Sitting of 11 June 1958

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  CLERGY ORPHAN CORPORATION BILL [Lords]
    SHELL (STANLOW TO PARTINGTON PIPELINE) BILL
    As amended, considered; to be read the Third time.
  LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [Lords]
  As amended, considered; an Amendment made to the Bill; Bill to be read the Third time.
  MANCHESTER CORPORATION BILL (By Order)
  Consideration, as amended, deferred till Thursday, 19th June.
  SOUTH LANCASHIRE TRANSPORT BILL [Lords] (By Order)
  Second Reading deferred till Thursday, 19th June.
  BRADFORD CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL
    MAIDSTONE CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL

      PIER AND HARBOUR PROVISIONAL ORDER (GREAT YARMOUTH) BILL
      PIER AND HARBOUR PROVISIONAL ORDER (KING'S LYNN CONSERVANCY) BILL
      PIER AND HARBOUR PROVISIONAL ORDER (SHEERNESS) BILL
      Read a Second lime and committed.

ORAL ANSWERS TO QUESTIONS
  ROYAL AIR FORCE

    Filton Aerodrome
    Mr. Coldrickasked the Secretary of State for Air what proposals he has under consideration for the use of Filton Aerodrome by the United States Air Force.
    The Secretary of State for Air (Mr. George Ward): None, Sir.
    Mr. Coldrick: Is there any substance whatever in the rumour, which is current in Bristol, that there is a possibility of Filton aerodrome being used by the United States nuclear bomber force? If not, would it not have been better to make a statement allaying the suspicions which have been aroused?
    Mr. Ward: As I have told the hon. Member, there are no plans for using this airfield for the United States Air Force.

    United Arab Republic Aircraft (Identification)
    Mr. S. O. Daviesasked the Secretary of State for Air on whose authority British fighter aeroplanes have on several occasions recently intercepted transport aircraft of the United Arab Republic following their usual air route between Cairo and Damascus.
    Mr. Ward: With the approval of the Government of Cyprus, the Royal Air Force authorities in Cyprus have standing instructions to identify aircraft approaching the island.
    Aircraft entering the Cyprus flight information region who have not given the air traffic control centre enough information to establish their identity and course, in accordance with the procedures recommended by the International Civil Aviation Organisation, may be approached by fighter aircraft to obtain visual identification. Some United Arab Republic aircraft have recently been approached in this way when they were not using the normal route between Cairo and Damascus and were flying nearer Cyprus than usual.
    Mr. Davies: Can the right hon. Gentleman inform the House whether it is necessary to try to force these transport planes down on Cyprus before full indentification can be made? Is not it correct that these transport aircraft are following their usual routes that they have taken now for quite a long time, and that they are being interfered with illegally?
    Mr. Ward: The point is that these aircraft are not on their normal routes. They are flying much nearer Cyprus than their normal routes and fighters approach

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    them to establish their identity and their course. It is a perfectly proper procedure to do so.

  ROADS

    Redruth By-pass
    Mr. Haymanasked the Minister of Transport and Civil Aviation whether, in view of unemployment in Camborne-Redruth, Cornwall, he will arrange for detailed plans to be prepared for a northeastern extension of Redruth by-pass road from Treleigh to Scorrier.
    The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. G. R. H. Nugent): It will probably be some time before this road is built. It would not therefore be useful to prepare detailed plans now.
    Mr. Hayman: May I ask the Minister whether he is aware that his reply will give considerable dissatisfaction in West Cornwall, because there is rising unemployment there and great apprehension exists among thousands of people, and that all that is asked is that plans be prepared for a by-pass which would provide a very useful diversion for holiday traffic? Will he reconsider the matter?
    Mr. Nugent: I am afraid it really cannot be justified solely on traffic grounds, and it would be wrong to mark out the line, thereby prejudicing the property concerned many years in advance of the road being built.

    Programme, Wales
    Mr. Gowerasked the Minister of Transport and Civil Aviation what new Welsh road construction and road improvement schemes he intends to include in the next phase of his programme; and if he will make a statement.
    The Minister of Transport and Civil Aviation (Mr. Harold Watkinson): As I have said before, in the interests of keeping my programme flexible I do not intend to issue lists of specific road schemes long in advance of the time when work on them can start.
    Mr. Gower: Will my right hon. Friend take account of the fact that a few years ago the Committee which sat under Lord Lloyd said that in its opinion the particular difficulties of industry in South Wales
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    could be met by a vast improvement in the road communications?
    Mr. Watkinson: Yes, Sir, I accept that. I think my hon. Friend will see, as the road programme develops, that Wales is certainly getting its fair share; some people might say more than its fair share.

    London—Birmingham Motorway
    Mr. Langford-Holtasked the Minister of Transport and Civil Aviation whether he will make a statement on the progress being made on the London to Birmingham motorway.
    Mr. Watkinson: Progress is well up to schedule. Site clearance is almost complete, as well as about 25 per cent. of the excavation and 20 per cent. of the drainage. Work has started on about half the bridges, and most of the 150 miles of temporary fencing has been put up.

  TRANSPORT

    Wales
    Mr. Gowerasked the Minister of Transport and Civil Aviation what progress has been made during the last year in the devolution of the work of his Department in Wales; what new Welsh officers have been appointed; what progress is contemplated during the next twelve months; and if he will make a statement.
    Mr. Watkinson: I hope at an early date to appoint a senior officer to represent me generally in Wales. It will be his responsibility among other things to report to me the Welsh interest and views on any matter which may have a particular impact on the Principality.

  SHIPPING

    Repair Yards, Cardiff
    Mr. G. Thomasasked the Minister of Transport and Civil Aviation whether he is aware that British shipowners are sending their vessels to Rotterdam for repair whilst shipbuilding and repair workers in Cardiff are unemployed; and what action he proposes to take with a view to assisting the industry in Cardiff.
    Mr. Watkinson: While I fully appreciate the difficulties which some repair yards in this country are experiencing, it would not be in the national interest to place any restrictions on the freedom of British shipping companies to have their ships repaired abroad. Moreover, a restrictive policy of this kind might affect the volume of foreign tonnage which is repaired in this country.
    Mr. Thomas: Yes, but does not the Minister believe that the shipowners in this country who are sending their ships over to Rotterdam are little better than those who fly the Liberian flag on their ships, since it is only to save money and they care not what happens to the workers in this country?
    Mr. Watkinson: No, I do not accept that for a moment. The fact is that the whole of our British mercantile operations have always depended, and always will depend, on getting the maximum freedom of trade, and this is a vital principle of our prosperity and thus of our full employment.
    Mr. Peyton: Does my right hon. Friend realise that what he has just said will have very wide support not only from this House and the country but from the industry, and that it would be absolute madness for this country to go in for a wholesale policy of discrimination?
    Mr. Thomas: But will the Minister bear in mind that, while I am not asking for direction, I am asking for an appeal to these people to bear in mind that skilled craftsmen in this country are unemployed at a time when they are sending work abroad?
    Mr. Watkinson: That is a different issue, and that I accept. I think any shipowner, or any person who is considering these matters, should take most careful account of the facilities offered in this country.
    Mr. J. Griffiths: Will the Minister realise that these ports have for generations made a very big contribution to the economy and wealth of the country, and now that they are meeting with difficulties his Ministry has the responsibility, within the lines of general policy, of doing everything possible to help them?
    Mr. Watkinson: I agree with that, too.
    Mr. P. Williams: Will not my right hon. Friend agree that the crucial point in this matter is the question of cost and the time in which the job can be done and, whether one likes it or not, the question of cost will force people to behave in certain ways, and that is all there is to it?

    South Wales Ports
    Mr. G. Thomasasked the Minister of Transport and Civil Aviation what recent consideration he has given to the recommendations of the Council for Wales and Monmouthshire in January. 1955, that he should ask the British Transport Commission to undertake an urgent and exhaustive review of the level and content of rates for port traffics, with special reference to the anomalous position of the South Wales ports.
    Mr. Watkinson: The British Transport Commission has given most careful consideration to these recommendations. British Railways, under its new charges scheme, is prepared to receive sympathetically any request from traders for an economic rate for goods regularly shipped through South Wales ports.
    Mr. Thomas: In view of the fact that it is now three years since these recommendations were made, is not it disappointing that no visible improvement has been made by those responsible for the docks in the rates charged? It seems to those concerned in Cardiff that nothing has been done in this matter.
    Mr. Watkinson: All I can say is that the facts are as I have stated them and that British Railways will do their very best to meet any requests from traders who want to get an economic rate through South Wales ports.
    Mr. Gower: Does my right hon. Friend recall that three years ago the Chairman of the British Transport Commission, Sir Brian Robertson, said in a speech at Cardiff that at an early date he was certain the ports of South Wales would be placed on what he described as an equal footing with other ports in the British Isles? Is my right hon. Friend aware that so far the resistance in London and on Merseyside has made that impossible, and will he use his own influence to speed this up?
    Mr. Watkinson: I am not aware of that, but if my hon. Friend would like to send me any details I will gladly look at them.
    Mr. G. Thomasasked the Minister of Transport and Civil Aviation what progress has been made since April, 1957, with regard to the proposals for ship-owners to accept responsibility for certain dock charges at South Wales; and if he will make a statement with particular reference to Cardiff.
    The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Airey Neave): I understand that there have been no new developments in this matter which, as my right hon. Friend indicated in reply to the hon. Member for Cardiff, South-East (Mr. Callaghan) on 11th April, 1957, is one to be pursued directly by the interests concerned.
    Mr. Thomas: But in view of the great importance to the port of Cardiff of some move in this direction, will not the Minister himself make a move in connection with these shipowners? Is he aware that much lower rates are charged for Merseyside and London than are charged by the same shipowners at Cardiff? Will he try to get them to make some effort towards helping the port?
    Mr. Neave: I know that the hon. Gentleman's point is one of some importance. I have been in touch with the Industrial Association of Wales and Monmouthshire, which is in touch with the shipping interests concerned. They are having a further meeting of their committee on 13th June, and I will get into touch with the hon. Gentleman about it.

  RAILWAYS

    Branch Lines
    Viscount Hinchingbrookeasked the Minister of Transport and Civil Aviation whether he will give a general direction to the British Transport Commission that it may sell or lease disused branch lines to private firms or agencies in areas where lines are to be closed for reasons of economy despite a continuing local demand for transport facilities.
    Mr. Watkinson: No, Sir. The Commission has already power to do this
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    under Section 2(7) of the 1947 Transport Act.
    Viscount Hinchingbrooke: Will my right hon. Friend set up a Departmental committee jointly with the British Transport Commission to examine the way in which a policy of this kind can be implemented? Is he aware that there is something rather disagreeable, as well as uneconomic, in the policy now being pursued by the Commission in ripping up the metals, removing the girders of the bridges, and allowing the embankments and the cuttings to grow weeds worse than those on Lady Garbett's farm?
    Mr. Watkinson: I will gladly look at any suggestions my noble Friend makes, but I hope what he is saying does not mean that he opposes the closing of uneconomic branch lines, because I must warn the House that this closure must go on. Perhaps I might take this opportunity of warning the House that it will be greatly expedited in the very near future.

  CIVIL AVIATION

    Prestwick Airport (Extended Runway)
    Mr. Rankinasked the Minister of Transport and Civil Aviation how many motor vehicles, private, commercial and military, crossed the extended runway at Prestwick Airport on 31st May or 6th June using that part of the road, A77, which lies between the village of Monkton and Prestwick town.
    Mr. Neave: I regret that this information is not available.
    Mr. Rankin: Would not the hon. Gentleman try to provide this information? Does he realise that it will be an important factor in guiding us as to whether or not there should be an underway at that part of the road in order that road transport may proceed without interruption?
    Mr. Neave: I know the hon. Gentleman's view about a tunnel under this roadway. I have nothing to add at the moment to what I said on 7th May, when I said I knew there were strong views about the matter and that they were being considered. I could not give the hon.

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    Gentleman an exact answer to his Question as it stands on the Order Paper, but a present estimate of the average is about 8,000 vehicles a day.
    Sir J. Hutchison: Since the question of the lengthening and broadening of these runways at Prestwick depends on information which my hon. Friend was seeking from Canada and the United States of America, can he tell us whether that information is now available and whether the broadening and lengthening of the runways is to proceed?
    Mr. Neave: It is certainly our intention to make plans in regard to that matter, but at the moment I cannot add to what I have said already. It is proposed to extend the runway by about 2,000 feet and so to divert A77 that it does not cross the runway unless, of course, it is possible to provide a tunnel.

    York Aircraft (Accidents)
    Mr. Mikardoasked the Minister of Transport and Civil Aviation how many accidents, including fatal accidents, have taken place to York aircraft during the last five years.
    Mr. Watkinson: During the last five years there have been twelve accidents to United Kingdom registered York aircraft, of which five have involved fatalities.
    Mr. Mikardo: May I ask the right hon. Gentleman whether or not he thinks the time has come seriously to consider whether the use of this aircraft ought to be allowed any longer? Does not he recollect that this aircraft has had a pretty unhappy history, and that in recent years in particular there has been growing evidence of the fact that the national interest would perhaps best be served if, possibly after giving due notice, we were to withdraw the licence?
    Mr. Watkinson: That is quite a proper point to put, but, on the other side, as I think the hon. Gentleman knows, this question of airworthiness is examined as one of the issues that comes out of every accident inquiry. What I have to say is that so far in any of the inquiries which have been held no information has been brought which would necessitate my technical advisers saying to me that the general certificate for this aircraft should be withdrawn.
    Mr. Beswick: Is there any common feature running through all these accidents from which certain conclusions may be drawn?
    Mr. Watkinson: No, I understand not.

    United Kingdom and Ghana (Traffic Rights)
    Mr. Beswickasked the Minister of Transport and Civil Aviation when he expects the agreement with Ghana with regard to the allocation of air traffic rights between the respective countries to be completed; and to what extent this agreement provides for operation into the United Kingdom of a Ghana national airline.
    Mr. Watkinson: Provisional agreement has already been reached on the traffic rights to be exchanged between Ghana and the United Kingdom, but some details remain to be settled and I cannot be specific until an air services agreement is signed; I hope that this stage will be reached shortly.
    Mr. Beswick: It would be wrong to ask questions about details, but would the Minister answer a question about the principle involved? Is not it obvious that a proportion of the traffic between the United Kingdom and Ghana will have to go to the Ghana airline, which will mean less for British operators? In this case, would not the Minister reconsider his declared policy of sharing this traffic from the United Kingdom to Ghana between B.O.A.C. and independent operators?
    Mr. Watkinson: That leads us into technical considerations, because, as I explained the last time we discussed this matter in the House, the independent route to Ghana is quite different from the B.O.A.C. route and does not involve quite the same considerations.
    Mr. Beswick: Would the Minister bear in mind that the Ghana Government will now be making agreements with other countries, in particular Holland and Belgium, I should imagine. In these cases, the chosen national instrument of Holland and Belgium will not have to put up with the competition which the Minister is now inflicting upon the British national instrument.
    Mr. Watkinson: I think we had better get a little further. I shall tell the House

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    the full facts of the agreement when it is reached, and perhaps the hon. Member will return to the charge.

    B.O.A.C. (East African Routes)
    Mr. Beswickasked the Minister of Transport and Civil Aviation what proportion of the loss of £2,750,000 made by the British Overseas Airways Corporation for the year ended 31st March, 1958, was due to their operations on the East African routes.
    Mr. Watkinson: It is not the commercial practice of B.O.A.C., or airlines generally, to publish figures of financial results on particular routes.
    Mr. Beswick: Is not it the case that hitherto the Minister and his predecessors justified their policy of allowing independent companies to compete with B.O.A.C. down to East Africa on the basis that the traffic so far made possible this parallel operation, and that they pointed to the profits made as proof of this? Now that there is a substantial loss, part of which does arise on the East African routes, is not there a good case for reconsidering the policy of the present Government of sharing the traffic between B.O.A.C. and the independent operators?
    Mr. Watkinson: I think the hon. Gentleman has raised an important principle, and that I should answer it. My answer is this. B.O.A.C. has been provided with modern aircraft and good facilities and is a highly successful and well-run airline, and it must not be too frightened of competition.

  MINISTRY OF DEFENCE

    Thor Rockets
    Mr. Peytonasked the Minister of Defence what stage in the development of Thor missiles has now been reached; and if he is still satisfied that these weapons can make a useful contribution to the defence of this country.
    Mr. de Freitasasked the Minister of Defence what portion of the £10 million to be spent on surface installations for the Thor missiles will be used for the missiles which will be launched from underground.
    The Minister of Defence (Mr. Duncan Sandys): The Thor rocket is now in an advanced stage of development. It is too soon to say how much of the site works for it will be suitable for later rocket weapons. I am confident that Thor rockets, deployed here and on the Continent, will constitute a valuable addition to the Western nuclear deterrent, and thus to the peace of the world.
    Mr. Peyton: While I appreciate that both security considerations and the fact that another Government is involved may make it very difficult for my right hon. Friend to say much, may I ask if he will bear in mind that there is a very widespread and strong desire to know the maximum possible about the development of this weapon on which so much reliance is being placed?
    Mr. Sandys: I think a good deal has been said already. My right hon. Friend the Secretary of State for Air gave a certain amount of information on 14th May, to which I would refer my hon. Friend.
    Mr. de Freitas: Can the Minister explain why it is that, almost without exception, independent aviation and military correspondents in this country, and indeed many in the United States, have described the Thor as not only ineffective, but obsolete before it has come into service?
    Mr. Sandys: The hon. Member never misses an opportunity to belittle the value of this weapon. If I may adapt a famous phrase of my right hon. Friend the Lord Privy Seal, I would say that it is the best rocket we have got.
    Viscount Hinchingbrooke: Does my right hon. Friend recall that the policy to establish these rocket bases in this country was justified to this House largely on the expectation that the United States Government would amend the McMahon Act? If, in fact, it is not amended, will there be any change in the Government's policy in this regard?
    Mr. Sandys: I know of no connection between the two points. The purpose of deploying these rockets over here is to increase the effectiveness and the variety—because that makes a difference from the point of view of knocking out the deterrent—of the Western nuclear deterrent. Jokes with the hon. Member opposite apart, all I would say is that in

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    test firings of new weapons we do expect failures, and we very often gain more experience from the failures. I have already given an assurance that this weapon will not be deployed here until both we and the Americans are satisfied that it is effective.
    Several Hon. Members—
    Mr. Speaker: Order. I am afraid that this matter cannot be debated now.

    United States Military Equipment (Sales)
    Mr. Peytonasked the Minister of Defence what measure of agreement he has reached with the United States Government concerning the sales of military aircraft and other weapons to foreign countries at prices substantially below the cost of production.
    Mr. Sandys: None, Sir.
    Mr. Peyton: Would my right hon. Friend consider making an approach to the American Government bearing in mind that, in any competition which is based on Government-subsidised sales, this country is almost bound to come off worst, and that foreign sales are of the utmost importance from the point of view of our home aircraft industry?
    Mr. Sandys: Of course, I fully understand the problem to which my hon. Friend has referred, but the prices at which Governments, or for that matter firms—and very often the problem arises as much with firms as with Governments—decide to sell weapons to foreign Governments is their own affair.

    Air and Sea Trooping
    Mr. de Freitasasked the Minister of Defence the ratio of air-trooping to sea-trooping in each of the last three financial years; and whether, in view of the relative increase in the cost of sea-trooping, compared with air-trooping, he will ensure that there is an increase in the proportion trooped by air.
    Mr. Sandys: Three to 2 in 1955–56, 7 to 6 in 1956–57 and 3 to 2 in 1957–58. It is the Government's policy to increase the proportion of trooping by air, during the next few years.
    Mr. Bellenger: Does not the right hon. Gentleman recollect that in successive
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    Service debates in this House we have been promised that this ratio would increase much more rapidly than seems to be apparent from what the right hon. Gentleman has just said? Cannot he give the House any hope that we intend to depend mainly on air trooping rather that sea trooping in the future to make our forces much more mobile?
    Mr. Sandys: The figures that I have given show that there has been an increase. As the carrying capacity of R.A.F. Transport Command increases, the number of troopships in use will be reduced. In general, it is, I think, undoubtedly more efficient and more economical to move troops by air. Nevertheless, I am sure hon. Members will recognise that for the sake of flexibility a certain number of troopships will always have to be retained in service.
    Mr. de Freitas: Does the right hon. Gentleman imply in his answer that trooping is done entirely by Transport Command? Surely it is quite another matter altogether.
    Mr. Sandys: I am not saying that, but the increase in the capacity of Transport Command will help us to increase the movement of troops by air, because that is one of the ways of using the capacity of Transport Command. One wants to retain a substantial fleet of aircraft in Transport Command, and unless one uses them for ordinary routine purposes it is very wasteful.
    Mr. de Freitas: In view of the announcement of the change in Government policy—
    Mr. Speaker: Order. I think this is more a matter for a defence debate.
    Mr. de Freitas: In view of the announcement of a change of Government policy in respect of trooping, I beg to give notice that I shall attempt to raise the matter on the Adjournment.

    N.A.T.O. Forces (Disposition)
    Mr. Shinwellasked the Minister of Defence what alterations in the military disposition of the North Atlantic Treaty Organisation forces are contemplated in view of the French situation.
    Mr. Sandys: I am not aware of any.
    Mr. Shinwell: Can the right hon. Gentleman say whether the French commitment in Algeria, which is likely to continue for some time, will effect no change in the military dispositions of N.A.T.O.? Is he in constant touch with the Supreme Commander on this subject?
    Mr. Sandys: The Algerian situation is, of course, not a new one. With regard to the general question, I have every confidence that France will, as always, faithfully discharge her international obligations.

    Recruits
    Mr. E. Fletcherasked the Minister of Defence the total number of recruits for the three Services in May, 1958, by comparison with those for May, 1957.
    Mr. Sandys: I am not yet able to publish the recruiting figures for May, since the returns are not yet completed; but the provisional figures I have received look pretty healthy.
    Mr. Fletcher: Will the right hon. Gentleman say what bearing these healthy figures have on his current estimate of the prospects of being able to end National Service?
    Mr. Sandys: They go further to support my contention.
    Mr. Shinwell: Would the right hon. Gentleman like to make a book on this subject? Is he prepared to have a sweepstake in the House available to all hon. and right hon. Gentlemen?
    Mr. Sandys: I should be prepared to have a private discussion with the right hon. Gentleman.

    Missile Bases, United Kingdom
    Mr. Zilliacusasked the Minister of Defence whether, in view of the accidental chain-explosion of eight United States rockets, resulting in the loss of several lives and much damage, and the consequent danger to life and property in this country through the establishment of rocket bases in the United Kingdom, he will now reconsider his decision to allow United States missile bases to be stationed in this country.
    Mr. Sandys: No, Sir.
    Mr. Zilliacus: While I admit that it may be the best rocket that the Americans have got, why do the Government
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    want it in such a hurry when it is obsolete already, as my hon. Friend the Member for Lincoln (Mr. de Freitas) has pointed out, when it is obviously dangerous to the population, which has to move out of the localities, and when we are supposed to be having a Summit Conference shortly to agree on disarmament? Why are the Government in such a terrible haste to have these very imperfect and dangerous weapons installed on our territory?
    Mr. Sandys: I think the hon. Gentleman is referring to the Thor rocket. The rocket which exploded was a Nike.

  NORTH AFRICA
  Mr. Brockwayasked the Secretary of State for Foreign Affairs whether he will instruct his representative at the Security Council to place upon the agenda the present situation in North Africa as a possible danger to world peace.
  The Minister of State for Foreign Affairs (Mr. D. Ormsby-Gore): No, Sir.
  Mr. Brockway: In view of the grave doubts that General de Gaulle will be able to bring peace in Algeria and the danger that war may be extended to Morocco and Tunisia, is not it desirable that the British Government should foresee the grave consequences and seek under some international authority to bring about peace in that area?
  Mr. Ormsby-Gore: I recognise that the hon. Gentleman tabled the Question on 26th May. Since then the situation has radically changed. [HON. MEMBERS: "Worsened."] The hon. Gentleman will be aware that the Security Council is at present seized of the difference of opinion between the Tunisian and French Governments. There has recently been a meeting of the Security Council, and it is now adjourned until, I think, 18th June.

  LEBANON

    Situation
    Mr. Brockwayasked the Secretary of State for Foreign Affairs how the British delegate on the Security Council of the United Nations voted on the complaint of the Lebanese Government of

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    intervention by the Government of the United Arab Republic in the internal affairs of the Lebanon.
    Mr. Swinglerasked the Secretary of State for Foreign Affairs what steps are being taken by Her Majesty's Government as a result of the situation in the Lebanon; and if he will make a statement.
    Mr. Ormsby-Gore: Since my right hon. and learned Friend answered Questions on this subject in the House on 19th May, some violence has continued. With the exception of damage to the Iraq Petroleum Company pipeline, which has now been repaired, there have been no reports of damage to British property nor of loss of British life.
    The Lebanese Government have submitted the matter to the Arab League and to the Security Council. The Security Council met yesterday and a resolution was introduced by the Swedish delegate. This was supported by the United Kingdom representative and the debate is still continuing.
    Mr. Brockway: I thank the right hon. Gentleman for that Answer, but may I ask him whether, as the American Government are supplying arms to the Lebanese Government, it is not desirable that we should seek to disengage the whole of the area from external political influence and military contributions?
    Mr. Ormsby-Gore: That goes very much wider than the Question on the Order Paper.
    Mr. Swingler: Will the right hon. Gentleman give an assurance that he will ask the British representative on the Security Council to take Steps to ensure that there is no armed intervention in the Lebanon except in circumstances which are approved by the United Nations General Assembly?
    Mr. Ormsby-Gore: I must make it perfectly clear that there is all the difference in the world between supplying arms to a recognised Government of a country and introducing arms over a border to support dissidents in the country.

    Arms and Equipment (Supply)
    Mr. S. O. Daviesasked the Secretary of State for Foreign Affairs how much British arms and military equipment has been supplied by Her Majesty's
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    Government to the Government of Lebanon; and why.
    Mr. Ormsby-Gore: It is not the policy of Her Majesty's Government to reveal details of arms transactions with other Governments. The reasons for this were explained by my right hon. Friend the Lord Privy Seal in reply to a Question on 4th December, 1956.
    Mr. Davies: Has not the right hon. Gentleman admitted this afternoon that arms are being supplied to this discredited Government of the Lebanon? Are not the Government aware that all such interference in the past has failed?
    Mr. Ormsby-Gore: Her Majesty's Government have for some time been a normal supplier of the Lebanese armed forces, and it would be an interference in the affairs of Lebanon to refuse to honour particular orders for arms which have been placed by the recognised Government of the Lebanese State.
    Mr. Lipton: Has not the Minister seen the report in today's newspapers that one of the arrangements made between the Prime Minister and President Eisenhower in Washington is for the Lebanese Government to be supplied with twelve Hawker Hunter jet fighters?
    Mr. Ormsby-Gore: I have not seen the report, but I do not see why the authorised Government of any country should not place orders for arms.
    Mr. S. Silverman: Would the Minister bear in mind, first, that this principle has not always been honoured—particularly in the most tragic case of Spain, during the civil war—and, secondly, that to follow the principle of supplying arms of this character without conditions and control to any Middle Eastern Government that happens to be able to maintain itself in power and buy them would merely be to add enormously to the danger in what is already the most explosive area in the world?
    Mr. Ormsby-Gore: I would say that the recent supply of arms to the Lebanese has been on a very small scale.

  MUSCAT AND OMAN—SAUDI ARABIA (FRONTIER)
  Mr. Brockwayasked the Secretary of State for Foreign Affairs what discussions have taken place with the Sultan

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  of Muscat and Oman on the delimitation of the frontier between the Sultanate and Saudi Arabia at Buraimi; and what action Her Majesty's Government are taking to resolve this dispute.
  Mr. Ormsby-Gore: As the hon. Member will know, His Highness the Sultan of Muscat and Oman is at present on a visit to this country. Her Majesty's Government are taking the opportunity of discussing with him a number of topics of mutual interest to our two countries, but I cannot reveal the nature of these private discussions.
  As regards the second part of the Question I have nothing to add to the Answers which my right hon. and learned Friend gave in reply to a Question by the hon. Member for Gloucestershire, West (Mr. Philips Price) on 23rd April.
  Mr. Brockway: While I do not wish to harm the discussions which are taking place, may I ask whether the right hon. Gentleman will urge that in them we should take the greatest possible effort to settle this issue and consider asking a commission of the United Nations to define the frontier because of its importance to peace in the Middle East?
  Mr. Ormsby-Gore: As I think the House knows, Her Majesty's Government act over the matter of Buraimi on behalf of both the Ruler of Abu-Dhabi and the Sultan of Muscat and Oman. I am bound to say that their experience of previous arbitration in this matter with the Saudi Arabian Government does not seem to make it very likely that they would be willing to resume negotiations of that kind.

  CUBA (MR. TOPHAM)
  Mr. Teelingasked the Secretary of State for Foreign Affairs the latest information concerning the trial of the man who shot Mr. Topham of Brighton in Cuba; and what compensation the Cuban Government have offered to Mr. Topham.
  Mr. Ormsby-Gore: I hope to have definite news about the trial next week. The question of compensation will largely depend, of course, on the result of the trial.

  ADEN-YEMEN FRONTIER
  Mr. P. Williamsasked the Secretary of State for Foreign Affairs what action he is taking to prevent further raids from the Yemen on Aden.
  Mr. Ormsby-Gore: British forces are dealing firmly with these raids and will continue to do so.
  Mr. Dugdale: Would not the right hon. Gentleman agree that it would be exceedingly useful if United Nations observers were sent to this frontier, because it is possible that there may be raids in the future which will present the same difficulties as have been presented in the past?
  Mr. Ormsby-Gore: Yes, but I think the right hon. Gentleman knows from his recent experience that this territory raises very many practical difficulties in respect of United Nations observers. We are in touch with the Yemeni Government. I think that if we could come to an arrangement with the Yemeni Government for some commission to define the frontier, that would be very much the best solution.

  SUMMIT CONFERENCE
  Mr. Swinglerasked the Secretary of State for Foreign Affairs what progress has been made in the diplomatic talks in Moscow in preparation for a Summit Conference.
  Mr. Ormsby-Gore: There have been no further developments since my right hon. Friend the Lord Privy Seal answered similar Questions in the House yesterday.
  Mr. Swingler: Can the right hon. Gentleman say how long he thinks these talks will be going on on a confidential basis, and is it still the Foreign Secretary's view, which he expressed on 19th May, that the talks are progressing hopefully? Is that still the view of the Foreign Office?
  Mr. Ormsby-Gore: That is still the view which is taken, but it is, of course, quite impossible to tell how long the talks will take. They are inevitably rather slow as the ambassadors have to go in one by one. They are at the moment making themselves available to Mr. Gromyko whenever he wishes to see them.

  FRANCE (MR. MICHAEL FOOT)
  Mr. Swinglerasked the Secretary of State for Foreign Affairs what representations have been made by Her Majesty's Government to the French Government about the expulsion from France of Mr. Michael Foot.
  Mr. Ormsby-Gore: None, Sir.
  Mr. Swingler: Is not it the function of British Embassies to represent British citizens abroad, irrespective of politics, or is there now to be political discrimination in the Foreign Service? Is not it a fact that Mr. Foot asked for the British Embassy to make representations in Paris, that the Embassy failed to find out the charge being made against him, and failed to inform him that he had a right of appeal against the expulsion order? Is not it the case that in London a quite inaccurate statement of the reason why he had been expelled was put round by the Foreign Office? Is not it disgraceful that because this happened to a Left-wing journalist—one can imagine the hullabaloo if it had been a Right-wing journalist—the Foreign Office decided to make no representations?
  Mr. Ormsby-Gore: Of course there is no political discrimination whatsoever in these cases. I hope that somebody, from the Front Bench opposite will repudiate any suggestion that the British Embassy in. Paris took no action because of the politics of the correspondent involved. Since the hon. Member seems to have it completely wrong, I should add that neither Mr. Foot nor the editor of the Daily Herald, for whom he was acting as special correspondent, has asked either Her Majesty's Embassy in Paris or the Foreign Office to protest about the decision of the French Government to expel him.
  Mr. J. Griffiths: This matter should be cleared up. Did Mr. Foot make any representations to the Embassy in Paris, and if so, what action did the Embassy take?
  Mr. Ormsby-Gore: He did ring up the Embassy in Paris—[HON. MEMBERS: "Ah."]—it is no good hon. Members saying "Ah"; the question was what representations had been made to the French Government about the expulsion.
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  I understand that the right hon. Gentleman is asking about Mr. Foot being kept in the Prefecture over the whole of Saturday, 31st May.
  Mr. J. Griffiths indicated assent.
  Mr. Ormsby-Gore: While he was there he rang up the Embassy and another member of the Daily Herald staff went to see Mr. Foot and visited the Embassy. A vice-consul from the Embassy went to see Mr. Foot at the Prefecture.
  Mr. Shinwell: If hon. Members opposite dislike Mr. Foot so much, why are they in favour of his expulsion from France?
  Mr. Ormsby-Gore: I have expressed no opinion on my like or dislike of Mr. Foot, but it has rather struck me that the new self-styled heirs of Tom Paine seem to be unduly sensitive in this generation.
  Mr. Callaghan: The right hon. Gentleman replied that no representations have been made. Why did the Embassy take no steps following the telephone call and the personal call made at its office? Does the right hon. Gentleman realise that the baying that followed his original Answer merely demeaned his hon. Friends, because not one of us who served with Mr. Foot when he was an hon. Member will ever challenge either his honesty of purpose or his service to the cause of democracy. [HON. MEMBERS: "Oh."]
  Mr. Ormsby-Gore: The hon. Member is elevating this to an important issue. Of course the Embassy took steps. It immediately took legal advice on whether there was any prospect of getting Mr. Foot out of detention until he was removed by aeroplane. The legal advice was that there was no possibility of getting him out of detention, and he was told that. The vice-consul also visited him, and I understand that arrangements were made to pay his hotel bill. Mrs. Foot went to see him at the Prefecture and I do not think that he suffered these great indignities which are now being suggested.

  INDONESIA (BRITISH VESSELS)
  Mr. Shinwellasked the Secretary of State for Foreign Affairs what information there is in his possession regarding the

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  attack on British vessels in Indonesian harbours and a British submarine in the Indian Ocean; and if he will make a statement.
  Mr. Ormsby-Gore: The British tankers "San Flaviano" and "Daronia" were attacked from the air by bombs in Balikpapan harbour, in Indonesian East Borneo, on 28th April. The "San Flaviano" was set on fire and sunk. Some of her crew were slightly injured. The "Daronia" escaped without damage or casualties.
  On 17th May, Her Majesty's submarine "Aurochs" was machine-gunned on the high seas in the Molucca Passage by an aircraft flying very high. The submarine suffered no casualties or damage.
  In both cases Her Majesty's Ambassador at Djakarta made inquiries of the Indonesian Government, as a result of which Her Majesty's Government are satisfied that the action was not carried out by the armed forces of the Indonesian Government. It is presumed that the attacking aircraft were under the orders of the Indonesian dissident forces in North Celebes.
  Mr. Shinwell: Does what the right hon. Gentleman said about the attack on the British submarine also apply to the sinking of the tanker in an Indonesian harbour? Are we to assume that Indonesia disclaims responsibility for that also?
  Mr. Ormsby-Gore: That is the case.
  Mr. Younger: Can the right hon. Gentleman say whether in the Government's opinion there is still danger to British shipping? What advice, if any, has been given to British shipping in these waters?
  Mr. Ormsby-Gore: As a result of the bombing of the "San Flaviano," the Shell Company suspended its tanker service to Balikpapan and evacuated wives and families from its installations there to Singapore. British shipping generally has been avoiding East Indonesian ports in view of the risks involved.

  ICELAND (FISHERY LIMITS)
  Mr. E. Fletcherasked the Secretary of State for Foreign Affairs what steps he is taking with regard to the
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  intention announced by the Icelandic Government to impose Icelandic control of all fishing within a 12-mile limit.
  Mr. Ormsby-Gore: I would refer the hon. Member to the Declaration published by Her Majesty's Government on 4th June, in which stress was laid on our desire for negotiations with the Icelandic Government. Her Majesty's Government have noted that the Icelandic Government's Declaration of 1st June refers to the Icelandic Government's desire to work for understanding and recognition of the legality of, and necessity for, the extension of their fishery limits. They hope that this indicates a desire for negotiations on the part of the Icelandic Government.
  Mr. Fletcher: May we take it from that that Her Majesty's Government will not accept any unilateral change in the present position in international law and will endeavour to arrange a direct conference with the Icelandic Government, or propose a meeting of all maritime Powers directly interested in the matter?
  Mr. Ormsby-Gore: Of course we cannot accept the unilateral declaration as changing the present state of international law. If Iceland were to agree to take part in a regional conference such as that proposed by the Danish Government, for instance, that would probably be the best method of solving fishing problems around Iceland, but we shall be ready to consider any suggestions for tackling the problems.
  Mr. Wall: Does my right hon. Friend recognise that there is not much time to call a conference of friendly Governments, as the Icelandic decree is timed for 30th June? Will he, therefore, have consultations as quickly as possible with other Governments interested in the subject to endeavour to summon a conference before that date?
  Mr. Ormsby-Gore: As I understand it, although nominally effective from the end of June, the Icelandic Government's declaration would not actually affect their territorial waters until September, so there is a little more time. We recognise that there is a very urgent need for early negotiations and we hope to get them going this month.
  Mr. Younger: Does not the right hon. Gentleman agree that, although it may be true that there is some kind of waiting

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  period until September, things may get more difficult after the end of June? He has not suggested to the House that Her Majesty's Government are taking any new initiatives in this matter. He referred to the Danish Government's initiative and he said that he was willing to accept suggestions. May we take it that Her Majesty's Government are actively working for the earliest possible conference?
  Mr. Ormbsy-Gore: We are certainly actively working for the earliest possible conference, but we have to consider which country would be the best to call together such a conference. This is a matter which we must bear in mind.

  BRITISH FORCES, GERMANY (SUPPORT COSTS)
  Mr. E. Fletcherasked the Secretary of State for Foreign Affairs what arrangements have now been made with the West German Government with regard to the cost of maintaining the British forces in Germany.
  Mr. Ormsby-Gore: I would refer the hon. Member to the reply I gave to the hon. Member for Scotstoun (Sir J. Hutchison) yesterday.
  Mr. Fletcher: Does not the Minister agree that this arrangement represents a considerable capitulation by Her Majesty's Government on the terms for which we were asking the West German Government? Will he say whether any assurances have been given to the German Government about the minimum number of troops which we shall keep in Germany over the next few years?
  Mr. Ormsby-Gore: The second part of the hon. Member's supplementary question is very fully answered in the statement which was circulated in the OFFICIAL REPORT yesterday. If he looks at the German Press, the hon. Member will see that German public opinion thinks that the German Government have given away far too much to the United Kingdom Government.

  BRUSSELS EXHIBITION (BRITISH PAVILION)
  Mr. Teelingasked the Secretary of State for Foreign Affairs what recent evidence he has received of public demand that the British Pavilion at the
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  Brussels Exhibition should remain open till 10 p.m.; and what action he is taking in the matter.
  Mr. Ormsby-Gore: I am informed by the United Kingdom Commissioner-General that he has received no new evidence of an increase in public demand which might justify a change in the arrangements described in my hon. Friend's reply to my hon. Friend the Member for Solihull (Mr. M. Lindsay) on 2nd May.
  Mr. Teeling: Does my right hon. Friend realise that many other people besides myself who have visited the Exhibition in the last few weeks have found that the British Pavilion is one of the best of the lot? Does he also realise that, with the exception of the Sovereign Order of Malta,. it is the only one which is closing at 6 p.m.? The others carry on until 9 or 10 p.m. Does my right hon. Friend realise that many business people go there in the evenings, and find that they cannot get into the British trade pavilion? It is not in the centre of the exhibition. Those who arrive, as I arrived, at half-past five, find that they are terribly rushed in going round the pavilion.
  Mr. Ormsby-Gore: My information is that quite a number of the other pavilions close at the same time as the British one. My hon. Friend will be aware that from the beginning of June until the end of August the British Pavilion will not be shut until 7 p.m., instead of 6 p.m. I would also say that all our information is that the vast number of visitors who go to the Brussels Exhibition in the evenings make for the amusement park.
  Mr. H. Morrison: Can the right hon. Gentleman say whether there is any appreciable demand on the part of the public to see the pavilion in the evening? One would have thought there would be. If there is an appreciable demand, surely it is quite ridiculous to close the pavilion at such an early hour.
  Mr. Ormsby-Gore: That is precisely the position. Of course the situation is examined the whole time. The people who are managing our pavilion take into account the question whether it would be worth their while to keep the pavilion open, but all the evidence we have had so far shows that it would not be worth while to keep it open after 7 or 8 p.m.
  Mr. Robens: Does not the right hon. Gentleman agree that we must provide the facilities before we can estimate the demand?
  Mr. Ormsby-Gore: We shall certainly look into this matter again.

  EMPLOYMENT

    Dundee
    Mr. G. M. Thomsonasked the Minister of Labour if he will give an analysis of the unemployment figures in Dundee at the most convenient recent date in May according to the lengths of time for which insured workers have been unemployed.
    The Minister of Labour and National Service (Mr. Iain Macleod): As the reply includes a Table of figures I will, if I may, circulate it in the OFFICIAL REPORT.
    Following is the information:

    NUMBERS OF WHOLLY UNEMPLOYED PERSONS ON THE REGISTERS OF THE DUNDEE EMPLOYMENT EXCHANGE AT 12TH MAY, 1958

    Duration of Unemployment

    Males

    Females

    Total

    Up to 2 weeks

    378

    188

    566

    More than 2 weeks and up to 8 weeks

    698

    429

    1,127

    More than 8 weeks

    1,720

    939

    2,659

    Total

    2,796

    1,556

    4,352

    NOTE: The Table above excludes persons registered as temporarily stopped. The number in that category in Dundee at 12th May was 1,030.
    Mr. G. M. Thomsonasked the Minister of Labour the percentage of unemployment in Dundee at the most recent convenient date in May; and the ratio of unemployed to unfilled vacancies.
    Mr. Iain Macleod: For the purpose of computing a percentage rate of unemployment the Dundee and Broughty Ferry areas have to be combined; the figure for the combined area at 12th May was 6·1 per cent. At that date there were about seven unfilled notified vacancies for every 100 persons registered as wholly unemployed.
    Mr. Thomson: Is the Minister aware that these figures are particularly disturbing in a city where the workers have proved themselves specially adaptable to
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    new skills whenever there has been an adequate Government effort to bring in new industries? What are the Government doing to bring jobs to the Dundee workers far more quickly than at present?
    Mr. Macleod: I agree that the figures are disturbing; there is a high and increasing rate of unemployment. The hon. Member will appreciate that this is largely a matter for my right hon. Friends, but I can say that we have done a great deal to help Dundee, and it is clear that we must do a great deal more—and we certainly will.
    Mr. Strachey: Will not the Minister announce shortly, on behalf of the Government, that in view of these figures they will not contemplate any further reduction in the so called mark-up of jute goods imports? That is the key to the situation.
    Mr. Macleod: That is not my Departmental responsibility, but I will certainly discuss it with the Minister responsible.
    Sir J. Duncan: Can my right hon. Friend say how soon the five new factories which the Government have induced industry to go to in Dundee will be employing workers?
    Mr. Macleod: I am afraid that I cannot answer that question without notice.
    Mr. G. M. Thomsonasked the Minister of Labour how many persons were registered at employment exchanges in Dundee as being jute workers and building trade workers, respectively; and what percentages of them were unemployed at the most recent convenient date in May.
    Mr. Iain Macleod: Estimates of the total numbers of employees in local areas are available for one date only in each year, and the latest figures relate to end-May, 1957. The estimated numbers of employed and unemployed in the jute and building industries in the area of the Dundee and Broughty Ferry Employment Exchanges at that date were 15,630 and 4,880, respectively. The numbers registered as unemployed at 12th May, 1958, represented 13 per cent. and 5.8 per cent. respectively of those two totals.
    Mr. Thomson: Is the Minister aware that this very high percentage of unemployment in the jute industry is

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    mainly the result of the Government's action? Does he realise that there is desperate anxiety in Dundee for a definite assurance from the Government as to their future intentions in respect of the jute industry, so that this dreadful uncertainty can be removed?

    Dock Strike, London
    Mr. Bodyasked the Minister of Labour whether he is aware that the dock strike in London will soon cause a large number of small businesses, particularly those in the import and export trades, to close down; and whether he will make a statement on the progress of conciliation in this matter.
    Mr. Iain Macleod: I have been in close touch with the situation throughout and fully realise the loss and damage which have resulted. The strikes are unofficial and it is, of course, for the unions to secure a resumption of work so that any matters in dispute may be discussed through the established machinery. Union officials have tried to end both the meat transport strike, which was the original cause of the trouble, and the unofficial stoppages in the cold stores and docks. I have invited the union representatives concerned with the meat transport dispute to meet my officials as soon as this can be arranged. If a settlement of this dispute can be effected I expect that the other unofficial strikes will at once be called off.
    Mr. J. Eden: Can my right hon. Friend give any estimate of the amount of damage done to foodstuffs as a result of this unofficial strike? Can he say what consideration prevented Her Majesty's Government from at once using troops to clear perishable cargoes from the ships?
    Mr. Macleod: I cannot give a direct estimate, although it is a good deal less than most of the reports have suggested. Of course, there is a responsibility upon all Governments; they clearly have to consider the use of troops if the food supplies of the public are in danger. But that position has not been reached.
    Mr. Robens: Would not the Minister agree that the officials of the Transport and General Workers' Union have worked valiantly to get these men on unofficial strike back to work? Would not he also agree that if the advice
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    proffered by his hon. Friend had been taken by the Minister he would have had every single port in the country out on strike?
    Mr. Macleod: This is certainly a very difficult position. The talks are now on the tightrope between success and failure, and I do not want to make the position more difficult. In reply to my hon. Friend, I would say that Governments naturally have their responsibilities where the food of the people is concerned.

    Trade Unions (Strikes)
    Mr. Gresham Cookeasked the Minister of Labour whether he will now make an approach to the Trades Union Council to invite that body to recommend to trade unions generally that their rule books should be modified so that strike action and its discontinuance be decided by a secret ballot of members in each instance.
    Mr. Iain Macleod: I would refer my hon. Friend to the reply which I gave to my hon. and gallant Friend the Member for Arundel and Shoreham (Captain Kerby) on 10th April, 1957, of which I am sending him a copy.
    Mr. Gresham Cooke: Is my right hon. Friend aware that there is a strong body of opinion which thinks that when strike action or its continuance is being considered the men are fearful to declare themselves by a show of hands, and that it would be in the national interest if these questions of strikes were decided by a secret ballot? Has not the time arrived for my right hon. Friend to consider having a talk with the T.U.C. on this matter?
    Mr. Macleod: This is a very difficult problem. It is quite true that a considerable body of opinion thinks as my hon. Friend does. I would merely say that from what study I have given to this matter—and I have studied it over a long period—I do not believe that a secret ballot would in any way reduce the incidence of strikes. In particular, it would have practically no impact upon the unofficial strikes which are the present main difficulty.
    Mr. J. Griffiths: Will not the right hon. Gentleman make it clear that those who have experience in industrial affairs on both sides of industry and in this House

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    are not all of the view held by some Government supporters that a secret ballot would lead to greater industrial peace, and that it might have quite the reverse effect?
    Mr. Macleod: There is a very considerable body of opinion on both sides. I have expressed my own opinion and that of the Government.
    Sir S. Summers: Will my right hon. Friend also bear in mind that there is a very considerable volume of opinion on this side of the House which shares his view on this subject?
    Mr. Lee: Can the right hon. Gentleman estimate how long a strike might drag on if there had to be a secret ballot on the issue of its continuance?

HORTICULTURAL MARKETS, GREATER LONDON
The Minister of Agriculture, Fisheries and Food (Mr. John Hare): With your permission, Mr. Speaker, and that of the House, I would like to make a statement on the conclusions which the Government have reached on the Runciman Committee's recommendations concerning the horticultural markets serving the Greater London area.
The Government accept the Committee's view that the market at Covent Garden should not be moved, but should be greatly improved, in the interests of efficiency, smoother traffic flow, reduction of fire risk and the proper development of the neighbourhood. It is proposed to bring in legislation providing for a statutory Covent Garden Market Authority, but it is not yet possible to say when this will be introduced. When set up, the Authority will first concentrate marketing in a smaller area by acquiring some of the land and premises at present in market use. Ultimately, it will provide and maintain up-to-date market buildings in the area.
These radical changes will require a review of the original Charter and of existing private legislation, and it will be necessary for the new Market Authority to acquire the Charter Market. The Authority will be given powers to enable it to prevent the present sprawl of the market over too wide an area.
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The Government have decided that the first step, in order to concentrate Covent Garden Market and to reduce traffic congestion, should be the provision elsewhere of storage premises. This new accommodation will then be available to take the bulk produce not required by retailers using the market and for empty containers at present stored there. Pending the establishment of the Authority, I hope to make temporary arrangements for the provision of these facilities by another agency, possibly a local authority.
In parallel with the improvement of the market, the London County Council, as planning authority, will prepare a plan for the development of the whole neighbourhood, for submission to my right hon. Friend the Minister of Housing and Local Government. The Government accept the Runciman Committee's recommendation that Brentford and Stratford Markets should be developed and expanded. This will reduce the number of retailers who at present come into Central London to make their purchases, despite inconvenience and loss of time.
The Government have come to the conclusion that this programme, which, I believe, will command wide acceptance, makes it unnecessary to proceed with the Runciman Committee's proposals for an additional market and for a London Markets Authority. I should like to thank the London County Council, the City Corporation, and all the other public authorities and trade organisations concerned, for their helpful suggestions and offers of assistance in giving effect to this plan, which I think will provide the right answer to a problem that for some years has appeared almost insoluble.
Mr. Willey: Does the right hon. Gentleman realise that, while we welcome the fact that the London County Council is to prepare a development plan for the Covent Garden area, his statement, for which we have waited for so long, is nevertheless very disappointing? Does he realise, also, that the recommendations of the Runciman Committee were accepted as being minimum recommendations, and that we do not feel that the right hon. Gentleman will solve the problem of London markets unless he accepts the further recommendations of the Runciman Committee that there should be a

213
new market for London, possibly in north-west London, and also the establishment of a London Markets Authority?
In view of the dissatisfaction that the right hon. Gentleman's statement will undoubtedly create, may I ask whether he will consult his right hon. Friend the Leader of the House and assure us that we shall have an opportunity to discuss the Report of the Runciman Committee before we disperse for the Summer Recess?
Mr. Hare: My right hon. Friend the Leader of the House is sitting next to me and has no doubt heard the last parts of the hon. Gentleman's question. I cannot share the hon. Gentleman's expression of gloom. I believe that the plan will provide a solution which both sides of the House have anxiously sought for a very considerable time. I believe that if the further recommendations of the Committee to which the hon. Gentleman has referred had been put into effect, we should be no nearer a solution for many years to come.
Mr. Hurd: While congratulating my hon. Friend on what seems to be a well-balanced scheme, may I ask whether, in view of the difficulties involved, my right hon. Friend can say how long it will take to carry through the plan to rebuild Covent Garden?
Mr. Hare: We shall make a start on the storage depôt as soon as possible. Later stages will include the rebuilding of the Covent Garden Market, which will take some years. Since it involves considerable capital expenditure, the precise phasing of the work will be subject to the financial and economic policies of the Government.
Mr. H. Morrison: Does not the right hon. Gentleman think that the existence of Covent Garden and other markets, including those for fish and meat, in the Central London area is a waste of valuable sites and contributes to the congestion of London traffic? Would it not be better to have mixed fruit, vegetable, meat and fish markets, about four of them, on the edge of the County of London so that they might serve both outer London and the County of London and thereby be more efficient and economical? In those circumstances, I should have
214
thought that, rather than establish another ad hoc specialist authority, the London County Council could be the authority to run these markets?
Mr. Hare: I know that the right hon. Gentleman has great experience of this subject, but I would put this to him: I think that my proposals will make a definite contribution by achieving two things. The first will, I hope, be the reducing of the fire risk which is a considerable concern of the London County Council. The second will be the relieving of traffic congestion by the removal of this huge area of storage of empties. It covers about eight acres of the present market. Those two results will achieve a great deal in a matter to which both sides of the House have given considerable thought for many years.
Mr. Whitelaw: What consultations has my right hon. Friend had with the various interests concerned, in view of the remarks made by the hon. Member for Sunderland, North (Mr. Willey)? What were the reactions of those organisations?
Mr. Hare: We have had consultations with the representatives of, I think, all the main interests concerned. They consist of local authorities, wholesalers, retailers, trade unions, growers, and so on. I think I can honestly say that the general reaction of the representatives of these interests has been that our proposals are on the right lines.
Mr. Willey: Surely the right hon. Gentleman realises that the fullest consulations were carried out by the Runciman Committee itself and that it was on the basis of those fullest consultations that the Committee made its recommendations.
Mr. Hare: No doubt the hon. Gentleman realises that I answered that question perfectly correctly, because all the consultations to which I have referred took place since the Runciman Report was published and since the Committee's consultations took place.
Major Legge-Bourke: Can my right hon. Friend say what sort of membership he visualises coming on to the new body which he proposes to set up to organise the market and whether it is his long-term intention to turn Covent Garden into a sort of sampling market?
Mr. Hare: I have tried to show that this is a matter which will require future legislation, since the authority which I have in mind—subject to considerable further thought—would be a small body of about five to seven members, not necessarily representing interests but chosen because of their efficiency in this field of work. It would be unwise to go further at this moment until we are in a position to discuss legislation which at some time will be brought before the House of Commons.
On the question of whether Covent Garden would become more of a sampling market, the tendency is that that will happen. Already a great deal of foreign fruit and of our own domestic apples is sold on sample. The whole tendency is to improve the packing and grading of horticultural produce. I believe that more will be sold on sample in future than is the case now.
Mr. Isaacs: Following on a question asked by one of my hon. Friends, has the right hon. Gentleman considered, or will he consider, the successful work of the Borough Market in Southwark, which is controlled by a small number of local people and which, I think he will find, is run most successfully from every point of view?
Mr. Hare: I am grateful to the right hon. Member for what he has said. My feeling is that a small body is right. I do not want to be more specific, but I think that the suggestion is sound and that the clearing of the air will be of help to the authorities of the Borough and of advantage to them in dealing with the ideas they have in mind.
Sir P. Agnew: Could my right hon. Friend say on whom the cost of rebuilding the market will fall?
Mr. Hare: This will be a commercial transaction. The cost will not fall on the
216
taxpayers or local authorities. The idea is that it will be paid for through tolls and market rents. It is a purely commercial affair.
Mr. Collins: Is the right hon. Gentleman aware that, since his proposals deal with a section of London markets only, they only touch the fringe of the horticultural marketing problem? What proposals are there for provincial markets? Does he not think that this proposal will extend the undesirable practice of re-consigning?
Mr. Hare: I think that that question is a little wide of my statement, which deals with London and the Greater London area. I hope my proposals will allow all the present marketing authorities, such as those of the Borough, Spitalfields, Brentford and Stratford, to plan ahead in a far better way than they have been able to in recent years.

SCOTTISH AFFAIRS
The matter of Research in Scotland, being a matter relating exclusively to Scotland, referred to the Scottish Grand Committee for their consideration.—[Mr. R. A. Butler.]

SCOTTISH ESTIMATES
Committee of Supply discharged from considering the Estimates set out hereunder and the said Estimates referred to the Scottish Grand Committee:—
Class V, Vote 10, Department of Health for Scotland;
Class V, Vote 12, Housing, Scotland;
Class V, Vote 11, National Health Service, Scotland.—[Mr. R. A. Butler.]

MEDICAL ACT, 1956 (AMENDMENT)
3.42 p.m.
Mr. John Hynd: I beg to move,
That leave be given to bring in a Bill to amend the provisions of the Medical Act, 1956, relating to the experience required for full registration and to applications for provisional registration, and of the First Schedule to that Act relating to fees, expenses and allowances.
The House will be aware that in 1950 the conditions of registration of medical practitioners, examinations, qualifications, and so on, were reviewed and very considerably examined by the General Medical Council and other bodies and that a number of new provisions were embodied in the Act. Since then a number of cases have come to my notice in which the wording of the Act has proved anomalous. It has led to quite serious injustices and has also resulted in a cumbersome and complicated procedure which it is the desire of everyone concerned to avoid so that the purposes of the Act may be mom effective.
I was a member of the General Medical Council at the time that Measure was introduced and, therefore, I feel some responsibility for the situation it has created. The Bill I ask leave to introduce has reference to the experience of eight years since the passing of the Act and eight years' experience of the new provisions embodied in it, which have not worked out in all cases exactly as desired. The main purpose of my proposed Bill, as shown in the title I have cited, is to simplify the procedure for medical practitioners who have qualified to obtain full registration, on the one hand, and provisional registration, on the other.
In the first case there are two groups of medical practitioners affected by the existing provisions of the Medical Act. The first are those who qualified before 1st January, 1953. Under the provisions of the Act the requirement to obtain full registration in this country is that a medical practitioner should not only have qualified, but have been entered on the Provisional Register and before he could be placed on the Provisional Register he must produce evidence to show that he has secured employment in
218
a hospital. He cannot get on the full Register until he has had 12 months' experience of medicine and surgery in an approved hospital, and he cannot get hospital employment until he is on the Provisional Register.
An anomalous situation has been created in cases where doctors qualified before 1st January, 1953, but, for various reasons, did not apply for full registration on the British Medical Register. For example, doctors who qualified before or during the war and went abroad with the Armed Forces and spent many years in practice, including hospital experience, or went abroad on medical missionary service and had similar experience, but on their return to this country have found that under the provisions of the Act they could not then obtain full registration until they had undertaken another year's internship training in a hospital. Until they had undergone that internship, doctors who have had all the training and experience necessary have thus been unable, because of this technicality, to obtain posts which were open to them and for which their services were required.
The second group is concerned with foreign or Commonwealth doctors with diplomas which are not recognised for registration in this country. In those cases they have first to obtain a British qualification. Whatever may have been their previous qualifications or experience, they must obtain a British qualification, pass a British examination and have a British diploma. They then find that they cannot be registered because they have still to do twelve months' internship in a hospital irrespective of their previous experience.
The result is that, whereas the Act provides that the holder of a foreign or Commonwealth diploma recognised in this country can come here and be placed on the Register immediately, provided he satisfies the General Medical Council that he has had the full hospital experience required under the Act, a doctor with an unrecognised foreign or Commonwealth diploma, and who gets a British diploma in addition, cannot have the same advantage but has to go through the additional formality of an additional year's hospital training.
The anomaly is emphasised by the fact that the Act makes an exception of

219
doctors holding Southern Irish diplomas as well as foreign and Commonwealth diplomas, which are recognised. My Bill would regulate this so that a sensible position would be maintained as in the case of the Irish and recognised foreign and Commonwealth doctors with foreign diplomas from registered schools, and for doctors who qualified in this country before 1953, and can produce evidence that they have at least as much hospital experience as is required from a newly-qualified doctor for registration.
My second point concerns provisional registration and is of particular interest to responsible medical bodies like the General Medical Council. A doctor who has applied for registration on the provisional list in order that he may undertake this twelve months' internship after the qualifying examination and who has obtained a job in a hospital must first produce a certificate of selection for employment in the hospital, which must then be submitted to his examining body, who must then check with that hospital, check his qualification and issue a further certificate. The General Medical Council deals with all these matters all over again, and in the meantime weeks may have gone by. About 2,000 cases a year are dealt with in this category.
The General Medical Council and other bodies concerned will confirm that considerable delays are involved, with the result that those doctors who cannot legally take up posts in a hospital until it is agreed that they shall go on the Provisional Register are either barred from starting in the hospital in a post for which they may be urgently required or, alternatively, they must take up the job in the hospital against the law. There may be many hundreds, even thousands, of doctors who are practising for days or even weeks in hospitals quite illegally because of the anomalous provisions of the Act; they are practising while they are waiting for the formal notification that they have been registered and that the certificate of employment has been received.
I understand that this provision largely is useless. It is cumbersome and embarrassing to everybody concerned and it does not provide an effective check, because it applies only to the first post which a practitioner gets in a hospital and
220
which, in the end, he may not take up, and does not apply to any subsequent post which he may take in the course of his twelve months' experience. I think that it will be generally agreed that it is desirable that the whole situation should be tidied up and that the purely technical provisions involving the time factor between the certificate of employment and provisional registration should be eliminated and the authority left in the hands of the General Medical Council, as was done satisfactorily until the 1950 Act.
My next point is one of detail which, I understand, would probably have been brought forward for rectification in the 1956 Act except for the fact that this was a consolidation Measure and, therefore, not appropriate for an amendment of this kind. It applies to the provisions in the Schedules of the Medical Act under which the fees and expenses of the members of the General Medical Council and its branch councils shall be such as may be decided by the General Medical Council with the approval of the Treasury. This may have been necessary a hundred years ago when the General Medical Council was first set up as an experimental body, but it is no longer necessary and it no longer means anything, because in any case there are no public funds in the General Medical Council's budget.
When we passed the Dentists Act and set up the General Dental Council, it was recognised that this proviso was anomalous and it was, therefore, eliminated from that Act. It might well have been eliminated in 1956 in the Medical Act but for the fact that it was only a consolidating Measure. I believe that this situation is embarrassing to the Treasury, to the General Medical Council and to others and that it means nothing at all, and I should like to take the opportunity of tidying up this point, too.
I assure the House that these suggestions are made only after eight years' experience of the working of the Act and after two years of examination of these points involving discussions with the branches of the Government, the various Ministries, with the General Medical Council and, I understand, with the British Medical Association. All concerned are agreed that these not only desirable but necessary improvements should be made in the Act after those

221
eight years' experience. With that assurance and with the recognition that all these bodies—the General Medical Council, the Ministry and others—have only one purpose in their administration of the medical laws, which is to ensure that the appropriate levels of experience and training shall be observed in the appointments to the Medical Register and in the practice of medicine in this country, I hope that the House will permit me to introduce the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. J. B. Hynd, Dr. J. Dickson Mabon, Dr. Donald Johnson, Dr. Reginald Bennett,
222
Mr. Hastings, Dr. Barnett Stross, Mrs. Hill, Mr. Blenkinsop, Sir Hugh Linstead, Sir Frederick Messer, and Mrs. McLaughlin.

