Sitting of 27 January 1959

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

  DOCUMENTS (CROWN PRIVILEGE)
  Mr. Marloweasked the Attorney-General whether his attention has been drawn to the recent observations of the Court of Appeal in relation to the exercise of Crown Privilege in respect of the production of documents in litigation; and whether, since it is undesirable that the good faith of Ministers exercising this jurisdiction should be called in question, he will appoint an ad hoc committee of Ministers and High Court judges to make recommendations with regard to the law and practice on this subject.
  The Attorney-General (Sir Reginald Manningham-Buller): No. I assume that my hon. and learned Friend is referring to the case of Auten v. Rayner, in which my right hon. Friend the Home Secretary objected in the public interest to the production of reports made by a police officer to his superiors, and communications passing between police forces in connection with an investigation into an alleged criminal offence. The enforcement of the criminal law would, of course, be seriously impeded if the production of such documents could be compelled.
  The objection was challenged by the plaintiff on a number of grounds, all of which were rejected by the Court of Appeal in a considered judgment which expressed no dissatisfaction with the existing law and practice. In particular, the Court ruled that there were no grounds for suspecting my right hon. Friend of bias, and pointed out how extravagant it would be to suppose that a Minister in my right hon. Friend's position would be in the least disabled or disqualified from giving proper consideration to the question whether it was
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  in the public interest that the documents should be produced. In these circumstances, as I said in answer to a Question by the hon. Member for Islington, East (Mr. E. Fletcher) last week, I do not consider that there is any need for a further review of the position.
  Mr. Marlowe: While, of course, agreeing with my right hon. and learned Friend that there was no question of the possibility of bias on the part of the Home Secretary in this matter, my Question is directed rather to the wider issue. Would he not agree that, on the whole, on this question of Crown privilege there is a considerable body of high judicial opinion that takes a view contrary to that of my right hon. and learned Friend, and would not that alone be sufficient ground for some independent investigation of this matter?
  Secondly, is he aware of the considerable support there is for the proposal that documents should be classified in two sections; those contrary to national security, which would retain the present protection, and those said to be contrary to public interest, which might well be submitted to some other body to determine where the public interest really does lie? That would obviate the suggestion that a Minister was biased.
  The Attorney-General: Various suggestions have been put forward from time to time. I think that all the suggestions that have been canvassed, including those now put forward again by my hon. and learned Friend, were considered when the whole matter was reviewed in 1956. As I said in answer to the hon. Member for Islington, East (Mr. E. Fletcher) last week, the Government came to the conclusion that no amendment of the law was required but, with the object of minimising the prejudice that might unavoidably be caused to litigants by the withholding of evidence, certain modifications of practice should be made. So far as I am aware, that practice, as modified, is now working well.

  LANDLORD AND TENANT ACT, 1958 (ACTIONS)
  Mr. Sparksasked the Attorney-General how many actions for possession of premises to which the landlord and

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  Tenant (Temporary Provisions) Act, 1958, applies have been entered in county courts in the Metropolitan police area; how the actions have been disposed of; and how many of these actions were entered in the Brentford County Court.
  The Attorney-General: I am obtaining this information, and will circulate it in the OFFICIAL REPORT when it is received.
  Mr. E. Fletcher: Is the Attorney-General aware that in a great many cases in Islington disappointingly short periods of relief have been granted by the courts—in the majority of cases, only one month—before the eviction order takes place? Is he aware that this is quite contrary to the expectations held out by the Minister when the Bill was discussed in this House?
  The Attorney-General: I do not see anything about Islington in this Question.

  LEGAL AID
  Mr. Chapmanasked the Attorney-General whether he is aware that under the Legal Aid and Advice Act people of slender means are being assessed as able to pay sums they cannot afford; and when he proposes to amend this Act and its Regulations so as at least to revise the figures for disposable income and disposable capital to allow for the fall in the value of money in the last 10 years.
  The Attorney-General: I have nothing to add to the reply which I gave to the hon. Member on 16th December, 1958.
  Mr. Chapman: If we make allowance for the fall in the value of money, are we not being very unjust as compared with the standard applied ten years ago? For example, is it really right that a lady with only £5 10s. a week coming in and with £150 in the bank—a very slender situation—should be assessed as able to pay £126 10s. towards the costs of her case? Cannot we be a little more generous than that?
  The Attorney-General: The assessment is made by the National Assistance Board in accordance with the Regulations now in force. I would point out to the hon. Gentleman that the Government are committed to introducing Sections 5 and 7 of the Legal Aid and Advice Act during this and the next financial year. As I
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  replied to him on 16th December last, once this scheme has been launched my noble Friend the Lord Chancellor will see what can be done about the financial provisions governing the rate of contribution of a person seeking legal aid.

  GROUND RENTS (APPORTIONMENT)
  Mr. Darlingasked the Attorney-General whether he will consider the legal consequences arising when the ground rents of divided leasehold estates of dwelling houses are not equitably apportioned among the buyers of the houses and the whole rent of the estate is, without warning or explanation, charged to an individual house-owner; and if he will take steps to bring to an end a legal custom which is causing hardship to house-owners in some districts.
  The Attorney-General: I assume that the hon. Member is referring to the apportionment of ground rents without the consent of the ground landlord. I am not aware that hardship is being caused by any custom having the force of law, and I do not, therefore, consider that any action by me is called for.
  Mr. Darling: Is the Attorney-General aware that the practice of charging the whole of the ground rent of leasehold houses to one purchaser in a group of houses is becoming more widespread and is causing concern to the building societies? Does he not think it grossly unfair that without any warning or explanation a person buying a house should be suddenly charged the ground rent of a group of houses instead of having the rent fairly apportioned?
  The Attorney-General: I am certain that a person buying a house in the circumstances described by the hon. Gentleman ought normally to receive a warning and know the liabilities he is incurring. He is dealing with a question where the land the subject of a ground lease is apportioned. Every person to whom land is apportioned is in law responsible for the ground rent, but I understand that in practice in some parts it is not a custom having the force of law. The person who holds the last bit of that land is looked to by the ground lessor for the ground rent for which he is liable in law. If he makes the apportionment with the other

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  occupants of that land without the landlord's consent and agreement, it does not seem to me that he has so much about which to complain. An agreement can be entered into as to the apportionment with the landlord, but if it is done without the landlord's consent I do not think there is much cause for complaint.
  Mr. Darling: In view of the importance of the subject matter and not because the Attorney-General's reply is unsatisfactory, I ask leave to raise the matter again.

  MINISTRY OF WORKS

    Lord Trenchard (Statue)
    Sir A. V. Harveyasked the Minister of Works what progress has been made with the plans for a memorial to the late Marshal of the Royal Air Force the Viscount Trenchard.
    The Minister of Works (Mr. Hugh Molson): After consulting my right hon. Friend the Secretary of State for Air, I have appointed a Committee to advise me on the erection of a statue to the late Lord Trenchard. Lord Templewood has agreed to act as Chairman. Lord De L'Isle, Sir Albert Richardson and Marshal of the Royal Air Force Sir Dermot Boyle have agreed to serve as members of the Committee.
    Sir A. V. Harvey: Is my right hon. Friend aware that his Answer will give much satisfaction to those who served under Lord Trenchard in the Royal Air Force and to the nation as a whole?

    New Entrance, Hyde Park (Edinburgh Gate)
    Mr. Teelingasked the Minister of Works whether a name has yet been chosen for the new entrance into Hyde Park from Knightsbridge.
    Mr. Molson: Yes, Sir. Her Majesty The Queen has graciously approved that the entrance shall be called Edinburgh Gate.

  SCIENTIFIC AND INDUSTRIAL RESEARCH

    Roads
    Mr. Rankinasked the Parliamentary Secretary to the Ministry of Works, as representing the Lord President of the
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    Council, what experiments are now taking place at the Road Research Laboratory at East Kilbride to further road safety by electrical, or other methods; and if he will make a statement.
    The Parliamentary Secretary to the Ministry of Works (Mr. Harmar Nicholls): The programme of research carried out by the Road Research Laboratory includes work on the electrical heating of road surfaces, the prevention of snowdrifts by snow fences, and chemical and mechanical means of removing ice and snow from roads. The Scottish branch at East Kilbride participates in this work, keeps in close touch with Scottish problems and assists in disseminating the results of this work in Scotland.
    Mr. Rankin: Is not the hon. Gentleman being a little too cautious? Can he say what results are being achieved, and, if any, would they have been of any use in the building of the Preston by-pass, for example? Is he aware that during this winter Everton Football Club have been using this method of surface heating throughout the season with great success and have been able to play all their games? Would it not be possible to apply that method to road surfaces?
    Mr. Nicholls: As the hon. Gentleman will remember, in an Answer to my hon. Friend the Member for Burton (Mr. Jennings) on 18th November, I recognised the success of electrically heating road surfaces. Good results are being achieved from this research, as is being shown by the way abnormal weather conditions are being dealt with. The Scottish branch is a branch of the main laboratory at Harmondsworth, Middlesex, but the branch deals with Scottish problems, making full use of its special experiences of local conditions.
    Mr. Woodburn: Is the hon. Gentleman aware that Edinburgh Corporation is at present considering electrifying the road in the Mound for this purpose?
    Mr. Nicholls: Yes, Sir.

    Hydro-electric Schemes (Hydraulic Structures)
    Mr. Jenningsasked the Parliamentary Secretary to the Ministry of Works, as representing the Lord President of the

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    Council, what Government research is undertaken on the hydraulic aspects of structures for hydro-electric schemes.
    Mr. H. Nicholls: The Hydraulics Research Station of the Department of Scientific and Industrial Research has undertaken scale-model investigations of hydraulic structures for a number of hydro-electric schemes, principally overseas. The structures have included intakes, sluices, spillways and stilling basins.
    Mr. Jennings: First, can my hon. Friend tell me for whom this work is carried out? Secondly, does the station charge for its services?
    Mr. Nicholls: In most cases the work is carried out for British firms of consulting engineers, and the charges made by the Hydraulics Research Station are based upon the staff time involved, to which is added the overhead costs.

    Geological Survey, East Midlands
    Mr. Atkinsasked the Parliamentary Secretary to the Ministry of Works, as representing the Lord President of the Council, what progress is being made towards completion of up-to-date geological maps covering the ironstone field in the East Midlands.
    Mr. H. Nicholls: The whole of the field has been geologically surveyed on the scale of six-inches to the mile. Out of the eight geological sheets on a scale of one-inch to the mile covering the Northampton Sand Ironstone Field, three have been published recently and three more are soon to be published.
    Mr. Atkins: Can my hon. Friend say whether any progress has been made with the mapping of the Oxfordshire ironstone field, and can he say whether explanatory notes have been published to cover the area?
    Mr. Nicholls: Yes. The smaller field of Oxfordshire is an area covered by two one-inch geological sheets. One sheet is being prepared for publication, and a survey on a scale of six inches to the mile of the area covered by the other sheet is now in progress. In addition to the maps, explanatory memoirs dealing with the ironstone fields have been published by the Geological Survey.

  SCOTLAND

    Mobile Silo Clamps
    Sir J. Duncanasked the Secretary of State for Scotland why he will not allow mobile silage clamps as eligible for silo subsidies in Scotland when they are eligible for subsidies in England.
    The Joint Under-Secretary of State for Scotland (Lord John Hope): Mobile type silo clamps have been approved for grant-aid in Scotland where they have been permanently set on a concrete base. A mobile silo is not generally suitable for Scottish conditions, but if my hon. Friend has any exceptional case in mind I shall be prepared to consider it.
    Sir J. Duncan: Is my noble Friend aware that I have sent him particulars from a producer of these clamps in which he says that they are eligible for subsidy in England but not in Scotland? That is why I tabled the Question. Is my hon. Friend aware that it is most useful to have mobile clamps on farms because they can be moved from one field to another from year to year?
    Lord John Hope: That is so, but as my hon. Friend will recognise, we do not have in Scotland the same systems of dairy farming, which are sometimes based on a movable bait, as in England, but, in the light of what I have said, if my hon. Friend knows of certain cases, I should be grateful if he would let me have details of them.

    Electricity Undertakings (Rating Valuations)
    Mr. N. McLeanasked the Secretary of State for Scotland whether he is aware that under the Local Government Act, 1958, which applies to England and Wales only, there is provision for electricity undertakings being rated after 1st April, 1959, on lines similar to those now operating for gas, with weightings for generation and distribution; and if he will introduce similar arrangements for Scotland.
    The Joint Under-Secretary of State for Scotland (Mr. J. Nixon Browne): My right hon. Friend has agreed with the local authority associations and the electricity boards that the present arrangements under which the boards make contributions for the benefit of local

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    authorities should be reviewed after the revaluation in 1961. The review will cover the possibility of replacing these arrangements by direct rate payments.
    Mr. McLean: While thanking my hon. Friend for that Answer, may I ask whether it would be possible for the Secretary of State to carry out this review before the new regulations about rating valuation in Scotland come into force?
    Mr. Browne: My right hon. Friend will start the review so that the new arrangements can be brought in for the 1961–62 rating year.

    Forestry
    Mr. Willisasked the Secretary of State for Scotland what steps are being taken to assist the Forestry Commission to dispose of the thinnings now coming from Scottish forests.
    Lord John Hope: Although there have been local difficulties in the disposal of thinnings, these have not been on such a scale as to call for special measures. There will, however, be a gradual increase in the supplies of thinnings and the problem of finding the additional outlets which will eventually be required is actively engaging the attention of the Forestry Commissioners.
    Mr. Willis: What is the hon. Gentleman's Department prepared to do to help in this matter?
    Lord John Hope: Everything we can. The hon. Member will realise that in the first instance this is a matter for the Commission, but we shall do all we can to help.
    Mr. Willisasked the Secretary of State for Scotland what steps are being taken to use Scottish supplies of timber to promote the growth of timber-using industries in Scotland.
    Lord John Hope: The Forestry Commission has in addition to normal marketing activities, sponsored investigations into the feasibility of establishing in Great Britain small-scale pulp, wood chipboard and wood fibre budding board plants. Reports on these studies are expected to be published within the next two or three months.
    Mr. Willis: Does the hon. Gentleman not think that, in view of the difficulties
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    which he indicated in answer to my previous Question on the subject, this is now becoming a matter of some urgency and ought to be treated as such? Is he aware that there will be great disappointment if the forestry programmes do not lead to the birth of a number of industries in Scotland, particularly the North of Scotland?
    Mr. Woodburn: Is the hon. Gentleman aware that as far back as 1950, during my own term of office, the Forestry Commission had practically concluded an arrangement for the establishment of a hardboard mill in Inverness, that consideration was given to a pulp mill in Argyllshire, where sufficient timber was estimated to be becoming available to keep a pulp mill going, and that there was also consideration of a furniture factory at Cannich? Is there any progress in any of this projects?
    Lord John Hope: I could not say without notice whether there is any progress in these specific cases, but I would like to look them up, now that the right hon. Gentleman has mentioned them, and let him know.

    Crofting Townships
    Mr. Willisasked the Secretary of State for Scotland what steps he proposes to take to meet the difficulties revealed by the Crofters Commission in the reorganisation of crofting townships.
    Lord John Hope: My right hon. Friend has at present no proposals to make for amending the existing provisions on this subject, but he knows that the Crofters Commission is giving thought to it and he would of course be prepared to consider any proposals which it might make.
    Mr. Willis: Is the hon. Gentleman aware that it would now appear that these provisions of the Crofting Act will never be made effective? Surely, he ought to do something about it now. The difficulties have been indicated. Should he not tackle them?
    Lord John Hope: It is for the Commission to judge, in the light of its own day-to-day experience, if and when the time is ripe for concrete proposals to be made. It may well come.

    John Ramsay (Prison Escapes)
    Mr. Hector Hughesasked the Secretary of State for Scotland if he will make a statement on the various escapes from Peterhead Prison of John Ramensky, stating in each case the manner of his escape, how long he was at large, how he was recaptured, how he was dealt with on his return to prison, and also indicating when a reconsideration of his present prison sentence is to be undertaken.
    The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson): John Ramsay, formerly Ramensky, escaped from Peterhead Prison in 1934, in 1952 and three times in 1958. On the first three occasions he climbed through windows or trap-doors in the roof and scaled the perimeter wall. On the fourth occasion he disappeared during recreation and on the fifth during exercise; and on both these occasions he appears to have scaled the wall. He was recaptured each time by the police, after being at large for one day (on two occasions) two days (on two occasions) and ten days (on the last occasion).
    For the first four of these escapes he was punished by loss of remission and temporary deprivation of certain privileges. He has not yet been dealt with for the last escape.
    The sentences of all long-term prisoners are kept under review, but my right hon. Friend is not aware of any ground which would justify reconsidering Ramsay's sentence now.
    Ramsay was charged this morning with defeating the ends of justice in that he escaped from legal custody, and he is appearing in Aberdeen Sheriff Court today.
    Mr. Hughes: Does the hon. Gentleman not agree that this is a remarkable case? Can he say what powers the excellent Governor of Peterhead Prison, of whom I make no criticism, has to deal with a case of this kind by giving the prisoner work suitable to his aptitude? If the Governor has no such special powers, will the hon. Gentleman see that he gets them?
    Mr. Macpherson: I dare say this prisoner has several aptitudes. No doubt, the Governor will take into account what the hon. and learned Member has said.
    Mr. Woodburn: Is this not a case either for giving the prisoner a key or for sending him to one of the prisons without walls?

    Food Supplies, Aberdeen
    Mr. Hector Hughesasked the Secretary of State for Scotland what steps he is taking to assist the citizens of Aberdeen who are threatened with food shortages caused by the recent storms there.
    Mr. N. Macpherson: None, Sir. So far as my right hon. Friend is aware, no threat of shortages exists.
    Mr. Hughes: Does the hon. Gentleman realise that if he read the Aberdeen Press and Journal he would find plenty of evidence about this? Will he read it in order to deal with the problems as they arise?
    Mr. Macpherson: My right hon. Friend has made inquiries of local authorities and of local sources concerned with the food supply in the area and he is assured that no difficulty has arisen.

    School Meals
    Mr. Hamiltonasked the Secretary of State for Scotland how many replies he received from local education authorities concerning the recent circular advising the more extensive use of bread and margarine instead of potatoes in school meals; and how many authorities commented favourably on the suggestion, and how many unfavourably.
    Mrs. Mannasked the Secretary of State for Scotland (1) how many local authorities are now following his recommendations to cut down the supply of potatoes to children partaking of school meals, and to substitute bread and margarine, rice and spaghetti instead;
    (2) why he recommended in Memorandum 16/1958 that education authorities should cut supplies of meat and potatoes in school meals served; and what has been the response from local authorities concerned.
    Mr. N. Macpherson: I would refer the hon. Members to the reply which I gave to the hon. Lady's question on 18th November, 1958. The memorandum did not call for a reply and the advice was given only in case the need arose. Two

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    education authorities considered that the meal would not be so nutritious or so palatable.
    Mr. Hamilton: Is the Minister aware that the reaction of local authorities to this circular was not entirely favourable? What are the peculiar attractions of rice, spaghetti and macaroni as substitutes for potatoes? Is be further aware that even if ¾oz. of these foods were substituted for potatoes, they can hardly be regarded as a milestone on the road towards doubling our standard of living in the next 25 years?
    Mr. Macpherson: Reductions in these commodities may not prove necessary. The local authorities are only being asked to do what any prudent housewife would do and switch from commodities which are rising in price to commodities which are not rising in price.
    Mrs. Mann: Is the Minister aware that the circular is in the interests of economy? Does that mean that because more children of the unemployed are now taking these dinners they have to have shabby dinners of bread and margarine, rice and spaghetti? Is the hon. Gentleman further aware that bread is 5½d. per lb., rice 1s. per lb. and spaghetti 1s. 2d. per lb., while there is a plentiful supply of good Scotch potatoes at 3½d. per lb.?
    Mr. Macpherson: The circular only gives recommendations to local authorities about what they should do if they find that their budget is being taxed by Changes in price. It does not follow that any action has so far been necessary in any particular case.
    Mrs. Mann: Owing to the unsatisfactory nature of the reply, I propose to raise this matter on the Adjournment at the earliest opportunity.
    Mrs. Mannasked the Secretary of State for Scotland how many school children were taking free meals in schools throughout Lanarkshire during the last ten weeks of 1957 and 1958, respectively.
    Mr. N. Macpherson: The information required by the hon. Member is not on record in my right hon. Friend's Department, but I understand that the average daily number of children receiving free meals in Lanarkshire for the month of November was 5,003 in 1957 and 6,822 in 1958.
    Mrs. Mann: Is it not a fact that this circular sent out in October means that a piece of cheese could replace butcher's meat and that bread and margarine could replace potatoes? Does the hon. Gentleman think that a piece of bread and margarine with cheese on it is an adequate meal for a child? Would he take into consideration the fact that these children are coming from homes stricken with unemployment, and that they require a good substantial meal in the middle of the day? Would he look into the matter of the meals now being served?
    Mr. Macpherson: I do not think the hon. Lady would be right in decrying the meals that are being supplied, which are of a very high standard.

    Teachers (Pensions)
    Mr. Rankinasked the Secretary of State for Scotland if he is aware that the salary increase of 5 per cent., recently awarded to teachers, has resulted, in the case of those promoted teachers who have retired but returned to teaching, in a decrease of the pension element so as to maintain their total salary at the same level; and what steps he proposes to take to remedy this anomaly.
    Mr. N. Macpherson: Yes, Sir. It is a general rule of public service superannuation that a pensioner re-employed in the same service may receive only so much of his pension as, when added to his pay, will not make the total of pay and pension greater than his pay at the time of his retirement. My right hon. Friend cannot exempt teachers in the circumstances mentioned from this general rule.
    Mr. Rankin: Might I urge the hon. Gentleman to get his right hon. Friend the Secretary of State to think about this matter again? Does he not realise that he is offending in two respects? First, he is refusing a teacher the right to draw a pension which he has earned, and secondly, he is creating a small pool of cheap labour in the teaching profession. Does the hon. Gentleman consider that this is a way in which he will help to bring the 1,000 extra teachers into the teaching profession?
    Mr. Macpherson: The provisions of the superannuation scheme are well known. This proposal would require an alteration in them.

    University Entrance Subject (History)
    Mr. Malcolm MacMillanasked the Secretary of State for Scotland what steps he is taking to sustain and enhance the status of history as a subject in the secondary school curriculum for the purpose of the School Leaving Certificate pass groups qualifying for university entrance.
    Mr. N. Macpherson: Pupils may be presented in history in the Scottish Leaving Certificate Examination on either the lower or the higher grade, but the conditions under which passes in history are recognised for university entrance are entirely a matter for the Scottish Universities Entrance Board.
    Mr. MacMillan: Is the Joint Under-Secretary aware that this treatment of a higher history pass as a lower equivalent pass will certainly lead to a reluctance on the part of students and scholars to take history at all and will lead in turn to a shortage of qualified history teachers, thus debasing the whole cultural and academic value of the Scottish school and university curriculum? Will the Joint Under-Secretary ensure that proper representations are made to sustain and enhance the status and reputation of history and history teaching in the schools? This is done in England. Why not in Scotland?
    Mr. Macpherson: Experience shows that the status of a subject is not dependent solely on its treatment from the viewpoint of university entrance. History is of very great value but, at the same time, we are anxious that courses in secondary schools should be as varied as possible and that pupils should have every opportunity to study such subjects, including history, as may be of most value to them.
    Mr. Woodburn: Is the Secretary of State aware that it is difficult to understand how in Scotland the subject of history is treated as a Cinderella? It was only recently that it was treated as part of the English courses. Surely, the intelligent man must know something about the history of his country.
    Mr. Macpherson: It simply is not true that history is treated as a Cinderella. At the moment, a condition of being presented for the Scottish leaving certificate
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    is that the student should have studied history for three years and either history or geography for the next two years.
    Mr. MacMillan: I give notice that I will raise this matter at the very earliest opportunity to try to wring a more satisfactory answer from the Joint Under-Secretary.

    Land (Foreign Purchase)
    Mr. Rankinasked the Secretary of State for Scotland if he will introduce legislation to ensure that before any land in Scotland shall be sold to a foreign buyer his sanction must first be obtained.
    Mr. N. Macpherson: No, Sir.
    Mr. Rankin: Would not the Minister expand that somewhat over-brief answer? Surely, there is a little more to be said? Surely, there is one Minister on the Government Front Bench who sometimes to himself hath said something about his native land?
    Mr. Macpherson: Under the Status of Aliens Act, 1914, aliens have the right to hold and acquire property in the same way as British subjects. To detract from that would be a retrograde and illiberal step, in the opinion of my right hon. Friend the Secretary of State, and in the opinion of the Home Secretary, and one which he is not prepared to contemplate.

    Road Bridge, Coldstream
    Sir W. Anstruther-Grayasked the Secretary of State for Scotland what is the estimated cost of strengthening the road bridge over the Tweed at Cold stream to enable it to carry the extra heavy traffic now directed over it; and what proportion of this cost is borne by the Government.
    Mr. N. Macpherson: The work at present in progress was originally estimated to cost £6,000, but the necessity for more extensive work has recently become clear. It is too early to say what the cost will be, but the Government will bear the whole amount.
    Sir W. Antruther-Gray: May I ask my hon. Friend to bear in mind the fact that his Department has been taking much too narrow a view of this problem? Is he aware that the present figure is much nearer £50,000, and that there is great

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    doubt whether the present Coldstream Bridge will ever be able to stand up to the very heavy traffic which is now directed over it, and that it might be necessary to find a different site for the bridge a mile or two upstream from the present Coldstream Bridge?
    Mr. Macpherson: My right hon. Friend is aware of that Berwick County Council has now asked for a meeting of representatives of all the authorities concerned to discuss the possibility of constructing a new bridge in the vicinity of Coldstream. My right hon. Friend is consulting his right hon. Friend the Minister of Transport and Civil Aviation, who is equally concerned.

    Voluntary Homes and Hostels
    Mr. Hannanasked the Secretary of State for Scotland (1) how many approved voluntary probation homes and hostels there are in Scotland for girls and boys, respectively;
    (2) how many voluntary homes, excluding approved schools, are registered under Section 29 of the Children Act, 1948; and when he will introduce regulations governing the administration, supervision and discipline in such homes;
    (3) if he will undertake to review the registers of all voluntary homes under the Children's Act, and voluntary probation homes and hostels approved under the Criminal Justice (Scotland) Act, 1949, so as to ensure that they have under their care only those cases appropriate to the purposes for which they have been approved.
    Mr. N. Macpherson: I shall, with permission, answer this Question and Questions Nos. 27 and 37 together.
    Mr. Hannan: On a point of order. The Joint Under-Secretary has asked permission to answer three Questions together. I think I am in order in asking that these Questions should be answered separately.
    Mr. Speaker: The hon. Member ought to hear the Answer to the combined Questions first, and then, if he is dissatisfied with it, perhaps he will have an opportunity of asking a supplementary question.
    Mr. Macpherson: The Answer is as follows. 132 voluntary homes in Scotland are registered under Section 29 of the
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    Children Act, 1948. Of these homes, 12 for girls and one for boys have been approved for the reception of probationers, and no other home or hostel has been approved for this purpose. My right hon. Friend hopes shortly to make regulations for the conduct of voluntary homes, but he has no power to determine that a voluntary home should receive only a particular category of child or young person.
    Mr. Hannan: Is the Minister aware that these Questions arise out of incidents which took place in such a home in my constituency? First, may I ask the hon. Gentleman, since there is only one such home for boys in Scotland, whether he is satisfied that that meets the need? Secondly, how often do his officers visit this home annually? Thirdly, since there is a danger in young people, charged with offences of varying degree or with none, being housed together in such homes, will he look upon the introduction of these regulations as a matter of the greatest urgency?
    Mr. Macpherson: In reply to the first question, it has been thought preferable not to segregate offenders put on probation with a condition of residence but to train them in living with others of their own age. With regard to the question how often inspectors pay visits, that varies, but if the hon. Gentleman would like particulars, perhaps he will put that question down. As to the third question, if in a particular home the combination of people going there seems to be unwise, my right hon. Friend would have this represented to the management, as well as to any local authority which had placed children there. The regulations will be made as soon as possible.
    Mr. Hannan: On the question of the urgency of these regulations, the hon. Gentleman will be aware that his right hon. Friend, in a letter to me dated 23rd October, said that such regulations would be introduced. In order to avoid the repetition of such incidents as these, and since the urgency of the matter is not denied by the Scottish Office, can the hon. Gentleman give me a clearer definition of "near future"? Can he put a date on it?
    Mr. Macpherson: A draft of the regulations was sent three months ago to representative voluntary societies and the

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    local authority associations, and the last reply was received only yesterday. The whole matter will be considered and the regulations laid without any undue delay.

    Marginal Agricultural Production Scheme
    Mr. Emrys Hughesasked the Secretary of State for Scotland what additional expenditure he proposes to incur in respect of the Marginal Agricultural Production Scheme as a result of his recent decision on marginal agricultural production payments announced on 21st January.
    Mr. Grimondasked the Secretary of State for Scotland if he will give further details of the modification he proposes over the running down of the Marginal Agricultural Production Scheme; and how much extra grant will be available for farms affected.
    Lord John Hope: My right hon. Friend proposes to provide £900,000 in respect of the Marginal Agricultural Production Scheme for the 1959 cropping year in place of the £600,000 which it was estimated would otherwise have been spent on a scheme under Clause 3 of the Small Farmers Bill. This should enable agricultural executive committees at their discretion to continue assistance on the scale which has obtained previously to occupiers of holdings of less than 150 acres and to give assistance again of course at their discretion at an aveage of half that rate to occupiers of holdings above that limit.
    Mr. Hughes: In view of the fact that the Minister was strongly opposed to this concession during the Committee stage of the Bill, is he going to resign?
    Lord John Hope: No, I think the hon. Gentleman must have got mixed up with some other debate. I never opposed this concession. I was only too pleased to advise my right hon. Friend that it ought to be made.
    Mr. Grimond: May I ask the noble Lord if he will confirm that it is the intention that the scheme will run for an extra year, and, secondly, if he will see if the applications now in can be dealt with more expeditiously? I am told that there has been some delay, and that there is some anxiety among the
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    farmers as to exactly what is the present position.
    Lord John Hope: That will be locked into.
    Mr. Woodburn: Do I understand the Minister to say that this scheme was going to run for an extra year? Is it not the case that it finishes on the date mentioned in the Bill when it was introduced, and that what has happened is that a gap has been filled which nobody seemed to know existed until we had the debate?
    Lord John Hope: What has happened, as I think the right hon. Gentleman knows, and what was meant by the hon. Gentleman below the Gangway, was that the putting into operation of the scheme under Clause 3 has been, in fact, postponed for a year.

    Maternity and Geriatric Beds, Glasgow
    Mrs. McAlisterasked the Secretary of State for Scotland whether he now has anything further to report in relation to an extension of maternity bed accommodation in Glasgow, as this problem is still giving concern to those responsible for the maternity services of the city.
    Mr. J. N. Browne: The regional hospital board is now preparing proposals for further substantial additions to the maternity bed accommodation in Glasgow.
    Mrs. McAlister: Whilst thanking the hon. Gentleman for that reply, may I ask whether he is aware that this is causing very grave concern, as I have stated in my Question, and that maternal and infant mortality figures were actually increased in the last M.O.H. Report? Is he aware that I am glad to hear that he is prepared to do something about this matter?
    Mrs. McAlisterasked the Secretary of State for Scotland how many sanatorium beds have been rendered vacant in the Glasgow area as a result of the new techniques in the treatment of tuberculosis; and to what extent he expects that a proportion of these beds will be avail-able soon for geriatric purposes.
    Mr. J. N. Browne: About 120 tuberculosis beds have become redundant in

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    Glasgow in the past year. Of these, 70 have been earmarked for geriatric patients, of which 20 are already in use.
    Mrs. McAlister: Whilst again thanking the hon. Gentleman for that reply, may I ask whether he is aware that large numbers of old people are still living in appalling conditions and that they cannot obtain geriatric beds? Is he aware that many of us are being driven to the reluctant conclusion that the Government have only two speeds—dead slow and stop—but that I am glad to know that they are making some progress, though it is not wholly satisfactory?
    Mr. Browne: I assure the hon. Lady that we have these considerations very much in the forefront of our minds.

    Tolsta-Ness Road, Isle of Lewis
    Mr. Malcolm MacMillanasked the Secretary of State for Scotland whether, in view of the value of the proposed Tolsta-Ness road in the Isle of Lewis to the development of tourism, agriculture and the local transport system, and in the provision of employment, he will now offer assistance towards the cost of its construction to Ross and Cromarty County Council.
    Mr. N. Macpherson: My right hon. Friend will of course consider very carefully any proposal that the county council may make to him about this road, but in view of the many competing claims on the limited funds available he cannot say when he could offer grant.
    Mr. MacMillan: In view of the fact that the Distribution of Industries Act has so far had no impact whatsoever upon the unemployment in this area—the heaviest in any part of Great Britain—and that no major scheme under his Department is now being carried out there to solve that problem of unemployment, will the hon. Gentleman consider this application which is coming very soon from the county council as a matter of immediate urgency?
    Mr. Macpherson: The application will certainly be considered. There will be no delay in the consideration of it, but I cannot give any promise as to when the grant can be offered.

    Scalpay and Kyles Scalpay, Isle of Harris (Jetties)
    Mr. Malcolm MacMillanasked the Secretary of State for Scotland whether he will now give financial aid to the construction by Inverness County Council of jetties at Scalpay and Kyles Scalpay, Isle of Harris, and the provision of a vehicular ferry service.
    Lord John Hope: The county council has not submitted any specific proposals for such jetties. If and when it does my right hon. Friend will be prepared to consider them.
    Mr. MacMillan: Is the noble Lord aware that this is part of a scheme embracing a road, jetties and a ferry service—started many years ago—and that it is becoming a matter of dismay to the local population and all concerned that the scheme has not been completed? Is he aware that there is no other industry in the island, since the Harris Tweed industry collapsed and fishing dwindled to its present small scale? Cannot the Government and the noble Lord feel that they can make some contribution through the Secretary of State's Department towards solving the problems of the area?
    Lord John Hope: Perhaps the hon. Member will direct his observations in the first place to the county council concerned if he thinks that it ought to produce specific proposals which, as he knows, must be made before anything can take place by way of response.

    Legal Aid
    Sir J. Hutchisonasked the Secretary of State for Scotland when he proposes to introduce regulations regarding new facilities for legal advice under the Legal Aid Act; and whether he will make a statement.
    Mr. N. Macpherson: My right hon. Friend hopes to make the necessary regulations within the next few days.

    Crofters
    Mr. Grimondasked the Secretary of State for Scotland if he will examine again the position of small owner-occupiers in the crofting counties who farm holdings similar to crofts but who in future, will be denied assistance either under the Crofters Commission or the Marginal Agricultural Production Scheme.
    Lord John Hope: The small owner-occupiers who have received assistance under the previous Marginal Agricultural Production Scheme will continue to do so for the 1959 cropping season under the new Scheme.
    Mr. Grimond: Is it not the case that after that they will receive no assistance? Is it not a position without any rhyme or reason to have one man, a crofter, who will receive extremely generous grants under the Crofting Acts and to have a next-door neighbour who has bought his croft who will have no grant under the M A.P. or under the Crofting Acts? After all the talk about encouraging people to own the land, is there any reason at all for this?
    Lord John Hope: The hon. Member has stated the problem perfectly fairly, and its urgency and intensity are certainly recognised.
    Commander Donaldson: On the broad aspect of the M.A.P. Scheme, as announced last week, are my noble Friend and my right hon. Friend keeping before them the possibility of receiving further suggestions regarding the continuation of the Order under the M.A.P. Scheme after the year of grace which was announced last week?
    Lord John Hope: That is a little wider than the Question, but my hon. and gallant Friend knows perfectly well that we are examining the whole problem afresh in the light of representations which we have received.
    Mr. Steele: Are we to understand that with the £7½ million bribe given to horticultural interests yesterday in the House it is also being considered, in view of what the Minister has said today, that something more might be done for the small farmer?
    Hon. Members: Answer.

  TRADE AND COMMERCE

    Industrial Development, Crook and Willington
    Mr. Ainsleyasked the President of the Board of Trade what was the nature of his reply to a letter he received from the Crook and Willington Urban District Council, County Durham, dated 15th January, 1959, on unemployment and lack of industry in the area.
    The Minister of State, Board of Trade (Mr. John Vaughan-Morgan): A reply will be sent by the Department tomorrow. My right hon. Friend has great sympathy with the District Council in their plea for the introduction of new industry into the district to offset reductions in employment in recent months. We cannot direct industry to particular places, but we shall do what we can to steer suitable firms to the district. In the larger area, of which this district forms a part, approved extentions to Government factories are expected to provide several hundred new jobs in the course of the year, and I hope that workers in the Crook and Willington district will succeed in getting a share of them.
    Mr. Ainsley: Is the Minister of State aware that sympathy at the moment is not sufficient? Is he aware that when the Prime Minister toured the North-East he did not contact the employment exchanges in the west of Durham? Is he aware that, according to the latest figures that I have received, unemployment is 4·4 per cent in an area which covers three constituencies and the percentage in the North-West Durham constituency—the area in question—is considerably higher than that? Will the hon. Gentleman now consider some special financial aid to encourage industrialists to enter the area?
    Mr. Vaughan-Morgan: The area is not on the D.A.T.A.C. list, but the matter is, of course, kept under review.

  NATIONAL FINANCE

    Advertisements (Tax Relief)
    Miss Leeasked the Chancellor of the Exchequer to what extent under his regulations Income Tax relief is allowed to business firms for expenditure incurred in advertising their products; and what limit is placed on the sums that may be spent for this purpose.
    The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory): Under the ordinary Schedule D expenses rule expenditure on advertising is allowed as a deduction if it was incurred wholly and exclusively for the purposes of the taxpayer's trade and was not of a capital nature. There is no statutory limit of amount.
    Miss Lee: Is the Chancellor of the Exchequer aware that certain steel firms, under the guise of advertising their wares, are carrying out a blatant anti-Labour Party and anti-nationalisation propaganda? Is he further aware that this has gone on now to such an extent in the dailies and weeklies that if any hon. Member had collected the examples he would have collected enough to paper the walls of this Chamber? Will the right hon. Gentleman say whether he intends to permit this abuse of legitimate advertising to continue?
    Mr. Amory: I need not go into the meritoriousness or the reverse of any particular form of advertising expenditure. The test is not the meritoriousness or otherwise of it but its connection with the business.
    Mr. Gaitskell: Will the right hon. Gentleman explain exactly in what way the advertisements to which my hon. Friend the Member for Cannock (Miss Lee) refers are related to the business of the specific undertaking?
    Mr. Amory: That is not precisely the Question which I have been asked to answer today.
    Mr. P. Williams: Would my right hon. Friend not agree that it is perfectly reasonable to take action to prevent a robber coming on board?
    Miss Lee rose —
    Mr. Speaker: Mr. Grey.
    Miss Lee: On a point of order. I think that on a question of this importance we might be allowed a few more supplementary questions.
    Mr. Speaker: I take another view.

    THE PRIME MINISTER (NORTH-EASTERN TOUR)
    Mr. Greyasked the Prime Minister (1) in view of the increasing difficulties being experienced by school leavers in finding employment, what official consultations he had, while on his tour to the North-East, concerning this problem; and if he will make a statement;
    (2) to what extent, during his recent tour of the North-East, he made visits to the employment exchanges in the area;
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    (3)what talks he had with trade union leaders concerning unemployment in the North-East during his recent tour of the area; and if he will make a statement.
    The Prime Minister (Mr. Harold Macmillan): The tour was not arranged for the purpose of official consultations, nor did it include any visits to employment exchanges. I did, however, have informal talks with many people, including, of course, trade unionists and members of works councils. I am well aware of the employment difficulties in certain parts of the area, both from the reports of my colleagues and from what I saw and heard for myself. I believe, however, that the measures which the Government are taking will increasingly show their effects both in the North-East and elsewhere throughout the country.
    Mr. Grey: Is the Prime Minister aware that the vast majority of the people in the North-East took a very dim view of the fact that he showed no practical concern over the unemployment in the area? [HON. MEMBERS:"Oh."] It is quite true. It might have served a much more useful purpose if at least the right hon. Gentleman had made some contact with the employment exchanges and also had some talks with the people who were unemployed. It might have saddened his heart a little and made his visit less flippant than it appeared to be. [HON. MEMBERS:"Order."] May I also ask the right hon. Gentleman what method he has set in motion to reverse the trend of unemployment, and if he thinks that the people in the North-East might have the right impression—
    Mr. Speaker: Order.
    Mr. Grey: I have not quite finished—
    Mr. Speaker: I ask hon. Members to remember that this is Question Time. There will be plenty of time for speeches later.
    Mr. Grey: May I put this further point to the Prime Minister, Mr. Speaker? If he had done this, at least it would have created the impression in the minds of the people that he had gone there as Prime Minister and not as leader of the Tory Party.
    The Prime Minister: So far as I could follow them, I think the greater part of

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    the hon. Gentleman's supplementary questions were a criticism of myself, which the House, and ultimately the country, must judge. With regard to any more precise questions, I am glad to feel that in the last few weeks proposals have been approved for the extension of twenty Government factories in the North-East Development Area. These will be completed by October of this year and should provide work for well over 2,000 people.
    Mr. H. Wilson: In view of the reference to school leavers in Question No. 45, is the Prime Minister aware that not only in the North-East but elsewhere thousands of school leavers of last July had not found jobs by November and December, and that very many who left school before Christmas are having the greatest difficulty in finding jobs and may have to wait weeks? Is this the Prime Minister's idea of what he calls the "Opportunity State"?
    The Prime Minister: Of course, I recognise that there has been this difficulty, but I am hopeful, and indeed confident, that the position will improve.
    Mr. Shinwell: Would the right hon. Gentleman be good enough to specify the Government measures which are likely to help the shipbuilding industry and to correct the redundancy in the coal mining industry? Is he aware that the total expenditure which the Government propose to incur in the building of hospitals, additional schools and the reconstruction of roads in the North-East is a mere bagatelle in comparison with the employment needs of the area, and would he look into this matter and do rather more than the Government propose?
    The Prime Minister: Of course, the stimulation of investment generally, the reduction of the Bank Rate, the easing of the credit squeeze, the increase in initial allowances and the very substantial increase in public investment—all these will have their effect. Perhaps the right hon. Gentleman, who I know is very courteous to his fellow Members, would allow me to answer his point in the next Question but one, which deals specifically with shipbuilding, because another hon. Member has it on the Order Paper.

    COTTON INDUSTRY
    Mr. Haleasked the Prime Minister whether he will transfer the responsibility for the cotton textile industry to a Department other than the Board of Trade.
    The Prime Minister: No, Sir.
    Mr. Hale: Would the right hon. Gentleman say that the reason for that reply may be that he has no more competent Ministers to pass it on to? Is he aware that for seven years we have been taking deputations to Presidents of the Board of Trade about the cotton industry without one single thing being done; that since he became Prime Minister two cotton workers have fallen out of employment every hour of every day of every month; that the situation is now grave; that the decision of the Restrictive Practices Court yesterday will almost certainly result in some short-term worsening of the situation? Will he, therefore, tell us in relation to cotton, as he has done in relation to shipbuilding, what measures the Government have in mind to deal with this?
    The Prime Minister: With regard to the last question about the judgment on the restrictive trading agreements, this, of course, is not a matter of decision by the Government but by the court, and since it was delivered only yesterday it would be in any case premature for me to make a statement now—
    Mr. Hale: On a point of order, Mr. Speaker. Surely it is in order for me to say that, if anyone considers the supplementary question I put, it will be realised that I did not ask what action was going to be taken about the restrictive trading agreements. I asked what action was going to be taken about the cotton industry, and the Prime Minister is deliberately trying to dodge any question about the cotton industry by getting away on a side issue.
    Mr. Speaker: Order, order.
    Mr. Hale: This is too big a matter to permit that sort of thing happening.
    Mr. Speaker: The hon. Member should resume his seat when I rise. This is not a point of order for me, it is a matter of debate and controversy.
    Mr. Hale: Further to that point of order, Mr. Speaker, surely I am entitled.

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    if it appears that the Prime Minister has misunderstood a question of grave importance, to make it clear that he has misunderstood it and ask him for an answer to my question?
    The Prime Minister: Perhaps the hon. Gentleman misunderstood what I said. I began by saying "with regard to the last question. "Since it was immediately in my mind I proposed to answer that part first. It is not an uncommon practice, and certainly there was no discourtesy to him.
    I repeat that as regards the last part of the supplementary question, the more specific part—I will not evade the other parts—the judgment was given only yesterday. It is a matter for which the judges are responsible under the Act, and since this was only given yesterday it would be premature now for me to attempt to make any statement as to its likely results or its effects. I would only remind the House that when that Bill, which is now an Act, was under discussion it was the continual complaint of the Opposition that the Measure would prove to be ineffective and that nothing would be done under it.
    With regard to the more general question, as the hon. Gentleman knows, at last after very long negotiations I am glad to feel that voluntary agreement has been reached between the industries on imports from Hong Kong. I am extremely hopeful that a similar arrangement will be made about imports from India and Pakistan. I think this is far the most satisfactory way of handling that part of the problem.
    Further, with regard to the general question. I feel, and I think the whole House feels, that there must be and will be very considerable changes in the structure and character of the industry if it is to maintain its strength and play a great part in the life of the county and of the country. But I think that no one who has studied this industry could believe, having regard to the competitive power of some of the new countries and the production of textiles in parts of the world which were once our customers, that the trade can be wholly recovered. We have to face the facts and make a policy within the industry which will be effective.
    Mr. H. Wilson: Since 400 mills have closed down in Lancashire since the last
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    election, and since nearly one-third of the cotton operatives have lost their jobs since the party opposite came into power, can the right hon. Gentleman tell us of a single action taken by this Government to help the industry?
    The Prime Minister: I understood that the party opposite—I do not know the right hon. Gentleman's view—were in favour of Government action to impose restrictions upon imports. I say that I am happy that this has been the result of voluntary agreement between the trades because of the effects of Government action, which is a very serious thing, upon the whole of our Commonwealth preferential system, upon the whole of the Ottawa-based system, which has worked and helped us for twenty or thirty years, and with regard to our very big responsibilities to Colonies and underdeveloped countries.
    Mr. Jay: Is the Prime Minister aware that when the Act was under discussion in this House the Opposition said repeatedly that this kind of decision should be taken not by judges but by Ministers responsible to Parliament, and does not this decision show how right we were?
    The Prime Minister: No, Sir. I would have thought that was a very dangerous doctrine. If we are to have a system which is intended to discourage this form of arrangement, a judicial decision is far the better method.

    SHIPBUILDING AND SHIP-REPAIRING
    Mr. Shortasked the Prime Minister what proposals Her Majesty's Government have for providing additional employment in ship-repairing and shipbuilding in the North-East as a result of the evidence submitted to him during his recent visit.
    The Prime Minister: Although a reduction in the volume of sea-borne trade and the laying up of ships has affected employment in the whole industry, the shipbuilders on the north-east coast have nearly one half of the total orders held by the industry in the United Kingdom and this will provide work for some years.
    The orders, however, are not evenly spread; and repair firms have less work than formerly. The Government are well

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    aware that the remedy is to bring about an increase in international trade and are doing their utmost to increase it by every means open to them.
    Mr. Short: The Prime Minister has given a very general answer which does not mean very much. If, as he says, his tour of the North-East was not just a pre-election vote-catching tour, are we not entitled to expect some more tangible results in relation to our employment problem? Is the right hon. Gentleman aware that when he visited my constituency he omitted the usual courtesy of informing the local Member of Parliament? May I ask why he confined himself to the soft lights and the red plush of the Station Hotel and did not ask me to take him round some of the rotten, decaying slums in which thousands of people are living in Newcastle after eight years of Tory rule?
    The Prime Minister: With regard to the first part of the hon. Gentleman's supplementary question, I think the answer I gave gives the facts. The only real remedy for the eventual increase of total shipbuilding is the increased use of shipping by the increase of world trade, by the work done by the International Monetary Fund, by the great increase in credit which we have been able to give as a result of our stronger position, by the great credits given to India and so on. There is also the record work in relation to the guarantees given under the Export Guarantees Acts. All these moves are devised to increase the total demand for shipping.
    With regard to the second part of the hon. Gentleman's supplementary question, if I did him a discourtesy I very much regret it. I moved through a great number of constituencies, and I hope he will accept that I meant no discourtesy to him.
    With regard to the third part of the hon. Member's supplementary question, I have a fairly wide knowledge of the area. I have seen it for many years. Although there are bad points, slums and places that need improvement, I think
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    a very great improvement has been made in the last 20 years, and from the housing point of view I am not ashamed of the contribution that my party has made.
    Mr. Gaitskell: Is the Prime Minister aware that a major contribution to the world recession which has affected ship-repairing was made by the credit and monetary policy of Her Majesty's Government in 1957? With reference to his announcement about the number of new factories to be set up in this area, may I ask him why it was not possible to take action of this kind earlier, and so provide the employment which is now so badly needed?
    The Prime Minister: The two parts of the right hon. Gentleman's supplementary question hang together. He objects to the monetary policy we followed in 1957. We have debated that often. I feel that the action which we took was necessary and alone provided the basis for the great increase in credit which we are now able to give.
    Mr. P. Williams: To return to the question of shipbuilding, would my right hon. Friend agree with the point of view that there are three levels at which action should be taken; first, by the Government, action which is already being taken; secondly, by management in making as modern as possible the yards of the North-East, which is largely being done already; and, thirdly, by the unions in helping to eliminate restrictive practices?
    The Prime Minister: My hon. Friend has very succinctly stated that this problem, like so many other problems, will be solved only by the efforts of everybody concerned.

BUSINESS OF THE HOUSE
Proceedings of the Committee on National Insurance [Money] exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[The Prime Minister.]
ORDERS OF THE DAY

  NATIONAL INSURANCE BILL
  3.35 p.m.
  The Minister of Pensions and National Insurance (Mr. John Boyd-Carpenter): I beg to move, That the Bill be now read a Second time.
  This Bill is designed to put in legislative form the proposals first published in the White Paper last autumn as they have appeared in the light of the very widespread discussions and debates which that White Paper evoked. In the words of The Times, the main proposals, having weathered the comments and criticisms which followed the White Paper, are embodied now in the form of the Bill. Therefore, though there are important variations from the White Paper, I think that I can best serve the House by saying that the Bill presents a scheme in which the main framework of the White Paper is reproduced, that is to say, a scheme offering a system of graduated pensions and contributions of a moderate size with provision for contracting out and with arrangements to concentrate the subsidy from the Exchequer particularly upon those with lowest earnings.
  The House debated the White Paper in full in November, and we had a preliminary discussion of it, as the right hon. Member for Llanelly (Mr. J. Griffiths) will recall, during the debate on the Address. I think, Mr. Speaker, that you would convict me of tedious repetition, or at any rate, of tedium, if I were for the third time to seek to take the House through the main framework of the proposals. I think that it will be more convenient, and that I can best serve the House, if I deal, first, and in greater detail, with the changes since the White Paper which appear in the Bill, and then deal with one or two of the major issues which arise out of the Bill, leaving my right hon. Friend the Minister of Labour, if he is successful in catching your eye, Mr. Speaker, to reply to any points that hon. Members may wish to raise.
  There are three important respects in which the Bill differs from the White Paper. Two of the changes are connected with what is the underlying concept of the Bill—that this is a scheme based on a partnership between employer, employee and the taxpayer, designed to be,
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  on that basis, self-supporting and with contributions which would move in a predetermined proportion to each other. It is in that context that we have looked again at the proposal in the White Paper that the Exchequer contribution should be fixed at £170 million from the beginning of the scheme and right through.
  The object in doing that in the original proposal was simply that the scheme, as hon. Members who have studied the Government Actuary's Report will realise, is only just in balance in its earlier years, but goes into more appreciable surplus later on. It was, therefore, thought more helpful to put in the full amount of Exchequer money to help the scheme in its early stages. But, in the light of the comments made in the House, in The Times and elsewhere, we feel that it is more in accordance with the spirit of the new scheme that the Exchequer contribution should also move in relationship to the other contributions, as is the provision under the present scheme.
  Therefore, we abandoned the idea of a fixed £170 million and introduced a formula for the Exchequer contribution, the formula being that the Exchequer contribution shall amount to a quarter of the combined contribution of employer and employee at the flat rate minimum—going back, as the right hon. Member for Llanelly will recall, to the proposal of the 1946 Act—and should retain in respect of the self-employed the one-third of their contribution, which is the present provision.
  That formula, if applied at once, would produce, not £170 million, but about £150 million. We therefore propose to retain the £170 million until such time as the formula will produce a higher figure; in other words, it is to be £170 million or the product of the formula, whichever is the higher. On present assumptions, it appears that this will happen by 1971–72, when the formula will produce £177 million.
  The concept is of a scheme which is self-supporting and not running surpluses or deficits, taking one year with another, but, broadly speaking, remaining in balance. With that concept very much in mind, we have introduced a second change from the White Paper, the provision which now appears as the proviso to Clause 1 (2).

