and during eleven difficult years often walked the streets trying to find capital to keep going. He achieved his object. The undertakings became profitable and paid decent dividends. When he came to this House to get additional powers, after a hearing in Edinburgh before a Committee of Lords and Commons, which unanimously decided in his favour, Mr. Tom Johnston had other views in wartime and they prevailed.
Another case is that of Noss Head, an important lighthouse just outside Wick, where there are three keepers' cottages without lights. In that case the Board took the view that because these were owned by the Northern Lighthouse Commissioners, they should undertake the work. This view runs through all the other remarks I shall make. These fellows are entitled to electricity but the Board has said that some other Government agency should pay. It is wrong.
Then there is the Causeway Mire, the historic centre of Caithness, on the road running from Latheron up to Thurso. There are 15 crofters and farmers along the road who have been waiting for electricity for years. This would cost money, but the moment it gets away from Main Street the Board says, "Nothing doing." This place was put high on the priority list for 1956, but because of the credit squeeze the project was dropped. It means that 15 farmers are without electricity, and yet they were the main people the Act was meant to serve.
At the Hill of Wester there is a croft beside the county road. A capital contribution of £781 was asked from the crofter. This is not out in the remote Highlands but just a mile or two outside Wick and close to the main road. He was also asked for £4 a year line rent for seven years. In other words, the Board said to the man, "Never in your lifetime will you get electricity." In the Burgh of Thurso a retired farmer was quoted £200 for a connection within the burgh limits. I was able to intervene in that case and a reduction to £91 was made plus a guarantee of £18 for seven years.
In Bilbster, a young man working for the railway in Wick, who was getting married and wanted a house, found one

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a few miles outside Wick on the railway within a short distance of the main road. He asked me to try to help him to get electricity. I have been trying for the last four years but he has not got it yet. He was asked to make a capital contribution of £340. That was a denial of his right to have electricity and yet the Act states that he should have it. Then there are 206 forestry workers' houses without electricity. These are not all in my constituency, and I took the figure from a letter of the Hydro-Electric Board. The Board will not give connections to these forestry workers, again because they are employed by another Government Department. It is a case of any excuse to avoid facing a more expensive connection. At Brack Loch, Lochinver, a crofter, Mr. Mackenzie, who is a fine rearer of high grade cattle, was asked to make a capital contribution of £470 plus a guarantee of £120 a year. As an alternative he could make a capital contribution of £1,470 with no guarantee.
Here is another case. Miss Macrae, a teacher of weaving, who had worked most of her life in Glasgow, came back to the place near Lochinver where she was born to teach the local girls weaving and afforestation on a croft. She was asked to make a capital contribution of £200 or pay £36 per annum for seven years. Much to my regret she gave in. So the poor soul, who went back to benefit her people, has had to pay £36 a year whether she uses the electricity or not. There are a bunch of crofters outside Dornoch at Rearquhar, one of whom is James Anderson. He was asked to pay £1,000 plus a guarantee.
This is not a happy recital, but these are facts which can be justified by my hon. Friends who represent the other Highland constituencies who can produce similar lists. The Board cannot just work along Main Street and deny these other people their rights. I assure the House that my hon. Friends and I will not let up on this. We expect support from the Secretary of State for Scotland. When I took to my right hon. Friend the case of the 15 residents in Newton Hill, Wick, I told him he was obstructing me in my work, but he washed his hands of the matter and said that it was the job of the Hydro-Electric Board. It is not so. He is the Minister responsible and these people are entitled to have electricity. I
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expect the Minister to be on my side, helping me instead of saying that it is not his business.
Now about losses. We have heard from the hon. Gentleman the Member for Dundee, East and from the Secretary of State about the losses incurred in 1955. It is true that these were due to an altogether exceptional drought. That is no reason for panic. In my opinion, the Board has done well in fighting losses up to now, and this would not have been possible without the Act, which brought the profitable areas of Aberdeen, Dundee and Perth into the coffers of the Board. I have no objection to that. It was very desirable. The Act dealt only with the seven crofter counties and this area must have been a great help to the Board.
In 1956 the Board was only £165,000 to the bad after charging £4,273,984 interest on capital and capital redemption of £1,960,113. That is a satisfactory situation for the shareholders, at least half of whom are the National Debt Commissioners, the Government. The Board not only has a great lasting asset in the great dams, power houses, transmission lines and other works of the Hydro-Electric Board, but interest has been paid out of the profits and there has been capital redemption of almost £2 million. Yet we talk about a loss of £165,000 to a Board which has had to carry tremendous burdens on work not in operation.
These schemes take years to come into operation, and all the while they have been under construction there has been the interest on capital to meet. At the present time on the balance sheets that we are discussing there is an item of more than £3 million in interest in respect of the construction of hydro-electric generating stations which are not yet operating. That must represent about £60 million of the Board's capital, and it is not bringing in a penny but is giving rise to interest charges and all kinds of expenses.
Consequently, why should there be all this panic about taking one year with another, dropping everything and saying that electricity cannot be taken to certain people because the Board cannot afford to do it? The whole thing could be done for a few thousand pounds.
I am informed—the Secretary of State has confirmed it—that in 1957 the Board

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paid its way. It has borne all the charges to which I have referred—the interest on capital, and the redemption of capital, running into millions of pounds—and has paid its way. It still has like a millstone round its neck £60 million of capital investment which does not bring in a penny but causes expense.
The Board should change its policy, drop its schemes and pause. It has expanded at a terrific pace. No one can deny it. It has rushed on madly with one scheme after another. Now it has reached a stage where it ought to stop and finish its current work, and then reflect on what it has done, and, finally, concentrate on its objective, which is not 85 per cent. distribution but 100 per cent. distribution. If it achieves that, the profits that it requires will flow from it.
I strongly urge the Board not to submit any new schemes. I strongly urge it not merely to accept deferment of some schemes but to stop its schemes altogether, completing only those which are nearly finished. Those which are half constructed should be put on a care and maintenance basis. What I have suggested would be an economical and sensible thing to do, and it would help the nation at this time of financial stringency. It would be an anti-inflationary move.
I wonder whether hon. Members realise that these schemes have cost three, four or even five times the estimates submitted to Parliament. The Board is very blameworthy in this respect it cannot escape blame. It says that every tender is a competitive one, and yet in the end a scheme which is estimated to cost £4 million probably costs more than £9 million. The Board is responsible for this, because it picks the men who make the estimates.
How can a fixed price tender be swollen three times while the work is being carried out? I believe the cause is unrestricted overtime, men working 12 hours a day, with time and a half on Saturday and double time on Sunday. I believe the publicans have benefited greatly from the work on the Shin scheme on which fantastic wages have been paid.
This matter must be probed. It is thoroughly unsatisfactory. No one must wonder at my saying that there is something wrong with the contractors, unless
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they are not fixed price tenders. The contractors should be encouraged to operate shifts and cut out unrestricted overtime. To its credit, the Labour Party fought for years for an eight-hour day decent conditions, but that does not apply to hydro-electric jobs.
Sir James Hutchison: I listened to the evidence on this very point before the Select Committee. We were concerned over the question of the out-turn of estimates compared with the original. These were not fixed-price tenders. It was not possible to get fixed-price tenders.
Sir D. Robertson: That is a very interesting intervention. To find out what was happening, I went to one of the largest civil engineering contractors and asked, "Do you work on a fixed price or cost-plus basis?" The reply was "Cost-plus is a thing of the past. We work on fixed price tenders at home and abroad." I asked whether a shift system was worked, and I was told that it was. I asked whether my informant could tell me where his firm was doing a job similar to the big hydro-electric works in my constituency, and I was told that it was concerned in a massive waterworks scheme in a remote part of the North of England where the work went on for twenty hours a day, there being two shifts of eight hours plus two hours' overtime. The firm believed that two hours' overtime was enough for a man day after day. That meant that 20 hours a day were spent on the construction work and the remaining four hours of the day were spent in maintaining the machines.
I should be glad to give to hon. Members who are interested the name of the man concerned. It is a household name. The firm is building a big canal in Egypt, the biggest since the Suez Canal, which will enable tankers to get to Iraq. The men work right round the clock there, on three shifts a day. Yet on the hydroelectric scheme to which I have referred the men work one shift with unrestricted overtime. If the accounts are probed, I believe that unrestricted overtime will be found to be one of the reasons why the costs have been so high.
As a businessman of some experience, I feel very strongly that the best thing the Board could do would be to pause and rest awhile and forget its plunging

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into the expenditure of capital on hydroelectric schemes. Apart from the fact that it needs to rest and to reflect, there is all over Great Britain today a tremendous glut of coal. There is far more coal available than we shall use this winter unless we stop mining for a while. There is a glut even in the Highlands. We have millions of tons of coal everywhere.
Mr. Thomas Oswald: The hon. Gentleman's statement is wrong. People in the West of Scotland are complaining at the moment of a shortage of coal. Complaints are being made right down the West of Scotland. It is probably something like what happened in 1947 when the Tory Party blamed the Labour Party for the bad winter.
Sir D. Robertson: I am stating a fact. A week ago about 30 million tons of coal were in stock in this country.
We also have nuclear power stations being erected in different parts of the country. That would be another justification for the Board pausing a little. If the Board paused, I believe that it would find that the profits about which it is so worried would come about in abundance, and then it would be able to reduce its charges and things would be much happier and better for us all.
8.9 p.m.
Mr. J. Grimond: I, too, welcome the opportunity to consider the work of the North of Scotland Hydro-Electric Board. I share the anxiety of other hon. Members that it should have taken so long to get the matter discussed in the House. Clearly, even now there will not be sufficient time—there very seldom is in debates of this sort—to examine the Report in detail or go into the facts and figures before us. We all have constituency points or points relating to the North of Scotland to raise, and there is little time to do that and also to examine what the Board has been doing.
I seriously suggest that the House requires a different way of examining these Accounts. There is a great deal to be said for having a committee to do the work regularly and in reasonable time. That is necessary to do justice to Reports such as these. The Board has done some good work and has produced a good
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Report, The Secretary of State has given us some information which I was very glad to have, but I want to ask a few more questions about the crofting counties. As I understand it, expenditure on distribution next year will be much the same as this year—about £1 million. Can the right hon. Gentleman indicate how much of that is expected to be spent within the crofting counties? Although the total number of consumers in the Board's area is high, the total number of crofts connected is not nearly as high; it is only 60 per cent. of the average.
I, too, am very concerned about costs. The hon. Member for Caithness and Sutherland (Sir D. Robertson) referred to this matter. It is common knowledge, at least a common suspicion, in the Highlands that the prices charged by contractors for any work in the Highlands, not only hydro-electric work, are extremely high. The whole system by which contracts are made needs investigation, particularly when we are told that the cost of raw materials, for instance, copper, is falling. Is that fall reflected in tenders, and can we be assured that general costs and wage payments in these schemes are being kept under control?
Can anything be said about taking electricity to the islanders? While in the Inner Hebrides some consumers have been connected to the supply, apart from the mainland of Orkney and Shetland and one island in the Orkneys, where the owner paid for electricity herself, the supply has hardly touched the people of the outer islands.
I pass from that to the subject of the capital contribution and the Board's charging system. I have raised this matter year after year. I do not intend to go over all the ground again. This matter still causes the widest dissatisfaction and still leads to unnecessary friction between the Board and small farmers and crofters who cannot understand the basis on which they are charged and who sometimes feel that the charges asked of them are such as to lead to a total denial of electricity to them.
That brings me to the topic of public relations between the Board and would-be consumers. This, I agree, is a very difficult matter. The Board obviously has to find out how many people want electricity and, in the process of doing that, is all too apt to give the impression that