MEDICAL ACT, 1956 (AMENDMENT)
  MEDICAL ACT, 1956 (AMENDMENT)
  Bill to amend the provisions of the Medical Act, 1956, relating to the experience required for full registration and to applications for provisional registration, and of the First Schedule to that Act relating to fees, expenses and allowances, presented accordingly and read the First time; to be read a Second time upon Friday and to be printed [Bill 128.]
ORDERS OF THE DAY

  FINANCE BILL
  Considered in Committee [Progress 21st May].

  [Sir CHARLES MACANDREW in the Chair]

  Schedule 1.—(SUBSTANTIVE CHANGES IN PURCHASE TAX RATES, ETC.)

  3.55 p.m.

  Amendment proposed: In page 30, line 37, leave out sub-paragraph (2).—[Mr. Isaacs.]

  Question put, That the words proposed to be left out stand part of the Schedule:—

  The Committee divided: Ayes 229, Noes 204.

  Division No. 144.]

  AYES

  [3.55 p.m.

  Agnew, Sir Peter

  Eden, J. B. (Bournemouth, West)

  Johnson, Dr. Donald (Carlisle)

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

  Elliott, R. W. (Ne'castle upon Tyne, N.)

  Johnson, Eric (Blackley)

  Amory, Rt. Hn. Heathcoat (Tiverton)

  Emmet, Hon. Mrs. Evelyn

  Joseph, Sir Keith

  Arbuthnot, John

  Errington, Sir Eric

  Keegan, D.

  Armstrong, C. W.

  Farey-Jones, F. W.

  Kerby, Capt. H. B.

  Ashton, H.

  Fell, A.

  Kerr, Sir Hamilton

  Astor, Hon. J. J.

  Finlay, Graeme

  Kershaw, J. A.

  Baldock, Lt.-Cmdr. J. M.

  Fisher, Nigel

  Langford-Holt, J. A.

  Baldwin, A. E.

  Fletcher-Cooke, C.

  Leavey, J. A.

  Balniel, Lord

  Foster, John

  Leburn, W. G.

  Barber, Anthony

  Fraser, Hon. Hugh (Stone)

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

  Barlow, Sir John

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  Legh, Hon. Peter (Petersfield)

  Beamish, Col. Tufton

  Freeth, Denzil

  Lindsay, Hon. James (Devon, N.)

  Bell, Philip (Bolton, E.)

  Gammans, Lady

  Lindsay, Martin (Solihull)

  Bell, Ronald (Bucks, S.)

  Garner-Evans, E. H.

  Linstead, Sir H. N.

  Bennett, F. M. (Torquay)

  George, J. C. (Pollok)

  Llewellyn, D. T.

  Bidgood, J. C.

  Gibson-Watt, D.

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

  Biggs-Davison, J. A.

  Glover, D.

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Birch, Rt. Hon. Nigel

  Godber, J. B.

  Lucas, Sir Jocelyn (Portsmouth, S.)

  Black, C. W.

  Gower, H. R.

  Lucas-Tooth, Sir Hugh

  Body, R. F.

  Graham, Sir Fergus

  McAdden, S. J.

  Bossom, Sir Alfred

  Grant, W. (Woodside)

  Macdonald, Sir Peter

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

  Green, A.

  Mackeson, Brig. Sir Harry

  Boyle, Sir Edward

  Gresham Cooke, R.

  McKibbin, Alan

  Braine, B. R.

  Grimston, Hon. John (St. Albans)

  Mackie, J. H. (Galloway)

  Braithwaite, Sir Albert (Harrow, W.)

  Grimston, Sir Robert (Westbury)

  McLaughlin, Mrs. P.

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

  Grosvenor, Lt.-Col. R. G.

  Maclay, Rt. Hon. John

  Brooke, Rt. Hon. Henry

  Gurden, Harold

  McLean, Neil (Inverness)

  Brooman-White, R. C.

  Hall, John (Wycombe)

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

  Bryan, P.

  Hare, Rt. Hon. J. H.

  Macmillan, Maurice (Halifax)

  Burden, F. F. A.

  Harris, Frederic (Croydon, N. W.)

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

  Butcher, Sir Herbert

  Harris, Reader (Heston)

  Maitland, Hon. Patrick (Lanark)

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

  Head, Rt. Hon. A. H.

  Manningham-Buller, Rt. Hn. Sir R.

  Campbell, Sir David

  Heald, Rt. Hon. Sir Lionel

  Markham, Major Sir Frank

  Cary, Sir Robert

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

  Marlowe, A. A. H.

  Clarke, Brig. Terence (Portsmth, W.)

  Henderson, John (Cathcart)

  Mathew, R.

  Cole, Norman

  Henderson-Stewart, Sir James

  Maudling, Rt. Hon. R.

  Conant, Maj. Sir Roger

  Hesketh, R. F.

  Mawby, R. L.

  Cooper, A. E.

  Hill, Rt. Hon. Charles (Luton)

  Medlicott, Sir Frank

  Cooper-Key, E. M.

  Hinchingbrooke, Viscount

  Milligan, Rt. Hon. W. R.

  Cordeaux, Lt.-Col. J. K.

  Hirst, Geoffrey

  Morrison, John (Salisbury)

  Corfield, Capt. F. V.

  Holland-Martin, C. J.

  Nabarro, G. D. N.

  Craddock, Beresford (Spelthorne)

  Hope, Lord John

  Nairn, D. L. S.

  Crosthwaite-Eyre, Col. O. E.

  Horobin, Sir Ian

  Neave, Airey

  Crowder, Sir John (Finchley)

  Howard, Gerald (Cambridgeshire)

  Nicholls, Harmar

  Cunningham, Knox

  Howard, John (Test)

  Nicholson, Sir Godfrey (Farnham)

  Currie, G. B. H.

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

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

  Dance, J. C. G.

  Hughes Hallett, Vice-Admiral J.

  Noble, Comdr. Rt. Hon. Allan

  Davidson, Viscountess

  Hughes-Young, M. H. C.

  Oakshott, H. D.

  D'Avigdor-Goldsmid, Sir Henry

  Hurd, A. R.

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

  Digby, Simon Wingfield

  Hutchison, Michael Clark (E'b'gh, S.)

  Orr, Capt. L. P. S.

  Dodds-Parker, A. D.

  Hyde, Montgomery

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

  Donaldson, Cmdr. C. E. McA.

  Hylton-Foster, Rt. Hon. Sir Harry

  Osborne, C.

  Doughty, C. J. A.

  Iremonger, T. L.

  Page, R. G.

  Drayson, G. B.

  Irvine, Bryant Godman (Rye)

  Pannell, N. A. (Kirkdale)

  du Cann, E. D. L.

  Jenkins, Robert (Dulwich)

  Partridge, E.

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

  Jennings, J. C. (Burton)

  Peel, W. J.

  Duncan, Sir James

  Jennings, Sir Roland (Hallam)

  Peyton, J. W. W.

  Pickthorn, K. W. M.

  Smithers, Peter (Winchester)

  Vaughan-Morgan, J. K.

  Pilkington, Capt. R. A.

  Smyth, Brig. Sir John (Norwood)

  Vickers, Miss Joan

  Pitt, Miss E. M.

  Speir, R. M.

  Vosper, Rt Hon. D. F.

  Pott, H. P.

  Stanley, Capt. Hon. Richard

  Wakefield, Edward (Derbyshire, W.)

  Price, David (Eastleigh)

  Stevens, Geoffrey

  Wakefield, Sir Wavell (St. M'lebone)

  Price, Henry (Lewisham, W.)

  Steward, Harold (Stookport, S.)

  Wall, Patrick

  Prior-Palmer, Brig. O. L.

  Storey, S.

  Ward, Dame Irene (Tynemouth)

  Profumo, J. D>

  Studholme, Sir Henry

  Watkinson, Rt. Hon. Harold

  Ramsden, J. E.

  Summers, Sir Spencer

  Whitelaw, W. S. I.

  Rawlinson, Peter

  Taylor, William (Bradford, N.)

  Williams, Paul (Sunderland, S.)

  Redmayne, M.

  Teeling, W.

  Williams, R. Dudley (Exeter)

  Remnant, Hon. P.

  Temple, John M.

  Wills, G. (Bridgwater)

  Renton, D. L. M.

  Thomas, Leslie (Canterbury)

  Wilson, Geoffrey (Truro).

  Roberts, Sir Peter (Heeley)

  Thomas, P. J. M. (Conway)

  Wood, Hon. R.

  Rodgers, John (Sevenoaks)

  Thompson, Kenneth (Walton)

  Yates, William (The Wrekin)

  Roper, Sir Harold

  Thompson, R. (Croydon, S.)

  Russell, R. S.

  Thorneycroft, Rt. Hon. P.

  TELLERS FOR THE AYES:

  Sharples, R. C.

  Tilney, John (Wavertree)

  Colonel J. H. Harrison and

  Shepherd, William

  Turton, Rt. Hon. R. H.

  Mr. Chichester-Clark.

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

  Vane, W. M. F.

  NOES

  Ainsley, J. W.

  Griffiths, Rt. Hon. James (Llanelly)

  Monslow, W.

  Allaun, Frank (Salford, E.)

  Griffiths, William (Exchange)

  Moody, A. S.

  Allen, Arthur (Bosworth)

  Grimond, J.

  Morris, Percy (Swansea, W.)

  Allen, Scholefield (Crewe)

  Hall, Rt. Hn. Glenvil (Colne Valley)

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

  Awbery, S. S.

  Hamilton, W. W.

  Mort, D. L.

  Bacon, Miss Alice

  Hannan, W.

  Moss, R.

  Balfour, A.

  Harrison, J. (Nottingham, N.)

  Moyle, A.

  Bellenger, Rt. Hon. F. J.

  Hastings, S.

  Mulley, F. W.

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

  Hayman, F. H.

  Neal, Harold (Bolsover)

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

  Healey, Denis

  Noel-Baker, Francis (Swindon)

  Beswick, Frank

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

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

  Blackburn, F.

  Herbison, Miss M.

  Oliver, G. H.

  Blenkinsop, A.

  Hobson, C. R. (Keighley)

  Oram, A. E.

  Blyton, W. R.

  Holman, P.

  Oswald, T.

  Bonham Carter, Mark

  Holmes, Horace

  Owen, W. J.

  Bottomley, Rt. Hon. A. G.

  Houghton, Douglas

  Paget, R. T.

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

  Hoy, J. H.

  Palmer, A. M. F.

  Bowles, F. G.

  Hubbard, T. F.

  Pannell, Charles (Leeds, W.)

  Boyd, T. C.

  Hughes, Emrys (S. Ayrshire)

  Parker, J.

  Braddock, Mrs. Elizabeth

  Hughes, Hector (Aberdeen, N.)

  Parkin, B. T.

  Brockway, A. F.

  Hunter, A. E.

  Paton, John

  Broughton, Dr. A. D. D.

  Hynd, H. (Accrington)

  Pearson, A.

  Brown, Thomas (Ince)

  Hynd, J. B. (Attercliffe)

  Peart, T. F.

  Burke, W. A.

  Irvine, A. J. (Edge Hill)

  Pentland, N.

  Burton, Miss F. E.

  Irving, Sydney (Dartford)

  Plummer, Sir Leslie

  Butler, Herbert (Hackney, C.)

  Isaacs, Rt. Hon. G. A.

  Popplewell, E.

  Callaghan, L. J.

  Janner, B.

  Prentice, R. E.

  Carmichael, J.

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

  Price, J. T. (Westhoughton)

  Castle, Mrs. B. A.

  Jeger, George (Goole)

  Probert, A. R.

  Champion, A. J.

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

  Proctor, W. T.

  Clunie, J.

  Jenkins, Roy (Stechford)

  Randall, H. E.

  Coldrick, W.

  Johnson, James (Rugby)

  Rankin, John

  Collins, V. J. (Shoreditch & Finsbury)

  Johnston, Douglas (Paisley)

  Redhead, E. C.

  Cove, W. G.

  Jones, David (The Hartlepools)

  Reid, William

  Craddock, George (Bradford, S.)

  Jones, Jack (Rotherham)

  Robens, Rt. Hon. A.

  Cullen, Mrs A.

  Jones, J. Idwal (Wrexham)

  Roberts, Goronwy (Caernarvon)

  Darling, George (Hillsborough)

  Jones, T. W. (Merioneth)

  Robinson, Kenneth (St. Pancras, N.)

  Davies, Stephen (Merthyr)

  Kertyon, C.

  Rogers, George (Kensington, N.)

  Deer, G.

  Key, Rt. Hon. C. W.

  Ross, William

  de Freitas, Geoffrey

  King, Dr. H. M.

  Royle, C.

  Delargy, H. J.

  Lawson, G. M.

  Shinwell, Rt. Hon. E.

  Diamond, John

  Lee, Frederick (Newton)

  Short, E. W.

  Dodds, N. N.

  Lindgren, G. S.

  Silverman, Sydney (Nelson)

  Donnelly, D. L.

  Lipton, Marcus

  Skeffington, A. M.

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

  Logan, D. G.

  Slater, Mrs. H. (Stoke, N)

  Edelman, M.

  Mabon, Dr. J. Dickson

  Slater, J. (Sedgefield)

  Edwards, Rt. Hon. Ness (Caerphilly)

  McAlister, Mrs. Mary

  Smith, Ellis (Stoke, S.)

  Edwards, W. J. (Stepney)

  McCann, J.

  Soskice, Rt. Hon. Sir Frank

  Evans, Albert (Islington, S. W.)

  MacColl, J. E.

  Sparks, J. A.

  Evans, Edward (Lowestoft)

  McGhee, H. G.

  Stewart, Michael (Fulham)

  Fernyhough, E.

  McGovern, J.

  Stonehouse, John

  Finch, H. J.

  McInnes, J.

  Stones, W. (Consett)

  Fletcher, Eric

  McLeavy, Frank

  Strachey, Rt. Hon. J.

  Foot, D. M.

  MacMillan, M. K. (Western Isles)

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

  George, Lady Megan Lloyd (Car'then)

  Mallalieu, E. L. (Brigg)

  Summerskill, Rt. Hon. E.

  Gibson, C. W.

  Marquand, Rt. Hon. H. A.

  Sylvester, G. O.

  Gordon Walker, Rt. Hon. P. C.

  Mason, Roy

  Taylor, Bernard (Mansfield)

  Greenwood, Anthony

  Mellish, R. J.

  Taylor, John (West Lothian)

  Grenfell, Rt. Hon. D. R.

  Messer, Sir F.

  Thomas, George (Cardiff)

  Grey, C. F.

  Mikardo, Ian

  Thomas, Iorwerth (Rhondda, W.)

  Griffiths, David (Rother Valley)

  Mitchison, G. R.

  Thomson, George (Dundee, E.)

  226

  227

  Thornton, E.

  Wells, William (Walsall, N.)

  Wilson, Rt. Hon. Harold (Huyton)

  Tomney, F.

  Wheeldon, W. E.

  Winterbottom, Richard

  Usborne, H. C.

  White, Mrs. Eirene (E. Flint)

  Woof, R. E.

  Wade, D. W.

  Willey, Frederick

  Younger, Rt. Hon. K.

  Warbey, W. N.

  Williams, David (Neath)

  Zilliacus, K.

  Watkins, T. E.

  Williams, Rev. Llywelyn (Ab'tillery)

  Weitzman, D.

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

  TELLERS FOR THE NOES:

  Wells, Percy (Faversham

  Willis, Eustace (Edinburgh, E.)

  Mr. Wilkins and Mr. Simmons.

  The Chairman: The next Amendment is that in page 30, line 49, with which it might be for the convenience of the Committee to take the Amendment in page 31, line 1, leave out "30"and insert"5".
  Mrs. Harriet Slater: I beg to move, in page 30, line 49, at the end to insert:
  (4) Sewing machines previously chargeable at 30 per cent. in paragraph (m) of the Group shall be chargeable at 5 per cent.
  When we have discussed Finance Bills over the last few years we have generally found that the womenfolk have been most hard-hit by them. We had the "pots and pans" Budget, and the present Budget continues, to some extent, the attempts to hit the housewife that were then made. I was very fortunate in having a mother who believed literally in the proverb that a stitch in time saves nine, and when I was quite a young girl she taught my sister and me not only how to sew by hand, but how to use the sewing machine to the best possible advantage. I remember quite well, as a small child, being persuaded—almost "kidded", if I can use a slang word—into doing sewing work which I might not have wanted to do. Our mother wanted us to learn how to use the machine. Sewing was considered to be a most valuable part of the training both of myself and my sister.
  When I got married, one of the first things that I bought was a sewing machine, because I realised that not only would it make it possible for me to save money by being able to make things quite quickly, but would also save very valuable time. As I entered politics and became a local councillor, I found that every minute that the sewing machine saved me was a very valuable part of the time I needed to spend in the house.
  We know that today it is very easy to buy ready-made clothes. Many of them are very attractively produced, but it is still true that a young girl can buy two yards of very gay material and make herself quite an attractive skirt for summer
  228
  or holiday wear, and, in that way, save shillings. Again, the fact that a mother can make her children's clothes is a very valuable thing. There are still large numbers of working-class families where the mother has to cut down father's trousers and mother's coat to make clothes for the children.
  A housewife's use of a sewing machine and its attachments, with which she can darn the sheets and do lots of other mending very quickly—even do small things like sewing tapes on the teacloths, so that her husband hangs them up instead of throwing them down—is an advantage if she has a large family. It is, therefore, a great pity that, at this stage, we should not only still have a tax of 30 per cent. on what is a very useful piece of furniture and a necessity in the home—and especially the home of the working-class family—but that, as a further stab at the housewife, we should now propose to put a tax on the cabinet that holds the machine.
  The tidy housewife does not like to see a machine standing open and without a cover. She likes a machine which can be covered up and thereby kept clean. This saves time in that she has not to get out the fluff and dirt and perhaps make repairs. If she can afford it, she also likes to have a sewing machine which will fold up in an inner cabinet and looks like a table. It then becomes an attractive piece of furniture in the house. So, in addition to the tax on the actual sewing machine, we now say that if she wants one with a cabinet so that it will keep clean and be a piece of furniture in the house, she has to pay 20 per cent. Purchase Tax upon the cabinet. I look upon that as a further stab at the housewife, and particularly the housewife who likes to manage her home in as good and economical way as possible.
  One other aspect of this is that we spend quite a lot of money on our schools in training children how to use a sewing machine. When I was a teacher, one of the main things that I did when teaching sewing was to have a small piece of calico which I could use to teach the children

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  to hem, seam and make buttonholes. They made specimen pieces. Today, in nearly all our schools, and in the secondary modern schools in particular, girls learn to make their own clothes and household equipment. If the Financial Secretary doubts the value of this as a very desirable part of education, I invite him to come to Stoke, where some of the secondary modern schools are arranging, next term, to have a mannequin parade, to show off the things that the girls have made. There he will see how they can make their own clothes—their dressing gowns, beach wear and their evening and party frocks.
  We are also spending a lot of money training our children how to use the sewing machine to the best advantage, how to save money and how to look attractive by making their own clothes in a smart way. When they grow up they tell their mother that they want a sewing machine. Mother is faced with the fact that in addition to the price of a machine, which is not a very easy payment, she has to pay Purchase Tax as well. Again, in our educational system, particularly for our womenfolk, we have the development of evening classes, growing to an almost uncomfortable degree because some authorities have not buildings of the size for them, where women go to learn dressmaking, embroidery, soft furnishings and things of that kind.
  There is the do-it-yourself campaign, which is being advertised to a great extent, and there is growing up the great joy of craft work. It is essential that young people should learn to do things with their hands as well as with machines, yet in the Finance Bill we are continuing a tax of 30 per cent. on sewing machines and also a tax on the cabinet, cover and table on which the machine stands.
  I ask the Financial Secretary to try to look at this from the point of view of the housewife who is a proud and good manager and good mother. From the husband's point of view, the more money that she saves in that way the better she can feed him and the more she can do with her housekeeping money generally. Also, from the point of view of the educational facilities we are offering and the encouragement which is given to young people, we should not make it more difficult for them to continue their training.
  4.15 p.m.
  Mr. Cyril Bence: In supporting the Amendment which has been so ably put forward by my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater), I want to put this to the Committee. From time to time we hear expositions from members of the Government and, indeed, from members of all parties that the people themselves could do a great deal to help stabilise the cost of living. I myself believe that. I believe that the discriminating housewife and good home manager—the same applies to a man—can do a great deal to stabilise the family cost of living.
  I could mention lots of things in the home which help to do this. I would point out, if I may without being out of order, that we found in our own household that during the week fresh fruit and vegetables and meat were invariably a little cheaper than they were on Fridays and Saturdays. So we got a refrigerator and we bought our fresh fruit and vegetables during the week when they were cheaper and kept them fresh in the refrigerator. For instance, we could buy tomatoes during the week 3d. a lb. cheaper than we could on Friday night, which was pay night. The same thing applies today.
  As my hon. Friend said, the housewife with a sewing machine in the home can save a great deal of money by using that machine to mend clothes and make her children's and her own clothes. Probably the cheapest way for Mrs. Jones to keep up with Mrs. Smith, if she has not a lot of money, is to get a sewing machine. There is no doubt about it. I could tell a story about a man with a bicycle in North Wales, but to do so would be out of order and probably indiscreet. There is no doubt that a young woman entering into marriage and raising a family can dress herself and the children much more cheaply and at a very good standard if she knows how to use a sewing machine and is discriminating in buying materials in the shops.
  I am convinced that if every young woman were trained, as my hon. Friend said, to use a sewing machine and perform these domestic functions at home the management of the marriage on the part of the man would be much easier. I have no doubt that a sewing machine in

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  the house is a great attraction to young women and to more elderly women too to stay at home and utilise it. The sewing machine is an evolving machine. There is change in its design and style from year to year. Believe me, the competition in this field today is becoming very intense, and it is not price competition. In my constituency, the best sewing machine in the world is made by the biggest manufacturers of sewing machines in the world, with the best service behind them. [An HON. MEMBER: "Singers."] I did not mention the firm. I am not talking of the Singer motor car, but the Singer sewing machine. My grandmother used one, and my wife and daughter use one now.
  Mrs. Patricia McLaughlin: The hon. Gentleman has referred to his grandmother having had a sewing machine and his wife and daughter having one, but in many cases sewing machines have almost an hereditary title, if one may use that phrase. In my family, the sewing machine comes down from generation to generation and I suggest that a sewing machine is not something which is invested in by every generation. I appreciate the hon. Gentleman's contention, but, at the same time, that is surely not an argument for a reduction in Purchase Tax.
  Mr. Bence: I was coming to that very point. I happened to come into the possession, through the death of a member of my family, of a sewing machine made by the Singer Company in Glasgow in 1892.
  Mr. E. C. Redhead: That was before Purchase Tax.
  Mr. Bence: Yes. It was a work of art. It had iron legs, a big lid on top and looked like an old-fashioned phonograph. So this thing came to me. My sisters did not want it. They said that mother had been using it for years; father would not buy her a new one, and they were not going to use that old thing. That is the ladies all over. They want something new. They want a change.
  Mrs. McLaughlin: No.
  Mr. Bence: Yes, that is so; they like a change in their machines. The tradition of handing the pram down from grandmother to grand-daughter has gone. They
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  want a new pram for the new baby. The average young woman likes a change when she sees a new design. It is this element in the intense competition facing the industry which is compelling all manufacturers, not only sewing machine manufacturers, continually to be pressing forward with the improvement of machines and their design. The Singer Sewing Machine Company is engaged now in redesigning its products and will soon be bringing on to the market a whole range of newly designed machines.
  Anyone engaged in light industry knows that efficient and economic production and development capacity enabling people to compete on price and design in the world markets depends upon having as large a market as can possibly be obtained. It depends upon the maximum home market. I have said this year after year. A mass production unit simply cannot be treated as a unit which can depend for its existence solely on the export market. It must have, with that, a good home market. If it does not have it, it will not accomplish as much as it might in the foreign market.
  I will not mention names, but there are three machines I know of which are available on the world market. My hon. Friend the Member for Stoke-on-Trent, North referred to the cabinet and accessories of sewing machines. Some of these foreign machines are selling very well indeed. The German one is selling because, with the machine itself, there is a complete range of accessories. The cabinet is one of them. I know of one machine with a beautiful cabinet and a lovely set of accessories, all of which are included with the machine. We can make these things in this country, but, since they are treated as extras to the sewing machine, they are subject to this heavy Purchase Tax and the total effect of the tax on them, as it were, is battened on to the sewing machine.
  The company about which I have been speaking is finding competition very severe, not only in the foreign markets but in our own market as well. One must remember, too, that if the British Government take action in this country which is liable to make production, especially of light engineering products, difficult here, the things can always be produced in some other country. The Singer Sewing Machine Company has

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  factories all over the world. In the interests not only of the housewife but of the general light engineering industry, I beg the hon. and learned Gentleman to remember that there are some industries—the sewing machine industry is one and the bicycle industry is another—in which a large home market is essential to successful export trading.
  I want to revert to the point I made earlier about encouraging the individual to exercise discrimination and initiative in his own affairs, to do something himself and exercise some personal responsibility about the inflationary pressure. The individual can reduce his demands on production generally, and, after all, that is what we mean when we talk about trying to curb inflationary pressure. The sewing machine in every home is an instrument which the housewife can use, with her ability as a seamstress, to make her children's clothes and things for herself. She can even make things for her husband. Some of the shirts turned out on sewing machines are really beautiful. A good wife can do brilliant work with her sewing machine for herself, her husband and her children, making a considerable saving for her husband's pocket. When one is born and brought up in a working-class family, one appreciates just what a wife can do with a sewing machine.
  If housewives with sewing machines had them taken from them and they were forced to go to the finished goods market for clothes, there might well be a small rise in price. Some people in the wholesale trade, perhaps, who have an interest in the selling of gowns, frocks, and children's clothes, quite naturally, I suppose, may look upon the sewing machine as a nuisance which they would much rather did not exist. However, I do not imagine that the Financial Secretary would take that view. I am sure that he would not support any interests which wanted to discourage the use of the sewing machine because it was detrimental to the sale of machine-manufactured goods.
  I ask the hon. and learned Gentleman to look at the matter again and consider whether it is possible to remove some of the Purchase Tax from the accessories, if not from the machines themselves. These accessories go to make the machines an
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  attractive proposition in face of competition from foreign machines which are coming in, machines which are, I assure the hon. and learned Gentleman, very attractive because of the accessories supplied with them.
  I ask the hon. and learned Gentleman to give this help to British industry. I speak with particular interest because one company is in my constituency, a good company with a good employment record. This company finds that the tax on all the accessories which are extras to the machine acts as a very serious hamper to it in competition with foreign manufacturers.
  Mr. Victor Collins: I shall not attempt to follow my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) in the detailed knowledge he has shown of the use of sewing machines and of sewing machines as heirlooms, nor can I possibly add to the case put by my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater). I intervene because I have, on two previous occasions, moved an Amendment similar to the one now before us, and I want to show the Financial Secretary just how completely illogical, unfair and discriminatory this particular tax is.
  The Chancellor has made considerable strides in the Finance Bill towards wiping out a good deal of the discrimination which has occurred in other respects, but, in this particular case, he appears deliberately to have continued what I can only describe as the vendetta which the Treasury has waged against the sewing machine. It is completely inexplicable. Perhaps the Chancellor, as a bachelor, may be able to succeed where his predecessors, married men, have failed. I hope that, whatever else he says when he replies, the Minister will try to deal adequately with these points and explain them.
  First, the cabinets, covers, and tables for sewing machines are furniture. They are domestic furniture which, in all other respects, is taxed at 5 per cent. It is absolutely indefensible that the Chancellor, seeing matters as they were before the Finance Bill, should suddenly take it into his head to tax those things at 30 per cent. He will probably say that he is wiping out an anomaly since sewing

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  machines are taxed at 30 per cent. and, of course, the table one puts a sewing machine on and the cover one puts upon it should be taxed at 30 per cent., too.
  The Chancellor may try to assert that these articles are no longer domestic furniture but are accessories of the sewing machine. But one can go to a shop and buy a small table upon which to put a sewing machine, and that table will be taxed at 5 per cent. If one goes to a sewing machine shop and buys a stand or table for a sewing machine, solely because it is sold by a sewing machine company it must be a sewing machine table and, so it is argued, one must pay a 30 per cent. tax.
  I am not trying to make a joke. I am simply putting the position as it is, without any exaggeration whatever. This is not something which the Chancellor discovered to be wrong and tried to put right. It is something that the Chancellor discovered was right and is trying to put wrong. We are giving him the chance to put it right again this afternoon.
  4.30 p.m.
  I said that the shifting of these cabinets for sewing machines from 5 per cent. to 30 per cent. is an extension of the vendetta which the Treasury has waged against sewing machines for the past several years. Last year all of the articles in this particular sub-group which were then at 30 per cent. the Chancellor's predecessor reduced to 15 per cent., with the sole exception of sewing machines. It is fair to say that this animus has continued. I should like to hear the Financial Secretary justify, first, why the tax on sewing machines was allowed to stay at 30 per cent. when everything else was reduced to 15 per cent. What is the industrial, ethical, domestic and moral justification? Secondly, will he tell us the justification for charging 5 per cent. on an ordinary table, but, when it is called a sewing machine table, charging a tax of 30 per cent.?
  I remind the Chancellor that for nearly three years the manufacturers have had to contend with difficulties such as a 50 per cent. initial deposit on hire purchase on hand-operated and treadle sewing machines. A high proportion of these machines is sold to poor people on hire purchase. It was one of the first
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  things ever to be sold in this way. During the war, when conditions were more difficult than they are now, manufacturers were still permitted to sell 10 per cent. of their output on hire purchase on the home market. The 50 per cent. initial deposit almost put an end to this type of business. In at least one of the leading companies, which has been mentioned this afternoon, there has been considerable redundancy.
  The Chancellor, having gone out of his way to maintain this 30 per cent. on sewing machines and to increase the 5 per cent. on the accessories to 30 per cent., is making things worse. He cannot argue that he has left sewing machines at the same level as vacuum cleaners and washing machines because they are electrically operated. This tax applies to hand-operated machines. Electrically-operated sewing machines are tax-free, anyway, as has been pointed out. The home sewing machine is now a luxury in the consumer goods line. As the hon. Lady the Member for Belfast, West (Mrs. McLaughlin) has said, it is domestic capital which lasts sometimes for a century, for several generations, but that is no reason for imposing Purchase Tax upon it. There is no reason why one generation should escape tax altogether and the present generation should be mulcted in this way.
  These machines are responsible for saving money in the home and labour in the factories. They have been featured at times of crisis in "make-do-and-mend campaigns" and, certainly, working mothers with young children cannot make do without sewing machines. The company that has been mentioned, which has its headquarters and brain centre in my division, has alone during the last few years trained a quarter of a million customer-students in the art of home dressmaking. What possible justification can there be for deliberately adding further burdens to the purchase of these humble, essential machines and their accessories?
  As has been mentioned, this high rate of tax will definitely affect exports through the home market. We know that the biggest companies are in a very strong position because they are exporting a high proportion of their total output. The other companies are not so well placed. One of them was exporting up

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  to 45 per cent. of its output. It is now exporting only 20 per cent. because of the home market drop. This company has had to abandon expansion schemes because the home market did not enable it to carry the expansion.
  Last year, when the tax stayed at 30 per cent., the sales dropped 10 per cent. There will surely be a further drop now that this further increase on the accessories has been imposed. Some of these firms have already had to discharge highly skilled workers, who take years, to obtain their skill. I do not think that there is any doubt that there will be a further decline in sales. No one can argue that these machines are luxury articles, and there is no valid reason for this tax, particularly at this now almost penal rate of 30 per cent. From every point of view it is a bad, unfair and unjustifiable tax, and I hope, for the sake of the hard-working women who use them, and the men who make them, that the Chancellor will accept the Amendment.
  Mrs. Eirene White: We have all listened with great interest to my hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater), because she spoke from long experience and with most sincere feelings. After all, sewing machines and the appliances which go with them are part of the domestic capital equipment of the housewife. If these were industrial machines they would be free of tax, but because they are equipment for the housewife in the home they become liable to a 30 per cent. tax. I think that my hon. Friend the Member for Shored itch and Finsbury (Mr. Collins) was in error in suggesting that electrically-operated machines are free of tax. They are all subject to the same tax of 30 per cent., whether they are electrically or hand-operated.
  The Chancellor now wishes to raise the tax on the stands, covers, and so forth, which according to a commonsense point of view, but evidently not according to the point of view of the Treasury, one would suppose to be articles of furniture and not machines. It is surely quite wrong of the hon. Lady the Member for Belfast, West (Mrs. McLaughlin) to suggest that one can continue with outmoded machines in the home. I am sure that she would not support that in the industrial sphere.
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  After all, sewing machines of ancient vintage may still have a good deal of wear in them, but they are not anything like as easy to use as the modern types of machine, particularly the electrical types.
  Mrs. McLaughlin: I speak with a certain amount of experience in these matters, and I know of three sewing machines of the same type. One is forty years old, the second, which is in my own possession, is nearly twenty years old, and the third one is almost two years old.
  Mr. Ellis Smith: That is in Northern Ireland.
  Mrs. McLaughlin: There is one precise difference between the machine which is twenty-one years old and the new machine. They are the same make and the same operation of electric sewing machine. The new one sews backwards, although not very well, otherwise it is exactly the same as the 21-year-old machine, which is just as efficient.
  Mrs. White: The hon. Lady may suppose so, but as my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) has suggested, that is an example of the antediluvian equipment common in Northern Ireland, whether domestic or industrial. Having been born in Belfast, though having escaped from it at the age of eighteen months, I can perfectly understand the outlook of the hon. Lady. The truth, of course, is that a young housewife today naturally wishes to have the most up-to-date machine, which not only sews backwards when required—which can sometimes be very useful—but which can also take all the modern types of attachment and equipment that enable one to do the most complex sewing operations which would be well beyond most of us these days to do by hand.
  We feel that this is a discriminatory tax against capital equipment. The Chancellor has been forthcoming in some directions. He has reduced the tax on some types of domestic capital equipment, such as refrigerators, for which we are grateful. However, we cannot understand why this article, which encourages economy in the home, should be penalised. My hon. Friend the Member for Shore-ditch and Finsbury suggested that there is a vendetta in the Treasury against sewing machines. I think I am correct in saying

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  that there was a period immediately after the war when there was a sharp dispute between the Treasury and the sewing machine company which has been mentioned today, but that is now past history. I cannot think that even the long memory of the Treasury would use that as a justification for the present rate of tax.
  We need not labour the point beyond saying that we regard the sewing machine as an investment. It is something which women purchase usually no more than once in a lifetime. It is something which they should be encouraged to purchase. We find it particularly difficult to swallow the change in this Finance Bill which taxes the stands and the covers—we object to that very strongly. It seems to us an unnecessary way of dealing with this matter and it introduces another anomaly rather than cures the one which it purports to cure. On all these grounds, unless we obtain some satisfaction in the reply which we are about to receive, we must express our dissent with the Chancellor's proposals.
  The Financial Secretary to the Treasury (Mr. J. E. S. Simon): This is, I think, the first time that the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) has moved an official Amendment from the other side of the Committee. Therefore, as well as because of its intrinsic merits, I should like to associate this side of the Committee with what the hon. Lady the Member for Flint, East (Mrs. White) has just said about the speech of her hon. Friend in introducing the Amendment.
  I assure the hon. Lady the Member for Flint, East and the hon. Member for Shoreditch and Finsbury (Mr. Collins) that there is no sort of vendetta or animus against the sewing machine. On the contrary, I remember an hon. Member who was held in great affection throughout the House of Commons—Sir Will Darling—saying on one occasion in a speech here that he thought the sewing machine and the bicycle had conferred more benefit on the under-developed parts of the world—and I do not think he would have limited the benefits merely to those areas—than all the schemes of international organisation. Anybody who remembers the "Song of the Shirt" will immediately see the great benefits that
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  the sewing machine has conferred on mankind.
  The hon. Member for Shoreditch and Finsbury asked me to give the ethical, domestic, economic and moral justification for this tax. When one looks into it in that way, the changes that have been made this time and the preservation of the 30 per cent. rate become apparent. The first thing is that the Purchase Tax is to raise revenue. The cost of the Amendment would be £500,000 a year. That, however, would not be a conclusive argument if the Amendment improved the general logical structure of the tax. That is my second point.
  During our previous discussions, the whole of the Committee has shown itself anxious that the Purchase Tax should have a logical structure. For that reason, there can be no question that sewing machines fit in with the domestic appliances which are taxed either at 30 per cent. if they are electrically operated or at 15 per cent. if they are not, and not at 5 per cent., which is the rate suggested in the Amendment. That is the second reason.
  Mr. Collins: We are complaining that sewing machines not designed for operation by electricity are taxed at 30 per cent., whereas the hon. and learned Gentleman has just said that domestic electrical apparatus is taxed at 15 per cent. While he is dealing with that point, will the hon. and learned Gentleman confirm, in view of what my hon. Friend the Member for Flint, East (Mrs. White) said, that industrial sewing machines, whether electrically operated or not, are certainly free of tax?
  Mr. Simon: The first of those points was the next one to which I intended to address myself. I understand that machines for use in a factory would be free of tax, but I do not think that that was what the hon. Lady the Member for Flint, East was referring to. She was emphasising that electrical machines and the electrical component of the machine are taxable at the same rate as the rest of the machine even if sold separately, as to which the hon. Lady was quite right. I come to the point that the hon. Member has just put to me. As I have said, we want to raise revenue. We want to have a logical structure. In other words,

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  we do not want to treat a domestic appliance here separately from other domestic appliances.
  4.45 p.m.
  The third thing, however, that the Committee has shown itself anxious to achieve is that we should minimise tax avoidance. It is for that reason that both the hand-operated machine and the electrically-operated machine are taxed at 30 per cent. and not at the lower rate of 15 per cent. The reason for it is this. The sewing machine head is common both to the hand and to the electric machine. Therefore, if the hand machine were taxed at a lower rate, there would be an incentive—indeed, there is reason to apprehend this—to buy the hand machine and to fit the electrical component into it. That is something which has had to be watched in a great many aspects of the Purchase Tax.
  One of the ways in which Purchase Tax is evaded is the making up of conversion kits. That drives a coach and horses through the logical structure of the tax. It causes intense resentment to the more legitimate traders, if I may put it that way, and brings the tax into disrepute.
  That brings me to the question of the furniture.
  Mr. Arthur Moyle: In view of the fact that the bulk of the machines that the hon. and learned Gentleman is talking about are in domestic use and the working-class housewife is the purchaser, why go to this extremity to prevent tax avoidance on the assumption that working-class housewives are more dishonest than certain other sections of the community?
  Mr. Simon: I do not know whether the hon. Member was present during the whole of my speech.
  Mr. Moyle: I was.
  Mr. Simon: Had the hon. Member listened, he could not possibly have got that impression from what I have just said. On the contrary, I was dealing with the trader. If it is permissible to sell a conversion kit, there is nothing
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  in any way reprehensible in buying one. What would be wrong is to allow the tax to be evaded and avoided by leaving a loophole by which it is open to a manufacturer to sell a conversion kit.
  Mr. Moyle: Why not make it a flat rate?
  Mr. Simon: I then come to the point of the second Amendment concerning the charging of accessories at the rate of the main article. That, again, is completely bound up with the question of avoidance and conversion. The hon. Member for Dunbartonshire, East (Mr. Bence) will appreciate what I am about to say. The major manufacturers and the manufacturers of some of our best machines make up the complete article with cover and stand. That has to pay the full rate on the whole of the article so made up. It merely gives the other machine makers a fortuitous advantage if they can sell the cover, the stand and all the other accessories separately at a lower rate of tax.
  Therefore, once again we have tried to apply in this field the principle that, I know, the whole of the Committee has very much in mind in this tax as in other taxes—that we should not leave a loophole for evasion and that we should not penalise one trader to the advantage of another who uses less legitimate methods of avoiding the tax—and have made the appliances taxable at the same rate.
  There is a logical reason for the new rate of tax on the accessories, and the rate of 30 per cent. on the machines themselves does not represent any animus, as the hon. Gentleman put it, against sewing machines. On the contrary, we recognise that they are valuable domestic appliances and that they should fit into the domestic appliance head of the Purchase Tax Schedule. I hope that for the reasons I have given the Committee will be satisfied that it is necessary to tax them at the rate of the electrical domestic appliances.
  Question put, That those words be there inserted:—
  The Committee divided: Ayes 210, Noes 246.
  5.0 p.m.
  Dr. Barnett Stross: I beg to move, in page 31, line 2, at the end to insert:
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  5. Garments, headgear, footwear or gloves designed to give protection against injury from accidents at work or road traffic accidents shall be exempt from tax.

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  I think the Committee will agree that this is an Amendment of a substantial nature which is of very real importance. It would be very difficult to exaggerate the value of such protection as can be offered to men and women in different branches of industry. I say at once that I accept the dictum that the fence must be on the machine and not on the worker, but it is because we cannot always fence the process that an attempt must be made by way of protective clothing to safeguard the workers.
  A number of my hon. Friends have points which they will wish to make on the detailed aspects of industrial processes and the protection required, and therefore I will limit myself to the general issue. A multiplicity of garments and appliances is needed and used for this purpose. There is protection of the body, protection of the hands and wrists, specific protection for the feet and ankles and special protection of the head. If I may briefly make reference to the types of coverings for the body which are involved in the Purchase Tax, we have aprons, which may be made of leather, asbestos or rubber. Leather is an excellent insulator against heat and sparks and, therefore, is very popular. Asbestos affords protection against flame or fire, and rubber against corrosives or splashes from acids. In addition to these, oilskins are used, particularly where grease, oil or water are involved, in order to prevent eczema of the skin, and the most modern types that one finds are very beautiful, popular and cheap plastic garments.
  Overalls are commonly used and are made of different materials. Some are required to be flameproof; namely, that they should smoulder when exposed to excessive heat, fire or sparks, but should not burst into flames. Wool is quite an extensive method of protection, and it is used in overalls because it is rather more resistant and does not disintegrate when in contact with fire. That is the advantage of wool. Impervious overalls have to be used by those in contact with explosives and corrosives, and very thick wool is now used in storage plants. These garments have an interesting name in that they are called "Fearnoughts".
  The hands and wrists are very frequently damaged and every care has to
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  be taken, but despite the care that is taken throughout industry, one of the most common causes of industrial disease or injury is some type of injury or affection of the hands or wrists. Here the aim is to protect the workers against heat or flame. In the multiplicity of new industrial processes, use is being made of many new types of solvents. Obviously, acids are also involved. The hands cannot be completely protected in some processes, and therefore mittens are used in cases where the fingers must be naked for handling the materials.
  In the case of the protection of the feet and ankles, we have an exception made up to a point, inasmuch as miners, moulders and quarrymen are able to buy protective boots free of Purchase Tax. I think I am right in saying that. These, however, are not the only workers who should be wearing protective boots. In addition to boots, leggings are often worn in many industries in which the workers are in contact with heat, chemicals, molten metals or extremes of temperature.
  There is a special type of shoe called the magazine shoe, which is subject to Purchase Tax. I think the only exemption is in the case of the special shoe which miners, foundry workers and quarry workers wear. There may also be special shoes to prevent any risk of explosion. I think that in these cases copper instead of iron or steel is used for nails. As my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) reminds me, they are called safety shoes, and my plea is that, being safety shoes, it seems wrong that they should be subject to the tax.
  The whole purpose of what I am saying, however inadequately, is to suggest that it is a good principle to give every possible incentive either to the worker or the industrialist who employs him to make certain that all these materials should be made available for the protection of the worker. It is the most economical thing to do, and we should encourage it in every possible way. If we add to the price and make these things more costly, that will be a disincentive to their use and replacement. Rubber boots are a type of safety wear, whether they be ankle or knee length or reach to the thigh, and whether used for cleaning drains, swilling out floors or any other work of that description.

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  If I may now make reference to the protection of the head, I will only say that on the subject of road accidents we have often raised in this House the problem of helmets for cyclists, and it has been discussed again and again. What is true of industrial workers is equally true of motor-cyclists. They must purchase these things, which are not necessarily purchased for them by the employer. All the more reason, therefore, that they should receive every encouragement to protect themselves. One does not have to urge on this Committee what is so very obvious—that unprotected motor-cyclists or ordinary cyclists when involved in accidents tend to receive fractures of the skull and head injuries generally much more easily than those of us who sit in cars. People in motor cars may be subject to cuts and scratches, but not so easily to fractures. I will leave this point, because I know that other hon. Members may care to take it up and urge upon the Government the desirability of forgoing the tax on crash helmets.
  I recognise that miners and quarrymen do not have to pay any tax for the protective helmets which they wear, for they are now free, but these are not the only type of headgear which workers wear. There are simple coverings such as the sou'wester for men who have to work in the open. That is a protective covering which is an absolute essential for them, and it falls, therefore, into the same class as any other type of head covering considered to be protective.
  I could say a word or two about the very special types of headgear, gear which covers the head and the neck and contains plus pressures of fresh air, for those working in poisonous atmospheres, but there are so few of them and so limited is their application that I can leave the matter, having mentioned it en passant.
  It is an anomalous situation that Purchase Tax is involved if the employee purchases for herself headgear to ensure that her hair does not get caught in moving machinery, which may cause scalping. That is a very serious matter when a woman is working among moving machinery. I have seen a number of such cases, and they are not pleasant. Such injuries can be avoided in three ways. One is to make certain about the fencing of the machine so that an accident
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  is impossible, but sometimes that cannot be absolutely guaranteed. The second is to make certain that the hair is worn in such a way or covered by an article of clothing so that it cannot come into contact with machinery so easily. The third method is the education of the worker. Here is the anomaly. If after being scalped the woman requires a wig, no Purchase Tax has to be paid. If in order to prevent such an injury occurring she buys a simple and cheap head covering, that is subject to Purchase Tax. I offer that as an example of a rather foolish anomaly.
  None of us can believe that any of these articles are luxuries. They are essential necessities. It is true that extra cost may be a disincentive to renewal. I have seen many cases of electroplating disease which were caused not by not wearing gloves but by the use of gloves which were faulty. If I am to believe the evidence given to me by the workers whom I was examining, they had asked for replacements but replacements were not available, or they had been told to carry on because it was all right to do so. Every hon. Member here knows it is true that when one is working with a corrosive a faulty glove is worse than no glove at all, for if there be cracks in the rubber material corrosive gets in but cannot get out. Consequently, there is less protection than none if faulty gloves are used. I am compelled to believe that it is possible—I must not put it higher than that—that extra cost is a disincentive to renewal on the part of the employer, and if that be the case we ought to realise that we are not performing a service to our workers, to the community as a whole or to industry generally by loading tax upon these essential matters.
  In an ever more complex world where modern techniques and science bring about a multiplicity of processes, not all of which we understand fully in the first place, nor know how to control when they are first presented to us, it is desirable that the greatest care should always be taken to protect the human material. I know, for example, that a number of people died of cadmium poisoning before the disease was scheduled; I am sure that if we had known years ago what we know today some lives would have been saved. In

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  making this type of plea for a reduction of Purchase Tax on protective clothing—
  Sir Ian Fraser: Before the hon. Gentleman finishes, would he not include the bowler hat which is worn by the builder's foreman—and also, for that matter, by the ex-officer who gets the sack; it protects him against the coldness and difficulties of civil life?
  Dr. Stross: That was an interesting interjection which I think I should not answer. I am normally of a most equable temperament, but I have been rather disgusted to hear it. We are discussing a serious subject. We are not discussing the bowler hat of the Guardsman, nor the bowler hat of the foreman builder. We are discussing what happens to more than 20 million men and women who work in industry. We are trying sincerely and honestly to make a plea, without having to use our imagination very strongly, that excessive cost of the material used to protect them may not be a good thing. I do not think I pitched my plea very high. Consequently, I was astonished at the interjection. I sincerely hope that the Government Front Bench will not face the problem in the way the interjector did.
  5.15 p.m.
  Mr. Gerald Nabarro: I hope that if any further relief of Purchase Tax is given next year the first priority will be given to the entire removal from the Purchase Tax schedules of industrial protective clothing. I do not propose to dilate upon this subject, but I claim, with due modesty, to have a great deal more experience of industrial machine shops and workshops than the majority of hon. Members and I am keenly aware of the fact that promotion of the use of industrial protective equipment in every type of industry in this country where it is necessary, is an essential adjunct to the expansion of industrial production.
  I believe that this year the Chancellor has given the maximum relief in Purchase Tax that the Revenue will stand, and therefore, I could not support the Amendment in its present form. I content myself with saying to my right hon. Friend that next year, when undoubtedly
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  further Purchase Tax reliefs will become possible, I hope first priority may be given to the total removal of Purchase Tax from industrial protective clothing.
  But there is one essential feature of industrial and protective clothing to which I should like the Paymaster-General to apply himself this year. Several of my Parliamentary Questions on Purchase Tax matters before the Budget were devoted to the extraordinary position in regard to helmets, namely, that a miner's helmet or a quarryman's helmet was free of Purchase Tax but a fireman's helmet or a motor cyclist's helmet or "skid-lid" attracted Purchase Tax, then at the rate of 10 per cent. Since the Budget, the rate of Purchase Tax on the fireman's helmet and the motor cyclist's helmet has been reduced from 10 per cent. to 5 per cent. The Chancellor originally in his Budget proposals, in order to give uniformity and in an endeavour to relieve an anomaly, applied a 5 per cent. rate of Purchase Tax to the miner's or quarryman's helmet. As the result of pressures brought to bear on him from all parts of the House, the 5 per cent. rate of Purchase Tax on miners' and quarrymen's helmets was subsequently removed. So, today, we have the extraordinary anomaly remaining that a fireman's helmet bears Purchase Tax at 5 per cent. a motor cyclist's helmet or skid-lid bears Purchase Tax at 5 per cent., a miner's helmet bears no Purchase Tax and a quarryman's helmet bears no Purchase Tax.
  I believe that the Chancellor of the Exchequer might be persuaded in the later stages of the Bill, notably on Report, to put this matter into equity and good order. I suggest that the Revenue he would lose by removing altogether from Purchase Tax firemen's helmets and motor cyclists' helmets would be small. There is an adidtional point, particularly in connection with firemen's helmets. The Treasury has no figures available—I have asked for them—and none of the trade associations or local authorities has any figures available, but I believe it is the fact that 95 per cent. of all firemen's helmets provided in this country are paid for from public funds. The other 5 per cent. represent firemen's helmets which are bought by private industrial firms for their fire prevention units generally in large factory establishments.

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  Therefore, the Purchase Tax paid on 95 per cent. of these firemen's helmets represents a circular transaction of the kind which I described on an earlier Amendment in connection with Purchase Tax on drugs and medicines provided within the National Health Service. I urge my right hon. Friend, in his Budget proposals for next year, to remove Purchase Tax from all protective clothing for industry and, secondly, on Report stage of this Bill, to endeavour to take out of the industrial protective clothing Schedules generally, the four classes of helmets to which I have referred and put right the evident anomaly, by reducing to a nil rate the tax on firemen's helmets and motor cyclists' helmets or skid-lids.
  Mr. John Dugdale: My hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross) moved the Amendment in a reasonable and lucid manner and, indeed, in the knowledgeable manner which we expect of him. I want to refer to only one class of protective clothing, that for foundry workers, of whom there are many in my constituency.
  I have some figures, which admittedly are rather old and which show that in 1955, for example, 1,282 people were injured in foundries by molten metal or other hot or corrosive substances, while 718 had eye injuries of some form. It is not possible to prevent all those accidents, but something could be done towards their prevention.
  The Government have recognised in their regulations for dealing with foundries the importance of protective clothing. The Iron and Steel Foundries Regulations, 1953, state:
  "The occupier shall provide and maintain suitable protective equipment of the types and for the processes or works respectively hereinafter in this Regulation specified.…"
  In other words, it is stated that there should be definite forms of protective clothing provided for foundry workers. Why should that clothing be taxed? Why should employers or workers have to pay tax on the equipment which they are enjoined by the Government to have? That seems to be entirely wrong.
  Certain equipment is provided free by the employers, protective equipment such as goggles and masks. It is essential that such equipment should be provided in those foundries where there is not ade-
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  quate dust extracting equipment. In foundries where such equipment is installed, protective equipment may not be necessary, but hon. Members with experience of foundries know the appalling risks of dust pollution. I need not mention the appalling risk from pneumoconiosis alone. The figures for pneumoconiosis cases are still very serious in spite of all that has been done to reduce them—and much has been done. It is as well to do everything possible, even a small thing such as reducing Purchase Tax on safety equipment, to increase safety precautions.
  Another danger to which foundry workers are exposed and for which they need protective equipment is that of injury to foot, leg or hand from contact with molten metal. That is a very serious danger. The Government have seen fit to do something about the tax on boots, but what of the tax on asbestos leggings? I believe that that tax remains, and that, too, should be reduced.
  It is quite wrong that the Government should enjoin workers and employers to use protective equipment and themselves to realise the need and then to put any obstacle whatever in the way of the purchase of that equipment. I hope that the Amendment will result in the removal of at least one small obstacle.
  Mr. Tom Brown: I hope the Committee will deal with the Amendment with the seriousness it deserves. It has as its object the protection of the human body. I fully appreciate the doggedness of the hon. Member for Kidderminster (Mr. Nabarro), who has pursued the subject of Purchase Tax with great vigour during the last few months and has met with some success, but I cannot understand why he should now advocate that the Chancellor should wait twelve months before removing Purchase Tax from safety gear. This procrastination might lead to a very great loss of manpower and man-hours.
  Mr. Nabarro: Surely it is an exaggeration of the position to say, as the hon. Member is now saying, that the existence of Purchase Tax is a cause of industrial accidents. Is the hon. Member not aware that the great difficulty is to get people to wear the protective equipment provided for them in the factories where they

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  work? Purchase Tax does not prevent the provision of that equipment.
  Mr. Brown: I agree, but it is easier for the worker to purchase it if he does not have to pay tax on it. The easier it is made for workers to buy safety and protective clothing, the better it is for all concerned.
  When I last spoke in this Committee before the Recess I was somewhat severe upon the Chancellor—and he deserved it. He thought that I was describing him as a monster. Since then I have changed my mind. Speaking as an ex-miner, I want to say how very much miners appreciate his concession in withdrawing his proposal to impose Purchase Tax on safety helmets and safety boots. We are grateful to him for doing that. He was inundated with questions because of the dissatisfaction in the mining industry.
  My hon. Friend the Member for Stoke-on-Trent, Central (Dr. Stross), who has high medical qualifications, spoke from considerable experience, and I can speak about safety gear from great experience as a practical miner. For many years I was a workman's inspector under the regulations of 1911. My duty included visiting the scenes of accidents. I was amazed to find the number of injuries which could have been prevented if protective clothing and protective gear had been provided.
  5.30 p.m.
  From that day to this I have been interested in the safety of the industrial worker. Whatever political philosophy we may have as Members of this Committee, the one thing that stands out in our minds is the importance of the safety of the human body. It is impossible for us to measure the number of man-hours lost as a result of accidents. We can give statistics showing to what extent an accident has had certain effects, but we cannot give exact figures of the number of man-hours lost. We have it on record, however, in the Report of the Chief Inspector of Mines, that three, if not four, out of every five cases of non-fatal accidents could be avoided if protective clothing were provided.
  Again, I am inspired by the Report of the Chief Inspector of Factories for 1956. It would be as well if the Treasury Bench and the permanent officials of the
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  Treasury took the trouble to read the first paragraph of that Report before suggesting that the Chancellor should impose Purchase Tax upon Safety and Protective Clothing. It says:
  "Accident prevention is gaining momentum. Public opinion is playing a part, and industrial safety is now seen to be making an essential contribution towards preventing the deplorable waste of life, limb and working potential which occurs through accidents in all walks of life. As a result, more will now be expected of industrial accident prevention organisation. We must all—firms, groups, national level committees, trade unions, and most important, humble individuals—set our sights a good deal higher. Each will have to do more hard thinking and spend more time, and some will have to spend more money, if we are all to play our part according to the measure of our responsibilities."
  One organisation which the Chief Inspector left out—I do not say that he did so intentionally—is the Government. He should have said to the Government, "Protective gear for industrial workers should not carry Purchase Tax."
  My right hon. Friend the Member for West Bromwich (Mr. Dugdale) referred to the foundry industry. I have been thinking of the high accident rate in foundries; it comes next to mining in this respect. Happily, we have been bringing down the incidence of accidents in the mines, very largely because protective gear has been provided for the workers. At one time the accident rate was tremendous. Now, slowly but surely, by advocating and agitating for the use of protective clothing we have introduced it to the miner and the accident rate has been brought down.
  Let us for a moment look at the foundry industry. In the foundry industry in 1951 there were 11,055 nonfatal accidents and 22 fatal ones amongst the 145,000 workers employed in our 2,000 foundries. During the last few years the figures have been going down, although there was a slight increase last year. The concession which has been made to the mining fraternity as a result of our agitation, Questions on the Order Paper and a sane and sympathetic consideration being given to our plea, should be extended to cover all industrial workers. Why should we differentiate between the miner and the foundry worker? Why should a line of demarcation be drawn between classes of workers who are entitled to concessions which

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  will make their lives and bodies safer than at present?
  I do not intend to detain the Committee, but I want to give a few figures. I know that statistics are hard to swallow, but I have been making a very close examination of the effect of the application of safety gear in the mines and I want to show how much the industry has gained in man-hours through the introduction of safety helmets. In 1951 no less than 6,100 men received head injuries, but since the introduction of safety helmets the figure has fallen to 5,700—a reduction of 400. That may not appear to be very many, but there has been an improvement. In 1951 there were 47,400 injuries to the upper limbs and in 1955 there were only 44,500—a reduction of 2,900. The figures in respect of injuries to the lower limbs were 41,100 and 38,700, respectively—a reduction of 2,400. That indicates the importance of safety appliances and protective clothing.
  It is crazy that the Treasury should have become possessed with the idea of making it more difficult for the industrial worker to protect himself from accidents. That is what the Treasury is doing by imposing this tax. Why does it not consider the suggestion made by the Chief Inspector of Factories? Why do not the Treasury officials, as they sit in their offices meditating upon these things and saying to themselves, "We had better put a tax on this and on that, and on that", act honestly? If they desire to help the industrial worker generally they should see that he does not have to pay Purchase Tax upon any appliance or article which protects the human body from injury.
  I strongly support the Amendment. Although the debate has had its jocular note, I hope that serious consideration will be given to the matter and that the Chancellor will make a concession in respect of all workers who are compelled by the nature of their jobs to wear safety and protective clothing.
  Mr. John Eden: I wish to underline, if that should prove necessary, what was said by my hon. Friend the Member for Kidderminster (Mr. Nabarro). The point to which he drew attention is a basic one. Most of the articles of protective clothing which have been mentioned are those provided by particular industries for the individuals in their employment. The one which is
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  removed from that category is that particular helmet or, as my hon. Friend called it, "skid lid", which the individual buys for himself.
  If my right hon. Friend the Paymaster-General could see his way to do something in this respect on Report by putting this category of helmet alongside the other two categories which have been freed from Purchase Tax, he would perform a great service and take a great step at very small cost towards helping those who are trying to help themselves to keep safety on the roads.
  Mr. John Rankin: No doubt it will be noted that all hon. Members who have participated in the debate so far have supported the Amendment. The only difference is that two hon. Members on the Government benches want to wait until next year while we on this side feel that action should be taken now.
  I am particularly interested in the Amendment because the industries in my division are principally shipbuilding, engineering and dockwork. The men and women employed in them are subjected to many dangers which might be avoided by adequate protection. At any moment a worker in a shipyard may get an angle iron falling upon his head. I think we all agree that we cannot wait for a year before doing something for them by way of protection. It should have been done long ago. At the moment, many of my constituents are subject to injury. I am therefore asking that the helmet, which is essential in the shipyards, should be free of tax. The same arguments apply to engineering. There are many hazards in that industry.
  I must go into a little more detail about the position of dockyard workers. Theirs is a peculiar case which the union has been fighting for a great many years without much success. Those who are employed in docks are liable to dermatitis, a disease of which there are two forms, one of which is scheduled and the other which is not. There is no difference between them, in the sense that they are equally incapacitating and troublesome and may lay a worker off for many weeks. Dockers who handle cereals, oils, grains or chemicals are liable to contract the dermatitis which is scheduled and, therefore, are to some extent protected. When

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  a dockworker handles beef, paint or timber he may contract the dermatitis which is not scheduled, and therefore he is not protected by insurance.
  5.45 p.m.
  Here is an injustice. If the worker has to provide himself with protective gloves, boots and so on, it is wrong that those articles should be taxed. The dockworker may have to handle butter, cheese, fruits and foodstuffs; also perishable cargoes which have gone foul or those which are salvaged. When he is doing these different jobs he wears the same clothes instead of special types, whether he is handling clean cargoes or foul cargoes.
  Special garments should be issued when unloading bad cargoes as a matter of public hygiene. I understand that the union has asked for this provision but without any success. All we are doing tonight is to ask the Chancellor of the Exchequer not to tax the type of clothing which dockers and other workers in my division must buy at their own expense. Surely that is not an excessive demand to make upon the public Exchequer in a matter which concerns public health.
  In addition to the dockers, there are the scalers and trimmers. They work largely over long weekends and are engaged in operations which are very sore on their clothes as well as being very dirty. The attend to bilges, boilers, tubes and oil tanks in the vessels. They require protective clothing like the docker. Because of the lack of such clothing in Glasgow Docks, on the average throughout the year 250 men are laid off out of a labour force of 2,800 through diseases acquired in handling the cargoes I have enumerated. That is a very high casualty rate indeed.
  As my hon. Friend the Member for Ince (Mr. T. Brown) said, there is the question of the protection of the worker. But there is also the efficient use of the labour force. If protective clothing of all forms were provided it would meet those two demands. People have said to me that today the workman, particularly in the docks, is getting wages sufficiently high to enable him to provide these things which are essential for the prosecution of his job out of his wages. I think that is completely wrong. One could ridicule it out of court, but I am sure the right hon.
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  Gentleman when he replies will not put any stress on an argument of that nature. It is a public duty to provide this clothing because public health is involved.
  Whilst I agree that in this debate we cannot put forward a claim for a special allowance to the workmen because of these industrial hazards, we can at least ask the Government to consider the advisability of relieving them of the payment of tax when they buy protective clothing which is necessary for personal safety and for the efficient carrying out of the job. That is not a great deal to expect. I hope that when the right hon. Gentleman replies he will agree with both sides of the Committee, but will accept our view that he should give the relief, now in this Finance Bill.
  Mr. Moyle: I wish to make one or two observations in support of the general contention on this Amendment which has come from both sides of the Committee, including the hon. Member for Kidderminster (Mr. Nabarro). I am grateful to the Chancellor for having got rid of the tax on safety boots for miners, quarrymen, moulders and foundry workers, but I find it difficult in equity and logic to understand why he should stop there.
  For the purposes of the argument for this relief from tax, I do not think one need worry unduly as to whether the employer or the workman pays it. I think it very wrong to assume in the case of the foundry worker that the employer provides the protective clothing. I wish that were true. When a factory inspector decides that certain protection is necessary, whether it is headgear, footwear, gloves or garments generally, it should be made an oncost on the product and not an impost on the wage packet. That is a generally accepted principle which, I think, the Committee would accept without reservation. I do not think it enters into this argument. The principle is whether it is reasonable, having regard to the desire to promote every kind of safety measure, that we should impose a tax on those who seek to give effect to such measures. Any reasonable Government would make it almost a condition that protective clothing should be exempt from any taxation, provided, of course, the inspector officially declared that such protection was essential.

