Sitting of 11 May 1959

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  PORTSMOUTH CORPORATION BILL.
  Queen's Consent, on behalf of the Crown, signified.
  Bill read the Third time and passed.

  TEES VALLEY AND CLEVELAND WATER BILL
  As amended, considered; to be read the Third time.
  MIDDLESEX COUNTY COUNCIL BILL [Lords]
  Read a Second time and committed.
ORAL ANSWERS TO QUESTIONS

  NILE WATERS
  Mr. P. Williamsasked the Secretary of State for Foreign Affairs whether he will now take the initiative in calling a technical conference to discuss the future use of the Nile Waters.
  The Minister of State for Foreign Affairs (Mr. John Profumo): No, Sir. But I will bear the suggestion in mind.
  Mr. Williams: Is my hon. Friend aware that both the Sudan and our friends in East Africa urgently need to be able to draw additional quantities of water off the Nile and that, in default of any agreement, they are restricted from doing so? Therefore, is it not necessary on technical grounds alone to take the initiative to get this matter started? To wait for political agreement would be too late.
  Mr. Profumo: There is little prospect of a successful conference until the U.A.R.
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  and the Sudanese Government have reached some agreement between themselves. Although technical considerations enter into the dispute, the basic issue is a political one of how to divide the water available.
  Mr. Emrys Hughes: If such a conference is called, will not the hon. Gentleman have to call in the Russians also, as they are building the Aswan Dam? Will he say how much responsibility the Government share for this peculiar position?
  Mr. Profumo: That matter does not arise at all.

  EUROPEAN SOCIAL CHARTER
  Mr. Swinglerasked the Secretary of State for Foreign Affairs what steps will be taken by Her Majesty's Government to adopt the proposals contained in the draft European Social Charter and discussed at the recent International Labour Organisation Conference convened at the Council of Europe's request; and if he will give special consideration to the application of these proposals to overseas territories governed by the United Kingdom.
  The Minister of State for Foreign Affairs (Mr. D. Ormsby-Gore): The proposals in question have still to be considered by the Committee of Ministers of the Council of Europe, which is at present awaiting the comments of the Assembly. The question of adoption does not, therefore, arise at this stage.

  REFUGEES
  Mr. Brockwayasked the Secretary of State for Foreign Affairs what contribution Her Majesty's Government propose to make to the funds of the World Refugee Year campaign, the objects of which include the closing of the camps in Europe and assistance to the Palestinian refugees and the refugees in China and Hong Kong.
  Mr. Ormsby-Gore: Her Majesty's Government have pledged £100,000 to the United Kingdom Committee for the World Refugee Year.
  Mr. Brockway: Is this not a woefully pitiful sum, in view of the fact that there are nearly 30 million refugees in one part

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  of the world or another at the present time? If this target is to be reached, it will involve a contribution of 3s. a week for each family in the country. Surely this Government can do more than that.
  Mr. Ormsby-Gore: I should make it clear that this is not all that we are doing for refugees in this year. Our budget for refugees runs at well over £2 million a year. The object of the World Refugee Year is to try to arouse the conscience of people all over the world to the need to give some support to these refugees, and this sum of money which I have announced is merely a subscription to the committee's fund in the British Isles.
  Mr. Dugdale: Would the right hon. Gentleman not agree that the best help that we could give to the Palestinian refugees would be to persuade the United Arab Republic to settle them outside the camps and then to get U.N.O. to abolish the camps altogether?
  Mr. Ormsby-Gore: That is a much wider matter than the Question on the Order Paper.
  Mr. Youngerasked the Secretary of State for Foreign Affairs what contribution Her Majesty's Government will make to the United Nations Relief and Works Agency for Palestine Refugees for the year ending 31st March, 1960; and whether this is more or less than was paid in 1958–59.
  Mr. Ormsby-Gore: A contribution to the United Nations Relief and Works Agency amounting to £1,928,572 has been provided for in the 1959–60 Estimates, subject to Parliamentary approval. This provision is the same as the sum actually paid to the Agency in the United Kingdom financial year 1958–59.
  Mr. Younger: Is it also the same sum as that promised on the last occasion? Is it not the case that the figure promised last year was larger than the figure in the current Estimates by about £70,000? If that is the case, can the Minister explain why the amount mentioned in the previous year was not in fact paid? Secondly, does he not think it rather ironical that apparently the Government are reducing their contribution to the Palestine refugees to the extent of two-thirds of the amount by which they are increasing their subscription to World
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  Refugee Year? Is that not rather a hypocritical position?
  Mr. Ormsby-Gore: I will look into the figures which the right hon. Gentleman has quoted. We are always considering the exact state of the budget of this Agency. As the right hon. Gentleman knows, the burden has frequently fallen upon us and the American Government to see that this Agency does not break down altogether. I can assure him that we have always seen that sums are available to keep the work of this Agency going.

  UNITED KINGDOM AND UNITED STATES (SHIPPING)
  Mr. Peytonasked the Secretary of State for Foreign Affairs if he will take an early opportunity to discuss with the United States Secretary of State the divergencies of views and policies on shipping matters which have arisen between the United Kingdom and the United States of America.
  Mr. Ormsby-Gore: My right hon. and learned Friend has discussed these matters with United States' Ministers on several occasions. Further talks will take place between officials in Washington next month.
  Mr. Peyton: Whilst I am glad to hear that, would not my right hon. Friend agree that this situation has really become so serious now that the problems can only be solved between Governments on a very high level? Will my right hon. Friend make it absolutely clear to the American Government that a continuation of the use of discriminatory practices, the continuing use of flags of convenience and the entering upon a war of subsidies, which would be uneconomic and ruinous in the long run, can only do harm? Will he really make certain that the American Government bring urgent attention to a problem far too long neglected?
  Mr. Ormsby-Gore: I certainly agree with a great deal that the hon. Member has mentioned.
  Mr. Shinwell: Will the right hon. Gentleman understand that many of us, if not all of us, are very resentful of the attitude adopted by the United States Government and shipowners in the United

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  States and that unless something drastic is done there will be a disastrous result for British shipping which we cannot afford? Will the right hon. Gentleman make it quite plain to his right hon. and learned Friend the Foreign Secretary that we expect something to be done at a very early stage?
  Mr. Ormsby-Gore: I quite appreciate that, and I know that it is the feeling of the whole House. We have, partly or our initiative, organised the meeting which is to take place next month between not only us and the United States, but a great many other maritime Powers which are equally concerned about United States practices.

  N.A.T.O. (SPAIN)
  Mr. Zilliacusasked the Secretary of State for Foreign Affairs what communications he has received from the French Government concerning the admission of Franco Spain to the North Atlantic Treaty Organisation; and what was his reply.
  Mr. Healeyasked the Secretary of State for Foreign Affairs to what extent it is Her Majesty's Government's policy that Spain should be admitted to the North Atlantic Treaty Organisation.
  Mr. Bevanasked the Secretary of State for Foreign Affairs what fresh proposals have been made to Her Majesty's Government regarding the admission of Spain to the North Atlantic Treaty Organisation; and what is the policy of Her Majesty's Government to this question.
  Mr. Profumo: No proposals have been made to Her Majesty's Government about Spanish membership of the North Atlantic Treaty Organisation. Nor has the French Government sent us a communication about it. Membership of the North Atlantic Treaty Organisation is a matter for all members of the organisation together. It would therefore be inappropriate for me to say now what the attitude of Her Majesty's Government might or might not be if Spanish membership came up for consideration at any time.
  Mr. Zilliacus: Will not the hon. Gentleman bear in mind that the General Assembly of the United Nations at one time pointed out that the Franco régime was a Fascist regime imposed upon Spain
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  by Hitler and Mussolini and in no way represented the Spanish people? Will he further bear in mind that there are already over 50 dictatorships in the so-called free world? Does he not believe that the admission of this malodorous Fascist regime to N.A.T.O. would expose the fact that what the Government mean by "defence of the free world" is the preservation of "The world of King Slickey", to quote the New Statesman?
  Mr. Profumo: That does not arise from my Answer. Perhaps the hon. Member might listen a little more closely to the answers I give to his Questions.

  BRITISH FORCES (USE)
  Mr. Zilliacusasked the Secretary of State for Foreign Affairs to what extent the Government still consider themselves entitled, as declared by the Prime Minister in the House on 17th July, 1958, to despatch British forces at the request of the ruler of any country who may ask for such assistance to enable him to defeat a rising in his own country which he ascribes to indirect aggression or infiltration and subversion by foreign agents.
  Mr. Profumo: I do not accept the hon. Member's version of the statement made by my right hon. Friend the Prime Minister on 17th July, 1958. With regard to the complicated hypothesis raised in his Question, I can only tell the hon. Member that Her Majesty's Government would have to deal with any new situation of the sort envisaged by his Question in the light of the particular circumstances of the case and of their international obligations and duties affecting it.
  Mr. Zilliacus: Will the hon. Gentleman state whether the Government consider that, under the resolution on the Middle East passed at the last General Assembly on the initiative of the Arab States, they still remain free to act in the way they acted in Jordan and to use the arguments for action that were used by the Prime Minister on 17th July?
  Mr. Profumo: I cannot commit Her Majesty's Government as to the precise circumstances in which they might consider it right to send assistance in the future.

  BAGDAD PACT
  Mr. Zilliacusasked the Secretary of State for Foreign Affairs to what extent the Government remain committed to the undertaking in paragraph 5 of the Bagdad Pact Council communiqué of 22nd November, 1955, to help defend the territories of the Bagdad Pact countries against Communist subversion, and by the reply of the Minister of Defence in the House on 27th February, 1957, to the effect that it was for the rulers of those countries to decide whether a rising in their territories constituted Communist subversion which Britain was pledged to help them combat by the despatch of armed forces.
  Mr. Profumo: I would refer the hon. Member to the reply given him by my right hon. Friend on 9th March last.
  Mr. Zilliacus: Will the hon. Gentleman clarify that reply by making it clear that the Government will not use military force to support the ruler of a country involved in difficulties with his own population, even if he alleges Communist subversion, indirect aggression, or what, have you?
  Mr. Profumo: The hon. Member has asked this Question at least five times and he knows the answer so well that I am led to wonder whether he puts down the Questions for mischievous purposes.
  Mr. Bevan: Was it not very improper to impute motives that when hon. Members put Questions on the Order Paper they do so for mischievous purposes?
  Mr. Speaker: "Mischievous" is used sometimes in the sense of meaning playful. At other times, it means something bad. The hon. Gentleman is not entitled to impute any unavowed motive to the hon. Member for Gorton (Mr. Zilliacus) in asking these Questions. One has to put the best construction on the utterances of hon. Members, and I thought that perhaps the Minister of State meant it in a playful sense.
  Mr. Bevan: In my submission, the Minister of State made his statement in such a way, and it was received by hon. Members behind him in such a fashion, as to show that it was impudent and arrogant.
  Mr. Zilliacus: In view of the utter impossibility of ever getting a straight answer
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  to this Question from the Government, I propose to raise this matter on the Adjournment at the earliest possible opportunity.

  ANGLO-AMERICAN CO-OPERATION (SPACE RESEARCH)
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs to what extent it is the policy of Her Majesty's Government to co-operate with the United States Government in outer space research and experimentation both in the nuclear and non-nuclear spheres.
  Mr. Ormsby-Gore: It is our policy to seek close and continuing collaboration with our American Allies in matters of this kind. But on the specific question of outer space research, I must ask the right hon. and learned Gentleman to await the policy statement which I believe my right hon. Friend the Prime Minister will be making tomorrow.
  Mr. Henderson: Will the statement to be made by the Prime Minister tomorrow cover the point raised in my Question?
  Mr. Ormbsy-Gore: I have no doubt that the right hon. and learned Gentleman will raise it as a supplementary if it is not.

  IRAQ (SUPPLY OF ARMS)
  Mr. Roy Jenkinsasked the Secretary of State for Foreign Affairs what negotiations for further arms shipments to Iraq are at present proceeding.
  Mr. Healeyasked the Secretary of State for Foreign Affairs what reply he has made to the recent request of the Iraq Government for a further shipment of arms.
  Sir C. Mott-Radclyffeasked the Secretary of State far Foreign Affairs what recent requests he has received from the Government of Iraq for the supply of arms; and if he will make a statement.
  Mr. Profumo: As the House knows, Iraq has traditionally looked to Great Britain to supply her with arms. As I informed the hon. Member for Newcastle-under-Lyme (Mr. Swingler) on 2nd March, several requests for the purchase

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  of military equipment have been received from the Iraqi Government since the revolution, and some of these, including orders dating from before the revolution, have already been met. Early this year, General Qasim asked Her Majesty's Ambassador in Bagdad whether her Majesty's Government would be wilding to authorise further sales, including certain aircraft and tanks. In making this request, General Qasim explicitly stated that he wished Britain to remain one of the main sources of supply for the Iraqi forces.
  Her Majesty's Government have agreed to issue the necessary export licences to the English Electric Company for the supply of a limited number of aircraft if financial arrangements can be made with he company. Her Majesty's Government have also informed the Iraqi Government that they are ready to authorise negotiations for the delivery of reasonable quantities of other arms, including tanks. Details are now under discussion between Her Majesty's Embassy in Bagdad and the Iraqi authorities.
  Mr. Jenkins: What possible advantage can there be in such a policy? Are the Government still so bitter about the events of two and a half years ago that they would prefer to see Iraq become more Communist than become more Nasserite? What argument is there for engaging at present in a policy which can only be regarded as extremely unfriendly towards Egypt and the United Arab Republic?
  Mr. Profumo: I do not think that forcing General Qasim to rely solely on the Soviet bloc for arms would contribute to stability in the Middle East, which is our sole aim.
  Dame Florence Horsbrugh: As this is bound to affect the neighbours of Iraq, may I ask whether this matter was discussed with the Shah of Persia when he was here and what was his opinion?
  Mr. Ellis Smith: The right hon. Lady can rely on that all right.
  Mr. Profumo: Yes, it was discussed and he and his advisers approved.
  Mr. Bevan: Is it not extremely ironical that we should now be reduced to supplying arms to Iraq following the revolution when it was stated from the
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  Government side of the House at the time that one of the reasons why we went into Jordan was because of the anxieties raised by the very Government to which we now supply the arms? Was it not said by Mr. Khrushchev that he invited Sir Anthony Eden to have a general embargo on the supply of arms to all nations in the Middle East? Has the hon. Gentleman discussed that with the Russian authorities since? Surely, this is a very upsetting statement to have to make.
  Mr. Profumo: I do not think that a general embargo on arms in the Middle East is practicable, and I do not think that the Russians would agree to it or that it could be enforced. The answer to this is that we should continue, within reason, our long tradition of supplying this country with arms and do our very best to allow General Qasim to maintain an independent line of action, which, he says, is what he wishes to do.
  Mr. Bevan: How can the hon. Gentleman express doubts about the practicability of an embargo on arms by all the major nations to the Middle East unless he tries it? On several occasions Mr. Khrushchev has made the statement that he made this offer. Why has the offer not been followed up? If it had been followed up and the arms embargo had been imposed upon the Middle East, the Government would not have to make this embarrassing statement this afternoon.
  Mr. Profumo: First of all, I really must say that the Government do not find this an embarrassing statement at all. [Interruption.]Certainly not. We do not find it embarrassing to come to the House and tell the House of something which we believe is a good decision. I will give the right hon. Gentleman something of an answer to the question he asked about why we have not done more to ask the Russians whether we can have a general embargo. One of the reasons is that the Russians themselves have been extremely busy since the revolution exporting arms to the region themselves.
  Sir C. Mott-Radclyffe: Is the delivery of these arms part of an outstanding contract, or is it a fresh contract? If it is a fresh contract, could my hon. Friend give the House some idea of when the consignment of arms is likely to be delivered?
  Mr. Profumo: I will refer my hon. Friend to my original Answer. Part of this, of course, is a new request from General Qasim. So far as that is concerned, the delivery of the major items cannot begin for some time.
  Mr. Healey: Is the Minister aware that the Iraqi Government have been making threats of armed action against the Government of the United Arab Republic, with which we are now seeking the resumption of diplomatic relations, and that they also have had a serious diplomatic quarrel with the Government of Persia, with which we are allied. Is not the policy of Her Majesty's Government totally reprehensible and damaging to British interests and world peace?
  Mr. Profumo: No, Sir; I simply do not accept the implication of the hon. Gentleman's supplementary question at all. My right hon. and learned Friend has taken steps to inform Colonel Nasser of the action we have taken.
  Mr. Shinwell: Have the Government detected any change in Iraq in the last year or so? Is Iraq going Communist or is it more friendly disposed towards the West, or what is its policy likely to be? Have they taken all these calculations into consideration before exporting arms to that country? Finally, does this provision of arms to Iraq mean that we are now prepared to provide arms for any Middle East country if it asks for them, including Israel?
  Mr. Profumo: I think that the last part of the right hon. Gentleman's supplementary is very much wider than the Question on the Order Paper. If he wishes to ask that question, perhaps he will put it down. All that this Question refers to is arms to Iraq. As regards the earlier part of his question, we have, of course, taken into consideration all the many ramifications which the right hon. Gentleman rightly points out to the House. Her Majesty's Government do not accept the premise that the present régime in Iraq is now completely dominated by the Communists. As to the future, we cannot tell, of course, but we regard the action we have taken as generally designed towards the maintenance of stability in the Middle East.