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  The main structure of the Bill provides for four quinquennial increases in contributions, the first beginning in 1965. As I have said, it is not our intention—indeed, it is one of the contrasts between our proposals and those of hon. Members opposite—to build up surpluses. It is certainly not our intention to take from the contributors more than is necessary to pay the benefits. But, as the assumptions on which the scheme is based are cautious and prudent, it may well be that the turn-out of the scheme will be more favourable to surplus than we have assumed.
  The Bill therefore proposes that it shall be possible, by Order, to reduce each of the four quinquennial increases when the time comes. We do not propose that they should be increased. On this side of the House, we have always taken the view that charges on the subject by way of National Insurance contributions should be increased only by legislation. It is consistent with the spirit of the scheme to lay down the maximum for the quinquennial increases and to take power, if they are not necessary, to reduce them when the time comes. It is our view that the scheme should balance and that, in the event of either a decrease or increase in its income being necessary, that decrease or increase should be produced by a joint and proportionate movement of the contributions of all three contributors.
  The third new matter is contained in Clause 6 of the Bill. That provides for an improvement in the increments which are earned by men and women who stay at work after pensionable age. As the House knows, the present position is that one has to work and contribute for 25 weeks after pensionable age to earn one increment of Is. 6d. There have been a number of complaints, while I have held my present office, of people who, having worked and contributed for 23 or 24 weeks and having fallen one or two contributions short of the amount needed for an increment, have felt those contributions to have been wasted—as, indeed, for that purpose they have been.
  The first part of the proposal is to reduce the number of contributions required for the earning of an increment, and we propose to reduce it to 12. We propose to increase its value by allowing those 12 contributions to earn 1s. on the
  890
  weekly pension when the contributor retires and goes on pension. That provides for quite a substantial increase in the amount which can be earned by people who stay at work after pensionable age.
  It takes the maximum which can be earned for a single man from 15s. to 21s. a week, and for a married man from 25s. to 31s. 6d. a week. In the case of someone who continues at work for the full five years, the total flat-rate pension he can earn—this has nothing to do with the graduated pension, which is additional—will rise to a maximum of 71s. a week for a single person, and, for a married man, 111s. 6d. a week.
  Mr. A. E. Hunter: May I interrupt the right hon. Gentleman?
  Mr. Boyd-Carpenter: I do not want to give way too much.
  Mr. Hunter: Will the increased increment come into effect when the Bill is passed, or will it have to wait until 1961?
  Mr. Boyd-Carpenter: I know that the hon. Gentleman wants to clear up that matter. I am coming to it, but I want to take these things in my own order.
  The change is even more striking at the intermediate stages, where the change results from the interaction of the shorter period needed to earn an increment and the higher value of the increments themselves. To take a not untypical example: a man who defers retirement for two years and who, during those two years, does not work for some six weeks, during which he will not contribute, at present would draw 4s. 6d. extra. Under the Bill, he will draw 8s. extra, and if he has a wife he will draw 4s., instead of 3s., for her.
  It will be appreciated that this is an improvement of the existing scheme. Here, I come to the point of the hon. Member for Feltham (Mr. Hunter). Power is taken to bring in this proposal in advance of the main scheme, which is planned for April, 1961. This is possible because it is an amendment of the existing scheme; but it is an amendment which it is intended to carry on and to attach to the new flat-rate minimum under the future graduated scheme.
  None the less, it comes very appropriately in the Bill. In the first place, it

  891
  will ultimately cost a good deal of money. In the first year, it will cost under £1 million, but the cost will steadily rise to £20 million in twenty years' time. It is exactly one of those proposals which would be, and would have been, difficult to accept, were it not for the fact that in the Bill as a whole we are putting the finances of the scheme right. We may look upon this as a kind of first fruit of solvency. It fits very well into the general picture of the Bill.
  The investigations which my Department made a short time ago into the reasons for retirement showed that a substantial number of those who worked after 65 were those who were not in occupational schemes. This will help them. It will also help those, for whom some concern has been expressed, whose earnings are low, and who, therefore, would, benefit less from the provisions of the graduated scheme. It will fit very well in the future pattern and will enable an increased pension to be earned by those who are able and willing to continue at work.
  It is not the only provision for increments. As we forecast in paragraph 65 of the White Paper, we propose to provide increments under the graduated scheme, too, both for graduated contributions paid after minimum pension age and also, on top of that, for graduated pension forgone because the contributor remained at work. We, propose to apply to additional graduated pensions after 65, and up to 70, the same formula as before; in other words, the pensioner will receive the "bricks" we talked about in the November debate at the same rate and same value as before he became 65, although, actuarially, contributions made at that age are a better bargain for him.
  We propose, as I have said, to treat pensions not drawn as additional graduated contributions. In the case of a pension not drawn, there is no counterbalancing employer's contribution, and it is, therefore, necessary to treat pension forgone as a contribution for both employer and employee, thus producing addition pension at half the rate that it would earn if it were an actual contribution.
  Although they help considerably, the proposals about increments help only that
  892
  substantial number of people—they include more than half the men now retiring—who stay on and earn increments. However, we all appreciate that there are others who, for one reason or another, are unwilling or unable to continue regular work after pensionable age. Nevertheless, many of those people can do a certain amount of work and what they can earn in addition to their pension is affected by what we all know as the "earnings rule."
  The whole purpose of that rule is to protect the retirement principle. It is clear that if there were no earnings limit it would be possible to go through a form of retirement one day and resume full earnings the next. I do not wish to enter into a long argument on the retirement principle today. It has been accepted by Beveridge and by the Phillips Committee and its abandonment would cost over £100 million a year almost entirely in pensions paid to people in full employment. The purpose of the earnings limit is solely to protect the retirement principle. Therefore, there is no reason for keeping it any lower than is necessary for this purpose.
  For retirement pensioners and widows the present earnings limit is 50s., with 6d. in the 1s. for the next 20s.; and for widowed mothers it is 60s., with 6d. in the 1s. for the next 20s. This has been so since 1956, when, for retirement pensioners, the limit had increased from 40s. Since 1956, the average earnings have risen appreciably and the latest figures show an increase for men of some 30s., and of 16s. for women.
  In the light of this, the Government have been giving consideration to the earnings limit and, during the last day or two, in accordance with the provisions in the National Insurance Act, I have sent to the National Insurance Advisory Committee draft regulations which will have the effect of increasing the earnings limit for retirement pensioners and widows from the present 50s. to 60s., while preserving the 6d. in the 1s. for the next 20s. above that.
  The House will recall that in 1956 widowed mothers were treated slightly differently for the purposes of the earnings limit, the figure being 60s., with 6d. in the 1s. on the next 20s. The draft regulations which I have submitted to the National Insurance Advisory Committee

  893
  propose to raise this 60s. to 80s. and, on top of that, to preserve the 6d. in the 1s.
  The effect of these regulations, so far as retirement pensioners are concerned, will be to raise to £6 the amount which can be earned before the pension is extinguished—and the House will recall that, in the case of a married man, this does not affect the wife's pension on the husband's insurance unless she is earning on her own. For widowed mothers the amount they can earn will rise to a figure of £7 before their own personal allowance is extinguished and we are preserving the provision under which the allowance continues to be paid in respect of her children, whatever her earnings may be.
  Perhaps I may say in parenthesis, that the allowance in respect of children, which, including the family allowance, is 20s. for the first two and 22s. for any subsequent children, is practically double what it was less than three years ago. I hope that this will help as a complement to the provision in respect of increments we are making for those who do not retire from work, by helping a little in respect of those who find it necessary to retire.
  Mr. John Cronin: Bearing in mind that there is now quite an amount of unemployment, did the Minister consult the trade unions before deciding to give these increases?
  Mr. Boyd-Carpenter: I am always available to anybody, unions or otherwise, who will give me the advantage of their advice on matters for which I am responsible. If the hon. Gentleman is asking whether I suggested to them what I was going to do, the answer is,"No". This is a decision which has to be taken on the responsibility of the Government of the day; and it is taken after the Government have ascertained the feelings and views and particularly the facts about earnings which in their judgment, bear upon that decision.
  I can deal briefly with one or two Clauses in the Bill about which I might be charged with remissness were I to omit to mention them. Clause 12 and the Second Schedule are designed to deal with the situation of certain public services where there is one service, but many employers. Local government provides one example, and education, perhaps, another. It would, plainly, be very inconvenient for the working of a service of
  894
  that kind if some employers were to contract out and others did not. It would affect the mobility of people within those services. It is, therefore, proposed that the Minister concerned with them should, after consultation with those affected, and if he thinks it right to do so, make regulations taking unto himself the power to act as the employer simply and only for the purpose of contracting out and of matters connected with it. I think that that would be a convenient method of securing that there is only one decision in this matter in each service.
  Clause 15 is designed to help those who run private schemes to modify them in accordance with their decision either to contract out or to try to live alongside the State scheme, if they desire to do so. It follows closely the provisions of the similar Section in the 1946 Act. On the question of provisions for the appointed day, as I have already mentioned in another context, the desire is to bring this Measure into effect in April, 1961. The move to the collection of graded contributions makes it convenient that it should take effect at the beginning of the financial year.
  Now I will pass to one or two issues arising on this Bill. The first relates to contracting out. That is dealt with in Part II of the Bill. Indeed, the Bill, in relation to its reasonably modest length, gives a disproportionate amount of space to this subject. That is perhaps because over the rest of the Bill we are able largely to use the machinery of the 1946 Act, whereas model machinery for the new concept of contracting out has to be provided in this Measure.
  In contracting out we follow the lines of the White Paper that there should be three necessary conditions: that the scheme is solvent; that it offers pension benefits in respect of the period of employment concerned equal at least to what can be earned in the State scheme at the maximum during that time; and that benefits up to that level at least are preserved on change of occupation.
  Various methods of preservation are open, apart from the obvious one of frozen pensions, and I think that contracting out may be facilitated, particularly in the early stage in respect of schemes which do not at present embody the preservation of rights by the fact that the alternative will be to make a payment

  895
  equivalent to the difference between the contracting out contribution and the maximum contribution under the State scheme when the employee leaves his contracted-out employment. I do not think that sufficient attention has been paid outside to the importance of that payment in lieu as a means of facilitating contracting out though I am sure that its significance has not been lost upon right hon. and hon. Members in this House.
  Dr. Horace King: The right hon. Gentleman has said that contracting out provides an alternative scheme with at least the benefits provided under the national scheme. Does that mean that an alternative scheme must be provided with widows' benefits?
  Mr. Boyd-Carpenter: No, it relates only to pension benefits, not for pre-retirement widowhood. This is a pensions scheme parallel to the pension provisions of the State scheme. The equivalency must be like against like—pension benefit against pension benefit—or comparison would be difficult, if not impossible.
  During the last 24 hours a statement has been issued by an organisation of employers dealing with the conditions of contracting out and suggesting that they are unduly onerous. Most of the points in that statement are frankly, Committee points, if not points for consideration when it comes to making regulations under the Bill. But there is one point involving contracting out about which it might be convenient if I said a word now. The statement objects to the fact that the amount of pension preserved when an employee leaves contracted out employment must be equivalent to the maximum he could have earned in that time in the State scheme, even though he had earned less than £15 a week and, if he had not been contracted out, his pension rights under that Scheme would have been much smaller.
  This is an important provision-naturally, I sympathise with any criticisms upon it—for several reasons. It is important to secure—I shall come later to the question of the individual right of option to contract out—that if, as the Bill proposes, an option lies with the employer, no one who is contracted out against his will shall, from the point of view of pension, be a penny worse off. That is secured by this provision, which
  896
  also secures the preservation of the rights to which many of us attach considerable importance. It also secures compensation to the man of lower means who, because he is contracted out, might find himself contributing more to the State scheme than he otherwise would.
  In return, he will, in these provisions, get, when he leaves that employment, the pension rights which he could only have earned in the State scheme at the maximum. I should have thought that a scheme which makes these simple calculations possible to employers, would help them by absolving them from the necessity of keeping records of earnings over many years. The importance of this part of the scheme may not have been appreciated.
  Mr. Arthur Moyle: In connection with statutory occupational pension schemes, after the consultations have taken place between the Minister and representatives of organisations of local authorities and employers and the terms have been agreed upon on the basis of either remaining in their own schemes, of being transferred, when will the point be reached when the employee, as on former occasions, will have the right to decide once and for all the option whether he or she proposes to remain in the existing scheme or be transferred to the State?
  Mr. Boyd-Carpenter: I am coming to that, as I said I would. The question of individual option has nothing to do with the position of people in other schemes where membership is not compulsory. That is a matter which is not affected in one way or the other and remains for ordinary negotiation between those concerned.
  Let me come now to the question of the individual option because there has been a genuine misunderstanding about it. Both under the Bill and under the proposals of hon. Gentlemen opposite no question of any option arises unless the employer causes it to arise, and unless there is an employers' scheme brought up to the standard for contracting out. Indeed, unless an application is made, nobody has an option. Therefore, we start on the basis that no question of individual option for the population as a whole, whether in or out of private or

  897
  State schemes, can arise. The conception that it could has quite unwittingly been created.
  The problem remains, however, and after considerable reflection we are clear about it. Contracting out must be on the employer's application, after consultation, and on his responsibility. The problems which arise when one departs from that procedure are illustrated clearly by the researches of a fellow worker in the same field, the hon. Member for Coventry, East (Mr. Crossman). He is no doubt appropriately described as the Labour Party's "pensions expert" because he gave advice in that capacity to the Fire Brigades Union in the November-December, 1958, issue of its publication, the Fire Fighter. The hon. Gentleman was perfectly clear about his proposals. He said:
  "The Labour Party insists that, even where an employer decides to apply for the right to contract out, each of his employees must retain the right to choose between(a) remaining in the private scheme,(b) joining the National scheme, or (c) joining both and paying both contributions."
  The hon. Member goes on to say:
  "… we make it a condition for the approval of private schemes that they should not be made 'a condition of service',"
  That sounds all very well, but the practical question remains whether, on these terms, there would be any contracting out. In the first place, hon Gentlemen opposite may say that the scheme which tries to contract out cannot make membership a condition of employment; but it is a fact that insurance is the necessary taking together of averages or, if I may quote my right hon. Friend the Member for Woodford (Sir W. Churchill), "bringing the magic of averages to the service of the millions." Insurance schemes are only persisted in if they do this, and do not involve what is called in insurance circles opting against the scheme, that is, accepting none of the good risks and all the bad ones. A condition of the sort mentioned by the hon. Member would be very likely to mean that there would be very few applications for contracting out by private schemes.
  I will take the hon. Gentleman's other proposal, which is that each person has to do one of these things: remain in the private scheme, join the national scheme, or join both. It sounds very attractive until we analyse it. In
  898
  such a case the employers would have a look at their scheme and decide whether their people could afford to pay both sets of contributions. If not, they would have to decide either to reduce or make an end of their scheme, or to apply to contract out of the State scheme and modify their scheme accordingly. But how on earth could an employer decide this without knowing which option his employees were going to take?
  There is a third alternative, if hon. Gentlemen will forgive my violation of English language. If the employee has the right to join or leave both schemes, presumably the schemes are optional for the employee but compulsory for the employer. The view I would take would be that, in these circumstances, there would be very little contracting out indeed, because the initiative which, it is accepted, must lie with the employer, both to start a scheme and to bring it up to contracting out, would hardly be likely to be exercised under such stringent conditions.
  Let us see what happens. The object of contracting out, both in the hon. Gentleman's scheme and ours, is to preserve private schemes from damage. If the option is made so unattractive that the scheme is not persisted in, shall we not get precisely that damage to the private schemes which the hon. Gentleman and this House would regret. I expect the hon. Member for Middlesbrough, East (Mr. Marquand) would not regret it, because he said in the White Paper debate:
  "I am not a great friend of the private schemes, for obvious reasons, and particularly of private schemes instituted in the steel industry to try to win the steel workers away from their allegiance to the Labour Party and in their belief in socialisation of the steel industry."—[OFFICIAL REPORT, 11th November, 1958; Vol. 595, c. 231.]
  It strengthens the thought that many of us on these benches have had for some time, that the Labour Party scheme, with its very high element of subsidisation of the lower-paid worker by the better paid, could not and would not have effective contracting out, because, on an individual basis, a highly subsidised scheme of that sort would result in the contracting out of the subsidisers and the leaving in the scheme of the subsidised. The more we go into the scheme of contracting out, the clearer it is that there would be considerable administrative difficulties,

  899
  and that it would be virtually impossible for the Labour Party's proposals to follow what the hon. Member for East Coventry said in his article in the Fire Fighter on this matter.
  The hon. Member answered a number of questions in this article. It is accompanied by a most agreeable photograph of the hon. Member, which, it would be almost ungallant to suggest, was taken some years ago. He answered these questions in his capacity as a Labour Party expert. He said:
  "If a scheme contracts out of National Superannuation, the employer and the employee will continue to pay the present flat-rate contribution to National Insurance and there will, therefore, be no increase of contribution."
  In answer to Question 5 in this document, he said that two important conditions for firemen, who, I think, he assumes will contract out, are:
  "We propose to raise the basic rate of flat-rate old age pension to £3 for a single or widowed person…."
  The suggestion there is that there will be an increase in the flat-rate benefit, but no increase in the contribution for the contracted-out person. The hon. Member shakes his head, but this is what he wrote to the firemen:
  "and there will, therefore, be no increase of contribution".
  The document"National Superannuation", on the other hand, which I understand, contains the proposals of the Labour Party, says, on page 39 that
  "the contributions of those employees who opt to remain in private schemes would be increased in order to ensure that they pay their share towards the improved flat-rate benefit to which they are entitled".
  Perhaps, when he speaks, the hon. Member will tell us whether what he told the firemen, or what his party document told the public, represents the intentions of the Labour Party.
  Mr. J. T. Price: Will the right hon. Gentleman give way?
  Mr. Boyd-Carpenter: I have given way a number of times. Perhaps the hon. Member will try to catch your eye later, Mr. Speaker.
  I now turn to the reasoned Amendment, as Parliamentary courtesy demands that I should describe it, which has been
  900
  placed on the Order Paper by the right hon. Member for Leeds, South (Mr. Gaitskell) and his right hon. and hon. Friends:
  "That this House declines to give a Second Reading to a Bill which does nothing to improve the lot of existing old age pensioners and fails to provide for a fully comprehensive national superannuation scheme."
  Reasoned Amendments are a device by which Oppositions seek to give themselves an excuse for voting against something which they know they wish to concede. The Leader of the Opposition, in his usual amiable way, on Thursday described the Bill as "a paltry Bill". I am bound to return the compliment and say that this is a very palty reasoned Amendment and a very much less robust one than that moved by the Opposition in the debate on the White Paper. Perhaps that indicates the ascendancy of Middlesbrough, East over Coventry, East. I do not know.
  Let us compare the two Amendments. The one which was put down for the debate on the White Paper called for raising the existing retirement pension immediately. Where is "immediately" in this one? It merely says:
  "does nothing to improve the lot of existing … pensioners".
  The one put down for the debate on the White Paper referred to the need for maintaining purchasing power in the future. Where is that? That has gone. Finally, the one put down for the other debate said that there should be:
  "a fully comprehensive system of national superannuation which will abolish poverty in old age."
  "Abolish poverty in old age"has also gone. So perhaps this is not so much of a reasoned Amendment.
  The Amendment raises one issue, or, perhaps, one-and-a-half issues. It might be convenient if I deal with them now. The first is the question of the existing pensioner. The House starts from the basis that the record of my hon. Friends on this matter is immeasurably superior to that of right hon. and hon. Members opposite. I do not need to remind the House of the three successive increases in the rate of benefit, totalling £1 for the single pensioner, made since 1952, compared with the 4s. in 1951 for some of

  901
  the pensioners, and nothing for the unemployed or sick, for which hon. Members opposite were responsible. I also do not need to remind the House of the increase—
  Mr. George Lawson: What about increases in contributions?
  Mr. Boyd-Carpenter: —made just a year ago almost to the day.
  To use the words of the hon. Member for Coventry, East in the debate on the White Paper, when he said that a 10s. increase is a big increase, this was a big increase of 10s. for a single person and 15s. for a married couple and raised the amount to a higher level than before. Since then the increase in retail prices has moved by no more than two points and the fact remains that what the pension will buy today is substantially more than it was at any period in the term of office of hon. Members opposite—6s. in the case of the single person and 9s. in the case of a married couple.
  Mr. Douglas Jay: In giving those figures and mentioning the 10s. of a year ago, has the right hon. Gentleman taken into account the withdrawal of tobacco tokens?
  Mr. Boyd-Carpenter: If the right hon. Member wishes me to mention the whole of the details of last year's Bill it will take a long time and I do not think that it would oblige him or his hon. Friends.
  The fact remains that the real value of the pension today is 10s. 8d. for the single person and 14s. 5d. for the married couple above the level to which right hon. Members opposite had just raised it when they made their increase for some pensioners in October, 1951, and they raised it to a level which one must assume they thought to be the right one. In the light of that it really is not good enough for hon. Members opposite to talk as they did in the debate on the White Paper, or to talk about a "destitution" pension, as the hon. Member for Coventry, East put it. It is a curious commentary of hon. Members opposite that they should denounce us for doing only 20 per cent. better than they did. Of course, this is an over-simplification—
  Mr. Lawson rose —
  Mr. Speaker: Order. The hon. Member should not remain standing unless the Minister gives way.
  Mr. Boyd-Carpenter: I have heard—
  Mr. Lawson rose —
  Mr. Speaker: Order. The hon. Member must obey the rules of order. We cannot have two hon. Members on their feet at the same time—
  Mr. Lawson rose —
  Mr. Speaker: —nor, when I am speaking, must another hon. Member rise. It is necessary to secure the consent of the hon. Member who is speaking before proceeding to interrupt him.
  Mr. Lawson: On a point of order. Is it not also necessary that we should have fair presentation of a case, and not this version, Sir?
  Mr. Speaker: Opinions differ violently about what is a fair presentation of a case, on both sides of the House. The point is that if an interruption or intervention is made it should be made only if the hon. Member who is speaking gives way.
  Mr. Boyd-Carpenter: If it will pacify the hon. Member for Motherwell (Mr. Lawson), I will say that, of course, contributions have been increased. That I understood to be the monotonous point he was making. It is understandable in an insurance scheme—and there is no party issue on this because all parties have followed the same line—that if benefits are increased, so are contributions. I did not give way to the hon. Member, although I heard his intervention, because I did not think it would facilitate the debate—[Interruption.]— and his later intervention rather confirms me in that view.
  This important issue is over-simplified again, as in the White Paper debate, by those who seek to suggest that the basic National Insurance pension is the only resource of the great majority of pensioners. Perhaps 1 million are now in receipt of occupational pensions; half the men now retiring have increments on their basic pension; many have savings. The House knows well the great increases in savings there have been in recent years under the present Government.
  Mr. Lawson: And National Assistance.
  Mr. Boyd-Carpenter: Failing all else—the hon. Member again is trying to assist me—there is National Assistance.

  903
  The House and he will be glad to know that the latest figures show the number of retirement pensioners on National Assistance as 20·3 per cent., as against 24·7 per cent. at the end of 1957.
  Any change on these questions of rates is, of course, quite alien to this type of Bill which, as the House knows, is de-signed to deal with the machinery. On the Bill which came into operation a year ago, I explained that we were considering changes in the machinery, but that we were not prepared to delay helping the existing pensioners while the necessarily lengthy process of dealing with the machinery took effect, and that this Bill is now the machinery Bill following the rates Bill. When I was asked why, I explained that this was not the sort of Bill to deal with rates. [HON. MEMBERS: "Why?"] Can hon. Members imagine anything more calculated legitimately to infuriate the pensioner than to enact proposals to increase rates in a Bill the main part of which cannot come into operation before April, 1961?
  I explained to the House at some length during the White Paper debate that, as we explicitly say in the White Paper, we intend, and it is our duty, to keep the main basic rates of benefit under review. There is nothing in the Bill which makes that task more difficult. On the contrary, it makes it much easier. To put the finances right is a necessary condition precedent, I should have thought, for any further advance, and I should have thought that to compare our record with that of the right hon. Gentlemen opposite should satisfy those outside of the value of our assurance. I would say this to right hon. Gentlemen opposite: those outside are more inclined to judge people and parties in this matter from what they did in office than from what they said in Opposition. [HON. MEMBERS: "Hear, hear."] I am glad that that lesson has been learned.
  Let me come to the famous 10s. which they now offer. Of course, it is not 10s. for both partners of a married couple; it is 5s. each. There is a further point, which I do not think has been drawn to the attention of the public, and which is raised in the document "National Super-annuation" on page 36—I refer to the revised edition as opposed to the orthodox. I refer to the one where the sums are correct. It says:
  904
  "… we believe that the pensioners have the right to know our precise intentions… All existing pensioners, male and female, in receipt of the basic rate then in force, will be eligible for the full increase, subject only to the contribution conditions now in force under National Insurance."
  At the bottom of page 37 there is a note that the model scheme excludes from this increase altogether single women between 60 and 65, and it says that this is a matter on which full public discussion of this difficult issue will be helpful. When hon. Members look at the model scheme they will see that it is clear that this increase is not offered in the model scheme to women between 60 and 65 but only to men and women of 65.
  What is more important, when hon. Members look at the tables at the back they will see it explicitly stated that the scheme is costed on that basis. When they talk of it being right that pensioners should know the precise intention of the parties, it is also necessary for us to be quite clear whether the statement qualified by a footnote in Part I, or the model scheme on which the financial calculations are based in Part II, represents the intention of right hon. Gentlemen opposite. Taking these things together, I think that most people will be a bit doubtful about this 10s.
  The reasoned Amendment also refers to the need for a comprehensive scheme of national superannuation. The word "comprehensive" is almost an "idea word" of right hon. Gentlemen opposite. How a scheme which affects every employed worker can be described as other than comprehensive I leave to the dialetical exhibitionism of the hon. Member for Coventry, East. What is important is that this reasoned Amendment should not obscure the issue on which the House is being asked to vote, or the effect which it would have if those who supported the reasoned Amendment turned out to be a majority. What they would be doing would be to make sure that we went no further—not even to Committee—with a number of proposals which, I think the House will appreciate, people outside would like to see go forward.
  Those who vote for the reasoned Amendment will be voting against a reduction of 2s. 10d. in the contribution for the worst-paid employed people and a reduction of 1s. 7d. in the man's own contribution. They would be voting

  905
  against the introduction for the first time in this country of a scheme of graduated contributions and pensions. They would be voting against proposals to put the National Insurance Fund on that sound financial basis which must be the condition precedent for further progress. They would be voting against increasing the increments for those who continue at work after pensionable age and against adopting a system of contracting out which will spread and encourage the perservation of rights in private schemes.
  The facts will be on record for hon. Members to explain; and, believe me, to state that they voted on a reasoned Amendment will not free hon. Members from having to say why they voted against things which the great majority of our non-political fellow-countrymen want to see done.
  The great difference between these proposals and those to which right hon. and hon. Gentlemen opposite more or less adhere is the scale. The scale of the proposals determines what I think is the great difference between us. Ours are proposals which will not bring back inflation and the proposals of right hon. Gentlemen opposite are plainly inflationary.
  Let me remind the House of what they involve. They involve 5 per cent. from the employer on all earnings, without limit, that is, 1s. in the £ tax on all earnings in the United Kingdom. They involve 3 per cent. from the employed person earning up to £2,000 a year and 8 per cent. up to £2,000 a year for the self-employed, involving a total contribution from the self-employed of just on £3 10s. a week at £2,000 a year down to 17s. 10d. a week at £8 a week.
  These are plainly inflationary, and if hon. Members will not take that from me, let them take it from "National Superannuation", which states, on page 119, that these additional costs would be shifted on to the consumer. Or let the House take it from the hon. Member for Coventry, East, who told the West of Scotland trade union delegates on 21st November, "It will be an inflationary scheme".
  Mr. R. H. S. Crossman: Will the right hon. Gentleman read on?
  Mr. Boyd Carpenter: I have the cutting here if it will assist the hon. Member, although I hesitate to inflict the whole of his exuberant eloquence on the House. This is a quotation from the Glasgow Herald of 22nd September, 1958. He said:
  "It will be an inflationary scheme and it will produce disaster if people try to add to their wages the cost of their superannuation contributions."
  He said that it would be inflationary.
  Mr. Crossman:"If".
  Mr. Boyd-Carpenter: No. The hon. Member forgets his eloquence. He said:
  "It will be an inflationary scheme and it will produce disaster if …"
  Mr. Crossman: No.
  Mr. Boyd-Carpenter: It is no use the hon. Member trying to argue this from a sedentary position. Let me read what the hon. Member is reported as saying and leave it to the House to judge. He said:
  "It will be an inflationary scheme and it will produce disaster if people try to add …"
  Mr. Crossman: "If."
  Mr. Boyd-Carpenter: The proposition is quite simple. The hon. Member is making two points. He says that it is an inflationary scheme and, as a second and separate proposition, he says that this inflationary scheme will produce disaster if people try to get the money back. I am not arguing that he is saying necessarily that it would be a disaster. I am arguing that he is on record as saying without qualification that it is an inflationary scheme.
  Mr. Crossman: It is a pity that the Minister should try to extract from this Press report a totally misleading impression. I was making it perfectly clear in that speech that people have to pay for their old-age pensions—I wish the Minister would support me in this—and that we shall have inflation if people are not prepared to pay for them. I bitterly regret that the Minister should try to distort my words and make something totally different from them. I said that this will be inflationary and that it will lead to disaster if people are not prepared to pay their contributions without trying to get the money back in increased wages. The Minister knows perfectly well what

  907
  I said and it only shows the barrenness of his argument that he has to revert to that type of sheer misrepresentation to try to finish a lengthy and very unsatisfactory speech.
  Mr. Boyd-Carpenter: The hon. Gentleman has, I think, convicted himself out of his own mouth. He has convicted himself, because it has brought home to him that he has not appreciated the fact that he said two things—that it would be an inflationary scheme and—he repeated the word at that Box, as the House will recall—and that it would produce disaster.
  I am not arguing on the second point, of disaster. But I am not going to let the hon. Gentleman get away with the first. The hon. Gentleman, when he said that, was quite right. He said no more than is said in "National Superannuation". He has said no more than he himself and his friends put on page 119 of this document, when they said that these massive contributions would be shifted on to the consumer. If that is not inflation, nothing is. I am surprised that the hon. Gentleman should get so excited at his own commendable frankness—and I agree entirely with the theme of his speech—when he said that if people seek to get back National Insurance contributions by increased earnings, it will cause difficulties. But that is a secondary point, as the hon. Gentleman is adroit enough controversially to know.
  Mr. William Hamilton: So is the right hon. Gentleman.
  Mr. Crossman: The Minister ought to try to be fair on this. He has put a full stop in the sentence. It was perfectly clear what my sentence meant. I have said this many times before and I repeat it at this Dispatch Box, that we on this side of the House are very conscious of the fact that if one were to try to levy a rate of contribution so high that people would react by raising wages, then that would lead to inflation. I have emphasised all the way through that it is essential that we should not levy a rate of contribution higher than the worker can appreciate and higher than he is willing to pay. In submitting that to the trade unions in Scotland, I was, quite rightly, I think, emphasising the need for self-restraint and emphasising how they could wreck our scheme if they chose to increase wages to pay contributions. For
  908
  a Minister of the Government who should be concerned with saving and with paying all old-age pensioners deliberately to misinterpret this into two statements instead of one, is a dirty trick.
  Hon. Members: Withdraw.
  Mr. Boyd-Carpenter: I have nothing to withdraw, because I have done nothing but quote the hon. Gentleman's words.
  Mr. James Griffiths: On a point of order. In accordance with the courtesy and traditions of the House, when a quotation is made by a Minister of what an hon. Member is alleged to have said, which is denied by that hon. Member—[HON. MEMBERS: "Oh."] May I put it to you, Mr. Deputy-Speaker that, in circumstances of this kind, the tradition of the House is for the Minister to say that he misrepresented the hon. Member and apologise.
  Mr. Boyd-Carpenter: My understanding was not that the hon. Gentleman said that I had misquoted him. He differed from the interpretation that I put upon what he said. If I had misquoted him I would, of course, have accepted at once his assurance that he was misreported. If he accepts that these words which are here are what he spoke, I am as entitled as any other hon. Member to put what seems to me, in my judgment, the natural interpretation upon them.
  Mr. Crossman: I would have thought that even the Minister was not entitled to punctuate my speech as he wishes and to insert a full stop where it is quite clear that I was using a single phrase—it will cause inflation and disaster to do a certain thing. He puts a full stop after inflation and says that I have stated that the scheme will cause disaster. I have not seen this Press report in the Glasgow Herald. It is quite clear what I meant. The Minister insists on misinterpreting this and attributing to me the statement that the scheme would be inflationary, full stop. That is not what I said and I ask him to withdraw the accusation.
  Mr. Boyd-Carpenter: Of course, if the hon. Gentleman said that he was mis-reported, I accept that, without qualification. If the hon. Gentleman states that he was not misreported, then I do not feel bound to accept his interpretation of what he said, although, of course, I accept his interpretation of what he meant.
  Mr. Grossman: I am stating that if, in this report—I have not seen it—there is a full stop after the word "inflationary," then the paper is wrong; but there was not, and that is why the Minister was grossly distorting what I said.
  Mr. J. Griffiths: It is quite clearly within the recollection of the House that the way in which the Minister read this statement was to imply that there was a full stop. I therefore ask you, Mr. Deputy-Speaker, as this document has been quoted from, whether you will give a ruling that it should be published in full in HANSARD.
  Mr. Boyd-Carpenter: I made no statement that there was a full stop, and indeed, hon. Members will remember, if they followed the grammar, that I read out the word "and"—[HON. MEMBERS: "Oh."] I hope that the House will accept the ordinary construction of an English sentence. [HON. MEMBERS: "No."] All right.
  Mr. Griffiths rose —
  Mr. Boyd-Carpenter: I am on the point of order.
  Mr. Deputy-Speaker (Sir Charles MacAndrew): Apparently the point of order is where the full stop came or did not come. That is not a point of order, although I would very often like to move for a full stop in this place. I cannot possibly insert punctuation in a report. It is not my business.
  Mr. Griffiths: Further to that point of order. I made a request to you, Mr. Deputy-Speaker, that this quotation should be published in full in HANSARD, so that hon. Members and the public could read it. I respectfully ask whether you will direct that that shall be done.
  Mr. Deputy-Speaker: It is not a State document that we are talking about; it is a newspaper report.
  Mr. Griffiths: May we have an assurance from you, Mr. Deputy-Speaker, that the quotation from that newspaper will appear in HANSARD exactly as it is, without any full stops being inserted?
  Mr. Deputy-Speaker: That has nothing to do with me.
  Mr. Boyd-Carpenter: It has not a full stop and is not going to have one, so
  910
  far as I know. I accept, of course, the hon. Gentleman's statement of what he had in mind, with which, I may say, I wholly agree. I think that it was unnecessary for him to get as excited about this as he did, because it is quite clear from "National Superannuation" itself that the argument that this matter will be inflationary is accepted by hon. Gentlemen, particularly by hon. Gentlemen associated with the document.
  Let me read this passage on page 119 which, so far as I know, has no additional full stops in it:
  "We have, however, assumed that the contributions are wholly 'shifted' on to consumers. As a result there is no loss of profits taxation attributable to the contribution".
  The matter on which this heat arose is, I think, a simple one, because it deals with the scale of the two schemes before us, between the scale of the large scheme that will have contributions which, as I have said to the House, are inevitably inflationary, and a scheme such as ours which, because of its moderate size, is designed to avoid inflation.
  I think that right hon. and hon. Members opposite gravely misjudge public feeling when they think that the public want, even in the guise of a pensions scheme, a new dose of inflation. On the contrary, I am sure that they are heartily sick of that, and that they desire a scheme for pensions on the lines of this Bill—non-inflationary, modest in scale, practical in application, and designed to meet the real needs of the situation. The Bill meets these needs and I think that it will not be unappreciated by those outside whom it is designed to benefit.
  4.40 p.m.
  Mr. H. A. Marquand: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House declines to give a Second Reading to a Bill which does nothing to improve the lot of existing old-age pensioners and fails to provide for a fully comprehensive national superannuation scheme."
  In the last half hour of his speech, the right hon. Gentleman the Minister of Pensions and National Insurance raised the temperature, and lowered the tone, of the debate. It will be my endeavour to get back, as quickly as possible, to discussing the Government's Bill. Before approaching that in more detail, let me say that we have, of course, deliberately

  911
  put down this Amendment after careful thought. We are well aware that when reasoned Amendments are put down against Second Readings of Bills those who put them down are afterwards accused of wanting to delay the Bills in question. They are accused of all sorts of things. We are grateful to the right hon. Gentleman for giving us a catalogue of what the Tory Central Office will say about our action in putting down this Amendment. We have done so deliberately.
  On at least three previous occasions when the right hon. Gentleman has introduced legislation we have facilitated its passage. We have debated it and have advanced our criticisms. We have discussed the Measures in Committee, and have endeavoured to improve them. But at no point have we obstructed or attempted to delay them. It therefore comes rather ill from the Minister to accuse us of those tactics today. Whenever a Bill has contained a substantial improvement in the conditions of existing pensioners we have, even though we thought it did not go far enough, given it full facilities. That cannot be denied.
  Today, we have put down this Amendment because the Bill makes no improvement of any substance whatsoever. We say "immediately", because we are dealing with a Bill that comes before this House this very afternoon. It is now that we want this improvement in the conditions of old-age pensioners to be put in the Bill—this afternoon—the moment we read it. There is, therefore, no need to say "immediately" in addition to that—when it is so obvious that we want it in this Bill, and want it immediately. Our reason for putting down the Amendment is that the Bill is too bad to pass without reasoned protest.
  We had a full debate on the White Paper, and all sorts of valuable and constructive criticisms were put forward then. I do not intend to repeat them all. I only want to say that we are very sorry indeed that the Government have not taken the advice we gave, that they have not acceded to the request we made at that time that they should have come forward with a better Bill.
  This Bill makes only three changes in the scheme originally outlined in the White Paper, and the right hon. Gentle-
  912
  man has told us what they are: a change in the calculation of Exchequer supplements: a power to modify in future the increases in contributions; and an improvement in the increments to be earned by postponing retirement. They are, after all, only minor changes. They do not alter in any way the basic structure of the Bill—and I notice that one of the Minister's hon. Friends who knows a good deal about this subject is nodding.
  I shall say something more later about these proposals, but what I want to say at the outset is that the Government have ignored a great opportunity. Having put forward their proposals, having received a very cold welcome for them not only from this side of the House but from many others interested in this question, the Government really should have thought again. They should have said to themselves, "We have in front of us a great opportunity. We could now put on the Statute Book a new scheme of pensions that would go down in history as honoured as did the Beveridge scheme in its time."
  They have ignored their opportunity. They could have looked at the example of the United States and Germany, where great new comprehensive schemes of social security in old age, on an entirely new basis, have been adopted and put into practice. They have not done that—not a bit of it. All they have sought to do, as I shall seek to show, is to modify the existing National Insurance scheme in the interests of the Income Tax and Surtax payers.
  Any new, and, I repeat, comprehensive scheme—although the Minister does not seem to like the word, even though it explains itself quite plainly—of superannuation in the year 1959 would provide two main things. First, that a larger share of the real national income should be given to those who have already retired, and to those who are to retire in the near future on minimum pension—a larger share of the real income. The right hon. Gentleman has repeated certain figures about cost of living but, at best, those figures show only that the pensions now paid give the same real share of the national income as was provided by the Act of 1946. If it is anything better, it is very slight indeed; and that is after twelve years.

  913
  In the meantime, it is undeniable that the national income has greatly increased. We need not argue about how or why it has increased. It has increased. Surely, when the real national income has so largely increased—we see it all around us in the form of all kinds of new amenities that did not exist in 1946, after a great war—the time has come, not merely to keep level with what was done in 1946 but to go beyond it, not only in money terms but in real terms.
  It is for that reason that in the first part of our own proposals we demand this increase in the real share. We have never claimed, although the Minister seemed to suggest that we had, that all existing retirement pensioners are living in abject poverty. On the contrary, one of the major arguments in the superannuation pamphlet we have put before the public is that there are two nations in old age. At least half of the retirement pensioners now live in reasonable decency and comfort—of course they do—but we want to draw attention to those who do not.
  There are large numbers—as the right hon. Gentleman himself said, approaching half of the total of retirement pensioners—who do not draw any increments. They consist largely of workers who have worn themselves out in the heavy industries. Those working in the heavy industries, and in similar work, cannot hope to continue their employment after the age of 65, and so earn increments.
  I have no doubt that some of my hon. Friends will have something to say about the improvement in the earnings limit which the right hon. Gentleman announced, but I do not want to expand upon that now. The improvement in the earnings limit will help certain pensioners, but it will not help those pensioners who need help most. How can it help the elderly man over 65 years of age who has retired from heavy work in the blast furnaces, the steel industry, the coal mines or shipbuilding? Already, at the age of 65, he finds himself worn out and his chances of light work in an industrial town like Middlesbrough, Sunderland and the other places which the Prime Minister visited recently are almost nil. Such things cannot' help, and we want to help.
  914
  Moreover, these things certainly cannot help the very elderly pensioners. They are the people who are worst off. We sometimes read about the old ladies and gentlemen living and dying alone in abject poverty, surrounded by miserable sticks of furniture and with almost no bedclothes. These old people long ago exhausted any money which they managed to put aside for their own welfare. They have found it impossible to replace worn out clothing and furniture, and they find it difficult to get out to the shops to buy the goods which they ought to have.
  We say that these pensioners could and should be helped as soon as possible. If in so doing we have to help those who are not so greatly in need, that cannot be avoided. Help to the existing old-age pensioners cannot be denied. We have asked for it again and again. I am sure that they will be anxiously listening tonight to the radio to hear what news there is from the House of Commons. The news will be, "No; nothing for you".
  Therefore, if there were no other reason for doing it, we should be obliged to move an Amendment and record our disappointment with the Bill. Of course, such a provision as the one I have mentioned could have been put in the Bill. This is a National Insurance Bill. It could have been incorporated in Part I of the Bill, and Part II could have dealt with what would happen in 1961. If it had been in Part I, we should not have tabled a reasoned Amendment against it and it might have been easier to get the Bill through, If that provision had been in Part I we should not have voted against the Second Reading.
  That is one form of advance which is imperative at this date in the twentieth century, when by our work and enterprise and past saving we have provided a real increase in our national income which expresses itself in motor cars, television sets and all sorts of luxuries for some, but which has not reached to the lower end of the old-age pension scale and has not touched in any way, except, perhaps, by the private charity or occasional benevolence of kindly neighbours, the very old, the people who have lived on this pension for so long. We plead again for them this afternoon.
  The second reason why the right hon. Gentleman could have seized the opportunity to introduce a new pension plan

  915
  upon a more generous and more imaginative basis is that the need has arisen somehow to provide every citizen with what so many citizens are already provided with. The middle classes, such as executives, civil servants,-"teachers and local government officials, have, in addition to their basic retirement pension, a superannuation scheme related to their earnings while in employment. If it can be done for them, why not for all? It is being done in the United States of America, Germany and France. Why cannot we do it? Yet such a scheme is not to be provided. This was a chance to do it, but the chance has been missed. I know that the Bill makes a pretence to do something of this sort, but it is only a pretence because, first, it deliberately excludes from the opportunity to earn superannuation in addition to pension 7 ¾ million workers earning less than £9 a week. The remainder receive a very bad bargain indeed.
  Let nobody say that the Bill is an imitation of the Labour Party's pension plan. The Prime Minister frankly denied that it was, and he was right. This is not a pensions Bill at all. It ought to be called "Finance Bill No. 1", because it is the precursor to "Finance Bill No. 2"which we shall get, no doubt, in April or May. That this is a bad bargain for those who are to be entitled to some form of graduated pension in addition to their basic pension is agreed by people who might be expected, to put it no higher, to support the Government.
  For example, the Life Offices' Association and the Associated Scottish Life Offices do not like the Labour Party's plan, because they fear that it will injure their business. Perhaps they have reason for not liking it, but we think that they are mistaken. One would expect these organisations to support a plan brought forward by a Conservative Government. Yet these organisations state:
  "There are … disturbing aspects about this graduated element. The Life Offices have stressed the desirability in a basic-needs scheme, financed on pay-as-you-go lines, of some degree of quick maturity of benefits, that is to say, some arrangement to enable those middle-aged or older to receive on retirement a substantial proportion of the full graduated pension benefits. This element is missing from the proposed scheme".
  The British Employer's Confederation, as I am sure the Minister of Labour has
  916
  not omitted to notice, has made this statement:
  "… the graduated benefits contemplated in the Government's proposals will not, generally speaking, represent nearly as good a bargain to the employer and the employee in relation to the graduated contribution paid as could be obtained from a life assurance office or under a properly established private pension scheme".
  Why is the Government's plan, supported, we are told, by some element of subsidy from the Exchequer, worse than one which can be provided under a private scheme? The Life Offices' Association and the British Employers' Confederation know what private schemes provide, and nobody can dispute their expertise in this sphere. Why is it that what is proposed is worse than people could buy outside? The simple answer is that a large part of the graduated contributions is not to go to the credit of those who pay them, but is to be used to help the Chancellor of the Exchequer in his plan to reduce taxation.
  We examined this point during the last debate, but it is now set out very clearly in the Report of the Government Actuary, which we did not have at that time, and I therefore make no apology for repeating the argument. I sometimes wish that we had blackboards or cinema screens on which we could exhibit figures, but we do not have them, so I must ask hon. Members who have the document in front of them to look at Table 2 in page 7 of the Government Actuary's Report. Table 2 deals with the Exchequer liability, the amount of money which the Chancellor of the Exchequer has to raise by general taxation in order to help the pension scheme.
  Exchequer liability arises in two ways. First, there is the supplement payable in respect of contributions. Secondly, there is the duty to meet any deficit between contributions and benefits. The total of those is correctly called the net Exchequer liability. Unfortunately, the totals are not added in the Report. If hon. Members will look at the column headed "1961–62" and add together the figures of the Exchequer supplement plus or minus the deficit of income over expenditure, making the total of what the Exchequer will have to provide in that year, they will find that under the present scheme in 1961–62 the Exchequer would have to provide £261 million. If the

  917
  Bill goes into operation, however, the net Exchequer liability will be only £162 million. The Government are reducing it in that way and getting rid of £100 million, in round figures, of their liability.
  In 1966–67, the net Exchequer liability would be £348 million. If the Bill goes into operation it will be down to £157 million. The only point at which the net liability reaches the magic figure of £170 million, which has been so much talked about, is in 1976–77, when, under the present plan, if it remains unaltered, the total Exchequer liability will be £508 million. It will be reduced then to £170 million, but thereafter it falls again to £145 million, £151 million and £101 million for each of the separate columns.
  Mr. Denzil Freeth: Is it not a fact that any excess earned in any year on the scheme as proposed will be added to the National Insurance Fund and will not reduce the liability of the Exchequer?
  Mr. Marquand: That is what I am saying. Most of this liability is, of course, notional, but the net liability is a real figure. This is the sum which has to be found by the Chancellor of the Exchequer. Under the provisions of the Bill, as set out clearly and frankly in the White Paper, the net liability of the Chancellor is to be reduced by the graduated contributions. The actual basic contributions are immediately to be lowered and to stay for ten, or fifteen years at a lower level than they are at present. The net liability of the Exchequer, however, is to be sharply reduced. Evidently, the only way in which that can be done is at the expense of those who pay the graduated contribution. That is why those who pay the graduated contribution will get a worse bargain than they would have got had they gone out and bought privately on the market, as the Life Offices' Association says.
  This is supposed to be a pay-as-you-go plan for pensions. Let us look as what those earning between £9 and £15 a week are to pay and where the money is to go. We find this in Appendix I of the Actuary's Statement, in page 10 of the White Paper. In the 1981–82 column, for example, it will be seen that the income
  918
  contains graduated contributions from employed persons of £193 million and from employers of £198 million, making a total of graduated contributions of £391 million. The benefits, however, as shown in the lower half of the table, are £63 million. Twenty years hence, these graduated contributors will be paying £391 million. They will be receiving £63 million. If we look forty years hence, at the last column of the table, the total paid in by the graduated contributors will be £537 million and their receipts £199 million. This is where the money is coming from to reduce the Exchequer liability.
  The figures prove definitely what I said in a previous debate, that this is not a plan for pensions. It is one more regressive fiscal device to relieve the wealthy. Instead of raising money by Income Tax, which takes fair account of individual, family and other responsibilities and circumstances, it substitutes a levy on the middle range of working-class incomes with no regard whatever to the circumstances of the individual. The Bill itself states that no regard shall be had to these various circumstances which entitle one to earned income relief and that kind of thing. All that is wiped out deliberately. This is a levy upon the middle range of working-class incomes with no relief for individual circumstances. It is class legislation of the worst possible kind.
  I have already quoted what the British Employers' Confederation said about a bad bargain. The Life Offices' Association says very much the same thing in page 5 of its document, from which I have quoted. It states:
  "for those now young and for future entrants to the scheme the joint contributions of employers and employees would be considerably greater than the commercial cost of the pensions. After the four quinquennial increases the joint contributions would be more than double the commercial cost of the combined flat and graduated pensions and this would apply for all new entrants thereafter."
  This is an utterly bad bargain which no businessman would consider for a moment.
  How can the right hon. Gentleman expect us, in these circumstances, not to draw special attention to his failure to provide a genuine and comprehensive scheme of national superannuation? I admit that to check the mounting net liability of the Exchequer would not be

  919
  unreasonable if the cost of doing so were spread equitably over almost the whole body of earnings, but to eliminate it by transferring the burden on to a selected band of earnings in the middle range of working-class incomes is utterly and absolutely wrong.
  Any pension plan should not only be equitable in contributions and benefits. It should strive to give the pensioner some protection against the erosion of the real value of the pension as the result of rising prices. The Minister claimed that our plan would be inflationary. What I am entitled to ask him is in what way his plan protects the pension from inflation. He said that it was non-inflationary. That was as far as he could go, even himself, making the best he could of his plan. Why has he made no provision for protection against inflation? Without arguing about who did this in 1931, who did that in 1951 and that sort of cheap stuff, we all know that pension contracts entered into before the war yield the saver when paid today only about one-third of the real income which he expected to receive.
  What are the Government doing about that to try to prevent it for the future and to insure against it? If they are absolutely confident that we will have a Government for twenty years—and they hope we will—of their party, and if they are confident of their ability to stop inflation for ever thereafter, why not put an anti-inflationary device in the scheme? It would cost them nothing.
  Of course, nobody else is confident that that will happen. We say that, in view of the long experience from 1939 up to 1959 of the erosion of the value of contracts freely entered into in 1939, the pensioner today has a right to ask that there be built into any scheme some sort of protection against inflation.
  Mr. Raymond Gower: Why does the right hon. Gentleman say that? Nobody can ensure that in any sphere of life. Does he suggest that if I save £100, I can do anything to ensure that in twenty years' time it will have the same value? This applies even more so in the case of a country. Obviously, in a world of inflation, it is impossible for that to be ensured.
  Mr. Marquand: I am delighted to have that question and I shall answer it. I need not answer it out of my own mouth. It may be answered from an authority which the hon. Member may regard as greater than mine. I certainly agree that the authority which I shall quote is more expert than I in these matters.
  I will quote from the advice given by Mr. V. R. Jackson, Pensions Officer of the Unilever Organisation, which is a very big organisation having pension schemes, for which it is responsible, not only in this country,,, but in many countries throughout the world with different forms of national schemes in the various countries in which it operates. Mr. Jackson says definitely that he thinks it can be done. He says:
  "So long, therefore, as a State pension scheme confines itself to the basic level of provision which I think the graduated proposals in the White Paper can be said to do, then I am in favour of the pensions being index-linked."
  He says later that a State pension should be broadly linked to the average earnings of wage earners as a whole, and he goes into some detail on how he thinks it can be done. There is the answer to the hon. Gentleman. This is the answer which we gave in our plan for national superannuation. We said that we should protect the basic pension against inflation, and we suggested that one way of doing it was by an annual review, based upon an index of the needs of the pensioners, with an annual rise in pensions to correspond with any rise in prices that took place. We believe that it could be done, as I said in the last debate, by the streamlined method used by the National Assistance Board. Perhaps if the hon. Gentleman does not like that, he could use Mr. Jackson's method. People who have thought longer about this proposal than he has done can be satisfied that this can be done.
  Sir Keith Joseph: Whereas the right hon. Gentleman has quoted exactly Mr. Jackson's views, would he not agree that, later in the conference at which Mr. Jackson spoke, some equal experts strongly disagreed with him that this was either necessary or practicable?
  Mr. Marquand: That is fair enough, and the hon. Member for Leeds, North-East (Sir K. Joseph) will be able to say

  921
  why he does not agree. I am concerned only to explain that I think it can be done, and I am quoting good authority. I believe that we should take the risk, if risk there be, that is involved.
  The proposal which we made was of an annual review, with the measuring of the basic pension by a special index, and the raising of the basic pension to ensure a minimum real income of adequate dimensions, and this is what I said at the beginning of my speech. The alternative method is that suggested by Mr. Jackson, which is also suggested by Professor Titmuss, which came in the second part of our superannuation plan, for what are called dynamic pensions. I believe that it can be done and think that it ought to be done, and those who believe that it can be done and think that it ought to be done cannot possibly accept the proposal before us this afternoon.
  Furthermore, in the long run, however pensions may be financed, the needs of the retired population can only be met in the end out of the current production of the nation at the time they draw their pensions, whatever we do about contributions during their working lives. If the payment of pensions is not in itself to produce inflation, then we must arrange that an increased quantity of goods shall be available when the pensions are paid. That requires investment, not mere money saving, but real saving, saving in the form of steel works and electricity generating plants and great ships to carry our goods, and all that kind of thing. The translation of a surplus accruing in the early days of a pensions plan into capital goods which will yield an increased volume of real wealth later on is, in my opinion, the way to do it.
  That opinion is emphatically endorsed by Mr. Jackson, whom I have already quoted, and it is part of our plan. Our proposal is that there shall be an accumulation of some surplus in the early years of the superannuation scheme which could be invested in precisely these forms of capital investment. Mr. Jackson says, and this may well be a warning to the right hon. Gentleman:
  "Moreover, I feel strongly that if we promise ourselves benefits in the future, without taking positive action to provide the means for the payment of those benefits, then, not to mince words, we are perpetrating a fraud upon generations to come."
  922
  I do not see anywhere in the Bill any provision for such investment.
  The reason why the Bill is so puny in its proposals and offers people a worse bargain than they can get at present, is not only that it is a tax device to enable the Chancellor of the Exchequer next April to distribute some "divi", but also that the Government have no confidence in their ability so to expand the economy that goods will be available for a better scheme when these pensions come to be paid. They have no confidence in their ability to do that, but we have confidence in our ability to do so, and it is an integral part of our whole economic policy that there has to be substantial savings. So we appeal to people when they defer their wages in the form of contributions not to make new wage demands. We propose to entrust the savings to the trustees who will ensure that these savings are translated into the real investment necessary to produce the goods which they will want to consume when eventually they draw their pensions.
  As I have said already, the right hon. Gentleman, if he really believes in his own policy, could afford to put in a safeguard against inflation. If he really believes that it will never happen, he could do that now; and if he wants to do something for the pensioner, let him provide for contributions as a form of saving and translate that into investment instead of a mere shift of revenue to enable the Chancellor of the Exchequer to save it up and give it away next April.
  There are very many other matters contained in the Bill on which one would want to comment, such as the question of contracting out, but I will leave them to my hon. Friends, and particularly to my hon. Friend the Member for Coventry, East (Mr. Crossman), who was often referred to by the right hon. Gentleman. I only want to say how much I agree with the British Employers' Confederation in its statement that
  "the Confederation regrets that there has not been a longer interval since the publication of the White Paper for the examination of these proposals."
  It has been a very short interval indeed since the White Paper was produced, and it was interrupted by the Christmas holidays. The British Employers' Confederation, which has plenty of machinery at its hand for consulting its members all over

  923
  the country, and ability to co-ordinate its members and bring them together to discuss and examine this matter, is not satisfied that the time is long enough. Why? What is the hurry? Pensions are not to be paid until 1961. That is the hurry. What is it all about? I think I have indicated already what the reason is.
  The reason is that the right hon. Gentleman wants the Chancellor to have on the Statute Book a guarantee, as he thinks, that he will not have to meet this additional Exchequer liability in years to come, and, therefore, he will be able to say "Now, the position is so good that we can make a give-away Budget for the Income Tax and Surtax payers once again"—just as in the case earlier, though the right hon. Gentleman was not the Chancellor at the time, they gave away the money they took from the children's bread and milk and from the various subsidies which helped the old-age pensioners to maintain their standard of living in the past.
  If they do this, if indeed this is what happens, if the Bill goes through unchanged and without any alteration, or is pushed through the House of Commons at excessive speed, as we fear is the intention of the right hon. Gentleman—if all these things are done, and if, at the end, we get a boom and bribery Budget, we shall know that this has been done deliberately for the advantage of the party opposite.
  5.20 p.m.
  Mr. Arthur Tiley: It is a real privilege to follow in the debate the right hon. Member for Middlesbrough, East (Mr. Marquand). I am sure that the House has listened to a very reasoned argument against the Bill. We shall, of course, employ our own debating powers in the course of the day to show how wrong the right hon. Gentleman is in so many ways. First of all, we were told that there are scarcely any changes from the White Paper in the Bill and then we had enumerated to us three important improvements on the White Paper.
  It is a great pity that when we are discussing matters which affect all our people we should keep on citing as examples countries whose economies are so different from ours. It is no good standing at the Dispatch Box and quoting the United States or Germany, because
  924
  their economies are completely different from ours. We have a population of about 30 million more than we can feed ourselves. America does not have that problem. Neither does Germany, and the essential feature of every measure of economies or finance which we discuss in the House should have that point in mind. Everything that we do here that increases the cost of our goods means that we produce a greater chance of unemployment, a greater chance of inflation and more than a chance of these pensions which we are now promising never coming to the people who are now working to pay for them. The sooner we bring to our minds, in comparisons that we make between this country and others, the fact that we need to export or die the better for all of us.
  Hon. Members opposite are always harking back to 1946 and the problems which existed then. They are apt to forget that one of the most important things that any country or any business needs when it intends to rebuild its fortune is orders from abroad. In 1946 and during the following five years there poured into every type of business in the country orders galore. The present Government and the Conservative Party, in the seven years or so of their administration, have faced an entirely different situation. More than that, we have been paying our way in exports and have not been living on borrowed dollars. [HON. MEMBERS: "Oh."] Well, we are paying, through the efforts of our workers, the interest on dollars borrowed by a previous Government, and we are paying more back than we borrowed, because hon. and right hon. Members opposite devalued the £. We are paying for the result of that action.
  It should be stated that we wish to discuss this very important problem without each side of the House trying to compete one with the other as to who has done most for our old folk. I am not proud of anything that we have done on either side of the House since 1946 for our pensioners, but I should be bitterly ashamed to sit on the other side of the House and remember what went on in the years 1946 to 1951 in the matter of provision for the old folk.
  I thought it, to say the least, impertinent of the right hon. Member for Middlesbrough, East to point to the Bill and