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  At this time of the year, from the end of March until later in the summer, gangs of men are employed in tar spraying on the roads. This aspect of their work is scheduled because of the liability of such workers to what is commonly known as "tar cancer." Safety boots are essential and they wear protective clothing and goggles. Protective clothing for those engaged on tarmac spraying is usually provided by the local authority. The clothing is essential and should be exempt from taxation. I agree with the urgent appeal made by the hon. Member for Bournemouth, West (Mr. J. Eden) for the provision of crash helmets tax free. It seems absurd to impose a tax on such essential means to safety. I hope the Chancellor will look again at the concession he has made and see if he can extend it to other types of protective clothing.
  Mrs. White: This subject is of extreme interest to all of us who have had any experience of industry. My experience of industry is not extensive, but during the war I was in the Ministry of Labour and it was part of my duties to go with factory inspectors to many factories in South Wales which were engaged on war production. Although I was not inspecting from the social angle, I learned a great deal about the matter by accompanying the factory inspectors.
  One of the difficulties mentioned by the hon. Member for Kidderminster (Mr. Nabarro) is that it is not always easy to persuade the employer, and sometimes the workman, to adopt the kind of protective clothing which would be for his benefit. Therefore, anything we can do to persuade employers and workers to use protective clothing should be encouraged. For the worker it is not only a matter of price, but also partly a question of design. The clothing as far as possible has to be comfortable and attractive. A great deal has been done in recent years to improve the design of industrial clothing and to make it more attractive.
  I suggest to the Chancellor, who is now sitting on the Treasury Bench, that this is a tremendous opportunity, at relatively little cost, to make a great industrial gesture. Far from making a sad blunder of first suggesting that the tax should be imposed on a group of protective garments hitherto exempt, he should have
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  used his imagination and realised that this was a chance of a lifetime for him. He could have made a handsome gesture towards industry by saying, "I am the Chancellor who cares about industrial safety. I will exempt not merely what was formerly exempt—protective boots and helmets used by miners, quarrymen or moulders—but also the protective clothing of all industrial workers in all processes where it is required. They will be able to obtain it without paying tax." He could have extended the exemption to motor cyclists, who are often young and sometimes rash, and to others who are peculiarly susceptible to road accidents. He could have gained enormously in prestige and popularity; and I do not believe that he is entirely indifferent to such considerations.
  6.0 p.m.
  The right hon. Gentleman could have done this, I am sure, at relatively little cost. He might even have had a net financial gain, because if we look at the cost to the community of the accidents which occur and put that on one side of the balance sheet, and if we put the Purchase Tax on protective clothing, such as it is, on the other side of the balance sheet, I am certain, although I have no figures to prove it, that the cost of treating the accidents, together with the loss of production through the absence of the workers from their jobs, will outbalance anything which may be collected in Purchase Tax on articles of protective clothing.
  I understand that in the various groups of industry about 720,000 workers each year receive injuries which bring them to the notice of the Ministry of Pensions and National Insurance. Unfortunately, there are more than 2,000 fatal accidents. There are 720,000 other accidents, and by far the largest number occur in mining and quarrying, although we are happy to know that under the vigorous policy pursued by the National Coal Board the incidence of accidents in coal mining is diminishing. Nevertheless, in spite of the Board's great efforts, there are still about 250,000 accidents a year in mining and quarrying. That is the largest group of accidents.
  There are other large groups of industries in which there are many accidents. For example, in the engineering and shipbuilding industries there are

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  more than 50,000 industrial accidents a year. In building and contracting there are 56,000 accidents a year which involve some insurance payment. In the distributive trades, which one might not have considered as perhaps being amongst the most prone to accidents, there are more than 33,000 industrial accidents of this type. When one thinks about it one realises that this is natural, because in those trades the workers handle heavy cases and packages and there is apt to be a high incidence of fractures.
  In many of these occupations these accidents, which cost so much to the community and the individual, could be avoided if the workers were supplied with adequate protecting clothing. I have no doubt that many hon. Members read the letter in The Times, which appeared when the controversy on miners' helmets was at its height, written by Mr. Denton, who is himself probably a manufacturer of protective footwear. He wrote from a Northamptonshire address, and he pointed out that there are many industries other than mining which are prone to foot accidents and in which protection can be secured not necessarily by wearing boots, which are the only footwear covered under the present arrangements, but by wearing properly constructed shoes.
  I think I am right in saying that fracture of the great toe is the accident which causes much more absence from work than any other single type of accident in this country, and in the processes where this is likely to occur, if one sees that the worker equips himself with properly constructed shoes, or provides them for him, a large majority of these accidents can be avoided and a great deal of loss of time can be saved.
  I have here, for example, a quotation from the April number of Man and Metal, which is the magazine circulated to the steel workers. It contains a reference to an experience in Sheffield and it states that great efforts are now being made to persuade steel workers to use protective footwear. A case is mentioned in which a steel casting weighing 76 lbs. fell on the foot of a workman recently. The workman was wearing safety boots and he escaped injury. Although the toe-cap crumbled under the
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  weight, he was able to remove the boot without difficulty.
  One can multiply such examples endlessly. In these works to which reference is made, the employees were expected to buy their own footwear; the firm made arrangements to collect payments from them but the men themselves had to pay. The hon. Member for Kidderminster was, therefore, wrong when he suggested that the employer always supplied this footwear. There are many cases in which the man or woman has to buy the protective clothing.
  This is a matter which the Committee ought to consider with good sense and imagination. I grant that there are some difficulties of definition and that there are some articles about which it is not easy to say categorically that they will be used only for industrial protection, because they might conceivably be used in ordinary day-to-day work. Nevertheless, there is a wide range of articles for which there could be no possible use other than industrial protection or protection on the roads.
  Why has it been considered necessary to persist with this very narrow restriction? If one looks at Group 2 and the definition which is now employed in deciding which articles of industrial footwear are exempt, one finds that exemption is given to footwear which complies with British Standards Institution Specification 1870, sections 1 and 3. Footwear which is in conformity with section 2 of that definition is not exempt. I believe that one of the difficulties is that one is boots and the other is shoes, but the distinction is illogical if the shoe does its job adequately.
  I contend that there are many articles, even if we started only with helmets, boots and shoes, which could be covered at once without any trouble of definition, leaving, if necessary, some of the other articles, if there is no B.S.I. definition which would apply to them and if it might be difficult to obtain such a definition between now and Report. If we confined it only to those articles for which adequate standards are available, and which could easily be defined, we could still take a great step forward.
  Perhaps I might remind the Chancellor that the present policies of Her Majesty's Administration are such that in many

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  heavy industries there is, if not redundancy, at any rate much less overtime being worked than previously and, therefore, less to spare for extras. The task of the safety officer is thus made more difficult in trying to persuade workers to buy this protective clothing. Surely this is a suitable time to make a gesture that would really help forward safety in industry.
  I repeat, the cost to the community of dealing with these injured workmen and workwomen is so fantastically high that the Chancellor, looking at what goes out of his pocket in other directions, should regard this as a good investment. It is suggested that the average cost of a foot injury might be £30. As there are about 50,000 of these foot injuries annually it means that £1½ million is spent on the treatment of injuries that might, in many cases, be prevented if we were able to persuade more people to wear protctive footwear.
  I believe that our case has been amply made out. I am sorry that the Chancellor did not himself realise that this was an opportunity that he should have grasped, but he still has a chance to repair the omission. By the suggestions contained in these Amendments we are giving him a chance to make a gesture to the industrial workers of the country which I hope he will take.
  The Paymaster-General (Mr. Reginald Maudling): This is a very important subject, and we have had some interesting and very well-informed speeches from both sides of the Committee. We have had the expert medical point of view of the hon. Member for Stoke-on-Trent. Central (Dr. Stross), and we have had the views of other hon. Members who have industrial knowledge and experience.
  I would not in any way disagree with anything that has been said about the great importance of preventing industrial injury and of mitigating the suffering caused by accidents if they occur. I think that the hon. Member for Stoke-on-Trent, Central was right in saying that we should fence the machinery rather than the worker, but it is equally true that we must do all we can to encourage people to protect themselves against the possible hazards of their occupations.
  I think, however, that in making their case for abolishing Purchase Tax in this way, hon. Members opposite have left
  266
  a little gap in their arguments. We must not exaggerate what Purchase Tax means in this case. At present, it is 5 per cent. on the wholesale value. That is, roughly, 8d. in the £ on the articles concerned, and I do not think that, for practical purposes, 8d. in the £ should be a serious disincentive to the purchase of these protective articles either by the employer or the employee.
  The hon. Member for Ince (Mr. T. Brown) quoted some figures of the numbers of accidents in which injury had been caused because of the absence of protective clothing, but the point is: in how many cases was the absence of the protective clothing due to the existence of the Purchase Tax? I do not really believe that there are any cases at all—
  Mr. Rankin: While the Purchase Tax is 5 per cent. on headgear and boots, is it not 50 per cent. on clothing?
  Mr. Maudling: No. Clothing, and so on, is subject to tax at 5 per cent., and the tax on headgear, of course, comes down from 10 per cent. to 5 per cent. under this Bill. The tax is only about 8d. in the £, which is not really a very large matter.
  There is also the point made by my hon. Friend the Member for Kidderminster (Mr. Nabarro) that in a number of industries the protective clothing is provided by the employer and, indeed, in many cases, there is a statutory duty to provide it—
  Dr. Stross: Can the right hon. Gentleman say whether the cost of administration in this particular field may not also be as much as 8d. in the £? If that is the cost, should not the tax be withdrawn on that account?
  Mr. Maudling: My point is that the price of the article in the shop is affected only by about 8d. in the £. For instance, a garment which, free of tax, would cost £1, would cost £1 0s. 8d. with tax. That is not a very great disincentive.
  The main point is not the money involved but, as the hon. Lady the Member for Flint, East (Mrs. White) has recognised, and as successive Governments have recognised, the difficulty of definition. However, before coming to that, perhaps I may be allowed to suggest that it is unwise for us to exaggerate the effect of Purchase Tax in these matters, because

  267
  it should not be used as an excuse, either by employers or workpeople, for failing to get or provide protective clothing when that is desirable. That is not an adequate excuse for anyone, but, when we exaggerate it, it may be used for that purpose.
  The real difficulty here is one of definition. How can we, for the purposes of law, quite clearly define what is protective clothing and therefore free of tax, and what is not protective clothing, and therefore liable to tax? In these matters we must have a clear definition, so that traders may know just what to do, and know whether or not the tax is properly leviable.
  6.15 p.m.
  We can define the article only by its nature, and not by its purpose. That is one rule of Purchase Tax that has always been observed, and it is one from which we cannot depart, because a shopkeeper selling the article does not know what the purchaser intends to do with it. The question of miners' boots, incidentally, brings me to the point raised by the hon. Lady: that although the exemption is for miners' boots in fact, for administrative purposes, we have to define the type of boot in terms of the British Standard to which she referred. The result of this is that the same kind of boot may be bought by other people for other purposes, although I imagine that they are not much bought except for use in mines or for similar purposes. As I say, we have to define the article by its nature and not by its use.
  The second principle in Purchase Tax matters is that one must always seek to see that similar treatment is applied to similar articles—
  Mrs. White: While the right hon. Gentleman is dealing with that, can he explain how there is any differentiation between the kind of protective helmet of moulded bakelite, or similar moulded plastic, specially fitted internally to absorb shocks, which are exempt for miners, though the exemption cannot, apparently, be applied to crash helmets?
  Mr. Maudling: I shall come to crash helmets later. However, I think that the hon. Lady will agree that definition must be by means of the nature of the article and not the purpose for which it is used.
  As I was saying, the second principle is to try to treat similar articles on a
  268
  similar basis, and if we are to exempt some protective or safety devices we must accept the principle of exempting them all. It is when one tries to define them that the real difficulty arises, and I think that the speech of the hon. Member for Stoke-on-Trent, Central, really brings out the difficulty we have here.
  The hon. Gentleman referred to the multiplicity of garments that are of the nature of protective clothing. Rubber boots are an example. All rubber boots would have to be free of Purchase Tax. He referred to sou'-westers—all sou'-westers would have to be free of Purchase Tax. And if that applies to sou'-westers to keep one's head dry, it must apply to mackintoshes to keep one's body dry, so all mackintoshes would have to be free of Purchase Tax. That, too, applies to rubber aprons and rubber gloves.
  The difficulty is to find a definition, and no Government has yet found one. Not even my right hon. Friend, with his ingenuity, has yet found a definition of protective clothing that meets the point but does not open the gates to an immense range of clothing—
  Mr. Dugdale: Protective asbestos coats cannot be used for anything except protection. They cannot be used for walking in the rain.
  Mr. Maudling: One has to try to treat things of a similar nature on a similar basis. If one tries to exempt part and not all of the range of protective clothing one gets into tremendous difficulties.
  Another example given was head scarves, used to prevent hair from being caught in machinery. It is very difficult to define when a head scarf is to be used for that purpose and when it is to be used, for example, for a sporting event. The difficulty that has always been found by succeeding Governments—and I think that it is a difficulty that cannot be resolved—is to find a definition of protection clothing in this way. It really is quite impossible.
  Helmets are rather a special case. It is true that there is already a special case in miners' helmets, but they are by no means the only form of protective headgear. My hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) mentioned the bowler hat. It

  269
  is perfectly true, so far as I know from a friend of mine in a dockyard, that it has been the custom of dockyard managers to wear bowler hats to protect them from things dropping accidentally on their heads as they pass by. I think also that headgear worn by paid servants of a hunt is something that they wear to protect themselves in the course of activities for which they are paid. I have given these examples and I agree that they are of a small kind, but I think that they illustrate the principle that when one starts saying that a thing is protective, where does one finally stop?
  There have been strong arguments from both sides of the Committee on the question of the crash helmet. I feel that the crash helmet is of rather a special character and rather different from overalls, gloves, gauntlets, boots and headscarves, about which we have been hearing. But once one says that one thing is of a special character one gets an immense number of other things brought up as being of a special character, so, again, where does one finish up?
  I should like to take the opportunity, between now and the Report stage to discuss the question of crash helmets with my right hon. Friend the Chancellor of the Exchequer. He has told me that he will be glad to think about it, and I shall be glad to put to him the arguments advanced on this particular matter from both sides of the Committee today. It is a matter of considerable importance.
  So far as the generality of the Amendment is concerned—
  Mr. Nabarro: Before my right hon. Friend leaves the question of helmets, will he recall that I put to him the consideration that there are four categories of helmets? He has mentioned only the motor-cyclist's helmet. He has scrupulously avoided reference to the fireman's helmet. I made the point that 95 per cent. of all firemen's helmets are paid for out of public funds anyway, so it seems rather silly to levy Purchase Tax on them. The four categories of helmets which I mentioned were: miners', quarrymen's, firemen's and motor-cyclists' helmets, or "skid lids", all of which we want to be free from Purchase Tax.
  Mr. Maudling: I do not think that my hon. Friend need be in any danger of thinking that I shall forget the arguments which he has made so very often in my hearing on that point. I assure him that they will not be forgotten. I will discuss with my right hon. Friend the question of helmets.
  Dr. Stross: We have heard, and we are very grateful for the fact, that the right hon. Gentleman and his right hon. Friend the Chancellor of the Exchequer will consider one aspect of this, namely, crash helmets. Would he give consideration to another point as well? That is the type of heavy rubber gloves used in the plating industry, which come up to the elbow and which can be used only in industries of that type, or perhaps by doctors in carrying out post-mortems, and cannot fall into the category of housewives' gloves.
  Mr. Maudling: That is just the danger of considering one article. One gets pressed far beyond the point where one must stop. The only thing that I can undertake to discuss with my right hon. Friend is the question of helmets. That brings me back to the general question of definition and, for reasons which this and preceding Governments have regarded as conclusive, I must ask the Committee to reject the Amendment.
  Mrs. White: Can the right hon. Gentleman extend his promised consideration not only to the four categories of helmet, but also to all boots and shoes covered by the British Standards Institution's Specification 1870?
  Mr. Maudling: We have been looking into the question of shoes. The trouble is that the protective shoe is nearly indistinguishable from the ordinary shoe and can be worn as an ordinary shoe. Clearly, a protective boot would not be worn for all purposes. That is the reason for the clear distinction made between boots and shoes. We have already considered it and we feel that we cannot do it.
  Question put, That those words be there inserted:—
  The Committee divided: Ayes 207, Noes 245.

  Division No. 146.]

  AYES

  [6.25 p.m.

  Ainsley, J. W.

  Hayman, F. H.

  Palmer, A. M. F.

  Allaun, Frank (Salford, E.)

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

  Pannell, Charles (Leeds, W.)

  Allen, Arthur (Bosworth)

  Herbison, Miss M.

  Parker, J.

  Allen, Scholefield (Crewe)

  Hobson, C. R. (Keighley)

  Parkin, B. T.

  Awbery, S. S.

  Holman, P.

  Paton, John

  Bacon, Miss Alice

  Holmes, Horace

  Pearson, A.

  Balfour, A.

  Houghton, Douglas

  Peart, T. F.

  Bellenger, Rt. Hon. F. J.

  Howell, Charles (Perry Barr)

  Pentland, N.

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

  Hoy, J. H.

  Plummer, Sir Leslie

  Benson, Sir George

  Hubbard, T. E.

  Popplewell, E.

  Beswick, Frank

  Hughes, Emrys (S. Ayrshire)

  Prentice, R. E.

  Blackburn, F.

  Hughes, Hector (Aberdeen, N.)

  Price, J. T. (Westhoughton)

  Blenkinsop, A.

  Hunter, A. E.

  Probert, A. R.

  Blyton, W. R.

  Hynd, H. (Accrington)

  Proctor, W. T.

  Boardman, H.

  Hynd, J. B. (Attercliffe)

  Pursey, Cmdr. H.

  Bonham Carter, Mark

  Irvine, A. J. (Edge Hill)

  Randall, H. E.

  Bottomley, Rt. Hon. A. G.

  Irving, Sydney (Dartford)

  Rankin, John

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

  Isaacs, Rt. Hon. G. A.

  Redhead, E. C.

  Bowen, E R. (Cardigan)

  Janner, B.

  Reeves, J.

  Bowles, F. G.

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

  Reid, William

  Braddock, Mrs. Elizabeth

  Jenkins, Roy (Stechford)

  Roberts, Rt. Hon. A.

  Brockway, A. F.

  Johnson, James (Rugby)

  Roberts, Goronwy (Caernarvon)

  Broughton, Dr. A. D. D.

  Johnston, Douglas (Paisley)

  Robinson, Kenneth (St. Pancras, N.)

  Brown, Thomas (Ince)

  Jones, David (The Hartlepools)

  Rogers, George (Kensington, N.)

  Burke, W. A.

  Jones, Jack (Rotherham)

  Ross, William

  Burton, Miss F. E.

  Jones, J. Idwal (Wrexham)

  Royle, C.

  Butler, Herbert (Hackney, C.)

  Jones, T. W. (Merioneth)

  Shinwell, Rt. Hon. E

  Carmichael, J.

  Kenyon, C.

  Silverman, Julius (Aston)

  Castle, Mrs. B. A.

  Key, Rt. Hon. C. W.

  Silverman, Sydney (Nelson)

  Champion, A. J.

  King, Dr H. M.

  Simmons, C. J. (Brierley Hill)

  Clunie, J.

  Lawson, G. M.

  Skeffington, A. M.

  Coldrick, W.

  Lee, Frederick (Newton)

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

  Collins, V. J. (Shoreditch & Finsbury)

  Lee, Miss Jennie (Cannock)

  Slater, J. (Sedgefield)

  Corbet, Mrs. Freda

  Lever, Leslie (Ardwick)

  Smith, Ellis (Stoke, S.)

  Cove, W. G.

  Lewis, Arthur

  Sorensen, R. W.

  Craddock, George (Bradford, S.)

  Lindgren, G. S.

  Soskice, Rt. Hon. Sir Frank

  Cullen, Mrs. A.

  Lipton, Marcus

  Sparks, J. A.

  Dalton, Rt. Hon. H.

  Logan, D. G.

  Stewart, Michael (Fulham)

  Darling, George (Hillsborough)

  Mabon, Dr. J. Dickson

  Stones, W. (Consett)

  Davies, Stephen (Merthyr)

  McAlister, Mrs. Mary

  Strachey, Rt. Hon. J.

  de Freitas, Geoffrey

  McCann, J.

  Delargy, H. J.

  MacColl, J. E.

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

  Diamond, John

  McGhee, H. G.

  Summerskill, Rt. Hon. E.

  Dodds, N. N.

  McGovern, J.

  Sylvester, G. O.

  Donnelly, D. L.

  McInnes, J.

  Taylor, Bernard (Mansfield)

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

  McLeavy, Frank

  Taylor, John (West Lothian)

  Ede, Rt. Hon. J. C.

  MacMillan, M. K. (Western Isles)

  Thomas, Iorwerth (Rhondda, W.)

  Edwards, Rt. Hon. Ness (Caerphilly)

  Mahon, Simon

  Thomson, George (Dundee, E.)

  Edwards, W. J. (Stepney)

  Mallalieu, E. L. (Brigg)

  Thornton, E.

  Evans, Albert (Islington, S. W.)

  Marquand, Rt. Hon. H. A.

  Tomney, F.

  Fernyhough, E.

  Mason, Roy

  Ungoed-Thomas, Sir Lynn

  Finch, H. J.

  Mellish, R. J.

  Wade, D. W.

  Fletcher, Eric

  Messer, Sir F.

  Warbey, W. N.

  Foot, D. M.

  Mitchison, G. R.

  Watkins, T. E.

  Forman, J. C.

  Monslow, W.

  Weitzman, D.

  George, Lady Megan Lloyd (Car'then)

  Moody, A. S.

  Wells, Percy (Faversham)

  Gibson, C. W.

  Morris, Percy (Swansea, W.)

  Wheeldon, W. E.

  Gordon Walker, Rt. Hon. P. C.

  Morrison, Rt. Hn. Herbert (Lewism, S.)

  White, Mrs. Eirene (E. Flint)

  Greenwood, Anthony

  Mort, D. L.

  Wilkins, W. A.

  Grenfell, Rt. Hon. D. R.

  Moss, R.

  Willey, Frederick

  Grey, C. F.

  Moyle, A.

  Williams, David (Neath)

  Griffiths, David (Rother Valley)

  Mulley, F. W.

  Williams, Rev. Llywelyn (Ab'tillery)

  Griffiths, Rt. Hon. James (Llanelly)

  Neal, Harold (Bolsover)

  Willis, Eustace (Edinburgh, E.)

  Grimond, J.

  Noel-Baker, Francis (Swindon)

  Wilson, Rt. Hon. Harold (Huyton)

  Hale, Leslie

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

  Winterbottom, Richard

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Oliver, G. H.

  Woof, R. E.

  Hamilton, W. W.

  Orem, A. E.

  Yates, V. (Ladywood)

  Hannan, W.

  Oswald, T.

  Zilliacus, K.

  Harrison, J. (Nottingham, N.)

  Owen, W. J.

  Hastings, S.

  Paget, R. T.

  TELLERS FOR THE AYES:

  Mr. Short and Mr. Deer.

  NOES

  Agnew, Sir Peter

  Baldock, Lt.-Cmdr. J. M.

  Bennett, F. M. (Torquay)

  Aitken, W. T.

  Baldwin, A. E.

  Bennett, Dr. Reginald

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

  Barber, Anthony

  Biggs-Davison, J. A.

  Amory, Rt. Hn. Heathcoat (Tiverton)

  Barlow, Sir John

  Birch, Rt. Hon. Nigel

  Arbuthnot, John

  Barter, John

  Bishop, F. P.

  Armstrong, C. W.

  Beamish, Col. Tufton

  Black, C. W.

  Ashton, H.

  Bell, Philip (Bolton, E.)

  Body, R. F.

  Atkins, H. E.

  Bell, Ronald (Bucks, S.)

  Boothby, Sir Robert

  272

  273

  Bossom, Sir Alfred

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

  Neave, Airey

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

  Henderson, John (Cathcart)

  Nicholls, Harmer

  Boyle, Sir Edward

  Henderson-Stewart, Sir James

  Nicholson, Sir Godfrey (Farnham)

  Brain, B. R.

  Hesketh, R. F.

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

  Braithwaite, Sir Albert (Harrow, W.)

  Hill, Rt. Hon. Charles (Luton)

  Noble, Cmdr. Rt. Hon. Allan

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

  Hill, Mrs. E. (Wythenshawe)

  Oakshott, H. D.

  Bryan, P.

  Hinohingbrooke, Viscount

  Orr, Capt. L. P. S.

  Bullus, Wing Commander E. E.

  Hirst, Geoffrey

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

  Burden, F. F. A.

  Holland-Martin, C. J.

  Osborne, C.

  Butcher, Sir Herbert

  Hope, Lord John

  Page, R. G.

  Campbell, Sir David

  Hornby, R. P.

  Pannell, N. A. (Kirkdale)

  Carr, Robert

  Horobin, Sir Ian

  Partridge, E.

  Cary, Sir Robert

  Horsbrugh, Rt. Hon. Dame Florence

  Peel, W. J.

  Chichester-Clark, R.

  Howard, Gerald (Cambridgeshire)

  Pickthorn, K. W. M.

  Cole, Norman

  Howard, John (Test)

  Pilkington, Capt. R. A.

  Conant, Maj. Sir Roger

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

  Pitman, I. J.

  Cooke, Robert

  Hughes-Young, M. H. C.

  Pitt, Miss E. M.

  Cooper, A. E.

  Hurd, A. R.

  Price, David (Eastleigh)

  Cooper-Key, E. M.

  Hutchison, Michael Clark (E'b'gh, S.)

  Price, Henry (Lewisham, W.)

  Cordeaux, Lt.-Col. J. K

  Hyde, Montgomery

  Prior-Palmer, Brig. O. L.

  Corfield, Capt, F. V.

  Hylton-Foster, Rt. Hon. Sir Harry

  Profumo, J. D.

  Craddock, Beresford (Spelthorne)

  Iremonger, T. L.

  Ramsden, J. E.

  Crosthwaite-Eyre, Col. O. E.

  Irvine, Bryant Godman (Rye)

  Redmayne, M.

  Crowder, Sir John (Finchley)

  Jenkins, Robert (Dulwich)

  Remnant, Hon. P.

  Crowder, Petre (Ruislip—Northwood)

  Jennings, J. C. (Burton)

  Renton, D. L. M.

  Cunningham, Knox

  Jennings, Sir Roland (Hallam)

  Roberts, Sir Peter (Heeley)

  Currie, G. B. H.

  Johnson, Dr. Donald (Carlisle)

  Robertson, Sir David

  Dance, J. C. C.

  Johnson, Eric (Blackley)

  Robinson, Sir Roland (Blackpool, S.)

  Davidson, Viscountess

  Joynson-Hicks, Hon. Sir Lancelot

  Rodgers, John (Sevenoaks)

  D'Avigdor-Goldsmid, Sir Henry

  Keegan, D.

  Roper, Sir Harold

  Deedes, W. F.

  Kerby, Capt. H. B.

  Russell, R. S.

  Digby, Simon Wingfield

  Kerr, Sir Hamilton

  Sharples, R. C.

  Dodds-Parker, A. D.

  Kershaw, J. A.

  Shepherd, William

  Donaldson, Cmdr. C. E. McA.

  Lambton, Viscount

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

  Doughty, C. J. A.

  Langford-Holt, J. A.

  Smithers, Peter (Winchester)

  du Cann, E. D. L.

  Leather, E. H. C.

  Smyth, Brig. Sir John (Norwood)

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

  Leavey, J. A.

  Duncan, Sir James

  Leburn, W. G.

  Speir, R. M.

  Eden, J. B. (Bournemouth, West)

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

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

  Elliott, R. W. (Ne'castle upon Tyne, N.)

  Lindsay, Hon. James (Devon, N.)

  Stevens, Geoffrey

  Emmet, Hon. Mrs. Evelyn

  Linstead, Sir H. N.

  Steward, Harold (Stockport, S.)

  Errington, Sir Eric

  Llewellyn, D. T.

  Storey, S.

  Farey-Jones, F. W.

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

  Stuart, Rt. Hon. James (Moray)

  Fell, A.

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Studholme, Sir Henry

  Finlay, Graeme

  Low, Rt. Hon. Sir Toby

  Summers, Sir Spencer

  Fisher, Nigel

  Lucas, Sir Jocelyn (Portsmouth, S.)

  Taylor, Sir Charles (Eastbourne)

  Fletcher-Cooke, C.

  Lucas, P. B. (Brentford & Chiswick)

  Teeling, W.

  Foster, John

  Lucas-Tooth, Sir Hugh

  Temple, John M.

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  McAdden, S. J.

  Thomas, Leslie (Canterbury)

  Freeth, Denzil

  Macdonald, Sir Peter

  Thomas, P. J. M. (Conway)

  Gammans, Lady

  Macheson, Brig. Sir Harry

  Thompson, Kenneth (Walton)

  Garner-Evans, E. H.

  McKibbin, Alan

  Thompson, R. (Croydon, S.)

  George, J. C. (Pollok)

  Mackie, J. H. (Galloway)

  Thorneycroft, Rt. Hon. P.

  Gibson-Watt, D.

  McLaughlin, Mrs. P.

  Thornton-Kemsley, Sir Colin

  Glover, D.

  Maclay, Rt. Hon. John

  Tilney, John (Wavertree)

  Godber, J. B.

  McLean, Neil (Inverness)

  Turton, Rt. Hon. R. H.

  Goodhart, Philip

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

  Vane, W. M. F.

  Gower, H. R.

  MacLeod, John (Ross & Cromarty)

  Vaughan-Morgan, J. K.

  Graham, Sir Fergus

  Maddan, Martin

  Vickers, Miss Joan

  Grant, W. (Woodside)

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

  Vosper, Rt Hon. D. F.

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

  Maitland, Hon. Patrick (Lanark)

  Wakefield, Edward (Derbyshire, W.)

  Green, A.

  Manningham-Buller, Rt. Hn. Sir R.

  Wakefield, Sir Wavell (St. M'lebone)

  Gresham Cooke, R.

  Markham, Major Sir Frank

  Wall, Patrick

  Grimston, Hon. John (St. Albans)

  Marlowe, A. A. H.

  Ward, Dame Irene (Tynemouth)

  Grimston, Sir Robert (Westbury)

  Marples, Rt. Hon. A. E.

  Watkinson, Rt. Hon. Harold

  Grosvenor, Lt.-Col. R. G.

  Marshall, Douglas

  Whitelaw, W. S. I.

  Gurden, Harold

  Mathew, R

  Williams, Paul (Sunderland, S.)

  Hall, John (Wycombe)

  Maudling, Rt. Hon. R.

  Wills, G. (Bridgwater)

  Hare, Rt. Hon. J. H.

  Mawby, R. L.

  Wilson, Geoffrey (Truro)

  Harris, Reader (Heston)

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

  Wood, Hon. R.

  Harrison, A. B. C. (Maldon)

  Medlicott, Sir Frank

  Woollam, John Victor

  Harrison, Col. J. H. (Eye)

  Milligan, Rt. Hon. W. R.

  Yates, William (The Wrekin)

  Harvey, John (Walthamstow, E.)

  Morrison, John (Salisbury)

  Hay, John

  Nabarro, G. D. N.

  TELLERS FOR THE NOES:

  Heald, Rt. Hon. Sir Lionel

  Nairn, D. L. S.

  Mr. Legh and Mr. Brooman-White.

  Dr. Horace King: I beg to move, in page 31, line 2, at the end to insert:
  5. Articles comprised in Group 9 (floor coverings), Group 11 (furniture, etc.), Group 12 (appliances and apparatus), Group 13 (cutlery),
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  Group 14 (lighting fittings, etc.), or Group 34 (stationery, etc.), being articles designed for use in schools, shall be exempt from tax.
  The Temporary Chairman (Sir Norman Hulbert): I think that it would be for the convenience of the Committee if we

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  were to discuss with this Amendment the Amendment in page 31, line 38, at the end to add:
  7. In the case of any articles chargeable to purchase tax in Groups 6, 7, 9, 10, 11, 12, 13, 14, 16 all such articles shall be exempt from tax if it is proved to the satisfaction of the Customs and Excise authorities that they are to be used solely for hotel or restaurant purposes.
  which stands in the name of the hon. Member for Hastings (Mr. Cooper-Key) and other hon. Members.
  Dr. King: The Amendment I have moved seeks to exempt from Purchase Tax a number of articles when purchased for use in schools. It is a quite serious Amendment which involves a fairly substantial amount of money. Floor coverings are at present taxed at 15 per cent. Furniture, at any rate up to the time of this new Finance Bill, has been taxed at 15 per cent. As regards furniture, the Chancellor has, in previous Finance Bills, already made a concession for school desks and lockers, and about that I shall, have a word or two to say later. Cupboards bear a tax of 5 per cent. Chairs are taxed at 5 per cent. Appliances, apparatus and cutlery bear a tax of 15 per cent. Lighting fittings used in schools are taxed at 30 per cent. Perhaps most important and most substantial of all, stationery is taxed at 30 per cent. There is a very heavy Purchase Tax on pencils, pens, crayons, duplicating paper, exercise books and the rest. Every schoolboy's father pays Purchase Tax on his son's terminal exam paper and on the exercise books and writing paper he uses.
  When this matter was referred to briefly when on Clause 1 we debated the Motion, "That the Clause stand part of the Bill," before the Whitsun Recess, the Chancellor said that he wanted to help education all he could. We know the Chancellor to be sincere, and I suggest to him that he has an opportunity really to help education by accepting this Amendment. He will agree, I think, that if we can remove any tax burden from education, we ought to do so. Education costs are rising and must continue to rise. Nobody can defend unnecessary expenditure. Indeed, unnecessary expenditure on education makes it much harder for us to justify to taxpayer and ratepayer necessary expenditure on education. I believe
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  that this Purchase Tax swells unnecessarily the education budget of every local authority.
  I mentioned in a previous debate the curious fact that, of the Purchase Tax levied by the Government on the items to which I referred, 60 per cent. is finally met by the Government under the percentage grant. The position is even more ridiculous in the case of items like floor coverings, cutlery and chairs used in school kitchens and dining rooms because, in this case, the Government meets 100 per cent. of the cost. I am not an economist. I should like to think that, if the Government impose a tax and then meet 100 per cent. of the cost thereof, that is merely a bookkeeping entry. But I cannot help feeling—I know that some hon. Members opposite share this view—that such a tax itself makes a tiny contribution to inflation. I am sure that it serves no useful purpose whatever when the grant which the Government make to local authorities to meet it is 100 per cent.
  I noted with pleasure that the Chancellor of the Exchequer and I share a love of Shakespeare and that he quoted Shakespeare in the last debate. I suggest to him that Shakespeare referred to this matter, as he referred somewhere to almost everything, when he said that
  "Wisdom wishes to appear most bright,
  When it doth tax itself."
  Purchase Tax levied and then met entirely by the Chancellor who levies it is, indeed, taxing oneself.
  I do not think that we need argue today the need to abolish Purchase Tax on education or the inflationary effect of the tax, especially on stationery. I will merely quote to the Committee the words of the present Parliamentary Secretary to the Board of Trade when he spoke on 14th February, 1951:
  "I think all of us, including the Chancellor, are agreed that the taxation of business stationery is inflationary. It is a direct cost to industry. … Some £23,000,000 a year is added to the total cost of making industry function."—[OFFICIAL REPORT, 14th February, 1951; Vol. 484, c. 558.]
  If the Committee will read the word "education" for the word "industry" that is the case I seek to put this evening.
  In the same debate, that distinguished and much loved Member of the House, the then Mr. Ralph Assheton, said:
  "Since the war … we on this side of the House"—

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  that is to say, the Conservative side—
  "have consistently urged the removal of Purchase Tax on commercial and educational stationery."—[OFFICIAL REPORT, 14th February, 1951; Vol. 484, c. 575.]
  In an earlier debate I gave a figure of about £ 14,000 as the Purchase Tax paid in one year by one local authority that I know very well. That was paid on ordinary school equipment. At least as much Purchase Tax again goes into items which are put into new school buildings as they are built and in the modernising and lighting of old schools, in the furnishing of new schools and refurnishing of old schools. I estimate that the local education authorities are paying between £2 million and £4 million in Purchase Tax for education items. I do not think anybody can justify this purely inflationary imposition on local authorities.
  Therefore, the problem boils down to the practical one of how to do what I should think every hon. Member would wish to do, I pay tribute here to the intellectual supremacy of the Treasury. No mediaeval schoolman could approach the subtlety of the Treasury in the arguments it advances from time to time when either imposing peculiar taxes or resisting concessions like this one. I think I state the Treasury's case fairly when I say that it objects to the Amendment because instead of taxing a thing we are seeking to tax its use. We seek to exempt from tax a certain number of taxable articles when they are used for a special purpose. The Treasury believes in what Carlyle in his Germanic moments—and most of his moments were Germanic—would call "the thing itself" and feels that there is something wrong about separating an article from its use.
  But even the Treasury is not quite consistent in that regard. For example, I note that in the bible of Purchase Tax, the document which lists the various rates and exemptions, it says that exemption is granted for cutlery if it is
  "designed for use solely in the course of any trade, profession … and unsuitable for use for other purposes."
  Here, I suppose the Treasury would argue that the sting is in the tail, that the butcher's knife is exempt only if it cannot be used for any other purpose but butchering, and that the school desk has been
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  relieved of Purchase Tax because nobody can conceive of any human being who was not compelled to do so sitting in the contraption known as a school desk. If that is so, I think it ought to be possible similarly to isolate at least school stationery. Exercise books are specially designed. The use of exercise books and lined school paper outside schools must be extremely limited. Both are distinct and quite distinctive. If the Chancellor is worried about it he can ensure that school stationery carries some imprint which would make it impossible for anyone to use it outside school without a sense of shame.
  However, I have always thought that the problem of excluding the supply of school materials from effective Purchase Tax was much simpler than that. Most local authorities obtain their school supplies from firms which do nothing but supply local authorities with educational equipment. In my opinion, it ought to be easy to grant Purchase Tax exemption to firms which are school suppliers, if necessary leaving the tax where it is for any casual purchase for a school if the local authority went outside the recognised educational suppliers.
  We have a most ingenious Treasury. If the Committee agrees that we ought not to tax these educational articles and still wants to retain a tax on the article not used for educaion, the Treasury ought to be capable of devising a method by which that can be put into effect. If the Chancellor says that he wishes to exempt educational articles from Purchase Tax, I am certain that his backroom boys will provide him with an efficient and effective way of doing it. On the other hand, he could at any rate save half or perhaps more than half of the burden of Purchase Tax which is borne by local authorities if he would remove stationery entirely from Purchase Tax.
  6.45 p.m.
  If it is technically impossible to achieve the aim of the Amendment in the way suggested, the Chancellor could certainly do much good to education without causing harm to business by following the advise of the present Parliamentary Secretary to the Board of Trade and the former Mr. Ralph Assheton by removing the Purchase Tax on stationery.
  Whatever way the Chancellor adopts, I urge him to take the Amendment as a

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  very serious attempt to relieve local education authorities, not of the burden of education, which is grievous and will become more grievous, but of an entirely unnecessary fiscal element in that burden. I am certain that if he accepts the Amendment local authorities will be very grateful to him.
  Mr. E. M. Cooper-Key: There is on the Order Paper an Amendment in the name of my hon. Friends and myself which seeks to exempt from Purchase Tax all of the most important articles used in hotel and catering establishments. I understand by your Ruling, Sir Norman, that we can discuss this matter fairly fully.
  At this stage I ought to declare an interest, because the main business in my constituency is the hotel and holiday trade. On the other hand, I hope to show that the issue is wider than a question of a few holiday resorts or even of the tourist industry, and could have a bearing on the national economy as a whole. Taking the narrower viewpoint first, the Committee will be familiar, after many years, with the case of hotels and restaurants in seeking a remission of Purchase Tax on furnishings and equipment, which are known as the tools of the trade. The tourist industry looks at the engineering industry. The engineering industry, presumably because it sells goods abroad, receives concessions because its machine tools are free of tax. The Treasury, however, seems to accept some justification in similar circumstances, because relief is given in Purchase Tax on furnishings used in equipping ocean liners. But the Treasury has always been stubborn in resisting the case of the domestic hotel for like treatment, in spite of the fact that this industry is a much larger earner of foreign money.
  In the past objection has always been raised on the ground of the inability to control this kind of purchase. There must certainly be methods of solving this problem if the desire can be awakened in the Treasury. One way might be to establish with the local authority a register of all catering establishments. However, the real issue is whether the Government are sympathetic towards the industry. There are encouraging signs that this is so. A few weeks ago the Board of Trade held a conference on tourism. The conference was addressed by four Ministers, all of
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  whom paid tribute to the earning capacity of the tourist industry which today brings in about £43 million a year in dollars and it is estimated that by about 1965 it could reach £100 million a year. But these estimates can and will fall short if our equipment and standards fall below those of our European competitors. Many of these enjoy considerable assistance from their Governments through remission of rates and other forms of taxation.
  This afternoon I merely wish to emphasise the fact that here at our feet lie large potentialities in the tourist trade, but these will bear fruit only if our hotels are maintained at a competitive standard. The imposition of Purchase Tax on equipment and furnishings will, if persisted in, lower the standard of service of these establishments, to the advantage of our European competitors. So far as I know, only one hotel has been built in London since the war. The present cost of building hotels is at the rate of about £5,000 to £6,000 a bedroom. Only one has been built in the provinces, the Hotel Leofric, in Coventry, and the amount of Purchase Tax paid in respect of furnishings and equipment for that building alone amounted to £30,000 which, at 5 per cent., is equivalent to an annual surcharge of £1,500 a year.
  Year after year many of us on both sides of the House have urged the Chancellor of the Exchequer to meet us in this matter. I hope that when my right hon. Friend replies to the debate we shall get some indication of more substantial help than lip service in view of the case for exemption from Purchase Tax of the tools of the trade of the hotel industry.
  Mrs. Slater: The hon. Member for Hastings (Mr. Cooper-Key) will not expect me to follow him in what he said, because I am sure he has a number of friends ready to speak on the same lines.
  I want to speak on two points in the Amendment moved by my hon. Friend the Member for Itchen (Dr. King). The first deals with floor coverings. In the same Finance Bill we are proposing to reduce the tax upon fur rugs from 50 per cent. to 30 per cent. and at the same time we are leaving at 15 per cent. the tax on all over floor coverings. The number of people who will buy fur rugs is limited so that the reduction in tax

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  will apply only to those with sufficient money to buy that type of fur covering.
  In this list of floor coverings is included linoleum as well as carpets. I am glad to find that when one goes into working-class homes today one sees the great change which has taken place. Many of them now have carpets rather than cold, bare linoleum. The fact remains, however, that in many working-class homes, especially those where there are young, growing children, linoleum is still used to a large extent, and in any case linoleum is the main type of covering used in bathrooms.
  I suggest that the tax of 15 per cent. on linoleum could easily have been abolished in the Finance Bill. I know all the arguments the Chancellor will advance against exemption, but this small amount could quite well have been handed to that section of the people who have to use linoleum on their floors by the very nature of their incomes and the fact that they have growing families. If it is possible to make a concession of 20 per cent. to the class of people who buy fur rugs, it could easily have been possible to make a concession to the poorer class of people who are compelled to buy linoleum.
  The other section of this Amendment has been spoken to by my hon. Friend, namely, the tax on furniture, stationery and equipment used in schools. I have in my possession a letter sent to me by the headmaster of one of the schools in Stoke-on-Trent. It is not big, but it is an important junior school which serves a very large area. He writes that he has just completed his requisition for writing materials, etc., for the next term. These include exercise books, writing paper of various kinds, ink, pens and other similar equipment. He says that the cost for this next term will be £78 6s. and of that amount £17 6s. is Purchase Tax. He goes on to point out that on these commodities under the present percentage grant system the Government give with one hand a grant of £46 19s. to the local authority but with the other hand they take back £17 6s. of the grant in Purchase Tax. If we think of all the schools in our local authorities, we can see that the cost of school equipment, ink, pens and art materials, amounts to a large sum. This method of taxation on such articles is penalising those local
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  authorities which are prepared to ensure that the necessary equipment is available for the children.
  I have said before in the House of Commons that I remember teaching at a time when needles were literally counted, when pen nibs were counted, and when local authorities were reluctant to supply large quantities of exercise books. Not so long ago I was speaking in a constituency, not my own, where a complaint was made that the local authority was insisting that the children must buy their own exercise books after the first one has been used. I disagree with that completely, but if local authorities are faced with the necessity of saving on education, it may well be that if the burden increases, plus the other attack made recently upon them, considerable economies may be necessary. [An HON. MEMBER: "We might return to slates and pencils."] Heaven forbid that we shall ever go back to the day when children used slates and pencils and had to spit on rags in order to wipe their slates clean. It was not only unhygienic but it was not conducive to good writing.
  The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory): The hon. Lady will admit that the squeak was the worst thing of all.
  Mrs. Slater: I do not agree with the right hon. Gentleman. I think that spitting on the rag was the worst.
  As my hon. Friend has pointed out, a method could easily be devised to exempt such educational equipment from Purchase Tax because the suppliers of educational materials are in the main two or three large firms which specialise in this equipment. After all, difficulties are made to be overcome, and I see no particular difficulty in exempting materials used for school and educational purposes. I therefore ask the Chancellor to give serious consideration to these two points.
  Mr. J. Eden: I must confess that I was wondering, Sir Norman, when you ruled that these two Amendments might be taken together, what exactly was the connection between the two. It must be what I would describe as "the tools of the trade". Certainly, from the point of view of the hotel industry, that is a good description, although it may not be so apposite in

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  the case of the Amendment dealing with schools.
  May I address my two remarks to the hotel industry, bearing in mind that since floor coverings, furniture, cutlery, and so on, can be regarded as the tools of the trade of the hotel industry they could, as the coupling of these two Amendments shows, be regarded as the tools of the trade of the schools as well.
  The hotel industry is perhaps the only industry in the country today which is taxed on the tools of its trade and on the equipment which it uses. It is, as everyone has been only too ready to admit from one day to the next, one of the most important export industries. It has always been slightly baffling to me that we have not endeavoured, during the latter post-war years, to do something slightly more demonstrative to assist this important export industry.
  7.0 p.m.
  The tools of trade of this industry are the furnishings, floor coverings, cutlery, linen and crockery. This concession is a contribution which could be made to assist an industry vital to our export trade, an industry which the right hon. Gentleman's colleagues have consistently been only too ready to praise and to say how important it is for the welfare of our economy as a whole that we should maintain a thriving hotel industry. The industry found it very difficult in these post-war years to build new hotels.
  So far as schools are concerned, a certain number of new ones have been provided in the post-war years, but not so with hotels, and, as my hon. Friend the Member for Hastings (Mr. Cooper-Key) has said, only one new hotel of any size or notability has been built. The reason for this is largely, if not wholly, the extremely high cost, which would make it absolutely prohibitive to try to run such an hotel subsequently as an economic proposition.
  So we fall back, if we wish to keep a thriving hotel industry, on how we can best make improvements to our hotels and add to the existing hotels new wings, new restaurants, and so on, and how to modernise the interiors of existing hotel structures. All this means new equipment, and new equipment for this industry means paying Purchase Tax. If we
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  wish to encourage this industry to go on earning more dollars and attracting more and more people from dollar and other countries to take their holidays in Great Britain, to travel around and see our holiday towns and others parts of the British Isles, we must try to assist it in some way. Most of its budgets today are just balancing out, and there is very little left which can be used in making the very necessary improvements which we are all agreed should be made.
  I urge my right hon. Friend as strongly as I can to give very serious consideration to the claims of this industry, of which he himself has spoken. In speaking of it, I hope that he will recognise that, like other industries, it has its tools of trade. I urge him to find some way of freeing these tools of trade from Purchase Tax.
  Mr. W. T. Proctor: I wish to support the Amendment moved by my hon. Friend the Member for Southampton, Itchen (Dr. King) and to deal with only one aspect of this matter. It is that the collection of this tax is a complete waste of public money and that no public benefit whatever is gained from it.
  The local authority borrows the money to purchase the goods and has to pay interest on the amount borrowed and also interest on the amount of the Purchase Tax. Therefore, the only people who gain are the people who lend the money for the payment of the Purchase Tax. I have in my division a firm which has met with very considerable financial difficulty as a result of the operation of this tax. The local authority buys furniture from this firm on credit and also has credit for the Purchase Tax.
  The Treasury demands that the firm must pay the Purchase Tax even before, in many cases, the firm is paid by the local authority. This went on very easily before the credit squeeze, because the firm was able to borrow the money from the bank with which to pay the Purchase Tax, but when the credit squeeze came, they were unable to get credit from the bank and were in grave financial difficulty. I had to intervene with the Treasury to make some special arrangements for them to prevent a much graver financial position developing.
  I see no sense in imposing this tax, in collecting it and in costing the community money to collect it, in paying financiers

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  the interest on loans in respect of it and finding out, in the end, that we are worse off. I am sure that if the Chancellor looks at it in an impartial manner, he will see that it is a waste of public money, and that it could be administered in such a way that it would not involve all this work and all this expenditure which the nation has to face. Surely, it is a ridiculous position when the Government impose a tax and the nation has to pay out in the costs of administering the tax more than it receives from it.
  Sir Peter Macdonald: The Amendment to which I shall address myself is the one standing in the name of my hon. Friend the Member for Hastings (Mr. Cooper-Key), to which my own name is also attached. It is an Amendment which deals with something which some of us have been raising for a great many years, but we are very hopeful that on this occasion we shall get some favourable response from my right hon. Friend the Chancellor of the Exchequer.
  It is recognised on all sides that the catering industry is a very important export industry. The Government must recognise that because of the fact that they subsidise the British Travel and Holiday Association to the extent of about £800,000 per year in order to encourage people to come to this country and to encourage tourism generally. I think that that organisation is doing a very good job. It is bringing people to this country, and the amount of tourism has increased, I understand, in the last ten years by 190 per cent. The amount of foreign currency brought into the country amounted to £190 million last year. It is recognised that the tourist industry is the largest dollar earner we have. That being the case, it seems to me to be highly ridiculous for the Government to spend this large sum of money annually to encourage people to come to this country unless they give some encouragement to the catering industry to look after them when they get here.
  I have said that the British Travel and Holiday Association is doing a very good job, but the association claims that when it has brought people over here in very large numbers they find that we lack sufficient hotel accommodation for them. The Board of Trade is well aware of the fact, because it is brought home to it
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  by the British Hotels and Restaurants Association, as well as by the British Travel and Holiday Association, and yet it seems to ignore the claims of this industry to have the tools of its trade tax-free.
  I know that the catering and hotel industry is very anxious to meet the demands of the tourists. The problem is, as has been pointed out by my colleague, the very high cost of building new hotels today. The cost is so high that there is very little prospect of getting a return on the very heavy capital expenditure required in any reasonable time, and therefore the industry is handicapped. Only one large hotel has been built in this country since the war. The hotels and the industry as a whole are very anxious to meet the wishes of the Government about extending their present accommodation, and much could be done by extending and improving their present premises, but even there they are handicapped by the amount of tax which they have to pay on the equipment of such extensions. I think it is perfectly reasonable that they should be given some allowance and reasonable encouragement by the removal of this heavy Purchase Tax on the equipment required for hotel extensions, furnishings and equipment.
  I urge the Chancellor on this occasion to give some encouragement to the industry so that it may meet the wishes of the Government, who are anxious to increase the tourist industry, and he can do that by giving relief from this tax. The Ministry of Transport and Civil Aviation says that it expects air travel to increase by about 400 per cent. in the next few years. It is no use bringing people to this country by air or any other means if there is no accommodation for them when they arrive. Consequently, I strongly urge the Chancellor to accept the Amendment and give some relief to this very heavily burdened industry, now.
  Mr. F. H. Hayman: I support both Amendments. I speak for Cornwall, and, in particular, my constituency, Falmouth and Camborne, where we have no large hotels of the kind about which hon. Gentlemen have been speaking. Nevertheless, the smaller hotels in the remoter areas are just as important as the very

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  large hotels in London, Eastbourne, or Bournemouth. I have been approached by hoteliers in my constituency to ask the Chancellor to grant the concession.
  The Chancellor himself comes from the neighbouring county, Devon, and he knows just how much this matter affects his own constituency. I am not sure that his constituency does not include Dawlish. The small hotels in the West Country face a far more difficult proposition than the larger hotels in Eastbourne, Bournemouth, Blackpool and elsewhere, because their season is so much shorter and a very much riskier affair than it is in places nearer the great centres of population.
  The type of provision which has to be made for the increased number of visitors each year is changing considerably. Caravan camps are springing up here and there, and they cater for a certain class of visitor. The small hotelier finds it a speculation as to what he shall spend. If ever there was a case where the tools of the trade ought to be exempted from tax, it is in places like those in the West Country that I have mentioned.
  I support the Amendment moved by my hon. Friend the Member for Southampton, Itchen (Dr. King). I, too, have been concerned with the administrative side of education, and, having had to prepare estimates for a county education authority, I have some knowledge of just how Purchase Tax impinges on items embraced by what we used to call the school supplies allowance. In pre-war days, at any rate, one of the greatest handicaps in rural areas was the small amount of the school supplies allowance. Today, most local authorities are far more generous. Even so, they find it impossible to grant all the requisites which come within the school supplies allowance, not only exercise books, but text books, readers, and so on.
  It is ridiculous that the ratepayers should have to dip deeply into their pockets to pay Purchase Tax to the Chancellor. I believe that the Chancellor was once a leading figure on the Devonshire Education Committee, so he will recall from his experience just how much this kind of expenditure bears on ratepayers and local authorities. I hope that the
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  right hon. Gentleman will grant these concessions and enhance his reputation by doing so.
  7.15 p.m.
  Mr. William Teeling: In dealing with these Amendments together, I feel a little like people in my constituency do when they are organising flag days. There are so many people who want their charity to be included that we always have to have two or three quite different charities each Saturday. The Chancellor must feel that he is in this position. I know that he wants to put his 1s. in the box for charity but wonders which one to help on this occasion. There is no reason, however, why he should not put in 2s. and so help both.
  So far, taking the tourist and hotel side, we seem to have been stressing the foreign tourists coming here. My mind goes back to the days just after the war when those of us who represented seaside resorts were faced with the problem of how to get hotels and lodging houses ready not so much for the foreigner, but for our own workpeople. The situation has not altered so very much. I remember Mr. Ernest Bevin saying that the British people badly needed holidays, for they had gone through the war, and that he would do everything he could to make it possible for them to take their holidays in comfortable surroundings. At the time a little was done, but perhaps not enough.
  Since then far more of our people have found themselves able to take holidays, but I am afraid that there is a tendency now for them to go abroad instead of going to the hotels and small lodging houses in this country because they feel that they get more comforts in foreign hotels for their money. This is largely due to the fact that no Government in the last few years has been able to help with the provision of the necessities about which hon. Members have just been speaking.
  No one can put a finger on any reasonably sized hotel group and say that it is making a big profit. One certainly could not say that about the smaller lodging house keepers either, or the small restaurant keepers; they are just able to make a profit, and they cannot find enough to put by to improve conditions.