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electricity is coming in the near future, with the result that people wire-up their houses, and then there are capital cuts or an alteration of plans resulting in a supply not being provided.
In the island of Uist there has been some confusion because the Board put up poles which it is now taking down again because some people have withdrawn from the scheme. If we could have an assurance that the present charging system, bad as it is, is not to be altered for the worse and if we could have some indication from the Government of how far they are prepared to help, especially under the Agriculture Acts, and whether they can do something for the crofting districts which do not fit in to the Agriculture Acts, we could allay some of the dissatisfaction which now certainly exists. I also ask that the Board should do its best to join up those odd pockets all over the Highlands where little groups of consumers appear to have been by-passed for technical reasons, something which again leads to much dissatisfaction.
When the Board was originally set up, it was hoped that industry would follow in its wake. In many Highland areas that has not happened and I was very glad to hear the Secretary of State say that the Board is giving serious consideration to developments in nuclear power. In an area such as mine which relies on diesel generation, electricity is not relatively cheap. Nuclear development may make it more possible to spread light industry over the countryside and bring electricity to those places so far unable to have it.
I want to deal with the farming position. There are powers to give grants to farmers under the Livestock Rearing Scheme and under the Development Grant Schemes. Can we be told about what is happening with these schemes in the Highlands? The reason it has been possible to bring electricity to many areas in Scandinavia is that there are Government grants for the purpose and other consumers do not have to subsidise the more difficult areas. How many schemes in the crafting areas have been approved? What help is given to crofters for drawing up and co-operating in schemes?
I want to follow what the hon. Member for Dundee, East (Mr. G. M. Thomson)
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said about the Consumers' Consultative Council. I do not in the least criticise members of the Council, least of all the Chairman with whom I have spoken and who has been very helpful. However, the position is absolutely unsatisfactory. The Chairman of the Council is Vice-Chairman of the Board and is bound to have a certain division of loyalty. No one believes that he can fight for the consumers. That belief may be wrong, but it is natural. No one knows enough about the Council and no one knows to whom to go. The Council is set up in such a way that it cannot do its job and is, therefore, relatively unsuccessful.
I now turn to a matter directly affecting Orkney and I apologise for perhaps wearying the House about it. However, the matter is rather urgent. It affects the future of the generating station at Lyness. I have raised this matter again and again. After a debate on the Navy Estimates two years ago, I was later told by the Civil Lord that
"Since shortly after the war the Admiralty had been ready to make part of the capacity of the generating station available for the supply of the civilian population on Hoy."
I was also told that
"Negotiations with the Board commenced in 1948."
The letter from the Civil Lord giving me that information went on:
"Last October, we were told by the Hydro Board that they were unable to extend their distribution lines to the area concerned."
That is as clear a statement as one would want that the Admiralty had offered electricity and that the Board had declined the offer.
In a letter of 26th April, 1956, the Chairman of the Board gave his reasons for refusing the Admiralty's offer. He agreed that negotiations had taken place, but said that the restrictions on capital expenditure made it impossible for the Board to proceed and that, in any event, it would be very expensive. He said that the Admiralty had attached two conditions—it reserved the right of priority over the supply and reserved the right to terminate the supply on three months' notice.
I had further correspondence about this with the Secretary of State and with the Board, but it was not until this autumn that I learned through Mr. Johnston that the Board had had no firm offer from the Admiralty. He later sent

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me a copy of the letter to the Admiralty in which he said:
"It is clear from your letter that the Admiralty are only now offering to negotiate terms and give no indication of prices.
Meanwhile, the Board hope it will be possible for you to find an occasion to let it be known that they have never had the opportunity to refuse to take over the plant."
This last is a rather curious statement but the conclusion is that these two bodies never got together to discuss a firm offer. This is a Department of the Government on the one hand and a nationalised industry on the other. What goes on? Do we have to bring them into a room and make them shake hands before each knows what the other is doing?
Later, apparently, there was a meeting between the Board and the Admiralty. The Board has told me, as I understand it, that the Admiralty expects to be paid for the installation and that even if the Board got it free, it would cost a considerable sum, about £115 per annum for each consumer to have a supply.
I imagine that the whole scheme for using this station, even for Admiralty employees, will fall to the ground, because the Admiralty has now said that it wants an answer by the middle of February. The Admiralty has been closing this base for two years or more and yet it has suddenly demanded an answer from the Board by the middle of February. If I am doing an injustice to either authority, I shall no doubt be told. I must say that it is a sad story.
There is a great feeling in my constituency that outlying districts and islands have not been joined up in accordance with the duty laid on the Board. We agree that that is difficult, but here is a generating station with a line already laid down from Lyness to Longhope. This gives an opportunity for reassuring the people in the North that the Board and the Government are keen to get into difficult areas and to do something for people in remote an as, who will be heavily enough charged if ever they get electricity at all. Although the cost will be heavy in this case, it will not necessarily be heavier than virtually selling off the station, or allowing it to lie on a care and maintenance basis. I beg the Government to consider this matter again. This is an opportunity for doing something for an outlying island, hard hit, and in danger of further depopulation.
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I want also to say this: the Board has brought in a scheme for the use of bottled gas which is certainly better than nothing, but it must be put on record that bottled gas is no substitute for electricity and I cannot allow it to be thought that it is.
I must not take up the, time of the House further. I regret that there is no time to go into the record of the Board in more detail, because in many respects it is a fine record. We seldom get these opportunities to air our grievances, and possibly give the impression that we are more dissatisfied with the work of the Board than is the case.
Many tributes have been paid to the Board with which I agree, but I should also like to put in a word for the Board's local managers, officials and workers. It is not easy to explain to crofters these different schemes and why they cannot be supplied with electricity; nor it is easy to maintain electrical lines in winter in the North of Scotland. I should, therefore, like to say a word on behalf of the local people in my area who have done a wonderful job.
8.21 p.m.
Mr. John MacLeod: I also welcome this opportunity to congratulate the Board on bringing forth such a comprehensive report. It is generally agreed—and it is certain to come out in this debate—that the Hydro-Electric Board has brought many benefits to north Scotland. I want to emphasise some of the points raised.
The Committee on Nationalised Industries seemed well satisfied with the Board's present activities. The Committee pointed out the distinction between this Board and other nationalised industries—namely, that its function is not only to supply, as a business concern, electric power to the North of Scotland, but also to collaborate so far as its powers and duties permit in the social and economic betterment of that vastly populated area. I am just as worried as the hon. Member for Caithness and Sutherland (Sir D. Robertson). It is disturbing to see these schemes work out two or three times more costly than expected. However, we have something that would never have happened if it had not been for the Hydro-Electric Board. I cannot conceive that the people in the Highlands would be getting electricity now unless it had been for the Hydro-Electric Board.
Mr. Nabarro: I do not derogate from the argument for electricity by one means or another for 100 per cent. of the population of the Highlands. Where the hon. Gentleman is manifestly wrong in his reference to social matters is that the Act of 1943 provided for that and it was always thought that the provision of electricity would be accompanied by the immigration of light industries to the Highlands. Has that happened?
Mr. MacLeod: I think it is happening now. Industries are coming to Inverness in particular. I agree that industries for which we had hoped have not come, but other social amenities have come. Let me say this—
Mr. Nabarro: Do not be too long, about it.
Mr. MacLeod: Let me have my say. The hon. Gentleman can have his chance if he is lucky enough to catch Mr. Speaker's eye.
Mr. Nabarro: If the hon. Member gives me time to say it.
Mr. MacLeod: The Committee pointed out that the problems of the uneconomic undertakings were more acute in North Scotland than in any other area. As has been stressed by other hon. Members, we have reached the stage where rural electrification in the Highlands is being slowed down, not only because of the present economic situation, but because it is more difficult and more expensive to bring electricity into certain remote areas. The Board has done a very good job in my constituency, where there are more constructional schemes going on just now than in any other area. Electricity has been brought into very remote parts of my constituency, and I welcome that.
We have reached the stage mentioned by other hon. Members which might be called "the hard core". I would like to know what the answer is, because as has been pointed out by my hon. Friend the Member for Caithness and Sutherland and the hon. Member for Orkney and Shetland (Mr. Grimond), and as I pointed out in a debate in November, dealing with a case in Torridon, which is a borderline case, there is a whole community which has been denied electricity because of these capital charges. What is the answer? I think the Board
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has to meet its obligations, but if, as it says, it cannot do it at present, surely it ought to be able to make use of other forms of grants. As the hon. Member for Orkney and Shetland pointed out, there is the Agriculture Act, 1957, for farm improvement schemes, and there is the Hill Farming and Livestock Rearing Acts. But there appears to be an anomaly regarding crofters, in that grants are given for equipment but not to enable electricity to be brought into the poorest areas. This question is mentioned on page 68 of the Report:
"Regulations issued under the Act have made grants available for the supply of electrical equipment but not for the supply of electricity itself. It was felt that this would merely emphasise the distinction between crofters who already had a supply and those who were still without it."
That is one of the most unfortunate positions today. There are people in the same areas who are asked to pay exorbitant capital charges as well as a guarantee living beside people who had the electricity free only a few years ago to their gable ends. It creates a very unfortunate feeling among the people in the area.
This problem must be tackled by the Board, probably by announcing some form of programme. The Secretary of State said that it could not do that, but it would surely be better to tell the people when they can expect a supply. The people of Torridon have been offered bottled gas but, as the hon. Member for Orkney and Shetland pointed out, bottled gas is no alternative for electricity, especially in an area which is hoping to have television. I do not suppose that we can get television through bottled gas. That is the kind of problem that we shall aggravate.
I do not want to delay the House very much longer, but I want to emphasise the other social aspects of the Board's activities. There is the question of roads, for example, which is touched upon in the Report. There is no doubt that many mistakes have been made in cases where the Board has replaced roads which have been flooded. It is only natural that the Board should expend a sum equivalent only to that required to replace the portion of the road which has been flooded, but opportunities have been lost in this way.
In Invermoriston the Board has replaced a road more or less as it was before, but it should have been replaced