  925
  attempt to show how certain people are paying out of their higher incomes to subsidise the pensions of the lower-paid workers, because sitting alongside the right hon. Gentleman is the hon. Member for Coventry, East (Mr. Crossman) whose pension scheme, which is the Labour Party scheme, provides, over and above a weekly wage of £11, for an increasing subsidy of the lower-paid pensions. A great amount of what would be paid in by the man and his employer under that scheme would subsidise the lower-paid contributor. I am glad to see that the hon. Member for Coventry, East is apparently giving his assent to that. Why should the right hon. Member for Middlesbrough, East point to this as a deficiency in our scheme? The great difference between the two schemes is that ours does not do it so much and so heavily and unfairly as hon. Members opposite would wish to have it done.
  Mr. Marquand: Does not the hon. Member appreciate that what I was saying was that, although there is this element of subsidy in the Government scheme, the greater part of the subsidy will go not to any pensioners but to Income Tax payers?
  Mr. Tiley: I assure the right hon. Gentleman that I shall deal with that point in the course of my speech. I should have declared an interest in this matter at the beginning, because I am engaged in the business of insurance, though I can say quite frankly that I am neither a specialist nor an expert. I have quite deliberately not read communications from the Life Offices' Association over the past few months, because I did not want to be too heavily prejudiced in our debates here. I gather, however, from the quotations made from those communications by the right hon. Member for Middlesbrough, East that if one extracts the graduated portion of the contributions and one does not take the pension as a whole, it is possible to build the case which the right hon. Gentleman made.
  It should have been pointed out, as my hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said, that there were at the meeting to which reference has been made people as clever as Mr. Jackson who opposed him completely; and when he said that we must prepare for future years by expansion of investment it was never his intention that the money should
  926
  be in the hands of a political party for investment.
  It has been my experience that I have never seen a pension scheme introduced which everybody did not criticise. The scheme is torn into shreds by all the people who are to be members of it. Everybody criticises it. The old directors always say when they see the scheme that it is too dear. The young directors, who have grown up in the firm from the shop floor, always think that the scheme is not ambitious enough. The firm's secretary and accountant say, "We shall be killed by all the clerical work." The old men say to each other in the canteen, "There is very little in this for us." The young men, looking at the distant age of 65 with something of the frozen look that Ike gives to Monty, think the scheme of no interest to them. The married women wonder what all the fuss is about because they think that the old man has the whole business tied up with his half-crown to the "Pru", and the young women think that they would rather have proposals for marriage than proposals for pensions.
  Then, after many months of negotiations and after the scheme has been torn to shreds, altered, and amended, it is eventually launched. Hon. Members can depend upon it that next day the managing director at his club will have a drink with somebody who has done a scheme quite as good at half the cost. Let us not be dismayed about the battle and about the onslaught on our scheme, but there is one important golden rule which is applicable to all schemes. Schemes must not be too costly as they affect either the contributor or the employer. When we examine the costliness of the Socialist scheme we begin to appreciate my right hon. Friend's proposals. What a difficult job it was! My right hon. Friend was not dealing with one scheme, he had to take into account 40,000 schemes. What a problem, what a dilemma, and what a complicated Bill.
  I must confess that in nearly four years of service in this House I have looked forward to the day when I might find a Bill which I could reasonably understand, and I had hoped that this would be it. How disillusioned I am. Indeed, when I read the Explanatory Notes at the beginning of the Bill, I wondered where was the explanatory note to explain the Explanatory Notes. I will say for my

  927
  right hon. Friend that he knows his Bill, and we shall expect to learn more about it during its Committee stage.
  During the course of this speech I do not want to deal with many technical points because we shall discuss the Bill in detail in Committee, but I want to make one or two general comments. For the first time we can applaud the Minister for reducing the weekly contributions of the lower paid workers. This at last is a step in the right direction. We have heard Chancellor after Chancellor at the Dispatch Box, and shadow Chancellor after shadow Chancellor at the box opposite, bemoaning the fact that it is difficult to help the man who does not pay Income Tax. Here my right hon. Friend has found an effective way and the contributions of the lower-paid workers are happily reduced.
  I have a comment to make about Clause 5. All of us, on both sides of the House, welcome the change in the earnings rule as it affects the widow, who has been sorely oppressed by this rule, and I am glad therefore that an upward change is being made. In Clause 5 we enable a widow who has reached pensionable age, and retired, to receive half the graduated benefit which her husband had earned, in addition to any graduated benefit earned by her own contributions. Surely this is a little bit mean? The graduated benefits have been dearly bought, taken as a separate thing, and it would not cost a lot of money if the widows could receive the full benefits instead of half. After all, this is one of the insurance principles which we on this side of the House must not overlook. Nearly all the private schemes in the country, in the event of death, would return almost the whole of the contributions to the widow of the man who died, and it is right that they should do so. These contributions have been made out of earnings. We might look at that point to see if an improvement can be made to the Clause.
  It is a fact that industry and industrialists throughout the country are upset at the amount of clerical work. The British Employers' Confederation has issued a circular to all of us mentioning the two points stressed by my right hon. Friend. These are important criticisms by an important confederation. It is our business to find the simplest way
  928
  administratively of putting the Bill on the Statute Book. I do not say this unkindly, but if we have an important mission on this side of the House it is because of our wider experience in administration. [HON. MEMBERS: "Oh."] Hon. Gentlemen opposite also have many advantages, on average, through their closer associations with the unions and so on. I am being fair. If we have an important mission to pursue it is to ensure that things are done administratively as economically and efficiently as possible. Personally, I have been appalled since I came here at the amount of administrative work we impose year by year on industry. All this is a burden on those who are working in the factories, the real men and women of toil, the producers in our land.
  I know the Minister will listen to the criticisms we make and, if we can amend the Bill during the Committee stage to improve administration, I know he will be glad. We ought to be a little cautious here. It has been my experience since I came to this House that many people shout "Object", and when we ask why we find that we are left on our own. The objectors cannot say why they object, and they are gone when we need them.
  The great attractions in the life office schemes have been twofold. The first is that the life offices have done all the clerical work, even as far as keeping the records and sending them once a year to be audited. All that has been done for industry. Secondly, the deductions have been fixed for fifty-two weeks without alteration.
  These are clerical problems with which we shall deal during the Committee stage, but the Government have a mission to pursue in this respect, too. In recent years we have gathered together the most complicated pensions legislation that any country could possibly have, and the Chancellor should be asked to simplify much of it in his Budget. Last year he cleaned up several dirty little things that existed and got rid of them. Here is an opportunity to enter the pensions field as regards several Sections of various Finance Acts. Solicitors and accountants and boards of directors are kept busy considering questions on which they should not have to spend time, and the work at the Board of Inland Revenue must be a positive nightmare. It is not

  929
  fair either to the Inland Revenue staffs that they should have to make decisions which are not governed completely by our Acts of Parliament.
  So the Government can help to simplify the administrative work, and I think also that the insurance companies can do a little themselves. It would be a very good thing if a central bank could be created for frozen pensions. This could deal with the contracting out and in, without money changing hands; it could make the calculations and so on, so much easier. The frozen pensions could be put to a man's credit there until he reaches the age of 65.
  Since there are 90 or 100 life offices all dealing with this matter, they could themselves create a central paying agency for pensions. We know that competition is important in industry, in insurance and in our economic way of life generally. I would not wish to keep out competition from the normal field of insurance, but since we are always grumbling at the gas and electricity boards for having two sets of accounts, two sets of books and two kinds of meter readers, it ought to be possible for the life offices to centralise the method by which they will be eventually called upon to pay millions of pensions.
  The Bill leaves out the self-employed. I think that is right and that it is in their favour. Since, however, the Minister did not mention this point, I will merely make this passing reference to them so that they will not think they have been forgotten. As I pointed out in a previous debate, it is a fact that they are able to do much better for themselves in the open market. I thought it rather strange on the occasion of the previous debate, when this topic cropped up, to see the readiness with which hon. Gentlemen opposite jumped to their feet to show that they did not wish to join the fantastic Socialist scheme. I thought that they would all, as self-employed people, want to aim at the biggest contributions possible. Evidently this was not so. They want to legislate for everybody else but they say, "Include me out".
  There was a debate on the subject of pensions in another place a few weeks ago, and the plea was made that we ought to take it out of party politics. It is impossible to do that. It is not that either side of the House disagrees with the pro-
  930
  vision of pensions, but there is a real division on how it shall be accomplished. I have never been able to understand why hon. Members opposite are so cruel to the workers. They do not want the workers to possess anything themselves. The workers must not possess a house, and they must not possess a pension in their own name. Hon. Members opposite want to take everything from the workers and put it in the name of the State.
  People resent deductions from their wages, and especially do they resent deductions when they lose control of the money. I should have thought that experience with post-war credits was sufficient to make all of us suspicious about the Government collaring any more of our earnings and savings. Ever since I left school I have felt that the Government had one hand in my pocket. I know what the Government are doing and have got used to that, but I am trying to make sure that the Government do not get a hand in the other pocket.
  Man is a hunter and wishes to acquire and possess things of his own. He wants his savings in his name and not in the name of any Government. In our last debate the hon. Member for Coventry, East spoke about a man who in 1919 put £100 in the Post Office and left it there and said that by now it amounted to £381. He compared the man who put £100 into ordinary stocks and shares, which had risen over those years to the value of £3,086. That is a very interesting comment, and a very important one, because our problem today is how we are to let the workers take a share in the industrial expansion which is to take place in the next twenty-five years. With the Labour Party's pension scheme the larger contributions will be put into something out of the control of the man himself and at the end of twenty or thirty years they will produce a smaller investment yield than Post Office savings. If it is done by means of Post Office savings and the man dies, the widow can go to the Post Office and get the money, and if the widow dies, the savings will still be there for the children.
  We are being asked to divide on something about which we disagree completely and vociferously with the Opposition. In its scheme the Labour Party would conscript our savings and confiscate many of them. I shall be very glad to support my right hon. Friend in the Division

  931
  Lobby so that our constituents may see that the value of the pension is to be maintained by a commonsense Bill.
  5.44 p.m.
  Mr. Douglas Houghton: If I may say so in a friendly way, the hon. Member for Bradford, West (Mr. Tiley) is an engaging mixture of simplicity and guile. His speech was littered with naiveties and provocations. If one were to follow all that he has said it would be difficult to get back to the Bill. The hon. Member began by throwing off a few unjustified criticisms of the Labour Party. Then he said, "We do not want to pursue this question of who did how much for the old people and when. We want to consider how we are to deal with them now."
  The reference to the past which the hon. Member made reminds me of two tiresome parts of the Minister's speech. I know that a certain degree of intellectual dishonesty is tolerated in the House. I regret it. I believe it to be an insult to the intelligence of our constituents, and I believe that one day our constituents will rise against it, because intellectual dishonesty is deception, and deception should not be tolerated in public life.
  The Minister knows full well that the period of the Labour Government from 1945 to 1951 and the period of office of the Conservative Government since 1951 are two distinct periods in international and economic history, and to relate the two at this stage is intellectually dishonest. The right hon. Gentleman should realise that whether the Labour Government, as some of us claim, laid the foundations of the economic expansion of this country, or whether there has been a fortuitous development of our resources and an increase in our wealth, the fact remains that the nation is able to do better for the old-age pensioners today than it could in 1945 and in 1946. The old people are the one section of the community who have not got trade unions, who have not got boards of directors and who have not got the resources available to those engaged in current activities to take their share of the rising national income. They depend on public opinion and on the good will of this House. That is why we have very special responsibilities towards them.
  There was an opportunity which the Government could have taken, in intro-
  932
  ducing the Bill, of announcing where they propose to stand in the future in relation to the real purchasing power of retirement pensions. I do not believe that it would be inflationary to guarantee the old people an adjustment of their money pension in order not only to preserve but even to expand the real value of their pension. They constitute the one section of the community to which that guarantee could be given. The trade unions do not need a guarantee; they are going to exercise their industrial and political power to obtain their increasing share of the national income, and if inflation has to be stemmed and curbed the Government can do it over the whole economy and not select one section to bear the burden.
  The other tiresome episode in the right hon. Gentleman's speech was his inability to read English and to make an intelligent interpretation of comments. I watched the faces of some hon. Gentlemen opposite, and they were as sick of it as I was. It ill becomes a Minister not only to resist the persistent denial of the hon. Member who made the speech that an erroneous interpretation was being put upon his words, but to persist with enthusiasm and conviction upon an interpretation that the words themselves did not bear.
  I have heard my hon. Friend the Member for Coventry, East (Mr. Cross-man) and others of the Labour Party in relation to the Labour Party's proposal for superannuation emphasise time and again that that scheme, and, indeed, any scheme of superannuation and superannuation payments, depends upon the willingness of the community to give up something in current consumption for storing up in terms of investment or the expansion of the economy for later distribution of benefit in the form of superannuation payments. That is elementary. Surely the right hon. Gentleman does not think that we are so economically illiterate that we do not understand the essentials of a scheme of the dimensions of that put forward by the Labour Party.
  I also deplore the haste with which the Bill has been put forward. I have certain responsibilities in the trade union movement among a very large section of white collar workers. There has been no opportunity to consult those whose interests are directly involved. Why could we not have been given a little

  933
  longer to find out what reactions have been and to examine the complexities with great care? It is not enough to say that the White Paper of October gave us several months for reflection and consideration.
  Indeed, the right hon. Gentleman made the specious claim that the scheme had weathered the criticisms and comments made since the White Paper was published. However, people have not had an opportunity of carefully considering the Report of the Government Actuary, because it has been published for only a matter of days. That is where the truth lies and it is from that that we can see what the scheme means. It is quite wrong for the right hon. Gentleman to refer to the Bill as a matter of machinery. It is fundamentally changing the whole financial structure of National Insurance.
  The hon. Member for Bradford, West, who spoke with his great knowledge of insurance, referred to the reduction in the contributions for the lower-paid workers who will still continue to pay for the standard benefits under the scheme. He said that that was a step in the right direction. What he did not say was that the reduction in contributions at that level is achieved by a transfer of the cost at that level to the workers slightly higher up the scale, irrespective of their ability to bear the increased charges.
  For many years to come, the scheme will be redistributive in character. I agree with my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand) that this is not really a pensions Bill and that the primary motive behind it has not been to provide graduated pensions for those receiving higher rates of pay. I do not believe that the social philosophy of right hon. and hon. Members opposite would lead them to a scheme of that kind, unless there were considerable financial interests at stake. That I believe to be the clue to the Bill.
  The fundamental condition of the Bill is that the Exchequer contribution of the future will be substantially reduced and the burden transferred from taxation to contributors. The contributors who will bear the higher cost are those earning more than £9 a week. I grant that the increased charge on those getting more than £9 a week will be proportionate up
  934
  to a point, but it will not be progressive. It is one of the features of our system of direct taxation that it is progressive. This matter gets to the root of our disagreement about the Bill.
  What is paid in graduated contributions will go to no fund, reserve or otherwise, or investment, productive or otherwise. It will go direct from the pockets of the graduated contributors to the pockets of the retirement pensioners. There is nothing in between. In other words, it is a form of taxation on those getting more than £9 a week, mitigated by the promise that in due course those who pay the extra will have their pensions related to the higher contributions which they have paid, although those higher pensions later on will be wholly dependent on the willingness and ability of the contributors of that time to bear the higher cost. That is a faithful summary of the essentials of the Bill.
  We should examine what evidence there is available—and it is not much—of the amount of subsidy towards basic pensions hidden in the graduated contribution. Men who are to be contracted out will pay 1s. 7d. a week more for the same basic pension as those who are contracted in. Where an employer applies to contract out of the scheme, he is imposing on the workers in his vocational superannuation arrangements an additional charge of 1s. 7d. a week for the existing basic pension. A man who is contracted out pays 1s. 7d. a week, and the employer 1s. 3d. a week, more for the basic pension compared with a man who joins the new graduated scheme.
  There is an anomaly in this connection. A man getting £11 a week—as the Economist pointed out last week—and who is brought into the new scheme, will pay only 1d. a week more than the man earning £11 a week who is left out. Thus, for 1d. a week more contribution, a man on £11 a week will earn an extra pension of 13s. a week, if his membership of the scheme goes from age 18 to the age of retirement, 65. That is extremely anomalous. The details are given in the Economist on page 238 of the issue of 17th January.
  This kind of anomaly and all the paraphernalia of contracting out and the administrative difficulties connected with it make one wonder whether for a marginal scheme of additional pensions

  935
  of this kind there is any justification for contracting out. That is a view which is probably not generally held, but the anomalies of those who will be in and those who will be out and the difficulties of going in and out, and all the other problems of contracting out, are out of proportion to the differences in benefits and burdens of those in and out of the scheme.
  If one were introducing a scheme of much greater dimensions, one which provided very much more substantial benefits and which went further up the scale and where contributions were proportionately heavier up the scale, it would obviously be necessary to make provision for contracting out, since it would be difficult for both employers and workers to bear the double burden. However, in this case there is already provision for employers to modify vocational schemes in order to adjust them to the new circumstances.
  If there is to be contracting out—and it seems to be the general view that there should be; although I believe that it is probably unjustified for the miserably small approach to the problem of graduated pensions shown by the Bill—the workers in the schemes concerned should have more say in whether they are to contract out. In the Bill the right is given to the employer to apply to the registrar, and if the scheme satisfies the conditions, the registrar can grant a certificate of contracting out. Presumably, the workers in the scheme may have no deciding voice, they may not even be consulted.
  In these circumstances, should not a majority of those directly concerned in the scheme decide whether they should come out or stay in? The employer is not as much concerned as one might assume, because he can adjust the two schemes. He can adjust his own scheme to the national scheme, or he can adjust his own scheme to contracting out status and encourage his workers to stay out. He can manipulate the vocational scheme to suit whatever decision is arrived at by his workers without much, if any, additional expense to himself. I am sure that the House cannot rest satisfied when thousands of workers in these vocational schemes may have no voice in what is to happen to them, and it is left wholly to the employers.
  The earnings rule to which the Minister referred must, in my opinion, be retained
  936
  in some reasonable form; at all events, so long as we have a scheme which is a substantial combination of Exchequer contributions and personal contributions from employers and workers. The lifting of the earnings rule money limits, announced by the Minister, is to be welcomed. Possibly they could have gone a little higher. That is a matter which we might consider after the report of the National Insurance Advisory Committee is available.
  Finally, I wish to refer to another remark about administration made by the hon. Member for Bradford, West. There is a great deal of administration in the Bill. I doubt whether hon. Members, or anyone else, yet fully appreciates the complications of administration which will arise. I will mention one in my own sphere. Are these graduated deductions to be admissible tax deductions under P.A.Y.E.? In my opinion, they will have to be, unless the House legislates to the contrary. At the moment, for flat-rate contributions, it is comparatively easy when doing the Income Tax coding to make a standard allowance for National Insurance contributions as a set-off against tax liabilities, because we all know what they are. But under this scheme there will be workers going in and out of the graduated zone. There will be some in all the time with a fluctuating remuneration, and no one will be able to say at the beginning of the financial year what the tax set-off should be for the National Insurance contributions for that year.
  Does this mean, then, that at the tax year end we are to have 12 million or 15 million adjustments of the coding notices for the previous year? Or is a change to be made in the law so that the tax set-off shall not be for the contributions of the current year but those of the previous year, in order to make administration easier?
  Mr. Tom Brown: Does my hon. Friend hold the view that the graduated schemes will change politically those in the Truck Acts?
  Mr. Houghton: That is taking me out of my depth. I will stick to Income Tax for the moment.
  Another difficulty arises over the need to translate monthly pay into weekly pay

  937
  to decide whether or not a man is in the graduated zone. Some of these things are positively frightening when one considers the work that will have to go on in counting houses and tax offices. I will not detain the House longer on those matters, because they are more suitable for closer examination during the Committee stage.
  I do not believe that the Bill is the real challenge which it should be to the problem of providing for old age in the Britain of tomorrow. It is not enough. When the hon. Member for Bradford, West seeks to differentiate between the position of this country and, on the one hand, that of the United States and, on the other, Western Germany, I ask him to reflect on the state of the West German economy ten years ago. We may regard America as a country with vast resources, not over-populated and without our economic problems. But surely Western Germany has pulled itself up by its boot straps in the last ten years and has shown a remarkable zest for economic recovery and social advance. For us to say that we must be behind a country which was defeated in the last war, a country which at present is dismembered and which faced a far greater economic struggle than we have had to face in the last ten years, is to get the whole thing completely out of proportion.
  The challenge which the Government have failed to make is yet to come. The only party from which it can come is the Labour Party, which has its own scheme. Despite the weaknesses of that scheme, it has shown a bold approach to the problem of providing for people who are no longer able to contribute to the national income.
  6.7 p.m.
  Sir Spencer Summers: If the hon. Member for Sowerby (Mr. Houghton) accuses the Minister of intellectual dishonesty and economic illiteracy, he must not complain if I accuse him of home-made self-righteousness. He failed to take account of a number of relevant considerations in the criticisms which he made. The hon. Member, as did other hon. Members, made great play with the absence from this scheme of any link with the cost of living. Mr. Jackson was quoted as being in favour of that proposition. It is, however, fair to point out that if there had been a link when the scheme first started the old-age pensioner
  938
  would have been infinitely worse off by its application than by the opportunities taken by successive Governments to change the basis of the day.
  The hon. Member also said that the lower-paid contributor got away with 1s. 7d. less than his counterpart only by reason of the fact that graduated contributions from better-paid people were being used for that purpose. What he completely overlooked was that the weight of assistance from the Exchequer is being brought to bear primarily on the lower-paid worker and not at all on the person earning £15 a week; so that the benefit may go where it is most needed. It is only right that that should be mentioned.
  Mr. G. W. Reynolds rose —
  Sir S. Summers: I do not wish to give way to the hon. Member, because there are other hon. Members who wish to speak and there is nothing in what I have just said about which the hon. Member need interrupt me.
  I welcome the news from the Minister about a change in the earnings rule. I am not confident that I heard him aright, and if I describe wrongly what he said, perhaps for my benefit and for the benefit of others my right hon. Friend will correct me. I understood him to say that a widow would be able to earn 20s. more and that the 6d. in the 1s. thereafter would be raised, but a man would be able to earn only 10s. more without prejudice to his pension.
  Mr. Boyd-Carpenter: My hon. Friend invited me to interrupt him and, for the sake of accuracy, I will take advantage of his invitation. The proposal in the draft Regulations to the Advisory Committee is for an increase of 10s. for the retirement pensioner and widow and of 20s. in respect of the widowed mother.
  Sir S. Summers: I am grateful to my right hon. Friend for that information. I echo the comment made by the hon. Member for Sowerby. In relation to an increase of 30s. in the average rate since the earnings limit was fixed, it seems rather modest to increase the limit by 10s., making a still bigger gap than prevailed when the earnings limits were last made between the amount which can be earned and the average

  939
  wage. I hope that at a later date opportunity will be found to give further thought to that arrangement.
  I welcome the three changes in the Bill in comparison with the plan of the White Paper. I have never been one of those who regarded increments as providing very much effect upon the proportion of people who decide to defer retirement. The vast number of people prefer to stay on if they are physically capable and are not induced to do so by the size of the increments which will accrue to them by so doing. Nevertheless, I welcome it, not the least because those who are well enough and are willing to stay on will have a better pension than otherwise and, if they are willing to stay on until 70, the increase by this change of 6s 6d. per week will be a very important contribution to their needs.
  I am glad that the additional contribution over five years may be reduced by the Minister if it is not needed. We may well find that the figures given to us were on the cautious side and we may well have a larger surplus than is provided for. If that be so, the power given in the Bill to reduce the additional quinquennial contributions may be valuable. I am glad also that the Government have changed the basis for establishing Exchequer contribution. If a certain percentage for a partner in the scheme, namely the Exchequer, is fair, there is no reason why that should be kept down to a ceiling, as was the case in the White Paper. I am glad that that plan has been changed.
  I want to allude to an aspect of this subject which has not been referred to today and which is not easy to express. It is assumed in the plan that earnings will increase by 2 per cent. per annum. Some people expect them to increase more, but that does not alter my argument and merely strengthens what I wish to say. There is a fixed grid of those who are full participants in the graduated scheme namely, those earning from £9 to £15 a week. The average wage earner gets about £12 10s. a week; and if the 2 per cent. increase goes on such a participant will, at the rate of 2s. 6d. a year, be able to reach the ceiling in 20 years.
  That brings out graphically the effect of applying the scheme as laid down. It means that more and more people will come up against the ceiling and that the
  940
  average man will be at the point at which his graduated contribution can go no higher in a comparatively short time. The two consequences of that trend seem to have escaped comment. One is that if the Exchequer contribution is to be concentrated on the lower paid participants by design, and if more and more of those people come up against the ceiling, the question of how the Exchequer contribution is to be concentrated becomes increasingly complicated.
  Secondly, the graduated principle loses its effect as a smaller and smaller proportion of the population is within or below the ceiling of the grid. What does this point prove? Surely it means that more account should be taken of the increase in the earnings than has been taken. In particular, do we not need to provide in the scheme an opportunity to raise the grid perhaps in five or ten years' time by an amount no doubt to be determined hereafter but for which provision should be made now, rather than have all the complications that will arise if that provision is not made.
  To keep matters more or less in balance, if wages are to go up, a grid of from £10 to £16 in ten years' time may be directly related to a grid of from £9 to £15 now. Those who are more familiar with this matter than I am will no doubt consider what will be the effect of any changes in the grid such as I have referred to.
  The surplus in the scheme may well prove to be more than has been provided for. The rise in earnings, assumed to be 2 per cent. per annum, may go up. In the last debate I gave reasons for believing that the 2 per cent. would be considerably more in practice.
  In the Actuary's Report are figures showing the effect at different periods of an increase of that percentage. The hon. Member for Sowerby did not think it was worth while making provision for people to contract out. I have expressed the view that far fewer people will contract out than has been provided for. If fewer than 2½ million do contract out, the balance in favour of the scheme will grow.
  Thirdly, provision is made in the figures for an estimated unemployment of 3 per cent., yet we hear much criticism about present unemployment which is at a

  941
  lower figure than that now. If it is assumed that we shall soon improve the present percentage we shall surely have a considerably higher figure in the reserves than has been provided for. Even in 40 years' time the graduated part of the plan represents only one-sixth of the total cost of the whole pension proposition. If the reserves grow, it will be very tempting to change the scheme. My own comment on that is to try to bring out that the cost of the basic pension being five-sixths of the whole compared to only one-sixth for the graduated figure, the increased reserves should be retained for use with the basic rather than the graduated figure.
  I would now turn to the document from the British Employers' Confederation referred to by the Minister. I find it difficult to see why an occupational pension scheme which seeks to contract out must, for all its members, provide benefits as good as those of the State scheme at £15 a week. It means that to contract out an employer must pay to people earning £10 a week benefits which they would get at the £15 level in the State scheme. Mention has been made of the need to give a greater voice to the individual when considering whether the scheme of his firm should or should not be contracted out. It is only right to point out, however, that he would be in no worse position if contracted out than he would be at £15 a week under the State scheme. So, on those grounds, he has very little criticism if he is taken out with only limited consultation. My point, however, is that it is difficult to see why such a severe test as that is necessary for contracting out.
  It also has a bearing on the position of the person working in a firm which has a pension scheme that passes the test who, after some years, leaves that firm and goes to another. I understand that unless the pension he has earned in the occupational scheme in that firm is assured the firm has to pay into the State pool the sums relevant to the highest-paid person in the State scheme, the £15 a week man. One would have thought, in the absence of the ability to maintain his pension earned whilst in that firm's employ, it would have 'been sufficient to have paid the sums he would have earned in the pool if the wages he actually earned were taken as the basis and not the maximum.
  942
  No doubt at a later date further consideration could be given to that point.
  Lastly under this heading, I ask the Minister to take kindly to the suggestion made by the Confederation that it should not be necessary for employers to take individual account of the contributions they make on each person's behalf so long as they give a certificate that they have matched the total contributions due in any particular period from the firm on behalf of those concerned. It undoubtedly would cut out a great deal of individual book-keeping in the firm if individual cases could be cut out. There are many aspects of this business on which one could comment, but I know that others wish to speak and I hope that when the Committee stage is reached these points will be given serious consideration by my right hon. Friend.
  6.22 p.m.
  Mr. John Cronin: The hon. Member for Aylesbury (Sir S. Summers) is obviously well informed on this subject and has made a very constructive and helpful speech. I am glad that his speech was not full of allusions to financial balance, because that theme dominated the speech of the Minister to a great extent. Every few minutes the Minister spoke about "putting the financial side of the scheme right", and of a "sound financial basis.". It seemed to have become an obsession with him to avoid any increase in the Exchequer deficit.
  I suggest to the Minister that, although obviously the contributory part of an insurance scheme is important, the most important basis of any form of social insurance is the taxable capacity of the nation. That is an asset which is always available and always increasing. Even if there were some extraordinary, sudden hyper-inflation which wiped out everyone's savings, there would still be the taxable capacity of the nation, which could completely underwrite any scheme in future. So this timid preoccupation on the part of the Government with reducing Exchequer deficits has no real foundation in economic facts.
  This timidity has produced this very inadequate, almost derisory, Bill. One could certainly say that the Government have laboured and produced a ridiculous mouse on this occasion. As we have just

  943
  passed to the feast of Robert Burns, one could say:
  "Wee sleekit, cowrin', tim'rous beastie!"
  I am not saying that the Minister is a"tim'rous beastie"—in fact, I shall suggest later that he is a person of considerable audacity—but this Bill is unenterprising and timid.
  One has only to look at the Actuary's Report to see that a boy of 18 who enters the scheme now and earns £15 a week solidly for the rest of his life will, by the time we reach the year 2008, get a pension of £6 a week. The Government Actuary himself admits that wages are likely to rise by 2 per cent. per annum, so wages by 2008 will be about £30 a week on that basis. Surely such a pension would have very little practical effect. In actual practice, wages have increased by 5 per cent. or 6 per cent. in value since the war. If that ratio continued we could think in terms of wages approaching £50 a week by the time we get to 2008, so the suggested pension under the present scheme seems rather exiguous.
  No doubt the Minister will argue that, as these graduated contributions and benefits are based on a percentage of earnings, that will rectify itself with the passage of time, but that does not make allowance for the fact that there is a ceiling of £15 to this scheme. I should like him to tell us what is to happen when most workers' wages reach £15 a week. We shall then be back on a flat-rate pension under this scheme and the whole graduated element will have disappeared completely.
  Although it is rather timid in some ways, there also seems to be something approaching knavery in this scheme. My right hon. Friend the Member for Middlesbrough, East (Mr. Marquand) gave some figures from Table 2 of the Actuary's Report, which indicated that very large reductions were to be made in the Exchequer deficit entirely at the expense of workers who earn between £9 and £15 a week. It seems that the Minister is running through the working population throwing alms to a few and picking the pockets of most. In Table 3 of the Actuary's Report, for instance, we see that there is going to be a reduction of Exchequer deficit of £169 million in
  944
  1961 and of £368 million in 1981. That money is not to come from wage-earners who receive less than £9 a week because they will be paying less. Therefore, it must come from wage-earners of between £9 and £15 a week.
  Sir S. Summers: I am sure the hon. Member has overlooked the fact that those with more than £15 a week are still to contribute.
  Mr. Cronin: That is quite obvious. The hon. Member means also from the point of view of taxation?
  Sir S. Summers: Perhaps I did not make the point clear. The hon. Member keeps talking about the people between £9 and £15 a week, but in fact those above £15 a week without limit will contribute. They will be treated as though they are receiving £15 a week.
  Mr. Cronin: The point I am making will become clearer to the hon. Gentleman in a minute.
  Sir S. Summers: I hope so.
  Mr. Cronin: I am suggesting that those in the scheme receiving wages of between £9 and £15 a week will receive rather inadequate benefits and, as a consequence, will pay a large part of the Exchequer deficit which will be saved. To bring the matter to a rather finer point, I have obtained some actuarial figures from a very reputable firm of actuaries. I cannot quote the name of the firm because professional anonymity is an important part of the actuary's code. I should be happy to give the Minister the name if he is interested.
  These figures are based on standard insurance practice and on a person earning £15 a week and, therefore, paying an additional contribution of 7s. 4d. Actuarial figures are based on prevailing rate of interest, and these are based on a rate of interest of 4 per cent., which is quite modest, because insurance figures are often based on rates of interest of 5 per cent. and 6 per cent. these days. We want to be fair to the Minister.
  On the assumption that he is earning £15 a week and paying an additional contribution of 7s. 4d., a man entering the Government scheme at the age of 18 will receive a pension of £2 1s. whereas under actuarial practice, at 4 per cent. interest rate, he will get a pension of £5 3d. A

  945
  man entering the scheme at the age of 30 will receive an addition to his pension, under the Government's scheme, of £1 10s. when he reaches the age of 65, but under ordinary commercial insurance practice he would receive a pension of £2 16s. A man who entered at the age of 40 would receive an addition of £1 2s. to his pension under the Government's scheme, but if he made the same contribution to a commercial insurance scheme he would receive £1 11s. 1d.
  Sir K. Joseph: Would the hon. Member give the figures for the man who enters at the age of 50?
  Mr. Cronin: Certainly. I was reluctant to bore the House with too many figures. For a man entering the scheme at the age of 50, the addition to his pension under the Government's scheme would be 13s., whereas under ordinary commercial insurance figures he would get 14s. 5d. I would like to help the hon. Gentleman. If a man enters the scheme at the age of 60, the addition to his pension under the Government's scheme is 4s., whereas under an ordinary commercial insurance policy it is only 3s. 8d., but it is necessary to go to the age of 60 on entering the scheme before the Government's scheme is worth while in terms of ordinary commercial insurance practice.
  The Minister may argue that the scheme is redistributive. We want to know who is receiving the redistribution. Under the Labour Party's scheme it is the lower-paid workers, whereas under the Government scheme it is the Treasury and therefore the Income Tax payers, the Surtax payers and commercial firms who pay tax.
  The Minister's scheme has certain typical Conservative electoral characteristics about it. He is making a gift before the election in the form of reduced rates, and the increased rates will be introduced after the election. This is a well-known Government habit. Age may not wither Conservative Governments, but custom certainly stales their infinite lack of variety.
  Mr. Gower: The hon. Member said that the scheme gives money to the Treasury. Does he not recall that his right hon. Friend admitted that a Labour Government would have to face the fact
  946
  that the existing scheme, introduced by the Labour Government just after the war, is in such a financial state at present that some provision would have to be made out of the new scheme to meet deficiencies arising in the present scheme? All that the right hon. Gentleman objected to was the method by which it was being done.
  Mr. Cronin: I think the hon. Member has selected a very small part of my right hon. Friend's speech.
  This scheme has an enormous advantage to insurance companies, because it competes so badly with them. It is interesting to look at the other people who gain from the Minister's scheme. First of all, employees would obviously gain because there is a reduction of 1s.7d.in their contributions. That is their immediate gain in the weekly rate. But the employer also gains 1s. 3d. for every employee. Thus, the more people he employs the bigger is his gain. If he employs 100 people, his gain is 100 times 1s. 3d., and if he employs 1,000 people it is 1,000 times 1s. 3d. But employees do not gain on the same scale. Their share of the booty is very small.
  Mr. Freeth: The hon. Member has referred to a firm with 100 employees. In considering the firm of 100 employees, all earning more than £11 a week, will the hon. Member also pour forth tears of sorrow for the employers, who have to pay out more in contributions?
  Mr. Cronin: I leave all those tears of sorrow to hon. Members opposite.
  If the Minister will look at Clause 10 (1, a) he will see that it refers to
  "the end of an insured person's service in a non-participating employment"
  and says that he is
  "entitled to a refund of any payments made under the recognised superannuation scheme".
  I should like to know what happens to the interest on the money which has been collected by the employers on behalf of the employees. The Bill does not make that at all clear. The impression which one gets is that the employer himself pockets the interest. I hope that at some point the Minister will make the point clear. Interest forms a very important part of insurance schemes, and towards the end of the period of payment it amounts to nearly as much as half the total fund available. What the employer

  947
  does with the interest on the money he has collected is of considerable importance to the employee.
  The Minister made an announcement this afternoon that there would be a rise in permitted earnings. He was applauded by some of the hon. Gentlemen opposite and it seemed at first sight an act of generosity. But as soon as one looks at the employment situation one realises that it is nothing of the sort. What are the prospects of an old-age pensioner increasing his earnings these days? All over the country old-age pensioners doing part-time work are being sacked right and left on account of falling production. This is a typical illustration that when the Government open the stable door we can be pretty sure that the horse is too sick to move. It would have been interesting had we been able to hear from the Minister that he had consulted the National Insurance Advisory Committee, but this rather high-handed action was taken without that.
  Mr. Boyd-Carpenter: In accordance with the National Insurance Act, 1946. these regulations have to go in draft to the National Insurance Advisory Committee. I said that in the last day or two I had submitted them to the Committee. The hon. Member may not have heard that in my speech.
  Mr. Cronin: It would perhaps have been more appropriate if the Minister had made the announcement after he had received the advice of the National Insurance Advisory Committee.
  Mr. Boyd-Carpenter: Perhaps the hon. Member is not familiar with the procedure which involves advertising by the Committee of the fact that it has received things of this sort, so that it can invite comments. It would therefore be impossible for me to conceal my well-doing for more than about 48 hours.
  Mr. Marquand: The right, hon. Gentleman will recollect that he submitted to the N.I.A.C. some time ago the whole question of the earnings rules and that the Committee's opinion at that time was that there should be no change.
  Mr. Boyd-Carpenter: I think the right hon. Gentleman's recollection is at fault. Following consideration by the Committee there was in fact the improvement
  948
  made in the 1956 legislation which followed, and I think went a little further than, the Committee's recommendation.
  Mr. Cronin: It is in any case a difficult matter which requires careful study. There are arguments for raising the permitted earnings rate, but these arguments tend to shrink in times of substantial unemployment like the present.
  A bolder Bill would have been an excellent opportunity for increasing savings on a substantial scale. Some hon. Members have spoken about the undesirability of forced savings. There is no doubt that the savings of this country are quite inadequate and that what we are putting aside for capital re-equipment is derisorily small compared with that of other countries. Recently the U.S.S.R. produced their seven-year plan and they envisaged an increase of capital equipment of 81 per cent. to 84 per cent. over the next seven years. In this country we are this year achieving a substantial reduction on last year, which is certainly nothing of which we can be proud.
  My hon. Friend the Member for Sowerby (Mr. Houghton) has spoken of the undesirability of employers having the complete initiative in contracting out of this scheme. I hope the Minister will also note that in Clause 12 it appears that the Minister concerned has the complete initiative in respect of employees contracting out in his Department, which could lead to some very unfortunate conflicts between employees and some civil servants at some future date.
  I will not prolong my speech, as I know that many hon. Members wish to take part in the debate. In conclusion, I should like to point out, without any apology, the desirability of increasing the basic rates of retirement pensions at the earliest possible moment. First of all, there is a sound economic reason, in that it would increase spending and be the most beneficial tonic we could possibly make for the recession which this country is going through at present. It would not have the same electoral advantage as a decrease in the standard rate of Income Tax, which is probably coming in the next Budget, but it would certainly help the people who need helping most.
  There is not only the economic reason but also the obvious reason that these

  949
  people are suffering very considerable distress. The Minister pointed out—and his figures were quite right—that retirement pensioners now are receiving in real terms more than they received in times of Labour Government, but I do not think it is fair to make a comparison between now and those very difficult financial times immediately after the war when we did not know whether we would go bankrupt as a nation without the most concerted efforts—efforts which, fortunately, were very successful.
  There is one other reason why it is particularly desirable that old-age pensioners should have help now, and that is a qualitative reason. The man who is an old-age pensioner now is the man who in the inter-war years spent most of his time unemployed, unwanted and living a life of under-nutrition. Those are the people who in their old age are receiving exactly the same treatment. I ask the Minister to remember that while we are debating this matter this evening all around us are gigantic quantities of these unfortunate people in ill-heated houses, under-nourished, unwanted and miserable. Will he do something to help them?
  6.43 p.m.
  Sir Keith Joseph: I think the country as a whole has much for which to thank the Members of the Opposition who have brought out so plainly in their work and speeches the difference in philosophy between the two parties on this most important matter. I have an embarrassing choice because there have been so many things I have heard today with which I disagree that I cannot possibly cope properly with them all.
  I should first like to stress the changing nature of the situation. Here we have a situation in which three vital factors in the vast picture are changing rapidly. Earnings are rising, savings are rising and occupational schemes are growing. This is the picture against which has to be seen the criticism made by the hon. Gentleman the Member for Loughborough (Mr. Cronin).
  I agree with him entirely that savings and investment are vital. As has been said by Members on both sides of the House in this debate, on the rate of investment depends our power to do anything, let alone anything adequate for pensioners
  950
  in the future. I should like to examine how the ideas put forward by both sides respectively will help or hinder the investment which we all want.
  I have spoken of a rise in earnings, savings and occupational schemes. What will this result in? As earnings grow, the income of the scheme will grow, permitting all sorts of discretions by the Government of the day in dealing with contributions or benefits or with taxation. As savings grow the investment behind all the services for the pensioner will grow, too. As occupational schemes grow, so human benefit to the pensioners grows also. With occupational schemes under the Government proposals goes transferability, at the highest level laid down by the Government, and also the human comfort to families in knowing that if death occurs before retirement there is a return of contributions.
  I recognise that those concerned with occupational schemes have to take very delicate and difficult decisions on whether or not to contract out. Those who decide to contract out must recognise, as I am sure they will, that they will be in competition with a protean Government scheme that can change its standards at any time in the future. Let us note that the Tory proposals do, at least, plainly state that there will be a two-way option for all time in the future to contract in or contract out, whereas the Socialist proposals hedge on this. It is stated in "National Superannuation" on page 43, that they cannot be sure that always in the future there will be option to contract out.
  I can see why the Socialists have to provide this hedge because, as we all know, the burden of contributions on those who receive above average earnings are so heavy under the Socialist proposals in order to subsidise the lower paid that if they allow opting out freely they would lose, as the Minister so rightly said, the subsidisers and keep only the subsidised. Let us remember that the Government proposals guarantee the two-way option continuously.
  The occupational scheme which decides to contract out will presumably have made sure in order to deal with the protean Government potential that it has a handsome margin of actuarial income over its basic requirements with which it can at any time bring its own benefits up

  951
  to any reasonable benefits that any Government in the future may introduce.
  My view is that many schemes that decide not to contract out will indulge in what I hope will be a growing insurance practice in this country and bring in what I hope will be even more popular than the top-hat system, and that is the top-up system, which will enable more private and public employers to stay on top of the Government's basic and graduated scheme with the additional element expressed in nominal money terms or percentages of final salary, which will always be welcome to the employee.
  Another possibility which may very well take place is that many occupational schemes will take advantage of the discretion given in the Bill to split their schemes in two between all those who, temporarily in most cases, are earning less than £11, because most people earning less than £11 will probably, in the next five years, be earning over £11, and another scheme for those earning larger sums which may well be more suited to contract out. This is the changed situation, and I suggest that within a very short time it will result in the problem of those who are to retire in some years from now being solved.
  We are left to deal with the interim problem which, of course, in human terms is an immense and very serious one. Here I should like to try to bring out what I suggest has been latent in the speeches of hon. Members opposite—a difference in philosophy. I, for one, and, I am sure, my colleagues, do not think that the Government should do all the saving for the citizen, or all the investing for the citizen. The basis of the Socialist scheme is that saving for an adequate retirement standard of living is to be compulsory—and compulsory through a Government scheme.
  How are the fruits for this distribution of wealth to be obtained? They are to be obtained by Government investment. I do not say that the people controlling Government investment, or any fund set up by a Government, so long as it lasts, would wish ill to the community—very obviously not—but Government investment maximises the chances of mistakes of judgment and mistakes of bias, whereas I believe that the more we can disperse investment decisions the more likely we are to make the right decisions—as well as,
  952
  sometimes, the wrong decisions, though the wrong decisions will not then of course necessarily be enormous.
  Let us also remember that the two sides of the House disagree strongly about the taxable capacity of the country, but I am glad to see that in page 9 of its publication the Socialist Party recognises—
  "There is a very real limit to the amount which the taxpayer, and that includes the working-class taxpayer, is prepared to pay in tax."
  The pamphlet goes on to say that if too much of the tax element is left in their insurance scheme any Socialist Government would have to restrict their taxation for other very desirable things, such as education.
  Surely, it is absurd to continue to tax people in order to provide the same people with the benefits for which, at a certain level of earnings, they can perfectly well pay themselves. The basis of the Tory Party's scheme is to desubsidise these people as they rise above a certain level, and the tax benefit coming from that does not go only, as is implied and as has been claimed by hon. Members opposite, to those with massive earnings of their own. In eight Budgets, the Tory Government have given concessions to the mass of taxpayers on seven separate occasions and have only on one occasion given a concession to Surtax payers. Here I may say that I hope that it will not only be direct taxation that will benefit. I want to see indirect taxation reduced as well.
  The fact is that the position between the two parties is a matter of balance, of degree. There can be too much paternalism. I believe that the Socialist scheme has far too much paternalism in it. I recognise that there may be far too little paternalism and that that, too, can be a danger which must be avoided, but I believe that the Government scheme with its graduated payments possibly strikes the balance in between.
  What would be absolutely fatal would be to think of giving to the pensioner with the one hand while taking it away with the other by inflation. Let us not forget that the Socialist scheme not only risks inflation by its contribution increases, pension increases and tax increases, but at the same time it proposes increased taxation to meet health charges, prescription charges, increased health contributions, subsidies on milk and bread—in

  953
  relation to which so much blame is put on us. The result could only be a massive inflation that would ruin the export trade and remove the benefit of any increase given to the pensioners in the meanwhile.
  I have spent rather more time than I had intended on the wood, so let me now concentrate a little on one or two trees. We are all, of course, wondering whether we should not be giving more to the retired at the moment. I am glad that hon. Members opposite have conceded that pensioners are better off today than they were ten years ago. I agree that ten years ago the country was recovering from war and was facing rearmament, but what has happened is that not only has the standard of living of the pensioner increased under the Tory Government but, quite rightly, our expectations of what the standard of living of a pensioner should be has increased very notably also according to the conscience of the country.
  Nobody, however, can abolish poverty overnight without causing grave evils of inflation and other damage to the economy. Regrettably, the Socialist proposal of a 10s. increase would rescue from the National Assistance Board only one-third of those who, in retirement, claim supplementary pensions today. I do not want to see the National Assistance Board the recourse of people in old age at all; but poverty is sometimes caused by ignorance, and I think it very interesting that the most thorough surveys of old people have revealed large numbers who were not claiming from the National Assistance Board the help to which they were entitled. So often we hear that the old people do not apply because of pride. So far, I have not found anyone in that category, although I agree that some may exist, but surely the large number who do not claim fail to claim out of ignorance—not pride. It is comforting to learn that in Salford several hundreds were advised to apply for it who had been entitled to it for several years.
  I thought it interesting that the right hon. Gentleman the Member for Middlesbrough, East (Mr. Marquand) and those, who followed him, whilst stressing so much the benefits the Government should have given and the benefits, as they think, that their own scheme provides, fail to
  954
  mention the cost involved in their own or any other scheme alternative to that of the Government. I believe that the Socialist scheme threatens inflation, and such inflation as would really endanger any increase they might be able to give, not just because the contribution of the individual employee is raised—although that might be a factor, as the hon. Member for Coventry, East (Mr. Crossman) may concede, if the employee claims increased wages as a result; not just because of taxation going up, but mainly because the employer is to have to pay so much more in contributions that he will, as the Socialist scheme expects, put up his prices.
  The combination of increased contributions, increased taxation and increased prices without a single ounce of extra production must surely be inflationary. That is a view expressed very forcibly in another place very recently by the gentleman whose name we commonly associate with this social matter of pensions. We should remember that when assessing the two schemes.
  Before sitting down, perhaps I may be allowed to try to demolish one other tree growing on the other side. It has been said several times that the Government scheme offers a bad bargain for those paying graduated contributions. There has been, it is true to say, a cri de coeur from the British Employers' Confederation that the Government's scheme is a very tough one with which to compete. That does not sound as if it gives bad value for money. On the other hand, there has been telling criticism from the Life Offices Association, which claims that its members could give double the value for new entrants. It was to that case that the hon. Member for Loughborough referred.
  It is, however, fair to say that the Life Offices Association was talking about new entrants; and not only new entrants now but new entrants twenty years hence, and not only new entrants in 1980, but after four full quinquennial increases had, presumably, been levied by the Government. We know that the Government have now taken power not to levy the four quinquennial increases—who knows whether those increases will be exacted in full at all? Let us, therefore, see how the two ranges of values compare. Even

  955
  if the Life Offices Association were anything near right—and here it is not—we see that the Government's scheme redistributes in the graduated field not according to income but to age. It is quite true that the young get less good value than the old. But the young, if history is any guide, will be continually getting uncovenanted benefits in the future, probably at the expense of the current generation of young people. The value of a graduated contribution depends on the age of the contributor. The older person gets excellent value for his money, but the younger person is not treated as well. The scheme, however, will probably change a great deal in future if history is any guide.
  I believe that every criticism levelled by the Opposition has all sorts of satisfactory answers, and that in general the Government scheme is admirable and should be supported because it strikes a balance between too much paternalism and too little paternalism and because, while benefiting pensioners of today by increasing the increments, by its raising of the earnings rule and by its avoidance of inflation, it leaves room for the great expansion of occupational schemes which I welcome and which I hope will continue to grow in future.
  7.1 p.m.
  Mr. Donald Wade: I agree with the hon. Member for Bradford, West (Mr. Tiley) that this is a formidable Bill. It is formidable for anyone who has to read it and even more formidable for anyone who has to try to understand every Clause.
  I certainly do not propose to refer to every Clause, but I should like to draw attention to some of the underlying principles. There are numerous points of detail upon which the Bill might well be criticised. Some of them are of major importance. For example, the re-distributive element is difficult to justify. In any national scheme one must expect some redistribution of income as between those who pay and those who receive, but it is unfair that one class—namely, those earning between £12 and £15 a week—should bear a disproportionately high share of this burden. That is a point which deserves further consideration.
  Sir K. Joseph: Could the hon. Gentleman explain what he means by redistri-
  956
  bution? I do not quite understand what he is saying.
  Mr. Wade: I was using the word in this sense. On examining the scheme, the hon. Member will find that those who are earning between £12 and £15 a week will contribute more than others towards the cost of the basic pension.
  Sir K. Joseph: Their own basic pension—not everybody else's.
  Mr. Wade: Furthermore, I think that the opting out arrangements will give rise to many anomalies and difficulties. They will create some serious headaches for employers. I notice that the provisions take up 11 pages of the Bill, but I am not sure that the House appreciates that all these opting out arrangements have been made necessary only by the introduction of the compulsory graded pension. I regard this as one of the fundamental issues.
  When the Government's scheme was first announced, my immediate reaction was that from a Treasury point of view it seemed to be sounder than the Labour Party's plan. However, it appeared to be a cautious compromise between the existing system and the Labour Party's proposals. Although there are many divergencies in detail, I do not see any fundamental difference between the Government's proposals and those put forward by the Labour Party.
  Mr. Crossman: Good gracious.
  Mr. Wade: I do not expect either the Government or the Opposition to agree with me.
  I listened with great interest to the Minister in the debate on the Address on 29th October, 1958. When he was dealing with the need for tackling the potential deficit on the fund, I thought that he was on firm ground, but when he outlined the principles which, in his view, underlay the Government proposals, I did not think that he was so convincing. Hon. Members will remember that during the debate there was an interchange of view between the Minister and the hon. Member for Coventry, East (Mr. Crossman) with reference to applying compulsion in a discriminative scheme. The Minister said:
  "The hon. Gentleman knows and the House knows that these questions of compulsion upon

  957
  the individual are in a modern society matters of degree and of judgment."—[OFFICIAL REPORT, 29th October, 1958; Vol. 594, c. 172.]
  That is fair enough, but I think that the difference between the two plans is one of degree rather than principle. Both introduce the compulsory graded pension, and the architects of both schemes seem to assume that it is the proper function of the State to ensure that when Mr. Jones retires he shall receive more than Mr. Smith, according to the wages which they earned during their working lives, rather than merely ensure that neither Mr. Jones nor Mr. Smith should find himself in the unfortunate position of being forced to live on National Assistance or below a certain minimum level.
  It is true that the Government's scheme does not go as far as the Labour Party's plan. I recognise that; but does anyone seriously believe that this is the end of the story? I do not think that it is. The Minister has shown great skill in stealing some of the Labour Party's clothes with which to dress up his plan, but this plan, if adopted, can be so easily treated as a first step towards something much more ambitious and eventually towards the State taking over the whole responsibility for superannuation. It may be that the hon. Member for Coventry, East will welcome that, but before deciding whether that is a good idea, and welcoming it, we should consider what kind of future we are looking forward to.
  I was interested in the observations of Lord Beveridge. I am not suggesting that everything that he says must be accepted as the law of the Medes and Persians, but he is one to whom we should listen with respect on a subject such as this. I had the opportunity of hearing him in London on 11th November, 1957, and he made rather similar observations in another place more recently. He said:
  "I do not see why everyone in the country should be taxed so that those who earn most wages at work should automatically get larger pensions when old. I prefer all citizens to stand together with equal basic provision against want at any time and to be free and responsible for managing their own affairs above that."
  The point which we have to consider is whether that idea is outmoded. I know that hon. Members on the Opposition side and apparently hon. Members on the Government benches think that it is outmoded. Do we look forward to the day
  958
  when it will be the normal duty of the State to ensure that Mr. Smith shall receive more than Mr. Jones, or vice versa? Or do we look forward to the day when voluntary saving will be so far advanced that it will be necessary only to ensure that there is a basic minimum and the remainder left to voluntary saving? That is the point at issue.
  If the first view is correct, this is a step forward, a social advance. If, however, the second view is correct, the Government's plan, embodied in the Bill, is merely a complicated financial scheme to deal with an economic and financial crisis and is not a social advance at all. I and my colleagues take the second view. We believe that this introduction of compulsory graded pensions is unnecessary as well as extremely complicated. Incidentally, it is a very complicated edifice that has been built up to provide comparatively small graded pensions at this stage.
  I do not want to spend all my time on destructive criticism. We should strive to achieve five objectives. I do not propose to quote figures and calculations; they are contained in the report of a Liberal committee on pensions which, I understand, will be published tomorrow and of which I have an advance copy. If, however, I am challenged on the figures, I am quite willing to give them.
  The first objective should be the provision of an adequate basic pension. There are far too many people today on National Assistance. It was never intended that anything like so large a proportion should have to rely upon National Assistance. Therefore, it is essential that there should be an increase in the basic pension.
  Secondly, there should be some safeguard against inflation so far as it affects old people who rely on pensions. Obviously, everyone cannot be made secure against inflation, but there is a special case for the pensioners. It is true that another period of inflation of the kind that we have had since the war could wreck any scheme, but it does not follow that no attempt should be made to safeguard pensioners from the effects of inflation. There should be regular periodic reviews, at least every two years, and the pension should be linked to a special pensioners' cost of living index. Obviously, the pension cannot be expected to rise and fall with the cost of living during

  959
  a year, but if there were periodical reviews with the pension linked to a special cost-of-living index, this would have many advantages, one of them being to help in taking the issue out of the realm of party political pressures. It would help to provide some kind of objective test.
  Thirdly, the public should know what they are paying for and how it is being provided. As long as we have a mixture of the Exchequer grant and a poll tax, it is extremely difficult to get the general public to understand or even to think in terms of what they pay being related to what pensioners receive. I am inclined to favour the view put forward by my hon. Friend the Member for Orkney and Shetland (Mr. Grimond), that we should introduce a graduated social security tax for providing the whole of the money, replacing both the contributions and the Exchequer grant.
  Mr. Grossman: Does the hon. Member mean that he wants to have the graded social security tax and a flat-rate pension?
  Mr. Wade: It would be a graded, progressive social security tax to provide a basic minimum pension.
  Mr. Moyle: If the hon. Member's party is in favour of substituting a social security tax for the existing arrangement as a basis of providing the necessary revenue, why is the Liberal Party not prepared to accept the existing Income Tax system as a method of financing?
  Mr. Wade: That is a fair enough point. The answer is that there are some who should make contributions, but who are below the Income Tax level. The contribution might be small, but it is perfectly fair that workers should make some contribution even if they do not come up to the Income Tax paying level. Pending this major reform, however, the Exchequer grant should be utilised in helping to provide the cost of the pension scheme. I suggest that there should be a maximum contribution, graded downwards, and this grading downwards would be made possible by the Exchequer grant. That, however, would be only a stopgap measure.
  Fourthly, those who have reached retirement age and are willing to work should not be discouraged from doing so. I welcome the raising of the earnings level, but I do not regard this as adequate.
  960
  All too often one hears of people who have reached retirement age and who feel deterred from earning because they do not like forgoing part of their pension. No amount of explanation about the benefits they may gain from continuing to work—benefits in the form of increased pensions later—will overcome that psychological difficulty.
  We have had more than ten years in which to study the earnings rule. The time has come for a much more radical reform than that proposed by the Minister. The time has come when the earnings rule should be abolished. I am quite aware of the cost and this has been taken into account in the report to which I have referred—
  Mr. Gower: Can the hon. Member explain how any sort of retirement principle could be preserved if that rule were abolished?
  Mr. Wade: I was coming to that. I appreciate the consequences of abolishing the earnings rule. It might be carried out immediately or over a period of years by gradually raising the limit until there was no difference between the retirement age and the qualification for the old-age pension. I would be willing to see a distinction retained in respect of tax allowances, but the difference in the pension would eventually disappear.
  That would have three advantages. First, it would get rid of the irritation caused by the earnings rule. Secondly, it would get rid of some of the evasion that takes place. Thirdly, it would help to solve one of our social problems—that is, the need for facilitating change of job when people have passed the peak of their mental and physical ability. It would provide some sort of cushion for those who have reached a stage when they should move on to employment less onerous, and, perhaps, less well paid, and make way for younger people.
  I realise that all this is controversial and I am obliged to the House for listening so patiently to me. The fifth objective is to bridge the gulf between those who have the advantage of occupational schemes and those who have not. I think that we all agree that there is a gulf and that we must try to bridge it. Where we differ, however, is on the need for introducing compulsory graded pensions to achieve it. I should like to deal with the

  961
  ways in which it can be done voluntarily, but it would take too long. More can be done in the way of tax reliefs and I would make a distinction between voluntary schemes which have provision for transferability and those which have not.
  Secondly, I should like to introduce certain proposals put forward by my colleagues and myself on the Finance Bill and known as the "own as you earn" proposals, which could be linked with a scheme to encourage saving for old age. I think there also are various amendments that could be made to the Finance Acts, and particularly to Section 22 of the 1956 Act. The point I want to make is that those who believe that this gulf can be bridged only by the introduction of compulsory graded pensions are, in my view, taking too pessimistic a view of the potentialities of developing voluntary saving encouraged by the State.
  To sum up, I would say that the objections to the Bill are threefold. It does not provide any assurance that there will be an adequate basic pension. It retains, and it must inevitably retain, the earnings rule. Thirdly, it provides for compulsory graduated pensions. It is for these reasons that my colleagues and I feel that we must vote against the Second Reading of the Bill. Of course, that does not indicate for one moment that we agree with the latter part of the Amendment tabled by the Opposition. It would seem that both hon. Members opposite and Members of the Opposition differ from us in that they wish to retain the earnings rule, and wish to introduce compulsory graded pensions. But the majority is not always right; sometimes the minority is right.
  Even if my views are not accepted by hon. Members opposite or by hon. Members of the Opposition, they will perhaps concede this point. This new scheme will put a great burden on industry. It will involve a lot of time, worry and expense. If I were an industrialist, which I am not, I think I should say that all this trouble, this extra time, expense and clerical work, might be worth while if I felt quite sure that in the future Governments would not be subjected to continual political pressure to change the scheme. It seems to me that there is very little hope of that. This scheme leaves this Government and others wide open to political pressure for constant and
  962
  frequent change, and I think that to be inevitable where we have a proposal which is not based on any clear principle.
  I have no doubt that the Minister has given a great deal of thought to the Bill, and that much care has been taken in drawing it up. It may be that, by now, the Minister has become very much attached to the Bill, but the only advice that I can offer is that he should get on at once with dealing with the problem of the old people, and that it would be wise to scrap the Bill and to try again.
  7.23 p.m.
  Mr. Denzil Freeth: I think we were all interested to hear the views of the Liberal Party on this question. We shall certainly read tomorrow the detailed proposals of the Liberal Party, but we could not glean very much of the details from the speech of the hon. Member for Huddersfield, West (Mr. Wade). I did gather, however, that his party is proposing that there should be a flat-rate pension and a graduated contribution.
  As the hon. Member doubtless knows, this is the system at present used in Israel, where it was devised with the simple idea of financing the pensions that had to be paid to large numbers of elderly immigrants who, naturally, had never paid any contributions, but I never met anybody in Israel who did not consider that a graduated contribution and a flat-rate pension were anything other than completely unjust in themselves and only defensible in view of the peculiar circumstances of that country.
  Mr. Wade: Does the hon. Member agree that, both under the existing system and under the scheme proposed by the Government, that will still be the case, so far as the provision of Exchequer grants out of Income Tax is concerned? Certainly, under the present system that is so, because the payment by Income Tax is graded and the receipt of pensions is at a flat rate.
  Mr. Freeth: Of course, every element of subsidy is an element of grading. On the other hand, it is quite impossible to state whether the Exchequer subsidy comes from direct or indirect, from progressive or non-progressive taxation Basically, I think that graded contributions and flat-rate pensions are an unhappy alliance.