  SAUDI ARABIA (DIPLOMATIC RELATIONS)
  Mr. Roy Jenkinsasked the Secretary of State for Foreign Affairs what are now the obstacles to the re-establishment of diplomatic relations with Saudi Arabia.
  Mr. Profumo: There are no obstacles on the side of Her Majesty's Government. We have channels through which we have been in contact with the Saudi Arabian Government and we hope to find a mutually acceptable basis for resuming relations.
  Mr. Jenkins: Did the hon. Gentleman see the report of an interview given to a British journalist which appeared in one of the Sunday newspapers yesterday? Does he agree that there might be a chance for our Middle Eastern policy being more consistent and sensible if we quickly resumed diplomatic relations with the two major Arab countries?
  Mr. Profumo: I did see the report to which the hon. Gentleman refers, but that, of course, is not the same as having a direct approach from the Government concerned. As I said in my Answer, I hope that a way may be found mutually acceptable for resuming relations with that country. I agree with the hon. Gentleman that it is very important.
  Mr. W. Yates: Is my hon. Friend aware that the supply of arms is a short-term policy, and will he consider—
  Mr. Speaker: Order. I think that that was the last Question. This is about diplomatic relations with Saudi Arabia.
  Mr. Yates: May I say, Mr. Speaker, that I was about to ask a question about diplomatic relations within the context of arms? May I now put my supplementary question?
  Mr. Speaker: On what subject? There is nothing about arms in the Question.
  Mr. Yates: About diplomatic relations, Sir. From the point of view of the problem of diplomatic relations, would it not be better policy for Her Majesty's Government to ask the Heads of State of Saudi Arabia, the United Arab Republic and Iraq to this country to try to reach some long-term policy for Great Britain and the Middle East as soon as possible?
  Mr. Profumo: I think that it would be wiser if we concentrated first on the resumption of diplomatic relations with Saudi Arabia.

  SUMMIT CONFERENCE
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs, in view of the recent official statement of the United Nations Secretary-General, to what extent it is now the policy of Her Majesty's Government that the proposed Summit Conference should be within the framework of the United Nations.
  Mr. Ormsby-Gore: I understand that at a Press conference on 5th May, Mr. Hammarskjold explained that he had not made a proposal in his speech a few days before. He added that whether or not a Summit Conference, if one were to be held, should be within the framework of the Security Council would, in his view, depend on the programme for such a conference. My right honourable and learned Friend agrees with these views.
  Mr. Henderson: Will the Government consider proposing that the Secretary-General of the United Nations be invited to sit in as an observer at the Summit Conference, and, to that extent, associate the United Nations with the conference?
  Mr. Ormsby-Gore: I think that it will very much depend on how the issues regarding Germany, Berlin and so on arise and whether they are taken up in the United Nations, and, if so, in what form they are taken up in the United Nations. It is much too early to pronounce on any of those matters.

  COLONIAL TERRITORIES
  Mr. Brockwayasked the Secretary of State for Foreign Affairs if, in the light of the decision of Ghana and Guinea to invite African States to establish a basis of union, he will initiate discussions with Governments responsible for the administration of Colonial Territories in order to facilitate the union of such territories on the achievement of independence when their Governments so desire.
  Mr. Profumo: I have nothing I can add to the Answer which I gave the hon. Member on 2nd March. Once a
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  State has achieved independence, questions of its union with other States are strictly its own responsibility.
  Mr. Brockway: Will the Minister discuss this matter with his right hon. and learned Friend and with the Secretary of State for the Colonies in order to foresee the difficulties which are now arising in the whole Continent of Africa where territories which used to accept imperial rule are now appealing to international considerations? In view of the fact that many European countries are involved. would it not be desirable to foresee this situation and have the discussions suggested in the Question?
  Mr. Profumo: I can assure the hon. Gentleman that, when the circumstances are propitious, Her Majesty's Government will make a point of confidential discussions and consultations with other friendly Governments.
  Mr. Younger: Are we to understand from that reply that there are no continuing discussions with France, in particular, about this large network of territories, the majority of which are still not independent and are under French or British rule? Is the Minister aware that there is a great deal of disquiet among many people interested in West Africa at the lack of co-operation there appears to be between the British and French Governments?
  Mr. Profumo: I do not think that there is any lack of co-operation between the two Governments concerned. This is much more a matter for my right hon. Friend the Colonial Secretary, but I think I should be right in telling the House that these consultations go on the whole time. I thought that the hon. Gentleman had something rather more than that in mind.

  FOREIGN COUNTRIES (BRITISH TEACHERS)
  Mr. John Hallasked the Secretary of State for Foreign Affairs what machinery he provides to help foreign Governments find suitably qualified British persons to teach in their schools and universities.
  Mr. Profumo: As the Answer to this Question is rather long, I will, with permission, circulate it in the OFFICIAL REPORT.
  Mr. Hall: Would it not be to the long-term advantage of this country as well as render a service to other countries that British teachers should be encouraged to take overseas appointments? If the organisation does not already exist, will my hon. Friend encourage the establishment of a central organisation to deal with applications from overseas countries?
  Mr. Profumo: I agree with my hon. Friend that this is a very important matter. I hope that he will find my Answer helpful when he reads it.
  Following is the information:
  Professors, lecturers and teachers are recruited in the United Kingdom for foreign Governments, or institutions in foreign countries, which wish either to employ British persons to teach on direct contract, or to have the services of such persons free of charge as technical experts, under, for instance, the Bagdad Pact or the Colombo Plan.
  In the first case, the British Council undertakes recruitment if the pay and conditions are suitable. The British Council is sometimes able to offer financial help. The local British Council representative helps by investigating the conditions of the post, and its headquarters in London arrange the details of particular appointments.
  As regards the second case, suitably qualified lecturers and professors are recruited by the Foreign Office or the British Council for the Middle East Technical University in Ankara and for other appointments in member countries of the Bagdad Pact, as well as of the Colombo Plan.

  U.S.S.R. (HUNGARIAN PRISONERS)
  Colonel Tufton Beamishasked the Secretary of State for Foreign Affairs what information he has received from the British Minister in Hungary about the number of Hungarians still in prison or slave labour camps in the Union of Soviet Socialist Republics or in China, following the reported deportation of 75,000 Hungarians after the 1956 revolution; and what efforts are being made to get the Soviet Government to return all these political prisoners to their own country in the light of obligations incurred by Her Majesty's Government under the Hungarian Peace Treaty and the resolutions agreed to by the United Nations after the revolution.
  Mr. Ormsby-Gore: I have no reliable information about the total number of Hungarians deported to the Soviet Union at the time of the Budapest uprising, or
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  about the number of these deportees subsequently repatriated to Hungary. I have no evidence that any of these deportees were sent to China. The Soviet Government have not seen fit to make any response to the many expressions of concern on this subject made in the General Assembly of the United Nations by Her Majesty's Government and many other Governments. They have also ignored the resolutions of the General Assembly calling upon them to respect human rights in Hungary and have refused to discuss Prince Wan's appeal of September, 1957, for the return of the Hungarian deportees to their own country.
  Colonel Beamish: Is my right hon. Friend aware that it would appear from the evidence submitted a few weeks ago to the United Nations that about 12,000 of these Hungarians have been repatriated during the last 18 months? Does he agree that nothing would be likely to contribute more to crowning with success the Foreign Minister's Conference, which are the words Mr. Gromyko used in expressing his hopes for the Conference, than the return of all these unfortunate people?
  Mr. Ormsby-Gore: That certainly would be a very helpful development.

  FOREIGN MINISTERS' CONFERENCE (MALTA)
  Mr. Brockwayasked the Secretary of State for Foreign Affairs what reply has been given to the request of Mr. Dom Mintoff that the question of Malta's independence should be discussed at the Foreign Ministers' Conference at Geneva.
  Mr. P. Williams: On a point of order. I wonder whether you could give the House some guidance in this matter, Mr. Speaker. This Question is related to Malta's independence. Malta is still a Colony and questions on Malta are normally answered by the Colonial Secretary. Is it in order for this Question to be put to the Foreign Office?
  Mr. Speaker: The Foreign Office thinks so. The Colonial Office thinks so, too, or it would not have agreed to its transfer. If the hon. Gentleman looks at the Question, he will see that it refers to the Foreign Ministers' Conference at Geneva.
  Mr. Profumo: It has been agreed between the four Governments that the

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  agenda of the Foreign Ministers' Conference at Geneva should be "questions relating to Germany, including a peace treaty with Germany and the question of Berlin". Even if this had not been the case, the future of Malta would not be a proper subject for discussion at the Geneva Conference. Mr. Mintoff is being so informed.
  Mr. Brockway: Is not this another instance of how colonial peoples are now looking towards an international authority rather than the old imperial authorities which have controlled them in the past—
  An Hon. Member: Ask Hungary.
  Mr. Brockway: I asked about Hungary at the time of Hungary—and will not the Minister anticipate the growing feeling among subject people that they wish to appeal to international authorities for their independence?
  Mr. Profumo: That certainly is not a proper subject for the Foreign Office.

  CENTRAL EUROPE (ARMS LIMITATION)
  Mr. Frank Allaunasked the Secretary of State for Foreign Affairs what is the reason for recent changes in the policy of Her Majesty's Government with regard to limiting arms in Central Europe.
  Mr. Ormsby-Gore: There have been no such changes in the policy of Her Majesty's Government.
  Mr. Allaun: Did not the Foreign Secretary, speaking on television last Monday, speak of
  "mutual inspection of arms and perhaps ceilings "
  instead of disengagement and thinning out? Does the Minister recall that the red lines on both sides of the carpet of this Chamber, beyond which we may not step, were originally imposed to keep possible adversaries at sword's length and thus avoid conflict? Could not this earlier method of disengagement be repeated equally successfully today? Just as we have learnt to discard swords, cannot the two worlds do so too?
  Mr. Ormsby-Gore: I do not think that my right hon. and learned Friend has
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  ever used the word "disengagement" in reference to any plan which the Government have tabled.
  Mr. Bevan: The Prime Minister has on several occasions used the phrase "limitation and thinning out".
  Mr. Ormsby-Gore: Those are different words.

  BURAIMI OASIS (DISPUTE)
  Mr. Healeyasked the Secretary of State for Foreign Affairs whether he will refer the legal aspects of the dispute over the Buraimi Oasis to the International Court for a decision.
  Mr. Profumo: No, Sir. This could not be done without the consent of the Sultan of Muscat and Oman and of the Ruler of Abu Dhabi, which would not he given.
  Mr. Healey: Does the Minister of State continue to pretend that the Sultan of Muscat and the Ruler of Abu Dhabi are not puppets of the British Government? Is not the Buraimi Oasis dispute the only obstacle to the restoration of diplomatic relations with Saudi Arabia? Although we all deplore the behaviour of the Saudi Arabian Government when this matter was last submitted to arbitration, is it not time to put first things first?
  Mr. Profumo: I cannot agree with any of that. First, they are certainly not puppets of Great Britain. Secondly, with regard to it being the only obstacle, I was only just now answering a Question about Prince Feisal's statement in which he said that this was not the case. Thirdly, perhaps the hon. Gentleman may like to refresh his memory of what happened when they went to arbitration last time.
  Mr. P. Noel-Baker: If we have a good case in this dispute, should we not strengthen it by submitting it to the International Court? Have we asked the Sultan whether he would agree to do so?
  Mr. Profumo: No. We cannot submit this matter without the agreement of all parties. As I informed the House, I am certain that the two Rulers concerned would not, unless they have recently changed their mind, subject themselves to this sort of thing.
  Mr. Noel-Baker: May I have an answer to my question? Have we recently asked the Rulers whether they will agree to submit it, and, if not, why not?
  Mr. Profumo: We have not asked them recently, if by "recently" the right hon. Gentleman means in the last month or so. I have no doubt that their attention will be called to this matter and, if they change their mind, we shall be very glad to continue to try to find a solution to this problem.

  MIDDLE EAST (NUCLEAR FREE-ZONE)
  Mr. Bevanasked the Secretary of State for Foreign Affairs what official communications have been received from the Governments of the Union of Soviet Socialist Republics and Persia concerning the establishment of an atom-free zone in the Middle East; and what is the policy of Her Majesty's Government with regard to this proposal.
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs to what extent it is the policy of Her Majesty's Government to agree to the Soviet proposal for a nuclear-free zone in the Middle East.
  Mr. Ormsby-Gore: Her Majesty's Government have received no official proposals of this nature either from the Soviet or Iranian Governments.
  Mr. Bevan: Do Her Majesty's Government intend to take the initiative themselves in this matter?
  Mr. Ormsby-Gore: No. We do not feel that dealing with the question of nuclear arms alone is ever likely to provide a useful solution. However, we are always prepared to discuss the question of the limitation or the elimination of nuclear arms in a properly balanced disarmament agreement.
  Mr. Bevan: Did the right hon. Gentleman hear his hon. Friend the Minister of State just now say with regard to the supply of conventional arms to the Middle East that we had not taken up the proposal of the Soviet Union? We are now informed that we are not going to take up the proposal on the prevention of atomic weapons in the Middle East because that ought to form part of a
  848
  general agreement. Will the Ministers stop playing Box and Cox with each other in this way? Will the hon. Gentleman now say whether he is prepared to discuss with the Soviet Union the prohibition of all additional arms to the Middle East, including nuclear weapons?
  Mr. Ormsby-Gore: My hon. Friend's Answer and mine were completely consistent. What I am saying, first, is that any discussion about limitation of arms should not be confined to one particular type of weapon, and, secondly, that I do not think that it is best to even approach these problems from a purely regional point of view. As the right hon. Gentleman knows very well, on many occasions we have expressed full proposals for disarmament which we have put to the Soviet Government, and it is only a pity that at the moment there is no forum in which the Soviet Government are prepared to discuss them.
  Mr. Bevan: Why does the right hon. Gentleman say that it is not Her Majesty's Government's policy to discuss limitation of arms on a regional basis when the Prime Minister made a declaration in Moscow in which he said that he was prepared to study seriously and earnestly the limitation of arms in Central Europe? What on earth are the Government doing in the matter? Why do not they have a little conference among themselves and agree what their reply to the House of Commons should be? We might then know what their policy is.
  Mr. Ormsby-Gore: What we are discussing is a disarmament proposal which, according to the right hon. Gentleman, was put forward by the Soviet Union. No such proposal was put forward. There was a statement by a Soviet spokesman about a zone in the Middle East, and when we made diplomatic approaches to the Soviet Government about what was the meaning of this statement it was clear that they had no official proposal to make and that no details were available.
  Mr. Bevan: May we have the truth here? We have just heard from the right hon. Gentleman's hon. Friend the Minister of State that no such approaches were made to the Soviet Union because the Government considered that they were not practicable. We are now told

  849
  that approaches have been made and that they came to nothing. Who is telling the truth?
  Mr. Ormsby-Gore: I think that the right hon. Gentleman might listen a little more carefully and perhaps read his own Question, which relates to a nuclear free zone. What my hon. Friend was replying to was a Question about the limitation on their own of ordinary conventional armaments. These are two different matters.
  Mr. A. Henderson: Does the reply of the Minister of State mean that there is no truth in the report published in The Times a few days ago stating that such a proposal had been made by the Soviet Government to the Government of Persia and that the Government of Persia in their reply said that they would give favourable consideration to the proposal if the Soviet Government could obtain the agreement of the other nuclear Powers—Her Majesty's Government and the United States Government? If there is any truth in that statement, may I ask the Minister of State whether he will at least say that the Government will consider the desirability of preventing nuclear weapons getting into the Middle East?
  Mr. Ormsby-Gore: The Iranian Government, in replying to the Soviet Note of last December, spoke about the importance which should be attached to agreement being reached within the framework of the United Nations on the prohibition of atomic weapons and the limitation of armaments in general. That, I think, is a statement of policy on behalf of the Iranian Government which exactly coincides with the policy of Her Majesty's Government.

  LAOS (COMMISSION FOR SUPERVISION AND CONTROL)
  Mr. Warbeyasked the Secretary of State for Foreign Affairs whether he is yet in a position to publish his reply to the Soviet Note proposing the reconvening of the International Commission for Supervision and Control in Laos.
  Mr. Profumo: We have not yet received the reaction's of the Soviet Government to our Note of 7th April. As my right hon and learned Friend said on 8th April, we are not prepared to disclose
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  its contents until those reactions have been received.
  Mr. Warbey: Why are the Government being so coy about this matter? Are they trying to avoid some awkward decision? Can the Minister at least say whether the Government favour steps towards the reconvening of the International Commission for Laos?
  Mr. Profumo: I cannot reveal what are the contents of our confidential discussions at the present time. Laos is now a sovereign and independent Government whose views on all these things have to be taken into account.

  UNITED NATIONS (NUCLEAR DISARMAMENT)
  Mr. Emrys Hughesasked the Secretary of State for Foreign Affairs to what extent Her Majesty's Government approve of the official proposals for nuclear disarmament made recently by the Government of Ireland at the United Nations General Assembly.
  Mr. Ormsby-Gore: Her Majesty's Government sympathise with the wish of the Government of the Irish Republic to make a contribution towards solving the problems of disarmament. We do not, however, feel that this particular proposal would achieve the desired result. The resolution embodying this proposal was withdrawn by the Irish Republic before the United Nations Assembly had the opportunity to vote on it as a whole.
  Mr. Hughes: Was there not a vote on this issue at one point and did not the Government abstain from voting? Can the Minister tell us exactly why? Does he not agree that Ireland is so near this country that if we decide to commit suicide as a nation by entering into a nuclear war the Irish may be obliterated. too?
  Mr. Ormsby-Gore: What happened at the United Nations was that one preambular paragraph was voted on and before the resolution was voted on as a whole the Irish Republic withdrew it. The reason we were not in favour of the resolution was that which I gave in the original Answer. We did not think that this particular proposal would achieve the desired results.