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by a road allowing at least two cars to pass comfortably. We must remember that the tourist industry is tremendously important to the Highlands. The Board has done much towards the development of this rapidly expanding industry, but there is a wastage of money and materials in the rebuilding of roads which have been flooded. These roads have been replaced more or less to their pre-flooded status, and they are already out of date. It is appalling to travel on them in summer, and I hope that the Joint Under-secretary will be able to guarantee a change of policy, and say that a more realistic approach will be adopted, especially in the case of trunk roads.
Another on the Board's activities is the improvement of fishing conditions in the lochs. This may seem to be a small point, but it is one of the few activities in which everybody can take part. I hope that the Secretary of State will examine the point made by the Board about the tremendous amount of poaching which is taking place in the lochs which it is stocking. It is very important to the development of our tourist industry, and the Board is doing a good job in this respect.
I criticise the Board merely in respect of what I have called the remote, hard core cases. I hope that the Secretary of State will take responsibility and not leave everything to the Board, as he did in November last, in replying to the debate I had then.
8.32 p.m.
Mr. Arthur Palmer: I am sorry that the hon. Member for Caithness and Sutherland (Sir D. Robertson) has left the Chamber, because I was personally delighted to hear his pleasing references to the late Mr. George Balfour, a former Member of the House. I believe that he sat for Hampstead, although he vas before my time. He founded the Grampian Company, but in the case of one of his other companies, by which I was trained as an engineer, there was no need for him to walk the streets. It was in the West End of London—a rather different territory.
Sir J. Hutchison: My hon. Friend asked me to apologise for him if the hon. Member for Cleveland (Mr. Palmer) rose in his absence. My hon. Friend has had
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nothing to eat, and he wanted to seize the chance of having a little dinner.
Mr. Palmer: I am grateful to the hon. Member, and I quite understand.
My excuse for intervening is not simply that I try to view these matters professionally—
Mr. Nabarro: The hon. Member's is an authoritative voice.
Mr. Palmer: —or that I happened to be a Member of the Select Committee. My special immediate qualification is that I went to the North of Scotland on Friday. I did not reach Caithness—Aberdeen was far enough for me on that occasion—but I did penetrate into the outer fringe of the Board's area, and I met quite a few members of its engineering staff. I want to echo what the hon. Member for Orkney and Shetland (Mr. Grimond) said. I am sure that it was not a deliberate omission on the part of the Secretary of State, or of my hon. Friend the Member for Dundee (Mr. Thomson) that no direct tribute was paid to the staffs and work people of this undertaking, but they obviously do a remarkable and sound job, under the most difficult climatic conditions, on behalf of Scotland.
If what I shall say seems slightly critical of some aspects of the Board's economic policy, I want it to be understood that I speak very much as a friend of the Board and as one who certainly supports the nationalisation of electricity. But I think that debates of this kind are valueless unless hon. Members on both sides are prepared to look realistically at the economies of publicly-owned undertakings. If sound economic principles are followed, there is in the long run a much greater chance of them winning public approval.
I was interested in what was said by the Secretary of State about the attitude of the Hydro-Electric Board in the future to the further development of water power. As was revealed in the figures given to the Select Committee, it has so far developed about one-third of the potential resources so that there is still a great way to go. If that programme is completed on the basis of water power alone, there will be of course a tremendous expenditure of capital. Knowing the difficulties of the country at the present moment in the general matter

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of captial resources, I think it fair to ask the Board to be quite certain that it is using capital in the most economical fashion possible.
The situation has been changed from what it was at the time when the Board was started in 1943. This has occurred, as has been pointed out by other hon. Members, through the fast development of nuclear energy. I know the answer given by the spokesmen of the Board to the Select Committee was that water power is more than sufficient and will meet its needs. In short the Board is continuing to have a marked bias towards water power. Figures were produced for the Select Committee purporting to show that water power was still cheaper. I know that the figures produced by the Board may show superficially that that is the case, but it makes two assumptions which should not be overlooked. First that the load factor will be permanently low. That is not inherent in the plant but in the habits of the population, and there is a danger that if that assumption be made the undertaking, after a time, may develop a vested interest in a low load factor, which would be a pity.
Secondly, the assumption is made that the capital cost of these undertakings can be spread over a very long period. I know the argument that they are heavy civil works and can, therefore, safely carry, shall we say, 70 years life. But I think that in the course of the next 70 years there will be a tremendous further development in nuclear power; particularly in view of the kind of news we had on Friday of how it may be possible at some near time to obtain nuclear energy from hydrogen. In that case an assumption of 70 years for the depreciation of capital in technical competition is, I think, slightly unrealistic.
Mr. Humphrey Atkins: Am I not right in thinking that in the case of many permanent works the period is, in fact, 80 years?
Mr. Palmer: Yes.
In my opinion—I think that the Select Committee also was of the same opinion—although I do not wish to be dogmatic, the Board must in the future regard itself more and more as a normal electricity undertaking. After all, in a sense that was forced upon it by the fact of the
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1947 Act, which added to the original water power area more densely populated districts such as Perth, Aberdeen and Dundee. I want to assure the hon. Gentleman for Kidderminster (Mr. Nabarro) of that, as he may be thinking he has made a convert to his point of view.
Mr. Nabarro: I am pleased that the hon. Gentleman has got around to that. I have been pleading this very argument for ten years. At long last the hon. Member for Cleveland (Mr. Palmer), the only really authoritative voice on electricity matters on the Opposition side of the House, is converted precisely to my view.
Mr. Palmer: The difference between us is that the hon. Member for Kidderminster has been studying the matter for a number of years but has not made very much progress upon it. He does not approach the question of nationalisation with the same sympathy as I do towards public ownership.
Mr. Nabarro: I have converted the hon. Member.
Mr. Palmer: Anyhow, I am pleased to read from the Report that the Board is considering the building of a nuclear station. If it is combined with pumped storage it will be a most hopeful economic development for the future.
One of the difficulties about the Board is that, mentally, it is a little too much turned in upon itself. It is a self-contained generating and distribution authority like the newer South of Scotland Board. The fact that it is rather mentally turned in upon itself has resulted not only in an out-of-proportion emphasis upon water power but, as the Select Committee pointed out, in failure to obtain competitive tenders. This was unfortunate, to say the least.
I appreciate and respect the sentiments which led the Board to confine itself to a large extent to Scottish manufacturers. One can understand and respect that point of view, yet it would have been useful, at least as a check on the tenders it had obtained, if tenders had been invited from English manufacturers or from overseas.
I am prepared still to argue that it was a pity, as with the 1954 South of Scotland Electric Board, to isolate this

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Board from the general electricity system of the rest of Great Britain, especially when ore considers the present European tendencies towards economic integration, Nevertheless, I accept the situation and I am prepared, as a mere Englishman, to agree that if the Scots want control of their electrical affairs, even if they are not to have political home rule, they should get it.
I would make a suggestion for the future. We are now to have under the 1957 Act an Electricity Council for the greater part of the Kingdom, not as an executive body—it cannot tell any electricity board what it should do—but as a co-ordinating and advisory body. Would it not be as well if the two Scottish Boards were represented upon it? That would do away with the tendency for them to live a mental life of their own in financial and engineering matters.
All this may sound unduly critical, but I do not want to be understood that way. From the general social point of view, in the best sense, the Board has a fine record of achievement, as the Select Committee discerned. From my personal experience of electrification, I believe that the rural electrification carried out by the North of Scotland Hydro-Electric Board compares very favourably with that of any other electricity board in the Kingdom. It is a remarkable record of achievement.
Financially, also, I think the Board has conic through very well. It has had to fight recently against two calamities. The first was the drought. It is always surprising to the English to think of a drought occurring in Scotland. It seems almost as unlikely as finding a pacifist in the cavalry club. The second calamity is having Her Majesty's present Ministers in charge. That is not a natural calamity, but one which may be put right in time. Under that second calamity the Board has had to put up with paucity of capital, price interference—which has not been touched on in the debate, but which was discussed at some length by the Select Committee—and has had to battle against ever-increasing interest rates. With that kind of adverse background, I think the Hydro-Electric Board has a fine record of success.
Having made some criticisms of detail, I say finally that the activity, work and
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achievement of bodies such as the Hydro-Electric Board justifies my socialist belief in public ownership.
8.47 p.m.
Sir Colin Thornton-Kemsley: On the achievements of the Hydro-Electric Board on one, I think, will disagree with the hon. Member for Cleveland (Mr. Palmer) and other hon. Members who have spoken from both sides of the House this evening. I think that most of us in speaking about the Board are very conscious of the fact that although it represents about 25 per cent. of the land area of Great Britain it has within that area only about 2·2 per cent. of the total population.
It has done a very remarkable job. For example, from the time it took over there were only about 7 per cent. of the farms in its area connected with electricity supply and now something like 60 per cent. are connected. In my area of North-East Scotland the number of consumers connected since the Board took over the area in 1948 has increased by 70 per cent., which is a very considerable achievement. Although many of us have been critical, and will be critical tonight, in this short debate we have time only to make criticisms and insufficient time to stress the value of the achievements of the Board, which we all appreciate.
I am, of course, aware that in April, 1956, the Board changed its policy in regard to new consumers. It then decided it could no longer rely on a minimum annual guarantee, but would have to make a capital charge. I was a little surprised to hear my right hon. Friend say in his opening speech that that capital charge was required in remote areas—outlying areas, I believe, were the words he used. My experience is that it is now asked in all cases, even those close to fairly considerable towns. The effect of that in many cases is disquieting and disappointing.
I want to tell the House the experience which is practically universal in my constituency. Throughout the County of Kincardine and the North-East of Scotland area of the Board we find exactly the same happening. First, there is a canvassing of the area and contracts are entered into as a result of which production programmes are made, wiring of

