Sitting of 20 July 1959

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  JOSEPH ROWNTREE MEMORIAL TRUST BILL [Lords]
  Read the Third time and passed, with an Amendment.

  FALMOUTH DOCKS BILL [Lords]
  Queen's Consent, on behalf of the Duchy of Cornwall, signified.
  Bill read the Third time and passed, with Amendments.

  BOOTLE CORPORATION BILL [Lords]
  As amended, considered; to be read the Third time.

MILFORD HAVEN (TIDAL BARRAGE) BILL [Lords]
Mr. Speaker: Mr. Donnelly.
Mr. Donnelly: I wish, Mr. Speaker, to substitute for the words that stand on the Notice Paper another Motion which reads as follows, and I understand that I can only do this—
Mr. Speaker: I am afraid that would be out of order. Such a Motion requires notice. The hon. Member must put his amended form of Motion on the Notice Paper so that the House is aware of it.
Mr. Donnelly: I understand, Mr. Speaker, that one can move an alternative Motion by leave of the House.
Mr. Speaker: I am afraid not. It requires notice, unless the hon. Member wishes to move this Motion.
Mr. Donnelly: In those circumstances, Sir, I beg to move,
That the Milford Haven (Tidal Barrage) Bill [Lords] stand re-committed to the Committee of Selection with an Instruction that the said Bill be not referred to the Committee to which it was previously referred.
Hon. Members: Object.
Mr. Speaker: What day?
Mr. Donnelly: Tomorrow.
On a point of order. May I ask the Chairman of Ways and Means when he proposes to allocate time for the Motion to be debated in view of the objection being sustained?
The Chairman of Ways and Means: I am afraid I cannot answer that question.
Mr. D. Howell: Further to that point of order. Could you advise us, Mr. Speaker, not only on the question of this Bill—the Corporation Bills of Lancaster and Halifax have received similar treatment—what right we have to raise matters when an entirely new procedure seems to be brought into Private Bills stopping the cross-examination of witnesses and behaving in a manner which some of us feel is not in the best interests of the House?
Mr. Speaker: Speaking offhand, I think that the only way for the hon. Member to do it is by Motion.
Mr. Donnelly: Further to that point of order. I respectfully submit, Mr. Speaker, that there is a very important principle involved here which, in view of the Summer Recess coming along, raises certain problems of procedure in the House. It is not a question of prejudging these Bills but of the procedural question which is involved. Could you give us your guidance, Mr. Speaker, as to how we can examine the procedural issue as far as the House is concerned?
Mr. Speaker: My first suggestion was—it is the only one which occurs to me—to put down a Motion and have the matter properly discussed in debate. I can see no other way.
Mr. Fletcher: Further to that point of order. May we take it, Mr. Speaker, that if such a Motion is put down time will be made available to debate it? What troubles us is that the Chairman of Ways and Means said that he could not indicate now when time could be given to debate my hon. Friend's Motion. What the House would be interested to know is whether some time before the

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end of the Session time would be made available for such a debate.
Mr. Speaker: That is not a matter for me. I cannot say when these matters will be attended to.

MILFORD HAVEN (TIDAL BARRAGE) BILL [Lords]
  BRITISH TRANSPORT COMMISSION ORDER CONFIRMATION BILL
  Considered; to be read the Third time Tomorrow.
ORAL ANSWERS TO QUESTIONS
  MINISTRY OF HEALTH

    Maternity Services (Report)
    Mr. F. Noel-Bakerasked the Minister of Health whether he has yet completed his consultations on the Cranbrook Committee's recommendations; which of its recommendations he will implement; and to what extent this will improve maternity services in Swindon.
    The Minister of Health (Mr. Derek Walker-Smith): As I said in the recent debate on the National Health Service, memoranda prepared in consultation with the appropriate organisations will shortly go out commending to hospital and local health authorities, executive councils and general practitioners many of the recommendations in this Report. I will send the hon. Member copies. It will be for the authorities and practitioners concerned to consider the maternity services at Swindon in the light of these memoranda.
    The recommendations concerning the maternity medical services provided by general practitioners, especially those about the future of the obstetric lists, are still under consideration, in consultation with the interested bodies.
    Mr. Noel-Baker: Has the Minister been in touch with the regional hospital board about conditions in Swindon, which are particularly inadequate at the present time? Has he any real hopes that there will be an improvement during the course of the next few months?
    Mr. Walker-Smith: As the hon. Gentleman will know, my medical and
    844
    nursing team visited Swindon in January. There are difficulties there, as in other parts of the country, but I am advised that there is no very serious shortage of midwives there. I certainly hope that Swindon will participate in the advantages which will accrue from the recommendations in the circulars.
    Dr. Summerskill: In view of the fact that the Cranbrook Report was published last February, can the Minister say when he will make his recommendations, having regard to the importance of the obstetric list and the need to make more hospital beds available?
    Mr. Walker-Smith: There are two matters here, as the right hon. Lady knows. There are the circulars containing the recommendations which I am now commending to the authorities concerned, and these are coming out very soon indeed. The question of the obstetric list is still under discussion with the professional organisations concerned.

    Elderly and Disabled Persons (Homes)
    Captain Pilkingtonasked the Minister of Health how many homes for old and disabled persons existed at the end of 1951 and at the end of June, 1959.
    Mr. Walker-Smith: One thousand, six hundred and forty-five and about 3,160, respectively.
    Captain Pilkington: Can my right hon. and learned Friend give an assurance that the Government will carry this good work on in the 'sixties?
    Mr. Walker-Smith: Yes, I am happy to give my hon. and gallant Friend that assurance.
    Mr. Blenkinsop: Will the Minister tell his hon. and gallant Friend also the number of old people there are now compared with 1951, and, perhaps, the number of old people who are dying now as compared with 1951—all interesting information?
    Mr. Walker-Smith: I am happy to say that it is, of course, a fact that in the last eight years the expectation of life of people in this country has increased. People are living longer, they are living in better conditions, and more have been housed in these homes.

    Pharmaceutical Firms (Research)
    Dr. D. Johnsonasked the Minister of Health whether he has taken note of the comments of paragraph 226 of the Report of the Hinchliffe Committee in which a distinction is made between pharmaceutical firms which undertake genuine research and those which make large profits on new preparations, which are not therapeutically superior to those already in existence, and devote no part of their profits to significant research; and what steps he is taking to make pricing arrangements with the pharmaceutical industry so that the fullest encouragement is given to firms which embark on genuine research expenditure
    Mr. Walker-Smith: Yes, Sir. As my hon. Friend will know, the Committee recognised that the present price agreement, which is in operation for a trial period, has features which allow for the need to encourage research. This agreement is at present under review, and in considering the arrangements for the future I shall certainly keep in mind the importance of encouraging genuine research.
    Dr. Johnson: I thank my right hon. and learned Friend for that reply. Will he press the matter vigorously, because the same paragraph gives some rather striking figures to the effect that, whereas £7 million annually is spent on research in Switzerland and £43 million is spent in the United States, only £4 million is spent in this country. Does he agree that there is a need for a fundamental change in this country to make up this kind of difference in the figures?
    Mr. Walker-Smith: We have, of course, to have regard to the findings of the Report as a whole. The possibility will certainly be explored in the review now in progress of relating permissible prices more directly in some way to a firm's research effort in any future scheme. This is a complex matter involving many considerations.
    Mr. Snow: In giving that answer to a Question which refers to "genuine research", has the Minister had in mind fundamental basic research or development research, which is a very different matter? What weight does he give to the fact that certain companies market
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    pharmaceutical supplies at very high prices in this country when the basic research has been done abroad?
    Mr. Walker-Smith: The basic research of, for example, subsidiaries of United States companies is very often, of course, carried out in the United States. That is one of the complicating factors. As the hon. Gentleman knows, the present agreement does not directly relate prices to research. The possibility of relating them more directly is one of the things being taken into account in our present review.

    Poliomyelitis
    Mr. E. Fletcherasked the Minister of Health what advice he gives to local authorities in areas in which an unusually large outbreak of poliomyelitis occurs.
    Mr. Walker-Smith: Local authorities are advised by their own medical officers of health to whom a medical memorandum was issued in July, 1954, recommending a code of practice on the occurrence of an outbreak of poliomyelitis. My medical officers are always available for consultation and advice.
    Mr. Fletcher: I am sure the Minister knows that there has been a serious outbreak of poliomyelitis in Islington. Will the right hon. and learned Gentleman bear in mind that statistics show that the risk is very much less in the case of children who have been immunised, even if they have had only two injections, compared with those who have not been immunised? In view of this, will the Minister do what he can to recommend the greatest possible use of immunisation among children?
    Mr. Walker-Smith: I have noted with regret these cases in Islington. In the early stages of the outbreak, there was a very good response to the vaccination programme in Islington, but I am sorry to say that it has shown signs of falling off. I hope that what the hon. Gentleman has said will encourage the response to pick up again.
    Dr. Summerskill: As immunisation is at the moment limited to certain age groups and expectant mothers, are we to take it from what the Minister has said that, in the event of an outbreak, all

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    contacts, irrespective of age, can be immunised?
    Mr. Walker-Smith: I am advised about those who should be vaccinated by the Committee presided over by Lord Cohen of Birkenhead, and I follow its recommendations. The Committee has recommended the priority groups at present eligible for vaccination.
    Mr. Kershaw: Has my right hon. and learned Friend any figures to show the improvement with regard to poliomyelitis outbreaks since the very large scale inoculations and vaccinations started?
    Mr. Walker-Smith: I am happy to say that the general incidence this year is

    —

    Deaths from respiratory diseases

    1938

    1958

    Total

    As per cent. of deaths from all causes

    Total

    As per cent. of deaths from all causes

    England and Wales

    …

    …

    …

    …

    48,222

    10·1

    60,808

    11·5

    Stoke-on-Trent

    …

    …

    …

    …

    358

    11·6

    415

    13·6

    Lancashire

    …

    …

    …

    …

    6,989

    10·9

    8,746

    13·3

    Sussex

    …

    …

    …

    …

    853

    7·8

    1,535

    9·9

    The "respiratory diseases" include influenza, bronchitis, pneumonia, industrial lung diseases and other relatively uncommon causes of death among respiratory diseases, but do not include tuberculosis or cancer of the lung.

    Mental Defectives, Essex
    Mr. Braineasked the Minister of Health how many mental defectives in Essex under and over the age of 16 years, respectively, are now registered as being in need of residential care; whether these figures represent an increase or decrease compared with those for previous years; and what steps are being taken to provide the necessary accommodation.
    The Parliamentary Secretary to the Ministry, of Health (Mr. Richard Thompson): At the end of 1958, 136 mental defectives under sixteen and 158 aged sixteen or over were reported by the Essex County Council as in need of hospital care. These figures represent a decrease compared with previous years for those under sixteen but an increase for those of sixteen or over. The regional hospital board has
    very low. The national rate is between I and 1½ per 100,000 of population.

    Respiratory Diseases
    Mr. Ellis Smithasked the Minister of Health the estimated percentage of those who died through respiratory diseases throughout the country and for Stoke-on-Trent, Lancashire and Sussex, and the totals, respectively, for the years 1938 and 1958.
    Mr. Walker-Smith: As the Answer contains a number of figures, I will, with permission, set these out in the OFFICIAL REPORT.
    Following are the figures:
    provided 513 additional beds for mentally defective patients since 1948, the majority of which are occupied by patients from Essex, and it is hoped to provide a further 170 beds within the next two years. In addition, the county council is considering the provision of some accommodation for cases needing residential but not hospital care.
    Mr. Braine: While it is, of course, good news that the number of child mental defectives has decreased, the overall figure has. I understand, increased and there are still children in the county, in my constituency in particular, for whom accommodation is unable to be found. Will my hon. Friend ensure that effort is made to speed up the action which the county authority apparently contemplates taking?
    Mr. Thompson: Yes, Sir.

    Dental and Ophthalmic Charges
    Mr. Blenkinsopasked the Minister of Health whether he will make a further statement regarding the future of dental treatment and ophthalmic charges.
    Mr. Walker-Smith: No, Sir, but I shall, of course, keep under consideration all relevant circumstances, both economic and social, relating to the financing of the Health Service.
    Mr. Blenkinsop: Does the Minister not remember that it was at the beginning of 1956 that the Guillebaud Committee recommended that the dental treatment charges should be the first consideration for removal and that the ophthalmic charges should come second? After all this passage of years, is he not prepared to say that at least some steps have been taken to get rid of the charges?
    Mr. Walker-Smith: As the hon. Member knows, the dental treatment and the glasses charges had a social purpose as well as a financial purpose. Therefore, it is necessary to consider these matters in the context of all these factors.
    Dame Florence Horsbrugh: In considering relieving the dental charges, will my right hon. and learned Friend ensure that at the same time the dentists are not taken from the school dental service, as happened before?
    Mr. Walker-Smith: As my right hon. Friend knows, one of the relevant social purposes in this context was the shortage of dentists for the school service at the material time.
    Mr. Blenkinsop: Does the Minister's reply mean that he does not accept the Guillebaud Committee's recommendation about the withdrawal of the dental charges?
    Mr. Walker-Smith: The hon. Member has had three years or so to put Questions on the Order Paper relating to the Government's attitude to the Report of the Guillebaud Committee. If he cares to put a Question down, I shall be happy to answer it.

    Industrial Health Service, Slough
    Mr. Brockwayasked the Minister of Health what provision is being made to enable the Occupational Health Service at Slough to maintain and extend its work.
    Mr. R. Thompson: The Slough Industrial Health Service is a voluntary organisation which is not in the National Health Service, and I have no information about its proposals for future maintenance and extension.
    Mr. Brockway: Will the Parliamentary Secretary discuss this matter with his colleagues in the Ministry of Labour and National Service who have recently visited this hospital? Is it not the case that this service is doing unique work in research on the effects of noise and of heat and dust, and is doing it for industry throughout the country in connection with leading hospitals? Should there not be some Government assistance for this valuable effort?
    Mr. Thompson: I have no precise information about any research activities of the Slough Industrial Health Service in this context. As the hon. Member indicated, this is primarily a matter for my right hon. Friend the Minister of Labour and National Service. I will certainly keep in touch with him on this subject.

    Preludine
    Mr. Abseasked the Minister of Health (1) whether, in view of the dangerous effects of taking the drug preludine, he will include this drug upon the schedule of drugs which may be sold only on medical prescription;
    (2) whether he will cause an inquiry to be made as to the physical and mental effects upon persons who take the drug preludine; and if he will publish a report on the findings.
    Mr. W. T. Williamsasked the Minister of Health (1) what representations he has received, and from whom, regarding the unrestricted sale by chemists of the drug preludine without the need for medical prescription; and if he will make a statement;
    (2) what evidence he has of addiction to the drug preludine and its effects upon persons taking preludine tablets; and what action he proposes to take to control its sale.
    Mr. Walker-Smith: I have received representations from an hon. Member and one other person about the use of this drug. It is among those which are being considered by the Interdepartmental

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    Committee on Drugs of Addiction in relation to its habit-forming characteristics.
    Mr. Abse: Is the Minister aware that this drug, which is being sold as slimming tablets in chemists' shops throughout the country, has already precipitated at least one murder and many acts of violence, all of which are known to the police and to the prison medical authorities? Does he not think that he should take immediate action, or is he waiting for another murder to be committed before he takes the action required?
    Mr. Walker-Smith: There is nothing about murder in any of these four Questions, and I am not aware of the facts adduced by the hon. Member in that regard. In general, however, apart from the Committee to which I have referred, I am considering whether there is need for some further measure of control of drugs which do not come within the scope of the Dangerous Drugs Act, nor are poisons, but the indiscriminate use of which may entail risk.
    Dr. Summerskill: As I believe this drug was produced by a non-British firm, can the Minister say whether the clinical trials were conducted in this country?
    Mr. Walker-Smith: Not without notice, but I will make inquiry for the right hon. Lady.

    Elderly Persons (Health and Welfare Services)
    Mr. Blenkinsopasked the Minister of Health whether he will carry out a review of domiciliary health and welfare services for the elderly that have been developed since the publication of the Boucher Report.
    Mr. Walker-Smith: I keep in close touch with developments in this service through my medical staff and regional officers and I do not consider that a further special review is needed at this time.
    Mr. Blenkinsop: Does the right hon. and learned Gentleman not feel that, in view of the great value of this Report and the great importance of the services whose development it recommended, it is desirable to have a further check-up to see exactly what has been done and
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    to publish the information for the help of authorities generally?
    Mr. Walker-Smith: I am satisfied that the local authorities are continuing to develop the domiciliary health and welfare services on the lines which I have commended to them following the survey in question. There is, I am glad to say, a lot of evidence of the progress which has been made following that action.

    Chiropody
    Mr. Blenkinsopasked the Minister of Health how many local authority schemes for chiropody services that include provision for domiciliary treatment have been submitted to him for approval to date.
    Mr. Walker-Smith: All the eight schemes which have so far been formally submitted for my approval include provision for domiciliary treatment.
    Mr. Blenkinsop: Will the Minister do something to give publicity to these schemes so that there can be more general information for the sake again of other authorities who are now considering the matter and how best it can be carried out?
    Mr. Walker-Smith: I think there is a general understanding of these matters, but I will certainly give consideration to the hon. Member's suggestion.

    Dentists, Essex
    Mr. Sorensenasked the Minister of Health what is the estimated shortage of dentists in the County of Essex and, in particular, in the Borough of Leyton.
    Mr. R. Thompson: I regret that no such estimate is available.
    Mr. Sorensen: Will the hon. Gentleman take steps to get the information, because it is of some public importance and significance?
    Mr. Thompson: I am bound to say that I understand that the Essex Executive Council has received very few complaints indeed of the effect of any shortage of dentists in Essex or in Leyton, in particular.

    Wholemeal Bread
    Mr. Sorensenasked the Minister of Health if his attention has been drawn to public anxiety arising from recent

    853
    scientific pronouncements on the amount of strontium in wholemeal bread; and if he will make a statement to remove public misconceptions as to the continuing value of this bread.
    Mr. Walker-Smith: There is no ground for anxiety. The Report on Strontium 90 in the Human Diet in 1958 by the Agricultural Research Council mentions that the effect of substituting wholemeal bread for white bread in an otherwise average diet would be to raise the ratio of Strontium 90 to calcium in the total diet approximately from 6 to 9 strontium units. I am advised that this higher figure would be a long way from giving grounds for concern about human health.
    Mr. Sorensen: May I ask the right hon. and learned Gentleman whether he feels that the statement which has appeared in the Press has given rise to some misconception, and what steps he has taken to remove this very absurd misconception of harm which may be done to those who consume this kind of bread?
    Mr. Walker-Smith: I think that the Question which the hon. Gentleman has asked and the Answer which I have given should go a long way towards correcting any misapprehension which may exist.

    Protection of Children (Drugs)
    Mr. Grimondasked the Minister of Health if he will take steps to stop or discourage the production of drugs in gay and attractive bottles and capsules likely to make children think they are sweets.
    Mr. R. Thompson: I do not think this would be either practicable or effective. The right solution is for all drugs to be kept out of the reach of children.
    Mr. Grimond: Is the Minister aware that several doctors have pointed out to me that they do receive drugs which are clearly got up in such a way that children could mistake them for sweets and that that may have serious results? Can he not give some publicity to this and to those who produce drugs in this form?
    Mr. Thompson: I think that what the hon. Gentleman has said today will go some way towards meeting the publicity
    854
    point, but I do not know of any drug bottles which are made to look particularly attractive.

  HOSPITALS

    Donations and Bequests
    Dr. D. Johnsonasked the Minister of Health whether he will draw the attention of regional hospital boards and hospital management committees to the fact that Sections 59 and 60 of the National Health Service Act permit funds received by them by way of donations or bequests to be used for the provision of additional facilities or accommodation; and if he will take appropriate steps to encourage them in the formation of voluntary committees for the purpose of stimulating the collection of funds on a local basis for such purposes.
    Mr. Walker-Smith: I am sure that all boards and committees are well aware of their powers in relation to non-Exchequer funds and of the value of encouraging local voluntary help like that given by Leagues of Friends.
    Dr. Johnson: Although the boards themselves may be aware of it, does my right hon. and learned Friend realise that there is a great deal of misconception among the public generally—in which, I have to admit, I myself shared—in regard to the potential use of funds voluntarily donated to hospitals? Will he take prompt measures to dispel any such misconceptions so that funds from voluntary subscriptions can be tapped in the way they were tapped in the past, before the Health Service came in?
    Mr. Walker-Smith: The purposes for which non-Exchequer funds held by hospital authorities can be used are defined in the National Health Service Act. In addition, there have been several memoranda of guidance which have made it clear that non-Exchequer funds as well as Exchequer funds may be used for capital works.

    Out-patients Department, Stoke-on-Trent
    Mr. Ellis Smithasked the Minister of Health (1) if he will state the dates upon which the hon. Member for Stoke-on-Trent, South was promised that consideration was being

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    given to the site upon which the new out-patients department hospital at Stoke would be built; who have been consulted about the site; on what dates the consultations took place; and why the promise made to the hon. Member for Stoke-on-Trent, South about the site has not been implemented;
    (2) if he is aware of the disappointment and concern of the trade unions and Mineworkers' Federation on the lack of urgency over the provision of the proposed new outpatients hospital which will serve the city of Stoke-on-Trent, North Staffordshire; where the responsibility for the delay rests; and if the matter will now be treated as one of urgency.
    Mrs. Slaterasked the Minister of Health (1) what committees or organisations are now being consulted on the plans for the proposed out-patients department at Stoke-on-Trent;
    (2) how long it is likely to take to finalise the plans for the new out-patients department at Stoke-on-Trent.
    Mr. Walker-Smith: This project is one of the major schemes which I announced on 6th December, 1957, and I then invited the regional hospital board to proceed with planning it. This has proved a complicated matter, owing to the need to avoid unnecessary and expensive duplication of services, and is not yet complete; but I can assure the hon. Members that it will proceed as quickly as possible.
    With regard to the other matters raised, I informed the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith), in reply to his Question on 8th December, 1958, that this scheme was under consideration, but I am not aware of any promises made to him about the site. I have received no representations from trades unions other than those conveyed to me by the hon. Members for Leek (Mr. Harold Davies) and for Stoke-on-Trent, Central (Dr. Stross), in January last. Consultations about the scheme have not, so far, taken place outside the hospital service.
    Mr. Ellis Smith: That reply seems to absolve the Minister from personal responsibility. Can he say whether others have been responsible for the delay? Is he aware that the miners, who work the hardest and suffer most from casualties,
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    are very disappointed at the delay, and will he now treat the matter as one of supreme urgency in this great industrial area?
    Mr. Walker-Smith: I quite appreciate what the hon. Gentleman says about the urgency, about the mining population, and also about the characteristics of the area in question. The problem here has been to find a site which is conveniently situated but to avoid the expensive duplication of services, such as laboratories, X-ray facilities, and so on. For that reason, the choice of site has been deferred until the schedules of accommodation are complete. I expect that a final decision will be reached very soon indeed.
    Mrs. Slater: Is the Minister aware that this matter has been going back and forth between his Ministry, the regional hospital board and other organisations for quite a long time and that, when the Members for Stoke-on-Trent met the previous Parliamentary Secretary in, I think, July, 1957, we were then told that it was hoped that plans would be sanctioned that year and working drawings would be started that year? Further, does the Minister realise that the local authority and the local executive council are both very concerned that there is no apparent liaison between the various bodies, and that there seems to be great reluctance on the part of the regional hospital board to have any liaison on a very important project such as this, which will affect people there at present and in the future?
    Mr. Walker-Smith: I am sorry that it has not proved possible to complete the actual plans and working drawings as quickly as had been hoped. This is a complicated matter, for the reason, among others, which I gave. We appreciate the desirability of getting on as quickly as those complications will allow. Machinery has been set up for a joint liaison committee. The committee has not actually met, but it will, no doubt, meet when the regional hospital board thinks that the time is ripe for useful discussions.
    Dr. Summerskill: In view of the fact that the House is to rise for the Recess at the end of next week and hon. Members have heard my hon. Friends raise this matter over the years, can

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    the Minister say, at this stage, where the delay arises? If he ventilates the matter now, it may be that he will be able to expedite matters.
    Mr. Walker-Smith: Within the necessary limitations of Question Time, I indicated in my reply to the hon. Member's first supplementary question the basic difficulty which caused delay. I am fully seized of all the considerations in this matter, and I can assure the hon. Members for Stoke-on-Trent that their case will in no way be prejudiced when we rise for the Recess.

    Out-patient Facilities, North Swindon
    Mr. F. Noel-Bakerasked the Minister of Health what steps he will take to provide facilities for casualties and out-patients in northern Swindon and the Penhill and Rodbourne areas after the opening of the new Princess Margaret Hospital at the southern end of the town.
    Mr. R. Thompson: The Oxford Regional Hospital Board is satisfied that the facilities for casualties and outpatients which will be provided by the Princess Margaret Hospital will be adequate to meet the needs of the whole town, and my right hon. and learned Friend sees no reason to disagree with its view.
    Mr. Noel-Baker: Is the hon. Gentleman aware that his Answer will be thought highly unsatisfactory in Swindon, because very large distances are involved? As I think he knows from the correspondence, many people are very apprehensive about what will happen when the existing casualty facilities in the town close down. Very many people are extremely worried. Will the hon. Gentleman look at the matter again?
    Mr. Thompson: If the hon. Member is mainly worried about transport arrangements to the new hospital involving greater journeys compared with the existing arrangements, I can tell him that the Swindon and District Hospital Management Committee has given consideration to the question and has arranged that, when the first stage of the Princess Margaret Hospital is opened, a special additional half-hourly bus service will be provided from Swindon Town Hall to the hospital.

    New Hospital, Cornwall
    Mr. Haymanasked the Minister of Health whether the sketch plans of the proposed new area hospital for Cornwall have yet been finally approved.
    Mr. R. Thompson: The sketch plans submitted by the South Western Regional Hospital Board for the first stage of the new hospital have now been approved subject to further consideration of the plans for housing resident staff.
    Mr. Hayman: While thanking the Minister for that Answer, for which we have been waiting many years, may I ask how long he thinks it will be before the working plans and bills of quantity are finalised? Will he take into account the statement reported this morning to have been made at the B.M.A. Conference at Edinburgh which states:
    "We are falling behind rapidly in the standards of hospital provision now available in Western Europe"?
    Will the hon. Gentleman do what he can to enable us to have a good hospital in Cornwall soon?
    Mr. Thompson: I cannot tell the hon. Gentleman precisely when building work will start, but I am sure that the preparation of working drawings and bills of quantity, which shows a considerable advance on previous progress, will be welcome to him. A considerable task is entailed and there are details of engineering services to be settled, but we are a stage further on and we shall continue to press forward.

    Mentally Defective Children, County Durham
    Mr. Chetwyndasked the Minister of Health what hospital accommodation is available for mentally defective children in County Durham; what is the waiting list for admission; and what is being done to improve the position.
    Mr. R. Thompson: There are now 400 mentally defective children in hospital in County Durham and 85 on the county council's waiting list. In addition to the expansion of hospital accommodation referred to in my reply to the hon. Member's Question on 10th November, 1958, further work has been authorised at Prudhoe hospital at an estimated cost of nearly £500,000.
    Mr. Chetwynd: In spite of these very welcome improvements, is the hon. Gentleman aware that there is still a grave shortage of accommodation for these people? Will he pay particular attention to the case which I sent to the Minister a few days ago concerning a boy in a children's home who is a menace to the health of the other people there?
    Mr. Thompson: Yes, Sir.

    Mental Patients (Farm Hostels)
    Mr. Oramasked the Minister of Health whether he is aware of the shortage of places in farm hostels for mental patients for whom this kind of accommodation is considered suitable; and what steps he proposes to remedy the position.
    Mr. Walker-Smith: I am not aware of any general shortage. Hospitals authorities appreciate the value of providing this type of accommodation for selected patients, and as part of the development of the community mental health services, there will be an increasing number of local health authority hostels for the mentally disordered.
    Mr. Oram: Is the Minister aware that for over eighteen months I have been in correspondence with the Board of Control about a constituent of mine, Mr. Oxley, who is a patient at Rampton Hospital? It is agreed that this type of accommodation is very suitable for this patient, but no place has been found for him because it is stated that there is a shortage of accommodation. In view of the first part of the Minister's Answer, that he is not aware of any general shortage, will he look into this case if I send him particulars?
    Mr. Walker-Smith: I am familiar with the case of Mr. Oxley, to which the hon. Gentleman has drawn attention. It is a fact that the two hostels in which it was sought to get him accommodation were not in a position to receive him. The alternative proposition at present under consideration is that he should go to South Ockenden Hospital, where daily farm work could be provided for him if he is suitable for it.

    Chester Royal Infirmary (Death)
    Mrs. Whiteasked the Minister of Health in what circumstances the widow of a patient who died in Chester Royal
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    Infirmary, of whom particulars have been sent to him, was permitted to see her husband's body following a postmortem examination before it had been properly laid out.
    Mr. R. Thompson: I am making full inquiries and will write to the hon. Member as soon as possible.
    Mrs. White: While thanking the Parliamentary Secretary for making inquiries, may I ask him whether he would not agree that the shock and distress inflicted on any woman seeing her husband's body in such circumstances is acute? Will he, therefore, take steps to ensure that authorities in charge of mortuaries tighten up their administration so that incidents of this kind do not occur?
    Mr. Thompson: I quite appreciate the hon. Lady's anxiety in this matter, but I think that I must await the reply from the hospital authority concerned, when I will certainly look into the whole matter, with particular reference to the point of view which she has expressed.

    Victoria Hospital, Lichfield (Children)
    Mr. Snowasked the Minister of Health what directions, advice or guidance are issued to hospitals under his control in the matter of the accommodation of children in adults' wards; and whether he is satisfied about the position at the Victoria Hospital, Lichfield, Staffordshire.
    Mr. R. Thompson: I am sending the hon. Member a copy of a memorandum my right hon. and learned Friend addressed to all hospital authorities in February last. With regard to the second part of the Question, I cannot add to the reply given to the hon. Member on 6th July last.
    Mr. Snow: Is the Parliamentary Secretary aware that this matter is causing anxiety locally? Indeed, the Mayor of Lichfield has been considering opening a public subscription fund to try to obtain a ward for these children. There are many undesirable factors and incidents in an adults' ward to which no small child should be subjected. Is the hon. Gentleman aware that no blame attaches to the local hospital management committee, which, in this case, as

    861
    in many others, is subject to the local regional board? Cannot the regional board do something in the matter?
    Mr. Thompson: As I told the hon. Member in reply to his earlier Question, a review of facilities for children in the region is now in progress and the position of the hospital will be considered in the light of it.

    Admissions
    Captain Pilkingtonasked the Minister of Health how many in-patients passed through the hospitals, and how large was the waiting list, in 1951 and 1958, respectively.
    Mr. Walker-Smith: The number of in-patients treated in England and Wales in 1951 was 3,260,000 and in 1958, 3,890,000. The waiting lists at the end of the year were 500,000 and 443,000, respectively.

    Building Expenditure
    Captain Pilkingtonasked the Minister of Health how much money was made available for building hospitals in 1951, and how much in 1958.
    Mr. Walker-Smith: In England and Wales, £8½ million was spent on hospital building in 1950–51 and about £20 million in 1958–59.
    Captain Pilkington: Does my right hon. and learned Friend not agree that the improvement shown in the Answers to both these Questions is a further striking mark of the success and efficiency of Tory Government?
    Mr. Walker-Smith: Yes, I agree with my hon. and gallant Friend. He has done a public service by drawing attention to the gratifying progress which we are making and which we certainly hope to continue to make.
    Dr. Snmmerskill: To have the proper picture, can the Minister tell us how much was spent on housing on bombed sites in 1951?
    Mr. Blenkinsop: How many building trade workers are unemployed now?
    Mr. Walker-Smith: I cannot tell the right hon. Lady without notice, especially as it is a matter for another Minister.

    London Teaching Hospitals (Nurses)
    Mr. Sorensenasked the Minister of Health if he will state the number of nurses, student nurses and part-time nurses in the London teaching hospitals, the average number of patients and the total number of beds available.
    Mr. R. Thompson: As the Answer involves a number of figures, I will with permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    The figures at 31st March, 1959, the latest available, were as follows:

    Nursing Staff

    Numbers

    Trained nurses—

    whole-time

    4,097

    part-time

    357

    Student nurses—whole-time

    7,108

    Enrolled assistant nurses—

    whole-time

    233

    part-time

    64

    Pupil assistant nurses—whole-time

    35

    Other nursing staff—

    whole-time

    377

    part-time

    161

    Midwives—

    whole-time

    308

    part-time

    34

    Pupil midwives—whole-time

    273

    Total—whole-time

    12,431

    Total—part-time

    616

    Average number of beds occupied

    13,271

    Total number of beds available

    15,476

    Hospitals, Liverpool (Schemes)
    Mr. Braddockasked the Minister of Health if he is aware that the United Liverpool Hospitals are still awaiting his sanction to proceed with a scheme to provide steam and hot water services to three hospitals in the centre of Liverpool, that correspondence, etc., has been, going on since 1950, and that the matter is now very urgent; and when the board may expect a definite decision on this matter.
    Mr. R. Thompson: My right hon. and learned Friend has written to the board of governors authorising their acceptance of a tender for the supply of boilers and the preparation of working drawings and bills of quantities for the remaining works.
    Mrs. Braddock: Is the Parliamentary Secretary aware that the Board is very

    863
    pleased that there has been a hurry-up since this Question was put on the Order Paper? Is he aware that these hospitals are in the central area of the city and that had it not been that they were under the control of the Government there would have been action taken by the Medical Officer of Health of Liverpool because of the Clean Air Act and the amount of smoke that has been coming from these chimneys for such a long time? Will the Parliamentary Secretary look at this case personally to see whether it is possible to prevent this sort of delay taking place in very important schemes in the City of Liverpool?
    Mr. Thompson: I appreciate what the hon. Lady has said. Of course, this is a very large and complex scheme involving the expenditure of £179,000. I would not want the House to think nothing has been done at all. In fact, work to the value of more than £40,000 has already been carried out, and I will endeavour to see that the process is kept up and speeded up.
    Mrs. Braddockasked the Minister of Health when the Eastern Group Liverpool Hospital Management Committee can expect to receive sanction to proceed with the modernisation of tuberculosis and venereal disease wards at Newsham General Hospital which was first requested in January, 1958.
    Mr. R. Thompson: My right hon. and learned Friend received working drawings and bills of quantities from the regional hospital board on 7th July last. These are being examined urgently and authority to proceed will be given as soon as possible.
    Mrs. Braddock: Is the Parliamentary Secretary aware that this matter has been going on for two years, that the venereal disease and tuberculosis wards in this old institution are really shocking and not fit for patients, and that this opinion is agreed by everybody responsible, both the committee and the board? Will he, therefore, see that there is a move on in dealing with this matter?
    Mr. Thompson: I will do my best, but I do not think there has been any material delay in considering the scheme either at the regional hospital board
    864
    level or in my Ministry. The original estimate was for £24,000. It is now estimated to cost £85,300. Naturally, in view of that increase, we have got to look at all the details very carefully indeed.

  NUCLEAR TESTS
  Mr. Healeyasked the Secretary of State for Foreign Affairs (1) to what extent it is his policy to make the proposed agreement for a nuclear test ban between Great Britain, the United States of America, and the Union of Soviet Socialist Republics dependent upon the accession of other Governments;
  (2) what steps he intends to take to secure the accession of other Governments to the proposed agreement between Great Britain, the United States of America and the Union of Soviet Socialist Republics for a ban on nuclear tests.
  The Minister of State for Foreign Affairs (Mr. D. Ormsby-Gore): The purpose of the Geneva Nuclear Tests Conference is to negotiate a treaty for the world-wide discontinuance of nuclear weapons tests under effective international controls. Therefore, all three Governments represented at this Conference have recognised the desirability and the need for other Governments to accede and we confidently expect that they will do so. Meanwhile, the first thing is to get an agreement between the three Powers on a treaty to which other Governments can accede.
  Mr. Healey: This is a most disappointing and worrying reply. We have always been given to understand that the three existing nuclear Powers were planning a treaty by which they themselves would stop tests. Am I to understand that if any other country starts testing, as now France has announced she intends to do, any agreement on stopping tests by Britain, America and Russia will automatically become null and void?
  Mr. Ormsby-Gore: No. That is not the case. It would not become null and void if another country carried out tests. That is not part of the treaty.
  Mr. Paget: Is the right hon. Gentleman wise when has says he confidently expects that General de Gaulle is going to accede to an agreement made by the three Powers without him?
  Mr. Ormsby-Gore: Yes, in time, I think France and every other country will accede.
  Mr. Frank Allaunasked the Secretary of State for Foreign Affairs if he will make a statement about the official proposal to control nuclear test explosions by means of earth satellites.
  Mr. Ormsby-Gore: In the report of last year's Geneva Conference of Experts it was stated that the control system recommended for the detection of nuclear tests did not include specific means to detect and identify nuclear explosions at high altitudes, that is to say at over 30 to 50 kilometres above the earth. The purpose of the recent technical group set up by the present Geneva Conference on Nuclear Tests was to try to fill this gap. The Group started their work on 22nd June and submitted an agreed report to the Conference on 10th July. A copy of this report is available in the Library of the House. The report recommends a ground-based system, as well as the use of earth satellites, as a means of detecting and identifying nuclear tests at high altitudes. It now remains to incorporate, on the basis of this report, suitable provisions in the treaty which is being drafted by the Conference.
  Mr. Allaun: While thanking the Minister of State for that reply, may I ask whether the Government would consider now giving the "go-ahead"? How long would it take to launch these satellites? Since the East-West experts agree on the feasibility of spotting these explosions, would not this be the ideal way of starting co-operation between the Governments and of avoiding the making of competing satellites for warlike purposes, as has been proposed by General James Gavin and others?
  Mr. Ormsby-Gore: Of course, if we could get agreement and it resulted in the joint launching and operation of earth satellites, that would be very much in the interests of world peace, but I am bound to point out to the hon. Member that this report is extremely complicated.
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  It is not necessarily decided that earth satellites should immediately be launched. The ground stations themselves would have quite considerable capability of detecting tests and it might be better to start off with the ground stations only.
  Mr. Frank Allaunasked the Secretary of State for Foreign Affairs to what extent, at their recent meeting, the representatives of the Western Governments discussed the proposed French tests of nuclear weapons; and if he will make a statement.
  Mr. Ormsby-Gore: I presume the hon. Member is referring to the meeting between the Western Foreign Ministers which took place at Geneva on 12th July, French nuclear tests were not discussed at that meeting.
  Mr. Allaun: Will the Government now ask the French to stop their proposed tests? In view of the nine months impasse at Geneva, will the Government end our tests unilaterally and permanently? How can we ask the French to forgo their tests if we insist on going on with our own?
  Mr. Ormsby-Gore: If we reach agreement at Geneva and everybody sticks to that, we shall not conduct any more tests, but, as my right hon. Friend the Prime Minister said last week, we do not think that at this stage any useful purpose would be served by approaching the French Government to stop their tests.
  Mr. Frank Allaunasked the Secretary of State for Foreign Affairs what communication he has received from the United States Government to the effect that they intend to invite British, Russian and other scientists to attend the non-nuclear underground explosions in the United States of America this summer.
  Mr. Ormsby-Gore: None, Sir.
  Mr. Allaun: Will the Minister of State seek such an invitation? Would it not end the suspicion that Washington is trying to manufacture arguments for not agreeing to stop tests?
  Mr. Ormsby-Gore: I do not accept that Washington is trying to manufacture arguments against an agreement for the suspension of tests. But, certainly, these experiments are of considerable interest and we are in touch with the United States.

  UNITED NATIONS SPECIAL FUND
  Mr. Marquandasked the Secretary of State for Foreign Affairs what is the estimated total contribution so far approved by the United Nations Special Fund towards the cost of survey and training projects in Commonwealth countries.
  Mr. Ormsby-Gore: The Governing Council of the United Nations Special Fund has so far approved a total expenditure of $1,165,000 for projects in Commonwealth countries.
  Mr. Marquand: Will not the right hon. Gentleman agree that this decision by the Special Fund is very welcome indeed, and does it not indicate that there exist in the Commonwealth worthwhile projects which cannot be adequately financed by the Colombo Plan and other forms of Commonwealth aid?
  Mr. Ormsby-Gore: Yes, I think that is true.
  Mr. Marquandasked the Secretary of State for Foreign Affairs what contribution Her Majesty's Government have undertaken to make during the financial year 1959 to the United Nations Special Fund; and what contributions have been pledged by Canada, the Netherlands and Sweden, respectively.
  Mrs. Whiteasked the Secretary of State for Foreign Affairs what reply has been made to Mr. Hoffman's request for an additional contribution to the United Nations Special Fund
  Mr. Ormsby-Gore: For the financial year 1959 Her Majesty's Government pledged $1 million to the Special Fund. Canada pledged $2 million, the Netherlands just over $2·4 million and Sweden $21 million. However, I can tell the House that the United Kingdom contribution to the Fund for 1960 will show a substantial increase over the $1 million pledged for 1959.
  Mr. Marquand: In view of the substantial grants already made by the Special Fund to Commonwealth countries, as indicated in the right hon. Gentleman's Answer to my last Question, and in view of the admission he has made that there are many worth-while projects to be financed in Commonwealth
  868
  countries, and in view of the further fact that the United States has promised to match contributions made by other countries by contributions by herself, would it not now be wise greatly to increase the United Kingdom's contribution to the Special Fund?
  Mr. Ormsby-Gore: If the right hon. Gentleman had been listening to me he would have heard that I said that next year's subscription was to be substantially increased over 1959.
  Mr. Marquand: Can we take it from that Answer that it will at least be equal to what Canada, Sweden and other countries have contributed?
  Mr. Ormsby-Gore: The precise figure has not yet been decided, but I can tell the right hon. Gentleman that it will be substantially increased.
  Mrs. White: Yes, but surely the right hon. Gentleman will agree that, whatever promise of reform there may be for the future, for this year, 1959, in which we are told on the highest authority that we have never had it so good, our contribution is derisory measured by the benefits we receive and the contributions made by other countries?
  Mr. Ormsby-Gore: Some of those other countries do not have anything like the demands on their resources that we have on ours in this country.
  Mr. Biggs-Davison: When my right hon. Friend says that our contribution is to be made in dollars, does he mean in the equivalent of dollars? Secondly, is this Fund conducted without excessive administrative expense?
  Mr. Ormsby-Gore: I think the Fund is conducted in a most admirable manner. The term "dollars" is used because that is the denomination in which everybody's contribution is normally announced. Of course, quite a lot of this expenditure may well be in sterling.

  TECHNICAL CONFERENCE ON MEASURES AGAINST SURPRISE ATTACK
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs which of the issues formerly before the Technical Conference on Measures against Surprise Attack are not included

  869
  in the discussions at Geneva between the Foreign Ministers; and, in view of the fact that the Technical Conference is not to be reconvened, what machinery is being devised to deal with these issues.
  Mr. Ormsby-Gore: The right hon. and learned Gentleman is asking me to compare a technical conference with a political one. As he will have seen from the Western Peace Plan tabled at Geneva on 14th May, measures of inspection and observation against surprise attack were proposed in Stage II of the plan. This was done in the context of comprehensive and inter-related proposals covering political settlements and general security measures in Europe. If the Soviet Union would agree to discuss the Western proposals as a whole, no doubt those matters concerning measures against surprise attack on which no decisions were reached at the purely technical conference last autumn would all have to be considered.
  Mr. Henderson: Is it not the fact that the report of the Technical Conference presented to the United Nations several months ago contained a unanimous and strong recommendation that discussion of this problem should be resumed as early as possible? Can we take it that Her Majesty's Government would be prepared to agree to a resumption of an examination of this problem by this Technical Conference?
  Mr. Ormsby-Gore: I do not think it would be much use reconvening the Conference unless we had some agreement on the terms of reference because, after several weeks of negotiation last time, it was quite clear that the Soviet Union was basing its negotiations on an entirely different conception of the terms of reference. Therefore, I do not think that much progress would be made by reconvening this Conference at the moment, but we feel the need to discuss this matter when a suitable forum can be found.

  DISARMAMENT
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs to what extent the disarmament proposals contained in the recent White Paper relating to the Proceedings of the Foreign Ministers' Conference at Geneva
  870
  constitute the disarmament policy of Her Majesty's Government; and whether he will make a statement on the present policy of the Government with regard to general disarmament.
  Mr. Ormsby-Gore: As I told the hon. Member for Ashfield (Mr. Warbey) on 24th June, the Western peace plan, which is set out in Command Paper 797, includes the proposal that the four Powers should
  "in an appropriate forum, initiate discussion of possible staged and controlled comprehensive disarmament measures."
  I should like to take this opportunity to say that Her Majesty's Government's ultimate aim is to obtain a balanced comprehensive agreement under effective international control. No one would overrate the prospects of attaining this objective in the near future, but we hope to pursue disarmament negotiations to this end. We regard the present conference at Geneva on the discontinuance of nuclear tests as a most important starting point on the road to our final objective but we consider there is an urgent need for an effective forum in which to discuss wider measures of disarmament.
  Mr. Henderson: In view of the fact that Her Majesty's Government during the past five or six years have put forward various sets of proposals, may I ask the Minister of State whether he will be more specific? Can we take it that Her Majesty's Government now base their policy on the proposals that they put forward in the Anglo-French Plan of 1954–55?
  Mr. Ormsby-Gore: No, Sir. Our most recent proposals were put forward in 1957 and, as the right hon. and learned Gentleman knows, they received the overwhelming support of the United Nations. What exact proposals we would put forward when a suitable forum can be found to discuss disarmament I am not in a position to state at the moment.
  Mr. Henderson: Does that reply mean that Her Majesty's Government have thrown over the proposals which they set out in the Anglo-French Plan of 1954–55?
  Mr. Ormsby-Gore: I do not think that we have thrown them over but we have substituted for them proposals which we thought would be more likely to be

  871
  acceptable to the Soviet Union. They did not prove to be so, and if a new disarmament forum can be set up no doubt we will come forward with some new proposals.

  AFRICA
  Mr. Bottomleyasked the Secretary of State for Foreign Affairs what official representations he has received from the French Government regarding their proposal that the United Kingdom, France and Belgium and other Powers with territorial interests in African should hold joint talks on African policy and should also consider the question of a joint approach to defence in Africa; and what reply has been considered by Her Majesty's Government.
  Mr. Ormsby-Gore: No such representations have been received.
  Mr. Bottomley: Is the Minister of State aware that it was reported in The Times of 13th July that M. Soustelle, the French Minister, made suggestions such as are contained in the Question? Will the right hon. Gentleman give an assurance that no such arrangements will be entered into without the authority of Parliament?
  Mr. Ormsby-Gore: I have seen the report to which the right hon. Gentleman refers, but, of course, we discuss matters of common concern regarding Africa not only with European Governments but with African Governments.

  MISSILE BASES
  Mr. Warbeyasked the Secretary of State for Foreign Affairs whether, in order to create a favourable atmosphere for the Foreign Ministers' Conference and the forthcoming Summit Conference, he will propose to the United States of America and the Union of Soviet Socialist Republics a standstill on the construction of missile bases outside the territories of those countries for the duration of the Conferences, and for such further period as may be agreed.
  Mr. Ormsby-Gore: No, Sir. I do not believe that such a proposal would have the effect the hon. Member suggests.
  Mr. Warbey: Will the Minister of State take into account the fact that the Opposition has put forward the suggestion that the building of missile bases should be suspended while negotiations are proceeding with the Soviet Union? Would not this be a gesture which might make a great contribution towards creating a more favourable atmosphere for the success of the negotiations?
  Mr. Ormsby-Gore: I am aware that the Opposition put forward a proposal of this kind a year ago, but I have not heard much about it since.

  GERMANY (BRUSSELS TREATY)
  Mr. Warbeyasked the Secretary of State for Foreign Affairs if he will state the terms of the proposed amendment to the Brussels Treaty to permit West Germany to manufacture weapons at present prohibited by the Treaty.
  Mr. Ormsby-Gore: The terms of an amendment are still under consideration.
  Mr. Warbey: Will the Minister of State tell the House when the terms are likely to be complete and whether the draft of them will be made available to the House before the amendment is incorporated in the Treaty, and whether the House will have an opportunity to debate any change in the Treaty before it is ratified by Her Majesty's Government?
  Mr. Ormsby-Gore: That is unlikely. I am afraid that I cannot say when it will be ready, but I can assure the hon. Member that the Amendment when made will not contravene the spirit of the Brussels Treaty since the additional weapons which Germany will be permitted to manufacture will be strictly defensive.
  Mr. Shinwell: Does that answer mean that West Germany would not be permitted in any circumstances to manufacture nuclear weapons?
  Mr. Ormsby-Gore: That is perfectly true. It will not be permitted to manufacture nuclear weapons.

GUENTER PODOLA
Mr. Paget Mr. Paget (by Private Notice) asked the Home Secretary what happened to Guenter Podola during the six hours at Chelsea Police Station which necessitated his removal to hospital on a stretcher, and why his lawyer was denied admittance?
The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler): I am informed that the hospital authorities have agreed that Podola should leave the hospital. He has been charged with murder and is being taken before a magistrate. In these circumstances, it would not be proper for me to say any more.
Hon. Members: Oh.
Mr. Paget: I am not concerned about the charge against Guenter Podola. I am concerned about the people who beat him unconscious. Have charges been preferred against them? If charges have not been preferred against them, the subject matter of this question is not sub judice.
Mr. Butler: The hon. and learned Gentleman has no right to say that this man was beaten unconscious, and he has no proof that it is so. This is a matter which I must now leave to the courts, as he has been charged with murder.
Hon. Members: No.
Mr. Gordon Walker: Is the right hon. Gentleman aware that whereas there was, naturally, universal horror about the cold-blooded murder of a policeman, and determination that whoever is guilty shall be brought to justice, none the less there is widespread feeling that unless even the most unpopular man in the country is given his full rights, our justice is in danger?
Owing to the widespread concern about the rather mysterious circumstances of this man's stay in hospital, would not the right hon. Gentleman do something to allay the concern by perhaps appointing an inquiry?
Could he also say by what authority the police held the man all this time when, apparently, he was not charged and was not brought before a magistrate?
874
Has he been in police custody all the time, and if so, by what authority?
Mr. Butler: The man has been in hospital because he was not in a fit state to be charged. [HON. MEMBERS: "Why?"] Now that he has been charged with murder and the hospital authorities have agreed that he is in a fit state to be so charged, it would not be right for me to make any comment or in any way to prejudice the situation.
Mr. Shinwell: Without sufficient evidence I certainly make no charge against the police, but what I wish to know is this. A statement appeared in the Press—perhaps the right hon. Gentleman can say whether it is accurate or not—that a number of business gentlemen had instructed a solicitor to act on behalf of the man, but that the solicitor was not permitted to see his client. Is that true? If so, why was the solicitor not permitted to see his client?
Mr. Butler: I have ascertained the facts about that. Podola made no request to see a solicitor, either at the police station or at the hospital. [HON. MEMBERS: "Oh."] Perhaps the House would listen. A solicitor called at the hospital, but Podola was not thought to be fit to see him. That was natural, as he was put in the hospital for the reason that he was not fit to be charged. I want to give the House this assurance, that the solicitor will be given every facility to see Podola, and he may see him in the very near future.
Mr. Grimond: Does the Home Secretary deny that Mr. Podola was kept in hospital in police custody, and can he assure the House that it is untrue that he was chained to his bed? Is it also untrue that it was the police who refused permission for a solicitor? Finally, would the right hon. Gentleman consider making an inquiry into the whole circumstances of the arrest, which cannot be fully investigated simply by leaving it to the trial?
Mr. Butler: I think that it could be stated that Podola was in hospital under custody. I am not prepared to go further into the case, as it is sub judice, and I am not, therefore, prepared to answer the question.
Sir G. Nicholson: Will my right hon. Friend go so far as to say what is the

875
nature of the man's illness or injuries that made it necessary for him to be taken to hospital?
Hon. Members: Answer.
Mr. Butler: I do not wish to prejudice this case. I think that it is unusual, Sir, for questions to be allowed when a man has been charged. [HON. MEMBERS: "No."] That is a matter for you, Mr. Speaker, but in my experience it is very unusual. Anything I may say may prejudice the future course of the trial and I am not prepared to do so.
Mr. Speaker: I think that the House ought to listen to the Home Secretary's plea in this regard. It is true that the line between what is sub judice and what is not is sometimes difficult to draw, but it seems to me, speaking from practice, that anything which may be said now about the previous conduct of the police—if that is the line—or the previous experiences of the man since he has been in custody might well have a bearing upon the trial. [HON. MEMBERS: "No."] Order, order. That is my view, and the House would not be well advised to discuss at any length a matter which might conceivably affect the fair trial of a man who has been charged.
Mr. Paget: Further to that point of order, Sir. With great respect, are there not two quite distinct things? There is a charge with regard to the murder of a policeman. There is another matter on which, I gather from the Home Secretary, no charge has been brought, as to an attack on Mr. Podola in which, according to some accounts, he received injuries to his skull and jaw. Surely the attack on him when in police custody cannot possibly have any bearing on whether or not he committed a murder previously, nor can his trial elucidate that question.
In my submission, what this House is concerned with, and concerned with very intimately, is that people should be safe in British police stations, and that the idea that either vengeance or beatings up occur in British police stations is utterly unacceptable. Because the person who was the victim of that beating up is also the subject of a charge, that ought not to prevent us from investigating the beating up, which is eminently our business.
Mr. Speaker: I see the hon. and learned Member's argument but, speaking from practice, I have frequently known it, in a trial of this gravity, to be alleged on behalf of the prisoner that he was ill-treated by the police, because that might have a very strong bearing upon whether any statement he made was admissable or not. That is the point which may come out. If the Home Secretary is asked questions about it at this stage it may have an effect upon the trial—I do not know that it will not; I am merelyasking the House to play safe in the matter. If there has been anything wrong with police conduct in this case, it can be discussed later, but let us give the man a trial free from any argument on our part.
Mr. Gordon Walker: Whereas, naturally, I agree that we must do nothing which would prejudice the trial, Mr. Speaker, is there not a great distinction between the matter of the trial and the question about the actual authority by which the police detained the man? Apparently, on the evidence, they detained him for a number of days although they were only entitled to do so for 24 hours, when he was, according to their own statement, not seriously ill. Therefore, he could have been brought before a magistrate even in hospital. This matter of the authority of the police to hold a man is something which concerns deeply the liberty of the subject, something in which the House is always interested, and which has nothing, as such, to do with the trial and could not possibly prejudice it.
Mr. Speaker: I am not dissenting from the right hon. Gentleman's view as to the importance of this matter, which is one in which the House always takes a very deep interest, a vital interest. I am saying that if the man is charged, all these matters will be in the hands of the judiciary to examine. [HON. MEMBERS: "No."] Yes, if there is any complaint about his treatment by the police it can come up, and I would say that it is safest not to argue the case.
Mr. A. Henderson: Could we not have an assurance from the Home Secretary that when the objection about the case being sub judice no longer exists a full statement, including medical evidence, will be given to the House?
Mr. Butler: I am absolutely satisfied that this man was not beaten up in the police station. I am equally not prepared to go further into the details, largely because I think that it might prejudice the defence, quite apart from the other side of the trial. It would be wrong for me to say any more at present, but, of course, I will pay attention to what the right hon. and learned Gentleman has said.
Mr. E. Fletcher: May I ask the Home Secretary this question? If this man is now, I understand, being charged with murder, would the Home Secretary agree that it is all the more desirable in the public interest that he should have the benefit of legal advice at the earliest possible moment? Would the Home Secretary please explain to the House why this man was denied access by a lawyer who wished to give him advice?
Mr. Butler: As I said before, Podola was thought not to be fit to see a solicitor—[HON. MEMBERS: "Oh."]—and that has been confirmed by the hospital authorities. I am not responsible for the direct police action, but the police must have been governed in this by the view of the hospital authority. But I can assure the hon. Gentleman that from now on there will be no impediment to this man seeing his solicitor. In fact, it may well be that he will see him this afternoon.
Mr. C. R. Hobson: Is the right hon. Gentleman aware that many people would have considered the police to have been extremely foolhardy if they had taken any chances when arresting this convicted criminal, who was known to shoot at sight? However, in view of the allegations by my hon. and learned Friend that Podola was beaten up, will the Home Secretary make a statement to the House as soon as possible, giving the facts as to what happened when Podola got to Chelsea Police Station, because that is the real point?
Mr. Butler: I agree with the hon. Gentleman that the police were dealing with a difficult case. I do not want to say anything to prejudice the man's character, or anything to do with it, now that the matter is sub judice. I cannot add to what I have said. However, I will say this, that the police called in the divisional police surgeon and it was on the divisional police surgeon's advice
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as to the state of the man that he was sent to hospital. Therefore, I do not think that any fault lies at the door of the police.
Mr. S. Silverman: May I ask the right hon. Gentleman whether he will make some facts clear which could not prejudice either the prosecution or the defence and which ought to be made clear now? Would he say at what time and on what date the arrest was made? Would he say at what time and on what date the police surgeon held that the man ought to be removed to a hospital? Will he say on what date and at what time any charge whatever was brought against this man, and on what authority he was held in custody between the moment that he was first arrested and the moment when any charge was brought against him? Is there any authority whatever in the law of our land for holding a man in custody without making a charge?
Mr. Butler: The second part of the hon. Gentleman's question answers the point of the right hon. and learned Gentleman's question, which, I think, deserves an answer. Before I come to that, I would say that the arrest was made at 4 p.m. on Thursday, 16th July, and Podola was taken to St. Stephen's Hospital shortly after midnight, and in between those times he was resting in the surgeon's room.
The other point raised by the hon. Gentleman is governed by Section 38 of the Magistrates' Courts Act, 1952. It provides that when a person is taken into custody for an offence without a warrant and is retained in custody he shall be brought before a magistrates' court as soon as practicable. Where it is not practicable to bring the detained person before a magistrates' court within 24 hours—the point raised by the hon. Gentleman—the officer in charge is obliged by Section 38 (1) of the Act to inquire into the circumstances of the case and to release him on bail.
But by the terms of the Section this obligation to release on bail has no application where the offence:
"… appears to the officer to be a serious one …"
Plainly, therefore, it has no application where the alleged offence is murder.
Mr. S. Silverman: On a point of order, Mr. Speaker. May I draw your attention

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to the fact that the answer which the right hon. Gentleman has given to the House is an answer to a question which was not asked? I did not ask him—I feel that it is most important that we should get this right—what authority there was for holding a man in custody for 24 hours when he was arrested for an offence. I asked him what authority there was for holding a man in custody at all where no charge has been made of any kind. Ought he not to answer that question before the House really knows what is sub judice and what is not?
Mr. Speaker: I think that the right hon. Gentleman has answered that question.
Mr. MacDermot: Can the Home Secretary confirm or deny the statements which have been made in the Press that at no stage did this man make any statement to the police? If it is correct that he has made no statement, can the Home Secretary say how he considers that the question of this man's treatment by the police could possibly become relevant to his defence in the offence with which he has been charged, since Mr. Speaker has pointed out that it is only on a question of the admissibility of a statement that the treatment that a man has received from the police has any relevance in the courts at all?
Mr. Butler: The hon. Gentleman is an able lawyer and I would not disagree with him, but I want to be sure of not making a statement which prejudices this man or the case, however serious we may all think it to be. I am unaware of any statement that he has made to the police.
Mr. Doughty: Is my right hon. Friend aware that the Judges' Rules, published in 1912, and amended, I think, in 1930, deal with the admissibility of statements, and that the question of the time when a man is charged and the question of his treatment in the police station are extremely relevant for decision by the judges or the jury as to whether a statement is admissible? [Interruption.] Perhaps hon. Gentlemen opposite think that they know better what happened in the police station. Those matters are extremely relevant in deciding questions which have to be decided, first, by the judge acting alone and, secondly, by the
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jury. A statement made outside the court may be extremely prejudicial either to the prosecution or to the defence at the trial.
Mr. Butler: In answer to my hon. and learned Friend, that is precisely why I have not gone further in the House this afternoon. I am convinced that I am right to say no more.
Mr. Grimond: May we press the Home Secretary a little further? He has said that he is satisfied that nothing was done improperly, or words to that affect, to this man in the police station. He has said that, whether that is prejudicial or not. Is it not true that the man has made no statement, and, furthermore, that he has not yet been charged? How, then, could his treatment last Thursday be relevant to anything raised now?
Mr. Speaker: Order. I want to be correct about this. I thought I heard the right hon. Gentleman say that this man has been charged with murder. Thai is the whole ground of my objection to further questions on this matter. The House should recognise that if the man is charged it may be a case which carries the most severe penalty known to our law, and this House has always been scrupulously careful not to let its proceedings interfere with those of the judiciary, whose duty it really is, with the jury called for the matter, to determine the innocence or guilt of the man.
Mr. Paget: As you pointed out, Mr. Speaker, if there had been a statement which was being challenged, maybe by the defence, this might have arisen at the trial. The Home Secretary has now told us that there is no such statement. This idea that one can say "sub judice" to hush up something which may be Ministerially inconvenient—
Mr. Speaker: Order. I do not know whether there has been a statement made by this man or not. [An HON. MEMBER: "Neither does the Home Secretary."] I do not know that the Home Secretary knows. What if evidence comes forward later that Podola made a statement and it comes into his trial? Then I think we should all be sorry that we ever raised the matter, or tried to discuss it here. I think that that is the point that we have to consider.
Mr. Abse: The Home Secretary has told us of the circumstances in which the solicitor was unable to see his client. Can the right hon. Gentleman explain why it was that, in view of these circumstances, the solicitor was not permitted to take a doctor along with him, as is a very regular custom in cases where men are under suspicion of murder, when the solicitor is often accompanied by a psychiatrist? Why could that not have been done in this case? There would then have been no possibility of the suspicions which have been aroused.
Mr. Butler: I am not aware that the solicitor asked to bring a doctor with him. If he had asked to bring a doctor the matter would have been different. But now the man who is held under charge will have an opportunity of seeing his solicitor, and that will be the most satisfactory course.
In answer to the hon. and learned Member for Northampton (Mr. Paget), I absolutely repudiate that Ministers or anybody else are trying to hush up anything. I am the police authority, but I have no particular responsibility for this aspect of the case.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. We have had quite enough discussion on this.
Mr. S. Silverman: On a point of order. Surely it is vital to the House's consideration of the matter that we should know whether or not what was done between the moment of arrest and the moment of charge was done under any legal or constitutional authority. It is that which lies at the basis of the whole of the discussion which we have had. Is it not now clear from the Home Secretary's answer that the whole of this custody up to the moment when a charge was made was without legal authority of any kind? Therefore, ought not the
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Home Secretary, who is responsible for the London police, to explain to the House how and why that was allowed to happen?
Mr. Speaker: I think that that all can be thrashed out by the judiciary. [HON. MEMBERS: "NO."] I think that it can, and we had better leave it to the judiciary.
Mr. E. Fletcher: Further to that point of order, Sir. Surely there are two quite separate and distinct matters. It is certainly a matter for the judiciary to decide whether this particular man has or has not committed a murder, but surely we are equally entitled to question the Home Secretary about the behaviour of the police towards a person who has been arrested and detained before a charge is made. Surely, in the interests of public justice and in the interests of seeing that a person charged with murder has the best possible advice, we are entitled to interrogate the Home Secretary and require better answers than we have yet had as to why a person in that predicament was deprived of legal advice at the very moment when he was most in need of it.
Mr. Speaker: The hon. Member is over-simplifying the matter. It is easy to say that these are two separate matters, but in by experience the two impinge upon each other and general discussion, debate and questions, when one does not know what will be said, are dangerous if there is to be a fair trial. That is my feeling. If there is a complaint against the police, all these matters can be probed to the full at another stage.

BUSINESS OF THE HOUSE
Ordered,
That this day Business other than the Business of Supply may be taken before Ten o'clock.—[Mr. R. A. Butler.]