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  The Catering (Wages) Act, 1943, has made it very difficult for hoteliers to keep down prices. One way to counteract that would be for them to use every possible modern labour-saving device. That can only be done if we get some help from the Government. The very small profits that are being made are not sufficient to put in these new improvements.
  In my constituency we have to look in the immediate future not only to the tourists coming from abroad but to the development of, for example, Gatwick Airport, from which we expect to get a considerable number of people passing through Brighton and spending just one night at a hotel, and the development of the new Sussex University, which will mean an immense number of people using lodging houses and restaurants.
  We must also do our best to improve conditions for ordinary tourists. Our bigger hotels have very ancient kitchens which it is almost impossible at present completely to modernise. The rooms in many of the hotels are far too large and too high, and it would need an immense amount of money to put them right. At the same time, the Board of Trade and others have been pointing out the tremendous advantage which is coming to the United Kingdom through the increase in the numbers of foreign tourists coming here. We are ahead of every other country in Europe at present and that is largely due to the go-ahead methods of the organisation run by Sir Arthur Morse, which has done everything possible to try to improve the situation.
  We are told the number of new tourists coming to this country, but how many of those tourists return for a second visit? There is a feeling in the tourist industry that many of them will not come back because they have not found the comforts which they required. I hope that the Chancellor of the Exchequer will bear in mind not only what we have been saying tonight, but what has been said for many years, and that he will try to do something to make the position easier for us and will not say that the concession we seek is impossible from a Customs point of view. I am perfectly certain that in this case, where there is a will, a way can certainly be found.
  Mr. Amory: I very much wish that I were in a position to accept both Amend
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  ments, because I am in sympathy with the arguments which have been used for both. Unfortunately, I am afraid that I must say straight away that I do not feel able to accept them, for the most practical reasons.
  The hon. Member for Southampton, Itchen (Dr. King) began his speech in a very cunning way by paying tribute to the intellectual supremacy of the Treasury. I accept that on behalf of my advisers and, I trust, my colleagues, because I am sure that the hon. Member meant to include Ministers within the term "Treasury". The hon. Member for Falmouth and Camborne (Mr. Hayman) referred to my constituency which gives me the opportunity of saying what a very pleasant place it is. We receive a great many visitors and I am amazed that any visitors go anywhere else.
  The hon. Member mentioned that I served on the Education Committee of the Devon County Council and that I must have been conscious of this burden. I did serve on that committee, but I was not conscious of this burden, because I served in the good old days when there was no such thing as Purchase Tax.
  I want first to deal with the Amendment which is concerned with schools. I remind the Committee that the principle of Purchase Tax is that liability should be determined by reference to the character of the article and not to the status of the user. That is for very practical reasons. I remind hon. Members that in cases where an article is specially designed for schools and as a result is of a character which is not suitable for purely domestic use, we try as far as possible to exempt it from charge.
  The other day I mentioned school desks in that category. The hon. Member for Southampton, Itchen referred to them today, and there are other things such as blackboards, laboratory furniture and equipment and lockers which are specially designed for school use, art room requisites and things like graph paper and tracing paper. Without running serious risk of abuse, we try as far as possible to exempt articles which are especially designed for school use.
  However, with things like lamps, floor coverings, chairs and tables—
  Mr. Nabarro: Carpets.
  Mr. Amory: —carpets are floor coverings—cutlery and stationery, it becomes impossible to differentiate satisfactorily.
  The hon. Member for Southampton, Itchen referred to firms specialising in school supplies and suggested that we might be able to organise exemption by exempting such firms. However, that is not possible in the case of stationery. It is true that a substantial proportion of stationery goes to schools from such firms, but a very substantial proportion does not go from firms dealing exclusively with schools. We have considered it, but I am afraid that it would be impossible to control exemption in that way.
  I agree with what was said about the collection of the tax becoming meaningless and even distorting the picture when the Government gives a high percentage grant. When the grant is 100 per cent., the transaction is a mere book entry. However, if there were a practical way of giving exemption, we should follow it, but although we have considered the matter sympathetically, we have been unable to find such a way.
  I now turn to the Amendment dealing with hotels which was supported by my hon. Friend the Member for Hastings (Mr. Cooper-Key), my hon. Friend the Member for the Isle of Wight (Sir P. Macdonald), my hon. Friend the Member for Brighton, Pavilion (Mr. Teeling), and my hon. Friend the Member for Bournemouth, West (Mr. J. Eden). Here again, I am completely in sympathy with their object. I join with the tribute which several of my colleagues have paid to the importance of the hotel industry and I assure hon. Members that this is not just lip-service. We regard it for what it is, a very important earner of foreign currency. Tourism in this country is going extremely well. The figures are most encouraging. I also pay tribute to the British Travel and Holidays Association for the work which it has done. As a result of the joint efforts of the industry and the association, the figures are steadily improving.
  I agree that the bottleneck in many cases has been the provision of modern and well-equipped hotel accommodation. We are anxious to do what we can to encourage that important industry. However, I must again remind hon. Members of the principle of the tax, because with a tax like this one must stick as closely
  292
  as possible to certain basic principles. The principle is that the tax should be charged on the nature of the article rather than on the status of the user. To attempt to control it by the eventual end-use is to get into the most formidable difficulties and to begin to flounder in a morass.
  Hotels are not the only industry whose tools of trade are subject to Purchase Tax. Stationery is a tool of the trade of a number of industries and it is taxed. A very much smaller business, car hire, has its vehicles taxed, and they are the tools of that trade.
  Again, where there is an appliance which a hotel uses for an industrial purpose and which can be clearly distinguished from the domestic article we try to give it the benefit of the doubt and to exempt it. I am thinking of things like large water storage heaters, large refrigerators and large food mixers, articles similar to the domestic articles, but capable of being clearly distinguished by virtue of their size. In those cases we try whenever possible to exempt the article from Purchase Tax.
  Sir Charles Taylor: My right hon. Friend will be aware that certain Purchase Tax concessions to the hotel industry were made shortly after the war.
  Mr. Amory: I am not sure to what my hon. Friend is referring, but it may be that I will come to that in a moment.
  These are difficulties of principle, but we should also be led into very great practical difficulties with administration. It would be impossible to decide the point at which tax should be levied—which is in the wholesale trade—on articles like cutlery, glassware and crockery, where it would be difficult to say exactly what would be the use to which those articles would be solely applied. It would be possible to obtain only an intention at that stage, and it would be wide open to evasion and abuse.
  7.30 p.m.
  Another difficulty is the practical one of defining the limits of the hotel and restaurant trade and deciding where to draw the line. I will not go into the question in detail, but if hon. Members begin to think about the matter they will see the difficulty of drawing a line between a hotel and a small boarding house which took in only one or two

  293
  people and which had a family as the basis of the household. It would be appallingly difficult to do this.
  I believe it was in 1950 that a scheme was designed—the right hon. Member for Battersea, North (Mr. Jay) may remember it—to try to get round this difficulty and to help the hotel trade. Under the scheme grants were made to hotels which were substantial dollar earners. I believe that the grant was based upon the proportion of the number of visitors from North America which, it was estimated might come to the hotels concerned, and also upon the Purchase Tax element in the expenditure of those hotels. As a result of the experience of the working of the scheme, I am told it was found that the incidence of Purchase Tax at that time was not so heavy as had been thought. The scheme proved very difficult to work and after a year it was discontinued.
  We have not forgotten the hotel trade. That is why I want to return to what I said earlier, that this is not only a question of paying lip-service to the importance of the trade. When my right hon. Friend the Home Secretary was Chancellor of the Exchequer he gave a great many exemptions in respect of soft furnishings, which are of importance to the trade. In this Budget the reductions that I have proposed to the Committee in respect of household appliances and some kinds of furniture will again be of value to the trade.
  In the case of capital allowances we have tried to stretch the provisions as far as possible in order to help in the provision of the tools of this industry. I am thinking of the allowance which is equivalent to the machinery and plant allowance—an initial allowance of 20 per cent. which I am proposing to increase this year. That capital allowance has been extended in the case of hotels to cover not only things like lifts, baths and hot water systems but carpets, linoleums and curtains, and that is going a very great way.
  I conclude by saying that, in principle, the arguments for both Amendments are good. I wish it were possible to meet them, but I am absolutely sure that on practical grounds it is not possible to do what I have been asked to do by the hon. Members concerned. I am sorry that that should be so, because the arguments are perfectly sound in both cases.
  Mr. Douglas JayAlthough, as usual, the Chancellor has tried to sound friendly, he has in substance given an extremely weak, negative and dusty answer to some eloquent pleas of a remarkable array of hon. Members. It seems that his pleasant memories of the hotels and schools of Devon have been entirely overwhelmed by what has been in this case lightly called the intellectual supremacy of the Treasury. He tells us that we cannot do anything for schools or hotels because it is impossible to discriminate, for the purpose of Purchase Tax, in terms of the end use of the product.
  There may be some plausibility in that argument if it is used by itself, but I do not think that it can be used by itself. In the case of schools I would say that the very difficulty to which he has referred shows the awkward position that we get into when we insist upon levying Purchase Tax upon necessities such as furniture and floor coverings, which ought not to bear tax at all. It is because these articles are necessities to the trade that they are, as several hon. Members have rightly said, the tools of the trade in the case of hotels, and the tools of the profession in the case of the schools.
  Mr. Nabarro: Surely there is a good deal of hypocrisy and humbug in the right hon. Gentleman's argument. Is he aware that in the instance of floor coverings—which are mostly carpets—the rate of Purchase Tax when his party was in office between 1945 and 1951 was never less than 33⅓ per cent.? At least my right hon. Friend and the former Chancellor had the good sense to reduce the tax to 15 per cent. What shocking hypocrisy the right hon. Gentleman is guilty of.
  Mr. Jay: Has the hon. Member forgotten, as he usually does—being so often weak in his facts—that the great majority of items of furniture were entirely free of tax under the Labour Government, whereas they are now all subject to Purchase Tax? This is a fair example of the sort of difficulties that we get into when we place a tax on necessities of that kind.
  Secondly, those who have spoken for the educational world in the debate have proved, by reason of the fact that, quite apart from the Purchase Tax arguments, there is a sense of grievance in that world,

  295
  that on all these financial counts education seems to be made a victim by the present Government. We are told that nothing can be done about Purchase Tax in the case of schools, although in the case of ocean liners it has been found possible to make some sort of concession. Again, when there is a question of making economies, education always seems to be the first victim. It is because this sense of grievance exists that people are not very convinced by the arguments advanced by the Chancellor.
  No doubt there is some difficulty about the end-use of the products in the hotel industry, as the Chancellor has said, but I would ask the hon. Member for Kidderminster (Mr. Nabarro) to note that the Labour Government succeeded in overcoming the difficulty. In a slightly casual fashion the Chancellor mentioned that a scheme was introduced in 1950 and abolished in 1951 or 1952. In fact, it was introduced by the Labour Government to help the hotel industry, and it was characteristically abolished by the present Government.
  Mr. Amory: Like a certain number of other Measures introduced by the right hon. Gentleman's Government, it proved to be not a great success.
  Mr. Jay: We have only the present Chancellor's word that it proved unworkable. I do not think that that is the view of the hotel industry, which would like to see the scheme continued. I think that the Chancellor will agree that it got over the difficulty of discriminating in connection with the end-use in this way:

  Division No. 147.]

  AYES

  [7.40 p.m.

  Ainsley, J. W.

  Butler, Herbert (Hackney, C.)

  Edwards, W. J. (Stepney)

  Allaun, Frank (Salford, E.)

  Carmichael, J.

  Evans, Albert (Islington, S. W.)

  Allen, Arthur (Bosworth)

  Castle, Mrs. B. A.

  Fernyhough, E.

  Allen, Scholefield (Crewe)

  Champion, A. J.

  Finch, H. J.

  Awbery, S. S.

  Clunie, J.

  Fletcher, Eric

  Bacon, Miss Alice

  Coldrick, W.

  Foot, D. M.

  Balfour, A.

  Collins, V. J. (Shoreditch & Finsbury)

  Forman, J. C.

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

  Cove, W. G.

  George, Lady Megan Lloyd (Car'then)

  Beswick, Frank

  Craddock, George (Bradford, S.)

  Gibson, C. W.

  Blackburn, F.

  Cullen, Mrs. A.

  Gordon Walker, Rt. Hon. P. C.

  Blenkinsop, A.

  Dalton, Rt. Hon. H.

  Grenfell, Rt. Hon. D. R.

  Blyton, W. R.

  Darling, George (Hillsborough)

  Grey, C. F.

  Boardman, H.

  Davies, Ernest (Enfield, E.)

  Griffiths, David (Rother Valley)

  Bottomley, Rt. Hon. A. G.

  Davies, Stephen (Merthyr)

  Hale, Leslie

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

  Deer, G.

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Bowen, E. R. (Cardigan)

  Delargy, H. J.

  Hamilton, W. W.

  Bowles, F. G.

  Diamond, John

  Harrison, W.

  Braddock, Mrs. Elizabeth

  Dodds, N. N.

  Harrison, J. (Nottingham, N.)

  Brookway, A. F.

  Donnelly, D. L.

  Hastings, S.

  Broughton, Dr. A. D. D.

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

  Hayman, F. H.

  Brown, Thomas (Ince)

  Ede, Rt. Hon. J. C.

  Healey, Denis

  Burke, W. A.

  Edwards, Rt. Hon. Ness (Caerphilly)

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

  Burton, Miss F. E.

  Edwards, Robert (Bilston)

  Herbison, Miss M.

  certain individual schemes for re-equipping hotels were approved by the Customs and Excise and the Board of Trade, and in those cases the Purchase Tax paid on the equipment—or a certain proportion of it—was returned to the hotels in question. At least this was a practical attempt to give some help and to recognise the benefit to this country of the tourist industry.
  No doubt it was difficult to administer, but it was an attempt to overcome the difficulties of the industry, and it would have been far better if, instead of simply giving up because some difficulties were involved, the Government had made some attempt along the same or similar lines to overcome the troubles which have arisen, thereby giving some practical help to the industry.
  The Chancellor said that one of the difficulties discovered was that the Purchase Tax was found not to be so heavy a burden as has been expected. The main item mentioned was furniture; the truth is that at that time furniture was exempt and it now bears Purchase Tax. That argument must therefore have very much less weight than the Chancellor appears to think. Would it not be much better if he tried to replace this scheme with one which is more workable—if he thinks that the present scheme is not workable—rather than give up the whole matter and give no hope to the hotel industry?
  Question put, That those words be there inserted:—
  The Committee divided: Ayes 198, Noes 229.

  Holman, P.

  Mitchison, G. R.

  Skeffington, A. M.

  Houghton, Douglas

  Monslow, W.

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

  Howell, Charles (Perry Barr)

  Moody, A. S.

  Slater, J. (Sedgefield)

  Hoy, J. H.

  Morris, Percy (Swansea, W.)

  Smith, Ellis (Stoke, S.)

  Hubbard, T. F.

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

  Sorensen, R. W.

  Hughes, Emrys (S. Ayrshire)

  Mort, D. L.

  Soskice, Rt. Hon. Sir Frank

  Hughes, Hector (Aberdeen, N.)

  Moss, R.

  Sparks, J. A.

  Hunter, A. E.

  Moyle, A.

  Stewart, Michael (Fulham)

  Hynd, H. (Accrington)

  Mulley, F. W.

  Stones, W. (Consett)

  Hynd, J. B. (Attercliffe)

  Neal, Harold (Bolsover)

  Strachey, Rt. Hon. J.

  Irvine, A. J. (Edge Hill)

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

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

  Irving, Sydney (Dartford)

  Oliver, G. H.

  Summerskill, Rt. Hon. E.

  Janner, B.

  Oram, A. E.

  Sylvester, G. O.

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

  Oswald, T.

  Taylor, Bernard (Mansfield)

  Johnson, James (Rugby)

  Owen, W. J.

  Taylor, John (West Lothian)

  Johnston, Douglas (Paisley)

  Paget, R. T.

  Thomas, Iorwerth (Rhondda, W.)

  Jones, David (The Hartlepools)

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

  Thomson, George (Dundee, E.)

  Jones, Jack (Rotherham)

  Palmer, A. M. F.

  Thornton, E.

  Jones, J. Idwal (Wrexham)

  Pannell, Charles (Leeds, W.)

  Tomney, F.

  Jones, T. W. (Merioneth)

  Parker, J.

  Ungoed-Thomas, Sir Lynn

  Kenyon, C.

  Parkin, B. T.

  Usborne, H. C.

  Key, Rt. Hon. C. W.

  Paton, John

  Wade, D. W.

  King, Dr. H. M.

  Pearson, A.

  Warbey, W. N.

  Lawson, G. M.

  Peart, T. F.

  Watkins, T. E.

  Lee, Frederick (Newton)

  Pentland, N.

  Weitzman, D.

  Plummer, Sir Leslie

  Wells, Percy (Faversham)

  Lee, Miss Jennie (Cannock)

  Popplewell, E.

  West, D. G.

  Lever, Leslie (Ardwick)

  Prentice, R. E.

  Wheeldon, W. E.

  Lewis, Arthur

  Price, J. T. (Westhoughton)

  Lindgren, G. S.

  Probert, A. R.

  White, Mrs. Eirene (E. Flint)

  Logan, D. G.

  Proctor, W. T.

  Wilkins, W. A.

  Mabon, Dr. J. Dickson

  Pursey, Cmdr. H.

  Willey, Frederick

  McAlister, Mrs. Mary

  Randall, H. E.

  Williams, David (Neath)

  McCann, J.

  Rankin, John

  Williams, Rev. Llywelyn (Ab'tillery)

  MacColl, J. E.

  Redhead, E. C.

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

  McGhee, H. G.

  Reid, William

  Willis, Eustace (Edinburgh, E.)

  McGovern, J.

  Robens, Rt. Hon. A.

  Wilson, Rt. Hon. Harold (Huyton)

  McInnes, J.

  Roberts, Goronwy (Caernarvon)

  Winterbottom, Richard

  McLeavy, Frank

  Robinson, Kenneth (St. Pancras, N.)

  Woof, R. E.

  MacMillan, M. K. (Western Isles)

  Rogers, George (Kensington, N.)

  Yates, V. (Ladywood)

  Mahon, Simon

  Ross, William

  Zilliacus, K.

  Mallalieu, E. L. (Brigg)

  Royle, C.

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

  Silverman, Julius (Aston)

  TELLERS FOR THE AYES:

  Marquand, Rt. Hon. H. A.

  Silverman, Sydney (Nelson)

  Mr. Holmes and Mr. Short.

  Mason, Roy

  Simmons, C. J. (Brierley Hill)

  NOES

  Agnew, Sir Peter

  Cooper, A. E.

  Goodhart, Philip

  Aitken, W. T.

  Cooper-Key, E. M.

  Gower, H. R.

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

  Cordeaux, Lt.-Col. J. K.

  Graham, Sir Fergus

  Amory, Rt. Hn. Heathcoat (Tiverton)

  Corfield, Capt. F. V.

  Grant, W. (Woodside)

  Arbuthnot, John

  Craddock, Beresford (Spelthorne)

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

  Armstrong, C. W.

  Crosthwaite-Eyre, Col. O. E.

  Green, A.

  Ashton, H.

  Crowder, Sir John (Finchley)

  Gresham Cooke, R.

  Atkins, H. E.

  Crowder, Petre (Ruislip—Northwood)

  Grimston, Hon. John (St. Albans)

  Baldock, Lt.-Cmdr. J. M.

  Cunningham, Knox

  Grosvenor, Lt.-Col. R. G.

  Baldwin, A. E.

  Currie, G. B. H.

  Gurden, Harold

  Barber, Anthony

  Dance, J. C. G.

  Hall, John (Wycombe)

  Barlow, Sir John

  Davidson, Viscountess

  Harrison, A. B. C. (Maldon)

  Barter, John

  D'Avigdor-Goldsmid, Sir Henry

  Harrison, Col. J. H. (Eye)

  Beamish, Col. Tufton

  Deedes, W. F.

  Harvey, John (Walthamstow, E.)

  Bell, Philip (Bolton, E.)

  Digby, Simon Wingfield

  Hay, John

  Bell, Ronald (Bucks, S.)

  Donaldson, Cmdr. C. E. McA.

  Heald, Rt. Hon. Sir Lionel

  Bennett, F. M. (Torquay)

  Doughty, C. J. A.

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

  Bennett, Dr. Reginald

  du Cann, E. D. L.

  Henderson, John (Cathcart)

  Biggs-Davison, J. A.

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

  Henderson-Stewart, Sir James

  Bishop, F. P.

  Duncan, Sir James

  Hesketh, R. F.

  Black, C. W.

  Eden, J. B. (Bournemouth, West)

  Hill, Mrs. E. (Wythenshawe)

  Body, R. F.

  Elliot, R. W. (Ne'castle upon Tyne, N.)

  Hirst, Geoffrey

  Bossom, Sir Alfred

  Emmet, Hon. Mrs. Evelyn

  Holland-Martin, C. J.

  Boyle, Sir Edward

  Errington, Sir Eric

  Hope, Lord John

  Braithwaite, Sir Albert (Harrow, W.)

  Farey-Jones, F. W.

  Hornby, R. P.

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

  Fell, A.

  Horobin, Sir Ian

  Bryan, P.

  Finlay, Graeme

  Horsbrugh, Rt. Hon. Dame Florence

  Bullus, Wing Commander E. E.

  Fisher, Nigel

  Howard, Gerald (Cambridgeshire)

  Burden, F. F. A.

  Fletcher-Cooke, C.

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

  Butcher, Sir Herbert

  Foster, John

  Hughes Hallett, Vice-Admiral J.

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

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  Hughes-Young, M. H. C.

  Campbell, Sir David

  Gammans, Lady

  Hurd, A. R.

  Carr, Robert

  Garner-Evans, E. H.

  Hutchison, Michael Clark (E'b'gh, S.)

  Chichester-Clark, R.

  George, J. C. (Pollok)

  Hyde, Montgomery

  Cole, Norman

  Glover, D.

  Hylton-Foster, Rt. Hon. Sir Harry

  Conant, Major, Sir Roger

  Glyn, Col. Richard H.

  Iremonger, T. L.

  Cooke, Robert

  Godber, J. B.

  Irvine, Bryant Godman (Rye)

  298

  299

  Jenkins, Robert (Dulwich)

  Maudling, Rt. Hon. R.

  Russell, R. S.

  Jennings, J. C. (Burton)

  Mawby, R. L.

  Scott-Miller, Cmdr. R.

  Jennings, Sir Roland (Hallam)

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

  Sharples, R. C.

  Johnson, Dr. Donald (Carlisle)

  Medlicott, Sir Frank

  Shepherd, William

  Johnson, Eric (Blackley)

  Milligan, Rt. Hon. W. R.

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

  Joynson-Hicks, Hon. Sir Lancelot

  Molson, Rt. Hon. Hugh

  Speir, R. M.

  Keegan, D.

  Morrison, John (Salisbury)

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

  Kerby, Capt. H. B.

  Nabarro, G. D. N.

  Steward, Harold (Stockport, S.)

  Kerr, Sir Hamilton

  Nairn, D. L. S.

  Storey, S.

  Kershaw, J. A.

  Neave, Airey

  Stuart, Rt. Hon. James (Moray)

  Nicholls, Harmar

  Lambton, Viscount

  Nicholson, Sir Godfrey (Farnham)

  Studholme, Sir Henry

  Langford-Holt, J. A.

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

  Summers, Sir Spencer

  Leather, E. H. C.

  Noble, Comdr. Rt. Hon. Allan

  Taylor, Sir Charles (Eastbourne)

  Leavey, J. A.

  Nugent, G. R. H.

  Teeling, W.

  Leburn, W. G.

  Oakshott, H. D.

  Temple, John M.

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

  Orr, Capt. L. P. S.

  Thomas, Leslie (Canterbury)

  Legh, Hon. Peter (Petersfield)

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

  Thomas, P. J. M. (Conway)

  Lindsay, Hon. James (Devon, N.)

  Osborne, C.

  Thompson, Kenneth (Walton)

  Linstead, Sir H. N.

  Page, R. G.

  Thompson, R. (Croydon, S.)

  Llewellyn, D. T.

  Pannell, N. A. (Kirkdale)

  Thorneycroft, Rt. Hon. P.

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

  Partridge, E.

  Tilney, John (Wavertree)

  Low, Rt. Hon. Sir Toby

  Peel, W. J.

  Turton, Rt. Hon. R. H.

  Lucas, Sir Jocelyn (Portsmouth, S.)

  Pickthorn, K. W. M.

  Vane, W. M. F.

  Lucas, P. B. (Brentford & Chiswick)

  Pilkington, Capt. R. A.

  Vaughan-Morgan, J. K.

  Lucas-Tooth, Sir Hugh

  Pitman, I. J.

  Vickers, Miss Joan

  Macdonald, Sir Peter

  Pitt, Miss E. M.

  Vosper, Rt. Hon. D. F.

  Mackeson, Brig. Sir Harry

  Powell, J. Enoch

  Wakefield, Edward (Derbyshire, W.)

  McKibbin, Alan

  Price, David (Eastleigh)

  Wakefield, Sir Wavell (St. M'lebone)

  Mackie, J. H. (Galloway)

  Price, Henry (Lewlsham, W.)

  Wall, Patrick

  Maclay, Rt. Hon. John

  Prior-Palmer, Brig. O. L.

  Ward, Dame Irene (Tynemouth)

  McLean, Neil (Inverness)

  Profumo, J. D.

  Watkinson, Rt. Hon. Harold

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

  Ramsden, J. E.

  Whitelaw, W. S. I.

  MacLeod, John (Ross & Cromarty)

  Redmayne, M.

  Williams, Paul (Sunderland, S.)

  Maddan, Martin

  Remnant, Hon. P.

  Wills, G. (Bridgwater)

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

  Renton, D. L. M.

  Wilson, Geoffrey (Truro)

  Maitland, Hon. Patrick (Lanark)

  Roberts, Sir Peter (Heeley)

  Woollam, John Victor

  Manningham-Buller, Rt. Hn. Sir R.

  Robertson, Sir David

  Yates, William (The Wrekin)

  Markham, Major Sir Frank

  Robinson, Sir Roland (Blackpool, S.)

  Marshall, Douglas

  Rodgers, John (Sevenoaks)

  TELLERS FOR THE NOES:

  Mathew, R.

  Roper, Sir Harold

  Mr. Brooman-White and

  Mr. Gibson-Watt.

  Mr. Coldrick: I beg to move, in page 31, line 2, at the end to insert:
  5. Floor coverings, tiles, strips and blocks, previously chargeable under Group 9 at 15 per cent. shall be chargeable at 5 per cent.
  This Amendment would have the effect of reducing Purchase Tax on the items mentioned from 15 per cent. to 5 per cent. I find it extremely difficult to discover upon what principle the Chancellor proceeds to operate when applying the tax to these items. One thing is certain, that he does not operate on the principle of the greatest good to the greatest number. I rather suspect that what he does is to look round, find things which are sold in the smallest quantities which would represent the least concession and, having made that concession, to come forward with a great gesture.
  In all other forms of taxation, particularly in Income Tax, we have a graduated system which makes it possible for people with very small incomes either to be exempt or to pay very small contributions. One would have thought that the same principle would operate in the case of Purchase Tax. When we had a
  300
  Labour Government we were constantly pressing for and receiving concessions giving exemption for those things which were indispensable in the home. I recognise that some concessions have been made in relation to carpets and I welcome those concessions. I welcome all concessions on Purchase Tax, but if the Chancellor cannot give complete concessions or grant complete exemptions one would expect him to take into consideration cases of greatest hardship.
  No one would imagine that people would buy linoleum if they could afford to buy carpets. People buy linoleum and the cheaper forms of floor covering because they cannot afford the more costly forms. I should have imagined that the Chancellor would recognise that as floor covering is indispensable he would encourage the poorest housewife to purchase these things without the penalty of any Purchase Tax on them. That would represent a comparatively small concession. There are a number of other items listed in this Amendment and I have no doubt that others who know more about those things than I do will probably speak about them.

  301
  I appeal to the Chancellor at least to make a concession in respect of linoleum and the cheaper forms of floor covering if he cannot find it possible to make concessions covering the wider range of items.
  Mr. Nabarro: I must at once disagree with the hon. Member for Bristol, North-East (Mr. Coldrick), who suggested that there should be a differential in Purchase Tax rates between various forms of floor covering. It has always been the policy of Conservative Administrations, and was formerly the policy of Socialist Administrations, that the incidence of Purchase Tax should be equal on all competitive forms of floor covering, carpets, linoleum, felt and various other groups of floor covering material under the Purchase Tax Schedules. It would be greatly inequitable if preference were given to particular forms of floor covering on the grounds of cost or for other considerations.
  My right hon. Friend the Member for Monmouth (Mr. P. Thorneycroft), when Chancellor, in 1957 unilaterally relieved floor coverings for Purchase Tax purposes by reducing the rates from 30 per cent. to 15 per cent. The Labour Party left the rate at 33⅓ per cent. when it left office in 1951. Therefore, today the rate is less than one-half what it was when the Labour Party relinquished office. Speaking principally on behalf of the carpet industry, for the greatest part of the carpet manufacturing industry is centred in Kidderminster, I must say at once that the industry was very grateful to the Chancellor of the Exchequer for the relief he gave to it. It was immediately reflected in last year's sales of carpets. In 1957, as compared with 1956, the total square yardage of carpet, manufactured principally in Kidderminster, rose by no less than 11 per cent. in the year and the value of carpets manufactured rose, to the nearest £1 million, from £59 million to £66 million in a single year.
  Those figures are published by the Federation of British Carpet Manufacturers in its Annual Report for 1957. I commend it to my hon. and learned Friend the Financial Secretary because I think it demonstrates what I have been endeavouring to put to him on so many earlier Amendments in connection with Purchase Tax, that when the rate is
  302
  lowered there is sufficient stimulus to manufacture and sales as to make good to the Treasury and the Revenue any apparent loss resulting from the lower rate. In the Annual Report of the Federation it is stated:
  "Both in square yards and by value, sales in 1957 were 11 per cent. greater than in the previous year."
  The principal reason given is the reduction in Purchase Tax.
  When I saw this Amendment I immediately approached the Federation of British Carpet Manufacturers to inquire whether it had made any representations to my right hon. Friend the Chancellor in the course of the last few months for a further reduction in Purchase Tax, and the answer I received was in the negative. I am authorised to quote from a letter sent to me by the secretary of the Federation. I think this is the complete answer to the Opposition Amendment, and it will not be necessary for my hon. and learned Friend to reply to it. The letter stated:
  "… the Federation realises that in the last Finance Act the burden of Purchase Tax with regard to floor covering was substantially alleviated, being reduced by one-half from 30 per cent. to 15 per cent. and it has been thought that in view of this recent reduction it would be entirely unrealistic to make further representations to the Chancellor of the Exchequer; consequently this has not been done."
  8.0 p.m.
  Domestic furniture is now subject to Purchase Tax at 5 per cent., while furnishing fabrics attract a rate of Purchase Tax of only 2 per cent. to 3 per cent. It is equitable that carpets should be considered in the same group for all purposes as domestic furniture and domestic furnishing fabrics. There is no reason in principle why carpets, linoleum, domestic furniture, domestic furnishing fabrics should not all be treated as part of the same general group and made subject to Purchase Tax at the same rate.
  In present circumstances, with domestic furniture at 5 per cent., furnishing fabrics at 2 per cent. to 3 per cent. and carpets at 15 per cent., it is clear that carpets are bearing an unduly heavy burden. I do not press upon my right hon. Friend any suggestion that this state of affairs should be remedied this year, but I commend it to him for the future and I hope that between the consideration of this Finance

  303
  Bill and next year's Budget he will give further consideration to what is obviously an inequitable state of affairs in the matter of domestic furnishings generally.
  Mr. Coldrick: I hope that the hon. Member is not seeking to give the impression that I was opposing any further reduction in the Purchase Tax upon carpets. If the Chancellor is unable to grant concessions on all these floor coverings, would the hon. Member maintain that it is better to keep the tax on linoleum at the same rate as that on carpets rather than to make the concession to the poorer part of the community?
  Mr. Nabarro: I said at the beginning of my speech that I could in no circumstances support a differential system of Purchase Tax for different forms of floor covering. With great respect, the hon. Member does not sit for a constituency which is primarily concerned with the manufacture of floor coverings. If he did, he would know that there is the fiercest competition between, for example, carpets manufactured in Kidderminster and linoleum manufactured in Lancaster. They are alternative forms of floor covering a person may cover the bathroom floor either with a carpet or with linoleum. It is not fair or equitable to suggest that different rates of Purchase Tax should be applied, one rate to linoleum and the other to carpets. There must be one rate for all floor coverings.
  I hope that my right hon. Friend resists the Amendment, because I believe that the Government behaved, unilaterally, with the greatest generosity in reducing the rate of Purchase Tax on floor coverings from 30 per cent. to 15 per cent. in the Finance Act, 1957.
  Mrs. White: I wonder whether we are to hear anything from the Government after the speech of the hon. Member for Kidderminster (Mr. Nabarro).
  Mr. Nabarro: It is not necessary, I assure the hon. Lady.
  Mrs. White: It is surprising that the hon. Member for Kidderminster has so far failed to persuade the Prime Minister that his correct place is not below the Gangway but on the Front Bench. Until he has been so translated I assume that, in spite of what he claims in the way
  304
  of omniscience, we shall receive some reply from one of Her Majesty's Ministers.
  I will not go in great length into the arguments which have been put very clearly and persuasively by my hon. Friend the Member for Bristol, North-East (Mr. Coldrick). The point of the Amendment is that we consider that floor coverings are just as essential to the furnishing of a house as are chairs, bedsteads and any other article that one may need for a house. We feel that it is an unwarrantable burden on a family that floor coverings should remain extremely expensive. It is true that the rate has been somewhat reduced recently, and of course the Chancellor has made a great gesture even in this Budget—not in this part of Group 9 but in another part of it—by reducing the rate of tax on tiger skins, leopard skins and bear skins from 50 per cent. to 30 per cent. Unfortunately, most of our constituents do not commonly furnish their rooms with tiger skins, leopard skins or bear skins. Although this is an imaginative gesture of Commonwealth unity, it is of no great moment to most of our constituents.
  The problem of ordinary floor coverings, of carpets and linoleum in particular, is extremely important. Anyone who has had to furnish a house, particularly a house which has not parquet flooring, which can have a rug placed here and there artistically upon it, but a house which needs a considerable acreage of floor covering, knows that it is a staggering item. I can speak from my own fairly recent experience, having lived previously in a flat and having moved last year to a house. I had to purchase stair carpet for the first time in my life. To obtain an adequate quality of stair carpet for a small house, but a house with several storeys, cost about £100, which is a substantial outlay. If it is substantial for a Member of Parliament, it is even more substantial for many other members of the community.
  It is useless to buy an inferior quality carpet for stairs or rooms where the carpet is subject to hard wear. The high tax on floor covering is one of the most irritating of all taxes to people who are faced with the expense of furnishing. There are some articles of furniture which one can reasonably buy secondhand and which it may be possible to

  305
  improve a little with craftsmanship, but that does not apply to carpets. One has to buy a carpet of reasonable quality if one is to have any wear out of it. It is false economy not to do so. The burden and the cost of obtaining floor coverings is therefore very considerable and our argument is primarily that expenditure on these items should logically be on the same basis as that on other articles of furniture.
  The hon. Member for Kidderminster tried to have it both ways. He tried to appear to support his constituency industry and to support the Government at the same time. This is not the first Amendment to the Bill on which he has taken that attitude.
  Mr. Nabarro: That is not accurate.
  Mrs. White: It is a perfectly accurate description of the hon. Member's behaviour throughout the Bill. He does not support or vote for his own Amendments and yet he tries to obtain as much credit as he can. We feel that it is a matter of principle that these articles should be considered to be in the same category as furnishings and we therefore feel that the Amendment should be pressed.
  Mr. Simon: If I rise to reply to the debate it is not because—
  Mr. David Weitzman: Is the hon. and learned Gentleman doing so with permission of the hon. Member for Kidderminster (Mr. Nabarro)?
  Mr. Simon: If I rise to reply to the debate it is not because I doubt for a moment that my hon. Friend the Member for Kidderminster (Mr. Nabarro) is right when he says that his answers to the points made by the hon. Member for Bristol, North-East (Mr. Coldrick) were conclusive. I think that anybody who

  Division No. 148.]

  AYES

  [8.12 p.m.

  Ainsley, J. W.

  Bottomley, Rt. Hon. A. G.

  Castle, Mrs. B. A.

  Allaun, Frank (Salford, E.)

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

  Clunie, J.

  Allen, Arthur (Bosworth)

  Bowen, E. R. (Cardigan)

  Coldrick, W.

  Allen, Scholefield (Crewe)

  Bowles, F. G.

  Collins, V. J. (Shoreditch & Finsbury)

  Awbery, S. S.

  Braddock, Mrs. Elizabeth

  Cove, W. G.

  Bacon, Miss Alice

  Brockway, A. F.

  Craddock, George (Bradford, S.)

  Balfour, A.

  Broughton, Dr. A. D. D.

  Cullen, Mrs. A.

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

  Brown, Thomas (Ince)

  Dalton, Rt. Hon. H.

  Blackburn, F.

  Burke, W. A.

  Darling, George (Hillsborough)

  Blenkinsop, A.

  Burton, Miss F. E.

  Davies, Rt. Hon. Clement (Montgomery)

  Blyton, W. R.

  Butler, Herbert (Hackney, C.)

  Davies, Stephen (Merthyr)

  Boardman, H.

  Carmichael, J.

  Deer, G.

  views the debate dispassionately will agree with that. It is because I find it impossible to resist any personal appeal, as opposed to political appeals, from the hon. Lady the Member for Flint, East (Mrs. White).
  The hon. Member for Bristol, North-East mentioned the greatest good of the greatest number. That is a good Benthamite principle, but I am afraid that in tax matters it can apply only when it comes to spending the proceeds of the tax. When one considers the raising of money by taxation one must consider the amount of the revenue which is involved.
  When I tell the Committee that this Amendment would cost the Exchequer £14 million a year, I think the Committee will see that that is out of all proportion to the general shape of this year's Budget, even compared with the very considerable concessions that have been made in Purchase Tax by my right hon. Friend. In addition to that, as my hon. Friend the Member for Kidderminster quite rightly pointed out, the tax stood considerably higher in 1951. It was halved in last year's Budget from 30 per cent. to 15 per cent., and at 15 per cent. it falls properly in the very wide range of other household requisites and utensils such as wallpaper, tableware and cutlery, and the less important items of furniture.
  Since there seems to be little doubt that at any rate the carpet trade has flourished as a result of last year's remission in taxation, since it would not fit in with the general shape of the tax which, I think, has commended itself to the whole of the Committee, and because of the cost that would be involved, I cannot advise the Committee to vote for this Amendment.
  Question put, That those words be there inserted:—
  The Committee divided: Ayes 194, Noes 223.

  Delargy, H. J.

  Lawson, G. M.

  Rankin, John

  Diamond, John

  Lee, Frederick (Newton)

  Redhead, E. C.

  Dodds, N. N.

  Lee, Miss Jennie (Cannock)

  Reid, William

  Donnelly, D. L.

  Lever, Harold (Cheetham)

  Roberts, Rt. Hon. A.

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

  Lever, Leslie (Ardwick)

  Roberts, Goronwy (Caernarvon)

  Ede, Rt. Hon. J. C.

  Lewis, Arthur

  Robinson, Kenneth (St. Pancras, N.)

  Edwards, Rt. Hon. Ness (Caerphilly)

  Lindgren, G. S.

  Ross, William

  Edwards, Robert (Bilston)

  Logan, D. G.

  Royle, C.

  Edwards, W. J. (Stepney)

  Mabon, Dr. J. Dickson

  Short, E. W.

  Evans, Albert (Islington, S. W.)

  McAlister, Mrs. Mary

  Silverman, Julius (Aston)

  Fernyhough, E.

  McCann, J.

  Silverman, Sydney (Nelson)

  Finch, H. J.

  MacColl, J. E.

  Simmons, C. J. (Brierley Hill)

  Fletcher, Eric

  McGhee, H. G.

  Skeffington, A. M.

  Foot, D. M.

  McGovern, J.

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

  Forman, J. C.

  McInnes, J.

  Slater, J. (Sedgefield)

  George, Lady Megan Lloyd (Car'then)

  McLeavy, Frank

  Smith, Ellis (Stoke, S.)

  Gibson, C. W.

  MacMillan, M. K. (Western Isles)

  Soskice, Rt. Hon. Sir Frank

  Gordon Walker, Rt. Hon. P. C.

  Mahon, Simon

  Sparks, J. A.

  Grenfell, Rt. Hon. D. R.

  Mallalieu, E. L. (Brigg)

  Stewart, Michael (Fulham)

  Grey, C. F.

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

  Stenes, W. (Consett)

  Griffiths, David (Rother Valley)

  Marquand, Rt. Hon. H. A.

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

  Hale, Leslie

  Mason, Roy

  Summerskill, Rt. Hon. E.

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Mitchison, G. R.

  Sylvester, G. O.

  Hamilton, W. W.

  Moody, A. S.

  Taylor, Bernard (Mansfield)

  Hannan, W.

  Morris, Percy (Swansea, W.)

  Taylor, John (West Lothian)

  Harrison, J. (Nottingham, N.)

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

  Thomas, Iorwerth (Rhondda, W.)

  Hastings, S.

  Mort, D. L.

  Thornton, E.

  Hayman, F. H.

  Moss, R.

  Tomney, F.

  Healey, Denis

  Moyle, A.

  Ungoed-Thomas, Sir Lynn

  Herbison, Miss M.

  Mulley, F. W.

  Usborne, H. C.

  Hobson, C. R. (Keighley)

  Neal, Harold (Bolsover)

  Wade, D. W.

  Holman, P.

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

  Warbey, W. N.

  Houghton, Douglas

  Oliver, G. H.

  Watkins, T. E.

  Howell, Charles (Perry Barr)

  Oram, A. E.

  Weitzman, D.

  Hoy, J. H.

  Oswald, T.

  Wells, Percy (Faversham)

  Hubbard, T. F.

  Owen, W. J.

  Wells, William (Walsall, N.)

  Hughes, Emrys (S. Ayrshire)

  Paget, R. T.

  West, D. G.

  Hughes, Hector (Aberdeen, N.)

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

  Wheeldon, W. E.

  Hunter, A. E.

  Palmer, A. M. F.

  White, Mrs. Eirene (E. Flint)

  Hynd, H. (Accrington)

  Pannell, Charles (Leeds, W.)

  Wilkins, W. A.

  Hynd, J. B. (Attercliffe)

  Parker, J.

  Willey, Frederick

  Irvine, A. J. (Edge Hill)

  Parkin, B. T.

  Williams, David (Neath)

  Irving, Sydney (Dartford)

  Paton, John

  Williams, Rev. Llywelyn (Ab'tillery)

  Janner, B.

  Pearson, A.

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

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

  Peart, T. F.

  Willis, Eustace (Edinburgh, E.)

  Johnson, James (Rugby)

  Pentland, N.

  Wilson, Rt. Hon. Harold (Huyton)

  Johnston, Douglas (Paisley)

  Plummer, Sir Leslie

  Winterbottom, Richard

  Jones, David (The Hartlepools)

  Popplewell, E.

  Woof, R. E.

  Jones, Jack (Rotherham)

  Prentice, R. E.

  Yates, V. (Ladywood)

  Jones, J. Idwal (Wrexham)

  Price, J. T. (Westhoughton)

  Zilliacus, K.

  Jones, T. W. (Merioneth)

  Probert, A. R.

  Kenyon, C.

  Proctor, W. T.

  TELLERS FOR THE AYES:

  Key, Rt. Hon. C. W.

  Pursey, Cmdr. H.

  Mr. Holmes and Mr. Rogers

  King, Dr. H. M.

  Randall, H. E.

  NOES

  Agnew, Sir Peter

  Brooman-White, R. C.

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

  Aitken, W. T.

  Bryan, P.

  Duncan, Sir James

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

  Bullus, Wing Commander E. E.

  Eden, J. B. (Bournemouth, West)

  Amory, Rt. Hn. Heathcoat (Tiverton)

  Burden, F. F. A.

  Elliott, R. W. (Ne'castleupon Tyne, N.)

  Arbuthnot, John

  Butcher, Sir Herbert

  Emmet, Hon. Mrs. Evelyn

  Armstrong, C. W.

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

  Farey-Jones, F. W.

  Ashton, H.

  Campbell, Sir David

  Finlay, Graeme

  Atkins, H. E.

  Carr, Robert

  Fisher, Nigel

  Baldock, Lt.-Cmdr. J. M.

  Cole, Norman

  Fletcher-Cooke, C.

  Baldwin, A. E.

  Cooke, Robert

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  Barber, Anthony

  Cooper-Key, E. M.

  Gammans, Lady

  Barlow, Sir John

  Cordeaux, Lt.-Col. J. K.

  Garner-Evans, E. H.

  Barter, John

  Corfield, Capt. F. V.

  George, J. C. (Pollok)

  Beamish, Col. Tufton

  Craddock, Beresford (Spelthorne)

  Glover, D.

  Bell, Philip (Bolton, E.)

  Crosthwaite-Eyre, Col. O. E.

  Glyn, Col. Richard H.

  Bell, Ronald (Bucks, S.)

  Crowder, Sir John (Finchley)

  Goodhart, Philip

  Bennett, F. M. (Torquay)

  Crowder, Petre (Ruislip—Northwood)

  Gower, H. R.

  Bennett, Dr. Reginald

  Cunningham, Knox

  Graham, Sir Fergus

  Birch, Rt. Hon. Nigel

  Currie, G. B. H.

  Grant, W. (Woodside)

  Bishop, F. P.

  Dance, J. C. G.

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

  Black, C. W.

  Davidson, Viscountess

  Green, A.

  Body, R. F.

  D'Avigdor-Goldsmid, Sir Henry

  Gresham Cooke, R.

  Bossom, Sir Alfred

  Deedes, W. F.

  Grimston, Hon. John (St. Albans)

  Boyle, Sir Edward

  Digby, Simon Wingfield

  Grimston, Sir Robert (Westbury)

  Braine, B. R.

  Donaldson, Cmdr. C. E. McA.

  Grosvenor, Lt.-Col. R. G.

  Braithwaite, Sir Albert (Harrow, W.)

  Doughty, C. J. A.

  Gurden, Harold

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

  du Cann, E. D. L.

  Hall, John (Wycombe)

  308

  309

  Harrison, A. B. C. (Maldon)

  Lucas-Tooth, Sir Hugh

  Ramsden, J. E.

  Harrison, Col. J. H. (Eye)

  Macdonald, Sir Peter

  Redmayne, M.

  Harvey, John (Walthamstow, E.)

  Mackeson, Brig. Sir Harry

  Renton, D. L. M.

  Hay, John

  Mckibbin, Alan

  Roberts, Sir Peter (Heeley)

  Heald, Rt. Hon. Sir Lionel

  Mackie, J. H. (Galloway)

  Robertson, Sir David

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

  Maclay, Rt. Hon. John

  Robinson, Sir Roland (Blackpool, S.)

  Henderson, John (Cathcart)

  McLean, Neil (Inverness)

  Rodgers, John (Sevenoaks)

  Henderson-Stewart, Sir James

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

  Roper, Sir Harold

  Hesketh, R. F.

  MacLeod, John (Ross & Cromarty)

  Russell, R. S.

  Hill, Mrs. E. (Wythenshawe)

  Maddan, Martin

  Scott-Miller, Cmdr. R.

  Hirst, Geoffrey

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

  Sharples, R. C.

  Holland-Martin, C. J.

  Maitland, Hon. Patrick (Lanark)

  Shepherd, William

  Hornby, R. P.

  Manningham-Buller, Rt. Hn. Sir R.

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

  Horobin, Sir Ian

  Markham, Major Sir Frank

  Speir, R. M.

  Horsbrugh, Rt. Hon. Dame Florence

  Marlowe, A. A. H.

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

  Howard, Gerald (Cambridgeshire)

  Marshall, Douglas

  Steward, Harold (Stockport, S.)

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

  Mathew, R.

  Storey, S.

  Hughes Hallett, Vice-Admiral J.

  Maudling, Rt. Hon. R.

  Stuart, Rt. Hon. James (Moray)

  Hughes-Young, M. H. C.

  Mawby, R. L.

  Studholme, Sir Henry

  Hurd, A. R.

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

  Summers, Sir Spencer

  Hutchison, Michael Clark (E'b'gh, S.)

  Medlicott, Sir Frank

  Taylor, Sir Charles (Eastbourne)

  Hyde, Montgomery

  Milligan, Rt. Hon. W. R.

  Teeling, W.

  Hylton-Foster, Rt. Hon. Sir Harry

  Monslow, W.

  Temple, John M.

  Iremonger, T. L.

  Morrison, John (Salisbury)

  Thomas, Leslie (Canterbury)

  Irvine, Bryant Godman (Rye)

  Nabarro, G. D. N.

  Thomas, P. J. M. (Conway)

  Jenkins, Robert (Dulwich)

  Nairn, D. L. S.

  Thompson, Kenneth (Walton)

  Jennings, J. C. (Burton)

  Neave, Airey

  Thompson, R. (Croydon, S.)

  Jennings, Sir Roland (Hallam)

  Nicholls, Harmar

  Thorneycroft, Rt. Hon. P.

  Johnson, Dr. Donald (Carlisle)

  Nicholson, Sir Godfrey (Farnham)

  Tilney, John (Wavertree)

  Johnson, Eric (Blackley)

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

  Turton, Rt. Hon. R. H.

  Joynson-Hicks, Hon. Sir Lancelot

  Noble, Comdr. Rt. Hon. Allan

  Vane, W. M. F.

  Keegan, D.

  Nugent, G. R. H.

  Vaughan-Morgan, J. K.

  Kerby, Capt. H. B.

  Oakshott, H. D.

  Vickers, Miss Joan

  Kerr, Sir Hamilton

  Orr, Capt. L. P. S.

  Vosper, Rt. Hon. D. F.

  Kershaw, J. A.

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

  Wakefield, Edward (Derbyshire, W.)

  Lambton, Viscount

  Osborne, C.

  Wakefield, Sir Wavell (St. M'lebone)

  Langford-Holt, J. A.

  Page, R. G.

  Wall, Patrick

  Leather, E. H. C.

  Pannell, N. A. (Kirkdale)

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

  Leavey, J. A.

  Partridge, E.

  Ward, Dame Irene (Tynemouth)

  Leburn, W. G.

  Peel, W. J.

  Whitelaw, W. S. I.

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

  Pickthorn, K. W. M.

  Williams, Paul (Sunderland, S.)

  Legh, Hon. Peter (Petersfield)

  Pilkington, Capt. R. A.

  Wills, G. (Bridgwater)

  Lindsay, Hon. James (Devon, N.)

  Pitman, I. J.

  Wilson, Geoffrey (Truro)

  Linstead, Sir H. N.

  Pitt, Miss E. M.

  Woollam, John Victor

  Llewellyn, D. T.

  Powell, J. Enoch

  Yates, William (The Wrekin)

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

  Price, David (Eastleigh)

  Low, Rt. Hon. Sir Toby

  Price, Henry (Lewisham, W.)

  TELLERS FOR THE NOES:

  Lucas, Sir Jocelyn (Portsmouth, S.)

  Prior-Palmer, Brig. O. L.

  Mr. Gibson-Watt and

  Lucas, P. B. (Brentford & Chiswick)

  Profumo, J. D.

  Mr. Chichester-Clark.

  Mr. Frederick Mulley: I beg to move, in page 31, line 2, at the end to insert:
  5. Cutlery previously chargeable under Group 13 at 15 per cent. shall be exempt from tax.
  I make no apology for raising again in this Committee the question of Purchase Tax on cutlery ware. Members of the Committee will recall that it is almost an annual occasion for us to debate the Sheffield cutlery industry and to plead for some remission of tax. I think that I am correct in saying—no doubt the Paymaster-General will correct me if I am wrong—that cutlery in the form of knives, forks and spoons are, the only basic, essential, domestic articles that have never been exempt from tax in the whole history of the Purchase Tax scheme. Since Purchase Tax was first introduced during the war there has never been a D scheme or Utility scheme by which any person could buy a knife, fork
  310
  or spoon of whatever quality and no matter how cheap without paying some Purchase Tax.
  Cutlery in the ordinary common or garden meaning of the word means knives, forks or spoons, whereas in the Sheffield technical sense cutlery is anything that cuts, and forks and spoons are generally referred to as flatware. I take it that in this debate we are referring to cutlery in the ordinary sense.
  I contend that knives, forks and spoons are very necessary articles when one is living in an even moderately civilised society. I base my argument again tonight, as I have done in the past, on the fact that when I was a guest of the German Government for five years during the war their provision of amenities was by no means lavish, but they did at least provide us with knives, forks and spoons. I must say that it was a very long time before I had any occasion to

  311
  use a fork because the basic diet could be coped with by the use of a knife and spoon, but the fact is that the lower one's standard of living the more necessary these articles are.
  I would point out to the Paymaster-General that if he had to cut a loaf of bread into five pieces and each piece represented a person's diet for the day he would need a very sharp knife to do so without causing a good deal of argument and confusion. In fact, the system adopted in my particular camp was that four people drew lots as to the order in which they took their piece. The person who actually executed the job was left with the last, or fifth piece. It was an admirable system for providing accuracy in the division of the loaf into five pieces. I am sorry to labour this point, but I say that at the lowest standard of life these articles are absolutely necessary, and they are articles that have never been free from Purchase Tax.
  The hon. Member for Sheffield, Heeley (Sir P. Roberts) will no doubt ask why the Labour Government did not relieve cutlery of Purchase Tax when they were in power. There is some force in that argument, but we have to relate the tax position to the general economic situation of the country at the time. We did not go round telling people "You have never had it so good." In 1950–51, when a concession might have been possible, we were having to conserve metal because of the great demands made on the metal-using industries for rearmament purposes. There is now no shortage of nickel, copper and the like. There are no special reasons for conserving metal. Indeed, many of the metal-using industries are on lower production, so that argument does not apply.
  As well as the obvious consumer interest, there is the trade interest. I was interested in the reply which the Financial Secretary gave to the previous Amendment when he said that, as a result of a reduction in the Purchase Tax on carpets, the carpet industry in Kidderminster was now flourishing. We in Sheffield would like to see the same incentive applied to the cutlery industry, and then it might also flourish. If this argument has worked in regard to Kidderminster, I see no reason why it
  312
  should not work in Sheffield because, in actual fact, the cutlery industry in Sheffield is in quite a serious position. As a result of the restriction on imports, particularly to Australia and New Zealand, trade is very difficult and a great many people are leaving the industry. Skilled workers are being lost and will never come back, and this is an industry which depends very largely on skill.
  I make no secret of the fact that the cutlery industry is not one of the country's most important industries. In purely financial terms, it is not a large industry in the City of Sheffield itself, but I claim that there is a special case for cutlery because of its prestige value. There is great prestige attached to the phrase "Sheffield made". The prestige attached to those words in any class of manufacture or engineering product is very largely due to the great reputation which the city got in its early days from the cutlery industry.
  When Sheffield cutlery is sold abroad it is something which is put on the table and shown. It has a prestige and advertising advantage quite out of proportion to its percentage of this country's trade and exports. Some of the firms are making efforts radically to alter their designs in order to equip themselves better to compete in the export market, and this trade is making very great efforts despite the whole pressure of economic events being against it. On this ground, as well as on the unanswerable ground that the knife, fork and spoon are essential articles for everyone, and therefore ought to be free from tax, I commend the Amendment to the Committee.
  Sir Roland Jennings: I make no apology for intervening, because I have, on many occasions during the past few years, delivered much the same kind of speech as that just made by the hon. Member for Sheffield, Park (Mr. Mulley). What concerned me in years gone by, when his own Government were in power—I shall give him what he expected—was that nothing whatever was done then. The hon. Gentleman said that I should argue that his Government did nothing, but, in my opinion, he gave the wrong reasons. He said that there was a shortage of materials because steel was wanted for other purposes. I say, however, that Sheffield's industry needed then, and

  313
  needs now, some greater encouragement. We have here the way to encourage it.
  Cutlery of the highest quality is produced in Sheffield. I should be very sorry indeed to see the industry become more depressed. I agree entirely with the hon. Gentleman that this is a serious matter from the point of view of Sheffield's cutlery industry. I know the difficulty that my right hon. Friend the Chancellor has in finding the money for this, that and the other, but I make no apology for supporting the Amendment. Here is an industry which needs encouragement and support. I beg the Chancellor, if he makes no change in this Finance Bill, to look at the matter seriously.
  I have collected a great deal of information from the Sheffield cutlery industry. There is no question but that the industry needs some help in this respect. I speak not only for the workers but also for those who are trying, under great difficulties, to run a very renowned industry. I support the hon. Member's Amendment, but I will tell him now that, if he divides the Committee, he will not find me in the Lobby with him, because he should have been in the Lobby with me years ago.
  8.30 p.m.
  Mr. John Hynd: I support the Amendment, but I must say that I rather deplore the speech made by the hon. Member for Sheffield, Hallam (Sir R. Jennings). There is, of course, no point in saying what might have been just after the war any more than there is in saying what might have been during the war. To bring the party issue into this is rather unfortunate. The fact is, as everybody knows, that there was a shortage of steel during and immediately after the war. The most deplorable part of the hon. Member's speech, however, was his invitation to the Chancellor, by implication, not to bother this year but to do something, perhaps, at some other time. That is a remarkable thing for any Member for a Sheffield constituency to say.
  My hon. Friend the Member for Sheffield, Park (Mr. Mulley) and I, together with other Sheffield Members, I am sure, press the Government very seriously to make a further concession on this occasion. I will put the argument on another ground.
  314
  My hon. Friend referred particularly to the importance of cutlery as a basic necessity in every home. One could develop the argument about the importance of cutlery, particularly Sheffield cutlery. One could take it along the line, as I once heard in a less serious discussion in Sheffield, of suggesting that many more historical decisions have been made and disputes settled by a few inches of Sheffield steel than by any other means. That would be hardly relevant to this debate.
  I am mainly concerned about conditions developing in the quality section of the Sheffield cutlery industry, in which the highly skilled craftsmen, many of whom inherited their craftsmanship over the ages, are drifting from the industry because it cannot develop the necessary home and foreign market, largely as a result of competition from mass production in America, Pakistan, Japan and elsewhere. Though faced with this competition, the Sheffield quality cutlery industry, which makes a product of which this country is proud and which stands high in esteem throughout the world, is penalised by the imposition of this tax. I should not object to it so strongly if the tax were really achieving anything, but the Minister will agree, I am sure, that the actual revenue from what remains of the cutlery Purchase Tax is relatively small and not worth the price we are paying in the competitive conditions of today.
  I have raised over and over again, in the Press and elsewhere, the terrible problem created by the sale of "phoney" Sheffield cutlery in America, the sale of cutlery part only of which is made in Sheffield—perhaps only the handle—but which is stamped "Made in Sheffield". The blade is probably stamped underneath "Japan", but the part where the stamp is is shoved into the haft where nobody can see it, thus meeting the requirements of the American equivalent of the Board of Trade. The stamp is on the article though nobody can see it.
  We are penalising the quality manufacturers of Sheffield by maintaining this tax which the Minister will surely admit is not of great importance from the revenue point of view. It is really very regrettable. With very little financial justification, it is having an effect not of creating widespread unemployment in

  315
  Sheffield but of destroying a highly technical industry, an industry which is very important in national prestige.
  I should like to refer to one particular branch of the industry, namely, that producing silver cutlery, nickel silver cutlery and the various alloys of silver and nickel which are used for decorative cutlery. One of the difficulties about the silverware industry is that it is not taxed as an industry; it is taxed according to the category of articles that it produces. The silver knife and fork or the nickel knife and fork are taxed on the same basis as other cutlery. A silver bowl is taxed as a presentation bowl whether it is silver, wood or anything else.
  These two branches of the industry are very much mixed up. Both types of goods are being produced at the same factories. The Minister would be shocked if he went to some of the outstanding and long-established Sheffield factories in the silverware branch of the industry which have names that resound throughout the world. He would find long rows of empty benches, with idle machinery and idle equipment and one or two people working part-time and the rest either unemployed or on short time and gradually drifting away altogether. This is the position in some of the most important, outstanding and well-known firms in Sheffield.
  I ask the Minister to consider what this means. The whole of the silverware industry is threatened because of the effect of Purchase Tax on the industry to the extent that the great name that Sheffield silverware has established throughout the world might become just another part of history. I concede this to the Government. They have made Purchase Tax concessions on cutlery in the past. Hon. Members opposite as well as my hon. Friends have joined in deputations, and we have eventually convinced the Minister that some concessions were desirable, and those concessions have been made. But the fact that these concessions were made is in itself a recognition of the importance of trying to maintain this industry and not to penalise it unnecessarily for a small revenue.
  I ask the Minister whether there is any real purpose in continuing even a token tax on cutlery if the purposes of the previous reductions have not been achieved. We heard in the debate on the
  316
  previous Amendment about the reductions in the tax on carpets which have led to a boom in the industry. The reductions in the case of cutlery have not led to a boom in the cutlery industry, and this small margin still remains. It is only 15 per cent. now, but that is still an imposition which restricts and restrains the development of the industry. Because the concessions previously made have not yet achieved the objective that both the Government and back bench Members want, I make this further appeal to the Minister to consider whether a further reduction or a complete abolition of the tax could be made at this stage without any great sacrifice to the Government.
  Sir Peter Roberts: It was unfortunate that the hon. Member for Sheffield, Attercliffe (Mr. J. Hynd) started his speech by attacking my hon. Friend the Member for Sheffield, Hallam (Sir R. Jennings), because this is not a political issue. But if we are to make it a political issue it is no good the hon. Members for Attercliffe and Sheffield, Park (Mr. Mulley) coming here in white sheets trying to explain why the Labour Party did not do anything about Purchase Tax when it was in power and bringing lame excuses about shortages of nickel. The answer is that the Conservative Government have been far more sympathetic to the cutlery industry in Sheffield than the Labour Government ever has been. Hon. Members opposite should recognise that fact.
  Mr. Mulley: I am sorry that the hon. Gentleman has not yet recognised that his party has been in power for nearly eight years and that anything he complains about now must be the responsibility of his hon. Friends.
  Sir P. Roberts: I was saying that the Conservative Government have reduced this tax in stages from over 50 per cent. to 15 per cent., and for that I am certain the people in Sheffield are grateful.
  Now I come to the second point. I am sorry in a way that the Government consider the cutlery industry in Sheffield less important than, for instance, the film industry. I am sorry that we in Sheffield could not produce a lot of film stars to come along to the Chancellor to ask him for a reduction in tax.
  Mr. Rankin: There is the hon. Member for Kidderminster (Mr. Nabarro).
  Sir P. Roberts: I said film stars. We have in the past produced workers, employers and representatives of the industry who have made their case better than any film star could do, and I am only sorry that this last step has not been taken by the Government so far. We are hopeful that this evening the reasonable arguments which have been put forward by both sides will be considered by my right hon. Friend.
  There is one other small point. I think it will be agreed on both sides of the Committee that there is no reason why safety razor blades should not be considered as cutlery. I do not want to go too far on this, but there is a good argument that safety razor blades really started in the cutlery industry, and I hope my right hon. Friend will bear this in mind in considering tax in the future, even though it might possibly be out of order on this Amendment.
  I hope the arguments he has heard from both sides of the Committee this evening will strengthen my right hon. Friend in his endeavour to take this final step for an industry which affects Sheffield so greatly.
  Mr. Jay: I rather deprecate the introduction of all these party politics into this argument. I only wish to say a word about cutlery. We have had forceful pleas advanced by the experts and, may I say, by the enthusiasts from Sheffield, but there are people interested in cutlery in other parts of the country and this is a matter which also affects the consumer. I would like to make a plea to the Paymaster-General on the grounds of making some contribution towards keeping down the cost of living. This is a case where the Government might do what they have signally failed to do of recent years, to use the Purchase Tax, amongst other things, as a weapon for stabilising the cost of living.
  It was the Paymaster-General himself a few years ago who very sensibly divided the products of industry into necessities, amenities and luxuries. I know that some people say we cannot define a luxury, but nevertheless when one is confronted in practice with a necessity, there is not much difficulty in saying that it is a necessity. My hon. Friend the Member for Sheffield, Park (Mr. Mulley) recounted how even in prisoner-of-war camps cutlery is considered to be essential. I would
  318
  be the last person to argue that anything not found in a prisoner-of-war camp is a luxury. Nevertheless, one can say that anything found in a prisoner-of-war camp must be a necessity, and it seems that it would be possible to make some contribution to lowering the cost of living by giving us further relief from this tax.
  When considering Government policy generally it is rather remarkable at the present time to find that, in spite of all the deflation and stagnation, and the check to the rise in production in the last year or two in this country, the cost of living has continued to rise. I think the Paymaster-General will confirm that it has actually risen by 5 per cent. in the last twelve months in spite of the much higher level of unemployment.
  Mr. Arthur Lewis: And 1s. a ton on coal.
  Mr. Jay: Though that might be out of order, it will contribute further to the rise. What I am saying is that there is an opportunity here, in this Purchase Tax on an absolute and complete and undoubted household necessity, for Government action which would give us some assistance. I make this point to the right hon. Gentleman as a serious economic argument which does not apply purely to cutlery. It is never appreciated that if a tax is imposed on some article of ordinary household use, where the rise in its price is likely to be taken into account in wage negotiations, then any increase in the Purchase Tax is definitely inflationary in the country generally. If we put the same tax on something which is inessential, the increased price of which would never be advanced as an argument in wages negotiations, then an increased tax is just the opposite and is almost certainly disinflationary. A tax on cutlery is most certainly an inflationary tax, and I would just add this argument to the eloquent ones we have heard from hon. Members from Sheffield in the hope that the Paymaster-General may seriously consider this important Amendment.
  8.45 p.m.
  Finally, I think there is force in the argument advanced by my hon. Friend—I hope the experts from Sheffield will confirm this—that this is the first moment, by and large, for nearly twenty years in this country in which there has been surplus capacity for the production

  319
  of steel. I think that establishes a stronger priority for making this concession than perhaps existed even in previous years. I hope the Paymaster-General will seriously consider all these arguments.
  Mr. Maudling: We have had a very wide-ranging debate, bringing in silverware, razor blades and even the price of coal, which came in by a side door. We even had the beginnings of an economic dissertation on inflation which might have been of a rather complicated character if it had been pursued much further.
  If the right hon. Gentleman the Member for Battersea, North (Mr. Jay) excluded from taxation all the items appearing in the cost of living index, he would be removing from taxation pretty well the whole of the articles now subject to the Purchase Tax. The idea that we could levy indirect taxation solely on luxuries is in fact a fallacy which ought now to be abandoned.
  Mr. Jay: May I make this interjection? I was not making the basis of my criterion all the items in the cost-of-living index, but those items where a rise in price was likely to be taken into account in wage negotiations.
  Mr. Maudling: Surely, that is a complete fallacy, because what is quoted in wages negotiations is the cost-of-living index. Included in that index are many things which could not possibly be described as necessities. However, we may get a little more out of order than we are at the moment if we pursue that, and I think you, Mr. Macpherson, have been very generous in allowing us to go so far.
  Returning to the strict matter of the Amendment, as the hon. Member pointed out, it deals with what is commonly known as cutlery—ordinary knives, forks and spoons, but not articles that are used for trade purposes, such as butchers' knives and surgical scissors, which I believe are already exempt from taxation. There were two general arguments advanced by the representatives of Sheffield constituencies on both sides of the Committee. One is that cutlery in this sense is a necessity and not a luxury, and the other is that the cutlery trade deserves support and encouragement.
  320
  On the first point, everyone in this country will agree that cutlery is a necessity, but I am afraid that I cannot accept the corollary of the hon. Gentleman's argument that because it is a necessity it must therefore be exempt from Purchase Tax. As has been argued on many occasions already in the discussions on the Finance Bill, it is the opinion of the Government that the Purchase Tax should be a broadly-based tax, and we do not think that it is possible in modern conditions to get the amount of revenue which we must get from indirect taxation without levying it over a very wide range of things. That is why there are in the Bill a number of items—clothing, furniture and all sorts of things—which, equally with cutlery, could be regarded as necessities.
  The tax of 15 per cent. which is borne by cutlery is the rate which my right hon. Friend the Chancellor described in his original Budget proposals as that which he considers suitable for normal articles of essential domestic use. The standard rate, or what we now describe as the standard rate, is 30 per cent., and the 15 per cent. rate borne by cutlery is the reduced rate for articles of essential domestic use, things like floor coverings, which we have just been discussing, hardware, kitchen ware of all kinds, and domestic appliances not operated by gas or electricity. I think it would be wrong to single out cutlery, which, clearly, I would argue, falls properly in this general category of household necessities, and which is taxed at 15 per cent.
  The second argument was that based upon the condition of the industry. The figures that I have been given show a rather more encouraging picture of the present state of the cutlery trade than one might gather from some of the remarks made by hon. Members. The figures which I have of the sales for the industry show that, after a decline in 1955 and 1956, there was a substantial increase in total sales in 1957. The export trade, which had been falling, seemed to steady up, and there was a big increase in home sales in 1957, a rise from just over £5 million to just under £6 million. I imagine that must have been partly connected with last year's Budget, because as my hon. Friends have pointed out, in that Budget the rate was reduced from 30 per cent. to 15 per cent. In addition, in

  321
  October, 1955, the higher charge on silver cutlery, to which the hon. Member for Sheffield, Attercliffe (Mr. J. Hynd) referred, was abolished.
  Consequently, I think that, by and large, we have done a good deal already to assist the cutlery trade. I will not go into the argument as to which party has done more for the cutlery industry, because it is obvious that the answer is as expressed by my hon. Friends. Though the cutlery industry is undoubtedly having difficulty, particularly with the export trade, I do not think the figures of sales for 1957, which probably reflect to some extent the concessions in last year's Budget, present a conclusive case for making a further concession at this stage.