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houses carried out and hopes raised, then there are years and years of delay and one excuse after another is made by the Board. First of all, it was shortage of materials, and next shortage of manpower. Then it was the credit squeeze, and then the Government's restrictions on capital expenditure.
Any excuse has been used to cover the Board's failure to fulfil its promises on time, and this is the disquieting fact. When these people complain and write to their Members of Parliament, as they do in the last resort, the Board comes along and says, "All right, if you want the supply, which we have contracted to give you without charge, we will make a charge of anything up to £1,000, which is the penalty"—and I use the Board's own phrase—"for jumping the queue."
That is not an uncommon experience. It happens time and time again. We get the canvass, and contracs are entered into. I confess an interest here, because I have a contract which I entered into over two years ago, but excuses have been made and we still have, not got the supply. Houses are wired for electricity and so on, and private plants are becoming unusable. One wonders what to do, and then the Board says, "All right, you want the supply, you can pay £1,000"—or whatever the sum may be—"and that is your penalty for jumping the queue."
My right hon. Friend, in his opening speech, said—I took down his words fairly carefully—that where the Board had agreed to make free connections, it will do so, even if—I think I am quoting his words—it means some delay. I hope that I am not unduly suspicious, but that did raise a feeling in my mind that that could be the secret of this continual delay in fulfilling the Board's contracts. The Board has contracted, in case after case, to make free connections, and it is now binding that it has to delay for one reason or another. Now, the Board says that it will still make these free connections, but it is able to secure from some other people capital contributions for jumping the queue, and so the delays go on. I hope indeed that that is not a deliberate policy of delay in order to secure capital contributions from people who are becoming more and more exasperated at the failure to get supplies.
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There is only one other matter I wish to mention, and I do it with the very greatest diffidence. It is not a personal matter at all. I would not be right if I did not follow up the Questions I have asked in this House and did not express my own disquiet about this matter. Last November, I asked my right hon. Friend the Secretary of State the date of the first appointment of the members of the Board, the date of the expiry of their present appointment and their ages. I did that quite deliberately, because I have the impression that the Board is very much too old for what ought to be an enterprising, expanding, virile public authority. I have the greatest respect for our old friend and former colleague, Mr. Thomas Johnston, but his period of office as Chairman has been extended to the time when he will be either 74 or 75 years old. That fact would not be so bad if he had a young Board behind him.
Mr. E. G. Willis: What about the right hon. Member for Woodford (Sir W. Churchill)?
Sir C. Thornton-Kemsley: If the hon. Member for Edinburgh, East (Mr. Willis) is to make sedentary interjections, I shall not reply to them.
Mr. Willis: I hope the hon. Gentleman remembers the age of the right hon. Member for Woodford when he, in fact, was Prime Minister.
Sir C. Thornton-Kemsley: I am not forgetting that, and there are, of course, exceptions to every rule; but I cannot believe that all these elderly gentlemen in the top places on the Board have the mental capacity of my right hon. Friend the Member for Woodford (Sir W. Churchill), nor anything like the drive and energy that he displayed during the war. Mr. Thomas Johnston will be 74 or 75 years of age when his present term of office expires; Sir Hugh Mackenzie, the Deputy Chairman, 72, and Sir George McGlashan, 74.
When I asked this Question in November, my hon. Friend the Joint Under-Secretary of State told me, with great glee, that the retirement of someone who was then 69 years of age was being accepted, and that someone else was to be put in his place. I looked anxiously to see who it would be. I cannot believe that it was deliberate, but it happened to be a very

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prominent Socialist from my own constituency—chairman of the co-operative society, and so—on an estimable man, but when his present appointment expires he will be 76 years old—
Mr. Emrys Hughes: Will the hon. Gentleman give us the average age of the directors of the big banks in Scotland?
The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson): I think that my hon. Friend would like to be corrected on a point of fact. The age of the member of the Board to whom he is referring is, in fact, 66.
Sir C. Thornton-Kemsley: I am grateful to my hon. Friend for that correction. I certainly meant to give his age as 66. Nevertheless, I think that it is serious when four or five of the leading men are between 66 and 76 years of age. We should have younger men, with drive and energy on this body. I assure the House that this is not a personal criticism. I admire those gentlemen, but I think that we need younger men, and men with more technical and practical experience of the production of electricity and of engineering problems—
Mr. G. M. Thomson: Would the hon. Gentleman agree that, in an industry that is providing electricity for domestic consumption, it might be a good thing to have a woman on the Board?
Dame Irene Ward: Hear, hear.
Sir C. Thornton-Kemsley: My right hon. Friend said, and I was glad to hear him say it, that the capital allocation to the Board will allow it to carry through in the next two years the same distributive rate as it carried through in 1957. I hope that I did not misunderstand my right hon. Friend, and I hope, too, that he will ensure that this is done. I hope, moreover, that he will make sure that the first priority is given to making the connections that were promised by the Board upwards of two years ago. These people should be at the head of the queue, and I trust that my right hon. Friend will satisfy himself that that will, in fact, be the case.
8.58 p.m.
Mr. John Taylor: We had considered that it might be wise to confine the speeches from this side of the
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House to those of hon. Members who reside within the area of operations of the North of Scotland Hydro-Electric Board, plus an authoritative and erudite contribution from my hon. Friend the Member for Cleveland (Mr. Palmer). However, I think that it would be appropriate, for a few minutes, to hear the voice of just one Scottish Member who does not reside within that area but who has, nevertheless, always taken a lively interest in the Board's affairs.
I feel that the criticisms that have so far been made have, to some extent, been justified, but that they have not, perhaps, taken sufficient account of the very important factor of—and I hate to use the word—the psychology of the people of the Highlands. Had we not had the Hydro-Electric Board, Scotland would have been in a much poorer condition than it is today. There were no other means by which the number of people now enjoying the benefits of electricity in remote areas could have had those benefits than by the formation of the Board. Bearing in mind the justification for many of these criticisms, I want to express a word or two of unqualified praise for the Board, its record, its history and its work.
I think that only a Scot could appreciate and understand the background of the Hydro-Electric Board and the full implications of its operations. I must apologise to the hon. Members for Orkney and Shetland (Mr. Grimond) and for Ross and Cromarty (Mr. John MacLeod) for not being able to hear their speeches in full. I understand from comments made since that they have drawn attention to the additional contributions of the Hydro-Electric Board to Scottish social and communal life. These benefits are many but they are largely unseen. When we talk about the cost of heavy capital investment for these big schemes, we must bear in mind that it is not merely the cost and the production of a source of hydro-electricity that is involved. In the course of the creation of these schemes, great value has accrued to the social life of the areas concerned, apart from the supply of electricity.
One has in mind, for example, in looking at the excellent and, from my point of view, model Tummel Garry scheme, the fact that the Board has felt obliged to give very special attention at considerable cost to what are generally described as amenities. In the Highlands these

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amenities are very important. They are very costly. The creation of a new loch is not merely the flooding of a valley or a strath. Regard is had for the general formation of the terrain, for the making good of any unsightly spots and the creation of special architectural features which will blend with the landscape, and these cannot be done in the normal way that a commercial business would do them.
In addition to that, we have the erection of power stations of a particularly pleasing character built with local stone, and the result of that has been that in several cases quarries that had closed down and had been decrepit for years are now in full operation as a direct result of the encouragement given to them by the Hydro-Electric Board to supply sufficient local stone of good quality for the erection of the power stations and the subsequent encouragement of those quarries to remain in production for the supply of building material all over the area.
In the middle of the war, the then Secretary of State for Scotland, the right hon. Thomas Johnston, had to go to the then Prime Minister and ask for a considerable sum of money to begin this scheme. It was part of the original intention, and it has always been in our minds, that the purpose of this scheme was not only to supply electricity which, but for the scheme, would not be supplied to the Highlands; it was not only to supply electricity to the remote areas, but it was to provide in the Highlands of Scotland a source of employment and a means of arresting the depopulation of that important area.
Insufficient attention has been given in criticisms to the actual problems of remoteness. When one goes into the farthest glens and sees the power cables marching across the hills one realises how remarkable is this achievement. The cables represent the effort, the energy, the thought and the expenditure which has gone into the supplying of these very remote areas. The job would be regarded as uneconomic, as of course it is, in other parts of these islands as well. That is not fully appreciated.
Complaints have been mentioned. Of course there are complaints. We in the area of the South of Scotland Electricity Board receive about the same percentage
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of complaints, for exactly the same reasons as those given by the hon. Member for North Angus and Mearns (Sir C. Thornton-Kemsley), as is received by the North of Scotland Hydro-Electric Board. They are the same because it is the intention and the plan of the Board to supply current to a certain area. A canvass is made and customers are secured. The original plans are laid and the early work is put into operation. The prospective consumers are told that the plans have been approved and they proceed with wiring their premises, anxious and eager to have the radios, the washing machines, the television sets and the electric irons and other accoutrements of civilised housekeeping. They jump the gun, but the delays which occur are true delays.
There are difficulties about tenders, about capital expenditure and high interest rates. These difficulties delay schemes in the South of Scotland just as much as they do in the area of the North of Scotland Hydro-Electric Board. Every hon. Member knows, and certainly every Member who represents a county constituency, that he has occasion to write frequently to the chairman or officers of the Board to say that such and such a scheme has been approved but has not been put into operation for eighteen months or more and that his constituents are getting restive.
The hon. Member for North Angus and Mearns also mentioned the age of the members of the Board. These members, one imagines, are very carefully chosen. One notices that they are people with very long and valuable experience of social life and of other important factors in Scotland and that most of them are experienced in the North of Scotland. To say that the Chairman of the Board, Mr. Tom Johnston, is too old for his job—because that is the only inference to be gathered from the hon. Member's words—is to display ignorance of that gentleman's capacity, virility and foresight.
Mr. Emrys Hughes: Is he not six years younger than the Lord Chief Justice?
Mr. Taylor: I am not acquainted with the age of the Lard Chief Justice, but I know that in the case of Mr. Johnston it is not a matter of years but of virility, of vigilance and of foresight, and that he has shown those qualities throughout his life.