ORDERS OF THE DAY

  SUPPLY
  [24TH ALLOTTED Day]
  Considered in Committee.
  [Sir CHARLES MACANDREW in the Chair]

CIVIL ESTIMATES AND ESTIMATES FOR REVENUE DEPARTMENTS, AND SUPPLEMENTARY ESTIMATE, 1959–60
Motion made, and Question proposed,
That a further sum, not exceeding £50, be granted to Her Majesty, towards defraying the charges for the year ending on the 31st day of March, 1960, for the following Services relating to Aid to Under-Developed Areas, namely:

CIVIL ESTIMATES, 1959–60

£

Class II, Vote 2 (Foreign Office Grants and Services)

10

Class II, Vote 5 (Commonwealth Services)

10

Class II, Vote 10 (Development and Welfare (Federation of Rhodesia and Nyasaland, and South African High Commission Territories))

10

Class II, Vote 8 (Colonial Services)

10

Class II, Vote 9 (Development and Welfare (Colonies, etc.))

10

Total

£50

UNDERDEVELOPED AREAS
3.54 p.m.
Mr. Philip Noel-Baker: The gravest short-term danger to the human race is the present arms race, with the new and fantastic weapons of destruction which it produces every year. But the gravest long-term danger is the poverty of the underdeveloped countries and the still widening gap between the living standards of the richer and the poorer nations of mankind.
This poverty of the "have-not" nations is a world-wide social waste. Our present is impoverished and our future is imperilled by what they are suffering now. In what we call the advanced countries, 400 million human beings live in comparative affluence today, while 1,000 million, perhaps more, live in conditions which we find it hard even to understand.
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In Britain, the infant mortality rate is 23 per 1,000; in India, it is 99; in Brazil, 170; in parts of Asia, it is 250 to 500, one baby out of two dying before it is twelve months old. In Britain, the expectation of life is 68 years; in Brazil, it is 39; in India, 32; in some parts of Asia, under 30.
Last year the United Nations Food and Agriculture Organisation estimated that 58 per cent. of the population of the world ate less than half the protein consumed by the nations we call advanced. In other words, most of the 58 per cent. are hungry from the cradle to the grave. In Bolivia, 68 per cent. of the people cannot read or write; in India, 80 per cent.; in Persia, 90 per cent. The underdeveloped countries are riddled by disease — yaws, leprosy, trachoma, malaria, each killing or crippling or reducing the power to work.
The income per head in the United States is more than 2,100 dollars a year. In 60 of the 83 countries which are members of the United Nations the average income per head is about 120 dollars, less than one-seventeenth of the American standard, and many are below the average. Let us take a melancholy catalogue of countries which we ruled until a dozen years ago. The average income in Ceylon is 110 dollars a year; in Pakistan, 70; in India, 60; in Burma, 48.
We cannot begin to grasp what poverty like that must mean. The really terrifying thing is that the gap between the "haves" and the "have-nots" is still increasing. We are growing richer and many of the poor, thanks to population pressures, are growing poorer still. In the West, we invest an average of £30 per head per annum for new plant and machinery to make us richer. The "have-nots" have £30 a year or less on which to live.
Since 1945, there has been a double revolution in the underdeveloped countries, a revolt against the colonialism of the past—a nationalist demand for self-government and self-determination, now already in many countries attained—and a revolt against the indigence, the ignorance and the suffering of the past. The still widening gap between their standards and ours make that double revolt potentially a most explosive force.

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Here in Britain we have a grave responsibility in the matter. We were the greatest of the colonial Powers—we ruled nearly one-quarter of mankind—and we have a major interest as importers of the primary products which they produce and as exporters of the manufactured goods which they require. Their prosperity and their progress are of vital importance to us now and in the decades to come. Let us remember that two-thirds of all our exports go to the countries from which the primary products come.
How can the economic progress of these backward peoples be achieved? They need health services, roads, railways, better techniques and tools and machines for agriculture. They need the development of their mineral and power resources. They need industry. Above all, they need Western capital, Western experts and Western administrative skill. How can it be given? I believe that here there is a basic cleavage between the two sides of the Committee.
In a 1957 White Paper about Commonwealth development and the United Kingdom rôle the Government said:
"… it is through the investment of privately-owned funds in the Commonwealth that the United Kingdom has made in the past, and should continue to make, its most valuable contribution to Commonwealth economic development."
Everybody wants private investment in the Colonies, and in other underdeveloped countries provided that it is not on terms that mean exploitation. But it is a dangerous delusion to believe that private investment can be for these countries the main instrument of economic advance. Surely the past and the present condition of these countries should teach us that.
There is a second point of difference between the two sides of the Committee. We believe that the investment needed in underdeveloped countries cannot rightly be done without an overall economic plan. I think that it is important that the International Bank has made general surveys of the resources of 14 different countries. Colombia was the first and Libya the last. In every case it got the Governments to set up central boards to prepare a comprehensive economic programme. As the French delegate pointed out in the Economic and Social Council the other day, there
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may be confusion, overlapping and waste unless such planning has been done.
Thirdly, we believe that the public funds required can be best applied, and the economic planning best effected, not by bilateral aid from one advanced to one underdeveloped country, but by a multilateral system such as is now worked on a very modest scale by the international machinery of the United Nations. I do not mean that we should end the bilateral aid already given to our dependent Colonies through commonwealth development and welfare funds, the Commonwealth Development Corporation, and the Colombo Plan. We played a major part in creating and building up these institutions before the United Nations Technical Assistance and the International Bank had seriously begun. Of course, we shah carry them on and hope to increase the C.D. and W. grants above the level of recent years—above the level of 1s. 4d. per head of Ghana's population which I believe it averaged to 1958, and above the 1s. 3d. which was the average for Nigeria.
We hope to free the Commonwealth Development Corporation from the administrative shackles of which its retiring chairman, Lord Reith, so bitterly complained. He complained about the bureaucratic interference of the Colonial Office in its decisions; the high rate of interest it was made to charge; its burden of past losses; and its inability to make grants in aid. As Lord Reith said, the shackles have kept the Colonial Development Corporation's investments in the Colonies far below the level for which Parliament voted and at which they might have been.
But we do not believe that bilateral aid can deal with world poverty, even in the Colonies which we still rule. The White Paper which I quoted ends by saying that we must attract more investment from outside the Commonwealth. That is true and here is proof, if proof is needed. Nine months ago the United Nations created a Special Fund, about which I shall speak again. So far, together with the United Nations Technical Assistance Fund, the fund has pledges of 58 million dollars for 1959. But, already, the Governments of the Commonwealth have submitted to the Director projects that would cost 27 million dollars. Unless I am misinformed, projects for 15 million

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dollars were vetted and submitted by the Colonial Office itself.
That shows, if anything could, that the problem of our Colonies is only part of one great world problem of poverty and it must be dealt with, as in small part it is dealt with now, through multilateral aid administered by institutions of the United Nations.
Looked at in the context of the world problem there are grave objections to the system of bilateral aid. Paul Hoffman, the director of the fund, had experience of administering bilateral aid on behalf of the United States. Years ago he explained its disadvantages. It is harder, he said, for the recipient Government not to react against the donor Government's advice. It is harder for it to carry through desirable reforms which the donor suggests. It feels a kind of colonialist dependence on its benefactor. Moreover, Paul Hoffman said that bilateral aid from one Government, for example, the United States, may become a kind of competition with bilateral aid from another Government, for example, Russia, a competition which may have the strongest political overtones.
Indeed, bilateral aid has a bad name, because it has been used far too freely by both Russia and the United States as an instrument in the cold war. In 1951, an American ambassador said that 10 countries which had defence agreements with the U.S.A. had received 12 times more economic aid than had been given to 11 countries of Asia and the Middle East which had refused such military ties. Quite apart from a deliberate policy of buying military support with aid it would be very difficult to free bilateral aid, as a method of dealing with the world problem, from the suspect taint of power politics.
That is why, when the United Nations started its technical assistance in 1949, it laid it down that the assistance given should never be
"a means of foreign, economic, or political interference in the internal affairs of a country."
There is another not unimportant point. On the bilateral basis, the Kremlin, with its power to enlarge its export surplus, may be a formidable rival. Already, says the United States' State Department, Russia has signed agree-
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ments with 18 underdeveloped countries for a total of 2,373 million dollars' worth of aid. Its terms are very attractive. The Russians built a steel mill in India, at Bhillai. They trained Indians free of cost in Russia. Their rate of interest was 2½ per cent. Repayment will be in Indian rupees. Russia will use these rupees to purchase Indian goods. The steel mill becomes the property of the Indian Government, and not of a foreign company or corporation.
Consider, also, Colonel Nasser's dam. The Soviet Government have proposed changes in the plan suggested by the West. They have saved a great sum on the capital cost. They have reduced the time for its construction from ten years to six years, and it will be a good dam. The Russians are constructing the Bratsk hydro-electric undertaking. It will be the greatest hydro-electric power station in the world, with a capacity nine times that of Battersea power station. This shows that Russia might be a valuable partner in a world-wide co-operative effort, but that if her economic progress goes forward she might become a formidable rival in a competitive struggle in bilateral aid.
There are two further considerations. However attractive the terms, no Government of an under-developed country—least of all Colonel Nasser's—likes bilateral aid. They hate dependence on either Russia or the West. Secondly, bilateral aid is, in any case, failing to do the job. Mr. Hoffman calculates that a major new effort is now required; that a minimum of £10,000 million or 30,000 million dollars, must be provided by the advanced nations over the next ten years.
Even that, he says, if present population trends continue, will give a rise of only 20 per cent. in the present standards of the poorer nations. His plan is to administer the investment of this new capital through the various institutions of the United Nations. He thinks, as we do, that experience has shown that these institutions can do the job, and we think that they deserve far greater support than the Government have given them in the last eight years.
I now want to examine, in all candour, the Government's record in this United Nations work. I start with the most

889
successful of the institutions, the International Bank. The Bank has so far invested between £1,500 million and £1,600 million, perhaps two-thirds of it in underdeveloped countries. It has a high level of efficiency in all its projects, and a large share of matching investment by borrowing Governments in local currency. It has had some quite dramatic successes. I will give two examples.
In India, at the period of monsoon storms, the River Damodar used to rise from eight to 10 feet in a few hours. In 1943, much of the countryside was six feet under water, and Calcutta itself was threatened. In the last four years the Bank has helped the Indian Government to build four great multi-purpose dams; the floods have been controlled; great quantities of electric power have been produced, and when the scheme is completed 1 million acres will be irrigated and much of the land will bear two crops a year.
In Pakistan, an uninhabited bamboo forest has been used to make a paper manufacturing plant, which employs thousands of workers in a fine, new, well-planned town, and which saves Pakistan 5 million dollars a year in foreign exchange.
I quote those two cases of investment in the Commonwealth, because I recall that the Economic Secretary—and he will recall this, too—told us, six months ago, that in 1958 the International Bank lent no less than £100 million to the independent countries of the Commonwealth. He told us then that the Government had released to the Bank rather more than half of the 18 per cent. of our subcription of sterling which the Bank can use for loans, with our consent. I gather that we released about £42 million. The Economic Secretary went on to say that, in addition, the Bank had bought £77 million worth of sterling and had paid in dollars and E.P.U. currencies, and had raised £10 million in London by bonds. He said:
"That means that United Kingdom exporters have enjoyed opportunities for exports far in excess of the amount of sterling released to the Bank by the United Kingdom."—[OFFICIAL REPORT, 16th February, 1959; Vol. 600, c. 96.]
We might have thought that this would lead the Government to press with all their power for the expansion of the Bank's activities, but I do not remember their doing very much. Of course, we
890
doubled the capital last year, but everybody did. There is not much credit to us in that.
The Economic Secretary to the Treasury (Mr. F. J. Erroll)The Economic Secretary to the Treasury (Mr. F. J. Erroll) indicated dissent.
Mr. Noel-Baker: The Economic Secretary will be able to make his case. I shall listen to him, and if I am wrong I shall apologise.
Again, I do not think that the Government's release of £40 million in sterling in twelve years is a very handsome record. When we speak of the Bank's success in doubling its capital we must remember how urgently its great expansion is required. Its total lending to the underdeveloped countries—less than £1,000 million in twelve years—is well below one-tenth of what Mr. Hoffman says is now needed. India has received the greatest total of any country—600 million dollars, which works out at two dollars per head of her population. Western countries are investing £30 per head per year. Surely we should be driving with all our power to help the Bank expand its work as widely and as quickly as it can.
From a very early stage in the Bank's activities it has been plain that the underdeveloped countries would need help of other kinds—help like that provided by U.N.R.R.A. and Marshal Aid, which brought Europe 16,000 million dollars in the post-war years. The underdeveloped countries need technical assistance, the help of foreign experts in training their own technicians, and grants-in-aid for many purposes. Again, with candour, I want to ask how the Government have dealt with the United Nation organs which exist to give such help.
First, there are the Specialised Agencies. Once more I ask the Economic Secretary to correct me if I am wrong in saying that the Specialised Agencies—I.L.O., F.A.O., W.H.O. and the others-play a vital part in the United Nations machine, through which economic aid must be administered. Their budgets ought to have been expanded in recent years, and their work much increased. Unless I am misinformed, however, their budgets have been almost stabilised, while the value of money has fallen and, in consequence, the normal activities of the Agencies have been inevitably cut.

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I cannot recall any occasion when the British delegate has proposed that the budgets of the Agencies should be increased, but there have been a number of occasions when he has proposed that so-called economies should be made. Even to the anti-malaria campaign of the World Health Organisation—a Commonwealth interest if ever there was one—the Government have contributed not a penny piece. The Agencies have had a share in the funds given to the United Nations Extended Programme of Technical Assistance which the Assembly set up in 1949, but I want to examine how the Government have dealt with this extended programme.
No one now disputes that the United Nations is doing a splendid job. As long ago as 1952 Lord Bruce of Melbourne, in another place, said that the work of its experts was "quite first-class", and the other day, in Geneva, Mr. Hoffman said that it had
"turned in an astonishing performance. No other organisation has yielded so much for so little. Its total budget for these ten years has amounted to a mere 235 million dollars. But the impact of some 8,000 devoted experts, who have provided technical assistance of all kinds in some 140 territories, and of the 14,000 Fellows who have studied abroad, has been incalculable."
The work has been good and we, the United Kingdom and Commonwealth, have done extremely well out of it.
In 1953, we contributed 1¼ million dollars to the Fund; we received, in payments to British experts, and from Fellows who came to this country to be trained, over 3 million dollars in foreign exchange. Last year, we contributed 2·2 million dollars, while projects to the value of 2·9 million dollars were carried out in Commonwealth and colonial countries to which we have an obligation.
How have the Government helped to expand this vital work? When we helped to set it up, in 1949, the first experimental budget was 20 million dollars. We hoped that by 1953, at the latest, it would have risen to 50 million dollars, and would go on rapidly from there. In fact, it rose very slowly to 25 million dollars and stayed there till 1959, when it rose to 31 million dollars. The Government are now giving the princely sum of £800,000, or 2·2 million dollars.
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We know that every year sound projects, many of them in the Commonwealth, have been turned down for lack of funds. Indeed, technical assistance has remained, until today, only a symbolic experiment, a demonstration of what could have been achieved. The Government will perhaps reply by pointing to their contribution to the fund for Arab refugees. I will speak of that, if the Government so desire. If their reply is, "We are the second largest contributor to the fund for technical assistance after the United States," I would answer, "I should hope so." We are the second richest country and we have immense interests at stake. In 1959, we are second only in the absolute amount of our contribution, but on contribution per head of population we are thirteenth in the list. Belgium, Venezuela and Uruguay all give more. We are giving 4·4 cents. per head per annum, but Norway gives just three times as much, and Denmark gives even more.
These last figures show something else which it is worth while to note. It is that every £ we give to U.N. technical assistance and other U.N. work draws in further large subscriptions from nations who never had any colonies and whose interest in ending world poverty is less direct than ours. In spite of this, I believe that in eight years there has not been one British speech in the U.N. urging that the general level of contributions to technical assistance should be increased.
The same is true of another U.N. Agency, U.N.I.C.E.F., the children's fund. Its work is well known to hon. Gentlemen. Help to mothers and children of underdeveloped countries is not sentiment and it is not charity. It is investment in the physical and mental health of the future citizens of the world. In 1959, 55 million women and children benefited from U.N.I.C.E.F. work—milk, school meals, curing of yaws and leprosy, maternity services, child welfare and the rest of it—but 550 million who needed help did not get it.
Last November, the British delegate voted in the U.N. Assembly for a resolution which recognised that
"… the impact of the Fund on social and eonomic development is steadily increasing and … there are increasing opportunities for the effective use of U.N.I.C.E.F. aid."

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The resolution congratulated the Fund on its outstanding achievements and expressed the hope that all Governments would contribute to the Fund as generously as possible. We voted for the resolution.
What does "as generously as possible" mean to our Government? Since it began, U.N.I.C.E.F. has received from contributing Governments about £100 million. The total British share has been about £1·6 million, or 1·6 per cent. Under pressure from these benches the Government raised the British contribution to £235,000 a year, that is 1d. per annum per head of our population. At that level we stand twentieth among the nations. New Zealand is seven times as generous as we are. The people of Brunei and Costa Rica give twice as much. As far as I am aware, never in eight years has our delegate made a speech urging that contributions should be increased. I believe there has never been a year when expenditure of U.N.I.C.E.F. funds in Commonwealth countries and here did not exceed in money value the contribution that we gave.
It was plain from the very early days that something more than U.N.I.C.E.F. and U.N. technical assistance was required if the war on world poverty was to be effectively pursued. It needed something like what Mr. Hoffman now proposes, with ample funds for giving under-developed countries grants in aid and low interest loans for basic social projects—roads, education, health work—without which economic expansion could not begin. It was this proposition which emerged from the U.N. debates, and which led to the proposal for S.U.N.F.E.D., which was to start when 30 Governments had pledged 250 million dollars a year. Even with this very modest target the Government helped to kill it dead. Year by year they opposed it, saying that they would do nothing till disarmament was achieved. Thus they gave the Russians the maximum inducement to obstruct disarmament and so to postpone effective Western aid to the uncommitted "have nots" of the world.
After seven years of opposition to S.U.N.F.E.D. the Government agreed at last, in 1958, to the special fund which Mr. Hoffman had proposed. The Assembly set a target of 70 million
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dollars. The U.S. promised 40 per cent. if the other Governments would give the rest. Our contribution to the total wanted was 1 million dollars. One million: and the Colonial Office has already presented projects to Mr. Hoffman which would cost 15 million dollars! What kind of people must he think we are? What kind of leadership and example are we giving to the other nations who have so much less responsibility and interest than we?
I beg the Government to say not only what they said at Question Time. that they would give a further undefined contribution, but that they will, at the next pledging conference in October—it is very near—do something really generous for a change, increase their pledge for technical assistance and give at least 10 million dollars to the special fund. That might evoke a big response from the other nations. It would give Mr. Hoffman and his colleagues a chance to prepare the way for the long-term investment which there has to be.
I will say a word about another piece of U.N. work for economic reconstruction and advance, that of the High Commissioner for Refugees. Refugees and other migrants, particularly from European countries, can play a great part in economic development overseas. Argentina, Brazil and Uruguay are in urgent need of the special skills which refugees and migrants possess. These people can help to furnish what Mr. Hoffman calls the "good mechanics "—farmers, engineers, doctors and administrators—who will carry out the economic development. The Government take credit for having sponsored World Refugee Year, a great united effort to liquidate the refugee problem for good and all. They have given to the High Commissioner as their extra contribution, £200,000. I find no adjective to describe that sum.
Then there is the Inter-Governmental Committee for European Migration, I.C.E.M., which is the High Commissioner's right hand in the transport and settlement of his refugees. So far, I.C.E.M. has settled 400,000, of which 295,000 were refugees within the High Commissioner's mandate. Although I have often pressed them, Her Majesty's Government have stubbornly refused to

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join I.C.E.M. The only ground I have discovered for this refusal is that our share of the administrative budget would be £60,000 a year.
I think that I have shown how small a part the Government have played in building up the multilateral work of the U.N. for the world war on want. We hope that the Government may have a death-bed repentence and that in September and October they may much increase their pledges to every organ of the U.N.
I am afraid that, in truth, there is a great gulf between us. We differ about the scale of the task to be accomplished, about the way in which it should be tackled and about the sort of contribution which our nation ought to make. We are pledged, when we take office after the General Election, to give 1 per cent. of our national income—that is, between £180 million and £190 million—a year to this war on want. Eighteen months ago, one of the present Ministers of State at the Foreign Office, then at the Colonial Office, said in the House:
"… heaven save our country if … this expenditure has to be put into effect."—[OFFICIAL REPORT, 14th November, 1957; Vol. 577, c. 1126.]
Last March, the Colonial Secretary, who had not consulted the Minister of State, claimed that our nation was already investing over £200 million a year in the underdeveloped countries. He called it 1¼ per cent. of our national income. We think that this claim was a great exaggeration. At the very most, our annual aid to underdeveloped nations, towards Commonwealth development and welfare, to the C.D.C., the International Bank, and all the rest, is not more than £100 million.
We shall give 1 per cent., quite apart from whatever capital investment from the London market there may be; that is to say, we shall make a massive increase in what the nation is now doing.
Sir John Barlow: Do those figures which the right hon. Gentleman gave include private investment as well as public investment?
Mr. Noel-Baker: Our figure does not include private investment. I believe that Colonial Secretary's figure did include private investment, and it included
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investment in the advanced countries of the Commonwealth. That is why we think that it does not deal with the subject of which I am treating today.
The Minister of State for Foreign Affairs (Mr. D. Ormsby-Gore): Will the right hon. Gentleman give the assurance that, if his party were returned to power, it would, in fact, have a surplus on the balance of payments to invest? On the last occasion, of course, it had a very large deficit.
Mr. Noel-Baker: I certainly can, because we intend, by the plans which are well known, so greatly to increase our gross national product that we shall easily be able to carry out our policy. [Laughter.] It is no good hon. Members opposite laughing. We shall certainly do it. We started this work in the immediate post-war years. What are right hon. and hon. Members opposite talking about? Are they really trying to compare conditions now with conditions in 1948? We started this work with the intention of building upon it to do what we knew had to be done.
Mr. Bernard Braine: The right hon. Gentleman is surely aware that, in the period after the war, such long-term development as was undertaken in these territories was undertaken at the cost of running up our short-term obligations. Such development took place at the expense of the Colonies.
Mr. Noel-Baker: I am well aware that what we did was right and that, if it had been developed by the present Government as it should have been—
Mr. Braine: I am much obliged to the right hon. Gentleman for allowing me to intervene again. I do not wish to confuse him on this issue, but it is an extremely important point and we should have it clear. Is he aware that only since about 1952 has this country been in a position to invest a net surplus in these overseas territories, and that the present position is that we are investing a higher proportion of our gross national income overseas, per capita, than any other country in the world, including the United States?
Mr. Noel-Baker: Of course, as a result of the war and our having sold our overseas investments during the war, we were

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in great difficulties. My right hon. Friend the Member for Battersea, North (Mr. Jay), who understands these matters very well, assures me that, in 1948, 1949 and 1950, we had a surplus on our balance of payments overseas.
In any case, conditions now are utterly different. In our opinion, the Government have failed to develop the work of the United Nations and have failed to give a proper lead. We shall make a massive increase in what they are doing now. We shall do better with our bilateral colonial funds, but we shall channel a great part of the increase through the various United Nations organs which I have mentioned. We believe that, in so doing, we shall fulfil a national responsibility which is plain for all the world to see. We shall serve the interests of our own people and of people in other continents who have been our partners for so long.
We shall build up the strength of the United Nations, which is our hope for peace. We shall exorcise a potential threat of conflict which might endanger the future of us all. After the arms race, this terrible contrast of wealth and poverty between the nations of the world is the greatest challenge to the wisdom of civilised mankind. Unless we meet it, we shall spell out our moral doom.
435 p.m.
Mr. John Tilney: I do not quarrel with many of the facts which the right hon. Member for Derby, South (Mr. P. Noel-Baker) gave, though I think that he was too optimistic about our balance of payments if, by some mischance, his party were to come to power after the next General Election. I suspect that not only will our financial position cease to be strong, but we shall not have, as my hon. Friend the Member for Essex, South-East (Mr. Braine) suggested, the balance of payments surplus which is essential for this country, for the Commonwealth and for the Colonies, to which we owe such an obligation.
It may be, of course, that the right hon. Gentleman is thinking of introducing controls again. If he is, it may be possible; but I think that this ought clearly to be stated to the electorate of this country before people vote at the next election.
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The total investment from all countries in those that are underdeveloped is far too small. I do not quarrel about that. It is 5½ billion dollars at the most, and the gap is, I agree, widening.
Mr. Leslie Hale: Then why did the hon. Gentleman's Government kill S.U.N.F.E.D.?
Mr. Tilney: I have one or two suggestions to make which are, I think, much better than S.U.N.F.E.D., if the hon. Gentleman will listen to what I have to say.
Mr. Hale: Suggestions now will be extremely helpful and we shall welcome them, but S.U.N.F.E.D. was murdered seven or eight years ago and nothing has been done by the Government during all the intervening years. They destroyed one of the most hopeful examples of international co-operation in almost any field.
Mr. Tilney: I am one who believes that much more can be done by private enterprise than can be done by what the hon. Member for Oldham, West (Mr. Hale) and the right hon. Member for Derby, South suggest. There is no reason why private investment should not be stimulated, and the two suggestions I have to make are designed to that end.
I agree with the right hon. Gentleman that there is the danger of political instability unless something is done. Communism, to many of these nations, appears to be offering more than the West, although, in fact, it is not offering more. Out of the 5½ billion dollars being given by the countries of the world, only 350 million dollars, a minute sum, comes from the Sino-Soviet bloc. It is as well to keep that in mind. I should like to see more given. I should regard it as an insurance policy in this ideologyriven world, and the money would, perhaps, be much better spent than some of the money we now spend on conventional weapons of defence.
The two suggestions I have to make would not, for the time being anyhow, cost very much. The first is for a long-term, modest step forward in multilateral co-operation, and the second is for a short-term effort which could be made by the United Kingdom itself. Both apply to private investment. Private investment, which can help world trade,

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which is a paramount British interest, has been frightened by events in Asia and in Africa. It has not even been helped by debates in the House. Foreign investment could be increased immensely if confidence were greater in Africa and in Asia.
When I was in Nigeria a few weeks ago, I had the privilege of speaking to the Prime Minister. He told me that the national income of Northern Nigeria was no more than £17 per head per annum. In the whole of Nigeria it is no more than £22. Whatever we may do about Government to Government loans, it will not be easy to take the place of the colonial development and welfare fund money. Though I believe that some investment, such as in roads, could be made by private enterprise, because, after all, that happened in this country in the toll roads, obviously much of the development in that country must be by the Government, especially the building of schools and much long-term investment of that kind. Therefore, I should like to see some sort of Colombo Plan for parts of Africa.
But I will confine myself to those two suggestions on private enterprise. I have been privileged to be a member of a Commission which sat under the chairmanship of the right hon. Member for Wakefield (Mr. Creech Jones). It was an all-party Commission, set up by the Parliamentary Group for World Government. It has produced a Report on A World Investment Convention, published today. It is suggested that that Convention is a more flexible instrument than a world investment code, which is not a new idea. It has been put forward by the International Chamber of Commerce. It was debated by the Inter-Parliamentary Union at Rio last year.
It was suggested during the original debates dealing with the Havana Charter, in which India took part, and by Vice-President Nixon, as late as this year, when he stated that
"international investment was sadly in need of a code governing the relationship between investors and capital-hungry nations."
The Report also says:
"the Prime Minister of the Federation of Malaya proposed, at the Economic Commission for Asia and the Far East, that a Code should be drawn up."
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It has been commended by the Finance Minister of Ghana.
What is the present position? There is no effective body of law covering international investment. I therefore suggest a convention laying down broad rules of behaviour between lenders ond borrowers, with a secretariat that could help in drawing up investment agreements, under the aegis of the United Nations or a body such as the General Agreement on Tariffs and Trade, and operating not from a "have" country, but, say, from New Delhi.
Not only should there be that sort of secretariat, but there should be some appeal should a country default, There should be an arbitration tribunal, posibly appointed by the International Court of Justice, and sitting not in Europe or in Northern America, but possibly going on circuit. I do not think that there is any doubt that some borrowing nations are afraid of exploitation. We heard the past-President of Bolivia give evidence. They are afraid of strings being attached to loans, or of political discrimination.
The odd paradox in this world—I do not always agree with all my colleagues on this side of the Committee on this—is that frequently a loan without strings can achieve a political aim much better than the other type of loan. If an investing country can only go into partnership with an underdeveloped country, remarkable development occurs. I have had some experience of that in West Africa.
I enter a plea that those companies which never think of publishing a prospectus outside London should do so. If they can possibly have local money in an enterprise in an underdeveloped country, it is a good insurance for the future and brings the people of that country into partnership. They may be people who fear that giving a concession away means mortgaging their future in an indefinite equity. They are merely following the example of some European countries which are determined to have their own quota of directors on a particular company's board.
If one could produce this agreed tribunal there would be a sanction of publicity—publicity which many possibly defaulting countries would like to

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avoid. They would much rather have their names held in high respect as keeping to their treaty obligations—obligations which they would enter into by agreement with the capital producing countries to pay compensation promptly if they should nationalise or in any way take over an undertaking.
I commend to the Committee one of the final paragraphs of this Report, paragraph 82:
"International trade is well served with organisations to supervise its working, of which (G.A.T.T. is the outstanding example. Foreign investment, on the other hand, has no similar supervisory body. Investment is just as essential as trade in promoting the economic growth of less-developed countries and it is high time that this gap in international organisation was filled."
I should like, finally, to turn to something which Her Majesty's Government could do immediately—not a multilateral solution such as I suggested, or a long-term one, but one based on the investment guarantee programme of the International Co-operation Administration. I have sent documents to my right hon. Friend the Secretary of State for the Colonies, asking him to send a copy on to my hon. Friend the Economic Secretary. Because private enterprise is frightened of investing in Asia and Africa, something must be done. I believe that something can be done for our own Commonwealth on the lines of the investment guarantee programme, which demands as an insurance against expropriation or non-convertibility only ½ per cent. per annum on the money invested. It may never be called on.
I suggest that it should be for new money only and for the Commonwealth only. That would limit the scope, because capital is difficult to obtain. I would much rather channel it to those for whom we are trustee rather than dissipate it in a world-wide way. Already, this Investment Guarantee Programme has 1 billion dollars of projects applied for. That was as long ago as last January. If only we could have some Commonwealth development of this kind, great things might be seen from private enterprise. This is action which we can put to use now for our underdeveloped areas of the world which prefer—and I think rightly prefer—to be called "the developing areas."
4.49 p.m.
Mr. Robert Edwards: I have listened with great interest to the remarks of the hon. Member for Liverpool, Wavertree (Mr. Tilney). I do not think that there will be any opposition from this side of the Committee to his suggestion that a convention should be set up to guarantee investments in the underdeveloped areas of the world. Although we are Socialists, and our preference is for investment for social and economic purposes, we realise that in our world there are mixed economies and that many forms of investment will need to flow from this country and the wealthy nations into the underdeveloped areas of the world—investments from the World Bank, from private individuals and from private companies.
If the countries of Africa and Asia want to encourage private investment they must be protected from political changes. There is no difference of opinion, as far as I can see, in the Committee on this matter. There is the need for a convention that will guarantee throughout the world the investments of private individuals. I have no doubt that even the Russians will support such a convention. They are rapidly becoming very important investors in the underdeveloped areas. I understand that the Russians have made a loan of £5 million at 2½ per cent. to the Yemen and that 150 Russian technicians are building a new port for the Yemen on the Red Sea. They are doing so only because we were stupid enough not to offer to lend the money to the Yemen because we were afraid that a new port might compete with Aden.
We spend £1,500 million a year on defence to save the Western world from the wicked Russians, yet through lack of a little common sense we have allowed the Russians, for an investment of £5 million, to penetrate politically right to the Red Sea. We refused to assist Colonel Nasser in building the High Dam at Aswan and influenced the World Bank to create difficulties. We allowed the Russians to make a loan of £37 million at 2½ per cent. so that a start could be made on the High Dam at Aswan. Again, for a very small investment the Russians have a very strong political hold in Egypt.

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The same policy is being carried on in the Middle East and in the Orient.
Mr. Hale: My hon. Friend will remember that it was the sudden refusal, under American pressure, to carry out the offer to finance the Aswan dam that led to the nationalisation of the Canal, to the Suez venture and to the throwing away of more money than we had given to the United Nations Agencies over since they began.
Mr. Edwards: I entirely agree with my hon. Friend, but I was afraid to develop the theme because I thought that I might be out of order. I am pleased that that fact has been written into the record, even in a debate like this. Temptation to deal with the political aspects is very great, but I must resist it because time is so limited.
During the last ten years we have developed the principle of the Welfare State. We now accept the simple ideal that we are our brothers' keepers. We have made ourselves responsible for those who are less fortunate than ourselves, those in real need. The time has come when we must extend this principle all over the world. This is the only way by which we can save human freedom—by accepting the fact that we are our brothers' keepers, no matter what the colour of their skins may be.
My right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker) made a human and profound speech which will be read and re-read when speeches like mine are forgotten in the dust of history. When debating the issue of assistance to the poorest people of the world, we are dealing with the greatest challenge of all time. It has been my privilege in recent years to visit quite a few parts of the world. I have been to the Middle East, from where two-thirds of the oil of the world is obtained. Oil is more valuable than diamonds or gold, yet in the Middle East the poorest people of the world live.
We are partly responsible for their position because in these areas we have supported the wrong people. We have allowed the oil revenues to go to sultans, shiekhs, kings and modern brigands and have used our military forces to keep such people in power. The money that has poured in from oil royalties has not seeped through to the people who need it We therefore have a great responsibility
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for the political development which has taken place in many parts of the world.
Recently, I visited the Cameroons, which has been in British trusteeship for forty years, ever since the First World War. There is still only one hard road in the South Cameroons, where the rainy season lasts for eight months of the year. Normal traffic is impossible along this road. It is necessary to use eight-wheeled tractors to cover some of the roads during the very heavy rainy season. The lovable, charming and loyal people of the Cameroons are among the poorest in Africa. That road was built, not by us, but by the Germans. All the big buildings and houses and bridges in the towns were, in the main, built by the Germans. We have not done a great deal for the people of the Cameroons, in spite of their great loyalty to this country. [Laughter.] This is not a laughing matter.
In the French Cameroons, there is a great network of hard roads. The French Cameroons have developed an oil industry, with oil refineries. They have developed an aluminium industry. They made a proper economic survey of the whole of the territory, which has not yet been done in the British Cameroons. Hon. Members may laugh, but I am dealing with the facts. A citizen of the South Cameroons said to me, "It is true that the French have developed the Cameroons tremendously. They have fine macadam roads, but I would sooner be free and safe on a British dusty road than I would die as an outlaw on the hard macadam roads of the French Cameroons". He was dealing with the politics of the two countries, but at the moment we are dealing with the economic and social problems.
The World Bank and private investors have serious limitations, because it is not possible to use capital from the World Bank to build hospitals and schools. Nor is it possible to use private investment to build roads. It is not possible to use private investment for the essential social services that are so desperately needed. We cannot open up these countries without roads. Who will invest £100 million in a new road, say, in the South Cameroons? We can cut out this idea of social investments coming from private enterprise or from the World

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Bank. It has to come from the Governments of Europe, the metropolis countries, which have taken so much wealth out of these underdeveloped areas in primary goods.
Mr. Tilney: I should like to suggest that it might be feasible to build some toll roads and toll bridges, as was done in this country not only many years ago, but, recently, in regard to the Mersey Tunnel.
Mr. Edwards: It took us a very long time to get rid of this kind of transport. It has always been opposed and caused frustration. In any case, we are dealing with simple people who have not pennies to pay for tolls, never mind the pounds that they would have to pay because of the high cost of building in these underdeveloped areas.
I should like to make one or two quick points before I conclude. The United Nations this year published an Economic Survey, covering world affairs for last year, which stated that the consequences of the deliberate inflationary policy of the Western countries—the rich countries—led to a collapse in the price of primary goods, and the extent of the decline in the cost of primary goods was 2,000 million dollars in one year. This was 2,000 million dollars lost to the producers of primary goods. These are the poorest people in the world. They are, for example, the little co-operative farmers in the South Cameroons who have organised themselves so that they can get a decent income from bananas and whose living standards have step by step increased until a few Cabinet Ministers in the capitals of the world and a few financiers behind closed doors decided, without consulting anybody, that the Bank Rate should go up to 7 per cent. As a consequence, down went the living standards of millions of people by a stroke of the pen, shattering their whole social advance in a very short time.
This 2,000 million dollars, which, according to the United Nations' Economic Survey, represented six times more than the World Bank had lent to all the underdeveloped countries during that year was lost in one year through the deflationary policies of the Western Powers. That might be clever politics, but it is immoral and fundamentally
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anti-Christian to make wealth and try to solve some of our inflationary policies at the expense of those people who need our assistance more than anyone else.
I am sorry that I have taken so long. I have not covered half the points which I intended to make. I think, however, that this has been a useful and important debate so far and I am very proud to have made a modest contribution to it.
5.4 p.m.
Mr. John Biggs-Davison: Like the hon. Gentleman the Member for Bilston (Mr. R. Edwards), I have travelled a little in the Cameroons, but I hope that he will forgive me if I do not follow him up the road to Buea and beyond.
Earlier in his speech, he referred to the Soviet economic penetration of the Yemen, and the right hon. Gentleman the Member for Derby, South (Mr. P. Noel-Baker) spoke about the Soviet steel mill in India. There is no doubt that, particularly since the nuclear stalemate, the world conflict has shifted to trade, aid and investment. There is a world conflict. I think that the right hon. Gentleman the Member for Derby South rather suggested that we might have to meet formidable Soviet competition. It is already there. There is a conflict. I hope that an active British diplomacy will play a part in removing the causes of that conflict.
Whether or not there is an agreement at the Summit between President Eisenhower, my right hon. Friend the Prime Minister and Mr. Khrushchev, these three statesmen have already agreed on one proposition at least and that is that the struggle in the world is today mainly economic. Speaking as recently as 12th July, at Oxford, that great colonial administrator. Sir Charles Arden-Clarke, said this of Africa, parts of which he knows so well:
"The new states are determined to develop and will not hesitate to go elsewhere for money if it is not forthcoming from us."
I think that some people who speak of a great multilateral international effort to aid the underdeveloped countries—I do not accuse the right hon. Genlteman of this—have it in their minds that the Americans will pay and that we shall get

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some of the credit by calling it international. I do not think that we can leave this to the Americans. If one considers the state of the United States economy today and, even more, the state of mind of the American Congress and democracy, one concludes that we cannot leave this great task entirely to the Americans, generous though they have been in recent years. Our own fate here in this island is bound up with the underdeveloped countries, so many of which are within the Commonwealth. We need trade in order to produce. Our life is in our trade and in the Commonwealth. In this race we cannot afford to pull into the pits and play the part of spectators. If, on the other hand, we are to stay in the race at all we must have rapid economic expansion in this country, and that is where the difficulty comes in. I do not think that the right hon. Gentleman met the point put to him by my right hon. Friend the Minister of State when he said that under previous Socialist Administrations there was no surplus on the balance of payments and therefore they had not been able to do this job, and when he was asked by my right hon. Friend how we could be sure that they would be able to do it in the future.
The trouble is that in the past—this is not a party point—rapid expansion has meant that we have imported more, and this has meant higher prices and a threat to our trade balance. On the other hand—here I am substantially in agreement with what the hon. Member for Bilston said—if we indulge in deflation in order to keep our imports within bounds we cause a depression in the primary producing countries and, in so doing, we lose export markets among some of our best customers.
In 1958, the United Nations Economic Survey tells us, the fall in raw material prices cost the primary producing countries 2,000 million dollars which is six times what was lent then by the World Bank, of which the right hon. Gentleman has spoken so highly. How are we to have expansion without this declining spiral? How are we to keep our imports within bounds while expanding our economy in order to meet the needs of the underdeveloped lands? One method which is sometimes urged is that of monetary restriction. But. as the hon.
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Member for Bilston has pointed out, that increases the difficulties of the underdeveloped countries. They cannot get finance on terms they can afford. Always the disadvantage of monetary restriction and excessive monetary discipline is that it tends to slow down expansion.
Lord Keynes was not always wrong about everything. He said in 1939 that this problem of excessive imports "cannot be remedied by the Treasury chastising itself with a high rate of interest." So much for monetary masochism. Then there is the other method which we sometimes have urged upon us, namely, Socialist sadism—the contrary perversion. Experience shows that Socialist controls tend to bungle, are bureaucratic and are destructive of private enterprise to which we on this side of the Committee are attached.
There is another method, and that is the flexible use of the tariff. We might learn a little about the beneficial use of the tariff from the United States, and we can also learn a little from the history of this country just before the war. We have been suffering since the war from the erosion and the obsolescence of our tariff structure. One should not have to urge upon a Tory Front Bench that the tariff is the best means so far invented of regulating free competitive enterprise at home, giving it the stability that it needs for capital formation, attracting foreign capital on acceptable terms, providing the means to bargain and cooperate abroad with Commonwealth and other countries and furnishing countries overseas with markets for the product of this development. It is no use developing an economy if, when an industry is established and set in motion, it is unable to sell what is produced.
It is astonishing how the free trade illusions of the nineteenth century have survived and have even been disinterred in the second half of the twentieth century. In shipping, in aviation and in commerce Britain is meeting with ruthless discrimination from the power which has used its world influence to write non-discrimination into international agreements which have governed the financial and commercial dealings of most of the free world—agreements which have been imposed as the price of aid in war and in cold war. The United States have assisted and

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supported the Germans and others in erecting a barrier between Britain and the Continent. This came out very clearly in the debate on Thursday on the plight of aircraft production in this country.
Then again, the foreign trade and investment of the Communist world, whose challenge we have to meet, is sustained by the monetary power of a totalitarian State. It is regrettable, but we are just not living in a free trade world. We are living—and I think the right hon. Gentleman rather burked this issue in his speech—in a world of rival empires, of competing Continental blocs, and the whole struggle is dominated by the competition of two systems for the mastery of the world economy and the control of the resources and potential resources of the underdeveloped areas.
I do not feel that there is anything essentially new in this for Britain. We have faced a world like this before. What is new is the scale of the challenge and the stakes. What worries me is that there does not seem to be much time left for us in Britain to form our own economic association disposing of markets and raw materials in an effective and equitable partnership.
To contend with these continental blocs what must Britain do? She is called to give a lead to the oceanic countries and to form not a bloc but a free association which will be bound, not divided, by air and sea, as the land blocs are joined by roads and railways—a free association united by common interest upon a common principle of commercial and financial practice. These Continental blocs which have emerged in recent years are in part a response to new standards of mass production and territorial power, but they also reflect the new industrialism of substitutes—substitutes for the traditional products of the underdeveloped areas. So, I believe that the underdeveloped countries themselves will become enthusiastic members of an association which genuinely offers mutual help and benefit and which offers partnership and not patronage, as an hon. Member has said.
All this, of course, is in the spirit of the Commonwealth and of the Colombo Plan. It has not always been the spirit of some United States and international agencies. The adverse balances and the
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crippling debts of many underdeveloped countries are being perpetuated by the rule of the International Monetary Fund that a member State whose holding has been exhausted must sell gold rather than other currencies. The industrial development of less advanced countries has also been retarded by the I.M.F. doctrine that if there is a deficit in a country's balance of payments, this is necessarily caused by the inflationary creation of bank credit. This point links up with what the hon. Member for Bilston said. If the I.M.F. and those behind it really accepted the principle of the interdependence of national economies, it would provide not so much for the deflation of debtor economies but for an expansion by the creditor Powers of their own imports and investments.
I have heard—and the Economic Secretary will know better than I—that there was quite a deal of resentment at the I.M.F. meeting in Delhi in October, 1958. The complaint was heard there from underdeveloped countries that the discipline imposed by the I.M.F. was already too oppressive, interfered too much with their internal affairs and that this infringement of their independence and sovereignty would increase with the expansion of liquid resources decided upon at that meeting. Again, Mr. Eugene Black said recently:
"In extreme cases aid poorly conceived, far from improving the economies of receiving countries, has actually added to the heavy burdens under which they are bending already."
Even outside the formal limits of the Commonwealth and Sterling Area, there are underdeveloped countries which would rally to our oceanic circle. But for their benefit and our own—for out position is precarious as well as theirs—we would have to enlarge our industrial base from which we can help and equip them. Norway, Sweden, Switzerland and Austria have been concerned in the recent negotiations of what are called the Outer Seven. Their close association with Britain and the Commonwealth will be most welcome. I believe an hon. Member asked, "What has that got to do with it?" The answer to him is that if we are to equip the underdeveloped countries we must have a larger and more productive industrial base. That is why the relationship of this country with other

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European countries is of such great importance for the advancement of underdeveloped countries oversea.
Mr. Hale: My right hon. Friend opened the debate by discussing those countries which have a standard of living of £30 a year and an expectation of life of twenty years. We are talking about starving kids and disease-ridden people. We have heard two speeches from the benches opposite concerned with directors' fees, dividends, and articles of association.
Mr. Biggs-Davison: I was not touching on those subjects, but was trying to suggest how we in Britain, together with partner countries, could help to deal with this problem, which is as terrible as the hon. Gentleman says. I am not going to do any of these starving kids—and there are many of them—any good by talking emotionally. One has to think out the means of helping them. I shall bring my speech to an end when I have made my contribution and then, no doubt, the hon. Member will be able to make his.
Such association of Commonwealth and European and other countries, developed and less developed, is in keeping with the aim accepted by the Commonwealth Economic Conference at Montreal of an expanding Commonwealth, that is, a Commonwealth that expands not by political annexation but by co-operation between sovereign partners, equal in status if not in strength.
This oceanic club, which is a sociable word for a flexible body, should, like the Commonwealth, have few rules and a very flexible constitution. May I briefly suggest the conditions under which I think it should operate? First, it would be agreed that we should limit imports from countries or blocs not importing in fair return. There would, to use Mr. Diefenbaker's expression, be a switch of trade from those countries not trading reciprocally to those who do. It is certain that Britain cannot help the underdeveloped countries if her imports from the dollar or the mark areas or from the franc zone are allowed to rise to the point where either Commonwealth production is depressed or where we face a sterling crisis. At the same time, as hon. Members have pointed out, we have got to run our economy at high
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pressure if we are to equip the underdeveloped countries without endangering the £.
It would be agreed that members of the club would not buy outside what could be bought inside at the same price or at a lower price provided that the quality was the same or superior. Then, I believe, it would be necessary to set aside, as the right hon. Gentleman suggested, a proportion of the national income to help the under-developed countries. The right hon. Gentleman mentioned 1 per cent., but I would not say what the percentage should be.
Already a considerable sum is being invested abroad as my hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) pointed out, but we should do more and I believe our people want to do more even if it means—and I think hon. Members opposite should say this if they believe it—that we defer for a while if necessary, a further increase in our own standard of living.
Again, there must be a real attempt to stabilise the commodities which these underdeveloped countries produce. There is a plan which I believe is now receiving consideration by the Government and which has been put forward by Mr. St. Clare Grondona. I should be interested to hear from the Economic Secretary, or from whoever replies to the debate, what stage the official study of that scheme has reached and to have an assurance that if the scheme is not likely to work they will, at least, bend their efforts to produce one that will.
The membership of this circle of nations and peoples would, I suggest, be open to those who kept the rules for as long as they kept them. They could come and go as in the Sterling Area or Commonwealth. Nor is it essential that every member of the Commonwealth should undertake all the obligations. In trying to establish a Commonwealth economic policy in recent years, we have made the mistake of saying that if we are not unanimous we cannot do anything. We could have said, "All right, we will go forward. We will revive our preferential system and those who want to will come with us." I think that if we step off smartly in the right direction we shall find that others will quickly follow.

913
I shall be told, I suppose, that what I have suggested amounts to discrimination. I shall also be told, no doubt, that our American friends insist on non-discrimination, that illusory ideal enshrined in the international agreements entered into during and since the war. But, of course, it is all nonsense. Discrimination is a law of life for men and nations, and for underdeveloped countries seeking aid and development without forfeiting their independence discrimination is necessary to solvency and survival.
The law and logic of non-discrimination is their subjection to their creditors, and the best service that we could render the underdeveloped countries would be to get rid of this rule of non-discrimination. I do not believe that the American mind is really as closed as some people here seem to imagine to the realities of the world, which is not one world at all, but a world of nations and groups of nations, needing to discriminate in order to secure reciprocal treatment and exploit their resources without jeopardising their balance of payments. The United States have approved and supported the European Common Market.
True, the General Agreement on Tariffs and Trade bans a preferential tariff area, but permits a Customs union. This is something which has done a great deal of harm to the advancement of certain countries. I remember reading the proceedings of the International Islamic Conference whose members discussed the forming among themselves of a preferential tariff area which would have been greatly to their advantage. They found that they were not allowed to do so. Early in the story of the Bagdad Pact, the member countries desired to form a preferential tariff area which would also have been greatly to their advantage. It would have helped them to develop their resources, but, again, they found that they were precluded by international agreement.
Men and nations were not made for international agreements, and if international agreements do not meet their needs they ought to be revised. I do not know how long the progress of the underdeveloped countries will be retarded by the legalistic formulae of the past decade. It cannot be much longer, but my fear is that it could be long enough to give the world to Communism.
914
I think that some such plan as I have tried to sketch should appeal to the great and generous American people who have shown their desire to raise up people less fortunate than themselves. In any case, this oceanic circle of nations should be open to all who accept the obligation of reciprocity, and those who approve common markets and free trade areas cannot in conscience or reason oppose the establishment of an association of free nations which, in the current jargon, is both non-exclusive and outward looking.
5.30 p.m.
Mr. A. E. Oram, I found myself in a certain amount of agreement with the opening remarks of the hon. Member for Chigwell (Mr. Biggs-Davison) in which he pointed out the connection between the subject matter of this debate and the issues which we hope are due to be discussed at the Summit Conference. However, I shared the irritation of my hon. Friend the Member for Oldham, West (Mr. Hale) at listening to a speech which seemed almost entirely devoted to notions of international trade rather than to the more immediate problems of the underdeveloped countries; although I admit—as I am sure we all recognise—that there is a close connection with the problems of international trade and indeed I shall possibly transgress in that respect myself during the course of my speech.
Mr. Biggs-Davison: How do we secure the means to help these people except from trade? How is it done?
Mr. Oram: I have just said that I recognise the connection with the problems of international trade, but in a debate of this kind I suggest that it is a question of balance.
This debate is mainly on the question of how to assist the peoples of the underdeveloped countries to raise then-standards of living. When I reflect on that problem I am impressed by three aspects of it. The first is the enormity of the problem which has often been described, and was graphically described this afternoon in a few well-chosen sentences by my right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker). It was recently described by Mr. Paul Hoffman, the managing director of the United Nations Special Fund.

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According to The Times, of a few days ago he used language which seemed to me an attempt to match the enormous severity of the problem of world poverty. He said that the dimensions of the problem were "staggering" and that the increase in personal standards of living in these countries was "dangerously too slow." That contrasted in my mind with a report which I read of the speech of the United Kingdom representative at the recent talks on world economy at Geneva, the Secretary of State for Foreign Affairs, who made what appeared to me a very complacent speech.
The second aspect of this problem which always impresses me is the enormous amount of study which has been devoted to it since the end of the war. If one starts to read about it, one is immediately faced with a tremendous amount of material. Not only from the universities and the academic world, but from the agencies of the United Nations, there has been produced a tremendous library, a tremendous record of wisdom on these problems. There is no lack of ideas about what ought to be done. The problem facing us is how to bring these academic studies down to hard reality, how to produce real results after the analyses have been so brilliantly made. That, it seems to me, is particularly the problem of the Government and of this Committee in such a debate as this.
The third aspect of this problem which impresses me is the enormous complacency which I found reflected in the speeches, and in the answers given at Question Time by Ministers of the present Government. I wish to give two examples of that complacency. The first has already been referred to by my right hon. Friend when he quoted from the Annual Report and Statement of Accounts of the Colonial Development Corporation. In that Report we find a glaring criticism by the Corporation of the attitude of the Government to development projects in underdeveloped countries. Forthright terms are used to express the dissatisfaction of the Corporation. I will read one or two of them:
"… unfortunately 1958 was not a happy year; many irritations; no capital reconstruction; … relations with Government departments became such that Corporation felt frustrated and discouraged. … The emphasis
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often seems to be heavier on the negative of doing nothing than on the positive of encouraging development.…"
and so on.
Being impressed by that highly critical Report I put down a Question to the Colonial Secretary asking what he proposed to do about reviewing his Department's methods in assessing the projects of the Colonial Development Corporation. Despite that authoritative criticism, his Answer was that he proposed to do nothing at all—apparently continuing the policy of "the negative of doing nothing."
The other example I take from the sphere of trade—and here I follow the hon. Member for Chigwell—rather than that of direct aid to the underdeveloped countries. There is an increasing awareness that the problems of poverty-stricken countries are likely to be solved not only by schemes of aid, such as have many times been discussed in this Chamber, but also by a sound international policy regarding trade in commodities. I find increasingly that people are inclined to the concept that if we are to have wide fluctuations in the prices of the basic commodities upon which these underdeveloped countries so much depend, whatever we do by way of aid is likely to be submerged in the tragedies that come upon them when prices go so drastically against them, as they are all too liable to do.
I have made modest attempts to call attention to this problem on previous occasions and I see other hon. Members present in the Chamber on both sides of the Committee who are aware of that fundamental problem. But I should like to call attention to the fact that recently we have had outside support for that general thesis in the World Economic Survey recently published and which was discussed recently at Geneva. A large part of that Survey is devoted this year to the problem of commodity prices; how they have been behaving over the long term and over a more recent period, and what has been the effect of fluctuations of world commodity prices on the economies of the underdeveloped countries.
I will not go into the detailed arguments of the Survey. Suffice it to say that it strikes me as one of the more challenging of the World Economic Surveys of recent years in that it poses this as an important problem with which the

917
statesmen of the world ought to grapple. That is why I referred to the complacency of the right hon. Gentleman the Secretary of State for Foreign Affairs when he spoke on the question at Geneva in the name of this country.
I may be doing the right hon. and learned Gentleman an injustice because the report of his speech which I have seen is a limited one, but it struck me as being a succession of bromides which did not match the challenge presented by the Survey. In my opinion this country has a unique opportunity to take up that challenge regarding what ought to be done about world commodity prices.
Post-war Britain is admittedly not in the first rank of world Powers in the economic as well as in the military and defence sense, and it may well be that we are not in a position to take the lead in the transfer of wealth from the West to the countries of South-East Asia and of Africa in the same sense as are the United States or, in another sense, as is the Soviet Union. We have not the same economic resources as have those two vast countries.
If that is so, however, it is all the more important that we should give a lead in those spheres, and by those means that are still open to us—in getting our commodity markets on a sound international basis. What is needed in that case is not so much economic wealth or possessions as economic know-how, initiative and courage. It is that that seems to me to have been woefully lacking in the Government's recent approach to these problems.
I suggest that a British Government spokesman could well have gone to Geneva and have given a moral lead to the world on how, by international commodity agreements and in other ways we might begin to solve the world's economic problems. Our present economic situation in relation to the underdeveloped countries is parallel with the political situation immediately after the end of the Second World War. At that time, the Labour Government were faced with a great need for political changes in South-East Asia, and with a great opportunity for making those political changes. They siezed that opportunity. They gave freedom to India, Ceylon and the others, and took steps that have been
918
recognised ever since as being of really great importance.
The parallel to which I want to point now is that in economic terms there is an equal need and an equal opportunity which this Government ought to be seizing. The Government ought to be giving a lead as imaginative, as forthright as that of the Labour Government in the years following 1945. Just as the crying need then was to show the peoples of the underdeveloped countries that the Colonial Powers were willing to give them their freedom, so the crying need of the world now is to show these underdeveloped peoples that the peoples of the West are prepared to give them their economic freedom.
It is because we had the sort of speech at Geneva to which I have referred that I feel that the Government are completely inadequate in facing up to that task, and one all the more welcomes the possibility—the probability—that, before long, we will have a Government able to take the initiative in economic affairs comparable to that which a previous Labour Government took in political and constitutional affairs.
5.44 p.m.
Mr. Maurice Macmillan: I am afraid that I cannot share the view of the hon. Member for East Ham, South (Mr. Oram) that a Labour Government would be so successful economically as it was politically, or that the same sort of "success" would be desirable either for this country or for the underdeveloped countres. I hope the hon. Gentleman will forgive me for not following him in the intricacies of his argument, as I intend to make only a short intervention. I will take him up on only one point, and that was when he claimed that it was entirely due to the Labour Government that freedom was given to India. It is more accurate to say that Indian independence has been the policy of all Governments practically since the Viceroyalty of Lord Dufferin and Ava.
In spite of the criticisms made from the benches opposite, a great deal has been done, but although I need not go into the details tonight, it is true to say that, however much we may admit has already been done, there is a great deal more to do both by direct help to the underdeveloped countries and, to some extent, by indirect help as well. The

919
Commonwealth Economic Conference at Montreal has made a start. It has set in train some new ideas, but there is no doubt that even with the plans put forward at Montreal there are no grounds for complacency, nor do I think that that has been shown on this side of the Committee.
There will always be a great deal more to do than any Government are doing, because the same kind of successful development of the underdeveloped countries as we have seen in this country will lead to increased demands from them just as it has, quite rightly, led to increased demands in regard to our own standard of living. It is also true to say that if the West will not help there are other countries and other sections of the world that will.
The right hon. Gentleman the Member for Derby, South (Mr. P. Noel-Baker) wanted more help canalised through United Nations Agencies. I would suggest that such direct aid is not enough; that we need the sort of aid—and the hon. Member for Bilston (Mr. R. Edwards) seemed to agree—that enables countries to develop themselves and to develop their own trade.
The hon. Member for Bilston quoted Russian penetration into the Middle East through loans and so on. In fact, his attack was really based on the Government's failure to compete with other Governments in what might be called strategically sound investment; that is to say, investments, small in cash, that produce big dividends in political influence. That is something perhaps a little outside the sphere of direct aid to underdeveloped countries, but it is something about which we cannot afford to be complacent. Perhaps I may quote a few figures.
The export trade of the Union of Soviet Socialist Republics with the non-sterling Middle East went up from 68 million United States dollars in 1956 to 150 million dollars in 1958. Russian export trade with the sterling countries in the Far East went up from £45 million in 1956 to £80 million in 1958. I do not want to exaggerate, but I think that there is here a political as well as an economic danger. I hope that in his desire to build up direct aid through the international agencies the right hon. Gentleman will not press us to divert too much
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through those channels from what might be called the straight competition, where politics as well as economics are involved and where, as the hon. Member for Bilston pointed out, quite small investments could pay quite big political dividends.
I hope the Committee will forgive me if I keep more or less on this line of trade and expansion rather than direct aid through the agencies. The Good Samaritan had a kind heart, but he also had two pence, and it was the two pence that paid for the wounded man's lodging. I therefore hope that the hon. Member for Oldham, West (Mr. Hale) will believe that we on this side do not lack heart if in this debate we think that we might well concentrate on the pence.
Apart from the general difficulties that many bilateral agreements bring to the underdeveloped countries, they are not always in the best economic interests of the countries concerned, particularly agreements with the Iron Curtain countries. There was a case not long ago when Ceylon got rather the worst of a bad bargain. Surely, the real solution to these problems lies in the expansion of trade and, in some cases, in the diversifiction of trade. There are obvious dangers to backward countries which are dependent upon one industry or one product only. There are dangers which not only affect their own strength and their own position in world markets, but which are themselves affected by what we do in this country and by decisions taken primarily in regard to Europe.
The points made by my hon. Friend the Member for Chigwell (Mr. Biggs-Davison) about the Common Market were valid, not only directly, but indirectly. There is, for example, the question of cocoa from Ghana, which was sold very much in West Germany. Now that West Germany is part of a Common Market, in which the dependencies of member countries are included, will the cocoa from Ghana be kept out by French West African cocoa? There are other points such as these which must be borne in mind when we think about how to help these countries, and particularly those which, both economically and morally, are our dependencies. We must never let it become a liability rather than an asset for such countries to be members of the Commonwealth.