  Division No. 149.]

  AYES

  [8.53 p.m.

  Ainsley, J. W.

  Grey, C. F.

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

  Allaun, Frank (Salford, E.)

  Griffiths, David (Rother Valley)

  Marquand, Rt. Hon. H. A.

  Allen, Arthur (Bosworth)

  Hale, Leslie

  Mason, Roy

  Allen, Scholefield (Crewe)

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Mitchison, G. R.

  Awbery, S. S.

  Hamilton, W. W.

  Monslow, W.

  Bacon, Miss Alice

  Hannan, W.

  Moody, A. S.

  Balfour, A.

  Harrison, J. (Nottingham, N.)

  Morris, Percy (Swansea, W.)

  Bellenger, Rt. Hon. F. J.

  Hastings, S.

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

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

  Hayman, F. H.

  Mort, D. L.

  Blackburn, F.

  Healey, Denis

  Moss, R.

  Blenkinsop, A.

  Herbison, Miss M.

  Moyle, A.

  Blyton, W. R.

  Hobson, C. R. (Keighley)

  Mulley, F. W.

  Boardman, H.

  Holman, P.

  Neal, Harold (Bolsover)

  Bottomley, Rt. Hon. A. G.

  Holmes, Horace

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

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

  Houghton, Douglas

  Oliver, G. H.

  Bowen, E. R. (Cardigan)

  Howell, Charles (Perry Barr)

  Oram, A. E.

  Bowles, F. G.

  Hoy, J. H.

  Oswald, T.

  Braddock, Mrs. Elizabeth

  Hubbard, T. F.

  Owen, W. J.

  Brockway, A. F.

  Hughes, Emrys (S. Ayrshire)

  Paget, R. T.

  Broughton, Dr. A. D. D.

  Hughes, Hector (Aberdeen, N.)

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

  Brown, Thomas (Ince)

  Hunter, A. E.

  Palmer, A. M. F.

  Burke, W. A.

  Hynd, H. (Accrington)

  Pannell, Charles (Leeds, W.)

  Burton, Miss F. E.

  Hynd, J. B. (Attercliffe)

  Parker, J.

  Butler, Herbert (Hackney, C.)

  Irvine, A. J. (Edge Hill)

  Parkin, B. T.

  Carmichael, J.

  Irving, Sydney (Dartford)

  Paton, John

  Castle, Mrs. B. A.

  Janner, B.

  Peart, T. F.

  Clunie, J.

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

  Pentland, N.

  Coldrick, W.

  Johnson, James (Rugby)

  Plummer, Sir Leslie

  Collins, V. J. (Shoreditch & Finsbury)

  Johnston, Douglas (Paisley)

  Popplewell, E.

  Cove, W. G.

  Jones, David (The Hartlepools)

  Prentice, R. E.

  Craddock, George (Bradford, S.)

  Jones, Jack (Rotherham)

  Price, J. T. (Westhoughton)

  Cullen, Mrs. A.

  Jones, J. Idwal (Wrexham)

  Probert, A. R.

  Dalton, Rt. Hon. H.

  Jones, T. W. (Merioneth)

  Proctor, W. T.

  Davies, Rt. Hn. Clement (Montgomery)

  Kenyon, C.

  Pursey, Cmdr. H.

  Davies, Stephen (Merthyr)

  Key, Rt. Hon. C. W.

  Randall, H. E.

  Deer, G.

  King, Dr. H. M.

  Rankin, John

  Delargy, H. J.

  Lawson, G. M.

  Redhead, E. C.

  Diamond, John

  Lee, Frederick (Newton)

  Reid, William

  Dodds, N. N.

  Lee, Miss Jennie (Cannock)

  Robens, Rt. Hon. A.

  Donnelly, D. L.

  Lever, Harold (Cheetham)

  Robinson, Kenneth (St. Pancras, N.)

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

  Rogers, George (Kensington, N.)

  Ede, Rt. Hon. J. C.

  Lever, Leslie (Ardwick)

  Ross, William

  Edwards, Rt. Hon. Ness (Caerphilly)

  Lewis, Arthur

  Royle, C.

  Edwards, Robert (Bilston)

  Lindgren, G. S.

  Short, E. W.

  Edwards, W. J. (Stepney)

  Mabon, Dr. J. Dickson

  Silverman, Julius (Aston)

  Evans, Albert (Islington, S. W.)

  McAlister, Mrs. Mary

  Silverman, Sydney (Nelson)

  Fernyhough, E.

  McCann, J.

  Skeffington, A. M.

  Finch, H. J.

  MacColl, J. E.

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

  Fletcher, Eric

  McGhee, H. G.

  Slater, J. (Sedgefield)

  Foot, D. M.

  McGovern, J.

  Smith, Ellis (Stoke, S.)

  Forman, J. C.

  Molnnes, J.

  Soskice, Rt. Hon. Sir Frank

  George, Lady Megan Lloyd (Car'then)

  McLeavy, Frank

  Sparks, J. A.

  Gibson, C. W.

  MacMillan, M. K. (Western Isles)

  Stewart, Michael (Fulham)

  Gordon Walker, Rt. Hon. P. C.

  Mahon, Simon

  Stones, W. (Consett)

  Grenfell, Rt. Hon. D. R.

  Malialieu, E. L. (Brigg)

  Strachey, Rt. Hon. J.

  The cost of the concession would be £2¼ million. I would tell the hon. Member for Attercliffe that my right hon. Friend could not regard that as an unconsidered trifle; it is a rather substantial amount. Perhaps the hon. Member did not realise that it would be as much as that. Because of the size of the loss of revenue involved and because it would mean taking cutlery out of the generality of household essentials, my right hon. Friend feels that he cannot accept the Amendment.
  Question put, That those words be there inserted:—
  The Committee divided: Ayes 196, Noes 221.

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

  Warbey, W. N.

  Williams, Rev. Llywelyn (Ab'tillery)

  Summerskill, Rt. Hon. E.

  Watkins, T. E.

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

  Sylvester, G. O.

  Weitzman, D.

  Willis, Eustace (Edinburgh, E.)

  Taylor, Bernard (Mansfield)

  Wells, Percy (Faversham)

  Wilson, Rt. Hon. Harold (Huyton)

  Taylor, John (West Lothian)

  Wells, William (Walsall, N.)

  Winterbottom, Richard

  Thomas, Iorwerth (Rhondda, W.)

  West, D. G.

  Woof, R. E.

  Thomson, George (Dundee, E.)

  Wheeldon, W. E.

  Yates, V. (Ladywood)

  Thornton, E.

  White, Mrs. Eirene (E. Flint)

  Zilliacus, K.

  Tomney, F.

  Wilcock, Group Capt. C. A. B.

  Ungoed-Thomas, Sir Lynn

  Wilkins, W. A.

  TELLERS FOR THE AYES:

  Usborne, H. C.

  Willey, Frederick

  Mr. Pearson and Mr. Simmons.

  Wade, D. W.

  Williams, David (Neath)

  NOES

  Agnew, Sir Peter

  Gower, H. R.

  Manningham-Buller, Rt. Hn. Sir R.

  Aitken, W. T.

  Graham, Sir Fergus

  Markham, Major Sir Frank

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

  Grant, W. (Woodside)

  Marlowe, A. A. H.

  Amory, Rt. Hn. Heathcoat (Tiverton)

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

  Marshall, Douglas

  Arbuthnot, John

  Green, A.

  Mathew, R.

  Armstrong, C. W.

  Gresham Cooke, R.

  Maudling, Rt. Hon. R.

  Ashton, H.

  Grimston, Hon. John (St. Albans)

  Mawby, R. L.

  Atkins, H. E.

  Grimston, Sir Robert (Westbury)

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

  Baldock, Lt.-Cmdr. J. M.

  Grosvenor, Lt.-Col. R. G.

  Medlicott, Sir Frank

  Baldwin, A. E.

  Gurden, Harold

  Milligan, Rt. Hon. W. R.

  Barber, Anthony

  Hall, John (Wycombe)

  Molson, Rt. Hon. Hugh

  Barlow, Sir John

  Harrison, A. B. C. (Maldon)

  Morrison, John (Salisbury)

  Barter, John

  Harvey, John (Walthamstow, E.)

  Nabarro, G. D. N.

  Beamish, Col. Tufton

  Heald, Rt. Hon. Sir Lionel

  Nairn, D. L. S.

  Bell, Philip (Bolton, E.)

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

  Neave, Airey

  Bell, Ronald (Bucks, S.)

  Henderson, John (Cathcart)

  Nicholls, Harmar

  Bennett, F. M. (Torquay)

  Henderson-Stewart, Sir James

  Nicholson, Sir Godfrey (Farnham)

  Bennett, Dr. Reginald

  Hesketh, R. F.

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

  Birch, Rt. Hon. Nigel

  Hill, Mrs. E. (Wythenshawe)

  Noble, Comdr. Rt. Hon. Allan

  Bishop, F. P.

  Hirst, Geoffrey

  Nugent, G. R. H.

  Black, C. W.

  Holland-Martin, C. J.

  Oakshott, H. D.

  Body, R. F.

  Hope, Lord John

  Orr, Capt. L. P. S.

  Bossom, Sir Alfred

  Hornby, R. P.

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

  Boyle, Sir Edward

  Horobin, Sir Ian

  Osborne, C.

  Braine, B. R.

  Horsbrugh, Rt. Hon. Dame Florence

  Page, R. G.

  Braithwaite, Sir Albert (Harrow, W.)

  Howard, Gerald (Cambridgeshire)

  Pannell, N. A. (Kirkdale)

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

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

  Partridge, E.

  Brooman-White, R. C.

  Hughes Hallett, Vice-Admiral J.

  Peel, W. J.

  Bryan, P.

  Hughes-Young, M. H. C.

  Peyton, J. W. W.

  Bullus, Wing Commander E. E.

  Hurd, A. R.

  Pickthorn, K. W. M.

  Burden, F. F. A.

  Hutchison, Michael Clark (E'b'gh, S.)

  Pilkington, Capt. R. A.

  Butcher, Sir Herbert

  Hyde, Montgomery

  Pitman, I. J.

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

  Hylton-Foster, Rt. Hon. Sir Harry

  Pitt, Miss E. M.

  Campbell, Sir David

  Iremonger, T. L.

  Powell, J. Enoch

  Carr, Robert

  Irvine, Bryant Godman (Rye)

  Price, David (Eastleigh)

  Chichester-Clark, R.

  Jenkins, Robert (Dulwich)

  Price, Henry (Lewisham, W.)

  Cooke, Robert

  Jennings, J. C. (Burton)

  Prior-Palmer, Brig. O. L.

  Cooper-Key, E. M.

  Johnson, Dr. Donald (Carlisle)

  Profumo, J. D.

  Cordeaux, Lt.-Col. J. K.

  Johnson, Eric (Blackley)

  Ramsden, J. E.

  Corfield, Capt. F. V.

  Jovnson-Hicks, Hon. Sir Lancelot

  Redmayne, M.

  Craddock, Beresford (Spelthorne)

  Keegan, D.

  Renton, D. L. M.

  Crosthwaite-Eyre, Col. O. E.

  Kerby, Capt. H. B.

  Robertson, Sir David

  Crowder, Sir John (Finchley)

  Kerr, Sir Hamilton

  Robinson, Sir Roland (Blackpool, S.)

  Crowder, Petre (Ruislip—Northwood)

  Kershaw, J. A.

  Rodgers, John (Sevenoaks)

  Cunningham, Knox

  Lambton, Viscount

  Roper, Sir Harold

  Currie, G. B. H.

  Langford-Holt, J. A.

  Russell, R. S.

  Dance, J. C. G.

  Leavey, J. A.

  Scott-Miller, Cmdr. R.

  Davidson, Viscountess

  Leburn, W. G.

  Sharples, R. C.

  D'Avigdor-Goldsmid, Sir Henry

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

  Shepherd, William

  Deedes, W. F.

  Legh, Hon. Peter (Petersfield)

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

  Digby, Simon Wingfield

  Lirdsay, Hon. James (Devon, N.)

  Smithers, Peter (Winchester)

  Donaldson, Cmdr. C. E. McA.

  Linstead, Sir H. N.

  Speir, R. M.

  Doughty, C. J. A.

  Llowellyn, D. T.

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

  du Cann, E. D. L.

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

  Steward, Harold (Stockport, S.)

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

  Duncan, Sir James

  Low, Rt. Hon. Sir Toby

  Storey, S.

  Eden, J. B. (Bournemouth, West)

  Lucas, Sir Jocelyn (Portsmouth, S.)

  Stuart, Rt. Hon. James (Moray)

  Elliott, R. W. (Ne'castle upon Tyne, N.)

  Lucas, P. B. (Brentford & Chiswick)

  Studholme, Sir Henry

  Emmet, Hon. Mrs. Evelyn

  Lucas-Tooth, Sir Hugh

  Summers, Sir Spencer

  Farey-Jones, F. W.

  Macdonald, Sir Peter

  Taylor, Sir Charles (Eastbourne)

  Finlay, Graeme

  Mackeson, Brig. Sir Harry

  Teeling, W.

  Fisher, Nigel

  McKibbin, Alan

  Temple, John M.

  Fletcher-Cooke, C.

  Mackie, J. H. (Galloway)

  Thomas, Leslie (Canterbury)

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  Maclay, Rt. Hon. John

  Thomas, P. J. M. (Conway)

  Gammans, Lady

  McLean, Neil (Inverness)

  Thompson, Kenneth (Walton)

  Garner-Evans, E. H.

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

  Thompson, R. (Croydon, S.)

  George, J. C. (Pollok)

  MacLeod, John (Ross & Cromarty)

  Tilney, John (Wavertree)

  Glover, D.

  Maddan, Martin

  Turton, Rt. Hon. R. H.

  Glyn, Col. Richard H.

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

  Vane, W. M. F.

  Goodhart, Philip

  Maitland, Hon. Patrick (Lanark)

  Vaughan-Morgan, J. K.

  324

  325

  Vickers, Miss Joan

  Ward, Dame Irene (Tynemouth)

  Yates, William (The Wrekin)

  Vosper, Rt. Hon. D. F.

  Whitelaw, W. S. I.

  Wakefield, Edward (Derbyshire, W.)

  Williams, Paul (Sunderland, S.)

  TELLERS FOR THE NOES:

  Wakefield, Sir Wavell (St. M'lebone)

  Wills, G. (Bridgwater)

  Colonel J. H. Harrison and

  Wall, Patrick

  Wilson, Geoffrey (Truro)

  Mr. Gibson-Watt.

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

  Woollam, John Victor

  9.0 p.m.
  Mr. Moyle: I beg to move, in page 31, to leave out lines 3 to 15.
  I should like to refer to the debate that we had on buttons on 19th May. I do not want to repeat all the arguments that I used on that occasion, but it might be a good thing if I mentioned that when the Financial Secretary replied to our contention that buttons should be relieved of tax he said that the whole debate had been carried on under a misconception on the part of hon. Members on this side of the Committee. He said:
  "Let me clear up the misconception, which has run through the whole of this debate, that button manufacturers are at a grave disadvantage when selling to the clothing manufacturers compared with the manufacturers of snap fasteners, press studs and so on."—[OFFICIAL REPORT, 19th May, 1958; Vol. 588, c. 1021.]
  At that time, in view of our ignorance of the subject, the Financial Secretary's argument was somewhat devastating. But he did not tell the whole story; that which was not advantageous to him he did not disclose.
  I went into this matter with the manufacturers and discovered not only that buttons supplied by the trade to the registered traders directly are tax-free, but that the products of their competitors enjoy the same freedom. In short, there is no distinction between the zip fastener, the press stud and buttons: they all enjoy exemption from tax, provided that the transaction concerned is within the trade. Therefore, the whole of the argument for the retention of this tax on the button, while relieving its competitors by 25 per cent., was not only iniquitous but also inequitable; and, therefore, our argument still stands.
  The other argument to which the Financial Secretary addressed himself concerned the amount of button production that went into cheap jewellery or imitation jewellery and the amount sold over the counter. I have gone into this matter with the trade, and I am advised that the amount of button production that goes into cheap or imitation jewellery is fragmentary and that the amount sold over the retail trade counter is about 25 per cent. I understand that the Treasury accept that percentage. In terms of
  326
  money it is about million a year, taking that part of the trade which is taxable at 30 per cent.
  With regard to the fragmentary part of the trade, the product described by the Treasury as "buttons" in Group 26 for Purchase Tax purposes, the amount that is covered by that group is relatively small. The main source from which this trade comes is Czechoslovakia. I understand that the bulk of the trade in the conversion of buttons into imitation jewellery has been taken by the Czechs to much greater length than by our people. The fact that we continue to charge tax on this button imitation jewellery puts the local trade at a disadvantage compared with the importer.
  Those are the facts which have been supplied to me by the trade. There is a great deal of feeling in the trade about the action of the Chancellor and his colleagues. The trade cannot understand why a category should suddenly be broken up, leaving the button, in splendid isolation, to bear the whole impost of 30 per cent. in respect of retail trade, parting company for the first time from its competitors, which I have described as clothes fasteners, things like press studs and zip fasteners. This action has put the competitors into a very disadvantageous position.
  The fact is that the circumstances are precisely the same now commercially as they were twelve months ago, and that there is no advantage earned by the button as the result of what the Financial Secretary argued, namely, that the button is tax-free internally, but something else was not. We now discover that they are all tax-free.
  Mr. Simon: The hon. Member for Oldbury and Halesowen (Mr. Moyle) is always perfectly fair to me and he would not wish to misrepresent me. I never suggested and I never intended to suggest that the zip fastener, or any other competitor of the button, paid tax when it went to the manufacturers.
  Mr. Moyle: I accept that statement. The inference is that the hon. and learned Gentleman knew, judging by the very

  327
  clever presentation of his Clause, that the button was still peculiarly in the position of being tax-free when sold direct while its competitors were not.
  In equity, the button manufacturers have an overwhelmingly strong case. The Financial Secretary says that we have to maintain a logical structure of Purchase Tax. The Chancellor has no case here in logic or equity. If we want logic and equity to return to their former glory, this matter should be put right in the sense I have indicated.
  I do not know whether I am knocking at an open door. There is nothing worse for an advocate than to argue' a case when someone knows that he is knocking at an open door. I have an idea that the Chancellor has been somewhat influenced by arguments which have come from both sides of the Committee on this issue. In our last debate, the right hon. Member for Thirsk and Malton (Mr. Turton) spoke strongly in support of the contention I am once again advancing. I do not want to prolong the debate on this issue and will end my speech in faith and hope and with, I trust, a certain amount of charity from the Chancellor. That may bring him somewhere near us and help button manufacturers to feel that they have received justice at his hands, which they certainly did not have over the Whitsun Recess.
  Mr. R. H. Turton: I wish to support the arguments used by the hon. Member for Oldbury and Halesowen (Mr. Moyle). In the last debate, I think that for once the Financial Secretary was a little unfair, because he started by espying what he regarded as artificial jewellery on the dress on the hon. Lady the Member for Flint. East (Mrs. White). That made us all rather regard these ordinary domestic articles as something of adornment and embellishment. My hon. and learned Friend will agree that if a button is imitation or even real jewellery it does not come under Group 5 at all but under Group 26. Equally, under the proposals of my right hon. Friend if a button is imitation or real jewellery it will not come under Group 4 but under Group 5 and be classified as jewellery rather than as a button.
  I am not pleading for an article of great adornment, but for the ordinary
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  utility button. It seems anomalous that the ordinary plastic, linen, wooden or bone button should be treated differently from other dress fasteners. The Financial Secretary made the further point that a great part of the buttons when sold to registered manufacturers did not pay duty and only a very small proportion went to the retail trade. The hon. Member for Oldbury and Halesowen said that in his view 25 per cent. of the trade of button manufacturers is in the retail trade. I feel sure he has evidence for that.
  In many button factories the proportion is a great deal higher. Buttons which go to local dressmakers are usually sold on cards, whereas those sold to registered manufacturers are usually sold loose. It is true that some manufacturers put them on cards and sell them to retailers, but for the purpose of the argument we can say that those sold on cards are certainly going to retailers and the majority, sold loose, are going to manufacturers. I have asked the factory near my constituency to give me particulars, and I find that 40 per cent. of their sales are on cards and 60 per cent. loose. In their view, therefore, at least 40 per cent. of their trade goes to the retailer.
  In view of these facts, I hope that my right hon. Friend will find some way to remedy the anomaly. I think such a way is already possible in the Schedule. I hope that he will be able to distinguish the button which is adornment or jewellery from the button which is purely utility and that he will keep the tax on the utility button at 5 per cent. I hope that, having registered the arguments which have been put from both sides of the Committee, he will give some concession on what I believe is an anomaly in the Schedule.
  9.15 p.m.
  Mr. Victor Yates: I fully support the views expressed by the right hon. Member for Thirsk and Malton (Mr. Turton). As one who has often tried to obtain a tax reduction on jewellery, I have never had representations made to me, nor, as far as I know, have any representations been made, for special concessions for the jewellery type of button.
  By placing the ordinary button in a less favourable position than other forms

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  of fastener the Chancellor will add considerably to the difficulties of the button manufacturers. My hon. Friend the Member for Oldbury and Halesowen (Mr. Moyle) referred to what the Financial Secretary said on this matter on 19th May. The hon. and learned Gentleman said
  "I can say, however, that by far the greater proportion of the buttons that are produced are sold to the trade and are tax free and, therefore, compete equally with tax-free zips—which are more expensive—."—[OFFICIAL REPORT, 19th May, 1958; Vol. 588, c. 1022.]
  I have here a letter addressed to the Treasury by the chairman of the Button Manufacturers' Association, in which he refutes this statement and says:
  "During our discussion the point was suggested that the bulk of our manufactured buttons were sold to clothing contractors or manufacturers. Therefore the matter of Purchase Tax was of no great consequence. We strongly refute this. Our Association calculates that at wholesale selling prices, on which Purchase Tax is assessed, the annual sale of buttons to the retail exceed £l½ million."
  Mr. Simon: It is still true that the greater proportion is sold to the manufacturer.
  Mr. Yates: I do not know what the hon. and learned Member means by that. He must have some information and some figures. It is not good enough merely to say that the bulk goes to the manufacturer. This is a very important figure for him to dismiss—£1½ million of retail purchases. The letter continues:
  "Most of these buttons are purchased for the home making of clothes such is knitwear. … A very large number of housewives who assist in fostering fashion trends will in their home making of various garments receive decided encouragement to buy zip fasteners instead of buttons."
  I cannot see why the Treasury should have distinguished between the two.
  I believe that there are, at present, three types of button—the jewellery type, the ordinary type, and another button that is tax-free. There has never been any difficulty in their differentiation, but if hooks and eyes, press studs and zip fasteners are now to be put into a much lower category it will have a serious effect on the button industry.
  Although I have many firms in the jewellery industry in my constituency, I also have button manufacturers, who inform me that they are extremely perturbed
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  at this sort of discrimination, a discrimination that will add considerably to the anomalies. The Financial Secretary knows that by Question in this House I have put to him the anomaly between one sort of tiepin and one sort of tie clip that is exempt while others, though similar, are taxed. These things all form part of an individual's dress accessories, and this differentiation is causing the utmost confusion.
  For example, a firm in my constituency tells me that advertising badges, and badges for organisations and bona fide clubs, are normally free of tax, but that because of the recent Budget alterations badges with a stick-in pin fastening are regarded as tiepins. A stick-in pin for the National Union of General and Municipal Workers is subject to tax at the rate of 30 per cent., though if some other fastening or contraption is used there is no tax at all. I understand, too, that badges for the Brownies—an organisation that does such very useful work—are now to be taxed at 30 per cent.
  I therefore hope that the Chancellor will seriously consider this matter, otherwise this discrimination will have a very serious effect upon the button industry. It is true, as my hon. Friend the Member for Oldbury and Halesowen says, that the proportion of the jewellery type of button is very small—the button manufacturers say that it is less than 50 per cent.—but there is a retail trade worth £1½ million annually. I do not think that there should be this discrimination, and I hope that we shall have a hopeful statement about it.
  Mr. S. O. Davies: A remark made by the right hon. Gentleman the Member for Thirsk and Malton (Mr. Turton) brings me to my feet. When we discussed this matter before, I admitted that I had a constituency interest, because in that area there is a very fine button factory more than 50 per cent. of whose production goes to the retail trade. They are forced to do that, I am told, because of the Purchase Tax on buttons and the efforts of manufacturers to cut down overheads to the absolute minimum.
  I do not blame the Financial Secretary for his very interesting argument, apparently in its favour, when he remarked on the ornamental trimming or button that my hon. Friend the Member for Flint, East (Mrs. White) was wearing

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  on that occasion. I do not think that was very fair, because the hon. Lady, as the Financial Secretary knows only too well, is invariably charmingly and attractively, if not impressively, attired for this Front Bench. At any rate, this is one part of the Committee which lends a little colour in the otherwise somewhat drab collection we represent.
  One point which has been referred to by the hon. Member for Oldbury and Halesowen (Mr. Moyle) is with regard to the ornamental button, but are we not correct in saying that the greater portion of ornamental buttons is imported and does not amount to more than 5 per cent. of all the buttons manufactured and sold in this country? I hope the Financial Secretary is now most anxious to get to his feet to allay our misgivings and to give us a very happy piece of information.
  Mr. Redhead: I prolong this discussion very briefly for the purpose of drawing the attention of the Committee to the fact that this Amendment has rather more involved in it than the subject which has formed the concentration of the argument, namely, buttons. There is a real expectancy that the Chancellor of the Exchequer will make some concession on this point, but I want to draw attention to the fact that it will not really meet the purpose of this Amendment, or the case that lies behind it, if a concession is made on buttons alone.
  I appeal to the Chancellor by reference to his own expressed purpose in his Purchase Tax proposals in the Bill. He has told us that he is very anxious to avoid anomalies and to simplify and streamline the tax. I suggest that in this case he is doing precisely the opposite; he is not simplifying but, in fact, confusing. The Amendment is concerned not only with buttons, but with such things as beads, sequins and similar articles; buttons, including shapes and moulds there for, cuff links and studs, hatpins; tiepins, tie-retainers, scarf rings, scarf holders and similar articles; hairpins, hair grips, hair curlers, dress combs, hair slides and similar articles.
  The point to which I wish to draw attention is the fact that all these articles have hitherto been charged at a common
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  rate with a whole range of other accessories of attire and minor articles of apparel. Those other items, hitherto embraced in the articles with which we are concerned in this Amendment under the general heading of haberdashery, have been reduced in the tax charge to 5 per cent. under the Bill. But these particular articles are singled out to be maintained at a charge of 30 per cent.
  If the Chancellor is really concerned with simplification and streamlining, I suggest that to apply to a whole range of articles which had hitherto enjoyed a common rate of tax no less than three different rates of tax, as will now be done in the Bill—5 per cent., 15 per cent. and 30 per cent.—is not simplification, but is adding unnecessarily to the confusion.
  The argument has been—I think that the Financial Secretary adduced it—that beads, sequins and buttons are often decorative articles and almost indistinguishable from imitation jewellery or articles in the jewellery classification. But this has been implicit in the whole category from its inception. To the best of my knowledge it has never been beyond the capacity of Customs and Excise to deal with that situation and to charge under the appropriate classification those articles which could rightly be regarded as jewellery or imitation jewellery. I see no reason why this complication should need to be introduced by separating these particular articles from the main stream of haberdashery.
  Moreover, these proposals include a provision that hatpins and tiepins of base metal, which hitherto have been exempt from tax, will henceforth be charged at 30 per cent. These items and others such as cuff links, studs, hairpins and hair curlers, though they be of common metal and by no stretch of the imagination can be described as decorative, are to be charged at 30 per cent. just as if they were articles of gold or silver or studded with precious stones.
  9.30 p.m.
  I suggest that it would serve the Chancellor's purpose to meet the Amendment in its entirety and not confine any concession he might be disposed to make purely to buttons. I entirely agree with the argument about buttons. There is an enormous range of buttons which can hardly be described as decorative. I would even go so far as to suggest that

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  the humble trouser button, of which there must be millions, is itself an article not only of utility but, strictly speaking, an article of necessity which might almost be embraced within the terms of our earlier discussion on the subject of protective clothing.
  I should like to remind the hon. and learned Gentleman of a point I made at an earlier stage, about the added absurdity of charging this range of articles at 30 per cent. as separate articles, whereas, if a purchaser buys a complete garment which may be smothered with beads, sequins or buttons with no other purpose, perhaps, than decoration, the whole garment, including the value of the added decorations, is chargeable at 5 per cent. If the purchaser thereafter, however, seeks to replace those things and buys them separately as replacements, he must pay 30 per cent. Surely, this creates a fresh anomaly in the process of the Chancellor's attempt to remove anomalies. I hope, therefore, that he will address himself to the Amendment in its entirety.
  Mrs. White: We had a fairly long discussion at an earlier stage of our proceedings which dealt with most of the articles included once more in this Amendment. My hon. Friend the Member for Walthamstow, West (Mr. Redhead) is quite right to draw attention to the fact that, although the most important part of the argument, perhaps, was directed to buttons, there was a number of other items included in the Amendment.
  At the time of our earlier discussion, the Financial Secretary suggested that most of the articles concerned could be confused in some way with, or might be indistinguishable from, artificial jewellery. If the hon. and learned Gentleman looks at page 31, he will surely not suggest that the first three, at least, hairpins, hairgrips and hair curlers, could in any circumstances be regarded as indistinguishable from jewellery. Indeed, I have always considered hair curlers to be one of the less romantic or attractive appurtenances of female attire.
  The hair grip, too, as my hon. Friend the Member for Lanarkshire, North (Miss Herbison) pointed out on the last occasion, is not usually a decorative item. Nor is a hairpin. I grant that a dress comb or hair slide may have
  334
  some ornamentation upon it which would make it classifiable, perhaps, with jewellery, but that really does not excuse the Chancellor for having put in these very necessary but not particularly beautiful objects, namely, hairpins, hair grips and hair curlers, with the other items we are discussing.
  I hope that, between now and the Report stage, he will reconsider at least this particular group. There is no justification in logic for what he proposes. As my hon. Friend the Member for Walthamstow, West pointed out, it brings in merely yet another anomaly. I should have thought that the Chancellor might very reasonably, without appreciable loss of revenue, modify that particular group.
  Our main argument has been concerned with the competitive position of the button. We have had very eloquent and informative speeches from my hon. Friends the Members for Oldbury and Halesowen (Mr. Moyle), Merthyr Tydvil (Mr. S. 0. Davies) and Birmingham, Ladywood (Mr. V. Yates), and, of course, the right hon. Member for Thirsk and Malton (Mr. Turton) has, I believe, a constituency interest and considerable information on the subject. I think it was made clear in the Committee on the last occasion that theirs was a very strong argument indeed. If I may be permitted to refer to my own remarks on that occasion, I said that the Chancellor had given way at very great expense on dividend stripping, at much less expense on miners' helmets, and I strongly suspected that he would find it politic to give way on buttons. He now has an opportunity to fulfil my prophecy.
  If the Chancellor finds that it is not possible to give the complete measure for which we are asking, we shall be interested to know whether he has at least some proposals to make, because the Financial Secretary last time made the point that some buttons, as well as these other articles, might be considered to be indistinguishable from artificial jewellery. He even made some complimentary references to the garment that I was then wearing. I took the precaution of coming most soberly arrayed today so that he could not have the benefit of that argument on this occasion. However, I believe that there are three types of button, one of which might be considered

  335
  to be akin to jewellery. There is also the uniform button which is worn by various Services, and so on. Then there is the normal button used in the tailoring trades and garment trades for which we could find no reason for the present rate of tax.
  Therefore, we should be very happy to learn from the Chancellor whether he has had second thoughts on this matter in view of the most persuasive, well-informed and lucid arguments which have been put forward from both sides. If he is now prepared to give the Committee the results of his cogitation, we shall be very happy to hear what he has to say.
  Mr. Amory: I have no doubt whatever about the importance of buttons. Since coming into the House today I have had the misfortune to lose a button, and all I can say is that it creates an uncomfortable feeling of uncertainty in one's mind.
  Mr. Harold Wilson: Is the Chancellor aware that the phrase coined by the former Financial Secretary for such a circumstance is "a yawning gap"?
  Mr. Amory: In view of the absolute necessity of replacing this button, I am not sure whether I ought not to say that I have an interest to declare.
  My hon. and learned Friend the Financial Secretary said on this subject at an earlier stage of our deliberations that he would report the discussion to me and ask me to consider the arguments that had been brought forward during the debate. I did read the arguments. As the hon. Lady the Member for Flint, East (Mrs. White) said, there are different types of button, and one of our difficulties is to differentiate between the normal plain functional button and the ornamental variety, of which she herself produced such an agreeable sample on the last occasion, although, as she said, she has played cautious and a plainer type of button is her selected mode of adornment today.
  I was impressed with some of the arguments produced by hon. Members on the last occasion, and I realise that there are arguments for saying that the majority of buttons, certainly plain buttons, fall into the category of "clothes" more neatly
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  than perhaps any other category. So, on further consideration, I think it would not be inappropriate that the plain ordinary buttons should come into the category which is chargeable at the rate of 5 per cent. Ornamental and fancy buttons would fall to be considered under the other group which deals with imitation jewellery. That will afford the authorities considerable difficulty in differentiating, but it is the kind of problem we always do our best to deal with, and we will certainly do our best on this occasion to draw the line at the right and fair place.
  My difficulty is that the Amendment moved by the hon. Member for Oldbury and Halesowen (Mr. Moyle) goes a great deal wider than the proposal I now have to make, so I could not accept his Amendment although I can accept its principle as far as that refers to the ordinary, plain, conventional button which I have mentioned. The two Amendments on the Order Paper in the name of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), the one consequential to the other, are narrower and, as I understand it, cover buttons only—
  Mr. Turton indicated assent.
  Mr. Amory: Those Amendments together will not do the trick entirely and we require one more Amendment to meet this case. I would like to ask you, Sir Gordon, whether you would find it possible to accept a manuscript Amendment additional to the two Amendments in the name of my right hon. Friend the Member for Thirsk and Malton? If so I would be glad to move a manuscript Amendment to Schedule 1, page 31, line 38, when the time comes.
  The Deputy-Chairman (Sir Gordon Touche): The Chairman of Ways and Means has agreed to accept the manuscript Amendment.
  Mr. Amory: I am much obliged, Sir Gordon. I am also wondering whether the hon. Member for Oldbury and Halesowen, in view of what I have said about my intention to propose to the Committee that we meet the principle and, in fact, his exact proposal as far as it relates to plain buttons, would feel inclined to withdraw his Amendment?
  Mr. H. Wilson: Before my hon. Friend rises in response to the Chancellor—and

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  I am sure that in the light of what has been said he will feel disposed to ask the leave of the Committee to withdraw his Amendment—perhaps I should say that obviously we are gratified that the Chancellor has responded to the eloquence of my hon. Friends and of right hon. and hon. Gentlemen opposite. I think this is a proof that, however small an item is in question, debates in this Committee sometimes have an effect on the bureaucracy and even on the usually stony-hearted denizens of No. 11.
  I think my hon. Friend, who has pursued this matter at earlier stages, will feel very glad that the Chancellor has decided to do what he has done tonight. It was my hon. Friend the Member for Flint, East (Mrs. White) who, before Whitsun and again tonight, asked the Chancellor to give way on buttons. It has become clear that the Chancellor's button had to give way on him before he felt disposed to accept the proposals that were urged upon him.
  It will not have been outside the knowledge of hon. Gentlemen opposite that feverish activity has been going on for the past few minutes on this side of the Committee and that a most unusual thing has occurred, if I may disclose it, Sir Gordon. We have had the position of the Chancellor of the Exchequer actually asking the Opposition side to carry on talking. I was a little afraid that suspicious-minded people might think that we were trying to cover up the right hon. Gentleman in some way because he felt it impossible to rise until he had dealt with the problem of the missing button. I can assure the Committee however that the reasons were quite other than those stated by the Chancellor of the Exchequer.
  Mr. Amory: I would like to thank the right hon. Gentleman for helping us with a little additional oratory from his side on this occasion, and I would like to express the hope that that additional oratory should be deducted from the future oratory we may expect.
  9.45 p.m.
  Mr. Wilson: The Chancellor has always found us extremely co-operative and helpful throughout the discussions on this Bill, and I am sure that he will continue to find us helpful. With regard to the proposal for a manuscript Amendment, it is always unusual, and if we were in
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  a less charitable mood we might have wondered why the Chancellor did not put it on the Order Paper before. Since he was clearly going to give way on it, he might have put it on the Order Paper yesterday.
  Nevertheless, I think he was right to ask for the manuscript Amendment to be permitted, because it is quite clear that my hon. Friend's Amendment is not quite in the form which the Chancellor requires, and the Amendment of the right hon. Member for Thirsk and Malton (Mr. Turton) would not quite do the trick. If the Chancellor were to wait until Report stage, it would obviously cause great uncertainty in the trade. It would not be possible to produce an Amendment on Report stage which would be retrospective, because that would cause hysterics on the part of some Members opposite. Therefore, we shall not object to the proposal for a manuscript Amendment, but it lies in the hands of my hon. Friend the Member for Oldbury and Halesowen whether he is willing to withdraw his Amendment.
  Mr. Moyle: I had a feeling when I was speaking earlier that I was pushing at an open door—a kind of Celtic intuition, I suppose. I am very glad that my intuition proved to be right. As I understand it, the Chancellor's proposal is that the group of buttons which was originally chargeable at 60 per cent. is the group which he has in mind, but the functional buttons will come into the category of tax levied at 5 per cent. In view of that, may I assure him that I shall not have the slightest hesitation in acceding to his request?
  As I understand it, his proposal is to place the functional buttons on the same terms as other competitors and that meets the major desire of the trade and also their sense of equity in the matter. I therefore beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Turton: I beg to move, in page 31, line 9, to leave out, "buttons, including shapes and moulds therefor."
  May I say how grateful I am to the Chancellor for the suggestion he has made, which I am sure meets my point and the points of all those who have addressed themselves to this subject and

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  will also give great satisfaction to the button manufacturing industry.
  Amendment agreed to.
  The Deputy-Chairman: The next Amendment selected is that in the name of the hon. Member for Orkney and Shetland (Mr. Grimond), in page 31, to leave out line 22. I think it would be convenient to discuss with it the following Amendment in the name of the hon. Lady the Member for Blackburn (Mrs. Castle), in page 31, to leave out lines 23 to 26, and also the Amendment in the name of the hon. Member for Orkney and Shetland, in page 31, to leave out line 33.
  Mr. Donald Wade: I beg to move, in page 31, to leave out line 22.
  0The object of this Amendment is to restore the total exemption for clogs and other wooden-soled footwear. There has already been one reference this evening to faith and hope, and I am moving this Amendment in hopeful anticipation that it may be accepted. When I first raised the subject of clogs, I was asked whether they were worn at all in these modern days. The answer is "Yes", although there is a decreasing demand for them. According to the latest information that I have, which is as accurate as I could obtain, the output in 1957 was a quarter of a million pairs of clogs, which is just over one-half of the output of ten years ago.
  In considering the claim for exemption, fortunately there is no substantial sum of revenue involved. In reply to a Question put by myself and answered by the Financial Secretary on Thursday, 24th April of this year, the hon. and learned Gentleman said that his right hon. Friend did not propose to withdraw this exemption for revenue reasons, as the estimated yield would be small, and this was not a material factor.
  Therefore, I do not need to argue the case on the basis of the revenue involved. It is simply a question whether it would be more anomalous to impose this tax than to remove it, and I think that there are adequate reasons for granting total exemption. First, there are many small firms whose turnover is less than £500 per annum, and, therefore, no tax will be charged, and were the Amendment
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  not accepted we should have the position that some clogs were subject to tax and some not.
  Secondly, a proportion of the clogs being manufactured today are known as safety clogs, and their use should be encouraged. The position has been fairly summed up in the following extract from a letter from a constituent of mine:
  "The new tax will force up the price of safety clogs as these are naturally dearer to start with in view of the extra steel toe-caps, etc., needed in their manufacture, Buyers may tend to purchase the cheaper non-safety clogs to keep costs down and neglect the safety of their workpeople who have been forced to be safety-minded' at considerable expense over the past few years. In effect, this tax is unfair to the progressive businesses who try to avoid accidents in industry …
  That brings me to a third reason. I think it would be unreasonable for the Chancellor to exempt safety boots but not safety clogs. In response to a considerable amount of persuasive argument, he has already agreed to exempt safety boots, and I think it is only right and proper that the same attitude should be shown towards safety clogs. To include safety boots and safety clogs and later remove them represents a welcome change of mind, one might say a consistency in the Chancellor's change of mind, but I think it would be very difficult to justify the imposition of tax on both these items, and then the removal of the tax from safety boots and the retention of it on safety clogs. For all these reasons, I think that there is an overwhelming case for granting total exemption. Already, the trade has found considerable difficulties arising in the collection of the tax, and I am sure that the removal of it will be welcomed.
  The object of the other Amendment in my name and the names of my hon. Friends is to grant total exemption in the case of shopping baskets and shopping bags. We discussed that subject before Whitsun, and I do not propose to repeat the arguments I am particularly concerned about those who are engaged in the making of shopping baskets, those who are incapacitated in various ways, particularly the blind, for I think we ought to do everything possible to assist them, and they are, as the Chancellor knows, somewhat worried about their future. The Chancellor showed sympathy before Whitsun, and I hope that sympathy will be put to practical effect tonight.

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  My last comment is that in choosing the subjects of footwear and shopping baskets my hon. Friends and I are not unaware of the many other anomalies to which Purchase Tax gives rise, but we hope that in picking out these subjects we have chosen winners in the contest for Purchase Tax relief.
  Mr. Amory: I find it quite possible to accept the Amendment which the hon. Member for Huddersfield, West (Mr. Wade) has moved. The change will be made from today and will require a further Amendment to deal with it, an Amendment which is on the Notice Paper in the name of my hon. Friend the Member for Dover (Mr. Arbuthnot). That is the Amendment in page 31, line 38, at the end to add:
  7. As respects the period ending with the eleventh day of June, nineteen hundred and fifty-eight, tax shall be chargeable at 5 per cent. in respect of any such clogs and wooden-soled footwear as are comprised in Group 2 (c).
  Perhaps, Sir Gordon, you will call that at the appropriate moment.
  Any question of unsold stocks will be sympathetically considered to see whether we can deal with it administratively. I have nothing more to say, except that in the circumstances there is no objection to the continued exemption of clogs.
  Mr. H. Wilson: On a point of order. As we are discussing a double-barrelled pair of Amendments, it would appear that what the Chancellor has said relates to clogs and to shopping baskets. Is that correct?
  Mr. Amory: No. I understand that the other Amendment which we are considering refers to laces and insoles which have not been mentioned and which you, Sir Gordon, said could be considered at the same time. I could not accept that Amendment.
  Mr. Wade: For the enlightenment of the Committee, at the appropriate time I propose to thank the Chancellor for what he has said and, in due course, to beg leave to withdraw the Amendment relating to clogs and other wooden-soled footwear, but I do not want to prevent discussion on the other Amendments which, I understand, may be discussed with the one which I moved.
  Mr. Collins: On a point of order. Can we be clear on this point? There are two Amendments in the name of the
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  Chancellor himself and I have not heard that they were moved and nor have they been explained. I hope that we are not discussing those at the moment.
  The Deputy-Chairman: We have not yet reached them.
  Mrs. White: Are we discussing the Amendment in page 31, leave out line 33?
  The Deputy-Chairman: That Amendment is included.
  Mrs. White: As well as the Amendment in page 31, to leave out line 22? I thought that the hon. Member for Huddersfield, West (Mr. Wade) was putting forward both Amendments.
  Mr. Wade: I understood, Sir Gordon, that your Ruling was that I was moving the first Amendment, but that the others could be debated.
  The Deputy-Chairman: That is correct.
  Mr. John Arbuthnot: In view of what my right hon. Friend has said, would it be convenient if my Amendment were considered now?
  The Deputy-Chairman: That would not be convenient. We had better wait until we come to that.
  Mr. H. Wilson: What are we talking about? Is it clogs. There seems to be a general impression that the hon. Member for Huddersfield, West (Mr. Wade) has moved an Amendment dealing with clogs and that it has been suggested that with that Amendment we should discuss a number of others, including that of the hon. Member for Dover (Mr. Arbuthnot) to which the Chancellor referred and which, in due course, will be moved formally. We are also trying to understand what it is that the Chancellor has accepted. Is it the Amendment relating to clogs?
  Mr. Amory: I was under the impression that one of the Amendments which we were discussing was that in the name of the hon. Member for Orkney and Shetland (Mr. Grimond), in page 31, to leave out line 22. That refers to clogs and other wooden-soled shoes only. That is the Amendment which I propose to accept.
  Mr. Wade: In view of the welcome announcement of the Chancellor, which I know will be very gratifying to those in the trade, I beg to ask leave to withdraw the Amendment.
  The Deputy-Chairman: There is no need to withdraw, since that. Amendment has not been moved.
  10.0 p.m.
  Mr. H. Wilson: On a point of order. It is important that the Committee should not be excessively confused about this matter. If, in fact, the hon. Member for Huddersfield, West (Mr. Wade) was not able to withdraw his Amendment, on the ground that it had not been moved, can you explain, Sir Gordon, what we are debating? Something must have been moved.
  The Deputy-Chairman: The Amendment to leave out line 22 was moved, and the Amendment to leave out line 33 was taken with it. I did not put the Question on the first Amendment, and the other Amendment has not been moved, so that it does not need to be withdrawn.
  Mr. Wilson: That was my impression, but I do not think that it was the impression of the hon. Member for Huddersfield, West. I think that he thought that he was withdrawing an Amendment which the Committee had already agreed to.
  Amendment agreed to.
  Mr. Simon: I beg to move, in page 31, line 33, after "shopping-baskets", to insert:
  "other than baskets of cane or wicker,"
  It will probably be convenient to the Committee to discuss, at the same time, the Amendment in line 38, at the end to add:
  7. As respects the period ending with the eleventh day of June, nineteen hundred and fifty-eight, tax shall be chargeable in respect of shopping baskets comprised in Group 23 (not being baskets fitted with lids or any other means of closing them) at 15 per cent. in the case of baskets which, except for external fitments, and except for bottoms of wood or other vegetable substance, are made wholly of cane or wicker, and at 30 per cent. in the case of other baskets of cane or wicker.;
  and in page 41, line 30, at the beginning to insert:

  (1) Shopping baskets of cane or wicker, not being baskets fitted with lids or any other means of closing them.

  (2)

  These Amendments relate to shopping baskets. The Committee will remember that when the question of shopping bags
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  and baskets was discussed at an earlier stage in these proceedings considerable apprehension was expressed by hon. Members on both sides of the Committee as to whether the changes which had been made by my right hon. Friend might not inure to the disadvantage of the disabled, who are particularly concerned with the making of baskets in cane and wicker. My right hon. Friend then said that he did not believe that any changes that we were proposing would work to the detriment of the blind or disabled, but he said:
  "If I were convinced that, in fact, they would, I should certainly not wish to make those changes."—[OFFICIAL REPORT, 19th May, 1958; Vol. 588, c. 1043.]
  He promised to look into the matter further.
  The Committee will remember that the changes made by the Budget and Finance Bill had the effect of making baskets and bags without lids—open baskets and bags—taxable at the same rates as closed baskets and bags, whereas previously there had been an anomaly, in that open baskets were exempt. In other words, there was an encouragement to use open baskets. The second effect of the Budget was to reduce the tax which had previously been payable on closed cane and wicker baskets and bags from 30 per cent. to 15 per cent., and from 60 per cent. to 30 per cent. in the case of baskets and bags made from other materials.
  The first matter which caused hon. Members some concern was the one that I have mentioned—the possible effect it might have on the blind and disabled, although there was still a marginal preference preserved for cane and wicker baskets if they were closed and a new one being introduced for open ones.
  The second apprehension, which was mentioned by the hon. Member for Shoreditch and Finsbury (Mr. Collins)—who had put a forceful case on the first apprehension as well—was that baskets which were predominantly cane and wicker, but might have some decoration or plastic strip, would have to bear the higher rate of 30 per cent., although they were essentially cane and wicker. My hon. Friend promised to consider both matters.
  My right hon. Friend has had discussions with the trade associations and with those concerned in the care of the blind

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  and disabled. The hon. Member for Shoreditch and Finsbury was concerned in both categories of discussion, and I should like to say how grateful we are for the help given to us by him and the others we consulted. We found that a genuine apprehension existed that even though we had introduced a new margin of preference, in favour of a certain type of cane and wicker basket which had previously been untaxed, the changes that we had made might, nevertheless, operate to the disadvantage of the blind and disabled. In those circumstances, my right hon. Friend decided that it would be right to respond to the pleas made earlier to him and to exempt entirely from tax the articles in this category when made of cane and wicker, on the ground that those are the materials which are predominantly used by the disabled.
  On the other point, the small element of some other material, we still came up against the difficulty which my right hon. Friend mentioned of the definition of "a small element of some other material". In agreement with the trade association concerned, it was felt that this point could best be dealt with primarily by administrative action. Previously, to be exempt or to have a reduced rate of tax, a cane or wicker basket had to be wholly of cane or wicker. If the word "wholly" were omitted and the matter were then left to the Customs and Excise officials themselves to decide if articles were essentially of cane or wicker, we think that would meet the case.
  The Amendments which have been tabled by my right hon. Friend are to fulfil that purpose. If hon. Members will look at the Amendment in page 41, line 30, at the beginning to insert:
  (1) Shopping baskets of cane or wicker, not being baskets fitted with lids or any other means of closing them.
  which makes an Amendment to the Second Schedule, they will see that it puts the matter in a form in which it will appear finally in the new Tax Schedule. They will see that it exempts shopping baskets of cane or wicker, not being baskets that are fitted with lids. They will also notice the omission of the word "wholly". In other words, these articles are now exempted from tax, whether they are closed or open.
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  The next Amendment, in page 31, line 33, after "shopping baskets", to insert:
  "other than baskets of cane or wicker,"
  is an Amendment to the First Schedule.
  Mr. Collins: I am not sure whether I have this right, but I think that the Financial Secretary said that these articles would be exempt from tax whether closed or open. Surely the position is that they will be exempt from tax only if they are open baskets.
  Mr. Simon: I am grateful to the hon. Member. I think he is quite right. I did say, by a slip of the tongue, that the exemption applied also to the closed basket. The difficulty was in relation to the open basket, the shopping basket.
  I pass on to the last Amendment, that which restores the previous exemption of shopping baskets of cane or wicker. That left to be dealt with the interim position, between the date of the introduction of the Budget and today. It is dealt with by the Amendment in page 31, line 38, at the end to add:
  7. As respects the period ending with the eleventh day of June, nineteen hundred and fifty-eight, tax shall be chargeable in respect of shopping backets comprised in Group 23 (not being baskets fitted with lids or any other means of closing them) at 15 per cent. in the case of baskets which, except for external fitments, and except for bottoms of wood or other vegetable substance, are made wholly of cane or wicker, and at 30 per cent. in the case of other baskets of cane or wicker.
  The effect of that Amendment is that there are three classes to be dealt with. The first is of shopping baskets of material other than cane or wicker, which are to pay tax at 30 per cent. The second class is of shopping baskets wholly of cane or wicker, which pay tax at 15 per cent. The third class is of shopping baskets partly of cane or wicker and partly of other materials, and they pay tax at 30 per cent., although in future they will be exempt from tax administratively.
  I hope that the Committee will feel that my right hon. Friend has met the arguments that were put forward, and has taken action which will allay the apprehensions of those who are very much concerned about work being provided for the blind or disabled.
  Mr. Collins: I am sure that the announcement the Financial Secretary has just made will be warmly welcomed

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  by the whole Committee and, far more important, will be received with considerable relief and thankfulness by many hundreds of blind, crippled and otherwise disabled people whose employment had been put in jeopardy. It will be equally welcomed by those whose task it is—often a very difficult task—to find means of employment for such people. Unfortunately, some of the disabled people have already been sacked from their jobs. We can only hope that they will be able to get their jobs back without very long unemployment.
  I know it is a very complicated matter, but I hope the Financial Secretary will not mind if for the record I briefly put my interpretation of the three Amendments he has explained. The effect of this decision will be that all cane and wicker shopping baskets without lids will be exempt from the tax and both the description and the exemption cover baskets in which a very small quantity of plastic, raffia and various other materials of that kind are introduced for decorative purposes.
  As the hon. and learned Gentleman said, I made it perfectly clear prior to Whitsun during the Committee stage and since in discussion that this was the chief concern because it is the one type of goods made by disabled people. This method of amending the Bill achieves this object, and when the Amendment has been accepted the relative position of the disabled will be better than it was before the introduction of the Budget. I think it only fair that that should be acknowledged. I am sure they and the Committee will be very grateful for that fact.
  Without being churlish or ungracious, it is fair to ask why this tax was ever reintroduced. We and the disabled went through all this in 1955. The arguments were then fully deployed and they have not altered. I submit to the Committee that it is very wrong that these people whom we are all concerned about should have had to suffer two months of acute anxiety. On Budget day I told the Chancellor, quite informally, that a mistake had been made. I do not expect any Chancellor to take much notice of anything anybody tells him on Budget day soon after he has introduced his Budget, but my right hon. Friend the
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  Member for Huyton (Mr. H. Wilson) took an early opportunity the next day, and my hon. Friends did so on the day after, of asking the Chancellor if a mistake had not been made.
  I hope the Chancellor will take advantage of the opportunity which has come to him to make an announcement similar to that in connection with protective clothing. I was unable to catch the Chairman's eye in the Budget debate or Mr. Speaker's eye on the Second Reading of the Bill. The first opportunity I had of raising this matter was in the Committee stage when I moved an Amendment.
  Meanwhile, because I had confidence in the case that was to be put and in the Chancellor's reception of it, I had to take the rather heavy responsibility of advising manufacturers who knew they could not otherwise sell their goods to retain their workers and not to sack them because I felt sure it would be righted eventually. I am very glad that the confidence I reposed in the case and in the Chancellor has not been misplaced. When the question was raised in Committee he immediately showed his sympathy and his knowledge of the circumstances, because he mentioned that when he was Minister of Pensions he became fully aware of the therapeutic value of this kind of work for disabled people.
  The right hon. Gentleman is putting the matter right very fully and satisfactorily now, but I hope he will not forget the anxiety and misery which has been caused by the original decision. All hon. Members, particularly those in high office, ought to think twice and then think again before taking any action which in its effects will bring hardship on those whom it is our duty to protect.
  10.15 p.m.
  Mr. H. Wilson: I do not think that we can let this matter rest where it is. We are, of course, glad that after all the time that has been spent in debate the Chancellor has given way, but the Committee is entitled to an explanation of how these things happened.
  The Chancellor keeps appealing to this side of the Committee to restrain themselves in the debate. We could have saved many hours of debate in Committee if this obvious error had not been made. It will be recalled—indeed, my hon.