  NUCLEAR TESTS
  Mr. P. Noel-Bakerasked the Secretary of State for Foreign Affairs whether he will now lay a White Paper containing the texts of the proposals for the suspension of nuclear tests so far made by the Governments participating in the present Geneva Conference.
  Mr. Ormsby-Gore: I regret that I cannot accede to this request for reasons already given to the House.
  Mr. Noel-Baker: Does the Minister recall that on 27th April the Foreign Secretary gave what we understood to be a full account of the proceedings in the Conference? If this was the Foreign Secretary's interpretation of the proposals, ought we not also to have the text of the proposals?
  Mr. Ormsby-Gore: For reasons which were given during that debate, it is very difficult if we are having confidential and secret negotiations for one party to publish the documents which are the subject of the negotiations inside the Conference chamber.
  Mr. Noel-Baker: If our Ministers are to give an interpretation of these proposals, is it not desirable that we should see the proposals? Is it not open to the Government to suggest to the other parties to the Conference that the proposals should now be published?
  Mr. Ormsby-Gore: We made such an approach early in the Conference and they were against such an action.
  Mr. Bevan: Would the Minister make a further attempt? It is a very difficult position for the House. First of all we are informed that these are secret and confidential negotiations and then one of the parties to the negotiations tells us something of what is being said and done. That is an ironical situation. Ought we not to approach them once more to see whether we can have the working documents published in order that we may judge for ourselves?
  Mr. Ormsby-Gore: There is a genuine difficulty. One of the problems with which we are faced is our desire to try to give the House at least some information as to how the negotiations are going, but it seems to me that this is likely always to arise when confidential and
  852
  secret negotiations are going on. It seems to me right that from time to time the Governments concerned—and that includes the Soviet Government and the United States Government—should give an indication of the policy which they are pursuing in the negotiations without necessarily disclosing the exact details of what is going on in the Conference.
  Mr. Noel-Baker: Does the Minister recall that in July, 1957, the Government published a White Paper precisely at this time about the proceedings of the Sub-Committee of the United Nations on Disarmament? The conditions were precisely similar to those of this Conference. If we could do it then, can we not do it now? Can we not at least propose it to the other parties?
  Mr. Ormsby-Gore: As I indicated, we did propose it to the other parties but they did not think it a good idea. We will certainly bear it in mind. If a suitable moment arises during the Conference when it would be possible to publish the documents, we are quite prepared so to do, but that moment has not yet arisen.

  BACTERIOLOGICAL WEAPONS AND POISON GASES
  Mr. P. Noel-Bakerasked the Secretary of State for Foreign Affairs how far Her Majesty's Government have yet formulated proposals for the abolition by international agreement of all biological and bacteriological weapons, and of all poison gases.
  Mr. Ormsby-Gore: I share the right hon. Gentleman's desire to see these weapons abolished. The whole question of disarmament, and the proposals we could usefully make to solve this vital problem, are being reviewed by the Departments concerned.
  Mr. Noel-Baker: Has the Minister of State not seen the warning given by General Marshall Stubbs of the United States Army last month that great technical advances in chemical and bacteriological weapons have been made in the last four years and that the survival of the American nation may depend on finding defences against them which do not now exist? In view of this, ought not the Government now to institute a very close study of proposals for their abolition?
  Mr. Ormsby-Gore: I think that that would be very wise, and we are quite prepared to do so, but, as the right hon. Gentleman is aware, at present those weapons are prohibited altogether. They are banned. What we have to do is to see that their abolition forms part of any disarmament proposals.
  Mr. Noel-Baker: I fully agree, and I am most grateful to the Minister for his Answers. Would he suggest to the Ministers of Defence and Supply that they should not pooh-pooh the dangers of these weapons and suggest that they have been exaggerated?

  ICELANDIC FISHERIES DISPUTE
  Mr. Awberyasked the Secretary of State for Foreign Affairs if he is aware that shots have recently been fired off the coast of Iceland and fishermen's lives are put in danger because the British and Icelandic Governments have failed to come to an agreement on the delimitation of coastal jurisdiction, and that this is likely to continue until a mutual agreement has been made; and, as the International Court which deals with these problems does not meet until April of next year, if he will make a further effort to contact the Icelandic Government with a view to arriving at a temporary settlement of the dispute until the meeting takes place next year, or seek an earlier meeting of the World Conference on the Law of the Sea.
  Mr. Ormsby-Gore: Unless the Icelandic Government are willing to come to some interim arrangements of a compromise nature to regulate fishing around Iceland, the risk of dangerous incidents in that area is likely to persist. We are constantly reminding the Icelandic Government of our readiness either to negotiate an interim arrangement, or to refer the dispute to the International Court and to accept any interim arrangement indicated by the Court. But the Icelandic Government have not responded to our approaches; and the Icelandic Parliament recently passed a resolution to the effect that "no fishery limit can be considered which is less than twelve miles from the base lines around Iceland". We shall, however, persist in our requests that the
  854
  Icelandic Government discuss an interim arrangement.
  Meanwhile, I will repeat an offer which my right hon. and learned Friend made last December to the Icelandic representative in the North Atlantic Treaty Organisation, namely, that we are prepared that all British warships should be withdrawn from their present task of protecting British trawlers within the twelve-mile limit if, as an interim arrangement, the Icelandic Government will see that the activities of their Fishery Protection vessels do not go beyond a six-mile limit.
  As for the possibility of advancing the date of the forthcoming United Nations Conference on the Law of the Sea, Her Majesty's Government would have liked a much earlier date than the one eventually fixed, but it was not possible to secure world agreement to a date earlier than the spring of 1960.
  Mr. Awbery: I am deeply grateful to the hon. Gentleman for the consideration he has given to this matter, which was discussed last week on the Floor of the House. Is he aware that so long as the question of territorial waters is unsolved our fishermen in that area are in danger, and that when the question of the twelve-mile limit was before the Conference on the Law of the Sea 39 voted for the twelve miles, 38 voted against the twelve miles and eight were neutral?
  In view of this vote, the Icelandic people believed that they were right in establishing the twelve miles. Will he, therefore, now ask them, as we voted for the six miles—whether they would make it alternate months—six miles for one month, twelve miles for the next month —and continue this arrangement until the international Conference meets? It has been done with the Faroe Government.
  Mr. Ormsby-Gore: I do not think it has been done with the Faroe Government along the lines which the hon. Gentleman suggests. What I indicated was that Her Majesty's Government had made every possible attempt to get the Icelandic Government to discuss some interim arrangement which would make fishing round Iceland safer during the interim period before the Law of the Sea Conference meets next year and comes to a final decision on the matter.
  Mr. Younger: Is the right hon. Gentleman aware that a great many people will think that the interim offer of Her Majesty's Government is, in fact, a very reasonable one? Can he tell me whether any steps have been taken, either through N.A.T.O. or O.E.E.C., both of which bodies have at various times attempted to mediate in this dispute? Is there anything going on about this at the present time in either forum?
  Mr. Ormsby-Gore: Not at the moment. As the right hon. Gentleman knows, we have tried for a very long time, through N.A.T.O., in particular, to get the Icelandic Government to discuss these problems, but I am afraid we were unsuccessful. It is a matter of judgment of when it would be useful to take up the matter again with the Icelandic Government, but I will certainly bear the right hon. Gentleman's suggestion in mind.

  EMPLOYMENT

    Lanarkshire
    Mr. Patrick Maitlandasked the Minister of Labour how many persons are now unemployed at Douglas and Douglas, West, in the county of Lanark.
    The Minister of Labour and National Service (Mr. lain Macleod): On 13th April, there were 19 men and two women unemployed at Douglas, and five men and one woman at Douglas West. In addition, two girls are registered as unemployed with the Youth Employment Service.
    Mr. Maitland: Could my right hon. Friend say what is the proportion of unemployment in this area and whether the Government would consider the village for D. A. T. A. C. help?
    Mr. Macleod: On the first point, I cannot calculate separately a percentage for Douglas as it is part of a large travel-to-work area. I have had the unemployment figures especially extracted for my hon. Friend. On the question of D.A.T.A.C., although it is not a D.A.T.A.C. area, if it would help to relieve unemployment in the locality, it is possible that a specific proposition might qualify.
    Mr. Patrick Maitlandasked the Minister of Labour how many miners
    856
    have left Douglas and Douglas, West, in the county of Lanark since December, 1958.
    Mr. lain Macleod: I regret that records in this form are not kept but I am writing to my hon. Friend giving him such information as is available.
    Mr. Maitland: Is my right hon. Friend aware that something like 70 families have already left the village since the turn of the year? Would he not agree that the departure of the population on this scale in a small area of employment creates subsidiary unemployment in other branches of commerce and activity and therefore requires the attention of the Government?
    Mr. Macleod: Douglas is a difficult problem. It has arisen in part because of the closing of this colliery. If my hon. Friend studies what information I have been able to collect on this subject, he might perhaps like to discuss it with me again.

    Disabled Persons, Oldham and Failsworth
    Mr. Haleasked the Minister of Labour the number of disabled persons registered on the disabled persons' register at the Oldham and Failsworth Employment Exchanges at the most recent date; and how many were unemployed.
    The Parliamentary Secretary to the Ministry of Labour and National Service (Mr. Richard Wood): On 20th April, 1959 the number was 3,199, of whom 299 were unemployed.
    Mr. Hale: Is the Parliamentary Secretary aware that with high unemployment in the area it is a particularly grave and rather heart-rending problem? The employment of disabled workers has become more acute. The restrictions which the Government have placed on Remploy and their failure to provide alternatives have led to very hard cases indeed in some types of illness in that they now render men quite capable of work virtually unemployable? Will he do something about this?
    Mr. Wood: According to the figures I have, an extension of Remploy would not benefit, because these are men and women able to take employment in general industry and obviously the main benefit that

    857
    we can bring to them would be an extension of industry generally.
    Mr. Hale: Is the Parliamentary Secretary aware that some of these young men are not available for open industry but may be said to be capable of some form of ordinary work in local industry of a limited kind? I am now constantly getting cases of people suffering from chronic but not wholly disabling diseases and persons who are wholly unable to get work of any kind and in respect of whom a competent disabled persons' employment officer has been unable to do anything effective for them.
    Mr. Wood: If the hon. Gentleman will put down a Question on a specific issue of those only fit for employment in sheltered conditions and give me all the facts at his disposal, I will be as helpful as I can.
    Mr. Haleasked the Minister of Labour how many disabled workers registered at the Oldham and Failsworth Employment Exchanges have been unemployed for periods totalling 26 weeks out of the period 12 months up to the most recent date for convenient computation.
    Mr. Wood: I am afraid the precise information asked for is not readily available, but at 8th December last 287 registered disabled persons suitable for open employment were registered as unemployed at these offices, of whom 145 had been out of work for more than 26 weeks.
    Mr. Hale: When the Parliamentary Secretary asks me to give him information, is he aware that I have been giving it for years? I have raised time after time classic cases of haemophilia and traumatic epilepsy. I myself have written to employers and tried to find them employment. Is not the situation in Oldham, where we have by voluntary effort provided a training establishment for mentally disabled workers and taken efforts to find a method of obtaining employment, such that there is something for the Government to do in providing training for these people with a view to their employment?
    Mr. Wood: It is certainly possible to provide training. I think that the easiest way in which I could help would be for the hon. Gentleman to put to me specific problems, when I will do my best to help him.

    School Leavers, North-Western Region
    Mr. Haleasked the Minister of Labour whether he is aware of the increasing difficulties of finding suitable employment for boys and girls leaving school in the north-western area and that children of promise are being forced into dead-end jobs; and what steps he proposes to take.
    Mr. Wood: I am aware that there are not enough apprenticeships and that boys may have to take work which is not their first choice, although most of them are eventually placed in employment suited to their qualifications. For girls, there were in the second week of April almost twice as many vacancies in the North-Western Region as the number of girls unemployed. As regards the last part of the Question, I would refer the hon. Member to my statement of 30th April in this House.
    Mr. Hale: I am much obliged for that reply. I appreciate that the Question was put down before that date. The hon. Gentleman knows that in December we were faced with what was for Oldham a fairly new problem, in that we had not had it to that extent before, and I should be grateful for the hon. Gentleman's assurance that he will keep a constant watch on this problem.
    Mr. Lawson: How does the Parliamentary Secretary reach the conclusion that most of these boys and girls are eventually placed in jobs suitable to their capabilities, because that is far from my own experience?
    Mr. Wood: The hon. Gentleman's experience in Scotland may be different from the experience in the north-western region. The information I have received from the youth employment officers was that eventually most of the boys and girls in the area for which I was answering are placed in jobs which suit their qualifications. If the hon. Gentleman would like to question me particularly about his boys and girls in Scotland. I will try to answer him.

    Unemployment Figures (Publication)
    Mr. Lawsonasked the Minister of Labour if he will ensure that the Library of the House of Commons receives the

    859
    latest unemployment figures at least as soon as they are issued to the Press.
    Mr. Iain Macleod: I will see that these figures are made available to the Library early on the morning of publication in the Press.
    Mr. Lawson: Will the Minister bear in mind that there is a file copy sent out, but what we had in mind particularly was the supply of copies which hon. Members can themselves pick up? Will he see that this supply is sent to us at the same time as the file copy is sent out and about the same time as the Press receives its information?
    Mr. Macleod: The second point is a rather difficult one. The Press receives its information on this and a hundred other sorts of documents the afternoon before with an embargo not to be published before midnight, and although one can embargo the Press, I cannot embargo the House of Commons. The best thing I can do is to make this available as soon as possible in the morning in which it appears in the Press. I will take the second point that adequate copies should be made available.

    Southampton
    Dr. Kingasked the Minister of Labour (1) if he will state the number of unemployed in Southampton for December, 1957, December, 1958, February, 1959, and for the latest available date;
    (2) if he will state the number of unemployed in the ship-repairing industry in Southampton for December, 1957, December, 1958, February, 1959, and for the latest available date.
    Mr. lain Macleod: The total number registered as unemployed in the Southampton area was 1,637 at 9th December, 1957, 2,724 at 8th December, 1958, 3,063 at 9th February, 1959, and 4,497 at 13th April, 1959. Of these, the numbers in the shipbuilding and ship-repairing industries were 337, 436, 404 and 1,806 respectively. Separate figures for ship repairing are not available.
    Dr. King: Is the Minister aware that every Southampton trade unionist is concerned about the growing unemployment, which his figures reveal, not only in the ship repairing industry but in the aircraft industry, and that employers in Southampton are desperately seeking new contracts to keep their workers at work? Will he come to Southampton and meet both sides to see in what way he can help them?
    Mr. Macleod: I am not sure I can promise to come to Southampton. I was there quite recently. I agree that this is a difficult problem. It is no coincidence that the individual problems which are mentioned in Questions on the Order Paper today are concerned with the ship repairing industry. When I gave the March figures I said that this was the one sector which, contrary to the present trend, was showing signs of decline. However, I think it is true to say that the main reason is the coming to an end of the repair programme for the liners over the winter. To that extent, it is not surprising that, contrary to the normal trend, unemployment does rise a little bit at this time of the year.
    Mr. J. Howard: While sharing the concern about the rise in unemployment in Southampton, may I ask my right hon. Friend, in connection with the ship-repairing industry, whether the number of orders which have gone abroad is comparatively a small margin, and could not that margin possibly be eliminated if the time for tea breaks were limited to specific times and a serious attempt were made to deal with the lines of demarcation, especially in work on the smaller orders?
    Mr. Macleod: I do not think I can break down these figures in the way in which my hon. Friend suggests. It is certainly true that there is a position that has become precarious in many of our important ports. I am sure that both sides of industry realise that, and that everything should be done to obtain as many orders as we possibly can for this country.

ORDERS OF THE DAY

  FINANCE BILL
  Considered in Committee.
  [Sir CHARLES MACANDREW in the Chair]
  Clauses 1 to 3 ordered to stand part of the Bill.

  FINANCE BILL

    Clause 4.—(EXCISE LICENCES REQUIRED FOR REGISTERED CLUBS: ABOLITION OF DUTY ON STATEMENTS.)
    3.33 p.m.
    Mr. John Hall: I beg to move, in page 6, line 23, after "pounds to insert:
    "or duty of threepence for every pound's worth of purchases of intoxicating liquor whichever is the less".
    The object of this very small Amendment is to ensure that small clubs, whose members number many thousands throughout the country, do not pay more in Excise Duty or in licence fee under the proposals of this Finance Bill than they are doing under the existing rates. The wording of the Amendment may not be entirely right and it may, perhaps, not meet with full acceptance by my right hon. Friend, but I would be quite willing to have the wording adjusted in any way he thought fit to give effect to the object I have in mind.
    I was moved to put down the Amendment by receiving a cri de coeur from a number of small clubs in Buckinghamshire about the effect which this apparently small imposition would have on them. One very typical letter from a cricket club about the size, of many throughout my own constituency says this:
    "In order to be able to offer visitors a drink after our home games we have had a club licence for a number of years, and all it has cost has been 5s. per year registration fee plus 3d. in the pound Excise duty. Last year … our total purchases only amounted to just over £21, so all we had to pay was 5s. licence registration and 5s. 3d. duty. By the terms of the Budget it seems that if we have a licence next year it may cost us £5 as compared to the total of 10s. 3d. for last year."
    That is just one letter out of many which I have received from my own constituency. I do not know whether other hon. Members have received similar representations from the many thousands
    862
    of small sports and social clubs which there are throughout the country.
    Most clubs have a bar only as a facility for their members; not to provide facilities for drinking, but merely as a part of the ordinary amenities of a club devoted primarily to sports or social purposes. To have to pay £3 when they have had to pay only 10s. or £1 may not, perhaps, seem very much, but many of the small clubs exist on the very fine margin of difference between just making ends meet and being "in the red". Everyone who has had sent to him, as most hon. Members have, balance sheets typical of those of these small clubs in their constituencies will know that the margin between solvency and insolvency is very small indeed, and this £2 or £3 could make all the difference to them.
    I will not labour the point. It has been expressed very fully already in some correspondence in The Times, and even reached the dignity, I noticed the other day, of a third leader in The Times. I do not think that the Chancellor of the Exchequer, when he introduced the Clause, intended to penalise small clubs in this way. 1 am quite certain that it is possible for him, as I hope he will, to find a way to give effect to this Amendment so that small clubs will not pay any more than they have been paying up to the present.
    It may be argued that this Amendment would give some help to those clubs which are formed purely as drinking clubs, of which there are large numbers, but I very much doubt whether small clubs formed as drinking clubs can exist if their turnover in terms of purchases is less than £400 a year, which is what it would have to be to equal a £5 licence fee. I know that some small drinking clubs are set up in seaside towns only during the season, but there again, the amount of turnover they would have would be in excess of that amount, I think.
    I hope, therefore, that my right hon. Friend will give this Amendment sympathetic consideration, and that he will be prepared to accept it.
    Colonel Richard H. Glyn: There is a great number of small social clubs, and I know of a great number in my own constituency and throughout the West Country which are not run in any way for a profit but which