  963
  The hon. Member for Huddersfield, West said that he regarded the Government's present proposals and the Labour Party's proposals as being the first steps on the way to eliminating private pension schemes, and I thought I saw on the faces of a number of hon. Members opposite a degree of agreement with the hon. Member, although I agree that the hon. Member for Coventry, East (Mr. Cross-man) shook his head. I think that there are many hon. Members opposite who regard private schemes with something like abhorrence, and who would very much prefer the State to do the job. I think that one of the great merits of our scheme is that it does not attempt to have any deleterious effect on the growth of private pension schemes; indeed, I believe that it will have the very opposite effect.
  One thing which we are seeking to do, which hon. Members opposite regard almost as a sin to attempt to do, is to attempt to eliminate the very large deficit which will occur in the present fund in the next ten or twenty years. Member after Member on the Labour benches opposite has risen and told us that the Bill was really Finance Bill No. 1, the sole aim of which, if I may quote the right hon. Member for Middlesbrough, East (Mr. Marquand), was to give a "divi" to the taxpayers in the Budget, or to do what another hon. Member referred to as to save money for the Chancellor to give away.
  Quite frankly, I find the idea of the Chancellor giving money away when he makes tax remissions wholly repugnant. It is not the Chancellor's money that he gives-away. It is money owned by people who earned it, and the Chancellor is merely taking a little less from them.
  The whole idea that the Bill will, in a mystic way, relieve the fund in the financial year 1959–60 is wholly erroneous, because the financial effect of the Bill will only appear in the financial year 1961–62. Therefore, whether the Bill is introduced or not, whether it advances quickly or slowly through Parliament, it will have no effect at all on the financial provisions which the Chancellor will have to make for 1959–60, which, of course, include a deficit of about £14 million and the Exchequer contribution of £125 million.
  When we come to the Exchequer contribution to this fund, one has a difficult
  964
  choice to make. It is a question of not too little and not too much. We are proposing that, over the next two years, the Exchequer contribution should rise by about £45 million to £170 million. The Labour Party's scheme proposes that in the first year the Exchequer should contribute about £289 million; in other words, a difference of 6d. on the Income Tax.
  I think it is a very bad thing that one should propose a scheme which can only function by increasing taxation, but, certainly, it should completely disprove the allegation of the right hon. Member for Huyton (Mr. H. Wilson) that Labour Party policies do not mean increasing taxation. If they would put up £125 million more than the Government are proposing as the Exchequer contribution, it could not do otherwise than result in a higher taxation base throughout the whole nation.
  It is said, and has been said by hon. Members opposite, that the old should have a greater share of the national wealth. How does one decide what such a share should be? One surely has to consider the number of young children and the number of old people and the share of the national wealth one should give to education and to the old and to the sick. I find this a kind of social service theology which bears no relation to reality at all. What we have to try to do, as the national wealth increases, is to give greater purchasing power to the old people. One rejoices that that has been proved to be possible during seven years of Conservative rule.
  We had at one moment of the speech by the right hon. Member for Middlesbrough, East a cleverly painted picture of gloom, of old people dying alone and in poverty, surrounded by miserable sticks of furniture. We all know that happens. We all know the lot of loneliness, and that lot will not be alleviated by any pension Bill from either side of the House. It is a different question altogether. Even if we assume that at present the position of the aged is anything but enviable, quite frankly, it will not be so profoundly altered by raising the basic pension from 50s. to 60s., and that certainly will not reduce appreciably the number of old-age pensioners who at present draw National Assistance.

  965
  I remember the right hon. Member for Middlesbrough, East talking about the vast amount of luxuries for some that exists in the world today, such as motor cars and refrigerators. He seemed to imply that if the Labour Party's scheme of national superannuation came into being these luxuries would be open to 'the great mass of retired aged. They will not be able to buy very many motor cars on the difference between 50s. and 60s. a week.
  Then we have the age-old problem of the Labour Party in opposition guaranteeing the purchasing power of the pension in the time of inflation. If we are to put the basic retirement pension on a kind of cost-of-living escalator, are we to do the same with National Insurance contribution? Otherwise, the two will get completely out of step. We cannot put up the pension automatically as the cost of living rises unless we are prepared, at the same time, to put up the contribution, and I have not met anybody who has been willing to popularise that side of the question.
  Graduated pensions, of course, are excellent. People have them in the United States, as the right hon. Member for Middlesbrough, East said, but the right hon. Gentleman did not mention that in the United States there is no State or Washington subsidy at all. Let it be said quite firmly that our scheme is, first, a comprehensive scheme. Hon. Members opposite are constantly stating that contributors earning under £9 a week are excluded from our scheme. As their contribution is reduced from 9s. 11d. to 8s. 4d., it is extraordinarily difficult to see how they are excluded.
  Then we have the argument about the fact that the National Insurance Fund would be running into profit and would have a surplus on some of the years of the 1960s. I remember the right hon. Member for Middlesbrough, East pointing out that in 1960–61 it was expected that there would be an excess of income over expenditure of £8 million, and he quoted some of the other years from Table 2 of Report by the Government Actuary on the Financial Provisions of the Bill. It was rather odd that he studiously avoided Table 3, on page 7 of the Report underneath the table which he quoted, which shows that until 1976, if yearly averages are taken, the scheme runs at a very small deficit, but nevertheless at a deficit.
  966
  I should like to deal with two of the differences between the White Paper and the Bill—the increase in increments on delayed retirement and the increase in the Exchequer contribution. I have always thought that for somebody aged between 65 and 70 a period of 25 weeks was a very long period for which to guarantee to be able to work, and a very long period to go through before any appreciable benefit accrued to one's pension.
  I had a case in my constituency not long ago of a man of 68 who worked for 20 weeks out of 25 and then found that his contributions were not counted to him by the Minister for righteousness' sake, and he received nothing for them at all. I therefore strongly welcome the proposal to shorten the qualifying period from 25 weeks to 12, and I also rejoice that my right hon. Friend has found it possible to propose not merely an increase in the total extra increment from 3s. to 4s. per week but, in the case of a married couple, from 25s. to 31s. 6d. for five years.
  I wonder whether it is widely known in the country that, in the case of a married couple, if a husband works until 70, he retires on a pension of £5 11s. 6d. a week. It is a fairly sizeable sum against the background of the hours we spend referring to pensions in terms of 50s. a week for a single man. I am glad that that provision has been added in the Bill, because this plan takes effect before 1961 and I hope that people will be benefiting from it at the end of the current year.
  Secondly, there is an increase in Exchequer contribution, and here I think we have pitched it about right between the very high figure in the Socialist scheme and the present figure which is a little low. I particularly rejoice that some method has been found to provide that the Exchequer contribution may increase as the national wealth increases.
  The main effects of the Bill will, of course, be wholly admirable. I think that the National Insurance contributor will continue to receive, as he does now, a really first-rate bargain for the money that he pays. If he earns under £9 a week he will pay less and get the same in pension. If he earns between £9 and £ 11 he will pay less and get more, and it is only at over £11 a week that a person pays more and gets more. I do not think that the contributions that have to be made are unduly high. After all, if a man earns £15 a

  967
  week he will pay under the Government scheme 13s. 5d. in contribution. It will be 14s. 4½d. under the scheme associated with the name of the hon. Member for Coventry, East (Mr. Crossman) and, for the man earning £20 a week, it will be as high as 17s. 4½d. under the Socialist plan.
  I believe that the graduations are fair when it is remembered that any State scheme has to have some kind of redistri-butive effect, at any rate to take care of the old entrants. My right hon. Friend, in the debate in the House on 29th October, said of the pensioner under the Socialist plan:
  "… it will be seen that he accumulates 1s. of pension for every £35 of graduated contribution paid as compared with the £30 which produces a similar amount of pension under the White Paper proposals."—[OFFICIAL REPORT, 29th October, 1958; Vol. 594, c. 167.]
  I think that the graduation side looks good, at any rate in relation to the Labour Party's plan.
  Very little has been said so far today about the self-employed. I know that a number of self-employed people feel that they are being put into a special and depressed class by this Bill. Frankly, I do not think so. One always has to remember that the self-employed have no employer and, therefore, if they were to enter into the graduated part of the scheme, they would have to provide not only the employee's contribution but also the employer's contribution as well. Certainly, they are no worse off, and they still get their share of the Exchequer subsidy needed to keep the present pension scheme in balance.
  It is well worth pointing out to them what would happen if the self-employed went into some such graduated scheme. If one takes the Labour Party's proposals, a self-employed person earning £12 a week, who now and under the Government scheme will continue to pay 12s. a week, would have to pay 24s. 2d. A self-employed person earning £15 a week, instead of the 12s. he now pays and will continue to pay under the Government scheme, would have to pay as much as 29s. Now, 29s. out of £15 is a lot to pay by way of a National Insurance contribution. I believe that we are far more right to make them contract out of this scheme and then to have and use the freedom, which the hon. Member for
  968
  Huddersfield, West was praising a little while ago, in order to enter into some of the schemes for which such large taxation relief is being given by the 1956 Finance Act.
  We then come to the question of what effect the Government's proposals will have on the economy as a whole. I think I have shown the House that the burdens placed on the employee are not so high as to make him demand substantial wage increases, as I believe he would demand under the Crossman plan. I do not believe either that the increased contributions from the employers are such as to have a deleterious effect. For the £20 a week employee the employer has to pay 12s. 1d. under the Government scheme. He would have to pay 20s. a week under the Labour Party scheme.
  I think that this very high employer's contribution would have two deleterious effects upon the economy as a whole. First, I believe it would act as a disincentive to the employers to pay adequately their higher executives, their research staffs and so on. We all know that such people tend to filter across to America and other places where pay for such grades is higher and direct taxation is less. Secondly, I believe that the very high employer's contribution would result in higher prices. As we all know from page 119 of their yellow book, that is recognised by the sponsors of the Labour Party's scheme.
  One final word on a detail, the detail of the people with fluctuating earnings. If people have a bonus which is paid each half year and during the rest of the year are paid at, let us say, £10 a week, are they or are they not to be given the chance to contribute and to receive the graduated contributions and the graduated pensions attributable to their annual maximum salaries divided by 52 weeks?
  This is one of the problems which was raised by the British Employers' Confederation, and I would very much like to know why the document they sent round to all hon. Members so speedily rejects the idea of taking a period—half a year or a whole year—during which the employee remains in the employment of the employer, and averaging across the relevant number of weeks that person's total remuneration in order to get what we might call an effective average weekly wage for graduated pension purposes. I

  969
  hope very much that my right hon. Friend will find it possible to do something here.
  I was also immensely impressed by the proposal of the British Employers' Confederation that they should raise then-percentage of the total contributions payable under the National Insurance scheme from the present 84 per cent. or 90 per cent. to 100 per cent. I think that it would simplify administration very much, and simplification in a scheme which, as the hon. Member for Sowerby (Mr. Houghton) reminded us, will involve a great deal of administration, cannot fail to be a major asset.
  7.45 p.m.
  Mr. G. W. Reynolds: I have listened with considerable interest to some of the things we have heard from the opposite side of this House during the debate, especially to those references, just made by the hon. Member for Basingstoke (Mr. Denzil Freeth), as to the inflationary effect there is bound to be, so we are told, if a pension scheme such as that put forward by the Labour Party were introduced in this country. At the same time we are asked to believe that the Government are sincere in their protestations that they want to see the spread of private occupational pensions. What I should like to have explained by someone opposite is why it is that in a State pension scheme high contributions are likely to be inflationary, in fact are going to be so, and that a similar contribution paid by, the Government hope, almost the same number of people into private occupational schemes is not inflationary. That is what we are asked to believe.
  We are also told that employers will pass on pretty well the whole cost to the consumer. That may be so in some industries, but I would remind hon. Gentlemen opposite that there are some good employers today in almost all kinds of industries who are already making contributions to pension funds on behalf of their employees. Other employers, not so good, are not making these contributions. Do hon. Gentlemen opposite sincerely believe that because those other employers have to find some more money that the ordinary price mechanism of the market will allow them suddenly to increase their prices, whereas the employer who is already paying the contribution will have no need to increase his prices? If hon. Gentlemen opposite really believe
  970
  in free enterprise, I think that to a large extent this could, in theory at any rate, according to their beliefs, cancel itself out.
  We have also been told during this debate of some of the differences that exist between the two sides of the Chamber on this issue. I believe that the main difference has been missed. The main difference is that we on this side of the House have been looking carefully at this problem for the last six years. It is well over three years ago now that there was set up the committee which prepared the policy document "National Superannuation", of which my hon. Friend the Member for Coventry, East (Mr. Crossman) was chairman.
  We on this side of the House really believe that people should have a' pension in retirement which bears some reasonable relation to their earnings during working life. I have yet to hear from anyone speaking from the Treasury Bench that the people on the other side of this Chamber really believe that same thing. They seem to believe, as far as I can judge, that only certain types of worker should get this type of benefit and that others should rely entirely on a State superannuation scheme. I agree very much with my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand) when he says that this Bill is not really a pensions Bill, but the first Finance Bill of the year. I hope to refer to that point again in a moment or two.
  Some eighteen months ago now the Labour Party presented the proposals contained in the policy document "National Superannuation". We were attacked on all sides. We were told by the insurance companies that this was no good because it was not properly founded. We were told that a proper pensions scheme must have a proper actuarial basis. The Tory Party said it was quite wrong, that a State scheme did not need a fund of this kind. It is apparent that at that time at any rate the Tories and their friends in the insurance companies had two separate points of view.
  We were then told, also by representatives of existing pension funds, that the proposals in the Labour Party document were so good that a large number of

  971
  lower-paid workers in existing pension funds would be tempted to contract out of the existing fund and into the State fund. At the same time we were told by Mr. Oliver Poole, who was chairman of the Conservative Party at that time, that the Labour Party's proposals were half pie in the sky because, he said, they only promised half pay on retirement in the year 2010. We have now got a Government scheme which does not promise anything like half pay on retirement to any of the contributors, yet we proposed to go up to that level at any rate by the year 2010.
  I should like to have a look at the way the proposals that we have from the Government affect one or two groups of people who are involved. We have the 7¾ million people earning under £9 a week. Despite the references which have been made to this as a comprehensive scheme, they are not included in the Government's proposals. Whether or not it is maintained that the scheme is comprehensive, I insist that these people receive nothing from it except a reduction in increases in contribution which the present Government have imposed on them over the past few years. It is audacious of the Conservative Party to claim that they are giving these people something by reducing their contributions when it was they who imposed the increases over the last few years. But the decrease in contribution is only a temporary measure; it will go up again over the next twenty years.
  It is a bad thing that these people should be left out of any wage-related pension scheme. The fact that they are left out makes me believe that the Conservative Party is not interested in providing wage-related pensions. It may be said that people can make their own arrangements for wage-related pensions, but these 7¾ million people are the very ones who would find it most difficult of all to make additional arrangements for retirement. In any event, they would find it most difficult to save during their working life. We ought to be concentrating on these people and enabling them to get a little more when the time comes for them to retire. The Government are excluding them from any benefits from this legislation on their retirement.
  Mr. Gower: Would not the hon. Gentleman modify what he has said in
  972
  view of the fact that the farming industry is now contemplating an occupational pensions scheme? Few would suggest that such people would find it an easy job, but surely that modifies one's judgment of the position?
  Mr. Reynolds: A lot of industries have been contemplating pension schemes since the publication of the proposals of the committee of which my hon. Friend the Member for Coventry, East was chairman. I shall believe that a large number of farm employees will get pensions when the National Farmers' Union starts its scheme and when we see how many farmers are prepared to allow their employees to join it.
  I should like to have a look at those who are earning under £9 a week and are in an existing pension scheme which is able to contract out. They will get no benefit whatever from this legislation. They will get no reduction in contribution. In fact, they are promised that over the next twenty years their contribution will rise by 3s. 11d. as between employer and employee. They will get no extra benefits, not even a reduction in contributions, but they have a threat of a 9d. a week increase in contribution every five years once the scheme comes into operation.
  Then we have those who have to foot the bill, those earning over £9 a week, who are included in the Government's scheme. Between them they will have to pay £196 million in the year 1961–62, rising to £391 million in the year 1981–82. I know that the main reason for the Bill is to get this extra money out of this group of National Insurance contributors. An attempt is then made to sweeten the pill by promising at some time very far in the future slightly higher benefits in return for these higher contributions.
  We then have the 5 million people— 2½ million public servants and 2½ million other persons in occupational schemes—who will, the Government think, contract out of the scheme. They will have to continue paying the same contribution, but they will also have to pay increases of 9d. a week in later years with a total extra contribution of 3s. 11d. in twenty years' time, without the promise of a single penny extra in benefit.
  Then there is the existing pensioner, to whom the Amendment refers, who is

  973
  promised absolutely nothing by the Bill and who will have to continue, if he has no other resources, to rely on National Assistance. This compares unfavourably with the idea of doubling the standard of living in 25 years' time, which only a few months ago we were assured was Government policy.
  Those who really benefit under the Government proposals are the taxpayers, particularly those in the higher income groups. They will be relieved from finding a total of £79 million in the year 1961–62, rising to £420 in the year 1981–82. So we have this relief for the "general body" of taxpayers. If we have learnt anything from hon. Members opposite in the past few years, this will mean benefit for the higher income earners at the expense of those earning £9 a week who are in the new scheme.
  I want to look at what will happen to the 4 million persons at present in occupational pension schemes which the Government assume will not apply to be or will not be approved as an alternative to the proposals contained in the Bill. We are told that there are 6½ million people outside the public service in occupational schemes, but the Government assume that only 2½ million will apply to opt out. What will happen to them? I assume that some of them will have to pay double contributions. I fear that in other cases the employer will say that as he has to pay an increased contribution to the National Insurance scheme he will not continue with his private scheme, saying, "It is either not good enough or cannot be recognised as an alternative". The employer will then have to pay his contribution to the State scheme. Will an employer be prepared to pay a contribution to the State scheme and at the same time continue with his own private scheme which is not recognised as an alternative? There will be difficulties for a large number of people in this respect.
  I hope that at some stage we shall have an assurance from the Government that they will provide some protection for a worker at present in a scheme which is not recognised as an alternative and which the employer decides to wind up. I see no reason why we should not provide that where an employer is proposing to wind up an existing scheme the Registrar, who will be given certain
  974
  duties under the Bill, should have the task of approving any plan which an employer has for winding up a scheme not recognised as an alternative. Otherwise we shall have workers who have been many years in a scheme and have been looking forward on retirement to obtaining a few pounds a week from it, in danger, as a result of the Bill and because the scheme is not recognised as a satisfactory alternative, of losing everything to which they have been looking forward. The Government must find some way of protecting such people. Several hundred thousand may be affected.
  With regard to approved schemes as alternatives to the Government scheme, the position in relation to the general principle is fairly clear at the moment, but we ought to know sooner or later, the sooner the better, what will be the position of a person who is not in an approved occupational scheme but has a satisfactory personal arrangement for his retirement with a private insurance company, a policy of some kind which will give him a reasonable pension when he retires. There is no employer to decide whether he will contract in or out of the scheme. It is a personal arrangement between an individual and an insurance company. In many cases it might be a good pension. Will such a person be allowed to opt out of the Government scheme? Will similar facilities be given to someone paying the same amount of money to an insurance company not for a pension but for a substantial lump sum when he retires? How will such people be affected? They have a right to know. So far as I know, no such information has yet been given.
  It will be a little hard on them if, having made adequate private arrangements and worked out how much they can afford to pay, they are called upon to pay additional money into the State scheme, whereas if they had been a member of an approved occupational scheme where the employer decided to opt in they would have been excused paying an additional contribution to the State scheme.
  I hope that when the time comes for approving occupational schemes as satisfactory alternatives, the Minister will insist that a widow who is over retirement age and whose husband had been in a

  975
  private scheme should be bound to get some benefit from that scheme. At present, most private schemes leave it to the husband to declare that he wants a portion of his pension allocated to his widow. If a private scheme is to be approved as a satisfactory alternative, provision must be made for the widow, otherwise when the husband dies and the pension dies with him the widow will be left in an extremely bad position. In many private schemes, nothing can be done for the widow. It must be compulsory on the individual to allocate part of his pension to his widow.
  When this matter was put to the Minister earlier, he treated it as a reference to widows under the age of 60, but there must be some provision in private schemes for widows over the age of 60 if those schemes are to be approved as satisfactory alternatives to the proposals contained in the Bill.
  Another point on which I wish to question the Minister concerns a statement he made on 29th October when he told the House that one of the advantages of the White Paper proposals was that it became possible to concentrate the contribution of the Exchequer in greater degree on those who, because their earnings were lower, would otherwise have more difficulty in making pension provision for themselves.
  That was an interesting statement. It said, in other words, that the Exchequer grant towards the scheme would be concentrated on providing pensions for the lower paid workers. I wondered how the Minister worked that out. In reply to a Question which I put down on 10th November, he said that the figures no longer applied because the scheme no longer depended on those funds. He said that he would expand the point in the debate on 11th November, but in that debate he merely repeated his claim that the Exchequer subsidy would be used more to help the lower-paid workers.
  I cannot see how that is worked out. We know exactly how much it costs, actuarially, at present to provide an insured contributor with the present level of benefit. For someone who joins the scheme at the age of 16, 168·6d. per week has to be paid in order to provide him with present benefits when he retires at 65. He may be entering the new scheme at 16 or 18 and earning less than
  976
  £9 throughout his working life. If he is to receive no subsidy, he obviously has to pay 168·6d. per week. He will actually pay 139d. when the scheme starts, a sum which will rise every five years thereafter, so there must be a Government subsidy of 29·6d. per week.
  On the basis of those figures, I cannot see how the Minister makes out that he will get more subsidy in future than has been the case in the past, since at present the Exchequer pays to the National Insurance Fund 29d. per week per contributor. Thus, the only additional subsidy which the lower-paid worker will get in future will be 6d. per week, yet the Minister and other hon. Members opposite have claimed that the new scheme enables a greater subsidy to go to the lower paid worker. The figures show that that subsidy will be increased only by ·6d. per week.
  Of course, we know that the extra money will go not to the lower-paid worker but to where it has been going for many years to meet the emerging costs of pensions, not of the lower-paid worker, but for pension benefits paid for by higher-and lower-paid workers in the past. If the Minister intends to repeat his claim that the Exchequer subsidy will be used for lower-paid workers, he should give the figures to show how that will be done. I shall otherwise maintain that it is intended to meet the emerging costs which we know it is intended to meet.
  The main point about the Bill is the paltry nature of the benefits which will come from it. About 40 per cent. of contributors will be included in the wage-related portion of the Government's proposals, the other 60 per cent. being excluded because they are earning less than £9 a week, or because they are members of approved schemes. In forty years from now, the average wage-related pension on top of the existing flat-rate pension will be £1 0s. 6d. a week.
  It must be realised that at present the National Assistance Board is paying about 1 million pensioners an average of 16s. 8d. a week, so that all we have under the Government's proposals forty years from now is that 40 per cent. of the pensioners will receive 4s. a week more than National Assistance beneficiaries are getting at present. The statement that this is purely a taxation Measure and not a pension Measure is borne out by that fact alone.
  8.5 p.m.
  Mr. Raymond Gower: The benefits from the Bill have been only slightly mentioned and yet deserve some repetition. I stress the value of the relaxation of the earnings rule for existing retirement pensioners. This is something which many of us in all parts of the House have advocated for a long time. I am glad that my right hon. Friend has found it possible to permit this relaxation. I equally appreciate the decision to relax the earnings rule for certain widows with family responsibilities. That is a matter of tremendous importance.
  I want to mention a point about increased increments for those who defer their retirement. Only this week I asked my right hon. Friend to reconsider the amounts of the various disregard I suggest that his decision to increase the increments for deferred retirement increases the need for a review of the disregards. If a man is to be persuaded to defer his retirement, some of the increased increment which he earns should be disregarded later.
  A major criticism from hon. Members opposite has been that the Bill's superannuation proposals are too limited an advance. On the other hand, the hon. Member for Huddersfield, West (Mr. Wade) said that that advance was possibly too much. I have much sympathy with his view. I wish that our experience of the last twenty or thirty years had made it unnecessary to introduce the Bill. In other words, I wish that private, occupational and industrial schemes had so spread throughout industry that it was possible for us to contemplate a future in which those schemes would effectively cover 99 per cent. of the population.
  In reply to the hon. Member for Huddersfield, West, I would say that our experience has shown that there is today a substantial number of people who may not at any time be covered effectively by any of these schemes. I accept the suggestion made by the hon. Member that more might have been done by successive Governments to stimulate the extension of these schemes by adjustment of taxation and so on. But nevertheless it seems that there is a nucleus of the population who, so far as we can see, cannot be expected to enter into some of these schemes. Therefore, it appears that we have—I
  978
  hope only temporarily—to provide accommodation in this Bill for the benefit of this section of the population. I am glad that the Bill represents a limited advance in this direction. Like my hon. Friend the Member for Leeds, North-East (Sir K. Joseph), I favour the private scheme raher than an extension of the State scheme.
  The hon. Member for Islington. North (Mr. Reynolds) asked why hon. Members on this side of the House thought that a large State scheme on too ambitious a scale was likely to be inflationary. He asked why the smaller private industrial schemes had not proved inflationary. I suggest that the chief reason for that contrast is, first, that they have been introduced gradually. It has been a piecemeal process. The State schemes envisaged by the Government and by hon. Members opposite are likely to be introduced at once, and so the impact of private and industrial schemes would be less than that of such schemes.
  Another reason why a lot of these private schemes would be less inflationary is that many of them have been funded with invested money. A definite sum of money has been invested from which a large number of pensions have been produced, but in neither of the schemes advocated by the two major parties in this House is there a proposal to fund the money. That is a deficiency in those schemes, and for that reason they would be likely to be more inflationary than the private schemes. Because the one advocated by the party opposite is on a more grandiose scale, I submit that it would be likely to be vastly more inflationary than the Government scheme.
  It is unfortunate that the party opposite produced their proposals regarding superannuation at a time when they were also proposing to nationalise industry in bits and pieces; not in the form of the traditional nationalisation which they preached in the past and which was applied to some industries immediately after the war, but a new kind of back-door nationalisation That has increased the distrust of their proposals felt by hon. Members on this side of the House. Hon. Members opposite may object to that interpretation, but I think we may be forgiven for holding that opinion because their two proposals were put forward contemporaneously.

  979
  Remarks which have been made about existing pensioners are relevant to this debate, and I accept what has been said by hon. Members opposite. But I am glad that my right hon. Friend has made clear that it will still be possible to increase their pensions. Had he inserted something in the present Bill regarding pensions, it might have been interpreted by pensioners as indicating that their rights would be deferred until the date when the Bill became operative. But my right hon. Friend made clear that in the future as in the past, whenever the need appears to be in accordance with the facts at his disposal, he will review the rates again. I hope that hon. Gentlemen opposite will recognise that fact, because in some of their speeches the impression has been given that, because there is no proposal in this Bill, the door is closed to the possibility of any increase in rates of pension. My right hon. Friend has effectively killed that suggestion, and I hope that fact will receive considerable publicity.
  This legislation represents an advance, it may be a limited advance, in a sphere which is comparatively new. I hope the need for it will prove to be of a temporary nature and that the tendency so far apparent for our private schemes to consolidate and extend will continue. I hope that the introduction of the Government's scheme will not prejudice that extension of private schemes. Subject to that reservation, because I deem the future of private schemes to be of great importance, I have no hesitation in supporting this Bill.
  8.16 p.m.
  Mr. Tom Brown: I am glad the hon. Member for Bradford, West (Mr. Tiley) is in the Chamber, because I wish to refer to some things he said during his humorous and interesting speech. The hon. Member infused some typical Yorkshire humour into the debate which, as a Lancashire man, I was happy to hear. He expressed some serious thoughts, also, of which the House should take note, not because he said them but because they were wise sayings. The hon. Member said we were dealing today with a very serious problem, and I agree. He referred to the confusing, conflicting, bewildering pieces of legislation which we are called upon to administer, and I agreed also about that.
  980
  It is now fifty years since we embarked on the State pension scheme, and during that time we have added pieces of legislation calculated to assist the old-age pensioners. Despite all the statesmanship which has been brought to bear on the question of pensions, we have not yet, I regret to say, evolved a system which provides an adequate pension or put on the Statute Book legislation which the man in the street can understand. The time has come when people responsible for drafting legislation should concentrate on making it as easy as possible to understand and simple for the ordinary man in the street to understand. We are now proposing to introduce legislation relating to pensions in the form of a Bill which, even though it may be amended before it reaches the Statute Book, will not be easily understood by the workers and employers who will be affected by it.
  There are, in my opinion, three units within the State responsible for the care of the old. There may be more, but three were laid down in 1909. There is the State, which is first; industry, which is second; and the workers, who come third.
  I have often expressed with great emphasis that it is the duty of each individual worker, whatever his vocation, be he a street sweeper or a town clerk, to do his best for the State in which he lives and has his being and for the industry in which he earns his livelihood. It is also the duty of the State and of industry to protect him from poverty, want or penury in his old age. That is a philosophy in which I have believed from 1919, and I still maintain that it is true. If the Government and the House of Commons, whatever their political complexion, fail to do that duty, they are failing in the great responsibility that rests upon them.
  We are faced with the Bill. I was hoping profoundly that it would be totally different from what it is. My first complaint is that it makes no provision for the existing old-age pensioner. Today four and three-quarter million people will have to be satisfied after the Bill reaches the Statute Book in its present form. They have been looking forward with great expectation for a Bill, promised by the Government, which would at least give them extra assistance. I find that such is not the case, which I much regret.

  981
  It is true, as mentioned by the hon. Member for Barry (Mr. Gower), that the Bill does not exclude the present old-age pensioners. I would warn the Minister. I have here the report of a deputation that the Minister met early in December. He gave a degree of contentment and satisfaction to the deputation, which represented the old-age pensioners. At the conclusion of the deputation he asked its members not to discuss the details or talk about the interview because he had no better promise to give. I am not saying that the Minister did wrong, but I say emphatically that if a Minister of the Crown makes a promise to the accredited deputation from an organisation such as the Old Age Pensioners Association, that promise should be honoured. Otherwise a satisfactory reason should be given why it has not been honoured.
  The right hon. Gentleman made great play, in his 66-minute speech, to which I listened with rapt attention, with the White Paper. He said that, as a result of the debate on 29th October, the Government had to a very large degree met the criticisms. I want to refer to only three paragraphs in the White Paper, since my time for speaking is limited. The first quotation I will give is from paragraph I, which states:
  "Her Majesty's Government's study of the wider problems of provision for old age has now reached the point at which the Government are ready to put forward their views to the country and to state the lines on which they consider future development should be based."
  Is the Bill the embodiment of the considered judgment of the Government? Does the Bill in its present form reveal what the Government will do for the existing old-age pensioners?
  The White Paper goes on, in paragraph 2:
  "How best to make proper provision for the old is one of the biggest social problems of our time."
  We agree upon that. The problem will become greater with the advancing years. All the papers that have been published—by the Economist, the Labour Party or the Tory Central Office or by well known thinkers—prophesy that in a few years the problem of dealing with our old-age pensioners will be more acute because of the longevity of the people. I have been saying that for a number of years. How true it is that both the
  982
  Labour Party and the Tory Party have failed to realise their full responsibility to the old folk.
  The White Paper then says:
  "It is vital, too, in considering public policy on this subject, to ensure that state action does not undermine the personal responsibility of each of us to make such provision as we can for our own old age."
  Decent British citizens do that, without being told by the Government, if they are in a position to do so; but, as has already been stated in the debate, many of the people for whom we are pleading lived during the interval years when they could not make provision for old age. Why? Because their wages were below a certain level, many of them were working for meagre wages and could not make provision for old age.
  The White Paper proceeds, in paragraph 3:
  "It is indeed one of the most encouraging features of the present position that many people—and an increasing proportion—have rights and obligations in respect of pensions over and above their rights and obligations under the state scheme of National Insurance".
  One could go on quoting from the White Paper to prove that the Bill which we are now debating falls very far short of putting into legislative form what was contained in that document in October, 1958, and debated in this House on 29th October, 1958.
  My time is ending, but there are two complaints I have to make. One is that the Bill does not make any immediate provision for assisting old-age pensioners, who now total 4¾ million. We are finding that an increasing number of people are compelled to go to the National Assistance Board, because of economic circumstances, to secure supplementation of the basic pension. It was If million in 1956. It is true that the number was reduced, but now it is increasing because of the economic position of the old folk due to the rising cost of living and the lowering of the value of the pound.
  I hope, after what has been said by the hon. Member for Barry, that the Minister of the Crown who is charged with the responsibility of replying to this debate will give the House and the nation—and the old-age pensioners—a categorical assurance that immediately the Bill is on the Statute Book the Government will tackle the question of increasing

  983
  the basic rate of old-age pension from £2 10s. for a single person to £3 10s., and for a married couple from £4 to £6.
  I shall not deal with the figures, which have all been very interesting. They can be analysed and will reflect no credit on the scheme proposed in the Bill. The one thing uppermost in my mind is that we are not doing the job we ought to do by excluding, or allowing to be excluded, the existing old-age pensioners. I beg the Minister to give serious consideration to that very important aspect of the provision for old age referred to in the White Paper of October, 1958.
  8.30 p.m.
  Mr. Anthony Kershaw: This is not the first time that I have had the privilege of following the hon. Gentleman the Member for Ince (Mr. T. Brown) m our debates about old-age pensions, and I do so again today with equal pleasure.
  The hon. Gentleman was not quite right, in his concluding remarks, when he said that the Bill does not include anything at present for the old-age pensioners. My right hon. Friend, when he opened the debate, mentioned the two items he was able to include in the Bill, as I know the hon. Gentleman will concede, namely, the relaxation of the earnings rule for men and widows with children, and also an increase in the increments and the easier calculation of increments which is to take place and will be implemented before the provisions of the rest of the Bill become law.
  The Bill is not designed to be the type of Measure which the hon. Member for Ince asks should be introduced at present. It is not designed to deal with the amounts which the pensioner shall receive. It is, as is frankly conceded, a Bill about the machinery for pensions in the future, which charts the course which pensions legislation is intended to take.
  Here, unfortunately, I must part company from the hon. Gentleman. His and my idea about how pensions should in future go are not, I think, quite the same. I believe that, as the Welfare State is developing, the future of all the services which the State provides, pensions not least, should take this course. We should concentrate far more upon providing a basic minimum for those who need it, but we should not continue to increase benefits for those who can equally well pro-
  984
  vide them for themselves. As my hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said earlier, there really is no logic in the State taxing heavily to provide for its citizens benefits which they can quite easily pay for themselves.
  Mr. E. Fernyhough: Would the hon. Gentleman apply that argument to the higher civil servants?
  Mr. Kershaw: I should apply it to anybody. I am not saying that we should not have graduated pensions. If people wish to buy graduated pensions for themselves, by all means let them do so. I shall have some good things to say about that in a few moments. I am arguing now that, in the provision by the State of social services of various kinds, of which pensions, which we are now discussing, are one, the State should have as its object the provision of a basic minimum for those who cannot afford to provide themselves with anything else, but should not tax the population to pay for benefits to those who pay the taxes.
  The Bill, in laying down the future course of pensions in this country, fits into that pattern which, I believe, should be the future pattern for all our welfare services.
  Mr. Fernyhough: I think that the hon. Gentleman did not take my point. For retired officers, retired civil servants, and so on, what the State does now is to tax people to pay their pensions.
  Mr. Kershaw: Certainly, in the case of public employees who have to be paid pensions, the Government must raise taxes to do that. In that respect, the Government are not acting differently from a private employer. Those pensions are regarded as part of the wages it pays to its employees during the time they are in active service.
  I am speaking of the provision of State pensions for everybody, irrespective of whether he is State-employed or not. In that matter, I believe that we should concentrate only on the basic pension and should not raise too high taxation on the rest of the community to provide a larger pension for those who are perfectly well able to provide it for themselves. I believe that the Bill achieves that object of helping those who cannot help themselves and leaves to the indi-

  985
  vidual who can help himself the opportunity to do so.
  The main criticisms of the Bill offered from the benches opposite today seem to be of two kinds. The first is that it is too small a scheme to merit the attention which we bestow upon it, and the second that the contributions are too high. Those criticisms seem to be mutually antagonistic to some extent, but in regard to the first I think that I have shown that even if the scheme is too small for some people it should not be made any larger. I would think it a retrograde step to provide very large pensions for those who desired them.
  The hon. Member for Huddersfield, West (Mr. Wade) gave us a preview of the Liberal Party's pamphlet on pensions. The Liberal Party apparently intends to provide a large basic pension with a graduated tax. I disagree fundamentally with that, both in respect of the graduated contributions and the provision of a large basic pension to everybody, irrespective of need. It is even more wrong than the scheme of the hon. Member for Coventry, East (Mr. Crossman).
  I find a connection between the publication of the Socialist Party's proposals on nationalisation by the back door and the publication of its pension scheme, which is designed to provide a very large surplus in the first years of its operation. If my suspicions are unworthy, it is the short interval between the publication of those two schemes that is the reason for my entertaining them.
  I was interested to hear the two alternative versions put forward by hon. Members opposite of what should be done with the accumulated fund to be found under the Socialist pension scheme. The hon. Member for Coventry, East said that it would be a backing against future inflation, but the hon. Member for Loughborough (Mr. Cronin) said that we must match the investment which Russia is putting into capital goods. He proposes to use the fund for that purpose. Those are two very different purposes, and if the proposal made by the hon. Member for Loughborough were put into operation it would certainly mean that the Government were utilising the pension fund to enter industry in a very large way. That would be exactly the method of nationalisation which is in future to be adopted if the Socialist Party is again elected. My suspicions are, therefore.
  986
  shared by the hon. Member for Loughborough.
  We have also discussed whether the Socialist scheme is inflationary. I believe that it must be, whatever the hon. Member for Coventry, East told his trade union audience in Scotland. It seems to me that it follows, as night follows day, that if the very large contributions to be exacted from contributors under the Socialist scheme are put into operation the individual will demand an increase in wages to meet his commitments.
  Secondly, if the employers' contribution also rises, that increased contribution must find its way into the costs of whatever is sold. Indeed, the Socialist pamphlet says that the cost will be passed on in the prices charged by any employer who is at present operating on a very close margin. If his costs are sharply increased he must put up his prices in order to stay in business. The Socialist scheme is, therefore, bound to be inflationary, both from the psychological and the purely economic point of view.
  It is the primary duty of this country not to be involved again in the kind of inflation from which we have suffered in the past twenty years, and the greatest measure of protection which any Government can give its old-age pensioners is to ensure that they do not have to suffer the privation and misery which inflation has brought them in that period.
  I do not believe that it is possible to have a built-in remedy against inflation in any pensions scheme. I know that Mr. Jackson, in the pamphlet mentioned by the right hon. Member for Middlesbrough, East (Mr. Marquand), said that to some extent it is possible to have a built-in provision in a pensions scheme against what he called moderate or mild inflation, but that view was strongly disagreed with by other commentators and I wonder whether it is any good. Putting provision against inflation in this Bill would be doing so only for the look of things because, however cleverly the Bill was drawn, if we had inflation the value of the pension would fall.
  I do not think that a built-in provision which may have to operate in an inflationary condition of economics would achieve the objects we have in mind. Nor would it take pensions out of politics. The fact that the pension would go up

  987
  with a rise in the cost of living and, presumably, would go down if the cost of living went down, would by no means remove it from the party arena. We should have the fundamental difference on which I touched in the earlier part of my remarks, that those on this side of the House believe in a basic pension while hon. Members opposite believe in a much larger pension for all whether they need it or do not need it.
  I welcome very much the relaxation in the earnings rule announced by my right hon. Friend. I should like to be able to agree at first sight with those who have said that we should entirely abandon the earnings rule as it has become out-of-date, but I cannot do so. When I know that the abandoning of this rule would cost £100 million a year in pensions paid to those who, by definition, have a larger pension than the basic amount, I cannot at this stage advocate the abandonment of the earnings rule entirely. I know how popular that would be with a great many people, but I believe it would be giving a benefit to those who are not on the base line of pensions need, and £100 million to them rather than those who need it most is something we could not support.
  I believe that consideration should be given in future—we should all start thinking about it now—to whether or not it is possible to raise the retiring age. Both parties are perhaps inhibited from doing that at present by reason of past promises made on the basis of retiring at 60 and 65, but, as we are living longer, the time has come to consider raising the retiring age. That would be of great importance to the future of the pensions fund. It would also encourage people to go on working, as they are now able, because of better health. It would increase the happiness and the health of the population.
  I welcome the increased increments given today. I believe that they will be welcome to those who, in the past, have had some very disagreeable experience in paying 24 or 23 contributions without getting any benefit therefrom. The Bill charts out a sound route for the future and I give it my wholehearted support.
  8.43 p.m.
  Mr. A. E. Hunter: Although I have sat through the debate since the
  988
  Minister opened it, I shall be very brief in my speech. Therefore, I shall not follow along the lines of the speech of the hon. Member for Stroud (Mr. Kershaw), except for one point. If there were any attempt to raise the retiring age it would meet strong opposition from hon. Members on this side of the House. The retirement age is 65, and we would certainly resist any attempt to raise that age.
  I wish to speak briefly and mainly on the Amendment. The Minister was very clear, as he generally is, in giving details of the Bill and, as the Bill can be dealt with in Committee, I shall devote my remarks mainly to the Amendment. Pensions is a subject to which I have given some study, and especially sympathetic study in relation to old age pensions. Therefore, if, like my hon. Friend the Member for Ince (Mr. T. Brown), I make a plea tonight for old-age pensioners, it is because, with him, in the House I have urged their claim to a proper pension.
  This Bill, which is now before the House for Second Reading, does nothing to improve the lot of existing old-age pensioners and fails to provide a proper scheme of national superannuation. When reports first appeared in the Press that the Government intended to introduce a new pensions scheme, it filled me with hope that it would follow similar lines to the Labour Party's pensions plan and finally, over the course of years, would provide a proper pension which would abolish poverty, want and hardship in old age. To my deep disappointment, the Government's pensions plan lacks courage, imagination and an appreciation of modern needs.
  Old-age pensions were commenced on a modest scale nearly fifty years ago. There were some Jonahs even at that period who wailed that we could not afford it and that it would cause inflation. Anyone who studies the reports of the public debates of 1910 and 1912 on pensions will see that there was opposition in those days even to the modest pension of 5s. a week. That pension was subject to a means test and was non-contributory.
  Since that time, nearly fifty years ago, there have been many changes made by National Insurance. At no time for many people did these changes abolish poverty

  989
  in old age, and during my brief time in the House hon. Members on both sides have had to plead for increases for old-age pensioners because of their need and their poverty.
  It is estimated that a retired person wishing to maintain a proper standard of life needs a pension equal to 60 per cent. of the income he received when working. Men and women who have spent their lives working in industry and commerce should not suffer poverty and worry in their old age. Provision is already made for a number of people under private superannuation schemes, and many of my hon. Friends and I have always encouraged these private schemes. They make for good industrial relations, and many trade union officials have negotiated with industrial firms a joint pensions scheme.
  It is estimated that one person in three is covered by private schemes. We should also bear in mind—and I am certain that the Minister does—that not all industries are suitable for private arrangements. Some industries do not allow for private schemes of the type which have been mentioned in the debate.
  This means that two-thirds of the nation have to depend upon National Insurance for their old age, and therefore we need a national scheme which will fully cover their needs in retirement.
  I feel that the Government have missed a great opportunity by failing to bring in a plan which would have commanded the support of all hon. Members and also of public opinion in the country. The Minister has attacked the Labour pensions plan, as he is entitled to attack it. It has been attacked by other hon. Members opposite. I feel that I am, therefore, entitled to give some examples from the Labour plan in order to compare it with the Government's plan.
  Under the Bill, there are five million old-age pensioners who get no increase at all. Their pensions are to remain at £4 a week for a married couple. Under the Labour pensions plan existing pension would go up to £4 10s. a week for a married couple. The hon. Member for Basingstoke (Mr. Denzil Freeth) virtually sneered at an increase of 10s. a week, but for people on a small income, 10s. a week is often quite a large increase.
  May I give the House other examples of the difference between the Govern-
  990
  ment's National Insurance scheme and the Labour pensions plan? There are some millions in this country who earn £9 a week or less. Though he pays contributions all his life, a married man will still receive only £4 a week under the Bill, whereas under Labour's pensions plan he would receive £6 a week— £2 per week more.
  A married man earning £12 a week, after paying contributions all his life, receives £5 a week under the Government scheme. Under the Labour pension plan he would receive £7 a week. The married man earning £18 a week under the Government pension scheme receives £6 1s. a week. Under the Labour pension plan he would receive £9 a week. Under the Labour pension scheme, the old-age pensioner is safeguarded against any rise in prices of food, rent, heat and clothing. There is a shield in our plan against inflation.
  In the Government scheme there is no safeguard against inflation. The Labour pension scheme of "National Superannuation" aims, in the course of time, to give to the pensioner retirement on half pay. Even so I do not regard our scheme as the complete Utopia, but it lays the foundation stones towards that ideal. In the years ahead for this nation, there must be rising standards for all.
  Social changes during this century have changed living standards. Living standards have gone up and the living standards of old-age pensioners must be included. Provision for retirement must be a reality and freedom from want established. This National Insurance Bill does not provide for these ideals. In my view, it is more a scheme for shifting the cost of pensions from the Treasury to the contributor than providing proper provision for old age.
  I trust that at an early opportunity Labour's pension plan can be established to provide eventually a pension scheme which will provide full security for the people of this country to enjoy retirement in the evening of their lives.
  8.52 p.m.
  Vice-Admiral Hughes Hallett: I am very grateful to the hon. Member for Feltham (Mr. Hunter) for allowing me a few minutes to make just one point. I am sure that he will acquit me of any discourtesy if

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  I do not follow him in his remarks. In any case, I was fortunate enough to speak in the debate on the White Paper, and I gave then my reasons for supporting the Government's policy, which apply equally to this Bill to which I give, also, my unwavering support.
  The point which I want to raise is, I think, a fresh one. I do not think that it has been raised in any of our discussions up-to-date. It is an extremely important one which, incidentally, would apply, I think, equally to the more ambitious Labour plan of superannuation as to the Government's scheme or, indeed, any scheme which had graduated benefits based on graduated contributions, with an option to contract out. I refer to future policy with regard to abatement.
  Perhaps I may remind the House that abatement is the principle whereby all persons who enter the public service after some date in 1948—the dates vary slightly in each profession—are liable to have their public service pension abated by an amount equal to the National Insurance pension when they receive the latter. For example, the civil servant who retires at 60 on £500 a year may find five years later that his pension has been reduced to £370 a year, if the present rate of National Insurance pension remains as it is. Even more remarkable is the case of a sergeant in the Army who goes out at the age of 40 on pension of £2 14s. a week and who, twenty-five years later, may find his Army pension cut to 4s. a week when he draws his National Insurance pension.
  I want to be perfectly fair about this. It has not happened yet. The history of the application of this principle of abatement is very curious. It was originally defended by the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton)—whom I see in his place—in, I think, 1946, by arguments that, I must say, have never convinced me in the very least, although, in fairness, I must add that they do not appear to have been opposed by my party at that time. Unfortunately, I was not a Member of this House then, or I would have had something to say about it.
  When the then Labour Government originally fixed the level of abatement at 26s. a week that was, in fact, the rate
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  of the single person's National Insurance pension. The House will recall that in 1951, shortly before they left office, the Labour Government raised the pension to 30s.. but the abatement level was left at 26s.
  I regret to say that during the seven years of office of the Conservative Government they have not taken the opportunity, in any subsequent National Insurance Acts, to abolish this principle. On the other hand, they have not raised the abatement, and although the pension has gone to 50s. a week the abatement level is still 26s. Like a sleeping dog, it has been left to lie, but, like a sleeping dog, it could be very dangerous to certain people if it were suddenly to awaken.
  The point is that any future Government would, as I understand the present law, be perfectly entitled to increase the abatement level right up to the maximum of the pensions that we are now considering, including the graduated element; and to say that they were acting in strict accordance with the letter—perhaps, even, the spirit—of the law. It seems to me that if there is any serious chance at all of that happening it will have a profound influence in making all those who are at present in the public service wish to contract out of a scheme of this nature. I do not see how it can fail to do so.
  We have not yet, of course, been told how the decision will be made by the various responsible Ministers as to whether or not public servants are to come into the scheme. Presumably, it will be done in consultation with the Whitley Council and the Burnham Committee, as the case may be. What will happen in the Armed Forces we have yet to learn.
  This is not a trivial matter. We are dealing, perhaps, with 2 million or 3 million employees. I realise that my right hon. Friend the Minister of Pensions and National Insurance is not responsible for this particular policy, but the Government are responsible, and I therefore suggest that before we come to the Third Reading of the Bill we should be given some indication of the Government's future intentions.
  It is also a very curious thing that this matter is not referred to, I think, in the Labour Party's papers and pamphlets on superannuation. I put it to the hon. Member for Coventry, East (Mr.