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  Friend the Member for Shoreditch and Finsbury (Mr. Collins) has just reminded us—that in the original debate in April I reminded the Committee, in the first speech made from this side of the House following the Budget, that a mistake had been made and asked the Chancellor to look at it again. The reason I said that was that the same thing had happened—I am not sure whether it was a mistake on that occasion—in the autumn Budget of 1955, when the Chancellor had been forced to withdraw, again after creating a great deal of uncertainty in the trade.
  I asked in the Second Reading debate whether there was some gremlin in the Board of Customs and Excise which, when the Chancellor has made a reasonably sensible decision, comes along late at night and interpolates in the Chancellor's speech or in the Money Resolution these quite odd and indefensible additions to text. I am sure it must have been clear to the Chancellor that this involved the blind workshops. If it were not, it must have been clear to his advisers that this problem would arise and that hon. Members on both sides of the House would press the Chancellor to change the decision.
  Yet this uncertainty in the trade has been created and this difficult responsibility has been placed on the shoulders of my hon. Friend the Member for Shoreditch and Finsbury. I am sure that it is a responsibility which no other hon. Member would like to have had to bear. The manufacturers went to my hon. Friend and said, "Here is the tax. I cannot sell my goods and there is uncertainty about the position. Shall I produce the goods and maintain my workers on the job in the hope that the Chancellor will give way?" He had to take a gamble on it and to make a guess whether the Chancellor would give way. I am glad that he guessed right and that he felt not only that the case was so strong but that the Chancellor would be able to understand that it was strong and would give way. He therefore gave that advice to the manufacturers. But suppose he had given the wrong advice, had involved them in a heavy loss and had involved the workers in disappointment by suggesting that they should be kept on a little longer it would have been a very difficult position for him. Frankly, the Chancellor ought not to
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  put manufacturers generally into this position and he ought not to put my hon. Friend into this position, either.
  I therefore hope that before we pass to the next Amendment we shall be told how these things happen. At the time of the autumn Budget of 1955 we were all much under the impression that the then Chancellor included all these items in Purchase Tax for the first time without even knowing that he was doing it. That was the legend which circulated around Whitehall and elsewhere. We thought that after his sad experience that could not happen again, but we have had it again this year. We had it with miners' protective clothing, with cloth and with shopping baskets. I will not say that we had it with buttons, because I think that that was a case where the debate genuinely convinced the Chancellor of the need for second thoughts.
  I think we should like to be told how this happened. Was it put up by the Board of Customs and Excise? Did not the Chancellor read the papers before he made his decision? What were the junior Ministers doing?
  Mr. Jay: Resigning.
  Mr. Wilson: The Chancellor has no Economic Secretary. The Paymaster-General has many other responsibilities, as we all understand.
  Mr. Gordon Walker: What about the Law Officers?
  Mr. Wilson: What was the Financial Secretary doing? One would have thought that he would have been through all this detail to relieve his master of doing so. The Solicitor-General could have been consulted. He is helpful to the Committee.
  We should like to know how this came about. I hope that the right hon. Gentleman will be able to give the Committee some undertaking that steps are being taken in the Treasury to ensure that this kind of thing will not be repeated year after year if, by any mischance, he and his right hon. and hon. Friends are still on that side of the Committee when the next Budget comes.
  Mr. Arbuthnot: I think that hon. Members on both sides will be extremely grateful to my right hon. Friend for the extremely generous way in which he has

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  met the case—[HON. MEMBERS: "No."] Oh, yes. The position of the disabled people is now better than it was before the introduction of the Budget—
  Mr. H. Wilson: I am not in any way attempting to mitigate that point, but it is really an odd way to carry on, to impose a tax and then take a bit off, therefore getting the gratitude of the House of Commons and the people. Would it not have been better in the first place to have taken it off before it was put on?
  Mr. Arbuthnot: In spite of that ungenerous attitude, I am sure that people will be grateful to my right hon. Friend for what he has done. Anybody who has been with him, as I was when he was Minister of Pensions, will know the way in which my right hon. Friend's mind works and the way in which he really does look after the interests of the disabled and the blind. I would like to say "Thank you" to him for what he has been able to do.
  Mr. Wade: I welcome the Financial Secretary's announcement. I think it is fair to say that it would have been very much better had the tax not been put on. These changes create great difficulties, and sometimes great anxiety, and I think that this is an example of anxiety being caused. However, it is better late than never and, the announcement having been made, I can assure the Financial Secretary that his decision will be welcomed.
  Mr. R. T. Paget: When the Financial Secretary claims that he is entitled to the gratitude of the disabled for what he has done—when the hon. Member for Dover (Mr. Arbuthnot) says so, at any rate—I wonder a little whether the hon. and learned Gentleman or the hon. Member for Dover was inspired by the American soldier who is said to have been decorated for saving a woman from rape on the grounds that he had changed his mind.
  Mr. Simon: I rise only to reply, as I think that I am bound to, to the right hon. Gentleman the Member for Huyton (Mr. H. Wilson). I ought to make it clear that the decision taken to make the tax changes that were made in the Budget
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  and the Finance Bill as framed were made by Ministers and are solely the responsibility of Ministers in a very real sense, and, indeed, were informed and intended changes.
  The right hon. Gentleman perfectly fairly asks why, in view of what happened in 1955, that change was made. The answer, as I think was made quite clear from what the right hon. Gentleman said, is that when the matter was debated it was felt—and I do ask hon. Members to recognise that there are very good grounds for feeling this—that the changes made left the disabled and the blind, on balance, no worse off, to put it at its very lowest. The reason for that is that the previous tax discrimination that they had was one of 50 per cent.
  In other words, the previous tax on these articles was 60 per cent. but only 30 per cent. on articles particularly produced by the disabled and blind. The bags without lids were exempt from tax, and in regard to these articles which have previously been exempt the disabled and blind were given, for the first time, a tax discrimination in their favour. It is for that reason that the hon. Member for Shoreditch and Finsbury (Mr. Collins) and my hon. Friend the Member for Dover (Mr. Arbuthnot) are quite right in saying that the result of the changes that have been made has been to leave the disabled in a more favourable position now than they were in before.
  I only desire to say this final thing. The right hon. Gentleman quite rightly said that what has just happened in relation to buttons was quite obviously a response to a well-argued debate. I assure him that equally the change which is being made in relation to shopping baskets is. Anyone who reads my right hon. Friend's speech on the last occasion will see that his aim was to see that the blind and disabled were placed at no disadvantage. It was in response to the arguments which were put forward and the obvious feeling of hon. and right hon. Members on both sides of the Committee, and, indeed, to the subsequent discussions with those very closely concerned with the welfare of the blind and the disabled, that this concession has been made.
  Amendment agreed to.
  Further Amendments made: In page 31, line 38, at end add:
  7. In the case of buttons, including shapes and moulds therefor, the reduction under this Schedule of tax chargeable under Group 5 shall not be deemed to have had effect before the twelfth day of June, nineteen hundred and fifty-eight.—[Mr. Simon.]
  In page 31, line 38, at end add:
  7. As respects the period ending with the eleventh day of June, nineteen hundred and fifty-eight, tax shall be chargeable in respect of shopping baskets comprised in Group 23 (not being baskets fitted with lids or any other means of closing them) at 15 per cent. in the case of baskets which, except for external fitments, and except for bottoms of wood or other vegetable substance, are made wholly of cane or wicker, and at 30 per cent. in the case of other baskets of cane or wicker.—[Mr. Amory.]
  Mr. Arbuthnot: I beg to move, in page 31, line 38, at the end to add:
  7. As respects the period ending with the eleventh day of June, nineteen hundred and fifty-eight, tax shall be chargeable at 5 per cent. in respect of any such clogs and wooden-soled footwear as are comprised in Group 2 (c).
  In view of what the Chancellor has said, I understand that he proposes to accept the Amendment in my name and that of my hon. Friend the Member for Langstone (Mr. Stevens). It may be asked why we put today's date into the Amendment. That is because if it were made retrospective to the Budget it would mean the reopening of some cases.
  Amendment agreed to.
  Motion made, and Question proposed, That this Schedule, as amended, be the First Schedule to the Bill.
  Mr. H. Wilson: I think those hon. Members who have taken part in previous Finance Bill debates, particularly the autumn debate of 1955, will now be, on the precedent set on those occasions, settling down for a good all-night sitting. It will be recalled that, in the famous all-night sitting of November, 1955, when we came to this Question on the Schedule we had a very long debate which went on until 3 o'clock, when the then Patronage Secretary made the biggest mistake of his career and moved the Closure. It will be recalled that the debate went on until 8 o'clock and that we made very little progress.
  I am, therefore, quite sure that hon. Members opposite would feel very disappointed if they thought that we were
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  not going to subject this very intricate Schedule to an extremely full and exhaustive examination. I think that we should be fully entitled to do so, and I think that the Chancellor who places himself in the position of overhauling or examining the Purchase Tax Schedule, which has to be done every two or three years, must expect a rather lengthy debate on this Schedule.
  I know it will be a great disappointment to hon. Members opposite when I suggest that, for my part at any rate, I do not intend to start off a debate of that kind. I do not know if any of my hon. Friends wish to do so. I personally am rather doubtful about it, and we have no intention of voting against the Schedule as a whole. We have voted on various items on which we feel that votes are called for. We certainly do not intend to vote on the Schedule. It is not for me to say, but I am doubtful whether my hon. Friends will wish to pursue this matter in debate.
  10.30 p.m.
  I trust that when, as may happen in other parts of the Bill, we find it necessary to subject various proposals to an exhaustive examination—and that is certainly our duty as a Committee, especially after the manifest failure of the Government in their attempts to curb dividends—there will be no signs of impatience on the part of hon. Members opposite if we attempt to do this job thoroughly. Should they be tempted to suggest that we are talking longer than they think necessary, I hope it will count to our credit that on this one outstanding occasion for eloquence, tempting and challenging though it may be, we have resisted all temptation and we are prepared to let the Schedule go through on the nod.
  Mr. Charles Royle: I am prepared to fall in with the suggestion of my right hon. Friend the Member for Huyton (Mr. H. Wilson) and will not detain the Committee for long. But I am one of the unfortunate Members whose Amendments were not called, and I regard the Amendment which is on the Order Paper in my name as of such great importance that I hope the Committee will forgive me if I spend two or three minutes discussing the matter in the only way which is properly open to me.

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  I refer to the Amendment in page 31, line 38, at the end to add:
  7. Vehicles otherwise conforming to the conditions of fitness for the time being laid down by the Commissioner of Police of the Metropolis shall be exempt from tax under Group 35 notwithstanding that they are fitted with four doors.
  It is a very narrow but important point from the point of view of the provincial taxi-cab owner and driver. My remarks are concerned principally with the question of the fourth door.
  The question of Purchase Tax on taxicabs has a long history, and it is mixed up with many other matters. It has a connection with the London Cab Order, 1934, and with the Runciman Committee of 1953, which reported in Cmd. 8804. I think it is necessary that I should explain the whole position. Under the Finance Act, 1946, Sections 16 and 18, all taxicabs were made subject to 60 per cent. Purchase Tax. This continued until the Finance Act, 1953, when the London town taxi-cab, the kind with which we are all so familiar, was exempted from 60 per cent. Purchase Tax. In that Act it was laid down that taxi-cabs which were exempt from Purchase Tax should be approved by the Commissioner of Police and should be built to a specification which complies with the conditions of fitness laid down by the Commissioner of Police for the purposes of the London Cab Order, 1934.
  I want to make two matters clear. First, there was the London Cab Order, applying to that type of cab which was manoeuvrable in the busy conditions of our London streets, and which was constructed so as to be easy to turn and to park in London traffic conditions. The second point is that the Runciman Committee which examined this matter never recommended in the course of its Report that the Purchase Tax exemption should apply to a type approved by the Commissioner of Police. The taxi-cabs in question had to be built to a condition of fitness laid down by the Commissioner of Police. However, it turned out that the type approved and the condition of fitness together resulted in the abolition of the Purchase Tax on the London-type cab which had only three doors. The important part is that three-door question. That is where the difference arises
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  between the type approved and the condition of fitness. It is a narrow difference, but it is extremely important.
  I do not expect the Chancellor of the Exchequer will exempt from the Purchase Tax any type of motor car that happens to be used as a taxi. I do not press that, and I appreciate to the full the reasons why that could not possibly be done. When, however, the only difference is an extra door at the front of the cab, I suggest that it is a bit much that the cab should be subject to a 60 per cent. Purchase Tax, whereas in the case of three doors there is no tax at all.
  Obviously, this difference arises from the provinces. Circumstances in Salford and Manchester I have in mind particularly. Our weather is not quite as good as London's, although in the last few months London has not been having exactly desirable weather. Manchester and district, however, has very inclement weather in comparison with London, and that is one of the things we have to put up with in that part of the country.
  The taxi owners and drivers there began to see that the London-type cab was much better than the type they had been using. Therefore, they started to buy it. They found that it manoeuvred better in the streets and that it parked better, and they bought the London type of cab. They found, however, that the inclement weather caused difficulties and that there was no comfort. They had longer waiting hours than the London taxi river and they were never quite as busy as the London cabmen. Therefore, they had the fourth door fitted. Then, they found that they had to pay the Purchase Tax because of the fourth door.
  Let me say straight away that negotiations have taken place and that the Board of Customs and Excise has appreciated the position; and where taxi owners in Manchester and district fitted the fourth door it has now been agreed to wipe out the Purchase Tax if the door is taken off. That is satisfactory up to that point. The trouble is—
  The Chairman (Sir Charles MacAndrew): The hon. Member was very polite when he began. I did not select his Amendment, and I hope he will not be too long on this aspect. We can discuss only what is in the Schedule.
  Mr. Royle: I am obliged, Sir Charles, that I have been allowed to make my case. I have been trying something on and I accept your Ruling. I agree that I must draw to a conclusion. I hope that the Treasury Bench will appreciate the point that is being made.
  I would make one strong point, if I may be allowed. In the last month, there have been four serious accidents in Manchester in which a taxi driver has been trapped in his cab and he has had no way out of the cab and a serious situation has arisen. I make an appeal that, in spite of the fact that I have not been able to move my Amendment, the Chancellor of the Exchequer or the Financial Secretary might treat this speech of mine as though I had been allowed to move it and that we might have a real opportunity—
  The Chairman: There are limits to what we can do.
  Mr. Royle: I hope that they will look at this matter before Report and will regard it as serious to the people who use this type of vehicle in that part of the country.
  Mr. Simon: I want to say a few words only in reply to the hon. Member for Salford. West (Mr. Royle). I cannot, of course, reply to the details of the case which he made. I will certainly read his speech and I hope, therefore, he feels that he has done what he sought to do. As he indicated, the Customs and Excise has sought to meet the difficulty that has arisen and to avoid payment of the very heavy tax by an administrative concession in allowing the removal of the door.
  We recognise that by re-writing a Schedule of Purchase Tax we have opened the door to very extensive debates which might have been very protracted. I assure the Committee that my right hon. Friend is extremely grateful far the very co-operative way in which matters have been discussed and, so far as I am concerned, the very enjoyable and informative way in which these matters have been treated.
  Question put and agreed to.
  Schedule, as amended, agreed to.

  Second Schedule.—(PURCHASE TAX (NEW LIST OF CHARGEABLE GOODS, ETC.).)
  Amendments made: In page 33, line 8, at end insert:
  (4) Clogs and other wooden-soled footwear, other than articles mace wholly or partly of fur skin;
  in page 33, line 30, leave out "Buttons (including shapes and moulds therefor)". [Mr. Arbuthnot.];
  in page 41, line 30, at beginning insert:

  (1) Shopping baskets of cane or wicker, not being baskets fitted with lids or any other means of closing them.

  (2).—[Mr. Simon.]

  Motion made, and Question proposed. That this Schedule, as amended, be the Second Schedule to the Bill.
  Mr. H. Wilson: We ought not to let the Schedule pass without pointing out again, since the Chancellor was not here when I spoke on the First Schedule, that the whole Committee could start a very long and constructive debate. I hope that the Chancellor will recognise our full spirit of co-operation in the course of going through this not very exciting Bill in resisting the temptation to say all that would occur to us on a very wide range of subjects.
  Mr. Amory: I appreciate the attention given by the Committee to all relevant points that have arisen in debate, and the fact that hon. and right hon. Members have shown restraint in not dealing with them at greater length than the circumstances warranted. On our part, we have tried to answer as many of the questions put to us as we could. I should like to thank the Committee for its co-operation so far.
  Mr. Wilson: I am sure that at this point, after what the Chancellor has said so generously, it will come very heavily on the consciences of hon. and right hon. Members opposite to remember the position in 1951 when the then Labour Government was not without its difficulties and the way in which certain hon. Members opposite behaved. The right hon. Gentleman will recognise the temptation that faces us in seeing this Government in the seventh year of its existence physically and visibly disintegrating. We have resisted every temptation to hasten their decline, as we could have done so easily on this Bill.
  Question put and agreed to.
  Schedule, as amended, agreed to.

  Clause 2.—(MEANING OF "BUSINESS.")
  The Chairman: I propose to call the Amendment in page 2, line 16, in the name of the hon. Member for Maryhill (Mr. Hannan) and his hon. Friends and

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  suggest that the Committee might also discuss the following Amendments:
  In page 2, line 16, to leave out from "business" to third "the" in line 17;
  in line 18, to leave out "other";
  in line 20, to leave out "authority or";
  in line 20, at the end to insert:
  Provided that the carrying out by a local authority of their statutory powers and duties shall not be deemed to constitute a business of the authority for the purposes of the said enactments.
  Mr. Rankin: The course you have suggested has my full approval, Sir Charles.
  10.45 p.m.
  Mr. William Hannan: I beg to move, in page 2, line 16, to leave out from the second "the" to "carrying" in line 17.
  I wish to endorse what my hon. Friend the Member for Govan (Mr. Rankin) has just said. It is perhaps because of an act of voluntary co-operation that we have been able to reach this Amendment and the others to be discussed with it, which are, of course, important.
  Mr. Rankin: Will my hon. Friend forgive me for interrupting him for a moment? Did I understand you to suggest, Sir Charles, that my hon. Friend would also be moving the Amendment which stands in my name and in the names of some of my hon. Friends?
  The Chairman: No. I called the hon. Member for Maryhill (Mr. Hannan) because I think his Amendment was down first, even though the Amendment in the name of the hon. Member for Govan (Mr. Rankin) comes before it on the Order Paper.
  Mr. Hannan: Together with the Amendment which I have moved, I am discussing the Amendment in page 2, line 18, to leave out "other", the Amendment in line 20, to leave out "authority or", and that in line 20 to insert the words on the Order Paper.
  The purpose of this Amendment is to exclude the application of Clause 2 from local authorities and, further, in order to avoid future litigation on the point which the Amendment tries to make, to make it clear that where local authorities are carrying out their statutory powers and duties they should not be deemed to be carrying on a business for the purposes of Purchase Tax legislation.
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  If these Amendments were accepted, local authorities would accordingly not be liable for Purchase Tax on chargeable goods resulting from their activities. It can be fairly contended, I think the Committee will agree, that where work is undertaken by a local authority in carrying out its statutory duties and powers, such work is done solely in the public interest. Since no question of profit arises, therefore, local authorities should not be asked to pay Purchase Tax. Under Clause 2 as it now stands such work would attract Purchase Tax.
  Glasgow Corporation, and probably other local authorities which carry on similar activities, resent the fact that they are being drawn into this net because certain decisions have been come to in the Court of Session—of which at least the Financial Secretary is aware—which have laid it down quite clearly that up till now a grave mistake has been made.
  We believe that the position of local authorities should be distinguished from that of commercial undertakings. All through the decisions of the Court of Session, the details of which I will come to in a moment, the Law Lords made it quite clear that the distinction should be made in the mercantile operations of private interests or commercial undertakings as distinct from local authorities.
  According to the Court of Session's decision, it would appear that the purpose of present legislation, that is, before the introduction of Clause 2 of this Finance Bill, is to make commercial undertakings liable to tax and not local authorities, which are, of course, carrying out statutory duties placed upon them by Parliament itself.
  If Clause 2, in so far as it applies to local authorities, is now considered by the Government to be necessary to resolve doubts on the previously accepted definition of the term "business," then surely this can only mean that Purchase Tax has been unlawfully charged against local authorities in the past. In our Amendments we are submitting that there is now no justification for altering the law to the disadvantage of the local authorities.
  Indeed, on the Second Reading of the Bill the Financial Secretary said:
  "Clause 2 is necessary to resolve the situation which arises out of the judgment of the Scottish Inner Court of Session. This has

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  cast doubts on the previously accepted definition of the term 'business' in Purchase Tax law and has left it uncertain how far local authorities are amenable to the Purchase Tax law."—[OFFICIAL REPORT, 12th May. 1958; Vol. 588, c.34.]
  In that decision it was being made clear that the distinction between local authorities and commercial undertakings had been there all the time, and it was by accident, if one cares to use that expression, that it was discovered that the local authority in Glasgow had been paying Purchase Tax on a vehicle part of which had been constructed in its workshop, and that Purchase Tax should not have been demanded or extracted from it.
  Under the Clause a local authority applying a chargeable process even in the course of the performance of its duties is required to register in terms of Section 18 of the Finance Act, 1946, for the purpose of payment of Purchase Tax. The corporation resents this very much.
  The case to which the Financial Secretary referred was one in which the corporation was sued in the Court of Session by the Lord Advocate acting on behalf of the Commissioners of Customs and Excise. He was suing it for the sum of £160 which was alleged to be due following operations carried out by the employees of the corporation on a motor van. The corporation had purchased a Ford 10 cwt. chassis and cab and then added to it a van specially constructed for the purpose of inspecting the lights. The vehicle was of no use to anyone else. It was for the corporation's own employees. There was no seating capacity in it; no passengers were carried. It was used for carrying the plant for the inspection of lights. Despite this, the Treasury wanted Purchase Tax. The corporation was sued. Its case was sustained, and on appeal it was again sustained. The van was used exclusively for carrying out the local authority's duties.
  It would appear from the Clause as now before us that the Treasury is no longer going to argue that the functions of local authorities will attract Purchase Tax, but on the other hand, as from 16th April, 1958, local authorities will be required to pay Purchase Tax on chargeable processes carried out by their own departments for their own use and convenience and not for commercial
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  purposes; and that, of course, is the principal reason why these Amendments are tabled.
  As we understood it, the original purpose of Purchase Tax was to curb spending, though in more recent years it has been used by the Government for revenue purposes. But local government finance is now one of the major problems of our times and it has not been made any easier in Scotland by the Local Government and Miscellaneous Financial Provisions (Scotland) Bill.
  To bring local authorities within the net of Purchase Tax in respect of these other activities is a retrograde step. They are not operating for gain. I should like the Committee to examine the conditions in the printing and stationery department in Glasgow, which the Treasury now has its eye on. At the moment another case is pending, where the local authority is seeking to have repaid to it about £163 which it has paid in past years in Purchase Tax in respect of that department. In the financial year ended 31st May, 1957—the last period for which figures are available—the total expenditure of the department, including depreciation, was £272,000 and its total revenue was £276,000, leaving a surplus of £4,000. Its accumulated surpluses to date amount to about £7,726. The point is that this is a direct local department. It may be that the Government are seeking this method of making an indirect attack on a direct department of a local authority.
  No profit is made. The department prints the minutes and documents for the corporation, and it makes for speed and efficiency in the corporation's business. Its policy is simply to see that its revenue balances its expenditure. The Financial Secretary suggested that, while a local authority would be liable for tax on certain goods which it makes for its own use, it would have the right to tax relief where it purchases taxable goods for the manufacture of tax-free goods, but the amount of relief would be very small compared with the liability.
  I have here a letter from the town clerk depute, who points out that:
  "The principal raw material used by the Printing Department is, of course, paper, and paper supplied in bulk is not subject to Purchase Tax. It is only in relation to binding materials that the Corporation purchases raw materials liable to tax for purposes of manufacture, and it would appear that the value of such taxable goods purchased is at present

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  in the region of £1,500 per annum. The effect of registration, therefore, is to relieve the Corporation of paying purchase tax on this amount—a figure unlikely to exceed £400 per annum"—
  that is, £400 out of an expenditure of £1,500—
  "On the other hand, the Corporation would require to pay something over £25,000 per annum in purchase tax on taxable goods manufactured in the Printing and Stationery Department."
  If my informant is correct, what the Financial Secretary is doing, in Scots terminology, is spitting out a sprat to catch a whale.
  Hon. Members: A mackerel.
  Mr. Hannan: It may be a mackerel down south, but I will stick to the whale.
  The Government have been posing to the nation as its saviour in the battle of inflation. They have been assiduous in calling on local authorities to exercise economy and to carry out duties at the least possible cost to the community. Here they are taking steps to nullify and frustrate the local authorities which have sought economy by the use of direct labour, and the benefit to the revenue here is going to be small, but to the local authorities concerned the extra burden on the ratepayers will be substantial.
  11.0 p.m.
  If, as a result of Clause 2, the cost of carrying on work such as printing and stationery is made excessive, local authorities with similar activities may find it necessary to discontinue it, and that will mean, in turn, disorganisation, loss of convenience and loss of speed and efficiency in the preparation of minutes and documents. I hope that the Committee and the hon. and learned Gentleman who is to reply for the Government will deal fully with the case I have tried to state in support of these Amendments.
  Mr. Rankin: As I cannot move the remaining Amendments on the Order Paper, I shall simply say what I had intended to say if I had moved them. It would appear that the Government have been caught out on this matter and that at some stage some person has blundered. The Financial Secretary, on 12th May, made it perfectly clear that the decision of the Inner Court of Session had cast doubt on the previously accepted definition of the term "business" and, because
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  of that fact, Glasgow local authority was going to be exempted from the operation of Purchase Tax and, therefore, the Government had to take steps to put in the Finance Bill a Clause which would prevent that in future. I wish to ask the Financial Secretary whether or not the Clause will prevent Glasgow's claim maturing with regard to the money which was wrongfully collected in the guise of Purchase Tax prior to 16th April, 1958. It may be that that is a matter which the Solicitor-General will be good enough to speak upon, if he can, for there is a very large claim which is founded on the wrongful application of the Finance Act as it stands at present.
  During the Second Reading, the Financial Secretary indicated that under the Clause the activities of local authorities and other non-commercial bodies are to be treated in the same way, for the purpose of Purchase Tax, as the activities of commercial bodies, and on that I am not going to comment at present. They will be liable for tax on certain goods which they make for their own use, and they will have the same right to tax relief where they use taxable goods for the manufacture of tax-free goods.
  The Financial Secretary was seeking to paint what I think he regarded as quite a fair future for local authorities. If we take Glasgow as an example, it would have a relief of tax of under £400 as against £25,000 of tax for which it would be liable. It would seem that the Chancellor is going to get much more out of the deal than Glasgow Corporation. It may be that Glasgow is the only local authority which would be adversely affected by the operation of Clause 2. I think that improbable, but it will be for hon. Members on both sides of the Committee to make their contributions on that point during the debate. Glasgow, at least, opposes the terms of the Clause and wants to see the law continuing to be operated as it has been interpreted by the Court of Session. Glasgow is entitled to maintain the law. The Chancellor wants to break it. The Government cannot have severe things to say about people who want to keep the law while they themselves are seeking to break it.
  We contend that when work is undertaken by a local authority in carrying out its statutory powers and duties this work is being done solely in the public interest

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  and no question of profit is involved. In our view it ought not, therefore, to attract Purchase Tax. The position of local authorities ought to be distinguished entirely from commercial undertakings. Further, if the liability to Purchase Tax is imposed on local authorities as proposed, the benefit to the Revenue will be comparatively small, but to the individual local authority concerned the extra burden on the ratepayers will be substantial. In view of that, it seems inconsistent that, while the Government who are urging local authorities to economise, they should be increasing the burdens which will prevent local authorities from carrying out those economies.
  Finally, the Court of Session decision means that Purchase Tax has been unlawfully charged against local authorities in the past. For years the Government have been acting in an unlawful manner. The Government have acquired money by a process which is now determined to have been completely illegal. A private person who conducted himself in that fashion would have rendered himself liable to fine or imprisonment and, in fairness, would be expected to disgorge some of his ill-gotten gains. Equity would have demanded that. The Government do no penance of any kind. They merely pass a law saying that what was wrong is now right, keep their gains, and create a new situation to the permanent disadvantage of the local authorities. That is what the Tories miscall good government.
  At the weekend—I quote from the Observer—the chairman of the Tory Party, a member of the Cabinet, and one of its distinguished Ministers—I think he is Lord President of the Council—referred to a group of people whom he called the "cardsharpers", and he had very harsh words to say about them. He said that they wanted to alter the rules of the game—a dirty thing to do. That is just what the Government are now doing. The Government of which he is part are in process of altering the rules of the game to the disadvantage of the local authorities.
  The Lord President implied that that is a dirty dodge. He said:
  "It is simply not honourable for a party to alter the system by the use of its Parliamentary majority."
  What will the Financial Secretary do tonight? Just the very thing that his
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  senior, the Lord President of the Council, says is dishonourable. Later on, the hon. and learned Gentleman will have to do just that.
  The Lord President went a little further—and this is a most fearful warning. He said:
  "The electorate would quite certainly punish us if they saw us quite deliberately doing something they regarded as a cheat."
  Well, there is a fearful future in front of all right hon. and hon. Gentlemen opposite if that is how it is to work out.
  His Lordship divided the people of whom he was speaking into two groups the "jolly cricketers" and the "cardsharpers". I am quite sure that if he was thinking of the jolly cricketers he was not thinking of his own Front Bench. I think the word "cardsharpers" is quite wrong. He should think of one group as the jolly cricketers and the other as the "jolly Rogers" on the Front Bench—the boys who make the laws and break the laws just as they choose.
  Tonight we are trying to prevent that happening. We are trying to leave the Government with a little shred of honour, and we are asking the Financial Secretary to assist us in the process of helping his own redemption, if he wants to do that he will support these Amendments which we are moving for his salvation.
  The Solicitor-General (Sir Harry Hylton-Foster): One much enjoys, inevitably, all that the hon. Member for Govan (Mr. Rankin) says, but I cannot help thinking that in meeting some of the indictment delivered against us we shall find some strange companions in the dock, because, truth to tell, Governments of every political complexion, from the very beginning of the operation of the Purchase Tax, have worked the law in the way that we have worked it until this final Inner House decision. Bad as we may be, there are others, I am afraid, tainted with the same hue.
  I hope that it may take some of the anxieties from hon. Members if I detain them just for a moment to remind them why the meaning of the word "business" has become important in this field. I have heard tonight, and have heard before, and fully understand, the arguments that local authorities should be exempt from the Purchase Tax in respect of their activities because they are not trading for profit but are doing what they do in the public service. However, it is rather

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  late in the history of Purchase Tax to urge that. As everybody knows, in the field of indirect taxation, local authorities, both in regard to tax and to tax reliefs, have always been treated just as any other kind of taxpayer.
  11.15 p.m.
  Purchase Tax has been no exception at any time. When it was first introduced, I do not suppose that anybody developed the argument that local authorities should not be subject to registration on some such ground as that. It worked then because the duty was leviable when goods were sold or appropriated by registered persons and this question of the word "business" did not matter then. But when it came to 1946, and the so-called "chargeable processes provisions" were introduced, it must be remembered that those were not introduced for the purpose of exempting local authorities from Purchase Tax. Nobody thought they were. In fact, they were introduced to prevent tax dodging.
  It is the way in which Parliament introduced these provisions which has given rise to this difficulty. They were raised in a form which made the tax become due when the goods made resulted from a chargeable process applied in the course of business. The person was required to be registered, whether he sold the goods or not in the course of his business, and nobody, until recently, ever thought that those words were intended to have the effect of giving local authorities a way out in respect of some of the chargeable processes which they apply. Certainly the House of Commons did not think so in 1951, because when the chargeable processes provision was extended to stationery, everybody concerned, including the right hon. Gentleman the Member for Battersea, North (Mr. Jay), then Financial Secretary to the Treasury, treated this as applying to stationery made by local authorities as to stationery made by everybody else. The exact regulation is the Purchase Tax (No. 1) Order, 1951, and nobody thought otherwise until we heard about this vehicle Glasgow Corporation made.
  It is true that the corporation produced a vehicle which, in the normal way, would have been taxable at 60 per cent. Purchase Tax and it is true that the Exchequer failed in its proceedings to secure
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  tax on the vehicle because the Glasgow Corporation successfully contended, and so contended up to the Inner House of the Court of Session, that it did not make its vehicle in its business, on the ground that the word "business" in this enactment, imports some commercial flavour. The idea that is being canvassed for the first time is that something is being imposed on local authorities. It is far from the truth and everyone has to face it. The result of this decision has been to create doubts, to say the least. The decision is applicable to the peculiar facts of that case and, as everybody knows, there are a great many differences between the activities of one local authority and another and between the activities of one department of a local authority and another. It would not work in the interests of either the taxpayer or the Exchequer to leave a number of doubtful cases outstanding which would cause recurrent litigation. That would not help anybody.
  It has been said that the benefit to the Exchequer is merely trifling; and these are very relevant words in the case of so large an authority as Glasgow Corporation. Speaking as a humble Law Officer, I can only say that, as far as one can estimate, the cost of this kind of Amendment is of the order of £1 million, and if that is really to be regarded as a trifling matter from the Revenue point of view—
  Mr. James McInnes: We did not say that.
  The Solicitor-General: If the hon. Member did not say it, I apologise. I thought I had got the phrase from somewhere. It is right that the Committee should know the cost to the Revenue of these Amendments as far as we can estimate them.
  But there are other reasons which I would urge upon the Committee why it is right to get the law into the shape into which it was always believed to be, which is what this Clause does. Is it really very fair to other taxpayers, particularly in the context of commercial printers, that because the enactment in 1946 did not succeed in doing what Parliament meant it to do, therefore local authorities should escape?
  There is the additional matter of relief. I am anxious to deal with the other points made. I think the words of my hon.

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  and learned Friend the Financial Secretary on Second Reading were a little harshly treated. What he was then saying was not that the relief would balance the tax—that would be rubbish—but that this was not a point which was going one way only, because there are a number of local authorities and other bodies which do avail themselves of their entitlement to get registered as manufacturers in order to get tax relief on goods which they buy, which would otherwise be taxed. They avail themselves of that provision. If the law were left in the state which the decision of the Court of Session leaves it, doubt would be cast on their entitlement to become registered and to get relief in that way.
  As to the "sprats and whales" argument of the hon. Member for Maryhill (Mr. Hannan), who unfortunately is not at the moment within my hearing, the Financial Secretary did not say that the relief would balance the tax. What he said in effect was that this was a point which did not go only one way. As to the stationery and printing department, this Bill, if it passes wholly unamended as it now is, will not change the existing practice with regard to the production of stationery by non-profit-making bodies for their own use. That, as the Committees knows, as a special matter has long been dealt with under those statutory provisions under which the Customs Commissioners have power to refrain from registering people if they think fit. If Glasgow Corporation complied with the conditions which are required in that context, they would not, any more than other non-commercial bodies would, have to be registered.
  I do not propose to say anything about Glasgow Corporation's current claim for a declarator, as I think it is called in Scotland—"declaration", as we call it in England—in effect that they shall have back the tax that they paid on their printing and stationery department I do not say a word about that because it is sub judice and the outcome of that matter will depend upon the decision of the court and on what is done after the decision of the court is known.
  In answer to the specific question of the hon. Member for Govan (Mr. Rankin), there is nothing whatsoever in this Clause which touches the past. The position will stand wholly unaffected by the Clause. The Bill deals only with
  370
  future matters. It is in no sense retrospective. That is the answer to his specific question to me.
  I think that has covered all the points which were urged in support of these Amendments, and I hope also that I have indicated a wide variety of reasons why it would not be possible for the Government to accept them. All that the Clause does, if enacted as it stands, is to put the law for the future precisely in that state in which it has always been operated and believed to work up to the decision in this case in the Court of Session.
  Mr. G. R. Mitchison: Can the right hon. and learned Gentleman give any estimate of the amount of the repayments which will be involved on the decision of the Court in Scotland? It appears that a local authority in carrying out its functions is not carrying on a business.
  The Solicitor-General: There is a double question involved in the apparent single question which the hon. and learned Member asks. That direct single question, I confess at once, I cannot answer. I do not have the figures available and I do not think that I could get them with precision, at least in time to meet the hon. and learned Gentleman's question.
  There is, however, a further question involved, because this Scots decision is a special case on special facts. It would be difficult to say which activities of which local authorities in respect of which they have paid Purchase Tax are affected as a matter of law or are governed by this decision. For that reason, it would not be possible to give a firm or sensible answer to the hon. and learned Member's question.
  Mr. McInnes: I am not altogether satisfied with the reply of the Solicitor-General. He conceded in the first instance that the insertion of Clause 2 in the Bill was largely the result of the litigation which Glasgow Corporation has entered into in the Court of Session case and because of the decision given, as my hon. Friend the Member for Maryhill (Mr. Hannan) indicated, in respect of the lighting department van that there was grave danger of the corporation succeeding in its action. I candidly confess, however, that while the case is sub judice, I also realise that in law one seldom gets back money that one has paid.

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  The Solicitor-General set out to argue against the case submitted by my hon. Friend on behalf of the Glasgow Corporation. Then, towards the end of his reply, he made a somewhat remarkable concession, because he said that so far as the Glasgow Corporation's direct-labour printing and stationery department is concerned, he does not know that the Clause will have the impact or effect that we seem to imagine, because the Customs and Excise people in Glasgow have power to refrain from registering the Glasgow Corporation if they feel that the Corporation fulfils all the requirements concerning non-registration. I should like to think that that actually is the case.
  Each of the five learned judges who gave their opinion in respect of the Court of Session case in Edinburgh centralised their opinion on the definition of the word "business." It is interesting to note that the original Act relating to Purchase Tax visualised only persons carrying on commercial enterprises. Each Section, particularly in the 1946 Act, refers to persons carrying on a business and "business" is clearly defined in a commercial sense.
  Without possessing any legal knowledge, I should say that surely Purchase Tax was originally designed as a tax arising on the ordinary mercantile sale of goods. As has been pointed out, the word "business" as mentioned in the 1940 Act related exclusively to ordinary mercantile business involving the sale or the selling of chargeable articles.
  11.30 p.m.
  Indeed, the whole ambit of chargeability to Purchase Tax under the original 1940 Act was directly connected with the mercantile operations of business in the category of wholesale merchants or of manufacturers, in which case an undertaking such as the Glasgow Corporation could not be classified and under no stretch of imagination could come within that category. There is reference to the word "business" in Sections 18, 23, 25, 26 and 41, where it relates purely to business in the mercantile or commercial sense of the word. I want to ask what interpretation the Solicitor-General places on the word "business" now as contained in Clause 2. Would he agree with me that
  372
  "business" in Clause 2 could rightly be defined in that context as someone engaged in gainful or commercial rather than in purely public service activity?
  I should like to have clearly defined what is implied by the word "business" in Clause 2. As far as I can find, there is no indication that a public authority, such as Glasgow Corporation, would be in any way excluded or indeed be included. Therefore, there is a sort of status quo position, and the indefiniteness of Clause 2 does not catch up even with Glasgow Corporation in its printing and stationery department. I should like to have made clear what was meant in the reference from the Front Bench opposite to Customs and Excise in Glasgow refraining from registering Glasgow Corporation if it conformed with certain standards and qualifications. Would the Solicitor-General say what qualifications are involved in non-registration?
  The Solicitor-General: Over all the years, Scots counsel and, as far as I know, with the exception of the ultra-wise Glasgow Corporation, all local authorities, Customs and the Revenue, and Governments of all political complexions have held that business in this context covered as a word the activities of local authorities. The very wise counsel who advised Glasgow Corporation have now been justified, certainly as far as the Inner House of the Court of Session is concerned, in their view that it does not.
  As to what the terms of business mean in Clause 2, being merely an English lawyer and therefore diffident about offering definitions across the Dispatch Box in Committee, it is sufficient for me to know what the Clause does if we have "business" meaning what the Inner House has now said it means—something with a commercial element about it. I do not remember the exact words. What the Clause does is to widen the meaning by saying that these activities should be deemed to constitute a business of the authority or body in this context. Therefore, the Clause widens the ordinary meaning of the word sufficiently to work for the purpose with which we have in hand.
  I would be willing to give the Committee—and will in a moment—a detailed explanation of what I meant by saying

  373
  that Customs would, in certain circumstances, have the right to refrain from registering the stationery and printing department of Glasgow Corporation. I did not develop the matter because there is on the Order Paper an Amendment in the name of my hon. Friend the Member for Dover (Mr. Arbuthnot) which involves going into detail on that, and I thought it best to do it then.
  Mr. Mitchison: I am no Scot and I am no Scots lawyer, but I am bound to say that I think the present state of affairs is most unsatisfactory. Purchase Tax was, of course, originally a tax on sales, and the provisions about a chargeable process, with which we are concerned today, were introduced in 1946 for one purpose and one purpose only. That was to prevent certain dealings with goods which resulted in their improvement and, in effect, enabled an evasion of the Purchase Tax.
  There really ought to be no doubt whatever about this. The right hon. and learned Gentleman's predecessor in office and my right hon. and learned Friend the Member for Newport (Sir F. Soskice) spoke on this matter in the debate on what is now the Finance (No. 2) Act of that year. On 19th June, 1946, he said:
  "The whole object of the Clause"—
  and this, of course, is the Clause we are now considering—
  "is to prevent just those transactions"—
  of which I have been talking—
  "which, in large measure at any rate, would be dealt with by the Amendment."
  My right hon. and learned Friend was speaking of an Amendment to vary the Clause. He was well aware, of course, of the importance of the word "business. Later in the same speech he said:
  "I accept the argument that there may be hard cases. The hon. Gentleman mentioned one which may or may not be within the terms of the Bill. The person to whom he goes to have the parts put together and made into a oar would have to be a person who applies a chargeable process for the purposes of his business; that is to say, it must be part of his regular business to put those parts together, otherwise it would not be within the Bill."—,[OFFICIAL REPORT, 19th June, 1946; Vol. 424, c. 332–4.]
  It seems to me to follow from that, that at the time when this legislation was introduced it was introduced for one purpose only, and that was in connection with this treatment of partly finished objects, and the importance of the use of the word
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  "business" was fully recognised. It is said that the Department of Customs and Excise has been collecting tax for some time past, to an amount which we have not heard, on the footing that local authorities were conducting a business. I am told that there is something peculiar in the opinions of the Lords of Session since everybody else apparently who has considered the matter has come to an opposite conclusion.
  I hesitate to form that opinion of the Lords of Session, the more so since this matter was considered by four Scottish judges in the Court of First instance and in the Inner House where there were unanimous decisions by the three Scottish Lords who considered the matter. I want the Committee to consider for a moment what was not the legal nicety but the real basis of the decision.
  The point they had to consider—and the only point, as they regarded it—was: is a local authority carrying on a business when carrying out its functions? The functions in this case were looking after street lighting. That was all that this vehicle was required for. The conclusion that they came to as I read their decisions—and I have read them—was that a local authority in carrying out its functions is not carrying on a business because in their opinion "business" in this Clause means same form of commercial conduct or transaction—"commercial as a commercial flavour" as one of them put it. That opinion I understood the right hon. and learned Gentleman to share—to this extent at any rate, that he regarded that as la substantial ground for the decision.
  What seems to me to be so wrong about this, apart from any legal decision and apart from any legal opinion about it, is simply that the tax when first introduced clearly could not have applied to this type of dealing. It clearly could not have applied to the particular case, and it clearly could not have applied to a corporation putting the heading on stationery for its own purposes in order to write to its ratepayers or contractors. It is perfectly clear that when the modification was made it was not intended to do anything to bring within the ambit of Purchase Tax a particular type of transaction that has nothing whatever in common with what we are considering today.
  I say it with all respect to my right hon. Friend the Member for Battersea,

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  North (Mr. Jay) who has been charged with accepting some other version of the matter in 1951. I have not read the report of that debate, and it may be that something or other was said at the time, but the essential point seems to me to be that when this Clause was introduced it was not the intention of Parliament to penalise local authorities by introducing it, and it is now being used to penalise them, and has been used, according to what we are told, for very many years past. Therefore, so far from putting in a Clause to carry out what was the intention of Parliament, we are doing the exact opposite. We are putting in a Clause to negative what was the intention of Parliament at the time when this Clause was introduced.
  I admit—we would all admit—that Governments from time to time make mistakes and have to put them right. I fully understand that, but it seems to me that the substantial question is not that at all. The real question is: ought one to charge ratepayers with the tax levied on local authorities solely in respect of what they are doing as local authorities to carry out their functions? I do not want to introduce any unnecessary heat into this debate, but we have had far too many cases lately of a transfer of burdens from the taxpayers to the ratepayers, and this is just a case in question. It seems to me that it is not right.
  More than that, it will result in a very difficult position indeed with regard to the past. The Government, at any rate since this Bill was introduced, are rightly averse to retrospective legislation, even in cases where a warning has been given. There is no question of a warning here, and there is no doubt that the Clause is not retrospective. Consequently, all the corporations which have been charged with this tax in the past will be faced with the question whether it is their duty to their ratepayers to take a hand in collecting it back from the Government.
  11.45 p.m.
  We are told by the right hon. and learned Gentleman that this was a very peculiar case. It may have been a very peculiar case, but, as I read the decision, the general principle was perfectly clear. It was that a corporation, when carrying out its functions, was not carrying on a business. I see that the Financial Sec-
  376
  retary is puzzled by that remark. There is no commercial activity in it; that is why it was said not to be carrying on a business. Therefore, in the vast majority of these cases, a large, undefined sum will be recoverable from the Government. I would have thought that the Government might very well have said, "Well, if you will say nothing about the past we will not go on being so naughty in the future."
  I have known that to happen between individuals. A farmer near where I happen to live discovered that he had the fishing rights in a river which had been constantly let by a neighbouring duke—there is no prejudice on my part about his being a duke—and he wrote to the duke and said, "What about my river?" The duke wrote back, "All right; it is your river and I will admit it, if you say nothing about the past," The right hon. Gentleman is the duke, and he is doing the opposite; he is saying, "Well, I am now going to put myself in the right and take over the river, but you will be able to recover from me if you care to embark on litigation," in what appears to be the right hon. and learned Gentleman to be a very difficult and doubtful matter.
  That is a very unsatisfactory state of affairs. Surely the right thing to do in this case is to have regard to what the Purchase Tax was really intended to deal with—which was not the ordinary function of local authorities, as the Scots courts rightly held—and to free local authorities from this burden. It will do no harm. It may cost the Exchequer a little more, but considering the amount that the Exchequer has been collecting from local authorities lately—I must not mention the Local Government Bill, or there will be trouble—it could easily afford one or two million pounds out of it.
  I suggest that the Government ought to think about this matter again and consider whether it is not better, in the circumstances, to try to come to some agreement with the local authorities about it, and at any rate not to justify the Government's malpractices in the past by a Clause which simply says that something must be deemed to be something, thereby implying that it has not been what it is now deemed to be. It is a pretty queer bit of business altogether. The Government would really do better to drop this provision, and I hope that

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  they will accept the Amendment, which has been so ably and convincingly moved with reference to Glasgow but which will, of course, affect local authorities all over the country.
  Amendment negatived.
  Mr. Arbuthnot: I beg to move, in page 2, line 17, to leave out from the second "authority" to "shall" in line 19.
  The Deputy-Chairman: Perhaps it would be convenient to discuss at the same time the Amendment in page 2, line 20, to leave out "or body".
  Mr. Arbuthnot: The purpose of the two Amendments is to exclude bodies other than local authorities from the provisions of Clause 2. The sort of bodies we have in mind and whose position we are anxious to preserve are bodies such as sports clubs or groups of persons who comprise trade associations, and people of that kind. From some of the comments made by my right hon. and learned Friend when speaking about the previous Amendment, I begin to wonder whether the position of such bodies is not already preserved as it is, but I should like to have an assurance from him that the position of sports clubs and trade associations will be made no different under Clause 2 than it is at present.
  The fear we have about their position under the Clause is, for example, that if a trade association or sports club uses die stamps to provide itself with letter headings, that becomes a chargeable process, and if it does, the body will be in contravention of the law, unless it applies for registration. That would seem to us to be unnecessary, particularly because the amount of paper used by such bodies is comparatively small. I hope that my right hon. and learned Friend will be able either to accept the Amendment or to give an assurance that bodies such as sports clubs and trade associations will not be affected adversely by Clause 2.
  The Solicitor-General: I think that, from the terms in which my hon. Friend moved this Amendment, what he has particularly in mind is the stationery activities—that is, stationery with an "e" in the appropriate syllable—of these non-profit-making bodies. I am able to
  378
  give him the certain assurance that if the Bill is enacted as it stands, without Amendment, it will not affect in any way the existing practice with regard to such bodies. It is not an enactment to impose any new requirement as to registration.
  The position about die-stamping and the like by non-commercial bodies is that the Customs have a statutory power to refrain from registering persons applying a chargeable process if they think fit, and the way in which that power is exercised in this context is set out in a public notice, which is No. 77D. Paragraphs 10 and 11 of that notice make it quite plain that such persons need not apply to be registered, provided they comply, or their goods comply, with two conditions.
  The substance of these is, first, that all the paper that they use in the production of their stationery and other printed matter is bought tax-paid. That works out all right for the Revenue, because although they lose the tax on the value of the completed stationery they get the value of the tax on the paper material used for the printing matter, which otherwise they would not get. The other condition is that the stationery which results from the process applied to it is used solely for the business of the organisation in question.
  Most of them, as far as I know, operate on that basis wholly satsifactorily. I do not know that it has caused any difficulty and the provisions of this Clause as it stands unamended will not alter that position in any way. As my hon. Friend was dealing only with the stationery, I do not think I need pursue the other reasons why it would not necessarily be to the advantage of the other bodies—and certainly would not be to the advantage of the Exchequer—to adopt the Amendment which he proposed.
  Mr. Mitchison: Now that the Government have succeeded in giving local authorities a business and therefore perhaps bringing them within the possibility of exemption under this Clause, may we take it that local authorities, however largo or small, and whether situated in England or Scotland will be exempted in the same way and on the same conditions as, let us say, sports organisations? I hope the right hon. and learned Gentleman will be able to answer that question.
  The Solicitor-General: If the hon. and learned Member will look at the notice—I am not surprised he has not done so unless he is a person who is die-stamping his own stationery for the use of his own business—he will see that it is quite unqualified for the persons concerned, provided they are not in the printing trade, and the terms are as I have summarised them. The size of the activities of the persons does not affect the qualifications, provided they comply with the conditions and are not in the printing trade.
  Mr. Mitchison: May I thank the Solicitor-General for that answer and point out that the notice could not have applied previously because, according to the decisions in the Scottish courts, a local authority was not carrying on a business and, therefore, could not have complied with the conditions.
  Mr. Arbuthnot: I thank my right hon. and learned Friend for the explanation he has given, which is extremely satisfactory. In view of what he has said, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Clause ordered to stand part of the Bill.
  To report Progress and ask leave to sit again.—[Mr. Amory.]
  Committee report Progress; to sit again Tomorrow.

ADJOURNMENT
Resolved, That this House do now adjourn.—[Mr. Edward Heath.]
Adjourned accordingly at two minutes to Twelve o'clock.

SHIPPING
  International Labour Conference, Geneva
  International Labour Conference, Geneva
ROYAL AIR FORCE
  Service Personnel (Caravans)
  Service Personnel (Caravans)
  Weather Ships (Admiralty Vessel)
  Weather Ships (Admiralty Vessel)
  Guided Missiles (Bristol Bloodhound)
  Guided Missiles (Bristol Bloodhound)
TRANSPORT
  Bus Service, Mannings Heath
  Bus Service, Mannings Heath
  Bus Strike (Free Lifts)
  Bus Strike (Free Lifts)
  NUCLEAR TESTS
  NUCLEAR TESTS
UNITED NATIONS
  Aden-Yemen Frontier
  Aden-Yemen Frontier
  Human Rights
  Human Rights
  CENTRAL AND EASTERN EUROPE (REDUCTION OF ARMAMENTS)
  CENTRAL AND EASTERN EUROPE (REDUCTION OF ARMAMENTS)
EMPLOYMENT
  Cardiff
  Cardiff
  Ordnance Factory, Llanishen and Llandaff Engineering Works
  Ordnance Factory, Llanishen and Llandaff Engineering Works
  Unemployment
  Unemployment
BRITISH ARMY
  Personal Case
  Personal Case
TELEVISION
  East Devon
  East Devon
MINISTRY OF SUPPLY
  Swallow Aircraft (Project)
  Swallow Aircraft (Project)
AGRICULTURE, FISHERIES AND FOOD
  New Zealand Meat and Butter
  New Zealand Meat and Butter
ROYAL NAVY
  Nuclear Submarine "Dreadnought"
  Nuclear Submarine "Dreadnought"
  ADMIRALTY MARSHAL
  ADMIRALTY MARSHAL
EAST AFRICA
  Makerere College (Extra-Mural Studies)
  Makerere College (Extra-Mural Studies)
KENYA
  Detained Persons
  Detained Persons
  Incidents, Lokitaung (Inquiry)
  Incidents, Lokitaung (Inquiry)
Preamble
The House met at half past two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers

  MESSAGES FROM THE QUEEN
  2.35 p.m.
  THE EARL OF SCARBROUGH: My Lords, I have the honour to present to your Lordships two Messages from Her Majesty The Queen, signed by her own hand. The first is as follows:
  "I have received your Address praying that the period of seven years ending on the thirty-first day of July, nineteen hundred and fifty-eight during which the river boards are, under subsection (2) of Section eight of the Rivers (Prevention of Pollution) Act, 1951, prohibited from taking action without the consent of the Minister of Housing and Local Government in respect of certain contraventions or apprehended contraventions of section two of that Act, be extended for a further period of three years so as to expire on the thirty-first day of July, nineteen hundred and sixty-one.
  "I will give directions accordingly."
  The second Message is in these terms:
  "I have received your Address praying that the International Organisations (Immunities and Privileges of the Council of Europe) (Amendment) Order, 1958, be made in t he form of the draft laid before Parliament.
  "I will comply with your request."

  ROYAL SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS BILL
  Read 3a, with the Amendments, and passed and returned to the Commons.
  HOLY TRINITY HOUNSLOW BILL
  Read 3a, and passed.

  CIVIL DEFENCE EXERCISES AND SPORTING EVENTS
  2.38 p.m.
  VISCOUNT BRIDGEMAN: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  The ask Her Majesty's Government whether they are aware that in connection with a recent exercise for Civil Defence and Royal Observer Corps a rehearsal was called for the afternoon of Saturday, 3rd May, which was also the time of the Cup Final, and whether they will see to it that in the interests of the morale of the voluntary forces concerned such a clash of dates is avoided in the future.]
  LORD CHESHAM: My Lords, this is certainly one of the considerations which are borne in mind in fixing the dates of major exercises of this kind, but there are a number of others to be taken into account and it is not always possible to avoid a clash with national sporting events. I should like to take this opportunity of paying a tribute to the public spirit of the volunteers—nearly 10,000 in all—who gave up two week-ends to this important exercise, which was of great value in testing the system for handling reports of radioactive fall-out. I am glad to say that my information is that their morale was very high indeed.
  VISCOUNT BRIDGEMAN: My Lords, while associating myself with the remarks of my noble friend about the morale of the voluntary forces concerned, may I remind him that one of the advantages of the Question and Answer at this time of the year is that those concerned will have plenty of time, before next year's exercise, to plan to avoid the incidents which occurred this last time.
  LORD CHESHAM: My Lords, I am sure that my right honourable friend will be most interested in the noble Lord's words.

  PARK LANE IMPROVEMENT SCHEME
  LORD CONESFORD: My Lords, I beg to ask the first Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask Her Majesty's Government, how many trees would be destroyed in carrying out the plans for which authority is sought in the Park Lane Improvement Bill.]
  THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE EARL OF PERTH): My Lords, present indications are that not more than ninety-five trees would have to be felled to enable the road improvements to be carried out. About one-third of these are small trees such as thorns. It may be possible to save some of the trees by minor deviations in the line of the roads; this matter is being carefully examined by my right honourable friend the Minister of Works.
  LORD CONESFORD: My Lords, do I understand from that Answer that Her Majesty's Government do not dispute the destruction of amenities described by my right honourable friend the former Minister of Works, Mr. Nigel Birch, in another place on April 30?
  THE EARL OF PERTH: My Lords, I am afraid that I do not know what Mr. Nigel Birch said at that time, but I can assure your Lordships that the Ministry of Works are most anxious to preserve amenities wherever possible.
  LORD SILKIN: My Lords, does the noble Earl know how many trees will be left standing?
  THE EARL OF PERTH: In Hyde Park and Green Park, something over 3,000.
  LORD CONESFORD: My Lords, I beg to ask the second Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask Her Majesty's Government whether they will publish in the OFFICIAL REPORT, or otherwise make available to the House, all reports by the Road Research Laboratory on the traffic problems at Hyde Park Corner and Park Lane, and on the proposals made to deal with them.]
  THE MINISTER WITHOUT PORTFOLIO (LORD MANCROFT): No, my Lords. My noble and learned friend will recognise that in a scheme such as the Park Lane improvement scheme many considerations have to be taken into account as well as traffic, and the reports to which he refers are only one part of the information on which the L.C.C. and my right honourable friend the Minister eventually drew up the plans now embodied in the Park Lane Improvement Bill. It would not be possible to publish all the voluminous advice that has been tendered to my right honourable friend over the years during which the present scheme has been evolved, and it would be inappropriate to publish only the reports to which the noble Lord refers. I am, incidentally, placing scale models of the scheme in the Royal Gallery tomorrow morning.
  LORD CONESFORD: My Lords, before we allow encroachments on the Royal Parks and the destruction of historic amenities in the heart of the capital ought we not at least to know what the expert traffic advisers believe will be the effect upon traffic? Is it not the fact that the Road Research Laboratory have conducted experiments on this scheme and have reported the results? Is not the I House entitled to know the results?
  LORD MANCROFT: My Lords, I think it would not be practicable to give publication to all the multitudinous advice which my right honourable friend receives, and will always receive in a case like this, before he finally makes up his mind and submits his decisions to Parliament.
  LORD CONESFORD: Has my noble friend seen the very serious allegations, so far uncontradicted, made in the Observer on April 27 and made by my right honourable friend Mr. Nigel Birch in another place on April 30, and can he assure the House that he will give detailed answers to the criticisms there raised when he commends the Bill on Second Reading?
  LORD MANCROFT: My Lords, I will do my best on Second Reading of this Bill to fall in with the wishes of the House. Naturally, those advising the Government did not get their way in every single point on the advice they offered. I can promise my noble and

  713
  learned friend that I did not get my way on every piece of advice I offered. But the scheme they have agreed was accepted by the Road Research Laboratory, as by my right honourable friend's other advisers, as being the most suitable, taking into account the many conflicting factors.
  VISCOUNT ELIBANK: Can the noble Lord say when the scheme will be started?
  LORD MANCROFT: We have not passed the Bill yet.
  EARL ATTLEE: May I ask for an assurance that it is not intended in future to call Hyde Park "Hyde Car Park".
  LORD MANCROFT: If the noble Earl, Lord Attlee, will look at the scheme again, as I am sure he has done already, he will see that it provides for a reduction in the number of cars parked in Hyde Park.
  LORD CONESFORD: May I thank my noble friend for his answers and for his promise to put on view a model which we can study. I wonder whether he can also arrange for somebody from the Departments concerned to show me and other noble Lords in all quarters who may be interested exactly what is involved on the spot, either on Friday or Saturday of this week.
  LORD MANCROFT: What will be involved on the spot is that the noble Lord should take great care not to get run over, because this is one of the most dangerous parts of London. If he cares to take that risk, either in my company or in the company of my professional advisers, we are all most happily at his disposal.
  LORD CONESFORD: Thank you very much.