    863
    are run purely for sporting or social purposes, cricket clubs, tennis clubs, golf clubs, and other similar clubs, which are accustomed to provide alcoholic refreshment for their members and can do so only by means of a club licence.
    As my hon. Friend the Member for Wycombe (Mr. John Hall) has pointed out, the turnover of most of them is very much less than £400 a year, and clubs with a turnover of less than that sum, if my arithmetic is correct, will lose by the proposed Excise Duty of £5. I can appreciate the administrative facility which the proposal in the Bill gives. It makes the whole thing much simpler and easier to run, but I would put in a word for some of these small clubs.
    Particularly I would mention the Territorial Army, with which I have long been associated. I think that the Committee will know that it is customary for the Territorial Army to run a club of this nature in conjunction with each drill hall. Territorials are, of course, extremely abstemious people, but after a spell in the drill hall they sometimes like to have a pint of beer. The only way in which this can be legally provided is by the drill hall being registered as a club.
    Some regiments are responsible for a substantial number of drill halls and, therefore, of clubs. When I was colonel of one regiment we had six drill halls and six clubs and we paid a total in Customs and Excise Duty of £10 a year on the six clubs. I have, for my sins, been promoted out of this regiment, but I have no doubt that my successor is still in that position. If the Clause becomes law, my successor will be called upon to find a total in duty of £30 instead of £10. That is a substantial sum for the regimental funds to produce, and will substantially reduce the amount available for amenities for the rank and file of each unit. An alternative would be to close down, which would be unfortunate. The other alternative would be to encourage members to drink three times as much alcohol, a course which would not commend itself.
    Mr. Gerald Nabarro: It would commend itself to the Chancellor. He wants his 2d. back on the beer.
    Colonel Glyn: In this case, I hope that it will not commend itself.
    I think that, for all these reasons, there is a strong case for making an allowance to the small clubs which exist not to make a profit but merely to provide an amenity. I hope that it will be found possible to accept the Amendment.
    Mr. Eric Fletcher: I should like to support the Amendment for the reasons given by the hon. Member for Wycombe (Mr. John Hall) and the hon. and gallant Member for Dorset, North (Colonel R. H. Glyn). The reason given by the Financial Secretary on Second Reading for opposing this proposal was that he thought that club secretaries would welcome the new arrangement. I am sure that the hon. and learned Gentleman will agree that they will not welcome it when they have to pay £5 in future as against the considerably smaller amount which they paid in the past. This will be popular neither with club secretaries nor with the clubs.
    The Clause is designed to simplify the present arrangements for the payment of club licence duty. All that the Amendment seeks to do is to preserve the existing position in respect of small clubs which have never paid a total duty during the year of as much as £5. As hon. Members have said, there are a number of very deserving social clubs. I have in mind, particularly, those associated with small tennis clubs and similar organisations in London. They exist, of course, throughout the country. They must have a licence, but they do not exist primarily to provide facilities for the consumption of alcohol. Those are quite incidental amenities provided by the clubs.
    It would be a great hardship to these clubs, which, in the past, have paid perhaps only £1 by way of duty, if they now find that they are the victims of this measure of simplification and that in the interest merely of simplification they have to pay as much as £5. I hope, therefore, that the Economic Secretary will realise that the Amendment will not in any way run counter to his general objective of simplification. He can still obtain his £5 from the other clubs. In the interests of equity and of the social values which these clubs serve, I hope that the Amendment will be accepted.
    Mr. James Simmons: I do not know how it will be possible to discriminate between one club and another. A very good argument has been put forward on behalf of the genuine social clubs, but it must not be forgotten that, during the term of office of the Conservative Party, Regulation 25C has been abolished and all kinds of unsavoury and undesirable clubs have sprung up in all parts of the country. They are a menace to the morals of London and other places. I should not like to vote for, or in silence acquiesce in, anything which would encourage the further development of these unsavoury clubs where they have strip-tease acts and things of that kind.
    I should be glad if the Minister would make it clear whether it is possible to discriminate between the various kinds of clubs if this concession is made.
    3.45 p.m.
    The Economic Secretary to the Treasury (Mr. F. J. Erroll)My right hon. Friend the Chancellor of the Exchequer appreciates and sympathises with the point of view expressed by my hon. Friend the Member for Wycombe (Mr. John Hall), my hon. and gallant Friend the Member for Dorset, North (Col. R. H. Glyn) and hon. Members opposite on the position of small clubs, but the revision of the liquor licence duties and the club licence duties represents a big operation of administrative reform and simplification. It is a matter of changing the system from one in which the duties were aimed at raising some revenue to a much simpler system of registration and payment of small fees to cover the licence which enables, in this case, a club to sell all forms of intoxicating liquor.
    The reason for fixing a sum of £5 was to make it possible for a club to sell any form of liquor and to make sure that the club paid the same amount as the on-licensee, in other words the publican, with the result that there would be no longer any discrimination in favour of the club as opposed to the publican. It would not be practicable to differentiate between a club selling only a few pints of beer after cricket or tennis and a club which wanted to sell spirits and wines as well, because the Customs and Excise have no power—and we do not wish to ask for the power—to enter club premises and see what types of liquor are being sold.
    866
    It is more satisfactory, therefore, to have a single licence and a single fee of £5. The administrative complexities of the old system were considerable. Club secretaries had to provide returns of intoxicating liquor sold during the year by the January or February of the year following, upon which assessment was made of the amount of duty to be paid. Under the new system all that club secretaries will have to do will be to apply in December for a licence to cover the whole of the year following.
    The operation is very substantial, because there are 23,674 clubs on the registers, and the average payment of duty has amounted to about £43 per club. Therefore, the vast majority of clubs will benefit substantially both from the cash point of view and from the point of view of simplification of administration as compared with the old arrangements. Nevertheless, this means that some clubs, particularly those mentioned by my hon. Friend the Member for Wycombe and the territorial drill halls referred to by my hon. and gallant Friend the Member for Dorset, North, unfortunately, will have to pay a little more than they have paid in the past.
    But we must look at the scale of this. First, no clubs have been paying nothing. All have been paying something. If they have been paying as little as £2 a year, the new duty of £5 will represent an increase of only £3 every year. With a minimum membership of 25, this can represent a matter of only a shilling or two per member for facilities to buy any form of intoxicating liquor while on club premises. We are, therefore, dealing with a matter of a very small increase to a number of small clubs and I am sure that club secretaries, in particular, will not be unappreciative of the administrative saving which the new arrangements represent.
    I would compare the £5 duty with the cost of obtaining a television licence at £4, which some clubs may wish to have as a desirable addition to their amenities. There is no question of that licence being reduced according to the number of fine days when people can play cricket and do not have to stay indoors to watch television. A licence duty of £4 for a television set is accepted as reasonable, so in the circumstances a duty of £5, to be able to sell any form of intoxicating

    867
    liquor on club premises, is on a reasonable scale.
    Nevertheless, my right hon. Friend appreciates that in the case of small clubs an increase in the amount payable, though small, may have a marginal effect upon finances, and he will look into the matter again. He has asked me, however, particularly to stress that, in view of the formidable administrative difficulties, it does not seem likely that it will be possible to make arrangements in the form suggested by the Amendment. However, if my hon. Friend would care to withdraw the Amendment, we will see if we can do anything, although I must re-emphasise that it is unlikely that we shall be able to do so.
    Mr. E. C. Redhead: Coming to this unaccustomed place on the Front Opposition bench for the first time, I am conscious of the fact that, however brief my stay may be, I am badly miscast for the role of talking on all possible aspects of the subject of liquor. Indeed, I feel as miscast, if I may say so, as I thought the hon. and learned Gentleman the Financial Secretary to the Treasury appeared to be when, on the occasion of the Second Reading, he stood opposite and extolled the virtue of beer with such gusto that I thought at one stage he would burst into the song, "Beer, beer, glorious beer."
    The Clause we are considering is one which forms part of the general proposal of the Chancellor for simplification of the existing complicated schedule of liquor licence duties. That general process of simplification is, clearly, one that can be welcomed when one bears in mind the existing scheme concerning 20 different categories of liquor licence, all requiring various bases of assessment.
    As regards the club duty, I must say that what we have just heard by way of answer to the Amendment does not seem to be one that is tenable in the case of the small clubs. It is suggested that there are formidable administrative problems involved in doing what the Amendment asks. In fact, there is no problem about discrimination. The discrimination would be a simple, automatic one of relating to the existing small clubs the existing system of paying licence duty on the basis of their annual purchases. It is over-stating the case to say that it is a formidable
    868
    administrative problem when, on the figures just given to us, only a small minority of the clubs will be affected and brought within the ambit of the Amendment.
    I, too, have seen representations from some of the small clubs, which ought not to be lightly dismissed on the basis that they are of a minimal character and that only a few shillings is involved for each member. One such communication, which was handed to me by an hon. Friend, came from a small rowing club, In the course of the secretary's letter he said what I believe to be typical of clubs of this character:
    "In the case of many, if not most clubs, in particular those with large memberships, the proposal will no doubt operate to effect a considerable saving. In the case of small clubs, however, such as our own, we shall be faced with a considerable increase. For instance last year our total purchases of beer and cider were only £50. Club duty on this figure will be 13s. 9d. The result is that as we are not in business to make a profit out of the sale of intoxicating liquor, but merely to stock beer and cider for the refreshment of our members after their rowing, we shall have to increase the prices which we charge to our members."
    In fact, they will have to do precisely the opposite of what the Chancellor is seeking to do by recasting the general duty on alcohol and the reduction in the beer duty. The letter continues:
    "On our small turnover such increases will more than cancel the savings as a result of the reduction in beer duty, also included in the Finance Bill."
    I have no means of knowing how many small registered clubs will come within the ambit of this Amendment, but, however small, it is invidious that they, and they alone, as the result of recasting the system should be faced not with a benefit but with a loss. It is no use trying to minimise this by saying that it will amount to only a few shillings a member. It is extremely unfair to impose this on the small social and sports club, which is not engaged in the sale of liquor on a big business scale but is only providing facilities of an incidental character for the amenities of its members.
    I agree that the form of the Amendment, which seeks to preserve for small clubs the existing basis of licence duty, would not by itself effect the purpose, because attention would have to be paid to subsection (9) as well, which, in the process of this Bill, wipes out the existing

    869
    machinery by which licence duty is now collected. Yet there would not be any insuperable difficulty, and whilst I am glad that we have had an assurance that the Chancellor will look at this again, I would be grateful if he would reinforce that assurance at a later stage by saying that he will come forward with a proposal which would not be very different from the Amendment, and which would effectively protect the small clubs from what otherwise will be a completely invidious discrimination against them.
    Mr. John Hall: Naturally, I am disappointed that the Chancellor cannot accept what I thought was a small but reasonable Amendment. Nevertheless, I appreciate some of the difficulties to which he has drawn the attention of the Committee, and in view of the assurance that this point will be considered again to see whether it is possible to arrive at sonic proposal whereby the small clubs will not find themselves paying more under this proposal that they were doing before, I beg to ask leave to withdraw the Amendment.
    Hon. Members: No.
    Mr. Ede: I have never heard a weaker promise of what looking at the Amendment "would mean. We were told in advance that it was so difficult that, while the Government will look at it, we must not expect that they will be able to do anything. I thought at one time that the Economic Secretary, robbed of every other argument, was going to ask us to discuss the relative pernicious effect of liquor and television. I imagine that for most people it is about even.
    I cannot understand why this proposal should be so administratively difficult. Nothing more will be required than, when the time comes to pay the £5 licence, for the secretary of the club to prepare a statement which, if necessary, could be signed before a justice of the peace or in some other way, making it a penal offence if a false statement is made that the receipts from the sale of liquor of all kinds in that club have been less than £400 during the previous year.
    That should be a sufficient safeguard for the Chancellor, who knows as well as I do that any club which breaks the rules is very soon reported upon to the police or some other authority by pub-
    870
    licans who think that their income is being impaired by illegal happenings in clubs. There is no doubt that this imposition will cause considerable difficulty among people who will lose by this amendment. It is all very well for Ministers on the Treasury Bench to talk about an increase of £3 or £4 as something which does not matter. Those of us who have been connected with clubs of this kind know that increases of any kind are always a matter of grave concern to the secretary and treasurer, and that they should not be brushed aside in the way that they were brushed aside by the Economic Secretary.
    4.0 p.m.
    The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory): I want merely to confirm what my hon. Friend the Economic Secretary has said. When we were proposing the flat rate we thought that we were doing something which would be appreciated by clubs because so many of them had emphasised to us their difficulties in keeping the detailed records which were required for the payment of the duty on the old basis.
    I do not know whether I ought to declare an interest, because in days gone by I was a Territorial and also a member of a rowing club. I have been trying to recollect whether I ever drank a glass of beer in either of those capacities, and I am inclined to think I did.
    We do not want to be hard-hearted about this, and we certainly do not want to exaggerate the administrative difficulties. We thought that we were doing something which would be welcomed by small clubs. As my hon. Friend has said, we will look into the matter, giving weight to everything that has been said, including what was said by the hon. Member for Walthamstow, West (Mr. Redhead) and my hon. Friend the Member for Wycombe (Mr. John Hall); and if we can find a solution acceptable to the Committee we will bring it forward.
    Mr. Douglas Jay: The hon. Member for Wycombe (Mr. John Hall) is very easily satisfied. He made a most persuasive and convincing case which was supported by my hon. Friend the Member for Walthamstow, West (Mr. Redhead), whose arguments

    871
    have not really been answered by the Chancellor.
    We have had in response a most timid, tentative, negative and unconvincing undertaking from the Chancellor and the Economic Secretary that perhaps in some way, though it is all very difficult and they do not now know how to do it, they will find a means of bringing about what the Committee wishes to achieve. I do not find this at all convincing. There have been occasions on Finance Bills in the last few years when we have had promises of
    this sort in Committee but nothing has been done on Report to implement them, which puts us in a very difficult position.
    Therefore, I hope that, to support the hon. Member for Wycombe and to encourage and assist the Government in what they profess to be their intentions, the Amendment will not be withdrawn and that my hon. Friends will support it in the Division Lobby.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 174, Noes 210.

    Division No. 103.]

    AYES

    [4.3 p.m.

    Ainsley, J. W.

    Grey, C. F.

    Padley, W. E.

    Albu, A. H.

    Griffiths, David (Rother Valley)

    Paget, R. T.

    Allaun, Frank (Salford, E.)

    Griffiths, Rt. Hon. James (Lianelly)

    Pargiter, G. A.

    Allen, Arthur (Bosworth)

    Griffiths, William (Exchange)

    Parker, J.

    Allen, Soholefield (Crewe)

    Grimond, J.

    Parkin, B. T.

    Awbery, S. S.

    Hale, Leslie

    Paton, John

    Bacon, Miss Alice

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Pearson, A.

    Balfour, A.

    Hamilton, W. W.

    Peart, T. F.

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

    Hannan, W.

    Pentland, N.

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

    Hastings, S.

    Plummer, Sir Leslie

    Beswick, Frank

    Hayman, F. H.

    Popplewell. E.

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

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

    Prentice, R. E.

    Blackburn, F.

    Herbison, Miss M.

    Price, J. T. (Westhoughton)

    Blenkinsop, A.

    Hilton, A. V.

    Rankin, John

    Blyton, W. R.

    Holman, P.

    Redhead, E. C.

    Bonham Carter, Mark

    Houghton, Douglas

    Reeves, J.

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

    Hughes, Cledwyn (Anglesey)

    Reid, William

    Bowles, F. G.

    Hughes, Emrys (S. Ayrshire)

    Reynolds, G. W.

    Boyd, T. C.

    Hughes, Hector (Aberdeen, N.)

    Rhodes, H.

    Braddock, Mrs. Elizabeth

    Hunter, A. E.

    Robens, Rt. Hon. A.

    Brown, Thomas (Ince)

    Hynd, H. (Accrington)

    Roberts, Albert (Normanton)

    Callaghan, L. J.

    Hynd, J. B. (Attercliffe)

    Ross, William

    Carmichael, J.

    Irving, Sydney (Dartford)

    Shinwell, Rt. Hon. E.

    Castle, Mrs. B. A.

    Isaacs, Rt. Hon. G. A.

    Short, E. W.

    Champion, A. J.

    Janner, B.

    Silverman, Julius (Aston)

    Chapman, W. D.

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

    Skeffington. A. M.

    Chetwynd, G. R.

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

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

    Clilfe, Michael

    Jenkins, Roy (Stetchford)

    Slater, J. (Sedgefield)

    Coflick, P. H. (Birkenhead)

    Johnson, James (Rugby)

    Smith, Ellis (Stoke, S.)

    Corbet, Mrs. Freda

    Jones, David (The Hartlepools)

    Sorensen, R. W.

    Cove, W. G.

    Key, Rt. Hon. C. W.

    Sparks, J. A.

    Craddock, George (Bradford, S.)

    King, Dr. H. M.

    Spriggs, Leslie

    Cronin, J. D.

    Lawson, G. M.

    Stewart, Michael (Fulham)

    Crossman, R. H. S.

    Ledger, R. J.

    Stonehouse, John

    Cullen, Mrs. A.

    Lipton, Marcus

    Strauss, Rt. Hon. George (Vauxhall)

    Darling, George (Hillsborough)

    Logan, D. G.

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

    Davies, Ernest (Enfield, E.)

    McCann, J.

    Swingler, S. T.

    Davies, Harold (Leek)

    Mclnnes, J.

    Taylor, Bernard (Mansfield)

    Deer, G.

    McKay, John (Wallsend)

    Thomson, George (Dundee, E.)

    Diamond, John

    McLeavey, Frank

    Timmons, J.

    Dodds, N. N.

    MacMillan, M. K. (Western Isles)

    Ungoed-Thomas. Sir Lynn

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

    MacPherson, Malcolm (Stirling)

    Viant, S. P.

    Ede, Rt. Hon. J. C.

    Mallalieu, E. L. (Brigg)

    Warbey, W. N.

    Edelman, M.

    Malialieu, J. P. W. (Hudderstd, E.)

    Weitzman, D.

    Edwards, Robert (Bliston)

    Mason, Roy

    Wells, Percy (Faversham)

    Edwards, W. J. (Stepney)

    Mayhew, C. P.

    White. Mrs. Eirene (E. Flint)

    Evans, Albert (Islington, S.W.)

    Messer, Sir F.

    Willey, Frederick

    Evans, Edward (Lowestoft)

    Mitchison, G. R.

    Williams, David (Neath)

    Fernyhough, E.