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  Crossman), who is about to address the House, that it is up to the Opposition, too, to state their policy. Meanwhile, I merely repeat that the idea of paying higher graduated contributions is unlikely to appeal to the millions of our public servants if there is any chance of the higher benefits being abated in this way.
  8.59 p.m.
  Mr. R. H. S. Crossman: I should like to start, if possible, with an uncontroversial remark. It is that those of us who feared that this debate might be an anti-climax after the debate on the White Paper have had a most pleasant surprise. I think that the standard of debate to which we have listened and the standard of precision on both sides have been considerably higher than on the previous occasion.
  It looks as though we have had time to reflect, and what is not surprising is that reflection has not brought us together but has tended rather to make sharper and clearer the differences between us. Reflection has even produced a Liberal pensions programme—or rather not exactly a programme but an attitude, which we were surprised to see managed to find no real difference between our plan and the Tory plan and, for one moment in this debate, brought the Minister and I together.
  Mr. Wade: The hon. Gentleman would have had the benefit of hearing my views in the debate on the White Paper had I been fortunate enough to catch Mr. Speaker's eye.
  Mr. Crossman: I was glad to hear the views of the hon. Member this time, and we were instructed by them. Although I did not learn as much, I was interested in the remarks of the hon. Member for Bradford, West (Mr. Tiley), and I learned a great deal from the hon. Member for Basingstoke (Mr. Denzil Freeth), but I do not think I am being prejudiced when I say that the most powerful contribution came from two hon. Members on this side of the House, namely, from my hon. Friends the Members for Sowerby (Mr. Houghton) and Islington, North (Mr. Reynolds). They produced a most formidable indictment of the Government's scheme.
  When we were discussing the White Paper it was still possible to have doubts. I think that those of us—certainly this
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  applies to myself—who on first reading described the White Paper as a counterfeit or bogus imitation of the Labour Party's plan were under-estimating how bad it was. On reflection, we now realise that if we were to call this Bill a swindle we would not be exaggerating. It is a deliberate attempt to persuade the people that some improvement in pensions is being carried out and that, for instance, wage related pensions are being introduced, when, as has been conclusively shown by my hon. Friends, the whole aim and object of the Bill is a fiscal arrangement to reduce the Exchequer liability and to redistribute the burden of pensions so that it falls predominantly on the middle range of wage earners.
  That case has been overwhelmingly made out from our side. We expect the Minister of Labour, when he replies, to take this indictment seriously and to answer it, if he can. For the Minister's convenience, I thought that I would try to summarise our indictment, not in a negative form but in a positive form, by telling him what I regard as the five prime requirements for any pensions scheme and then to show how the Government's scheme fails in each requirement.
  It seems to us that the first requirement is universality. A sound scheme must include everyone and ensure that everyone, in addition to a flat rate pension, qualifies for a superannuation pension as a member either of a good private scheme or of the national scheme. That would be our definition of the requirement of universality.
  Secondly, we insist on transferability and freedom of choice between the Government and private schemes which contract out. Thirdly, we insist on parity between the private and public sector—that is to say, the national scheme must be as good as private schemes and must be permitted by the Government to be competitive with decent private schemes.
  Fourthly, the bill must be fairly shared between Exchequer, employer and employee. Lastly, and most important of all, any long-term measure for reforming the pensions scheme must include a fair deal for existing pensioners. At the conclusion of my speech, I shall show why I regard the inclusion of existing pensioners as absolutely essential to the health of the long-term scheme.

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  I do not think I need waste much time on the principle of universality. There is no dispute in the House about it. There could be nothing less universal than the Government's new graded pension. My hon. Friend the Member for Islington, North pointed out that it excludes all present pensioners, everybody earning under £9 a week and self-employed persons. The graded benefits will apply to less than half the working community.
  Like my hon. Friend the Member for Sowerby, I cannot help asking myself why this colossal, elaborate administrative structure, to which a number of right hon. and hon. Members have called attention—and it will be a complicated thing to have all this contracting in and contracting out—should be created for the sake of a pitiable increase in the benefits of a segment only of the working class. It is very difficult not to believe that this plan started in the Ministry as a quite good superannuation plan, and there then occurred one of those battles in which the Treasury came out the victor against the Minister.
  If that was so, it would explain why the Minister has been so singularly bad tempered in presenting his Bill. I cannot believe that any Minister of Pensions could think very much of the Bill. If it was being put forward by the Chancellor of the Exchequer, he could be glowing in self-congratulation on what he had achieved, but for a poor—or, shall we say, ambitious—Minister of Pensions, even a well-intentioned Minister of Pensions, to come to the House with this pitiable swindle of a Measure must be a sad disappointment for the right hon. Gentleman.
  Before leaving the question of universality, I want to repeat one request to the Minister of Labour which I made in the previous debate, when I called attention to certain facts about the position of widows' pensions. I pointed out that in public pensions schemes—municipal or national, for example—widows' pensions were included but that in most private insurance schemes there was only a cash payment. I want to know whether it will be made a condition for a scheme to contract out that it shall include an adequate widows' pension. Secondly, we begged the Minister to reconsider the provision he proposed
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  to make for widows in the Bill. It is a mean provision, and I expected that there would be an opportunity to improve that part of the Bill.
  I now turn to the conditions for contracting out, and particularly transferability. This is a technical subject. I start by referring to the remarks of the hon. and gallant Member for Croydon, North-East (Vice-Admiral Hughes Hallett) about abatement. I fully agree with him. It is extremely important for the Government and for the next Government to disclose their views about abatement as it affects several million people in the Civil Service. I hope to hear from the Minister of Labour whether the Government are thinking about this.
  I will say what we think, for we have been consulting on this subject for many months with the relevant trade unions. We have said to them that we were talking informally and could not, of course, bind the future Labour Government, but that it seemed to us fairly clear that in the scheme that we should introduce in our amending Bill in a few months' time one basic principle would be the universality of a fixed flat-rate pension—the £3 a week pension guaranteed against inflation—which everybody would draw. Since that was an essential element in our scheme, it seemed to us clear that if there was to be a contracting-out scheme for civil servants it would have to be re-negotiated with the Treasury and, in that re-negotiation, I would strongly advise civil servants to study our book and to use its argument for liquidating the problem of abatement and having a settlement of it more satisfactory to themselves.
  Now, I come to the much more important problem of transferability. As we said in the debate on the White Paper, we welcome the conversion of the Government to the principle of transferability of pension rights. I want, however, to repeat a point made by my hon. Friend the Member for East Ham, North (Mr. Prentice), not today but in the debate on the White Paper, when he pointed out that although the Government had accepted the principle of transferability they had accepted it in only a moderate and halfhearted manner. All that is transferred if a person moves from a private to a public scheme or from one private scheme to another is the element in his private pension rights equal to the maximum to

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  which he would be entitled under the Government scheme.
  I would like the Minister of Labour to explain why, only that element of a private pension right equal to the maximum available under the Government should be transferred. In our philosophy of transferability, we believe that all pension rights should be regarded as deferred pay. We believe that the whole basis or philosophy of pensions is that one agrees with one's employer—whether it is the State or a private person does not matter—not to draw all one's wage and that a certain proportion of it is put aside to be used in one's old age. In this case pension rights are earned. They are something which one acquires and, if one acquires them, one can transfer them. We shall certainly include this in our Bill—providing that in future all pension rights of private schemes that are permitted as alternatives to the national scheme must be fully transferable in the sense that all the rights which each man has acquired are his and go with him whenever he changes his job and however often he changes it, so that at the end of his life he has a total of accumulated pension rights for every week—indeed, for every day and for every hour—that he has worked.
  We are assured by the world of insurance that this definition of transferability is perfectly practicable and that it is something which could quite easily be done. Indeed, we have already got it as between the municipalities. It is already a fact that in large areas of industry people move with their total pension rights. We therefore ask the Government to reconsider the Clause. We ask them whether they cannot introduce the full principle of transferability as part of the Bill and at least do one big, positive action in the course of this mean little Bill.
  Now I come to the much more difficult problem of the right to choose between the Government and private schemes. I should like to tell the Minister, and also the Minister of Labour, that since the issue of the White Paper, and since he made what I thought was a very reasoned and thoughtful contribution on this subject, we have considered the problem raised with the very greatest care. We agree with him that there are a number of quite serious administrative problems about laying down a purely
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  abstract right to opt. Quite clearly, we could not have a person opting as often as he liked—a dozen times a year in and out of every possible scheme—and there certainly must be a limit to the right of the individual to play hanky-panky with the scheme.
  Nevertheless, we think it is intolerable to introduce a kind of Clause such as Clause 12. I do not know whether hon. Members opposite have read Clause 12, which lays down, for instance, that the Minister of Education, provided he has had a little consultation with the unions, shall decide whether or not school teachers shall all be in or out of the scheme. I suppose the Minister of Housing and Local Government is going to decide whether all local government officials in one fell swoop are in or out of the scheme, after consultation. In our view, this is a violation of freedom which is utterly intolerable.
  We also realise that there are difficulties. Clearly, we think that there must be a once-for-all individual option at the start of the scheme, and I think that some of my expert advisers will know far more about that than I do. I am told that there are one or two precedents for a once-for-all option, such as in the Local Government Act, 1929, and the National Health Service Act, into which was written in a once-for-all option after which one had to stay put. I should like to have that considered, and I agree very much with what one of my hon. Friends said—that after this option what we have to find is a proper democratic method of considering this problem. It may well be that that is the method of the majority decision, and not a pure individual right. We are thinking about this, and we recognise the difficulties of this particular problem.
  Now I come to the third of my tests, which I laid down to be parity between the national and private schemes. Of course, the really interesting fact about the Government scheme is the deliberate way in which they have contrived to introduce a wage-related pension scheme and make sure that it is a shabby, poor little scheme, inferior, as they themselves admit, to any that an insurance company could give. Why have they done that? The secret was really given in a charming speech by the hon. Member for Leeds, North-East (Sir K. Joseph), a constituency

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  where insurance seems to be hereditary. The hon. Member told us quite frankly that, after all, we have to consider the healthiness of private superannuation and the insurance companies, and the hon. Member for Basingstoke was almost as frank when he said that the great virtue of the Government's scheme was that it did not upset or disturb the insurance companies.
  I suggest with great respect to the Minister that, although one ought to take the greatest care to be strictly fair to all private schemes, one is entitled to demand genuine parity for the national scheme. We ought to try to get a satisfactory position, a balance which is absolutely fair, giving no advantages to either side. We have worked very hard in our scheme to work out something which is genuinely fair, and if people can show me that it is unfair we are perfectly prepared to consider any objections which indicate that.
  People have said that we subsidise the national scheme. It is quite untrue, because the Exchequer grant does not even cover the basic £3 a week, and no penny of Exchequer money goes to somebody in the national scheme that does not equally go to somebody in a private scheme drawing a £3 a week pension.
  We have taken the most scrupulous care in preparing our scheme to give a fair deal to private enterprise in superannuation, but the Government, charac-teristicly enough, have quite deliberately swung the whole pendulum against national enterprise. They have made it quite certain that it will be mean and beastly. They have it quite certain that to compel a man to pay these contributions and get these benefits is an insult to that unfortunate person.
  Here I should like to have some answer from the Minister of Labour to the remarkable figures which were quoted by my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand). He did something which I cannot do. He added up the figures in Appendix I of the Government Actuary's Report and reached the interesting conclusion that the contributions of the people who pay for grading, the £9 to £15 a week people, come to £391 million in 1981 and the benefits to £63 million. And in the year 2001–2 the contributions will be
  1000
  £587 million and the benefits will be £199 million. This in a pay-as-you-go scheme which claims to raise each year in contribution what is paid out in benefit in the same year! That type of levying of contribution with no relation to benefit makes a mockery of the word"superannuation".
  We are determined in all we do to be scrupulously fair to both sides. I know that there are a number of people opposite who feel that the great advance that we intend towards national superannuation would be a blow to the insurance world. I think that my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) would confirm that when he made the last great advance in National Insurance the insurance companies came quivering with the feeling that they were all going to be made bankrupt. Frankly, insurance companies are not made bankrupt if we enable people to become insurance-minded. If we systematically teach people to make provision for old age and give them facilities to do that in a private or in a national scheme, if we educate people to insure for old age and provide half-pay on retirement, I believe that most people will not be content with what we have given and will take out further insurance, either through a private employer's scheme or through their own individual enterprise, as millions of people do today.
  It is a most short-sighted attitude on the part of the insurance companies to say that they want a mean, miserable national scheme, because that discredits insurance. Frankly, the Government scheme discredits the idea of insurance and has been received with considerable embarrassment by the insurance companies. They have had to cheer, but what a faint, embarrassed cheer it has been from the Life Offices and from the Scottish Life Offices. The only cheer has come from the Economist, which discovered that the Government hereby were saving hundreds of millions of pounds a year to the Treasury. There is my third test by which the Government fail altogether. They fail because their scheme fails to keep a balance between the private and the public sector in superannuation.
  I come now to the fourth test, the fairness in paying the bill, a test linked, of course, with the previous one of parity.

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  We all know the aim of the Government plan. They made it clear in the White Paper. The Government's aim is to see to it that Exchequer liability over a period of years is greatly less than it was estimated to be, and that that liability is transferred to a section of the contributors. I want to make it quite clear from our side that we are not opposed to the principle of redistribution in old-age pension insurance. We think it fair that those who are better off should contribute rather more than those who are worse off. It is a good sound Socialist principle, and we are not ashamed to have written that principle into our plan.
  So we do not object to the Government saying,"We are going to see to it that the contributions of the poorest people go down and those of the better off people go up. The principle is all right, but they have applied the principle in the most outrageous way. For they have applied the principle below the £15 level. Of course it is true that anybody who earns £50 pays up to £15. But if we stop contributions at the top of the line—on the £15 wage band—we put the whole weight of the burden on one section and eliminate, or greatly lessen, the burden for those with from £15 to £50 or £60 a week.
  The whole difference between the Government scheme and ours is that ours is all-embracing, including everybody up to £2,000 a year, whereas under the Government scheme people only help to contribute towards reducing the Exchequer deficit up to the level of £15 a week.
  One of the most interesting sentences in this new document is the assertion of the Government's conversion to"Pay as you go". I often wonder what would have happened if we had produced a"Pay as you go"scheme two years ago. By jove, what we would have been told about how any insurance scheme must be funded! But, having produced a funded scheme, and having shown that a funded scheme can do great things for capital investment, we scared them out of that. So now they take to"Pay as you go", which means be swindled as you go, because what people in this middle wage band get is almost nothing compared with what they pay.
  I also want to mention something which has not been mentioned in this debate but to which my hon. Friend the Member
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  for Motherwell (Mr. Lawson) referred in the debate on the White Paper. The Government's method of estimating how much a contributor gets is by saying that on each £15 of his earnings credited to him he gets 1s. pension. It is what they call the "brick" method. Under the Government scheme, if a person earns a brick a year each brick of £15 earns 1s. a week pension. So if he earns one brick this year at the age of 15 he gets a pension 45 years later of 1s. a week, although by then the cost of living may have doubled. This is the fallacy of trying to make a pay-as-you-go scheme a contributory scheme.
  The only honest pay-as-you-go scheme is a scheme financed by taxation such as the Australians have. There is no nonsense about it. It is paid out of the Budget like the National Health Service. Quite literally you pay as you go. Each year so much is collected off the taxpayers' money and handed out to the pensioners. If, however, the scheme is operated on the principle of contributions, we are swindling the unfortunate contributor. We are saying to him, "All you will get in forty years time is £I and not the equivalent purchasing power of a 1958 £ in the year 2005".
  I tell the Minister that we took a lot of trouble over the scheme. Finally, we borrowed from the Germans their system of dynamic pensions, in which it is possible to revalue year by year the contribution paid in so as to ensure that the pensions have the purchasing power of the year in which they are paid out and not of the year in which the contribution is paid in. That principle is essential to any contributory scheme which claims to be fair to the contributors. Why is it not in the Government scheme? Because, as my hon. Friends have said, the Government scheme is not really a superannuation scheme, it is merely a device for transferring the fiscal burden.
  Now I come to a rather unpleasant point which I must mention. The only real attack on our scheme in this debate has been the charge that our scheme will be inflationary. As my hon. Friend the Member for Islington, North pointed out, all the Tories here believe in private schemes. If private employers contribute 10 per cent. and take 5 per cent. off the employeee that is

  1003
  apparently non-inflationary, but the moment we do that through the State for the agricultural worker, it becomes inflationary. Why? Because the insurance companies run one and we run the other. That is the only difference.
  It is the sheerest humbug, and therefore I resented what the Minister tried to do to me when he chose, quite coldbloodedly, to stop reading a sentence in the middle. He has been kind enough to give me the cutting. He read a sentence of mine and said that I had already admitted in a speech in Scotland that our scheme is inflationary. The Minister quoted:
  "… he said, 'It will be an inflationary scheme'"—
  At this point an hon. Friend of mine interrupted, and I said"Read on."I will now read on. It will interest my hon. Friends to hear how much distortion takes place. I said:
  "… will produce disaster if people try to add to their wages the cost of superannuation contributions. You cannot get something for nothing in this scheme.'
  All that would happen if they tried to recover their contributions by wage demands would be that prices would rise and old people would suffer again.
  This is a voluntary scheme and it will work only if you voluntarily decide to refrain from pushing wages up …'"
  To say that that speech admitted th,at our scheme was inflationary is as near to total distortion as a Minister should ever get. I would not have minded the Minister doing it, but having done it he refused to withdraw it. I. ask him now whether he is prepared to admit that that was a sharp trick and that he should not have done it.
  Mr. Boyd-Carpenter: I do not want to quarrel with the hon. Gentleman on the construction of words used in a report of his speech. I say to the House—I know the House will accept it from me—that I quoted from his speech in all sincerity in the belief that the construction that I put upon it was right, but if the hon. Gentleman tells me that I am wrong I am perfectly prepared to accept his construction, and if he feels that I have misrepresented him, I am only too happy to withdraw any argument that may have been based upon it.
  Mr. Crossman: That is a characteristic apology. I accept it.
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  In conclusion, I want to say something on the question why the Government did not include anything for the existing pensioners. I gather that the argument is that one first has a scheme and later on puts into it an increase in the existing pension. If I were to ask the Minister of Labour whether an increase is in the offing, I suppose he would tell me that he could not anticipate his right hon. Friend's Budget. I note with what care the Government are saying,"It is open to us at any time to raise the old-age pension."I suggest to the Minister of Labour that when we are dealing with the problem of the existing pension it is not fair to hold the matter over in this way. Why not state what we think the country can afford to pay the pensioners?
  When we have decided, as we believe, to pay them £3 a week, is it not essential to guarantee that sum against any variations in the cost of living? We are told that the cost of living has been kept very steady in the last two years. We have made a rough calculation, and it is true that there has not been the whittling away of the pension to the degree that there was previously, but it still remains true that the pension of 50s. which was introduced is worth 1s. 2d. less today. I expect that the hon. Member for Basingstoke would say,"What does that matter?", but to swindle people on small marginal incomes out of 1s. 2d. is a scandal.
  We believe that there should be written into a Bill—it will be written into our Bill—a Clause under which the value of the pension will be automatically adjusted year by year to maintain its purchasing power. If one wants to increase the real value of the pension, to allocate a larger slice of the national income, one needs a Bill. If we merely want to ensure that the old-age pension, like the Army pension, as recommended by the Grigg Report, retains its purchasing power—we insist that it should first be raised to £3, and it should then be maintained at that level—why cannot this be done? There is no difficulty about writing it into the Bill. Can it be that the Government prefer to keep pensions as something electorally attractive? Can it be that they care more about postponing this until the last moment? If so, they are showing their hand. We believe that it is still vital to get poverty abolished.

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  We believe that it is possible to get this written into an Act of Parliament so that the old of today are given at least an adequate pension, and the old of the future are given the far better basis which we can assure. We believe that that is possible. We know that the Bill will not do it, and because the Bill departs from all the five principles of a decent insurance scheme we shall go into the Lobby against it tonight.
  9.31 p.m.
  The Minister of Labour and National Service (Mr. Iain Macleod): I agree that this has been an excellent debate. There are two reasons why I am delighted to take part in it, even though the Bill comes from another Ministry. The first is that, as Minister of Labour, I have a deep interest in all pensions schemes. They are closely linked to good industrial relations and I have been delighted to see the growth of occupational pensions schemes over the years. The second reason, as many hon. Members who took part in the debate will know, is that when I first came to the House I never missed attending, and rarely missed speaking in, a pensions debate, and I am very happy to find myself doing that again today.
  When nearly all the speeches consist of many questions, it is extremely difficult to try to answer them all, but I will do my best and try to isolate one or two themes, since, on Second Reading, we can talk about not only what is in. but what is not in, the Bill.
  Several hon. Members mentioned the position of the self-employed. The case for including them was put most cogently in a leader in the Manchester Guardian on 25th October, but there is a convincing answer to all the points which were made. It is an obvious enough point, but most important of all, that by definition a self-employed man has no employer and, therefore, the return of pension he can get cannot be buttressed by the employer's contribution.
  I recognise, too, that the Labour scheme said that the matter would be given further thought. As it stands, to take a domestic example which was pointed out in our last debate on pensions, a Member of Parliament will have to pay about £140 a year in contributions. Although I am not an advocate of the secret ballot in
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  industrial relations, I would not mind seeing the result of a secret ballot among us on that proposition.
  The Manchester Guardian made the perfectly valid point that the 1956 Finance Act has been of great value to the self-employed, but of little comfort to the odd job man and the freelance gardener, who rank in that category. That is true. For obvious reasons, the assessment on the self-employed has to be made annually. Obviously, an annual assessment of such casual earnings would be a formidable undertaking.
  Even so—and I hope that the hon. Member for Coventry, East (Mr. Crossman) will follow this point carefully—we find that for the mass of the self-employed there is no satisfactory way of assessing annual earnings for this purpose. It might be thought that the Inland Revenue assessment of profits for Income Tax purposes would do, and, of course, we looked at that first. However, it will not do.
  For example, for technical reasons, some business costs are allowed for deduction against trading accounts, while others are taken into account for tax allowance. That makes no difference to the final tax liability, but it markedly affects the contributions payable, since those would be levied on a gross assessment. There are many other difficulties. I am always reluctant to plead administrative difficulties, but in this case I believe them to be very serious. They include matters such as the carrying forward of a loss to be offset against future profits, the time lag in assessing business profits and the possibility of such assessments being revised a long period, up to six years, afterwards.
  If another entirely new method of assessment had to be found it would, of course, be extremely costly. So the Manchester Guardian, in the leader to which I referred, came to the conclusion that the best answer would be to allow the self-employed to make voluntary payments into the scheme at the level which they themselves decided they could afford.
  At first sight that has an obvious attraction, but it seems to me extremely difficult to admit this sort of principle. Naturally, this option would be exercised by those who could obtain the most pension for the least contribution and I cannot see any Chancellor of the Exchequer agreeing to this proposition. The hon.

  1007
  Member for Coventry, East asked me a good many questions and perhaps I may be allowed to ask one back. I ask it purely out of interest in this matter. In his article in the Fire Fighter he contemplated that it was possible for a man to join both schemes and pay both contributions; it seems to me that either the man pays voluntarily himself without the employer's contribution, or that he compels the employer to pay twice.
  I do not know which the hon. Member has in mind, and he may not be ready to answer that point at the moment. If the first, it is open to the objections which I have made, and, if the second, it would, of course, inevitably kill any conceivable chance of the employer applying for a scheme to be contracted out. For all these reasons I believe that this is a sphere in which it is best to leave people to make their own arrangements. I have a feeling that if, with the resources of the Government behind him, the hon. Member for Coventry, East could look again and give further thought to the proposals which he realises are necessary, he might well come to the same conclusion about the self-employed that I now put to the House.
  My next point was referred to in a number of speeches; it was referred to by the hon. Member for Sowerby (Mr. Houghton); by the hon. Member for Islington, North (Mr. Reynolds) in an admirable speech; by my hon. Friend from Leeds, North-East (Sir K. Joseph) and by other hon. Members. It refers to the different aspects of the problem of contracting out. In the time available to me I cannot deal with the whole of that problem, but I wish to discuss one aspect of it which is of particular interest to me as Minister of Labour, the question of the mobility of labour.
  We lay down three conditions which are familiar to the House; solvency, the principle of equivalency at the maximum and the principle of preservation of rights at the maximum. I step aside for a moment to answer a point put to me by the hon. Member for Coventry, East about widows. My right hon. Friend dealt with this point in response to an interjection during his speech. It is not a condition for contracting out that there should be an equivalency in widows' benefits. The comparison is with the personal pension
  1008
  in the occupational scheme vis-a-vis the personal pension in the State scheme, but in the State scheme at the maximum.
  I am sure that the Minister was right in saying that the full significance of this proposal for making equivalency at the maximum has not yet been fully understood. All these matters may be controversial, but after a great deal of thought we came to the conclusion that this is the only way of contracting out that will work. I do not believe that what is proposed in the Labour Party scheme for contracting out will work but, with all its difficulties, I believe that our scheme can work; because the provisions of the Bill—this is of the first importance—ensure that a worker need not hesitate to leave employment which is insurable under the graduated part of the State scheme for non-participating employment for fear that when the time comes he may be worse off for pension purposes. It is not possible that he will be worse off.
  One aspect has been particularly criticised by the British Employers' Confederation and it was referred to by my hon. Friend the Member for Aylesbury (Sir S. Summers) and my hon. Friend the Member for Basingstoke (Mr. Denzil Freeth). I do not think that the employers are being quite as generous as was suggested by my hon. Friend the Member for Basingstoke. We are dealing with a point between £9 and £15 and the 4¼ per cent. Their suggestion is that the employer should simply double the amount assessed on his employees when he pays over the contribution. If we could do that, it would be an enormous gain in simplicity.
  I do not want anything I say to close the door upon this suggestion, as I think this is something well worth studying. Obviously, it would be a tremendous saving in the administrative labour of the employer in bookkeeping if it could be done. Although I want to make one or two tentative points about it, or perhaps even against it, the matter can be discussed in Committee and I do not want my answer today to be taken as a final Government"No"to what is administratively a very attractive proposition.
  The difficulty I see is that then the fund would forgo the employers' share of a graduated contribution where the employee was not liable to make one.

  1009
  One might think that this does not apply to many people but, in fact, it applies to a surprising number, approaching ¼ million pensioners in employment at more than £9 a week. It breaches a very important principle to which trade unions and this House attach great importance. That is that, throughout the history of National Insurance, whatever case there may be for not collecting contributions from an employee the employer should always be liable for his share of it. This seems a genuine difficulty, but one that is worth examining to see whether we can come a little closer together.
  Sir S. Summers: My right hon. Friend referred to ¼ million people retired and in employment. I think that that was my right hon. Friend's phrase. Since the Bill is concerned with retirement pensions, perhaps my right hon. Friend can explain how that anomaly arises.
  Mr. Macleod: I am talking about people who are over the final pension age, over 70 for men, and over 65 for women, who would not have to make any contribution and for whom the problem of the employers' contribution would somehow have to be solved.
  The hon. Member for Coventry, East was right when he said that a matter in dispute between us was the linking of the pension with a new index which was more closely related to pensioners. I want to say something about that second aspect, because I have a particular responsibility for the Retail Prices Index. When we published the results of the household budget inquiry this point was raised, but the Government took the view—I must say I hold it firmly—that the Retail Prices Index comes into so many wage matters and matters of industrial relations that it would be confusing to have two indexes, if we can avoid doing so.
  As the House knows, the Retail Prices Index is something which we take a great deal of trouble to make as accurate as we can. We take no fewer than 120,000 calculations every month. I believe this to be the most accurate Retail Prices Index in the world. There have been changes over the years—I want to put this point entirely without party bias—in the pensions of 1951, 1952, 1954 and 1958; and only in 1951 was the increase inadequate, judged by the standard of the Retail Prices Index.
  1010
  The point was made that if we concentrated more on the needs of pensioners, and more strictly on food, clothing, housing and fuel, we should have a very different picture. In fact, the picture would not be as different as some of the advocates of this method think. It is possible to calculate this matter with some exactitude, as some hon. Members know from the figures I put before the House about four years ago. They were published separately and were not included in the index because the three-quarters of the household's income came from Government sources.
  If we take those households—I am helping the Opposition's case, because not all pensioners are as poor as that—and apply the figures to the whole band of pensioners, we find that the 30s. pension of October, 1951, to which I have referred, would have an equivalent weight today of 41s. 7d. against the 50s. pension. Certainly there is a difference, but not one, I think, which destroys the general validity of the argument, which essentially is that it is better to have these rates under continual review at the Ministry of Pensions and National Insurance and the Treasury than to have an annual automatic review.
  The point that the hon. Member for Coventry, East is so fond of making about the Grigg Committee Report is in this context something of a red herring.
  Mr. Crossman: The point we are making about the automatic review is that the delay is caused by the cumbrous machinery of legislation. That is what we protest against. We want this written into the Bill, so that adjustment can be made without legislation.
  Mr. Macleod: I understand that, and, of course, this can be discussed in detail at the appropriate stage of the Bill; but I am not sure that the pensioners would, in fact, benefit—that, after all, is what we want—from such a provision. It would be tempting to leave them where they are on an automatic review and not to give them the increase in real standards which we want to see, and which has happened to them over the years. A good way of looking at this was in a point made— [Interruption.] There has been an increase in the past years, particularly the last seven years, but we would like to see it more.

  1011
  The right hon. Member for Middlesbrough, East (Mr. Marquand), in his speech this afternoon, raised the question of what proportion of the national income—or, to use the jargon we always use, what sized slice of the national cake—has been devoted to retirement pensioners. We can calculate the figures from 1949, and I should like to put them on record. In 1949, it was 2·45 per cent.; in 1950, 2·37 per cent.; in 1951, 2·31 per cent.— all were going down—in 1952, which may or may not be a coincidence, it went up to 2·46 per cent.; and in 1957 it was 2·67 per cent. Although we have not got the figures for 1958, I expect those to be higher than before. The argument is still sound.
  Why, then, is the hon. Member for Coventry, East so keen about this? I do not believe that if this had been written into the 1946 Bill the pensioners would, in fact, be as well off now as the figures I have given show they are in practice. I can offer one reason to him. He knows that the Deputy Leader of the Opposition said in 1946—these are strong words and the right hon. Gentleman knows them very well—"This is undesirable and impracticable."The Leader of the Opposition had the main responsibility for the Bill of 1951, which was the only Bill which went against the trend. I think that the hon. Member for Coventry, East is doing a little insuring and trying to save himself from his hon. Friends. Of course, there is a case for arguing that what should happen is precisely the converse of that.
  The improvements announced by my right hon. Friend today were, I think, generally welcomed, although rather tepidly by the right hon. Member for Middlesbrough, East. He proceeded then to a popular fallacy—which, I think, worth correcting—when he said that these are of little value to people in the heavy industries. If he will study the Departmental Report—I am sure he knew it and has forgotten this part of it—published in 1954, he will find it very remarkable in reasons given for retiring or continuing at work what a high percentage of those in what are called the heavy industries stay at work.
  The graph is extremely revealing. It shows, for example, that only 26 per cent. of those in mining and quarrying take their pensions at 65, whereas no less than
  1012
  63 per cent. in local government do so; and there are comparable figures in many other industries.
  Mr. Fernyhough: Their pensions are different.
  Mr. Macleod: Of course they are. The hon. Member is making my case against the case of his right hon. Friend.
  This comparison has been attempted many times in the debate and in the previous debate on the White Paper. Whether the object of the exercise is to praise, or whether it is to denigrate the Government scheme, I do not believe that it is possible to make a short comparison between this scheme, or, for that matter, the Labour Party scheme, and either that of the United States or that of Germany. When we were studying these matters we looked at the schemes in Germany and in America, as, I am sure, did the right hon. Gentleman and his supporters. I do not know which side of the House started to work on this matter first, but we have been at work, it seems to me, for years and years on these proposals.
  It is not possible to make a true picture of the comparison—as I think the right hon. Member for Llanelly (Mr. J. Griffiths) sought to do in the debate on the Reply to the Address—between this scheme and the American scheme if we simply try to convert at the rate of 280 dollars to the £ the comparable figures in the two schemes, because we must take into account, first, the relative purchasing value of the dollar and the £ and, secondly, the different level of industrial earnings.
  A more important point comes into the comparison constantly made—in favour of the German scheme—between the Government scheme and the German scheme. That has been done, I think, three or four times today, and it was developed at some little length by the right hon. Member for Middlesbrough, East in the debate on the White Paper in November. He was twice challenged on the point, but he failed to give the contributions for the scheme put forward by the Federal Republic of Germany. In fact, the social security contribution there—and this does not include payments towards education or a National Health Service of the sort we have here

  1013
  —total 27·1 per cent. of earnings. That would mean that, on average male earnings in this country at present, a contribution of about £3 10s. would be required. This is about twice what even the Labour Party think is right.
  I think that nobody will argue for a moment that this scale of contributions would be even remotely tolerable in this country at present, and, therefore, any comparison between the German scheme and our scheme, or to be fair even the Labour Party scheme, is wholly vitiated by that fact. Incidentally, the finances of the German scheme are already under very serious consideration and there is some question whether a further contribution, which seems to me impossible, or an added subsidy will be required.
  It is fair to compare the Labour Party's scheme and the Government's Bill, and this has been done over and over again. Many criticisms have been made of our plan and many of the plans put forward by the Labour Party, but I believe that nearly all of the serious criticisms of the scheme can be boiled down to one major complaint against each scheme. I do not ask hon. Members to accept that the criticisms are right, but I ask them to agree that this is the main criticism made against each of the two schemes. Hon. Members opposite say, about the Government scheme, that although it puts right the finances of the old scheme, it then goes on to take far too small and far too timid a step forward. That is the main criticism—that it is a little mouse of a scheme. The criticism of the Labour Party's scheme is that the contributions would prove to be so heavy as to be insupportable and that it would turn out to be a signpost to inflation.
  This matter was discussed in a very important speech, with which the House is familiar, by Lord Beveridge just before Christmas, and these were exactly the criticisms which he made of the two schemes. I think it is fair for me to say that, in so far as it related to the Exchequer contribution at £170 million, his criticism of the Government's scheme has to some extent been met by the Bill. I cannot resist adding that he said that although he disliked the Government's scheme he disliked the Labour Party's scheme, if possible, even more. We quote Lord Beveridge often enough in these debates, and if we appeal to Caesar then
  1014
  we might on this occasion listen to what Caesar says.
  I do not expect that the two sides of the House will accept that he is entirely right in the criticism of their scheme or our scheme, but let us accept that in this matter of National Insurance there is truth in what Lord Beveridge has said about our two schemes, which, I would remind the House, is the kernal of the criticism made about this Bill and the Labour Party scheme.
  Even if there is truth in these criticisms, although they may not be the whole truth, I still believe that our proposal is by far the better of the two, for the one thing that wrecked the Beveridge proposals was the inability of the Government, whatever they may have professed, to hold prices stable in the post-war years. I think that at all costs we must not risk that inflation again. So we have this Bill for which we are asking a Second Reading.
  The main distinction between Governments and Opposition is that Governments can produce Bills and for the moment, while in opposition, the Opposition can produce only pamphlets. I do not complain in the least that the Opposition intend to vote by the well-known device of a reasoned Amendment against the Bill tonight. The position of the Liberal Party is a little more obscure for, if I gather rightly from what their spokesman said, they are going to vote for the first part of the reasoned Amendment and against the second part. It will be an interesting Parliamentary exercise to see it carried out.
  Mr. Wade rose —
  Mr. Macleod: I have not time to give way.
  It is true, also, that this argument will not finish tonight; it will go on to the General Election. That is wholly right. I feel that I have tried to keep my comments on an even-tempered keel throughout. Sooner or later, there must come the moment of decision. It is wholly right to debate this question, take it to the country and argue the case there, but it would be quite intolerable, apart from being administratively impracticable, if, over the years, between the parties as they change, this question of pensions for

  1015
  the old people was shuttlecocked backwards and forwards.
  Sooner or later, in my view, and, so far as I am concerned, the sooner the better, there is bound to be a measure of all-party agreement on what everyone in the House wants to see, and that is the
  highest possible measure of pension that we can afford for the people of our country.
  Question put. That the words proposed to be left out stand part of the Question:—
  The House divided: Ayes 305, Noes 259.

  Division No. 22.]

  AYES

  [9.57 p.m.

  Agnew, Sir Peter

  Doughty, C. J. A.

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

  Aitken, W. T.

  Drayson, G. B.

  Hutchison, Sir James (Scotstoun)

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

  du Cann, E. D. L.

  Hylton-Foster, Rt. Hon. Sir Harry

  Amery, Julian (Preston, N.)

  Duncan, Sir James

  Iremonger, T. L.

  Amory, Rt. Hn. Heathcoat (Tiverton)

  Duthie, W. S.

  Irvine, Bryant Godman (Rye)

  Anstruther-Gray, Major Sir William

  Eccles, Rt. Hon. Sir David

  Jenkins, Robert (Dulwich)

  Arbuthnot, John

  Eden, J. B. (Bournemouth, West)

  Jennings, J. C. (Burton)

  Armstrong, C. W.

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

  Jennings, Sir Roland (Hallam)

  Ashton, H.

  Emmet, Hon. Mrs. Evelyn

  Johnson, Dr. Donald (Carlisle)

  Atkins, H. E.

  Erroll, F. J.

  Johnson, Eric (Blaokley)

  Baldock, Lt.-Cmdr. J. M.

  Farey-Jones, F. W.

  Johnson, Howard (Kemptown)

  Baldwin, Sir Archer

  Fell, A.

  Jones, Rt. Hon. Aubrey (Hall Green)

  Balniel, Lord

  Finlay, Graeme

  Joseph, Sir Keith

  Barber, Anthony

  Fisher, Nigel

  Kaberry, D.

  Barlow, Sir John

  Forrest, G.

  Keegan, D.

  Barter, John

  Fort, R.

  Kerby, Capt. H. B.

  Batsford, Brian

  Foster, John

  Kerr, Sir Hamilton

  Baxter, Sir Beverley

  Fraser, Hon. Hugh (Stone)

  Kershaw, J. A.

  Beamish, Col. Tufton

  Freeth, Denzil

  Kimball, M.

  Bell, Philip (Bolton, E.)

  Galbraith, Hon. T. G. D.

  Kirk, P. M.

  Bell, Ronald (Bucks, S.)

  Gammans, Lady

  Lagden, G. W.

  Bennett, F. M. (Torquay)

  Garner-Evans, E. H.

  Lambton, Viscount

  Bennett, Dr. Reginald

  George, J. C. (Pollok)

  Lancaster, Col. C. G.

  Bevins, J. R. (Toxteth)

  Gibson-Watt, D.

  Langford-Holt, J. A.

  Bidgood, J. C.

  Glover, D.

  Leather, E. H. C.

  Biggs-Davison, J. A.

  Glyn, Col. Richard H.

  Leavey, J. A.

  Bingham, R. M.

  Godber, J. B.

  Leburn, W. G.

  Birch, Rt. Hon. Nigel

  Goodhart, Philip

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

  Bishop, F. P.

  Gough, C. F. H.

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

  Black, Sir Cyril

  Gower, H. R.

  Lindsay, Hon. James (Devon, N.)

  Body, R. F.

  Graham, Sir Fergus

  Lindsay, Martin (Solihull)

  Bossom, Sir Alfred

  Grant, Rt. Hon. W. (Woodside)

  Linstead, Sir H. N.

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

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

  Llewellyn, D. T,

  Boyle, Sir Edward

  Green, A.

  Lloyd, Rt. Hon, C. (Sutton Coldfield)

  Braine, B. R.

  Gresham Cooke, R.

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

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

  Grimston, Hon. John (St. Albans)

  Lloyd, Rt. Hon, Selwyn (Wirral)

  Brooke, Rt. Hon. Henry

  Grimston, Sir Robert (Westbury)

  Longden, Gilbert

  Brooman-White, R. C.

  Grosvenor, Lt.-Col. R. G.

  Loveys, Walter H.

  Browne, J. Nixon (Craigton)

  Gurden, Harold

  Low, Rt. Hon. Sir Toby

  Bryan, P.

  Hall, John (Wycombe)

  Lucas, Sir Jocelyn (Portsmouth, S.)

  Bullus, Wing Commander E. E.

  Hare, Rt. Hon. J. H.

  Lucas, P. B. (Brentford & Chiswick)

  Burden, F. F. A.

  Harris, Frederic (Croydon, N. W.)

  Lucas-Tooth, Sir Hugh

  Butcher, Sir Herbert

  Harris, Reader (Heston)

  McAdden, S. J.

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

  Harrison, A. B. C. (Maldon)

  Macdonald, Sir Peter

  Campbell, Sir David

  Harrison, Col. J. H. (Eye)

  Mackeson, Brig. Sir Harry

  Carr, Robert

  Harvey, Sir Arthur Vere (Macclesf'd)

  McLaughlin, Mrs. P.

  Cary, Sir Robert

  Harvey, John (Walthamstow, E.)

  Maclay, Rt. Hon. John

  Chichester-Clark, R.

  Hay, John

  Maclean, Sir Fitzroy (Lancaster)

  Clarke, Brig. Terence (portsmth, W.)

  Heald, Rt. Hon. Sir Lionel

  McLean, Nell (Inverness)

  Cole, Norman

  Henderson, John (Cathcart)

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

  Conant, Mal. Sir Roger

  Henderson-Stewart, Sir James

  Macmillan, Rt. Hn. Harold (Bromley)

  Cooke, Robert

  Hesketh, R. F.

  Macmillan, Maurice (Halifax)

  Cooper, A. E.

  Hicks-Beach, Maj. W. W.

  Macpherson, Niall (Dumfries)

  Cooper-Key, E. M.

  Hill, Mrs. E. (Wythenshawe)

  Maddan, Martin

  Cordeaux, Lt.-Col. J. K.

  Hill, John (S. Norfolk)

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

  Corfield, F. V.

  Hinchingbrooke, Viscount

  Manningham-Buller, Rt. Hn. Sir R.

  Craddock, Beresford (Spelthorne)

  Hirst, Geoffrey

  Markham, Major Sir Frank

  Crosthwaite-Eyre, Col. O. E.

  Hobson, John(Warwick & Leam'gt'n)

  Marples, Rt. Hon. A. E.

  Crowder, Sir John (Finchley)

  Holland-Martin, C. J.

  Mathew, R.

  Crowder, Petre (Rulslip-Northwood)

  Hope, Lord John

  Maudling, Rt. Hon. R.

  Cunningham, Knox

  Hornby, R. P.

  Mawby, R. L.

  Currie, G. B. H.

  Hornsby-Smith, Miss M. P.

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

  Dance, J. C. G.

  Horobin, Sir Ian

  Medlicott, Sir Frank

  Davidson, Viscountess

  Horsbrugh, Rt. Hon, Dame Florence

  Milligan, Rt. Hon. W. R.

  D'Avigdor-Goldsmld, Sir Henry

  Howard, Hon. Greville (St. Ives)

  Molson, Rt. Hon. Hugh

  Deedes, W. F.

  Howard, John (Test)

  Moore, Sir Thomas

  de Ferranti, Basil

  Hughes Hallett, Vice-Admiral J.

  Morrison, John (Salisbury)

  Digby, Simon wingfield

  Hughes-Young, M. H. C.

  Mott-Radclyffe, Sir Charles

  Dodds-Parker, A. D.

  Hurd, Sir Anthony

  Nabarro, G. D. N.

  Donaldson, Cmdr. C. E. McA.

  Hutohison, Miohael Clark (E'b'gh, S.)

  Nairn, D. L. S.

  Neave, Airey

  Ridsdale, J. E.

  Thomas, P. J. M. (Conway)

  Nicholls, Harmar

  Rippon, A. G. F.

  Thompson, Kenneth (Walton)

  Nicholson, Sir Godfrey (Farnham)

  Roberts, Sir Peter (Heeley)

  Thompson, R. (Croydon, S.)

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

  Robinson, Sir Roland (Blackpool, S.)

  Thornton-Kemsley, Sir Colin

  Noble, Michael (Argyll)

  Robson Brown, Sir William

  Tiley, A. (Bradford, W.)

  Nugent, G. R. H.

  Roper, Sir Harold

  Tilney, John (Wavertree)

  Oakshott, H. D.

  Ropner, Col. Sir Leonard

  Turner, H. F. L.

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

  Russell, R. S.

  Turton, Rt. Hon. R. H.

  Orr, Capt. L. P. S.

  Scott-Miller, Cmdr. R.

  Vane, W. M. F.

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

  Sharples, R. C.

  Vaughan-Morgan, J. K.

  Osborne, C.

  Shepherd, William

  Vickers, Miss Joan

  Page, R. G.

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

  Vosper, Rt. Hon. D. F.

  Pannell, N. A. (Kirkdale)

  Smithers, Peter (Winchester)

  Wakefield, Sir Wavell (St. M'lebone)

  Partridge, E.

  Smyth, Brig. Sir John (Norwood)

  Walker-Smith, Rt. Hon. Derek

  Peel, W. J.

  Soames, Rt. Hon. Christopher

  Wall, Patrick

  Peyton, J. W. W.

  Spearman, Sir Alexander

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

  Pickthorn, Sir Kenneth

  Speir, R. M.

  Ward, Dame Irene (Tynemouth)

  Pike, Miss Mervyn

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

  Watkinson, Rt. Hon. Harold

  Pilkington, Capt. R. A.

  Stanley, Capt. Hon. Richard

  Webbe, Sir H.

  Pitman, I. J.

  Stevens, Geoffrey

  Webster, David

  Pitt, Miss E. M.

  Steward, Harold (Stockport, S.)

  Whitelaw, W. S. I.

  Pott, H. P.

  Steward, Sir William (Woolwich, W.)

  Williams, Paul (Sunderland, S.)

  Powell, J. Enoch

  Stoddart-Scott, Col. Sir Malcolm

  Williams, R. Dudley (Exeter)

  Price, David (Eastleigh)

  Storey, S.

  Wills, Sir Gerald (Bridgwater)

  Price, Henry (Lewisham, W.)

  Stuart, Rt. Hon. James (Moray)

  Wilson, Geoffrey (Truro)

  Prior-Palmer, Brig. O. L.

  Studholme, Sir Henry

  Wolrige-Gordon, Patrick

  Profumo, J. D.

  Summers, Sir Spencer

  Wood, Hon. R.

  Ramsden, J. E.

  Sumner, W. D. M. (Orpington)

  Woollam, John Victor

  Rawlinson, Peter

  Taylor, Sir Charles (Eastbourne)

  Yates, William (The Wrekin)

  Redraayne, M.

  Taylor, William (Bradford, N.)

  Rees-Davies, W. R.

  Teeling, W.

  TELLERS FOR THE AYES:

  Remnant, Hon. P.

  Temple, John M.

  Mr. Legh and Mr. E. Wakefield

  Renton, D. L. M.

  Thomas, Leslie (Canterbury)

  NOES

  Abse, Leo

  Davies, Ernest (Enfield, E.)

  Hughes, Cledwyn (Anglesey)

  Ainsley, J. W.

  Davies, Harold (Leek)

  Hughes, Emrys (S. Ayrshire)

  Albu, A. H.

  Davies, Stephen (Merthyr)

  Hughes, Hector (Aberdeen, N.)

  Allaun, Frank (Salford, E.)

  Deer, G.

  Hunter, A. E.

  Allen, Arthur (Bosworth)

  Delargy, H. J.

  Hynd, H. (Accrington)

  Allen, Scholefield (Crewe)

  Diamond, John

  Hynd, J. B. (Attercliffe)

  Awbery, S. S.

  Dodds, N. N.

  Irvine, A. J. (Edge Hill)

  Bacon, Miss Alice

  Donnelly, D. L.

  Irving, Sydney (Dartford)

  Baird, J.

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

  Isaacs, Rt. Hon. G. A.

  Balfour, A.

  Ede, Rt. Hon. J. C.

  Janner, B.

  Bellenger, Rt. Hon. F. J.

  Edelman, M.

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

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

  Edwards, Rt. Hon. John (Brighouse)

  Jeger, George (Goole)

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

  Edwards, Rt. Hon. Ness (Caerphilly)

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

  Benson, Sir George

  Edwards, Robert (Bilston)

  Jenkins, Roy (Stechford)

  Beswick, Frank

  Edwards, W. J. (Stepney)

  Johnson, James (Rugby)

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

  Evans, Albert (Islington, S. W.)

  Johnston, Douglas (Paisley)

  Blackburn, F.

  Evans, Edward (Lowestoft)

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

  Blenkinsop, A.

  Fernyhough, E.

  Jones, David (The Hartlepools)

  Blyton, W. R.

  Finch, H. J.

  Jones, Jack (Rotherham)

  Boardman, H.

  Fitch, Alan

  Jones, J. Idwal (Wrexham)

  Bonham Carter, Mark

  Fletcher, Eric

  Jones, T. W. (Merioneth)

  Bottomley, Rt. Hon. A. G.

  Forman. J. C.

  Kenyon, C.

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

  Fraser, Thomas (Hamilton)

  Key, Rt. Hon. C. W.

  Bowles, F. G.

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

  King, Dr. H. M.

  Boyd, T. C.

  George, Lady Megan Lloyd (Car'then)

  Lawson, G. M.

  Braddock, Mrs. Elizabeth

  Gibson, C. W.

  Ledger, R. J.

  Brockway, A. F.

  Gooch, E. G.

  Lee, Frederick (Newton)

  Broughton, Dr. A. D. D.

  Grenfell, Rt. Hon. D. R.

  Lee, Miss Jennie (Cannock)

  Brown, Rt. Hon. George (Belper)

  Grey, C. F.

  Lever, Harold (Cheetham)

  Brown, Thomas (Ince)

  Griffiths, David (Rother Valley)

  Lever, Leslie (Ardwick)

  Burton, Miss F. E.

  Griffiths, Rt. Hon. James (Llanelly)

  Lewis, Arthur

  Butler, Herbert (Hackney, C.)

  Griffiths, William (Exchange)

  Lindgren, G. S.

  Butler, Mrs. Joyce (Wood Green)

  Grimond, J.

  Logan, D. G.

  Castle, Mrs. B. A.

  Hale, Leslie

  Mabon, Dr. J. Dickson

  Champion, A. J.

  Hall, Rt. Hn. Glenvil (Colne Valley)

  McAllster, Mrs. Mary

  Chapman, W. D.

  Hamilton, W. W.

  McCann, J.

  Chetwynd, G. R.

  Hannan, W.

  MacColl, J. E.

  Cliffe, Michael

  Hastings, S.

  MacDermot, Niall

  Clunie, J.

  Hayman, F. H.

  McGhee, H. G.

  Coldrick, W.

  Healey, Denis

  McKay, John (Wallsend)

  Collick, P. H. (Birkenhead)

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

  McLeavy, Frank

  Corbet, Mrs. Freda

  Hewitson, Capt. M.

  MacMillan, M. K. (Western Isles)

  Craddock, George (Bradford, S.)

  Hobson, C. R. (Keighley)

  MacPherson, Malcolm (Stirling)

  Cronin, J. D.

  Holman, P.

  Mahon, Simon

  Crossman, R. H. S.

  Holmes, Horace

  Mainwaring, W. H.

  Cullen, Mrs. A.

  Houghton, Douglas

  Mallalleu, E. L. (Brigg)

  Dalton, Rt. Hon. H.

  Howell, Charles (Perry Barr)

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

  Darling, George (Hillsborough)

  Howell, Denis (All Saints)

  Mann, Mrs. Joan

  Davies, Rt. Hon. Clement (Montgomery)

  Hoy, J. H,

  Marquand, Rt. Hon. H. A.

  1018

  1019

  Mason, Roy

  Pursey, Cmdr. H.

  Sylvester, G. O.

  Mayhew, C. P.

  Randall, H. E.

  Taylor, Bernard (Mansfield)

  Mellish, R. J.

  Rankin, John

  Taylor, John (West Lothian)

  Messer, Sir F.

  Redhead, E. C.

  Thomas, George (Cardiff)

  Mikardo, Ian

  Reeves, J.

  Thomas, lorwerth (Rhondda, W.)

  Mitchison, G. R.

  Reid, William

  Thomson, George (Dundee, E.)

  Monslow, W.

  Reynolds, G. W.

  Thornton, E.

  Moody, A. S.

  Rhodes, H.

  Timmons, J.

  Morris, Percy (Swansea, W.)

  Robens, Rt. Hon. A.

  Tomney, F.

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

  Roberts, Albert (Normanton)

  Ungoed-Thomas, Sir Lynn

  Mort, D. L.

  Roberts, Goronwy (Caernarvon)

  Usborne, H. C.

  Moss, R.

  Robinson, Kenneth (St. Pancras, N.)

  Viant, S. P.

  Moyle, A.

  Rogers, George (Kensington, N.)

  Wade, D. W.

  Mulley, F. W.

  Ross, William

  Warbey, W. N.

  Neal, Harold (Bolsover)

  Royle, C.

  Watkins, T. E.

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

  Shinwell, Rt. Hon. E.

  Weitzman, D.

  O'Brien, Sir Thomas

  Short, E. W.

  Wells, Percy (Faversham)

  Oliver, G. H.

  Silverman, Julius (Aston)

  Wells, William (Walsall, N.)

  Oram, A. E.

  Silverman, Sydney (Nelson)

  Wheeldon, W. E.

  Oswald, T.

  Simmons, C. J. (Brierley Hill)

  White, Mrs. Eirene (E. Flint)

  Owen, W. J.

  Skeffington, A. M.

  White, Henry (Derbyshire, N.E.)

  Padley, W. E.

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

  Wigg, George

  Paget, R. T.

  Slater, J. (Sedgefield)

  Wilcock, Group Capt. C. A. B.

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

  Smith, Ellis (Stoke, S.)

  Wilkins, W. A.

  Paling, Will T. (Dewsbury)

  Snow, J. W.

  Willey, Frederick

  Palmer, A. M. F.

  Sorensen, R. W.

  Williams, David (Neath)

  Pannell, Charles (Leeds, W.)

  Soskice, Rt. Hon. Sir Frank

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

  Pargiter, G. A.

  Sparks, J. A.

  Williams, Richard (Openshaw)

  Parker, J.

  Spriggs, Leslie

  Willis, Eustace (Edinburgh, E.)

  Parkin, B. T.

  Steele, T.

  Wilson, Rt. Hon. Harold (Huytoel)

  Paton, John

  Stewart, Michael (Fulham)

  Winterbottom, Richard

  Peart, T. F.

  Stonehouse, John

  Woodburn, Rt. Hon. A.

  Pentland, N.

  Stones, W. (Consett)

  Woof, R. E.

  Plummer, Sir Leslie

  Strachey, Rt. Hon, J.

  Yates, V. (Ladywood)

  Prentice, R. E.

  Strauss, Rt. Hon. George (Vauxhall)

  Younger, Rt. Hon. K.

  Price, J. T. (Westhoughton)

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

  Price, Philips (Gloucestershire, W.)

  Summerskill, Rt. Hon. E.

  TELLERS FOR THE NOES:

  Probert, A. R.

  Swingler, S. T.

  Mr. Popplewell and Mr. Pearson.

  Proctor, W. T.

  Bill read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).

NATIONAL INSURANCE [MONEY]
[Queen's Recommendation signified.]Considered in Committee under Standing Order No. 84 (Money Committees.]
[Sir CHARLES MACANDREW in the Chair]
Motion made, and Question proposed,
That for the purposes of any Act of the present Session to alter the contributions payable to the National Insurance Fund under the National Insurance Acts, 1946 to 1957, and the retirement benefits payable under those Acts, and in particular to provide for payment of a graduated retirement benefit in return for contributions related to the amount of a person's remuneration, it is expedient to authorise the making of provision for the following purposes: —

(1) for altering the contributions payable to the National Insurance Fund out of moneys provided by Parliament, so that—

(a) as regards Exchequer supplements—

(i) subject to (ii) below, the supplements for contributions as an employed person and for employer's contributions shall be of an amount equal to one quarter of the contributions, and the supplements for

contributions as a self-employed or non-employed person shall be of an amount equal to one third of the contributions:
Provided that for this purpose there shall be excluded from the contributions as an employed person and from the employer's contributions—
(A) contributions related to the amount of a person's remuneration (referred to below as"graduated contributions"); and
(B) if the Act provides for graduated contributions not to be payable in respect of remuneration from certain employments (referred to below as"non-participating employments"), the amount, if any, by which the other contributions payable by reason of a person's employment are higher because it is a non-participating employment;
(ii) in any financial year ending in or after 1962 there shall be paid for the supplements in respect of contributions paid in that financial year sums amounting to not less than one hundred and seventy million pounds;
(b) in addition to the Exchequer supplements there may in respect of the financial years ending in 1961 and 1962 be paid sums not exceeding in the aggregate, with the sums paid in respect of the five preceding financial years under subsection (3) of section two of the National Insurance Act, 1954, the three hundred and twenty-five million pounds authorised to be paid under that subsection in respect of those five years;
(2) for the payment out of moneys provided by Parliament of expenses incurred by a Minister of the Crown under any provision of

1021
the Act enabling him, in relation to any class of employments covered by a statutory superannuation scheme, to act in place of the employers for the purpose of the provisions relating to non-participating employments (including expenses incurred by the Minister in making any payments required of an employer under those provisions), and for the payment into the Exchequer of any sums recouped to the Minister in respect of payments so made;
(3) for the payment out of moneys provided by Parliament of any expenses incurred by the Minister of Pensions and National Insurance or any other government department in carrying the Act into effect, but so that the amount of any such expenses, except in so far as they are estimated to be attributable to the collection of national health service contributions, shall be re-imbursed to the Treasury out of the National Insurance Fund or out of the Industrial Injuries Fund.—[Mr. Boyd-Carpenter.]
Mr. H. A. Marquand: I should like to draw your atten-lion Sir Charles, to the words contained
in lines 10 to 14 of the Money Resolution. In our view, one of the major defects of the Bill which we have just been discussing is its financial provisions.
We had certainly hoped in Committee, as we have had no reply whatever tonight to our objection to those financial provisions, to be able to put forward constructive alternatives without imposing any charge beyond that at present levied on the Exchequer under the present scheme. It looks very much, however, as if our freedom to discuss the financial provisions of the Bill will be limited if this Resolution is passed. I therefore ask the Committee to reject it.
Question put:—
The Committee divided:Ayes 303, Noes 250.