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I mention that point because it gives me the opportunity to say that if one mixes with the actual operational staff, the engineers and electricians who are in executive capacities working for the Board, one finds a body of young men, enthusiastic and extremely able, operating and managing this great concern on the technical side.
Their keenness and enthusiasm is the more to be commended when one recalls how many live in remote areas without much social life, their lives being confined practically to their own job and to their interest in it. As one who has met many of them, enjoyed their company, and observed how enthusiastic they are about the development of a scheme and the benefits it will bring, one can feel only that if in every section of industry there were the same enthusiasm, we should have few worries about the future.
This may sound like an unduly uncritical paean of praise for the Board. I make it deliberately because the Scots, who are supposed to be a hardheaded race, are really a sentimental one. We are the most sentimental people in these islands, and what appeals to us about the Board is the romance of this adventure of the conquering of the elements and the harnessing of the one we have in the greatest supply, water, for the service of ordinary people.
The original intention of the Board was to bring domestic electricity to homes that would not otherwise have it. The Board is fulfilling that obligation and is doing it to a much greater extent than we visualised when operations began fifteen years ago. It has rendered a great service to the nation, it is well served by a good technical staff. Although it is right that the criticisms, financial and economic, which have been made tonight should have been made, because that is our duty, it is just as well that one other Scot representing a Lowland constituency, should look at the picture on the other side and tell the House how we feel the Board has tholed its assize, dree' d its weird, and not let down the people of Scotland in general and the people of the Highlands in particular.
9.13 p.m.
Mr. Malcolm MacMillan: I am genuinely regretful that the hon. Member for Kidderminster (Mr. Nabarro) has not been able to take part
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in the debate. He will appreciate that it is no fault of my own, because we should like to have heard his contribution, which would, I have no doubt, have been very lively. It worries me that more hon. Members on both sides of the House have not been able to speak tonight, and I am afraid that the debate has suffered for that reason.
Like the hon. Member for Caithness and Sutherland (Sir D. Robertson), I deeply regret that we have not had many more debates of this kind; and I hope there may be further opportunities later in the Session for a discussion of these matters. After all, the activities of the Hydro-Electric Board touch the life of the Scottish people, particularly the Highland people, at almost every point. They affect the domestic life of many hundreds of thousands of people throughout the Highlands and the northern cities and towns. They affect the life of the people on the crofts and farms and, indeed, of the whole of the upper half of Scotland, if I may call it that, including Aberdeen, Perth, Dundee and the rest, as well as the life of the industrial workers, in the textile mills in places like Stornoway, Thurso and Wick.
In my view, the activities of such a body should in the interest of everyone be under more frequent, regular, and close scrutiny, and to a large extent that is the purpose of this debate. I will return to the point about Parliamentary scrutiny, because it is important at every point of the Board's activities. Indeed, the present Chairman of the Board, Torn Johnston, said in February, 1943, on the Second Reading of the Bill which created this Act:
"It is therefore necessary in the Scottish national and public interest that the activities of the new Board, whether in the development survey stage, the constructional scheme stage, or the distribution scheme stage, should always be subject to a Minister who is answerable to Parliament."—[OFFICIAL REPORT, 24th February, 1943; Vol. 387, c. 193.]
We would all agree with that, but I think that we should go further and say that regular and full debates, with ample time for dealing with the Reports and Accounts, would greatly add to the reality of that public accountability. I repeat that I can only hope that we shall have opportunities later in the Session. My hon. Friend the Member for Dundee, East (Mr. G. M. Thomson), and other hon.

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Members, in particular the hon. Member for Caithness and Sutherland have emphasised the important aspect of public accountability.
Whatever the criticisms there may have been from both sides of the House, some justified and some, perhaps, less justified, we in the Highlands and Islands look upon the Board as a friend. Above all the minor criticism, there is the sense that the Board is a friend of the people, encouraging them to progress and to improve the social and economic life of the area. I join the hon. Member for Orkney and Shetland (Mr. Grimond) in his tribute to the area managers and other employees of the Board. Some of them have to go out in all weathers, and it is remarkable what a quick and efficient job they do whenever there is a breakdown of any kind in remote areas. They are like the Post Office linesmen. The Board seems to be able to obtain the same high-quality type of employee who can give a good account of himself in the most difficult circumstances and weather.
In the Highlands, the Board has done so many fine jobs that we tend to place it almost beyond criticism, except, perhaps, for minor things. It has proved a friend to thousands of crofters in Orkney, Caithness, the Western Isles, Argyll and Inverness—to remote places as well as to cities like Aberdeen. Dundee and Perth, The Board has brought light in the domestic sense to the homes of thousands of crofters who used to have to potter about with messy and expensive paraffin lamps. It has also introduced a new lively pulse of industrial power into those areas, without which there would be no hope at all of kindling an interest in industry, which was so desperately needed there for many years. The areas may now have, at least, a little attraction for industrialists because electric power is provided. Whenever someone has shown a little enterprise by starting up small industry and has gone to the Board and asked for power, the Board has helped him out. If it has not been able to give the man a permanent supply from hydro-electric sources, it has provided a temporary supply from diesel or other sources to tide him over. I do not know of a case in my area, at any rate, where the Board has let down an industrialist who wanted to set up an industry.
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Along the fringe of the Board's area, there are, however, still places among the islands and in parts of the mainland, where communities have not yet been given electricity supplies—places like the Island of Barra and part of the Uists and some of the smaller islands in the Outer Hebrides. I have no doubt that Shetland and other parts have their problems, and some parts of the mainland are in the same position. At the end of the day, these areas are the places which need electricity most because at the moment they are the places which are the least attractive to industrialists and the least capable of developing their natural resources from land or sea until power is provided and processing factories are set up to employ and retain the people. Without power and without better transport and adequate water supplies there is no hope of creating industries there which will give employment and prospects of a livelihood to the young people and induce the population to remain there. In the last five or six years, about 8,000 people have gone from these areas, which is a higher rate of depopulation than even pre-war.
These basic services, including electricity, must come first, because the industries will not come in ahead of them. They must come soon for a further reason, which is—and we cannot emphasise it too much—that the young people are drifting away in their thousands, disenchanted with the labour of the soil and the labour of the sea, which in these times is not giving them a standard of life anywhere near to that of the average industrial area.
For a time after the war, when there was a Labour Government, we thought that we had stemmed depopulation. For 100 years we had had commissions and committees investigating the Highlands' problems and spawning new committees and new commissions all the time, each one in its turn producing a report recommending that someone should go further into the matter. So it went on, generation after generation, and very little was done; a little patchwork here, a little ambulance work there. The main problems remained. People continued to drift away generation after generation, leaving the old, until populations became so small that in many villages the process reached the "point of no return" and passed away.

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In 1936, the House unanimously accepted a Motion recognising and deploring distress, economic distress, in particular, in the Islands and Highlands of Scotland and urging effective and prompt steps to remedy it. I am not aware that anything happened after that up to 1939 and the war. In areas like Wick and Campbeltown and Stornoway and Lerwick unemployed men could not escape by going to Glasgow and could not escape even by emigration to America, because America had unemployment too, and would not accept them. In Glasgow there were hundreds of thousands between the dole and public assistance in their own streets, looking for non-existent jobs and hanging about in demoralising despair.
Even a small place like Stornoway in 1937 had more than 3,500 men unemployed with no prospect of employment in an area with no prospect of economic development. One of the factors among those economic difficulties was the absence of electric power, and the absence of any interest in or prospect of developing industry in that area. That continued till war came.
Then came the post-war planning phase, and in that Torn Johnston took a very prominent and imaginative part, indeed,—a very practical part as well. The criticisms of the hon. Member for North Angus and Mearns (Sir C. Thornton-Kemsley) tonight came very ill from him. Had he made a fraction of the contribution which Tom Johnston made to Scottish and Highland development, it might have been for him to make some criticisms.
In 1943, when the North of Scotland Hydro-Electric Board was set up, the Highlands began to look forward to the possibility of industrialisation and I am glad that tonight we have some opportunity—though short enough—of examining what the Board has been trying to do in the last fourteen or fifteen years.
After the war the Board gave employment to thousands of men in their own homeland—something which had never been done on that scale before—with great constructional schemes and the rest. Thousands of people began to enjoy electric power and light in their homes for the first time. By 1949–50, something else had happened to which the Board made a great contribution in many ways.
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The population drift seemed to have halted for the time being at least. I remember that on the Highland Advisory Panel we thought that this was a triumph indeed; and that action by the Government and public enterprise had helped to do something which had never been done before, to stem at least the drift of population from these areas.
From 1851, when there were 396,000 people in the Highlands and 1951, when there were only 286,000, the Highlands have seen a terrible fall in the populations of most of the areas except, perhaps from Inverness, Stornoway and the small urban areas. But the biggest fall of all came not in those years of unemployment, but between 1951 and 1956. There must be something to account for that. I leave hon. Members opposite to give us all the answers. The drift away in those years—mostly of the young, enterprising and understandably impatient—was about 50 per cent. worse, on average, than it was in the years which everybody says were the years of depression and unemployment, the 1930s. Somebody must answer for that fall of 8,000 between 1951 and 1956. The present Government has much to answer for.
Without the Board's contribution in that situation, how much worse would things have been? I leave that for the hon. Member for Kidderminster to answer. Perhaps he can tell us what it would have been like if the Board had not been continuing with its great constructional schemes, thereby providing employment and a livelihood for people who would otherwise have emigrated. The Board alone cannot solve those major problems. We sometimes expect it to do far too much. The House must ask itself what help the Board requires, and what is obstructing its progress.
I believe that there are many such things. It may be that there was here and there an internal weakness. Perhaps the Board is partly to blame; the hon. Member for Kidderminster may be right in certain of his criticisms. I have no doubt that lie thinks he is, and we sometimes agree with him. It may be that the Board, in taking on as much as it did in the early days, had tried to do too much and is now feeling the strain a little more than it would if it had taken more time to plan.