    Monslow, W.

    Williams, Rev. Llywelyn (Ab'tillery)

    Finch, H. J. (Bedwellty)

    Moody, A. S.

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

    Fitch, A. E. (Wigan)

    Moss, R.

    Willis, Eustace (Edinburgh, E.)

    Fletcher, Eric

    Moyle, A.

    Wilson, Rt. Hon. Harold (Huyton)

    Forman, J. C.

    Mulley, F. W.

    Winterbottom, Richard

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

    Noel-Baker, Francis (Swindon)

    Woof, R. E.

    George, Lady Megan Lloyd(Car'then)

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

    Yates, V. (Ladywood)

    Gibson, C. W.

    Oram, A. E.

    Zilliacus, K.

    Gooch, E. G.

    Orbach, M.

    Gordon Walker, Rt. Hon. P. C.

    Oswald, T.

    TELLERS FOR THE AYES:

    Greenwood, Anthony

    Owen, W. J.

    Mr. Holmes and Mr. Simmons.

    NOES

    Agnew, Sir Peter

    Green, A.

    Neave, Alrey

    Aitken, W. T.

    Gresham Cooke, R.

    Nicholson Sir Godfrey (Farnham)

    Alport, C. J. M.

    Grimston, Hon. John (St. Albans)

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

    Amory, Rt. Hn. Heathooat (Tiverton)

    Grosvenor, Lt.-Col. R. G.

    Noble, Comdr. Rt. Hon. Allan

    Anstruther Gray, Major Sir William

    Gurden, Harold

    Noble, Michael (Argyll)

    Arbuthnot, John

    Hare, Rt. Hon. J. H.

    Nugent, G. R. H.

    Balniel, Lord

    Harrison, A. B. C. (Maldon)

    Oakshott, H. D.

    Barber, Anthony

    Harvey, Sir Arthur Vere (Macclesf'd)

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

    Barter, John

    Hay, John

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

    Batsford, Brian

    Henderson, John (Cathcart)

    Orr, Capt. L. P. S.

    Baxter, Sir Beverley

    Hesketh, R. F.

    Page, R. G.

    Beamish, Col. Tufton

    Hicks-Beach, Maj. W. W.

    Pannell, N. A. (Kirkdale)

    Bevins, J. R. (Toxteth)

    Hill, Mrs. E. (Wythenshawe)

    Partridge, E.

    Biggs-Davison, J. A.

    Hill, John (S. Norfolk)

    Peel, W. J.

    Bingham, R. M.

    Hinchingbrooke, Viscount

    Peyton, J. W. W.

    Birch, Rt. Hon. Nigel

    Hornby, R. P.

    Pickthorn, Sir Kenneth

    Bishop, F. P.

    Hornsby-Smith, Miss M. P.

    Pilkington, Capt. R. A.

    Black, Sir Cyril

    Horobin, Sir Ian

    Pitt, Miss E. M.

    Body, R. F.

    Horsbrugh, Rt. Hon. Dame Florence

    Price, David (Eastleigh)

    Braine, B. R.

    Howard, Hon. Greville (St. Ives)

    Profumo, J. D.

    Braithwaite, Sir Albert (Harrow, W.)

    Howard, John (Test)

    Rawlinson, Peter

    Brewis, John

    Hughes Hallett, Vice-Admiral J.

    Redmayne, M.

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

    Hughes-Young, M. H. C.

    Remnant, Hon. P.

    Brooke, Rt. Hon. Henry

    Hurd, Sir Anthony

    Renton, D. L. M.

    Brooman-White, R. C.

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

    Ridedale, J. E.

    Browne, J. Nixon (Craigton)

    Hutchison, Sir James (Scotstoun)

    Robertson, Sir David

    Bullus, Wing Commander E. E.

    Hylton-Foster, Rt. Hon. Sir Harry

    Robinson, Sir Roland (Blackpool, S.)

    Burden, F. F. A.

    Iremonger, T. L.

    Rodgers, John (Sevenoaks)

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

    Irvine, Bryant Godman (Rye)

    Roper, Sir Harold

    Campbell, Sir David

    Jenkins, Robert (Dulwich)

    Ropner, Col. Sir Leonard

    Cary, Sir Robert

    Jennings, J. C. (Burton)

    Scott-Miller, Cmdr. R.

    Channon, H. P. G.

    Johnson, Dr. Donald (Carlisle)

    Sharples, R. C.

    Chichester-Clark, R.

    Johnson, Eric (Blackley)

    Shepherd, William

    Clarke, Brig. Terence (Portsmth, W.)

    Johnson, Howard (Kemptown)

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

    Cole, Norman

    Jones, Rt. Hon. Aubrey (Hall Green)

    Smithers, Peter (Winchester)

    Conant, Maj. Sir Roger

    Keegan, D.

    Spearman, Sir Alexander

    Cooper, A. E.

    Kerby, Capt. H. B.

    Speir, R. M.

    Courtney, Cdr. Anthony

    Kerr, Sir Hamilton

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

    Craddock, Beresford (Spelthorne)

    Kershaw, J. A.

    Stanley, Capt. Hon. Richard

    Crosthwaite-Eyre, Col. O. E.

    Kimball, M.

    Stevens, Geoffrey

    Crowder, Sir John (Finchley)

    Lagden, G. W.

    Steward, Harold (Stockport, S.)

    Cunningham, Knox

    Lambton, Viscount

    Storey, S.

    D'Avigdor-Goldsmid, Sir Henry

    Langford-Holt, J. A.

    Stuart, Rt. Hon. James (Moray)

    de Ferranti, Basil

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

    Taylor, Sir Charles (Eastbourne)

    Dodds-Parker, A. D.

    Legh, Hon. Peter (Petersfield)

    Taylor, William (Bradford, N.)

    Donaldson, Cmdr. C. E. McA.

    Lindsay, Hon. James (Devon, N.)

    Teeling, W.

    du Cann, E. D. L.

    Lindsay, Martin (Solihull)

    Thompson, Kenneth (Walton)

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

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

    Thorneycroft, Rt. Hon. P.

    Duncan, Sir James

    Loveys, Walter H.

    Thornton-Kemsley, Sir Colin

    Duthie, W. S.

    Lucas, Sir Jocelyn (Portsmouth, S.)

    Turner, H. F. L.

    Eden, J. B. (Bournemouth, West)

    Macdonald, Sir Peter

    Turton, Rt. Hon. R. H.

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

    Maclean, Sir Fitzroy (Lancaster)

    Tweedsmuir, Lady

    Emmet, Hon. Mrs. Evelyn

    McLean, Nell (Inverness)

    Vaughan-Morgan. J. K.

    Erroll, F. J.

    MacLeod, John (Ross & Cromarty)

    Wakefield, Edward (Derbyshire, W.)

    Farey-Jones, F. W.

    McMaster, Stanley

    Wakefield, Sir Wavell (St. M'lebone)

    Fell, A.

    Macmillan, Rt. Hn. Harold(Bromley)

    Wall, Patrick

    Finlay Graeme

    Macmillan, Maurice (Halifax)

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

    Fisher, Nigel

    Macpherson, Niall (Dumfries)

    Ward, Dame Irene (Tynemouth)

    Fletcher-Cooke, C.

    Maitland, Hon. Patrick (Lanark)

    Watkinson, Rt. Hon. Harold

    Forrest, G.

    Manningham-Buller, Rt. Hn. Sir R.

    Webster, David

    Foster, John

    Markham, Major Sir Frank

    Whitelaw, W. S. I.

    Freeth, Denzil

    Marshall, Douglas

    Williams, Paul (Sunderland, S.)

    Galbraith, Hon. T. G. D.

    Mathew, R.

    Williams, R. Dudley (Exeter)

    Gammans, Lady

    Maudling, Rt. Hon. R.

    Wills, Sir Gerald (Bridgwater)

    Gibson-Watt, D.

    Mawby, R. L.

    Wilson, Geoffrey (Truro)

    Glover, D.

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

    Wood, Hon. R.

    Glyn, Col. Richard H.

    Medlicott, Sir Frank

    Woollam, John Victor

    Godber, J. B.

    Milligan, Rt. Hon. W. R.

    Yates, William (The Wrekin)

    Goodhart, Philip

    Morrison, John (Salisbury)

    Gough, C. F. H.

    Nabarro, G. D. N.

    TELLERS FOR THE NOES:

    Gower, H. R.

    Nairn, D. L. S.

    Colonel J. H. Harrison and

    Mr. Bryan.

    Clause ordered to stand part of the Bill.

    Clause 5.—(ABOLITION OF REQUIREMENTS AS TO MONOPOLY VALUE.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mr. Glenvil Hall rose—
    Mr. Ellis Smith: On a point of order. It is usual at the beginning of the Committee stage of the Finance Bill for the Chairman to

    875
    make a statement, or for the Committee to ask for the statement, so that one or two matters of uncertainty may be resolved. Therefore, Sir Charles, I should like to have the benefit of your advice.
    My first question is: what is meant by the numbers printed at the side of the Amendments on the Notice Paper? What procedure will the Chair adopt with regard to them, so that hon. Members, including those who are not here now, and who may be interested in particular Amendments, will be able to know what the numbers mean? Shall I continue, or will you give a reply to that point first?
    The Chairman: This is a new idea, particularly useful with regard to new Clauses, because at present it is very difficult to find the marginal titles. If the Amendments are given numbers, one can easily identify them, and it has the advantage that when Amendments are consequential one can give the numbers of them. They are not at the moment in their right order. They were in the right order the first time the marshalling was done, but there have been additions since. That does not make a great difference. I think it is a convenient arrangement to have.
    Mr. E. Fletcher: Before my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) raises his second question, may I ask you, Sir Charles, if the numbers now given to Amendments will be maintained throughout the whole of the proceedings on the Finance Bill?
    The Chairman: Yes, of course, otherwise there would be tremendous confusion.
    Viscount Hinchingbrooke: Will you also give consideration, Sir Charles, to the possibility of these numbers being shown on the annunciator, because it would make it much easier for hon. Members who are in various parts of the House to know which Amendment was being discussed in the Chamber?
    The Chairman: I think that it is done at present by reference to the Clause, the page and the line.
    Mr. Harold Wilson: It is a very frequent occurrence, and it will be in the case of this Bill, when we come to Clause 16, that there are three or four
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    Amendments to the some line in the Bill. The point made by the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) was an extremely good one, and I wonder whether consideration has been given to showing the appropriate numbers in cases where three or four Amendments to the same line of the Bill are being discussed together.
    The Chairman: Give all the numbers if we are discussing four Amendments together? Is that the idea?
    Mr. Wilson: I do not think that I made myself clear, Sir Charles. Sometimes, there may be three or four Amendments all having the same reference, though not the same number—three or four Amendments all relating to one particular Clause, one particular subsection, and one particular line of the Bill, and sometimes it is difficult to know, from the annunciator, which of the three or four Amendments, which all have the same reference, is being debated.
    4.15 p.m.
    In these circumstances, when there is more than one Amendment relating to one particular line in the Bill, and it is necessary for us to know which one is being debated, we feel that that would be the time when the appropriate numbers could be shown on the annunciator. I think that usually there is a statement from the Chair to the effect that it is the first, second or third Amendment, and so on, but now that the Amendments are being identified in this way, it would be a helpful thing—and this is a useful innovation this year—if the respective numbers could be shown in the annunciator.
    The Chairman: The first one of a series of Amendments is given on the annunciator. If there is a series, the difficulty of identifying them all would be in regard to the machinery and the man who does this. He would have to come to see me and get his paper marked accordingly. For example, there is an Amendment at the top of page 2188, and the next and the one at the top of the next page, all in the name of the right hon. Member for Huyton (Mr. H. Wilson), and all going together. Some way would have to be found to inform him about this.
    Mr. Wilson: I was not raising the point—and I do not think the noble Lord was —about a group of three or four Amendments being debated. The point is that

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    sometimes on one of the key sections of the Finance Bill, for instance, Income Tax, a number of hon. Members may want to move different Amendments all with reference to the same line in the Clause. As they appear on the Notice Paper, they all look the same. They are all described by reference to the same Clause, the same page and the same line.
    In this case, they are now separable by virtue of having these marginal numbers which are printed on the Notice Paper, and where it is necessary to distinguish between some of those which have the same references it would be useful if the annunciator could also indicate these marginal numbers.
    The Chairman: The annunciator will have to give the marginal numbers in respect of the second or third Amendments. Nevertheless, it is not my affair, but I think it would be a great help for the number to be put on the annunciator.
    Mr. Ellis Smith: I thank you, Sir Charles, for making the matter so clear.
    should like to go a little further and ask you to convey the appreciation of the Committee to whoever is responsible for bringing about this further improvement, because it is an improvement.
    The Chairman: I assure the hon. Gentleman that I have already done that.
    Mr. Ellis Smith: That gives credit where it is due, and also puts it on the record.
    My next point is that in this Bill the big issues are contained in Parts II, III and V. I should like to ask you if you have already given consideration, and, if not, will you do so, to the fact that a number of Amendments will be interlocked, and we shall be liable to a lot of repetition.
    I should like you to consider whether it would not be better to facilitate the clear-cut consideration of each point as it arises, and if we could have a broad discussion on these three parts of the Bill—Parts II, III and V—on the condition that the Chair will allow, when we come to each respective Amendment, a brief discussion, bearing in mind that we shall already have had a wide discussion on the subject, so that there ought not to be any need for repetition as each Amendment is moved
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    I think that that would facilitate the Committee's consideration of the vital issues involved in the Bill. For example, I am concerned about some of the working-class issues which are deeply involved in the Bill. I think that it is time that we, speaking for the people whom we represent, made our presence felt in this Committee. If this procedure were adopted, I believe that it would facilitate consideration of these points.
    Mr. H. Wilson: Further to that point of order. It should not be assumed that the idea of having a debate on a particular part of the Bill, even if it were in accordance with our procedure, would he widely supported. In choosing Amendments, we have attempted, as far as possible, to ensure that time spent on the Bill in Committee will be purposefully directed to three or four of the key issues raised by the Bill.
    I am sure that it is the feeling of the Committee generally that we do not need to spend an excessive time on the Finance Bill this year and on going into minutae on some of the Clauses. We have chosen Amendments in such a way as to in fluence, as far as lies within our power, the course of the debate in the way that my hon. Friend wants, namely, so that there will be an adequate discussion at reasonable times of the day on some of the general issues, rather than getting the Committee bogged down in too much detail.
    The Chairman: As the right hon. Gentleman knows, I always try to meet the wishes of hon. Members. If they particularly want to discuss an Amendment, I call it, and if they do not particularly want to discuss it, I do not call it. My reply to the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) is that Amendments are often grouped together and that we often have discussions on the groups, sometimes having an extra Division. I think that that meets his point.
    Mr. Glenvil Hall: As you will have already gathered, Sir Charles, hon. Members on this side of the Committee want to debate the proposal in this Clause at reasonable length. The Clause abolishes the requirement of a monopoly value payment every time a new on-licence is granted. 1 think that it is safe to say that when, in his Budget speech, the

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    Chancellor announced this abolition, few people knew what he was talking about or had been aware that monopoly value payments were made and that there was provision for them on the Statute Book. In itself, that is an indication that those who have paid them have not regarded them as an injustice, since they would have agitated publicly for their removal before now.
    As we are now all aware, these payments have been in existence for about fifty-five years. They were the outcome of one of the fiercest Parliamentary battles of modern times, that which was fought round the Licensing Act, 1902, onwards. The Measure which included these provisions was introduced by the Conservative Government of that day. I think that Mr. A. J. Balfour, afterwards Lord Balfour, was Prime Minister at the time.
    The debates make interesting reading for those who want to follow up the matter. The situation which gave rise to that Measure was then described by Mr. Balfour as "utterly irrational." The 1904 Bill was designed to do away with the annual review of public house licences giving the holders of such licences all but permanent possession so long as they behaved themselves. As a corollary to that, to meet the outburst of criticism, particularly from the Liberals, then in larger numbers on this side of the House than they now are, in addition to providing compensation for public houses found to be redundant provision was made for monopoly value payments.
    It was inserted in the Bill by the Government themselves to meet the critics. Sir Edward Carson, afterwards Lord Carson, moved the Amendment which was designed to ensure that when a new on-licence was granted the person who received it should pay the Treasury the difference between the value of his premises without a licence and their value which the granting of a licence gave.
    In moving the rejection of the Measure, Mr. Asquith, later Lord Oxford and Asquith, declared that this was about the only provision in the Bill which merited any support. He said that the monopoly value created by the public should be reserved for the public—a point of view which I want to commend to the Committee this afternoon and which is one
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    shared by all my hon. Friends on this side of the Committee.
    Down the years, these payments have brought many millions of pounds into the Exchequer. Last year, the figure was about £¾ million and the average since the war has been about £1 million. One of the questions I want to ask the Chancellor, and I am sure that with his usual courtesy he will answer it, is why, after all these years, when the arrangement has apparently worked exceedingly well, when it has brought to the Exchequer a sum not lightly to be thrown away, when no one has objected to the payments and when, above all, the right hon. Gentleman's own party originally introduced the provision which has stood the test of time, he should suddenly decide to throw away these payments.
    This announcement was one of the surprises of the Budget. I have been looking at the legislation upon which these provisions are now based. The old Act has, I believe, been repealed and replaced by the Licensing Act, 1953. I have been looking at that Act to see whether the words used in Clause 5 meet the new situation created. I have done so because, since I raised this matter earlier during the Budget debates, I have been told by those competent to judge that the legislative position remains obscure. I want to ask the Chancellor if he will repeat the assurance he gave during his Budget speech, when he said:
    "…these changes in the Excise licence duties in no way affect the control over she sale of alcoholic drink exercised by the licensing justices."—[OFFICIAL REPORT. 7th April. 1959; Vol. 603, c. 57.]
    I want to ask whether the licence duties which he then had in mind were the changes in the public house and other duties from the old scale down to a flat rate, or whether he also included the change due to the abolition of monopoly payments.
    4.30 p.m.
    I do not want to weary the Committee, but those hon. Members who are interested might care to look at Section 5 onwards of the Licensing Act, 1953, together with Section 59 and the Schedules which affect this matter. Before we part with this Clause, we on this side of the Committee would be glad if the Chancellor would let us know what the legal position is and whether the change he now proposes makes it perfectly clear.