Division No. 23.]

AYES

[10.13 p.m.

Agnew, Sir Peter

Cooper, A. E.

Grimston, Hon. John (St. Albans)

Aitken, W. T.

Cooper-Key, E. M.

Grimston, Sir Robert (Westbury)

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

Cordeaux, Lt.-Col. J. K.

Grosvenor, Lt.-Col. R. G.

Amery, Julian (Preston, N.)

Corfield, F. V.

Gurden, Harold

Amory, Rt. Hn. Heathcoat (Tiverton)

Craddock, Beresford (Spelthorne)

Hall, John (Wycombe)

Anstruther-Gray, Major Sir William

Crosthwaite-Eyre, Col. O. E.

Hare, Rt. Hon. J. H.

Arbuthnot, John

Crowder, Sir John (Finchley)

Harris, Frederic (Croydon, N. W.)

Armstrong, C. W.

Crowder, Petre (Rulslip—Northwood)

Harris, Reader (Hestorn)

Ashton, H.

Cunningham, Knox

Harrison, A. B. C. (Maldon)

Atkins, H. E.

Currie, G. B. H.

Harrison, Col. J. H. (Eye)

Baldock, Lt.-Cmdr. J. M.

Dance, J. C. G.

Harvey, Sir Arthur Vere (Maoclesf'd)

Baldwin, Sir Archer

Davidson, Viscountess

Harvey, John (Walthamstow, E.)

Balniel, Lord

D'Avigdor-Goldsmid, Sir Henry

Hay, John

Barber, Anthony

Deedes, W. F.

Heald, Rt. Hon. Sir Lionel

Barlow, Sir John

de Ferranti, Basil

Henderson, John (Cathcart)

Barter, John

Digby, Simon Wingfield

Henderson-Stewart, Sir James

Batsford, Brian

Dodds-Parker, A. D.

Hesketh, R. F.

Baxter, Sir Beverley

Donaldson, Cmdr. C. E. McA.

Hill, Mrs. E. (Wythenshawe)

Beamish, Col. Tufton

Doughty, C. J. A.

Hill, John (S. Norfolk)

Bell, Philip (Bolton, E.)

Drayson, C. B.

Hinchingbrooke, Viscount

Bell, Ronald (Bucks, S.)

du Cann, E. D. L.

Hirst, Geoffrey

Bennett, F. M. (Torquay)

Duncan, Sir James

Hobson, John (Warwick & Leam'gt'n)

Bennett, Dr. Reginald

Duthie, W. S.

Holland-Martin, C. J.

Bevins, J. R. (Toxteth)

Eccles, Rt. Hon. Sir David

Hope, Lord John

Bidgood, J. C.

Eden, J. B. (Bournemouth, West)

Hornby, R. P.

Biggs-Davison, J. A.

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

Hornsby-Smith, Miss M. P.

Bingham, R. M.

Emmet, Hon. Mrs. Evelyn

Horobin, Sir Ian

Birch, Rt. Hon. Nigel

Erroll, F. J.

Horsbrugh, Rt. Hon. Dame Florence

Bishop, F. P.

Farey-Jones, F. W.

Howard, Hon. Greville (St. Ives)

Black, Sir Cyril

Fell, A.

Howard, John (Test)

Body, R. F.

F inlay, Graeme

Hughes Hallett, Vice-Admiral J.

Bossom, Sir Alfred

Fisher, Nigel

Hughes-Young, M. H. C.

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

Forrest, G.

Hurd, Sir Anthony

Boyle, Sir Edward

Fort, R.

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

Braine, B. R.

Foster, John

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

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

Fraser, Hon. Hugh (Stone)

Hutchison, Sir James (Scotstoun)

Brooke, Rt. Hon. Henry

Freeth, Denzil

Hylton-Foster, Rt. Hon. Sir Harry

Brooman-White, R. C.

Gammans, Lady

Iremonger, T. L.

Browne, J. Nixon (Craigton)

Gamer-Evans, E. H.

Irvine, Bryant Godman (Rye)

Bryan, P.

George, J. C. (Pollok)

Jenkins, Robert (Dulwich)

Bullus, Wing Commander E. E.

Gibson-Watt, D.

Jennings, J. C. (Burton)

Burden, F. F. A.

Glover, D.

Jennings, Sir Roland (Hallam)

Butcher, Sir Herbert

Glyn, Col. Richard H.

Johnson, Dr. Donald (Carlisle)

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

Godber, J. B.

Johnson, Eric (Blackley)

Campbell, Sir David

Goodhart, Philip

Johnson, Howard (Kemptown)

Carr, Robert

Cough, C. F. H.

Jones, Rt. Hon. Aubrey (Hall Green)

Cary, Sir Robert

Gower, H. R.

Joseph, Sir Keith

Chichester-Clark, R.

Graham, Sir Fergus

Kaberry, D.

Clarke, Brig. Terence (Portsmth, W.)

Grant, Rt. Hon. W. (Woodside)

Keegan, D.

Cole, Norman

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

Kerby, Capt. H. B.

Conant, Maj. Sir Roger

Green, A.

Kerr, Sir Hamilton

Cooke, Robert

Gresham Cooke, R.

Kershaw, J. A.

Kimball, M.

Nabarro, G. D. N.

Spearman, Sir Alexander

Kirk, P. M.

Nairn, D. L. S.

Speir, R. M.

Lagden, G. W.

Neave, Airey

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

Lambton, Viscount

Nicholls, Harmar

Stanley, Capt. Hon. Richard

Lancaster, Col. C. G.

Nicholson, Sir Godfrey (Farnham)

Stevens, Geoffrey

Langford-Holt, J. A.

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

Steward, Harold (Stockport, S.)

Leather, E. H. C.

Noble, Michael (Argyll)

Steward, Sir William (Woolwich, W.)

Leavey, J. A.

Nugent, G. R. H.

Stoddart-Scott, Col. Sir Malcolm

Leburn, W. G.

Oakshott, H. D.

Storey, S.

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

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

Stuart, Rt. Hon. James (Moray)

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

Orr, Capt. L. P. S.

Studholme, Sir Henry

Lindsay, Hon. James (Devon, N.)

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

Summers, Sir Spencer

Lindsay, Martin (Solihull)

Osborne, C.

Sumner, W. D. M. (Orpington)

Linstead, Sir H. N.

Page, R. G.

Taylor, Sir Charles (Eastbourne)

Llewellyn, D. T.

Parmell, N. A. (Kirkdale)

Taylor, William (Bradford, N.)

Lloyd, Rt. Hon. C. (Sutton Coldfield)

Partridge, E.

Teeling, W.

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

Peel, W. J.

Temple, John M.

Lloyd, Rt. Hon. Selwyn (Wirral)

Peyton, J. W. W.

Thomas, Leslie (Canterbury)

Longden, Gilbert

Pickthorn, Sir Kenneth

Thomas, P. J. M. (Conway)

Loveys, Walter H.

Pike, Mist Mervyn

Thompson, Kenneth (Walton)

Low, Rt. Hon. Sir Toby

Pilkington, Capt. R. A.

Thompson, R. (Croydon, S.)

Lucas, Sir Jocelyn (Portsmouth, S.)

Pitman, I. J.

Thornton-Kemsley, Sir Colin

Lucas, P. B. (Brentford & Chiswlck)

Pitt, Miss E. M.

Tiley, A. (Bradford, W.)

Lucas-Tooth, Sir Hugh

Pott, H. P.

Tilney, John (Wavertree)

McAdden, S. J.

Powell, J. Enoch

Turner, H. F. L.

Macdonald, Sir Peter

Price, David (Eastleigh)

Turton, Rt. Hon. R. H.

Mackeson, Brig. Sir Harry

Price, Henry (Lewisham, W.)

Vane, W. M. F.

McLaughlin, Mrs. P.

Prior-Palmer, Brig. O. L.

Vaughan-Morgan, J. K.

Maclay, Rt. Hon. John

Profumo, J. D.

Vickers, Miss Joan

Maclean, Sir Fitzroy (Lancaster)

Ramsden, J. E.

Vosper, Rt. Hon. D. F.

McLean, Neil (Inverness)

Rawlinson, Peter

Wakefield, Sir Wavell (St. M'lebone)

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

Redmayne, M.

Walker-Smith, Rt. Hon. Derek

Macmillan, Rt. Hn. Harold (Bromley)

Rees-Davies, W. R.

Wall, Patrick

Macmillan, Maurice (Halifax)

Remnant, Hon. P.

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

Macpherson, Niall (Dumfries)

Renton, D. L. M.

Ward, Dame Irene (Tynemouth)

Maddan, Martin

Ridsdale, J. E.

Watkinson, Rt. Hon. Harold

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

Rippon, A. G. F.

Webbe, Sir H.

Manningham-Buller, Rt. Hn. Sir R.

Roberts, Sir Peter (Heeley)

Webster, David

Markham, Major Sir Frank

Robinson, Sir Roland (Blackpool, S.)

Whitelaw, W. S. I.

Marlowe, A. A. H.

Robson Brown, Sir William

Williams, Paul (Sunderland, S.)

Marples, Rt. Hon, A. E.

Roper, Sir Harold

Williams, R. Dudley (Exeter)

Mathew, R.

Ropner, Col. Sir Leonard

Wills, Sir Gerald (Bridgwater)

Maudllng, Rt. Hon. R.

Russell, R. S.

Wilson, Geoffrey (Truro)

Mawby, R. L.

Scott-Miller, Cmdr. R.

Wolrige-Gordon, Patrick

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

Sharples, R. C.

Wood, Hon. R.

Medlicott, Sir Frank

Shepherd, William

Woollam, John Victor

Milligan, Rt. Hon. W. R.

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

Yates, William (The Wrekin)

Molson, Rt. Hon. Hugh

Smithers, Peter (Winchester)

Moore, Sir Thomas

Smyth, Brig. Sir John (Norwood)

TELLERS FOR THE AYES:

Mott-Radclyffe, Sir Charles

Soames, Rt. Hon. Christopher

Mr. Legh and Mr. E. Wakefield.

NOES

Abse, Leo

Champion, A. J.

Fletcher, Eric

Ainsley, J. W.

Chapman, W. D.

Forman, J. C.

Albu, A. H.

Chetwynd, G. R.

Fraser, Thomas (Hamilton)

Allaun, Frank (Salford, E.)

Cliffe, Michael

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

Allen, Arthur (Bosworth)

Clunie, J.

George, Lady Megan Lloyd (Car'then)

Allen, Scholefield (Crewe)

Coldrlck, W.

Gibson, C. W.

Awbery, S. S.

Collick, P. H. (Birkenhead)

Gooch, E. G.

Bacon, Miss Alice

Corbet, Mrs. Freda

Grenfell, Rt. Hon. D. R.

Baird, J.

Craddock, George (Bradford, S.)

Grey, C. F.

Balfour, A.

Cronin, J. D.

Griffiths, David (Rother Valley)

Bellenger, Rt. Hon. F. J.

Crossman, R. H. S.

Griffiths, Rt. Hon. James (Lianelly)

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

Cullen, Mrs. A.

Griffiths, William (Exchange)

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

Dalton, Rt. Hon. H.

Grimond, J.

Benson, Sir George

Davies, Ernest (Enfield, E.)

Hale, Leslie

Beswick, Frank

Davies, Harold (Leek)

Hall, Rt. Hn. Glenvil (Colne Valley)

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

Davies, Stephen (Merthyr)

Hamilton, W. W.

Blackburn, F.

Deer, G.

Hannan, W.

Blenkinsop, A.

Delargy, H. J.

Hastings, S.

Blyton, W. R.

Diamond, John

Hayman, F. H.

Boardman, H.

Dodds, N. N.

Healey, Denis

Bonham Carter, Mark

Donnelly, D. L.

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

Bottomley, Rt. Hon. A. G.

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

Hewitson, Capt. M.

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

Ede, Rt. Hon. J. C.

Hobson, C. R. (Keighley)

Boyd, T. C.

Edelman, M.

Holman, P.

Braddock, Mrs. Elizabeth

Edwards, Rt. Hon. John (Brighouse)

Holmes, Horace

Brockway, A. F.

Edwards, Rt. Hon. Ness (Caerphilly)

Houghton, Douglas

Broughton, Dr. A. D, D.

Edwards, Robert (Bilston)

Howell, Charles (Perry Barr)

Brown, Rt. Hon. George (Belper)

Edwards, W. J. (Stepney)

Howell, Denla (All Saints)

Brown, Thomas (Ince)

Evans, Albert (Islington, S.W.)

Hoy, J. H.

Burton, Miss F. E.

Fernyhough, E.

Hughes, Cledwyn (Anglesey)

Butler, Mrs. Joyce (Wood Green)

Finch, H. J.

Hughes, Emrys (S. Ayrshire)

Castle, Mrs. B. A.

Fitch, Alan

Hughes, Hector (Aberdeen, N.)

1024

1025

Hunter, A. E.

Moody, A. S.

Skeffington, A. M.

Hynd, H. (Accrington)

Morris, Percy (Swansea, W.)

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

Hynd, J. B. (Attercliffe)

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

Slater, J. (Sedgefield)

Irvine, A. J. (Edge Hill)

Mort, D. L.

Smith, Ellis (Stoke, S.)

Irving, Sydney (Dartford)

Moss, R.

Snow, J. W.

Isaacs, Rt. Hon. G. A.

Moyle, A.

Sorensen, R. W.

Janner, B.

Mulley, F. W.

Soskice, Rt. Hon. Sir Frank

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

Neal, Harold (Bolsover)

Sparks, J. A.

Jeger, George (Goole)

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

Spriggs, Leslie

Jeger, Mrs. LertafHolbn & St. Pncs. S.)

O'Brien, Sir Thomas

Steele, T.

Jenkins, Roy (Stechford)

Oliver, G. H.

Stewart, Michael (Fulham)

Johnson, James (Rugby)

Oram, A. E.

Stonehouse, John

Johnston, Douglas (Paisley)

Oswald, T.

Stones, W. (Consett)

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

Owen, W. J.

Strachey, Rt. Hon. J.

Jones, David (The Hartlepools)

Padley, w. E.

Strauss, Rt. Hon. George (Vauxhall)

Jones, Jack (Rotherham)

Paget, R. T.

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

Jones, J. Idwal (Wrexham)

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

Summerskill, Rt. Hon. E.

Jones, T. W. (Merioneth)

Paling, Will T. (Dewsbury)

Swingler, S. T.

Kenyon, C.

Palmer, A. M, F.

Sylvester, G. O.

Key, Rt. Hon. C. W.

Pannell, Charles (Leeds, W.)

Taylor, Bernard (Mansfield)

King, Dr. H. M.

Pargiter, G. A.

Taylor, John (West Lothian)

Lawson, G. M.

Parker, J.

Thomas, George (Cardiff)

Ledger, R. J.

Parkin, B. T.

Thomas, lorwerth (Rhondda, W.)

Lee, Frederick (Newton)

Paton, John

Thomson, George (Dundee, E.)

Lee, Miss Jennie (Cannock)

Peart, T. F.

Thornton, E.

Lever, Harold (Cheetham)

Pentland, N.

Timmons, J.

Lever, Leslie (Ardwick)

Plummer, Sir Leslie

Tomney, F.

Lewis, Arthur

Popplewell, E.

Ungoed-Thomas, Sir Lynn

Lindgren, G. S.

Prentice, R. E.

Usborne, H. C.

Logan, D. G.

Price, J. T. (Westhoughton)

Wade, D. W.

Mabon, Dr. J. Dickson

Price, Philips (Gloucestershire, W.)

Warbey, W. N.

McAlister, Mrs. Mary

Probert, A. R.

Watkins, T. E.

McCann, J.

Proctor, W. T.

Weitzman, D.

MacColl, J. E.

Pursey, Cmdr. H.

Wells, William (Walsall, N.)

MacDermot, Niall

Randall, H. E.

Wheeldon, W. E.

McGhee, H. G.

Rankin, John

White, Mrs. Eirene (E. Flint)

McKay, John (Wallsend)

Redhead, E. C.

White, Henry (Derbyshire, N.E.)

McLeavy, Frank

Reeves, J.

Wigg, George

MacMillan, M. K. (Western Isles)

Held, William

Wilcock, Croup Capt. C. A. B.

MacPherson, Malcolm (Stirling)

Reynolds, G. W.

Willey, Frederick

Mahon, Simon

Rhodes, H.

Williams, David (Neath)

Mainwaring, W. H.

Robens, Rt. Hon. A.

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

Mallalieu, E. L. (Brigg)

Roberts, Albert (Normanton)

Williams, Richard (Openshaw)

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

Roberts, Goronwy (Caernarvon)

Willis, Eustace (Edinburgh, E.)

Mann, Mrs. Jean

Robinson, Kenneth (St. Pancras, N.)

Wilson, Rt. Hon. Harold (Huyton)

Marquand, Rt. Hon. H. A.

Rogers, George (Kensington, N.)

Winterbottom, Richard

Mason, Roy

Roes, William

Woodburn, Rt. Hon. A.

Mayhew, C. P.

Royle, C.

Woof, R. E.

Mellish, R. J.

Short, E. W.

Yates, V. (Ladywood)

Mikardo, Ian

Silverman, Julius (Aston)

Younger, Rt. Hon. K.

Mitchison, G. R.

Silverman, Sydney (Nelson)

Monslow, W.

Simmons, C. J. (Brierley Hill)

TELLERS FOR THE NOES:

Mr. Pearson and Mr. Watkins.

Resolution to be reported.
Report to be received Tomorrow.

OPEN PRISON, FORD
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Brooman-White.]
10.25 p.m.
Mr. Walter H. Loveys: I gather, Mr. Deputy-Speaker, that it is somewhat unusual for a new Member of the House to ask for the indulgence of the House on an Adjournment debate, but it so happens that a matter of the gravest concern to many of my constituents has arisen, and, therefore, I feel it my duty to take this opportunity of airing the matter here tonight. Before doing so, I would like to say what a great honour I feel it is to succeed as Member for Chichester a man who has now been transported to another place and who served this House faithfully for sixteen years.
I say straight away that I entirely approve of the principal of open prisons, and it is only after very much consideration that I have to come to the conclusion that I cannot approve of the Prison Commissioners' scheme to introduce an open prison at Ford, in my constituency. In considering this matter, I took the opportunity of visiting an open prison on the Isle of Sheppey, and what an excellent place it is. I enjoyed my visit very much and I thank the Prison Commissioners for their courtesy in showing me round that open prison.
However, Sheppey is an island and there is only one route to the mainland, which makes it an ideal place. But even at Sheppey, where there is little chance of abscondence, 33 people absconded last year, although that was a bad year and I understand that the average is 2 per cent.
I feel I must disprove of the attempt of the Prison Commissioners to make an open prison at Ford for three reasons. One is because it would so seriously affect the amenities of the district. The second is because it would so seriously affect the livelihood of many of my constituents. The third is because it would give so many opportunities and temptations for the prisoners themselves to escape.
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First, I will say something about the effect on the amenities of the district. It is my pleasure to represent the most delightful constituency in the United Kingdom. On our northern boundary we have what is now universally called "glorious Goodwood" and on our southern boundary we have stretches of the finest sands on the South Coast. Now, in the middle, the Prison Commissioners wish to put an open prison. Many families come to the South Coast, many young children come every year to enjoy the bathing facilities, and parents will think twice about bringing their families to this holiday spot if they know that there is an open prison a short distance away.
Also, we have a large residential area of thousands of elderly people who have chosen to spend the evening of their life in this spot, which will be only a few miles away from this open prison. I do not assume that the prisoners will harm these old people, but whatever we' say, whatever explanations we give them, whatever figures we produce, there is no doubt that there will be fear in their minds.
My second point is that this will seriously affect the livelihood of so many of my constituents. We have a holiday trade which is an important consideration in that area. Of course, people will be reluctant to come to that area with their families knowing that there is an open prison within a few miles. The hotel, restaurant and caravan industries are bound to be affected. We have many large caravan sites and holiday camps within a few miles of the proposed open prison. A large holiday camp is to be built next year on the Ford side of Bognor Regis. There are already signs of the values of the properties in the locality declining considerably.
There is an excellent, old-established girls' school right on the borders, and there are also several boys' schools in the locality. I do not suggest that the prisoners would necessarily interfere with the girls or boys, but I ask all hon. Members who have children whether they would like to send their daughters to a school if they knew that the school was situated within half a mile of an open prison.
In our district are many men who go to work in the large industrial areas around Portsmouth and other industrial

1029
towns, and they have told me that they would be horrified to think that they would have to go away to work and leave their wives and children within a few miles of an open prison. It may be that these fears are unfounded, but whatever we do or say, those fears are very real, and I am sure that it is right that we should take them into consideration.
Finally, there is the question of the many opportunities and temptations for the prisoners in an open prison to escape from Ford. There is a public road which goes right through the middle of the proposed site. I do not know—perhaps my hon. and learned Friend the Joint Under-Secretary of State for the Home Department could tell me—whether there are any other open prisons with a public road passing through the middle. I understand that there is one with a road running alongside, but in this case there is a public road right through the middle of the proposed site and, of course, my constituents are afraid that if the Prison Commissioners get this site the first thing they will want to do will be to close the public road.
There is a bus service every quarter of an hour only a few hundred yards away from the proposed site, and there is a railway also a few hundred yards away. On the other side, only a few yards away, there is a river with plenty of small boats. In fact, I can honestly say that if prisoners wished to abscond they would have an opportunity to do so by train, or by road, or by boat.
In addition, there is a caravan site not far away. What an opportunity, if anyone should wish to abscond, to have an accomplice in the caravan site, with a change of clothing and all the other necessities, only a few hundred yards away.
I know that it is the custom that maiden speeches should be brief, and I know that there are other hon. Members who wish to speak, but I should like to ask my hon. and learned Friend whether I could have an assurance that there will be a full public inquiry before the Prison Commissioners take any action in connection with their proposed plans; and, secondly, whether compensation would be paid to the many people whose livelihood would be affected if there were an open prison situated at Ford.
1030
I am daily receiving numbers of letters opposing the scheme. I have received letters from the Chichester Rural District Council, the Bognor Regis Urban District Council, parish councils, the Felpham Association of Ratepayers, and the Bognor Regis Hotel and Restaurant Association, and many personal letters. The West Sussex County Council has not yet announced its decision, but I know that the local representative is wholeheartedly against the scheme. In my large post-bag I have not had one letter approving of the Prison Commissioners' proposals for Ford.
Surely there are more suitable sites in the country. I should like to assure my hon. and learned Friend that I am not being parochial-minded about the matter. I do not have an un-Christian attitude towards the treatment of prisoners. I approve of the principle of open prisons and would welcome an open prison in my constituency if I could have an assurance, first that it did not so seriously affect the amenities of the district; secondly, that it did not so seriously affect the livelihood of so many of Her Majesty's loyal subjects; and, thirdly, that it did not give so many opportunities and temptations for prisoners to escape. I can honestly say that I consider that Ford is not such a place.
10.37 p.m.
Captain Henry Kerby: I am grateful for this opportunity of being able to support my hon. Friend the Member for Chichester (Mr. Loveys) in what must be one of the most able maiden speeches made in this House for many years, a speech upon which I congratulate him most warmly.
The south-western tip of my constituency adjoins and marches with the threatened area at Ford. The peace of mind of about 20,000 of my constituents and the very livelihood of a very large number of them are directly threatened by these rash proposals on the part of the Prison Commissioners. I speak on their behalf as also on behalf of the two local authorities in my constituency directly concerned, namely, the Little-hampton Urban District Council and the ancient Borough of Arundel, both of which oppose and condemn the proposals in the strongest possible terms.

1031
The establishment of a so-called open prison in the heart of an area which depends for its very livelihood upon every aspect and ramification of the family holiday trade, an area which abounds in schools, nursing homes and convalescent homes and which is peopled by thousands of very elderly retired folk, invalids, caravan and houseboat dwellers, is fraught with the very greatest danger. It would be a tragic and disastrous mistake, difficult and expensive to rectify and the very reverse of so-called planning.
The local planning authority is the West Sussex County Council, but, as usual in such cases of Crown development, the County Council seems to be "sitting pretty", on the fence. The county planners should come off the fence and reject out of hand these dangerous and anti-social proposals of the Prison Commissioners. They would then be supporting every other local authority directly concerned and defending the highest interests of the county.
Is this another Crichel Down? Was this valuable agricultural land offered back to its original owners, or in the open market, when the Admiralty had no further use for it? If not, why not? I hope that my hon. and learned Friend will have second thoughts and instruct the Prison Commissioners to have third thoughts and to withdraw their sinister proposals for Ford. At the same time, and in view of the most violent local objections, may we please have an immediate and public inquiry before the pass is sold behind our backs by the West Sussex County Council?
If there is an open prison at Ford, it will be a prison with no bars and no walls. There will be nothing to fence in hundreds of convicted criminals. There will be nothing to segregate them from 30,000 or 40,000 law-abiding citizens in West Sussex. If common sense and common justice rather than sloppy sentimentality are to prevail it simply means that a much longer and more expensive wall will have to be erected around the constituency of my hon. Friend the Member for Chichester and my own constituency, for if there is nothing to keep the criminals in we shall be forced to keep them out.
Is this planning? Is this justice? In my opinion, it is sentimentality run mad.
10.41 p.m.
Mr. Frederick Gough: I am fully aware of the fact that my hon. and learned Friend the Joint Under-Secretary of State has a very short time left in which to answer the debate, but being, in a sense, the nigger in the woodpile, perhaps I may be allowed to say a few words and to start by adding my praise to my hon. Friend the Member for Chichester (Mr. Loveys) on his maiden speech. I hope that, in the circumstances, he will accept that as sufficient acknowledgement, although I hope that we shall hear him many times.
The original plan for this prison without bars was that it should be within my constituency in an area called Itchingfield and within 300 yards of a home for maladjusted boys. In addition, there were many other detrimental factors to the siting of the prison at that spot. My hon. Friend the Member for Chichester and my hon. and gallant Friend the Member for Arundel and Shoreham (Captain Kerby) both said that, in principle, they agreed with the idea of open prisons.
Captain Kerby Captain Kerby indicated dissent.
Mr. Gough: Certainly, my hon. Friend the Member for Chichester does, and if my hon. and gallant Friend does not, that only weakens his case. Surely it is better to find the best site in Sussex. I am sure that every Sussex Member will agree that we must take the same responsibility as any other part of Britain for this experiment of open prisons and that we must find the best site available.
Here is a disused airfield with houses for the warders and with good amenities and with bus routes for the children of the warders, and so on. Escape has been mentioned. Surely the one idea of a prisoner who escapes—and there are not many of them—is to get out of the district. I am prepared to leave the case in the hands of my hon. and learned Friend, but I urge that the original plan to site the prison at Itchingfield next to a home for maladjusted boys was obviously wrong. I believe that in that area Ford represents the best site.
10.44 p.m.
The Joint Under-Secretary of State for the Home Department (Mr. David Renton): I, too, congratulate my hon. Friend the Member for Chichester (Mr.

1033
Loveys) on his maiden speech. Perhaps I may also congratulate him on his modesty, because it is a form of modesty to choose an Adjournment debate at the end of the main business of the day for such an important occasion as making a maiden speech. I know of no precedent for it.
At the same time, there is no more effective way of serving one's constituents than that which my hon. Friend has chosen, namely, by telling the House of the anxieties which one's constituents feel about the proposals of a Government Department or public authority. Looking back to my own maiden speech and to those of many other hon. Members, I suggest that my hon. Friend is to be congratulated upon the ease and poise which he displayed on this occasion.
While my hon. Friend has properly brought to the notice of the House the problems that he anticipates if an open prison is established on the site at Ford Aerodrome, I am sorry to say that at present there is little that I can do to oblige him, for reasons which I will explain. He will see that at present it is not in my hands, or in the hands of the Home Secretary.
As the House well knows, the prison population is increasing at an alarming rate. Two years ago it was 20,000 and now it is over 26,000. About 6,000 men are sleeping three in a cell, a deplorable state of affairs. A building programme on a considerable scale is being planned for new prisons and Borstals, but it must be some years before that will appreciably ease the situation. Meanwhile, the need for more accommodation is immediate and urgent, and it can be met only by more open prisons, of which I am glad to say that my hon. Friend the Member for Chichester and my hon. Friend the Member for Horsham (Mr. Gough) both approve in principle.
We are in a dilemma which is not an unusual one. While the need and the principle are willingly accepted by all hon. Members, no hon. Member, at first sight, is willing to accept an open prison in his own constituency. That is very human and natural. But I think that were inquiry to be made in the neighbourhood of open prisons which have been established now for some years it would be found that the early fears had been forgotten, and that the prisons were
1034
accepted as good, and even as welcome, neighbours. I hasten to add that I have an open Borstal in my own constituency.
I can assure the House that premises suitable for conversion are not easy to find. Ford Aerodrome, which is a redundant Royal Naval Air Service establishment in the occupation and ownership of the Crown, was brought to the notice of the Commissioners as an alternative to another site which has been mentioned by my hon. Friend the Member for Horsham, and which they first wished to acquire. In the face of strong objections to that proposal they agreed to consider Ford Aerodrome and found that it was well suited to their needs. It requires an unusually small expenditure on conversion, and will provide two separate establishments to accommodate up to 600 men. One of the establishments would be for elderly prisoners and the other for selected men, most of whom would be in prison for the first time. All of them would be specially chosen as being suitable for detaining in open conditions.
Since the siting of a new prison almost invariably raises local objections there is a well-established procedure for dealing with them. The first step is for the Prison Commissions to discuss the project with the local planning authority, in this case the West Sussex County Council. I was sorry that my hon. and gallant Friend the Member for Arundel and Shoreham (Captain Kerby) did not display the trust which one normally accords to one's own local authority. In the present case a meeting has been arranged to take place later this week between the Prison Commissioners and that planning authority.
My hon. Friend the Member for Chichester asked whether there would be a full inquiry. The position is that if the Commissioners and the planning authority fail to reach agreement, the next step is for local people to ask the Minister of Housing and Local Government to appoint an inspector to hold a public inquiry and there the views of all concerned can be fully and publicly ventilated.
The House will, therefore, appreciate, in view of what I have said, that this matter is in effect sub judice. That being so, it would not be appropriate for me

1035
to discuss in detail all the points put by my hon. Friends.
To sum up, the position is this: there must be more open prisons. There are very few suitable sites available. Whichever sites are selected they are bound to raise some local objections. Those local objections are, however, impartially considered so that a decision can be taken as to where the balance of public interest lies. I hope that the House will be able to accept that that is as far as I can go tonight.
I conclude by saying that the Prison Commissioners will be grateful for the arguments advanced by my hon. Friends tonight and will pay due attention to them, especially to the arguments of my hon. Friend the Member for Chichester, on whose initiative this matter was raised and in whose constituency the proposed site lies. Equally, I am sure that my hon. Friends will remain aware of the urgent need which greatly trouble my right hon. Friend the Home Secretary for more prison accommodation.
Vice-Admiral John Hughes Hallett: Would my hon. and learned Friend confirm, for the sake of the record, one point which I did not
1036
quite follow? Is the suggestion of my hon. Friend the Member for Horsham (Mr. Gough) correct, that the reason for the change of site was to avoid having this prison close to a home for maladjusted children?
Mr. Renton: I think that that would be oversimplifying the matter. The Prison Commissioners, needing an open prison in the South of England, considered a number of sites. On first consideration the site at Itchingfield seemed suitable, but then various objections were made to that site and were brought to the notice of the Prison Commissioners. In the light of those objections, they decided that they could not pursue that proposal any further and proceeded to consider other available sites in the area. Ford aerodrome appealed to them because, from the point of view of accommodation and position, it seemed suitable. But that is not the end of the matter. They have made their proposals to the local planning authority and it is now for the local planning authority to give its views on the matter.
Question put and agreed to.
Adjourned accordingy at seven minutes to Eleven o'clock.

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

CALVINISTIC METHODIST OR PRESBYTERIAN CHURCH OF WALES (AMENDMENT) BILL [H.L.]
Read 2ª, and referred to the Examiners.
RAILWAY CLEARING SYSTEM SUPERANNUATION FUND BILL [H.L.]
Read 2ª, and referred to the Examiners.
ROYAL WANSTEAD SCHOOL BILL [H.L.]
Read 2ª, and referred to the Examiners.
THAMES CONSERVANCY BILL [H.L.]
Read 2ª.

INFORMATION FROM BRITISH EMBASSIES
2.37 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have taken or propose to take steps to improve the information available to the Foreign Office from British Embassies, having regard to recent experience in Iraq and Cuba.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF LANSDOWNE): My Lords, Her Majesty's Government understand the anxiety which has been expressed in many quarters on this important subject. If, however, the Question of the noble Viscount the Leader of the Opposition was intended to imply that any of Her Majesty's representatives abroad had failed in their duty, I cannot accept that implication. It is, of course, one of the first concerns of my right honourable
788
and learned friend to ensure that the flow of information from Her Majesty's Missions overseas is maintained and, wherever possible, improved. The various methods of achieving this are constantly under review.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I would assure the noble Marquess, whether or not he could read it from the Question, that I was careful not to make any attack upon any sections of Her Majesty's Service. But has he seen, for example, amongst all the other Press; publicity, the article in the Economist, "How green are our diplomats"? I ask that, not because that is a nice title, but because of the evidence in that article that so much of what was going on in Cuba could even be found in foreign newspapers in Cuba, and therefore could have been communicated to those in this country. But apparently Her Majesty's Government found the event to be a complete surprise and went on supplying the Batista Government with arms.
THE MARQUESS OF LANSDOWNE: My Lords, Her Majesty's Government and I personally are aware of the publication to which the noble Viscount has referred; and I would say at once that I am particularly glad I misunderstood what I thought were perhaps implications in the Question of the noble Viscount. I want to make it perfectly clear to your Lordships that we have no reason whatsoever to hold any feelings or to make any observations other than those which I have given in my original Answer. It might perhaps be relevant if I reminded your Lordships that the Americans in fact retained their military mission to General Batista up to the very end.
LORD HENDERSON: My Lords, the noble Marquess said in his first reply that there was no criticism to be made of the information supplied by Her Majesty's representatives abroad, including this particular case. Are we to understand, therefore, that Her Majesty's Government were properly informed as to the facts in Cuba but that the Foreign Office's judgment was quite different from that of Her Majesty's representative there?
THE MARQUESS OF LANSDOWNE: My Lords, we received, as I have said,

789
full information of the situation and took careful note of it. There was no difference of opinion at all.
LORD LAWSON: My Lords, if we had full information in this country about the Cuban situation, may I ask the noble Marquess why it was that all the people of this country were bemused and misled by the statements that came from Cuba?
THE MARQUESS OF LANSDOWNE: My Lords, I am not sure that I quite understand the noble Lord's question. Am I to understand him to say that we were bemused by the information that came from Cuba?
LORD LAWSON: My Lords, yes. I gathered that the noble Marquess said that we were fully informed in this country about the Cuban situation. What I am saying is that repeated statements that came from Cuba led people in this country to a certain view; and, contrary to what the noble Marquess said, the people of this country were misled utterly by the statements made in the Press generally as to what the situation was there.
THE MARQUESS OF LANSDOWNE: My Lords, if I have understood the noble Lord's question correctly, I think I must say at once that the people in this country were not misled, and certainly they were not misled by Her Majesty's Government.
LORD LAWSON: My Lords, may I ask the noble Marquess whether he is aware that, in spite of the knowledge of the Government, the people in this country did not know what the position was in Cuba? It came to them as a very great surprise.
THE MARQUESS OF LANSDOWNE: I can assure the noble Lord that Her Majesty's Government did not withhold information.
VISCOUNT BRENTFORD: My Lords, may I ask the noble Marquess whether he is aware that those of us who have been actively engaged in commerce and industry in Cuba this past year know full well that the information available in Cuba was no greater than the information available to the public in England; that we did receive the utmost information from our representative there and are
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continuing to do so; that he stands in the highest prestige in that country and that any suggestion of denigrating his efforts will only redound against the prestige and interests of this country?
EARL ATTLEE: My Lords, it would seem that the Government are rather frequently ill-informed. Matters seem to come as a surprise to them. It was the same in Iraq. Do Ministers read the telegrams?
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT HAILSHAM): My Lords, I must say that that comes ill from the noble Earl. We were most surprised at some of the trouble he 1st us in for the other day.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, is it not a fact that it was not in our minds—certainly it was not revealed to me—that there was a state of civil war for a considerable time before the actual event? Certainly this country was not fully informed, either here or there. Nor is there any explanation, I think, of why the Government went on supplying arms to Batista until almost the last moment, to the great annoyance of those who have now the upper hand in Cuba. Why was that?
VISCOUNT HAILSHAM: My Lords, if I may say so, the people of this country could have learned that there was a state of civil war from the newspapers, which is their proper source of information. If the noble Viscount did not draw the inference from the newspapers, I can only advise him to read them more carefully.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, why did not the Government draw the inference themselves from the newspapers and stop the supply of arms?
VISCOUNT HAILSHAM: That comes somewhat ill from a member of a Party which has been urging us to sell destroyers to Indonesia.
LORD HENDERSON: My Lords, the noble Marquess has said that the Americans retained their military mission there. But the Americans had cut off the supply of arms and we did not cut off the supply of arms, and now the noble Marquess has said that everybody knew that there was a civil war going on.
THE MARQUESS OF LANSDOWNE: My Lords, there were two reasons for the cutting off of the supply of arms by America. One was that there had been a very powerful lobby by émigrés in the United States. That was one of the reasons, probably well known to your Lordships. The other reason was that there had been smuggling of arms on a very considerable scale, and it was decided by the Government of the United States of America that the best way of stopping smuggling was to stop the supply of arms to both sides. That was why an American embargo on arms was set up.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, we are wholly dissatisfied with the answers. I think the best thing to do is not to prolong this discussion any further but to raise it in the next Foreign Affairs debate.

NOTICE OF SHAREHOLDERS' MEETINGS
2.45 p.m.
LORD BARNBY: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of interpretations put on recent statements by Ministers on certain industries, particularly cotton and jute textile, that such are regarded as expendable, thereby indicating encouragement to concentrations as a solution towards re-equipment problems, also in view of the current "climate" for "take-over bids" they will now, in order to expedite consultation with shareholders, consider appropriate permission to revert to earlier practice of fourteen days' statutory requirements for the summoning of general meetings of shareholders.]
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, I must reject the implication to which the noble Lord refers that Her Majesty's Government regard the cotton and jute industries as expendable, and I am not aware of any statements by Her Majesty's Ministers which could be given this interpretation. A take-over bid which is to be discussed at a meeting of shareholders would normally necessitate the calling of an ad hoc meeting and the
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passage of a special resolution. For such a meeting the statutory period of notice has been twenty-one days since the Companies Act of 1929. It is doubtless this period of notice which the noble Lord wishes to see reduced. Although their Report was written before the development of take-over bids, the Cohen Committee on Company Law Amendment, in recommending a longer period of notice for certain classes of meeting, and endorsing the period of twenty-one days for meetings called for the passage of a special resolution, did emphasise the importance of an adequate period of notice being given to shareholders. Moreover the statutory period of notice cannot be departed from by means of any special permission and any change would require legislation.
LORD BARNBY: My Lords, in thanking the noble Earl for his reply, I would ask him whether it is correct that in the early period it was seven days' notice for extraordinary general meetings and not the twenty-one days which are now required. His reply does not give any encouragement that Her Majesty's Government intend to change it. May I ask, with regard to the earlier part of his reply, in which he denied the suggestion that the Ministers' replies about those industries suggested that they were expendable, how he reconciles that with the reply given by the Minister to the mover of a Motion in your Lordships' House in July of last year, which certainly conveyed that impression and which will be well within the noble Earl's recollection.
THE EARL OF DUNDEE: I do not know whether the noble Lord is referring to jute or to cotton.
LORD BARNBY: To jute.
THE EARL OF DUNDEE: My Lords, the reply on jute did not give me the impression that the Government regarded that industry as expendable. I was the mover of the Motion on the subject. The Government are affording the jute industry a unique kind of protection by the present system of purchase by the Jute Board from India.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, do I understand that the jute industry are satisfied with that protection as being in a special class?
THE EARL OF DUNDEE: I think that they are satisfied that they are not regarded as being expendable.
LORD BARNBY: My Lords, does the noble Earl feel that the reply which he gave was trying to reconcile the acceptance by himself of the answers which he received on another occasion with the reply given in another place to a debate on cotton which once more emphasised the impression that in present circumstances the Government do regard the cotton industry as expendable?
THE EARL OF DUNDEE: My Lords, I think that that is an extremely unwarranted inference to draw from anything that has been said in your Lordships' House or in another place. I do not know whether we can really have a debate on the cotton industry or the jute industry at Question Time, but I do not think that any observations by any Minister could possibly justify an inference of that kind. The Minister concerned has expressed his anxiety to help the cotton industry in bringing about a balanced and efficient structure. I do not think that that is the same thing as telling it that it is expendable.
LORD SALTOUN: My Lords, might I ask Her Majesty's Government whether, strictly speaking, the form of the Question was not itself out of order?

FAMILY ALLOWANCES AND NATIONAL INSURANCE BILL
Brought from the Commons; read 1ª, and to be printed.

BUSINESS OF THE HOUSE
VISCOUNT HAILSHAM: My Lords, I beg to move the Motion standing in my name. This is to enable the Lord Chancellor to play his part in the Second Reading referred to. He is now, I understand, engaged on the Judicial Business of the Privy Council.
Moved, That Standing Order No. 35 be considered in order to its being dispensed with for the purpose of giving precedence to the Motion of the Earl of Cork and Orrery over the other Orders of the Day.—(Viscount Hailsham.)
On Question, Motion agreed to, and ordered accordingly.

STRENGTH OF THE ROYAL NAVY
2.52 p.m.
THE EARL OF CORK AND ORRERY THE EARL OF CORK AND ORRERY rose to move to resolve, That, in the opinion of this House, the depleted strength of the Royal Navy creates a dangerous situation. The noble Earl said: My Lords, I am not going to begin my few remarks by apologising for bringing this matter before your Lordships' House again, although it was debated only a few months ago—but to empty Benches. In my view, there are certain aspects of the Government's defence policy which require consideration at the proper time; and one of them—and in my opinion, the most important—is to stop depleting the Fleet and running it down to nothing before we have something to take its place. The text on which I want to talk is: Do not throw away good articles until you have got something better to take their place.
We are engaged now in changing from a conventional Navy to a nuclear Navy, and everybody understands that this is a task which must take time. Every new device must be well tried before it is fitted into ships of the new Fleet—a Fleet upon which so much may depend in the future. Further, it is quite obvious, in the present state of the world, with rulers of powerful States telling each other, not perhaps to "go to Hell," but that force will be met by force, that nobody can say that the shadow of another world war does not hang over us. I think it behoves the Government, therefore, to walk warily, and not to do either of two things: to let the conventional Navy be so depleted that it cannot manage the task it may be called upon to perform at the present moment, or to let the other nations get such a long start with a nuclear Fleet that we are left hopelessly astern. I submit that we are in danger of doing both those things.
The background against which we must consider this question is a simple one. Every year we have to import into these islands 100 million tons of food and raw materials, and 99 per cent. of that huge tonnage has to come by sea in ships. In his Explanatory Statement on the Navy Estimates for last year, the First Lord said:
"The oceans cover 70 per cent. of the world surface … nothing is more important than that our merchant shipping should be

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able to pass freely and safely across them. Our very existence, in peace and in war, depends upon this freedom."
The Minister of Defence has said a similar thing. He has said:
"It is surely the first duty of the Navy to pay attention to the protection of the sea communications upon which the whole life and economy of our island people depends."
In view of those two statements by those responsible Ministers, can it be wondered that the general public should not concern themselves much about this question but take it for granted that, having made those important statements, the Government will see that everything is done to implement them?
But, my Lords, we are not the only people who have studied the lessons to be learned from the last two wars. Other nations, too, have noted what a powerful weapon the submarine is against merchant shipping, and how it can be used to bring to its knees and to starvation a nation which depends entirely upon its merchant shipping. For that purpose Russia—essentially a Continental Power—has during the last decade built a very powerful and very modern navy. None of the ships in that navy is more than ten years old, so the ships are all modern. In addition, the Russians have a powerful maritime air force—some 3,000 machines. I am not insinuating that the nation has been purposely kept in ignorance of the position, but I do feel that there is a general misunderstanding of the situation as it now exists. There have been such headlines in the Press, for instance, as "Home Fleet leaves for Manœuvres in the North Sea." How many people realise that that means two ships and a flotilla of small craft? Then, another one was "N.A.T.O.'s Manœuvres East of Suez". How many people realise that the British contingent consisted of one carrier, one destroyer, and one submarine? When, after full-scale exercises in the Atlantic, the American and British air and sea officers reported that they had not sufficient planes or ships to do the task allotted to them, they were hardly listened to, if not actually frowned upon.
At the present time we have a small naval force which I do not hesitate to say would be quite unable to protect our shipping if war were to come to-morrow.
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The First Lord recently said [OFFICIAL REPORT, Vol. 211, col. 651]:
"What I am concerned with is what we are going to have in ten years' time."
He then went on to say:
"… it is no good thinking only of to-day. I do not think that the immediate danger of a major war is great …"
My Lords, I have a great respect for all that the First Lord says, except on this particular point. Surely the present intervening years require a close and careful study and a watching from hour to hour. The position should be kept very much in the foreground, so that the change from the conventional to the nuclear Navy is made as a rather gradual transition, and not as a period of fits and starts.
I know that I shall be told that we are not alone. If we were alone at the present time, with the Navy as it is to-day, we should not have a chance. To my way of thinking—and no doubt many other noble Lords will agree—that is a sad position for Britain to be in. Our opponents will have several advantages over us if they choose to bring about a war. The first, and perhaps main, advantage will be that they will be under one command. With one command you can do your planning and movement of ships and have everything ready and settled almost before your opponents know that anything is happening. We do not know much about what goes on behind the Iron Curtain, as has been proved by certain recent events, and it is possible that they could have the whole thing ready to surprise us. What would our position be then? We should be like a fox in a henyard, clattering about as to whether we should declare war according to this or that.
I do not wish to burden your Lordships with figures, but I feel that the strength of the Russian Fleet ought to be borne in mind. They have 32 cruisers, 180 destroyers, 1,000 escort ships, 500 submarines and, in addition, a powerful maritime force of something like 3,000 planes. Next year our strength will be 3 carriers, 3 cruisers, 24 destroyers and approximately 40 to 50 frigates. The amount of merchant shipping that we should have to protect with that strength does not differ much from what it was in 1939; in fact, it is probably somewhat larger, because of the increased demand

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for oil. There is only one thing to be said in regard to that, and that is that we have not the force to protect it.
If there is anything behind all the Russian movements, the very state of the Fleet at this time, even if we could come to any agreement about nuclear weapons, would invite them to take the opportunity of destroying us. I have told your Lordships that there are about 40 to 50 frigates, and that may sound to some noble Lords to be a goodly number. But frigates have other tasks to perform than escort duty. And when we consider escort vessels, we should not think in tens or twenties, but must think in hundreds. During the last war we never had enough escorts until towards the very end of that war. Escort vessels comprise not only frigates, but also cruisers and other ships, down to submarines and small craft such as oceangoing trawlers.
In March, 1942, the British and American authorities looking after convoys got together to decide what number of escort craft they required. The British required 720 and had 380; the Americans required 550 and had 120. So that they were together something like 800 below requirements. At that time some 200 escort ships were being built in the United States for Britain, and it was hoped that they would be delivered before the end of that year. They did not enter service fast enough to meet the growing demand for escorts, however, and we suffered from a severe shortage of these vessels until almost the end of the war. As late as 1943 we find our Prime Minister telling the President of the United States:
"The sinking of 17 ships in convoy in the North Atlantic in two days is final proof that everywhere our escorts are too thin."
And he goes on to say:
"The strain upon the British navy is getting intolerable."
What could we do with the force that we have available now if we were called upon to carry out a similar task!
That struggle for escort vessels remained, as I have said, almost a permanent feature in the Atlantic battle during the whole of the war. One reason for that was because of a clash of priorities in the United States, both sides no doubt thinking that their interests were the most important. The Americans wanted the labour and materials for the landing craft in the Pacific and for the
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North African expedition, and we wanted more ships to guard our food supplies.
Much the same state of affairs existed with escort carriers, of which a great deal was hoped. We did not get them for some time and had to employ a make-shift class of ship. Are we again to be asked to go all these troubles? This certainly cost us thousands of lives and hundreds of merchant ships, which, if we had the forces to protect them, would have been spared. We read of an attack upon a convoy and are told that three ships have gone down in one column, two in another and a further ship in another. We are all very sad about the loss of the ships, but nobody thinks about the merchant seamen, who, in losses of that nature, would represent something like 300 men.
On the question of scrapping of ships, it is the fact that in the last three years we have been doing little else. I should like to give your Lordships an example of what happens—my information is all from the newspapers, so it may be that there is something more behind it. A 9,000 tons cruiser arrived home just before Christmas, having come 10,000 miles. She was a Flagship in the Eastern part of the world—off the back-door, as it were, of Vladivostock—a station where typhoons and extremely heavy weather are not unknown. The ship brought back 700 or 800 men in safety, but the same day she arrives it was announced that she was to be scrapped. Why should she be scrapped? She was out there, and presumably she was an efficient ship. I feel sure that she was kept in a high state of efficiency, because Her Majesty's ships usually are, and she had proved herself quite safe at sea. Yet she is to be scrapped. That ship would have been much more suited to the work that was given to the unfortunate "Jervis Bay" at the beginning of the last war. The "Jervis Bay", an armed liner, was the only armed vessel with a convoy of 37 ships. She was sighted by a German cruiser, which engaged and sank her, along with seven other ships in the convoy. That represented the loss of another 300 or 400 merchant seamen.
Surely we could give the ship I have mentioned two or three years more. A small crew would keep her in the required state. I do not know whether any of

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your Lordships read the House of Commons examination, but they were not loud in their praises of the Admiralty as concerns the old ships.
There are many other matters which I should have liked to bring before your Lordships to-day. In my opinion it is a point of honour for the Government to give not only the sailors of the Merchant Navy—I am not talking at the moment about the Royal Navy—but all soldiers, airmen and Government officials of all kinds who have to be transported by sea better protection and rescue vessels, so that if they do meet disaster they do not all go.
I hope that this subject will be taken up by subsequent speakers and I must ask your Lordships' leave not to make any more remarks. I have been suffering from a throat, and I am rather in difficulties. I should like to say that a well protected, efficient Merchant Navy is the hope of salvation of this country. If our food and our supplies do not come in time of war, we run a great risk of a bad effect upon national morale. Picture thousands of men out of work, standing about and seeing their wives struggling to keep the children happy, the children crying for food and starving. That could lead to a very strong "Stop the war" movement, to demonstrations and riots, and from riots to chaos and perhaps even revolution. I beg to move my Resolution.
Moved, That, in the opinion of this House the depleted strength of the Royal Navy creates a dangerous situation.—(The Earl of Cork and Orrery.)
3.13 p.m.
LORD WINSTER: My Lords, I hope the noble and gallant Admiral of the Fleet will allow me to say, with respect, that he has always had the reputation of being a man who uses words sparingly but uses them to express his exact meaning. If he warns us to-day that the country is moving into danger because of the naval situation, then he means exactly that, and I trust that the Government will heed the warning.
The First Sea Lord made a speech early this month in which he said that he welcomed the public reawakening to recognition of the Navy's role. I am bound to say that I have not noticed much in
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that direction myself, and I wish it were so, with all my heart. The Government will have to adopt a different attitude towards the Navy if indeed the public is to be awakened to its functions and to its present state. The First Sea Lord went on to say that the Navy could operate efficiently in a cold war, a limited war and a global war. That sounds all very well, but it requires some amplification which I hope the First Lord may be able to give us this afternoon. What I should like to know is: What does the Navy do? What is the function of the Navy in each of those three eventualities of which the First Sea Lord spoke? What ships would be necessary in each case to enable the Navy to carry out that function? Finally, have we got those ships, or what is the prospect of getting them? Unless we have some facts of that nature I am bound to say that I think the First Sea Lord's speech carries very little weight.
The First Lord, answering the noble Earl, Lord Howe, a short time ago used these words [OFFICIAL REPORT, Vol. 213 (No. 20), col. 81]:
"… we intend to maintain a Fleet which will fulfil these tasks."
I take it that he meant the tasks of which the First Sea Lord has spoken. But does the First Lord really think that, say, in 1961 all those tasks as defined by the First Sea Lord can be performed on a basis of three carriers and three cruisers? Those are the figures issued recently by the Navy League, and I have not seen any contradiction of them. Does the Admiralty really think that that basis is adequate? The First Lord used these words recently:
"Resources are being repeatedly diverted from the shore support of the Navy to the fighting ships themselves."
What exactly does that mean? The fighting ships are diminishing steadily, and they are to be reduced to three carriers and three cruisers with, of course, the attendant ships. What are these resources being diverted for? Why the urgency to divert the resources from shore support to the fighting ships themselves when the fighting ships are getting fewer and fewer? Of course, the First Lord, I recognise fully, is bound by his political loyalties, but I find it difficult to believe that he is satisfied in his own heart, beyond all reasonable doubt, that we are strong enough at sea and that where the Navy is

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concerned our defence policy is today correct and effective.
Let us look for a moment at another speech made by the First Sea Lord on Trafalgar Day of last year. He quoted Nelson as having warned the Admiralty once in 1803 in connection with steam propulsion which was then being talked about. The First Sea Lord made this comment:
"Let us take to heart this lesson from Nelson's life: Look ahead, keep abreast of the times and where possible ahead of them."
Very fine words indeed. But we are not ahead of the times; we are miles astern of America and Russia, who are now first and second. What is the position in which we find ourselves? The Prime Minister spoke on naval matters when recently in Australia and he said:
"We must not lower our guard."
But at sea that is exactly what we have done. The official statement is:
"We have decided not to attempt to maintain in home waters a balanced naval force containing warships capable of discharging every rôle."
If that is not lowering our guard I should like to know what is. The Prime Minister continued:
"Interdependence must here come to Britain's aid."
I confess that that frightened me, for our experience of interdependence has not been very happy. The story of where our support should come from has been too much a story of delays, too little and too late, poor quality and quarrels militating against victories. The story of interdependence is not altogether a happy one for us.
I want to pass on to what an Admiral of the Fleet said about the Merchant Navy. The Merchant Navy Officers' Association has recently communicated to the First Lord its fears that the Admiralty is neglecting the defence of the Merchant Navy. The Admiralty reply claims that it
"… always bears in mind its special responsibility to the Merchant Navy."
But, my Lords, two wars have proved that that claim is quite unfounded, and as things are going to-day a third war would, I fear, repeat the melancholy story. The Admiralty reply, as a matter of fact, admits my criticism when it says:
"… at the beginning of the last war a number of armed merchant cruisers had to be given the task of protecting convoys from
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surface attack. … We all remember with pride the epic fights of the 'Rawalpindi' and the 'Jervis Bay'."
We remember with pride; and the Admiralty feels pride in those two episodes.
I had the following comment on this letter from a most eminent and distinguished naval officer. He says that, in the letter,
"we have an exposition of Admiralty policy which will not stand the most elementary examination. With you I regard the 'Rawalpindi' and 'Jervis Bay' with shame; but of course the praise and V.C.s were the smoke screen behind which the authorities sought refuge. Who has ever doubted the courage of the personnel of the Royal Navy or the Merchant Navy?"
I thought that a very poor passage in the Admiralty reply.
The Admiralty letter then goes on:
"I am bound to agree that the submarine threat has increased. As you know, the Royal Navy has concentrated on anti-aircraft and anti-submarine measures as its main contribution to the N.A.T.O. navies."
But we know from Admiral Eccles, when he was Commander-in-Chief of the Home Fleet, that he had not got under his command the resources to enable him to defend the Merchant Navy adequately if called upon to do so. The letter concluded by hoping
"you will feel that the Royal Navy can best succour the Merchant Navy by concentrating on building a powerful, active Fleet."
My naval friend made the appropriate comment again:
"It is not as if the 'powerful, active Fleet' was just round the corner instead of being over the hills and far away."
The Merchant Navy has so many of these reassurances to endure. The noble Viscount, Lord Cilcennin, when he was First Lord, said:
"The Merchant Navy can still rely on the Royal Navy to escort it as it performs its vital task. The frigates and the carriers will be there."
That was some time ago, but they are not there yet. This has not been the Merchant Navy's experience in two wars after similarly optimistic and reassuring Admiralty pronouncements. The Merchant Navy has had enough of these bland reassurances, the worthlessness of which was proved in the last war by 35,000 casualties and 11 million tons of shipping sunk. In the debate of June 11 last year the noble and gallant Admiral of the Fleet, Lord Cunningham of Hyndhope, pointed out that we ended

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the last war with 880 ocean escort vessels. That gives the measure of the task which the Admiralty is called upon to perform with regard to our Merchant Navy. We had 880 ocean escort vessels. What have we got to-day?
The noble Viscount went on to say that unacceptable risks are being run at sea. It is surely a sorry day when the Merchant Navy can no longer rely for protection on the Royal Navy. He called attention to the Russian submarine force and said [OFFICIAL REPORT, Vol. 209, col. 751]:
"… the forces to meet and defeat this very real menace are, in my view, quite inadequate … unacceptable risks are being run."
And he was supported by another Admiral of the Fleet, the noble and gallant Lord, Lord Chatfield, who asked for an assurance that there will be ships available to give "reasonable security" for our merchantmen. He did not ask for too much; he asked for "reasonable security" for our merchantmen. I should like to put it a little higher than that and say that we want very real security indeed for our merchant shipping.
It was noticeable that in that debate of June last year, although two Admirals of the Fleet expressed themselves in these very strong terms about the Merchant Navy, the First Lord made no reply. I read through the two speeches that he made on that occasion; I read through them yesterday, and I do not think I missed anything—if I did I will apologise, of course—but I could not find that the First Lord made any reasoned reply to what those two gallant officers had said. I hope we may be more fortunate to-day. I think that what we hope for is not an attempt to prove that everything is all right—I mean the sort of speech that Lord Cilcennin once made, that "the carriers and the ships will be there", and so on. We do not ask for that sort of assurance from the First Lord to-day; I am afraid we should not believe it if we got it. What we should like to hear is something in detail about the plans which are in hand, the programmes which are being devised in order to build up the sort of protection that the Merchant Navy must have.
I do not want to go at length this afternoon into the question of the atomic submarine, the "Dreadnought", but I
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must say that I think it is a sorry story indeed. In fact, I am almost tempted to use a stronger adjective than sorry. But why all the secrecy about this vessel? I do not know what is the purpose of the secrecy. Surely everything about atomic submarines is now known certainly to America and very probably indeed also to Russia, so why must there be all this secrecy about the ship? Why cannot we be told that the keel has been laid or when it is hoped to lay the keel, or when it is hoped she may be launched, and when it is hoped that she may be with the Fleet and operational? Why the secrecy? I can understand many difficulties which have arisen in regard to this vessel, and I am sure there is a good reason for the many delays; but I cannot understand the reason for secrecy.
In March last year, less than a year ago, the Parliamentary Secretary said:
"The coming of atomic submarines is inevitable. The Admiralty is working on this."
Rip van Winkle again! At that time the "Nautilus" had cruised 66,000 miles, and the Parliamentary Secretary had realised that the coming of these craft is inevitable! Rear Admiral Wilson was recently appointed—a very good appointment indeed—in charge of nuclear propulsion, and he has stressed the importance of getting to sea with the minimum delay, using these words:
"Posterity will not excuse us if we fail in this task."
At the present moment if we are not in fact failing, certainly we are lagging behind. The latest Jane's Fighting Ships speaks of our "modest effort" to produce one atomic submarine. At that I think I will leave the subject this afternoon. But the series of quotations would I think shock your Lordships if one were to go back over the whole story of this submarine from the time she was first thought about. To my mind, the story is all the more regrettable because I have been told that we actually had the embryonic idea before America; but America now has certainly five and I believe seven atomic submarines at sea with the Fleet.
Then I want to say a word or two about what I call "modern" ships. Again, this year Jane's Fighting Ships says:
"The Navy Departments of major naval Powers have been shaken out of the static orbit of conventional ships, conventional propulsion and conventional weapons."