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We must remember, however, that these were the years of demobilisation, when thousands of men were returning to an area which had suffered disenchantment after previous wars, when men came back and could not find jobs, and had to go across the Atlantic, to New Zealand, and all over the world. The Board was in a hurry, and we encouraged it to be in a hurry and told it to get on with the work. In spite of the difficulties created by the war and by the immediate post-war conditions, the Labour Government encouraged the Board in those years, and if the Board overdid matters by speeding things up too much against an optimistic time table it was for good reasons, and we were all in it together.
Then, there was the second element of soaring costs. Perhaps it should have been anticipated that after the war there would be great competition for all our resources—raw materials, labour and everything else—and that more foresight should have been exercised. But none of us told the Board that it would come up against the problem of soaring costs on the scale which materialised.
Again, the Board has suffered from acts of Government as well as what are sometimes termed "acts of God." They do not always coincide, especially when a Tory Government are in office. The Board has suffered from restriction of capital expenditure and the use of its resources. It has suffered grievously through one deliberate act of Government policy in recent months and years, namely, the "economic squeeze," which accounts largely for the very big deficit carried forward from the year 1955–56. Now, with the 7 per cent. Bank Rate on top, the Board is bound to be in difficulties, for which hon. Members opposite will have to be responsible.
The Board has also suffered obstruction by landed and other financial interests. I can see the hon. Member for Stafford and Stone (Mr. H. Fraser) keeping an eye on me in case I go back to the attack against the old firm again; but I have no intention of slanging anybody tonight.
At this moment a project is in the planning stage, which the Board is anxious to get on with, namely, the Strathfarrar and Kilmorack scheme, but the gentleman that I am concerned with
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very much more than Lord Lovat is Sir Robert Spencer-Nairn, who is concerned not so much with refusing to accommodate the Board on a financial basis, but appears to be merely anxious that the scheme shall not go through at all. I could almost swear that he had been inspired by the hon. Member for Kidderminster in this respect.
Mr. Nabarro: I wonder if the hon. Member has read the whole of the proceedings of the public inquiry into the Strathfarrar and Kilmorack scheme, as indeed I have, and the objections voiced by Sir Robert Spencer-Nairn through his representatives? Is he aware that they most largely rested on amenity grounds, whereas my objections, which will be voiced in due course when I pray in this House against the Order for the scheme, are solely on economic and financial grounds?
Mr. MacMillan: I am surprised at the hon. Gentleman's innocence, because the word "amenity" is the most abused word used by anybody who has opposed hydro-electricity from the start on all sorts of grounds.
Mr. Maclay: To avoid any hon. Member getting into trouble, may I say that this matter is sub judice at the moment?
Mr. MacMillan: I apologise, and I shall leave it there. I can still talk in general terms. The matter of the name arose because the gentleman happened to be the most relevant to this case. There is no doubt and can be no doubt in anybody's mind but that the Board has suffered years of obstruction and delay while costs were soaring and difficulties were created by the activities of landed interests. These interests have been well represented on the other side of the House over the past ten years. Some of them have dug themselves in like heels—that can be permitted in any sense—and have not permitted the Board to go ahead. For every month's and every year's delay, the costs were rising and everybody was bound to suffer. This House should take power by democratic process in Parliament to dig those heels out. We have allowed this thing for too long while the Board has to pay tribute to every feudal interest, not to mention the nouveaux riches nabobs of the Highlands. [Interruption.] Parliament can help the Board in this regard, at least,

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by getting rid of these obstructions that retard economic and social development of the area and the work of the Board.
Mr. Nabarro: "Nabarro", not "nabob".
Mr. MacMillan: I am sorry, but I was not quick enough in following the hon. Member for Kidderminster's interruption. Does he recognise the description given a long time ago about the type of obstructionists that I am talking about:
"It is noteworthy that the nobles of the country (Scotland) have maintained quite despicable behaviour from the days of Wallace downwards—a selfish, ferocious, famishing, unprincipled set of hyenas, from whom at no time, and in no way, has the country derived any benefit whatever."
If that was true in the days of Thomas Carlyle it certainly is not any less true or expensive to the community today.
I now come again to a narrower issue in accountability. It does not seem right to me that the House should not have available to it broken down details and statistics of the amounts payable to individuals by way of compensation, That should happen in every case and if there is nothing to hide there should be no reason why it should not be made known to the public. Action has been taken in the case of Strathfarrar-Kilmorack. We have the figure. Lord Lovat was good enough ultimately to give us the figures, but he did not have to. I am sure others would not have been so forthcoming even under pressure. We should insist that the Board should break down those figures and publish them, too, in all cases, whether compensation sums are agreed in early negotiations or after formal objections have been heard.
I think we have the right to ask for accountability by the Board in all such cases. I thought that the Board was being more than generous in the case of Lord Lovat. I think hon. Members opposite may take another view; but £100,000 could do a lot to help to provide electricity for those people who are being refused it in my constituency. That refusal applies to thousands of people in my constituency, apart from those in other parts of the country, and they want to know why, when large-scale compensation is still being paid elsewhere. To give £100,000 to anyone, however well meaning and deserving, means that the Board, on its own plea that it has no other
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money, is depriving other areas of the simple right to enjoy the benefits of electricity.
Mr. Hugh Fraser: I would point out that this assessment of £100,000 with which my brother was concerned was worked out purely as a negotiated matter between himself and the Board, with, of course, two independent assessors evaluating the property which was to be taken over. I am not going into the question of whether it is a high figure or a low figure, but it is not a mere question of marginal acres of land, it is a question of 18 miles of river fishing and so forth. We must stick to the idea that there should be compensation, provided that it is just.
Mr. MacMillan: I am obliged to the hon. Member; it is a refreshing thing for me to be able to agree with him even in part. Compensation was given in respect of "reduced opportunities for angling on 18 miles of excellent fishing"—
Mr. Fraser: And for netting which, of course, is very heavy in that area.
Mr. MacMillan: —but the point is that we know that the payment by the Board for the flooding of marginal land was only what Lord Lovat called a mere nominal sum.
Mr. Neil McLean: On a question of fact, this land is not "marginal land." That expression was introduced by the hon. Member for the Western Isles (Mr. Malcolm MacMillan). Actually it is wintering for sheep.
Mr. MacMillan: I am obliged to the hon. Member, but Lord Lovat used the phrase himself that compensation for the land was a "mere nominal sum." He further said it was not a question of the reduction of or damage to salmon stock. Therefore, it narrows down to £100,000 compensation paid in respect of reduced angling opportunities—netting as well if you like—on a certain stretch of river. I think the public have a right to know the reason as well as the sum. I think it a good thing that Lord Lovat gave the figure, but I consider that in its accounts the Board should mention in detail every one of these transactions, and I doubt whether any hon. Member would dispute that that would be a good thing.
Mr. Emrys Hughes: Does not it mean that if Lord Lovat invested his £100,000 at 6 per cent. with the Inverness County Council he would get £6,000 a year, or £1,000 a year more than the Secretary of State for Scotland or the Chancellor of the Exchequer, for doing nothing?
Mr. MacMillan: No doubt. Meantime, I think that anyone who goes in for football pools any longer is daft if he can go in for salmon pools instead. In that sort of pool one does not gamble; it is a "dead cert". One waits for a little bit of paper to turn up saying that £100,000 is rolling in. That is the thing to do—go in for salmon pools and pray for a rainy day.
I do not wish to say anything that may sound or seem in the least bit slanderous about Lord Lovat. I am not concerned with him individually. I did not even know his politics until he started to become really abusive, and then I assumed that he must be a Tory. Apart from that, there is no personal animosity on my part towards him and I think that in Inverness everyone concerned has a high regard for Lord Lovat. But he represents a class of the community which in certain respects is obstructing development in the Highlands, wherever land and fishing interests are concerned.
It may be true that ultimately the "wolf shall lie down with the lamb… and a little child shall lead them"; but I do not think that the public interest will ever lie down in peace with Lord Lovat and the rest of the Highland landlords, however well intentioned they claim they are. Ultimately, this House must say that if the Highlands are to be fully developed and the public interest sustained, and if vast spending of money is to be guaranteed by this Parliament and the Treasury, some of the outmoded privilege of that caste and the obstruction and expense which it entails for this nation must be stripped away. The sooner that is embodied in legislation, the better it will be for all of us.
9.40 p.m.
The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson): I would like to join the hon. Member for Dundee, East (Mr. G. M. Thomson) in expressing regret that the hon. Member for Hamilton (Mr. T. Fraser) is not here, particularly because of the reason. I will
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congratulate the hon. Gentleman himself on what I think was his first performance at the Dispatch Box. Without wishing to appear in any way patronising may I say, as is usually said after a maiden speech, that we shall welcome the hon. Gentleman there very often?
At the outset, I would deal with what the hon. Member for Western Isles (Mr. Malcolm MacMillan) has been saying. By his last few remarks he spoiled the tone of the debate. The House would do well to remember that it is a generally accepted principle that we do not deprive people, whether they be very great landowners or owners of a but and ben, of their property without fair compensation. That being so, the question is, What is to be fair compensation?
The hon. Gentleman says that in all cases there should be no power to object on the part of private interests. That is something on which this House has always laid great stress. For example, we have recently had the Franks Tribunal trying to strike a balance between the interests of the individual and those of the community. It has to be remembered in this particular case that the Act lays down procedure which has to be followed in these circumstances. The Board prefers to proceed by negotiation. The hon. Gentleman seems to think that is wrong.
Mr. Malcolm MacMillan: No.
Mr. Macpherson: He seems to think that when the Board has proceeded by negotiation it should at least publish the figures. That has never been done so far. What happens is that the Board makes provision in the Estimates for the constructional scheme for the amount of compensation, and my right hon. Friend the Secretary of State has to judge whether that is a proper amount in relation to the scheme and whether the scheme is economic.
Mr. MacMillan: The Minister has twice misrepresented me. I did not say that I objected to compensation. I think it is most important. The Secretary of State has the advantage over us in that he knows what figure is embodied in the overall figure. We do not.
Mr. Macpherson: What I ought to have said is, "land and compensation." This is a matter for negotiation between the Board on the one hand and the parties