921
I do not want to anticipate Wednesday's debate, but it is worth while remembering that not least of the Government's duties in giving economic aid to underdeveloped countries is to do what they can to ensure that countries of the Commonwealth are economically viable units and are not split up and detached into units and components which can never work by themselves.
I hope, too, that I shall not be out of order in referring to books. I must declare a quite considerable interest, as a good deal of my time is spent in selling books to the underdeveloped countries. It is a material point, however, that our aid is not only financial, but technical with expert advice which involves the technical education of the countries concerned. Particularly if we are leading them towards economic and political self-sufficiency, they must be able to work things themselves.
Although my right hon. Friend the Chancellor of the Duchy of Lancaster has made a considerable advance, I should warn him that he has not gone nearly far enough. It is no good considering these problems of education and books on the sort of scale of small help to the British Council or assistance to the arts in our own provincial towns. These problems must be thought of in relation to the scale of our other economic aid, or, indeed, in relation to the scale on which we are planning our defence expenditure, because politically these are as much weapons of the cold war as any others.
I quite agree that the measures proposed by the Government to help countries which are short of sterling to spend more on books in general are very satisfactory; but the plans for the subsidy to reduce the price of individual books leave much to be desired: apart from the difficulty of choosing the books to be subsidised, apart from the fact that the method chosen will probably destroy the normal export of books to underdeveloped countries, there is the competition from the United States and from Russia to be considered.
We all know the size of the United States programme. As to Russia, I have recently been shown a technical book, which would be of great use to Indian students and a copy of which I have given to my right hon. Friend. This was
922
exported by Russia and priced in India at 8 rupees, or approximately 12s. 6d. The nearest that we could get to it from this country would be a price in India of 42s. to 50s. I do not know whether it is true that trade follows the flag, but techniques very much follow the book. If we hope to give British technical aid to underdeveloped countries, this is a point which we should bear well in mind.
It would be expensive to do it properly, but this sort of thing is always expensive and we must accept that. We must also accept that however undeveloped a country is, it does not want to share in adversity, but only in prosperity. If we want to help others, our own economy must be sound. When hon. Members opposite criticise the Government for reducing their contributions to United Nations Agencies and the rest, they are in large measure admitting the high standard which the success of the Government's economic policy has led them to expect.
In any event, how can contributions through international agencies be increased except from either increased prosperity and savings or by increasing taxation—or, perhaps, the increased contributions proposed under the Socialist superannuation scheme might be used to increase contributions to these agencies; the new pensions scheme might be an admirable source of investment which could help to provide the contributions. In any case, wherever the contributions come from, they depend upon the success of our export trade and of our balance of payments. I hope that hon. and right hon. Gentlemen opposite will recognise that this has been largely achieved by private enterprise and that they will not seek to interfere with it too much.
I do not, however, want to go further into this controversial aspect of aid to underdeveloped countries and the conditions which are its prerequisite here at home, but there is one other consequence which it is likely to have here which we must accept. Not only must we not kill the industries which have been started with our aid, but we must help them to develop and to find their markets. I do not say that we should not protect our own industries; it is difficult, though by no means impossible, to do both.
The Lancashire cotton trade has been in great difficulty. I consider that the

923
Government were quite correct in refusing to impose a quota on the exports from Hong Kong to this country because Hong Kong is a Colony, underdeveloped in relation to its increased population, for which we are entirely responsible. Whatever the rights and wrongs of the measures that the Government chose to take, I think it important that we should accept those sort of measures as a principle, so that we can achieve a proper division of labour, not only within this country, but within the Commonwealth as a whole.
The Government must accept the responsibility for developing the industries of backward countries even if they conflict with our own industries. We must also accept the responsibility of adjusting ourselves at home in a way which does not destroy the development we have made abroad. I am old-fashioned enough to believe that an increase of trade in one part of the world, if properly dealt with, leads to a general increase of trade and prosperity throughout. There are some cases in which a tariff can be helpful, but that does not always apply. We must take great care that the sort of arrangements which, say, the Belgian furnishing industry has made with its raw material producers do not damage other countries as their arrangements damage us.
In the end, the whole future of the underdeveloped countries and the extent of our aid both through United Nations Agencies and directly to help these countries develop themselves comes from our prosperity at home. I am glad to be able to end in agreeing with the right hon. Member for Derby, South in the fact that he, too, would say that the final object of this aid is not just rich countries dispensing charity to poor ones, but is establishing a world trade and prosperity which will be of benefit to us all.
6.0 p.m.
Mr. Leslie Hale: I had not intended to seek to catch your eye in this debate, Sir Gordon, and I apologise for rising to speak without preparation and without all the figures readily and securely at my disposal. I listened to the opening speech of my right hon. Friend the Member for Derby, South (Mr. P. Noel-Baker) with more satisfaction than I have listened to any
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speech in this Chamber for many a long day. It was a very good speech indeed. It was also a speech which I know will bring great joy to many Labour electors because of the certainty with which he spoke and the clear, unequivocal pledges which he gave.
I would be the last to accuse the hon. Member for Halifax (Mr. Maurice Macmillan) of lack of heart, and I wish him all joy in his efforts to sell books to underdeveloped or any other countries. I have spent a good deal of time trying to sell books to reluctant publishers, and I recognise that success in selling books is almost a political art. With a great deal of what the hon. Member said I am in agreement, and I have no desire for any sort of quarrel even with what has been said by hon. Members opposite, but so much of it was irrelevant to the many aspects of the subject.
Our difficulty in a debate of this sort is that we are talking of quite different and separate things. Private enterprise may have given generous subscriptions. Indeed, it has. Many private enterprise firms have been very generous, but that has nothing whatever to do with the United Nations Children's Fund, and cannot have anything to do with its organisation or operation. We are talking, on the one hand, of bringing help, light—if hon. Members like—to those who live in darkness and in the valley of the shadow of death; of bringing them life, bringing them a chance of health. I think that the hon. Member, who made a good speech, when he reads it through will, perhaps, regret the observation, "How can we do more?"
This is the Government who took £60 million tax off beer this year. To what might they not have transferred it, if they had all that money at their disposal in one year? I agree that there may have been blocked sterling, but could we not have directed it to some of these good causes? I can go to any "pub" in Oldham, where there are big-hearted, generous men who may be glad at a 1d. a pint off beer, but who would not have wished it when it might have done so much for suffering people, and when we give to the Children's Fund £300,000 a year or thereabouts—something like 1d. per year per head of the population, and when we know, from those such as

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Ritchie Calder, who have seen them, the miracles which have been performed, literally miracles, by antibiotics in the treatment of crippling diseases. We have seen the lame, the halt and the maimed, after half a crown's worth of penicillin injection, taking up their beds and walking, again becoming fit men, women and children after having been crippled for years. And we give 1d. per year per head to this!
I am glad that my right hon. Friend was rude to the Government about the comparatively small addition to the Refugees' Fund. A few weeks ago, I had been rather polite about it. That is one of the prices one pays for an all-party resolution.
But the Government have done a good deal by comparison with many countries; the record of this is not bad. But surely there could be a little more sense of urgency, a little more sense of reality in this question. Because the United Nations High Commissioner speaks of what is not merely a Christian duty, but an economic investment. Instead of just keeping the refugees alive, by giving a little more we could provide them with rehabilitation, and a job and a home.
I have not, as I said, the figures at my finger tips, but I think I am right in saying that about £400 will rehabilitate a man, and, if he has them, his wife and family. These are things we cannot afford to be mean about. If we cannot do them because we have a Christian duty and because we believe in performing Christian duties, we can still do them on hard, realistic, economic grounds.
The hon. Member for Liverpool, Wavertree (Mr. Tilney) spoke at some length about private investment, but that sort of approach, the private investment economic approach, is still remote from the magnitude of the problems. I agree with what he said about Africa, but it is the background of expenditure in Africa that matters. One of the problems in Africa is the problem of transport. One of the immediate, political problems of East Africa is the domination of East Africa by the Nairobi-Mombasa Railway. It is a physical fact that gives political control.
The whole question of the development of Africa is tied up with large-scale schemes for the provision of trans-
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port which can never hope to pay in terms of our lifetime or in terms of a generation and which, indeed, are not worth considering from the point of view of investment at all, except in so far as there is in the long-term background the necessity of the planning and development of a great Continent—which may have a much greater share in future history than any of us are able to perceive at the moment.
Of course, when we talk of these things we talk humbly and without much information, because no one can forecast what the coming of atomic power or the development of a whole nation will do. A former Member of the House, a man loved on both sides, the late Dick Stokes, took me "some years ago to see some of his machines used for the construction of canals, very different from those of the days of De Lesseps. Indeed, it is not easy for us to know what can be done.
The hon. Member for Wavertree referred to the Communist countries and how little they were doing through the United Nations. But how much are they doing direct? China is an underdeveloped area. China, with 600 million people, is one of the countries which, a few years ago, we talked of as one of the poorest; China, with a transport problem such that it can have overproduction of agricultural produce in a distant part of one province and a famine in a distant part of another and no communication to make it possible for the one part to feed the other. I can remember talking to a Chinese manufacturer not long ago who wanted to export eggs to earn foreign exchange to buy other food for people who were starving. That is where international planning comes in.
I ask hon. Members opposite to remember—I say it with all the moderation I can—that economic development of our Colonies does not mean the digging of mines. The digging of mines may be necessary, but very often it is a stark tragedy—when, for instance, we dug up gold in South Africa to bury it at Fort Knox. That is being replaced now by a new procedure, the digging up of metals in Africa for use in America and Western Europe, too. The great juggernaut of the American industrial machine, and, to a lesser degree, our own, is demanding more and more

927
share of essential raw materials from all the world, and this operation will, naturally, increase the poverty of the rest of the world, unless there is planning, unless there is organisation, and unless this work is embarked on as a great, serious venture.
I beg hon. Members to remember, too, that it is not all a question of our economic development. There is the Chinese plan for the Yellow River—or is it the Yangtse, I am not quite sure——
Mr. Farey-Jones: The Yellow River.
Mr. Hale: The northern-most one. It is to be opened up to 3,000 miles for sea-going ships and to irrigate a vast new area, with construction dams on the lines of those in the Tennessee Valley. It will rank not as one of the greatest economic schemes, but the greatest that the world has contemplated up to now. The Aswan Dam was a small thing beside it, but that dam, as I said in an interjection earlier, had great political implications. No one got up at the time of Suez and asked, "How can we spend this money and finance the payment of troops in the Canal? How can we do all this from our limited resources?" It was thought necessary then, and there is no scheme in the world more necessary than the one we are talking about at the moment and no item of any political programme of more importance to the world.
Research is another item. The hon. Member for Halifax talked about books. I would be the last to deny people, books, but they are not much use to those who cannot read or write. I know that they may be of use to those who teach them. I do not underestimate their importance. I am happy to be associated with the hon. Member in any efforts he makes to import books. [HON. MEMBERS: "Export."] Yes, to export books, but to import books as well, as far as I am concerned.
My right hon. Friend the Member for Derby, South gave figures of illiteracy in many of these areas. Those figures are relevant to this debate. In many of these countries we are not talking about transition even to great agricultural development. In some cases it is just a matter of minor schemes of irrigation.
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In Indonesia it is the development of the protein from fish. In the deserts it is a question of afforestation, first, to prevent soil erosion. All these are questions of research. It may well be true that some of the experiments going on in agricultural colleges can prove of greater effect in the development of the world than some of the major schemes about which we hear so much. I remember the experiments on the hybridisation of rice, some years ago, which could have transformed the feeding habits of half the population of the world.
We are talking about countries where riches means an extra handful of rice a day, and some of the things we have talked about today have no relevance, no existence, and little possibility of taking place. The Government could do something and the Minister would probbably like to do it. I have always accepted the point made by an hon. Member opposite about the need to try to secure self-contained economic areas. I put that forward not as part of this programme, but as part of having an independent Britain which can exercise its own judgment in foreign affairs and have its own foreign policy. I looked forward to a free Western Europe, in the face of the disapproval of Transport House and my right hon. Friends above the Gangway. We have missed that opportunity. The free world of Western Europe now means Dr. Adenauer, General De Gaulle and General Franco, and when we do not like what they say we call them the Common Market.
There is, however, a good deal that we can do. I would say to the Minister with all sincerity that he should see Dr. Lindt again and talk about the refugees. I am not criticising. I know that the Government have given some support, but here is a field in which a little extra expenditure could do so much and would be very worth while. I have never attempted to speak for my leaders above the Gangway, because I have often found myself in disagreement with them, but I will take the risk today of saying without any hesitation that the Minister can count on all-party support for any gesture which he makes in that way and on heartfelt thanks from all of us on this side of the Committee.
Then there is the Children's Fund. I remember seeing years ago, that charming

929
man, whose name I have forgotten, but who was with Rupert Brooke, at Cambridge.
Mr. P. Noel-Baker: Dudley Ward.
Mr. Hale: He was secretary of the Children's Fund. We asked what we could do to help and he said, "The one thing that you can do is to go back to the House of Commons and persuade the Government to give more money." We organised a deputation and got some promises and a kindly reception, but we got no more money. Things are more costly today and the work is expanding, but we give only a 1d. per head per year, and that is a contribution which the Government could double without anyone raising any criticism.
There is one thing which I should like to say about the whole of this debate. I realise that I have said it before, and I do so now realising that probably there are very few of those watching gentlemen upstairs who with their pens would like to record this repetitiveness. But every now and then I remember my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) saying that the trouble with politics is that all the indications do not point the same way at one and the same time. Indications from one aspect point one way and from another aspect the other way, and one cannot reconcile them. But now and again in history all the indications point in the same direction at once, and that is the time when statesmen go very quickly in that direction.
Here we have the clear path of Christian duty. Here we have the clear path of economic interest, because the development of the standard of living will, of course, make ultimate contributions to international trade of value to a small and over-populated island which is dependent on the trade of the world for its essential raw materials. We have the clear path of international statesmanship, as my right hon. Friend the Member for Derby, South said so much better than I could say it. As a country solicitor, when I wanted to resolve a difficulty I tried, first, to agree with my opponents on the things on which there was a chance of getting agreement. If we had an international development fund to cover developments stretching from one side of the Iron Curtain to the other and we "got cracking" together on work of that
930
kind, we would begin to create a climate of understanding and a chance of cooperating and of realising that neither side is quite as bad as the other thought. That is the best chance of peace.
It might be asked how all this is to be financed. The best way of financing a great international development programme is as part of disarmament. We are more likely to get agreement on disarmament if we are deliberately reducing expenditure on arms in order to devote the money to a great international, beneficent project. This is one of the most important debates that we have had in the House of Commons. All indications point to the necessity of urgent, sincere and generous action. While we would give great benefit to the poor and the suffering of the world if we so acted, it is neither unreasonable nor immoral to point out that it would also be a scheme of great benefit to us.
6.19 p.m.
Sir John Barlow: I do not propose to follow in great detail the speech of the hon. Member for Oldham, West (Mr. Hale). He traversed very wide fields, discussing canals, Chinese eggs, gold mines, juggernauts of industrial machines, the Aswan Dam and so on. It was such a wide canvas that I wondered when he was coming to the groundnut scheme, but he omitted that altogether.
I am glad that I am speaking fairly soon after the speech made by the hon. Member for East Ham, South (Mr. Oram), because I can see that he is taking a great interest in colonial development. Within the next six weeks I hope that he and I and two other hon. Members will be discussing these problems and investigating them on the spot in one of the most backward and most primitive parts of the world. We shall have the opportunity then of seeing how we should like our theories to be practised and for that reason I was most interested to hear the hon. Member's speech.
In discussing the question of Commonwealth development there is no doubt that we have great responsibility and great power, and it is a matter of absorbing interest. It may well be that if we develop the Commonwealth on proper lines we shall not only bring greater joy, happiness and prosperity to people with lower standards of living, but we shall also

931
make a great contribution to the world. We have an opportunity now, in a rapidly changing world. Our problem is how to meet this with the relatively small funds at our disposal. We can only develop, or help to develop, the Commonwealth with the surplus funds available, which means that we must have a stable and prosperous economy in this country, without which it is impossible to help others abroad as much as we would like.
The right hon. Member for Derby, South (Mr. P. Noel-Baker), who I regret to see is not in his place at the moment, laid great stress on channelling funds through United Nations organs. This may be all very well up to a point, but it is only one side of the matter. I attach great importance to development by private enterprise. As hon. Members know, I have been connected with this in a small way for many years, and I have seen the great contribution which can be made to colonial countries and emerging Powers, and to ourselves as well, if it is done in a reasonable way.
I am not one of those who believe that the Government should delve into industrial enterprise. In a most general way it seems to me that it is the responsibility of the Government to provide roads, power and to maintain health services, so that a country can develop normally. In some parts of the world we have seen that private enterprise can develop a country much more economically than is possible by Government, and we have seen those countries prosper and go ahead. We have seen several instances of this. In my opinion it is a great mistake for the Government to try to channel funds to develop a country's industry or agriculture.
Mention has been made of the Colonial Development Corporation and the frustration it has felt during the last year. Without going into its problems in great detail, it seems to me that one difficulty is that we have not clearly defined what is Government expenditure on improvements and what is industrial enterprise. There is great division on that point and it is a mistake, I believe, to try to mix them. There should, therefore, be a clearer definition. As for the Corporation wishing to wipe out its accumulated debt of £8 million, I do not see any reason for this. Since the Cor-
932
poration started a comparatively few years ago, there is no doubt that it has accumulated a vast debt, but why wipe it out? No private company could do so without reconstruction, so why should the Corporation?
Reference has also been made to the Grondona scheme for the stabilisation of produce prices in different parts of the world. Although this may be difficult, it would seem to me to be a great help to underdeveloped countries if some stabilising scheme for produce could be developed. Many countries rely entirely on one, two or three commodities, and if those prices fall they are in a bad way. To try to meet the position, they develop small industries which in many cases are uneconomic, yet in the present scheme of things they are bound to do so because there is no way out for them if there is a fall in commodity prices, as we have seen time and time again.
Since I have only a few minutes in which to speak I will conclude by saying that it would be wrong to suggest that we should spend 1 per cent. or 2 per cent. of our national income, as has been proposed. It would be better to encourage the right atmosphere for private enterprise in the underdeveloped countries, so that they can help themselves and the Commonwealth as well. We have a great responsibility for developing the Commonwealth and I hope that, although there are small differences between the two sides of the Committee, we are not too far apart to spoil the great opportunity we have for development in the future.
6.26 p.m.
The Economic Secretary to the Treasury (Mr. F. J. Erroll): This afternoon we have had an interesting and valuable debate and, if time does not permit me to reply to all the points made, I can assure the Committee that they will be studied carefully by the Treasury and by the other Departments concerned. In particular, I found interesting the suggestion made by my hon. Friend the Member for Liverpool, Wavertree (Mr. Tilney) concerning the possibility of an International Investment Convention, and I shall study the report which he has told the Committee will be published today. The remarks of my hon. Friend the Member for Middleton and Prestwich (Sir J. Barlow) reminded the Committee of the

933
valuable rôle which private enterprise can play in the development of the newly emerging territories. This is a most important point for us to remember, and I shall be referring to it during my concluding remarks.
It is clear from what hon. Members on both sides of the Committee have said that hon. Members would like to see additional aid provided by the Government for the underdeveloped countries, or, as I personally prefer to call them, the less-developed countries. We must remember that Britain is doing a great deal, as I shall presently show. We intend to do more as time goes on and as our economic position strengthens, but our present efforts can, on a national income basis, bear comparison with those of any other countries, although naturally we cannot match in absolute terms the massive aid provided by the United States of America. In deciding how much we can do we have to keep several important factors in mind, and if the Committee will bear with me for a moment I will remind hon. Members of them briefly.
First, our own domestic economy must remain strong. An economically weak Britain would be in no position to help other countries. Secondly, there must be confidence in the £ sterling throughout the world. A lack of such confidence would damage world trade; and the producers of primary products, often the principal output of underdeveloped countries, would be the first to suffer. We would not be helping these countries in the long run if, in our efforts to assist them, we were to overstrain ourselves. Thirdly, we see advantages in multilateral programmes of aid with as many of the industrialised countries as possible joining in. I listened with great interest to what the right hon. Gentleman the Member for Derby, South (Mr. P. Noel-Baker) said about the dislike of many countries for bilateral aid. It may sound odd that a country which is receiving a gift should find so many objections to receiving it, yet the fact remains that recipient countries harbour suspicions and these must be taken into account.
In favouring multilateral programmes, I hope the right hon. Gentleman will therefore give us credit for playing our full part in urging these forward. During my brief interruption of his speech, when I pointed out that we had played our
934
full part in increasing the capital of the International Bank, I think he suggested that we were not entitled to take any credit for that. If he advocates that we should propose multilateral programmes, I think Britain is entitled to take her share of credit for those programmes which go off successfully.
Mr. P. Noel-Baker: I said in our debate on the International Bank in February that, while we welcomed the increase in the capital of the Bank, we did not think it was nearly enough, and I still think that we ought to be pressing with all our power to increase the work of the Bank and to release more of our sterling for its use.
Mr. Braine: What is "enough"?
Mr. Erroll: As my hon. Friend has just interjected, what is "enough"? There can never be enough in a field as big as this. What we have to do is to provide what we think can be afforded without over-straining the British economy.
Furthermore, we cannot go it alone without over-straining the economy. It is essential that other countries should join in. That is why I was glad to see that at the Atlantic Congress held in London in June, a resolution was passed in favour of partnership to help the underdeveloped countries. It was called Resolution D. It is rather too long to quote in full, but I should like to give two sentences from it. One sentence said:
"Our nations should provide a massive and sustained effort towards this end. …"
That is, towards forming a partnership of the peoples of Asia and helping in the great task of the development of that continent. It went on to say:
"Its aim would be to help the peoples of the less-developed countries to achieve a rising standard of living together with individual freedom, human dignity and democratic institutions."
That resolution, which was passed only last June, will, I am sure, be studied very carefully by all the countries concerned.
Fourthly, we directly help the underdeveloped countries by maintaining a high level of international trade, and we should not forget how important this is to them, because it leads to a consequently greater demand for their products.

935
Fifthly, the hard fact remains that we cannot hope to contribute to every desirable objective. There are so many more things to be done than we can possibly afford to do.
I rather deplore the unfavourable comparisons which some hon. Members have made of our efforts compared with those made by other countries. It is true that there may be in regard to one or two particular projects a greater contribution made by certain smaller countries, but what one must do is to look at our overall record. The contribution which we make through a variety of agencies. which I shall detail to the House, will, I believe, stand comparison with that of any other country in the world.
I think it would help the Committee if I were just to run over briefly the many forms of aid and assistance which the United Kingdom Government provide, because it is not easy to find these all in one book of reference. Indeed, the hon. Member for East Ham, South (Mr. Oram) referred to the bewilderingly large literature which is available on this subject. Perhaps I may at the same time bring the Committee up to date on some of the latest figures.
First of all, dealing with the aid for which the United Kingdom is primarily responsible, I should like to mention the Colonial Development and Welfare Acts, under which approximately £20 million of United Kingdom money each year is being spent on development and welfare in the Colonies. One of the guiding principles is to encourage the Colonial Governments themselves to employ as much initiative as possible in the use of this money. The total which has been made available for the five-year period ending 31st March, 1964, is about £139 million. Almost all of this assistance is given by way of grant.
In addition to these grants, there has been introduced a system of Exchequer loans. While we expect Colonial Governments to continue to look in the first place to the London market for their external borrowing, Her Majesty's Government recognise that they may need to make loans to Colonial Territories in cases where we can be satisfied that a territory cannot raise from any other source the funds required for its necessary development. £100 million is being
936
made available for this purpose over the five-year period.
Several hon. Members have criticised the working of the Colonial Development Corporation. Nevertheless, despite the tone of some of the annual reports, the fact is that the Corporation has done a great deal in its own sphere. In 1958–59, it borrowed from the Exchequer some £5·78 million, and borrowings for the current year are likely to amount to at least as much. Its total borrowing powers amount to £150 million. and approximately £95 million has been approved up to 31st March this year. So very considerable use has been made of this agency.
As regards the criticisms about the difficulties and frustrations of the C.D.C., I would remind the Committee that Lord Sinclair's Committee will be examining the future of the Colonial Development Corporation, and I think we can safely leave the problems and the criticisms of the C.D.C. to that excellent and impartial Committee.
I should like to mention what we are doing by way of Commonwealth assistance loans. These are Government-to-Government loans, and they are designed specifically to help to overcome the main drawback to the flow of funds to the Commonwealth through existing institutions; that is, to provide for the less developed countries and those newly emerging into independence whose credit may not yet be fully established. In 1958–59, we made loans to India and Pakistan totalling £38·5 million, and in the current financial year further loans are at present being negotiated, but I am not yet in a position to be able to give a total figure. There are also loans, in addition to the two that I have mentioned, to non-Commonwealth countries, totalling £8 million, £5 million of which was provided for the Sudan.
I now pass more to the international agencies in which the United Kingdom Government play a greater or lesser part as the case may be. First of all, there is the Colombo Plan, a technical cooperation scheme which provides technical assistance—for example, experts, training facilities for students, training equipment and other forms of technical assistance—to Commonwealth and foreign countries in South and South-East Asia. This scheme has always had

937
the fullest support from Her Majesty's Government. In the early years of the scheme up to March, 1956, we contributed about £2 million. Since then we have extended our commitment, and we propose to make available a sum of up to £9 million over the period of 7 years from April, 1956. Between April, 1956, and March, 1959, our expenditure was about £2·8 million, and this financial year we are estimating for an expenditure of over £1·2 million.
I now come to the International Monetary Fund, which, while it may not appear to be a body specifically directed to providing aid for underdeveloped territories, nevertheless is a most valuable institution for helping to stabilise the economies of newly emerging territories. Its purpose is to help a country which is experiencing short-run balance of payment difficulties. It may do this in several different ways. The operation is usually tailor-made to suit the needs of the individual country. There may be a loan or there may be drawing rights under a stand-by arrangement, or a combination of the two. Any developing country can experience balance of payments difficulties, and the Fund can provide valuable help.
Here the United Kingdom has played its full part in securing an all-round increase of 50 per cent. in the I.M.F. quotas. We hope this will become effective in the Autumn. Parliament has already empowered us to make, and we have already made, the necessary gold payment of £58 million, so that we are helping that institution to play its full part.
I now go on to some of the United Nations agencies, which were referred to by the right hon. Member for Derby, South, the hon. Member for Oldham, West (Mr. Hale) and several other speakers. We have been accused of dragging our feet and not increasing our subscriptions. I should like to refute that charge straight away. We have not been dragging our feet. Our contributions are made on an assessed basis to budgets which are agreed as reasonable and appropriate. Our generosity, as distinct from our contributions, finds its full scope outside the regular budgetary system. We have occasionally sought at times for a policy of stabilisation in the budgets, but that has been mainly directed at increasing the administrative
938
efficiency of the organisations. We have not sought to restrict the programmes proposed.
The right hon. Gentleman particularly criticised us for not having contributed to the Malaria Eradication Fund. The reason for that is because we have been doing a great deal of anti-malaria work on our own. We feel that the best help which the United Kingdom Government can give towards a solution of the problem of malaria is by continuing our existing efforts mainly on the basis of direct help. We are already doing a great deal, particularly in the dependent territories. In recent years, we have spent nearly £800,000 on malaria eradication in the Colonies. Cyprus, Mauritius and British Guiana have all been freed of malaria, and considerable progress has been made elsewhere. I think it is right for us to help in this direction, as we are doing.
Mr. P. Noel-Baker: Did the hon. Gentleman say "£800,000 over a number of years"?
Mr. Erroll: Yes. I said £800,000 in recent years. Offhand, I cannot give the exact number of years.
Mr. Braine: Is it not a fact that it is not the money but the results which count and that malaria, a killing disease, in these territories has been completely and totally eradicated?
Mr. Erroll: I am much obliged to my hon. Friend for that intervention. It is not only the amount of money which is spent but the results achieved, which we would do well to remember.
We were criticised for offering a contribution of only £200,000 to the World Refugee Year. In fairness, the right hon. Gentleman might have reminded the Committee of our annual contribution to the Arab refugees of about £2 million a year.
Mr. P. Noel-Baker: I mentioned that we paid £2 million to the Arabs, but we do that because of our long record of responsibility in Palestine.
Mr. Erroll: It is quite right that those places where we have had responsibilities should have first call on the funds available.
The right hon. Gentleman and others referred to the Special Fund of the United

939
Nations, and I should like to explain that Her Majesty's Government give their full support to the aims and objectives of the United Nations Special Fund. We have contributed the equivalent of 1 million dollars to the Fund for its first year of operation. We are at present discussing what our contribution for 1960 should be in the light of our other commitments to underdeveloped countries. While I obviously cannot give any exact figure, I think that I can say that Her Majesty's Government are prepared to consider making a considerable increase in their contributions to that Fund.
Mr. Hale: Will the hon. Gentleman say a few words about the very special problem of the Arab refugees from Algeria in Tunisia and Morocco, of whom, we are told, there are now between 180,000 and 220,000, living in the open and facing winter, and in respect of whom, we are told, General de Gaulle refuses to permit assistance to go through, except under very limited heads? Will he bear in mind that if General de Gaulle is right in his contention that these are French nationals, the matter might be raised at N.A.T.O., since this is then a civil war?
Mr. Erroll: I will not reply to the hon. Gentleman now, but I will carefully study what he has said.
For the year ended 30th June, 1955, the International Bank approved loans of no less than $703 million, and of those loans new lending by the Bank was 75 per cent. above the average rate for the period 1954–57. The Bank's cumulative total of lending is now $4,400 million, of which roughly one-third has been for the Commonwealth. That has meant that this multilateral lending organisation has secured very substantial benefits for the Commonwealth.
We are the second largest subscriber to the Bank's capital, the United States being the largest. Our total cash subscription is £93 million, and this has been going out in Bank loans at a rate of about £20 million a year, and a further £20 million still remains to go out. As I said, along with the United States of America, we have played the leading rôle in the plan for doubling the Bank's authorised capital.
940
I now come to a new proposal which, incidentally, was also mentioned in the Resolutions of the Atlantic Congress, in Resolution F.
Dr. Barnett Stross: Should not the hon. Gentleman give some credit to the work of the voluntary agencies which work from Britain, such as the Save the Children Fund, which set the pace and show the need? Although such organisations have restricted funds, they do a great deal of work.
Mr. Erroll: I am very grateful to the hon. Gentleman for referring to the voluntary organisations, which do a great deal. Unfortunately, in the few minutes which remain I shall not have time to do more than acknowledge what the hon. Gentleman has said.
I was coming to the new proposal to establish an International Development Association. The question is often raised as to whether some new financial instrument is needed to provide economic assistance, or whether there are so many organisations that there is perhaps a degree of overlapping which reduces efficiency. We think that in general it is often misleading to think that these problems can be solved merely by expanding the number of institutions. After all, in themselves new institutions do not create new capital. As I have described, we already have the United Nations Agencies and the various regional and bilateral arrangements which are in existence. And there is the International Bank to which I have also referred.
In addition to the International Bank, there is its affiliate, the International Finance Corporation, which, unlike the Bank itself, invests only in non-Governmental enterprises and which is now providing funds on a useful although on a much smaller scale. The extent of United Kingdom's subscription to the Corporation is 14·4 million dollars.
However, there is one proposal for a new instrument of economic assistance which does not seem to us to be open to the same objections of unnecessary duplication of institutions. This is the suggestion for a new international development association to operate as a further affiliate of the International

941
Bank, and which could supplement the Bank's existing operations without duplicating the institutional and organisational arrangements.
There would be, we hope, a substantial sharing of facilities and a close relationship between the operations of the Bank and the International Development Association. The idea is that the new Association would represent not merely an additional supply of funds, but funds which may be used for loans on somewhat more flexible terms than is possible for the Bank, which, as hon. Members know, must match its own lending with the terms on which it can itself provide fresh loans.
It is, of course, true that the Bank already enables countries to obtain loans on terms which would not otherwise be possible for them. Nevertheless, we feel that there is a case for loans on terms which would defer or alleviate the burden of debt repayment by the less advanced countries while they were still in the relatively early stages of economic development.
This matter was aired at the annual meeting last year of the International Bank in Delhi. Further discussion is expected at this year's annual meeting in Washington, and it is quite likely that a measurable step forward may then be taken to bring the suggested association into being. Her Majesty's Government are prepared to join in working out plans for such as association. This naturally means that, if acceptable plans come to fruition, the United Kingdom would contribute to the capital of the Association as to the capital of the International Bank. The possible size of the International Development Association is obviously one of the most important aspects still to be settled, and it is therefore too soon to say what Britain's contribution might be.
A capital of 1,000 million dollars was suggested when the plan was first advanced in the United States of America. If that were to be the figure, and we contributed the same proportion, 14 per cent., as we do to the International Bank, our subscription to the I.D.A. would be £50 million.
What I have said so far has been mainly concerned with Government assistance, and I should like to remind the
942
House of the important rôle of private British investment in underdeveloped countries. The great advantage of such assistance is that it is flexible. It can take the form of direct investment by United Kingdom companies, or of fresh money raised in the London Market. Money so raised in London can be used by the Commonwealth, including Colonial Governments, and by public corporations and companies in those countries. If this money is lent, it enables the Governments to provide the basic economic services. If directly invested in specific enterprises, it brings technical and managerial skills and creates employment and help in the form of goods to be consumed or exported.
Employers are fully aware of the importance of private investment in underdeveloped territories. Only last week, the British Employers' Confederation held a meeting of industrialists of other European countries to study the economic development of the emerging countries of the world. At the end of their meeting, they said that this should be one of the leading objectives of employers from countries which have already obtained a high degree of industrialisation. The employment and training of local labour in technical skills of all types and all levels, including management techniques, the responsibilities to be undertaken by foreign investment companies, and the importance of investment and liaison between foreign and local employers and the Government were also discussed.
I have kept to my notes rather carefully because of the figures involved of the various forms of assistance which Great Britain is at present making. What does all this add up to? It adds up to an impressive total, taking Government and private investment together. The actual expenditure under grants and loans by Her Majesty's Government to underdeveloped countries in 1958–59 was approximately £90 million. To this should be added figures which are not covered in certain published surveys. For example, the International Bank in the same period disbursed £19 million from our sterling subscription for loans to underdeveloped countries. With these additions, and one or two others which I have not time to mention, the total of United Kingdom aid to the underdeveloped countries in 1958–59,

943
excluding military aid, was about £115 million. This figure represents an increase of over £35 million compared with the previous year. Under our existing commitments, the total will rise substantially again in 1959–60.
As regards private United Kingdom investment overseas, this totalled about £200 million to all countries, and we estimate that of this about one-half went to underdeveloped countries. If we add an approximate figure of £100 million of private investment to the figure of Government aid which I have already given, the resulting total is about £215 million. This represents rather more than 1 per cent. of the average gross national product of the United Kingdom in recent years. I have deliberately included the total of private investment not only because we believe that this investment is just as valuable to the receiving countries but because £ for £ it represents just as great a drain on the nation's capital resources.
Mr. P. Noel-Baker: Was the figure of £100 million of private investment to underdeveloped countries, or to the Commonwealth as a whole?
Mr. Erroll: To underdeveloped countries. The total figure was £200 million.
We have listened to many pleas for additional assistance for one project or another, and we would like to be able to respond more generously to them. We recognise that the pleas for greater assistance are in a sense an unconscious tribute to Britain's strong financial position which has been built up by a Conservative Government. I do not,
however, wish to end on a controversial note.
Hon. Gentlemen opposite, and particularly the right hon. Gentleman the Member for Derby, South, pressed for aid for social purposes. This is most desirable, and were greater funds available we would help more in this direction, but the resources that we can devote to helping underdeveloped territories are strictly limited. A choice between desirable objectives has to be made. The development of wealth-creating resources in these countries must come first. Without such indigenous sources of wealth these countries would never be able to sustain the social services and welfare that we would like them to possess. I believe that our priorities are right and that our contribution, both Government and private, to the needs of the underdeveloped territories, is one of which we can be proud. I therefore commend it with confidence to the Committee.
Mr. P. Noel-Baker: The Financial Secretary always speaks in a most conciliatory way, but I am afraid that he has not satisfied us that, in the words of the N.A.T.O. Resolution which he quoted, a massive and sustained effort is to be made. He has not satisfied us that if we could afford Suez we cannot now afford the things which we are denying to the underdeveloped countries. What he said about the International Development Association by no means assuages my fears. In view of all this, I beg to move, That Item Class II, Vote 2 (Foreign Office Grants and Services), be reduced by £5.
Question put:—
The Committee divided: Ayes 192. Noes 213.

Division No. 170.]

AYES

[6.58 p.m.

Ainsley, J. W.

Brown, Rt. Hon. George (Belper)

Davies, Ernest (Enfield, E.)

Albu, A. H.

Brown, Thomas (Ince)

Davies, S. O. (Merthyr)

Allaun, Frank (Salford, E.)

Burton, Miss F. E.

Deer, G.

Allen, Arthur (Bosworth)

Butler, Herbert (Hackney, C.)

de Freitas, Geoffrey

Allen, Scholefield (Crewe)

Butler, Mrs. Joyce (Wood Green)

Delargy, H. J.

Awbery, S. S.

Callaghan, L. J.

Diamond, John

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

Carmlchael, J.

Dodds, N. N.

Benson, Sir George

Castle, Mrs. B. A.

Edelman, M.

Beswick, Frank

Champion, A. J.

Edwards, Robert (Bilston)

Blackburn, F.

Chapman, W. D.

Edwards, W. J. (Stepney)

Blenklnsop, A.

Cllffe, Michael

Evans, Albert (Islington, S. W.)

Blyton, W. R.

Collick, P. H. (Blrkenhead)

Evans, Edward (Lowestoft)

Boardman, H.

Corbet, Mrs. Freda

Finch, H. J. (Bedwellty)

Bonham Carter, Mark

Craddock, George (Bradford, S.)

Fletcher, Erie

Bottomley, Rt. Hon. A. G.

Cronln, J. D.

Forman, J. C.

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

Crossman, R. H. S.

Fraser, Thomas (Hamilton)

Bowles, F. G.

Cullen, Mrs. A.

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

Boyd, T. C.

Darling, George (Hillsborough)

George, Lady Megan Lloyd (Car'then)

Braddock, Mrs. Elizabeth

Davies, Rt. Hn. Clement (Montgomery)

Gibson, C. W.

Gordon Walker, Rt. Hon. P. C.

McKay, John (Wallsend)

Robinson, Kenneth (St. Pancras, N.)

Grenfell, Rt. Hon. D. R.

McLeavy, Frank

Rogers, George (Kensington, N.)

Grey, C. F.

MacPherson, Malcolm (Stirling)

Ross, William

Griffiths, Rt. Hon. James (Llanelly)

Mahon, Simon

Royle, C.

Griffiths, William (Exchange)

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

Silverman, Julius (Aston)

Grimond, J.

Marquand, Rt. Hon, H. A.

Silverman, Sydney (Nelson)

Hale, Leslie

Mason, Roy

Simmons, C. J. (Brierley Hill)

Hall, Rt. Hn. Glenvil (Colne Valley)

Mayhew, C. P.

Skeffington, A. M.

Hamilton, W. W.

Mellish, R. J.

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

Hannan, W.

Mikardo, Ian

Slater, J. (Sedgefield)

Hastings, S.

Mitchlson, G. R.

Snow, J. W.

Hayman, F. H.

Monslow, W.

Sorensen, R. W.

Healey, Denis

Moody, A. S.

Soskice, Rt. Hon. Sir Frank

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

Morris, Percy (Swansea, W.)

Sparks, J. A.

Herbison, Miss M.

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

Spriggs, Leslie

Hewitson, Capt. M.

Mort, D. L.

Stewart, Michael (Fulham)

Hobson, C. R. (Keighley)

Moss, R.

Stonehouse, John

Holman. P.

Mulley, F. W.

Stones, W. (Consett)

Holmes, Horace

Noel-Baker, Francis (Swindon)

Strauss, Rt. Hon. George (Vauxhall)

Houghton, Douglas

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

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

Howell, Charles (Perry Barr)

O'Brien, Sir Thomas

Summerskill, Rt. Hon. E.

Howell, Denis (All Saints)

Oliver, G. H.

Swingler, S. T.

Hughes, Cledwyn (Anglesey)

Oram, A. E.

Sylvester, G. O.

Hughes, Hector (Aberdeen, N.)

Orbach, M.

Symonds, J. B.

Hunter, A. E.

Oswald, T.

Taylor, Bernard (Mansfield)

Hynd, H. (Accrington)

Owen, W. J.

Thomas, George (Cardiff)

Irvine, A. J. (Edge Hill)

Padley, W. E.

Thomson, George (Dundee, E.)

Irving, Sydney (Dartford)

Paget, R. T.

Thornton, E.

Isaacs, Rt. Hon. G. A.

Palmer, A. M. F.

Ungoed-Thomas, Sir Lynn

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

Pannell, Charles (Leeds, W.)

Viant, S. P.

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

Parker, J.

Warbey, W. N.

Jenkins, Roy (Stechford)

Parkin, B. T.

Weltzman, D.

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

Paton, John

Wells, Percy (Faversham)

Jones, David (The Hartlepools)

Pearson, A.

Wells, William (Walsall, N.)

Jones, J. Idwal (Wrexham)

Pentland, N.

White, Mrs. Eirene (E. Flint)

Jones, T. W. (Merloneth)

Plummer, Sir Leslie

Wilcock, Group Capt. C. A. B.

Kenyon, C.

Popplewell, E.

Willey, Frederick

Key, Rt. Hon. C. W.

Probert, A. R.

Williams Rt. Hon. T. (Don Valley)

King, Dr. H. M.

Proctor, W. T.

Williams, W. R. (Openshaw)

Lawson, G. M.

Pursey, Cmdr. H.

Winterbottom, Richard

Lee, Frederick (Newton)

Randall, H. E.

Woof, R. E.

Lindgren, G. S.

Redhead, E. C.

Yates, V. (Ladywood)

Mabon, Dr. J. Dickson

Reld, William

Zilliacus, K.

McAlister, Mrs. Mary

Reynolds, G. W.

MacColl, J. E.

Roberts, Albert (Normanton)

TELLERS FOR THE AYES:

MacDermot, Nlall

Roberts, Goronwy (Caernarvon)

Mr. J. T. Price and Mr. Short.

NOES

Agnew, Sir Peter

Bryan, P.

Freeth, Denzil

Altken, W. T.

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

Gammans, Lady

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

Campbell, Sir David

Gibson-Watt, D.

Alport, C. J. M.

Cary, Sir Robert

Glyn, Col. Richard H.

Amery, Julian (Preston, N.)

Channon, H. P. G.

Godber, J. B.

Anstruther-Gray, Major Sir William

Clarke, Brig. Terence (Portsmth, W.)

Goodhart, Philip

Arbuthnot, John

Cole, Norman

Cough, C. F. H.

Armstrong, C. W.

Conant, Maj. Sir Roger

Gower, H. R.

Ashton, Sir Hubert

Cooper, A. E.

Graham, Sir Fergus

Astor, Hon. J. J.

Cordeaux, Lt.-Col. J. K.

Grant, Rt. Hon. W. (Woodside)

Atkins, H. E.

Corfleld, F. V.

Green, A.

Baldock, Lt.-Cmdr. J. M.

Courtney, Cdr. Anthony

Gresham Cooke, R.

Baldwin, Sir Archer

Craddock, Beresford (Spelthorne)

Grimston, Hon. John (St. Albans)

Barber, Anthony

Crosthwaite-Eyre, Col. O. E.

Grimston, Sir Robert (Westbury)

Barlow, Sir John

Crowder, sir John (Finchley)

Gurden, Harold

Barter, John

Cunningham, Knox

Hall, John (Wycombe)

Batsford, Brian

Currle, G. B. H.

Harris, Frederic (Croydon, N. W.)

Baxter, Sir Beverley

Dance, J. C. G.

Harris, Reader (Heston)

Beamish. Col. Tufton

Davidson, Viscountess

Harrison, A. B. C. (Maldon)

Bell, Phillp (Bolton, E.)

D'Avigdor-Goldsmid, Sir Henry

Harvey, Sir Arthur Vere (Macclesf'd)

Bennett, Dr. Reginald

de Ferranti, Basil

Harvey, John (Walthamstow, E.)

Bevins, J. R. (Toxteth)

Dodds-Parker, A. D.

Hay, John

Biggs-Davison, J. A.

Donaldson, Cmdr. C. E. MoA

Heald, Rt. Hon. Sir Lionel

Bingham, R. M.

Doughty, C. J. A.

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

Birch, Rt. Hon. Nigel

Drayson, G. B.

H'cks-Beach, Maj. W. W.

Bishop, F. P.

du Cann, E. D. L.

Hill, Rt. Hon. Charles (Luton)

Black, Sir Cyril

Duthie, Sir William

Hill, John (S. Norfolk)

Body, R. F.

Eden, J. B. (Bournemouth, West)

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

Bossom, Sir Alfred

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

Holland-Martin, C. J.

Boyle, Sir Edward

Emmet, Hon. Mrs. Evelyn

Hornby, R. P.

Braine, B. R.

Errington, Sir Erio

Hornsby-Smith, Miss M. P.

Brewis, John

Erroll, F. J.

Horobin, Sir Ian

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

Farey-Jones, P. W.

Horsbrugh, Rt. Hon. Dame Florence

Brooke, Rt. Hon. Henry

Finlay, Graeme

Howard, Gerald (Cambridgeshire)

Brooman-White, R. C.

Fisher, Nigel

Howard, Hon. Greville (St. Ives)

Browne. J. Nixon (Cralgton)

Forrest, G.

Howard, John (Test)

946

947

Hughes Hallett, Vioe-Admiral J.

Mawby, R. L.

Shepherd, William

Hughes-Young, M. H. C.

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

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

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

Morrison, John (Salisbury)

Smithers, Peter (Winchester)

Hutchison, Sir James (Scotstoun)

Mott-Radclyffe, Sir Charles

Stevens, Geoffrey

Hylton-Foster, Rt. Hon. Sir Harry

Nabarro, G. D. N.

Stoddart-Scott, Col. Sir Malcolm

Irvine, Bryant Godman (Rye)

Nairn, D. L. S.

Stuart, Rt. Hon. James (Moray)

Jenkins, Robert (Dulwich)

Neave, Airey

Studholme, Sir Henry

Jennings, J. C. (Burton)

Nicholson, Sir Godfrey (Farnham)

Summers, Sir Spencer

Johnson, Dr. Donald (Carlisle)

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

Sumner, W. D. M. (Orpington)

Johnson, Eric (Blackley)

Noble, Michael (Argyll)

Taylor, Sir Charles (Eastbourne)

Keegan, D.

Nugent, Richard

Taylor, William (Bradford, N.)

Kerby, Capt. H. B.

Oakshott, Sir Hendrie

Temple, John M.

Kerr, Sir Hamilton

Orr, Capt. L. P. S.

Thomas, Leslie (Canterbury)

Kirk, P. M.

Page, R. G.

Thomas, P. J. M. (Conway)

Lancaster, Col. C. G.

Pannell, N. A. (Kirkdale)

Thompson, R. (Croydon, S.)

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

Partridge, E.

Thomton-Kemsley, sir Colin

Legh, Hon. Peter (Petersfleld)

Peel, W. J.

Turton, Rt, Hon. R. H.

Lindsay, Hon. James (Devon, N.)

Peyton, J. W. W.

Tweedsmuir, Lady

Longden, Gilbert

Pickthorn, Sir Kenneth

Vosper, Rt. Hon. D. F.

Loveys, Walter H.

Pitt, Miss E. M.

Wakefield, Edward (Derbyshire, W.)

Low, Rt. Hon. Sir Toby

Pott, H. P.

Wall, Patrick

Lucas, Sir Jocelyn (Portsmouth, S.)

Powell, J. Enoch

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

Lucas-Tooth, Sir Hugh

Price, David (Eastleigh)

Watkinson, Rt. Hon. Harold

McAdden, S. J.

Price, Henry (Lewisham, W.)

Webbe, Sir H.

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

Prior-Palmer, Brig. Sir Otho

Webster, David

McMaster, Stanley

Ramsden, J. E.

Whitelaw, W. S. I.

Macmillan, Rt. Hn. Harold (Bromiey)

Redmayne, M.

Williams, Paul (Sunderland, S.)

Macmillan, Maurice (Halifax)

Renton, D. L. M.

Williams, R. Dudley (Exeter)

Macpherson, Niall (Dumfries)

Rippon, A. G. F.

Wills, Sir Gerald (Bridgwater)

Maddan, Martin

Roberts, Sir Peter (Heeley)

Wilson, Geoffrey (Truro)

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

Robinson, Sir Roland (Blackpool, S.)

Wolrige-Cordon, Patrick

Maitland, Hon. Patrick (Lanark)

Rodgers, John (Sevenoaks)

Wood, Hon. R.

Manningnam-Buller, Rt. Hn. Sir R.

Roper, Sir Harold

Yates, William (The Wrekin)

Marples, Rt. Hon. A. E.

Ropner, Col. Sir Leonard

Marshall, Douglas

Russell, R. S.

TELLERS FOR THE NOES:

Mathew, R.

Sharples, R. C.

Colonel J. H. Harrison and

Mr. Chichester-Clark.

Original Question again proposed.
Motion, by leave, withdrawn.

CIVIL AVIATION
Motion made, and Question proposed.
That a further sum, not exceeding £35, be granted to Her Majesty, towards defraying the charges for the year ending on the 31st day of March, 1960, for the following Services relating to the Report from the Select Committee on Nationalised Industries (Reports and Accounts) on the Air Corporations and the Report on the Civil Aircraft Accident at Southall, namely:

CIVIL ESTIMATES AND SUPPLEMENTARY ESTIMATE, 1959–60

£

Class IX, Vote 1 (Ministry of Transport and Civil Aviation)

10

Class IX, Vote 4 (Civil Aviation)

10

Class VI, Vote 10 (Ministry of Supply)

10

Class VI, Vote 10 (Ministry of Supply) (Supplementary Estimate)

5

Total

£35

7.7 p.m.
Mr. Frank Beswick: The Select Committee's Report on the Air Corporations merits a full day's debate, and there are many Members who will regret that this is not possible. To discuss it in half a day is bad enough, but to discuss it together with the Report of the Southall accident inquiry is almost impossible. Nevertheless, we have some questions to put to the Minister, and I hope that we shall get the information we ask for.
On the Air Corporations' Report, I want, first, to offer my tribute to the work of the right hon. and hon. Gentlemen who produced it. It is a remarkably thorough and penetrating work. There is nothing superficial about it. It was also a unanimous Report which, although it probably means that some of the phrases might be a little more muted than would otherwise be the case, adds to the authority of its conclusions. The first thing that emerges from a reading of the document is the genuinely national character and purpose of our two Corporations. The Committee also pointed out that in the international sphere most of the companies with whom our Corporations have to compete are themselves nationalised undertakings, and that all, in any case, are protected and supported by their Governments.
The Select Committee's analysis of the financial results of the Corporations is well worth studying. To illustrate its
950
point about the national purpose of the Corporations, it clearly shows that B.O.A.C.'s 1957–58 small overall loss was entirely accounted for by the loss of £591,000 on its associated and subsidiary companies. I gather that that amount will be greater in the following year. British European Airways made a modest overall profit—a large profit of £2½ million on its overseas services and a loss of about £1½ million on its domestic routes. In the case both of B.E.A.'s domestic routes and B.O.A.C.'s associated activities, the Report emphasises—and hon. Members on both sides of the Committee should appreciate this—that these services are operated not simply, or even primarily, in some cases, for commercial reasons, but for other wider and national political considerations. It mentions the B.E.A.'s Scottish Highlands and Islands operations and Kuwait, Airways, which was run at the direct request of the Foreign Office and which apparently cost the Corporation nearly £100,000 in one year.
When we have before us, as we have had in recent weeks, case after case of a private company coming to the House of Commons for subsidies from the public purse, it is remarkable that we have here two publicly-owned companies which are, in fact, subsidising other Government Departments. I am not myself certain, as the Report appears to suggest, that we should make direct Government payments for particular corporation services, but I am absolutely certain that here is another absolutely conclusive argument that the Minister should stop his policy of trying to pare off part of the Corporations' activities for the benefit of private companies.
The Select Committee also makes some wise observations about the associated companies of B.O.A.C. They point out, rightly I think, that we cannot view that Corporation's activities only in the light of profit-and-loss account. The Committee says:
"While the losses are definite and known, the gains are in part immeasurable",
because there are many social and political benefits. But we ought to know where this money is going. I was very pleased that the Select Committee's Report stated quite definitely, in paragraph 184, that information about the working of the subsidiaries is "essential to the

951
House". The Report goes on to recommend that that information be included in all future Annual Reports.
I have tried to follow this matter, but it has been most difficult for hon. Members to get the necessary information. I want to ask the Minister now whether he has been able to follow this aspect of B.O.A.C.'s affairs. The Corporation has lost £591,000 in one year on these companies and it is likely to lose about £3 million in the following year. We are entitled to be absolutely certain that the Minister is in full possession of the facts. I wonder whether the Minister has directed himself to this aspect of the Corporation's activities. I will tell him why.
On 4th February this year, after considerable difficulty in getting a Question down at all, I asked the Minister, in relation to the accountability to Parliament of the subsidiary companies, if he was aware that about £80,000 had been paid as compensation for loss of office to one particular individual in one of these companies. The Minister answered:
"If the hon. Gentleman has any particular case he would like to put I will look at it."—[OFFICIAL REPORT, 4th February, 1959; Vol. 599, c. 388.]
Does the Minister wish the Committee now to know that he did not know of this case where one individual in this company had taken out, as a special payment, a sum of this order? Will the right hon. Gentleman tell us whether he knew about this or not? If he knew, why did he not tell the House frankly why the sum was paid? Moreover, if he did know, why did he not step in? This is clear evidence that money was being paid out very lavishly by this Middle Eastern company.
There were political factors, which is one reason why these airways were operating, and they are always more difficult to assess than ordinary commercial factors. There is here a special responsibility upon the Minister to advise the Corporation of the value to the country of operations of this kind. The fact of the matter is that Middle East Airlines has been one big sieve through which public money has been poured. I want to know whether the Minister has satisfied himself that the money was paid out for good reason and whether he had
952
been making inquiries prior to my Question of February.
The Report also makes interesting observations about the operating efficiency of the two Corporations. I only wish that I had the time to go into some of these details. Of B.E.A. I was especially gratified, and so were many other hon. Members on this side, to note the extremely good impression which the Chairman of B.E.A. had made upon the Select Committee. Although the Minister behaved reasonably, I would remind him about the uproar there was among Conservative Members at the time that this Marshal of the Royal Air Force was appointed. They clamoured against his appointment simply and solely because this particular Marshal was known to be sympathetic to Labour. I am glad to know that that appointment has been entirely justified. I hope that there are some Government supporters who feel a little ashamed at the clamour they made at the time of the appointment.
The Committee draws a picture of the B.O.A.C. which is not so bright as that of its sister Corporation. When it comes to the detailed criticisms, one of the most important is that the Corporation is spending too much money upon maintenance. In the light of recent events I am bound to say that I would far rather be criticised for spending too much money on maintenance than for spending too little. The Corporation faces a difficult task in reorganising its engineering methods and reducing costs. I only hope that it does not make the mistake which was nearly made on another occasion in the Corporation's history of going too far in the direction of retiring or paying off too many of its skilled engineering staff at this stage, only to find later on that it has to incur further expense by recruiting and training skilled men all over again.
I should like to think that a much greater effort was being made to meet redundancy by expanding the services of the Corporation rather than by reducing its engineering staffs. [Interruption.] I have no doubt that the hon. Member for Macclesfield (Sir A. V. Harvey) will have his own opportunities for—
Sir Arthur Vere Harvey: I am much obliged to the hon. Gentleman for giving way. I am not

953
disagreeing with the principle outlined by the hon. Gentleman, but would he not agree that where maintenance costs are just about double what they should be there is some ground for streamlining the organisation?
Mr. Beswick: I do not disagree that there is room for streamlining. I am saying that the proportion of engineering costs to total costs can be reduced in one of two ways: by dismissing men, or by increasing the turnover. Instead of reducing staff, I should think there is scope for concentrating upon increasing the activities of the Corporation. There is no doubt in my mind that much of the trouble at London Airport with the Corporation stemmed from the fact that the men were facing redundancy at the same time as they saw the Corporation's activities restricted by Governmental policy and some of its operations contracted out to private companies. The Select Committee made a special reference to this factor when it asked a representative of B.O.A.C. why the Corporation had agreed to certain things. The answer was that it had to, because it was trying to "get along with" the Government's policy of sharing the traffic with independent operators.
That brings me to the references in the Report to the African services, which the Minister has licensed to independent companies to operate down both sides of the African Continent, the east and the west. I have many times raised this matter in the House and I wonder whether the Minister does not now feel, in the light of this Report, that now is the time when he should review his decision in this matter. The Select Committee pointed out that B.O.A.C. has consistently objected to these services. It stated that the services were making inroads into its own traffic and it protested vigorously, both to the Air Transport Advisory Council and to the Minister, about the licences being given to these companies.
Incidentally, I may say that, to add insult to injury, not only have the Corporations protested, not only have they had to accept these services running parallel with their own, but, in order to legalise the services, they have had to sign a document to the effect that in their view these services are operated
954
only because it would help to develop civil aviation in the United Kingdom.
The Minister turned his back on these objections from the Corporations and in this Chamber he said that they ought not to be afraid of a little competition. Hon. Members opposite say, "Hear, hear," to this idea of competition. If it were competition they wanted, I should not mind. But they are not asking for competition, not true competition. In this connection, I think that the Minister is simply uttering a lot of clichés. Moreover, it shows that the right hon. Gentleman has no grasp of some of the elementary facts of the transport business. I will say what I mean. In roads, rail and shipping transport.
Over the years there has never been an acceptance of the fact that competition by the duplication of parallel services was uneconomic. First on the road, then on the railways, and on the shipping sea routes, we have seen little companies being taken over by big ones. We have seen the big companies merge until virtually there has been a monopoly. That has happened, not because of an argument about the merits of private and public enterprise, but as a result of facing the economic facts of transport, and the advantages of unification.
These companies which now want to come into the air transport business are largely backed by shipping capital. In their activities on the seas shipping companies do not practise competition at all. How many British shipping companies compete across the Atlantic to New York? Can anyone deny that there is a monopoly on the shipping route to West Africa? Who would dream of suggesting today that there should be another British shipping company competing with the present company operating on the route to Australia?
The Minister, or hon. and gallant Members opposite who talk about genuine competition in these matters should ask themselves what has happened to some of the independent companies which were allowed to operate under a Labour Government. I remember being asked, "Give these R.A.F. men a chance". We did, they had companies; what has happened to some of them? What about Air Commodore "Taffy" Powell who started Silver City

955
Airways and who was praised in this Chamber? What about Freeman who came from the R.A.F. and started the very successful Transair? What about Wing Commander Barry Aikman who tried hard to keep the flying-boat services of Aquila Airways? They have all been bought out, taken over by companies dominated by shipping capital.
It is not genuine competition that these people want, it is simply an opportunity to put in some new capital, as they hope profitably, and which, as the Minister was naive enough to say on one occasion, cannot now find employment in the shipping business. The Minister has given undertakings to the interests concerned that he will make more room for them, if he has the opportunity after the General Election. It seems that this proposal for a new licensing authority is a device which the right hon. Gentleman proposes to employ to make available new opportunities.
On Thursday we gathered that the Minister's proposal now is to give to this central licensing authority responsibility not only for the allocation of routes but also for licensing from the point of view of safety standards. I think this a mistake. We know that some action regarding safety standards is a matter of urgency, but to ensure safety is largely a matter, I suggest, of better administration, adequate inspection and a sufficiently large staff for enforcement purposes. This should not be confused with the wider and bigger decisions about the allocation of routes as between one company and another. In my view, the Minister has spent far too much time on this question. Far too much thought has been given by the right hon. Gentleman to how to make room for the private companies, and he has spent far too little time on the question of the administration of safety regulations. I would have liked to ask more on this licensing authority, but I have not sufficient time in which to do so.
I should now like to put one or two questions to the Minister about the Report of the Public Inquiry into the causes and circumstances of an accident to Viking Aircraft G-AIJE. I think hon. Members will bear me out when I say that I have never seized the opportunity afforded by an accident to one indepen-
956
dent firm to attack all independent firms. I think that wrong. My argument against independent companies, or some of them, is based on what I believe to be airline economics and the development of British aviation. I have never seized the opportunity afforded to attack the concept of the Minister, which I believe to be wrong, to give more power to some independent companies. I think it wrong that the operations of the Corporations should be split up, but I believe that to be wrong on the basis of aviation economics.
There is one other general remark I would offer. I am a little sorry that Captain Kozubski was attacked so strongly in the Report when, as I gather, he did not have an opportunity to answer questions. Apparently he did not appear, and I should have thought that far too much blame has been placed on him and far too little on some other people. After all, there were other directors, and a person who accepts the responsibilities which go with a directorship of a company ought to take full responsibility, and not be prepared to put the blame on others. But I believe also that the blame rests not alone on Captain Kozubski, or even on the other directors, but also on the Minister of Transport and Civil Aviation who is responsible in this country for safety matters.
Mr. Paul Williams: Surely there is an obligation on companies to maintain reasonable standards?
Mr. Beswick: Nothing which I have said suggests the contrary.
I am conscious of the fact that we have only half a day in which to discuss these matters and that a lot of hon. Members desire to speak. I will, therefore, content myself by asking a few questions. May I ask the Minister what he really meant when, in reply to my hon. Friend the Member for Fife, West (Mr. Hamilton) he said last week:
"If the hon. Gentleman studies this matter very carefully he will find that this company had already been prosecuted by my Ministry and that, in fact, another prosecution was pending …"
Then he added this:
"Other than that, I have no comment to make on the Report of Mr. Justice Phillimore."—[OFFICIAL REPORT, 15th July, 1959; Vol. 609, c. 403.]

957
That was an extraordinary thing to say. Here is a Report which has roused profound public interest; which has given rise to a good deal of anxiety among the air travelling public and which, indirectly, very strongly criticises the Minister of Transport and Civil Aviation. Yet the right hon. Gentleman says, after that brief reference,
"I have no comment to make."
This Report is one of the most strongly-worded documents which has been published. I ask the Minister again, did he really mean what he said when he used the words:
"I have no comment to make."?
It was in answer to a supplementary question, I agree, but I should have thought that the right hon. Gentleman would have come to the House of Commons and volunteered information or made a statement attached to the Report of the Inquiry. There are precedents for that; but all we had was that brush-off from the Minister.
The Committee is entitled also to some explanation about the time taken before inquiries into these accidents are held and the findings of the courts become available. There has been concern about this for two or three years. I have asked Questions on several occasions. On 26th March, 1958, I asked if a shortage of investigation staff was the cause of the delays. The Minister told us that he had just appointed another technically qualified officer and that he might appoint another two, but that, in any case, as usual, he was quite satisfied. But the delays have recurred and now we have this case.
The impression has been created, wittingly or unwittingly, that the responsibility for this delay rests upon the shoulders of the deputy-coroner of Middlesex. The Solicitor-General, when answering a Question tabled by my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) last week, mentioned that the inquest had taken rather a long time and went on to concede that offences have now been disclosed by the investigation, but that action was barred by Statute. The implication was that the time which had elapsed was the result of the delay caused by the obstinacy of Mr. Gorsky, the deputy-coroner. Whose fault was this delay? This is a matter
958
which we should look into very carefully. I tabled some Questions to the Minister on this point, and the impression I gained from the reply I received was that the inquest had continued and been resumed because at that stage there was no possibility of action being taken.
Let us look at what Mr. Gorsky said, in The Times of 28th January Mr. Gorsky is reported as saying:
"I adjourned the inquest at the request of the Accidents Branch of the Ministry of Transport and Civil Aviation. … When I was asked to resume the inquest before the public inquiry I was left to seek the information slowly and with difficulty. … I had hoped, not as a matter of right but as a courtesy that I would be kept informed officially or unofficially, but this was not so."
This does not suggest an awkward coroner who is abusing his powers. This does not suggest that Mr. Gorsky was a man who did not want to co-operate with the Minister. This suggests that he was a coroner only too anxious to co-operate with the Minister. He halted the inquest at the Ministry's request, so he said, and resumed it only when requested to do so by the Ministry of Transport and Civil Aviation.
Does the Minister agree with what the deputy-coroner said? During the time when some of us were thinking that action should have been taken, during the time when we thought that some prosecutions should have been put into train, the story which was spread about—I believe knowingly and wilfully spread about—was that the Minister was not taking action because some of his own staff were involved. I do not say that in criticism of the Minister, because it was not spread about by him. However, that was the story going around. I was very pleased, therefore that Mr. Justice Phillimore said that he had not looked into the minor matters which had been brought up about the air traffic control officers. In answer to Question 7 on page 20 of the Report, he said:
"I am entirely satisfied that the Air Traffic Control Officers not only did their duty but in fact did far more than they were strictly required to do and no possible criticism attaches to them."
It is absolutely right that that should be made abundantly clear. But we are still faced with the delay. I hope that the Minister will tell us why there was no proper communication between him and the deputy-coroner.