  THE NAVY ESTIMATES
  2.45 p.m.
  VISCOUNT ALEXANDER OF HILLS-BOROUGH VISCOUNT ALEXANDER OF HILLS-BOROUGH rose to call attention to the Explanatory Statement by the First Lord of the Admiralty on the Navy Estimates, 1958–59 (Cmnd. 371); and to move for Papers. The noble Viscount said: My Lords, I beg to move the Motion which stands in my name on the. Order Paper. May I say at the outset that I hope it will be with the consent of the House that the arrangements made between the First Lord of the Admiralty and myself—that I should move my Motion, and that he should make a very early statement of Admiralty policy, with the right afterwards, by leave of the House, to reply to the debate—will be agreeable to your Lordships.
  The reading of the First Lord's Paper on the Navy Estimates must have tilled most of us with pretty mixed feelings. There are one or two things that might be put upon the credit side, perhaps not least the fact that at last, after many years of pressure, the Government have decided in the last fifteen months what the role of the Royal Navy is to be in the future years and in the changing circumstances, and that this year it is included in the White Paper on Defence. In that Paper the three main tasks of naval forces are:
  "In peace time, to help carry out Britain's responsibilities in colonies and protected territories, to defend British shipping and generally to contribute by their presence to the mainenance of peace and stability;
  in limited war, to protect sea communications, to escort troops and supplies to the theatre of operations and to give them support in action;
  M global war, to make an effective contribution to the combined naval forces of the Western Alliance."
  That, I think, is not an unreasonable definition, to the minds of most of us, as to what the role of the Royal Navy should be. But looking at the first part, which says that the Royal Navy's task in peace time is
  "generally to contribute by their presence to the maintenance of peace and stability,"
  I just wonder how, with the steadily reducing strength of the Fleet, and the proportion of even that reduced Fleet which is put into reserve, it can possibly cover the situation.
  I remember that in one of the naval journals Mr. Dudley Pope, the Naval

  715
  Correspondent of the Evening News, said this:
  "To patrol its 33 million square-mile parish in the Atlantic and the Mediterranean the Navy will have two aircraft carriers and two cruisers. For the Pacific and Indian Oceans, more than 97 million square miles, British interests and shipping will be guarded by one carrier and a few escorts, with a commando-carrying carrier coming along later."
  "Later" is the right emphasis. "Later" will depend, I take it, upon when "Albion" relieves "Bulwark" in the East, how long "Bulwark" takes to get home and how many months elapse, due to the requirements that staffs usually have during the transformation or refit of a ship, before the commando carrier is available. But obviously, whilst it may be added that besides the two aircraft carriers and two cruisers in the Mediterranean and Atlantic sphere there will be other important vessels, even though minor in category, the fact remains that, compared to the influence we were able to bring to bear in the past, not merely in protecting our vast shipping interests but in actually promoting good will in the world, our influence will have been very much reduced. I cannot picture that in any circumstances this island community of ours, with all its great shipping traditions, and with its vast interests throughout the British Commonwealth, can ever afford to be without such forces as are required to keep these great vast stretches of sea safe for our Commonwealth citizens.
  If one looks at the White Paper issued by the First Lord of the Admiralty, one finds he says in paragraph 7 on page 4 just the essential things. He points out that the oceans cover over 70 per cent. of the world's surface, and adds:
  "Taking first the interests of these islands and of the Commonwealth, nothing is more important than that merchant shipping should be able to pass freely and safely across them. Our very existence, in peace and in war, depends upon this freedom."
  It is my submission—and whatever anybody else may say I stick to this submission—that in the extent of naval provision we are being cut to a situation in which those most vital interests which the First Lord himself mentions in his White Paper cannot properly be met and covered. That is why I put down a Motion of the kind that appears on the Order Paper to-day.
  The Defence White Paper contained a couple of most interesting paragraphs—paragraphs 46 and 47—which I think also require a little elucidation by the First Lord of the Admiralty. Paragraph 46 states,
  "In the Atlantic and Mediterranean, the Royal Navy and maritime aircraft of the R.A.F. will continue to play their part in N.A.T.O. Since, apart from fulfilling certain colonial responsibilities, the Royal Navy will be operating in conjunction with other allied navies, the aim will be to make the most effective contribution to the combined forces of the Alliance, and not necessarily to provide a fully balanced all-purpose British fleet."
  For that purpose—not having a fully balanced all-purpose British fleet—it goes on to say:
  "The British naval forces in this area will include two carriers, two cruisers and a number of destroyers, frigates and submarines."
  Then the White Paper deals with the question of the East. In paragraph 47 it says:
  "East of Suez, it is proposed to maintain a balanced, all-purpose fleet of appreciable strength."
  The exact qualification of "appreciable" to the noun "strength" I am not quite able to assess.
  "This is necessary to enable Britain to discharge her obligations to S.E.A.T.O. and the Baghdad Alliance, and to fulfil her independent military commitments in that area."
  According to paragraph 48, the Eastern fleet will be composed of one aircraft carrier, one cruiser and a number of destroyers. So that in the case of the fleet, so called—one can hardly call a flotilla of this size a "fleet"—it is to be an all-purpose balanced fleet, with one aircraft carrier, one cruiser and some destroyers. But in the Mediterranean and for that part of the sea in the Atlantic ocean, it is not to be an all-purpose, well-balanced fleet, although it will have two aircraft carriers, two cruisers and some subsidiary vessels.
  I really do not understand exactly who could have written the White Paper on Defence. It certainly could not have been anybody in the Admiralty; and I should have thought that by now there must have been some arguments in furioso terms between the Ministry of Defence and the Board of Admiralty as to what is an all-purpose, well-balanced fleet. I must confess that the First Lord of the Admiralty, in the paragraphs with which he opens his White Paper on general policy, seems to have done the best he can to cover up

  717
  what is the real fact—namely, that under the pressure of the Treasury, and it may be through the channel of (I do not know whether he would wholly agree with this) the Minister of Defence there is a continuous rundown proposed for the Royal Navy.
  There is a good deal of talk about economies which are going to be effected by reductions in civilian staff and the reduction in naval posts occupied on shore. In fact, however, anybody who takes the trouble to study the situation of the Fleet in the last two years, and the Fleet as it is forecast to be in commission or in reserve in the future, can see quite plainly that instead of, as is suggested by the First Lord's White Paper, there being increased numbers of ships in commission, with increased resources made available by sacking civilians and shutting up naval posts on shore, the main purpose of the Government, through its Treasury and the Ministry of Defence, is to drag down the strength of the Fleet the whole time. That stands out a mile to anybody who makes an impartial study of these two Papers—the Defence White Paper on actual defence policy and the White Paper of the First Lord which we are examining this afternoon.
  I want to say quite clearly that I must not be regarded at all as one who holds that there should be no progress to disarmament. I do not hold that view at all. I am most anxious that the Summit conference should take place. I am most anxious that we shall see an agreement which will avoid this stupid, suicidal policy of placing far too much reliance upon the ultimate deterrent of the H. bomb, and that we shall be able then to proceed to a proper round-table conference between all the Powers concerned, such as has been advocated by Her Majesty's Government, for general disarmament in conventional weapons. On the other hand, I am all against the suggestion that we should make any undue unilateral disarmament before all the Powers concerned are brought into consultation and are willing to make the same contributions to general disarmament. Were we to do that, we should put ourselves into an unsafe position, and indeed seriously detract from the weight, the breadth and the scope of our diplomatic representation throughout the world.
  That is my conviction upon this matter, and it is because of the dithering of the
  718
  last few years, in which we have had six or seven different Ministers of Defence coming to no real statement of policy, and in which we have been refused over and over again a detailed national inquiry as to what ought to be the future of the fighting forces so that there might be a real result from such a study, that I feel that we ought to tell the Government quite clearly that we are wholly dissatisfied with their defence policy and are bitterly dissatisfied—those of us who know what are our responsibilities at sea—with the treatment of the Royal Navy.
  The situation that staggers me is that we take this line upon the strength of the Royal Navy at a time when the Power which predominates in most people's minds as being the biggest threat to our peace and security, the U.S.S.R., is taking quite the opposite line. I think it is a great pity—and I would ask the First Lord whether when he replies later in the debate he will tell me why this is so—that we do not nowadays get the old Blue Book called Fleets, so that we might have before Parliament at all times a proper comparative study of the strengths of other Naval Powers. But if one looks at the only really authoritative source we have at the moment, Jane's Fighting Ships, and sees what is going on in the U.S.S.R., it is certainly staggering to think that we, as a nation, are falling far behind a Power which used to be so secondary to us in regard to naval strength and are relying upon something which at present it is in the power of only one of our Allies to deliver—the ultimate deterrent, the H-bomb.
  One sees at a glance what the change has been. According to Jane's Fighting Ships Russia has 37 cruisers, while our total strength, on paper, at the moment is 15; and before this debate ends I should like to know what the strength of our cruiser fleet is to be in twelve months' time, because I cannot find that out at the moment. At any rate, that has to be matched against the U.S.S.R.'s strength of 37 cruisers, practically all of which are reasonably modern. Leaving out only that part of the "Kirov" class and ex-German and ex-Italian vessels, the oldest of them have been laid down since 1939. And we talk of the strength of our cruiser fleet, which includes ships like the "Town" class—the "Sheffield", the "Birmingham" and others—which

  719
  were finished and at sea, in commission, long before the last war broke out! Take just that one category and compare it, and one wonders what is becoming of this great sea strength of ours.
  Take destroyers. I do not know exactly how many active destroyers we have. I have looked at the figures once or twice, but taking the figures we have—26 in commission and 30 in reserve—they compare with 155 which the Russians have. In frigates and escort vessels we are rather ahead of them: they have 76. But, of course, we have only between 50 and 60 submarines. Discounting much of the inflation in stories about the Russian submarine strength, and getting as near as I can to the "brass tacks" of the situation, I imagine that the Russians certainly have more than 300 effective submarines; in fact, I believe that their total strength in submarines to-day is certainly nearer 400 than 300, against which we postulate a force of 56 destroyers; and while we have 57 submarines, the Russians possess 155 destroyers.
  I know, of course, that it will be said: "You must remember that we are now only a part of a wider and more general collective strength: we have allies." When I read of events in France in the last three weeks, I am not at all sure of how far every part of the structure of N.A.T.O. is going to stand up to every kind of national wind that blows; and I certainly cannot see it to be a sound defence policy to do as Her Majesty's Government propose. Here we are, a great shipbuilding nation, building up at present on a programme which stretches into years ahead, covering 5 million or 6 million tons of merchant shipping and ships trading all over the world, under many flags as well as our own—because at least 20 per cent. of our shipbuilding is exported to foreign Powers. Apparently we are gradually to let down the protection of our vast interest in all that, for the idea of the H-bomb, wielded at present only by somebody else, and incapable even of being used except by consent of the other Power. As I said on the debate on the Defence White Paper, that is surely leading us to a policy of suicide; and when one thinks what this country has to thank the Royal Navy for in the past for being its saviour from starvation, it is hardly a good thing
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  to adopt in defence a policy of suicide for the purpose of saving ourselves from starvation. I am just amazed that we should have come to this pass, and I hope that when the noble Earl, the First Lord of the Admiralty, comes to reply he will give us some effective answer to my fears and the fears of many other people on that particular point.
  May I ask the noble Earl a few questions of detail? In paragraph 11 of his Paper he refers to the fact that:
  "The carriers will continue to be the core of the new Navy."
  There seems to be a vast difference in the value attached to a core of this character now and the value attached to it in the days when I first went to be political head of the Admiralty in 1929—that is a long time ago. I remember going down with the present noble and gallant Lord, Lord Chatfield, when he was commanding the Home Fleet. I saw his ships in Torbay. Our total Navy manpower strength was about 89,000 or 90,000, I believe, and there were a full battleship squadron, an excellent battle cruiser squadron, a heavily gunned "County" class cruiser squadron and a lighter cruiser squadron; a couple of flotillas of destroyers and all the necessary supply ships—all well within our power and strength in those days to be manned and used to show the Flag in times of peace when any trouble seemed to be on the horizon.
  One looked at the core, and the core was the battleship and the battle cruiser, very well added to by a most powerful cruiser squadron. In 1930, when I went to debate this matter at the international table of the London Naval Conference, the Admiralty's cruiser programme—which they thought was insufficient—was to be a minimum of 70; and I was well attacked from the Conservative side for ever agreeing to a maximum tonnage of (I believe it was) 335,000 tons, allowing of a reasonable fleet of cruisers, about 50.
  What is the core of the fleet now? Is it four aircraft carriers, or is it nine? I should like to know. That is not a very heavy core for this great country and the British Commonwealth. It is certainly all that we have in commission, and so far as I can see the four will never be in commission, on active service, all at one time. Where is this core? There are five aircraft carriers, of different ages and in different stages of conversion, in

  721
  reserve. How many are to be scrapped? Could we know? What is to be the total of this new form of capital ship at the core—the aircraft carrier? Is it to be four, five or how many? Apparently, the only ship in the aircraft carrier class that is being completed at the moment is the "Hermes." There is one ship which has been laid down for years. It was, away back, included in my war programme, and it is still lying on the stocks, uncompleted.
  This core, says the First Lord of the Admiralty, is to be surrounded by other supporting ships, armed to meet every kind of attack, whether under-water, surface or overhead. Apparently, the total number of cruisers in commission at the moment is six, and if cruisers are to be scrapped how many operational cruisers shall we have in twelve months time? Could we know? It was very useful recently when a cruiser could look in at Aden, was it not? I wish that the House could be fully apprised on the sort of anxieties I have in my mind with regard to the running down of the Fleet.
  If one looks at the destroyer class, I must say that, so far as they have been allowed, the Admiralty seem to have done an exceedingly good job in turning over to the fast frigate class a number of the older but fast destroyers; and the fact that we have not as many destroyers as I should like is to some extent made up for by the new anti-submarine and escort vessel categories. But to say that those two classes of ships are sufficiently great in number, or in sufficiently continuous use for training, or operationally, ready to deal at any time with a Power having between 300 and 400 submarines, does not seem to be in accordance with fact. I am not asking that we should provide the whole of the anti-submarine forces, having regard to the strength of certain other Allies; but to say that operationally and effectively we are making a proper contribution to our maritime defence seems to me to be quite unacceptable.
  I should like to say this to the First Lord, in addition to rapping out some of my attacks. I should like to thank him for giving a rather better idea this year of the development of our aircraft for the Fleet Air Arm. Yet I should like some more details, if possible. Let us see where we are going in this modern age. The new strike aircraft "Blackburn" interests me very much, but I do
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  not seem to know enough about it to understand it; and the same applies to one or two other like craft. In these days, when our moving bases are so different from the fixed bases which could be so easily attacked at any time, especially when close to the bases of the enemy—your bases were vulnerable to the enemy and his were vulnerable to you—I would ask this question. When are we going to have the kind of aircraft that can take off from the aircraft carrier, in any part of the world, and deliver an effective striking blow with the same power as can be delivered from a land base?
  I should also like to know (something has been said about this matter from time to time, and I am very interested in the information that is given) how soon it is thought that the new development with regard to direct vertical lift can be put into effect for aircraft. I am quite sure that there is a future in that connection, if the various engineering and other problems can be overcome. I am no engineer; I have always left engineering problems to other people, and I do not know the answer. But I should like to have some information on what progress we are making in vertical lift in the craft we could use for heavy attack from the moving base of an aircraft carrier.
  Then I should like to know a little more about something which seems quite strange to me. It is a long time since I myself was operating in the Admiralty (I have been away from there now for eight years), but I remember Mr. H. G. Wells coming and having a furious row with me in the Admiralty at the end of 1940 because, he said, we were wasting our time in the Navy since we were not providing helicopters to sink the enemy submarines. In those days, of course, we did not get enough aircraft coming off the production line to be able to supply the basic needs of the Royal Air Force and the lesser needs of the Fleet Air Arm. Moreover, except for the Sikorsky helicopter in the United States, we did not know of any real progress being made with helicopters. Therefore, obviously, that matter had to be set on one side. But what I did know from talking to naval officers was this: that all submarines carry a fairly powerful surface gun; and the helicopter, as we knew it then, was such a "sitting bird" that it had very little opportunity to stay

  723
  long enough in a position to get a direct attack upon a submarine. If it attempted to do so it would be shot down. What change has taken place in the helicopter? What will be its new potentialities, compared with what they were during the last war, that will make it such a strong candidate as a principal method of attack upon a submarine? I should like to know a little more about that point, if the First Lord could give us some information.
  I come now to a point to which I have already referred. I should like to know from the First Lord when he expects that the "Bulwark" will be fit for commission and remodelled as a commando aircraft carrier. Would he give a date? Is it the end of 1959? Is it the middle of 1960, or the end of 1960? What sort of date would he give for the time when we shall get the "Bulwark" as a carrier, especially suited for the kind of task we shall have in the eastern seas?
  Another thing people complain about, quite understandably, is that so often the Admiralty report to Parliament that orders will be placed, and then there is delay. It is perhaps said that orders have been placed for this or that type of ship. In paragraphs 30 and 31 of the Explanatory Statement reference is made to guided-missile ships. I note that it is said that four guided missile destroyers have been ordered, and their names have been selected. But I remember that it was in 1955 that we first learnt in Parliament that these destroyers were to be ordered. This is three years later, and there is nothing at all in this Paper to indicate that a start has been made. Have the orders been placed on contract with certain firms, and have the firms begun the construction of these guided-missile craft? I should like to know, and I feel sure that Parliament would like to know.
  I should like to congratulate the First Lord upon the obvious progress in the submarines of the "Porpoise" class; and I am interested now in referring only to submarines, because obviously that class of craft is doing very well. I should like also to ask what has become of the "Dreadnought", the nuclear-powered ship, as it is hoped she will be. This ship has been on the stocks now for a very long time, and I should like to know
  724
  what is the present position. Paragraph 35 of the Explanatory Statement says:
  "As regards ' Dreadnought.' the first of the Navy's nuclear submarines, much experimental work has been done in association with the Atomic Energy Authority, and the reactor for the zero energy experiment, known as 'Neptune,' is now in operation."
  Apparently nothing has happened, except the putting up of buildings and the starting of experiments on a sort of engineering prototype on land. When are we likely to begin to have the same sense of urgency in this country as has been evinced by the United States Navy about this particular function of the future Navy? I just do not understand it. Why is it? Here we have at least three nuclear-powered submarines in the United States Fleet, and with all our great history and capacity in this field of nautical warfare we have not a single one, and we seem to be years off the conclusion of the construction of such a ship. May we please have a report to-day on what is the exact stage, and will the First Lord give us a date for the completion of the "Dreadnought" and say how many more nuclear-powered submarines the Admiralty propose should be laid down for the future?
  The Explanatory Statement says, in paragraph 38:
  "In recent years the policy has been to reduce the size of the Reserve Fleet, and to maintain the more important ships therein at a higher state of readiness; following the current review of defence policy this trend will be accentuated."
  What does that mean? When we turn to pages 13, 14 and 15 of the Explanatory Statement and see the actual categories of ships now in commission and those which are in reserve, we feel a little confident about the number of ships in all existing categories in reserve, but what does the Statement mean by "accentuating" the reduction of the Reserve? Will the First Lord tell us by how much he is going to reduce the Reserve in the next twelve months? Is it going to be reduced? What does that paragraph mean? And what is the value of suddenly scrapping good ships?
  Looking back at the years of war, I remember that we had a lot of argument in 1929–31 about what should be held in Reserve and what should be scrapped. We used to keep an Admiral in command of the Reserve and he had a number of ships in the Reserve. When war broke

  725
  out in 1939 we needed every one of them—the "V" and "W" class destroyers and even the older battleships which had been regarded by all the critics as stone dead and finished. Even when we came to so late a time as 1944, to the great landing on the coast of Normandy, and we were getting a frightful time on the French beaches from the raking fire of the German "Long Tom" on the other side of the Weems Canal, the only thing we had to keep it in check and which finally quashed it were the guns of a succession of old capital ships—the "Warspite", the "Rodney" (getting pretty old then) and even one of the "Royal Sovereign" class. These ships kept down that gun and so reduced the number of casualties on the beaches, so that, except for air attack, we were from that time able to go on almost uninterruptedly with the landings on shore which were so essential for the operation. We should be careful how we throw away our Reserves—very careful. We shall need them. Do not keep a ship which we cannot repair economically, but be very careful that we keep an adequate Reserve.
  If your Lordships would look at the summary in paragraph 58, you will see that it says:
  "It is recognised that these measures will create disturbance and difficulties for both civilian and naval personnel. Everything possible will be done to mitigate hardship for all who are affected, and particularly to help civilian employees discharged to find other work The Ministry of Labour and National Service will be arranging, as necessary, to open special employment offices inside the establishments affected before discharges begin. The assistance of the Northern Ireland Ministry of Labour and National Insurance is also being sought."
  The next paragraph states that the savings proposed run into £7 million under the first head, £5 million a year under the second and £3½ million under the third. I do not know—we cannot be prophets—but I wonder what the lack of provision we have at present may mean in ten or twenty years' time, in the next outbreak, if it comes, in regard to not the ultimate deterrent but some other form of weapon. I am getting old—I am 73; I look back a long way and I had to learn a lot about defence. I remember as a lad, in 1899, watching the Artillery Reserve going out from Bristol to South Africa. The position could not have been held until they got there if we had not had a Naval Brigade there. I remember, when we came to take stock, that
  726
  although we had had a whole series of Liberal and Tory Governments we had not the stuff to fight even a colonial war in South Africa.
  I remember 1914, and that the size of our Forces then for the magnitude of the task we were forced to undertake because of imperialism in Europe was wholly inadequate. We came as near defeat as possible and I believe that defeat would have been positive in the war of 1914–1918, if we had not had the naval strength we had then. I look back at the last war and remember what was the state of preparation in 1939. Governments who had been working upon the ten-year rule were to blame. For ten years we were always going forward, year after year, saying that there was no risk of war and therefore "we need not do this, that or the other; we can save the money now"—so that in 1939 we found we did not have the stuff.
  Although I belong to a Party many of whose members would disagree with me in detail about this—and I do not mind having to disagree with them in details about it—I am certain of this: that we should save a lot of time and money, as well as valuable lives and property, if in all matters of defence we took precautions, steady precautions, at the right time. I beg to move for Papers.
  3.30 p.m.
  THE FIRST LORD OF THE ADMIR-ALTY (THE EARL OF SELKIRK): My Lords, if it is the wish of the House, I should be glad to fall in with the proposal which the noble Viscount, Lord Alexander of Hillsborough, has made, that I should speak again at the end of the debate. Before I reply, perhaps I may be permitted to congratulate the noble Viscount and Lady Alexander of Hillsborough on their Golden Wedding. I feel sure that the noble Viscount is a much less controversial figure in domestic life than he is on political occasions.
  The noble Viscount, Lord Alexander of Hillsborough, has cast his net fairly wide, and in reply I would do the same, because I think it is desirable. The first thing which I have sought to do in the nearly eighteen months I have been at the Admiralty, as the noble Viscount said, is to try to lay down fairly clearly the role of the Navy. The noble Viscount has been good enough to say that he finds general approval of the terms

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  in which that appears in the Defence White Paper. We must remember changing circumstances. Throughout the nineteenth century we had the largest Navy in the world and were able to maintain free communications over the seas. I think we can claim that after the Napoleonic Wars we played a considerable part in preventing a world conflagration throughout the century.
  The first challenge came at the turn of the century with the building of the German Navy. At that time we replied by saying that we would build two ships to one. We did not perhaps entirely succeed in doing that, but we had enough ships to ensure complete control of the seas during the First World War. Following the First World War we sought to limit the size of navies through the Washington Treaty; and this was fairly successful until the years immediately preceding the Second World War, when the system broke down. Still, even if we were unable to maintain quite our past standards, we were able, with the assistance of the Royal Air Force, to meet the challenge to our sea communications in the Second World War and finally to defeat it completely.
  We are now in a different position. We cannot be the dominant Navy in the world nor can we limit navies. It is all very well for the noble Viscount to say what he would like to build, but we must know where the funds are to come from if that building is to be carried out. If the noble Viscount can say that his Party is prepared to spend literally hundreds of millions more on defence, then much of what he has said to-day is quite logical. I must make that point, because that is how the position stands. If the noble Viscount really says that he wishes to give up any form of deterrent, then again he is leaving that side entirely to someone else to carry out for us. The position I am putting forward is that our policy is to see that the essential rôle of the Royal Navy in maintaining our sea communications is carried out by close association with Commonwealth navies, with the navies of the United States of America and of Europe through the North Atlantic Treaty Organisation, and with the navies of our other friends through the Baghdad Pact and S.E.A.T.O. This is a new situation, for the Navy, to have to depend on
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  friendly relations with other navies to ensure our control of the seas. I would say that this occupies a good deal of the time of our Commanders-in-Chief, who are fulfilling this difficult role with great skill.
  I know that the considerably reduced size of the Navy, both numerically and in comparison with other navies of the world, is causing anxiety to your Lordships and, indeed, to many sections of the country. But I think it is proper to remind ourselves that the strongest of our allies, the United States of America, have the largest navy which the world has ever seen; and it is always worth remembering that they spend about nine times as much on it as we do on the Royal Navy. This is immensely reassuring, but I know that there are those who argue, quite reasonably, that although the broad purpose of our policies is well aligned, there are inevitably occasions and areas where we have responsibilities special to ourselves.
  We can, I think, take great satisfaction in the growing strength of the navies of the Commonwealth, and much of the work which they do now was formerly done by the Royal Navy. If we take the combined operational fleets of the Commonwealth, including the Royal Navy, we find that it has to-day 6 aircraft carriers, 11 cruisers and 120 destroyers and frigates. I think it is fair to say that this is a Force roughly comparable to the prewar Royal Navy, and it is a powerful element on the side of stability and the maintenance of free sea communications throughout the world. I can say that the standard of professional ability is very high. I had the pleasure of watching exercises this spring between the Royal Canadian Navy and the Royal Navy in the North Atlantic, and the professional ability and seamanship were clearly embodied in the one Navy as in the other. I think we can take credit and pride in the developments which have taken place in our Commonwealth navies.
  I would mention here three factors in the world situation which affect the part the Navy has to play. The first is the world-wide sense of nationalism which is evident almost everywhere. The nascent and developing countries of the world want to run their own show. Secondly, the areas of potential nationalism are much greater than they used to be; and this is no doubt largely due to improved

  729
  communications. The result is that the areas of instability tend to be greater in extent, and their repercussions are likely to he much more far-reaching. The third point is that to-day almost any country may, by the use of foreign volunteers or by purchasing weapons on easy payments, he possessed of very modern weapons. This is true even of quite small countries and must necessarily strongly influence our policy. We have therefore a world where areas of instability may arise swiftly in many different parts, and this can have an exceedingly adverse effect on us as a world trading community. I submit that we have in naval forces elements to meet precisely those three points, because a ship does not violate sovereignty in the same way as forces which are stationed on land: it is mobile and can easily be brought to action to prevent the spreading of any area of instability; it is, moreover, a compact versatile force with a wide variety of weapons prepared to meet a considerable variety of circumstances and, occasions.
  There are two further points I would mention here. During the two world wars we have concentrated all our consideration the Atlantic, and that may in some ways have obscured the continuing importance of our world communications. While we had a large naval force stationed all over the world it was unnecessary for us to consider what might happen if, say, the South Atlantic or the Indian Ocean came under the control of a hostile Power. We had an example of this in 1948 when during the demobilisation period after the last war the Home Fleet was considerably run down, and at that time certain claims were laid to various territories in Antarctica. I do not know whether that was coincidental or whether there may have been a causal connection. Now, with much smaller forces to fulfil our tasks and to maintain the Navy on a world-wide basis we are stretched to the utmost, and the Admiralty have to use all their ingenuity to provide forces both sufficient and suitable to meet the demands of our foreign policy.
  The second point which I want to make here brings me back to the important point of the control of the Atlantic, where our whole outlook to-day has necessarily been clouded by the Russian submarine fleet. The submarine
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  is, of course, essentially, though not exclusively, an offensive weapon, and its great virtue lies in its ability to operate in waters not entirely within the control of its own country. In this sense, if the Russians wish to gain active control of distant waters, I have ma doubt that strategically they are perfectly correct to concentrate on building up a submarine fleet. Moreover, it is clear that one way or another they are putting submarines at the disposal of what they assume to be friendly countries. Accordingly, our aim is to provide naval forces which are at one and the same time suitable for cold and limited war and can also deal effectively with the submarine menace.
  If I may pass from the broad point of the role, may I go on to what I describe as the internal adjustments which I have been trying to make during the time I have been there. It has been a considerable problem, particularly in dealing with the size of Vote A and civilian staff. Vote A has to come down in any case with the gradual abolition of National Service. During the current year the total will fall from 112,000 to 105,000, and will eventually drop to rather below 100,000. It was also clear, of course, that the strategic changes in the last years would necessarily be reflected in shore support. The size of the Fleet was shrinking and the cost of ships and equipment was growing. Therefore, if an adequate Fleet was to be kept at sea, shore support had to be cut radically. The obvious solution was more difficult to apply, since the extraordinary and remarkable increase in the complexity of modern ships meant increased shore backing in certain respects. That includes the whole field, from the naval architects designing the ships to the storekeepers who are responsible for the immense variety and complexity of modern equipment.
  I hope your Lordships will look upon what we are doing as a sort of creative evolution which has attempted to redesign the whole pattern of the Navy's shore support to meet modern needs. I have explained in the Explanatory Statement how dockyards, commands, bases, air stations, hospitals, R and D establishments and store depots have all been affected. Our aim throughout has been to economise on the overheads and running costs, and to amalgamate and

  731
  concentrate wherever possible. Eventually, we hope, taking January 1, 1957, as our datum period, to reduce Naval manpower by nearly 20 per cent. and Admiralty civilians by, I hope, at least 25 per cent.
  I know also how much regret there is at the closing of places which have had long and distinguished associations with the Royal Navy, and I can assure your Lordships that I have not enjoyed being at the Admiralty at a time when we have had to hand over Simonstown (though I think it was a wise thing to do) and Trincomalee; decided to reduce Hong Kong; to close the yards at Portland and Sheerness; to transfer the Torpedo Experimental Establishment from Greenock; to abolish the Nore Command, and to concentrate the Air Command, including the closure of the air station at Eglinton, near Londonderry. These were hard decisions, and were reached only after a great deal of heart-burning, particularly in regard to Greenock and Londonderry, which are already faced with high local unemployment. Nevertheless, I believe that these were right decisions, and that there was no real alternative if the size and efficiency of the Fleet at sea was to be maintained.
  But I should not like the House to think that we have been simply closing down dockyards and establishments: we have also been devoting a tremendous amount of thought to increasing the efficiency of those upon which we decided to concentrate. I have already explained something to the House on an earlier occasion about reorganising the Admiralty itself.
  VISCOUNT ALEXANDER OF HILLS-BOROUGH: I am sorry to interrupt the First Lord, but could he give us, if not now, perhaps when he is winding up, some information as to the progress for finding alternative employment or the disposal of Government assets at Sheerness and Portland?
  THE EARL OF SELKIRK: Yes, I can say straight away that I am very optimistic about the future of Sheerness, and I will see if I can be a little more specific before I sit down. I was referring to a statement I have made before in regard to the Controller's Department in the Admiralty. This has been reorganized
  732
  and will now be divided under broad functional sub-divisions—that is to say ships, weapons and aircraft—instead of under the existing specialised professional departments. I am sure that this is a much sounder basis of organisation. but it will, of course, take a little time to bring it fully into operation.
  The same general principles are being applied to the Royal Dockyards, with the appointment of a general manager under the authority of the Admiral Superintendent. He, in his turn, will have departments under him carrying out specific tasks, instead of the dockyard being divided, as has been done previously, according to the profession of individuals—that is, constructors, engineers, and electrical engineers. As a first step we have discontinued the experimental post of Deputy Superintendent Industrial at Chatham, and have appointed the same man as General Manager designate. I can already say that we are getting results from the new planning and organisation of the Royal Dockyards, and there is evidence of this both in reduced cost and time for refits.
  I suppose it is true to say that much the most difficult task has been the need to cut down the number of ships in the Fleet. We have tried so far as possible to spare the operational Fleet, but I am afraid that the cruisers, as the noble Viscount opposite has said, have suffered pretty heavily. It is a sobering thought to compare the thirty-three cruisers in commission before the war with the three which we plan to have in the operational fleet by 1960. If the noble Viscount wants to know what is the number for the next year he can see it in paragraph 61 of my Memorandum. As the noble Viscount has said, many of these cruisers will be reaching the end of their useful life, and we believe that in modern conditions aircraft carriers, destroyers, frigates and submarines give better value than the old cruisers.
  I am sure that we cannot hope to maintain even our present level of new construction and, at the same time, the whole of the Reserve Fleet as at present. Therefore, there have had to be considerable reductions in the Reserve Fleet. I am not saying that the considerations which the noble Viscount has advanced have not been with us—of course they have. I think the reasons why we

  733
  have come to this conclusion should be clearly before the House. Many of the ships in the Reserve Fleet are reaching, if they have not already done so, the end of their useful life, and they could not he kept going except by spending a very large sum of money. Others, if in reasonable condition, have equipment, which is largely out of date. With the rapid advance of equipment, it would mean completely re-equipping ships which have been out of service for a short time. Moreover, keeping ships in Reserve is exceedingly expensive. If we spend money there, it means that there will be less available for the Active Fleet. It is our view that in global war we simply should not have time to bring out of reserve large numbers of ships which are not in a high state of readiness. Even in a limited war it is, I think, unlikely that we should be able to get the ships ready in time, emphasising, as I have done, the need for fairly quick action if they are to be of any great use. I am certain, in the present circumstances, that the largest possible Active Fleet in commission is the most useful for us to have, whether our consideration be of global or, indeed, that of limited war.
  Before going on to the third point I want to make, may I mention recruiting for a moment, as I think it might interest the House? In 1956–57 we obtained 8,150 recruits; in 1957–58—that is, until last March—we had a fall to 6,900, and we need, for a Navy of just under 100,000, about 7,750 a year. I am glad to say that the prospects are encouraging. Now that we have the role of the Navy established and the incentives by way of pay, we look forward to an improvement—and it is worth noting that in 1962 the effect of the higher birthrate will mean an increased potential for recruiting of about one-quarter higher than it was last year. I think, therefore, that our chances for the Royal Navy and indeed figures for the last two months confirm it—are very encouraging. As far as the Royal Marines are concerned, there has been a startling and extremely welcome improvement. The figures for April and May are running at over twice the rate they were a year earlier. I think, therefore, that the prospects of raising 1,100 Marines a year are quite good, particularly as we are now introducing
  734
  a youth entry into the Royal Marines on the lines of the entry which has proved so popular for the Royal Navy. There are one or two difficult categories. Among juniors we want rather more seamen and communicators; we want more writers, stores ratings and sick berth attendants. In particular I would mention artificers, to whom we always give particular attention.
  May I say one word about a matter which has struck me a great deal since I have been in the Admiralty, and that is the very high standard of education and training? The Navy have been pioneers in this field. Their first technical schools were pioneers in this field over 100 years ago, and I am quite certain that if there were more technological colleges like that at Portsmouth Dockyard, this country would be in a stronger position scientifically and technically. Exactly the same applies to the artificer-apprentice establishments at "Fisgard, "Caledonia," "Collingwood" and "Condor." I was immensely struck with the quality of training and the type of young man coming forward there. We want more artificers at the present time, and I would emphasise that this is a great opportunity for intelligent young men to obtain very fine training. I am told that the engineering trade unions all agree that these establishments produce craftsmen whose quality is second to none.
  Very much the same applies to the training of officers. Dartmouth and the Naval Engineering College at Manadon are well known. and at Greenwich the Navy provide the most advanced naval architecture course in the country; their civilian electrical engineers are rated so highly that when they take degrees at London they are almost automatically expected to get Firsts. It is not surprising that we attach importance to technical training. There lies in front of us a very wide range of difficult problems—nuclear and guided missile problems—and it is of the utmost importance that we should train, as we are doing, officers on the scientific and technological side.
  The third great challenge which the Admiralty has to face, I think, is to give the Navy the modern ships and equipment which it must have to fulfil its

  735
  rôole. I have already explained that where the ships and weapons are required for limited war they have to be absolutely up to date, since it is quite clear that Russia will continue to supply modern arms and equipment to her friends throughout the world. This is a vital task made more difficult because military materials have risen enormously in price over the last twenty years. For example, a "Daring" to-day costs about ten times as much as a "Tribal" destroyer twenty years ago. A modern fighter aircraft costs forty or fifty times as much as a comparable aircraft just before the war. For this reason alone it seems to me obvious that the numbers must be subordinated in some way to quality.
  The problem of sea power to-day is not just a contest between surface ships; it is a contest in three media—under the sea, on the surface and in the air. Anyone who wishes to control the passage of the seas must control in all those three media. What of the weapons needed for these three media? The modern weapon really consists of two parts: the first is the means of detecting the enemy, and the second is the means of destroying it. So far as the first is concerned, our modern radar which we are now putting in our carriers is as good as, if not better than, any in the world. Here I would particularly refer to the "Victorious" which is now finishing her trials. We consider that her radar and air-detection facilities are the most advanced in any country.
  Our real task is to bring up our capacity to hit the enemy after once detecting him. To do this for longer-range air targets we have first of all the fighter aircraft. The first Scimitar squadron was formed last week. Next year the Sea Vixens will come into service with the guided missile Firestreak. For the shorter-range air defence of the Fleet we shall have the guided-missile destroyers with Seaslug, which has been doing very well in recent trials. I should also add the new close-range guided missile which we intend progressively to take the place of anti-aircraft Bofors with which the Fleet is at present armed. It is a most ingenious weapon with a novel type of direction which gives very high promise. Similarly, under the water the new Asdic which we are fitting will, I think, Fully
  736
  meet our requirements for detection. Our ships are not all fitted with modern Asdic but it is coming along with reasonable speed. Our problem is to find a weapon capable of making the fullest use of the Asdic potential which we have.
  We think greater flexibility of range will be obtained by using helicopters. The advantages of the helicopter are, first, that it can operate not only from carriers but also from the new type destroyers; secondly, that it vastly extends the detecting and destroying range of the escorts; and thirdly, these helicopters will be able to operate not only against conventional submarines as we know them to-day but also against nuclear submarines. Nuclear submarines will present an entirely new problem to anti-submarine forces. They will certainly possess an underwater speed of anything from 20 to 25 knots, perhaps higher, which is going to make them extremely awkward to destroy from ordinary surface vessels, because for the first time the destroyer will no longer possess the wide margin of speed which has formerly been such an essential part in submarine hunting. This is a real revolution which makes the submarine no longer a relatively cumbersome and slow-moving vessel compared with a surface ship but as fast and as manœuvrable as a surface ship. It is no longer in any way a handicap for it to be under water, and accordingly it is very unlikely to surface except in its own waters. That in some ways answers the point the noble Viscount made earlier.
  I do not want to pretend we are going to rely exclusively on helicopters. Submarine chasing will essentially be a combination of all arms, above water, on the surface and underwater, and it is in this combination that our most effective anti-submarine strength will lie.
  May I just turn quite shortly to frigates and say this. This year we should bring our new frigates up to 24, which is rather more than completion of half the programme which we have in hand. We have also received the first post-war operational submarines, and we hope to have five by the end of this financial year. While I am speaking on submarines, I have already emphasised the importance of nuclear power as a means of propulsion for submarines. The principles of nuclear power are in some ways so simple that I

  737
  think people are led astray by statements that nuclear power is light in weight, compact, requires little development and can be easily produced. All I can say is that our experience is diametrically opposite to that in every respect. So far as we can see, nuclear power is almost inevitably bulky, complex and expensive; it requires a great deal of research and development and takes a long time to produce; and even then it may not be economical, though it will undoubtedly have other important long-term advantages.
  The Government, with the other Governments of N.A.T.O., have considered the best way of using their research and development facilities, and discussions have been held with this object in view. It was in this line of thought that at the conclusion of their meeting last Autumn the President of the United States and the Prime Minister issued a declaration of common purpose. This declaration recognised that the countries of the free world could maintain their security only by combining their resources and sharing their tasks. Only in this way could the best use be made of scientific talents.
  The advantages of such a policy of inter-dependence are exemplified by the approach which we have recently made to the American Government for approval to purchase one nuclear submarine propulsion machinery unit from an American firm. A great deal of work has been done in the United States towards the design and development of pressurised water reactors for submarine propulsion. They already have a number of these vessels at sea and the submarines "Nautilus" and "Skate" have achieved astonishing feats of underwater range and endurance. Many of these technical achievements and problems have been discussed by experts in the Admiralty and there is no doubt that they represent a considerable testimony to American determination.
  We announced our intention to build such a submarine some time ago and considerable progress has been made towards this objective. But it has become clear that a number of difficulties which still confront us could be readily overcome if it were possible to obtain an American built set of machinery and the associated design information, including manufacturing know-how. We should
  738
  save research effort and the propulsion machinery could be installed in H.M.S. "Dreadnought" earlier than would otherwise be the case. We do not yet know whether the Americans will agree to these proposals. Legislation in the United States Congress would be necessary before the United States Government could agree to our request. All I can say at present is that our proposals are now being carefully considered in the United States.
  I would mention only two small points further. One is the Commando carrier to which the noble Viscount, Lord Alexander of Hillsborough, referred. I can say that her conversion starts later this year and we hope that she will be available for service next year. The equipment of the Commando carrier will enable her to carry a full Royal Marine Commando with equipment, and she will be able to carry light vehicles and sufficient helicopters to load and maintain the whole force. This is a dramatic development which will enable full use to be made of the highly trained Marine Commandos, and adds to the versatility of naval forces which already operate on the surface, under the sea and in the air. I can also say that this Commando carrier could be re-converted and use its own helicopters for anti-submarine work.
  The noble Viscount, Lord Alexander of Hillsborough, also referred to vertical lift aircraft. I think this is not a subject which can yet be said to have entered into the sphere of a naval debate. It is still some little way off. I realise the importance of it, but I think it would be wrong for me to introduce it as a current matter in a naval debate.
  But I can say that the strike aircraft N.A.39 is one to which we attach great importance. I think it is worth recording that three years ago the Blackburn Company said that it would fly in April, 1958, and I am glad to say that the first flight in fact took place in that month. The aircraft combines a number of entirely new elements and features in design of British aircraft—such things as area rule, which reduces drag, integral construction of the wing, and blown flaps to reduce speed on landing, are included from the initial drawing. The N.A.39 gives the Navy a strike capability over a considerable range.

  739
  My Lords, I have tried—I hope at not too great a length—to deal with three things: the rôle of the Royal Navy, the internal adjustments that we have had to make, and the new equipment which we envisage. But I think it would be wrong to pretend that the Navy consists only of theories on defence, organisational plans and pieces of equipment, however remarkable. All these would be of no value if it were not for the quality of the officers and ratings who have shown themselves willing and able to dedicate their services to the Royal Navy. Of course, individuals change year by year—indeed, surprisingly quickly; but the Service has lost none of its historic touch which has given the Royal Navy a unique position in the world. I think that this country is fortunate in the standard of ability of the men, and, indeed, women, of all ranks who have followed the call of the Service. I would only say that if this standard is to be maintained I am sure the Service must have the full support not only of Parliament but also of the country, and the assurance that the importance of their task is recognised and that their service is held in undiminished regard by their fellow countrymen.
  4.5 p.m.
  LORD TEYNHAM: My Lords, if the First Lord will forgive me for saying so. I am not greatly impressed by his statement to-day, although I think he has made a good case out of a bad one. He referred to changing circumstances. It is perfectly true that circumstances are changing, but I do not think that that is a justification for the present state of the Navy. He has referred to the great strength of the fleets of our principal Allies and of our Commonwealth; but, of course, we cannot always, in all conditions, rely on our Allies.
  I think it is true to say that this is the first occasion on which there have been presented Naval Estimates which contain no provision for the laying down of new tonnage, other than that authorised in past Estimates, and which contain instead only a few pious hopes for the future. There is no word about cruiser replacement, and I think it is evident—in fact, I believe the First Lord has to-day confirmed it—that the three "Tiger class cruisers will eventually be our only cruisers in the Fleet; and they are, of
  740
  course, rapidly becoming out of date because they have been so long in completion. There is also nothing yet about guided missile cruisers. The four guided missile destroyers promised in last year's Estimates have got no further than being ordered, which is very different from being laid down. What a sorry state our Navy has come to—hamstrung on the altar of economy! But that economy will be justified only if the defence of Britain and our lifeline overseas is maintained in as high a state of efficiency as ever before, and I very much doubt whether this is now possible. In fact, the money to be spent on the Navy is only a little more than the subsidy we are giving to the farmers. I do not begrudge the subsidy to the farmers, but I think that the balance is incorrect.
  I would say that the only encouraging statement in the Estimates is a clearer definition of the rôle of the Navy, which was certainly most inadequately expressed last year. I fully appreciate the courage of the Admiralty in cutting the supporting "tail" of the Navy in favour of the seagoing Fleet. This is certainly a great improvement. The noble Viscount, Lord Alexander of Hillsborough, has referred to the rundown of men in shore bases. Let us look at these figures a little closer. May I draw your Lordships' attention to paragraph 50 of the Defence White Paper and paragraph 60 of the Explanatory Statement before us to-day?
  Paragraph 50 of the Defence White Paper states that:
  " … dockyard and base facilities will be curtailed to correspond with the reduction in the size of the Fleet."
  On the other hand paragraph 60 of the Explanatory Statement on the Naval Estimates states that the closing down of the bases will save 7,000 naval posts ashore which will release these men for the seagoing Fleet. Much as I should like to believe to the contrary, I presume that there is no intention of commissioning more ships from the Reserve Fleet. If this is so, and if the Fleet is in fact to be further reduced, where are the ships for these 7,000 men? Would it not be much more honest to say that this saving of 7,000 shore posts is merely a rundown in men and that it is very doubtful if any of them will get to sea? Surely it is quite clear that, if more ships are not to be put into commission, paragraph 50

  741
  of the Defence White Paper, and paragraph 60 in the Explanatory Statement on the Naval Estimates do not tie up at all. The fact is that year by year the Fleet is being greatly reduced, and there appears to be a complete lack of a replacement programme. Does the First Lord of the Admiralty, with his statement of a balanced Fleet East of Suez, really think that one carrier is sufficient insurance to deal with a local war? A little boiler trouble in the one carrier and there would be no carrier at all. Where would the balance of the Fleet be then?
  It is clear from the Explanatory Statement that the plans for the Reserve Fleet are to be revised. The Explanatory Statement goes on to say that the Reserve Fleet should comprise only sufficient ships to keep the Active Fleet up to strength. From the point of view of nuclear warfare I agree that to keep in the Reserve Fleet ships that cannot be manned and put to sea quickly would be a great mistake But the Active Fleet is now so small that the proposed plan must mean the scrapping of a large number of still useful ships of the Reserve Fleet. I was very interested to hear the support which the noble Viscount, Lord Hillsborough gave, to our old friend the battleships, as I thought it was not very long ago that he was asking for them to be scrapped—but perhaps I am wrong. Could not arrangements be made, perhaps with Canada or with some other Commonwealth country, for them to take these ships and certain valuable ships of the Reserve Fleet on a "care and maintenance" basis?—because we know very well, to our cost, that in time of war anything that can float and steam is of great service to us.
  I cannot help feeling that there is a great lack of urgency in making good the past neglect of the Fleet. In the Estimates for 1955–56 provision was made to order two new fleet escorts, and in the Estimates for the following year, 1956–57, it was stated that these vessels would be armed with guided missiles and provision was made for a further two such ships. Again, in last year's Estimates we were told that orders had been placed for the four ships, but there was no report of progress on the first two. What do we find in to-day's Estimates? Merely a statement that they have still been ordered; and this time they are named. What astonishing progress! There is still
  742
  no evidence that their keels have been laid. It may be, of course, that delays have occurred with the guided missiles, but if that is the case surely it would have been far better not to mislead us by the annual remarks I have mentioned but to say what are the real facts.
  Our contribution to N.A.T.O. is certainly going to be a meagre one. As I understand, it will be two aircraft carriers and two cruisers, together with a certain number of submarines, frigates and destroyers. Admiral Wright, the N.A.T.O. Commannder-in-Chief, recently stated in New York—and these were his very words—that he
  "views with grave concern the British decision to make drastic cuts in Naval forces."
  The cuts, he said,
  "will have a far-reaching effect on Britain's N.A.T.O. contribution, and he feared they will be taken as an example by other Allies in Europe."
  He went on to say that
  "he hopes these reductions will be temporary, and that Britain will soon be restored to her traditional position."
  That is a very depressing statement. This, then, is our Navy—the Navy, let it be said, in terms of its operational strength, of a fourth-rate Power. I suggest that our proposed Naval force will be completely inadequate, not only to discharge our possible limited war responsibilities but also even our peacetime duties. The noble Viscount, Lord Alexander of Hillsborough, has referred to the "presence" of the Fleet. That is very important. We must be able to show the Flag in as many parts of the world as possible to promote good will. I believe that we are all agreed that a global war may well spring from some peace-time incident or perhaps from a limited war; and I maintain that our Naval forces must be capable of dealing swiftly with such outbreaks. What is more, by their ability to do so they form a most important part of the deterrent; and to undermine this, I should say, would be folly in the extreme.
  I am sure that many of your Lordships with more Naval experience than mine will agree that not less than six carrier task forces are required, four of which would he constantly operational, with one in training and one refitting and giving leave. In fact, I understand that the task force scheme may not even be realised and that we are likely to have

  743
  only a group of ships, to be known as a composite squadron, with or without a carrier, and that the Fleet train to supply these ships is now unlikely to be extended. I hope that the First Lord, in his reply, will be able to give us some information on these very vital matters.
  I need hardly add that the Merchant Navy is very concerned about the ability of the Navy to protect our sea communications. It is the men of the Merchant Navy who carry the onerous and hazardous responsibility of maintaining our food supplies in time of war, and they certainly deserve all the protection we can give them. I was delighted to hear that there now seems to be some hope of obtaining a nuclear submarine power plant from the United States of America. I have little doubt that the nuclear-powered missile-firing submarine will be the most potent form of nuclear attack in the future. It will add a completely new dimension to strategic power, and I believe that it should be possible for a submarine of this type to remain at sea for perhaps a year or more, and submerged for the greater part of that period. Almost all the important targets in Russia could be threatened with comparatively small fear of detection. How much better that would be than using the proposed land bases! I should have liked to see much greater emphasis in the Naval Estimates on the development of nuclear submarines, because I believe that they may well prove the greatest deterrent of all. It is true that the Navy is still in a state of transition, but the trouble is that the transition is much too slow; and I think it must be speeded up. We cannot go on continually changing our ideas at the behest of the scientist and holding up construction. A deadline must be set and a fixed date determined. Anyone who has had anything to do with the construction of warships will know that work is frequently hampered and hindered by some last-minute change in design.
  In the past, successive Governments have dithered about the future role of the Navy, and this has been the excuse for past neglect of the Fleet. I hope that, now that its role has been properly defined, we may begin to see some improvement. I would go so far as to say that it is common knowledge that
  744
  there are certain senior members of Her Majesty's Government who consider that the Navy has a very small role to play in the future and that it would be better to spend the minimum amount of money on it without causing alarm. But let me put this to the "doubting Thomases": if one believes that a global war would kill nearly everyone, then of course a strong Navy would be of little importance. But we cannot be sure. The trouble is that if we are not sure that in a big war nearly everyone is going to be killed, or if we are not sure that a big war would not be a conventional war, and we have an inadequate Navy, then we face the possibility that in a conflict Europe would be cut off from America, and we should be quickly starved and destroyed. I hope that these "doubting Thomases" will have been converted before it is too late.
  4.18 p.m.
  LORD CHATFIELD: My Lords, the last sentence of the speech made by the noble Lord. Lord Teynham, is one which might well be posted up on the notice boards all over the country. I am very happy to be able to speak on a Motion that has been so enthusiastically moved by my old friend. Lord Alexander of Hillsborough. I do not want in any way to make a complete speech, because in reality there are not a great many topics in this debate. Most of them have been traversed already, and many of my distinguished colleagues who are to speak later will probably express, more capably than I can do, their views on the subject.
  I was exceedingly happy that it should have been the noble Viscount, Lord Alexander of Hillsborough, who opened this debate, for more than one reason: he has been a great deal in Whitehall, looking after naval interests, as well as having been Minister of Defence, and he has always taken a great interest in the Navy. Although his speech was perhaps so enthusiastic that it rather carried him away from what is possible, as the First Lord said, he nevertheless spoke in the right spirit, which would have given great pleasure to any sailor who heard him. He came to visit my Fleet, as he said, twenty years ago, when I was Commander-in-Chief, and he stayed with me at Invergordon and in Malta; and I well remember the interest he took in considering with us there naval policy and the seaman's life, which was balanced

  745
  by the amusement and interest that I and my staff had in discussing with him Socialism and co-operative societies.
  I am also very glad that he should have proposed the Motion because he is the Leader of the Opposition. That is a very important thing to me, confirming, as far as it can, that at the present time our sea responsibilities are not a Party matter, at any rate in principle. We may have different ways of doing things in defence, and think differently as to what should be done, but the main thing to-day is that Parliament wants the nation to be defended. It was very different before the war, and I myself feel in a kind of political paradise to-day, when one realises the feelings of those who are here compared to what they were in the thirteen years which I spent in the Admiralty before the war, fighting to get a few ships for His Majesty's Navy. At that time one Party would say, "No ships! Let us trust to something else", and the other Party would be afraid to build them because it would be unpopular. Now, my Lords, we have a much more pleasant situation, because all that ended with the war. When the Labour Government came into power they, to their credit, as they had been advised by many of us, completely reorganised the Defence staff, and they also started spending the vast sums of money that are spent on defending this country and the Empire. I say that although I am a Conservative—honour to whom honour is due.
  It is very difficult for old seamen like myself to speak on the Navy Estimates to-day. I, personally, and I daresay even some of my younger colleagues here—they are not all much younger—feel in the position that the Admirals were in at the end of the last century. They had mastered their profession. They had their muzzle-loading guns. Then they suddenly found that horrible things like destroyers and submarines and dreadnoughts and armoured ships and turbines had suddenly become de rigeur. They knew nothing about them; they had not been educated in such subjects. To-day we find ourselves in the same position, though perhaps not quite so seriously. We find ships which my colleague Lord Cunningham commanded such a short time ago—was it fifteen years ago or less? He also must be acutely aware of the modern developments in science and in nuclear reactors, and so on, which have been men-
  746
  tioned by Lord Teynham and others. It is really quite impossible for us to come to the House and pretend that we can give the House information of an important nature about the Navy. I cannot; and so I confine myself when I come here to asking questions. I come to the House of Lords only to learn something about the Navy, not to tell the House of Lords something about the Navy, and that is what I am going to do to-day.
  I first want to ask a few questions of the First Lord, with the greatest respect for one who is my lord and master, as First Lord of the Admiralty, while I am still an Admiral on the active list. I should just like to say what a tremendous advantage it is to your Lordships' House to have the noble Earl, Lord Selkirk, here to-day to advise us and to tell us what the Admiralty are doing. After all, Parliament has tremendous responsibilities in defence; it cannot shove it all off on to the Government. It is Parliament which is finally responsible and which can compel the Government to do what Parliament wants. Therefore, it is of immense importance that Parliament should be well informed. I remember that in the 1920s the First Lord and the First Sea Lord resigned, or tendered their resignation, because the Government would not build any cruisers, and the remainder of the Board had to decide what they would do—were they to resign or not? The political and naval members who remained agreed that we would tell the Prime Minister that if he would inform Parliament of the problem, of the Admiralty's case and the Government's case, and if Parliament supported him, we would stay in our posts. That was just an example of the fact that the basic factor is not the Government in these problems; it is Parliament.
  I realise the First Lord's difficulty in writing the White Paper. I hope that he will long remain at the Admiralty, because I know that he has the greatest ability and immense political knowledge; and I think he will forgive me for saying that I hope he will wish to stay, and that he will be allowed to stay, in his present post as long as possible for the good of the Service. To-day his responsibility is as part of a combination of Navies, as we all know and as has been said. In the past, it was the First Lord's sole duty to provide an adequate Navy, equal to defeating the enemy's main fleet

  747
  and protecting our commerce. To-day we share that responsibility with others—all kinds of nations, some with vast fleets and others with a few gunboats. They are all our allies. In the past, as has been said by the noble Viscount, Lord Alexander of Hillsborough, we had powerful battleships and packs of cruisers to hunt the raiders of the enemy and the other surface ships that were attacking our trade. Our convoys got from South America to Liverpool only because a battleship like the "Ramillies" was escorting them, thirty or forty or fifty ships or more, and nothing could come near them on the surface.
  To-day we have none. We have a handful of cruisers, as I read in the White Paper, and a few tiny squadrons"Fleets" they are called, I suppose by courtesy—which have a Commander-in-Chief. I suppose the idea is that these little squadrons, to which the noble Lord, Lord Teynham, referred quite sarcastically, are expected to be joined by other ships of our Allies who, when they find a fleet in the South Atlantic or Indian Ocean with a Commander-in-Chief, join his flag and he takes command of the whole lot. That would be a good way of ensuring that the British Navy remains in command at sea. We should command a few ships of our own and a large number belonging to our Allies. I do not know whether that is the case. Perhaps the First Lord will tell us if that is the idea of calling these three or four ships a fleet and having a Commander-in-Chief to take command. I am sure that it is a good idea or the Admiralty would not have had it.
  I feel that in paragraphs 9, 14 and 15, the White Paper implies a confidence which, on the information given, seems to be optimistic, and I should like to ask the First Lord, in accordance with my political principle, three or four questions, omitting any reference to submarine defence problems, which I know will be dealt with by others. Can the First Lord tell Parliament the strength of the surface forces that the United States would deploy to help our tiny squadrons in every ocean? I see no reason at all why the figures should not be told. There was no secrecy about our allies before the war. We did not send our Army over to France without knowing how many men they were going to have on
  748
  the front line and where they would be, and also where the French Navy was and what it was going to do. Why is it to-day that we know nothing about this and just talk about "our Allies". Allies are Allies—they may be good Allies or they may not.
  We must surely have some fixed arrangement in N.A.T.O. by which a fleet of four or five ships and a few other frigates in the Atlantic will be supported by a certain number of certain kinds of warships. Can the First Lord tell us what that is? Or if, for some political reason, he is not able to tell us, can he give Parliament, not me, an assurance that he is satisfied that the ships that our Allies will bring to the support of our various squadrons in the various oceans will give reasonable security for our merchantmen on the seas? That is the first question about which I hope the First Lord will be able to say something. This terrible cruiser question is a sort of core question which has been worrying me, and I am sure worrying others, this afternoon.
  My next question is one to which the noble Viscount, Lord Alexander of Hillsborough, has referred briefly. In paragraph 10, the Explanatory Statement speaks of a reduction in the number of ships over the next few years, as if it were a kind of fact accepted in advance. Can the First Lord say if that was intended and on what principle these further reductions are to be made? Are they being made for financial reasons or because we have more reliable information from our Allies of what they will send to support us? It is very difficult to understand that paragraph and it may mean a great deal less than it reads. I hope it does.
  I should like to ask the First Lord a question about the new nuclear submarine, "Dreadnought", which also has been mentioned by the noble Viscount and which is dealt with in paragraph 35 of the White Paper. This question has already been brought up in another place, yet Parliament is uninformed about it. I hope that your Lordships' House can be more completely informed. What is the policy about "Dreadnought"? We are told that only the design work is proceeding. Is she to be equipped, like the United States nuclear submarine "Nautilus", with intermediate range ballistic missiles that can be fired from

  749
  100 feet under the sea, go 1,500 miles and drop something unpleasant on some big town in a country far away? I have read that the United States and Russia already have nuclear submarines with that power and that they are highly dangerous.
  What is the Admiralty policy about "Dreadnought"? Should it not be to lessen the danger of Russia, we will say—I think we talk about Russia in that kind of way nowadays—achieving a "Pearl Harbour" knockout of our Eastern air bases (our great deterrent there) and installing a mobile sea base like the "Nautilus", that could not be destroyed suddenly as our Eastern bases could be. That would seem to me to be a wholly reasonable way to spend our money—such money as there is—and I hope that the First Lord can enlighten us on that. I daresay it is purely a financial problem, but from what the First Lord said about the difficulties of building and getting nuclear material, it would seem that it is not only a financial matter.
  I would conclude by asking only one more question. The noble Earl may not be able to reply to this, but could Parliament be assured that the Navy Estimates are reasonably sufficient for the Admiralty's great responsibilities today? There is certainly no indication in the White Paper that this is not so; but there is no idea in the White Paper t hat there is this hungry Admiralty waiting for more money. One feels that the Estimates are insufficient to meet the danger point, even with our Allies, and there is nothing sufficiently definite in the White Paper to guide Parliament in its final great responsibility in that matter. I feel that something more should be said about the anxieties of the Admiralty, if they exist, about the financial situation of our naval defence. Personally I should like to add, with the greatest respect to the First Lord, and I am sure that my naval colleagues would agree, that I have the fullest confidence in him and in his able naval advisers and I am sure that they have made the wisest use of the money allotted to them. But is it enough?—that is the problem.
  4.40 p.m.
  VISCOUNT CUNNINGHAM OF HYNDHOPE: My Lords, I also am pleased to speak to this Motion moved by the noble Viscount, Lord Alexander of
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  Hillsborough. I find that I agree with practically every word that he said, which is perhaps not surprising as for three years we were working together at the Admiralty. The noble Lord, Lord Chatfield, has disclaimed all knowledge of the modern Navy, but I think he would find very few connected with the Navy who would agree with him on that point. Much of what I wish to say has already been touched on by noble Lords who have spoken, and I hope not to weary your Lordships by too much repetition.
  In the present conditions of financial stringency I find it difficult to comment on the Navy Estimates, which must be the result of much hard thought by the Admiralty, and much paring and scraping. All one can do is to try to examine how the resources at the disposal of the Admiralty have been used, and whether the forces provided are sufficient in numbers and in capability to carry out the duties laid on them in the Defence White Paper. The Admiralty can have had no easy task in providing even for the rather meagre forces which now form the Fleet; but certainly, in my opinion, they are on the right lines in reducing the shore support, a measure much overdue and one which I think could be carried further. It must have been with deep regret that they abolished the Nore Command and some of the establishments there which had served the Navy so well for so long. It is to be hoped that the closing of Chatham Barracks, which for years has been the "home from home" for men from Kent, London and the Eastern Counties, will not have an adverse effect on the recruiting in those areas.
  The Admiralty are to be congratulated, I think, on the imaginative idea of stationing a carrier, with a commando of Marines on board, in the Far East. I do not wish to take any gilt off the Admiralty gingerbread but, allowing for technical progress, this has been tried before. About fifty years ago a small cruiser, manned almost entirely by Royal Marines, was stationed in the West Indies with the same purpose, that of being able to move quickly to any point where trouble looked like starting up. There is no doubt, however, that this carrier will be of tremendous use either in working with the forces on the station or perhaps in preparing the way for the

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  central reserve, when it is flown out; and I am sure we are all glad to hear that it is going to be functioning before 1960.
  The Report on Defence Paper, paragraph 45, states that owing to the threat of Russia's formidable submarine force
  "the Government consider it desirable to concentrate the efforts of the Royal Navy to an increasing extent on the anti-submarine rôle."
  While this danger of Russia's enormous submarine force is now recognised, the forces to meet and defeat this very real menace are, in my view, quite inadequate. The Navy Estimates Paper shows that, counting all ships in the Reserve Fleet—those engaged in trial and training and those building—we can muster, at the most, 184 anti-submarine craft. To these may be added those of the Commonwealth and our N.A.T.O. Allies—and here, I regret to say, the figures of the First Lord and mine are somewhat at variance; I am sure that his are correct, but perhaps mine are nearer reality. Altogether, I would place the number of anti-submarine craft that we, the Commonwealth and our N.A.T.O. Allies, possess at between 300 and 400. And, of course, many of these will be dispersed abroad, engaged on other duties, such as escorting warships and so on, and not available for convoy duty.
  In the late war, at the time of the peak of our losses from submarine attack, when we were losing, on an average, 500,000 tons a month—and in some months much more—from the operations of, on the average, 60 German submarines, we had in the Atlantic battle alone 465 major anti-submarine vessels and 252 minor anti-submarine vessels. The heavy and crippling losses then sustained show how deficient those numbers were. But how much greater would the deficiency be now, when we might have to face up to 200 Russian submarines at sea! These will present a far more formidable menace. Many of them will travel at high submerged speed, and all of them, I expect, will be able to remain submerged for weeks on end, as against the few hours possible in the late war. Towards the end of that war, when we more or less had the mastery of the submarine, the Admiralty had under their control 880 escort vessels for ocean escort, and a further 2,000 Asdic-fitted
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  vessels for close inshore work. Obviously we cannot maintain such large forces in peace time, but it is certain that the difference between what we have at present and what we might need to give any really adequate protection to our merchant ships bringing the essential supplies to this country makes it highly necessary that we should have a larger and steadier building programme of these anti-submarine vessels. Of course, the anti-submarine surface vessels may expect to be reinforced by the carrier borne anti-submarine aircraft and, it is to be hoped, a strong and highly trained Coastal Command.
  In this connection, I should like to ask (without, I fear, expecting an answer) whether the Admiralty are satisfied with the present strength of Coastal Command and with the numbers that may be expected to be operational in war time. In the B.B.C's. presentation of last autumn's exercise "Sea Watch", the Coastal Command aircraft appeared to be very thin on the ground—or, perhaps, I should say, in the air over the sea. Everyone can remember the great part played by Coastal Command in winning the Battle of the Atlantic, and it is worthy of note that towards the end of the war they employed in that battle over 700 aircraft. Certainly no fewer will be required in any future war. Yet apart from one passing reference to Coastal Command it is not mentioned in the Air Estimates, and there is no indication of its present strength and composition.
  So far I have dealt only with the Russian submarine threat and have made no reference to that perhaps equally formidable threat from the Russian maritime aircraft, estimated to number 3,500. During the Second World War German maritime aircraft were relatively few in numbers. They were not very well equipped, and certainly in the early years they were not very well trained. Yet they achieved considerable success against our Allied merchant ships and warships unprotected by fighters. It does not appear to me that Coastal Command and Fighter Command could do much about some hundreds of long-range aircraft marauding over the oceans. It looks as though the carrier fighters and the guided missile ships, when we get them, will have to do their best. I do not think that sufficient provision has been made to meet that threat.