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on the other. It is not one for the Secretary of State to come into, because he has not the means of judging which the parties have. The Board has expert advisers who are fully qualified to be arbitrators, and the landowner is very often represented by somebody equally qualified. They get together and decide on a figure. That is the way the thing works.
I assure the hon. Gentleman that the figure agreed upon in this case has been considered by both parties to be fair compensation. The only way, or the best way, to arrive at fair compensation is for the parties to settle it among themselves. It has never been the custom, nor would it be possible, for the Secretary of State to override a bargain of that kind, once it had been made.
Mr. G. M. Thomson: Quite apart from that, why should the taxpayer not know how much of his money has been spent? Why should the Board not do what any local authority does, publish in its minutes the sums paid in compensation?
Mr. Macpherson: The amount that appears in the estimate of the scheme is for land and compensation. I refer the hon. Member to the statement of capital expenditure, in which land and compensation are referred to under almost every single item.
Mr. Thomson: There is no detail.
Mr. Macpherson: There is no detail there, but why should there be?—[HON. MEMBERS: "Why should there not be?"] On the one hand, agreements have been freely entered into and, on the other hand, there are the results of arbitration between the parties. The total figure is partly of estimated compensation, because we do not know what the arbitrators will arrive at, and partly formed from figures arrived at—I say this deliberately—subject, of course, to the scheme being confirmed. It is a contingent figure. If the cost for land and compensation were to look too high, it is quite on the cards that the Secretary of State would not feel able to agree to the scheme going ahead on the grounds that it was not economic.
Mr. Malcolm MacMillan: Would he explain to the House that he was refusing it in respect of too high a figure for compensation without disclosing that figure? In fairness to this House, it is reasonable to ask for some figure to be given.
Mr. Macpherson: I really do not think we can pursue this matter in this debate. It would be a very great mistake if this debate—the first of the kind we have had on this Board—were to be wholly taken up by one particular instance. No doubt it gives rise to a particular principle, but on a matter which has not given rise to difficulty—
Mr. Nabarro: And on a scheme which has not yet started.
Several Hon. Members rose—
Mr. Speaker: Order, there is little time left.
Dr. J. Dickson Mabon: Could I put a reasonable point?
Mr. Macpherson: No, I am afraid I cannot give way.
Dr. Mabon: It is a public scandal.
Mr. Macpherson: It is of great value that we have had this debate. As the hon. Member for Dundee, East said, it is a great tribute to the Board that these debates have not been frequent and regular. None the less, it is of value that we should have close scrutiny now. The hon. Member for the Western Isles said that the Board was beyond criticism except on minor things, and for my part I would join him in the tributes paid both to the Board and the staff for the success they have had.
The purpose of the debate as I see it is to examine the working of the Board in the light of Government policy, and certainly not vice versa. The first question we have to ask is, is the Board doing its duty? By any test I think we have to agree that it is, and I do so gladly. The number of kilowatts installed by the Board has risen from 87,000 kilowatts in 1949 to 729,000 in 1957. The hon. Member for Western Isles wonders if it has gone a little too fast on that. In generation, the number of million units has risen for hydro-electric power from 322 to 1,624.
I think my right hon. Friend gave the figure for connections, which have risen from 188,000 odd by nearly 176,000 at the end of 1957. The number of farms connected has risen from 1,400 in 1949 to 11,854 in 1957, and sales rose from 50 million units to 97 million units. The number of crofts connected has risen

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from 550 to about 13,000. We must agree, in the light of those figures, that the Board is doing a good job.
The next question is whether the Board has been doing it in the most economical way. One of the great advantages of a debate like this is that it gives an opportunity, as the hon. Member for Cleveland (Mr. Palmer) said, to look realistically at the economics of the matter. The Select Committee itself asked whether investment was not excessive. Perhaps it could be reduced if different methods were employed. It has been suggested by my hon. Friend the Member for Caithness and Sutherland (Sir D. Robertson) that the Board should pause and consider—that it should lay off in a time of scarce capital and high interest rates. Finally, it has also been suggested that the reason for that is that hydro-electric power may perhaps be replaced or rendered obsolete by nuclear generation.
Here again, I think one has to look at the whole principle of what the Board is trying to do, and here I am afraid I must be exceedingly brief. Reference has been made to the average cost per kilowatt installed of hydro-electric power as compared with thermal power, and of course hydro-electric power is very much higher. Doubts have been expressed by the hon. Member for Cleveland as to whether it is wise to depreciate an asset of that character over so long a period of time, even though the asset may last—
Mr. Palmer: In view of the technical developments.
Mr. Macpherson: Yes, in view of the technical developments, and that is a matter for serious consideration. There is, of course, the effect on the cost per unit of these factors. The cost per unit in hydro-electric power has gone down, and I would reinforce the point made by my right hon. Friend by saying that it went down from ·64d. per unit in 1956 to ·59d. per unit in 1957, whereas in England and Wales in 1955–56 it went up from ·78d, to ·86d. Partly, no doubt, one of the reasons for that as far as the Hydro-Electric Board is concerned was the climatic conditions, but the point is that this comparison does not show the position quite as favourable for hydroelectric development as I think it really is.
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The hon. Member for Cleveland also made reference to the load factor in the North of Scotland area as being between 35 and 45 per cent., and he wondered if it would be permanently low. In any case, the point is that, with a load factor of that character, hydro-electric power, which can be turned on or off more or less at will, is ideally suitable, as also in order to supplement the peak load demands of the South of Scotland Board. As has been said, it is on that peak load demand that the North of Scotland Board makes the profit which enables it to go in for unecomonic distribution developments.
On the subject of nuclear developments, it may well be in the future that for the base load for the North of Scotland area a nuclear station in the North-East area may be the right thing, but in any case it will not be available, I should say, until 1965. In the meantime, we shall have nuclear developments coming on from the South of Scotland which will be ideally suited to supplying energy in off-peak periods for pump storage, and so enable the Board to make that kind of profit at the peak periods which it needs in order to develop distribution in the more uneconomic areas. The difference in price there is very marked, and reflects, of course, the marginal advantage to the South of Scotland Board in having this additional supply of electricity without having to establish marginal plants of its own.
Before dealing, in the closing minutes, with what has been said about distribution, I should like to make a brief reference to the cuts in capital expenditure to which reference has also been made. My hon. Friend the Member for Caithness and Sutherland thought that we should pause, and pause more than we are doing. On the other hand, the hon. Member for Dundee, East thought that we should be going ahead more rapidly with the development of distribution. Those are the two opposite points of view.
I have to put it to the House that the Government must look at the position from the whole national point of view. We are, at the moment, on the verge of developing nuclear power stations, into which a great deal of the national Exchequer must go. It will also be to the advantage of the North of Scotland

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Hydro-Electric Board that those nuclear stations should be developed because, as I have shown, it will be able to make an additional profit from that. I therefore do not think that it is unreasonable that the capital expenditure for 1958 should be £18 million, as against an estimated £20·8 million for 1957—which, however, will not nearly be reached—and an estimate of £15½ million for 1959.
It may be said with reasonable confidence that this expenditure will not hold back the Board from a reasonable amount of development, and I can give my hon. Friend the Member for North Angus (Sir C. Thornton-Kemsley) the assurance that distribution development will run on, not just at the 1957 level—which, though not for any reasons of Government restriction, happened to fall rather below that of 1956—but at the 1956 level. That is expected to be done.
We must, of course, have the greatest sympathy for those areas which have not been enabled to have a supply of electricity so far, but in that regard it is only fair to refer to the evidence that Mr. Tom Johnston himself gave to the Select Committee. He said that even when the Act was going through, both the former Lord Advocate, now Lord Reid, and he had explained to the House of Commons that perhaps there were areas so remote that it would be impossible under the Act, with its present financial arrangements, to provide them with electricity.
Hon. Members on both sides have expressed the view that perhaps an alteration in the Board's powers is required.
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That is the kind of thing that this debate was no doubt intended to explore. In looking at the whole of the exercise of the powers of the Hydro-Electric Board, it was no doubt proper that we should explore whether or not those powers were exactly right. In that connection I might, perhaps, refer to the position of the Chairman of the Consultative Council which, I can assure the two hon. Gentlemen who referred to it, will have continued attention, though I cannot go into that now.
I would say that, in our view, the North of Scotland Hydro-Electric Board has fulfilled its functions extremely well. We believe that we are providing the means for it to continue to do so, and I would ask the House to accept the Motion.
Question put and agreed to.
Resolved,
That this House takes note of the Report and Accounts of the North of Scotland Hydro-Electric Board for 1956.

ORDERS OF THE DAY

  OPENCAST COAL [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session to make provision with respell to the working of coal by opencast operations, it is expedient to authorise the payment out of moneys provided by Parliament of any expenses incurred for the purposes of the said Act by the Minister of Power.
  Resolution agreed to.

  COAL (PRICES AND GRADES)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr Wills.]
  9.59 p.m.
  Mr. George Craddock: Before introducing this subject of coal prices, I would like to say that I had an interview last July with the Minister's predecessor in office, when we discussed a number of coal matters concerning the City of Bradford, particularly enforcement. I thought that I had a very sympathetic hearing, and I was very pleased to note that the Minister's predecessor seemed to have full cognisance of our many difficulties in Bradford.
  It being Ten o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, That this House do now adjourn.—[Mr Wills.]
  Therefore, I hope that the Minister will look carefully into this matter because it is one which concerns a great many people in the City of Bradford. I have had many complaints in connection with overcharging and misdescription during the past twelve months, and my investigations over that period have been quite unhurried. I have gone very carefully into all the information that has been given to me, and I have checked and cross-checked everything. I want to talk on facts and not on hearsay. I must say that I have had some very good advice given to me today, but I am not including that in my speech because I think this subject needs to be dealt with very carefully and one must be quite sure of one's ground.
  It is important that I should say at the beginning that I have plenty of information which proves that there is evidence of overcharging and misdescription. Consequently, consumers suffer from the lack of a proper check on sales. The number of enforcement officers, which is only thirty-six for the whole country, is an insufficient check for an important matter like coal which affects everybody, and the reluctance to grant warrants to local authorities to conduct their own prosecutions enables unlawful practices to take place.
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  The weights and measures departments throughout the land have been responsible for a certain amount of enforcement connected with fuel distribution since 1889, and they could easily be given the job of safeguarding the consumers' interests in solid fuels.
  For the sake of clarity and in order that the Minister may have the complete scope of my remarks, I should like to say that I wish to talk about present legislation, the need to have improved legislation, the failure of the present method of enforcement, the need for a transfer of this responsibility to weights and measures inspectors who, in my opinion, are fully qualified for the task, the present method of stocking by merchants—that is a matter which needs careful study—the question of grading, overcharging and misdescription.
  That seems a pretty big tally to do in a matter of a quarter of an hour, but I must bow to the rules of the House and try to say as much as I can in that short time. We have at the present time an entirely useless legislation. I fully understand that we had this legislation to meet war-time difficulties. It has gone on for seventeen years. We have not the same shortages. Although in this House from time to time we complain about the shortage of fuel, it seems to me that it is now given out in a more widespread and easier fashion than even five or six years ago. Therefore, there is not the grumbling and the difficulty that we had not long back.
  Officials from Bradford visited the Ministry last year, and the case was conceded that the legislation was very much behind. However, it was said that in view of the imminence of decontrol it was not considered politic to put forward a new Order. The statement about the imminence of decontrol has been made repeatedly during the past four years, and I hope the Minister will agree with me that that has worn a little thin and that it is necessary that we should have some other reply.
  I do not know whether it would include the decontrol of maximum prices, which is a very chancy undertaking. It is, however, an appalling thought that this puerile legislation has existed for as long as seventeen years. I see no reason that should stand in the way of an immediate revision of the Order, which I believe