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I come now to a matter raised by Mr. Justice Phillimore concerning flight time limitations. Throughout the Report we come back repeatedly to the theme that this pilot and his crew were tired, that one contributory factor was fatigue, and that, moreover, there had been about ten previous prosecutions of this company for contravening Articles 34 (B) and 34 (E) concerned with flight limitations. The Report calls attention to what it calls a ridiculous loophole in these limitations.
Some hon. Members will remember discussing this matter in the House of Commons on 1st April, 1957. I had to complain then, speaking from this Box, about the delay which there had been in bringing the Regulations forward. There had been a delay of no less than twelve months since an original draft had been produced. We asked then why there had been this delay, because the subsequent draft was no improvement. There had been one change, and that was for the worst. We allowed those Regulations to go through, on the distinct understanding that they would be reviewed in the light of experience. We took that to mean that probably after six months' or twelve months' working they would be renewed again. That was the undertaking which the Minister gave us two years and four months ago.
Since then I understand that members of the pilots' organisation have been asked for their observations and they submitted comments some time last year. Nothing has been done. Those Regulations have not been tightened up. Now there is another accident. There has been a further loss of life which could have been avoided if there had not been this delay in tightening up the Articles relating to flight time limitations.
In paragraph 42 of his Report Mr. Justice Phillimore deals with the conduct of the six-monthly check. He says that in an earlier Report, for which he was responsible, into another accident to another Viking at Blackbushe, he had made certain recommendations about this check. The same recommendations were largely endorsed by another accident inquiry report dated 19th July, 1958. They were very relevant and cogent recommendations. If those re-
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commendations had been carried out, they would have made a reality of this six-monthly check of pilots. But months passed after the publication of the first Phillimore Report. On 26th March, 1958, I asked the Minister of Transport and Civil Aviation:
"if he will now state the detailed steps taken by his Department to implement the recommendations made on 1st May, 1957, of the commission of the public inquiry into the accident to the aircraft G-AJBO, regarding the enforcement of regulations concerning air crew tests."
The Minister answered:
"I hope to introduce by the end of this summer revised procedures for testing pilots following my acceptance in principle of the recommendations in the accident report dated 17th October, 1957."—[OFFICIAL REPORT, 26th March, 1958; Vol. 585, c. 422.]
That was on 17th October, 1957. There was another delay, and then, on 27th May, 1959, we have Mr. Justice Phillimore saying in paragraph 42:
"Certainly the loss of life involved in this accident … might never have occurred if the pilots involved had received the proper tests which a true six-monthly check would provide."
The Minister has something to answer there.
I have taken a good deal of time and I must leave time for other hon. Members to make their observations, but I say this to the Minister. In the last month he has been criticised by two Select Committees, and by Mr. Justice Phillimore in this Report. I think that it is more than a coincidence that in recent months many representative bodies have asked for a separate Minister of Aviation who would give time to some of the needs of aviation. The Association of British Chambers of Commerce supported that idea, and the Royal Aero Club passed a resolution. I understand that the Guild of Airline Pilots and Navigators also passed a similar resolution.
Something has been lacking in our aviation needs. When we look at our two principle instruments—the two air Corporations—there has undoubtedly been a feeling of frustration. The Select Committee Report refers to "interference." As for safety, it is my belief that the Minister has spent so much time either on other sides of his Department—and it is a very wide-reaching Department and we cannot blame him for that—or on the politics of the business of

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trying to find ways and means of making it possible for private companies to come in, that he has had far too little time on the administrative safety side of the Department.
Had the right hon. Gentleman taken some action along the lines suggested by some of these questions, and by the recommendations of Mr. Justice Phillimore, we should not have been considering this accident report today. Had it not been for the Minister's political bias in favour of the private aviation companies, we should have had an even brighter Report on the two air Corporations from the Select Committee
7.42 p.m.
The Minister of Transport and Civil Aviation (Mr. Harold Watkinson): I welcome this debate, because these are matters that need discussing in detail. Perhaps I might just remind the Committee that my reason for not wishing to continue this discussion recently at Question Time was that, for example, the hon. Member for Fife, West, (Mr. Hamilton) said in a supplementary question:
"Does he not think that it is a reflection on his own Department that this kind of murder by private enterprise has to take place … "—[OFFICIAL REPORT, 15th July, 1959: Vol. 609, c. 403.]
I felt that when the House got that sort of mis-statement it was, on the whole, wiser for me to say that, at that stage, and in a supplementary answer, I did not propose to do other than rest on the very able Report of Mr. Justice Phillimore, which sets out the facts most clearly. I think that the thanks of the whole House are due to Mr. Justice Phillimore for that Report.
Nor do I accept for one moment the concluding ideas of the hon. Member for Uxbridge (Mr. Beswick) on what Mr. Justice Phillimore said or thought. I am sorry that at the end of what was a very factual and fair presentation the hon. Member should rather have slipped into the very kind of political judgments on this very tragic accident into which I do not propose to follow him.
It is quite untrue to say that any Minister who holds my job does not have as possibly his greatest anxiety the constant thought that he is responsible for the safety of all those who travel by land, sea or air. I think that it is a disgraceful allegation against anyone who
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endeavours to do my job with a sense of public duty to say that he does not have safety considerations in the very forefront of his mind and policies. In the history of the accident at Southall, which I propose to give, it will be shown quite clearly that that was true. It will also be shown quite clearly that no blame whatsoever rests on the Ministry of Transport and Civil Aviation for not trying to exert the maximum penalty of the law in regard to this accident.
Before I set out the facts, perhaps I may just say, as I think the hon. Member for Uxbridge did, also, that I visited the scene of the civil accident only an hour or so after it happened. I, too, saw the broken homes and the tragedy, and I returned from the scene of that accident determined that, with the whole power of the Ministry, I would see that if there had been some failure justifying that any kind of charge at all that charge should be brought, and pressed to the uttermost.
I gave instructions to my Deputy-Secretary on the day following the accident that the whole effort of the Department was to be turned to investigating the accident, first, and secondly, if charges were to be brought, to see that they were not only brought, but pressed—and that is the truth—
Mr. Beswick: The right hon. Gentleman has rejected entirely what I have said, but I have quoted the words from Mr. Justice Phillimore's Report, where he says:
"Certainly, the loss of life involved in this accident … might never had occurred if the pilots involved had received the proper tests… "
Why, therefore, is the Minister so categorical?
Mr. Watkinson: Perhaps the hon. Gentleman will wait until I come to that, but the immediate short answer is that, as the hon. Gentleman knows full well, the six-monthly checks of pilots are not mandatory, but something that any airline has to do as part of its proper control over safety and good management. I will explain in a moment the action we took to see that, as far as possible, those six-monthly checks were held, but if one company does not hold them the blame is not necessarily to be laid on the Ministry—[HON. MEMBERS: "Why not?"]—and if Mr. Justice Phillimore's

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words are read with care hon. Members will see that that is so. I will deal with the question "Why not?" in a moment. The Committee is entitled to the history of the matter.
First, I assume that hon. Members have read the Phillimore Report and will not, therefore, wish me to go through it in any great detail. They will know the general course of affairs leading to the accident, and what I have to tell the Committee is what the Ministry did to see that this accident was fully investigated. To answer the allegation that, in some way or other, the Ministry had not carried out the proper inspections on this company—as, indeed, it carries them out on all the independent companies, and. of course, on the Corporations—the company concerned was inspected no less than eight times in the thirty-one months prior to the crash on 2nd September, 1958.
Applications by the company, to operate scheduled services were withheld for well over twelve months, and were granted only after the sixth inspection of the company, which was on 30th January, 1958, when no fault or irregularity was found. That inspection had been proceeded by one in October, 1957, following which, because it had revealed infringements of flight-time regulations, the company was successfully prosecuted. It was only following the sixth inspection, in January, 1958, which found the company satisfactory, and the seventh, in May, 1958, which confirmed the previous impression, that the company was allowed to undertake a number of air hop trooping flights. Notwithstanding those satisfactory inspections, the company was inspected for an eighth time on 26th August—just before the accident.
This is very important. This inspection revealed prima facie evidence of infringement of flight-time regulations. Therefore, approval for the company to operate scheduled services was at once withdrawn, and the company was taken off the Department's Fair List of operators suitable for enjoying Government contracts. The accident intervened, but the evidence collected at that inspection was at once sent to the Director of Public Prosecutions.
Investigation into these infringements was overtaken by the very much graver
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issues suggested by the preliminary investigation, as I have said, into the cause of the accident because, as is well known—and as has been mentioned in a newspaper today, quite improperly—there is no doubt that the initial inspection by the police and by other investigating officers showed at least a suspicion that this aircraft was seriously overloaded.
It was on that basis, as I say, that I instructed the Ministry to do everything it possibly could, with my full knowledge and support, to concentrate its efforts on investigating these possibilities. This investigation was started as soon as possible and, to answer the hon. Member for Uxbridge, we asked the coroner—and I have no complaints to make about the coroner—to adjourn his inquest for a time in case a charge of manslaughter should be preferred.
The fact that, in the end, a charge was not so brought is not, of course, a matter for me or the Ministry, as the Committee understands. The reason for the adjournment was so that the prosecuting authority, the Director of Public Prosecutions, could satisfy himself whether a major charge, such as manslaughter, might not be preferred. When it was found that there was not sufficient evidence, the coroner was asked to resume the inquest. That is not a matter which the Ministry could decide.
It was the Ministry's duty to provide every shred of evidence to the Director of Public Prosecutions. That it did. I do not think that it is right for me to express a view whether the decision was right or wrong. All on which I have to satisfy the Committee is that the Ministry gave full evidence to the Director on which he could base his judgment. That, I think, I have shown very clearly was done.
However, even after that there still remained the possible grave charge of overloading. This could not be taken up until the inquest had been concluded, because the coroner's verdict itself might have led to a charge of manslaughter. Therefore, the next step of the Ministry was to co-operate with the coroner to see that he got all the help that he needed to go ahead with his inquest. Mr. Justice Phillimore said that it took a considerable time to complete. I agree with that. That is not, of course, a matter for me.

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Coroners are their own masters in these matters—
Group Captain C. A. B. Wilcock Group Captain C. A. B. Wilcock (Derby, North)rose—
Mr. Watkinson: I should like to finish dealing with the history of this particular accident. Then I will be pleased to give way.
The story of events now goes on to the inquest which, as the Committee knows, in the end returned an open verdict, a matter not within the control of the Ministry or any Department of State. Coroners and coroners' courts are a law unto themselves. When the inquest finished counsel was again asked whether the evidence about overloading which emerged during the course of the inquest would justify the bringing of a charge. He advised that it would not. Thus the two major counts failed not through any inactivity of the Ministry, but because there was judged to be insufficient evidence to justify legal proceedings. That was certainly not a matter for me.
Unfortunately, during all that time little work could be done on one or two minor infringements which stood over. As the result of the very long time taken by the inquest—I am not blaming anyone for that, but it took a very long time, as Mr. Justice Phillimore said—there were only four weeks left at the end of that period when any action could be taken. It may be thought that even then we should have taken proceedings on a minor charge. I will explain to the Committee why we did not. Had we proceeded on a minor charge, and had the company put in a notice of appeal, the public inquiry could have been held up indefinitely.
I take full responsibility for this decision. I considered at this stage that as we had failed in any major charge the public interest was best served by having the public inquiry as quickly as possible as the only means left to us to bring out the facts of the case. Indeed, I was pressed by both sides of the House to do it. I take the full responsibility for deciding at that stage that rather than proceed with a minor charge, which could have led to indefinite delay, we should proceed forthwith with this inquiry.
Mr. Beswick: There is one aspect which the Minister has not cleared up.
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I have not been in touch with the coroner and I am taking what was reported in The Times. According to what the coroner said, he resumed the inquest at the request of the Ministry of Transport and Civil Aviation. Had it not been resumed, but adjourned, as is the usual case while a technical inquiry is being held, a technical inquiry would have been held and the Minister would have had ample time to bring what he has called minor charges arising out of that investigation.
Mr. Watkinson: I am sorry. That is not so at all. The inquest was adjourned and any subsequent adjournment was a matter for the coroner. The first adjournment in question was clearly asked for by the Ministry because it was then believed that the Director of Public Prosecutions might find that a charge of manslaughter could be preferred.
As I have explained quite clearly to the Committee, in the end the Director of Public Prosecutions felt that could not be done. The hon. Gentleman has asked, "Why not continue the adjournment"? What would have been the sense of that when it was still possible that the completed inquest would itself bring in a serious charge, if such a charge were held to be justified by the facts? Therefore, to adjourn indefinitely the inquest and to proceed on a purely minor and technical charge would, I am sure, not have been the right thing to do.
I think that I have explained clearly the various steps which the Ministry took and I think that I have established to the satisfaction of all reasonable people that the Ministry did every single thing that it could—and it was certainly my wish that it should do so—to try to bring this company to justice if it were right that it should so be brought. The fact that the Law Officers felt that this should not be done is, of course, a mailer for them and it certainly is not any slur or any criticism of those in the Ministry who worked so hard and painstakingly to present all the evidence that, in the end, that evidence was found to be insufficient. They all did their best and anyone who says to the contrary is putting a quite unjustified slur on the technical officers of the Department.
I should like to deal quickly with one or two other matters which the hon. Member for Uxbridge raised.
Group Captain Wilcock: The right hon. Gentleman appears to be trying to justify the Ministry in that there was no delay because of certain matters it had to investigate, such as overloading. Is he suggesting that it took the Ministry all that long time before the answers could be made to those things? Is not it rather the case that the Ministry tried to make one person, the managing director, responsible for the whole accident and take no responsibility itself?
Mr. Watkinson: The hon. and gallant Gentleman has not listened to anything I have said and I do not intend to take up the time of the Committee by going into it again.
To deal with the point about flight time regulations, the point meant, I think, was empty flying, that is to say, the time spent in the air flying an empty aircraft, which is not counted against the pilot's time on duty.
That is something which we have been worried about for some time and we propose to deal with it in the general revision of the Air Navigation Order, which we hope to secure before the end of this year. It is a matter which has to be discussed with a great many people and it also covers a great many other aspects. It fulfils the promise given that we would reconsider the regulations. It has, in fact, no reference to this particular accident, but I thought that the hon. Gentleman might like to know that we are proposing to proceed with these amendments of the Order.
Mr. Beswick: The Minister said that we would all have read the Report of the accident. It says specifically in the Report that fatigue was a contributory factor and that if flight time limitations had been in force, then the accident might not have occurred. I am not talking about empty flying. There were other matters raised on 1st April, 1957, on which the Minister said he would come to the House within six or twelve months. It is now two years and four months.
Mr. Watkinson: The hon. Gentleman, quite properly, is trying to make his case. I have the right to make my reply.
Some very wide and, I think, improper allegations have been made. The hon. Gentleman quite fairly said that he did not make them or associate himself
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with them, but many allegations have been made that this accident is merely an example of the general inefficiency of the independent operator. Frankly, I am not as concerned with safety matters as the operator is. It is merely my job to see that he flies safely. Hon. Members may like to know that there has been only one other case in recent years of an operator who has transgressed to the extent that I.A.T. undoubtedly did.
Secondly, the question of the statements by Mr. Justice Phillimore amounts simply to this. Of course, this company was in breach of all sorts of regulations. We should not have prosecuted it once: we should not have been taking it off the list again if it had not been so guilty. I heartily accept Mr. Justice Phillimore's views that all those things were probably contributory causes to this accident. But no police force, no Department which has to administer regulations, can guarantee that no firm or no burglar will ever succeed in breaking them. That is exactly what has happened here. It is not necessarily a criticism of the regulations that this firm succeeded in being in breach of a great many of them. So I do not think that that helps at all.
As to the question of the six-monthly checks of pilots, this was not delayed. In fact, on 23rd January, 1958, following the Report in October of the previous year, we had a series of meetings on these six-monthly checks which Mr. Phillimore, as he then was, said in his Report, the Blackbushe Report, were only matters for consideration. He knew clearly that we had no powers of enforcement. This is a matter which the Department has to oversee and in which it has generally to try to secure that the airline companies carry out this checking system.
As a result, we went into the whole of the points raised by Mr. Phillimore, as he then was. Although we had no statutory power, we had general agreement amongst the operators that the system would be tightened up, and, in fact, we wrote to I.A.T. on 15th November, 1957, informing the company of the recommendations, and it acknowledged this letter and undertook to comply with the suggestions. Again, it may be that I.A.T. did not implement the recommendations. All I have to say again is that the Ministry—because it is my responsibility—fully

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and properly fulfilled its duty, and more than its duty, in trying to keep this question of air safety properly in hand.
To sum up, the position is this. I have related the facts to the Committee. I have purposely tried not to comment upon them. I have merely tried to set out the facts as they exist and as they stand. The Committee must form its own judgment on them. My duty in charge of safety is to do no other than, as I have said, try to get at the facts, to see that justice is done where it should be done, and to see that the proper facts are presented to the proper authorities at the proper time. All that work has been fulfilled and accurately completed.
Mr. John Eden: My right hon. Friend has said that he is anxious to see that justice should be done. Can he tell the Committee whether it is a fact that the former managing director of this airline was given an opportunity, as it were, to appear in the dock and answer some of the charges made against him?
Mr. Watkinson: Yes, I am advised that this man could certainly have appeared if he had so wished, and that he would have had every opportunity to make his case, to be properly heard and to be subject to cross-examination and all the rest.
Perhaps I may now say a word or two about the Select Committee's Report. I join with the hon. Gentleman in saying that half a day in which to discuss all these complicated matters is a quite impossible assignment. I also join with him and the whole Committee in expressing congratulations to the Chairman of the Select Committee, my right hon. Friend the Member for Blackpool, North (Sir T. Low). The Select Committee did a fine and painstaking job, and, as I said very shortly after the publication of the Report, I accept the Report as a factual and helpful study of the Air Corporations. Indeed, I went further and said that I accepted one of its main contentions that the Ministry was, on the whole, rather too mixed up with the Air Corporations. I will come back to that matter in a moment.
However, I do not accept the selections of a somewhat misleading nature produced by the hon. Gentleman this evening and by some sections of the
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Press. The Select Committee itself made it plain that
"Relations between Ministry and Corporations are clearly good, and the last thing Your Committee want to do is to disturb such a relationship."
I am happy to tell my right hon. Friend that he has not disturbed the relationship and that it remains as good as it was.
I want to make one other point. As the Select Committee states, it was hampered by not being able to take evidence from independent air corporations or from the trade unions, and, to this extent, it was not quite able to survey the air field as a whole.
I want to deal with one point in the Committee's findings, and that is the much commented view that the Minister's non-statutory powers may add up to a degree of control greater than that envisaged by the statutes. I do not disagree with that. What I want to say—and it is my main point on the Committee's Report—is that that flows clearly from the, I will not say unworkable, but most difficult circumstances under which we have had to work due to the 1949 Air Corporations Act. I do not say that in any political sense, but I think I can say that the Act is not working at all well at the moment. I think I carry the whole Committee with me on that, although we may differ on how it should be amended.
To take two examples of the kind of interference, as I think it has been called in the Press, which flows quite naturally from present arrangements, in the House of Commons on 27th May, 1952, my right hon. Friend the Colonial Secretary announced in great detail—I believe the House debated it and divided on it—a new policy to give independent companies rather more scope. Therefore, that piece of interference, if it be so called, was not begun until Parliament had been clearly informed by one of my predecessors and had debated the issue, and I have acted under that policy ever since. But it was not a policy connived at through the back door. It was a policy fairly brought to the House and clearly expounded in the House.
The hon. Member for Uxbridge raised a lot of issues on this Report. I should like simply to say that I have never connived at any carving up of the Corporations. I have always believed, as

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my predecessors have believed, that there is a very important field in this expanding business of the air for the independent operator, and I challenge any Member opposite to deny that the pioneering work done in inclusive tours, in the car ferry service, and in other directions by independents, has not been clear gain to civil aviation as a whole. Indeed, that is proved by the fact that one of B.E.A.'s most attractive pieces of business is now in the inclusive tour market built up originally by the independent operators. All credit to them for that.
Any Government who wish to expand in the air would be absolutely wrong not to try to exploit the pioneering work of people who are prepared to put in their own money and risk their own capital in this job. That does not mean, as I often see in trade union journals, that one is deliberately trying to take business away from the Corporations. We are trying to increase the totality of that business so that the cake that we all cut should be bigger. I challenge anybody to deny that that is the right and sensible policy for civil aviation as a whole. I make no apology, therefore, for continuing this policy, and it remains the Government's view that independent operators have a valuable contribution to make to our prosperity and development in the air.
Mr. Beswick: That was said in 1950.
Mr. Watkinson: That may be. The hon. Member may like to know that in the Department we have put much painstaking work into this concept, which he appears to dislike, of a new central licensing body that will license both operations and the organisations themselves. That will have two advantages. One is that it will get the Minister a bit more out of this business of trying to sort out routes and services, which I think is right, and, secondly, it will give the Ministry—and this is at the request of the British Independent Air Travel Association—the power, which it now has on the roads, of withdrawing the licence of an unsatisfactory operator; in other words, a clear mandate to control the situation more satisfactorily than we can under the present Acts.
Group Captain Wilcock: When will the Minister do that?
Mr. Watkinson: As soon as may be in a new Parliament.
One other example of the policy of a Minister interfering with the Corporations concerns their capital investment. When I wound up the debate in the House last week, I was answering criticisms that Ministers do not interfere enough with the purchases of aircraft by the Air Corporations. I think, therefore, that the truth lies somewhere in between. Certainly, I think it is in the national interest that the Air Corporations should consult me about their capital investment, in which the Treasury either provides the money or guarantees the loans. That is inescapable so long as they remain nationalised.
I agree entirely with the Select Committee that when a Minister over-rides the commercial judgment of the corporations the fact should be clearly recorded. The only occasion—the hon. Member for Uxbridge mentioned it—when I have so over-ridden the commercial judgment of B.O.A.C., for reasons which I will not waste time to explain now, was when I asked the Corporation to operate a service in Kuwait. I wrote a letter to the chairman saying that I hoped he would note it in his report, which he did, which I thought was quite right and proper and clearly follows the recommendations of the Select Committee.
I do not disagree that the Ministry is too mixed up, but it is mixed up only because by a kind of friendly cooperation can we hope to operate the almost impossible situation created by the 1949 Act. We can only make it work by disregarding the rules and trying to regard the airline chairmen as friends and colleagues which, I hope, I do and always have done. I must pay tribute to Lord Douglas of Kirtleside and Sir Gerard d'Erlanger. The hon. Member for Uxbridge said that we had grumbled about Lord Douglas. I seem to remember the hon. Member grumbling about Sir Gerard d'Erlanger. Perhaps, therefore, honours are even on that score. They are doing a fine job for their country and I am sure that I carry the Committee with me in saying that.
For the future, I think that in the new central licensing authority there will be a new plan for the air which will allow greater freedom, a quicker rate of expansion and a fair deal for both the

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Corporations and the independent airlines. For the moment, Ministers have to work legislation if they are not prepared to change it. Obviously, I cannot change this legislation in this Session of the present Parliament. Therefore, I have to work it as best I may. That must be my reason for the charge that I go beyond the intentions of the Statute, as, I certainly agree, I do, but only for the purpose of trying to make a success of B.O.A.C. and B.E.A.
I will answer briefly an important point raised by the hon. Member for Uxbridge concerning the subsidiary companies of B.O.A.C. He was referring, I think, to a company called Middle East Airlines. Although that is an associate company of B.O.A.C. it is a foreign company in which B.O.A.C. has, I agree, invested a great deal of money. The Corporation does not necessarily, therefore, have complete control, because it is not a subsidiary. That is why I did not at the time know about the payment to the managing director, which, incidentally, was not money that he took out of the company, but money which was paid to him by the board for a contract over a period of years, not payment, I understand, for loss of office at the end of that time.
Of more importance is the fact that I agree with the hon. Member for Uxbridge that B.O.A.C. today would be making an operating profit but for two things. One is the American reluctance to grant Tokyo rights, which I regard as a grave breach of our international relations. The second reason is the heavy losses made by the Corporation's associate companies. I was glad to have my opposite number from British West Indies Airways, Mr. Rose, over here. We had some useful talks and I am grateful to him. A quite new situation can now come in the West Indies which will put the position on a much better financial basis.
In Middle East Airlines, however, I regard the situation as being extremely grave. Therefore, I have approached the chairman of B.O.A.C. and he has appointed Sir George Cribbett to go into the whole matter. He quite agrees that we cannot go on with the drastic losses in this company and that matters must either be wound up or some different arrangements come to. I thought that
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hon. Members would like to know that I took that decision some time ago. Sir George Cribbett has been putting in a great deal of painstaking work and I hope that he will soon come to a conclusion.
As to the maintenance problems of B.O.A.C. it is in the interests of everybody employed by B.O.A.C. that the Corporation should get its costs in relation to those of its competitors. Of course, the Corporation can get more business, too, and so it is doing at the moment, but it must get down its costs. So far, the trade unions have cooperated extremely well in the plan for redundancies. I only hope that they will continue this co-operation. It is in the interests of us all.
I hope that the Committee accepts that I have told the truth about the Southall accident. It was not a pleasant job for me and I quite accept that the Opposition should raise their doubts and fears about this disastrous accident. I have tried not to comment politically. I have kept out of the path, into which we were all led in the House the other day, of drawing wider conclusions. I do not think that they can be drawn. I have tried not to do that tonight. I have merely tried to say that I hope I have done my duty and that the Ministry has done its duty. I leave it to the Committee to judge on the facts.
Select Committees are, by their very terms of reference, critical and that is a great safeguard for the House of Commons and for democracy. If, occasionally, I am criticised by a Select Committee, as I have been recently, I do not he awake at nights, provided I am satisfied in my conscience that I can say that although we all make mistakes and are very imperfect—certainly I am—at least I have tried to do what I thought was right in the national interest. I shall go on doing so.
8.16 p.m.
Mr. A. E. Hunter: I am glad to have the opportunity of following the Minister. I wish to deal not with the latter part of his speech, but with the accident at Southall. My constituency and those of my hon. Friends the Members for Southall (Mr. Pargiter) and Hayes and Harlington (Mr. Skeffing-ton) are all around London Airport. Therefore, we are strongly interested in

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air safety. It is the duty of Parliament tonight to make sure that the Minister does everything in his power to make air travel as safe as possible not only for those who travel by air and for the crews, but also for the people who live in the large towns, the cities and the countryside.
The Viking aircrash disaster at Southall on 2nd September, 1958, killed seven people, the crew of three and four members of the public in the Southall constituency. The Report by Mr. Justice Phillimore has come as a great shock to the country. All hon. Members must agree that the Report is a damning indictment against the owners of the aircraft, Independent Air Travel. It is proper that Parliament should debate the Report and insist that action is taken by the Minister to ensure that such conditions as existed in Independent Air Travel are not again permitted in companies licensed by the Ministry of Transport and Civil Aviation.
Part of my constituency adjoins the constituency of my hon. Friend the Member for Southall. Thousands of my constituents live in the area of the airport; indeed, some houses are only 400 yards from a runway. The Report of the Inquiry has caused concern against residents who, night and day, have aircraft taking off and landing at London Airport and flying over their homes. Representing them in the House of Commons, I feel it my duty to voice their concern.
Independent Air Travel was licensed to carry out its inclusive tours and also able, until the Minister intervened, to tender for Government contracts. On this matter, we must not mince our words. The lesson we can learn from the tragedy at Southall is to safeguard the future and to make sure that this does not happen again.
Let me briefly state some of the points from the inquiry held by Mr. Justice Phillimore. I take them from the Report, which, I take it, most hon. Members have read. These are some of the findings. The company was being run in a manner designed to keep expense to a minimum. The proper checking of training facilities was deliberately refused, with that object in view. It was surprising that the company, Independent Air Travel, did not have an accident before. The aircraft
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was not properly maintained, neither its engines nor its radio installations. The aircraft was overloaded. The pilot ought not to have taken off in this aircraft which, to his knowledge, was overloaded. The crew, as he must have known, were not of approved competence, and it was at a time when he himself was suffering from fatigue.
Mr. J. Eden: The hon. Gentleman says that he assumes that most hon. Members have read the Report. He is paraphrasing some of its comments. Would he not also draw the attention of hon. Members to the fact that in the Report reference is made to the exceedingly good engineering condition of the aircraft and that no fault was found with that?
Mr. Hunter: I promised that I would not be very long. If I went through all the Report I should be standing here a long time. The hon. Member has drawn attention to that part of the Report.
There is another paragraph of the findings which says that the conduct of the pilot and the whole course of events contributed to the policy of the company of keeping its aircraft gainfully employed regardless of regulations. Mr. Justice Phillimore also criticises the Ministry of Transport and Civil Aviation for not acting on previous recommendations that it should tighten up the regulations for the six-monthly checks of pilots.
Can it be wondered that, after such an indictment, people are shocked? I am not using this debate to attack the independent air operators. Many of them are good, reputable firms, and perform a useful service. I am attacking Independent Air Travel, a company which was a disgrace to the country. It is in the interests of the independent air operators that similar companies should not be allowed to exist.
Air safety has always been a watchword of the Air Corporations. I have been on a visit to their training school with my hon. Friend the Member for Uxbridge (Mr. Beswick) and with my hon. Friend the Member for Enfield, East (Mr. Ernest Davies), and we have seen the great care which the Corporations take at that school. I am glad to see that the Joint Parliamentary Secretary agrees with me. Every hon. Member should go to the training school, for it is well worth seeing, to see the great care

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and pains which the Air Corporations take to train their pilots and crews.
Air safety, as I have said, has always been a watchword of B.E.A. and B.O.A.C., and it should be the watchword of all airline companies. Parliament must insist upon it. We owe it to the people who travel by air, to the air crews, and to those who live in the towns and countryside.
Our national prestige is at stake. This country has been a pioneer in this great new form of air travel and in civil aviation. It is against our national prestige to have companies like the late company, Independent Air Travel, operating. We must make sure that this country's reputation for air safety is second to none. Just as, many years ago, Parliament had to insist that our ships which sailed the seas were seaworthy, so today we must insist that measures be taken to make regulations to ensure that in future air companies like the one indicated in Mr. Justice Phillimore's Report are not allowed to exist.
Let the Government act, and act now, and let Parliament insist that there shall be no more tragedies like the one which occurred at Southall.
8.25 p.m.
Mr. Nigel Nicolson: No person has a greater right to speak on the Southall disaster than the hon. Member for Feltham (Mr. Hunter), whose constituency suffered—
Mr. Hunter: No. It was the constituency of my hon. Friend the Member for Southall (Mr. Pargiter) that suffered. My constituency adjoins Southall.
Mr. Nicolson: —whose own constituency adjoins the area where the aeroplane crashed. Of course, as he pointed out, there is no guarantee whatever that a constituency which lies on the boundary of a great airport is not in some danger from an air accident.
However, I also, I think, have a right, perhaps an equal right, to intervene in this debate, because many of the management and the employees of the firm which operated this Viking aircraft were my constituents. I have, in addition to this constituency interest, to disclose to the Committee a personal interest, and I should like to explain to
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the Committee exactly what that interest is.
I was never a director of Independent Air Travel. My sole interest in the firm was that many of its employees were my constituents, and from time to time, as their Member, I did my best to help them. After the Independent Air Travel company broke up, since the crash, its former managing director, Captain Kozubski, formed a new company called Falcon Airways Ltd., and a month ago I joined the company as a director, although I have no shares in it. So the Committee will see that my interest, apart from the constituency one, is limited to speaking up for a man who for many years has been my friend, and for just over one month has been my partner. Even if there were not that slight personal interest I should still feel it my duty to speak in this Committee on behalf of the many people who sent me here as their Member.
I should like to give the Committee—I will do it very shortly—some idea of who Captain Kozubski is, and what sort of man he is. As his name indicates, he is by birth a Pole. He came to this country soon after his own was overrun by the Germans in 1939, and he served in the Polish Squadron of Bomber Command throughout the war. He won, serving with our Air Force, the Polish equivalent of the Victoria Cross, the D.F.C. with two bars, the A.F.C., and the Croix de Guerre. I do not advance that as an argument that his war record makes him the most suitable person to run a civilian airline, but I emphasise that he is a pilot himself, and some would say one of the greatest pilots this country has ever seen; a man who can understand the difficulties and, if hon. Members like, the shortcomings of other pilots; and, what is more, a man whose war service shows that he is a person to whom none of us would wish to deny that most elementary right of British justice, the right to reply.
If my right hon. Friend the Member for Blackpool, North (Sir T. Low) had not voluntarily given way to me, that reply would never have been heard and hon. Members, like the hon. Member for Feltham, would have remained convinced, as they would have had every right to be, that this Report is a true

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account of what happened on 2nd September, 1958.
It seems to me most unfortunate and unfair that Captain Kozubski was not called to give evidence at the public inquiry. I say that on two grounds. First, that it was essential that an inquiry which was to investigate so closely the affairs of the company should have called upon the managing director of the company, when the Report itself states that he was the driving force in it and that "the company's operations were conducted by him." It is not a pleasant thing for an hon. Member, particularly one who has had to declare a special interest, to criticise in any way one of the most eminent of Her Majesty's judges, but I am bound to say that I feel that Mr. Justice Phillimore should have exercised his power as chairman of the court to call this man and not wait until he, a foreigner in our midst, came to him and asked to be called.
Moreover, Mr. Justice Phillimore was obliged by law to call him and did not do so. I should like to call my right hon. Friend's attention to Regulation 9 (4) of his own Civil Aviation (Investigation of Accidents) Regulations, 1951, which reads:
"Every public inquiry held under these regulations shall be conducted in such a manner that if a charge is made against any person, that person shall have an opportunity of making a defence."
Surely, that can mean only one thing—that when a report of this sort is published to the world the man most heavily criticised in it should have had a chance to give a reply to the allegations at the inquiry itself, and before the court had come to the conclusions which were clearly in its mind as it was hearing the evidence.
The hon. Member for Feltham had the impression, which I think every hon. Member and the world outside shares with him, that this accident was due primarily to three causes—poor maintenance of the aircraft due to the deliberate policy of the company to cut costs to the minimum, secondly, the fatigue and inexperience of the crew, and, thirdly, the overloading of the Viking prior to take-off.
As for maintenance, the Committee knows that an independent charter com-
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pany does not operate in a vacuum. It is subject to daily inspections by the Air Registration Board to start with, and the A.R.B. have on the spot at Hum and Blackbushe its own officers whose duty it is to prowl round the hangars and see whether the Ministry's regulations are being carried out and the aircraft are in every way fitted to take the air. In addition, there are the Ministerial inspections, of which my right hon. Friend has said there were eight in the case of this company. In answering supplementary questions on Wednesday, my right hon. Friend said that these inspections were carried out "to very high standards," and he three times repeated that phrase.
Is it to be supposed that these very high standards were relaxed in the case of I.A.T.? On the contrary, they were tightened up. The inspections were more frequent and more stringent simply because the company had been prosecuted for infringement of flight-time regulations in the past. They were keeping their eye on the company, and quite rightly. To suppose that the company was never properly investigated is a supposition which cannot be upheld. There were eight such inspections, two within three months of the accident. My right hon. Friend has described how after the inspection of May, 1958 and indeed just before it, the company was considered so satisfactory in all respects by his Ministry's inspectors, that it was granted a licence which I understand is technically known as the "Inclusive Tours Scheduled Services Licence" in association with B.E.A., a privilege which is much sought after and seldom awarded by his Ministry. How did it come about, if the company was run in the way alleged in the Report, that this privilege could have been awarded to it only six months before the accident took place?
That was not all. During the Jordan crisis of last summer the Air Ministry was very pleased to make use of the services of I.A.T. It used them to such an extent during that crisis that they went to Aden, Cyprus and as far afield as Christmas Island, and earned—and I mean earned—nearly £100,000 of public money last year working for the Government, and at the end of the operation the Air Ministry said that it was

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highly delighted with the company's performance.
Mr. Hunter: Would the hon. Gentleman state who was responsible for the overloading of the aircraft, and would he state that Mr. Justice Phillimore said that his only surprise was—
Mr. Nicolson: I hope the hon. Gentleman will allow me to pursue my argument. I apologise to the Committee if I take longer than I normally do. This is the last speech I am likely to make in the House of Commons and the one I have most wanted to make in the whole seven years I have been here.
The inspection of 26th August, a week before the crash took place, did not reveal a single error in maintenance by the company, not one. My right hon. Friend said in his speech this afternoon that it was as a result of that inspection that the company's licence to operate inclusive tours was withdrawn. That came as a complete surprise to me, and I have only had time since he spoke to check with one or two of those who know the company most intimately. They have told me, of course relying on their memories, that they believe that, after the inspection of 26th August, the licence to operate the tours was not withdrawn. What happened was that when the company applied again for the licence to operate similar tours in 1959, it was quite properly refused, not because of the inspection, but because of the crash at Southall.
I do not think it is surprising that the company should have gained so clean a bill of health—not totally clean, but as clean as it was, particularly on the score of maintenance. It had nine aircraft and employed over 100 people solely concerned with their maintenance. In the last seven months before the accident the company spent £150,000 in maintenance upon the aircraft, exclusive of the salaries and wages of the 100 men I have mentioned. In view of that, I ask my right hon. Friend this question: after that inspection on 26th August, would his inspectors have signed a statement to the following effect:
"… the policy of this Company was to keep its aircraft flying at all costs and without any real regard for the requirements of maintenance …"?
Hon. Members will notice that this quotation is taken direct from the
982
Report. This is what Mr. Justice Phillimore says the company was like. I am asking if that was also the opinion of the inspectors who inspected it rigorously a week before? Either that statement in the Report is true or untrue. If it is true, why did not the Minister's inspectors say so while there was time? If they knew it was true, or thought it was true, and still did not say so, surely they must share some of the responsibility for the tragic accident at Southall?
Mr. Watkinson: I am sorry to interrupt my hon. Friend, but I must put him right on one point by reminding him of what I said. It was that on 26th August, the date he has referred to, just before the accident, the inspection revealed prima facie evidence of infringement of flight-time regulations. That was not a criticism of the maintenance. There was a breach of the regulations, and a clear breach, and approval for the company to operate scheduled services was withdrawn because of that evidence.
Mr. Nicolson: I am very pleased that my right hon. Friend has confirmed just what I thought. There was no criticism of the maintenance operations of the company at all a week before the accident took place; as far as maintenance was concerned, it was given a clean bill of health. So I ask my right hon. Friend again, but it is a rhetorical question, does he think that the verdict of the public inquiry upon this subject is one which would have been supported a week before by his own inspectors? If it is not true, the Minister should defend his own officers in defending the company, and say quite candidly to the Committee that the most pungent accusations made against I.A.T. in the Report are not true and cannot be true. If they were true his inspectors could have, should have and would have stopped these aircraft flying, but they did not do so.
I now come to a subject which the hon. Member for Uxbridge (Mr. Beswick) raised at Question Time on Wednesday. He gave the House to believe that he had information which showed that Lloyds underwriters had refused to insure the company, and he deduced from this that Lloyds knew better than the Ministry. I checked up on this. The hon. Member may have

983
seen in the Daily Telegraph on Thursday—I called his attention to the cutting before the debate—that Lloyds underwriters utterly denied this. I should like to read the words. The Daily Telegraph said:
"Aviation insurance underwriters consulted in the City yesterday denied that there was any foundation for a suggestion made by Mr. Beswick … at question time in the Commons yesterday that Lloyds had at any time refused to insure the owners of the Viking that crashed at Southall."
It goes on:
"There is always the possibility that an individual underwriter or company may for technical reasons have decided not to take a 'line'."
That is a technical insurance term.
"This would not reflect upon the insured."
I am sure that the hon. Member did not wish to mislead the House, and I hope he will allow me to put this matter right. The company was insured at Lloyds. It was considered a good risk, and it was considered a good risk because it had paid vast sums in insurance premiums and had made no claims at all. In the last year of its operations, in 1958, it had paid £30,000 for the premium on the insurance of its nine aircraft. The claim made during the six years of its existence amounted to £240. The Committee may be interested to know that that was in respect of one of its aircraft grounded at Rotterdam into which a lorry belonging to another company backed and damaged part of the fuselage, and in the end it was the company owning the lorry which paid the claim Therefore, no claims at all were made upon the insurance company. Far from this company being a bad risk at Lloyds the underwriters were reaching for its business, and one can understand why.
Mr. Beswick: Perhaps I may be allowed to say to the hon. Gentleman that he is protesting a little too much. I think he is overpainting his case very seriously, and he is not doing his own firm any good. What the Daily Telegraph said is quite true, but it was not the whole truth. Nothing that I said related to matters prior to the accident. What I was saying, and what I intended to say—I said it in a supplementary question—was that Lloyds underwriters had not been able to accept a risk affecting the firm at a time when the Minister was permitting it to operate. That is what
984
I said, and, to the best of my knowledge and belief, that is correct.
I will tell the hon. Member what happened. Following the operation of the company, of which he is now a director, of a Viking taken over from Independent Air Travel, part of the contract that Captain Kozubski took with him was that the aircraft should be maintained by Independent Air Travel, of which a director has just entered the Committee My information was that it was necessary for the hon. Gentleman's company to insure the aircraft and that when it made a proposal for the insurance it had to state which was the maintenance firm. The maintenance firm was Independent Air Travel. Lloyds sent a skilled assessor, a technical man, to Hum on 24th March, 1959. [HON. MEMBERS: "Speech."] The hon Member made a rather serious remark in relation to me. and I am giving him the facts. The assessor's remarks about what he found at Hurn were heard by others on the aerodrome, and the net result was that the insurance risk was not accepted by those underwriters on the basis of Independent Air Travel doing the maintenance.
Mr. Nicolson: I shall not pursue the matter of insurance, because it would take up too much time and I have so many more important things to say. I hope that the hon. Gentleman will not think that I am overstating the case, but that fact is that the company had flown 30,000 hours, which is 6 million miles, without a single accident.
We have a much closer check upon whether the company maintained its aircraft well. We have the check upon the Viking to which I shall refer to as Juliett Echo, its code name, after the crash itself. The Report is very forthcoming about this subject, but I shall read to the Committee what is not in the Report. This is what the Solicitor-General said in opening the case for the Crown at the Inquiry:
"The starboard engine had no internal mechanical failure,"—
that was the engine that was suspect—
"no sign of one. Lubrication had been adequate. General operating conditions seem to have been satisfactory. I may summarise it by saying that from the wreckage there was no indication of any failure by either engine."
The same is true of the airframe and the radio equipment.

985
When the chief technical officer of the Air Registration Board gave evidence, his summary was:
"The aircraft's performance was considerably above the average."
I think that we can conclude that the Report's picture of maintenance is considerably overdrawn.
Now I come to deal with the crew. It is alleged that the crew members were inexperienced and fatigued. We know that Captain Mayger, the pilot, was a pilot of very great experience, with 13,000 hours with B.O.A.C. and the R.A.F. His co-pilot and first officer was Mr. Altena, a Dutchman, who had 1,000 hours as pilot and of whose ability as a navigator the Solicitor-General said at the inquiry:
"He was a competent navigator, had an excellent knowledge of radio navigation, and used radio aids to good advantage."
These were skilled men.
There was a third man in the aeroplane, Mr. Howard. Mr. Howard need not have been there at all. Regulations demanded that on such flights at least two men should be taken, but there was no need of a third. Mr. Howard went on this flight solely to help with the unloading of the two Proteus engines, which were the cargo, at its destination in Israel. He had nothing whatever to do with the navigation, or pilotage, or engineering of the aircraft in which he was travelling.
When we read in the Report an alleged remark by Mr. Howard to one of the marshallers of the M.T.C.A. at London Airport, to the effect:
"Well, if that spare part is not available, as far as I am concerned the aircraft is grounded and I refuse to sign.",
we begin to wonder whether the court of inquiry went sufficiently well into the evidence, for it is impossible for Howard to have made that remark. It was as if someone had said to a cabin steward in a ship, "Are we ready to sail yet?", in which case he would have answered, "Ask the captain". Howard was a nobody in this crew. He had no right to sign and he would never have demanded that right and nobody would have asked him.
The two important members of the crew were, therefore, not inexperienced. Were they tired? The Report says that Altena was not tired, but that "Captain
986
Mayger certain was." That may seem a little surprising since Captain Mayger had had more sleep than Altena. Even disregarding that, let us look at what Captain Mayger had been doing in the twenty-four hours before he took off. On the previous night, that is Sunday/Monday, he went to an hotel near Basingstoke. His wife was with him. She was interrogated at the inquiry, but her evidence is not reproduced in the Report. She was asked how her husband slept and she said he had been sound asleep for seven hours.
"Q. During that night did your husband have a good rest? A. Very good."
Before he left for Blackbushe the next morning he volunteered the information which his wife repeated in her evidence:
"I feel very fit this morning."
He did not have to take off until 2.30 that afternoon. He had the whole morning free. He then did a thirty-minute flight from Blackbushe to London Airport. After he arrived at London Airport he probably stayed in the neighbourhood of the aircraft until about 4 p.m. Nobody knows exactly what he did after that, but we know from Mr. Rodger Winn who appeared with my right hon. and learned Friend at the inquiry that there was no evidence that Mayger was working after 6 p.m. All we know is that at 9 p.m. he arrived at the Berkeley Arms Hotel where he was to spend the night, and he went to bed almost immediately afterwards.
I am now coming to a point on which I wish to lay the greatest emphasis. There was no need for Captain Mayger to have left London Airport at 6 a.m. the following morning. It was entirely up to him to choose when he left. He could have left at mid-day or even at 4 p.m. If he was feeling tired, as the Report consistently alleges, one is obliged to ask oneself why he did not take a longer rest. The schedule for this flight gave five days in all to go out to Israel and return to Blackbushe. The aircraft was not required to be at Blackbushe until Saturday morning.
Half of Monday was taken up with the maintenance of the aircraft at London Airport. That left four days and nights in which to make a flight of twenty-four hours to Israel and back. The pilot was entitled to stagger his flight exactly as he wished, and that is

987
the normal practice for any pilot. He could have made his first stop in the South of France, or in Italy, or in Athens. He probably intended to make Nice his first stop and go on the next day in what is, after all, an easy stage, to Israel, and spend two whole days coming back. One can only assume that because he chose to start so early when it was not necessary to do so, he was feeling, as his wife said of him, "fit and fully rested".
If hon. Gentlemen had had the opportunities which I have had of listening to the tape-recording of the messages that passed between Juliett Echo and the ground control during the last half-hour of that final flight, they would know that there was no trace of tiredness, or even anxiety, in the voice of either Peter Mayger or Mr. Altena. This accusation of fatigue is wrong, false and groundless, and should not have been made.
I now deal with overloading. This aircraft was undoubtedly carrying 400 kilograms more than it should have been. To what extent was the pilot forced to carry that overweight? He was not forced to do so. When he left Black-bushe he was given a manifest which showed precisely what he was carrying in the aeroplane before it was loaded with the two Proteus engines. In this document which Peter Mayger was given, and which he signed for, it is clearly shown that the stands, blocks and lashings necessary to secure these two engines to the fuselage weighed just over 400 kilograms.
When he got to London Airport he was away from his advanced base. In a sense he was en route for his final destination, even though he was in telephonic communication with Blackbushe. It was he who, quite rightly, had to decide how much petrol to put into that aircraft. The aircraft was loaded for him by B.O.A.C., and the Corporation signed the cargo manifest. Captain Mayger told Shell-Mex how much petrol he wanted, and he loaded in about 100 gallons more than the aircraft either needed or was at that weight entitled to carry. Those extra 100 gallons of fuel account wholly for this overweight.
The Report makes a very sinister comment upon this. It says that:
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"If the load was correctly stated, it would have been necessary to land at Lyons, thus incurring additional cost and increased time. This is, of course, easy to understand if the Company was being run in such a way as to cut expenses to the minimum."
There are two answers to that statement. The first is that the aeroplane, with that load, could have made Nice quite easily in one hop without carrying the extra weight of petrol. Secondly, contrary to what the Commissioner says, it would have been more and not less expensive for the aircraft to make its first stop at Nice rather than Lyons. The reasons are very simple. First, with Rome as the next stop, Nice is 20 miles further from London Airport than is Lyons. Secondly, handling is more expensive at Nice, and the transit longer, as Lyons gives free handling to aircraft which go there, as it is their municipal policy to attract aeroplanes to its airport.
So we find that the truth on this point is the very opposite of what is stated. If the company had wished to save money it would have had the aircraft stop at Lyons and not at Nice. It cannot be argued for a moment that Captain Mayger put this extra petrol on in order to make a cheaper journey; by going to Nice he was making a more expensive one.
Was Juliett Echo dangerously overloaded? My right hon. Friend said that he thought it was. I would put the contrary argument, that a Viking of this sort is dangerously overloaded when it is overloaded by about 2,000 kilograms. This aircraft was overloaded by under 400 kilograms. It is as if a driver was said to be driving dangerously when he drove at 32 m.p.h. in a built-up area. Certainly he exceeded the speed limit, and could be prosecuted, but he was not driving dangerously as, for instance, a car would be driven dangerously if, on its way from Marble Arch to the Arc de Triomphe, it went through London at 60 m.p.h.
The performance of the aircraft in the air immediately after take-off was such as to make it quite impossible to argue that it was dangerously overloaded. From take-off it rose 4,000 feet in the first four minutes. Hon. Members will find that evidence in Appendix "A" to the Report. The rate of climb was thus 1,000 feet per minute. That is not only exceptional for a Viking of that

989
type but is surely a tribute to the standard of its maintenance. How could it climb with its admitted overload, at double the normal rate, unless it was a very good aeroplane, and unless the technical director of A.R.B. was right in saying that its performance was above average?
By the time it turned back from Dunsfold it had shed much of its load and used a lot of its petrol, and the Solicitor-General admitted in his speech at the public inquiry that it was most unlikely that overloading could do anything to explain the aircraft's high speed of descent in the last moments.
This part of the Report is summed up in these terrible words, about Captain Mayger:
"This man was put in a situation which no pilot should be required to face."
I ask the Minister to imagine what Mrs. Mayger's feelings were when she read those words. Can she have drawn any other conclusion than that Captain Kozubski was her husband's murderer? Those words were wholly unjustified. They were untrue, and terribly cruel, not only to this man's widow but crueller to the man who was one of his greatest friends, responsible for his life and for the aircraft in which he asked him to fly.
I hope that I have been able to show to the Committee that the truth is that the aircraft was admitted to be fully serviceable, that the pilot and first officer were very experienced men, that the overload was neither necessary nor dangerous, and that Captain Mayger had chosen his own route and his own time of departure. If those are not the reasons for the crash, what were the real reasons? I think there were two reasons, neither of which has been gone into at all fully in the Report.
The first reason was pilot error and the second reason was the air traffic control system around London. As for pilot error, I think it is within the recollection of all hon. Members that the most experienced pilots flying for the most reputable airlines have, on occasion, made errors of inexplicable magnitude. I remember an air crash which took place last Christmas Eve not a mile from my house in Hampshire, when a Britannia of B.O.A.C. crashed, with heavy loss of life, because its crew had misread the altimeter by 10,000 ft. I remember another case not long ago when a
990
B.O.A.C. airliner flew 90 degrees off its course right across the Sahara until it ran out of petrol—again the result of pilot error.
I have not much doubt that Captain Mayger made a pilot error in that he mistuned, as is suggested in the Report, to the beacon of Amsterdam instead of to Blackbushe. The beacon of one is much stronger than the other. He failed to check his position by the navigational aids at his disposal, such as the magnetic compass, or even by the sun, which was shining brightly at the time, which would have given him some clue that he was going in the wrong direction.
The second reason is related to the air traffic control system around London. I would ask the Committee to note that I use the word "system" and not "officers". It is right that I should read out to the Committee the passage in the the Report which has already been quoted once:
"I am entirely satisfied that the air traffic control officers not only did their duty but in fact did far more than they were strictly required to do and no possible criticism attaches to them."
I am not seeking to attack them, but am merely saying that the accident was at least in part due to the fact that there was no system in force in the London area to make it essential that one airport shall exchange information with another about an aircraft in distress in its immediate vicinity. [Interruption.] I apologise to hon. Members for speaking for so long. My next point is crucially important, because it affects future operations as well as this crash.
What did London Airport know at the time of the final crash? It did not know very much, because it had ordered Juliett Echo to switch over to the Blackbushe frequency. But it did continue to keep in touch with the aircraft during its flight.
Air traffic control officers at London Airport noticed as early as 6.22 that the Viking was flying off its course. A message was sent to the aeroplane via Blackbushe to correct that error. As we know, the error was never entirely corrected. Soon afterwards a B.O.A.C. plane in the air near London Airport spotted the Viking in the air and radioed back to London Airport that it was still

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off course. Then four officers at London Airport followed the flight of this Viking on the radar screen. At first they were not certain that it was the Viking they were seeing. Later they became more certain, and at 6.26 the officer known as the Epsom stack control told Black-bushe again. By that time Juliett Echo was six miles south-east of London Airport. Various other officers saw the same thing and in the end they followed round the "blip" on the screen until it disappeared when the aircraft crashed.
That was what London knew. It was following the path of the aircraft on the radar screen. But Blackbushe had no radar, or none capable of reaching as far as the aircraft had then proceeded. All Blackbushe had was a short-range local radar belonging to the United States Navy and available to Blackbushe Airport on a thirty-minute call. Yet this was the airport in control of a machine known to be in difficulties and know to be losing height.
I will not pursue the story in any further detail. I will simply sum up this side of it in this way. London could see the Viking but could not speak to it. Blackbushe could speak to the Viking but could not see it. London knew its position but not its height. Blackbushe knew its height but not its position. If either airport had known both facts together the aircraft could have been taken over by London Airport and safely landed. In fact, the Commissioner put this question to the supervisor of the southern air traffic control centre at London Airport:
"It could easily have landed at London Airport, I suppose, if anybody had been able to direct it as to its position?"
To which the supervisor replied:
"Yes, depending upon its manoeuvrability and its ability to maintain height."
In view of these disturbing facts which I have had to burrow out from the evidence—as hon. Members will find that there is no discussion of them in the Report—I ask the Minister these questions. First, should not there be throughout the twenty-four hours some central authority within the London traffic area responsible for plotting the flight of a distressed aircraft to whichever airport it has been directed? Secondly, should not it be an established practice that London Airport should
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take over control of such distressed aircraft when they enter the London control zone particularly when neighbouring airfields are known not to have the same facilities for observing or plotting its flight? Thirdly, should not one airport exchange full information with another about an aircraft known to be in distress and flying between their zones of responsibility?
Whatever we think about the Southall crash it has lessons which I have tried to draw about air safety in the London area as a whole. I asked my right hon. Friend to look at these facts both in the light of what happened on 2nd September last year and in the light of the possibility of future accidents. This Report is a charge of criminal negligence against a company.
Mr. G. Lindgren: Quite right, too.
Mr. Nicolson: I had nothing to do with it except as a Member of Parliament representing the constituency near which was its main base. I feel that the Minister should either dissociate himself from the most stringent charges made in this Report or else he should show the Committee much more exactly how they can be justified. I have no interest whatsoever in the old company, but I have an interest in the director of the new company, Captain Kozubski, who was associated with I.A.T.
I thank all hon. Members for their extraordinary patience in allowing me this opportunity, the only opportunity there will ever be, to state the answer to the Report which hon. Members have in their hands.
9.10 p.m.
Mr. Clement Davies: The Committee is not in a position to re-try this case or question the decision of such an experienced man as Mr. Justice Phillimore, who spent seven days hearing the facts and had the assistance of experienced counsel on every side. In drawing up his Report, he has used the most strong and direct language that I have ever read in any report.
I am concerned with only one point, and I want to state that as shortly as I possibly can. It arises from two replies given by the Solicitor-General in the House last Tuesday. He said:
"I concede that there are now disclosed by the investigation offences against the Regulations,

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but, as I have explained, there is a statutory period of limitation already past in respect of those."
The right hon. and learned Gentleman later said:
"The House will realise that one would be most eager to see that we never reach a position of this kind again."—[OFFICIAL REPORT. 14th July, 1959; Vol. 609, c. 182–3.]
The Southall accident was a terrible tragedy. Seven people were killed. The aircraft concerned, and the owners of the aircraft, had been the subject of a previous inquiry by the Minister. Only a few days before the crash there had been a breach of regulations. Therefore, I should have thought that the Minister at once was put upon his guard to make a direct inquiry and should have been concerned to get that made as quickly as possible.
I understand that the deputy-coroner sat on either 4th or 5th September to open the inquest formally, but it must be remembered that in every case the coroner is very much dependent upon the police or some authority—in this case it may have been Scotland Yard—for such information as he can obtain, because he is not in a position to collect information and put questions to witnesses unless he has help from outside. We know that it was at the request of the Ministry that the deputy-coroner adjourned the inquest until the end of January. There had been a breach of regulations by this company before and this tremendous disaster had taken place, yet September, October, November, December and nearly the whole of January passed before the matter was brought again before the coroner. He summed up, I think, on 28th and 29th January. Thereupon the jury returned an open verdict.
Again time was allowed to elapse, because not until 18th February was Mr. Justice Phillimore appointed. He did not begin to sit until 16th March. The vital date was 2nd March. The accident occurred on 2nd September. Therefore, if proceedings were to be taken in respect of breach of regulation they had to be begun before 2nd March. I should like—and the Committee and the country are entitled to it—an explanation of that long delay. It is true that, as the Minister has said, there might have been the possibility of a serious charge of manslaughter being brought and that the
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Ministry was anxious about that, but that, apparently was cleared up at an earlier period to the satisfaction either of the Director of Public Prosecutions or of the Ministry.
That being so, and even allowing for the fact that the coroner's jury returned an open verdict and finished the matter only on 9th January, why was no step whatsoever taken against this company between 29th January and 2nd March? That is a question that, I think, is being asked even by the learned Solicitor-General, because he has asked what we are to do to see that this never happens again. That is the one question that worries me.
Sir A. V. Harvey: I do not think that the right hon. and learned Gentleman was present at the beginning of the debate, when the Minister, I thought, made absolutely clear exactly what took place.
Mr. Davies: I did not think so.
9.16 p.m.
Vice-Admiral John Hughes Hallett: It had not been my intention, in this debate, to touch on that part of it that deals with the accident at Southall, but so much has already been said on the subject that I feel constrained to make one or two observations. I speak as one who has spent most of his working like in a Service where, unfortunately, accidents of this type—often involving much greater loss, of life—occur from time to time; and as one who has presided over a number of inquiries into accidents, has convened other inquiries, and has had to consider their evidence.
I must say that I was entirely convinced by my right hon. Friend's explanation of his own action and that of the Ministry. We understand, of course, the reasons that prompt the Opposition to bring this matter forward in Parliament but, to be perfectly frank, I do not think that if one flogs over the ground too far one contributes in any way to air safety in the future. I entirely agree with what was said by the right hon. and learned Member for Montgomery (Mr. C. Davies). In this Committee we cannot rehear the case.
Although I was moved by the speech of my hon. Friend the Member for

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Bournemouth, East and Christchurch (Mr. N. Nicolson) I very much doubt whether, by challenging the findings of the judge in such detail he served to any great extent the cause that he has at heart. However, if he will allow me to say so, there is one point that he raised that I would like my hon. Friend the Joint Parliamentary Secretary to deal with when he replies. Although I probably ought to be clear about it, I must say that I still am not quite clear about the circumstances in which persons who were blamed at the inquiry were not called as witnesses.
I understood my right hon. Friend to say that an opportunity was given to the managing director of the company. I understood my hon. Friend the Member for Bournemouth, East and Christchurch to say that that opportunity was not given. Can we have that point cleared up? Was the opportunity given during the main inquiry itself, or after the finding was drafted or promulgated? Secondly, was it given formally in open court?
In these matters, I believe the procedure of a Service court of inquiry is in some ways superior to the proceedings of an inquiry such as this, because in the Service inquiry, if there is any question of blaming any individual, that individual is always called as a witness in open court. He will be told that he need not give evidence if he does not wish to, and then the first of a series of questions is put to him. If he refuses to answer, the position is quite plain and everyone understands. I should like my hon. Friend to tell us exactly what is the procedure of an inquiry of this nature.
I should now like to say a few brief words about the Report of the Select Committee. To begin with, perhaps the only remark in the speech of the hon. Member for Uxbridge (Mr. Beswick) with which I agreed was that paying tribute to that Report. It is an excellent Report, and fully justifies the decision of the House to set up a Select Committee on the nationalised industries. Nevertheless, although I regard it as an excellent Report, I have an uneasy feeling that I speak with a lone voice in relation to those on either side of the industry when I say that I regard it as a disturbing
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Report. From the point of view of the travelling public or, perhaps I should say, the would-be travelling public, it reveals a shocking and, indeed, rather a ridiculous state of affairs.
I should like to read the opening words of paragraph 3 of the Report, which says:
"Since fares are fixed, competition is concentrated upon such things as the quality of service, the reputation for efficiency and punctuality, and the speed of flights; and the best way of winning traffic from competitors is by flying better aircraft than they have."
Since it is pointed out a little later in the Report that the purchase of new aircraft involves about 80 per cent. of the capital development of these Corporations, it is obvious that, if competition is channelled into these particular lines, there is no prospect of getting cheaper air travel.
It is no answer to say, as is said and probably quite correctly, that the newer aircraft are as cheap, if not cheaper, to operate than the older ones, because enormous expenditure is involved in the development of new types and the change-over earlier than otherwise would be necessary in order to keep up to date or to keep up with the Joneses. Yet cheaper travel is surely the supreme need in the interest of the aircraft industry itself and the interest of the manufacturing industry.
There must be in the world today many hundreds of thousands if not millions of people in the middle income groups who would like to visit other continents and to see other races in distant parts of the world. In the days before the aeroplane was invented, this was impossible because of the time it would take. Anyhow, it would be impossible until they retired, by which time usually their incomes would be insufficient. Even now, although we have the aeroplane, it is still just as impossible on account of the cost.
One thing which I should like to see—it has never been published in any of the reports on the nationalised industries—and which I should like to put to my right hon. Friend, is that he might try to obtain one very important piece of information. I should like to see the breakdown figures of all passengers carried by B.O.A.C. into those whose fares are paid by the Government, those whose fares are paid wholly by the firm for which they work, those who are self-employed and claim that the visit is

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necessary for the conduct of their business and thus claw back a substantial part of the fare from the Chancellor of the Exchequer, and those who pay their own fares. I think that in the case of B.O.A.C. the percentage who pay their own fares must be very small indeed.
As the Report makes quite clear in paragraph 74, the great obstacle, as hon. Members of the Committee know, to reducing fares is I.A.T.A. I was, therefore, very disappointed indeed that the Committee went on, in paragraph 76, so it seems to me, to accept the inevitability of the present state of affairs. I was, however, delighted to notice that my right hon. Friend's reply to the debate on the manufacturing industry the other day showed that he takes a very much more robust point of view of this matter.
I am bound to say, in passing, that I regret, and I hope that the country will take note, that from beginning to end in the speech of the hon. Member for Uxbridge he said nothing whatever to encourage the idea that we might get cheaper flying, yet that is the supreme need if this industry is to survive. [HON. MEMBERS: "Nor did the Minister."] My right hon. Friend said a great deal about it in the debate last week. I think that this is a matter which those who defend the present state of affairs have got to answer.
What is the reason for the basic difference between the development of sea travel and air travel in this respect? If we look back over this century we find that it would have been technically possible at any time during the past fifty years to build liners which could serve any of the routes in the world at a service speed of 30 knots. It was never done, except for a small number of ships, which were very often run at a loss and in many cases subsidised, on the North Atlantic route. The reason why this was not more general was that it did not pay. It would be technically possible today to build a replacement of the "Queen Elizabeth" which would cross the Atlantic at 45 knots, but I should be surprised if anybody suggested such a thing, because it would not pay.
The question that I put is this, and I feel that somebody who wishes to defend the present state of affairs should answer it. What valid reason is there for any difference in the case of air travel?
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There are certainly two undesirable answers. One is the factor that I have already mentioned. The passenger fare list is artificial in the sense that most passengers do not pay their own fares. But I think, also, that we have to face the fact—and I impinge a little on the debate that we had on Thursday last—that one of the things which have influenced the Corporations in their policy is that it has suited the aircraft industry to concentrate more attention on developing new types rather than on manufacturing and developing cheaper processes with existing types.
I do not necessarily blame the people in the industry for that. They grew up in a climate of two world wars, in an age in which it was necessary to produce an aeroplane which flew higher, faster and further. If only we could get back to competitive fares, I suggest that the aircraft industry and, in turn, the Corporations would set themselves very different targets. If we consider the two principal types being flown by B.O.A.C. and B.E.A., the Britannias and the Viscounts, I suggest that they represent a certain finality in air travel, because they have a performance in height, speed and range which enable them to operate with reasonable consistency to a fairly tight schedule on all the principal air routes of the world.
Suppose it had been firmly decided by the Corporations that they would stabilise on this particular performance, say, for thirty years. By how much could the cost of the aircraft and, therefore, the cost of the travel be brought down during that period? What might not have been achieved? To people of my sort of age this Report is a depressing one. So far as we are concerned, there is not the slightest hope or prospect of our ever benefiting from the development of air transport. We shall never travel to distant continents, unless somebody else pays our fare for us.
The travelling public, or perhaps I should say the potential travelling public, has come a very poor last among the people considered so far in the policy of the Corporations and the industry. In consequence, it would not be saying too much to say that for the vast majority of the people of the world we would have been much better off if the aeroplane had never been invested at all, because all

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that most of us get at the moment is noise and higher taxation in time of peace, and bombs in time of war. It is for that reason that I wish my right hon. Friend all possible success when he joins issue, later this year, with the other nations interested in this question of the fixing of fares.
9.30 p.m.
Mr. G. A. Pargiter: We have listened, first, to forty-five minutes of defence by an hon. Member of a company in which he has an interest. We have now been listening further to matters which are hardly germane to this debate.
Vice-Admiral Hughes Hallett Vice-Admiral Hughes Hallett rose—
Mr. Pargiter: We have wasted enough time—
The Chairman: If the hon. Member reads what is on the Order Paper, he will see that what has been said is perfectly in order. Otherwise, I would have stopped hon. Members.
Hon. Members: Withdraw.
Mr. Denis Howell: It was irrelevant.
Mr. Pargiter: Whilst the subject was relevant, the remarks were highly irrelevant.
Sir A. V. Harvey: So will the hon. Member's be.
Mr. Pargiter: My concern is about the aircraft crash at Southall, in my constituency. I was on the scene of the crash shortly afterwards. If the hon. Member for Bournemouth, East and Christchurch (Mr. N. Nicolson) had been there, he might not have been so concerned as he has been in the defence of the people who have been so scathingly condemned in this Report.
I want to come to certain of the facts arising from the inquiry. Some whitewashing has been done. The coroner took an inordinately long time. Of course, we cannot control what coroners do. It is just as well that we examine some of the facts. I wrote to the Minister on the day of the crash and asked for a full public inquiry to be held. He kindly replied immediately saying that there would be a full public inquiry, and I was happy. I asumed that in the next couple of days, a commissioner
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would be appointed and the inquiry would commence. Instead, we find that not only was a commissioner not appointed, but that nothing was done in that direction until February and, even then, the hearings did not commence until the middle of March. These are vital facts.
The inquest was opened formally at the beginning of September. It was necessary for the coroner to issue the necessary certificates for the bodies to be buried and this was done. The inquest was adjourned, I understand, at the request of the Accidents Investigation Branch and not at the request of the coroner.
Mr. Watkinson: I am not sure that the hon. Member was present for the first part of my speech, when I explained all that in great detail.
Mr. Pargiter: It is equally true that the ground upon which the coroner was asked to adjourn the inquest was that it was pending the inquiry—in other words, that the inquiry would proceed. The inquiry did not proceed. At the end of October or, possibly, the beginning of November, although there had been no inquiry or request in the meantime, the coroner received a request through the local superintendent of police to resume the inquest. There may be no significance in this, but it seems to me to be a peculiar set-up concerning the investigation.
The coroner endeavoured, I understand, to obtain information from the Accidents Investigation Branch and from the Director of Public Prosecutions about what had been happening in the meantime and what they could produce for him when he re-opened the inquest. He was unable to get any satisfactory answer. The inquest, however, was resumed. It had to be adjourned for witnesses to be brought back. There was an unwillingness, I gather, or not very much willingness, by the departments concerned to produce witnesses. That does not look very good, but these, I am told, are the facts. The inquest had to be adjourned again so that certain witnesses could be brought back to be examined.
It might be arguable what a coroner must do in a matter of this nature. Obviously, a coroner is entitled in any way he thinks fit to seek the causes of

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people's deaths. In spite of all that anybody has said to the contrary and of the criticism that may be offered, a coroner is entitled to call any witness he wishes in order to establish the cause of death. If he can establish negligence on the part of anybody so that he can return a true verdict, he is entitled to examine witnesses and to call for any evidence or witnesses whom he chooses. It seems to me there is not very much that can he said about this.
I would ask the Minister to deal with these points because there are criticisms which I have heard outside and which I should like to be dealt with. One of the difficulties happens to be the relationship in certain cases between officers in the Department and the private companies. Many of them are senior officers who happen to hold pilots' certificates. They have to get in a certain amount of flying time, and they are dependent on the private companies for getting in that flying time. It may make for nice relationships, but I am not at all sure it makes for the best sort of relationship when it comes to inquiries which may have to be made about infringements of regulations. I should be glad to have a denial of this, but in view of these things which have been said, I think it just as well we should get the position cleared up.
Having regard to the reasons for the lapse of time—for which apologies have been made, none of them very satisfactory—I should like to know whether or not it is true that any senior officer has been transferred from his job because of his connection with this matter. I should also like to know—I do not suppose I can get this information—the nature of the communications which were made to the Department by Members of Parliament other than myself about this accident. It may be that they were quite satisfactory, but I listened to the hon. Member for Bournemouth, East and Christchurch, and I wonder.
I should like to know whether it is true or not, on the general question of inquiries, that there were inquiries following the Blackbushe disaster, the Aquila disaster, and also the aircraft crash at Wigan; and whether, in each of those cases, by the time when the inquiry was completed, it would have been Statute-barred had any action been required.
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Then there is a question relating to the whole set-up. In this case in particular there is further evidence of considerable delay, the cause for which, in my view, comes back to the culpability of some people in some Department or another. I understand that in the Accidents Investigation Branch there is a peculiar situation, for that Department is housed in the Ministry of Civil Aviation but is not of it. I think it is just as well to have the position cleared up and to know where the responsibility lies, and in fact what is the relationship between the Accidents Investigation Branch and the Ministry of Civil Aviation, and also what are the relations with the Attorney-General's Department, and incidentally, what are the connections between them and the Director of Public Prosecutions.
I ask these questions, but no answer to them and no one will bring back the people whose lives have been lost. I may have seemed to have been unkind in the strictures I have made. I should like the hon. Gentleman to believe that I am doing this in the interests of my constituents, because I think it is our duty to raise these points and because I think these are questions which want answering. If my strictures are denied, I shall be quite happy to accept that, but these are things which have caused disquiet, and the disquiet has grown up over a long time, and we ought to get these matters cleared up and make sure that such things do not happen again.
9.38 p.m.
The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. John Hay): I understand the situation of the hon. Member for Southall (Mr. Pargiter). This accident did affect his constituency tragically, as we all know, and it is quite natural that he should want to put a number of questions about it. I think, however, that it was unfortunate that he did not have enough time to develop the themes which he had in mind.
I should like to begin what I have to say to the Committee by saying at once that the rumours which he admits he has heard about whether senior officials of my right hon. Friend's Department have been transferred, and things of that kind, are quite untrue. I am sure he will be glad to have that assurance.