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I am afraid that that can hardly be said about our Navy. There is, of course, a great distinction between new and modern ships. Although we have been building some new ships we have not yet built a modern ship in the accepted sense of the word. I could build a house. I could build it without central heating, without electric light and without any water supply. When it was finished I should have a new house, but I should not have a modern house. The Admiralty has been building some new ships, but they have not yet built a modern ship.
When I spoke about this in our last debate the noble Earl, Lord Selkirk, said that I had advocated having a lot of new ships, the building of which would lead to bankruptcy. I asked for nothing of the sort. I only asked that when we do build something it should be modern in the accepted naval sense of the word to-day. Modern ships are those which embody modern ideas—atomic propulsion, rockets, missiles, vertical take-off aircraft, atomic missile launching submarines. Those are modern ships as navies understand them to-day. We have none of those things. The noble Viscount, Lord Hailsham, when he was First Lord, said:
"We may have to put up with a smaller Navy, but let us resolve not to be content with an obsolete one."
That is very true indeed. I could almost wish that he had remained in that office in order to put his words into effect.
What we have been building, while it may be new, is not by my reckoning modern—in fact, it is obsolescent already and it will be years before a modern, as opposed to a new, ship joins the Fleet. We have had one submarine since 1948—we build one submarine while Russia has apparently built 500—but she and her sister ships are new, not modern. They will be armed with torpedoes, not with missiles; and the rest of our submarines are left-overs from the last war. There are three cruisers. One of them is now undergoing her trials. It is over nineteen years since the "Tiger" was laid down, and something like fifteen years since she was launched. We heard from the Admiralty, when questioned about these three cruisers at one time, that the work on them was "gathering pace"—this snails' race of nineteen years!—and also that when they did come out they would have up-to-date armament. But the armament is not
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up to date. They are armed with guns, not with missiles, at a time when America is taking guns out of her carriers and has ceased to make any more big gun ammunition.
The habit of thought that the Admiralty has evinced in these answers that we get seems to me to be all wrong. Money wasted on obsolescent equipment, if put into modern ideas, would have given us a Fleet which certainly would have been small—I agree about that—but which would have been a powerful deterrent to an international conflict, the thing that we want above all things to avoid. We are in the midst of a transitional era at sea, but we are not abreast of our era, and I regret to say that it is Admiral Arleigh Burke, known as "Thirty knot Burke", the chief of the American Navy, who, in Lord Mountbatten's words, is
"Looking ahead, keeping abreast of the times and where possible ahead of them."
It is to America that we have to go to find that being done. As things are to-day we have neither a Fleet in being—we have abandoned the attempt to keep a Fleet adequate for all our needs at home—nor have we a Fleet in prospect to discharge the responsibilities which are now envisaged by the Admiralty in the definition of the Navy's roles which the Admiralty has recently put forward.
In 1953, the then First Lord said that a replacement programme was necessary if the Navy is to exist as an efficient force. That was six years ago. Since then, what have we seen?—a steady wastage; no planned continuous replacement programme; no sense of urgency about modern ships; but, instead, year after year of doubt and indecision, with the Navy rather smaller when each year ended than when it began. I trust that we may to-day have from the First Lord some indication that these facts are at least being borne in mind and that, especially with regard to the modern Navy, the programme of escort ships which is essential to its service is now being planned and will be put into action in not too long a time.
3.40 p.m.
VISCOUNT DE L'ISLE: My Lords, I must admit that I feel a little shy about taking part in this debate on the Royal Navy, as I never had the honour of serving in that Service; nor did I have the privilege of serving as a Minister of the

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Admiralty. This House in itself contains many memorials to the greatness of the Royal Navy in the names with which it is decorated—or, may I say, jewelled?—Hood and Howe, Jellicoe and Beatty, Rodney and Nelson and other great names which make us recall the splendid past of the Royal Navy. And the list is kept up to date. To-day we shall hear the noble and gallant Viscount, Lord Cunningham of Hyndhope, as we have heard the noble and gallant Earl, Lord Cork and Orrery.
Certainly I feel that the Navy, throughout its history, has benefited immensely from the vigilance which has been shown in both Houses of Parliament, and not least in your Lordships' House, both from those who have served at the Admiralty and from those who have served in the Royal Navy. So the whole House ought to be grateful to the noble and gallant Earl, whom we all so greatly admire, for bringing forward this subject to-day. No one is better fitted than the noble Earl to remind any Government of their duty towards the Royal Navy. I am one of those who believe that the greatest and, indeed, the happiest days of this nation were those in which the Royal Navy was supreme upon the seas; and I believe that those were happier days for the world. The prayer "Britannia, rule the waves" (not "rules" the waves) was uttered then by all the citizens of this country, and I, for one, regret the passing of those days. But they have gone past recall, and no longer is Britain's armed strength exactly synonymous with the strength and efficiency of the Royal Navy.
A modern Government in this country has a supremely difficult problem to solve, and the strength of the Royal Navy has to be taken in the context of the whole defence problem; and while I consider that pre-war Governments could be arraigned for neglecting the nation's defences, I think that, on the whole, this is not true of any post-war Government, of either colour. The nation has spent all it could properly afford, and possibly more, on its Services and on preparations for defence. Although the noble Lord, Lord Winster, does not like the word, it nevertheless remains true that to-day our national defence policy must rest upon interdependence—interdependence between the nations of the Western Alliance
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and, internally, on interdependence between the Services.
I agree that all Governments, of whatever Party and complexion, by whomever they may be led, need constantly to be reminded that they must not prefer internal welfare to the strength of the nation externally. However, I do not think that the present Administration can justly be accused of such neglect. In essence to-day all debates, whether they are on one Service or on more than one Service, are both defence debates and foreign policy debates. In any debate of this nature we must always ask ourselves: How can we, as a nation, best underpin the Western Allies? How can we best contribute Armed Forces which will help to preserve peace with freedom? We must ask also: By what means can we secure that Britain has an effective voice in the policy of the Alliance? And lastly: How can we satisfy the requirements and preparations for global war with the security problems that are always with us, such as Cyprus is to-day?
I submit, with great respect, that this debate, on such a high level and in which so many speakers of great weight and experience will take part, should be conducted within the context of these questions; and I further submit that, unless it is, the debate will not have the effect which it ought to have outside of this House. I hope that these questions will be constantly in the minds of all speakers, and that they will debate the Motion with the national and international aspects of defence policy in their minds. I do not know whether the noble and gallant Earl intends to press his Motion to a Division. He, of all men, I think, has always followed the exhortation to lay his ship alongside the enemy's and board her. I must say that, much as I admire him and his vigilance, on the wording of the Motion to-day I could not go into the Lobby with him.
3.46 p.m.
EARL STANHOPE: My Lords, within a few months it will be fifty years since I first addressed your Lordships' House, and some years ago, with increasing deafness, I fully felt that my time of speaking in the House was over. But the whole of my political life I have stood up for the adequate defence of this country—not by any means a popular subject for most of that period—and as I happened to be First Lord during the

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ten months immediately preceding the outbreak of war in 1939 I thought that I might have figures to give to your Lordships showing the position as it was then and comparing it with the position today.
My figures for 1939 I quote from the Official Return of Fleets published in February of that year. On February 1, 1939, we had 6 aircraft carriers, with 5 others building. Although, to some extent, battleships took part in defending our merchant navy and our sea routes, that was only a side issue, so I am omitting battleships from the figures I give your Lordships to-day. Of cruisers we had 39, with 21 over age but fully operational—a total of 60, with 17 under construction; and I may say that none of those over age was more than about 22 years old, "over age", for a cruiser, meaning anything over 20 years old.
As regards destroyers, we had 97, with 62 others over 16 years of age—none of them, I think, more than 20 years of age—a total of 159 destroyers, with 28 others building. Of escort vessels (later called frigates) we had 32, with 107 trawlers which had been converted for anti-submarine work and clearing of mines, making a total of 139, with 58 then building and due to come into service at an early date. Then of submarines: we had 44, with 15 others building. The total of cruisers, destroyers and frigates in being was 311. Many of the 108 ships then building were due for completion at a very early date.
The Germans, according to Admiral Doenitz's book, which is appearing serially in the Sunday Times, had at the beginning of the war 56 submarines in commission, of which only 46 were operational. Of those 46, only 22—I repeat, only 22—had sufficient range of action to act in the Atlantic. The 24 others were so small that they could not operate outside the North Sea. Of course the Admiralty knew quite well that if war broke out the Germans would begin to build many more submarines. But we felt that we, too, should have time to build extra ships as they were required; and therefore we felt that what we were putting forward in the Estimates in 1939 was adequate to meet that situation.
I was interested, a few nights ago, to read the speech which the noble Viscount, Lord Alexander of Hillsborough (as he now is), made at that time
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on behalf of the Labour Party in another place, when the Estimates were presented by the then Parliamentary Secretary, Sir Geoffrey Shakespeare. He seemed to be quite content with the figures that were produced, and certainly he did not say that they were too high. Yet with 311 British ships against only 46 (which number, of course, rapidly increased), we shall all remember the shortages that we suffered in every kind of way throughout the war—rationing of food, rationing of petrol and rationing of all sorts of products which were necessary for the safety and welfare of this country.
My Lords, let us now compare with that position the position of to-day. The U.S.S.R. is reported to have at least 400 submarines in being, and most of them are large submarines capable of action in the far seas. They are faster, a good deal faster, than the German submarines of twenty years ago; and as they have considerable fuel capacity they will have to withdraw far less often away from the operational areas in order to refuel or to return home for the same purpose. They will be able to remain at sea much longer and, therefore, they are worth far more, ship for Ship, than were the submarines of the Germans twenty years ago. I am aware, of course, that radar detection has made great strides, arid that to-day we can probably spot a submarine, if she is afloat, right up to the horizon, and possibly slightly further. But I doubt very much whether my noble friend the First Lord will say that echo-sounding has increased very materially in range, or that we have means of easily finding a submarine while submerged. How my noble friend Lord De L'Isle thinks we are going to find submarines submerged, particularly at night, I do not know.
What have we to put against these 400 submarines? I quote from the Explanatory Statement of the First Lord which he published last year, and I hope he will feel that I am not only being fair to him but even being super-generous, because I am going to include in ships in commission those engaged on trials and training; and I am going to include among ships in reserve those in all classes of reserve, whether undergoing extensive refit, modernisation or conversion, and so on. Many of these ships will, of course, be many months undergoing that conversion and modernisation; nevertheless, I will regard them as being in reserve. These

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are the figures: cruisers, 7, plus 9 in reserve, making a total of 16, against 60 twenty years ago; destroyers, 24, plus 32 in reserve, a total of 56, against 159 twenty years ago; frigates, 30, plus 75 in reserve, making 105, against 140 twenty years ago. That is a total of 177 cruisers, destroyers and frigates, as compared with 359 twenty years ago.
My Lords, I may be told, as I believe my noble friend Lord De L'Isle said, that we must not forget we now have N.A.T.O. Allies. Yes. But will they be able to come to our rescue? Am I wrong in saying that many of the Russian submarines mount fairly big guns? Suppose those submarines lie submerged off the East Coast of America and that in the hours of darkness, or when they think it is safe to rise to the surface, they shell some of those great cities situated on the Eastern seaboard of the United States, Does anybody think for one moment that the American people will not insist—as, after all, we were inclined to insist when shelled for a short time in the 1914–18 war—that their Fleet, their frigates and cruisers and so on, should patrol their coast to ensure that their cities are protected and safe from bombardment? Will they, in these circumstances, be available to protect our trade routes and our merchant shipping on sea? And what happens if they cannot? The blockade was bad enough in the last war. With ten times the number of submarines, at least, and those submarines infinitely more efficient, surely the danger now is far greater than it was then.
What may happen? Suppose that our fuel supplies are cut off. We may run our power stations on coal; we cannot run our aircraft on coal, Every one of them would be tied to the ground. We could not even use our Fleet. It is all now powered by oil fuel. We should not be able to use our road transport; and many of our railways, too, are now using diesel engines instead of coal. And that is only the beginning of the problem. What is the alternative? Are we going to be the first to use a nuclear bomb? Are we going to be prepared to do so—or are we prepared to become a nation similar to Poland or Roumania, or possibly Hungary?
We are all aware that it is far more expensive to build a fleet these days than
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it was twenty years ago. There is no comparison with the position fifty years ago, when we could build a dreadnought for under £1 million, which, I suppose, is a figure not far different from that which a destroyer costs to-day. Yet, my Lords, are we justified in putting anything before the safety of this country? Surely protection of this country must be a first charge on our expenditure and on all that we possess. I do not believe that this country, if told the facts, would hesitate to provide the funds necessary for building an adequate Fleet, even though it meant giving up cherished expectations and things we have longed to have for many years past: further support of the arts, improved education and all the rest of it. Failing an agreement between East and West on which we can all rely, we must put first the protection of this country, by sea, by air and on the land. I cannot but think that this Government, who have shown such courage in putting through legislation which we on this side feel to have been right, can lack the courage necessary to tell the, people of this country the truth. I plead that they should put in hand, not a Fleet of dreadnoughts and battle cruisers, and so on, but of small ships, to fight the submarine menace and to help out what can be done from the air, to see that the trade routes of this country are maintained and our merchant fleet protected.
House adjourned during pleasure and resumed by The LORD CHANCELLOR.
4.1 p.m.
LORD SHACKLETON: My Lords, I feel a certain hesitation in butting in on such a naval occasion, all the more so since I find myself in great disagreement with those noble Lords who have spoken, with the exception of the noble Viscount. Lord De L'Isle. I personally am very sorry we were not able to hear the full wisdom of the noble Earl, Lord Cork and Orrery. However, I find that much of what has been said to-day smacks of that unreality—and I am sorry to use such a strong expression—which is still shown by so many of our people in the face of the atomic weapon, and I hope that the Government, even though they may have had a bad week last week, will stand up to-day to the suggestion that we ought to have a larger Navy.

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I say straight away that no one has a higher esteem for the qualities of the Navy—for those remarkable qualities of discipline and courage, and all those virtues that protected this country so effectively in the past—than I have. But we are faced with a situation in which sentiment alone cannot determine our actions; and the comparisons that have been made in the numbers of ships that we have to-day as opposed to those that we had thirty years ago are, in my opinion, as valid as if we were to judge the transport system of this country by the number of railway engines that we have, or, indeed, by the number of horses. The situation is radically different.
As I understand the Government policy—and this is the view which many people in other Parties hold, and not all my colleagues would agree—it is that we rely for the defence of this country very largely on the prevention of war by means of the deterrent, and it is the deterrent which is the basis of Government policy. Whether that is right or wrong can be argued, but that is, at the moment, the fundamental concept which, year after year, has found expression in Government Defence White Papers. I would ask those noble Lords who have been advocating a larger Navy whether in fact they disagree with the Government on this particular matter, because this is the crux of the issue.
I personally think that the development of atomic weapons, terrible though they are, has made its contribution to the preservation of peace. But if there is one way in which I believe we shall be in danger of finding ourselves at war, it is if we attempt to compete with the Russians, and compete alone with the Russians, in terms of conventional weapons. We have heard a lot of talk about the size of the Russian Navy and of the number of Russian submarines. For the last ten years we have been hearing about a figure varying between 350 and 500 Russian submarines—and in a very excitable moment it was the present Prime Minister, I think, who once said that he thought there were 1,000. But any noble Lords who have examined Jane's Fighting Ships will find that the submarines which are listed there year after year are the ones that have been there year after year—and, indeed, were there before the war.
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From the information which I have had, I think it is likely that, even if the Russians have in fact succeeded in getting a certain number of the more modern type of submarine based on the German Type 21, and even if they have some with closed-cycle propulsion, they still lack the resources and, above all, they lack the ports. The German threat in the last war reached its climax when they obtained possession of the Atlantic ports, and at that time they were operating at sea as many as 100 submarines. I do not know whether the noble Lords who are advocating that we should strengthen our defence against that threat think that a war would be extended so far as to give a possible Russian enemy deep-sea ports on the Atlantic without somebody, somewhere, dropping an atom bomb.
Of course, if it were to come to that, the situation is today radically different from what it was in the last war, for most of the last war bombing of submarine bases, although it had a considerable disrupting effect, none the less was not decisive. The great bulk of German submarines which were sunk were sunk at sea, and were sunk at sea by aircraft—and if the noble Lord disagrees with me I will give him the figures in a moment. I hope, therefore, that the Government will not be too disturbed by this Motion, because I believe that it is important that we should look at the defence of this country, as the noble Viscount, Lord De L'Isle, said, as interdependent between the Services and, above all, as interdependent between the Allies. If we start doubting our Allies, we might as well "pack it in" now; and I am sure that we should not follow any policy which is based on a belief that we cannot maintain an alliance.
Now I want to turn to another matter. I hope that the Government, in their desire to conciliate naval interests, will not follow the course which I understand is now very much under consideration. It is believed, certainly among some people in the Air Force, that it is quite likely that the Navy, at their tenth attempt, will succeed in wresting Coastal Command from the Royal Air Force. I would remind your Lordships of some of the facts and of some of the arguments that have been put forward in the past. We all appreciate that there is a concept of sea power—a concept which has been of

815
profound importance in the growth and power of this country: but there is also a concept of air power, and I should like to illustrate it, if I may go back to the last war, although the arguments that I am going to use are not wholly relevant to the present situation but are relevant to what has been said to-day.
In the U-boat war we were faced by a threat which, it is fully conceded, very nearly brought this country down. It was defeated by the knowledge and courage of the Merchant Navy, the Royal Navy, and the Royal Air Force. When it came to the sinking of submarines, it was in fact land-based aircraft which were largely responsible or which had the major share, and here I have the actual figures, derived from the Government's own White Paper which was published a few years ago on this very subject. In the first part of the war aircraft hardly sank a submarine—I think they sank something like one and a half submarines in the first two years, and those halves were, in fact, those in which they co-operated with the Royal Navy. The number was so small partly because they were using depth charges which were set at a depth at which one could not sink a submerged submarine. By 1942 and 1943 Coastal Command and maritime forces were sinking submarines in far greater numbers. During the last part of the war they sank 690, of which 390 were sunk by aircraft, and of those 49 per cent. (very nearly half) were sunk by shore-based aircraft. The great bulk of those were sunk by the British—524 to be exact—and 248, again very nearly half, were sunk by land-based aircraft. I admit that a certain number were sunk by Bomber Command, but the majority were sunk by shore-based maritime aircraft.
The decisive factor that brought about this destruction at a crucial stage (and noble Lords who have been following the extracts from Admiral Doenitz's book which are appearing in the Sunday Times will notice that he has reached this very point) was the development of centimetre radar and the strengthening of the maritime Air Force. After Casablanca, the decision was taken to make the U-boat war a priority, and at that point squadrons were moved out of Bomber Command into Coastal Command. It was the sort of thing that could not have been done without a unified Air Force and it is a
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thing that will not be so easy to do if there is a Naval Air Force shore-based and independent of the Royal Air Force.
As a contribution towards a consideration of this problem, I would ask the Government whether they would arrange for the dispatches of Sir John Slessor to be published. So far as I know, they have not yet been published. I should like to suggest also that any change should be resisted unless the strongest case has been made out for such a change. The arguments, as I understand them, are, first of all, that those who fly over the sea ought to be sailors. I do not think that that argument really stands up, because in fact people who fly over the seas are mostly not sailors and there is not the time to make them sailors. At a crucial stage in the last war the United States Army Air Force, which had a very effective school of anti-submarine warfare and four squadrons operating from this country, did extremely well. The United States Navy traded their strategic Bomber Command for the United States Air Force Anti-Submarine Command, and right in the middle of a crucial stage of the Battle of the Atlantic out went the highly-trained Army Air Force crews and in came the Navy crews. I had quite a part in helping to train those American naval crews and I make no reflection on their qualities, either as men or as pilots, but one thing they were not, and that was sailors. They did not know any more about the sea than anybody else. In war time we always have to rely on a greatly expanded force, including civilians. It was a long while before the Navy squadrons reached the efficiency the Army Air Force had before.
If it is seriously proposed to switch Coastal Command, I would ask the Government to consider what the consequences are. The first consequence is that it will be extremely destructive of good inter-Service relations. It is this sort of imperialism that will destroy an excellent working set-up. If there is one thing on which I am sure all noble Lords who have served will agree it is on the excellent relationship that existed between the Air Force and the Navy and the excellent co-operation there was at Joint Headquarters.
There will be no economy; indeed, it will be a more expensive move, because the Navy will have to set up their own training facilities. There will be no

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economy in airfields. Coastal Command airfields are already full and in many cases they may want to operate aircraft in double roles from the same airfield. Therefore, I would ask those who advocate such a course to think very seriously before taking a decision which has constantly been turned down and which is even more irrelevant in the present situation, because the whole conception of war is different from what it was twenty years ago. I believe that the Government are sincere in believing that they can prevent war by the deterrent. We shall certainly encourage war if we weaken ourselves by internal dissensions or weaken or fritter away our forces. I hope that we shall see no change of this kind and that the noble Earl who is to reply for the Government will be able to tell us that there is no pressure of this kind.
I hope that we shall conclude this debate by acknowledging the achievements of the Royal Navy, realising that they have a vital role in policing the world and helping to preserve peace. No doubt if war, a real atomic war, did break out, all the Navy could do would be little better than a rescue operation. I do not think that we are going to get greater security or greater peace if we build up the number of surface ships or take away Coastal Command from the Royal Air Force.
4.16 p.m.
LORD HANKEY: My Lords, in rising to support the Motion, I wish to congratulate my old friend and colleague, the noble and gallant Earl, Lord Cork and Orrery, for his persistence in this matter in the adverse circumstances to which he referred at the outset of his speech. I think that he has done valuable service in initiating this debate and in attracting such a notable array of speakers. For my part, I am out of date. I cannot pretend to support him with more figures than have been given. In fact, we have been given about as many figures as we can digest.
I had not intended to speak until Sunday evening, after, I am afraid, spending a large part of the Sabbath in reading Admiral Doenitz and the notable letter from my noble and gallant friend Lord Cunningham of Hyndhope, whom I am glad to see here to-day. Those documents set up a train of thought in my mind carrying me back a good many years, and I think that at my age I can
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more usefully contribute from the past than from my thoughts of the future. The years 1942, 1943 and onwards, when I had co-operated with my noble and gallant friend, were brought back to my mind. At that time the Germans were undoubtedly getting the upper hand in anti-submarine warfare, and my noble friends whom I see around me to-day, like the noble and gallant Lord, Lord Chatfield, and the noble and gallant Earl, felt that we must get priority for our first line of offence in the conduct of the war. What my noble friend Lord Cork and Orrery was working for especially was much the same as he wants to-day; that is, more escorts, more protection for the ships and more long-range aircraft.
My speciality at that time was radar. I had raised most of the personnel for radar, and, although I resigned from the Government in 1942, I was still in charge, and remained so until the end of the war, of the machinery for training vast numbers of men for radar. That brought me into touch with the naval side, and in my training investigations I was made aware that there were two special forms of apparatus which, combined, could render great service against submarines. One was long-range radar, which would enable an aircraft to distinguish the submarine at a long distance, when, as it had to in those days, it came up to refuel; and in the dark or in calm weather that would bring her very close. The other was a new short-range apparatus which enabled the aircraft to hit when it got within range.
The trouble at that time was that the Government of the day were set on bombardment. They thought that by bombarding towns, factories, dockyards and the like, they could end the war. It was most difficult to get even 25 heavy aircraft (I remember that figure well) with what I insisted on—namely, the special apparatus to deal with this matter. When I read Doenitz on Sunday I was delighted and somewhat astounded to see his exact description of the plight of the German U-boats at that time. They lost three batches of five, I think, and some of the most famous and relied on of their U-boat commanders; and that dashed Doenitz's spirits to the ground. We did, eventually succeed in getting a reasonable quantity of these aircraft properly

819
fitted for the purpose, but they came along so slowly that it was a long time before the U-boat was mastered.
It seems to me that that position is in a sense repeated to-day, and, as the last speaker mentioned most effectively, we appear to be relying largely on the famous deterrent of the atomic weapon. I myself am dubious about the deterrent, and always have been—and I have spoken about this matter before. It sounds very good that a whole mass of nations should be united in N.A.T.O., all prepared to come into action when the word is given. But what I am always apprehensive about is the top-heavy machinery; that is, the difference between one force which can be set in motion by one person—an omnipotent power in his own country—coming to one decision, and a decision that has to be taken by a number of nations, each of which has its own political problems and troubles. If, by arrangement, this were reduced to, say, only three—I fancy there is some such arrangement, but I do not know—those three would still include one gallant and most important nation, the most powerful or one of the most powerful in the world, whose strong point is not a decision to come into action promptly.
It seems to me that this situation provides openings to the supposed opponent. He has two weapons. First of all, he has, as we have, an equally powerful nuclear weapon; and, secondly, he has this enormously powerful fleet (I think he has a powerful army, too, but that does not come in to-day) and this mass of U-boats. The figures given to-day show that we could not hope to compete with those. Supposing he says that he is not going to be the first to use the nuclear weapon, although if anybody else does it will go off straight away, but is going to deal with such-and-such a nation with which he is particularly at loggerheads—which may be us—with the ordinary pre-nuclear weapons. I feel that we should have some insurance against that (I think my noble friend Lord Cunningham of Hyndhope put it in that way), and I think that at the moment the insurance is not sufficient. I speak without hearing what my noble friend the First Lord of the Admiralty will say, but subject to that, it seems that we have not yet the right insurance.
4.29 p.m.
EARL HOWE: My Lords, I have listened with the greatest interest to the whole of this debate so far. I want to assure my noble friend the First Lord of the Admiralty that anything that I have to say is in no way intended as a reflection upon him, but there are one or two things that it seems to me need saying quite forcibly. I think the whole trouble began with the Defence White Paper published by the Minister of Defence. That White Paper was published in April, 1957, and the first line of paragraph 24, on page 42, says:
"The rôle of naval forces in total war is somewhat uncertain."
When I read that statement it was a terrible shock, because it seems to me to fly in the teeth of history. It seems to me to have no relation to the troubles with which we are faced. I submit to your Lordships that in these days of deterrents, nuclear warfare and all the rest, while weapons and tactics may change the central role of the Navy remains just as much to-day as it did in the days of Nelson or of the great leaders of World War I, Lord Beatty, Lord Jellicoe and others. Ignorance of the role of the Navy is no excuse whatever for making such an astounding statement: it could be excused only by complete ignorance.
I wonder what the noble Lord, Lord Shackleton (who belongs, I believe, to the Socialist Party), would say if, in a war, the Navy failed to protect the trade routes. He should know as well as anybody, and I am sure he does, that half our food and all our oil come from overseas. That is true whether a war is war with a deterrent or without a deterrent. What do we do? What is the industrial population to do without the food? What answer would he have? I only hope that the day does not come when the noble Lord who stressed the unreality of the arguments used for having an adequate Navy may have to eat his words; and I hope that, if he does, he will remember the speech he made to-day.
The Minister of Defence has been doing his best to reduce the Navy to an absurd position. In fact we are to-day almost, and shall be next year for certain, a fourth-rate Power at sea. Many of the

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officers and men no longer have the interest in the profession which they used to have. They cannot see any future for it or for themselves. It seems to me that one thing the Minister of Defence will be able to say is that he has succeeded in doing what the Germans tried, and failed, to do in two wars: he will go down in history and will be remembered by that.
Just think of the position which will arise in the near future, if it does not arise at the end of this year. We shall have three carriers and three cruisers, and no more. I am the last person to suggest that we should go in for a great programme of carrier building. It would be grand if we could, but in the economic situation of the country I do not see how we could reasonably expect it. But the problem is not being tackled in the right way at either end. Every time a ship is scrapped I wonder what is going to take her place and what will happen without her. Ships have been scrapped during the last two or three years, and Parliament has never been consulted beforehand. We are never told what the result is; and no effort is made to replace them. It seems to me to be the most extraordinary problem.
The replacement programme that I should like to see is one for small craft capable of holding their own with the newer type of submarine which we have and which we know the Russians have. They are much faster and capable of going at a very high speed when submerged (I believe at a higher speed even than when on the surface), and I think that it requires a special type of ship to deal with them. One would have thought that the Minister of Defence and the Admiralty would have gone in for a programme of construction of smaller ships of this type. But what have we found? Three years ago the Admiralty started talking about four new-type guided-missile destroyers that were to be laid down for the Navy. But not one has yet been laid down. They hope to lay down the first one in April of this year. When will she be completed? Perhaps the First Lord can tell us that. It will give us some idea of the efforts being made by the Ministry of Defence to return the Navy to something like the position which it ought to hold if it is to cope with the submarine menace.
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We all know that in the last war the Navy had to protect sea communications, movement of troops and supplies and give them support. How can that be done with three aircraft carriers and three cruisers? One of those aircraft carriers is earmarked for working East of Suez, so that we shall have two aircraft carriers and perhaps three cruisers, wherever they are to be stationed. It is really a desperate problem. It has been said that we have about 40 or 50 destroyers. We have another 40 or 50 frigates. The noble Lord who preceded me referred to that regrettable letter from the noble and gallant Admiral of the Fleet Lord Cunningham of Hyndhope which appeared on Sunday. He gave the figures showing what was required for escorting convoys and the like. He said that we had 400 escort vessels and some 800 aircraft for safeguarding the trade routes. How can we possibly safeguard the trade routes with the number of ships we have? It is simply impossible. If the powers-that-be were to tell the truth, they would say so and tell us: "It is very regrettable, but we cannot do it. We could not even defend the Western Approaches with what we have." It seems to me the most appalling problem.
I do not know what one can usefully suggest. What I say is that unless urgent and immediate steps are taken by the Minister of Defence and by the Admiralty to produce the type of ship that will be required to escort our convoys and to safeguard the trade routes, they will definitely go down in history as having failed in their duty. There is every sort of opinion to back one up in those views. There was a former Controller of the Navy, Admiral Daniel, who said that the proposed Naval forces are completely inadequate to discharge their peace and limited war responsibilities. In my view, six forces are required, four operational, one training and one re-fitting and giving leave. The former Controller of the Navy must know what he is taking about, and that statement has not been refuted by anybody.
There is also the statement that was made after the exercise in Norwegian waters by Admiral Eccles. I think that has been quoted this afternoon, and I will not enlarge on it. Air Marshal Sir Bryan Reynolds said the stark fact was that they had not got the forces needed, and that

823
the exercise had definitely shown that they were specially short of long-range aircraft. I submit that the Navy, in these days of the modern submarine, cannot, with the weapons it is given to use, of itself finally destroy the submarine menace. It must be tackled by the air forces and the Navy together, in the same wonderful spirit of co-operation that was used in the last war, and I hope that will not be forgotten.
There are other authorities one could quote. There is the noble and gallant Admiral of the Fleet, Lord Chatfield. I see that he has been in his place most of the afternoon. I hope that the country will not forget what he said in the debate on June 11. Perhaps I may suggest to the noble Lord that the role of the Royal Navy in a future war would be exactly the same as in past wars, in that its task would be to prevent the enemy's navy from taking command of the seas. We all bow to the noble Lord, Lord Shackleton, who has told us he thinks we are unrealistic because we want to try to safeguard the trade routes. I submit to the noble Lord that that is a very dangerous theory, and I only hope that he will not have any more to say about it.
There is one other matter to which I want to refer. In the debate on June 11 I asked the First Lord some questions about the aircraft carrier called "Warrior", which had twice been refitted and brought up to date. I had been asking questions about the "Warrior" for some time past, and I understood from what was said the last time I asked about it that in all probability she was going to be scrapped. I believe that is so. I do not know whether the First Lord will confirm that or not. I have here a letter, dated May 17, 1956, from his predecessor at the Admiralty about the same ship. He said:
"We are, of course, already spending a lot of money in keeping our carrier force up to date, by completing the 'Hermes' and modernising the 'Victorious' and 'Warrior' and there should be more modernisations to come."
I hope that the First Lord will tell us to-day (I know that the "Warrior" is only a standby ship) whether, in fact, that ship is to be scrapped; and, if so, what are the reasons for it. This letter which I have here—and I can show it to the First Lord—seems to indicate that a ship which is still capable of service is being done away with.
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I only wish, my Lords, that I were not so desperately anxious about this whole question. I have no axe whatever to grind in the matter, except that I do not want to see the officers and men of the Royal Navy asked to carry out duties which they are quite unable to carry out because we are not giving them the tools they must have. I cannot help feeling very anxious indeed, and I put nine-tenths of the trouble down to the Minister of Defence. I should like to recall to your Lordships' minds a paragraph in Lord Montgomery of Alamein's Memoirs:
"A Minister of Defence in peacetime must be a skilled politician and able to handle the political side of Service affairs. But it was unlikely that such a man would understand defence problems sufficiently well to guide, direct, co-ordinate and settle the great issues of policy with which his Chiefs of Staff would have to grapple."
I hope that that paragraph will not be lost on our Minister of Defence.
4.45 p.m.
LORD TEDDER: My Lords, I will be brief. There are two points I should like to put to you. The first is on the question of nuclear warfare. That threat is a horrid development which, quite frankly, makes nonsense of most of our ideas on defence. Perhaps the only good thing is that the prospects of such a war, with its threat, literally of annihilation, has led to the unexpectedly sane conclusion that the overriding consideration in all military planning must be to prevent war. I am not going to argue the case for the deterrent it is very well known. To me it is unanswerable, but I noticed that the noble Lord, Lord Hankey, and I rather think the noble Earl, too, expressed scepticism about the deterrent. I am not quite sure what that scepticism is. Do they believe that the deterrent will not deter? If it does not, then we face annihilation and that is that. If it does deter, then what do they not believe about it?
EARL HOWE: My Lords, I hope the noble Lord will forgive me for interrupting him. I am not sure whether he is referring to what I said. Surely it is the same position as that is relation to mustard gas in the last war. Both sides may think that the deterrent is so appalling that they resort to the use of conventional weapons instead of the deterrent.
LORD TEDDER: That is precisely where I was going; that is the next logical step. That means that what we have to face is a full-scale conventional war against the Soviets, the Soviet Navy with submarines about which we have heard so much, as well as the Air Forces; and although the noble Lord, Lord Hankey, said that the Army does not come into this, it does come into it. We face a problem there which would mean that we should need not only immense anti-submarine forces—and I entirely sympathise with my noble friends the Admirals—but the rebuilding of Fighter Command, Coastal Command and Bomber Command up to the 1945 strength. That is what we are faced with if we say that we are going to do without the deterrent, or rather that the deterrent will work and we shall he forced back on conventional war. I put it to your Lordships that the answer to the conventional war is bankruptcy—just that.
There is one other point about which I wanted to say something. I picked up a phrase from the noble Earl, Lord Howe, when he said that the Navy failed to protect the sea communications. With all respect to him, the responsibility for the security of the sea communications is not entirely a naval matter, as I am glad that at the end of his speech he did point out. I have been disturbed and worried by the signs of resurgence of the old pre-war idea that any aspect of war is the exclusive province of any one Service. I should have thought that one of the outstanding lessons of the last war was the essential unity of war. To try to segregate the war in the air from the war on land, or the war at sea from the war in the air and on land, is, to my mind, absolutely wrong. It is wrong to say that we can now throw into the wastepaper basket the bulk of our most valuable experience in the last war.
It has been suggested in this connection that Coastal Command is the sole force concerned with sea communications. I think that that was thoroughly disproved in the last war, because, apart from the fact that squadrons were diverted, as has been mentioned by the noble Lord, Lord Shackleton, and as I am sure will be endorsed by the former First Lord, all the other Commands—Bomber, Fighter and the photographic reconnaissance units—all played their
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part, and a very important part, in the defence of our sea communications at that time. The whole Air Force took its share in that matter, in just the same way as did the whole Royal Navy.
The noble Viscount who was First Lord at the beginning of 1940 will probably refer to the occasion when he tried to get more bombers from Bomber Command to help in the problem of sea communication. He got a good deal, although he did not get as much as he wanted. But that is a matter of priorities, which is quite rightly dealt with by the combined Chiefs of Staff with the Minister of Defence. To my mind, that was the secret during the last war, and I hope that there will be no revival of any attempt again to divide up the Services and to destroy just that unity which we got so well and so completely during the war, and which is still going on progressively, particularly in regard to cooperation between Coastal Command and the Navy.
4.52 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, we have had this subject under debate on two previous occasions, thanks to the diligence and aliveness of the noble arid gallant Admiral of the Fleet, Lord Cork and Orrery, who has again addressed us this afternoon. He has done so in spite of what we all hope to be a temporary physical disability. With his old doggedness of purpose he has got through his speech, and we are very proud of him. The text of the Resolution which he has put down refers to the possibility of a dangerous situation arising through the deflated state of the Royal Navy at the present time. The noble and gallant Admiral of the Fleet connects that with the fact not only that we are failing to retain what could be adequate naval reserve ships, but that we are not making sufficient progress, even with the projects that we have, to proceed with the modern Navy. I should say that a good deal of his speech would seem to justify what was, after all, his main criticism: that in fact, so far as we can see, the Navy is being allowed to fall away from the kind of minimum Navy which was envisaged in the last White Paper on Defence.
It is largely by the standards of the Government's general policy on Defence that I would judge the purpose behind

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the Resolution that has been moved to-day. What did they say about sea power? They said that British naval power must be fitted to perform three tasks in peace time. One is to help carry out Britain's responsibilities in the Colonies and protected territories, which I am glad to say they still do. Only the other day I think the Navy helped the R.A.F. in regard to a particular problem. Then it must defend British shipping; and it has generally to contribute by its presence to the maintenance of peace and stability. That has been a great function of the Royal Navy in the past. Although we know that perhaps we ought not to rely too much on tradition—I agree with the noble Viscount, Lord De L'Isle, in that respect—nevertheless, I remember Frank Knox saying in the war, when he visited us as Secretary of State for the American Navy, "Of course, it is a fact that for a century, from 1815 to 1914, there was no real war of a world character, because of the peace-ensuring work and the qualities of the Royal Navy." One could not have a more independent opinion than that. He went on to say—it was the gist of his conversations with me for days as I took him to stations in this country—that it was quite impossible to think that with the financial sacrifices that this country had to make in the Second World War we should be left to bear the burden alone as we had done after the First World War.
Therefore, we look at the first peacetime rôle recorded in the last White Paper on Defence, and I think we are entitled to say to each other that this is a point to which the noble Earl the First Lord must give his attention. Has that been faithfully carried out? Do the kind of figures, for example, which were given by the noble Lord, Lord Winister, this afternoon of the effective commissioned strength employed by the First Lord and his administration at the present time enable us to deal with any kind of contingent emergency in peace-time? I personally should have thought that if you say that with your hand on your heart, you would be taking at least some risks. I would not put it any stronger than that. Above all, much as we hear from time to time that the main Parties in the State diverge in opinions and in fundamentals, in relation to the security
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of our country it is obviously important that as far as possible defence policy and the administration of defence ought to be on a non-Party basis. I emphasise "as far as possible". We ought never to be afraid of offering our criticism at the right time, any more than the right honourable gentleman, Sir Winston Churchill, was afraid to offer criticisms from 1935 to 1939. We must not be considered to be departing from a joint and collective desire to see our country defended just because from time to time we bring criticism to bear upon the policy of the current Government.
In the second part of the purposes laid down in paragraph 44 of the White Paper last year, it is said that in a limited war the rôle of the Navy is to protect sea communications, to escort troops and supplies to the theatre of operations and to give them support in action—that is, anywhere in the world. We all hope and pray that we shall not have to deal with anything in the shape of even a limited war. In fact, the White Paper last year seemed to me to show that if there were any real possibility of an attack by the Soviet States upon the West by conventional forces, we should be utterly committed to reply at once with, as it is said, "a massive attack with nuclear weapons". One knows perfectly well that when one speaks nowadays of "a massive attack with nuclear weapons" it means using the megaton and not the kiloton bomb. Nobody even yet knows whether the megaton is the top limit that is to be sought in the bomb ultimately to be delivered. Nor has it been really understood how far the actual explosion of those bombs will affect our own population as well as others.
The third point was that in global war we were to have a Navy which was to make an effective contribution to the combined naval forces of the Western Alliance. It is very difficult to judge, because we do not see the inner working of N.A.T.O.—an organisation in which I have been intensely interested, as the Minister of Defence at the time it was set up and perhaps one of the very few individuals in the State who has never been invited by N.A.T.O. to visit them since, for what reason I do not know. It is impossible, from an ordinary reading of newspapers and the like, to understand exactly what are the arrangements

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among the different nations who are to contribute collectively to the action to be taken in global war, or, indeed, in limited war.
If it had been so, perhaps we should have heard in the middle of 1956 far more than we did about Suez, because I imagine that the sort of action then taken, without consultation with the rest of those in the collective set-up, must have cut across every kind of plan or intercommunication, method of approach, routes and everything else within the planning of N.A.T.O. It seemed to me, therefore, to be the absolute reverse of real, co-operative collective action; and if that kind of thing is to emerge in the future I do not know where our country is going to be landed. I should be very sorry indeed if we were to be launched into that kind of thing again and had not sufficient naval forces to give at least some protection at sea and at home.
I made a speech in July, following the noble and gallant Admiral of the Fleet who moved this Motion this afternoon, and spoke later in the year as well. I do not want to trouble the House with my recital at that time of those parts of the case of the noble and gallant Admiral which I was only too happy to support because the figures were correct. I do not want to go through all that again, but I do say that if I had some really authoritative position at the moment to help and advise the Government of the day I am quite sure I should not necessarily insist on spending a lot more money at the present time—apart from that required for steady, new and modern development—but for the next two or three years, while we see how far we can make progress in our international negotiations, I should not be in such a hurry to sell, say, a vessel which cost £4 million to £5 million for a few tens of thousands of pounds. That point about international negotiations, by the way, was not overlooked in the White Paper on Defence, for it seemed to me that Her Majesty's Government hoped to see progress in the twelve months which were to intervene before the next White Paper. We should thus have something which would not cost us much, so that in the event of minor emergencies, or even a limited war anywhere, we should be able to take much more effective action by the naval section of our defence than otherwise would be the case.
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I consider that up to the present time we have not got enough clear thinking on the part of Her Majesty's Government. We have no assurance, from their conduct in the last few years, to be able to say to the nation that they are firm believers in collective security and will always rely upon it. Nor am I at all sure that in regard to the nuclear policy they have considered what would be the effect on our economic life if at the present we were to go all out to push still further in the naval, air, and military forces, for new developments of purely nuclear and thermo-nuclear warfare.
I am told by my noble friend who was at the Admiralty after I was, Lord Hall, about the cost of the "Dreadnought" nuclear submarine. Questions have been asked about that this afternoon. It now seems to be either settled or hovering between a settlement as to who should provide the internal workings—whether that is to be done by British invention and construction, or American. But even with the limited nature of the operations of the "Dreadnought", that one submarine will cost £10 million. If one takes the facts of American progress in this matter, as was pointed out in an article (I believe a week ago) in the Economist, one finds that the more modern nuclear submarine of the United States of America, if adopted here, would cost, in English currency, £27 million, and that one of these vessels, actually costing £27 million (so far as I could read the report, though I did not quite understand what they meant by it), would be able to discharge only sixteen missiles.
I am therefore not a little hesitant about going too much in that direction, lest the point made by the noble and gallant Marshal of the Royal Air Force, Lord Tedder, as to bankruptcy were to arrive on the scene. In the present circumstances it is very difficult, especially after the period of economic crisis through which we have passed in the last three years, to see how much more we could afford. If I might reply to the point made by the noble Earl, Lord Stanhope—that we ought to set about telling Her Majesty's Government what we ought to afford in the matter—I do not know how we could very well afford much more than the figure of £1,600 million a year which we are already spending on defence. We are now faced, therefore, with the settlement

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of the problem that I tried to raise in the debate last year: what is the real prospect if we are willing to negotiate on interdependence and general co-operation and perhaps to get agreement on coexistence—which is not easy to get? We are doing our best to get that, but if we can have a prospect of doing so, why should we have to go into those negotiations depending upon our threat to use a terrible, anti-human weapon like the megaton bomb, and be running down our conventional forces, so that if afterwards we pursue the twin endeavour, first to ban the bomb and then to get general world disarmament under a collective agreement, we have hardly enough of our conventional armaments to lay on the table as our stake in a disarmament conference? We could have so much more to lay in that respect if we had a reasonably wise policy with arms, ships and other things in reserve, rather than scrapping at the present rate.
It is all very well to talk as the noble Earl the First Lord did on the last occasion and to say that it is no good wasting money on old ships. There seems to be a lot of sound sense at the bottom of that but, on the other hand, how far are we prepared, in our forces, on a modern basis today? In the Manchester Evening News a week or two ago there was an article by Harold Evans who had come back from making a detailed and intensive examination of the Armed Forces in Germany. He says that, after all the years that have gone by since 1950, the Army out there are not properly equipped, have not got the proper weapons which are available, and certainly not the modern transport which is available at the present time.
I should like to get my mind a little clearer on the general problem when the next White Paper on Defence comes out. I should like the Government to say—giving a full break-up of the information if it has not already been done—exactly what are the details of our expenditure upon nuclear and thermo-nuclear production and upon nuclear and thermonuclear research. I have never been against research for modernisation. I think it was our Government which in 1946 introduced for the first time into its general defence budget a global sum of £150 million for research. It was while the noble Lord, Lord Tedder, was my
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principal adviser that we adopted for the first time the course of spending £150 million on research. But if we find that we are going to be without necessary equipment for our Forces, who would be called upon at any moment if there were an emergency to-day, and are spending too much in the other direction, we ought to have the opportunity of seeing the figures and making our own judgment, as Parliament, upon them.
Nobody could have been more moved than I myself was, as was the noble Earl who moved the Resolution and the noble Lord, Lord Winster, who recounted them, about the difficulties of the merchant seamen. Never shall I forget the times we went through then. Night after night we were hardly able to go to bed because of the movements of convoys through the fields of submarines. However, I do not want to-night to say that I shall vote for a Resolution because it says that the Navy, as such, to-day is so running down that it leads to a dangerous situation. I think that is probably quite true. But what I do want to say is that when we get a White Paper that talks about interdependence, that talks about co-operation, that talks about all the things that are required and what are the roles of the three Forces, then certainly there ought to be no situation in which our existing Forces are not properly provided for, so as to be able to supply the minimum requirements of their present role. On that basis, because I think that the Government have not reached that stage. I myself should be quite prepared—and any of my followers who, I hope, would agree with me—to go into the Lobby.
Perhaps we might refer briefly for a moment to one other matter which has been introduced into the debate, though it was not raised by speakers previous to my noble friend Lord Shackleton, whose addition to the House I so much welcome, because of his great ability and experience. Let me say that I had no idea that such a question was going to be raised. I am quite sure that there is talk about it in the clubs, but I have never heard it seriously discussed anywhere else. We had great difficulties at the beginning of the war—the noble and gallant Lord, Lord Tedder, was quite right. I was fighting for more long-range bombers for protection of communications and so forth. I did not get all I wanted,

833
but we did have the situation, which was fundamentally effective, that Coastal Command was placed under the operational control of the Admiralty; and working together, as they did (as I visited their headquarters from time to time I could see they were working together like a real team), they had enormous success. I am very glad to see that my noble friend Lord Shackleton does not claim quite so much credit as he did in his first phrase regarding the "killing" of submarines. He does have the credit which is due to the Air Force, because a very large number were sunk by the Air Force land machines; but, on the other hand, a great many of those destroyed by air, bringing the number up to the majority, were based upon ships.
That leads me to just one other remark about the Royal Navy. If we are to have any naval research I think it is fundamental that we should have some early research into what would happen if—your Lordships may think this is fantastic to say—we were at the beginning of a thermo-nuclear war in a difficult position and had to take some forces to another pert of the Commonwealth to defend it. I should want a large number of moving, floating bases. How far have we made any progress in research in that connection'? I am quite certain that in such a circumstance a combination of aircraft from floating bases and of submarines would have a great influence.
I remember so well, as First Lord, trying my best with Admiral Dudley Pound in Bordeaux in 1940 to persuade Darlan to sail the French Fleet from Bordeaux. I asked him to rest them in any place he liked, except the Mediterranean, where they would have been in danger of being ordered to French metropolitan ports, and to continue to fight the war with us with all the strength that they could muster, by their seapower allied to ours, based upon their Empire. If they had done so the war, in my view, would have been much shorter. We may in the mad world in which we live come to circumstances in which we may have to suggest all kinds of extraordinary movements and evolutions if the Commonwealth as a whole is to be saved. It is because I do not feel that at the moment we have a sufficiently thought-out and comprehensive collective policy in our defence that, if this occasion is one in which we were given the opportunity to register our vote,
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then I should go into the Lobby in support of the Resolution.
5.17 p.m.
THE FIRST LORD OF THE ADMIRALTY (THE EARL OF SELKIRK): My Lords, the noble and gallant Earl, Lord Cork and Orrery, has been anxious to put his Motion down for discussion for some time, I am sorry that he has brought it forward at a time when we shall be talking in a week or so about the White Paper on Defence shortly to be published. I am therefore in a slightly embarrassing position, since I must be careful not to anticipate in one way or another anything that may be said in that debate. But I do not think that this need affect the debate to-day very much, because the House has been kept reasonably informed of our position. I hope that the noble Earl will agree—and I think he does—that my Explanatory Memorandum attached to Navy Estimates last year was fairly full; and during the last year we have had an extensive discussion on at least two occasions in the House.
This debate has been interesting and, if I may venture to say so, greatly improved by the fact that it has not been entirely confined to what one might call the "Naval Lobby". I think it is a weakness of this House, if I may say so in all humility, that in the Service debates people tend to be interested in one particular Service and to talk only about that Service. We have had the advantage, which I value, of noble Lords speaking from a different angle. It has given the debate a slightly wider and better basis.
There is one fundamental difference, which I must emphasise at the outset, between myself and the noble Earl, Lord Cork and Orrery. It is this. He thinks that it is a sad admission to have to work with allies. Of course, it is fundamental to the Government's position that we are working with allies.
THE EARL OF CORK AND ORRERY: My Lords, may I interrupt the noble Earl? I never intended to convey anything of the sort. Of course we work with allies. I am grateful we have had allies.
THE EARL OF SELKIRK: My Lords, I am delighted to find that the noble Earl is at one with me on that. But the burden of his case, as it seems to me, is

835
that the Royal Navy should undertake certain duties in isolation. I certainly understood that from the noble Lord, Lord Winster, who appeared to me to make very clearly the point that we were not strong enough at sea to meet the situation entirely by ourselves. He went on to say that we might have to rely on interdependence, and that our experience of interdependence was not happy. I must make it clear to the House that this is absolutely fundamental to our position at the present time. I think it is right that it should be, and I feel that it is quite wrong to think there is anything at all shameful in working with allies. The Allied position in the West is absolutely essential. If I may go further, I will say this: I think it is quite clear that at the present time we should be entirely wrong not to work in the closest association with our Western allies.
Now, my Lords, I should like to turn to what the Government have said in the last year, in the pages of the Defence White Paper which deal with sea power. For reasons which have become clear in this debate, there appears to have been some confusion about what operations should be undertaken by sea power, and I would say to the noble Lord, Lord Winster, that those do include very clearly the duties to the Merchant Navy which the Royal Navy has always performed. I thought that the noble Lord was rather less than generous in suggesting that the support which the Royal Navy gave to the Merchant Navy in the two world wars was not of very high value. If he looks in the White Paper of last year, he will see that in paragraph 44 there is clearly laid down, as part of the task which the Royal Navy has to perform, the defence of British shipping.
LORD WINSTER: Will the noble Earl forgive me for intervening? I should not like it to be thought for one second that I had said anything which intimated that the Royal Navy had not done all it could to defend the Merchant Navy in the two wars. The point I endeavoured to make was that the Royal Navy had not been provided with the tools to enable it to defend the Merchant Navy effectively; and the figures of the Merchant Navy losses, in men and ships, in the two wars bring out my point.
THE EARL OF SELKIRK: The noble Lord is saying, in effect, that the Navy was unable to provide to the Merchant Navy the assistance that it could have done, whereas I should have thought the Navy did a great deal to help the Merchant Navy during the two world wars.
However, if I may go on, I should like now to draw attention to what has been laid down in the White Paper. Most of the remarks to-day have referred to the Atlantic, but I would emphasise that the Royal Navy is still deployed on a world basis, and I am sure it is right that this should be so. The position is described fully in the White Paper. We still have important bases at Malta, Gibraltar, Aden, Hong Kong, Singapore, and elsewhere, which contribute greatly to the influence we are able to exercise. Noble Lords may argue (and I am not going to deny it) that the number of ships we keep on station seem thin, but they can be backed up and reinforced quickly. Looking at the wider world pattern, during the last twelve months we have had difficulties in the Eastern Mediterranean, in the Persian Gulf, and in Iceland, and I think I can say that there has been no essential difficulty in meeting the demands which were made in those areas. I can add this: that the Fleet as described in the Defence White Paper will not be substantially different from that of to-day. I am confident that the Navy will continue to be able to meet the kind of contingencies which we can expect, particularly in the cold war.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Does that mean that the First Lord does not agree with Admiral Sir John Eccles, who was the Commander-in-Chief of the Eastern Section of the N.A.T.O. Navy, which we used to refer to as the Home Command, when he said that he had not the amount of forces necessary for him to carry out his task in that united Navy?
THE EARL OF SELKIRK: I am going to meet the noble Viscount fully on that, but I am talking now about the British part, working on a world basis in the circumstances of what we call cold or limited war. Admiral Eccles was referring specifically to N.A.T.O. requirements in a global war, and I will deal with that aspect in a minute.