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    The Royal Commission on Licensing Reform, which sat in 1929–1931, received evidence on these monopoly value payments. Among others, one of the witnesses was Mr. O. F. Dowson, who at that time was the legal adviser to the Home Office. He said:
    "This very important question of monopoly values means that it is a fundamental feature of our licensing system with regard to the granting of new licences."
    and he described the provision in the Act, under which monopoly value was paid as "a mandatory provision". He continued:
    "The justices are hound to impose this monopoly value condition."
    If the Act makes it mandatory to see that a licence can only be granted and conform legally as part of the payment of the monopoly value contribution, do the mere words contained in Clause 5 put the matter beyond all question?
    The change which we are discussing is. of course, part of the other changes which run to seven and a half pages of the Finance Bill designed to reduce the cost of a pint of beer by 2d. As my hon. Friend the Member for Walthamstow, West (Mr. Redhead) said, the Financial Secretary waxed lyrical during his Second Reading speech on this part of the Finance Bill. In fact, he spent more time dealing with beer and this provision for 2d. off the pint than with any other part of what in some of its Clauses is a very complicated Measure.
    The Financial Secretary even broke into poetry and quoted from, I think, "The New Mistress", by Housman:
    "Malt does more than Milton can
    To justify God's ways to man "-[OFFICIAL REPORT, 28th April, 1959; Vol. 604, c. 1110.]
    But, unfortunately, he did not complete the verse. I propose to make good the omission. The next two lines run:
    "Ale man Ale's the stuff to drink
    For fellows whom it hurts to think."
    Re-reading the Financial Secretary's speech, I was struck by the fact that he commits himself to the assertion that, in getting rid of the monopoly value payments, the Chancellor is doing no more than returning to the public the amount which previously has been taken in these payments. He said:
    "The assessment of these amounts is not a simple matter. Clause 5 abolishes monopoly value, but preserves the principle that the public and not the individual should benefit
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    from the monopoly constituted by the licence. It does this by converting the charge into an addition to the beer duty. I think that the House will agree that this is far simpler and more satisfactory."—[OFFICIAL REPORT, 28th April, 1959; Vol. 604, c. 1108–9.]
    I read those words more than once, and to begin with I thought that there must have been a misprint until I realised that what he was trying to say was that in reducing the price of a pint of beer by 2d., the Chancellor has made the amount up to the brewers, by reducing the duty by £40 million a year, and making changes to licence duties which will bring in something just under £5 million in a full year, and that he has made up the balance by the abolition of monopoly value payments, which amounted to about £720,000 last year. According to the Financial Secretary, what the Chancellor is doing is giving this £720,000 to the public as part of the reduction of 2d, a pint in the price of beer.
    That argument will not hold water. [HON. MEMBERS: "Hear, hear."] The receipt from the beer duty during the past year was £253 million. This, then, is the real position—a figure of £¾ million against £253 million. The abolition of this relatively small sum can thus surely play but a very tiny part in the price of a pint of beer. It certainly does not make a difference of a penny; I doubt if it is a farthing, and there is no reason, when one comes to a fraction of that kind, why the brewers themselves should not find the extra money.
    Looking down the Stock Exchange list, one does not find any brewery company in difficulties. The dividends paid vary from 48 per cent. to 25, and 12 per cent. The prices of the shares too are exceedingly high. If the brewers themselves are finding, as is said, that people are not drinking as much beer as they previously did, surely the remedy is in their own hands. They should reduce the price themselves and not expect the taxpayer to meet the cost.
    Look at this how one will, it seems to me anti-social and wrong for the Chancellor of the Exchequer to make this change. He has done it not for one year, but permanently. From now on as long as beer is drunk and taxes are levied the brewers will get away with the best part of £1 million which quite properly belong to the public, and should go to the public. If the Chancellor of the Exchequer did

    883
    not want this money, we can suggest quite a number of directions in which it could have been used. Why not, for example, put it towards the building of the National Theatre? Or what about using part to take the tax off musical instruments? The Chancellor could do that and still leave a fair sum to be put to some other useful purpose.
    When the Chancellor of the Exchequer made this proposal during his Budget speech, he did not explain why he was doing it. He made a flat, bare statement, and nothing more. Up to now we have had no explanation from him as to why he is doing it. Looking at the facts and knowing the history of the matter, we feel pretty certain that he has no real explanation to give. Therefore, I hope my hon. and right hon. Friends will go into the Lobby to register their objections to the proposal.
    Mr. C. W. Gibson: I want to put one point to the Chancellor which has not been put by my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall). There is no public support that I can see anywhere for this proposal. It was put into legislation over fifty years ago in response to public pressure. As my right hon. Friend said, it was almost a second thought, resulting from that public pressure but, so far as I can tell, no one has been able to say that there has been public pressure anywhere for the abolition of payment of monopoly values to the State.
    It seems that the Chancellor has no real case against that being done, except apparently, as a sop to the brewers to keep the 2d. off a pint of beer.
    Mr. Amory indicated dissent.
    Mr. Gibson: The right hon. Gentleman shakes his head, but what other reason can there be?
    I have heard it said that clubs provide the answer as so many clubs are not subject to the ordinary laws about drinking as are public houses. That is something which some of us on more than one occasion have tried to raise in the House, but that reason cannot apply over enormous areas of country. In my district I do not know of a single club where beer is drunk as a result of a licence to sell drink. In all those areas the publican
    884
    still has a very valuable monopoly because of the licence he is compelled to get but others are prevented from getting. This is altogether wrong, apart from the social implications. This is a step back in British history, not a step forward. I hope that the Chancellor will have second thoughts about it.
    Part of the use to which moneys raised by monopoly charges has been put was compensation for "pubs "declared redundant. As one which has had a little to do with the remodelling and planning of London, and the transfer of public house licences, I know what enormous pressure the brewers can put on over the question of monopoly values. There are still many places where, everyone admits, there are too many "pubs." If some are to be closed is the ordinary taxpayer to be saddled with the cost of compensation for closed houses because there are too many? That has not been the position in the past.
    4.45 p.m.
    Mr. Peter Remnant: Surely the compensation fund is a fund levied at the instigation of the licensing justice and paid by the brewing trade, not by the public.
    Mr. Gibson: It is paid by the brewing trade as part of the moneys collected from monopoly values. I want to know whether this change in the law makes a difference from that point of view.
    The chief reason why I oppose the suggestion is that public opinion is not in favour of it. Indeed, there is very strong vocal public opinion against making this change. I hope that in this democratic assembly we shall pay some attention to public opinion. The whole idea of this change is wrong. It is bad socially and completely unnecessary. It is a free gift to a very wealthy industry. Although the Chancellor shook his head, it is true that everyone to whom I have spoken regards this as a sop to the brewers to make sure that the Government could take the 2d. a pint off beer.
    I think that the Government are making ail enormous mistake even over that. So far as I can tell it is not having the desired influence on the drinking of beer. According to one report published this weekend there has been no increase in beer drinking as a result of reduction in the

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    duty. That is something for the Government to worry about, but we ought not to make a change of this kind, when the provision has been on the Statute Book for more than fifty years, without there being a good, strong reason for making that change. One factor to which we ought to pay attention is whether public opinion is in favour of it, and, as I have said there is no evidence whatever that public opinion supports it. 1 hope that the Chancellor will withdraw the Clause so that we do not have to mess about with the licensing laws and restart an argument which, as some of us remember from our young days, was very bitter.
    Sir Charles Taylor: I shall detain the Committee for only a few moments. I hope that before we leave this Clause the Chancellor will point out some of the fallacies in the speeches of the right hon. Member for Colne Valley (Mr. Glenvil Hall) and the hon. Member for Clapham (Mr. Gibson).
    Many people in the country have always thought the imposition of monopoly value payments unfair. Here I should like to say a few words from the hotel aspect. Hon. Members know that I am interested in the hotel industry and I hasten to declare my interest. It was obviously objectionable that if one were running an hotel that was built before a certain date there was no monopoly value to be paid, whereas any new hotel was assessed for monopoly value; and, if I may say so, assessed in a rather arbitrary fashion.
    It was obviously unfair that those who ran hotels of the older vintage should get off scot-free, whereas those with new hotels were assessed for monopoly value. Great pressure has been brought to bear for the building of new hotels. Although the establishment with which I am associated had to pay monopoly value, I still feel it right to do away with monopoly value payments. [Laughter.] That is fair enough. An hon. Member may laugh, but he would take the same view if he were in my situation.
    Clause 5 (2) says:
    "A person who, in pursuance of any such condition, has paid a sum which became due on or after the said eighth day of April shall be entitled to repayment of that sum."
    I do not ask my right hon. Friend to answer the case today, because I want the opportunity of putting certain facts and
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    figures before him before the Report stage of the Bill, but I would point out that there have been cases in which certain establishments have agreed to pay a once-for-all capital payment in order to buy out the monopoly value. It would be grossly unfair if that payment were not related, as it were, to the years during which monopoly value would have had to be paid. As I say, I do not ask my right hon. Friend for an answer today, because I should prefer him to consider, before Report, the evidence which I am prepared to give him.
    I do not believe that it affects many people, but it affects some establishments in the country which I regard as important. If they are to be caught in this way through having paid a large purchase price, so many years' purchase, to redeem the monopoly value, and having almost been encouraged to do so, it would be grossly unfair. Rather than ask him to deal with the point now, I should prefer the Chancellor to listen to the evidence which I and others are prepared to put before him.
    Mr. Glenvil Hall: Would it not be fairer to the Committee if the hon. Member were to tell us that any part of the hotel profits or business not concerned with an on-licence are not subject to the value payment?
    Sir C. Taylor: I am talking entirely of the case of a hotel which is due to pay a monopoly value for its licence as an annual payment. There have been cases in which this annual payment has been redeemed by a capital sum calculated on so many years' purchase. In return for the capital sum the monopoly value in those instances has been washed out. If a substantial capital sum were paid to cover so many years' purchase of the monopoly value, some consideration should be given to those establishments which agreed to do this at that time.
    Mr. E. Fletcher: It is obvious from the speech of my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall) that this Clause impinges on a very big subject. There is a great deal more to be said about the subject than appears from the remarks made by the Chancellor in introducing the Budget, or by the Financial Secretary in moving the Second Reading of the Bill. The Clause, like the preceding Clause, is recommended to us

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    as part of a series of Clauses designed to tidy up administration but, as we found in dealing with the previous Clause, when we tidy up administration, unless we are careful we can at the same time both create injustice and prejudice the merits of existing laws.
    I have not had much time to refresh my memory about the debates which took place in 1902–06, but my right hon. Friend has reminded us of them and of the fact that in those years there was a raging controversy in the country on this subject and that at the General Election of 1906 this issue of licensing loomed large in the fight between the Conservative Party and the Liberal Party.
    Mr. Douglas Glover: And look what happened.
    Mr. Fletcher: Exactly. I want to be careful in what I say, because I have not had long to refresh my memory and I am, therefore, subject to correction by my right hon. Friend. I understand that a licensing Bill was first introduced in 1902 by the then Conservative Government. It was subject to considerable amendment in Committee at the instigation of the then Liberal opposition. Various Amendments were moved, if I remember correctly, from the Liberal Party, by, among others, Mr. Asquith and Mr. Lloyd-George, as they then were. There were violent debates in the House on the subject. Some of the Amendments were accepted by Mr. Balfour, then Prime Minister, supported by Sir Edward Carson, subsequently Lord Carson.
    A subsequent Bill was introduced, making considerable changes. One right hon. Member—I forget whether it was Mr. Balfour or Sir Edward Carson—pointed out that the Bill had been largely transformed. I forget precisely when that Bill passed into law, but it was passed into law and became the subject of heated controversy in 1906 when it was attacked by the then Liberal Opposition. As a result, in the election the Conservative Government were defeated and the Liberal Party came into power for a number of years.
    I mention these matters of history as a warning to the Government that they should bear in mind that licensing is a very dangerous and delicate subject. I
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    should have much preferred the Chancellor to withdraw the Clause from the Bill. If we are to have a wholesale amendment of the licensing law, with all the political implications which might ensue, we should have it in a separate Bill. I am not much enamoured of this device which the Government are adopting of trying to slip into the Finance Bill a Clause making these revolutionary changes in the licensing laws. We have come here primarily to address our minds on the Finance Bill to important matters of national finance. As my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) said, we have come primarily to debate Income Tax, Purchase Tax, and taxation generally. This is not one of the major subjects which should be dealt with in a Budget. Nevertheless, it is in the Bill and we have to apply our minds to it as best we can.
    May we, therefore, consider what is involved, from the point of view of the licensing laws, in this proposal to alter the requirements as to monopoly value? As I understand the debates which raged from 1902 to 1906, there were various aspects of licensing, drunkenness and social conditions generally which then agitated the country. I am happy to say that some of them do not agitate the country today. We no longer have the unhappy and unfortunate aspect of widespread drunkenness which occurred when the Conservative Government were in power in the early part of this century. No doubt the Liberal Party helped to cure that in 1906.
    The licensing laws were obviously designed to deal with licensing. [HON. MEMBERS: "Hear, hear."] Hon. Members should not forget that in this country, unlike a great many continental countries, such as France and Italy, it became recognised as desirable to license public houses for the sale of liquor. It was not merely necessary to have licensed hours within which the sale of intoxicating drinks could take place, but also to grant licences to selected persons to whom permission was granted to sell intoxicating liquor, whether it was at public houses or, as the hon. Member for Eastbourne (Sir C. Taylor) said, at hotels. There is a valid distinction between hotels and public houses, to which some of the hon. Gentleman's predecessors referred to in the earlier debates. That is a point to which I should like to return later.

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    5.0 p.m.
    The problem which confronted the House of Commons at that time was this. If there was to be a licensing system under which magistrates were entrusted with the power of saying to an applicant that he should have permission for a licensed public house or he should not, the magistrates were obviously being given the power to grant a franchise of very considerable value to someone or another. It was agreed that the number of public houses in any locality should be limited. I notice that the then hon. Member for West Ham was complaining that there were fewer public houses in West Ham than in any other part of the country, but that is by the way.
    Then it was asked on what basis the magistrates were to exercise the discretion. The point was made that very probably the brewers would benefit, because if the House of Commons were to give magistrates power, as one of the conditions to the licence, to exact a payment, it was probable, as one hon. Member said that
    "the brewer would pay the highest price, because he would not only get the advantage of the liquor sold, but also secure the trade of that particular house for his brewery."
    At that time that was one of the potential evils of the system.
    It was said that the brewer
    "would probably offer as satisfactory a person to carry on the house as anybody else, and fully comply with all the other conditions, so that the justices would be almost bound, if they were to secure the full monopoly value, to give the licence to the brewer."
    Experience over the last fifty-five years has shown that that is what has very largely happened in practice. As my right hon. Friend said, since then most new licences have been granted to brewers. That may have been inevitable. It may have been implicit in the fact that there was this licensing system. Then it was said from the Liberal benches, and ultimately accepted with some hesitation by Mr. Balfour and Sir Edward Carson, that we might be granting this monopoly to brewers, but we could correct or mitigate the apparent injustice of granting the brewers the monopoly by imposing on them the liability to pay a monopoly tax.
    That was done. It was provided that the monopoly value should be the difference between the value of the premises without a licence and the value of the premises with a licence. In some cases,
    890
    the difference was as much as £30,000. Whatever the figure was, it was paid over to the Government. That was the corollary to giving the brewers this monopoly. The point was well put by Sir Edward Carson on 27th July, 1904:
    "When the magistrates granted a licence to a house, the value of the house rose. What caused that increase of value? The licence. In the circumstances, the Government thought it desirable to put into the Bill a definition of monopoly value. He was sure it was better to have it described as they attempted to describe it than to leave it for the magistrates to try to interpret in their own way."
    I will not trouble the Committee with the details, but there was a great deal of argument about how the monopoly value should be calculated. That discussion wont on week after week. As my right hon. Friend reminded the Committee, the net result was that, as a result of the law passed in 1904, the Government have been receiving about £¾ million a year for the last fifty-five years from those to whom the new licences have been granted.
    Then there was the question about the hotels, in which the hon. Member for Eastbourne is interested. The question was raised in 1904. I have no doubt that it is a very fair point. I do not think that the hon. Member for Eastbourne put it any better than it was put fifty-five years ago. It was pointed out then that in the case of hotels there might be ground for special consideration and that the Clause as it stood did not refer to hotels and public houses. I will leave the hon. Gentleman to pursue that matter at some later stage.
    We have had no kind of explanation given to us by the Chancellor or by anybody else of why the arguments that were valid in 1904 and which have brought to the Exchequer a very substantial sum of money are no longer valid. No one has ever suggested that the brewers could not afford to pay. Neither the Chancellor nor anyone else from the Front Bench has told us why those arguments which have been valid since 1904 have today ceased to be valid and ceased to be relevant.
    What has brought about this change? The monopoly value is exacted because, by reason of a grant by a magistrate to a particular individual or brewery company, the value of the property is enhanced. It has always been The law that, because of that franchise, because of that privilege granted to the individual or the brewery company, the value should not go into