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I cannot satisfy the hon. Member upon one point, that we should communicate either to him or the Committee generally communications made to my right hon. Friend by other hon. Members.
Mr. Pargiter: I did not expect it.
Mr. Hay: I am glad to hear that the hon. Member did not think that that was likely to be done. It is not constitutional practice that it should be done, otherwise things would be quite intolerable.
As to the hon. Member's last point, the position of the Chief Inspector of Accidents is that he is attached to the Ministry of Transport and Civil Aviation, but he is not part of the normal Departmental structure. He reports direct to my right hon. Friend and is to a very large degree detached, and is completely impartial in all his investigations, as are his staff.
Mr. Pargiter: Was it known to him by 11th October that three was a prima facie case?
Mr. Hay: I cannot say. I cannot answer whether the Chief Inspector knew by a certain date that there was a prima facie case. If the hon. Member will examine carefully what my right hon. Friend said, which I do not think he was here earlier to listen to in full, he will find that he explained the timetable involved in this—and I may have time to say a word or so about it myself. I think that he will be satisfied as to the situation.
I should like to say something about our inspection system, because it seems to me that it would be of general assistance to the Committee and to the country to know what my right hon. Friend is responsible for in respect of inspections of aircraft companies. We try to carry out an inspection about every six months. The purposes of the inspections made by our officials are twofold. First, it is to try to acquaint operators with their responsibilities, and, secondly, to check that their operations are in accordance with the regulations and with good operating practice.
The Committee knows that aviation is constantly developing and increasing and a great many flights are carried out by all these different organisations. It is
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quite obvious that we cannot examine all the documents and records relating to all the flights. Therefore, we are forced to carry out a series of spot checks which cover a cross-section of the operations and the aircraft. They are of two types. The first is a check of the operating base itself—loads, trim sheets, training records, and so on—and also checks of aircraft. We try to cover, in conjunction with the Air Registration Board surveyors, the question of the maintenance of aircraft; and my right hon. Friend was quite right in telling the House last Wednesday that we insist upon a very high standard.
To give the Southall accident a little more perspective, I would remind the Committee that it is in the interest of the companies themselves that their standards should be good, because, after all, they are carrying the public and they have a good deal of money involved in the aircraft. It is to their advantage to keep their standards high.
As for pilots, the main checks are twofold. There is a check on the pilot's competency, and we are talking, of course, of pilots who are licensed and certified and who have obtained the original qualifications. There is a periodic check of their competency, and tests of their qualifications to fly on the route. Regulations 44 and 45 place the responsibility for carrying out these tests on the pilots upon the operators themselves. My right hon. Friend has no statutory power to insist upon these checks being carried out in any particular form. In fact, we advise on these checks, and, as the hon. Member for Uxbridge (Mr. Beswick) said, Mr. Justice Phillimore in his Report, and again in a previous Report, recommended certain changes which he would like to see in the form of this six-monthly check, in particular, on pilots.
As my right hon. Friend said earlier, when we knew of these recommendations we did what we could, within the limitations under which we work—namely, that we have no statutory power to force them—to try to persuade the independent operators to carry out the sort of new procedure to which Mr. Justice Phillimore referred. It is unfortunately the fact, and I must admit this frankly to the Committee, that when Mr. Justice Phillimore was conducting the inquiry

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into the Southall crash, he neither asked for, nor did we volunteer, the information as to the alterations that had been made in the practice of a six-monthly check following his earlier recommendation some year or so ago.
It may well be that in the course of perhaps the next Session, or in a new Parliament, we shall have to ask Parliament for additional powers to enable us to do a number of things covering the whole question of licensing. My right hon. Friend has already outlined broadly what we are seeking in this connection, and we shall have to look at that in due course.
The Committee will realise from what I have said that, in view of the number of operations involved, we cannot be expected with the best will in the world, to check everything. It follows from this that we cannot invariably detect some deliberate concealment. In the case of the Southall crash the opinion of Mr. Justice Phillimore—based upon a lengthy consideration of the evidence of a large number of witnesses, evidence which was taken on oath, evidence which was tested by cross-examination by a whole galaxy of distinguished counsel—was that this was a company which had, in effect, falsified records relating to the training of pilots.
We could not, and cannot, be expected invariably to detect the falsification of records of that kind, although we do, in fact, find out this kind of thing by a process of cross-checking. As is clear from the Report itself, and from the documents which are displayed as appendices to it, even Independent Air Travel could not cover up the fact that it was not checking its pilots correctly all the time.
Before I pass from this part of what I want to say, I feel sure that the Committee would endorse a tribute to the officials of the Ministry of Transport and Civil Aviation, who have a very difficult but very responsible job to carry out in trying to maintain these very high standards which we rightly set ourselves for safety in the air. We cannot guard against every eventuality, but I claim that, in the majority of cases, we are able to maintain these high standards.
Mr. Beswick: What I was going to ask the Parliamentary Secretary, and I
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apologise to him in so far as it is a little way from what he has been saying, is this. He has emphasised again and again that the Ministry tries to enforce these high safety standards. We were told earlier today by the Minister that as a result of the insistence on high safety standards neither Falcon Airways, of which the hon. Member for Bournemouth, East and Christchurch (Mr. N. Nicolson) is a member, nor Independent Air Travel, are on the Fair List, or are allowed to carry passengers in accordance with the Air Transport Committee's licences. Yet the fact is that every week, and since May, both companies have been and are carrying 600 passengers a week to the Continent, passengers on inclusive tours. Can the hon. Gentleman explain why, despite all these precautions, this is still happening?
Mr. Hay: This is the first time that I have heard that allegation and it is something which I would very much like to look into. If the hon. Gentleman has some evidence or information that he wants us to investigate along the lines of the question he has just put to me, I certainly hope he will let us have it so that we will look into it. As I have said, we cannot cover every possible eventuality. What we try to do on the safety side is to maintain the highest standards we can within the confines of what I have tried to explain.
Now I want to come to the speech of my hon. Friend the Member for Bournemouth, East and Christchurch (Mr. N. Nicolson). I am sure that the whole Committee will be sorry to know that his speech is the final one that he proposes to make in this Chamber. He felt extremely deeply about the subject of this debate and, with the best will in the world towards by hon. Friend, I must agree with the comment made subsequently by the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies), that whatever one thinks about the Report of the Commissioner the House of Commons is not the place to rehear the whole of the case. Much of my hon. Friend's speech consisted of comments on the Report. The Report is not the responsibility of my right hon. Friend. It is the responsibility of Mr. Justice Phillimore. However, there were a number of points mentioned by my hon. Friend to which I should like to refer.

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The first relates to the calling as a witness of Captain Kozubski, the former managing director of Independent Air Transport. My hon. Friend pointed out that Regulation 4 of the Investigation of Accidents Regulations provides for a person who is to be charged to be called. But what he did not go on to say was that there were two other Regulations, 5 and 7, which enable a person to become a party if he wishes.
In this case what happened was that Captain Kozubski was the managing director of the company, and he was served with, notice, just as the other directors of the company were, in that capacity. The other directors of the company, as I understand it, gave evidence, appearing before the inquiry. Captain Kozubski chose, for reasons best known to himself, not to do so. However, I must make it perfectly clear to my hon. Friend and the Committee that it was perfectly open to Captain Kozubski at any time to have given evidence had he wished to do so.
I am informed that he was present at the Court of Inquiry for part of the time, presumably, I suppose, sitting as a spectator. He was certainly present during the inquest for a lot of the time. He certainly must have known that these sort of charges were to be made about him, because this was what witnesses were saying. It was open to him under Regulation 7 at any moment, had he chosen, to come forward and say to Mr. Justice Phillimore, "I wish to give evidence. My name is being blackened. I want to defend myself". That is my answer to my hon. Friend on the first point.
The second major point taken by my hon. Friend was the question of air traffic control. Here, he put a number of questions to me, which, in effect, amount to this, "Should there not be some kind of a permanent 24-hour watch kept by the air traffic control system for distressed aircraft?" In view of the shortness of time, I am paraphrasing what my hon. Friend said. The answer is that there is in existence such a system, but what went wrong in the case of the aircraft Juliett Echo was that not until almost the very end of its fatal flight did the aircraft declare an emergency. Therefore, so far as the controllers at both Blackbushe and
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London Airport knew this was an aircraft on a normal flight.
It was true that the captain had reported that one of his engines was out, but as the hon. Member for Uxbridge, who has great practical experience of flying, which I have not, knows very well, the fact that an aircraft has an engine out is in these days not considered to be an emergency condition at all. Aircraft are quite accustomed, and are designed, to fly on less than the full number of engines.
Frankly, if Captain Mayger had at any moment from the time that he reached the Dunsfold beacon onwards announced that he was in trouble, and required the assistance of the controllers on the ground, that would instantly have been given to him, but, in fact, he did not do that. It is a great tragedy and a pity that he did not, because if he had we might not have had this fatality. I must say to the Committee with all sincerity that Mr. Justice Phillimore finds in his Report no justification whatever for blaming the air traffic control staff. They knew nothing about it.
Mr. N. Nicolson: I do not blame the officers at all, as I said, but, in fact, they knew that Captain Mayger was in trouble, because he said, "I am finding difficulty in maintaining height." Blackbushe knew it, but London Airport did not.
Mr. Hay: As I tried to explain, Captain Mayger may have said, "I am finding difficulty in maintaining height", but he did not send out the international distress call which would instantly have brought all the services to his aid—the simple word "Mayday". That was, in fact, said by Altena, the co-pilot, at the very last moment before the aircraft went into the ground. It was not until that moment that anybody on the ground really knew that the aircraft needed an emergency service.
In fact, what actually happens, as I think most hon. Members know, is that our air traffic control system is based primarily on providing a system which avoids collision in the air. I do not see how it can be said that a system of that kind, which is intended to avoid collision, should always be on the look-out for aircraft off course, unless it has some idea that something has gone wrong with the aircraft in a serious way.

1009
Here was an unidentified aircraft which appeared on the radar screen. Fortunately, it was identified and it was realised that it was Juliett Echo, and it was given a new course to steer to get it into London Airport or Blackbushe. In fact, by that time, as the Report shows, the pilot had lost control of the aircraft and could not maintain asymmetrical control and the aircraft went into the ground.
In the limited time at my disposal, I have tried to deal with some of the major issues which have arisen out of the inquiry into the Southall accident. I conclude by saying that the Ministry of Transport and Civil Aviation at once accepts that this is one of those tragic things from which we must draw experience and lessons. My right hon. Friend does not pretend, and it would be quite wrong for me to stand at this Box and pretend, that everything is perfect and that there is absolutely nothing wrong, because it is always human experience that one has to draw lessons from what happens.
My right hon. Friend has said several times that we intend to look very closely
into the whole of the licensing system, not only to cover the aspect of safety, but also to cover the sort of operations which can be carried out by some of the independent companies. Some of these companies, it is clear, can drive their aircraft and can drive their pilots. That is possible under the system, as the accident shows, although it is, fortunately, very rare.
We will try, in the course of the next Parliament, to introduce the necessary legislation and thereby try to ensure that this kind of thing does not happen again. But I think I may say with confidence that the whole of this story makes it clear that no blame can rest on my right hon. Friend or upon the Ministry of Transport and Civil Aviation. That is the view which I ask the Committee to commend.
Mr. Beswick: Since we do not accept that view, I beg to move, That Item Class IX, Vote 1 (Ministry of Transport and Civil Aviation), be reduced by £5.
Question put:—
The Committee divided: Ayes 180, Noes 220.

Division No. 171.]

AYES

[9.58 p.m.

Ainsley, J. W.

Davies, S. O. (Merthyr)

Irvine, A. J. (Edge Hill)

Albu, A. H.

Deer, G.

Irving, Sydney (Dartford)

Allaun, Frank (Salford, E.)

de Freitas, Geoffrey

Isaacs, Rt. Hon. G. A.

Allen, Arthur (Bosworth)

Delargy, H. J.

Janner, B.

Allen, Scholefield (Crewe)

Dodds, N. N.

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

Awbery, S. S.

Edwards, Robert (Bilston)

Jenkins, Roy (Stechford)

Bacon, Miss Alice

Edwards, W. J. (Stepney)

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

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

Evans, Albert (Islington, S. W.)

Jones, David (The Hartlepools)

Benton, Sir George

Finch, H. J. (Bedweilty)

Jones, J. Idwal (Wrexham)

Beswick, Frank

Fletcher, Eric

Jones, T. W. (Merioneth)

Blackburn, F.

Foot, D. M.

Kenyon, C.

Blenkinsop, A.

Forman, J. C.

Key, Rt. Hon. C. W.

Blyton, W. R.

Fraser, Thomas (Hamilton)

King, Dr. H. M.

Boardman, H.

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

Lawson, G. M.

Bonham Carter, Mark

George, Lady Megan Lloyd (Car'then)

Lee, Frederick (Newton)

Bottomley, Rt. Hon. A. G.

Gibson, C. W.

Lindgren, C. S.

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

Gordon Walker, Rt. Hon. P. C.

Mabon, Dr. J. Dickson

Bowles, F. G.

Grenfell, Rt. Hon. D. R.

McAlister, Mrs. Mary

Boyd, T. C.

Grey, C. F.

MacColl, J. E.

Braddock, Mrs. Elizabeth

Griffiths, Rt. Hon. dames (Lianelly)

McKay, John (Wallsend)

Brockway, A. F.

Griffiths, William (Exchange)

McLeavy, Frank

Brown, Rt. Hon. George (Belper)

Grimond, J.

MacPherson, Malcolm (Stirling)

Brown, Thomas (Ince)

Hale, Leslie

Mahon, Simon

Burton, Miss F. E.

Hall, Rt. Hn. Glenvil (Colne Valley)

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

Butler, Herbert (Hackney, C.)

Hamilton, W. W.

Marquand, Rt. Hon. H. A.

Butler, Mrs. Joyce (Wood Green)

Hannan, W.

Mason, Roy

Callaghan, L. J.

Hayman, F. H.

Mayhew, C. P.

Carmichael, J.

Healey, Denis

Mikardo, Ian

Cattle, Mrs. B. A.

Herbison, Miss M.

Mitchiton, G. R.

Champion, A. J.

Hobson, C. R. (Koighley)

Monslow, W.

Chapman, W. D.

Holman, P.

Moody, A. S.

Cliffe, Michael

Holmes, Horace

Morris, Percy (Swansea, W.)

Collick, P. H. (Birkenhead)

Houghton, Douglas

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

Craddock, George (Bradford, S.)

Howell, Charles (Perry Barr)

Mort, D. L.

Cronin, J. D.

Howell, Denis (All Saints)

Moss, R.

Crossman, R. H. S.

Hughes, Cledwyn (Anglesey)

Mulley, F. W.

Cullen, Mrs. A.

Hughes, Emrys (S. Ayrshire)

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

Darling, George (Hillsborough)

Hughes, Hector (Aberdeen, N.)

O'Brien, Sir Thomas

Davies, Rt. Hn. Clement (Montgomery)

Hunter, A. E.

Oram, A. E.

Davies, Ernest (Enfield, E.)

Hynd, H. (Accrington)

Orbach, M.

Oswald, T.

Roberts, Albert (Normanton)

Symonds, J. B.

Owen, W. J.

Roberts, Goronwy (Caernarvon)

Taylor, Bernard (Mansfield)

Padley, W. E.

Robinson, Kenneth (St. Pancras, N.)

Thomas, George (Cardiff)

Paget, R. T.

Rogers, George (Kensington, N.)

Thornton, E.

Palmer, A. M. F.

Ross, William

Ungoed-Thomas, Sir Lynn

Panned, Charles (Leeds, W.)

Royle, C.

Viant, S. P.

Pargiter, G. A.

Short, E. W.

Wade, D. W.

Parker, J.

Skeffington, A. M.

Warbey, W. N.

Paton, John

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

Weitzman, D.

Pentland, N.

Slater, J. (Sedgefield)

Wells, William (Walsall, N.)

Plummer, sir Leslie

Smith, Ellis (Stoke, S.)

White, Mrs. Eirene (E. Flint)

Popplewell, E.

Snow, J. W.

Wilcock, Group Capt. C. A. B.

Price, J. T. (Westhoughton)

Soskice, Rt. Hon. Sir Frank

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

Price, Philips (Gloucestershire, W.)

Sparks, J. A.

Williams, W. R. (Openshaw)

Probert, A. R.

Sprlggs, Leslie

Winter-bottom, Richard

Pursey, Cmdr. H.

Stewart, Michael (Fulham)

Woof, R. E.

Randall, H. E.

Stones, W. (Consett)

Yates, V. (Ladywood)

Rankin, John

Strauss, Rt. Hon. George (Vauxhall)

Zilliacus, K.

Redhead, E. C.

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

Reid, William

Summersklll, Rt. Hon. E.

TELLERS FOR THE AYES:

Reynolds, G. W.

Sylvester, G. O.

Mr. Pearson and Mr. Simmons.

NOES

Agnew, Sir Peter

Farey-Jones, F. W.

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

Aitken, W. T.

Fell, A.

Lindsay, Hon. James (Devon, N.)

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

Finlay, Graeme

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

Alport, C. J. M.

Fisher, Nigel

Longden, Gilbert

Amery, Julian (Preston, N.)

Fletcher-Cooke, C.

Loveys, Walter H.

Anstruther-Gray, Major Sir William

Forrest, G.

Low, Rt. Hon. Sir Toby

Arbuthnot, John

Gammans, Lady

Lucas, Sir Jocelyn (Portsmouth, S.)

Armstrong, C. W.

Garner-Evans, E. H.

Lucas-Tooth, Sir Hugh

Ashton, Sir Hubert

Gibson-Watt, D.

McAdden, S. J.

Astor, Hon. J. J.

Glyn, Col. Richard H.

Macdonald, Sir Peter

Atkins, H. E.

Godber, J. B.

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

Baldock, Lt.-Cmdr. J. M.

Goodhart, Philip

McMaster, Stanley

Baldwin, Sir Archer

Gough, C. F. H.

Macmillan. Rt. Hn. Harold (Bromley)

Barber, Anthony

Gower, H. R.

Macmillan, Maurice (Halifax)

Barlow, Sir John

Graham, Sir Fergus

Macpherson, Niall (Dumfries)

Barter, John

Grant, Rt. Hon. W. (Woodside)

Maddan, Martin

Batsford, Brian

Green, A.

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

Baiter, Sir Beverley

Gresham Cooke, R.

Maltland, Hon. Patrick (Lanark)

Beamish, Col. Tufton

Grimston, Hon. John (St. Albans)

Manningham-Buller, Rt. Hn. Sir R.

Bell, Philip (Bolton, E.)

Grimston, Sir Robert (Westbury)

Marples, Rt. Hon. A. E.

Bennett, Dr. Reginald

Gurden, Harold

Marshall, Douglas

Bevins, J. R. (Toxteth)

Hall, John (Wycombe)

Mathew, R.

Bldgood, J. C.

Hare, Rt. Hon. J. H.

Mawby, R. L.

Biggs-Davison, J. A.

Harris, Frederic (Croydon, N. W.)

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

Bingham, R. M.

Harris, Reader (Heston)

Medllcott, Sir Frank

Birch, Rt. Hon. Nigel

Harrison, A. B. C. (Maldon)

Morrison, John (Salisbury)

Bishop, F. P.

Harrison, Col. J. H. (Eye)

Nabarro, G. D. N.

Black, Sir Cyril

Harvey, Sir Arthur Vere (Macclesf'd)

Nairn, D. L. S.

Body, R. F.

Harvey, John (Walthamstow, E.)

Neave, Airey

Bossom, Sir Alfred

Hay, John

Nicholson, Sir Godfrey (Farnham)

Boyle, Sir Edward

Heald, Rt. Hon. Sir Lionel

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

Braine, B. R.

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

Noble, Michael (Argyll)

Brewis, John

Henderson, John (Cathcart)

Nugent, Richard

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

Henderson-Stewart, Sir James

Oakshott, Sir Hendrie

Brooman-White, R. C.

Hicks-Beach, Maj. W. W.

Orr, Capt. L. P. S.

Browne, J. Nixon (Craigton)

Hill, John (S. Norfolk)

Page, R. G.

Campbell, Sir David

Hirst, Geoffrey

Pannell, N. A. (Kirkdale)

Cary, Sir Robert

Holland-Martin, C. J.

Partridge, E.

Channon, H. P. G.

Hornby, R. P.

Peel, W. J.

Chichester-Clark, R.

Horobin, Sir Ian

Peyton, J. W. W.

Clarke, Brig. Terence (Portsmth, W.)

Horsbrugh, Rt. Hon. Dame Florence

Plckthorn, Sir Kenneth

Cole, Norman

Howard, Gerald (Cambridgeshire)

Pilkington, Capt. R. A.

Cooper, A. E.

Howard, John (Test)

Pitt, Miss E. M.

Cordeaux, Lt.-Col. J. K.

Hughes Hallett, Vice-Admiral J.

Pott, H. P.

Corfield, F. V.

Hughes-Young, M. H. C.

Powell, J. Enoch

Courtney, Cdr. Anthony

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

Price, David (Eastleigh)

Craddock, Beresford (Spelthorne)

Hylton-Foster, Rt. Hon. Sir Harry

Price, Henry (Lewisham, W.)

Crosthwaite-Eyre, Col. O. E.

Irvine, Bryant Godman (Rye)

Prior-Palmer, Brig. Sir Otho

Cunningham, Knox

Jenkins, Robert (Dulwich)

Profumo, J. D.

Currie, G. B. H.

Jennings, J. C. (Burton)

Ramsden, J. E.

Dance, J. C. G.

Johnson, Dr. Donald (Carlisle)

Rawlinson, Peter

Davidson, Viscountess

Johnson, Eric (Blackley)

Redmayne, M.

D'Avigdor-Goldsmld, Sir Henry

Jones, Rt. Hon. Aubrey (Hall Green)

Rees-Davies, W. R.

Deedes, W. F.

Kaberry, D.

Renton, D. L. M.

de Ferranti, Basil

Keegan, D.

Rldsdale, J. E.

Donaldson, Cmdr. C. E. McA.

Kerby, Capt. H. B.

Rlppon, A. G. F.

Drayson, G. B.

Kerr, Sir Hamilton

Roberts, Sir Peter (Heeley)

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

Kershaw, J. A.

Robinson, Sir Roland (Blackpool, S.)

Emmet, Hon. Mrs. Evelyn

Kirk, P. M.

Rodgers, John (Sevenoaks)

Errington, Sir Eric

Lancaster, Col. C. G.

Roper, Sir Harold

Erroll, F. J.

Langford-Holt, J. A.

Ropner, Col. Sir Leonard

1012

1013

Russell, R. S.

Taylor, William (Bradford N.)

Watkinson, Rt. Hon. Harold

Sharples, R. C.

Teeling, W.

Webbe, Sir H.

Shepherd, William

Temple John M.

Webster, David

Smithers, Peter (Winchester)

Thomas, Leslie (Canterbury)

Whitelaw, W. S. I.

Speir, R. M.

Thomas, P. J. M. (Conway)

Williams, Paul (Sunderland, S.)

Stevens, Geoffrey

Thompson, R. (Croydon, S.)

Wills, Sir Gerald (Bridgwater)

Steward, Harold (Stockport S.)

Thornton-Kemsley Sir Colin

Wilson Geoffrey (Truro)

Stoddart-Scott, Col. Sir Malcolm

Tiley, A. (Bradford, W.)

Wolrige-Gordon, Patrick

Stuart, Rt. Hon. James (Moray)

Turton, Rt. Hon. R. H.

Wood, Hon. R.

Studholme, Sir Henry

Tweedsmuir, Lady

Woollam, John Victor

Summers, Sir Spencer

Vosper, Rt. Hon. D. F.

Yates, William (The Wrekin)

Sumner, W. D. M. (Orpington)

Wakefield, Edward (Derbyshire, W.)

Taylor, Sir Charles (Eastbourne)

Wall, Patrick

TELLERS FOR THE NOES:

Mr. Legh and Mr. Bryan.

Original Question again proposed.
Mr. Ray Mawby Mr. Ray Mawby (Totnes) rose—
It being after Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.
Committee report Progress; to sit again Tomorrow.

MARITIME CONSULTATIVE ORGANISATION (IMMUNITIES AND PRIVILEGES)
10.7 p.m.
The Joint Under-Secretary of State for Foreign Affairs (Mr. Robert Allan): I beg to move,
That an humble Address be presented to Her Majesty, praying that the Inter-governmental Maritime Consultative Organisation (Immunities and Privileges) Order, 1959, be made in the form of the draft laid before this House on 8th July.
The House will remember that in July, 1955, we approved an Order conferring upon the Inter-governmental Maritime Consultative Organisation certain immunities and privileges. At the time it was known that these would have to be altered when the Organisation acceded to the Convention on the Privileges and Immunities of the Specialised Agencies by approving Annex XII of the Convention. This they did in January of this year, and the Convention came into force in February. We now, therefore, propose to revoke the 1955 Order and replace it by the one before the House tonight.
The main difference between the two Orders is very small, and is largely confined to making the changes which are necessary to give effect to the Annex. There is no difference in the first seven Articles. The main difference in Article 8 is that it expressly relates the immunities given to those accorded to an envoy of a foreign Power. Article 9 specifies the Secretary-General and the Secretary of the Safety Committee as the only
1014
holders of offices to be accorded full privileges and immunities. It excludes citizens of the United Kingdom so long as the headquarters of the Organisation remain in the United Kingdom.
Article 10 specifies the other classes of officers who are to enjoy limited privileges and immunities, and Article 11 confers on experts privileges and immunities when acting in their official capacity.
Although these Orders are by their nature somewhat complicated, I do not think that this one is controversial, and I hope that with that rather brief explanation the House may feel able to approve it.
10.10 p.m.
Sir Frank Soskice: I do not think that the House would desire to tarry very long over this Order. As the Minister has explained, all that is being done is slightly to alter the existing privilege which this organisation enjoys. We on this side of the House recognise that privileges of this sort must be accorded to international bodies, but sometimes we question whether privileges are not being too widely and lavishly distributed.
I take it that the Minister has satisfied himself that the particular organisation should continue to enjoy this privilege and I hope that he will be able to assure us that he is satisfied that the privilege which is now being given by this amended Order does not go beyond what is strictly necessary for the proper performance by the organisation and its members of the duties incumbent upon it.
Mr. R. Allan: I think that I can give that assurance, which concerns one of the points which I myself asked about. On the point whether there are too many of these Orders, the answer is that so long as we remain members of United Nations we are under an obligation to see that these Specialised Agencies get

1015
immunities and privileges which are broadly similar.
Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty, praying that the Inter-governmental Maritime Consultative Organisation (Immunities and Privileges) Order, 1959, be made in the form of the draft laid before this House on 8th July.
To be presented by Privy Councillors or Members of Her Majesty's Household.

PURCHASE TAX (LAWN MOWERS)
10.12 p.m.
The Economic Secretary to the Treasury (Mr. F. J. Enroll): I beg to move,
That the Purchase Tax (No. 3) Order, 1959 (S.I., 1959, No. 1176), dated 6th July, 1959, a copy of which was laid before this House on 9th July, be approved.
This Order brings into line with modern developments the scope of Group 16 (a) of the Purchase Tax Schedule, which has been substantially unchanged since 1940. It does not alter the rate of tax, which remains at 25 per cent.
The scope of the group was previously confined to
"… lawn mowers and grass boxes for lawn mowers".
Since 1940, there has been a great deal of development and there are now two main types of grass mowing machines: the traditional cylinder type of mower which cuts by means of a revolving reel of knives, and the "rotary" type which cuts by means of a horizontal "fan" of knife-edge blades.
With the traditional cylinder type of machine, all those of a small width of cut, that is to say, less than 18 inches, have always been taxable as "lawn mowers". Broadly, a similiar consideration applies in the case of the newer rotary machines except that, in one or two instances, smaller types of rotary machine escaped tax under the old heading because they were claimed to be unsuitable for use over a substantial area of lawn.
There are no differences in character between these tax-free machines and taxable rotary mowers. The former are
1016
also in direct competition with taxable, narrow-cut, cylinder machines designed for much the same purposes. The Order therefore applies the tax generally to all grass cutters, regardless of type, having a width of cut of less than 18 inches, thus removing the anomaly, and introducing equitable treatment.
Another recent development has been the use of powered tools in gardening. The makers of mechanical garden cultivators and power tools sell a wide range of accessories or attachments for hoeing, digging, ridging, weeding and so forth, and also for grass mowing. It is clearly right in equity that mowing attachments which perform the same task as taxable lawn mowers and grass cutters should themselves be taxable.
Mr. Gerald Nabarro: May I ask a question of my hon. Friend before he gets further in this argument? What happens in the case of a tool which is less than 18 ins. in width and is designed specifically for the cutting of long grass and weeds and cannot be used to cut a lawn in any circumstances? Is that now to be taxed whereas previously it was not taxed?
Mr. Erroll: I think that we shall have to look at that case with care.
Mr. Nabarro: Will my hon. Friend—
Mr. Erroll: No, I am going to finish my speech. I know that my hon. Friend is going to speak, if he catches your eye, Mr. Speaker, and we shall listen to him with interest.
The Order removes any doubt there may have been about this liability. Finally, the Order applies the tax to grass collecting bags for mowers and cutters. These bags have recently been developed as a substitute for the traditional grass box, which has always been taxed. The Order, therefore, modernises, clarifies and makes more equitable the scope of tax in this sector. The effect of it is not great and the resultant addition to the revenue is negligible.
10.16 p.m.
Mr. Douglas Jay: It will be noticed that the presence of both the Economic Secretary and the Financial Secretary is necessary in order to explain and to justify this Order. I do not imagine that anybody will wish to

1017
question the principle of the Order although perhaps the Financial Secretary, even though he is now leaving the Chamber, will wind up the debate after the hon. Member for Kidderminster (Mr. Nabarro) has spoken—if he catches your eye, Mr. Speaker.
This Order illustrates a point which many hon. Members, including myself, have made in the past regarding Purchase Tax. It is that so long as we have the number of ratings which we have at present and so long as we include in the tax the vast array of products which come under it, we are bound to be involved in this extraordinary question of demarcation and distinction which the Economic Secretary has laid before us. We started with lawn mowers in 1940. We go on to lawn mowers and grass boxes for lawn mowers and then, by the natural progress of things, we are involved in lawn-mowing attachments, grass boxes or bags for lawn mowers, etc. As long as the tax has various rates, the kind of complication apparent in the Order is absolutely inevitable.
Looking at the Order with no wish to be pedantic, but in a common-sense spirit, and trying to understand what the Economic Secretary wishes the House to do, I should like to ask this question. We are asked to bring under tax at 25 per cent. cutters or attachments having a width of cut of less than 18 in. What is not clear to me—I am sure it is clear to the Economic Secretary—is what happens to cutters or attachments of more than 18 in.? Are they exempt from tax? If so, why? If not, do they bear some rate other than 25 per cent. and if so, what is the rate they bear? That is not clear to me on reading the Order, and I am sure that the Economic Secretary would wish to make it clear to the House before we finally give approval to the Order.
10.19 p.m.
Mr. Gerald Nabarro: The right hon. Member for Battersea, North (Mr. Jay) went to the nub of the matter when he used the words "demarcation and distinction" over a wide range of articles and with many rates of Purchase Tax applicable to them. This simple agricultural and garden tool, the lawn mower, has been the subject of a long Parliamentary history, Mr. Speaker,
1018
as no doubt you will recall. It was Question No. 69 in my first century of Purchase Tax Questions and I asked it on 6th March, 1958. It was one of the minor victories I may modestly claim to have scored at the expense of the Treasury, which capitulated on the point which I then brought to its attention.
The bureaucracy within the Treasury leads it to the conclusions enunciated this evening by the Economic Secretary, namely, that evidently a lawn mower, to be a lawn mower, must have a width of less than 18 inches if it is to be used for domestic purposes. There are appliances and tools having a width of less than 18 inches which are designed specifically in such a fashion as to make it impossible for them to cut the short grass on a lawn. They are extensively used in orchards by horticulturists in the Vale of Evesham, in the Teyn Valley, in other agricultural areas of the United Kingdom, by county councils and by those responsible for operating cemeteries, for example, where long grass is a serious consideration.
Far be it from me to sponsor or espouse the cause of any proprietary appliance, but there is one particular appliance called a "Grassmaster" manufactured by a company called the Tarpen Engineering Co. Ltd. It is advertised as a Grassmaster ", but it cannot cut a lawn, because the construction of the machine is such that it cannot cut grass down to just two inches, which is the normal growth that one encounters in cutting a lawn, for example, my lawn at home, which I cut regularly on Sunday afternoons.
This matter was raised on 6th March, 1958. It is important that I should detain the House and quote what then transpired in the context of the minor and modest victory I scored at the hands of the Treasury. On that occasion I asked the Chancellor of the Exchequer:
"why mechanical devices specifically designed for cutting long grass and weeds, and in no way suitable for use as lawn mowers, have recently been selected as liable for Purchase Tax lawn-mowers under Group 16; and whether he will arrange for this decision to be rescinded forthwith".
The present Financial Secretary to the Treasury replied:
"As my hon. Friend is aware, this matter has been reviewed, and the particular machine to which he refers will not, in future, be regarded as taxable".

1019
I then asked a supplementary question. It was rather a long supplementary, but it was a matter of importance and you, Mr. Speaker, did not interrupt me. I said:
"That is a great victory for me for once. Is my hon. and learned Friend aware that, after a long battle against the Treasury, the Purchase Tax on these machines has now been removed, although a large number of customers who bought this machine have already paid the Purchase Tax? Would my hon. and learned Friend now be scrupulously fair and authorise the manufacturers who have collected the Purchase Tax to repay to each of the owners of the machines the Purchase Tax which they have illicitly, at his behest, charged?"
The Financial Secretary replied:
"This is an example of the way the Customs is always willing to review the interpretation, in conjunction with the trade interests concerned. As for any tax which has been paid already on this article, the Customs will, of course, consider any claim for repayment."—[OFFICIAL REPORT, 6th March, 1958; Vol. 583, c. 1310–11.]
Does the right hon. Member for Colne Valley (Mr. Glenvil Hall) wish to intervene—
Mr. Speaker: Order. The hon. Gentleman ought to get on with his speech.
Mr. Nabarro: I was merely anxious, Mr. Speaker, that the right hon. Gentleman should put in the OFFICIAL REPORT the words he uttered sotto voce to the effect that I was quite wrong. On the contrary, I am not wrong.
The Financial Secretary said on that occasion that he would consider repaying the tax, but the tax was then repaid, and it was ruled by the Treasury and by the Customs and Excise that these machines, being Tarpen Grassmasters, designed, although less than 18 in. in width, only for cutting long grass and weeds, were not within the scope of the Purchase Tax Regulations and should be tax-free. The effect of this Order is to restore payment of Purchase Tax to these machines—not retrospectively, so far as I am aware, but the Order does restore payment of Purchase Tax to these machines.
In 1958, after a long struggle, on the ground that they were agricultural machines, we secured the removal of the Purchase Tax. The Treasury has now restored it, and that creates the rather extraordinary state of affairs that in a matter of just two years it is found that
1020
these machines, the Tarpen Grassmasters, were free of Purchase Tax prior to 1957, that they were subject to Purchase Tax in 1957, that they were freed again from Purchase Tax in 1958, remaining free of Purchase Tax until 1959, and now, under this Order of July, 1959, they are restored once more to Purchase Tax. Can the Treasury make up its mind once and for all in this matter?
I was so uncertain as to the logic of what my right hon. Friend the Chancellor of the Exchequer was proposing in this Order that I telephoned the Economic Secretary's private secretary this morning and said that as I proposed to raise the matter tonight would he finally confirm that the Tarpen Grassmaster did come within the scope of the Order. His answer was affirmative—that it does come within the Order
Therefore, the victory that my hon. and gallant Friend the Member for Knutsford (Lieut.-Colonel Bromley-Davenport), myself and many other hon. Members on both sides of the House secured eighteen months ago has now evidently been overturned—and without any explanation at all from the Economic Secretary. This machine is an agricultural and horticultural machine. It is exactly on all fours with a combine harvester, but in a different sphere of work.
The Economic Secretary, who is looking so disdainful when I say that, should remember that Altrincham and Sale is not necessarily a predominantly agricultural or horticultural division. He has few, if any, farmers among his constituents—
Mr. Erroll: I have plenty of lawns.
Mr. Nabarro: The Economic Secretary is trying to be funny at my expense, but he evidently does not realise that this machine never cuts a lawn, cannot cut a lawn, and was never designed to cut a lawn—yet he sits in his place, bleating, "I have lawns in Altrincham and Sale". He has a poor wit, and is extremely illogical in what he has to say.
Every agricultural hon. Member should be with me here tonight in claiming that this machine is an agricultural machine in exactly the same way as is a combine harvester, although it performs a relatively minor function. It cannot be used for domestic purposes. It is

1021
wholly wrong to subject it to Purchase Tax. The Treasury recognised in 1958 that it was wholly wrong to subject it to Purchase Tax, and I see no justifiable cause, fifteen months later, for suddenly reimposing Purchase Tax on a machine which though less than 18 inches in width, cannot possibly cut a lawn.
I hope that my hon. Friend the Member for Worcestershire, South (Sir P. Agnew), who will perceive these machines all round his constituency doing valuable agricultural work, will lend his voice in aid in protest against this suggestion, and I invite my hon. Friend the Economic Secretary to see a demonstration of the work done by the machine, not in Altrincham and Sale—for they do not grow any long grass there, or weeds, but only refined lawns of a domestic character—but in Worcestershire, or elsewhere, where we are doing the yeoman task of agricultural production.
10.30 p.m.
Sir Peter Agnew: Without repeating the arguments so cogently put before the House by my hon. Friend the Member for Kidderminster (Mr. Nabarro), I strongly support his point of view in this matter. I do not think that anybody objects, not even I, as his Member of Parliament—because he is my constituent—to the fact that he has to pay Purchase Tax on the mowing machines that cut so beautifully the lawns of his lovely house at Broadway, in my constituency.
When, however, it comes apparently to imposing a tax, that has not manifestly been applicable before, upon machines that are exclusively used for horticulture in places like the Vale of Evesham, it is indeed a matter which should have been deployed at the same time as were the Budget Resolutions and the Finance Bill, when, against all the reliefs that were given, would have stood out the fact that machines were being taxed and a slightly heavier burden thereby placed upon an industry—horticulture—which is not enjoying a particularly prosperous time. Therefore, I take exception to this Order being brought down to the House late in the Session like this to be rushed through late at night.
10.32 p.m.
Mr. Martin Maddan: I congratulate my hon. Friend the Economic Secretary on the extremely sympathetic
1022
manner in which the Treasury has dealt with lawn trimmers that work on a horizontal rotary system as opposed to a rotary vertical system. I am sure that all hon. Members will be familiar with the fact that all that the Order does is to treat these two different types of trimmer in a different manner.
My only reason for rising is to place on record my extreme satisfaction, and that of one of the manufacturers in my constituency, with the logical, helpful way in which my hon. Friend has dealt with the representations that have been made to him.
10.33 p.m.
Sir Archer Baldwin: After the speech of my hon. Friend the Member for Hitchin (Mr. Maddan), I must get up on the side of those who have spoken against the Order. It is essential that we have machines of this sort to cut the weeds and the grass in our orchards. I hope that my hon. Friend the Economic Secretary will be able to say that he will again remove this type of machine from the Purchase Tax Order. It is essential that he should do so.
10.34 p.m.
Mr. Erroll: Perhaps I may reply briefly to the debate by first thanking my hon. Friend the Member for Hitchin (Mr. Maddan) for his remarks about the logical way in which the Customs and the Treasury approached this matter. That is indeed what we had in mind. When my hon. Friend the Member for Kidderminster (Mr. Nabarro) asks what we are doing and why we cannot make up our minds once and for all and stick to our decision, my reply is that there are developments in this industry, as in many others, and we have to adapt the scope of the tax to deal with the developments, in this case particularly the attachments.
That enables me to reply to the right hon. Member for Battersea, North (Mr. Jay) concerning rotary grass cutters and attachments over 18 inches in width. They will be free of tax. They are typically articles of the kind used for rough grass cutting in orchards, paddocks and the like and, therefore, they are not regarded as lawn mowers or akin to lawn mowers, in which case they would have attracted the tax.
Mr. Jay: The hon. Gentleman's basic aim, therefore, is to levy tax on mowers normally used for lawns in gardens and to leave exempt equipment which is used for agricultural or horticultural purposes. Is that what the hon. Gentleman is trying to do?
Mr. Erroll: That is the basic aim. There is, however, a difficulty with the narrow cutters. That was the main burden of the argument of my hon. Friend the Member for Kidderminster.
We are in the difficulty that when dealing with rotary grass cutters under 18 inches in width, there is no line of demarcation between them and those rotary grass cutters which are admittedly lawn mowers. Therefore, the only fair thing to do is to take a dimensional limit and say that all rotary grass cutters under 18 inches in width shall be treated like lawn mowers and shall attract the tax at 25 per cent.
One must also remember that these small rotary grass cutters under 18 inches in width are in competition with the small cylinder types of machines which already attract tax, and so, to be fair to the small cylinder machines, it is appropriate that the tax should also cover the similar small rotary machines.
My hon. Friend the Member for Kidderminster dealt particularly with the Tarpen "Grassmaster." I have been looking at the pamphlet which that company issues describing its "Grassmaster," both the wheeled and the roller version. While it is true that this "Grassmaster" can do rough jobs it is also obviously intended to do lawn cutting jobs as well.
Mr. Nabarro: Would my hon. Friend read the leaflet through thoroughly? This machine cannot cut grass in a lawn. It is impossible for it to. It can only cut long grass and weeds.
Mr. Erroll: I have read the leaflet through very carefully. I do not want to take up too much of the time of the House by reading the whole of it out loud, but I will quote one or two extracts. For example, in the panel which is entitled, "Advantages of the Grass-master" it says it
"Cuts growth very short."
In another paragraph it points out that machines for garden use can be operated
1024
by a lady, which would imply that it is going to be used for something fairly genteel. In the centre panel under the heading, "For gardens, sports grounds and estates", it says—I quote so as not to appear to be giving a biased answer—
"The Grassmaster or the Wheeled Grass-master provide the complete answer to rough grass and weed cutting problems but for a very fine and close finish the Roller Grass-master is recommended."
A very fine and close finish is the sort required for a lawn.
Mr. Jay: Like a moustache.
Mr. Erroll: It also cuts
"rough grass, weeds and nettles down to ground level in the most awkward places."
There are one or two more examples which I could give. There is, for example, the reference to the "Verge-master," which is quite clearly designed for cutting edges of lawns electrically.
Although I must say I recognise the feelings which have been aroused in the breast of my hon. Friend the Member for Kidderminster, the fact remains that the Tarpen "Grassmaster" ought properly to fall within the scope of the tax, and I hope that the House will now approve the Order.
Mr. Nabarro: These arguments are an exact fascimile of those the Treasury used two years ago—
Mr. Speaker: Order. The hon. Member has already made a speech.
Mr. Nabarro: I want to ask a question.
Mr. Speaker: If the hon. Member wants to ask a question he may do so, but he must not make another speech.
Mr. Nabarro: I was coming to the question. These arguments are the exact fascimile of those used by the Treasury two years ago——
Mr. Speaker: That is not a question.
Mr. Nabarro: I will now ask the question. Would my hon. Friend the Economic Secretary tell the House in what way the arguments he has used this evening differ from those used by the

1025
Treasury two years ago immediately prior to the rescinding of the tax on this machine? Why did it then rescind tax, and why does it now reimpose it on exactly the same machine?
Mr. Jay: Before the Economic Secretary is irrevocably seated, will he answer this question? I am merely asking a question. Will he confirm that he is by this Order imposing a tax on certain
1026
forms of mower which at present are exempt from tax?
Mr. Erroll: In certain marginal cases, yes.
Question put and agreed to.
Resolved,
That the Purchase Tax (No. 3) Order, 1959 (S.I., 1959, No. 1176), dated 6th July, 1959, a copy of which was laid before this House on 9th July, be approved.

IRON WORKS, NORMANBY (CLOSING)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Legh.]
10.40 p.m.
Mr. H. A. Marquand: After more than six years of attempted denationalisation a certain number of iron and steel companies, not including among them any of the major steel companies, have been sold back to private enterprise. Thirteen companies, including the most important in the country, have had their ordinary share capital sold back, but none of their prior-charge securities, thus leaving the directors in control of more than £200 million of public capital without any accountability to Parliament. Finally, 13 companies remain which are still wholly owned by the nation. One of these is the Normanby Ironworks, situated in my constituency.
Hitherto, this undertaking has employed 465 persons of all grades, including clerical and managerial staff. About 450 of these are wage-earners, the majority of them blast furnacemen. On 8th July, the Iron and Steel Realisation Agency, which owns the share capital of this undertaking, announced that the works was to be closed down at the end of this week. In other words, less than three weeks' notice was given to the men, many of whom had worked almost the whole of their working lives at this plant, who were to lose their jobs and had to try to find others in an area which is already stricken by unemployment caused by the Government's restriction of investment in other industries.
When one asks why so short a notice was given to the workpeople and their unions in circumstances where there was to be not merely some recession of trade but the whole undertaking was to cease, one is told that there is a risk, if people are told too soon in advance, that the workpeople will melt away and one will lose production and involve oneself in the last few months in very heavy losses. But surely, when a works is to be completely closed and all production on this site abandoned for ever, a longer time could have been given for consultation,
1028
at any rate with the union concerned if not with every one of the workpeople on the plant, for a planned tapering off of the work.
There is the greatest dissatisfaction in the area that men had so little notice that their whole livelihood was to come to an end in so short a time. As soon as he knew about it, the General Secretary of the Blastfurnacemen's Union stepped in and negotiated compensation for redundancy for the workpeople concerned. I propose to say no more about that aspect of the matter. A negotiated agreement, fortunately, has been made with the general secretary and accepted by him. Therefore, it is not for me to comment about it. I propose to say nothing, either, at any length about the efforts which I know the Ministry of Labour is making locally to take account of all the qualifications of every one of the men concerned and to try its best, in a difficult situation on Tees-side, to find them alternative work. But I think that I am entitled to ask a question about the salaried staff.
If the Blastfurnacemen's Union is looking after the workpeople to the best of its capacity in negotiating compensation for redundancy, and the Ministry of Labour is trying to find alternative work for them, what about the salaried staff? I believe, and hope that the Economic Secretary will accept it, that as this works is wholly owned by the nation, the Realisation Agency and the Government together should accept responsibility for trying to find work for salaried staff, technical men and managers alike, in the public sector of the iron and steel industry which they still control and which is still quite substantial. If not, they should give them every possible help to find work in the private or semi-private sector of the industry.
I want also to ask a question which is being asked widely on Tees-side: is there to be any payment in compensation to the directors for loss of office, about which we have heard a great deal in recent months in respect of other companies.
Finally, what of the site on which this works has been operating? I apologise for not having given notice to the hon. Gentleman that I was to ask this question, but will he draw the attention of

1029
the President of the Board of Trade to the fact that this works has been operating on an admirable site, having a large deep-water wharf which could be of great value to some other industry? If the production of iron there is to be abandoned, can we hope that the works will not be allowed to be derelict and to rust away and cumber the ground with all sorts of unsightly industrial remains, but will be cleared and offered by the Board of Trade to some other industry which could make use of the admirable site?
There is no time available for me to say any more about those aspects of the problem. What of the reasons for closing the works? Why was no considered statement or explanation given by the Agency or the Iron and Steel Board, which has been involved in consultations about this matter? Why did they make no considered statement public to the nation? Here is a publicly-owned company, which has been doing valuable work in the past and which has been nationally owned for nine years or more, now to be closed down and abandoned. Why cannot we have, and why did we not have, from the Government, or the Board, or the Agency, or all three together, a considered statement of the reasons?
Is this operation part of the general policy of the Government, to render no account to the nation of the progress of the nationally-owned companies? The Economic Secretary to the Treasury and I have already had an exchange of questions at Question Time about the position of this nationally-owned concern, but only purely financial information was given. These companies, which are still owned by the nation and which have not been sold, are treated as if they were in the hands of the receivers and of no account.
As we have said in a pamphlet issued by the Labour Party about the steel industry, this is the worst conceivable form of public ownership. That the Government are guilty of a breach of trust in the way they have handled this section of the steel industry is proved by the fact that the Economic Secretary is here to answer the debate. I am sorry for him. He is in a very awkward position. The proper Government representative to be here is the
1030
representative of the Minister of Power, who has responsibility for the overall policy of the steel industry in this country. But it is left to the Economic Secretary.
Because this sector of the steel industry is nationally owned, and because it is owned by the Iron and Steel Holding Realisation Agency, which is responsible to the Chancellor of the Exchequer, we get a purely financial treatment of the affairs of these concerns, instead of expert treatment by a Minister who has available to him staff who know the production and problems of the steel industry in all respects.
We are told that the closing of this works is necessary because there is a general decline in demand for hematite iron, which is what this works has been producing. When did that decline in the demand for hematite iron begin? To the best of my information, up to only fifteen months ago demand for hematite iron from this works was reasonably good. Indeed, during the last six or eight weeks or so, with some general improvement in the steel and metal industries generally, there has been an improvement in demand for hematite iron.
Was a decline for that comparatively short period a sufficient reason for the closing of this works? In any case, before that decline began the directors of the firm had submitted to the Agency proposals for the modernisation of their plant for bringing it up to date and for getting rid of the old hand-charged furnaces and putting in modern mechanical plant which could have made it up to date and efficient.
These plans were rejected, and rejected more than fifteen months ago when the decline in demand for hematite first took took place. Why? In the meantime, the Report of the Iron and Steel Board, which was presented to Parliament only a few days ago, shows that other producers of hematite iron during 1958 and 1959 have been allowed to expand their plants and modernise them. We read on page 42 of the Report that in 1959 the Millom Hematite Ore and Iron Co., Ltd., which operates a similar plant on the West Coast of England, was able to complete an ore-crushing and screening plant.

1031
We read on page 45 of the Report that the Millom Hematite Ore and Iron Co., Ltd., has been engaged during 1958 and 1959—it has completed it during 1959—in the replacement and enlargement of its blast furnace, a boiler and the construction of a turbo-alternator. Here is a firm on the West Coast of England which was sold back to private ownership in September, 1958, which has been permitted and encouraged by the Iron and Steel Board to go ahead with the modernisation of a hematite iron concern. The nationally-owned concern on the East Coast of England is not allowed to do that although it put forward proposals to that effect.
Is there a deliberate policy—this is what we want to know on Tees-side; I was there last weekend and met many of the people concerned, and this is what men are asking—by the Government or the Iron and Steel Board, or both, to abandon hematite iron production on the North-East Coast and concentrate it on the North-West Coast? If so, why? If not, is the agency prepared to inject new capital into the one remaining hematite producer which is still in Middlesbrough, also in my constituency, namely, the firm of Gjeers Mills, which operates a works known in the district as the Ayresome Works?
Is the agency now prepared, having turned down the proposals of the Normanby Works for improvement of production and having closed it, to provide new capital for the modernisation and improvement of the Gjers Mills works and, therefore, to continue the production of hematite iron on the North-East Coast, and, if possible, absorb some of the men displaced by the closing of the Normanby Works?
These events have caused grave misgivings in the minds of many people on Tees-side, and we hope that this evening we may have an answer to some of our questions. I say "we", because my hon. Friend the Member for Cleveland (Mr. Palmer) is also greatly interested in this subject. Many workpeople living in his constituency have worked in the Normanby Iron Works, and, more important than that, there exists in his constituency an important steel works which is still nationally owned and he will say more about that. He will be glad
1032
of the opportunity, if he can catch your eye, Mr. Speaker, to ask what is the future of the iron works in his constituency as well.
10.54 p.m.
Mr. Arthur Palmer: The Economic Secretary knows my interest in the Normanby Iron Works. It is true that it is in the constituency of my right hon. Friend the Member for Middlesbrough, East (Mr. Marquand), but it is on my boundary and a number of my constituents work there. I would add my voice to the vigorous protest which my right hon. Friend has made about what I think is the very shabby treatment of iron and steel workers at this plant.
Last year in a similar Adjournment debate to this, I protested about the surprise decision to withdraw the subsidy which had hitherto been paid for iron ore mining in the Cleveland area. I had no satisfactory answer from the Parliamentary Secretary to the Ministry of Power, but the result of that decision was that in my constituency, in East Cleveland, one mine closed and others went on to short-time working, and, just as in the case of the Normanby Iron Works, there was no proper period of warning.
Therefore, I have the right to put this question to the hon. Gentleman on behalf of my constituents: what is to happen to the Skinningrove Iron Works in Cleveland? We are bothered about this question because the plant is in the possession of the Realisation Agency of the Iron and Steel Board. It is an important but isolated iron and steel works, which provides the bulk of employment in East Cleveland. The plant has not been fully modernised, though I happen to know that those who direct it would like it to be modernised. I am sure they have plans to that end, but apparently the Realisation Agency will not permit them. Is this works to be the next sudden victim?
All I would say, finally, is that if that is to be the case, my constituents and the trade unions have a right to be told. If there is to be rationalisation in the North-East in the matter of iron and steel it should not be a secret plan.
10.56 p.m.
The Economic Secretary to the Treasury (Mr. F. J. Enroll): I would like

1033
to begin by describing the background to the closure, of the Normanby Ironworks, the need for which I need hardly say we all regret very much. The fact is that the works are obsolete and the plant has reached the end of its useful life. The three blast furnaces were last rebuilt in 1900, 1906 and 1923 respectively. The furnaces would not, in any event, last very much longer, and there was some doubt about the possibilities of the restarting of at least one of them after damping down for the holiday period. Production has been running at a rate of about 60 per cent. of capacity, which is not an economic rate of production with obsolete plant, and, moreover, much of the production had to be stockpiled.
The works employ rather less than 500 people. Closure must always be a matter for regret, but the closure is taking place against a much less gloomy background than was apparent a few months ago. At the June count unemployment among men and boys on Tees-side showed a further fall. Those unemployed then amounted to 3,800, or 2·9 per cent., as compared with 4·1 per cent. at the beginning of the year. There are reasonably good prospects for a further fall at the July count. The right hon. Gentleman was good enough to say that the Ministry of Labour has been doing its best to make arrangements to do all it can to help those discharged from Normanby to find alternative employment.
The right hon. Gentleman referred to the possibilty of replacing the works. Suggestions have been made by the company from time to time during the last twenty years about the possibility of rebuilding these works. During the lifetime of the Agency some tentative proposals were made, but they were not of a kind which could be developed into a worthwhile proposition. There were various reasons for this. Rebuilding would have involved very heavy investment, perhaps six or seven times as much as the cost of the undertaking on nationalisation. The demand for haematite iron has not been increasing in recent years, and the output needed could be provided elsewhere more economically than at Normanby. Extensions of capacity have, in fact, been provided by the Agency through its other subsidiaries and by private enterprise.
1034
The Iron and Steel Board, which is the statutory authority for looking after the provision and maintenance of adequate capacity, found no objection to closure on supply grounds, since there was evidence that there would be ample capacity even after the closure of Normanby. Those who advocate investment of the taxpayers' money in a new iron works at Normanby are advocating investment not only to create employment at Normanby, but also to create unemployment or underemployment of men and capacity elsewhere—possibly in places where unemployment is no less serious than on Tees-side.
Capital development at Normanby would have been a very expensive proposition compared with capital expenditure at other works engaged in the production of haematite iron. At the Barrow Works, operated by the Agency, a £1¼ million investment produced an increase of 190,000 tons capacity. But it was estimated that to rebuild Normanby at a cost of several million pounds would produce capacity of only 290,000 tons. I could give figures of other capital investment programmes for comparable works where a much greater increase in capacity would be produced by a much smaller investment.
The right hon. Gentleman referred to the short notice given about the closure of the works. Impending closures always raise difficult problems of timing, notices and consultation, and it is seldom possible to arrange all these to the satisfaction of everyone, but everything possible was done in this case to minimise the inevitable difficulties. The possibility of a closure has been around for more than two years now and the works have been kept going much longer than would normally happen. At the request of the management, and out of consideration for the employees, the Agency enabled the company to struggle on for nearly two years longer than would otherwise have seemed possible.
It was uncertain how long the furnaces could reasonably be kept going, and it was only very recently that a firm decision to close had to be taken, especially in the light of the difficulties that would arise in attempting to restart the furnaces after the holidays. It would have been wrong before this to create uncertainty and anxiety in the minds of employees by rumours of impending closure. As

1035
soon as the decision to close became inevitable, a representative of the union was informed in advance of the public announcement in confidence, and, naturally and properly, he respected that confidence.
Consultation on keeping the works going would have served no useful purpose, since the possibility was not a real one and discussion would have merely prolonged uncertainty. The course of events reduced the period of notice so that it was rather shorter than would normally be reckoned desirable. Even so, rather more than a fortnight's notice has been given and the workmen will, with the paid holidays, be receiving pay for four weeks from the date of the announcement. In addition, the closure comes at a time when the unemployment situation in Tees-side has considerably improved and when prospects are brighter than they were a few months ago.
The right hon. Gentleman referred to the question of redundancy payments for the salaried staff. I am glad to say that negotiations are in progress, as are similar negotiations for the workpeople, and as such negotiations in respect of redundancy payments of salaried staff are taking place, it would be inappropriate to enter into details.
I can assure the right hon. Gentleman that no question of compensation for the directors has arisen. All the directors are part-time, and two of them are already full-time directors of another subsidiary of the agency.
On the point raised by the right hon. Gentleman about the salaried staff being found other jobs in the nationalised sector of the industry, the engagement of staff is a matter for the companies, but I am advised that it would be wrong to hold out hope of employment for the staff in the local subsidiaries of the Agency, although all efforts will be made to find other appointments for them.
Then the right hon. Gentleman referred to the question of whether the Agency was proposing to abandon haematite production in the North-East. I can assure him that the Agency has no such plans, nor has it plans for modernising Gjers Mills. The
1036
question of further investment will need to be looked at in the light of the demand—supply situation, the economics of investment and the effect on the disposability of the undertaking. There is no question of abandoning production on the North-East Coast.
Mr. Marquand: May I remind the Economic Secretary that competing firms on the North-West Coast have been, and are being, modernised.
Mr. Erroll: I would remind the right hon. Gentleman of the economics of the matter, as well.
The hon. Member for Cleveland (Mr. Palmer) referred to the Skinningrove Works, where a considerable amount of investment has taken place since the war and further proposals may come forward. I cannot deal adequately with the problems of Skinningrove in the course of a short Adjournment debate.
The right hon. Member for Middlesbrough, East referred to the future of the site of the works. I appreciate his apology for not having given me longer notice. Had he done so, I should have done my best to make inquiries of the Board of Trade. I will take up the matter with the President of the Board of Trade in the morning and draw his attention to the site, if his regional officers are not already fully aware of its existence and the facilities mentioned by the right hon. Gentleman.
I cannot pretend that a debate such as this can be regarded as satisfactory by anybody. It gives me a great sense of disappointment to have to talk about the closing down of a works, whether old or new, with all that is involved. From what I have said I hope that everyone will realise that the right course has been chosen. A difficult decision has been made. If there is any fault to be found, it is that we took so long before we made it. But I think it was right to delay matters as long as possible to give the men concerned the best possible chance of finding other employment.
Question put and agreed to.
Adjourned accordingly at seven minutes past Eleven o'clock.

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  Steels Engineering Products, Ltd. (Orders)
  N.A.39 Aircraft
  N.A.39 Aircraft
  T.S.R.2 Aircraft
  T.S.R.2 Aircraft
  Bluestreak Ballistic Missiles
  Bluestreak Ballistic Missiles
TRADE AND COMMERCE
  Republic of Ireland (Trade Relations)
  Republic of Ireland (Trade Relations)
  Textile Machinery
  Textile Machinery
  Processed Milk
  Processed Milk
LOCAL GOVERNMENT
  Local Authority Meetings (Press Facilities)
  Local Authority Meetings (Press Facilities)
HOUSING
  Owner-Occupied Houses (Compulsory Clearance)
  Owner-Occupied Houses (Compulsory Clearance)
  War-Destroyed and War-Damaged Houses
  War-Destroyed and War-Damaged Houses
NATIONAL FINANCE
  Hydrocarbon Oils
  Hydrocarbon Oils
  Income Tax Act, 1952 (Advisory Panel)
  Income Tax Act, 1952 (Advisory Panel)
TELEPHONE SERVICE
  Tunbridge Wells (Classified Directory)
  Tunbridge Wells (Classified Directory)
POST OFFICE
  Parcel Post, North Lincolnshire
  Parcel Post, North Lincolnshire
WIRELESS AND TELEVISION
  Highlands and Islands
  Highlands and Islands
COAL
  Undistributed Stocks, West Midlands Division
  Undistributed Stocks, West Midlands Division
MINISTRY OF POWER
  Oil Stocks
  Oil Stocks

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Chancellor
The Viscount Norwich—Sat first in Parliament after the death of his father.