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What I should like to emphasise is that we do have the persistent probability of disturbances in a great many parts of the world which tend to disrupt our economic and commercial interests. Some of these troubles are connected with fervent nationalism. I have little doubt that we can more easily help to persuade the people concerned, or many of them, that their true interest lies in co-operation with the West if they do from time to time have the opportunity of welcoming into their midst units of the Royal Navy. It is in this sphere that the Navy has always been important in the past. I recently came across these words used by Admiral Lord Fisher quite a long time ago:
"One bucket of water ready on the spot, in the shape of an instantly ready Fleet, will stop the conflagration of war which all the fire brigades of the world won't stop a little later on".
That has a curiously familiar ring at the present time. It is an illustration which has been used a good deal. I would add that nuclear weapons make no sense unless they are backed by a strong Navy, Army and Air Force, capable of dealing with local trouble.
In this general context, I think I should mention the very close co-operation in which we work with the Commonwealth Navies. It cannot be too fully emphasised that the last twenty years have seen a very important development of the naval forces of our Commonwealth partners. It is largely for that reason that I have visited virtually all the Navies of the Commonwealth during the last two years. They work in the closest cooperation with the Royal Navy, and they carry out exercises together; and whilst, of course, it is true that their political views are not absolutely identical, either with us or with each other, I am quite sure that they are actuated by those principles favouring the maintenance of stability and peace which we have in common with them. I should add that since the war we have transferred about seventy larger ships, besides thirty smaller ones, to the Commonwealth Navies. These Navies model themselves on the high standard maintained in the Royal Navy.
I have been dealing with what I regard as the individual part which we are playing, particularly in the cold war. If I may turn to the possibility of global war, I would say this. I am in considerable
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agreement with the description of this given by the noble Lord, Lord Tedder. It is far from easy to balance up the possibilities of conflict between countries capable of destroying themselves. At the same time, there is no doubt, however one looks at it, that we are facing a serious threat from the Soviet Navy. What I should stress is that we are preparing against it with Allies. If I may say so to the noble Lord, Lord Hankey, I believe that this offers some assurance that we shall be able to meet it if we should have to do so.
With one or two exceptions, this country always has had allies, whether one goes to the Marlborough Wars, the Seven Years War, the Napoleonic Wars or, except for one period, to either the Second or the First World War. To-day, in peace time, we have prepared our alliances, which, of course, include in particular the Nato Alliance. We have agreed the broad strategy and plans. We are accustomed to working in close co-operation with the other N.A.T.O. Forces. That is of the utmost importance in ensuring that the closest co-operation that can be obtained exists between the different countries. We have a command structure which exists from the Levant, in the South, up to the North Cape—something we have never attempted to achieve before. We have a great deal in common in the research and development field. I do not think that so high a measure of confidence in the military field has ever existed between countries as exists at the present time among the countries of N.A.T.O., in the establishment of which the noble Viscount, Lord Alexander of Hillsborough, is so rightly proud at having played a part. It would be just as wrong for us to base our policy of defence on isolation as it would be if the Americans were to do so. I have no doubt that some Americans consider that their policy of defence should be one of complete isolation.
If I may now turn from the broad background of strategy, I should like to say a word about the size and shape of the Fleet. We are going through an extremely difficult period of change, which is both expensive and rapid—rapid, not because scientific discoveries are produced rapidly, but because they succeed one another with great rapidity. Any entirely new development will probably

839
take ten years to come into full operation, and the cost is ten, twenty or thirty times as much as it was twenty years ago. A new carrier costs up to £40 million; and a frigate from £3 million to £4 million, four times as much as a battleship in the days about which the noble Earl, Lord Stanhope, was talking. The complete modernisation of our amphibious warfare ships might cost up to £20 million. This is roughly the background to the Government's task of maintaining the Fleet.
The noble Viscount, Lord Alexander of Hillsborough, talked on the last occasion about seventy cruisers—he was a little more modest to-day. Cruisers are tending to fall into the same category as battleships, because a great deal of the work they have done will be done by strike aircraft and, as the noble Viscount is fully aware, they are not of value for anti-submarine work. I much prefer to have more ships working separately on anti-submarine work than to concentrate on cruisers.
VISCOUNT ALEXANDER OF HILLS BOROUGH: My Lords, on the last occasion I said only that the Board of Admiralty of the day were asking at the London Naval Conference for 70 cruisers, but settled on 50. I do not think that we may want as many as 50 to-day. Surely the noble Earl is not going to claim that strike aircraft can deal with a major situation in many areas in the Colonies. I think that we could do it much more peacefully with a cruiser.
THE EARL OF SELKIRK: My Lords, I think that cruisers are too expensive—they cost about £15 million to build—if we want to use them only for that kind of work. My experience is that a frigate is generally quite suitable for such tasks.
Perhaps one or two comparisons between what the Navy has cost in the past and what it costs to-day might interest your Lordships. Thirty years ago the Navy cost £58 million, and in the current year it is costing about £340 million—something of the order of six times as much. By any normal standards, even allowing for the depreciation of money, that is a big increase in the real cost of the Navy. Let me take another figure. The cost of the Navy as a percentage of Government expenditure in 1927–28 was 6·9 per cent. In 1958–59 it was 6·7 per
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cent., which is closely comparable. When the noble Viscount, Lord Alexander of Hillsborough was First Lord, in 1930 and 1931, the proportion was broadly the same.
If, however, we look at the immediate post-war period, in 1946, when the noble Viscount was First Lord, we find that the Navy had a smaller proportion of the total Government expenditure; and when the noble Viscount was Minister of Defence, in 1948–49, the proportion fell to 4·7 per cent. As your Lordships will remember, that was the year of the Berlin Air-lift, and I do not think that it could be claimed that the prospects for world peace were any higher then than they are to-day. At the time of the Korean war, in 1951–52, when we were actually at war, expenditure on the Navy, as a percentage of total Government expenditure, was 6·7. So I think that I can claim to have had just as much change from the Chancellor of the Exchequer as the noble Viscount ever had.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Except that you have not the strength.
THE EARL OF SELKIRK: I have the strength, but the noble Viscount wants to have a lot of rotten bottoms sailing about the seas, and I have not the slightest intention of agreeing to that. What we want are first-class ships.
THE EARL OF CORK AND ORRERY: My Lords, why have ships ever been allowed to have rotten bottoms?
THE EARL OF SELKIRK: My Lords, the noble and gallant Earl has more experience of what happens to ships when they go to sea than I have, and I should not like to give an answer to that question. It is largely a technical matter.
My Lords, I think that the figures I have quoted are some answer to those who say that we are allowing naval defence to fall to a lower level than at any time since the Dutch were in the Medway. The cost of modern equipment makes the amount we can have to-day much smaller than we were able to have in the past. Noble Lords who have referred to the complaints of N.A.T.O. commanders that we have not enough "hardware" should remember that they were talking about N.A.T.O. as a whole, and that what they said applies not only

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to us but to all the other N.A.T.O. countries, who are open to exactly the same criticism as we are. We have borne a pretty good share of N.A.T.O. expenditure.
LORD WINSTER: My Lords, has the noble Earl seen the report that Admiral Wright has reported to his chiefs that the cuts in the British Navy have thrown a heavy strain upon his resources?
THE EARL OF SELKIRK: I am aware of that fact. There is no commander in the field who has not wanted more forces at some time. I quite agree with the noble Lord: I am not pretending for a moment that there is any room for complacency here. We are up against a big challenge, partly military and partly economic. What I am saying is that we have as a first task to maintain our economy, and then we have to balance our defence tasks against the standard of living which this country expects. That is the balance which the Government have tried to strike. I think that we have had a fair share of the defence burden in the past.
May I pass to the question of whether we should equip the Navy with completely up-to-date ships or be content with, shall I say, second-rate ships—that is, ships without modern radar and asdic and relying on the equipment we used during the war; whether we should have more ships of a rather lower standard or fewer ships at a high standard. The Government have come to the conclusion that it would be wrong to have second-rate ships and I will tell your Lordships why. In the first place, the Soviet Union have a tendency to sell or dispose of certain ships to various other countries, and it would be quite wrong for us to call on our Navy to meet good ships or ships better than we have. We might then be outclassed in the cold war.
In the second place, it would have a bad effect on the morale of sailors who are asked to work with equipment which they know is anything but first-class. Thirdly, it would reduce the flexibility of the Navy, which would mean that ships could not be used to deal with any situation when it arose. Fourthly, of course, it would make co-operation with our N.A.T.O. Allies less easy. For those reasons, we think that it would be wrong to have any but first-class
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ships. Even if we look back to past history, to the time of the Armada and at Trafalgar, we find that, while we did not have as many ships as were ranged against us at that time, we did have ships with a finer fighting capacity.
I believe that some of the anxiety which has been felt about the Navy is due to the repeated announcements of reductions in shore establishments. These have been proceeded with deliberately, in order that we should be able to maintain the maximum amount of ships in the Active Fleet. I thought the noble Lord, Lord Winster, was less than normally realistic in this matter. If you have a big shore establishment, clearly you have not the resources you would otherwise have for the maintenance of ships at sea. The whole point of this is to release resources from ashore; and that is what we have done. Though many of these cuts in our shore establishments are regrettable, they are releasing considerable resources which would not otherwise be available. During the last two years, for instance, we have either ceased to be responsible, or are ceasing to be responsible, for five dockyards. We have abolished one Command and are closing another. We have closed three naval bases, and we are closing or absorbing elsewhere seven different training establishments and seven air establishments. We have achieved all this without reducing the quality of training of naval personnel.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Or ships' bottoms?
THE EARL OF SELKIRK: I do not say that I am reducing the quality of ships' bottoms, but I am getting rid of some of them. As a result of these and other changes, we shall eventually save 7,000 naval posts ashore; and by the end of this year will have reduced the number of civilian posts by 23,000.
With regard to the Reserve Fleet, the noble Earl, Lord Howe, asked about "Warrior". "Warrior" has been sold to the Argentine and has been re-christened "Independencia". The noble Earl, Lord Cork and Orrery, referred to "Newcastle," which came home from the Far East just before Christmas. She was not really in a condition such as to make it worth converting or modernising her for further use, and it was for that

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reason that it was decided to dispose of her. I will not repeat what I said last summer in regard to the Reserve Fleet, but I would ask the noble Earl not to press me, because I think it quite wrong to preserve ships which are out of date. I think that we should not be right to attempt to bring fully up-to-date to meet modern requirements these ships that we are proposing to scrap. It would be extremely expensive, and even then the ships would not have a very long life.
EARL HOWE: May I ask whether "Warrior" conformed to the doctrine which the noble Earl has just laid down? The letter I have here from the then First Lord of the Admiralty, the noble Viscount, Lord Cilcennin, says that "Warrior" had been modernised in the same way as Victorious ". Why have we sold her to another Power?
THE EARL OF SELKIRK: I can give the noble Earl the categorical answer that "Warrior" had not been modernised in the same way as "Victorious". I think I am right in saying that the noble Earl quoted from a letter from my predecessor which is at least three years old.
EARL HOWE: Yes.
THE EARL OF SELKIRK: Quite frankly, three years is a long period in the evolution of carriers at the present time. I should not like to say that what was reasonably modern three years ago would be considered suitable to-day. I think that may be the answer to the noble Earl. This is something that happens from time to time in navies. I find, for instance, that one of the great reforms which Lord Fisher put through in 1904 was to get rid of the Reserve Fleet. He said that we must remove as soon as possible all out-of-date ships, and that those which were put in reserve were to have a nucleus crew so as to provide instant readiness for war. I think these arguments apply with equal force to-day. It would be quite wrong to keep a large Reserve Fleet which could be brought into operation only with great difficulty. It costs a great deal of money. The Reserve Fleet is costing about £15 million a year. A frigate costs about £100,000 a year to maintain in reserve.
I would now say a word or two on what I would describe as the build-up of the new Fleet. The noble Lord, Lord
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Winster, drew a distinction between modern and new ships. I do not know whether he would call the latest submarine of the "Porpoise" class a new ship or a modern ship. It has all the modern equipment. Three of them came into service in the course of last year. I would say that they were modern ships, just as I would say that the modern frigates, and particularly the anti-sub-marine frigates, are modern ships. Over the three year period from January, 1956, to January of this year we have brought into service 2 aircraft carriers, 14 destroyers, 26 frigates, 12 submarines and more than 80 minesweepers and smaller vessels which are completely new or completely modernised; and during the next two years we shall have commissioned from new construction 1 carrier, 3 cruisers, 10 frigates and a number of submarines and small craft. So I think it is fair to say that, with some 40 ships building at present, we are getting on with trying to see that the Fleet is kept thoroughly up to date.
LORD WINSTER: Perhaps I might reply to the noble Earl, as he has referred to me. My definition of a modern submarine would be one armed with missiles and not with torpedoes.
THE EARL OF SELKIRK: I would point out that a submarine armed with missiles—and there are none in the world, as such—
LORD WINSTER: I think the American Navy has one.
THE EARL OF SELKIRK: Not one armed with the V.2 type, although they may be armed with the V.1. However, they are not "hunter killer" submarines, but strategic submarines. It is a question of the rôle in which they can be used. I would add that, whereas five years ago we had 66 minesweepers, we now have well over 200. I would only say this about the "Dreadnought", which is coming on: the assistance of the United States, for which we are most grateful, is leading to faster progress, and much of the preliminary work has already been completed.
If I may sum up quite shortly, I would say to the noble Earl, Lord Cork and Orrery, that we in the Admiralty are not complacent. We do not underestimate the Soviet threat; and we are not less conscious than

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Anyone else of the dangers of the world we are living in. We have, however, to face the situation as it is and as it will be in the future, and not as it has been in the past. I think we are right to face with our Allies—as we are doing—the much greater Soviet threat, and our contribution in the naval sphere will be second only to that of the United States Navy.
The forces of the N.A.T.O. Alliance, backed by the nuclear power of the West, present a formidable deterrent to a major war in any form. There remain the national day-to-day commitments of a country with world-wide interests. I have spoken of the part which the Royal Navy plays in this respect, and I am confident that it will continue to fulfil its essential role. I would add only this. We are trying to learn the central lesson that history has, I think, taught us that is, to prevent war by maintaining the unity of N.A.T.O., and to form a solid, practised naval alliance, whose united confidence is the surest shield against war-like ambitions. The Government have no illusions in regard to the vital rôle which the Navy can and must play in this task. I submit that the rôle is clearly laid down in the White Paper published last year. It is for that reason that I would ask the noble Earl, Lord Cork and Orrery, not to press his Motion to a Division.
EARL HOWE: Before the noble Earl sits down, could be say a word about the "County" class missile destroyers?
THE EARL OF SELKIRK: My Lords, I can say that work has started on them. We are quite aware of the importance to be attached to them. The noble Viscount, Lord Alexander of Hillsborough, complained about their going slowly. One of the troubles today is that people talk about things which are a long way off. When they have been talked about for one or two years development appears to be slow. The noble Viscount said that he heard about them two years ago. A ship takes at least two years to design, two years to build, and probably another year before its trials are completed. I do not think there has been any undue delay, and we are conscious of the need to press on immediately.
LORD SHACKLETON: My Lords, could the noble Earl answer the question about Coastal Command, or are we to take it, from his silence, that the
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Admiralty are hoping to replenish the Navy with that part of the Royal Air Force?
THE EARL OF SELKIRK: I do not want the noble Lord to take anything of the kind. What I said at the outset is that I do not want to make either an admission or a denial about what the White Paper may or may not say. Of course there have been discussions on almost every aspect of defence.
VISCOUNT ALEXANDER OF HILLS BOROUGH: My Lords, might we hope that the Ministers will give some attention to the debate and the views of your Lordships as a whole in finishing off the construction of the White Paper?
THE EARL OF SELKIRK: I hope they will.
LORD WINSTER: Is the noble Earl able to say whether the keel of the "Dreadnought" has yet been laid?
THE EARL OF SELKIRK: My Lords, I am afraid that the noble Lord's emphasis on secrecy shows that he cannot have followed some of the Naval debates in another place for a long time. He is aware that normally no mention is made of submarines until they are launched. Therefore, I am afraid it would be contrary to practice for me to make any statement on this until the launching has taken place. I am aware that a good deal more publicity has been given to the "Dreadnought" than to other submarines. I hope that I am not committing a terrible breach when I say that material work has actually started.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, whilst the procedure is not to say too much about submarines, nevertheless once the keel has been laid it is perfectly obvious, from the following Navy Estimates, that the ship is under construction.
THE EARL OF SELKIRK: I do not think that is so. If the noble Viscount will look at the Estimates he will find that there is no mention of the construction of submarines until they have been launched.
5.54 p.m.
THE EARL OF CORK AND ORRERY: My Lords, I am sorry that I do not feel able to accede to the request of the First Lord to abstain from dividing the House. My Motion is a very simple one. It has.

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been smothered over with all sorts of subjects that I never expected. I was sorry that anything to do with Service rivalry came in. I have never taken part in anything of the sort, and I thought we were living in a modern age and that it was accepted that nobody would go back to that. But my Motion says simply that in the opinion of this House the Navy has been depleted to a dangerous extent. We have heard to-day promises about what is going to be done, but that is the
Resolved in the Negative, and Resolution disagreed to accordingly.
difficulty—nothing is done. We go on year after year, and the promises are still in the air. We still have not an atomic or nuclear Navy. I ask those Members of your Lordships' House who are not satisfied with the present position and the strength of the Navy to come into the Division Lobby against the Government.
On Question, Whether the said Resolution shall be agreed to?
Their Lordships divided: Contents, 27; Not-Contents, 52.

CONTENTS

Ailwyn, L.

Cunningham of Hyndhope, V. [Teller.]

Milner of Leeds, L.

Albemarle, E.

Ogmore, L.

Alexander of Hillsborough, V.

Gifford, L.

Pakenham, L.

Ampthill, L.

Hankey, L.

Silkin, L.

Amulree, L.

Henderson, L.

Stanhope, E.

Brocket, L.

Howe, E.

Stansgate, V.

Carnock, L.

Latham, L.

Stonham, L.

Cork and Orrery, E. [Teller.]

Lawson, L.

Uvedale of North End, L.

Crook, L.

Lucan, E.

Williams, L.

Winster, L.

NOT-CONTENTS

Amwell, L.

Dorchester, L.

Onslow, E. [Teller.]

Atholl, D.

Elliot of Harwood, Baroness.

Perth, E.

Auckland, L.

Gosford, E.

Radnor, E.

Balfour of Burleigh, L.

Grantchester, L.

Rathcavan, L.

Balfour of Inchrye, L.

Grenfell, L.

Rea, L.

Bathurst, E.

Hailsham, V. (L. President.)

Reading, M.

Chesham, L.

Howard of Glossop, L.

St. Aldwyn, E. [Teller.]

Clitheroe, L.

Jellicoe, E.

St. Just, L.

Coleraine, L.

Jessel, L.

Sandford, L.

Colville of Culross, V.

Kilmuir, V. (L. Chancellor.)

Selkirk, E.

Conesford, L.

Kinnaird, L.

Soulbury, V.

Congleton, L.

Leconfield, L.

Strathclyde, L.

Craigmyle, L.

Lonsdale, E.

Swinton, E.

Craven, E.

Malmesbury, E.

Tenby, V.

De L'Isle, V.

Mancroft, L.

Waldegrave, E.

Denham, L.

Massereene and Ferrard, V.

Waleran, L.

Derwent, L.

Merrivale, L.

Yarborough, E.

Devonport, V.

EMERGENCY LAWS (REPEAL) BILL
6.0 p.m.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I desire to thank your Lordships for the consideration which you have shown to me in my various duties by the arrangement of the Business to-day. In rising to move that this Bill be now read a second time I should like first of all to offer some remarks in exposition of the contents of the Bill, then to say something about the Government's reasons for introducing it and finally to comment very briefly on certain of the criticisms which have been raised. In the first part of what I have to say I shall refer first of all to the situation with which the Bill deals, and then to the measures proposed in it. I am conscious that the Bill has been before Parliament for two and a half months and that it was accompanied by an explanatory White Paper. Detailed expositions are never very enlivening and noble Lords who are interested might find it convenient if I keep this part of my speech relatively brief and refer to particular and detailed points by reference to appropriate paragraphs of the White Paper. I think they will find it easier to follow my exposition of a somewhat complex piece of legislation if they are able to refer to the printed explanation of particular points.
The emergency legislation still in existence consists, first, of the remaining Defence Regulations, which are kept in force by the Supplies and Services Act and by the Emergency Laws Acts; secondly, of the amendment of the Ministry of Supply Act by the Supplies and Services Act; and, thirdly, of three separate Emergency Acts which have as yet neither been repealed nor incorporated in or replaced by permanent legislation. I will refer in succession to those three parts of the corpus of legislation with which the Bill deals.
The original Act under which Defence Regulations could be made by Order in Council was the Emergency Powers (Defence) Act, 1939, which, as some of your Lordships will remember, was passed in a single day a few days before the outbreak of the Second World War. Paragraph 10 of the White Paper explains how, before this Act expired after
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the war, the two new Acts to which I have referred were passed in order to keep in force such Defence Regulations as the Government of the day felt to be still required. The Supplies and Services Act dealt broadly with regulations concerned with economic matters and the Emergency Laws Act with the rest.
Only thirteen Defence Regulations of substance now remain in existence. These are set out in paragraphs 11 and 12 of the White Paper, and, together with the twenty-five ancillary and procedural Regulations listed in Appendix A, they represent the residue of the 215 Regulations at the time of the change of Government in 1951. Eight of those thirteen are either to lapse or to be replaced by permanent legislation. The Bill is, therefore, concerned only with the remaining five, though it keeps in force a sixth, Regulation 59, until that Regulation is replaced by provisions in the Factories Bill which is already before Parliament. These reductions and the five Regulations remaining are set out in paragraphs 17 and 18 of the White Paper.
The mere reduction in numbers does not, however, of itself bring about the corresponding reduction of the scope of the powers which a Government can exercise under Defence Regulations. Three of these five remaining Regulations confer, at least potentially, very wide powers indeed upon the Government. Defence Regulation 55 gives power to impose physical controls on any kind of commodity whatever for a very wide range of economic and defence purposes, while Regulation 55AB gives the power to impose price control on any kind of goods and services for any purposes whatever. Regulation 55AA empowers the Government to obtain such information as is needed for the enforcement of the other two Regulations.
It is true that in January, 1955. these wide powers were reduced by an Order in Council to a limited number of specified uses. The limitation, however, did not deprive the Government of the power to extend afresh the powers which could be exercised under the three Regulations without seeking fresh legislation. This is because Section 3 of the Supplies and Services (Transitional Powers) Act, 1945, gives power to vary by Order in Council Regulations kept in force by that Act, and

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this power to vary can include the resumption of powers given up so long as they fall within the ambit of the Defence Regulation in question and are exercised for the purposes of the Supplies and Services Acts. I would refer your Lordships to paragraphs 19 and 20 of the White Paper for fuller details as to the original scope of the Regulations, the purposes for which they can be used and the use made, since the reduction of their scope in 1955, of the power to vary them.
Now may I turn for a moment to the Ministry of Supply. The extension of the Ministry of Supply Act by Section 6 of the Supplies and Services Act, 1945, gave the Government power to buy, sell and manufacture on Government account any articles, in order to ensure, in the words of the Section:
"a sufficiency of those essential for the wellbeing of the community, or other equitable distribution, or their availability at fair prices."
Noble Lords will recognise that these powers complement those of the three Regulations to which I have referred. The Regulations enable the Government to control the private manufacture, purchase and sale of essential goods, while the amendment to the Ministry of Supply Act enables it to manufacture and sell them on Government account.
There are, thirdly, three remaining Emergency Acts described in paragraph 23 of the White Paper, which are all that now remain of a much larger number. These three are of very different importance. First, we have the Import, Export and Customs Powers (Defence) Act which provides the whole of the Government's present powers for the control of exports and imports; the purposes for which these powers may be exercised are not restricted by any definition in the Act. Secondly, there is the Ships and Aircraft (Transfer Restriction) Act, 1939, which enables the Minister of Transport and Civil Aviation to forbid the transfer of British ships other than those registered in an independent Commonwealth country. Thirdly, the Government and other Stocks (Emergency Provisions) Act is on a very different key and is a minor measure which, apart from a provision applicable only to war-time conditions, facilitates the procedure for the transfer of certain stocks, the number of which is now small. Noble Lords will realise that
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only very limited use is made of these residual emergency powers.
Some of the functions exercised under the three Regulations on which I have dwelt have been abandoned in recent months, leaving only seven altogether with one continuing authority. Those are all listed in paragraph 21 of the White Paper. But I again repeat what I have emphasised: that in spite of the modest use at present made of the Regulations, wider powers can still be exercised under them if use is made of the power to vary. Similarly, although the use made of the extension of the Ministry of Supply Acts is limited, those very widely extended powers will remain in existence.
I now turn to the Government proposals for dealing with this legislation, which are set out in the Bill before the House. I am aware that the ideal course would be to repeal the whole of it and to enact permanent and detailed legislation covering each of such powers which must be retained. It is, however, quite impossible to do that in a single Parliamentary Session. The replacement of this residual legislation would call for at least half a dozen Bills, each in a different legislative field and some of them substantial and complex. We had, therefore, to envisage this process taking place over a number of years. The objects of the present Bill are accordingly relatively limited. First, it creates a new legislative basis for the Defence Regulations in a much restricted form, and a limited extension of the Minister of Supply's powers. It also repeals, in part, two of the three remaining emergency Acts of Parliament. Secondly, it keeps the Defence Regulations and the extended powers of the Ministry of Supply in force only in respect of the specific powers which are now exercised. The Bill does not do away with any powers which are actually being exercised at the present time. It does do away with the possibility of extending the powers which are exercised to-day. There is one exception to this principle to which I shall refer in a moment.
I should now like to go briefly through the Bill and to explain how these two principles have been applied in drafting it. Clause 1 repeals the substance of the Supplies and Services Acts and the Emergency Laws Acts. Clauses 2 and 3 substitute a new legislative basis for the powers previously exercised by virtue of

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these two Acts. Clause 2 keeps in force the five Defence Regulations specified in paragraph 18 of the White Paper and the orders and directions at present in force under them; but it specifies that the powers given by these Regulations are limited to those set out in paragraphs 21 (b) and 22 of the White Paper. As a matter of drafting, the necessary amendments to the Regulations are set out in the First Schedule, and the Regulations in their amended form—that is to say, the form in which they will have effect if the Bill becomes law—in the Second Schedule.
Here I should draw your Lordships' attention to the last of the eight powers set out in paragraph 21 (b) of the White Paper—the power to control the production, distribution and price of any commodity if supplies from overseas on which we depend should be interrupted. This differs from the other powers in that the commodities are not specified, although the circumstances in which the power may be exercised are strictly defined in paragraph 1 of the First Schedule, which your Lordships will find on page 9 of the Bill in lines 35 to 47. This is a precautionary power which Her Majesty's Government feel they must have. No-one can be certain that vital supplies on which we depend may not be interrupted owing, for example, to political instability in some part of the world which is supplying us, or it may be to some natural disaster. It is impossible to specify in advance what commodity may be affected and it might be necessary to take action quickly.
May I come now to the amendments with regard to the powers of the Minister of Supply? Clause 3 continues temporarily the extended powers of the Minister of Supply but limits them to those set out in subsection (2) of that clause. Here, again, the general principle is that the Minister will be entitled to exercise only those powers of which he is making use at present. So the Bill has been amended in another place at the instance of Her Majesty's Government, since it was felt that the clause as originally introduced was too restricted to cover the work at present being undertaken by the Royal Ordnance Factories. This clause also continues the authority for the operations of the Jute Control. The responsibility for this now lies with the Board of Trade, having been transferred
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under the Ministers of the Crown (Transfer of Functions) Act, 1946. This is the only power under emergency legislation which Her Majesty's Government propose to retain to trade in commodities. I am sure your Lordships are aware of the particular situation that obtains in Dundee and the Government statements with regard to it and I need not go into it in any more detail. Clause 4 deals with the Ships and Aircraft (Transfer Restrictions) Act. The licensing of aircraft is now carried out under other powers by the Board of Trade and the appropriate part of the Act has been repealed so that it now applies only to ships. Further, the effect of the clause is to keep in force the Minister's power to control the transfer of ships to and from the British flag only for purposes of national defence. The only other clause to which I think it necessary to refer your Lordships is Clause 10, which specifies that, apart from one minor provision, the whole Act shall continue in force only up to the end of 1964.
Noble Lords may have noticed one important omission from the emergency legislation dealt with in the Bill: that is, the Import Export and Customs Powers (Defence) Act. This Act ought, in due course, to be replaced by legislation meeting the more limited needs and purposes of peace time. I believe your Lordships will readily appreciate that Her Majesty's Government do not judge the present moment to be appropriate for the introduction of a major measure dealing with this particular subject, and I need not go into the various international matters which have caused us to take that view.
May I just say one or two words on the reasons for the introduction of this legislation? I hope that what I have said will have given noble Lords a reasonably clear idea of the situation with which the Bill deals and what it proposes to do. May I now say some thing as to the reasons for it. I venture to describe it as a realistic attempt, within the limits of what is practicable in a single Session, to put on to a proper legislative basis the limited emergency powers that must remain. The two essential points were put in the White Paper. In the first place, a legislative structure designed for war emergency conditions should not continue indefinitely in peace

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time. Secondly, powers should not exist in peace time unspecified as to their scope and purpose and which the Government might use at their discretion without explicit authority from Parliament. We admit that in this Bill we cannot do all that ultimately will be desirable to achieve both objects. We do propose, however, to demolish the structure of legislation resting on the Emergency Powers (Defence) Act and to do away with the potentially unlimited fringe of powers which might at present be exercised without new legislation. It is for these reasons that the Bill has been referred to as an exercise in constitutional propriety and a measure conducive to the good government of the Realm.
I should like to turn, finally, to certain criticisms which have been made of the Bill. No objection has been taken to the first of our two principles—that the powers to be retained should be put on a now legislative basis to be considered and determined by Parliament. There has been some criticism of their reduction to a limited number of specific purposes. This has drawn two different kinds of criticism: first, that we were setting out to deprive a possible successor Government of powers which they might consider themselves to need; and secondly, that this, our own Government, are depriving themselves of powers which they ought to keep, even though at present they have no desire to use any of them.
With great respect, the first criticism strikes me as rather confused. We are accused of setting out to make things more difficult for possible successors. In the first place, I would point out quite seriously—and I hope the noble Lord, Lord Silkin, will not take this as merely a debating point, for I think it is a serious one—that the Bill does nothing to weaken or reduce any of the powers at present in existence to protect our balance of payments or the strength of our currency. As regards questions of internal policy, no Government can bind their successors and there is nothing whatever to prevent a future Government from asking Parliament for whatever powers they wish to exercise. If they wish to exercise wide powers, however, we believe that they ought to seek fresh legislative authority for them and not to rely on emergency
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legislation which is now nearly twenty years old and was passed by a Parliament united in the prosecution of objectives quite different from those for which the emergency powers would now be used. We do not question the right of a future Government to do anything which they can get Parliament to authorise but we feel that they must seek Parliamentary authority in a proper way.
As regards the second criticism, that Her Majesty's Government are depriving themselves of powers which they ought to keep, this raises a different question and one on which we must recognise that Her Majesty's Government and the Opposition take different views—and views different not merely in degree. We do not believe that the Government should have unlimited powers to manufacture and trade in commodities or to control the undertakings which do so, or to control all the prices of goods and services. We do not think that such general powers are or should be needed in peace time. We consider that if they were needed in respect of any particular commodity the Government ought to seek specific powers from Parliament for that purpose. I hope that, although noble Lords opposite may not agree with the second of the principles to which we have sought to give expression in the Bill, they will at any rate recognise that it is a consistent embodiment, within the limits of what is practicable, of both these principles; and I now ask the House to give the Bill a Second Reading.
Moved that the Bill be now read 2ª.—(The Lord Chancellor.)
6.31 p.m.
LORD SILKIN: My Lords, I do not propose to detain the House by debating further the two criticisms which the noble and learned Viscount said, quite fairly, have been directed against the Bill. I think it is legitimate for a Government to make things more difficult for its successors; I would not complain about that. The Government, as the noble and learned Viscount says, cannot prevent their successors from introducing any legislation which they desire. I would not myself quarrel, at any rate not violently, with any attempt on the part of the Government to make life more difficult for their successors, so that where in an emergency they might have availed

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themselves of the existing emergency legislation, they will now have to seek Parliamentary powers by means of fresh legislation. Nor do I particularly quarrel with the view of the noble and learned Viscount that if this Government genuinely believe that they do not require certain emergency legislation, and will not in any circumstances need it, they should accordingly repeal it. So I am not associating myself strongly with the criticisms that he has enunciated, and I have no quarrel with this Bill as such.
I am very much obliged, as the whole House is, to the noble and learned Viscount for his explanation of the Bill. I have been wrestling with the Bill itself for some time with little success. I made three attempts to try to understand it by means of the White Paper. It certainly threw some light on it, and sometimes I thought I had got it and sometimes I thought I had not. I actually had tables showing what legislation was still in existence, what was disappearing and what was going to be introduced into permanent legislation. I could never make the sum agree. But I will certainly read the noble and learned Viscount's explanation. I cannot pretend that even now I have completely got it. I will read it and I hope that the combination of the Bill, the White Paper and the speech will throw complete light on this most difficult subject.
We have had discussions of this kind every year since the present Government have been in office. I believe there have been eight of them. The noble and learned Viscount and his predecessor have made the kind of speech that he has made this evening; and I believe that on every occasion except one, when the noble and learned Earl, Lord Jowitt, made the speech, I have been responsible for saying something in reply. I assure the noble and learned Viscount that in no circumstances will I make another speech of this kind. I really think this is the last. Therefore, in spite of the thinness and lack of excitement that exists in this House over this subject, perhaps he will permit me to make my swan song on emergency legislation.
As the noble and learned Viscount say s, when the present Government came into office there were 215 Regulations; and they came in on the basis of getting rid of them all. They were going to "set the people free"; they were going to
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sweep away all these emergency Regulations, and there was nothing said about putting anything in their place. Now all these years have gone by, and the noble and learned Viscount realises today that the sweeping away of all these Regulations and "setting the people free" has been a longer and more painful and a more difficult process than he could have imagined at the time. And at the end of it all, this is what the Government say in the White Paper about, these Regulations:
"Since 1939 new problems of government have arisen and powers taken to deal with emergency conditions have become indispensable if those services which modern Society demands are to be carried on."
That is what we have always thought. We have all thought that these powers, or many of them, were essential.
No Government, and certainly not we on this side, had any intention of hanging on to powers or Regulations which were not necessary. Had we been in office—whichever Government had been in office —we would equally have been introducing legislation of the kind which the noble and learned Viscount is introducing in this House to-day. We might have disagreed as to the nature of it and the extent, and there would have been legitimate differences of opinion as to the amount of legislation that was required, but we should have done exactly the same as the Government have been doing in principle; that is, converting such Regulations as we thought were required in the new condition of things into permanent legislation and repealing those that were not required. I do not think that there would have been any difference between us. But saying that is a very far cry from saying that at long last we were going to get rid of all emergency legislation and were "going to set the people free".
I should like to ask the noble and learned Viscount whether he cannot tell us, either now or after investigation, how many of the 215 Regulations which were in force in 1951 have been converted into permanent form by means of permanent legislation. I think he will find it is a very considerable number. Indeed, even in the case of the last thirteen, the last that remain, we find that five still continue in force at present. We are left with five, and I believe that that five are to be incorporated, or have been

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incorporated, in permanent legislation. I am not sure whether my figures are right or not, but I believe the position is something of that sort. So we have still to live with eight of these thirteen even now, after all these years, to say nothing of the thirty-four or thirty-five subsidiary Regulations. I am not quarrelling with that; I am merely pointing out that the Government have at last discovered what we had all along believed to be the fact: that these Regulations were needed, or that some Regulations were needed, and that we could not just wipe them away with a wave of the hand.
There is one other point—and the noble and learned Viscount referred to it—namely, that a power still remains under Section 3 of the Supplies and Services (Transitional Powers) Act, 1945, to widen the scope of some of the Regulations, if necessary, in those cases where the scope has been reduced. Here again. I think it is very wise of the Government to retain this power. Am I wrong?
THE LORD CHANCELLOR: Yes; I am sorry. I should have liked the noble Lord to develop the point; but I quite realise how the noble Lord may have been misled. That was by Section 3 of the Act, and although the form of the Bill is only to repeal, I think, Section 8 (1), which allows the Bill to be extended year by year, once you have repealed the section which allows the Bill to be extended you have repealed the whole Bill, and that power under Section 3 goes. Therefore, after this Bill becomes law, it will no longer be possible to extend the Regulations again. I am sorry that the Bill is in that form, and I quite understand why the noble Lord took that view.
LORD SILKIN: I must apologise for my stupidity in not following it. I had been under the impression that it would still be possible, but I accept the noble and learned Viscount's assurance that that is not the case.
I do not wish to say any more about the general scope of the Bill, or the need for the Bill. I accept it, and no difficulties will be put in the way of the Government for this Bill to go through. I will, however, in association with my noble friends, have one more look at the Bill to see whether any powers that it is sought to repeal may still be required,
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or whether it is possible to go even further than the noble and learned Viscount proposes to go under the Bill. If we find that there is any cause for suggesting any Amendments to the Bill, they will be duly dealt with, I hope, on the Committee stage; but, subject to that, we accept the principle of the Bill and hope that it will have a speedy passage.
6.42 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, may I ask the noble and learned Viscount the Lord Chancellor one question which I think is a good Second Reading point? I should be grateful if he would tell me what the situation will be at the beginning of 1965. As I understand subsection (2) of Clause 10 of this Bill, the reference to the Interpretation Act will prevent any powers from re-arising which might be thought to do so by the ending of this Act and the possible re-arising of that which it repeals. Is it also the case that all the powers under the Defence Regulations which are retained by this Bill—and I gather that they are all the remaining ones—will also lapse, and that it will then be necessary to introduce new legislation, if it is considered needed, to carry on the powers of this Act? If I am right in that view, I should be grateful if the Lord Chancellor would tell me so.
LORD CONESFORD: My Lords, may I put one question to my noble and learned friend? In the first subsection of Clause 4 it is provided that the Ships and Aircraft (Transfer Restriction) Act, 1939, shall expire at the expiration of the thirty-first day of December, 1964. I do not think that my noble and learned friend, in the course of his admirably clear explanation of the Bill, dealt with the reason for that date. I do not say that there is anything wrong with it, but I wondered what the reason was. If it is more convenient that it should be explained in Committee rather than to-day, I shall quite understand.
THE LORD CHANCELLOR: I hope the noble Lord, Lord Silkin, will not think me discourteous if I reply to these specific points while they are fresh in my mind, and then come back to him. My noble friend Lord Colville of Culross wanted some information on the incidence of the Interpretation Act. The position

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is that the expiry of the Act is timed for December 31, 1964, and the reason why it is December is, of course, that if it were wanted at that time to use the Expiring Laws Continuance Act for any provision, then it would fit for December. That is the first point. But the position with regard to the Interpretation Act is that, as he knows, one purpose of the Interpretation Act, if I can put it quite broadly, is to safeguard acts that have been done under an earlier Act. Now, this sounds rather like the stock answer to a question in a law examination, but I hope the noble Viscount will bear with me if I put it in that way. If an Act expires by way of running out—and again I am putting the matter quite broadly—it does not attract the provision under Section 30, which, at the same time, acts as a preservation of powers exercised and, of course, safeguards the people that exercise the powers. That is why it is necessary to draft it in the way that we have done. I hope that that meets the noble Viscount's point, but if there is any further point I shall be pleased for him to let Mme know, and I will try to explain it to him.
With regard to the more general point of my noble friend Lord Conesford, as to the five years, we hope and believe that during that period we shall be able to complete the task which I have admitted is not finished—that is, to adjust the various matters which are left in this Bill, very limited and very reduced in scope, to peace-time legislation. My noble friend during his service—if he will allow an old friend to say so, his distinguished service —at the Board of Trade, must have been very conscious of the point I did mention in regard to the Import and Export and Customs Act. That depends upon negotiations and upon factors in our external economic affairs on which I need not spend time to-day, but I think he will agree that it would be to the point of view of the good functioning of the Department of which he was an admirable member if we could, during the next five years, get the Imports and Exports and Customs laws into another form. We have taken the time, and we hope it will be possible to deal with all the detailed points.
LORD CONESFORD: My question was limited to the Ships and Aircraft (Transfer Restriction) Act mentioned at the beginning of Clause 4. It may be
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simply that it was convenient to take the same date.
THE LORD CHANCELLOR: Yes, it was. I am sorry; I thought my noble friend wanted the greater to include the less, but that is the position. We think that from the point of view of healthy Parliamentary functioning this ought to be a temporary Act, and we have taken the same period.
The noble Lord, Lord Silkin, has made a very restrained speech, and in answer to it, and to signify my gratitude for it, I will make a very short reply. In fact, in all the eight times on which I have dealt with this problem I do not think his lower limb has ever been elevated less than to-day. It is not because he could not have said more, because he has often done so before, and we have enjoyed the discussions. May I just make this point? —and he knows that I do not do it in any controversial way. I am glad that the noble Lord made a speech with the content and in the tone which we have heard to-night, because it is important that in our legislative functions we should try to preserve that as much as possible of the laws to which the people of this country are subject should be dealt with in Parliament. It is very important that that should go out from everyone as being what is desirable.
Undoubtedly a great many of what I may term colloquially "back room powers" that had been taken during the war by the Government, of which I had the honour to be a member, had become built into our economy and our laws. Moreover, the ability to make orders and permits under them was a direct temptation to laziness in government, quite irrespective of what Party was the Government. It is so easy to make an order under a Negative Resolution, and busy Members of another place will not bother to put down a Prayer. One knows the temptation, and I think that it is an excellent thing that it should go out that that is a temptation to be resisted when we can. The noble Lord, Lord Silkin, from his Ministerial experience knows perfectly well, as I do, that there are cases where we cannot avoid it; but let us try to avoid it and when we do something which in our heart of hearts we feel should be a true piece of legislation, let us make it a true piece of legislation and bring it to the attention of Parliament.

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I have always tried to draw the distinction between legislating by Affirmative Resolution and by Negative Resolution. I know that there may be many cases where it may be pointed out that I have failed to do it, and I think that every Minister must frankly admit that these cases do occur. That is why in these words in reply to the noble Lord I would say that if it goes out that we are going to do our utmost to see that Her Majesty's subjects are under only laws at which Parliament has had a look, I think we shall have done something not undeserving of the confidence of our successors. I wish to thank all noble Lords for the tone of this debate.
On Question, Bill read 2ª; and committed to a Committee of the Whole House.

HIGHWAYS BILL [H.L.]
6.54 p.m.
Order of the Day for the Second Reading, read.
THE EARL OF GOSFORD: My Lords, at this late hour I do not propose to detain your Lordships longer than is necessary, but a Bill as complex as this, with some 300 clauses, cannot be dismissed in two lines. The main purpose of this Bill is to consolidate highway law in England and Wales. It is not, however, a Consolidation Bill in the strict technical sense, because it does include some amendments of the law, even though they are minor ones. Therefore the procedure applicable to true Consolidation Bills is not appropriate to this one.
In consequence, the following procedure, which has been used with success in a number of previous Bills similar to that now before your Lordships, has been adopted. The Bill being technical, a draft was referred to a Committee of experts of recognised authority on the subject. This procedure was last used for the Bill which became the Customs and Excise Act, 1952, and it was also used in connection with two or three Bills before the war, commencing with the Bill which became the Local Government Act. 1933. It is hoped that, as a result of the Committee's work, the Bill will be in such a form that it will be acceptable to your Lordships without long debate.
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The Committee was appointed by my right honourable friends the Minister of Housing and Local Government and the Minister of Transport and Civil Aviation. I know that my right honourable friends consider themselves singularly fortunate in that not only were they able to secure the services of a number of experts in the field of highway law and administration but also that the noble Marquess, Lord Reading (who I am sorry to say cannot be with us this evening) was good enough to accept their invitation to preside over the Committee.
My right honourable friends have already recorded in another place their gratitude to the noble Marquess and to the members of the Committee for the care and skill with which, despite the many other calls upon their time, they dealt with their complex task. And I should like to add my own warmest personal thanks to the noble Marquess and his Committee. Their lucid explanations of the nature and scope of the Bill, and of the considerations which were taken into account in shaping the Bill into its final form, have been, and will be, of immeasurable value to all who have to deal with this Bill, not least to myself.
Your Lordships will no doubt share with me the reflection that the Report and the work behind it constitute another example of invaluable but unobtrusive service conscientiously rendered, which is a feature of our public life.
The Report of the Committee has been presented to Parliament and published as a White Paper (Cmnd. 630). Two things will have been at once apparent to your Lordships. The first is that the draft Bill has been subjected to a searching scrutiny by the Committee. The second is that the Committee have considered with meticulous care the many observations and suggestions put to them by the various organisations from whom they invited comments.
Before I turn to the Bill itself I might remind your Lordships that the last Act which attempted the consolidation of highway law was the Highway Act, 1835. Since that time, of course, highways have changed beyond recognition, and there have been many and far-reaching changes in the law relating to them. Moreover, the whole structure of local government has developed from the time when the parish was the unit of local government.

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Local authorities are now the bodies involved in responsibility for, and administration of, highways. It is not surprising that a century of growth and development in this field has left a legacy of legislation that is complex and, in some respects, archaic, obsolete and anomalous. The task of those whose job it is to administer highway law has become needlessly difficult. Shortly before World War II a start on drafting a Bill to consolidate highway law was made by a Committee under the chairmanship of the late Lord Amulree. The intervention of the war, unhappily, brought the work of the Committee to a premature end.
My Lords, this Bill seeks to reduce to intelligible and workable form a mass of legislation relating to highways, bridges and streets in England and Wales which has grown up in somewhat haphazard fashion over the years. It replaces in their entirety some thirty Acts of Parliament, and replaces as many more in part. Enactments designed to regulate traffic are not within the scope of the Bill. To have included them would have increased the size of the Bill unmanageably. As it is, it runs, as I have said, to over 300 clauses and 26 Schedules. Highway law in Scotland differs in many respects from that in England and Wales and is a separate study in itself. It might interest your Lordships to know that the earliest of the enactments repealed and reproduced in the Bill is a Statute of 1530 which makes provision in connection with the repair of bridges. Indeed, some of the earliest of what might be called highway law is to be found in Magna Charta itself.
I have already said that, although this is a Bill to consolidate the law, it does make some amendments of the law. The scope of the amendments made by the Bill is indicated by the terms of reference of the Committee, which show, I think very clearly, the limited degree of amendment which the Bill seeks to make to highway law. They were enjoined, inter alia, to consider
"what amendments not of substantial importance… are desirable in connection with the consolidation, either to improve the form of the law or for the removal of anomalies, inconsistencies and ambiguities, for abrogating provisions which are obsolete or otherwise unnecessary or for modernising procedure".
The Committee have reported that in their opinion the draft Bill as revised by them satisfactorily achieves the consolidation
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of highway law—and these are the material words in this context:
"with such amendments only as are within our terms of reference"
It embodies no amendment of the law of such importance that it ought to be separately enacted.
I will mention now two or three of the most important of the amendments. It has long been a rule of Common Law that the duty to repair the highways in any area is upon the inhabitants at large of that area. The Committee were of the opinion, and I think rightly, that to perpetuate this rule in the circumstances of to-day would be absurd, and they agreed that the responsibility for repairing highways should in terms be placed upon the highway authority, who are usually the local authority. Although this unfortunately has resulted in the disappearance of the time-honoured expression "highways repairable by the inhabitants at large", I think that the expression "highways maintainable at the public expense" used in the Bill is more readily intelligible and more accurately reflects the position.
Another chance which the Bill seeks to make is the abolition of indictment as a means of enforcing the repair of highways. These changes mean that the inhabitants of a district will no longer be liable to have criminal proceedings taken against them if a road in their neighbourhood falls into disrepair. My Lords, I do not suggest that the inhabitants have ever—at any rate in recent years—regarded this possibility as a very real one. Indeed, it is for this reason that we regard the disappearance of the sanction as permissible. Nor, of course, does it mean that we may now expect the roads of the country to fall into disrepair. The law already provides means of enforcing the repair of the highways by those whose duty it is to do so, and these provisions are retained in the Bill.
A third change made by the Bill is in the general law relating to the stopping up of unnecessary highways. A simplification and modernisation of procedure has been achieved while retaining safeguards for the public rights involved. Most of the other changes effected by the Bill, though numerous and complex, are on points of even less substance than these, such as the repeal of the provision against bull baiting, windmills, and so on.

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Lastly, many organisations have made this Bill the opportunity to suggest what they regard as desirable but substantial changes in the law. My right honourable friends have taken the view throughout that the Bill is not the occasion for a large scale overhaul of highway law and that the existing law must first be consolidated. A combination of the two processes in this case would be an immense task which it would not be right to ask Parliament to undertake.
I commend this Bill to your Lordships as a measure which, by seeking to restate in intelligible, unambiguous and accessible form the present law relating to highways, will be of immense practical value to those concerned with the administration of this branch of the law. In view of the fact that, as your Lordships will see from the following Motion, I propose to ask the House to agree to this Bill's being referred to a Joint Committee of both Houses, I hope that your Lordships will agree with me that there would not seem to be reason for much discussion at this stage. I beg to move this Bill be read a second time.
Moved, That the Bill be now read 2ª.—(The Earl of Gosford.)
7.7 p.m.
LORD SILKIN: My Lords, I will gladly accede to the last remarks of the noble Earl and not ask the House to indulge in much discussion, but I think a few words would be appropriate, if only to associate this side of the House with our gratitude to the Committee which was set up in February last year for the purpose of looking into the draft consolidation provisions. We owe a deep debt of thanks to all those who undertake unspectacular tasks of this kind; sometimes they get the thanks of the House and sometimes it is forgotten. They do a really good job. Without the help of this Committee it would have been impossible to carry out this piece of legislation. They have carried through their task with great speed: having been appointed in February, 1958, within less than a year they were able to report to Parliament. I should also like to congratulate the Government—this must not be taken as a precedent—on the speed with which they have introduced this legislation.
I fully agree with the noble Earl that the changes which have been made are
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of a minor character and really bring a note of realism into something which has been out of date for many years. They will make no practical difference to the law on the subject. I think that all Acts of consolidation are of immense value to the person who has to look up the law. Hitherto, as I understand it, if one wanted to ascertain any point on highway law one might have had to look up some forty different Acts of Parliament, if one could have found them, and one might have missed the very point one was looking, for. In this monumental Bill—and it must be one of the longest Bills I have ever seen, with its 311 Clauses and 26 Schedules—at least one has the whole of the law relating to highways, apart from the regulation of traffic, in one volume.
Unfortunately, the noble Earl has already given a hint that this will not endure for long, because in the view of local authorities there are a number of improvements in the highway law that are called for. No doubt we shall begin the new process of having more legislation and more measures on the subject, and possibly by the year 2035 or thereabouts we shall need another measure of consolidation. But I do not think we need spend a great deal of time in worrying about that. I hope, however, that in so far as the law requires improvement the introduction of this Bill will not impede the necessary improvement of the highway law. This Bill will no doubt go through quickly, and I hope that, so far as the local authorities feel that improvement in the law is desirable, they will, if the case is made out, get the necessary legislation.
I should like to ask the noble Earl one question about the procedure. If the Motion he is to put to the House is carried, as no doubt it will be, this Bill will go to a Joint Committee. Could he explain to the House what happens then? The Committee will no doubt make recommendations which will come back to the House. What are the rights of Members of the House in connection with the Bill? In other words, will the Committee supersede the rights of the Members themselves to introduce Amendments to the Bill if they so desire? For instance, we may conceivably want to restore this provision about inhabitants at large. What will happen then? Will there be a full opportunity for the House

869
to discuss this Bill after we have had the benefit of the services of this Joint Corn-mince? Subject to that, we are glad to welcome this Bill, as we welcome all measures of consolidation, and we wish it a speedy passage.
7.12 p.m.
THE EARL OF GOSFORD: My Lords, I should like to thank the noble Lord for his acceptance of this Bill and for the kind remarks he has made, not only about the Committee who sat on this Bill but also on the speed with which the Government have pushed it along. I do not think that this Bill will impede any measures for improvement if and when they appear to be necessary. I am informed that the noble Lord can rest assured that this Bill will go through all the normal stages when it has been to the Committee of both Houses: there will be a Committee stage in this House in the normal way.
On Question, Bill read 2ª.
THE EARL OF GOSFORD THE EARL OF GOSFORD, My Lords, I rise to move the second Motion standing in my name on the Order Paper.
Moved to resolve, That it is desirable that the said Bill be referred to a Joint Committee of both Houses of Parliarnent.—(The Earl of Gosford.)
On Question, Motion agreed to: Ordered, That a Message be sent to the Commons to communicate this Resolution and to desire their concurrence.

  SMALL FARMERS' AID SCHEME
  SMALL FARMERS' AID SCHEME