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  could be done very quickly if the Ministry were so minded.
  At the moment, the merchants have matters almost entirely their own way. With such practices as stocking and the keeping of absolutely the minimum of records, the detection of upgrading is very difficult indeed. As to the pricing and grading of coal, which are the kernel of this matter, present legislation requires a merchant to keep records of supplies of rationed coal only as to quantity. It does not require that such records shall include details of the type or the grade supplied. Not only need the records include quantity only, but even that requirement does not apply to unrationed coal.
  It seems to me rather ridiculous that a record only as to quantity must be kept and not as to the type or quality as well. It is almost entirely because of this that there is so much upgrading and consequent overcharging. Many merchants make use of ground stocks which have been in existence for considerable periods. After a lapse of time, it is quite impossible to identify the coal by clerical methods, with the result that the classification placed upon the coal by the merchants can never be challenged.
  I have had reported to me the case of one merchant in Bradford who, as soon as two or three trucks of coal come into the yard, puts the coal in stock. He does not even draw upon the railway wagons for current loads to be delivered that day. It seems to me the height of absurdity to think that a merchant imposes that extra physical strain on his men and the consequent loss of their time merely for the sake of doing it. He does it because he knows that he can then upgrade the price of that coal. It all goes into stock and if in consequence he puts it up by only one grade it means an increase in the price equal to 13s. 4d. a ton.
  There are many old-age pensioners and people working in factories and shops who are in receipt of a net weekly figure of not more than £7 or £8. To these people such a method employed by a coal merchant, because of the lack of legislation to prevent it, involves the imposition of a considerable increase in the cost of living, which cannot be and is not being detected. I say, therefore, that this is a most serious matter and I hope that
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  the Minister will indicate that an inquiry will be made into it.
  Some of these stocks have been grounded for years. Whatever quality coal comes along, it all goes into the stock and I imagine that the merchant charges for coal drawn from that stock not the price for the lowest grade of coal but often the highest or the middle price and thereby gets away with a great deal of money. As a matter of fact, a carter in one case which came before the court in Bradford admitted that he was making £4 in a morning. By this method, and through the lack of information on waybills, it was considered that the man concerned in one case made between £1,000 and £1,500 on the side. We must give more protection to the general public. The Order merely states that it shall be an offence to overcharge. It makes not the slightest suggestion as to how the price shall be recorded. There is no link between the various transactions. Everything is left to the integrity of the merchant, and in many cases this proves to be an unfortunate state of affairs for purchasers.
  I want to say more about stocking. No one can detect the price or the grade. This is unidentifiable simply because there is no necessity to keep records of grades received and of their subsequent movements. The difference in price of even one grade is approximately 13s. a ton. The Ministry is already aware of the position. In my opinion, it could be remedied easily by legislation providing for the keeping of simple records, and for the waybill to show the grade, price and quantity of coal loaded on the vehicle.
  Now I will quote some of the decisions in the courts in the last twelve months or so in Bradford. They are very revealing. One coal merchant who sold coal at a price exceeding the permitted maximum was fined £35 and his manager was fined £49 for aiding and abetting. Another coal merchant on the same charge was fined £480 and costs of £21. Another was fined £240, and yet another £240 or six months imprisonment in default. Another one was fined £480, and another £600.
  It is a serious position when local weights and measures inspectors, notwithstanding the fact that they have very

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  little to work upon, can make these discoveries. The cases I have just given affect merchants and managers. I will mention one or two other cases involving coal carters. One charged with the larceny of 15 cwt. of coal was given twenty-one months. A similar case involving 5 cwt. of coal resulted in a man receiving six months' imprisonment, and a fine of £10 was inflicted in a larceny case concerning 10 cwt. of coal. I have been at great pains to get this information, and I hope that something will be done to try to improve the position.
  As regards the enforcement of administration, is the Minister aware that since Bradford appointed its inspectors of weights and measures as price enforcement officers, prosecutions have been fifty times greater than hitherto? There were two prosecutions for overcharging by the Ministry enforcement officers in five years, both in respect of the same merchant, and there have been forty prosecutions in two years by the Bradford Weights and Measure Department. In fact, there were cases shortly after they had the warrant to proceed with their own enforcement.
  Can the Minister say why other local authorities have been refused similar powers? I am thinking of Stockport and Rochdale, which have been refused the powers extended to Manchester, Bradford, Glasgow and one or two other places. Is the Minister aware that enforcement by the Ministry of Power, by its very disposition of regions and administration, can no more than make a gesture? This was admitted by the previous regional coal officer in the City of Bradford.
  I wish to comment about grading and the National Coal Board. It is almost impossible to leave this subject out of my speech, for the very simple reason that it is germane to the point. I have in the main been interested in advocating protection for domestic users of solid fuel. Is the Minister aware that at present there are seven grades of household coal and that discontent exists among coal buyers and merchants alike not only about the methods of establishing the grades but also about the fluctuations of the grades in certain classes of coal.
  The method of establishing a group of coals is arbitrary and was originally
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  based on the consensus of opinion of some dozen merchants without reference to any scientific formula although there has been a British Standard on the subject since 1942. Later the groups have appeared to vary considerably, and nearly always in an upward direction. For instance, Beamshaw Doubles have risen from Group 5 to Group 1 in the last ten years, and Lofthouse Doubles from Group 7 to Group 2. These are two examples from hundreds. The difference in retail price averages about 12s. per ton. The ratio of five to one means an increase of well over £2 per ton.
  Very naturally, there is dissatisfaction about grading. This cannot be denied. Is it not a fact that changes in grading by the Board are nearly always in an upward direction, and that, while such group descriptions are arbitrary, such upgradings represent a concealed price increase to the consumer? Would it not be advisable for the Minister to institute an inquiry into the methods of price fixing, enforcement, grading, and marketing generally in order to allay the concern which exists about these matters?
  10.17 p.m.
  The Parliamentary Secretary to the Ministry of Power (Sir Ian Horobin): The matter which has been raised is one of very general importance, and it has been very reasonably put to us. It is fair to point out that the subject was raised on the Adjournment only about six weeks ago, and, therefore, there is very little new that I can add to what was said on that occasion. It is recognised that, for some reason which I confess is not clear to me, Bradford seems to be a very awkward spot in this matter. Another one is Glasgow, and the subject was raised on the previous occasion by one of the hon. Members representing that city.
  A number of points have been raised tonight, and we will examine them. As to the type of records to be kept, I think it is necessary to bear in mind that, while good records are always desirable, we are by no means dependent in enforcement on records kept by the merchant. The National Coal Board has very exact records of deliveries, and in any case where wholesale and deliberate continuing fraud is taking place, the inspectors, I am advised, are by no means unable to check it. On the other hand

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  we must be very careful, especially in the winter, not to impose a lot of pettifogging extra records on the merchant, because they lead to what is at present almost a more frequent cause of complaint than that of quality, namely, delays in getting supplies.
  I will consider the method of stocking, but, in principle, if the merchant mixes, for instance, any group 4 coal with group 3 coal and sells it as group 3, he is committing an offence. Exactly how that is to be determined is another matter, but the offence is there.
  There are two matters to be distinguished in these complaints, the problem of upgrading, with which I will deal—and I do not at all dissent from the argument that there is a very considerable financial incentive to a dishonest merchant to upgrade—and the matter of sheer overcharging. It is important to bear in mind that it is obligatory to have a list of the controlled prices on the lorry, so that to a very substantial extent the matter of overcharging is in the consumer's own hands.
  I think that the hon. Member is slightly misinformed about the method of grading. I am advised that it is not at all correct to say that the merchants settle grading among themselves. It is a definite responsibility of the National Coal Board. It is true that the Board is assisted by a panel of merchants, and that is reasonable, but the responsibility for putting a particular consignment or type of coal into a particular group—and that is obviously necessary, because there are only seven groups, but endless varieties of coal and the whole system would break down if the number was not reduced—is plainly and definitely on the shoulders of the Coal Board.
  Referring to the matter of who is to enforce this, the hon. Member put the same argument that was made on a previous occasion, that warrants should be issued to the weights and measures inspectors. His figures were slightly incorrect on that, and to show that there is no dogmatic question at issue I can say that about one-third of those with warrants are weights and measures inspectors. The whole point is what is generally desirable in this matter.
  It is interesting to observe that in the two towns where this reinforcement of the corps of persons with the necessary
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  powers began—Bradford and Glasgow—in the latter case the initiative came from the Ministry, which shows that we are looking at this purely as a matter of what is reasonable. I say at once that if the figures from Bradford could be held to be prima facie corresponding to the situation all over the country, there would be at least a very strong argument for saying that if we gave similar powers all over the country we might get closer enforcement.
  However, two comments can be made about that. We feel that these very considerable powers of entry onto premises and calling for records, and so on, are such that they should not be given unless a case is definitely made out. At the Ministry we have in mind the consideration that once having given those powers, we have no control over the persons holding our warrants, as against our own inspectors. If the case is made out, well and good, but it must be made out in the individual case. Since the instances of Bradford and Glasgow, certain local authorities have been given these powers, each one on its merits, while others have been refused because it did not appear that the case had been made out.
  I want to quote one of two cases which has arisen in our experience in the last six months. These were cases where the Ministry thought that a prima facie case for handing over powers similar to those of Bradford had been made out. I refer to Manchester. If one takes the proportion of population and the length of time over which they have had these powers, one would have expected about a dozen prosecutions in Manchester since these powers were given. In fact, there have been none. Even in a town where the Ministry thought that a case had been made out for conditions somewhat similar to Bradford, if I may say so without offence to that great town, experience indicates so far that the circumstances in Manchester are not similar to Bradford. Therefore, it is not fair to say that the Bradford experiment proves that if only we gave these wide powers all over the country we should unearth and stop a very large violation of the order. It becomes purely a question of balance.
  I know that I was warned about this, but I think I must come back to the point: what is sensible in this matter?

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  It must to a great extent depend on whether we think that rationing and price control are permanent or are even going on for a long period of time. I think it is fair to say that if we were forced to the conclusion that they would have to go on for a long time, and the efforts which had been made and which are being made to bring them to an end in a reasonable period would fail—I am bound to say that that would be a considerable criticism of the way in which the National Coal Board had been carrying out their statutory duty to provide coal in the quality and quantity required—then I am free to admit that this question, amongst a number of other things, would probably have to be considered.
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  But as the Government hope and intend, if humanly possible, to bring an end within a reasonably short time to rationing and the control that goes with it, we feel that the case is not made out for a drastic change in the machinery that has lasted so long. That is not to say that if in any particular town or area a prima facie case is made out we will refuse to consider it. What we do not feel is right is that at this time, long after the end of the war, we should give general permission to use these large powers to people outside the control of the Ministry where we have no reason to suppose that they are urgently required.
  Question put and agreed to.
  Adjourned accordingly at twenty-eight minutes past Ten o'clock.

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