DOMESTIC STOVES AND SMALL COAL
2.36 p.m.
LORD FRASER OF LONSDALE: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether further consideration has been given to the question which he raised on 16th December last relating to the encouragement, or subsidy by the Government, of the purchase by house-holders of enclosed stoves suitable for burning small coal and, if so, with what result.]
THE MINISTER OF POWER (LORD MILLS): My Lords, despite considerable experimental work by the Government, research bodies, and private industry, an enclosed stove has not yet been developed which will burn small coal both efficiently and smokelessly. By small coal I mean, my Lords, the fine ungraded coal which forms a large proportion of our coal production. Work in this field is therefore being mainly concentrated on the development of new methods of processing small coal into briquettes and smokeless fuels, so that it can be burned efficiently in modern domestic appliances. This work is proceeding very successfully. Grants are already available in "Smoke Control Areas" to assist householders to install modern appliances in place of those which cannot burn smokeless fuels.
LORD FRASER OF LONSDALE: My Lords, while thanking my noble friend for the interest which he has taken in my Question, may I ask him whether he agrees that the British people are backward in using enclosed stoves and that if, over a period of years, it were possible to persuade them that they
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would get better value that way we might at the same time go some way towards curing the abundance of small coal which is now troubling the coal industry? Will he therefore pursue this matter vigorously, and see whether such encouragement as he can give will bring about this desirable result?
LORD MILLS: My Lords, I cannot say that the British people are backward; that is the last thing I would say. This problem of burning what is known as small coals efficiently and smokelessly is not an easy one. It may be that there is some confusion in my noble friend's mind between smokeless fuels and ordinary small, ungraded coal, where I can assure him that there are technical problems which so far have not been overcome. It is, I know, a common fallacy to think that the price of these small coals could be reduced and that they could be sold easily for domestic consumption; but they are not suitable for domestic consumption.
EARL HOWE: My Lords, may I ask the noble Lord whether his answer refers to the use of anthracite, or to purely smokeless coal?
LORD MILLS: No, my Lords. Anthracite is capable of being used efficiently and smokelessly in enclosed stoves.
LORD FRASER OF LONSDALE: My Lords, are not most of the well-known small, enclosed stoves omnivorous, so that they can burn, one could say, almost anything?
LORD MILLS: No, my Lords; that is not the case. I wish it were the case.
LORD HAWKE: Would my noble friend consider giving some publicity to what the Coal Board and his Ministry are doing, and have done, in the way of the development of smokeless fuel? Because the general public have heard a great deal about experiments, but so far the smokeless fuel on the market is very expensive and by no means always plentiful.
LORD MILLS: My Lords, I am very grateful for that suggestion. I am having, and have had for some time now, the whole question of smokeless fuels, the work that has been done on them and the work which requires to be done on them, examined, and I hope to present a report to the public later this year.

THE ELECTORAL REGISTER AND EX-SERVICE VOTERS
THE EARL OF LUCAN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government if they are aware of the large number of inaccurate entries in the Register of Electors relating to former Service electors, and whether they are satisfied that the Central National Registration Office notifies Electoral Registration Offices without undue delay when such personnel leave the Services.]
LORD CHESHAM: My Lords, the Register of Electors, which is published annually on February 15, relates to circumstances on the qualifying date for the register—namely, the previous October 10. The register remains in force for a year from February 16 and cannot be amended once it is published. It follows that a person who was a Service voter on the qualifying date will remain on the relevant register as a Service voter even if he has left the Service in the meantime. This cannot be avoided, and the person concerned suffers no disadvantage by remaining on the register as a Service voter. The important thing is to ensure that discharges from the Services are notified promptly to the electoral registration officer at the time the register is being compiled, and Her Majesty's Government are satisfied that this is in fact done.
THE EARL OF LUCAN: My Lords, I thank the noble Lord for his Answer. I think that perhaps I failed to make my meaning perfectly clear. Would he not agree that, owing to the fact that electoral registration officers are not allowed to delete a Serviceman's name from the register until they have authority from the central office, names frequently remain on the register for, not twelve months, but several years after a man has left the Service? In view of that, the Serviceman is misled into thinking that he is entitled to vote, if he has a vote, and the register itself is artificially inflated with names which are useless and out of date. Would Her Majesty's Government go into the question of this imperfection in the system of representation of the people, in order to try to
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remove this delay? Or, if delay cannot be removed under the system as it is, would they look into the possibility of changing the system?
LORD CHESHAM: My Lords, the noble Earl is of course right in that if the Services Register Index fails to send the necessary document to the electoral registration officer, the name will remain on the list. He is right in saying that the registration officer cannot remove it without the necessary document being passed to him. But I have no knowledge of there being great discrepancies in this respect, and if the noble Earl has evidence to the contrary, perhaps he will be good enough to let me know about it so that the matter can be looked into. I should like to say further, in regard to the deletion of obsolete addresses of Service voters, that a Working Party has been working on this matter and the Service Departments have agreed that at the annual check-up in the Services every man who may have made a declaration some time before should be asked to bring it as completely up-to-date as he can.
THE EARL OF LUCAN: My Lords, I am glad to hear that; and I will certainly let the Minister have the instances of which I know.

BRITISH CLAIMS AGAINST JAPAN
2.45 p.m.
VISCOUNT ELIBANK: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether any satisfaction has been received from the Japanese Government in respect of pre-war claims of British nationals against Japan; and what is the position relating to those justifiable claims.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF LANSDOWNE): My Lords, the answer to the first part of the noble Viscount's question is, No. As regards the present position, noble Lords will be aware that on the recent occasion of the visit of the Prime Minister of Japan, the hope was expressed to him that it would

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be possible soon to reach agreement on the settlement of United Kingdom claims under Article 18 (a) of the Peace Treaty. This matter was specifically referred to in the joint communiqué issued on July 15, and in it Mr. Kishi gave an assurance that the Japan Government would do their best to bring the matter to a conclusion at any early date.
VISCOUNT EUBANK: My Lords, I beg to thank the noble Marquess for his Answer. Is he aware that under the Japanese Peace Treaty of 1952, Article 18 (b), the Japanese Government expressed its intention to encourage negotiations in respect of pre-war claims and obligations? During most of the seven years since then, the Japanese Government has done nothing to encourage such negotiations, and even last week the Japanese Prime Minister said at a Press Conference that he could not give a date for a final settlement. Is the noble Marquess aware that many of us hope that the Japanese Government will display a greater sense of urgency in this matter of £1 million sterling than it has done hitherto?
THE MARQUESS OF LANSDOWNE: My Lords, as the noble Viscount is aware, negotiations are now proceeding in Tokyo, and I think that the noble Viscount himself would agree that it would be inappropriate at this stage for me to make any further comment. But I can assure him that any impetus that can be given, through the result of the Prime Minister's visit here is being given, and he may rest assured that we are making every effort to bring this matter to a satisfactory conclusion.

Mr. CHIUME'S EXCLUSION FROM NORTHERN RHODESIA
VISCOUNT STANSGATE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will state the circumstances in which an order was served on Mr. Chiume banning him from Northern Rhodesia; on whose responsibility the order was made; whether the British police were used in the service of the order, and under whose direction they were acting.]
THE MINISTER OF STATE FOR COLONIAL AFFAIRS (THE EARL OF PERTH): My Lords, the Governor of Northern Rhodesia has made an order under Section 7 of the Northern Rhodesia Inter-Territorial Movement of Persons (Control) Ordinance prohibiting Mr. Chiume, who is a Nyasalander, from entering Northern Rhodesia. The High Commissioner for the Federation in London received a request to serve the order upon Mr. Chiume. This was done by two officials of his office. The British police were not involved.
VISCOUNT STANSGATE: My Lords, I am grateful for that reply. May I ask this question in a general way, in preparation perhaps for a debate later? What is the position in regard to Mr. Chiume? The gravest charges were made against him about four months ago. He has no redress. The charges were made under cover of Parliamentary privilege. He cannot bring an action. Is it just that the situation should remain as it is?
THE EARL, OF PERTH: My Lords, as the noble Viscount says, we are very shortly going to receive a Report from the Devlin Commission on the question of Nyasaland generally, and maybe something of this business will be said in that Report, so I think that it would be appropriate to leave the matter for the time being.
VISCOUNT STANSGATE: My Lords, does the noble Earl say that we have to wait for the Devlin Report before we can justify the charges which were made publicly, in a Parliamentary Paper, against this young man?
THE EARL OF PERTH: My Lords, I think that the Answer to that question is that if Mr. Chiume wants to raise this matter, he may; but so far as I am concerned, I will wait until the Report comes out.
VISCOUNT STANSGATE: My Lords, that is all very well. The noble Earl says that if Mr. Chiume wants to raise the matter, he may. If the statement had appeared in a newspaper, he would have raised the matter and possibly would have secured substantial damages—I do not know. But he cannot raise the matter because it is under cover of

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Parliamentary privilege. The Government issued a statement and, moreover, pursues Mr. Chiume with prohibition orders without justifying them or giving him any opportunity to justify himself.
LORD TEVIOT: My Lords, no doubt there are other noble Lords who will remember that Mr. Chiume said in the Panorama programme of the B.B.C. that the Colonial Secretary, Mr. Alan Lennox Boyd, and Sir Roy Welensky were both liars. Everybody knows that he said that. I heard it myself. Therefore I do not think that he has much grievance, whatever the noble Viscount may say. If Mr. Chiume says that about Ministers of the Crown, I think he deserves all that he is getting.
VISCOUNT STANSGATE: I do not know whether the noble Lord has given a correct account of British law, but, if so, I am afraid that a number of persons might come under suspicion.

INTER-GOVERNMENTAL MARITIME CONSULTATIVE ORGANISATION (IMMUNITIES AND PRIVILEGES) ORDER, 1959
2.50 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF LANSDOWNE)THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF LANSDOWNE) rose to move, That an Humble Address be presented to Her Majesty praying that the Inter-governmental Maritime Consultative Organisation (Immunities and Privileges) Order, 1959, be made in the form of the draft laid before the House on the 8th instant. The noble Marquess said: My Lords, the purpose of this Draft Order is to confer on the Organisation and officers of the Inter-governmental Maritime Consultative Organisation the legal capacity, privileges and immunities required under Article 50 of the Convention to which Her Majesty's Government is a signatory. In 1955 your Lordships approved an Order in Council conferring on the Organisation and its officers certain privileges and immunities. That Order was designed to extend to that body the type of privilege which is accorded to the Specialised Agencies of the United Nations. It was designed to cover the period pending the approval of the usual Annex which, your Lordships may
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remember, has to be approved by the Agency and by the countries participating in the particular body, and which embodies the general pattern of immunities and privileges set out in the Convention on Privileges and Immunities which was concluded by members of the United Nations in 1947. The Organisation acceded to the Convention on Privileges and Immunities on January 16, 1959, by approving Annex XII thereto.
The effect of the approval of this Annex is to make slight changes in the privileges and immunities which we are required to accord to the Organisation. In order to do this, it is necessary to revoke the 1955 Order and to make the new Order, the draft of which is now before your Lordships. In the present draft Order Articles 1 to 7 are identical with the corresponding Articles in the 1955 Order. The total number of officers affected by this new Order is about 30, and their privileges and immunities remain the same as before. There is no change in the privileges and immunities accorded to Representatives. The experts who are members of the Committees of the Organisation or who are employed on its behalf will get the same privileges as Representatives, but only when they are acting in their official capacities and only in so far as it is necessary for the effective exercise of their functions. I beg to move.
Moved, That an Humble Address be presented to Her Majesty praying that the Inter-governmental Maritime Consultative Organisation (Immunities and Privileges) Order, 1959, be made in the form of the draft laid before the House on the 8th instant.—(The Marquess of Lansdowne.)
LORD SILKIN: My Lords, as the House knows, we on this side, and I imagine many other noble Lords in other parts of the House, always view these questions of extensions of privilege with a certain amount of jealousy: we are not anxious that these privileges should be extended and that people should be above the law. We recognise, however, that there are occasions when it is necessary—these matters are, of course, reciprocal—and on this occasion we do not propose to raise any objection.
On Question, Motion agreed to: the said Address to be presented to Her Majesty by the Lords with White Staves.

FINANCE BILL
2.53 p.m.
Order of the Day for the Second Reading read.
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT HAILSHAM): My Lords, this is the third time that I have had the honour of proposing the Second Reading of the Finance Bill in your Lordships' House. Before I proceed to do so, I should, with your Lordships' permission first of all ask for a personal indulgence. As those of your Lordships who have held office are aware, towards the end of July Government business sometimes develops rather heavily upon the shoulders of members of the Government, and it so happens that I have been unable to arrange to stay in the House throughout the debate on this Bill. My noble friend Lord Dundee is ready to reply to any points which may be raised. I hope that in the circumstances I shall meet with your Lordships' understanding and indulgence.
The task in this House of moving the Second Reading of the Finance Bill obviously resolves itself into two separate sections: that is to say a review of the current economic situation and a statement of the principal tax and other changes envisaged by or effected by the Bill itself. We have already debated the Budget changes more or less contemporaneously in detail, and, in any event, by mid-July it is, I suppose, inevitable that we should find the economic situation generally a more attractive subject for discussion. I will therefore begin by referring to that, and in doing so, I should like to refer to three general observations before embarking on the rather more solid and reliable material provided for my fare this afternoon.
It was in the first few months of 1957 that I first referred in your Lordships' House to the situation in this country as being one of prosperity balanced on a knife-edge. At that time I was referring to the great vulnerability of the British economy to extremes. If that is less obvious to-day, I would claim that my right honourable friend the Chancellor of the Exchequer, in particular, and perhaps the Government in general, are entitled to take a certain amount of credit. But I believe that the underlying doctrine still remains there. A very narrow margin
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separates us from inflation, on the one hand, and unemployment and recession on the other; and the House and the country are, I would say, now becoming familiar with the successive adjustments in the helm necessary to keep the ship on course.
From time to time some attempt has been made to use the necessity for these adjustments as evidence of indecisiveness or vacillating purpose. But I would say that the nation is becoming sufficiently attuned to our economic situation to be aware that inflation and recession may follow one another in relatively quick succession, calling in moderate degree for opposite remedies, as they do. I believe that it is precisely because we have been prepared to apply the remedies appropriate to the correct appreciation of our economic necessities that we have managed to bring off what my right honourable friend has recently called his two doubles: that is to say, I think we have managed to get the better of inflation without losing full employment, and we have managed to reduce taxation while still expanding our social services.
Secondly, I would say, by way of general observation, that a debate about finance and economics is necessarily a debate about material things. All the same, I am anxious to rebut the suggestion, which I have seen recently emerging as part of the criticism of our economic policy, that we are becoming a nation of materialists in glorifying unduly material standards. If that were true it would be a serious criticism. That, at least, has not been our object. We are well aware (and your Lordships will, I think, agree that I myself have certainly said so on many occasions) that there is a great deal more to civilisation than material things: the standard of life or the various appliances which make our life more easy, or even important things like pensions and particular economic grievances. The value of a sound economic policy is, as I believe, and as the Government believe, that only so, only by pursuing a sound economic policy, can we carry out our moral responsibility both at home and overseas.
Thirdly, I would make this general observation—and here again I must make it plain that this is very much a

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personal assessment. I would say that if one looks at the world between the wars, it would be possible now, looking backwards, to say that the dominant feature of that period was shortage of work, shortage of activity, inadequate activity. I do not believe that that has been the dominant feature of these last 15 years, and I do not think that it will be the dominant feature of the coming years. I believe that the great feature of the world to-day is shortage of capital, and as I see the situation, the calls upon Government credit are not likely to be reduced in the coming months and years. But I regard that as all the more reason why the economic policy we pursue should be balanced and sound, and an example of good housekeeping in every respect.
The broad aim of our economic policy is to maintain full employment and a high rate of economic growth, consistently with the maintenance of stable prices and a satisfactory balance of payments. This is our permanent aim. All the same, as I have said, policy changes with circumstances. Sometimes the stress is on one part of this series of objectives, and at another on another part of them. Between 1955 and 1957, I think we shall all agree, employment was extremely full—some people said overfull—prices were rising steadily, and the balance of payments was precarious, perhaps even with a tendency to crisis. In this period on the whole, therefore, policy was, as I should submit, rightly directed towards damping down excessive demand.
But by the middle of last year—that is, by the middle of the calendar year, 1958—circumstances had changed considerably. The pressure of demand for resources in this country had eased considerably; there had been a drop in world commodity prices; a more satisfactory trend had appeared in our own domestic price levels—a trend which, I am happy to say, has continued in the past twelve months—and there had been an improvement in our overseas balance of payments. Therefore at that stage it became appropriate to remove the various restrictions on demand, and prudent gradually to move over to giving positive encouragement to expenditure. This is reflected in the measures which we took. The credit squeeze, as it was
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called, was relaxed; there was the removal of controls on hire purchase, and, side by side with these steps, we decided considerably to lift the level of the public investment programme.
My Lords, this general trend of policy culminated in the Budget of last April which we are discussing in retrospect this afternoon. The Budget was based upon a fundamental assumption that there was room in the economy for a considerable expansion of demand. In contrast with the conditions of previous years, this expansion of demand was not merely desirable on merits; it was also an objective which could be pursued safely without menacing the value of money or the international position of the pound. Thus the Budget sought to promote expansion by providing tax reliefs and by other repayments, amounting in all to a total of £366 million. One of the principal other matters to which I referred by which the Budget added to purchasing power, was the accelerated payment of Post-War Credits—a problem which had to some extent eluded previous Chancellors of the Exchequer ever since Post-War Credits were initiated. It is, I think, worth noting that, apart from the moral aspects of the matter, this was a measure of carefully calculated and strictly limited effect. It has the additional advantage that in itself it does not add to purchasing power beyond the initial period to which it is related. Secondly, as your Lordships know, there were reductions in purchase tax and in the beer duty, which equally had the effect of increasing the purchasing power of the people. There were also the reductions in income tax and the restoration of the investment allowances; and these too were expected to have, and have had, a stimulating effect on demand.
But in these cases there were other important objectives which it was hoped would be served by the changes brought about by the Budget. The reduction in income tax was, as we believe, calculated to improve the incentive to effort and enterprise. It was, and is, my right honourable friend's wish to do all that he can to make the economy more competitive, and I am bound to say that it is the view of the Government that very high rates of income tax, such as we have had, are harmful from this point of

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view. Under the same broad rubric, the improvement of the efficiency of the national economy, I would include the restoration of the investment allowances, at the rate of 20 per cent. for plant and machinery and 10 per cent. for buildings. These allowances were substituted for initial allowances of the same extent, and I hope they will give a stronger incentive to industry to increase its rate of investment. In particular it was my right honourable friend's hope that they would encourage industrialists to bring forward plans for investment which they would otherwise have intended to fulfil at a later date. Thus the main object of the Budget was to give a strong stimulant to economic expansion, and to do it in a way which would promote efficiency and investment.
My Lords, three months have passed since the Budget, and I think, therefore, it may be worth while to consider how far the picture of the economy is one which suggests to-day that the Government's expectations were well founded and the policies which it then announced were well designed. I should therefore like to review some of the main indicators or indices of our national economic welfare, and first I imagine that your Lordships would like to put production. There is no doubt at all that a very considerable expansion of the national output is now in progress. The index of industrial production rose by three points between the months of February and April, from 107 to 110, and in the latter month it reached a record for all time. The preliminary indications so far available suggest that the May figure will be equal to that of April, or perhaps even higher. In the steel industry, whose importance in such matters your Lordships will know, most of last year's decline in output has now been recovered. Production of cars is at a level much above previous peaks. The chemical industry is also producing at a very high rate, and even in the textile industries there are clear signs of recovery. Private house-building has been going up steadily and other kinds of building work are also going ahead fast.
One of the principal sources of this rise in production has been provided by increased expenditure by private consumers. There has been, as we all realise, a sharp increase in the rate of expenditure on hire purchase. This has
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affected cars, furniture and other consumer durables. Perhaps less generally realised is the fact that recent retail sales figures show that expenditure on other consumer goods has also been going up. Nor is the expansion confined to the industries supplying consumer goods. In April and May there was a very satisfactory rise in exports. Together the two months show a growth over the corresponding period of last year by 9 per cent., and the trade deficit for May was, I believe, lower than at any time in living memory. Then there has been an increase of demand in parts of the investment field. Capital expenditure by manufacturing industry has not yet begun to recover, but other kinds of capital expenditure are going up well. House building, both private and public, is on the increase and other investment in the public sector, as well as investment in the distributive and service industries, has also been going up. On the whole, then, it can be seen that the rise in demand is fairly broadly based. I would say that those who are tempted to picture the recovery which has taken place simply as an inflationary bubble of credit purchases are not really in contact with the true facts of the case.
I now turn to the question of employment and unemployment. At the time of the Budget my right honourable friend took the view that the current level of unemployment was higher than he thought it ought to be. Indeed, it was one of the main objects of his Budget to get the figure down. Between March and May quite a substantial reduction took place, and between May and June the fall reached the remarkable figure of 67,000. In June the number unemployed was 413,000, less than 2 per cent., and throughout these months the decline has considerably exceeded the normal seasonal fall at this time of year. Perhaps I ought to add a cautionary note at this stage. We have now reached the middle of July, with August and September, the school-leavers and the holiday season, upon us. I daresay we cannot expect such a favourable trend to continue.
So far I have been able to tell a tale of expansion and improvement. This would, in itself, be very encouraging, but I am happy to say that there are some particular features of the situation which

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make it even better than would appear from the information which I have so far laid before your Lordships. I would first mention the fact that this expansion is being achieved in conditions of price stability. The retail price index for May was 109. This was the same as for April, and it means that there has been virtual stability now for more than twelve months. The Government believe that it ought to be possible to maintain this stability of consumer prices during the second half of the year. If that can be done it will be a unique achievement in the post-war period. I would say that it is particularly satisfactory to be in this position at the same time as we are enjoying a rapid growth in both demand and production, as I have been trying to show.
Besides price stability I should also mention the balance of payments, since this is another potential weak spot in our economy, another sensitive point. Here again I believe that your Lordships will find the situation fairly satisfactory. We enjoyed in the first quarter of this year, according to the new quarterly series, a current surplus of £78 million. This is in itself quite a good surplus, and it must be remembered that the excellent export figures for April and May have still to be reflected in the balance of payments statistics. So that here, too, I think we can claim that the expansion is proceeding on a reasonably secure basis. We must also remember that we have not yet seen the full effect of the Budget measures, although I am not, of course, claiming that by themselves these deserve the full credit for the progress we have been making in recent months. But for all those reasons I feel that the Government have considerable grounds for confidence that the period of growth, the statistical picture of which I have been attempting to draw, is going to continue in the future. For the time being, at least, the prospects are cheering, and we have good hope that we can maintain the momentum of recovery without running the risk of deterioration in the value of the currency either at home or abroad. I have therefore to say that on the general picture the Government will continue the broad lines of policy which have brought the country into a condition which I can,
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with some reason, regard as very satisfactory.
I now come to the Budget changes and, following the traditional arrangement with your Lordships' permission, I will deal first with the Customs and Excise and then with the Inland Revenue side. In introducing his Budget, my right honourable friend said that he could
"contemplate with safety some tax reductions that will lead to a fuller use of our resources without creating dangerous pressures on the economy."
The principal changes in the Customs and Excise duties were a reduction in the beer duty, accompanied by a reform of the licence duty system, and a reduction in the three top rates of purchase tax. During the passage of the Bill through the House of Commons, the Chancellor has been able to propose two further measures. The first was designed to give entertainments duty relief to the cinema industry, and in particular to cinemas in small towns and rural districts. The second was to provide some relief to small clubs which, under the new flat rate licence proposals, would have had to pay a little more than previously.
The Chancellor of the Exchequer proposed a reduction in the duty on beer, and this, together with the savings resulting from the reform of the licence duty system, enabled the price of beer to the public to be reduced by 2d. a pint. This will cost the Exchequer £40 million in a full year. As your Lordships will be aware, beer is widely consumed in this country—it is indeed, as an article in the Financial Times said, a "staple of mass enjoyment"—and this is reflected in the cost-of-living index; an index which, as I think I said in our debate on the Budget of the time, is not intended as a moral judgment but as a reflection of actual practice. The general reduction in the price of beer by 2d. a pint will, in fact, reduce the index by nearly two-thirds of a point. There are good reasons for saying that beer has not shared in the steady increase which has been shown by most other alcoholic beverages. For a number of years since the war there has been a downward trend in consumption. From the revenue point of view this was not wholly satisfactory, and the reduction in the duty, and therefore in the price of the article, should help to put the revenue on a firmer basis.

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The Chancellor of the Exchequer also took the opportunity of the reduction in the beer duty to reform the system of licence duties required for the sale of intoxicating liquor. This was done by means of a simple system of flat-rate licence duties, which will in future be regarded as registration licences rather than as sources of revenue. This was done without additional cost to the Revenue, since the cost of these reforms was, in effect, added to the duty of beer. In the course of these changes we have abolished the payment of monopoly value, and we have provided that as from January 1, 1960, clubs should also pay a flat-rate licence duty. In the case of very small sports and social clubs it was represented that the proposed flat-rate licence duty of £5 might cause hardship, as it was greater than the amount paid under the old system of 3d. for each £1 of purchases by the club. My right honourable friend therefore reviewed the position, and during the Report stage of the Bill in another place introduced an Amendment under which clubs would be entitled to a refund of £2 10s. out of the £5 licence duty if their purchases of intoxicating liquor during the previous calendar year did not exceed £200, or to refund of the whole duty if no purchases were made during the year. This arrangement maintains the principle of flat-rate licence duties while at the same time substantially meeting the complaints from small sports or social clubs where the supply of intoxicating liquor is no more than an incidental amenity for members. The overall result of the reform of the licence duty structure as a whole will be a great simplification of what was certainly a complex system, and it permits a substantial administrative saving without loss to the Revenue.
It will be remembered that last year I was able to inform this House that the 1958 Budget changes constituted [OFFICIAL REPORT, Vol. 211, cols. 387–8]:
"an imaginative recasting of the purchase tax provisions";
that they removed a number of anomalies and produced a simpler and more logical structure; and that this made the tax more defensible as a revenue instrument and more easily comprehensible to traders. Last year my right honourable friend said that the new structure
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"would also enable any future changes to be made with the minimum disturbance to trade."
Following on that, this year he was accordingly able to propose reductions which will leave the general structure of the tax unchanged, but provide some stimulus to the economy in accordance with the underlying policy which I have been endeavouring to describe. The three higher rates of purchase tax at 60 per cent., 30 per cent. and 15 per cent. were reduced by one-sixth to 50 per cent., 25 per cent. and 12½ per cent. respectively. These reductions, which should increase demand for consumer goods, will, I hope, play a significant part in encouraging the expansion of economic activity.
There are two special cases in which complete exemption from purchase tax has been provided: commercial vehicle chassis and replacement television tubes. Commercial vehicle chassis have been the only taxable articles of industrial capital equipment, virtually all the purchases being for business use. The Chancellor of the Exchequer felt able to spare the revenue this year, and therefore removed the tax altogether. Television replacement tubes were exempted because their cost is high, their life uncertain and because in some cases the tax represented a serious hardship. Steps have in fact been taken to ensure that part of the tax on new sets is not avoided by delivering them without tubes and inserting them later. The estimated full year cost of the purchase tax reductions is £81½ million, and the effect of the consequential price reductions will be to reduce the cost of living index by about one-fifth of a point.
I turn now, my Lords, to entertainments duty. Your Lordships will remember that during the Committee stage of the Bill the Chancellor of the Exchequer said that he was particularly concerned about the special problem represented by the small rural cinemas and cinemas serving small market towns where there is only one cinema. He therefore introduced a new clause to the Bill, the effect of which was to reduce by £20 a week the entertainments duty payable in respect of admissions to each place of entertainment. This method of giving relief was chosen because, although it will benefit all cinemas, it will divert proportionately greater relief to cinemas of the type my right honourable friend had in mind and proportionately less to

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bigger cinemas in the larger towns. I do not think that it would be possible for me to give accurate figures, but it is estimated that something in the region of a further 1,500 cinemas will be virtually freed from duty by this clause. The cost of this remission is put at about £2½ million in a full year. The total cost of the Customs and Excise reductions is £124 million in a full year, and it is our belief that it will benefit almost all sections of the community. The reductions, we hope, will play their part in stimulating the economy, and we believe that their combined effect will reduce the cost of living index by about four-fifths of a point.
I now pass to the Inland Revenue provisions, which are of course contained in Parts III, IV and V of the Bill. The most important of these is, of course, the reduction of 9d. in the standard rate of income tax, and of 6d. in each of the reduced rates chargeable on the lowest bands of the taxable income of individuals. Your Lordships will find these contained in Clauses 17 and 19 of the Bill. They are intended to resume the process of reducing the burden of direct taxation, a process which was begun in 1952 and continued in subsequent years. The standard rate of income tax will, as a result, have been reduced under successive Governments manned by members of the Party on this side of the House since 1951 by 1s. 9d. in the £, from 9s. 6d. to 7s. 9d. Substantial changes in favour of the taxpayer have also been made in the reduced rate structure.
This year's reductions in income tax rates will cost £192 million in 1959–60, and £229 million in a full year. Individuals, I am told, will benefit to the extent of about £166 million in a full year, and we believe that the effect of this will be to encourage more enterprise, more work and more savings. The relief to the undistributed profits of companies will amount to about £63 million in a full year, and this will leave companies with more resources for productive investment and will encourage enterprise and employment generally. It was the pervasive effect of the reduction in tax rates that decided my right honourable friend to devote to it this year most of the revenue that he could spare.
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It was also felt by my right honourable friend that the economy required some additional stimulus, and his Budget, therefore, contained two other major proposals in the sphere of Inland Revenue duty. First, there was the scheme for a further release of Post-War Credits, which, for the sake of speed, as your Lordships know, was authorised by a separate Bill. My concern, of course, to-day is with the Finance Bill, so I will confine my comments on this topic to saying that the current release of credits will assist the Government's present objectives without prejudicing the Exchequer in the future. Thanks to the economic stability which has been achieved, my right honourable friend has been able to make a substantial attack on this long-standing and difficult problem.
My Lords, the other major proposal to which I have referred is contained in Clause 21, and is designed to stimulate industrial investment in productive plant and buildings. Last year's Finance Act increased the initial allowances for industrial buildings from 10 per cent. to 15 per cent. and the initial allowances for plant and machinery from 20 per cent. to 30 per cent. This year the existence of some spare capacity in industries making capital goods, which may not be available later on, makes it desirable to provide an incentive to bring forward expenditure on new investment which might otherwise take place later. My right honourable friend has therefore decided to restore the investment allowance, which was introduced in 1954 and withdrawn in 1956, for qualifying capital expenditure becoming due and payable after April 7, 1959.
The investment allowance differs from the initial allowance in that it is given as well as other capital allowances amounting in total to the full cost of the asset, and therefore provides, as we think, a more powerful stimulus to new investment. The rates are to be the same as in 1954. They will be 20 per cent. for new plant and machinery, for instance; but, in addition, an initial allowance will be given, where appropriate, so as to bring the combined investment and initial allowances up to the same rate as the initial allowance now in force. For example, capital expenditure on new machinery, which would have qualified under last year's

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provisions for a 30 per cent. initial allowance, will qualify under the new scheme of combined investment and initial allowances for a 20 per cent. investment allowance and a 10 per cent. initial allowance. We believe that this reintroduction of the investment allowance should have an important effect on business sentiment and we think it will thereby affect the timing of investment decisions.
The only other important Inland Revenue changes involving substantial cost are those made by Clauses 30 and 33. The former of these two clauses replaces the present ad valorem stamp duty on sea insurance policies by a flat rate duty of 6d. The cost will be about £3 million in a full year. We hope it will help the overseas business of our marine insurance market and will also give some benefit to our shipping industry and shippers.
Clause 33, the second of the two clauses I have just mentioned, will also cost in a full year about £3 million. It increases in certain cases the amount of directors' remuneration which may be deducted in computing the profits of a director-controlled company for profits tax purposes. The limits concerned are those which apply in practice to most of the smaller companies. At present the scale starts at £2,500 and it rises by steps of £1,500 for each full-time working director after the first, and reaches a maximum of £7,000 where there are four or more such directors. In view of the increases in salaries and wages since 1952, when these limits were fixed, the minimum of this scale is being increased by £500 to £3,000 and the steps are being increased from £1,500 to £2,000, giving a new maximum of £9,000 where there are four or more full-time working directors.
The most important of the remaining Inland Revenue provisions of the Bill consist of anti-avoidance measures. Clauses 23 to 26 are designed to protect the Revenue against unjustifiable claims to repayment which arise through transactions involving the purchase of securities "cum dividend" and their sale "ex dividend" soon afterwards. The clauses contain provisions to ensure that they do not hamper the ordinary operations of the securities market or interfere with legitimate business more than is necessary to keep the door closed against
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avoidance. Clause 29 validates an amendment of the double tax agreement with the Republic of Ireland designed to put it beyond doubt that residents in the United Kingdom or in the Republic cannot benefit from what are known as "dividend-stripping" devices in relation to companies in the other country. In conclusion, I would say that Clause 32 might be noted if only because it proposes the total abolition of one tax, the corporation duty. The yield of that tax has always been small and the Chancellor has decided that it is not worth while maintaining it.
That summarises both the provisions of the Bill and the economic policy underlying it. As I tried to say in opening, the purposes of financial policy are, of course, limited to economic and material things, but they are a means to ends which are not necessarily material and not necessarily economic. Upon the solid basis of a sound economic and financial policy I believe this country can go forward, discharging its duty in the international field and improving the structure of its social justice at home. I beg to move.
Moved, That the Bill be now read 2a.—(Viscount Hailsham.)
3.39 p.m.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, first of all I want to apologise for following the Minister to-day. I do so only because of the absence in Germany of my noble friend Lord Pethick-Lawrence, who has endeared himself to the House, I believe, for the manner in which he usually deals with these matters. I am quite sure he deserves the endearment much more than I ever shall in such matters.
The Lord President of the Council, in introducing this debate to-day, has, if I may say so, taken a much better line in the matter than was taken a year or two ago, when we thought that he did not tell us enough because he was going to reply. But to-day he has given us two main sections in his speech: the first dealing with what he considers to be the true economic position of the country now, and the second an explanation of what is provided in the clauses of the Finance Bill, and we appreciate that he has obviously gone to a good deal of trouble to prepare his case for your Lordships this afternoon.

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It is always a little difficult for some one following immediately after such a careful and detailed preparation as that which the noble Viscount has made, to be able to comment at once upon the various assessments which he has made of the national economic position. Nevertheless, if I may say so to him, there are one or two phrases that he used that flash back upon my mind now at the Box, with which I shall very largely agree. Perhaps one of the most notable things he said this afternoon was: on what a very narrow margin we tread—I am using my own words in expressing what he said—as between prosperity and something in reverse. That is absolutely true. Moreover, it brings home to me the point which was referred to, I think a fortnight ago, in an article in the Economist—an article quite remarkable for some of its statements. I am not going into it in any detail, I assure your Lordships, but the article was under the title of "Halcyon Days", and in it the path we have been treading these past few years was rightly described as between a morass on this side and marsh land on the other, or something of that kind.
I must say that when the Government seek to take a great deal of credit for the general economic position, they do not tell us very much about the great windfall (that has become the current description of it) there has been in the way of the fall in import prices from 1951 onwards—quite a remarkable reduction. If you look at the years from 1952 to 1959 and take the period overall, you will find that, taking the figure for 1951 as 100, it would not be much more than about 84 or 85 to-day. That is a very large percentage reduction in the cost of imports of raw materials, of manufactured products, and of foodstuffs coming into this country.
When one looks at what has been happening to the home economy in between all that, then one is bound to wonder whether the policy of the Government on fiscal matters has been altogether correct, and whether we could not have made much better use of this windfall in the way of import prices than has actually been the case. I think the Economist was quite right in that article a fortnight ago to which I have referred, when it suggested that from
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time to time we are bound to face certain changes in such a situation, and that it requires a movement of only 3 to 4 per cent. in our terms of trade to lead to a situation which could change our over-all position by at least £200 million per anum. If you take that into consideration, and if my figures are correct—I am open to correction on them—then in fact import prices have fallen over that period by nearly fifteen or sixteen points, and if a change of three or four points is, according to expert economists, going to mean a difference of £200 million, then that leads to very considerable reflection on what would be the likely effect upon our position here.
Moreover, during the last eight years we have had a number of crises affecting the value of our currency, some of which, of course, were from different causes, but some of which, we felt, were entirely due to the Government's policy. The noble Viscount said during the course of his speech that certain underlying principles had affected their policy all the way through; that at times you must do this, and at times you must do that. Of course, we have to allow to any Government the fact that they will sometimes have varying sets of circumstances to deal with. But what he said was that, above all, you must have at all times a sound economic policy. We do not think that the Government's policy on economic matters has been at all sound all the way through. I wonder myself how we could regard as Sound economic policy the Suez adventure, for example, when one reckons up the aftermath, with regard both to the cost of the actual expendition and to the effect upon our overall finances—first in the borrowing we had to make, and, secondly, in the run upon the pound, which was clearly anticipated, judged by what was revealed in Mr. Randolph Churchill's recent book. I should not regard that longish period—I will not call it an "incident"—With its economic effect, as being a specimen of sound economic policy.
Nor do I regard the general treatment by the Government of our economic policy as having altogether sound economic effects. Take, for example, the general question of price inflation. One would imagine, listening to the defenders of the Government's policy, that price

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inflation is almost entirely due to the demands of workers for a standard of living which keeps pace with the current prices which they have to pay. I know, of course, that nobody could argue that that is the only cause of inflation, but it has frequently been said to be the case. But the beginning of that, in reality, was due to the Government's reversal of the policy which they had promised to the electorate: that was, that they would not reduce the subsidies on food; whereas those subsidies have been abolished and the cost of living raised—and raised accumulatively, because as the cost of living is raised a well-organised trade union community has insisted upon the wages being adjusted to meet it. It may well be, perhaps, that in one or two instances—very few instances—the wage may have gone slightly ahead of that, but only, in the main, where it could be shown that much higher profits were being made in the industries concerned. The task of the trade unions during the last eight years has been to try to keep the standard of life of the worker up to the position which he would have had if prices had not advanced as they have. Now it is a very curious thing, looking back, to feel that we have had for eight years all the benefit from the reduction in the prices of imports coming into this country, and yet have not been able to relate it to the general economic position of the country, and especially to the position of the workers, without the worker having to fight for wage adjustments to be made in relation to his general rising cost of living.
The Government Party's policy at the last two Elections has been, certainly, that they would reduce the cost of living. That was put to the electorate as one of the main planks of their programme and they declared that, whatever we might say, the cost of food would not go up seriously. Yet an answer which was given by a Minister in another place only a short time ago showed that the cost of food alone has gone up by nearly 49 per cent. in the period of office of the Conservative Government. Therefore there is a considerable case to be made for the manner in which the workers have reacted to their needs in these circumstances.
All this has added to the cost of production, with its consequent effect on the export trade. There is something even
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more serious. Here I want to check with the noble Viscount, to see whether I have understood him aright on this point. In dealing with economic policy, he spoke of two periods, the first up to 1957 and the other afterwards. He showed that although there was full employment in the first period, the balance of payments was maintained in a precarious position and that policy was in the direction of damping down production.
VISCOUNT HAILSHAM: My Lords, I do not think that I said that. I said that the object of policy in an inflationary period was to keep demand down. I think that those were the words I used.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I could not possibly write the noble Viscount's words down in longhand, but I had that impression. Compared with the increase in the rate of production from 1945 until 1951 and with the increased rate of production in Continental and other countries, we have not done very well in expanding our production over the whole period. Indeed, in the years from 1956 we showed little increase in production. When the noble Viscount said that he was pleased with the amount of recovery which has taken place in production during the last few months—and nobody wants to take away his pleasure in that—I could not help feeling that, with a different economic policy all the way through, we might be in a very different position at the present time. I look at the announcements made from time to time by the Federation of British Industries, and a few weeks ago I saw in one of their publications that at the beginning of June a large section of British industry was still working at 75 per cent. of capacity. Therefore I was reassured when I heard the noble Viscount utter the warning that we must not be complacent about the matter. In fact, we are coming on to a difficult period of the year, when it is difficult to find all the places desired by the expanding output from the schools seeking employment.
I appreciate that the noble Viscount has taken a good deal of time to explain what he regards to be the position and I find myself in a measure of agreement with him on what are the main problems. The balance of payments, the internal pressure on resources, and inflation—these are the three outstanding problems

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which any Government have to tackle. When we take the balance of payments, it is obvious that when the country is in difficulty about payments certain restrictions have to take place. I think that that would have to be admitted by anybody, speaking for any Government. The question is: what kind of restrictions? When the real trouble began at the end of 1956, the great remedy was to put up the bank rate and to restrict credit severely. When the Labour Government were faced with a position of virtual bankruptcy in the national finances in 1945, we could not have afforded to adopt a policy like that. The only way we could deal with the situation was to push up production at all costs and obtain abstention by the public from unreasonable demand in the face of the overall requirements of the country's stability—and we succeeded.
Let me take the two outstanding features that are in my mind at the moment. The first is that we should have gone on succeeding but for the enormously rising bill for armaments at a time when we were putting into operation the Welfare State. At the end of 1945 the second of the joint armament programmes agreed to by the Labour Government raised the triennial programme to £4,700 million, and that was the point at which the pressure of that cost, combined with the internal pressure of operating growing social services of the Welfare State, came to a peak.
The second thing in my mind is that during the last three years of our first Government, which lasted until 1950, we were being pressed all the time from Conservative sources to give up restraints and "set the people free". It was said that they were not getting a fair share of the benefits of the country. They were pressing us all the time and calling down all the curses that could be uttered on the austerity of men like Sir Stafford Cripps. That was what actually took place.
If we have to meet a wider margin of safety than apparently we may have to face in these halcyon days of the future, we shall need more than the sudden imposition of a high bank rate and restrictions upon capital development; we shall rather need to turn to the general control of economic affairs; when, instead of restricting production, we
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shall have the difficulty of finding economic controls to expand production. I am certain that if we were to have the pleasure of listening to the noble Viscount, Lord Hailsham, in reply (and we quite understand that he could not stay) he would violently combat these arguments. But I have never yet found any statement by a Conservative speaker on these matters that has convinced me that their story of financial success in these last few years is sound, or that, much more could not have been done with the opportunities they have had.
I have not mentioned one serious effect we have had to face in the last few years as a result of Government policy and mistakes, and that is the heavy increase of the cost of the service of the Debt. I did not hear that remarked upon to-day. It is true that some of the special borrowings that were made as part of the Suez crises have been in part repaid; but, at the same time, we have never got away from the heavy increase in the cost of the floating debt. It is a large sum that we have had to pay as a result of those increased charges—I should say probably somewhere near £400 million to £500 million altogether, over the period, in increased charges for interest and the like for the service of the debt. That is a very large sum. It is more than double the sum which has gone out of the Budget this year, for example, to relieve income tax by 9d. in the pound. Yet that is all pure increase. There is no doubt where that money has gone: it has gone to the banking and issuing houses who deal largely in lending for Government purposes of that kind. But it had at certain times a grave effect upon the general line of the public investment in what are called gilt-edged securities of the Government—and I hope that somebody is taking a note of these remarks for the noble Earl, so that when he comes back he will know what I am saying.
There has been a notable effect; and it is that Government securities have fallen disastrously. Why did they fall? Because there was a growing lack of faith in them. There has been a constant move from gilt-edged securities into the equity market. There is no doubt about that. Some of the figures that one could quote, if one had time to go into all these things, are most striking. Having

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a look at the City and the prices in the last twelve months of equities must surely give one cause to think. Equities were at an index price of 167, and quite recently they went as high at 246 or 247, which represents a big margin of increase in their value.
Nor is this merely an internal move, as between the usual dealers on the Stock Exchange in equities. Many people who are investors have turned definitely from gilt-edged securities. I do not know what is the right body to describe as being in charge of Church of England investments, but I suppose it is the Ecclesiastical Commissioners. In the last ten years they have turned very largely away from investment in gilt-edged securities, and from the annual returns now coming to the Church, they seem to have made wide use of their investments in equities, land properties and things of that kind. The effect has been the same.
I am wondering now how far the tremendous developments of great companies like the Prudential Assurance Company will go. In the old days, I suppose, they were almost the largest single outside holder of gilt-edged securities, but they are now investing their life, fire and other insurance funds very largely in equities and industries, while still, of course, retaining a considerable proportion of gilt-edged securities. How is this going to affect the borrowing of the Government in the future? What is to be the policy about that?
I think it would be a good thing if in your Lordships' House, which contains so many experts in matters of which I have only a passing knowledge, the Government could tell us whether they are going to be able to meet the situation for borrowing in the long term without some adjustment in their present policy: whether they are going to have straight undated securities; whether they are going to have dated securities of an altered length of period in various cases, and some means of recapturing the freedom of the Government to be able to borrow at reasonable rates over a long term and not be forced on to a floating debt at high current rates—because it would have a great effect upon the economy of the country if that was actually arranged.
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One of the constant problems of policy which faces any Government in regard to financing the country as a whole is what is the fair method the Government should adopt in the budgetary and trade policies to secure a fair distribution of the wealth of the nation. We in my Party hold that, in the end, all wealth comes from the application of labour to land, with the help of capital savings, and that the people in the country as a whole have a great moral right to an adequate share of what is thus created. The manner in which it is distributed is, however, almost essentially in the hands of the Government of the day. The noble Viscount, Lord Hailsham, said that the present Government can claim a substantial success, because they have been able to relieve taxation greatly whilst at the same time seeing an expanding number of social services. If you just put down certain figures left and right on the two sides of an account you would probably see that, broadly speaking, that statement could be justified. But there are other figures to be considered which show that in fact the distribution is going a good deal more in the other direction.
The noble Viscount has pointed out to us to-day that 9d. in the pound relief from income tax costs the Chancellor of the Exchequer something like £229 million; and that is quite a figure. Although probably that now is a higher global sum in any year than it would have been in previous years, because of the development of population and trade and profit, you have to remember that income tax has been reduced by this Government since they have been in office by as much as 1s. 9d. So that the actual amount distributed, say, in a full year at present rates of income of that 1s. 9d. must be somewhere near £700 million; I have not worked out the exact total, but it is somewhere near that figure.
If you take the record, so far as I have been able to get it (I have not been able to get the figure since 1957; I think this figure was given in the Government statistical returns published in 1958), in 1949 there were 5,200 people in this country who had an annual income, after payment of tax of £4,000 per annum or more. But by 1957 this number had increased from 5,200 to 18,800, more

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than three and a half times as many. Yet if I look at the same set of returns I find that in 1957 there were 12,630,000 of our people who were receiving less than £10 per week before tax. If you think that these figures indicate a fair distribution of wealth, all I can say is that I cannot agree with you. Take the kind of thing which arises directly from Government policy, like the dealing with rents, company remissions and the like. The income from rents, dividends and interest (I obtained these figures from returns published in 1958) rose by £648 million from 1952 to 1957. And in the last three years, since the effect of the rent legislation of the Government has been felt, great fortunes have been made in land property and rents.
The noble Viscount said that one of the great needs at the present time is capital. Well, if that could be shown to all the workers in the country in an understandable and simple manner, it would be useful. They just look at the take-over bids week by week, month by month. Where does the money come from? If the worker looks at the history of the equity companies in the past five or six years, and takes account of the increases of dividends and of the issues of capital, he says, "I do not see where the shortage of capital is." I am quite sure myself that there is a shortage of capital as a whole, and that we could do with a good deal more saving by the community than we actually get. But, you see, while you have the great mass of people wanting to get modern appliances into their homes, and they can get them only by the exercise of hire purchase operations, it is no good going to them and saying, "You cannot afford it, you know"; because just around the corner in the next street of the suburb people will be buying cars on hire purchase at a very high cost to the borrowers—and some of the biggest accretions of capital come to those who finance hire purchase. When you think of the manner in which the main banks of the country have entered into hire purchase finance in the last two years (every one of the banks has been able, without going to the general market at all, to issue new capital in order to finance their further operations in hire purchase finance) you will get more wonderment of the worker as to what is going on.
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I suppose that this is the last Finance Bill Second Reading debate we shall have before an Election, and I am quite sure that when the Election comes many of these things are likely to be canvassed, and I do not see at all myself why they should not be. The relief to the wealthy has been almost continuous. Not only is there the 1s. 9d. reduction in income tax, which affects all classes of income above a certain amount, but there is also the great relief to the surtax payers—a relief that, in my view, was certainly not necessary in dealing with the great problems of the State to-day. But it is always said that the Conservative Party is well able to take care of those who support it.
I think it is worth while drawing attention to a note I had here of a comparison. This is an extract from a statement in another place by one of the Opposition Front Bench, in which he said:
"The Conservatives gave £33 million tax relief to 200,000 taxpayers earning more than £3,000 a year"—
that is, surtax payers—
"a relief that works out to £165 per year per head. Under the present National Assistance proposals £32 million was being given to 2½ million people who are the poorest in the land, the equal of a sum of £12 16s. per head."
It might well be argued that the relief was not necessary to that class at all, but very good use would have been made of that by an increase in demand, about which we heard so much this afternoon, if more could have been given to those who were getting a slight adjustment in their National Assistance basis.
That is generally how we see the effects of Government policy on finance. I had so much more to say and I have not got time to say it, but I must refer to one other matter before I sit down. Many of my old friends in Parliament know that I have given most of my life to the service of the Co-operative Movement. Somehow or other the Conservative Party seems to be gradually working itself into the position of being the continuing enemy of the Co-operative Movement. That Movement is a great institution. This year it will reach, practically for certain, £1,000 million turnover in the retail societies. It has a membership of nearly 13 million people. It never goes to the finance market for capital; all the capital it has comes from the savings

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effected in the mutuality and thrift of its people, in not overspending those savings but leaving them to finance the business. It is a great asset to the country in that it finances not only retail distribution, but pure finance in the way of banking. It is a great investor in Government stock, and it also controls something over 300 factories of varying size and in varying trades. That is an enormous thing. It is no wonder that the late Lord Home, when he was Sir Robert Horne, Chancellor of the Exchequer, said of this movement that it is one of the most steadying and stabilising factors in the life of the nation. Why is it that suddenly, in the last few years, and the last two or three years before the war, it is made the butt of Conservative administration?
Here is an introduction to your Lordships' knowledge this afternoon by the noble Viscount, the Lord President of the Council: among other budgetary proposals he touched on are amendments to assessment under profits tax. What has the Chancellor of the Exchequer done? He has brought about a change from a system under which the tax was levied in two different ways, 3 per cent. upon undistributed and 30 per cent. on distributed profits. It has been changed about so that it is 10 per cent. all round. Every one of those in industry participating in the effects of this amendment, except the "Co-ops.", are favourably placed—every one of them, so far as I know; I should like to hear some instances where they are not. The claim of the Chancellor certainly was that they would be able to do very much better not only in regard to the immediate effect of the benefits to them, but also in the future adjustments from time to time that might have to be made. Certainly the relief claimed by the Chancellor was going to the majority of those affected. But the only effect on the Co-operative Movement is to tax them another £1½ million. It is a preposterous position, for a great movement with the position in the State which I have mentioned, to be treated like that. Noble Lords opposite must not be surprised if we have to use the platforms this autumn to make sure that people in the Co-operative Movement understand exactly who are their friends and who are not their friends in matters of this kind.
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I apologise for having been led, in much of my dissertation this afternoon, by the good and wise explanation by the Lord President of the Council of his policies and the Bill, into speaking longer than I usually do on these matters. I felt that I had to go on, once I had started with the arguments. I have by no means finished all I wanted to say, but I will finish, and I apologise for having gone on for so long. I end by saying that I hope that the time may not be far distant when we shall have an Administration, whatever it might be called by other sections of the community, which will be known to its supporters as standing for the fairest distribution of wealth.
4.23 p.m.
LORD HAWKE: My Lords, we all miss today the annual objective survey of our economic position that we have been accustomed to receiving from the noble Lord, Lord Pethick-Lawrence. I hope that he is enjoying himself in Germany. The noble Viscount the Leader of the Opposition trotted a vast number of delectable hares across the course, and though I should dearly love to chase every one of them, your Lordships would not like me to do it. I will content myself with two or three only. On the subject of food, which the noble Viscount raised, I most profoundly disagree with him, because I believe that the Government's food policy has been an outstanding success during their term of office. By allowing food to find its own level of price, they have created such an abundance that the problem is what to do with the stuff instead of where to get the next meal. In my bag outside I have a list of the rations in 1951 when the Conservative Government attained office, and, believe me, it is rather shocking to read to-day.
With regard to the terms of trade, we are always told that we have had a great deal of luck over the terms of trade. I am very doubtful whether in fact it is a complete windfall and luck, though I know that some financial writers take that view. The terms of trade, which are affected by fairly marginal buying of commodities can be influenced very largely by the control of credit in the manufacturing countries. Mr. Butler, when he put up the bank rate, burst the Korean boom, and I believe that it is our money policy in this country that

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has largely led to the terms of trade being what is called favourable, though I add a rider that it is not wise to have them too favourable.
Our old friend the bank rate, of course, came up, and I can assure the noble Viscount that the banks do not profit enormously from any increase in the bank rate. It means merely that the people who lend their money get more for it and the banks charge more when they lend it out. The bank rate has become the most potent weapon that we have in riding the trade cycle. If you believe in a free economy, as we do, and at the same time do not want to let things rip, you must have some control; and the bank rate is our most important control. For our free monetary economy has the ability to call into existence the amount of credit it requires at any given time. If that amount of credit is too large for the supply of goods we get inflation; if it is too small we get deflation. The volume of credit can be influenced very greatly by the bank rate, so it really is an essential method of control. The cost of financing the floating debt, to which the noble Viscount rightly referred is, I believe, a small price to pay for the avoidance of the alternative, which would have been the devaluation of the pound. I do not think I will worry any more about any more of the noble Viscount's hares.
The Chancellor of the Exchequer is rather like a mountaineer. He is climbins up a narrow ridge covered with ice, with a precipice on each side; and in doing so he is being buffeted by winds, now from one side and now from the other. The difficulty to advance and keep his balance is enormous. That path has not been traversed by anyone yet, and his guides from the Treasury have not been over the ground either. That path is the path of full employment in a free society without inflation. He has been successful, and I believe that the mountaincraft of the Party is steadily increasing. In fact, I believe that all over the free world the monetary authorities are gaining increasing skill with practice at this business of regulating the world's credit, and the way they have dealt with the last depression, which might have been very serious is most creditable to them.
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In the Budget the Chancellor of the Exchequer took, I believe absolutely rightly, the view that he must increase the power of consumer buying and rely on borrowing or, if necessary, creating credit to meet his capital needs; and the principal part of that policy was met by the cut in the standard rate of income tax. That I believe to be very good. I should expect, with an Election not far off, that allegations would be made that the Conservative Party are always cosseting the rich and grinding the faces of the poor. I never thought that the noble Viscount would respond so quickly to my anticipations. Such allegations have been the stock-in-trade of demagogues for centuries, and are often untrue; but I suppose they will continue to be popular cries so long as man continues to disobey the Tenth Commandment.
It is interesting to see whether there is any truth in the allegation. I took the trouble to do a little arithmetic on the subject. I wanted to compare the rich under Dr. Dalton, that scourge of the rich, with the rich to-day. Since 1947 the cost of living has gone up 68 per cent. I took married couples under Dr. Dalton with salaries of £1,000, £2,000, £5,000 and £10,000, and I found what they had left after paying their taxes. I converted that amount into present day pounds. Then I took similar married couples to-day, but I assumed that by diligence they had in the interval managed to increase their gross salaries by the amount of the rise in the cost of living—in other words, by 68 per cent. The results were interesting. When comparing the purchasing power they had left with the purchasing power Dr. Dalton's victims had left, Dr. Dalton's £1,000 man would be £75 better off to-day; his £2,000 man would be £80 better off; his £5,000 man £100, and his £10,000 man would be £200 worse off to-day. I may add that before this Budget all of those plus figures would have been minus figures. So that I think it is at least arguable that some change was long overdue, because Dr. Dalton can hardly be regarded as a friend of the rich. I think that dismisses the allegation that the Tories' taxation policy is to favour the rich.
I welcome the reduction in the standard rate, and I expect that most members of the Labour Party, in their

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hearts, do, too. This is only one of many changes and adjustments which are wanted. Sur-tax is long overdue for revision. It does not bring in a great revenue and it has very bad effects on the economy. There are two different separate effects. The first one is in the lower ranges. This affects the executives, particularly the young and rising executives. If you want to give a £3,000 a year man a rise and you make it £1,000, the product is only £528. If you want to give a similar rise to a £4,000 man the product is £466. If you want to give a similar rise to a £5,000 man the product is £376.
This puts two different classes of employer in great difficulties. First of all, its puts the Government in great difficulty, as we have seen in regard to senior civil servants, judges and the like. In order to produce some worthwhile increase of net income they have to be given gross salary increases that can appear unnecessarily large. Then particularly to manufacturing and trading companies, it produces difficulty in that if they want a man to take up a more responsible post, and particularly to move to London, they have great difficulty in managing to remunerate him without hopelessly upsetting the scale of the rest of their employees. You can see from the figures that I have mentioned that the whole difference might go in rent in London as compared with a provincial town. That may well involve a person spending the whole of the product of a £1,000 salary increase; and if he is going to take up more responsibility as well, he will probably expect an amount which will upset all his colleagues. This, of course, leads to various ways round, such as expense allowances and so on, which I believe do no good to anybody.
The other harm to the economy is done at the top end, where the very high rates on the top marginal incomes encourage every kind of extravagance, where anything can be bought by the firm or partnership which formerly would have been bought by the individual partners or directors themselves. I believe that a reform of this sur-tax is urgently needed, and I believe that it could be so conducted that the loss in revenue would be negligible or none.
When we come to death duties the anomalies are probably still greater.
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The revenue is far below what one would expect, judging from the figures. For instance, in 1957–58 I believe the product was lower than in 1951, which looks a ridiculous situation. One can only conclude that more and more people are taking good advice on how to distribute their wealth during their lifetime. I accept that modern society demands a measure of levelling down; but if you try to go too fast you defeat your own end. Here perhaps I may take up something that the noble Viscount said. He was comparing the equality of the people who had incomes of £520 a year with those who had £4,000 after tax. To anybody who believes in the perfect equality of income for all men, naturally that must be a grave injustice. But if he does that, how is it possible to justify a Coventry motor worker earning more pounds in a week than an Indian earns rupees in a month? Here, again, in this field of death duties, I believe that, on balance, reforms could be made without loss of revenue. What we want are rates which will ensure, or shall we say encourage, rich men to die possessed of their wealth within the bounds of this kingdom.
I was glad to see a reduction in the beer duty, because I think I am right in saying that the alcohol in beer has for some time been taxed at a higher rate than the alcohol in wine, and that is plainly silly. The British public knew that it was silly and were switching from beer to wine. My only doubt is whether the reduction has gone far enough to safeguard the duty in a normal English summer. I wish that we could re-elect the present Chancellor of the Exchequer for many years, to put through a programme of reform of the revenue; and I hope that he would not ride off on the recommendation of the Royal Commission, because, if I remember aright, the Royal Commission was instructed to make no recommendation for reduction without a corresponding one for increase. That, I think, would be liable to stultify and detract from the value of any report.
The Chancellor of the Exchequer to-day has a heavy burden. The noble Viscount referred to what is perhaps almost his chief preoccupation, which must be the problem of how to borrow enough money to manage his national

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debt. Some dismiss the problem as being only a manifestation of the bank rate, and that if the bank rate went down all would be easy. I rather think that the noble Viscount tended to take that view. But I am afraid this is a view I cannot accept. I believe that there is a deepening divorce between the long-term rate and possibilities for borrowing money and the short-term rate, and that it will take a great deal and a long period of stability to persuade people to lend money to a Government on the long term with the competition that they have from all other forms of investment both here and abroad. So that it seems that, in practice, the capital projects of a long-term nature will have to be financed from the medium and short-term funds, which the purists will not like.
The alternative is for the Government to borrow or to fix rates at which they really could borrow long-term, and the cost, in interest and discount, might rather shock people. But it is very gratifying to see the very substantial increase in the short-term and medium-term lendings to the Government through the National Savings Movement. In fact, they considerably lighten this nightmare of the Chancellor of the Exchequer. I believe, my Lords, that the Chancellor of the Exchequer has made an excellent beginning by showing himself flexible and susceptible to ideas of change in the field of taxation. He has shown skill in his main preoccupation, which is the pursuit of full employment with stable prices, and I hope that he will have many years to run. I support the Bill.
4.41 p.m.
LORD MCCORQUODALE OF NEWTON: My Lords, I had not meant to address your Lordships, but I wish just to refer to one point which I think the noble Viscount, Lord Alexander of Hillsborough, must have made in error. So far as I understood him, he said that the change in profits tax benefited all the companies concerned. Of course, in actual fact the change in profits tax benefits some companies, but for other companies, notably those ploughing back the bulk of their resources, it is very hard indeed, as I know to my cost in the company with which I am associated. On the other hand, the 10 per cent. all
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round was obviously in the long run fair, because different circumstances suited different people best, and it was better to have one standard.
I sympathise, as I am sure everybody does, with the co-operative societies if the change of tax means that they have to pay more, as it does for my own company. But I cannot believe that the noble Viscount would wish the co-operative societies to be treated more generously than any other company or concern in the State. If everybody pays the same, that is proper equality and I should have thought that is what the noble Viscount would prefer. I would otherwise say to him—I am sure my colleagues on this side of the House and many of us who have been acquainted with the magnificent work that the Co-operative Movement has done, especially in the North of England, for so many years would say the same—that we have no hostility to the Movement at all. On the contrary, we think it is a very fine Movement. We only feel that it is a pity it has allied itself to one political Party rather than keeping out of politics altogether.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, I am much obliged to the noble Lord. I did say I thought there were perhaps some companies who were not favoured by the change in tax, and I dare say I was a little underestimating the number. But certainly my Movement is to be mulcted for £1½ million a year in increased tax. When the noble Lord says that surely I do not want the co-operative societies to be treated more generously, I would say that I do want them treated more generously than the Conservatives have treated them from the time they altered the tax law in 1933. They were the first Government ever to do so and to interfere with the taxation upon the results of mutual trading instead of competitive trading—I repeat, mutual trading. And so it goes on, we are bound to say.
The noble Lord says that we joined one political Party. So we have, from the point of view of putting over our central views on these matters; but it is only because we were driven to it, and we had to pay tax upon every penny we spent in that way. I wish that all the supporters of the Conservative Party did the same and showed in their