    891
    the individual's pocket or the brewery company's profits, but should belong to the country. This proposition has only to be stated to be accepted as axiomatic. I am amazed that the Chancellor should even attempt to get it through the Committee.
    I looked, as all my hon. Friends have looked, at the speech of the Financial Secretary to see if there was any apparent justification.
    Sir C. Taylor: Would it be in order to remind the hon. Member that we are now in 1959 and not 1904, that we have progressed since 1904 and that red flags are not now needed in front of motor cars?
    Mr. Gerald Nabarro: Or at St. Pancras.
    Mr. Fletcher: The country will notice that the reason given by the hon. Member for Eastbourne for transferring nearly £1 million from the Government to the brewers and for changing a law which has existed for fifty-five years, as a result of which brewers have willingly paid nearly £1 million a year to the Exchequer, is that we no longer want red flags in front of motor cars or a red flag on any particular town hall.
    If that is the best reason which can be given, it completely exposes the futility and chicanery of it. It is treating the Committee with contempt to expect either that we can accept the Clause, which is a monstrous Clause, or that we can accept that kind of infantile reasoning as a reason for introducing—
    Mr. Geoffrey Hirst: That reasoning is as good as the hon. Member's.
    Mr. Fletcher: It is naked and unashamed relief of taxation to the brewers, giving them an uncovenanted benefit at the expense of the Exchequer. I hope that it will not need a great many more speeches from this side of the Committee to convince the Government they have made a serious mistake in having introduced the Clause. In view of the hollowness of the arguments which the Government have adduced in support of the Clause, I hope that they will now withdraw it.
    Mr. Simmons: I think that we ought to have a little more illumination from the benches opposite because, when I first
    892
    came into politics, which was about the time of the Bill about which we are talking, the Tory Party was very voluble in support of the brewery industry. It was closely identified with the brewing trade. It now seems to be rather ashamed of that fact and to be trying to do favours to the brewing trade by backdoor methods.
    A leading member of the Conservative Party once referred on a very famous occasion to the open hand at the Exchequer and the open door at the public house. It was the right hon. Member for Woodford (Sir W. Churchill), who was then a Liberal. When we remember that and when we see the open hand of the Chancellor being extended to the brewers we feel that the Conservative Party has not changed very much at all.
    We have here a short little Clause hidden away in the Budget the object of which is to give a subvention to the brewers of the country. We are always hearing of the virtues of private enterprise from members of the Conservative Party. They say, "Leave it all to free enterprise. Good old private enterprise." Yet they subsidise the building of ships, the production of steel, and even 2d. off the pint of beer. The private enterprise brewers are so clever that when they take 2d. off the price of a pint of beer the Government propose to give them the money first. At the same time they can go on paying out enormous dividends. The "neck oil "factories in Birmingham are making enormous profits and paying out big dividends. This should make it unnecessary for the Government to use the taxpayers' money with which to subsidise a reduction in the price of beer.
    We have a belief that the granting of a licence by a magistrate confers upon the person to whom the licence is granted a certain right and a certain monopoly. I do not see how one can get away from that. I hope that the Treasury Bench will be able to allay our fears about the matter. We are concerned as to how far the Clause is going to undermine the powers of the licensing magistrates—what discretion it is going to take away from them. At present, the granting of a licence is at the discretion of the licensing magistrates. When they grant a licence to a brewery that brewery has the sole right to purvey intoxicating liquors, or "neck oil", whichever one likes to

    893
    call it. from its establishment in a particular area.
    Take a great city like Birmingham. I see some of my Birmingham colleagues present and I hope that they will back me up in what I am saying. My hon. Friend the Member for Northfield (Mr. Chapman) has an enormous number of electors in his constituency. On the other hand, my hon. Friend the Member for Ladywood (Mr. V. Yates) represents a constituency which is being depleted of electors. The public houses in Ladywood do not sell as much liquor today as they did because the population has moved out to Northfield. When the brewers go to Northfield they are granted a licence. But it would be no good granting them a licence if they had planted their public houses on a meadow or field some five or ten years ago because that meadow or field is now covered with council houses and factories within reasonable distance of other public amenities. They are public amenities provided by the corporation. There are corporation roads, transport, parks, swimming baths and council schools. All these amenities are created by the community. All that the brewers have to do is to dump down their hostelry there, get a licence and they are made. They have the monopoly value.
    5.15 p.m.
    In effect, this Bill says that what the City of Birmingham does for its population is of no value at all. We should take no notice of that, because had the brewers gone there before the Corporation of Birmingham had done any of these things they would not have made a profit and they would not have sold any liquor. Of course they would not. The community has created the value of the site on which the public house is built.
    A remarkable thing is that when a new council estate is being planned in Birmingham the first thing marked out is the site of the public house. That is done even before the planning of schools or other social amenities, and it leads one to suspect that the brewers value the monopoly value which the licence gives them.
    The very fact that the brewing trade has to be licensed is another reason for seeing that its activities are very closely watched. In the old days we had an enormous amount of drunkenness in the
    894
    country—at the time about which the hon. Member for Eastbourne (Sir C. Taylor) spoke in his reference to red flags—and there was abject poverty It was that poverty which created drunkenness and the other social evils with which the licensing legislation of the period was designed to deal.
    I hope that we shall not tamely let the Government insert in the Finance Bill this small Clause of about a dozen lines which proposes to take away from the community its right to the value which it has created for its members living in the area. My hon. Friend the Member for Islington, East (Mr. E. Fletcher) suggested that what we really need is a Bill to deal progressively with our licensing laws. That would be the honest way to do it, instead of through the back door of the Budget. Let the Government bring in a Bill to deal with the job honestly and straightforwardly, and to deal with the licensing laws of the country generally. Such a Bill could deal with clubs and pubs, the protection of young life and the social implications of the drink trade. Why cannot we have such a Bill?
    There is not much on the Order Paper this Session, which still has some time to go. If the Tory Party is so barren of ideas of its own, why not borrow the idea of my hon. Friend the Member for Islington, East, withdraw the Clause and put forward a proposal that we should deal in a comprehensive manner, in a comprehensive Bill, with the whole of our licensing laws? I would rather we were dealing with matters of more fundamental working-class importance, but we cannot expect that from the Conservative Party.
    Until the Labour Party became a force in the House of Commons, the Tory Party spent most of its time during the 1906–1910 period talking about licensing. disestablishment in Wales and things like that. Working-class problems were shoved into the background. Not until Keir Hardie gingered up the Tories did they have to face working-class problems.
    I would not myself make a licensing Bill the first priority for the Government, but if they were stuck to find something to do for the rest of this Parliament, which is dying on its feet, if they want to keep it employed and they cannot think of anything better to do, let them be

    895
    honest about their attitude about the drink trade and the licence trade and bring in, honestly and fairly and squarely, a Bill to deal with the problem instead of coming through the back door of the Budget.
    Mr. Erroll: It might be helpful if at this stage I reply to those hon. Members who have already spoken and, in particular, to the opening remarks of the right hon. Member for Colne Valley (Mr. Glenvil Hall). He suggested that the Clause contains legislative obscurity, and the hon. Member for Brierley Hill (Mr. Simmons) also suggested that the Clause would undermine the power of the licensing justices. I should like to reassure the Committee straight away that the Clause, to use the right hon. Gentleman's own words, puts the matter beyond all question.
    The Clause does not affect the powers of the licensing justices in any way. Indeed, its opening sentence, in subsection (1), states that
    "Conditions shall no longer be attached to the grant of new justices' on-licences for the purpose of securing monopoly value to the public".
    Clearly, from the wording, that does not imply any change in the powers of the justices or in the considerations which they should have in mind when considering whether to grant an on-licence.
    Mr. Donald Chapman: Is not the removal of the monopoly value in this case an open invitation to justices to be more free in the granting of licences? [HON. MEMBERS: "No."] It leads one to suspect that they may be encouraged to think in those terms. We would like to have a clear answer.
    Mr. Erroll: It is a matter for the licensing justices to decide for themselves exactly what conditions they should take into account before granting an on-licence. I hardly think that they would be likely to change their views on the ground that monopoly value was no longer to be levied. That consideration arises only after the decision has been made to grant the on-licence.
    The main feature of the debate has been the whole principle of monopoly value—
    Mr. Glenvil Hall: I am sorry to interrupt the hon. Gentleman, but we might as well get the position clear as we proceed. What I had in mind was Section 6 (2) of the Licensing Act 1953, which states:
    "The licensing justices may attach to the grant of a new justices' on-licence such conditions governing the tenure of the licence and any other matters as they think proper in the interests of the public".
    That is a condition. The Clause definitely specifies that
    "Conditions shall no longer be attached to the grant of new justices' on-licences for the purpose of securing monopoly value to the public".
    It does not say "monopoly value payment". This has been pointed out to me and I undertook to those interested that with my right hon. and hon. Friends I would try to settle the point. In spite of what the hon. Gentleman has said, I still am not clear.
    Mr. Erroll: Obviously, there is no point in securing monopoly value if the payments will not be made. I do not see that the condition
    "for the purpose of securing monopoly value "
    being no longer attached in any way affects the other powers of the licensing justices.
    Mr. Glenvil Hall: They can lay down conditions?
    Mr. Erroll: They can still lay down conditions, but not those particular conditions, namely,
    "Conditions … for the purpose of securing monopoly value".
    Those are the only conditions which are affected by the Clause. Other conditions can be laid down as heretofore. Nevertheless, I cannot at the moment check the right hon. Gentleman's exact reference to the 1953 Act, but I will look it up and make certain that what I have said accords with the facts.
    Mr. Gibson: If no monopoly value is charged, presumably the justices can allow brewers to open their "pubs "on the corner of every street, as happened fifty years ago. Is that point covered by the Clause? As I read it, it is not.
    Mr. Erroll: There is no change in regard to the number of on-licences which may be granted by the justices at their discretion. Their discretion was in no way hampered previously by the purpose

    897
    of securing monopoly value. They remain unfettered in the future, as in the past, regarding the number of on-licences that they are prepared to grant. There is no change whatever in that respect.
    A number of hon. Members have referred to the fundamental principle of monopoly value. Several hon. Members have referred to the debates which took place in 1904 and some of my hon. Friends have pointed out that conditions have indeed changed since those days. That is one of the reasons why monopoly value does not have the importance today that it had in the past. The right hon. Member for Colne Valley said that everybody was content with the present arrangements and that there was no need for a change. I should like to point out that everyone was by no means content. 'The licensing trade has made representations for a number of years to the Treasury protesting against the continuance of monopoly value and pointing out the severe disadvantages which it entails for the on-licence holder.
    It may be that in the conditions of 1904, a substantial monopoly value accrued to the possessor of an on licence, but conditions have changed in a number of important ways. In the first place, there has been a remarkable growth of clubs. There are now four times as many clubs in existence as there were in 1904. Secondly, the concept itself is an imperfect one, because the monopoly value fixed at the time the licence was granted cannot take into account any further licence which may be granted by the licensing justices in the ensuing year or two, although such a second licence effectively destroys a considerable part of the monopoly value granted to the first licence holder, who, incidentally, can get no benefit by way of rebate or repayment in respect of the monopoly value attached originally to 'his licence.
    Thirdly—and this is an important social development—the consumption of beer, wines and spirits takes place to a much greater extent in the home today than perhaps it did in 1904. The off-licence holder is able to sell quite freely and easily to those who prefer to consume their alcoholic beverages in the home and this in turn reduces the monopoly content of the on-licensee's licence.
    5.30 p.m.
    Mr. Glenvil Hall: There is still £750,000 a year.
    Mr. Erroll: I am coming to that.
    The next point is that monopoly value does not arise in Scotland. There is. therefore, a conflict of principle between English practice and Scottish practice. In Scotland, this method has not been found necessary.
    Mr. E. Fletcher: But is not this because there is no monopoly value in Scotland?
    Mr. Erroll: It just shows that it is a very shaky principle.
    One of the biggest disadvantages hither-to has been that it necessitated the fixing of the monopoly value in advance before those making the assessment could hope to be in a position to judge the prosperity or otherwise of the licence-holder. It was inevitably something of a "hit or miss" business. The right hon. Member for Colne Valley points out that it has been bringing in £700,000 to £800,000 annually. That is so, but the sum would be expected to decline as the programme for building new houses to replace the old ones comes to an end. It would be a declining source of revenue to the Exchequer.
    I come now to what I think is the most important argument in favour of removing monopoly value, which is that the Royal Commission on Licensing (England and Wales), which sat between 1929 and 1931, thought that the provision tended to give an advantage to applicants with large financial resources. For what we believe to be extremely sound reasons, the Commission recommended the abolition of monopoly value.
    Several hon. Members suggested that the money which no longer has to be paid in this way is something of a gift either to rich brewers or to publicans or is in some other way lost to the Exchequer. This is not so. It is, in effect, added to the duty on beer in the same way as the changes in excise liquor duty and club duty are added. I will try to explain this by reference to the figures in regard to beer. A reduction of 2d. a pint in the retail price of beer means that the retail price is reduced by 48s. a barrel. The beer duty reduction actually given in the

    899
    Finance Bill is only 43s. 7d. The remaining 4s. 5d., that is, the difference between 48s. and 43s. 7d., is accounted for by the licence duty, the club duty and the monopoly value reduction. These three items totalling 4s. 5d. per barrel must be borne by the trade. The consequential changes are matters to be worked out between the brewers, the publicans and the off-licence holders.
    The amount which is apparently lost in this way is either recovered by the Exchequer or is passed on to the public in the form of the reduction of 2d. a pint. The monopoly value does not revert to the publican. It goes where it should go, namely, to the public themselves.
    Mr. Simmons: Is it not true that it is a subsidy to the publican to help him to take 2d. off a pint of beer?
    Mr. Erroll: No, there is no benefit whatever to the publican.
    Mr. Simmons: He could not take 2d. off otherwise.
    Mr. Erroll: No; the publican is not taking 2d. off. The brewer is taking 2d. off, although he is not receiving the full 2d. relief in the change of duty. The brewer is recovering from the retailer—I use the term in the most general sense—what the retailer would otherwise gain by the abolition or reduction of the duties which we have been discussing. The brewer is exactly where he was and, by and large, the retailer is about equally compensated for the higher price wholesale which he must pay for his beer, which is countervailed by the removal or reduction of the duties.
    Mr. Jay: No doubt that may seem to be the immediate impact, but how can we be sure that, after a time, when costs and other circumstances change, this will not, in fact, be a benefit to the brewer?
    Mr. Erroll: It is hardly likely to become a benefit to the brewer if he is only passing on increased costs which have arisen in connection with the production of beer, because then he is merely passing on costs which can either appear as an increase in the retail price or be accepted in the form of smaller profit margins by the wholesale and retail sections of the trade. If costs go down, one
    900
    relies on the competitive nature of the brewing industry to ensure that lower prices are charged to the public.
    Mr. Jay: That is really no answer to the question of what will happen if costs come down later.
    Mr. Erroll: We believe that, if costs go down, provided that there is a competitive system, as there is in the production and distribution of beer, the result is a reduction in prices to the public. It depends on how much costs go down and on the unit costs of sale.
    The hon. Member for Clapham (Mr. Gibson) spoke about the compensation charge. There is no change at all with regard to the compensation charge. It is a levy on the trade. The compensation authorities can vary the sum which they fix each year. No part of the compensation charge accrues to the Exchequer, and it involves no revenue cost. The compensation charge not being mentioned in Clause 5, it is really not an appropriate matter for discussion at this stage, but I thought that I might help the hon. Gentleman by making that point clear now.
    The points made by my hon. Friend the Member for Eastbourne (Sir C. Taylor) will be noted most closely by my right hon. Friend and myself before a final decision is arrived at.
    I hope that what I have said will reassure the Committee as to the soundness of our proposals and that the Committee will now accept the Clause.
    Mr. Ede: We are sometimes accused of being doctrinnaire on this side of the Committee. I wonder what view the hon. Gentleman the Economic Secretary takes of the statement that the Government rely for the adjustment of all these problems on the competitive nature of the brewing industry. I only hope that, in the course of many years, he will at last reach the position of Home Secretary. He will then know exactly how much trust can be placed on the competitive nature of the brewing industry. One of the most amazing examples of the way in which small trading has been gradually, over the years, absorbed in huge, capitalistic co-operative enterprises is shown by the brewing industry. Local brewing firms throughout the country now have virtually disappeared. There are a few

    901
    large interests which divide the new houses between them in accordance with their own plan. Really, the hon. Gentleman must think of something better than that to justify this proposal.
    I gather that nothing is to happen to those people who, like the firm for whom the hon. Member for Eastbourne (Sir C. Taylor) pleaded, have paid monopoly value. Everyone before 1904 escaped having to pay monopoly value, unless they so much improved the house that, when they came for sanction for the improvements, it was obvious that they had created a new set of premises. All people who, after 28th April, 1959, take out a new licence will not have to pay monopoly value. The people in between, between the appointed day in the Act of 1904 and the appointed day in 1959, will have paid. What will happen to their payments? Will the people who have paid what is now regarded as an unjustifiable sum get a refund?
    I wish that we could have been told the way 2n which monopoly value has been calculated. I was a licensing magistrate for nearly forty years. We granted some new licences during that period. As far as I could make out, the calculation was arranged between an accountant acting for the brewer and an accountant acting on behalf of the Treasury. They assured us that they had arrived at an agreement and that the figure was so much. I never heard either side cross-examine the other on the way in which the figure was arrived at. I agree with the Economic Secretary that it is very difficult to arrive at the figure. It must have been, because nobody ever ventured to explain how it was done nor where it was arrived at.
    Let us take the reasons that, we understand, have now been advanced by someone or other to the Treasury why the requirements as to monopoly value should disappear. Monopoly value is a fact, and let there be no doubt about it. When a licence is granted to a person to carry on a trade in a particular house, from that moment that house has an additional value in the market. The people who own the house are very careful to see that the conduct of the person associated with the house shall be such as never to place that value in jeopardy. If a licensee has the misfortune to be convicted in a magistrates' court of an offence against
    902
    the law dealing with this trade, he is rarely the person who applies for the renewal of the licence at the next sessions. In those circumstances, a person who has received the kind of testimonials that are required from every person who holds a licence, which are far higher testimonials than are required by any bishop or dignitary of any of the Churches of which I have heard, is installed.
    Therefore, a monopoly value is created by the act of the justices in agreeing that certain premises meet with their approval for the conduct of this trade. In almost any other trade, if a man thinks that there is a good market for the exploitation of his trading skill he can open a shop, and no one can question it. It is true that during the war it was necessary to limit that for the time being, but, by and large. a man can practise any trade or profession that he likes, but he runs the risk of someone opening another shop in competition with him.
    In the licensing trade, if a man has a justices' licence, he has the right to object to someone else opening a house in close proximity to him. If he objects, the licensing justices have placed before them by the applicant and by the opponent maps of the district showing the number of houses within a quarter of a mile, half mile and one mile radius and the number of licences in that area. There is no doubt that the grant of a justices' licence confers on an individual a very substantial right to a monopoly in the area and very considerable proof must be adduced that the requirements of the area should be met by the granting of another licence.
    5.45 p.m.
    The trade has now moved from the on-licence to the off-licence. During the latter part of my experience as chairman of a licensing committee, every year we received applications from people holding off-licences to remove some of the limitations that had been placed on them at the behest of the on-licence holders when the first application for an off-licence was made. Whereas in the old days people took home half a dozen bottles of ale or would have half a dozen bottles of ale delivered to their homes, nowadays, when they want licensed products in the house while watching television, they never want half a dozen bottles but only one bottle. People consume liquor in such small quantities that they do not require a pint bottle.