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  Perhaps I may be allowed to refer to the cruisers. Counting the ships in reserve, we have fourteen, with three building. All the fourteen are approaching twenty years of age, and though they are doubtless very useful in peace time, they are quite out of date for modern war. No cruisers seem to be projected. In another place a spokesman on behalf of the Admiralty said that the strike aircraft in the carriers would be able to deal with the two dozen or so modern Russian cruisers. I think that is rather wishful thinking. It is to be hoped that what he said is true; but apart from the fact that at sea there are many days on which aircraft cannot operate, especially in the Atlantic, the aircraft in the small number of carriers that we have seem to me to be already heavily overburdened by their multifarious duties. It is to be hoped that the squadrons for the four or five carriers we have in reserve are in being and available at short call in an emergency.
  My Lords, I hope that I have said enough to show that without question our Naval forces, as set out in the Explanatory Statement are quite inadequate to carry out the duties expected of them, particularly as regards the protection of shipping. It is not surprising that the. C.-in-C. Eastern Atlantic stated, at the conclusion of exercise "Sea Watch":
  "My own conclusion is that we have not got anything like enough forces to carry out the duties that would fall to them in the event of war. We are desperately short of all the hardware needed to fight this battle."
  I assume that by "hardware" he meant ships and weapons. In this view he was supported by the Supreme Commander, Atlantic, who said that grave shortages had been noticed. I will go further and say that unacceptable risks are being run at sea. It appears, in fact, that the security of our merchant ships, which are indispensable to our survival as a nation, are more dependent on the use of the nuclear deterrent than on our naval forces and those of our N.A.T.O. Allies. It is surely a sorry day when the Merchant Navy can no longer rely for protection on the Royal Navy. I would urge most strongly, well knowing that in present conditions, the idea is unpopular, and not likely to be heeded by Her Majesty's Government, that greater resources should be made available to the Admiralty so that our merchant ships can he given reasonable security at sea
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  land the reduction of this country to starvation be prevented, and so as to avoid our being forced into that dreadful and probably suicidal alternative, starting up a nuclear war.
  4.57 p.m.
  EARL HOWE: My Lords, I was most anxious to take part in this debate, but it is difficult for anybody like me to follow the noble and gallant Admiral of the Fleet who has just sat down. But I want particularly to find out what policy is really contemplated by the Admiralty with regard to the Navy. The first thing that happened was the issue of the Defence White Paper by the present Minister of Defence, in which he told a startled world that the rôle of the naval forces in total war is somewhat uncertain, and it may be that the initial nuclear bombardment and the counter bombardment would be so crippling as to bring the war to an end within a few weeks or even days, in which case naval operations would not play a significant part. I am glad to think that that obiter dictum from the present Minister of Defence has quite clearly been thrown over the side, because on page 5 of the Explanatory Statement on the Navy Estimates, the present First Lord says:
  "Uncertainty about the course and direction of global war, which applies to all the fighting services, does not therefore restrict the rôle, the shape, or the size of the future Navy."
  There are further remarks in the general policy Statement which also apply in the same sense.
  I believe it is proposed to sell a number of ships. I simply cannot find out what ships the Admiralty contemplates selling. Various statements are made from time to time. Obviously every ship you sell out of the Navy leaves active service and puts a greater strain on the ones left, which makes it still more difficult for them to carry out their tasks. In the Explanatory Statement with which the First Lord has provided us, in the paragraph dealing with the strength of the Fleet a ship called "H.M.S. Warrior" is shown as being in reserve or undergoing extended refit, modernisation or conversion during the course of the year. Are we, or are we not, going to sell the "Warrior"? We have precious few carriers; there are only five carriers left in the Reserve. Yet a statement was allowed to go out the other day that "Warrior" is going to be disposed of.

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  I understand that two other carriers are also going to be disposed of. Could the First Lord tell us what is the real policy? We see, from time to time, these statements that ships are going to be disposed of but Parliament is not asked whether it approves the idea or not. Long before Parliament has a chance to say anything, statements go out and arrangements are made for ships concerned to be disposed of. It seems to me that Parliament ought to be kept far more closely informed than it has been in the past with regard to these disposals. I shall be very grateful if the First Lord will tell us the state of the market as far as "Warrior" is concerned.
  The Navy is shrinking rapidly every day, as we know only too well, and as has been stated by everybody this afternoon. Last September, I think it was, a N.A.T.O. exercise was carried out and after that exercise some very remarkable statements were made. The noble and gallant Admiral of the Fleet Lord Cunningham of Hyndhope has referred to one which was made by Sir John Eccles, but he was not the only officer who spoke about it. Air Marshal Sir Bryan Reynolds, who was also serving as a N.A.T.O. officer at the time, referred to the exercise in these terms:
  "The stark fact was that they had not the forces needed. The exercise had definitely shown that they were especially short of long-range aircraft."
  He was not the only one. There were other statements by Admiral Jerauld Wright and there was a statement by Admiral Boone of the United States Navy in the same sense. There was one most remarkable incident which was supposed to have taken place during that exercise. Admiral Pirie, an American Admiral, striking in the north Norwegian sea, was steaming south into an area well known to be submarine infested. It was not possible to give the distant anti-submarine support which was undoubtedly needed, because the maritime aircraft were fully employed on anti-submarine searches in other concentrated areas. If those things can happen in peace time during an exercise, it seems to me that those responsible for the Navy and the Ministry of Defence in this country must really sit up and take notice.
  I venture to submit, in all humility, that the Navy at present is being
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  extremely badly let down. I do not believe that the trouble lies so much with the Board of Admiralty; I believe the trouble lies with the Ministry of Defence, and in particular the Minister. I should like very much to know when the Minister of Defence, as opposed to the Board of Admiralty, is going really to tell the country what sort of Navy we are going to be allowed to have. Many years ago when I was in the House of Commons we used to discuss the advisability of having a Ministry of Defence, and those of us who considered it at that time were mostly against it because we thought that it would tend to a lessening of the responsibility of either one of the Services. I still hold that view most strongly myself.
  In the Explanatory Statement on the Navy Estimates this year there is no reference whatever to a replacement programme for destroyers. The subject has already been referred to by other speakers. If we are so gravely short of destroyers and really have only about 50 left, whilst the Russians have 120 or something of that sort, how can we say that the forces proposed in the White Paper are really adequate? Then again, there is a point not mentioned by any speaker so far this afternoon, and that is the question of supply ships. We are going to have these small task forces distributed all over the world. They will not be able to come back into harbour periodically and refit; they will probably have to be kept at sea, as was the American Pacific Fleet in the last war. That will require a large number of a special type of ships, fairly fast and able to keep at sea for long periods. Therefore I submit that the Board of Admiralty should tell us what they have in mind. No doubt the matter has not escaped the attention of the Board of Admiralty. Cannot they tell us, and tell Parliament, what they have in mind with regard to a Fleet train? I am perfectly certain that we do not want the same scale of Fleet train that the Americans had in the Pacific, but at any rate we shall need some arrangement for enabling the Fleet to carry out its task.
  My Lords, there is much more I should have liked to say, but most of the points have been touched on by previous speakers and therefore I will not go over them again. Many of us who have no

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  axe to grind in this matter are profoundly disturbed and anxious with regard to the state of the Navy and the policy of the Government with regard to it. In the fullness of time we shall no doubt come to another General Election. It will be difficult to rally the people to the side of the present Government unless we are able to show that they really have been carrying out their responsibilities. I do not think I could subscribe to such a statement to-day. I hope that the First Lord when he comes to reply to this debate will realise the force of the arguments used by the distinguished speakers who have preceded me.
  5.10 p.m.
  LORD WINSTER: My Lords, there are one or two points in the First Lord's speech to which I should like briefly to refer, although the First Lord is not present at the moment. He spoke about our having had complete control of the sea in the First World War. That statement will not bear examination for a moment. In 1917 we were in sight of defeat because of our inability to protect our shipping at sea. In the Second World War a very similar situation arose. The Battle of the Atlantic was a very near run thing indeed, and at one time it looked like being a lost battle. The anxieties of many who have spoken this afternoon are that a Third World War might find us in similar difficulties over the protection of our shipping. We must be careful how we use such phrases as "complete control of the sea" when they are not borne out by the facts.
  The First Lord referred to the fact that many of the difficulties arose because of lack of funds, and he asked where the funds are to come from. I will not go into that point this afternoon, but I will say, "Do not waste funds." I remember the money that was spent on the "Vanguard" after the end of the last war and the money being spent on the three "Tiger" class cruisers at the present moment, may also, I fear, come to represent a waste of funds. I was delighted to hear what was said about our dockyards. I remember bringing forward a Motion in this House in which I urged the need for an overhaul of the dockyard administration, and I was severely rebuked by a former First Lord and a former First Sea Lord, who of course had their share of responsibility for the shortcomings of which I was com-
  758
  plaining. However, these things have now been put right, so that we can "call that a day". I should also like to say, with respect, how warmly I agree with what the First Lord said on the subject of ships in reserve: I think he was completely right in what he said.
  I remember that after achieving the life-long ambition, Sir Winston Churchill once remarked that he had not become Prime Minister in order to preside over the liquidation of the British Empire. I sometimes think that those distinguished naval officers who have fulfilled probably a life-long and honourable ambition by finding themselves called to the Board of Admiralty, may sometimes feel rather perturbed to find themselves apparently presiding over reductions in the British Navy which closely resemble the liquidation of the British Navy. Much has been said this afternoon in criticism of the Board of Admiralty. May I assure the First Lord that, in my view, those who have uttered criticisms—and I shall utter some—are not really criticising the Board of Admiralty. This afternoon the Board of Admiralty are acting as the whipping boy for the Government the criticisms are really directed against the Government. I myself should not wish to criticise the Board of Admiralty because I recognise, with respect, their great difficulties in the transition period through which we are passing at the moment, when everything is altering almost overnight, and with the present shortage of funds.
  Then, of course, we cannot know—it is a matter of high policy—what are the relations between the First Lord of the Admiralty and the Minister of Defence. Much of that which apparently lies at the door of the First Lord of the Admiralty may in reality be the result of views advocated by the Minister of Defence. For all those reasons, I say that I hope the First Lord will recognise that what I have to say is not said in criticism of the Board but is really a criticism of the Government. Of course, I understand the question of Cabinet responsibility and so on. It does sometimes look like the liquidation of the British Navy when one considers the melancholy list of announcements that have been made in this House. Old traditional Commands have been abolished; one dockyard after another has gone, and 99

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  establishments are going. Paragraphs 42 and 54 of the First Lord's Statement indeed make melancholy reading. I do not say that I disapprove of the reductions which have been made; I think a very strong case is there to be made out for all of them. But there were times when I read the Statement, when I said to myself,
  "Change and decay in all around I see".
  Indeed, it is a melancholy Statement in those respects.
  I have spoken of the great transitional era through which we are passing. It is one of the great transitional eras of the Navy: steam to nuclear propulsion; gunpowder to H-bombs; guns to guided missiles; subsonic propelled aircraft to supersonic jets—all at the same time. Indeed, the problems falling upon the Naval staff are immense. But I believe that the urgent priorities in this era upon which much emphasis should be placed are these: atomic propulsion, rocket and missile-launching submarines, submersive ships—that in the very far future, I agree—and also this problem of vertical lift which I think the First Lord was quite right in saying we should not debate in detail this afternoon. I believe that those are the developments which really indicate the way ahead for the Navy.
  Then there is the matter of building which has been so much spoken about this afternoon. The trouble here is that the Admiralty have for so long been unable to define the Navy's rôle. Outside circumstances have had to be taken into account, and it has been difficult to define the Navy's rôle—so much so that there has been a lag in building up the Fleet and the staff, because until the role had been devised the staff has been unable to decide what should be built. Apart from that, there has seemed at times to be a lack of a sense of urgency at the Admiralty or, if not a sense of urgency (if that is too harsh a word), sometimes a lack of decision. Now we see, in paragraph 62 of this Statement, that no important ships are being laid down. Clearly, it will be years before the first modern ship joins the Fleet—I use the adjective "modern" as opposed to "new" ship, because to my mind the modern ship, certainly as the Americans understand the term, is one propelled by
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  nuclear power and armed with missiles only, such as the rocket-launching submarine. Clearly it will be several years before such a ship joins the Fleet.
  I spoke just now about the "Tigers". In the 1957–58 Statement the construction of the three "Tigers" which had been laid down twelve years before was said to be (I quote the words in the Statement) "now gathering pace"—in other words, they had put on a sprint in the snails' Derby. One was to start trials early in 1959—again I quote the words: "with their up-to-date armament." Guns are no longer up-to-date armament: they are on their way out. The United States have scrapped the 5-inch guns in the two "Forrestals" and have replaced them by missile launchers; and the nuclear cruiser which is projected will have only rockets and missiles. The cruiser "Longbeach", expected in 1960, will contain all guided missiles. It is no longer any use speaking of guns as modern armaments; they are not. The modern armaments of to-day are the rockets and the missiles.
  What we see as the result of the building programme is that the Fleet gets steadily smaller. The First Lord said in December last that at the end of the rundown the Navy will be rather bigger than it was twenty years ago. That takes us back to 1939, when we realised that the Navy was completely inadequate for its duty and especially inadequate in escort ships and destroyers; so that if at the end of the rundown we are left with a Fleet larger than the 1939 fleet we have only got something larger than what was inadequate. Therefore I feel that that is a slightly misleading statement—unintentionally misleading, I need hardly say.
  To-day we are faced with a possible naval offensive considerably greater than faced us in 1939. Hitler had not got 500 submarines when war broke out, but he gave us a very hot run for our money; and to-day Russia has more submarines than the United States of America. The Estimates authorise no additional ships of any substance. The programme is for ships which have been authorised in past Estimates. Yet in 1953 the then First Lord told us that the Fleet was getting old and that a speedy replacement programme was necessary if the Navy was to exist as an efficient force. Brave

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  words, I agree, but year after year the Fleet has been diminished.
  We constantly hear of ships being scrapped; we have heard of that this afternoon. But if we scrap a ship, that merely emphasises the necessity for replacement, and since 1956–57, taking into account ships in operational service, cruisers are down by three, destroyers by five, submarines by five, minesweepers by nine and coastal craft by twenty-one. Landing vessels are down by two. The number of carriers is the same and frigates are up by two. As far as I can follow it, the Defence White Paper foreshadows that in the future operational carriers will be down from four to three plus the Commando carrier, and that cruisers will also be down to three. I agree that carriers will continue to be the core of the new Navy; but have not the task forces gone by the board—those task forces which I understood were the reason for regarding the carrier as the hard core of the Navy?
  I pin my faith in the future on the submarine. In any case, when one thinks of the duties which apparently carriers are expected to perform in the event of war, we can only say that for their numbers they are hopelessly overloaded; yet one finds the kind of statement that appears in paragraph 10 of the Statement after the responsibilities falling upon the attenuated Navy have been enumerated:
  "The Navy is already well advanced towards realising this ideal."
  My Lords, it is not. Those words are a completely misleading deception. The Navy is not well advanced towards realising this ideal, however much it is put into the White Paper. That is the fact. To realise that ideal we require guided missile ships and atomic powered submarines able to discharge rockets; and yet these essentials are only in very distant prospect. Yet the world is in such a state to-day that the prevention of a global war may very well depend upon our having an operational modern naval force immediately available so that some incident which might turn into a global war may be brought up with a round turn. That is the way in which we may find ourselves involved in a global war for lack of forces of that nature.
  The Estimates are up by £20 million but we are getting less and less naval protection. We are getting less Navy for
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  more money. Paragraph 3 speaks of the "lower requirements of the Fleet of the future". There are rockets, guided missiles, nuclear propulsion, atomic powered submarines—every sort of new kind of weapon and equipment—and yet naval requirements are to be "lower". I, in my ignorance, simply do not understand what is meant by that phrase. Paragraph 15 states that:
  "The Royal Navy's contribution to N.A.T.O. should be predominantly in the anti-submarine rôle."
  When are we going to build that contribution? After the N.A.T.O. exercise Strike Back, both Admiral Wright, the American Admiral, who has been quoted already this afternoon, and our own Admiral Eccles made the most scathing comments about the forces available for performing that essential rôle on behalf of N.A.T.O. Admiral Eccles said:
  "I say as a professional man with over forty years' experience. I cannot carry out my task without more forces."
  In short, that is the opinion of the man who was then charged with the responsibility of carrying out what the Minister of Defence had proclaimed as the primary object of the Navy. The man who had to discharge that duty told us that he simply had not got the forces necessary to discharge his duty and that we were running a very great risk on that account.
  The noble and learned Viscount, Lord Hailsham, in the short interim before he exchanged the peak cap for the mortarboard, said, as First Lord, that we had underbuilt in anti-submarine escort vessels. In this Statement which we are considering this afternoon, where is provision being made for catching up those arrears of which the noble and learned Viscount, as First Lord, spoke?
  If I may ask a question to which, like many others put to the First Lord this afternoon, we cannot expect an answer: upon what tactics are the Admiralty relying for the defence of our convoys?—assuming that in a nuclear war any convoys at all will be possible. Upon what tactics are the Admiralty relying for the defence of our convoys with the forces at present available to our commanders at sea? The noble and learned Viscount, Lord Hailsham, said some very wise things in that short interlude as First Lord. He said that we may have to put up with a smaller Navy than we should like, but, he said, let us resolve not to be

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  content with an obsolete one. It is looking very like an obsolescent one, to my mind, and the Fleet is bound to become obsolete if we do not build replacements as they are needed.
  Again, the noble and learned Viscount said that a programme of new construction was inescapable. He was only repeating the words of the First Lord in 1953. But no important ships are being laid down in this current year. What is the programme for this "inescapable new construction"? How many nuclear-propelled ships, how many guided-missile ships and how many rocket-launching submarines are involved? Where is this programme of "inescapable construction"? Of what does it consist?
  My Lords, it has been truly said this afternoon that the nuclear submarine marks a transition in naval affairs comparable with the building of the monitor. A Parliamentary Secretary said on March 4 of this year, in regard to nuclear submarines [OFFICIAL REPORT, Commons, Vol. 583, col. 983]:
  "Their coming, however, is inevitable.…. The Admiralty, of course, is working on this.…"
  I myself should prefer to say that the Admiralty are dragging their feet on this. Harwell was working on the idea in 1946. The "Dreadnought" was projected in 1954; yet it is still only in the early experimental stages. In the 1957–58 Statement we heard that progress was being made with the design. Good progress on designing the reactor was reported in February, 1957. In 1957, again, the First Sea Lord said that our first atomic submarine was
  "well on the drawing hoard."
  That was the first time I had heard that phrase used in naval construction. He went on to say that the Board were then —these are his words:
  "… trying to think of an imaginative and dramatic name for this revolutionary vessel."
  If I remember aright, the Rainiers were engaged in the same struggle—to think of a name for the baby which was on the stocks. But the baby has beaten the "Dreadnought" by many lengths.
  Now we are in 1958–59, and what have we got? In paragraphs 35 and 36 of the Estimates we are told:
  "… the reactor for the zero energy experiment.. is now in operation … work on
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  the buildings intended for the shore prototype plant is well advanced."
  In other words, we have not got a car, but we are getting the garage in readiness for when it comes. And we are told that:
  "Design work for the submarine herself is proceeding."
  That is very satisfactory indeed! But I think this question has been put to the First Lord already this afternoon: When are we to have a nuclear submarine available, a nuclear submarine in which to begin the training of officers and crews? Not until we have such submarines, armed with rockets, and operational, shall we be able to begin the dismantling of these much-criticised missile bases on land. In a future war two factors will be of supreme importance: mobility and dispersability, For that reason it is a matter of urgency to get the rocket-launchers to sea, where they cannot be found, instead of making targets on our own soil. Hardly anywhere in the world is out of range of nuclear submarine carrying missiles of 1,500 miles range. So the sooner we get our rocket-launchers to sea, and operational, the better it will clearly be.
  I would say just a word about the guided-missile ships. Paragraph 31 states that four guided-missile ships have been ordered and named. That curious phrase "provision to order" was announced for two of these ships in the 1955–56 Estimates, and provision to order the other two appeared in the 1956–57 Estimates. Anyone reading that statement would be rather apt to think that something was really being done about these guided-missile ships. It was stated, too, in 1956–57 that all four would be armed with guided missiles. In the 1957–58 Estimates we were told that orders had been placed for all four; and in 1958–59 we find that there is no progress on these ships and that work has not yet started on them. With great respect to the First Lord, who would not be a party to anything that was not completely straightforward and above board, I suggest that those statements about the four guided-missile ships are highly misleading, and I hope that when the First Lord comes to address the House at the end of the debate he may be able to give us something more about those ships.

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  Meanwhile, the United States goes steadily ahead converting the Navy from guns to missiles. She had a guided-missile ship, the "Canberra", operating in the Mediterranean in 1956. Nine cruisers are being converted; she has the first nuclear guided-missile cruiser being built; destroyers and frigates are being converted or built, without conventional guns but to use missiles. No more big gun ammunition is being produced in the United States for the Navy. That is a clear indication of how naval thought is progressing across the Atlantic. "Regulus II" is operating; "Polaris", which can be launched from nuclear-powered submarines, submerged, is coming along. I know that the question of funds is involved, but it looks as if thought has proceeded along more advanced lines in the United States than it has done in this country; and that I think is a complaint that may legitimately be levelled against past Boards of Admiralty.
  I say nothing about this nuclear carrier the United States has projected, a vessel of 85,000 tons, and 33 knots, able to do several trips round the world without refuelling. Indeed, she need not refuel for five years—for the duration of a war. Nuclear submarines can cruise indefinitely at depths out of radar reach. "Nautilus" cruised for 1,000 miles beneath the Arctic ice cap and reached a point within 180 miles of the North Pole. One cannot help being impressed by this evidence of forward-thinking in America. It is no pleasure to anyone on this side of the Atlantic to point repeatedly to what has been done by America on the other side of the Atlantic, especially when we know their advantage in the matter of funds and so on. But, as I say, one cannot but be impressed by the forward-thinking of which we see so many evidences on that side of the Atlantic.
  The First Lord has been most illuminating about the role of the Navy this afternoon. On the last occasion we had the announcement about task forces in the future rôle of the Navy. That was not so long ago. That principle has apparently now gone by the board in favour of these composite squadrons. Is this change of plan dictated by new conceptions of strategy, as it well may be, or by considerations of economy? I think that the new rôle announced for the Navy
  766
  and what has been said about co-operation with other N.A.T.O. countries in anti-submarine operations both point to a concentration on defence against an attack by enemy submarines against N.A.T.O. supply lines. As a layman and a complete amateur I would say that I think that is right; and, having arrived at this new conception of the role of the Navy, I very much hope that we shall stick to it, and that the First Lord will not have to announce another change of rôle when, as I hope, he comes to address us next year on the Explanatory Statement on the Navy Estimates.
  There are so many things that I should like to talk about. I am delighted to find that the question of civilian manpower has been tackled at long last, for the preponderance of civilian manpower over naval manpower has been approaching a scandal. On the civilian side we had arrived at Parkinson's Law which, as your Lordships will be well aware, states that work expands according to the time and staff available to perform it. That is what has been happening at the Admiralty and in many other Naval establishments.
  I feel that I must take up no more of your Lordships' time in what I fear has already been too lengthy a speech, though there are many other things to which I should have liked to refer. I would but echo what has already been said by my noble friend and add my plea to his for the recognition by Parliament and by the public of the responsibilities falling upon the Navy in future and of the essential part which the Navy still has to play in the defence of this country. It is necessary to convince the public on this point. If I may make a personal remark, it is not so long since I was asked by a newspaper to write a centre page article entitled, "Do we need a Navy any longer?" I did not accept the commission. Yet it illuminates the state of public opinion in this country that a paper should suggest to me such a commission as writing that article.
  We have a great duty falling upon us to try to convince the public, by every means in our power, of the necessity of the Navy. When I read in an American paper the other day of the Navy League of America holding its annual convention in New York, when they had a "ticker tape" procession up Broadway, with over forty Admirals and a large number of

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  Generals riding in it, it made my mouth water, because it indicated a state of feeling in the public of America which I wish with all my heart we could see reproduced in this country today.
  5.44 p.m.
  LORD CONGLETON: My Lords, I will endeavour not to keep the House too long, as I feel that everything has been covered far better by noble Lords who are wiser than I am and more experienced in the affairs of the Navy, but there are one or two domestic matters which I should like to raise in regard to the closing down of the establishments listed in the White Paper. The first is the question of airfields. I wonder if the First Lord can tell us whether these airfields are being closed down permanently or are just being withdrawn from service while runways are mended.
  The second point concerns the closing down of the Admiralty gunnery establishment at Portland, and its transfer, seemingly, to Portsdown. I feel that noble Lords who know the Portsdown Hills will join with me in wishing that another large building should not be built on the top of these hills. I hope that the closing down and transfer of the gunnery establishment will not mean that. Again with regard to the closing down of the barracks at Chatham, a matter touched upon by my noble and gallant friend Lord Cunningham of Hyndhope, I wonder whether there is any indication of the possible effect on recruiting and whether there is any means of countering it at the moment. The only thought that came to me on this matter was whether it might not be worth considering the erection of a small barracks on the closed-down air station at Arbroath, in what I might call the Edinburgh-Glasgow complex. There are a fairly large number of Scotsmen serving in the Navy, and a barracks near their homes would be of great help and might assist recruiting. The opposition to this scheme in the past has always come from the Merchant Service, because this has been one of the main recruiting centres for merchant seamen. At the present time, it might well be that they would be glad of an alternative.
  There is one other point on which I would touch. I see no mention in the
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  White Paper this year, or, so far as I recall, last year, of the Hydrographic Department. I am sorry that this should be so, because they perform one of the most essential services the Admiralty carries out in peace time. I think that normally there are six survey ships, which spend their time going round the world, producing new charts and mending old ones, and keeping all ships and the seamen who sail in them over the whole world up to date and safe. I feel that they should have a place in the White Paper. I believe that they have recently been put to other uses. I notice that the High Commissioner of Ceylon was carried from Colombo to Gann in H.M.S. "Vidal."
  May I add my thanks to the First Lord for the admirable trip in one of Her Majesty's carriers which he arranged last year for some Members of your Lordships' House, including myself? I enjoyed it very much. One thing which struck me on that trip was the youth of the crew. I gained the impression that the men who are in the Navy at the moment are younger than when I knew them a short five years ago, and that they are full of purpose. I felt that they knew what they were doing and were quite satisfied with how things were going.
  5.48 p.m.
  VISCOUNT CILCENNIN: My Lords, I hesitate to intervene in this debate at this late stage because there is little that I can say that is not repetition, but I feel that perhaps I ought to join in the debate started by my old war-time chief and also because I probably know as well as anybody in your Lordships' House what the difficulties of the First Lord and of the Admiralty have been of late. It is two years ago since I spoke from that Box about defence matters in general and Navy matters in particular. There was doubt in the minds of noble Lords who spoke in that debate and in my own mind of the value of the role of the Royal Navy in future. There certainly was a great deal of doubt in defence circles generally at that time. To sum it up briefly, that has been the root cause of almost all the delays about which complaints have been made from all sides of the House to-day.

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  Of course, all these doubts sprang from the arrival of the hydrogen bomb. I am sure that in the minds of those who doubled whether the Navy had a role in future, those doubts were genuine and fundamental. When money is asked for and money is scarce, it is tempting to think that perhaps warships are out of date and that peace can be maintained merely by the possession of the hydrogen bomb. That was the battle which of late all of us at the Admiralty have had to fight, and before I left that office I hoped that a certain light was beginning to dawn on our critics. At least, so far as aircraft carriers are concerned, we were immensely helped by the complete conversion of the noble and gallant Viscount, Field-Marshal Lord Montgomery, from one of their bitterest critics to one of their most ardent supporters. But I will not conceal from your Lordships that when I left office those doubts and uncertainties were still running in the minds of the scientists and the strategists and all we were able to do was to keep the position financially level for the Navy and go on arguing ceaselessly about the importance of the rôle of the Navy in the atomic age that lay ahead.
  During these last two years there has been another re-examination of the position—I think we had about six re-examinations during my time at the Admiralty—but on this occasion the results show that the battle for the future of the Navy has largely been won by its advocates. So my first feeling tonight is one of great relief and thankfulness, although I also have a great deal of sympathy for the speeches made to-day by noble Lords on all sides of the House in support of carrying on the building programme of the Navy as quickly as possible now that we know where we are as to its rôle. I must confess that I had some sympathy for remarks similar to those made to-clay when I stood at the Dispatch Box, and it is rather pleasant to be able to show that sympathy more clearly this evening than I was able to do on that occasion two years ago. But none of these steps which in those days the Board of Admiralty and your Lordships who spoke in the debate, were so anxious to have taken, were able to be sanctioned because the future rôle had not been defined. That, I repeat, has been our trouble all through.
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  Therefore, I am free to congratulate my successors as First Lord. They have carried on the battle to a substantial victory. But, as I think those two noble Lords would be the first to admit, the main burden of producing technical evidence in favour of the usefulness of the Navy has naturally fallen upon the Naval Staff, and especially upon their leaders—that is, the three First Sea Lords in my time, who, of course, included the present First Sea Lord. I think they have fought that battle brilliantly and without respite, and the Royal Navy owes them a tremendous debt of gratitude.
  It seems to me that both in the First Lord's Explanatory Statement on the Nary Estimates and in the statement of the Minister of Defence in his White Paper, the rôle of the Navy has now publicly been proclaimed, whatever the building programme may be, to be as vital a one in the defence of our country as it has ever been in the past: a streamlined Navy, of course, in view of the country's finances, but with plans for modernisation which I am sure will make it a thoroughly efficient force, when the ships come along, in this nuclear age. I agree with more than one speaker that what money the Admiralty are able to spend at the moment, they are spending well. In speaking for the rôle of the Navy we have always maintained that it had this great power of deterrent; and we made it quite clear also that you cannot rely completely on the nuclear bomb, although obviously the bomb is the ultimate deterrent. But the bomb cannot be used in the many dangerous situations that are developing, and are likely to go on developing, throughout the world, falling short of the threat of global war.
  Among other arguments, an old one used often, but none the less true for that, is that the Navy has this great power of deterrent and is uniquely fitted to deal with these situations because of its mobility, which enables it to react quickly where speed is vital to stop a small trouble from growing into a big one. But I think the point one should stress most is that the Navy makes it possible to keep a show of force to a minimum where the appearance of powerful forces may only aggravate feelings unnecessarily. When I was First Lord I could not help feeling faintly cynical, when the future role of the Navy was being discussed, at

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  the repeated requests which came from the Government to the Admiralty if only for a destroyer or a frigate to show this force without aggravation.
  Now these arguments seem to be recognised generally, and the commando carrier especially is given pride of place. The commando carrier seems to me to be one of the most important ideas in the naval field for some time. We are rapidly losing our bases all over the world, and in my view this concept of a commando carrier offers one of the best ways of maintaining British interests against aggressive and irresponsible small nations that are being so tiresome at the moment, quite apart from its major contribution to the question of peace as a whole. I hope that the Government will not hesitate to extend this idea if the situation demands it. Above all, I rejoice that it gives another vitally important task to those magnificent Royal Marines.
  In my time there was a school of thought outside the Admiralty that the anti-submarine rôle was on the wane and could largely be left to the American naval forces. Now I am glad to see the Government are strengthening the Navy's efforts in this rôle. Quite apart from the immense submarine forces possessed by certain nations, other small nations are getting submarines and are likely to get them still more in the future, and we may well have to deal with a submarine threat not merely in the Atlantic but in many different parts of the world.
  Passing from the subject of the antisubmarine rôle to that of aircraft, I am glad to see the report of the aircraft coming along at last. Nothing was more disappointing or disheartening in the time when some of us were Ministers than the delay through mishaps and through engineering disappointments that we had with our aircraft, whether for the Royal Air Force or for the Admiralty; and I am not sure that in many ways the Navy was not luckier than the Royal Air Force in those misfortunes. But now we are on the right lines and the right machines are coming along; but the years of delay caused by these mistakes will take a great deal of catching up.
  I would now turn to the question of guided weapons. I know, and your Lordships know, that the Admiralty have been planning these guided weapons for some
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  time, and their plans, so far as I can guess, are admirable. But I do ask the Government to ensure that there is sufficient money allowed for the development of these vital weapons, and to deal with the whole general question of nuclear-powered submarines. I wish good fortune to the American talks about the purchase of their power plant. But I do not think it has been suggested in this debate today—and I have heard almost every speech—that nuclear-powered submarines are, after all, only the forerunners of nuclear-powered merchant ships, and when money for the Admiralty is so short, surely it is possible for shipowners and shipbuilders to consider helping financially with the research which will mean so much for their businesses and their trades in the years to come.
  The noble Lord, Lord Winster, has reminded me that it has always been brought to the notice of the Government of the country that our present Fleet is ageing, and that has been stressed again to-day. I do not withdraw any of the words I used in 1953; I only wish we had been able to fulfil them. Because of the delay in settling the rôle of the Navy, the new construction under way at present is not sufficient to replace this ageing Fleet. As I think the noble Viscount, Lord Alexander of Hillsborough, said, and other noble Lords echoed him, a long time elapses between the first statement of a requirement for a ship and its coming into service. For instance, plans made for new ships now will not come to fruition until about the middle of 1960 at the earliest. Therefore it is essential, as it always has been—and I know the First Lord and the Naval Staff are aware of this—that the Admiralty should state their firm requirements for new ships at the earliest possible moment, and that they be working out now the new Fleet we shall need in the next ten years.
  I think all Parties in your Lordships' House to-day have agreed about the importance of the main object of getting as many ships as possible to sea. Hard though the blow has been to certain ports in the country—and I for one had to take the preliminary preparations for it—I am glad to see that the Committee of my time, which we called "The Way Ahead", and which was then beginning to do useful work, has had the courage to recommend to the Board of Admiralty to take in these last Estimates these

  773
  drastic decisions, sad though they are, to streamline still further, and drastically, the Navy's shore support. Of course, the complex modern naval force requires a backing, and a large backing, ashore, if it is to be kept in fighting trim. But we have to get the maximum of our ships and aircraft at sea. I believe the Committee are still in session, and I hope that as the months go by they will continue to streamline the shore support of the Navy in favour of the ships at sea, and they will not forget, in making those cuts, to find a few parallel cuts in the Headquarters staff of the Admiralty itself.
  I hope I have made it clear that I, for one, am by no means complacent about the speed of the building programme. But I return to my original feeling of relief that the rôle of the Navy has been set out for all to see, and that it is a vital one for the defence of the country. Whatever complaints we may have, let us, above all, stress this point, and stress it as publicly as possible, for recruiting depends so much on that. The Navy has never had the same recruiting troubles as the Royal Air Force, and certainly not the same as the Army. I am glad to hear that the First Lord is optimistic about the future. But there has been so much talk about the Navy, as the noble Lord, Lord Winster, was saying: "Is the Navy to-day really necessary?" There is so much of that talk in so many articles in newspapers—and I am thankful the noble Lord did not add to them—that it has got around and will, if it is allowed to continue, have an adverse effect upon recruiting. It has got to be wiped out once and for all. In the past years, as the First Lord has said to-day, we have done an immense amount for the living conditions of men in the Fleet and their families. There has been a distinct advance in conditions of pay. But what we all now want to do is to get it across that the Navy goes on with a future as valuable to the country and to the Commonwealth as her role has ever been in the past.
  6.4 p.m.
  LORD PAKENHAM: My Lords, the noble Lord who has just spoken began by expressing some doubt whether he could contribute anything useful. He has certainly contributed a most enthralling speech, which I know will be studied very widely, by those who heard
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  it here who want to read it again, anti wherever the Naval interest is followed at all. As I was his predecessor, though for only a few months, I can testify once more to the high esteem in which I know he was always held by the Admiralty and the Navy.
  I feel, as we all must, that this has been an expert debate, and in that sense I can certainly add nothing to it of any value. If I speak at all--and I say this without affectation, because my time in the Admiralty was so short, and I had no previous contact with the Navy—it is as a well-disposed layman who, for various reasons, some of them family, loves the Navy but who cannot compare in any way with those (and this applies to nearly all the speakers) who have spent so much of their life in service in the Royal Navy. In some ways I think it is a pity that in these debates of ours we always find that the speakers are all in love with their subject, and are all experts who take the same kind of view. In recent months, I have been specialising in much less attractive subjects than the Royal Navy—the Wolfenden Report, mental deficiency, prisons and topics of that sort. There again we usually find—it was not so with the Wolfenden Report, but that was a new inflammatory topic—what you might call the "penal boys" coming out of their holes one afternoon, and all the mental people another. So it is, I am afraid, with the Navy. To-day we have with us those who have every right to speak about the Navy from expert knowledge, but who in that sense are not representative of the general public to whom the noble Lord, Lord Winster, referred in a speech which was one of the most cogent even he has delivered.
  I think there are many people (I know the noble Viscount, Lord Cilcennin, did not use quite the expression who "ought to be wiped out by violence"; I am sure he did not mean violent liquidation), a great many well-disposed people, not necessarily the pacifists, who are asking to-day, in all sincerity: "What point is there in the Navy in the nuclear age?" In a moment I will deal with that point because, speaking as a relative layman, I might enter into the minds of such people perhaps more completely than some of the great men who have spoken.
  Before coming to that, may I put two questions which I know my noble

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  Leader, who opened so powerfully, would like me to put. He touched on one of them, but I know he would like that one and another one placed before the noble Earl Lord Selkirk. Would the noble Earl say something more, if it is possible to-day, about the employment position following the closure, actual or pending, of the dockyards and establishments? My noble Leader referred to that matter. The noble Earl said, in one connection at least, that he was optimistic, but can he say something more about the actual position that is arising, or is likely to arise, in Chatham, Sheerness, Portland, Greenock and Londonderry? It is a matter to which we on this side, and I have no doubt all noble Lords, attach great importance.
  Can he also say something—here perhaps I can hardly hope he will say something definite—about Coastal Command? We read in the papers that there is great activity on that front. The Minister of Defence pays a visit, which is afterwards described as a routine visit with no special significance and so on, but we understand that the topic is very much to the fore. We, of course, live on one side of the "Iron Curtain". I do not know whether it is the better or the worse side, but there is a curtain between us and these sources of information. We do not even know what the noble Lord, Lord Teynham, knows, that there are some very highly placed Ministers who are apparently adverse to the Navy. I was tempted to ask whether the Minister of Defence was one of them, but I thought that would be an impertinence. But perhaps the noble Earl may throw light on that topic. To return to Coastal Command, can the noble Earl tell us whether, as many of us think, Coastal Command may be handled adequately by the Royal Navy? Would he at any rate bear in mind that we are interested in that question?
  May I now turn to one theme that has been touched upon, though not quite in this sense, throughout the debate. I think the general line taken by most people is that the rôle of the Navy has at any rate been defined, but that there is a lack of urgency about proceeding to get anything done. There has also been heavy criticism by two great sailors and others about the shortage of money. I
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  will say a word about the urgency at the end. Speaking now simply as the landlubber, the ignoramus, may I ask whether the rôle of the Navy has, in fact, been defined in global war? It seems to be taken for granted that some great victory—no doubt it is a victory on paper at the moment, in some recess of Whitehall—or Downing Street—has been won as a result of a great struggle. Now the Admiralty are said to have come out on top and we all know where we are.
  I am afraid that I do not quite know where we are, or I hope none of us wants to be where this would take us. But in the event of global war has any of us any idea of what the rôle of the Navy would be? It seems to be assumed that that is more or less settled. In the White Paper we are told
  "Uncertainty about the course and direction of global war, which applies to all the fighting services, does not therefore restrict the rôle, the shape, or the size of the future Navy."
  That does not exactly say that the rôle has been defined, but the Parliamentary Secretary, in the speech he made in another place, actually said that the Navy's tasks have been defined. He used that expression in the Navy Estimates debate [OFFICIAL REPORT, Commons, Vol. 583, col. 982]:
  "The Navy's tasks have been defined".
  He went on to say:
  "They are: in global war to make an effective contribution to the combined naval forces of the Western Alliance."
  We are apparently to understand, and it has been accepted by many speakers, that the Navy's rôle in a global war has been defined. Am I breaking some security rule if I ask what the Navy's rôle would be?
  LORD WINSTER: If the noble Lord would allow me to intervene, I think that in a previous White Paper there has been a reference to the Navy going to sea during the "broken back" war which would follow the first nuclear attack upon this country. It will remain at sea and come back triumphantly when things have settled down.
  LORD PAKENHAM: That could be another substantial victory, I gather. Seriously, I do want to know, if I am allowed to ask and it is not something supposed to be kept secret, what exactly the Navy's rôle is in global war. Quite seriously, I think that few of us suppose that if you had a really flat-out total war, with the ultimate deterrent being used—
  LoRD CHATFIELD: Perhaps I may suggest to the noble Lord that the role of the Navy in a future war would be exactly the same as it has been in past wars, in that its task would be to prevent the enemy's navy from obtaining command of the seas.
  LORD PAKENHAM: But I am raising the point—and I am speaking only as a layman—that the global war would not last more than a fortnight; it would be all over. That is what three-quarters of the population now believe.
  LORD CHATFIELD: That, I would suggest, is only in the noble Lord's imagination. It may be right but it may be wrong; and if your imagination is wrong and you cannot rebuild the Navy for ten years, you cannot do away with the hydrogen bomb until you have rebuilt your Navy.
  LORD PAKENHAM: The noble Lord has identified me as an enemy of the Navy. I was going to reach almost the same conclusion but by a more circuitous route.
  LORD CHATFIELD: I apologise. I am afraid that that often happens.
  LORD PAKENHAM: In fact I was simply approaching that point rather more laboriously, being a landlubber and not having the noble Lord's direct naval methods. The noble Lord comes to it directly. But I do seriously ask whether you can say that the Navy has a rôle in a global war at all. If you think of a maximum global war, surely the whole thing would be over before the Navy could carry out any rôle. You might say the Navy might be used in the shortest of wars for hitting the enemy. That is one possible answer. But I do not think it is the answer given.
  I hope I am not making a pedantic point, but I am suggesting what most people have in mind: that the Navy's main role would occur if the ultimate deterrent were not being used, if it were not global war in the full sense at all. I would say, therefore, that it is a pity, if we are talking of definitions, that we have not a fourth category. We have global war in which the Navy is supposed to make a contribution to N.A.T.O. We have also something called limited war, which is something more like Suez, though we hope that sort of thing will not occur
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  again. And then there is the Navy's rôle in peace time.
  But what about a major war in which the Soviet Union was the enemy although the ultimate deterrent was not being used? I think many people assume that that situation might possibly occur. I believe it is not unreasonable to think that, as the major Powers in the world reach a certain parity in destructive power, that parity will in fact rule out the ultimate deterrent. That, I think, is a possibility. When the ultimate deterrent is ruled out I can see a form of war which is not global war in the ordinary sense that the man in the street is thinking about. In short, the main danger would occur where we were fighting an enemy but the ultimate deterrent was not being used. If that is what is meant by global war, when the Navy is to play its part in N.A.T.O., would it not be better to say so?
  I feel that this is an important point, and until it is cleared up a great many people will be asking the question which the noble Lord, Lord Winster, asked. They will read the White Paper and the speeches, and say, "It is bunkum, because the war will be over in a fortnight". I think the biggest danger will occur when you get this parity and find yourself faced with a war against a terrific and implacable enemy but the ultimate deterrent is ruled out.
  LORD TEYNHAM: The trouble about global war is that you cannot be sure everybody is going to be killed. There may be a lot of people left alive. You still have to protect the lifelines, and that is why you require the Navy.
  LORD PAKENHAM: It may be so. It may be that there will be some form of life in this country when the global war has come and gone. It may be that we shall find an answer to the H-bomb—that is a possibility. These things must be borne in mind. I agree with the principle stated by the noble Lords, Lord Chatfield, Lord Cunningham of Hyndhope, and others, that it would be treachery for anyone who believes in national defence at all to discard a strong Navy. I do think, when we are trying to persuade the country about what our real purpose is, the situation is far more as I have described it than the situation described in rather vague terms in these

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  various documents. The situation mentioned by the noble Lord, Lord Teynham, could arise, but I should not think it very likely. What is much more likely is a major war in which the deterrent has been ruled out.
  LORD CHATFIELD: Would the noble Lord accept the principle which I have often stated in this House, that we must have the same types of weapon as our possible enemy? You can never be sure which weapon he will fight with, and if he has one which you have not and he fights in a certain way then you lose the war. You can never afford to be without the same types of ships in a Fleet that your enemy has. You must have the same. Because of the uncertainty of the calculations we have to make, a Government must, to my mind, on that primary principle, have the same means of defence and attack that the enemy has.
  LORD WINSTER: Might I make a short point in reply to what the noble Lord, Lord Chatfield, has said? I remember that in a previous debate the noble Lord said that if another country had a battleship we must have a battleship, and that is the principle that I feel he has just enunciated. My reply to that is that what we must have is not necessarily a battleship but the antidote to the battleship. That, I believe, is a rather sounder way of putting, it.
  LORD PAKENHAM: I think between two eminent sailors my opinion would be comparatively worthless, but I will support, if I may, Lord Winster's type of answer. I would also add, that I am assuming we are acting in conjunction with Allies.
  LORD WINSTER: With N.A.T.O.
  LORD PAKENHAM: Yes. I have very little more to say, in view of the time and the fact that we want to hear the noble Earl again. I could repeat a great many of the things which have been said, and I should like to echo what was said about the pre-eminent place the Navy occupies in the institutions of this country. The Royal Family is really the only institution which can be compared with it.
  I must, however, say one word about urgency. There is no doubt that all those who have spoken to-day are depressed and oppressed and obsessed by a kind
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  of sluggishness in the transition to which Lord Winster, my noble friend Lord Alexander of Hillsborough and many other noble Lords have referred. What is the explanation? I may be doing him an injustice, but I think Lord Winster referred to the Admiralty "dragging their feet."
  LORD WINSTER: That was in regard to nuclear submarines.
  LORD PAKENHAM: Well, in regard to nuclear submarines, missiles, everything that matters most, we all get this feeling (I think we can hardly be wrong) that there has been an unwarrantable delay. I would not think in regard to those noble Lords who have been at the Admiralty since my time that there has been any likelihood of their "dragging their feet." Certainly the present First Sea Lord is the last man who would "drag his feet." The same goes for all those concerned with the Admiralty who are known to me personally. I find it difficult therefore to believe that the fault lies wholly or perhaps largely with the Admiralty.
  What other explanations are offered? Shortage of money has been touched on. That may come in, but it can hardly be a good reason for everything taking so long, though it would. of course, affect the scope of the programme. Nor, so far as I can judge, are technical problems, which are always coming up, the main factor. So it seems that there is something else—some unexplained element—which has produced delay. The noble Viscount, Lord Cilcennin, has supplied an answer. He said that there has been this great struggle behind the scenes. He assured us that, though there have been delays, there will be no more delays because the battle has now been won. May he indeed prove a true prophet! It certainly is the object of all of us here. But he will not think us unduly sceptical if we await results, because these delays are something too serious to pass over lightly.
  The noble Lord, Lord Teynham, has also offered an explanation. He said that there are powerful Ministers who are un-favourable to the Navy or to the view that so many of us take of the Navy of the future. That may be the answer. Whatever the reason, I do put it to the noble Earl who is held in such high

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  esteem by all of us, both in his capacity here as a fine speaker and as First Lord of the Senior Service, that the last word said before he speaks to-night is a word that combines good will with disquiet—serious disquiet at the delays that have taken place. Whatever may be the explanation, I hope that to-night and later he will do all in his power to remove from our minds the very grave doubt and anxiety that at present hang over all of us.
  6.24 p.m.
  THE EARL OF SELKIRK: My Lords, I think I should thank noble Lords for what they have said. They have spoken in kindly criticism of the Department I represent and I greatly value their comments, coming as they do from two former First Lords and two present Admirals of the Fleet. I do not propose to enter into this fascinating controversy on the deterrent which I find always arouses people's intense interest—I noticed that when the noble Lord, Lord Pakenham, referred to it three people were on their feet discussing their theories on the deterrent. I did arm myself with one of the quotations from Kissinger which I always find interesting in this connection. It is very much on the lines of the noble Lord's argument, and it is this:
  "A renunciation of force by eliminating the penalty for intransigence, will therefore place the international order at the mercy of its most rutbless or its most irresponsible member."
  I think that that is very much the point that the noble Lord was making.
  But the real issue, so far as the Navy is concerned, is that we should really have substantially the same equipment for limited war as we should have for a global war. So that point does not arise in the same acute way as it would do in other Services. We should require the same forces. I do not feel under any obligation to go deeply into this point, because I believe that it would perhaps be wrong of us to try to see the future, for it would be too difficult to say exactly what future was in store for us. We might make just as much of a mistake by taking one course as we should by taking another.
  LORD PAKENHAM: My Lords, may I say to the noble Earl, in all sincerity, that I think that that is a very disappointing comment on my observations? He has simply ignored the whole
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  question that I raised as to the role of the Navy in the event of a global war. He says that he does not feel able to say anything on that subject.
  THE EARL OF SELKIRK: With respect, I should be the last person to ignore what the noble Lord has said. I did not say that I had nothing to say on that point. What I said was that the equipment which the Navy would require, whether in global or limited war, would be substantially the same. I think the noble Lord is going rather far if he expects me to describe precisely what the naval role would be either in global war or in limited war. What I can tell him is the sort of equipment which we might require or that we should require to meet the contingency. But I think it is going a little far to expect me to give precise descriptions of how the Navy would meet a nuclear attack or any other form of attack launched in a war. What I think is important, from my point of view and from the point of view of the House, is that the equipment that the ships would require would be substantially the same. It would not be different. That is one of the advantages: that you can combine in a ship a fairly wide variety of equipment which can be used to meet different types of necessity. I hope the noble Lord does not think I am evading the question. I do not think that I can usefully explain to him what in fact could happen in global war, because it would be pure surmise.
  Coming to the general debate, I think the House will agree with me on these two points. The first is that we must not arm ourselves into bankruptcy. That has been said often, and I know that everybody agrees with it, but in listening to the many types of ships which the noble Lord, Lord Winster, suggested we ought to be building now, I thought that he was going a long way in that direction. That, I feel, is a point in this matter which we must bear in mind. The other point is that if we look back in our history we can rarely point to a time when we were acting without allies. There is nothing wrong with having allies. It has been the policy for an extremely long period for this Island to have allies. If we look back to almost any war to the time of Marlborough it will be found that we have acted with allies. In the presence of the noble and gallant Lord,

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  Lord Dowding, I can say that there was a period when for a short time we acted without allies; but it was a very unpleasant period and one which I think almost all of us would never seek to repeat.
  My Lords, the main criticism which has been directed to me to-day has been in regard to new construction. I am grateful to my noble friend Lord Cilcennin for making some reference to that, because the modern ship is something which requires a great deal of preliminary work before it even reaches the stage of development. I do not in any way differ from noble Lords in regard to the need to maintain the impetus of modern construction. What I do emphasise, though, is that it is more important to keep modern ships going than it is to try to spend one's energies on the older ships. I can say that there has been no cancellation at all in the shipbuilding programme. We do not normally mention ships in the programme because they are there; we report them as they come into the Fleet. If I may try to console the noble Lord. Lord Teynham a little, I can assure him that the position is this. We have now completed the conversion of the thirty-two Type 15 and 16, and they are all available in service. That was started in the time of the Korean war. We have now rather more than half of the new frigates already with the Fleet. or shall have this year.
  We also have a quite impressive programme for modernising destroyers, some of which will be equipped with radar to enable them to act as pickets. All our carriers have been completed since the war, but during that time there have been considerable changes in the carrier requirement and they have all required fairly expensive modernisation—the kind of requirement which the Americans have been only too willing to realise, and to which we have made a tremendous contribution.
  I very much hope that the first of the new cruisers, the "Tiger", will be completed very early next year. The noble Lord says that it is already out of date. If he knows exactly the type of war that we are going to fight I should be very grateful to know. My own feeling is that that will be a very useful ship. As the
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  noble Viscount, Lord Cilcennin, has said, what is really important is that we should have a definite idea of what we are aiming at for the middle 'sixties. It is with the object of incorporating new ideas and the latest thoughts of the Naval Staff that I have formed a Fleet Requirements Committee which includes designers, naval staff and scientists, all closely associated together, to see what ships are likely to be required from the middle 'sixties onwards.
  There has been some comment, for instance, on guided-missile destroyers. Not only is that an entirely new form of weapon but it involves an entirely new form of propulsion, combining steam turbines with gas turbines, which will necessarily take a long time to develop. I have one more word for the noble Viscount, Lord Alexander of Hillsborough, on the first flight of the Short SC.1 direct lift aircraft which took place on Whit Monday. That is at least a step forward, but it is really too early to start discussing that in any detail. The noble Viscount also asked about Fleets which I understand ceased publication in February, 1938. I have to assume it was thought that Jane's Fighting Ships told the public all they wanted to know.
  There was considerable emphasis on Fleet support and a number of speakers spoke upon that, among them, I believe, the noble Lords, Lord Congleton and Lord Teynham. I agree that we do want more afloat support, and in my recent visit to the United States Sixth Fleet in the Mediterranean, which is entirely maintained by afloat support, while that is certainly very impressive, I got the impression that it must be extremely expensive.
  LORD WINSTER: Hear, hear!
  THE EARL OF SELKIRK: A comparison between the Fleet to-day and that of pre-war times shows, I think, that we have a much bigger number of ships available for that purpose than we had then; but at the present time I can only say that I do not think we shall be able to afford expenditure on the American scale.
  One noble Lord raised the question of Sheerness. We are in close touch with the Board of Trade and are doing everything practicable to ensure that the facilities there are made available to those who

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  are interested. I am told that we have a large number of inquiries, and we have good hopes that it will be possible to dispose of the yard in such a way as to provide considerable employment. I am afraid that I cannot go any further at the moment, but I am glad to be able to give optimistic news upon it so far.
  The noble Lord, Lord Congleton, asked a number of questions on employment, and at the present juncture it is a little premature to say what will be the effect Greenock is not at all affected at the present time. The move has not started and will not start until next year. At the moment Eglinton is not at all affected, so I have no information which I can usefully give the noble Lord at the present time. I can assure him that there is no intention to build a very large new building on the top of Portsdown, and the noble Lord need have no anxiety about that. The fact is that the Admiralty Gunnery Establishment, Portland, is being transferred to a different purpose, which have explained on a former occasion, and the gunnery side concentrated with radar at the Portsdown establishment.
  The noble Lord also asked about airfields. By and large, those shown in the Statement will be given up, with the exception of Brawdy, in South Wales, which is being retained as a reserve field. The noble Lord raised the question of the Hydrographer, and I can assure him that there is not the slightest question of giving up the Hydrographer for the Navy—indeed, many other people would be in a poor way without the Hydrographer. He is giving an exhibition which is travelling round the country at present, and if the noble Lord is interested he might like to see that at some time.
  We have had some severe warnings on the numbers of our ships. I am not here to say that I am by any means satisfied with the numbers we have or the speed at which construction is taking place. I am afraid that I cannot tell the noble and gallant Lord, Lord Chatfield, the numbers declared by our Allies and ourselves to N.A.T.O., but I can assure him that those likely to be available in these waters are considerable. I believe it is fair to say that the forces we could make available are not inconsiderable. Some of your Lordships have asked, "Have we enough?"
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  Of course, no one can ever know that in advance. It would be quite wrong, however, to say that our contribution is in itself decisive, or that the contribution which is made by our Allies is very small.
  A number of noble Lords have raised the question of "Polaris "—the missile which is now being built in America. I have not a great deal to say about that beyond what is already known. It is a solid propellant guided missile, firing perhaps 1,500 miles. One submarine carries perhaps a dozen or more missiles. It can load in safety in port, go to a spot and operate. It is said to use an extremely accurate system of navigation under-water and can launch its missiles with great accuracy; and, if necessary, it can operate from holes in the ice fields at the North Pole. A few submarines of this kind are said to be able to cover the greater part of the Eurasian land-mass, should that be necessary. In short, there is no doubt that this is a most significant development—one which we are watching extremely closely. It is an extremely potent weapon. mobile, versatile and very difficult to detect. It is extremely difficult to destroy and carries, if necessary, a megaton warhead.
  LORD WINSTER: My Lords, may I ask whether the noble Earl the First Lord happens to know if she can fire the missile from a depth below the radar detection limit?
  THE EARL OF SELKIRK: My Lords. I can answer that question very easily, because radar detection does not operate under water but if the noble Lord has Asdic detection in mind. I would not say that it would be below Asdic depth, so far as I know. On the other hand, as the noble Lord will be aware, Asdic requires to be very close to a submarine, as compared with radar, to be effective. I do not know whether there is any question which I have been asked to which I have not given an answer.
  VISCOUNT ALEXANDER OF HILLS-BOROUGH: Coastal Command.
  THE EARL OF SELKIRK: My Lords, I am glad the noble Viscount raised the question of Coastal Command, in view of recent reports that Her Majesty's Government have made a decision on that.

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  The answer is: No, that is pure speculation. I believe that that is all I need say on that at the present time. Time is getting on, but I should like again to thank those of your Lordships who have taken part in this debate. The advice and guidance which you give is of value to us in our considerations, even if I have not necessarily been able entirely to satisfy your Lordships this evening.
  6.41 p.m.
  VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, before asking for the leave of the House to withdraw the Motion, because we certainly should not want to divide on it, may I thank the First Lord for the trouble he has taken to reply to the debate? I hope that he will not dismiss the idea of the Navy's having some more permanent control of Coastal Command, because our experience in the war was that if we had not been able to get operational control of it we should never have had such an expanding and wonderful success by Coastal Command in sinking sub-marines. They had a very good toll, but it was Coastal Command's co-operation under the operational directions of the Admiralty that led to the success. If we could have a little more actual training in Coastal Command in peace time on that principle, I think it would do a lot of good.
  The First Lord asked whether I or my Party would be prepared to pay all the extra millions that some of my arguments seemed to imply would be necessary, and to give up the deterrent. I think I have made my position on the deterrent perfectly plain in speaking on the White Paper on Defence and on this occasion. But, of course, in dealing with the last six years, we get into the sphere of political controversy. As for the previous six years we would take our caning if any caning was due to us; but in the
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  last six and a half years costs have risen so violently, we think because of the economic and financial policy of the Government, that we have nothing like fulfilled the programme formulated by the Labour Government. We think that something better might have been done in that regard. I am not blaming the First Lord, and certainly not the Board of Admiralty. They have been hedged in by rising costs that have been made effective as inflated costs and by the policy of "Set the people free from all controls and let them spend just what they like"; and that is what has happened in that connection.
  I am grateful to all the noble Lords who have joined in the debate on this Motion this afternoon. I feel quite certain that the more each one of us individually gives expression to his view as to what is the special need for maritime defence of this old country and our Commonwealth, the better it will be for the nation, the better it will be for recruitment into this great Service and the better it will be for the prevention, rather than the promotion, of war in our country in the future. I beg leave to withdraw the Motion.
  Motion for Papers, by leave, withdrawn.

  SEAHAM HARBOUR DOCK BILL [H.L.]
  Returned from the Commons, agreed to.

  BLACKPOOL CORPORATION BILL [H.L.]
  Returned from the Commons, agreed to with Amendments: the said Amendments considered and agreed to.
  House adjourned at seventeen minutes before seven o'clock.