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balance sheets where they got their money from, what companies let them have it and whether they pay tax on these particular payments.
4.45 p.m.
LORD CHORLEY: My Lords, I should just like to say two or three words on a completely non-Party aspect of this Bill; that is, on the most valuable clause which does away with the duty on insurance policies. I have, I think, on more than one occasion in your Lordships' House criticised what seemed to me to be the antediluvian Revenue doctrine of taxing commercial documents. At a time when the impingement of Revenue taxes was not so well understood by economists as it is now, and when Chancellors of the Exchequer were at their wits' end to find revenue, there may have been something to be said for it, but I think that is a long time ago.
I have in the past criticised particularly the maintenance of the ad valorem duties on bills of exchange and, of course, the fixed duty on cheques. The commercial community relieve the Government by means of this commercial monetary paper of a great deal of expense and provide for the business community an exceedingly valuable type of currency without which trade would really be quite impossible. The ad valorem tax on insurance policies has been a similar type of old-fashioned revenue-raising machinery. Whether it is now being abolished for scientific reasons of this kind, or simply because it is being found that foreign insurers dislike the quite substantial amounts which the ad valorem duty requires them to pay when taking out marine insurance policies, in the London market particularly, I really do not know. But it will, I imagine, be very welcome indeed at Lloyd's, which, after all, is still much the largest institution for marine insurance in the world; and it cannot but have a valuable effect in increasing our already largely invisible earnings in respect of marine insurance.
In addition, I am quite sure that the noble and learned Viscount the Lord Chancellor, if he were here on the Woolsack, would agree with me in saying that this matter has given rise to many difficult and tiresome problems in marine insurance where in the case of a time policy the stamp has had to be renewed every
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twelve months. Very often, of course, ships were at sea when the policy expired, with the result that continuation clauses have had to be introduced, and tricky problems have arisen as to when and how far such clauses could be effectively enforced, or whether they were to be regarded as evasions of stamp duties. Your Lordships will see that many problems of this kind, which have been tiresome both to the marine insurance market and to the lawyers who advise them on their cases, will be obviated as a result of the new proposals. I should like to say, although in a sense it is a small aspect of this particular Finance Bill, that it is nevertheless a very valuable one, and I congratulate the Government on having introduced it.
4.48 p.m.
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, I should like to add my regrets to those which your Lordships have already expressed that the noble Lord, Lord Pethick-Lawrence, who always leads for the Party opposite in these debates with so much moderation and such great knowledge and charm, is not here to-day. But I think that the loss is ours and not his, and we must all envy him his holiday in Germany. As your Lordships have a great deal of business before you, and as the weather is rather less conducive to oratory than to what my noble friend chose to describe as the "staple of mass enjoyment," I hope I am right in assuming your Lordships do not desire me to make a very long speech. I am grateful to the noble Viscount, Lord Alexander of Hills-borough, to my noble friend Lord Hawke and to the noble Lord, Lord Chorley, for having been much less interrogatory than I know they all can be if they really try.
My Lords, the first purpose of the Finance Bill—what used to be its only purpose, and what is still its first purpose—is to raise money by taxation to pay for the public services. The second purpose, which has now become perhaps almost as important as the first, is to guide our whole economy in what is believed to be the best national interest. For example, the purchase tax produces a very large amount of revenue: but all the changes up and down which are made from time to time in the purchase

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tax are not made entirely for revenue reasons; they are also made in accordance with whether it is thought right at the moment to stimulate or to check consumer expenditure in the interests of the national economy generally.
My Lords, I think that our system of taxation in Great Britain is much the best, and is the most scientific, in the world. The only trouble about it is that it is much too high. We have devoted a great deal of skill and a great deal of trouble to mitigating the harm that is done by the incidence of excessively high taxation in all kinds of ways—by various rebates, and exemptions, and remissions of every kind, which are designed to temper the wind to the shorn lamb. I think we have done so very successfully. But all these arrangements cannot change or disguise the fact that the total volume of our taxation is far too high a proportion of the gross national product—higher than is good for the economy of any country; and we must aim steadfastly at trying to reduce it.
We know that we cannot reduce it quickly, because our commitments are too great, although the noble Viscount, who mentioned in his speech the cost of administering the National Debt, will no doubt be glad to know from this year's financial statement that the interest and management of the National Debt, which was estimated to cost £695 million last year, is estimated for the current year to cost only £600 million—that is, a reduction of £95 million. The total estimated cost of the Consolidated Fund services is being reduced from £816 million to £728 million—that is, a reduction of £88 million.
We cannot save much, I am afraid, on defence. Our social services will undoubtedly demand increases rather than reductions, if their efficiency is to be maintained, as time goes on; and in order to achieve a better balance between taxation and the gross national product, we must be patient. We must rely on the expansion of revenue and the increase of prosperity. I think, my Lords, it is a matter of some satisfaction that we have this year moved a little way towards that. Taxation has been reduced by £366 million in this Finance Bill, although our estimated expenditure for next year is £120 million higher than it was last year. In
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particular, our estimated expenditure on the National Health Service is going up from £499 million to £533 million; on the National Insurance Fund from £139 million to £170 million; and on National Assistance, in the financial statement, from £114 million to £123 million—although that increase will be greater, no doubt, on account of the measure which has been introduced since the Finance Bill was brought into the other place and the statement prepared.
My Lords, in his remarks on taxation the noble Viscount opposite made two general criticisms. The first was about the reductions in taxation which have taken place. He thought they were badly conceived; and, no doubt, that some of them ought not to have been made. He said that the Conservative Party was very good at looking after its friends. Perhaps it is; but I think it is also very good at taxing its friends. Of the five major increases in death duties which I can remember in my life-time, four have been made by Conservative Chancellors of the Exchequer, and only one by a Labour Chancellor. It has been Conservative Chancellors of the Exchequer who have been mainly responsible for raising the maximum rates for death duties to their present confiscatory figure; and the same applies to income tax and sur-tax.
I think that the only objection which the noble Viscount had against the taxes actually levied in this Budget was the change in the profits tax, which he thinks had an unfair effect on the co-operative societies. I am sure he will not mind if I respectfully remind your Lordships that this change in the profits tax was not made in this year's Finance Bill, but in last year's Finance Bill; not in 1959, but in 1958. I have the OFFICIAL REPORT here, and I see that the noble Viscount opposite said exactly the same on July 29 last year about this profits tax affecting co-operative societies as he has said this afternoon, although he said it at very much greater length—I expect that probably it was not quite such a warm day.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: May I just explain that this matter was raised during the discussion on this Bill in the other place, where they could move an Amendment, and that an

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Amendment was so moved. But I cannot move an Amendment on the Finance Bill up here. I can only repeat the argument which has already been used in the course of discussion on an Amendment in another place. Otherwise, if I could put down here an Amendment to the Finance Bill, I should put it down every year.
THE EARL OF DUNDEE: My Lords, I should like to assure the noble Viscount that we are always delighted to hear what he has to say about this, and I hope we shall often hear him say it again. But I was going to point out that in this debate last year, to which I have referred, my noble friend Lord Hailsham, who replied to the debate, before he came to the main part of his speech, filled exactly two and a half columns of Hansard in replying to this point made by the noble Viscount. Therefore, I hope that your Lordships will excuse me from doing so, and will look instead at Column 437 of Volume 211 of last year's Hansard.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: Does that mean that the noble Earl does not want to be committed to saying it as his own opinion?
THE EARL OF DUNDEE: If the noble Viscount likes I will not read the whole two and a half columns, but I will mention that my noble friend Lord Hailsham pointed out that the Chancellor of the Exchequer had fully taken into account the position of the co-operative societies; that he had allowed, as a special concession, interest on share capital to be deducted on the same basis as loan interest, which it more nearly resembles. And, of course, the trade discounts, which are called dividends, are also omitted. He also pointed out that the profits tax on co-operative societies was therefore on the same basis as that of other companies, and that it might be perhaps unfair on those other companies if the co-operative societies were taxed at a lower rate. However, it is all there in last year's Hansard for your Lordships to see.
Now, with regard to the effects of our annual Finance Bills on the general economic state of the country, the noble Viscount, Lord Alexander of Hills-borough, gave some description of the problems which confronted the Government of which he was a member, and compared them with those which have
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confronted the Conservative Governments which have been in office since 1951. I am not going to dispute that point with the noble Viscount on Party lines at all: I am going to make only one very brief observation about what I think our real problem has been. After the war, for some years we had what was called a "sellers' market." Nearly everybody was anxious to buy almost anything he could get from almost anyone. Now the sellers' market is no longer there, and our difficulty has been that, while the conditions in which our exports have to be sold abroad have been getting tighter and more difficult, the wage-price spiral has gone on, and inflation, which we tried to check, has continued until nearly a year ago. Our efforts to check inflation, although they were continuous, and though sometimes we thought that we had succeeded, did not in fact succeed.
In 1957, which the noble Viscount referred to as a critical year, there was a world trade recession—not a tremendous one as there used to be before the war, but quite an appreciable one. There was a reduction in foreign buying. If, in those circumstances, we had gone on allowing our internal price levels to rise, if we had gone on with an inflationary economy when competition was growing keener abroad, we would have failed to sell abroad what we must sell to keep our economy stable; we would have had very heavy unemployment. There was a crucial imminent danger of that, which perhaps forced the Government in September of that year to take more drastic measures to stop inflation than they had done before. This is always a difficult question to decide—a question of balance and not a question of principle: how far we should go in the direction of expanding economy, or how far in checking inflation.
The fact is, my Lords, that we have checked inflation. The noble Viscount attributed the chief reason for that to what the Prime Minister and Mr. Stanley Holloway call "a little bit of luck", and he suggested that we had not used that "little bit of luck"—that is, the terms of trade which have moved in our favour—to produce the best results. But I think that we have used them to consolidate our position in a not unsatisfactory way. At the end of last month our gold and convertible currency

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reserves stood at £1,133 million, which is £321 million higher than they were at the end of 1957. We paid off £67 million on North American loans at the end of last December, £71 million to the International Monetary Fund in March, and an additional gold subscription of £58 million to the International Monetary Fund in May. At the same time we have maintained our very high rate of overseas investment. Most of this has taken place in the Commonwealth, and it assists the economic development of those countries, and so helps to raise the standard of living of peoples with whom we have such close ties. As my noble friend Lord Hawke said, we do not want the terms of trade to be too much in our favour, because that means that the primary producing countries, who are generally economically backward countries, become poorer and cannot afford to buy our exports. So it is in our interests that commodity prices should not be too low and that our customers should earn enough money to enable them to buy our exports.
After the Montreal Conference last December the volume of investment in the Commonwealth on a Government-to-Government basis has increased. The level of grants to under-developed countries is now running at the high level of over £50 million a year. We can meet these calls on our reserves now without weakening our overseas monetary position only if our current balance is in a healthy surplus, and we had a record current surplus of about £450 millions last year. That is a fact, and even though in the month of June, as your Lordships will remember, we had a large surplus of imports over exports, the strength and position of sterling in the world has enabled us to take that without any concern about the future of our balance of payments position for next year.
We have been able now to release controls on a large number of imports from dollar countries with whom we want to trade. Our export trade with Canada, in particular, and with the United States, has gone up heavily in the last twelve months, and our export trade with
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Western Europe has also gone up. Although, as I mentioned to your Lordships in our debate in April, we expected our exports to the rest of the sterling area to be at their lowest in the first quarter of this year, they also are now beginning to rise. We have this good export position; unemployment is coming down; and production is going up. As my noble friend, Lord Hailsham, mentioned in his speech, the production index, which had risen fairly quickly from 1954 to 1956, then slowed down until in 1958 it was almost stationary. Now, in the first quarter of this year, if has risen from last year's level of 107 to 110, and is expected to be between 110 and 111 in May.
These things may have happened before; but what has not happened before is that the price level has now been steady for about fifteen months: it is the same to-day as it was in April, 1958. I suggest to your Lordships that all these facts lead to the conclusion that the present economic policy which we are trying to pursue is the right one. Now that we have gained this position of stable prices, full employment, increasing production, and increasing exports, we must try to hold that position, consolidate it and use it as a basis for going forward again. In my submission to your Lordships we must resist any proposals which may lead us back into inflation once more or which may destroy the growing confidence in the future of British industry, so that next year we may again move further on towards prosperity.
On Question, Bill read 2a; Committee negatived.

TOWN AND COUNTRY PLANNING (SCOTLAND) BILL [H.L.]
5.10 p.m.
House in Committee (according to Order), on report from the Joint Committee on Consolidation Bills: The Amendment made by the Joint Committee agreed to.
Then, Standing Order No. 41 having been suspended (pursuant to the Resolution of July 16), Bill read 3a, and passed, and sent to the Commons.

NEW TOWNS BILL
5.11 p.m.
Considered on Report (according to Order).
Clause 2:
Establishment and functions of Commission for the New Towns
(4) Subject to the provisions of this Act and to any direction given to them by the Minister, the Commission shall have power, with a view to the better fulfilment of the purpose mentioned in subsection (1) of this section by the improvement of any of their towns, or to the convenience or welfare of persons residing, working or carrying on business there,—
(d) to dispose of any property for such purposes and in such manner as they think fit.
(7) Where it appears to the Minister, after consultation with the Treasury and with the Commission, that the Commission have a surplus whether on capital or on revenue account after making allowance by way of transfer to reserve or otherwise for their future requirements (including any contributions that may be required to be made in any of their towns under the last mentioned paragraph (b)), the Commission shall, if the Minister after such consultation as aforesaid so directs, pay to the Minister such sum not exceeding the amount of that surplus as may be specified in the direction; and any sum received by the Minister under this subsection shall be paid into the Exchequer.
LORD SILKINhad given Notice of two Amendments, the first being, in sub-section (4), to omit paragraph (d). The noble Lord said: My Lords, with your Lordships' permission, I should like to couple the first Amendment on the Paper with the second one, as the two are related. On the Committee stage I moved an Amendment to delete these same lines, 43 and 44, which give the Commission the power
"to dispose of any property for such purposes and in such manner as they think fit."
I thought those powers were far too wide to entrust to the Commission. It was pointed out that there were the preliminary words,
"Subject to the provisions of this Act and to any direction given to them by the Minister."
But the. words, "Subject to the provisions of this Act" are really no great safeguard, because the provisions of the Act provide merely that the Commission are to do the best for the undertaking, and I do not imagine that any Com-
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mission is arbitrarily going to dispose of the property of the new towns just for the pleasure of doing so. I believe that they may dispose of the property possibly under the mistaken view that it is in the interests of the new towns. Nor do I think that the second safeguard, "Subject…to any direction given to them by the Minister", is really a safeguard, because it might well come after the event. The Commission may well dispose of a property of the new town before the Minister has given any direction or before he is even aware that they propose to do it.
Nevertheless, I felt that the points that were made by the noble Earl, Lord Waldegrave, should be met if possible, and I have transferred those words to the next subsection of the Bill, so that the Commission may dispose of any property, but cannot do so without the authority given generally or specially by the Minister. I should like to ask, in connection with this, what the Government mean by "property". Does that include landed property? If it does, then there is specific separate provision for landed property in subsection (5). Does it then mean chattels only? But "property" is a much wider term than "chattels of land". I wish that the noble and learned Viscount the Lord Chancellor were here, and I think he would take the view that "property" does include landed property. So that, as the clause stands, the Commission may dispose of any property, real or personal, which is the legal term, "for such purposes and in such manner as they think fit". The next subsection goes on to say that in the case of landed property—but I am not clear about that; it seems to be quite separate—they can only do so with the authority, general or specific, of the Minister.
I think, in any case, that this is badly worded and arranged, even if it is to mean what I understand the noble Earl explained it is intended to mean. I still maintain that, for the reasons I have given, it is far too wide, and if it really is intended that the Minister should have control over the sale of property other than landed property, which is already dealt with in subsection (5), then it should come within subsection (5) and be treated in the same way as

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freeholds or leaseholds for a term of ninety years or more. It may be said that we ought to allow the Commission to dispose of surplus material that they do not want; assuming that they are carrying on building operations—which I gather they are not going to do—they might have building materials or something of the kind that they want to dispose of, and they ought to be allowed to do so. But I see no difficulty about their doing that under the terms of subsection (5), because the Minister can give either general or special directions. The terms of his general authority could quite cover that kind of sale of surplus material no longer required.
I object to a body which has not even been set up—and we do not know what its composition is to be—being given so free a hand to dispose of any property "for such purposes and in such manner as they think fit". Incidentally, the words "for such purposes…as they think fit" rather contradict the earlier words, "Subject to the provisions of this Act". I should have thought that those words would permit them to override the provisions of the Bill; but I am not sure about it. At any rate, this is a badly-worded provision, and I should be happier if it were left out altogether. However, out of deference to the case put up by the noble Earl on the Committee stage, I have brought the words back so that they will come under the terms of subsection (5), but I have left out the words, "as they think fit". Therefore they will be able to dispose of the property only in accordance with the provisions of the Act and with the authority given, general or special, by the Minister.
I believe that this is a reasonable Amendment. I hope the view will not be taken that if this Amendment is accepted it may jeopardise the Bill because of the coming Election and of the Prorogation of Parliament, and because we cannot leave any legislation over the Recess. If that is the view, then I think it is making a mockery of our proceedings here and we are all wasting our time and breath in moving Amendments with the object of improving the Bill. I am sure the noble Earl will not say that, and I hope he will not imply it. I beg to move.
Amendment moved—
Page 2, leave out lines 43 and 44.—(Lord Silkin.)
5.20 p.m.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL WALDEGRAVE): My Lords, when we discussed these matters with some care in Committee, when it was agreed that we should have a Report stage I gave an undertaking that I would consider these matters again with my right honourable friend. I should like to assure noble Lords opposite that that was not just a phrase. I have indeed consulted my right honourable friend in person, and we have discussed this matter fully. Secondly, I should like to make it perfectly clear that I am not going to ask your Lordships to resist these two Amendments (we will take them together) for the reasons for which the noble Lord, Lord Silkin, said I might—that is to say, that there was not time, and that if we upset this Bill it would not go back to another place before the end of the Session. I am going to ask your Lordships to resist these Amendments on the merits of the arguments I shall try to adduce.
I shall try to be as brief as I can, but I think we will discuss these two Amendments together because the noble Lord said that he had taken something out to put it in again later. I want to try to demonstrate how, in my view, that will not work. Any misgivings there are about paragraph (d) arise from the impression that this paragraph stands alone. I tried to say on Second Reading, and I say again, that this paragraph really does not stand alone, and I have little to add to what the noble and learned Viscount the Lord Chancellor said in the debate last week. The draftsman had two quite distinct things to describe: he had to describe the Commission's powers, and he had also to describe the restrictions that were to be placed on the exercise of those powers. Paragraph (d) relates only to the Commission's powers, and simply describes one of the Commission's powers—a power to dispose of property, and not only land.
The noble Lord, Lord Silkin, asked about the word "property". By "property" we mean land, chattels, money

217
and all forms of legal property, as I understand it, such as property in a lease or in a tenancy. The words, "in such manner as they think fit" are intended simply to indicate that the Commission have powers to dispose of property by a variety of means—sale of freeholds, grant of a long lease or periodic tenancies, or the sale of typewriters. These things have got to be done. The words simply indicate that the Commission are free to decide what form the disposal will take.
LORD SILKIN: And "for such purposes"?
EARL WALDEGRAVE: All within the purposes of subsection (1). In Committee, the noble and learned Viscount the Lord Chancellor explained how the other provisions of the Bill restrict the Commission in their exercise of this power. Subsection (6) of this clause bars them absolutely from giving land or property away, except in so far as they are authorised to make cash contributions:. They must not give land or property away or mortgage it, but they must be allowed power to make contributions, because that is the power on which they are allowed to make contributions towards the welfare amenities that will be dealt with by the local authority, and which we all want them to do so much. Therefore, they are restricted under subsection (5), which makes it clear that the sale of land is restricted.
I come to the second point. Sub-section (5) is restrictive. It is the sub-section which says that they cannot dispose—going gack to (d)—of land without the Minister's consent except, be it noted, that the Commission can sell houses to their occupants. But in all other cases they have to come to the Minister before they sell land. Clause 2 (4) would not be complete unless paragraph (d) remained, because all the powers are listed there. If we take out this important power of disposing of property—that is to say, real property and chattels, as well as land which is restricted by subsection (5)—we should be short of powers.
If we are discussing the second Amendment at the same time—though naturally they will be moved separately—I should like to say this. It is quite
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clear that property in this sense does include chattels and cash, and—I am no lawyer—every form of property. The effect of this Bill, as it stands, is that the Commission have power to dispose of property other than land as they think fit, but they are precluded by sub-section (6) from giving it away except in so far as a cash contribution for amenities.
What is the effect of the Bill as it stands today? This Commission will be a responsible body and must have freedom to decide for itself how it will deal with these assets which, under the previous provisions of the Bill, it has to conserve, maintain and enhance. It your Lordships accepted this Amendment it would require the Minister to consent. That is all that subsection (5) is; it provides that you have to get the Minister's consent to a disposal. If you insert "to dispose of any other property of the Commission" at that point, you are saying that the Commission is fettered by having to go to the Minister even to sell a second-hand motor car or even, as the noble Lord said, some old bricks.
LORD SILKIN: My Lords, I hoped I had dealt with that point. The Minister can give general directions, and he can say in a general authority, "You may sell your second-hand motor cars for all time." I am not suggesting for a moment and, indeed, would not be so absurd as to suggest, that on each sale of a second-hand typewriter they ought to go to the Minister for an authority. The words are already there. The authority can be given generally or specially, and I am suggesting that in matters of this kind it can be a general authority.
EARL WALDEGRAVE: My Lords, I am advised that if you insert, "dispose of any other property of the Commission" at that place it would have the effect of meaning that you must have the Minister's consent to such sales. I do not think your Lordships would feel that that is desirable. I am not in the least making any kind of Party point here, as I am sure the noble Lord would agree. But I should like to point out, and to remind the noble Lord, that in his 1946 Act—Section 2 of the Act, as he will remember—there were provisions as to disposals. The only

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qualification of disposals came in, I think, Section 5 (1) in relation to land. There have never been qualifications for the disposal of those other things before. We think it right that it should be so, as it was in the 1946 Act.
I am sorry if I have not been able to convince noble Lords opposite, but I ask your Lordships to resist this Amendment on its merits—that it would not have the effect it is desired to have; that it would have a restrictive effect, and that it is quite unnecessary, because if lines 43 and 44 are taken into consideration, as the Lord Chancellor said last week, there is no question of a disposals board here and we are perfectly safe. I must ask your Lordships to resist this Amendment.
5.30 p.m.
LORD LATHAM: My Lords, I should like to support the Amendment moved by my noble friend, Lord Silkin, and to assure your Lordships that we do not regard these Amendments as being meretricious or finicky. They really are of some considerable importance, since the Bill confers powers upon the Commission, of which, of course, no one has had any experience at the moment, and no one knows in detail what the constitution will be. The noble Earl said that paragraph (d) of subsection (4) of Clause 2 must not be taken as standing alone. That is precisely the basis of our submissions; it does not stand alone. It purports to give the Commission power "to dispose of any property for such purposes". What are "such purposes"? As I read the clause, the purposes are set out in paragraph (c), which states that they are:
"to promote or assist by any means, and in particular by making advances towards the cost of purchasing land, or of erecting, extending, improving or adapting buildings or works, the setting up or extension of businesses in the town;"
All those are the purposes for which the Commission has, subject to subsection (5), almost unlimited power of disposing of the property of the Commission.
Subsection (5) does not prevent the Commission from disposing of land; it restricts such an operation only if a lease is for more than 99 years; and as regards private dwellings, which could, of course, comprehend 100, 200, 300 or 400 private houses, the Commission does not need to have the authority, whether general or special, of the Minister. The same is the case with other chattels. Therefore land can be disposed of. The transaction can have taken place without the Minister knowing anything about it unless the Minister had previously issued a direction. We suggest that powers of that kind ought not to be given to a Commission of this kind and that the Commission should need the authority of the Minister to dispose of the assets, as has been suggested by Lord Silkin.
My noble friend has dealt with the humorous suggestion that the Minister's authority would be needed for disposing of an individual second-hand car. The Minister, as my noble friend indicated, could issue a general direction, and attached to that direction could be a schedule which could be altered, extended or reduced as time and experience might show, in respect of the assets in regard to which the Commission had power without further leave, and that would leave the other important assets of the Commission disposable only with the authority, whether generally or specially, of the Minister. It is hoped that notwithstanding what the noble Earl has said, this Amendment will be accepted.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided Their Lordships divided: Contents, 12; Not-Contents, 50.

CONTENTS

Alexander of Hillsborough, V.

Henderson, L.

Shepherd, L. [Teller.]

Amwell, L.

Latham, L.

Silkin, L.

Chorley, L.

Lucan, E. [Teller.]

Stansgate, V.

Crook, L.

Ogmore, L.

Williams, L.

NOT-CONTENTS

Aberdare, L.

Bathurst, E.

Cholmondeley, M.

Addington, L.

Bessborough, E.

Clitheroe, L.

Ailwyn, L.

Birdwood, L.

Conesford, L.

Auckland, L.

Buckinghamshire, E.

Crathorne, L.

Baden-Powell, L.

Chesham, L.

Digby, L.

Dundee, E.

Harcourt, V.

Robins, L.

Dynevor, L.

Hawke, L.

Russell of Liverpool, L.

Ebbisham, L.

Home, E.

St. Aldwyn, E. [Teller].

Ebury, L.

Jellicoe, E.

Saltoun, L.

Fortescue, E.

Kilmuir, V. (L. Chancellor.)

Sinha, L.

Fraser of North Cape, L.

Lansdowne, M.

Soulbury, V.

Furness, V.

Limerick, E.

Strang, L.

Goschen, V.

McCorquodale of Newton, L.

Strathspey, L.

Gosford, E.

Monk Bretton, L.

Tweedsmuir, L.

Grantchester, L.

Newall, L.

Waldegrave, E.

Hailsham, V. (L. President)

Onslow, E. [Teller.]

Waleran, L.

Hampton, L.

Reading, M.

Resolved in the negative, and Amendment disagreed to accordingly.

LORD SILKIN: My Lords, this Amendment goes with the previous Amendment. The first Amendment having been defeated on a vote, I imagine that this Amendment would suffer the same fate if it went to a Division. I do not propose to go through a Division. I shall move the Amendment and allow it to be negatived.
Amendment moved—
Page 3, line 11, at end insert—
("(c) dispose of any other property of the Commission.").—(Lord Silkin.)
On Question, Amendment negatived.
5.41 p.m.
LORD SILKIN LORD SILKIN moved to add to subsection (7)
"and shall be used for such purposes for the benefit of the new towns or the local authorities in whose area such new towns are situated as the Minister may determine".
The noble Lord said: My Lords, this again is a matter upon which we had some discussion in Committee. I have drafted this Amendment in the light of one part of the criticism which the noble Earl, Lord Waldegrave, brought to bear against the drafting of my Amendment at that stage.
The issue here is this. If, or when, there is a surplus on the accounts of a new town, what should happen to that surplus? The surplus would arise after payment of all debt charges, interest and repayment of capital to the Exchequer. The Bill provides that such surpluses should go to the Exchequer, presumably in relief of taxation. By the Amendment that I moved in Committee I proposed that any surplus should go to the new town, but after consideration I realised that although in some cases a new town has an authority of its own, in other cases there is a local authority which is rather wider than the new town. Therefore, I now propose that the surplus
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should go to the new town or to the local authority in the area of any such new town, as the Minister may determine. It is left to his choice.
I do not wish to repeat all the arguments for the surplus going to the new towns, but I will summarise them. First, the new towns have been created at the expense of the areas concerned. Local authorities have often levied considerably higher rates than they otherwise would for the provision of services over a period of time, from which they have had no particular benefit. It seems right that those local authorities should be able to recoup themselves in respect of such excess rates when the new towns show a surplus. Secondly, the surplus will have been created by the efforts of the population as a whole, and therefore it is right that it should go to them.
Where the undertakings of any other local authority show a surplus, the profits from those undertakings do not go to the Exchequer. They go for the benefit of the town itself, even though the undertakings may have been provided out of money advanced by the Exchequer. I will take the example of Bournemouth, or of many other seaside towns which have undertakings run by the authority. They are often very profitable undertakings, and they have been provided out of loans granted by the Exchequer. It seems to me that the Exchequer would have equal justification for saying that it wanted the profits of, let us say, the swimming baths or little café-restaurants because it had advanced the money; that it was not satisfied with having its money back, and not satisfied with reasonable interest on the money. The Exchequer might equally say that it wanted any profits which were derived therefrom. This would be just as logical and reasonable as demanding the surplus from a new town The new town will have created the surplus, and in my view it is entitled to it.
I have no illusions about whether the Minister will accept the Amendment, because he stated quite definitely in Committee that the Minister of Housing and Local Government had taken a different view. Nevertheless, I think it right That the House should have an opportunity of expressing its view on the principle of the Amendment.
Amendment moved—
Page 3, line 28, after ("Exchequer") insert the said words.—(Lord Silkin.)
5.50 p.m.
EARL WALDEGRAVE: My Lords, as the noble Lord, Lord Silkin, has said, we deployed this point by argument on Second Reading and also in Committee, and this Amendment is very much in the same form as the Amendment that we had on Committee, except that it brings in the fact that the surplus could go not only to the new town or to the group of new towns, or to the whole twelve of the new towns, but could go to the local authority as well. But that still does not meet my basic difficulty, on the principle which the noble Lord, Lord Silkin, has again mentioned; that is, whether or not these new towns have a right—a sort of equity right—to any surpluses.
I think we must just go over this ground as briefly as possible again, because I believe that this Amendment and the thought that lies behind it are misconceived. We are talking about what happens in the Commission, not of the absolute right of towns like Bournemouth—we are talking about a Commission which has a comparatively short life: in any case of ten or twenty years, which was the period that my right honourable friend spoke of in another place. We are trying to decide what should happen to the surplus. The Commission is required to have regard to the convenience and welfare of the local people, and it has power to make contributions towards the cost incurred by local authorities for their amenities, and for welfare, water and sewerage. No surplus can be required to be paid over to the Exchequer until after provision has been made for these things. We really must not consider, therefore, that the Commission is likely to fail in its project—I think that is quite pessimistic and unjustified.
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We do not regard these new towns as primarily profit-making concerns, but it is still necessary to have some provision to regulate the situation if a surplus should arise. I personally think that the whole of this argument is a little ephemeral, because I see no big surpluses being available in any very near future, if we take everything into account. There may be a surplus on one account, but on another account there may be a big deficit. I am bound to say that Section 15 of the 1946 Act, the Act which set up these new towns, provides that, on winding up, the surpluses should be paid over to the Exchequer or that any loss should be borne by the Exchequer. If that was right then, I think it is right now.
Should the local authority have some of the surplus because of the enormous burden (to use the noble Lord Latham's words in Committee) the local authority may have in these new town areas? It is because of the heavy burden that the local authority has while the new towns are in their infancy, and while all these amenity and welfare considerations have so much to be taken into consideration, that the Commission has power to contribute to the cost of the amenities. The fact that it contributes to them will use up that surplus, if there could conceivably be a surplus, if the Commission does its duty by the amenities. It has to be remembered that if the Commission has done its duty by its amenities, and has contributed towards them to a considerable extent, not only will there be no surplus, but there may be a highly increased rateable value, which of course, to put it mildly, the local authority will find convenient.
The Government concede that many amenities are still lacking at the present time, though much of the leeway may be caught up before even the Commission takes over and during the lifetime of the corporation in each new town. As I have mentioned, this Bill is legislating for ten or twenty years, and if the Commission really makes handsome profits—nobody can guess—one has to consider seriously what should be done with these profits at the end of that lifetime, when, by definition, the amenities should really have reached saturation point. It would be ridiculous to go on equipping the new towns with more amenities in that situation Perhaps the

225
surplus is to be used as a sort of undisguised rent subsidy. What do the new towns want these hypothetical surpluses for? We have to consider what that would lead us to. I do not know whether the neighbouring villages in South Wales to Cwmbran, or the neighbouring villages in County Durham to Peterlee, would be particularly pleased. I do not know what they would have to say if there were this special spending of these hypothetical surpluses. They would probably say, "Let us all move to the new towns". I do not think that would be justice at all.
But I come back to my basic point, that no Chancellor of the Exchequer can properly earmark one section of his revenue for one particular point. I must restate that argument as the other argument was restated. It would not be right and it would not be done; indeed,

WESTERN AID FOR UNCOMMITTED COUNTRIES
6.7 p.m.
EARL JELLICOE EARL JELLICOE rose to call attention to the need, which was emphasised by the recent Atlantic Congress, for a definite, long-term and consistent policy towards those countries which lie outside the Atlantic Community and also outside the Communist bloc aimed at en-
I am not really sure that people would want that to be done when the time comes. If the Chancellor of the Exchequer has a surplus on any account we do not want it to be earmarked for new towns or something else on a sort of special pleading; we want it for whatever may be the great thing that the Chancellor has in mind to use surpluses for. It may be for increasing pensions or reducing taxation. I do not think that the principle behind this Amendment is acceptable. No really new argument has been adduced other than that the Amendment has been slightly widened to incorporate local authorities as well as new towns. I must ask your Lordships not to accept this Amendment.
On Question, Whether the said Amendment shall be agreed to?
Their Lordships divided: Contents, 13; Not-Contents, 47.

CONTENTS

Alexander of Hillsborough, V.

Lawson, L.

Shepherd, L. [Teller.]

Amwell, L.

Lucan, E. [Teller.]

Silkin, L.

Crook, L.

Macpherson of Drumochter, L.

Stansgate, V.

Henderson, L.

Ogmore, L.

Strabolgi, L.

Latham, L.

NOT-CONTENTS

Aberdare, L.

Ebbisham, L.

McCorquodale of Newton, L.

Aldington, L.

Ebury, L.

Margesson, V.

Ailwyn, L.

Fortescue, E.

Monk Bretton, L.

Airedale, L.

Fraser of North Cape, L.

Newall, L.

Auckland, L.

Furness, V.

Onslow, E. [Teller.]

Bathurst, E.

Goschen, V.

Reading, M.

Bessborough, E.

Gosford, E.

Robins, L.

Birdwood, L.

Grantchester, L.

St. Aldwyn, E. [Teller]

Buckinghamshire, E.

Hailsham, V. (L. President.)

Sinha, L.

Chesham, L.

Hampton, L.

Soulbury, V.

Cholmondeley, M.

Hawke, L.

Strang, L.

Clitheroe, L.

Home, E.

Strathspey, L.

Conesford, L.

Jellicoe, E.

Tweedsmuir, L.

Crathorne, L.

Kilmuir, V. (L. Chancellor.)

Waldegrave, E.

Digby, L.

Lansdowne, M.

Waleran, L.

Dundee, E.

Limerick, E.

Resolved in the negative, and Amendment Disagreed to accordingly.

suring that their political independence is firmly based on a sound economic foundation; and to move for Papers. The noble Earl said: My Lords, I beg leave to move the Motion standing in my name. Last month a rather remarkable Congress took place in London. It was remarkable in that it brought together some 650 eminent citizens from the countries of the Atlantic Alliance. Perhaps I should correct the figure: 649 were eminent, and there was myself. But for me, my Lords, the Congress was chiefly remarkable in that there was an almost unanimous recognition of the

227
fact that perhaps the major task confronting our countries in the future is that of trying to reach a solid relationship with those countries which lie both outside our Atlantic Community and also outside the Soviet bloc; or, to be more precise, should I say the Sino-Soviet bloc?
Which are these countries? They are very varied, yet they have certain marked common characteristics. This great arena of countries, peopled by more than 1,000 million people, lies mostly to the South, in Latin America, in Africa and the Middle East, and in Asia. Very few of their peoples are of European stock. Most of them have a different pigmentation from your Lordships. Almost all live in countries which for 300 years or so have been in one way or another dependent upon Western Europe. All share a passionate belief in political independence, whether they have recently acquired it or still seek to acquire it. Many feel an equally passionate desire to stand aside from the great contest which wracks our Northern societies, the contest between the concept of the free society and the concept of Communism. Finally, my Lords, all these countries are poor and all are under-developed.
This, I feel, is a problem of increasing urgency. In this revolutionary age change of all sorts steals on us much more quickly than we expect. Who of us would have expected ten years ago, for example, that we and other Colonial Powers should find ourselves in such difficulties in Central and Southern Africa to-day? In economic terms the problem is urgent, since at the present time we are faced with two simultaneous revolutions in the world: the revolution of rising expectations of the poorer populations and the revolution of their exploding population. So it is that, as these countries gain one rung on the ladder of economic progress, they are pulled down two rungs by the drag of population. It is still a fact, as my noble friend Lord Strang reminded us vividly some months ago, that the average annual income of an Egyptian is less than the price of a television set. What is more important, these populations are becoming conscious of their poverty. It will not be possible, therefore, my Lords, for this world to continue, half
228
rich and half poor, without a series of the most violent convulsions.
The other reason, of course, why this problem is so urgent is that the Communists see in this other third of the world the key to world domination. The bear of Red Russia and the dragon of Red China are waiting impatiently in the wings. We must recognise, too, that the Communists have powerful advantages. They work from interior lines; they work to a long-term strategy; they work with a total tactical unscrupulousness. And, above all, they work with unity of purpose. They have cleverly managed to dodge the stigma of colonialism. Finally, Red Russia has shown, and Red China is showing, how an undeveloped country can, by its own exertions, by the boot-strap technique, albeit at a fearful cost in human freedom, pull itself up to a place in the economic sun. I think that, for Asian and African peoples, our industrial revolutions are rather vieux jeu; but the industrialisation of Red China and of the Soviet Union are taking place before their eyes and, indeed, almost on their doorsteps in certain cases. For hungry people, for thirsty people, these great programmes which they see going on in front of them are an intoxicating draught.
The Soviet challenge is, I feel, a compelling motive for decisive Western action. It sharpens our dilemma and increases the penalties of failure. But it is a negative motive, and the Atlantic Congress felt that there were other, and stronger, positive motives for action. In part these are moral. As we in the West have come to believe that slum conditions in our own societies cannot be tolerated, how can we sit idly by while the rich countries become richer and the poor, if anything, poorer? We must remember that in this contracting world the slums of Baghdad, of Johannesburg, of Karachi and of Calcutta are as close to us to-day as the slums of Liverpool and Manchester were a century ago. There is also the powerful and compelling motive of economic self-interest for us to help these countries to help themselves. It is the great trading nations of the West who stand to gain most by the conquest of world poverty and the extension of world prosperity.
The Congress considered that three principles should underlie our Westerns

229
policies in this field. The first was the recognition of the primacy of politics—and, indeed, psychology—over economics. If the West does not get its politics and its psychology right with these people, it will not get its economics right with them. Our relations with these new and emerging countries must therefore be grounded on a basis of partnership—real partnership. The second principle was the recognition that for poor and under-developed countries political independence is a fiction unless it is buttressed by real economic independence. But to attain this economic independence, which must be mainly won by self-help, massive and sustained assistance from the West will be required. The third principle was that the policies in this field must receive high and continuing priority from our Western Governments—as high a priority, indeed, as we accord to defence or to the Welfare State. This means that we in the West cannot rely, as I feel we have relied in part hitherto, on ad hoc, piecemeal, inconsistent, and unconcerted policies.
In the political field, the application of these principles will involve quick, and sometimes painful, adjustments of policy. They mean that we must "go with the grain of nationalism." In certain areas—in the plural societies of Africa, for example—it means that we must move faster than we or the European communities there may wish to go. In the words which Sir William Hayter used in an admirable paper submitted to the Congress:
"The Western Governments ought to examine quite coldly, in the context of the main world struggle between the West and the Communists, how much positive advantage to their own countries and to the West as a whole continues to reside in each particular case where nationalist forces are still being opposed."
Since our aim is to give aid as between equals, it will defeat our purposes if we attach political or military strings to that aid. We shall defeat them too, I feel, if we seek to tie our aid to the adoption by these new countries of our practice of democracy. Their external freedom is our concern, but their internal freedom is their concern. The criterion which we should apply is rather the efficiency of their administrations; their ability effectively to absorb the aid which is given to them. This presupposes a degree of administrative efficiency; it also presupposes a degree
230
of popular support. But it does not presuppose that Mr. Nkrumah or General Ayub Khan or Mr. Nehru should model themselves on Mr. Edmund Burke or Mr. Stanley Baldwin.
In the economic sphere, our effort, as the Congress saw it, should be deployed in three main fields. The first field is money. Massive injections of foreign capital are required to enable the underdeveloped countries to make the so-called "break-through" (I think that is the term the economists use, though I am not one myself), so that their economies can become truly self-sustaining. The experts suggest that the under-developed countries need to invest a sum equivalent to some 12 per cent. of their national income each year in order to render their economics really self-propelling. They also agree—and it is a remarkable thing, given the fact that they are experts, that they do agree—that in order to do this these countries will need approximately double the amount of external assistance they are receiving at the present time. They will need, in fact, something of the order of £15,000 million extra over the next decade—something of the order of £1,500 million each year. This is a very tall order indeed. But, my Lords, it is not all that tall: it is about one-tenth of what the United States is spending this year on defence.
How is this money to be found? Partly through private investment, and partly through bilateral aid from Government to Government. In addition, the Congress believed that everything possible should be done to reinforce the international agencies of aid—the U.N. agencies, and agencies of the U.N. like the Special Fund, the I.M.F., and the World Bank. Agencies like the World Bank—and the World Bank is perhaps a particularly good example—have great experience and great expertise. They have gained the confidence of the recipient countries. Very often these countries will accept from them advice and conditions which they would not tolerate from a national Government.
In this respect, I should like to ask the noble Marquess who will be replying two questions. The first concerns the newly established United Nations Special Fund. As I understand it, the purpose of this Fund is to act as a spark for

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development. It is in the safe hands of Mr. Paul Hoffman, of Marshall Plan fame. He came to this country hoping to persuade Her Majesty's Government to raise their present contribution to this newly established Fund, this fledgling, from the present modest figure of about one million dollars. He failed. Could my noble friend perhaps let us know a little more about this?
My second question relates to the proposal for an International Development Association, a proposal which the Congress officially backed. On the whole, the delegates were against the creation of new agencies—goodness knows! we have enough of them already—but they did make an exception in favour of this particular one; and I think they are right. It is a good egg and there seems to be a good chance of hatching it out fairly soon. It would be designed, as I understand it, to meet a very real need; the provision of development loans to underdeveloped countries which cannot be financed on hard currency repayment terms. The International Bank makes "bankable" loans to the under-developed countries. This agency would provide for what is also needed, and what indeed all of us like—"soft" loans. I myself see an advantage in such loans being made available by an international agency, perhaps under the wing of the World Bank. Most important of all, this proposed new "soft" loan agency is a real starter, since it has received strong off-the-course backing from the Americans. I hope that Her Majesty's Government will do all they can to ensure that this egg is conceived in as big a way as possible and that it is hatched out as soon as possible.
I noticed that Sir Oliver Franks has suggested that the initial capital of this proposed Association should be in the region of £1,000 million and that our share of it might be between £100 and £150 million. I hope that Her Majesty's Government are thinking as big as the bankers. There is little point in putting a little money on a lame horse. Money on a great scale is certainly needed. However, the magic wand of capital by itself cannot do the trick. It is equally important that the money should be wisely spent. This is no easy matter, since the rapid development of an under-
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developed country raises actute social and economic problems, as well as purely economic ones. One of the greatest of these problems is that such development, unless wisely directed, can increase the gap between the relatively well-to-do urban populations and the impoverished rural masses. I well remember in Baghdad the unspeakable misery in which the hundred thousand or so peasants, who had been sucked in from the country by the lure of the jobs created by industrial development, were living.
It is true that large-scale schemes of development are needed, but equally badly needed are small-scale schemes, in particular those connected with agriculture—the provision of rural houses, local irrigation and the improvement of small-scale agricultural techniques. Here I am sure our Western countries could do far more to help the undeveloped countries than they have done hitherto—and perhaps make the Communists look a little foolish into the bargain. For although the Communists have certainly evolved a highly successful technique of industrialisation, one fact sticks out like a sore thumb in their world—their failure over agriculture. Men are, in fact—and I should like to insist on this, as the Congress insisted on it—just as important as money.
Some of these men—technicians, economists and administrators—have to come from outside. We have to provide them. And here I believe that we can do a great deal better. I do not suggest that we should flood the underdeveloped countries with a horde of Western technicians. It is not the quantity that counts; it is the quality. I feel, too, that here the West may perhaps be able with profit to take a page from the Russians' book. Their technicians are carefully selected. They are well-versed in the customs of the countries to which they go; and, above all, they speak the language. I do not suggest that we can, or should, ape their methods, but I do suggest that we can, and should, improve our arrangements on the national level for supplying technicians and administrators, and above all that we can make a far better division of effort and far better co-ordination of resources between the Western countries. Perhaps we should seek to establish, as was suggested by Sir Leslie Rowan in his Paper to the

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Congress, an international technical and economic service, possibly under the I.M.F. and the World Bank, but staffed by a few men and women of the highest quality and qualifications.
But again, in the human sphere, it is on self-help that the under-developed countries must ultimately rely. It is their technicians, their economists, their administrators, who must run their development programmes. Yet the West can help these countries to help themselves Nowhere can we help more than in the field of education. We can help by finding more places for foreign students in our colleges and universities in the West. We can help by planning to enlarge our schools, universities and technical colleges in order to cope with this great need. We can help by doing far more than we are doing at present—for example, in Africa—to underpin the Administrations and the economies of the emerging countries with a really solid infrastructure in education. We can help, too, by encouraging and making it easier for our teachers and professors to take up appointments in the schools, colleges and universities of these developing countries.
The third field to which the Congress felt the West should direct its close attention is that of its trade relations with the developing countries. Since the accent is on self help, surely we must do all that we can to organise things so that those countries can make their way in the world by trade rather than by aid. And here we must be consistent. To my mind, it is totally inconsistent for us to adopt liberal aid policies towards developing countries if, at the same time, we pursue illiberal trade policies.
The programme which I have sketched out is undoubtedly a strenuous one. It demands from the West an effort of imagination, organisation and will equal to that which inspired the Marshall Plan. Then, faced with the devastation of Europe after the war—faced with an extraordinary situation—the United States took extraordinary measures to help Europe to help itself. Now, faced with the poverty of the other third of the world, we, in my submission, must take extraordinary measures to help the under-developed countries to help themselves.
I believe that in this strenuous task the United States, Britain and Europe should pull together. This time the lead must be shared: the impulse cannot come only from the United States, but must come also from Britain and Europe. There are many reasons why it should. Europe, with its political, historical and territorial extensions, and Europe, as the largest importer of raw materials in the world, has a vital stake in the prosperity and stability of these countries; and Europe is now rich. To take only one yardstick, in the last ten years the gross national product of the European N.A.T.O. countries has increased by 50 per cent., and in that same period the gross national product of the United States has increased by only 35 per cent. One glance at Paris, or Hamburg, or Vienna, or Milan, or, indeed, London, confirms this prosperity. In Europe, too, there are great untapped reserves of skills and resources which should be harnessed to this yoke. France, it is true, devotes more of her national income to this purpose than we or the Americans do. But it is idle to pretend that Western Europe could not do more. Possibly the French could; I strongly suspect that we could; and I am quite certain that Germany, the strongest economic unit in Europe, could.
I said just now that I thought the lead should come from Britain and Europe. I submit that it should come from Britain in Europe. There are many reasons why we, as the centre of the Commonwealth, should take the lead over this matter, but there is, I think, a particular reason at present. In the European context, the Six, the countries of the European Economic Community are now paying much attention to the development of the overseas territories linked with them. We are trying to organise the Seven. My hope would be that, if we succeed, we should immediately propose that both groups should jointly study this whole problem of aid to the under-developed countries with a view to seeing how the policies and plans of both groups should best be co-ordinated and developed. This is desirable in itself to ensure that Europe's energies and reserves on this front are fully and effectively deployed. But it might also be helpful as opening up to the Six and Seven a field for fruitful and positive collaboration—as strengthening that bridge between the two groups

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which we hope to build. I believe, too, that we already have in the O.E.E.C. the obvious instrument for co-ordinating our policies towards the under-developed countries—a good machine, and one which is lying rather idle at present. it is for these reasons that I should like to suggest that Her Majesty's Government should take the lead, in concert with our friends and neighbours in Western Europe, in initiating high level discussions, possibly within the O.E.E.C., with a view to putting to the Americans at any early date a considered, agreed and concerted European programme.
To conclude, my Lords, I believe that the crisis of our era is largely a crisis of leadership in the West. As a result, what do we so often see?—so often, in fact, that we now seem to assume that it is part of the natural order of things. What we see is the rather pathetic spectacle of the West dancing, a little out of step, to a Muscovite tune. But surely, my Lords, if ever a challenge cried out for leadership, it is this—one of the great challenges of our times—the task of helping half of the world to pull itself up in freedom out of poverty. Of one thing I am sure. I am sure that we in the rich West have the resources for this task. We have the men, and we have the money, too. But have we the will? I beg to move for Papers.
6.35 p.m.
LORD OGMORE: My Lords, we are all grateful—and this is no formal tribute—to the noble Earl, Lord Jellicoe, for putting down this Motion and also for the brilliant speech he has made, splendidly delivered and full of common sense. I hope that the conclusions of it will make the impressions they should do upon the noble Marquess who is to reply, upon the Government and upon a much wider field outside the United Kingdom Government to which, to some extent, his words were addressed. I think the noble Earl was quite right in putting down this Motion to-day, although it is perhaps, by our standards, a little late in the evening for a debate of this character to come on. We are going away for some three months at the end of next week, and it would have been odd and inappropriate, in my opinion, if we had gone away without a word being said about the Atlantic
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Congress which drew this large number of people to London and without a word being said in this House on the problem with which the noble Earl has dealt.
I should like to congratulate the Congress organisers on the Atlantic Congress, and I would pay tribute to the leader of the United Kingdom delegation, the noble Lord, Lord Crathorne, who has just joined our ranks. There has been, I understand, in uninformed quarters some criticism that the Congress was held. There are some, again uninformed, who feel that a good deal too much money was spent on it. Well, it was not Government money but private money, and, in my view, it was well worth every penny that was spent. It was necessary after ten years for representatives of the Atlantic Community to come together in London or elsewhere to examine what had happened in those ten years; to look at the problems which faced the Atlantic Community, and to give some thought to the future. Looking at it from a more parochial point of view, the delegates saw London, which was looking its best at that particular time, and they sampled our hospitality, which, as we all remember, was on a generous scale, both from the Government and from private benefactors. In fact, those of us who were hosts must, I think, pay tribute to the noble Baroness, Lady Elliot of Harwood, who was indefatigable in this field; indeed, any of us who for one moment sought a little refreshment to sustain us in our arduous duties of hospitality found her at our elbow looking reproachful and urging us on to fresh endeavours. As I say, she was indefatigable, and we owe her and all the ladies who helped her in this task a deep debt of gratitude.
I think it was important, too, that the various representatives, not only Parliamentarians but others, should have the opportunity of meeting many of the leaders of the various communities. The Congress had the honour of being opened by Her Majesty the Queen and the Duke, and afterwards they met, or had the opportunity of hearing, a large number of our distinguished figures, including the noble and learned Viscount on the Woolsack, the Prime Minister, Mr. Gaitskell, my noble friend Lord Attlee and others; and, of course, we in this country had the opportunity of hearing

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the distinguished leaders from other countries.
May I now turn to the Motion before the House? In the simplest and most dramatic terms it can be seen at the present day in the ideological conflict between India and China. India's dilemma is of a vast Parliamentary democracy on an hitherto unheard-of scale, with a population increasing every year by that of Greater London; with a national income of less than £25 per head of the population per annum; with a cattle population almost as great as the human, and much of it quite useless; and with an expectation of life steadily prolonged by medical science. Can this problem, which has never been faced before, so far as I am aware, in the history of the world, be faced and solved by the methods of Parliamentary democracy, or must India follow China's example and try to do it by totalitarian means? The same problem with which India is faced faces other countries both in the Commonwealth and outside, although, of course, not to the same extent.
As the noble Earl, Lord Jellicoe, has quite rightly said, the situation is not getting better but worse, in so far as the rich countries are getting richer and the poor countries poorer. We have, in a way, Disraeli's two worlds on an international, if no longer on a national, scale. Mr. Paul Hoffman, speaking in Geneva last week, addressing the United Nations Economic and Social Council, said that sixty of the eighty-two nations in the United Nations could be classed as less developed with a population of 1,000 million and with an average income of about £43 per head per annum, as compared with an average of £285 per head per annum in developed countries. The population is increasing in the under-developed countries by 2 per cent. whereas the increase in their income is increasing by only 3 per cent., or 6s. 8d. per annum. When you get down to brass tacks, that is in fact what is happening-there is an increase of 6s. 8d. per head per annum in the under-developed territories, which is not very much.
As the noble Earl has said, the Atlantic Congress was preoccupied with this problem probably more than any other. There is no doubt about it that there has been an enormous change in
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the climate of opinion in N.A.T.O. circles in the last two years. In the 1957 conference in Paris I made a speech drawing attention to the problems of Asia and Africa, and it made the same effect as a stone makes dropped in a pool of water—that is, none at all. Less than two years later we could see at this conference that the attention of the delegates from all over the Western world was concentrated upon it, so that it shows what an enormous change there has been in the climate of opinion in less than two years. Eight resolutions of the Congress referred to this problem and two of them, as the noble Earl has said, referred to the formation of new organisations. One was the World Development Corporation and the other an International Development Association. A third suggested that the implementation of policies in this field had better be carried out by N.A.T.O. members severally or through joint agencies less associated in the public mind with military policy than is N.A.T.O.
There was general agreement on the last resolution—in other words, that N.A.T.O. itself does not want to carry out these particular policies—but there was not, I think, general agreement on the other two resolutions; that is to say, on the formation of these new organisations. As the noble Earl has said, the United States Government and also the United States delegates at the conference favoured the creation of new organisations for this purpose. I think it is also true to say that, generally speaking, the United Kingdom delegates did not. This was made clear in speeches by delegates and also by speeches at the conference. I thought the Prime Minister made this clear, and certainly Mr. Hugh Gaitskell made it very clear in his speech, that we do not favour the setting up of new organisations for this purpose. He felt that there was no lack of organisations. What is needed is for the existing national and international organisations to have their resources increased, their scope widened and some of their present limitations removed. I note since the Congress was held that Mr. Kishi, the Prime Minister of Japan, has also advocated a new international bank or a fund for Asia, lending in and being repaid by soft currencies. This, as the noble Earl has said, was the United

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States policy at the New Delhi conference.
There you have a difference of opinion, not as to the ends in view but as to the means. I suppose it will have to be threshed out in Government circles of the West, in the N.A.T.O. Conference of Ministers and at the N.A.T.O. Parliamentary Conference which is to be held in November in Washington. Our experience in this field is of value, because we have probably had more experience in dealing with under-developed territories than almost any country in the world. I should have thought that the short supply of funds, hard and soft, of "know-how", of managerial experience—and that is terribly important in this field—of professional men and of technicians was the real problem. At the moment I have this problem personally on my desk, because a country in the colonial territories in which I am interested has asked me to find a technician or rather a professional man of a certain type for them, and I am finding it very difficult even to get one candidate. I am told by those who know best what the position is in this field that I shall be lucky if I get one candidate. So the setting up of organisations in themselves is not going to have much effect if the men and the resources are not there.
Although a few years ago materials were in short supply, I do not feel that that is still the case. It is not materials, but the question of men and money. We have a large number of agencies in the West. We have national agencies in our own country, which are very well tried; that is to say we have the various Government agencies, and we have private enterprise agencies, and then there are the international agencies. Is it going to be of much use to set up a new one which will inevitably be competing in this close and narrow field for the men and the money that we require?
Last week the Commonwealth officials met in London under the chairmanship of Sir Roger Makins, who also played an active part in the Congress, and they met to consider means of mobilising resources for Commonwealth development. I should be interested to know what their conclusions were, if the noble Marquess is in a position to tell us. At Montreal, the Commonwealth Develop-
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ment Bank was suggested. Was this considered, and, if so, did the views of the British Government, which I imagine are similar to those I have now been stating, prevail, or were some of our Commonwealth colleagues inclined still to favour a Commonwealth Development Bank?
Recently there have been two other related conferences which I might mention shortly because they all bear on this problem. There was the study group on Asian and African languages held in London in May, which reported, among other things, that in order to establish a better relationship with the people of Asia and Africa, and to understand them and their cultures, a knowledge of their language is necessary. The study group drew up a list of some seventy Asian and African languages, a knowledge of which they felt was essential. It set out proposals for recruitment and training of teachers and research workers, grants to students, establishment of study institutes and other schools, the provision of materials necessary for the teaching of these languages and good library facilities.
Then there was the Commonwealth Education Conference, which was opened by the noble Earl the Leader of the House, which considered how to deal with the 1,000 new places in Commonwealth universities which were agreed upon at the Montreal Conference, 500 of which are to be in the United Kingdom. I should like just to quote a short extract from The Times relating to a speech by the leader of the Pakistan delegation, Mr. Sharif:
"Mr. Sharif said that some nations were achieving continuously higher standards of living; but others, through lack of resources both in capital investment and in trained manpower, are finding it difficult to maintain even their existing low standards against rising population.
'The only way for us to escape from this misery-go-round of poverty, ignorance, and ill-health is to close the gap between the advanced and the underdeveloped countries by training up to the highest level of quality a host of scientists, engineers, technologists, and agricultural specialists.'"
I mention those two conferences, both of which dealt with education, because I think it shows that it is not just a question of even providing money. It is a question of getting down to bedrock and providing people like teachers before

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you can really in many cases get the development that is needed going.
I have always felt that in this field research is absolutely vital. Have we enough of it? And still more, do we make enough use of the findings of research? I remember some years ago reading a report of the United Kingdom Research Organisation which said at that lime the industrialists and manufacturers in this country were ten years behind the findings of our own research organisation; in other words, there was a ten years' gap in which they had not caught up. I always have a suspicion—I may be wrong—that in this field, even in the Commonwealth, still more in other under-developed territories, we are not sufficiently looking at the findings of the research bodies and applying them.
The Americans, at any rate, in their own country, are very good at this. They do get hold of the findings of research bodies or inventors, whether from their own country or anywhere else; and, as we know only too well, quite a number of the advances in material things for which they are famous were invented somewhere else, usually in this country, turned down here and then taken to the United States. I have mentioned before, as an example, Group Captain Whittle and the jet aircraft. The jet aircraft patent was allowed to lapse because the Air Ministry would not put up £5 for it to be renewed; and Whittle was at that time a young man in the Air Force and had not got £5. So this great invention, from which all jet aircraft and turbo-prop aircraft now stem, fell. The first patent fell because no one would put up £5. I cannot imagine that that could happen in the United States.
I do not feel that this is solely a matter for the Government. I believe that this development should be a combined operation in the West. Not only Governments, but nationalised industries, private enterprise, co-operative societies, trade unions and professional organisations should all join in a really combined effort; and without such a combined effort. I do not believe that any scheme will be a success. The noble Earl, Lord Jellicoe, mentioned other Western Powers who have funds. There is one country he did not mention that has enormous funds—Switzerland. Whether anybody will ever get any money out
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of the Swiss I do not know, but they certainly have enormous funds. I have argued this many times in Switzerland with the Swiss and told them in so many words that they have no tradition of development of this kind, of putting money into under-developed countries. Whereas you can get any amount of money in Switzerland at incredibly low rates of interest to build hotels and offices and that sort of thing, nevertheless they have no tradition in respect of the under-developed countries. If this project of the Outer Seven comes off, I hope that one of the things they will be able to do is to persuade one of the seven, namely Switzerland, as well as the other six, to put funds into this deserving cause.
There is very little more I want to say, except that I would emphasise what the noble Earl has said about aid not being sufficient in itself. There must be aid and trade. It is no good refusing the entry of goods of people whose economy we have built up in order to produce those goods; yet too often that is happening to-day. We are here now, one might say, as a Commonwealth or at least an under-developed territories habilitation society; but another day, on another debate, we shall find the protectionist society coming along for some industry or other, and they will not be at all inclined to let the goods come in from these territories. Indeed they are not. Probably there are now on the Order Paper one or two Motions strongly condemning the Government for doing this particular thing, namely, going into this Outer Seven pact.
Another thing we must not do is to allow the West to make artificial products which would compete unfairly with the only products, the raw materials, which they can produce or provide. We have got to be honest. Otherwise we are a lot of international Pecksniffs. We must take great care not to make our aid part of the cold war. People are not really interested in being "anti" anything. We must convince them that we are "pro" them and not "anti" anything. By the same token, we must not attach strings to our aid: there is too much of that going on. Bridges and other similar structures are labelled, "This is put up by such-and-such an aid fund". Even where there is a loan, and not aid, where there has been a grant which has to be

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repaid, there is a label set in the concrete by means of a copper or brass plaque saying that the building, or whatever it is, has been provided out of some international or national fund. That is not the way to do it.
The noble Earl, Lord Jellicoe, has mentioned political stability. I agree that economic stability is a very important adjunct to political stability. Recent experience in newly emerged territories, as well as in older ones, makes us wonder whether perhaps our constitutional model is in all ways suitable to Asian, African and South American countries. In a few years in many cases they have had to superimpose Western-type institutions and ways of thought on ancient tribal or other collective systems. Naturally, as we see for instance in Ghana, stresses and strains have developed. I believe that we must give these countries every sympathy based on understanding of their problems and as much assistance as we possibly can. I am sure that, with this assistance and with this sympathy, they will work out a new pattern of democratic society, one which will harmonise with the old and which will also blend the best of their ancient systems with our own. The fact that so many countries are experiencing these difficulties is no reason at all to my mind why we should not help them. Indeed, it is all the more reason why we should. Only in this spirit, I feel, should our aid be given, and only with this spirit of sympathy and understanding will our aid be a success.
7.0 p.m.
LORD GRANTCHESTER: My Lords, my remarks will be little more than comment from a rather different point of view upon some aspects of the vast problem which the noble Earl, Lord Jellicoe, has posed. The noble Earl has raised political and religious as well as economic questions, and he has done us a service by bringing this Motion to debate in your Lordships' House, particularly following the Congress recently held in London at which a great deal of discussion took place upon the subjects mentioned in the Motion.
I must admit that I was somewhat alarmed at the manner in which the Congress was staged. In many cases the delegates were almost self-appointed,
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responsible to no one and quite unofficial. Thus the door was opened to anyone with a bright idea to canvass, as well as to many organisations engaged in propaganda—well-meaning, no doubt, but propaganda, nevertheless—for such ideas as world government, the reform of the United Nations, federalism, the forcible redistribution of national incomes or physical resources, and so forth. All this would not have mattered, and might even have done some good, through a free exchange of ideas, if the unofficial character of the Congress could not have been called into question. I was afraid that misunderstandings might arise when Her Majesty graciously consented to open the Congress and Members of Her Majesty's Government became associated with it.
Some rather wild suggestions, in my opinion, were made, not only in discussions but in some of the papers presented; and representatives of some countries might, I felt, consider that they reflected the policy of this country, a possibility which might eventually lead to a charge of bad faith. One of the advantages of our having this debate will be to correct any such misapprehension and to enable Her Majesty's Government to state their views on what is sound economic policy. Before territories cut themselves off from those who are associated with them, and to whom they have been looking for guidance in the past, it is at least desirable that they should learn the ways of sound economic development. I shall confine myself to what is, in the broadest sense, commercial development. Defence aid and welfare aid such as that given to our British Colonies through the Colonial Development and Welfare Fund are matters which need separate consideration.
My Lords, I hope that something will be said to expose some of the fallacies current to-day among those who discuss the economic development of the less industrialised territories. The argument usually starts with the proposition that there are in the world developed and rich nations, such as Britain and the United States, and that there are underdeveloped nations, which include most of the rest; that these under-developed nations are caught in what is called a "vicious circle of poverty"; that this circle can be broken only, first, by the

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adoption by the under-developed countries of elaborate planning measures with respect to their domestic economies and, second, by their receiving large injections, as the noble Earl, Lord Jellicoe has said, of Government help from the richer countries.
The term "under-developed" is applied on purely materialist considerations, on a comparison of real wages and capital per capita. Such calculations do not always, I think, reflect the true position. On such a comparison, when we speak of under-developed nations we are really talking of more than half the world—about every nation, that is, except Western Europe, the United States, Canada, Australia, New Zealand, and possibly Japan and Malaya. All the rest are under-developed if one uses per capita real income figures as the basis for comparison. Yet these underdeveloped nations are not homogeneous; they exhibit wide differences of character.
It is not unreasonable to assume that these so-called under-developed countries would benefit from the application of the same economic principles from which the richer nations have benefited. What is not emphasised is that economic progress has occurred in the world; that poor nations have become rich; that there was a time when Europe and America were poor by to-day's standards. There has been, in these so-called rich countries, development on a colossal scale without central planning, without Government aid, with only normal private investment. This applies not only to the development of the United States. Western Europe itself is an example of normal development through market means over a comparatively short period. One could cite also an Eastern country, Malaya, for instance, which showed enormous advance in the early part of this century through the normal processes of the market. A good deal of progress on similar lines has already been made in West Africa.
In considering countries which are still on a subsistence economy, we must realise that it is far more important for such societies to begin to pass to a market economy on an exchange basis than it is for them to undertake huge industrial projects. There is in some quarters to-day a totally false emphasis on big
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and heavy industry, as distinct from agricultural development. Most of the so-called under-developed territories are heavily agricultural: agriculture is their mainstay. It is not desirable to establish in them, without any intermediate stages, heavy industrial plants such as steel mills and the like, as is often proposed, without any regard to economic conditions or to the profitability of such industry if it is established. The big industries in the rich countries have all grown from small beginnings. There was the blacksmith's shop, and, after the blacksmith's shop, a slow building of very small industrial units. To believe that countries advance simply by setting up large industrial units, irrespective of the conditions in which they can operate, is one of the fallacies of the times. Nor, if we are to learn from the past, is development best achieved by Governmental projects. It is achieved by the work and initiative of thousands of enterprising people starting in a small way, with limited capital, and extending their operations as success develops.
That does not mean that, whatever we do and however we behave, all will be well. As we see territories passing from a subsistence economy to an exchange economy, we must be prepared to join in the exchange, as both the noble Lord, Lord Ogmore, and the noble Earl. Lord Jellicoe, admitted. Sound economic development depends upon free trade between territories. It is quite hypocritical to say that we wish to see the backward territories advance and then to erect barriers against the import of the products of developing lands. Moreover (this point was not mentioned by either of the noble Lords), it is equally hypocritical to subsidise agriculture with the same object of keeping out the agricultural products of the developing territories. The provision of gift capital, which is sometimes suggested, even if it were desirable, is no cure if the products which result from the use of that capital are excluded from the markets of the givers.
I have already mentioned the undesirability of judging standards by material tests alone. With all the advances made in the material field during the last 150 years, we have still to ask whether we have progressed, even in the West. Envy, hatred, dishonesty, are more widespread than ever, and if Communism has not succeeded in its aim,

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expressed in the Communist manifesto of 1848, to abolish eternal truths, all religion and all morality, it is significant that it is the absence of ordinary commercial honesty that is probably the greatest hindrance to-day to economic development. A noted American economist recently stated the problem in these words:
"Economically foreign investment has succeeded everywhere and contributed specifically to the improvement of the standard of living in the countries in which the investments are made. But in most countries it has ended in expropriation and confiscation. Some Governments do it openly without shame; others deviously by means of discriminatory taxation and foreign exchange control. If one says today that private investment cannot do the job, it is precisely because of these anti-capitalist policies of the receiving countries."
May I ask, my Lords, whether Her Majesty's Government consider some concerted action by the chief investing countries is possible to draw up a code of honest practice to which all Governments might be invited to adhere in order to make free economic development more likely over a wider area?
May I conclude by reinforcing the plea I have been making for gradual and progressive advance through the enterprise and initiative of many individuals, so that ordinary people may feel the interest and experience the excitement of participating in a developing life; that their enterprise should not be overmuch curtailed by control by so-called experts; that material progress must come stage by stage, in gradual instalments, over a period of years; that it is undesirable, even if it were possible, that Governments should pour vast sums of money into projects which become but the playthings of experts without really adding to the enjoyment of the life of the ordinary people. Even in Europe to-day we see a danger of technical inventions, artificially stimulated by large grants of public money, outstripping the ability of men to digest or put to good use the discoveries that are being made.
7.14 p.m.
LORD SALTER: My Lords, a great deal has been said, both in the brilliant speech of the noble Earl who introduced the Motion this evening and after he spoke, which I should much like to discuss on an appropriate occasion, but at this hour I propose to speak on one
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point only. I want to make a suggestion as to the methods and machinery of arranging loans to under-developed countries. Let me put what seems to me the crux of the problem. In my experience in relation to development schemes in a number of countries, one lesson has been burned into me, both in success and in failure—namely, that it is quite indispensable for success to have an administration that will secure the reasonably efficient use of the money that is supplied, and that there is a Government sufficiently stable and of such a kind as to make that administration possible.
The most successful schemes with which I personally have ever been associated were those in the early 'twenties undertaken by the League of Nations in Austria, in Hungary, in Greece and in Bulgaria. There we achieved great success. We did so because the psychology and political attitude of the beneficiary countries was such as actually to welcome some form of external control during the crucial years. In regard to the countries we now have in mind, that particular advantage is not available, and we have to find something else. But, negatively, I remember that in China it did not matter how good the advice or intrinsically good a particular scheme might be, it had no chance of success because there was no Government with more than the most limited range of authority and the most precarious tenure except within a very narrow sphere
Much more recently, going to Iraq, where every possible technical condition seemed to be quite unusually favourable for an immense and rapid development, one had only one doubt, and that was whether the administration would be sufficiently efficient, and whether the political regime there would be such as to make that possible. Well, everything went extremely well until a year ago. Now, necessarily, a question mark hangs over the future.
Having said that, I must add that I entirely agree with what has been said about the importance of not attaching the kind of political strings that are inevitably so much resented. But I think that we have to make a distinction between political strings and economic safeguards designed for and essential to the success of the actual economic project on hand. This brings us right

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up to the question of how and by what machinery. I think it is rarely that political representatives of a national Government of a country from which capital is coming will be able to negotiate appropriate safeguards as to the choice of project, as to the method of its administration, or as to the environment of fiscal policy which is necessary for the success of that project. What they try to impose will be resented and, if verbally agreed to, will probably be destroyed a little later. However, it is, I think, certainly true that if you can get your arrangements made with the recipient country by an institution that is international, you can go a good deal further, and if the institution is not only international but is essentially of a banking and technical character, you can go further still. Safeguards that would be, and indeed are, accepted when arranged by the International Bank, could not be secured by political representatives of separate national Governments. Can we then entrust this task to the International Bank? Here, again, there is a considerable difficulty to which I will refer in a moment.
There is indeed a great deal to be said against the alternatives that have sometimes been suggested. I entirely agree, for the reasons that have been given this evening, that it is most unsuitable to ask N.A.T.O. to enlarge itself for this purpose. That would underline and emphasise just the kind of political difficulties of voting sentiments which we most need to avoid. I am very doubtful, too. about the creation of a completely new institution, whether we call it an International Development Agency or whatever it may be, independent of the existing international agencies, separate from them, possibly rivalling them, overlapping them and without the experience and technical skill at their disposal. At least I should like to know much more about the composition of such a new proposed body and of its precise relationship to the existing bodies before I personally would be prepared to say that I should be in agreement with it.
Can, therefore, the task be entrusted to the International Bank, the World Bank? There we come up against a difficulty of a different character. The International Bank has a high and a deserved reputation for making sound
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loans which have been successful, without involving loss to the International Bank itself. It has a high financial reputation as well as having done a great deal of work of very great use in the world. Yes; but that of course means that, quite apart from arranging safeguards that are technically good, the loans must be "hard" in the sense that they do not exceed in a particular country a total which makes the risk a reasonable risk for a prudent banker. At the same time it is undoubtedly true that if you limit yourself in regard to the under-developed countries which we have in mind entirely to "hard" loans of that character you will not be able, whatever may be the financial resources at your disposal, effectively to get anything like enough to meet the economic opportunities that exist in these countries, or to satisfy the expectations of their peoples or to give a good show by comparison with others who are making conflicting or competing offers.
How, then, do we resolve this problem? Undoubtedly loans that would not in their amount, at least, satisfy the conditions of a prudent banker need to be made and they must be made at the risk of the public funds of the contributing countries; that is to say, the Treasuries or Foreign Offices or State Departments of the capital-forming countries. But, as I said, if those departments themselves negotiate they will meet such resentment and difficulty as will make their task impossible. If, on the other hand, they hand over the matter to the international Bank and the Bank makes loans that are "soft" as well as "hard", the Bank may lose its present high reputation and destroy its utility for the very valuable and important work it is now, and has been for many years, engaged upon.
Is there any way out of this dilemma? I suggest this principle. I think that perhaps the International Bank, with the Monetary Fund in association with it, could be brought into such relation with the departments of the national Governments from which extra money will come as to negotiate what I think Mr. Douglas Dillon called a "package" deal; to negotiate arrangements which would really be in two parts. The safeguards would be negotiated by the Bank, but the amounts forthcoming would be greater than the Bank as a banking

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institution could prudently provide. There would therefore have to be an arrangement between the Bank and the national Governments which would in effect mean that as far as the loans were "hard" the loans would be the Bank's risk, as its present loans are, but beyond that point, though the loan might still prove to be good, the risk would be taken by the Treasuries of the national Governments.
That, I think, is not an impossible arrangement. The Bank, so to speak, in regard to these loans would be like a lender holding a first mortgage and the Governments would take the position of a lender who was content to take a second mortgage. This, of course, is a complex suggestion that I ought to describe and defend more than it is possible or would be tolerable to your Lordships that I should attempt to do to-night. I should be happy to supplement the suggestion on an appropriate occasion, but for the moment I leave it at that.
7.26 p.m.
LORD BIRDWOOD: My Lords, I am sure we are all very grateful for the exposition which my noble friend Lord Salter has given us. For me, to whom economics is a rather distant kind of magic, I confess I have heard for the first time an explanation of a logical way in which aid could pass from, shall we say, the over-developed to the underdeveloped world, and I would certainly not try to follow him in enlarging in any way on an aspect which he has so brilliantly described.
I think our great regret this evening is that so challenging an aspect of the international scene comes at a time when your Lordships have so many other things to think about, particularly in the domestic field; and it seems bad luck after the noble Earl has presented this matter to us with great skill and care and thought. After all, this is a new problem in the world. As I see it, it has arisen only in the last forty years. When we recall that only within these last fourteen years the United Nations have spread from a family of 51 to 82, and of the new entrants every single one could be, as the noble Lord, Lord Ogmore, reminded us, regarded as either uncommitted or underdeveloped or both, then I think we realise
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the nature and urgency of the problem; and we in Britain, who have great experience in this particular field, surely have our great and imaginative part to play in the future.
I am not going to attempt to elaborate any sort of fool-proof international administrative machinery to meet the needs. We have heard discussed this afternoon whether the United Nations should shoulder the main responsibility in this task, or, not so much the Atlantic community but (and I was interested to note that the noble Earl laid emphasis on it) the European community as such. Personally, I should like to see the European community taking the initiative, provided always, as has been stressed, that in no way the concept of a military or strategic alliance is imported into the very contrasted atmosphere of laying sound economic foundations—which I think is quoting the noble Earl's Motion.
It is, I suppose, true that we should all be governed by that old adage that asks us to remember that one can do a lot of good if one does not mind who takes the credit. I personally should like to see Europe taking the credit, not only for reasons of sentiment but perhaps for practical reasons, practical reasons in that one would start off with a uniformity of approach in regard to the necessary skills and techniques which have to be imported into under-developed countries, which would be more effective and more manageable, as I see it, than aid given and organised and directed against the very diversified background of the United Nations.
It may be that I am quite wrong in this; and certainly I have no set conviction in the matter. In any case, I am not qualified to be assertive. Indeed, all I intend to do in a few minutes is to lay emphasis on certain principles—and here I believe I shall find myself in great agreement with the noble Lord, Lord Grantchester—which I consider are too little understood and which are fundamental to the establishment of a sound economic foundation. I have no specific economic training, but I have had some practical experience in countries which could be regarded as having an economic foundation such as not to encourage the development of those political institutions which we usually associate with progressive communities. Now it seems

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to me that we have been all agreed that to go into a country merely with a set of abstract concepts of high intention, and just hope that it will all come true, is not going to be enough. You cannot dig drains only with a moral intention or purpose.
I think also that we shall this evening have debunked the idea that mere gifts or loans measured in quantities of dollars will by themselves raise the standard of life of a people. I can recall an American statesman whose voice shakes with emotion as he describes how the surplus wealth from the West will pour into the Middle East; the wealth that, in his view, should turn camels and goats into Cadillacs and Coca-Cola. I think we have to realise that in fact real prosperity can never be given by one nation to another nation, or by one set of nations to another nation. And I would disagree profoundly with Mr. Bevan who recently in Hamburg, when addressing the Socialist International, spoke of this country as providing a higher standard of life for the Middle East. For applause at a meeting, or for the purposes of quick popularity in the Middle East, that may be effective. But it is not, in my view, related to reality. Nor will mere material benevolence align a people in a conveniently correct political relationship with the West. Instead, as the noble Lord, Lord Grantchester suggested, we have got to learn this thing the hard way; and it takes a long and careful study and preparation, very far removed from politics, and related to the practical things that men can think out with their brains and do with their hands.
In very simple terms, I see the requirement as, first, one of making a survey of things as they are and not as we should like them to be—assessing the resources, the men and material in a territory; and then, and then only, deciding what can and should be done. One difficulty in deciding these development programmes is this instinct—amounting, as I see it, to an obsession—that heavy industry is the hallmark of wealth and progress. It seems; to become a matter of prestige for a country particularly in its first flush of political independence, to demand an industrial self-sufficiency which its raw materials in no way justify. In those circumstances, I suggest that it is no service whatsoever
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to a country for the West to encourage what I can describe only as disloyalty to a country's environment. If the natural economy of a country is agricultural, then that country, as I see it, will be all the more prosperous for concentrating on improving existing resources, whether for export, to save foreign exchange or to earn foreign exchange, or merely to put more food into the mouths of its people.
LORD OGMORE: May I interrupt the noble Lord? He is making the same point as Lord Grantchester made; but in these countries it is not the difference between agriculture on the one hand and heavy industry on the other. In fact, what they are trying to do is to develop secondary industries which will make use of a lot of their agricultural products. That is what they mean by industrial development; not the creation of steel mills, and so on.
LORD BIRDWOOD: I do not quite agree with the noble Lord. I do not know whether the noble Lord remembers the great Industrial Development Corporation outside and around Karachi. Pakistan is essentially an agricultural country, and there is a mass of big industry there which the country itself has found it cannot sustain.
My Lords, if there be any truth in what I have said, it implies that it may be wiser to develop the existing facilities rather than to create new ones. If I may give an example, we can all think of certain countries where the farmers take water off small, modest irrigation systems; from springs of streams, or from tanks and reservoirs and the like. As often as not, those systems lend themselves to improvement and expansion which could double the productivity of the existing acreage, which, in turn, would put roughly double the income into the farmer's pocket. That, in turn, creates local demand, and stimulates the local industry. So you get a chain reaction set in motion: and the merit of the process seems to me just this: that it remains both indigenous and self-creative.
Now compare that kind of development with the more familiar situation where a Government falls for the temptation of opening up vast tracts of new territory. Along come the Western firms and the

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big engineers, and there is a scramble for the contract. Not unnaturally, the contract goes to the lowest tender, and frequently that by no means represents the most serviceable and enduring work on the job. The final effect usually is merely to create another million mouths or so to feed. So far as irrigation is concerned, I should like to quote what a well-known irrigation engineer, Mr. Michael Ionides, has said of this situation:
"We ought to judge irrigation schemes in terms of new water put on the land rather than in terms of new areas of land put under water."
That, in his view, was a more economic and better use, in the social sense, of the available resources.
I have contrasted those two methods of development, and I do not necessarily say that either is always wrong or that either is necessarily always right. But what I do maintain is that which is right and which is wrong is seldom really considered; so far as I can see, the international machinery for its consideration just does not exist. Nor do I think, my Lords, that social implications of development are in any way given sufficient thought. Without a doubt, any under-developed country which now seeks to integrate itself into the modern mechanised world is bound at some time to transform the whole of its social and administrative structure. The noble Earl has quoted Mr. Paul Hoffman. It was Mr. Paul Hoffman, I think, who said of the Nile that it had been fully and thoroughly surveyed as to the water; that the hydrographic data is all there; the engineering requirements are known, as is the new acreage which will come under development, and its measurements and location. All those things are known, but what no one has bothered to find out is what happens to the lives of the population which might move into the new areas which are opened up. No one has related their economy and their social pattern to that knowledge of the behaviour of the river.
My Lords, I could put this problem of the social development in perhaps a concentrated form by reminding your Lordships of a little story that I heard in Kuwait. When I was in Kuwait two or three years ago they told me that a small Arab boy could draw with perfect
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accuracy the silhouette of a Cadillac car long before he could draw a picture of his own house. I suggest that the task of the Western world and of the world that accepts Western aid is to teach the little boy to draw his house before he can draw a Cadillac.
We in the West—and I think we can take our country as a fair example—have been able to adapt ourselves step by step to the pattern of mechanisation and advance of science, because these advances have come always from within. We ourselves have been the inventors, as often as not, and initiators of these advances, and they have been spread evenly over the land on the basis of local availability and know-how. But exactly the reverse is the process in the under-developed countries. The physical machinery, the training and the basic knowledge usually have all to be imported, and those who have to import them are usually the smallest section of the population, who are fortunate enough to have acquired the education which will appreciate the nature of the modern industrial processes. On them surely rests a grave responsibility, because they happen also to be the policymakers. It is they who have to choose the whole pattern of the development of their land, and it is on their choice and on their judgment which must depend the kind of lives that their people have to live and the general social and economic pattern that their country must develop.
In that task of laying their plans, we can only hope and pray that they will always bear in mind the great truth: that the real reserves of capital, the real prosperity of a nation, rest on the collective skill and will of its own people. Foreign capital, investment grants or loans, whether on an international scale, a governmental scale or a private scale, may pour in. Foreign know-how may help to launch their schemes, and indeed, as I see it, that is its task. Foreign know-how may map the necessary course. But unless the people can use it in the right way, and, perhaps more important, have the will to do so, then I suggest that the schemes will fade away and the house, rather than being built on rock, will be found to have been built on shifting sand.
I think that at this moment I should say a word about a development to

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which the noble Earl referred. We are apt to judge this problem on an international basis, as one between a rich country and a poor country, comparing perhaps the wealth of the Ruhr with the Korean countryside. But we have exactly that same disparity within those countries themselves. The new wealth, whether from rubber, uranium or oil, and its management and the management of all the related mushroom activities which come with it, remain concentrated in the towns. That will of the people of which I spoke remains an urban will, and the result is that the peasantry, that same peasantry of whom Oliver Goldsmith said
"…once destroyed, can never be supplied",
desert their fields, and, as the noble Earl reminded us, squat themselves in the most appalling squalor around the towns in search of the opportunities and high wages which never come.
How can that rot be stopped? As I said, only by applying this new wealth to stimulate rural small industries. Alas! such wisdom is neither very spectacular nor has it much voting appeal. I have maintained that the real wealth of a nation resides in the will and brains of its people. If so, the educational service and the pattern of education must certainly be related closely to economic advances. If the system of education is broadly based and tied to the immediate needs of these rural communities, then that town drift will never take place, because the stimulus which creates the necessary will of the people will be their own support and will not have to be sought out in the towns.
I am aware that I have made only a sketchy diagnosis without suggesting any remedy. I have done so in the belief that the modern tendency is to go for the remedy before, or even without, diagnosis. That diagnosis has led me to the conclusion that there are far more problems waiting to be solved within these countries themselves than by a committed world which seeks to help them. At that international conference in Hamburg, Mr. Bevan also spoke of the oil royalties which, he said, could be used for the great advancement of the Middle East. He added that it was to their advantage that the area should be regarded as an integrated unit. That
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is perfectly true; but what Mr. Bevan did not say is that the very first people who have to be persuaded are the Arabs themselves, who have to apply the integration.
As to the scientific initial diagnosis, the United Nations Special Fund has been mentioned, and if, as I believe, it encourages and provides the means by which that essential survey can be made, I would certainly agree with the noble Earl that it merits far more support than we are prepared to give it at present. The noble Earl mentioned an international technical survey. I can recall the proposal for an international civil service coming up at the meeting of World Government at Copenhagen in 1952, and at the 13th Session of the United Nations last year a proposal for an international administrative service was defeated, alas! by an overwhelming majority, which included the whole of the Soviet bloc. Therefore, I would suggest that probably a more practical approach might be to recognise some form of an international research institute which perhaps would be the forerunner of a service. And if the problems which I have only touched upon exist, are little understood and are neglected, surely it is a matter for just such an international institute of public administration, perhaps as a counterpart of our own Royal Institute of a similar nature. I quoted the case of the gap in our knowledge of the Nile. It would be just that kind of problem at which such an international institute would be fitted to take a look.
Finally, I would sound just one note of criticism and warning. I know that it is taboo these days to hint at the merits of colonial systems, but, believing in the logic of borrowing what is good from all systems, as I do, I suggest that there is a missing link in the manner in which we envisage aid passing from an international dispensation; that it would lack those personal associations which, wherever the fate of one country is tied to aid exclusively given from another country, do seem to be effective. The great Gezira cotton scheme in the Sudan is surely as fine an example of progress, economic, social and political, since all its elements were planned together, as one could wish to find in the world; and yet it is built entirely on an exclusive relationship between this country and the

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Sudan. I can see no reason why an international dispensation, or a European dispensation, should not set about evolving their policies, bearing in mind the great value to be derived from a retention of that element of personal relationship which we recognise in systems which are now slowly, but perhaps inevitably, passing off the stage of international affairs.
7.50 p.m.
THE EARL OF BESSBOROUGH: My Lords, the noble Earl, Lord Jellicoe, is to be congratulated on putting forward his Motion to-day and on deciding to pursue it, because I feel that the subjects which have been raised lie at the very roots of our foreign policy and may, in fact, develop into the most important aspect of our relations with other countries, and especially the uncommitted countries. Like the noble Earl, Lord Jellicoe, I was also a delegate to the Atlantic Congress and sat under the wise guidance of the noble Lord, Lord Crathorne, who we are so glad has joined us in this House. I have also, during the past six or seven years, paid a number of visits, albeit fairly brief ones, to the Middle East—indeed I returned only last week from the last one. Although my knowledge of these countries is not so great as that of the noble Earl, I have had some experience, particularly of their economic problems, relating especially to certain aspects of their industrial development. I agree with the noble Earl that perhaps the major task confronting the countries of the Atlantic Community over the next decade is that of striking the right relationship with these developing countries. It is wrong to call them under-developed or even backward. Egyptians quickly became efficient pilots in the Suez Canal; Iraqis were trained more rapidly than anyone suspected in the arts of the electronic engineer.
But the aspect of these problems to which I should particularly like to refer at this late hour is the general attitude and outlook of the Western Powers, and particularly this country, towards the Governments and peoples of these free and independent States. I am sorry to say that I do not feel that, by and large, we have always adopted the right attitude. I do not think that this is the
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fault of the Foreign Office, and certainly not of my right honourable friend the Foreign Secretary or of his Minister of State, or of the noble Marquess who is to reply to the debate. They, I know, take an imaginative view of our relationships with these countries. But I am sorry to say that I feel the attitude of certain members of some of Her Majesty's missions on the spot is not always such as to create the best relations with these newly developing countries, nor to achieve the best results in so far as British industry and our export market is concerned. Some of our representatives—and I can think of one, in particular, in that part of the world—are highly imaginative and robust, who follow out admirably what I believe to be the attitude that Her Majesty's Government would like them to adopt. They know that these countries are proud of their newly won independence. They recognise that in granting aid to them it is a great mistake to attach strings; and in their general relations with Ministers, officials and people on the spot they treat them as equals and partners.
Unfortunately, this enlightened, forward-looking attitude is not universal. In certain capitals the head of a mission and members of his staff, and even, curiously enough, sometimes younger members of the staff, seem incapable of resisting the temptation to take up a kind of patronising "wet nurse" attitude towards officials of the country to which they are accredited. Some of them have even been described by friends of mine in industry as pompous and "prissy" in varying degrees, and even prim and prudish. I know how easy it is to get like that, for I have served in the Service myself. But in no case does that attitude improve relations with that country; nor does it facilitate industrial activity by British firms.
In one capital in the Middle East, I recall that a few years ago a member of the Embassy, in his normal, perhaps unofficial, relations with local officials took up the attitude that such-and-such a country was not ready for a particular form of technical development and advised the British firms not to press on with trying to sell their equipment to that country. Executives of the firms concerned went out to the country and tried to sell their equipment, offering at

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the same time to bring over trainees to this country—and that seems to me to be even more important sometimes than training technicians on the spot. The executives of the firm had to return to this country, but members of Her Majesty's Embassy remained on the spot; and when the executives had gone an official of the Embassy privately discouraged local officials from proceeding with the particular plan, and may also, I believe, have given advice on a matter about which he knew very little. The result in that case was that another company from another country quickly jumped into the breach, and all the orders were lost to British industry. That was disastrous.
In other capitals somewhat similar situations have arisen. I will not burden your Lordships with details, but I should be glad to give them to the noble Marquess or to any of his right honourable friends if they are not already aware of them. In some cases it has been possible at the last moment to retrieve something, but not always. You sometimes find among our representatives, I fear, the attitude that certain, say, types of equipment are rather like dangerous toys with which these less well developed countries would be ill-advised to play. You also find the opinion expressed that the country concerned perhaps cannot afford some particular form of development. It seems to me that in those cases we must stick rigidly to the rule of "no strings", and not even give private advice on the detailed expenditure incurred by such a country. These countries should be allowed to buy what they want and to learn by their own mistakes. Otherwise, if we advise or cajole them, the two unhappy effects which I have mentioned are almost certain to come about.
I did not find our German friends in the Middle East taking up the attitude which I fear certain British and American officials have been known to do. Neither, I need hardly say, do our Soviet friends. They are hard and realistic in their commercial and economic policies. They would not take up any patronising attitude. They take off their coats, roll up their sleeves and get down to business, treating officials on the spot as their equals and comrades in a new enterprise. How different this can be from Her Majesty's Ambassador driving
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down the main street in his upright Rolls, and sometimes in his top hat! I am not saying that an Ambassador should not drive in a Rolls or occasionally wear a top hat. I merely say that, in doing so, he presents a different picture from others, and very different from all the Arabs, who to-day, I am sorry to say, drive around mainly in Cadillacs and Mercedes. What I mean to say is that, while I believe in tradition, we must sometimes, and especially in these countries, break away from it and realise that. we are living in a modern technological world.
But I would not only venture to criticise our own official representatives. Some local representatives of industry also adopt the wrong attitude with labour on the spot. We, the British, cannot sometimes resist the temptation of reverting to a kind of "pukka-Poonah" attitude in dealing with local labour. In this connection, it is significant that some of the more successful British firms in that part of the world feel obliged to employ foreign and neutral representatives, such as Belgians or Swedes, as their agents. But in all this what worries me most are the sometimes unhappy relations between our own officials and representatives of British industry. I occasionally wonder whether our officials, who may have spent long years in the country concerned, may not be jealous of representatives who come out on specific visits and then have to go on to other countries or go home rapidly by Comet. I believe there is a certain jealousy existing there which has not been good for relations.
There are so many Foreign Service officials waiting to make their mark. They themselves recognise that they are fairly thick on the ground. Many are filled with feelings of frustrated ambition. As a result, they feel it necessary to re-analyse and re-assess every problem, perhaps in order to satisfy their own ego. Thus, instead of doing the good which they genuinely desire to do, they do harm. They are so tied up with their clerical procedures. All this should not be; but whether it is the case or not, it is true that officials and industrialists are trained in totally different, often diametrically opposite, ways.
I regret to have to speak thus, for I spent happy years in the Foreign Service

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and I learnt, I hope not too inadequately, the necessary procedure of how to record in minute form, in draft dispatches or telegram, anything which might seem likely to become of any importance. That report may eventually have got back to England with suitable drafting amendments by other members of the Embassy. I was one who was trained, like the noble Earl, Lord Jellicoe, to work like that. Then when I went into industry I found that quite different methods were employed. Instead of referring everything back, you suddenly had to take certain decisions on your own. If you put the lot down on paper, no one read it. You had to telephone at once, and get on with the job, rather than discuss it on paper over a matter of days or even weeks.
It seems to me that this difficult relationship between British official and business man may be at the root of our problem. There are, of course, rights and wrongs on both sides. But I think this is a subject which might well merit a special debate in your Lordships' House. I would propose to discuss the idea of setting down a Motion with the noble Lord, Lord Strang, who must be fully conscious of this particular problem. There are other senior and distinguished members of the Foreign Service who have recently also been in industry. They fully appreciate the problem, and, at the same time, there are officials who have gone into industry. But that traffic is, on the whole, very small, and there is not the necessary flow back and forth. My own feeling is that there ought to be a more regular interchange from the earlier years. For example, a bright young man who had been three or four years in some up-and-coming industry might do two or three years in one of our Embassies abroad, and vice versa. Then, perhaps, we might understand each other's respective methods rather better.
I do not believe that in these days, even in regard to the Foreign Service, the security aspect should in any way be used as an argument against such an interchange, for the secrets of industry are often as important and valuable as the secrets of diplomacy. I feel that we should all, the whole nation, the Government, business and the people go forward together in our attitude towards
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these developing countries more successfully if such exchanges were arranged.
I beg you, my Lords—and I must be forgiven for having detained your Lordships so long—to give this problem your serious consideration. I would beg my right honourable friend the Foreign Secretary, and my other friends in the Foreign Office, to think on these things. One of the most interesting papers at the Atlantic Congress was, as the noble Earl, Lord Jellicoe, knows, produced by Mr. William Clark. Mr. Clark is a distinguished economist and journalist who has spent a good deal of time in Afro-Asian countries, and particularly in the great Republic of India. I do not know whether he would endorse the strictures which I have made this afternoon, but he made one primordial point in that paper when he said that we in Britain and we in the Western countries must mix ourselves up more with the world's poor as partners and as friends, and not as patrons. We should not give things away "for free", if your Lordships will permit the term. These developing countries should have to pay for what they get. It looks suspicious to some if free gifts are offered, even if it is stated that no string is, in fact, attached. And it is true, perhaps, that our American friends have been more guilty in this respect than we have.
I fully agree with the noble Earl, Lord Jellicoe, and I think it is also the view of the noble Lord, Lord Salter, that aid, when possible, should be granted direct through the private channels of finance and industry, or through an international body such as the World Bank, rather than directly from the Government of a specific country. I agree with the noble Earl, Lord Jellicoe, and the noble Lord, Lord Salter, that there should be some kind of improved machinery—if not a new agency, at least improved machinery—for extending "soft" loans by Governments. But this, of course, could not be done through N.A.T.O. Obviously, "hard" loans are not so difficult to arrange. However, if, as Mr. William Clark said, the West simply lends money and various forms of industrial capacity without a psychological change in our outlook, all our plans will crumble. These countries must be brought to develop a wealth-producing capacity of their own. I am told—and I think the noble Earl would endorse this—that it would cost

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the Western countries only about one half of 1 per cent. per annum of their total national incomes to achieve this. This is not a completely unattainable sum. I only hope that an eventual reduction in arms expenditure may help the West to do more. But, above all, we must change our outlook.
8.7 p.m.
LORD ABERDARE: My Lords, so far as national economic policy is concerned the nations of the Western World have learnt the lesson that too great a gap between the rich and the poor is liable to lead to unrest and instability in any country. But this lesson has not yet been learned in our international economic affairs, although I believe that in general it holds true. The existence of wide differences in wealth between nations is just as likely to lead to unrest and instability internationally, and I think it is possible to visualise a much more peaceful world were the present underdeveloped countries able to support their citizens at a higher level of existence. Quite clearly, were a World Government ever to be realised, one of its first steps would be to use the resources of the richer nations to subsidise the standard of living of the poorer nations. Equally true, I think, is the analogy between internal economic affairs and international affairs, in the fact of the economic advantage to us all of a wider spread of purchasing power.
At the present moment the pace of modern industrial development is such that the poorer nations can see the rich increasing their wealth at an evergrowing rate. I do not believe it is any good the noble Lord, Lord Grantchester, or even my noble friend Lord Birdwood, saying that it is not desirable for these under-developed countries to industrialise themselves. These people wish to industrialise themselves, and if we do not help them somebody else will. As the noble Lord, Lord Ogmore, said, they will. certainly be looking with great interest at the progress of China, who has recently abandoned the Western form of capitalism and is making a vast effort towards industrial development under a Communist system. They will most certainly compare it with the progress made in India under a capitalist system. That is the challenge which we in the West must face.
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So far as the Commonwealth is concerned I think we have realised our responsibilities, and if I may quote just a short passage from the Report of the Montreal Conference, it seems to me what was then said about the development of the Commonwealth is equally true in a world context. The Report said:
"We cannot be indifferent to the poverty of some Commonwealth countries. The concern we feel is based fundamentally on common humanity, but it is supported as well by the knowledge that the economic development of Commonwealth countries would be of material benefit to us all. We also know that if the hopes of the less developed countries are too long deferred the democratic institutions which we all cherish might be in danger."
I feel absolutely certain that that applies to the under-developed countries of the world as well as to the Commonwealth countries.
In developing a policy for the future I should like to emphasise one point that has already been made by the noble Earl, Lord Jellicoe, and others; and that is the necessity of taking into account the psychology of the people whom we are trying to assist. Mostly they consist of ex-Colonial territories, highly suspicious of any new form of economic colonialism. Soviet propaganda is constantly emphasising the fact that, in their version, Russian aid is without strings, while aid from the West is "economic Imperialism". It was vividly expressed, although perhaps somewhat exaggeratedly, by a Nigerian recently who wrote:
"If Nigeria must take aids, whether from Washington or Moscow, London or Delhi, she should do so with caution. Africans brought up on the farm or in the open countryside must have watched a bee or fly hovering over honey and subsequently alighting on it. First the legs get stuck and then the wings. Soon the whole insect is completely stuck, body and all. The developed countries are comparable to the honey and the under-developed to the insect."
It is, therefore, very important, to my mind, that economic assistance from outside must be closely co-ordinated with local initiative. It is essential to remove all fear of economic exploitation and to create an atmosphere of joint participation for mutual benefit.
I agree wholeheartedly with what the noble Earl, Lord Jellicoe, has expressed as the means with which we might go about this task. It is, I am sure, especially important to provide skilled

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technicians, although the problem here is acute, for it is so hard to find men of the requisite skill who are ready to accept a short-term contract, to live in a remote area of the world and accept the authority of people whose wisdom they may doubt. It is very much easier for those trained behind the Iron Curtain: they go where they are told, they are trained as arranged, and there is no argument about it. It is therefore very much to be hoped that we shall make rapid progress with the education of the local people themselves in technical skills. And here also I think that the Commonwealth has shown the way, with the Colombo Plan, an excellent example of full co-operation on a basis of equality between nations of varying economic strength, the underlying principle being that those who can afford the most will make the greatest contribution.
Underlying the whole system of aid to the under-developed countries I would also support what has already been said, the necessity of ensuring markets for their primary products in order that they themselves may be able to contribute to their capital programmes. I will not go into the question of whether a new agency is required. I personally do not believe that any one agency can meet the situation. It may well be, as my noble friend Lord Jellicoe said, that a subsidiary organisation of the International Bank is necessary to provide the capital on easier terms. But in general I think that the more sources of capital and skilled technicians, and so forth, there are, the better it will meet up to the varying needs that there are.
What I believe is important is that those who are in positions of responsibility in the under-developed countries should know what agencies there are open to them, and I believe that the United Nations might play a useful role in supplying them with that information. For example, the Economic Commission for Africa would be doing the African countries a service if it produced a survey of the whole field of agencies and institutions able to assist them in their economic development. I would also stress the need not only for aid to be given but for it to be seen to be given, and for the full use of information services for the purpose of educating public
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opinion in the under-developed countries to a realisation of what is being done by the West for their economic assistance. It is very easy at the moment for a comparatively modest amount of Russian aid to be magnified at the expense of the continuing efforts of the Western World: one spectacular effort is always more newsworthy than a continuing process. But, my Lords, our achievements are far from insignificant, and I hope, that they will be given the publicity they deserve.
8.17 p.m.
VISCOUNT GOSCHEN: My Lords, I should like first to correct one impression which the noble Earl, Lord Jellicoe, in his opening remarks, may have made upon your Lordships. He said that there were a great many eminent delegates to this Congress which took place earlier in June, and himself. In fact I know full well that he himself did a great deal of work before this Conference began and was largely responsible for its success. I agree with the Motion and I support it.
I do not intend to go into the economic side of this problem of these conferences and what they stand for at all, but propose to speak for two or three minutes on one aspect which does worry me. Like the noble Lord, Lord Ogmore, I have been a delegate to the N.A.T.O. Parliamentarians' Conference—I think I have been for four years. He is perfectly right when he says that the opinion there has rather changed. In my early days most of the opinion and most of the thought at the Conference was directed to the military side, but of recent years the economic and the scientific—and I think particularly the scientific—sides have been brought out much more clearly. At this Atlantic Congress that was even more noticeable.
Many noble Lords have talked about under-developed nations being suspicious about gifts and being suspicious of the designs of the givers. I think that is absolutely true, and the psychological approach is very necessary. But I believe that one of the most important things is that the people of the countries of the Atlantic Community and N.A.T.O. are themselves suspicious when they hear about giving aid to the under-developed countries, because I do not think they really know what it means. I do not

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think this is the fault of the Press or wireless and television: I believe that a great many people in this country do not take the slightest interest in the affairs of N.A.T.O. or the Atlantic Community. They really take notice of N.A.T.O. only when the question of nuclear weapons comes up or through some crisis; they do not realise what N.A.T.O. is doing on the economic side, and I am quite certain they do not know what this aid to the under-developed countries means to the countries concerned. I hope that the Government will work out some means of educating the public, and that Governments in the other Atlantic Community countries will do the same. To put it in this way, the results of the conferences we hold are very often not known to the general public at all. They should be brought to the notice of people generally more than they are. I am sure that this is very important.
The noble Lord, Lord Ogmore, has already said how important the Congress itself was. I agree with every word he said about that. I think that we are all proud of being Englishmen. Those of us who were at the Congress or who were delegates to the Congress were particularly proud. It was very gratifying when delegates from the other countries represented at the Congress spoke to one and said, as many of them did, that there is only one nation which could have put on such an opening for a Congress like that, namely, Britain. This is very gratifying, and I am sure that noble Lords will bear me out and agree that that was so.
People from overseas were really extremely impressed. Many of them had never been to England or to London before. Some of the old, hardened Parliamentarians are always pleased to come back, and will say so, but many of the business people and the business delegates had never been to England hitherto. They were all very impressed by everything. They saw that we had come out of our economic crisis and that things were really quite good in England at the present time. They were even very surprised at the fine weather provided for them in England.
As to the entertainment side, the noble Lord, Lord Ogmore, has already spoken of this, and I will add my tribute to the noble Baroness, Lady Elliot of Harwood,
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for the magnificent way in which she arranged everything. Both for the delegates and for their wives and families there was hardly a moment when they were not being entertained in some way or another. All of this did this country a great deal of good.
I hope that, when conferences are arranged in other places in the future, they will be attended by representative people who are willing to learn from other countries and to take an interest in how other countries live and what they do.
LORD OGMORE: May I tell the noble Viscount, Lord Goschen, that I forgot to mention in my speech that the Congress gave the British delegation and people a standing ovation, which, I think, must be unique in history.
VISCOUNT GOSCHEN: I, also, had forgotten that.
8.23 p.m.
BARONESS ELLIOT OF HARWOOD: My Lords, I rise at this late hour to make a very short contribution and to apologise at the outset to the noble Lord, Lord Ogmore, for not being present when he, I understand, kindly made some very flattering remarks about the contribution which the hospitality committee, under my chairmanship, made to the Congress. Unfortunately, a meeting in connection with the World Refugee Year clashed with the beginning of this debate and I was not able to be present for the opening speeches. I should like to say how grateful I am for the kind remarks which he and the noble Viscount, Lord Goschen, made.
To the noble Lord, Lord Grantchester, who seemed a little nervous about the appointment of the delegates, I will say that, so far as I know, the Parliamentary delegations were appointed by the Speaker from another place and by the Lord Chancellor. I was very honoured to be asked to be a delegate, and I think, on the whole, that the nervousness which the noble Lord expressed was, perhaps, not justified.
This was the first time that I had been a delegate to the Conference of N.A.T.O. Parliamentarians. It was the first time, I think, that such a large Congress had ever been organised by the N.A.T.O. Parliamentarians. It seemed

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to me that there were two themes running through the whole Congress, which struck me very forcibly: first, that all the N.A.T.O. countries present were anxious to co-operate together in the non-military field as well as the military field, and, second, that the countries known as the free world countries realise that freedom is not defended behind a Maginot Line somewhere in Europe but that, all over the world wherever Communism gains a hold, freedom is in jeopardy. The most recent example, the tragedy in Tibet, is a case in point, where the methods were all too obvious and, alas! successful.
The theme running through all the committees of the Congress was, inevitably, how we might co-operate to preserve peace and protect freedom. This is all the more complicated since the language used by Communist politicians is the same as that used by the free world—"liberation from Fascist aggression", and the "establishment of true democratic government"—the words in both cases being unexceptionable but the results being exactly the opposite, as we know from Hungary and Tibet. This means that, among the N.A.T.O. countries and further afield, if we are to build up nations capable of withstanding Communist blandishments we must look to methods other than military and to points of view other than these of defence. That is why I was glad that the noble Earl, Lord Jellicoe, put down his Motion, which was the subject of the committee on which we both served and the implications of which are very far-reaching.
If the under-developed areas of the world were coloured red on the map, as used to be the British Empire in school atlases when I was at school, vast areas would be revealed, and, in the twentieth century, when the skill of man is so great, it is almost impossible to say that potential wealth does not lie everywhere. When the State of Israel can make the desert sands bear fruit in abundance, and the Trucial Coast produces millions of gallons of fuel oil, the Sahara may not be a desert except to the eye. One can look at no place on the map and say that this is barren land of no use for anything, for who knows?
Thus, the speed with which twentieth-century developments take place is so
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great that, if one thinks of one aspect alone, namely agriculture, which was mentioned by Lord Birdwood, it is clear that the mechanisation of cultivation and the increasing of yields through the skilful application of fertilisers and so forth can increase the potential production of the under-developed countries very rapidly. Men who cannot read or write can easily be taught to drive a tractor or a truck. In many spheres of modern development, machinery driven by unskilled labour does what skilled men had to do very laboriously fifty or more years ago; and the same can be said of many industrial developments to-day.
I will not weary your Lordships at this late hour with any further amplification of this matter, but I feel that there is needed one thing which has not, I think, been much mentioned in the debate, namely, the education of the people of the newly emerging States to be able to do what is necessary and use modern skills wisely. Here, in education, speed is more difficult. If the enthusiasm of new nations and the new and violent nationalisms spreading like bush fires across the world are to be used for the benefit of the countries themselves and not leave a trail of disaster along which Communism will quickly follow, then far more attention must be paid to training and education in the underdeveloped countries. I refer to all types of education, but especially to the education and training, through universities and technical institutions, of men and women to take on the responsibilities of government, the civil service, medicine and the law.
Illiteracy, I know, presents us with a vast field to conquer, but we must try to fight the battle. All too often we hear in this House and outside reference made to the lack of people trained to become political leaders or to run a Government Department, and, therefore, independence is not granted. But how much of the success of the self-governing States of the British Commonwealth is due to the universities which we started there? Among these are the University of Ibadan in Nigeria, with just over 1,000 students, Makerere College in East Africa, with 800 students, the University College of Rhodesia and Nyasaland, the Hong Kong University with 1,000 students, and the University College of the West

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Indies with 600 students. As well, there are the universities in India and the countries which we call affectionately the "old Commonwealth", where the training of men and women to take part in the most difficult of all skills, the skill required for government, takes place.
In spite of what is being done in all these universities, from the colonial countries alone 11,000 students come to Britain every year. One of the best things agreed at Montreal in September, 1958, was the establishment of 1,000 new Commonwealth scholarships, of which 500 are to be British and 250 Canadian, and at the Oxford Conference, which I think has either just started or is starting immediately, the distribution and content of these scholarships will no doubt be discussed. But I feel that in the long run and in the end the more satisfactory method is to build up universites and technical colleges in the new States themselves. I know that there is the question of staffing, and in the beginning, no doubt, many of the staffs of these new institutions would need to come from outside the countries concerned, or be nationals trained outside in the universities of the free world. But it would surely be worth while for the investment of funds, called for by the Atlantic Congress and subscribed through the World Bank, the United Nations and its agencies, and in other ways, to invest a lot of money in education, and in particular at university level, to provide the personnel to run the emergent States. In this sphere the Commonwealth countries can be proud of what has been done, particularly, as I mentioned, in West Africa; but it is not enough to develop the land and the resources of the world and to leave behind higher education as a kind of Cinderella in this development.
I would plead that there should be equal opportunities for the education of women, for the standard of development of a nation is determined as much by the education of a woman as of a man—the days of a one-sided educational development are over. The content of women's education in these new countries need not be the same, but the opportunities should be. The example of India in this matter is very striking.
My Lords, action by our Government in co-operation with the Commonwealth
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and the other N.A.T.O. countries would, I am sure, meet with a great response. When we read in the Press the speech by Mr. Paul Hoffmann, which I think Lord Jellicoe quoted, of the sixty nations classed as less developed, with more than 1,000 million people living in these countries, we appreciate that the magnitude of this problem is very great indeed. So I believe that if only we can increase the present development of these countries for these 1,000 million, in whatever way is considered to be the best way, even though vast sums of money are quoted and required, it would be worth while, for the emergent territories themselves will make the contributions as well as the highly-developed countries. It can be an investment and not an extravagance—an investment in health, food consumption and industrial development, in rising standards and in free nations. Poverty and misery is a good seed-bed for Communism. Rising standards of living and an educated public opinion is a stony ground for Communism.
So I hope that Her Majesty's Government will continue to support and increase their support to the United Nations agencies designed to help this development, to the World Bank and any other special fund that they may think appropriate for the job, although I agree with Lord Salter that existing monetary machinery should be studied in the first place. Time is not on our side in this particular matter; speed is essential. I hope that we shall push on with a policy that we have always advocated, and which is more necessary than ever.
8.34 p.m.
THE MARQUESS OF LANSDOWNE: My Lords, at the outset of my remarks I should like to give a warm welcome to the Motion which has been put down by my noble friend Lord Jellicoe. I think that your Lordships in all parts of this House will agree that we have had a valuable and really important debate; I am only sorry that it was not possible to hold it earlier in the day, so that we might perhaps have gone into this matter in even greater detail.
The declarations that were made at the recent Atlantic Congress, and which have inspired the Motion which the noble Earl has put down to-day, have, I think,

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high-lighted a subject to which Her Majesty's Government have for many years been giving close attention. As noble Lords are aware, the United Kingdom has played a leading part in promoting and supporting international techniques for assisting less developed countries throughout the world. In this we have a good record. I was interested by the observation of the noble Lord, Lord Ogmore, when he called our attention to the fact that in the Atlantic Congress, at least among N.A.T.O. Parliamentarians, this seemed to be a subject which until a short time ago received less attention.
LORD OGMORE: It received none at all.
THE MARQUESS OF LANSDOWNE: I think the noble Lord said that he threw his pebble in. Let me assure noble Lords that if that was the case among N.A.T.O. Parliamentarians, it has certainly not been the case with members of Her Majesty's Government. As was stated by my right honourable friend the Prime Minister, we in the Commonwealth believe in giving help to each other without patronage and without conditions. I think it is natural that, so far as Her Majesty's Government are concerned, this help has been directed first towards fellow-member countries of the Commonwealth which are less developed than ourselves; and it is our firm belief that this help should be given in a spirit of equal partnership.
Under Article 55 of the United Nations Charter, the industrial nations of the West have accepted a moral commitment to help nations improve their living standards. Substantial efforts have been made, both within the United Nations and by countries individually, to implement this commitment, by Government-to-Government loans, by grants and by technical assistance. Encouragement has also been given to private investment and to the expansion of trade. None the less, many of the under-developed countries—call them what you will—still have a desperate struggle even to maintain a mere subsistence. We believe that helping the under-developed countries is in the interests of world economy as a whole; but we also believe that there rests upon us a moral obligation to help
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them. The efforts which the United Kingdom are making are prompted solely by these considerations.
I should like to remind your Lordships of some practical steps which have been taken by Her Majesty's Government. First let us consider for a moment the field of Government investment. In this our record is second only to that of the United States, and our bilateral contributions and contributions within multilateral international arrangements have been steadily increasing. In the financial year 1957–58 the United Kingdom Government aid to under-developed countries totalled £77·8 million. In the last financial year we increased our aid by 45 per cent., to approximately £115 million. As I have said already, it is natural that the major part of our efforts has been devoted to Commonwealth countries. Many of the countries which have been helped through the Colonial Development and Welfare funds and the Colonial Development Corporation are now close to achieving independence. Her Majesty's Government will continue to give priority to those countries with which we have a special link in our Commonwealth.
The Colonial Development and Welfare funds cover just the sort of development which I think the noble Earl, Lord Jellicoe, wishes; and since 1946 we have voted over £300 million of funds for this purpose, including £95 million for the five year period ending in 1964. This is a steady and continuing source of help on which, subject to Parliament's approval, the colonial territories can rely for their development. Then there is the Colonial Development Corporation, with authorised capital of £150 million to invest, alone or alongside private enterprise, in colonial ventures, be they industrial or agricultural. There is the London market, and the colonial territories can also have recourse to Exchequer loans over the next five years up to a total of £100 million. Then there is all the money that may come from private industry making direct or indirect investment in the territories. Perhaps even more important, there is the technical assistance, the providing of know-how; and last, but certainly not least, there are the international institutions to which noble Lords have referred in the course of many speeches

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this afternoon. All these add up to a very considerable total of United Kingdom effort; and while I would not pretend for a moment—nor indeed, would any member of Her Majesty's Government wish to pretend—that we believe that what we are doing is sufficient, we do believe that we are making a very great effort, and a great effort in the right direction.
Much has been said about the importance of technical assistance; and naturally, through our long history of association with overseas territories and our tradition of service abroad, we in the United Kingdom have the necessary experience to render technical assistance to countries in the process of their development. This assistance usually takes the form of supplying instructors and providing, in the United Kingdom and elsewhere, training facilities for students—a matter to which my noble friend Lady Elliot of Harwood has just referred. In addition, we also provide training equipment to colleges and institutes abroad under the technical assistance programmes not only of the United Nations and the Colombo Plan, but also of the Baghdad Pact.
Within the last seven years the number of overseas students training in the United Kingdom has trebled, and it now stands at a figure, I am told, of approximately 38,000. Between 10 and 12 per cent. of all the full-time places available at the technical colleges and universities are held by overseas students, and two-thirds of these overseas students come from Commonwealth countries. A large number of these students are directly financed by Her Majesty's Government. Since 1950 Her Majesty's Government have financed 2,500 trainees from the countries of South-East Asia under the Technical Operation Scheme of the Colombo Plan. Training in the United Kingdom is being given under the Baghdad Pact and under the Mutual Technical Assistance Agreement which exists between Ghana and this country.
The United Kingdom plays an active part, as your Lordships well know, in the N.A.T.O. finishing scheme and in the N.A.T.O. pocket for the support of advanced students. It is our hope that by 1970 we shall have twice as many highly qualified scientists and technologists as we had in 1955. University
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places are to be increased from 90,000 to 130,000 in a ten-year period, and the output of advanced courses for technical colleges in England and Wales is to rise from 9,500 to something over 15,000. It is estimated that about 11,000 United Kingdom teachers are serving at this moment overseas. Since 1957, 550 United Kingdom experts have been employed under the United Nations expanded technical assistance programmes. Up to now the United Kingdom has provided more candidates under these programmes than any other country.
As a founder member of the Colombo Plan technical co-operation scheme, the United Kingdom gave technical assistance up to December, 1958, to the value of £3·3 million to Commonwealth countries, and nearly £900,000 to member countries outside the Commonwealth. Our annual contributions to the United Nations technical assistance and specialised agencies totals more than £2 million. Under the Baghdad Pact the United Kingdom contributes £850,000 annually, out of which £50,000 is devoted to the exchange of students between member countries and also to the provision of training facilities for them.
Even at this late hour I do not apologise for calling your Lordships' attention to these figures, for they represent, as I think your Lordships will agree, a very commendable effort on the part of our country; and an effort, as I have said, in the right direction. But I feel that I must, in honesty, issue a word of warning. We must be careful not to provide, in one way or another, more than our balance of trade and our sterling reserves will allow. If we were to lend to such a point that our reserves became low and the pound became suspect, it would do harm to all in the sterling area and to the cause of economic development. For this reason we have always, as your Lordships are well aware, to keep this in mind; and in a debate such as we have had this evening, ranging over such a wide field and where, naturally, enthusiasms have risen, I felt that perhaps there was a risk we might forget that our resources are, in fact, limited.
Naturally I have talked mostly about Government aid, but that does not mean that I in any way underestimate the

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importance of private aid; nor that I underestimate the importance of what can be done by individuals. A number of your Lordships have referred to this aspect in the course of this evening's debate, and I entirely agree with them. This is not a problem which can be shouldered by Governments alone; it is a problem, as I believe the noble Lord, Lord Ogmore, said, in which every facet of life and every country of the West should participate. And with that view I can assure your Lordships Her Majesty's Government are in entire agreement.
Your Lordships may think that, because I have given you these figures of our very substantial effort, there might be in the heart or the mind of Her Majesty's Government some degree of complacency. Let me assure noble Lords at once that no such thing is the case. Her Majesty's Government are fully conscious that this whole subject of under-developed countries is a subject of enormous importance and of gigantic proportions. We are constantly considering the desires and the needs of these emergent countries, and we also have to consider the risk of the misuse of their aspirations for political purposes which might be inimical to their national independence. As to the observations made by the noble Lord, Lord Grantchester, with which I am afraid I could not find myself wholly in agreement, I think perhaps he was wishing to draw attention to the dangers of a misuse of the aspirations of these emergent countries. I can assure noble Lords that Her Majesty's Government are well aware of this risk.
I have said that we in the United Kingdom believe that we have a moral duty to help under-developed countries, and that we further believe it to be in the interests of the world economy as a whole that we should do so. Now for a number of years immediately after the war the Soviet Union, under Stalin, seemed to be trying to impose its will on the world by the threat or the use of military weapons. This method was used to dominate Eastern Europe: it was also used in the Far East. Gradually, the free world organised its defences against such aggression, and in Western Europe, in particular, the strength and unity of N.A.T.O. has provided an obstacle against Communist advances which has
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now held for ten years. In 1952 in the Communist Party Conference, there were signs that Soviet thinking was turning towards an economic offensive to supplement, or perhaps replace, the strategic offensive which had come up against such determined resistance. But apart from an attempt to influence elections with cargoes of grain, there was not much sign of these thoughts being translated into activity. However, from about 1954 there have been increasing numbers of Communist offers of aid to carefully selected uncommitted countries. There have also been signs of increased Communist commercial activities.
In several respects aid from the Communist countries must be welcome. It is in the spirit of the present time that the "haves" should contribute and help the "have nots". This spirit has been acted upon by the countries of the free world for years, and the Soviet Government are latecomers in the field. I submit, my Lords, that we must be vigilant, and I believe it is our duty to unmask the ulterior motive—the attempt to achieve economic or political domination. I do not believe that we need fear Communist competition. Where we can do better than the Communists, we should demonstrate the fact; and where their contributions can be genuinely helpful, we should recognise it.
Nevertheless, we should not forget that in May of 1957, in an interview to a correspondent, Mr. Khrushchev said this:
"We think that capitalism should be destroyed not by means of war and military conflicts, but through an ideological and economic struggle."
Some of the aspects of Communist aid must make us think that this statement was not purely a piece of political theory; for whereas Western assistance has been spread over no fewer than 70 nations, nine-tenths of the Russian aid is given to only six countries. This, of course, does not mean that aid from the Communist bloc is always useless or should be refused. The point is that the selection made suggests a basically political objective. Soviet aid, as we know, and as has been mentioned in speeches this afternoon, usually is offered with the label "no strings attached". But we also know that a number of countries have found this label to be very nearly a false prospectus: and we cannot forget that in 1957 Soviet aid to

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Yugoslavia was suddenly cut off when the policy of the Yugoslav Government did not satisfy the leaders of the Soviet Government.
So, my Lords, we have to be vigilant, and I think that it is our duty to disclose the fact when we feel that aid is being given for no other purpose than the motive of political and economic domination. As the noble Earl who moved this Motion said, we believe that the passionate belief in political independence of the emergent nations is a perfectly proper and natural thing. We also understand that their conduct of their internal affairs is a matter primarily for themselves, and if we are able to help them develop their economy that is all we should seek to do
My Lords, there is one particular recommendation which emerged through discussions in the North Atlantic Congress to which I wish to pay special attention, and that is the question of a possibility of the creation of an International Development Association. The question has often been raised—indeed, it has been raised this afternoon—whether a new international financial instrument is needed to provide economic assistance to the under-developed countries. Although it is obvious that no new institutions will of themselves produce additional capital, Her Majesty's Government are of the opinion that such a proposal as the I.D.A. is likely to be able to grant aid to underdeveloped countries on terms that are more flexible than are at present possible. We believe that the I.D.A. might possibly operate as a further affiliate of the International Bank, and that it could supplement the Bank's existing operations without duplicating all the institutional and organisational arrangements, since there could be a substantial sharing of facilities and a close relationship between the operations of the Bank and of the I.D.A.
As your Lordships know, this matter was discussed at last year's annual meeting of the International Bank in Delhi. It is expected that it will be further discussed at this year's annual meeting in Washington; and it is probable that a step forward may then be taken towards bringing the suggested association into existence. Her Majesty's Government are prepared to join in
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working out plans for such an association, and if acceptable plans could be worked out it would mean that the United Kingdom would contribute to the capital of the association just as it contributes to the capital of the International Bank.
It has been suggested that the capital of the I.D.A. should be of the order of 1,000 million dollars. This, I think, we shall all agree, is a minimum figure; and it is not the figure (as those of your Lordships who were listening to Lord Jellicoe's speech will be aware) which the noble Earl quoted as having been given by Sir Oliver Franks. Be that as it may, we believe that there are possibilities here. Now if the United Kingdom were to contribute to the I.D.A. on the same basis as we contribute to the International Bank, our subscription would be in the neighbourhood of £50 million—that is to say, 14 per cent. of the whole. I hope that your Lordships, even at this late hour, will consider this figure of £50 million against the background of the figures which I have already given to your Lordships. We must be realists in this business, and we must see, as I have said earlier, that we do not so overtax ourselves that, rather than being able to help, we in fact weaken our own financial position; and it is only through the strength of sterling, and it is only through the ingenuity of our traders, that we are able to make the contributions that we do.
LORD OGMORE: May I interrupt the noble Marquess? This is a very important statement that he has made, and I am very grateful indeed to him for making it. I think it ought to be widely known. And if nothing else does, I think this statement justifies Lord Jellicoe's Motion. I take it that what the noble Marquess is implying is something on the lines suggested by the noble Lord, Lord Salter. This is a considerable departure, is it not, from the original view of Her Majesty's Government? May I ask whether this Association will be able to lend and receive in soft currencies?
EARL JELLICOE: My Lords, before the noble Marquess replies, may I ask him one question on what was a very encouraging reply on this particular point? He gave the figure of a possible £50 million as being our proportional

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share of the subscription. That, I assume, would be on the basis of 1,000 million dollars.
THE MARQUESS OF LANSDOWNE: My Lords, I do not wish in any way to disappoint the noble Lord, Lord Ogmore. I think that if he reads what I have said in the OFFICIAL REPORT tomorrow, he will see exactly where Her Majesty's Government stand. We look upon this proposal with favour, and it will be most carefully scrutinised, but naturally I cannot this evening commit any of my colleagues to anything definite. As I have tried to explain, we are prepared to co-operate in seeing whether it is possible to work out a scheme which will be practicable. I go no further than that.
I am afraid it is possible that I may not be able to answer all the points which noble Lords have raised and indeed it may well be that your Lordships will not wish me to do so. Some noble Lords who took part in the debate have been obliged to leave. But I should like to answer one or two specific questions, and if there are others which I have forgotten I hope that noble Lords will not hesitate to ask me. The noble Earl, Lord Jellicoe, referred to the question of the co-ordination of our efforts with other European countries. I listened to that part of his speech, as I did to the whole of his speech, with great interest. As the noble Earl may well be aware, various ideas are being considered, and the noble Earl's suggestion about the possibility of using O.E.E.C. is one of the schemes that is being considered. We will certainly take note of what he has said. I think that the noble Earl made a valuable suggestion when he said that he thought that perhaps the co-operation of the countries of the Six and the countries of the Seven on aid to underdeveloped countries might help to constitute the bridge that we so much desire between these two economic organisations.
The noble Lord, Lord Ogmore, asked me about the Commonwealth Development Bank. Officials met here last week to review the availability of resources to help economic development in the Commonwealth. They reviewed the idea of a Commonwealth Development Bank. I have no doubt that in due course they will
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be reporting to their Governments on their conclusions, but I think the indications are that they found the difficulties no less than the Ministers found them when they were discussing this matter at Montreal. In particular, there is no certainty that the creation of a Commonwealth Development Bank could increase the funds available to the Commonwealth. But no doubt the Finance Ministers, when they meet in September, will discuss this matter further, though I think, that we may once again find that the creation of another organ does not create more wealth.
The noble Earl, Lord Jellicoe, asked where Her Majesty's Government stood in relation to the Special Fund. It is true that our subscription to the Special Fund has been of the order of one million dollars. This was for the first year of the Fund's operation. At present we are discussing what our contribution for 1960 should be. This, of course, we have to consider in the light of our other commitments. I think that there was perhaps a slight mis-statement when it was suggested that Mr. Hoffman had been unable to persuade us of the need. That, I must assure the noble Earl, is not the case. We are fully aware of the need, but we have to make calculations. I think that it is safe to tell the noble Earl that it is our hope that Her Majesty's Government will be able to make an increased contribution.
The noble Earl, Lord Bessborough, felt obliged from his experience to call attention to certain shortcomings which, he considered, existed in some of our representatives overseas. Surely an adult country like ours can afford self-criticism. I do not find it possible to agree with all that the noble Earl said, but it may be that we should be wise to consider whether our attitude is always the most suitable attitude in modern times. The reports that I have from overseas are nearly always good, but I suppose that it may be that at times, such as in the instances the noble Earl gave us, our representatives may fall below the level of events.
The noble Lord, Lord Ogmore, paid compliments to the organisers of the Atlantic Congress, and the noble Viscount, Lord Goschen, associated himself with these compliments. I should like to say, both personally and on behalf of

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Her Majesty's Government, how much we admired the way the Atlantic Congress was organised. I heard of the standing ovation which was given to the British contingent, a wonderful tribute of appreciation from our visitors from abroad.
I am certain that there will be a number of questions with which I have either not dealt with at all or dealt with inadequately. I am not going to attempt this evening to go into the interesting details of the methods and machinery for arranging loans, which were developed by the noble Lord, Lord Salter. These are suggestions that obviously deserve consideration and they will be given that consideration. I should simply like to say this in conclusion. I repeat our thanks to the noble Earl, Lord Jellicoe, for having moved this Motion and our gratitude to noble Lords who have taken part in this debate and made valuable contributions, all of which will be carefully considered. I sit down leaving with your Lordships this thought—that we in the United Kingdom are not ashamed of the efforts that we have made. We are not satisfied with what we have done and will certainly bend our minds and our energies to making further contributions towards a cause which has nothing whatever to do with politics, but is a moral obligation, to help those who are less fortunate than ourselves. I think that if we approach this problem only from the angle of arresting a type of government in which we do not believe, we shall be making a mistake. Naturally, we must see that aid is given unconditionally, and that is the way in which Her Majesty's Government are attempting to make their contribution to this gigantic task.
9.10 p.m.
EARL JELLICOE: My Lords, before I beg leave to withdraw the Motion I should just like to put your Lordships' minds and digestions at rest; I am not going to make my speech or those of your Lordships again. I just want to say three things. First, I should like to add my word to those which have fallen from other noble Lords in praise of the work done by the noble Lord, Lord Crathorne, and the noble Baroness, Lady Elliot of Harwood, in helping to organise and to make a success of the Atlantic Congress. Secondly, I most sincerely thank the noble Marquess, Lord Lansdowne, for his courteous, very full, considered and, to my mind at least, very positive and rather encouraging reply. It was encouraging, at least to me, because so far as the three suggestions that I put to him are concerned I think I scored three inners, or perhaps two inners and a magpie, on the target presented by the noble Marquess. Thirdly, and in conclusion, I would thank all noble Lords and the noble Baroness who have spoken in the debate. I think their speeches, together with that of the noble Marquess, have done what the Motion was intended to do, which was to focus attention on this really vital problem in our whole international relations. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

HUMBER BRIDGE BILL
The Queen's consent signified, and Bill reported, with Amendments.
House adjourned at twelve minutes past nine o'clock.