    903
    They therefore asked that a special kind of sale should be made by which they could have three bottles each containing one-third of a pint—a habit which they appear to have picked up in their childhood, when they were provided with milk in one-third pint bottles at school. I know of no other explanation for this particularly curious development.
    It was said that difficulty is caused because the amount has to be fixed in advance. Many calculations of this kind, such as in the purchase of businesses, and so on, are made by fixing the amount to be paid in advance. In fifty years an arrangement has grown up which I am sure no one connected with the trade will deny, namely, that very rarely, if ever, is the amount contested before the justices when it has been made at the kind of conference which I have mentioned.
    Monopoly value is a value created by an administrative act associated with the Government. When the country creates such a value, I do not see why it should not have the right to receive it. There may be speculations about unearned increment in land and many other things when one attempts to forecast the future, but one thing that is certain is that, if a justices' licence is granted, an artificial value in the premises concerned is created from that moment.
    Would the brewing trade agree that there should be no monopoly and that anybody should be able to open a place where intoxicating liquors can be sold? If it is a hardship to pay a monopoly value, will they agree that anybody shall be able to open premises at which these commodities can be sold?
    There is no question here of moral issues. It is purely the commercial question: is there a value in the conferment on a particular person of the right to be able to carry on this trade in a certain set of premises with the certainty that no fresh competition can be brought into that trade in his area without his being able to object to the licensing justices on the grounds that he has bought a monopoly value that should not be interfered with?
    There can be no case for this Clause at all. In fact, there has not been any attempt to make out a case. That being so, I sincerely hope that my right hon.
    904
    and hon. Friends will go into the Lobby against it.
    Mr. Redhead: Having listened with very great care to the Economic Secretary—because I was exceedingly puzzled, earlier, about the real reason for this proposal—I remain completely unconvinced of the justification of this Clause. I submit most earnestly to the Committee that a provision that was introduced by this Parliament as long ago, admittedly, as 1904, after the most earnest thought, ought not to be abandoned lightly or without some much more solid reason given than we have had from the Economic Secretary today.
    What does the hon. Gentleman say? He says that conditions have changed since 1904. Certain hon. Gentlemen opposite were restive when some of my hon. Friends reminded them of the arguments that brought this monopoly value provision originally on to the Statute Book. They did not take note, nor did the Economic Secretary remind us, when he brought in aid the Report of the Royal Commission of 1931, whose recommendation was that monopoly value should be abolished—which recommendation, he said, was backed up with very good reasons—that this very provision was reenacted in the Licensing Act, 1953, during the tenure of office of the party opposite.
    If that principle was good in 1904, and was again, presumably, judged still sound in 1953, why is it no longer considered good and sufficient? One cannot be other than highly suspicious of the whole of the present proposal, and of the very peculiar arguments that have been advanced in its favour.
    There has been an increase in the number of clubs, but not at a particularly high rate. There has been an increase of only about 5 per cent. in the total number of clubs since 1953—that is, since the provision was last re-enacted. The Economic Secretary was at great pains to suggest that there really was no longer any monopoly at all. Nevertheless, it has been yielding a high revenue. The revenue varies from year to year because of the progress in building, or interruptions of the building programme, but it amounted to between £700,000 per annum and over £1 million only a couple of years ago.

    905
    We have had a reiteration of the argument adduced by the hon. Gentleman on Second Reading that the principle of retaining the monopoly value for the public was being preserved by converting the charge into an addition to the beer July. To speak bluntly, I just cannot understand that line of argument. It is an echo of the earlier contention of the Financial Secretary, who told us that the total cost of all the reliefs in licence duty, club duty and monopoly value was £5½ million. He added, however, that this is not forgone by the Exchequer because the benefit is passed on to the consumer to make up, with the reduction in the beer duty, the 2d. a pint off the retail price of beer.
    The fact is that it is forgone by the Treasury. The Exchequer no longer takes and retains this monopoly value. It is no good trying to involve us in arguments about putting the charge on the beer duty when, in fact, the whole of this operation is directed to the purpose of reducing the sum total burden upon beer. The fact is that the Treasury is not receiving this revenue.
    I am very puzzled to know why the Financial Secretary made this gratuitous explanation at all. I have tried to discover the reason but I have failed— unless it be that he was anxious that it should not be observed that the concessions amount to considerably more than even the trade itself has been urging in all its representations on the subject. What is meant, we discover, is that the remission of monopoly value payment, estimated by the Chancellor in respect of this year—had the provision continued—at: about £700,000, has been appropriated to the reduction in the retail price of beer. Thus, it has been added to the relief on the beer duty itself, but the benefit does not remain with the public in general—that is, with the Exchequer. As I have explained, the Exchequer definitely abandons this revenue.
    I would again remind the Committee that, as some of my hon. Friends have mentioned, there can be no guarantee whatsoever that these reliefs will be passed on. or that things will remain in their present happy position for any length of time. One can imagine the pretexts on the part of the brewers in no far distant time when they bring to their own benefit the remissions they are
    906
    now enjoying. To the extent that it is passed on, it is passed on not to the general public, but to beer drinkers only. who, on the most optimistic anticipation of the Financial Secretary, represent only about half the population—
    Mr. Remnant: Surely it has been passed on to those who have paid it in the past. Is that not fair?
    Mr. Redhead: Hitherto, judging by the representations to which the Economic Secretary has referred, this has been a burden not upon the public, but on the brewers, who have been responsible for the agitation. We have said that we welcome the tidying-up of liquor licence duties upon which the Chancellor is engaged in the Bill. I certainly commend him for taking an obviously sensible step in removing a very complicated schedule of liquor licences and substituting for it a series of registration fees that will achieve what has now become a fundamental purpose of licences, which is to facilitate the control of revenue.
    This monopoly value, however, is not an essential part of the administrative tidying-up process. Monopoly value stands on its own, and is not in any strict sense a licence duty. It has, in fact, been swept up with the reductions in that duty to add to the beer duty remissions so as to bring about the 2d. reduction in the pint of beer at the retail end.
    I know that the Chancellor is wedded very passionately to this concept of a reduction in the price of beer. I know that he is most anxious to preserve every possible element towards this ultimate end. But I was amused to find the Minister thinking up, as yet another reason for this step, that it ensured that the fiscal remissions extended palpably to the productive worker, and not least to those who do not pay Income Tax. He became most lyrical about the reduction in the beer duty which, on the most optimistic calculation, amounts, for his regular, moderate drinker, to not more than about £2 or £3 a year, but which compares very strangely, as an exercise in the fiscal equity, with the reductions that some Income Tax payers will derive from other parts of the Bill.
    6.0 p.m.
    Quite frankly, the reduction looks more like a reflection of the rather typical, old-fashioned and by no means

    907
    flattering Tory view of the British workman as being a creature only interested to the exclusion of more important matters in his pint of "wallop", and. therefore, that 2d. off a pint could be calculated to make him cheer in gratitude, and dutifully vote Tory at the next General Election. If that was what he contemplated, I am quite certain that the Chancellor has miscalculated, because I do not imagine that he will have cheers from the ranks of the old-age pensioners who have been sorrily dealt with in this Bill and who are not likely to derive much benefit from it.
    But granting the Chancellor his purpose of seeking to secure this reduction in the price of beer, may I say most emphatically that it is not essential for that purpose that he should have this Clause. What does it amount to? The revenue that he forgoes by this Clause amounts to £700,000, on his own estimate, and its effect on the price of beer is one-twenty-fifth of a ld. I do not believe for a moment that the brewers are in such a parlous condition that they cannot sustain that slight contribution to the Chancellor's purpose in the price of beer.
    I remain completely unconvinced by the reasons that have been advanced, and I must tell the Chancellor that what the Economic Secretary said this afternoon has not induced us on this side of the Committee to change our view. So strongly do we feed about it that we shall take our point of view into the Division Lobby.
    Mr. Amory: There is one thing on which I can agree with the hon. Gentleman the Member for Walthamstow, West (Mr. Redhead), and that is that this Clause is not necessary to obtain the object of reducing the price of beer by 2d. That is the only reason that I intervene. We could perfectly well have brought that about by leaving the monopoly value where it was, But hon. Members opposite seem very reluctant ever to bring themselves to acknowledge that times have changed since 1904.
    I should like to say that we listened, as we always do, with very great interest indeed to the speech of the right hon. Gentleman the Member for South Shields (Mr. Ede). I know that he has almost unrivalled experience in this
    908
    matter from the point of view of the administration of justice.
    We are making this change because of the growing amount of evidence that today, in present circumstances, the monopoly value procedure was not working fairly. That was thought to be so even in 1931, by the Royal Commission. Hon. Gentlemen have asked why we did not make the change in 1953. The answer is because the other changes that we are making, and the reduction in the beer duty, afforded us an opportunity of making this change which would otherwise have been difficult to do.
    I want to stress what the Economic Secretary said, that this is not putting an additional burden on the taxpayer at all. What we are doing is this. A reduction in the duty on beer that would have been represented by 2d. a pint would have amounted to 48s. a barrel. Instead of giving that concession to the brewers we are giving a smaller concession of 43s. 7d. a barrel instead of 48s. The difference between the 43s. 7d. that they get and the 48s. which they would have been entitled to get as representing a fall of 2d. is represented by the gain to the trade in the aggregate from the change in the licence duties and the removal of the monopoly value.
    If our premise that the monopoly value procedure was not working fairly is right, it seems that this step which we have taken is extremely sensible and that it certainly will not work out to the disadvantage of the taxpayer. Therefore, I hope that the Committee will approve the Clause as it stands.
    Mr. H. Wilson: The Chancellor's intervention seems to have carried the confusion still further. Quite apart from his contradiction about 1931 and 1953, he is still harking back to 1931 to get his argument, yet in 1953 this Government re-enacted the monopoly value procedure. The Chancellor has entirely failed to show why it is considered right by the Government to do this thing and why it has to be done in the Finance Bill at this time. It has been traditionally dealt as part of licensing procedure. The Royal Commission referred to licensing and not to finance. Why has the Chancellor brought this highly controversial little measure into the Finance Bill this year?

    909
    He has been explaining his little calculations about an item which makes a difference of only one twenty-fifth of a penny per pint, and he has gone so far as to agree with my hon. Friends that this was not necessary in order to secure a reduction in the price of a pint of beer.
    Mr. Amory: I explained that because we were altering the rate this year in the beer duty this was a convenient moment to alter it in respect of these other matters as well.
    Mr. Wilson: What the Chancellor has done is to get through a highly controversial matter, one which many of us on this side of the Committee and many people in the country not connected with the Labour Party or any party consider to be a vicious principle, and he is doing this by the back door in the Finance Bill.
    Sir James Duncan: Nationalisation by the back door.
    Mr. Wilson: If the hon. Gentleman wants to debate the Institute of Directors with me I shall be glad to do so, although I am sure that I should be as out of order as the hon. Gentleman was in his intervenion. I suggest that the Institute should read its own newspaper, the Director, before it starts talking about things it knows nothing about.
    To return to the question of the Finance Bill, we strongly suspect that the reason that the Chancellor has brought this highly controversial Measure forward has nothing to do directly with the Finance Bill and will affront a lot of public opinion. I think we can say that we have debated it in an atmosphere very different from that in which these matters were debated in 1904 and the years that followed. Nevertheless, this is a principle that should have stood on its own. If the Government wanted to introduce
    it, they should have brought it in in a properly constituted licensing Bill. I suppose that the Chancellor hoped to get this through on the nod or submerge it in the enormous volume of beer that is envisaged under Clause 1 of the Bill, and that somehow it would escape notice.
    We are quite unconvinced that it should have been done in this way. The Government surely would not have introduced a betting reform in the Finance Bill; they would have introduced a betting Bill if ever they were going to introduce betting reform and not in this way. We are convinced that this is the wrong way to deal with this problem, and we also believe that, even if it were the right way, it is the wrong principle to introduce that the monopoly value should now be abolished.
    The arguments have been put forcibly by my right hon. Friend the Member for Colne Valley (Mr. Glenvil Hall), my right hon. Friend the Member for South Shields (Mr. Ede) and other hon. Members, and we have had no satisfactory explanation at all. The more we think, about this, the more we begin to wonder whether there was some other hidden motive for this particular sell-out to the brewers this year. Surely it could not have been because the Tory Party funds are getting so low. Surely there is confidence that the vast industrial and brewery empires are doing political propaganda for them, although admittedly somewhat ham-handedly and inefficiently. Surely it was not necessary for the Chancellor to use the Finance Bill for the purposes of another sell-out to the brewing community. Therefore, we intend to challenge this in the Lobby.
    Question put, That the Clause stand part of the Bill:—
    The Committee divided: Ayes 227, Noes 184.

    Division No. 104.]

    AYES

    [6.10 p.m.

    Agnew, Sir Peter

    Bell, Ronald (Bucks, S.)

    Browne, J. Nixon (Craigton)

    Aitken, W. T.

    Bevins, J. R. (Toxteth)

    Bryan, P.

    Amory, Rt. Hon. Heathcoat (Tiverton)

    Biggs-Davison, J. A.

    Bullus, Wing Commander E. E.

    Anstruther-Gray, Major Sir William

    Bingham, R. M.

    Burden, F. F. A.

    Arbuthnot, John

    Birch, Rt. Hon. Nigel

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

    Ashton, H.

    Bishop, F. P.

    Campbell, Sir David

    Baldock, Lt.-Cmdr. J. M.

    Body, R. F.

    Cary, Sir Robert

    Balniel, Lord

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

    Channon, H. P. G.

    Barber, Anthony

    Boyle, Sir Edward

    Chichester-Clark, R.

    Barlow, Sir John

    Brains, B. R.

    Clarke, Brig. Terence (Portsmth, W.)

    Barter, John

    Braithwaite, Sir Albert (Harrow, W.)

    Cole, Norman

    Batsford, Brian

    Brewis, John

    Conant, Maj. Sir Roger

    Baxter, Sir Beverley

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

    Courtney, Cdr. Anthony

    Beamish, Col. Tufton

    Brooke, Rt. Hon. Henry

    Craddock, Beresford (Spelthorne)

    Bell, Philip (Bolton, E.)

    Brooman-White, R. C.

    Crowder, Sir John (Finchley)

    Crowder, Petre (Ruislip—Northwood)

    Hughes Hallett, Vice-Admiral J.

    Pickthorn, Sir Kenneth

    Cunningham, Knox

    Hurd, Sir Anthony

    Pilkington, Capt. R. A.

    Currie, G. B. H.

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

    Pott, H. P.

    Davidson, Viscountess

    Hylton-Foster, Rt. Hon. Sir Harry

    Price, David (Eastleigh)

    D'Avigdor Goldsmid, Sir Henry

    Iremonger, T. L.

    Price, Henry (Lewisham, W.)

    de Ferranti, Basil

    Irvine, Bryant Godman (Rye)

    Prior-Palmer, Brig, O. L.

    Donaldson, Cmdr. C. E. McA.

    Jenkins, Robert (Dulwich)

    Profumo, J. D.

    Doughty, C.J.A.

    Jennings, J. C. (Burton)

    Rawlinson, Peter

    du Cann, E. D. L.

    Jennings, Sir Roland (Hallam)

    Redmayne, M.

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

    Johnson, Dr. Donald (Carlisle)

    Rees-Davies, W. R.

    Duncan, Sir James

    Johnson, Eric (Blackley)

    Remnant, Hon. P.

    Eden, J. B. (Bournemouth, West)

    Johnson, Howard (Kemptown)

    Renton, D. L. M.

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

    Kerr, Sir Hamilton

    Ridsdale, J. E.

    Errington, Sir Eric

    Kershaw, J. A.

    Rippon, A. G. F.

    Erroll, F. J.

    Lagden, G. W.

    Robinson, Sir Roland (Blackpool, S.)

    Farey-Jones, F. W.

    Lambton, Viscount

    Roper, Sir Harold

    Fell, A.

    Langford-Holt, J. A.

    Ropner, Col. Sir Leonard

    Finlay, Graeme

    Leather, E. H. C.

    Scott-Miller, Cmdr. R.

    Fisher, Nigel

    Legh, Hon. Peter (Petersfleld)

    Sharples, R. C.

    Fletcher-Cooke, C.

    Lindsay, Hon. James (Devon, N.)

    Shepherd, William

    Forrest, G.

    Lindsay, Martin (Solihull)

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

    Foster, John

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

    Smithers, Peter (Winchester)

    Freeth, Denzil

    Loveys, Walter H.

    Spearman, Sir Alexander

    Galbraith, Hon. T. G. D.

    Low, Rt. Hon. Sir Toby

    Speir, R. M.

    Gammons, Lady

    Lucas-Tooth, Sir Hugh

    Stevens, Geoffrey

    Gibson-Watt, D.

    Macdonald, Sir Peter

    Steward, Harold (Stockport, S.)

    Glover, D.

    McLaughlin, Mrs. P.

    Stoddart-Scott, Col. Sir Malcolm

    Glyn, Cot. Richard H.

    Maclean, Sir Fitzroy (Lancaster)

    Storey, S.

    Godber, J. B.

    McLean, Nell (Inverness)

    Stuart, Rt. Hon. James (Moray)

    Goodhart, Philip

    MacLeod, John (Ross & Cromarty)

    Studholme, Sir Henry

    Gough, C. F. H.

    McMaster, Stanley

    Summers, Sir Spencer

    Gower, H. R.

    Macmillan, Maurice (Hallfax)

    Sumner, W. D. M. (Orpington)

    Graham, Sir Fergus

    Macpherson, Niall (Dumfries)

    Taylor, Sir Charles (Eastbourne)

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

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

    Taylor, William (Bradford, N.)

    Green, A.

    Maitland, Hon. Patrick (Lanark)

    Teeling, W.

    Grimston, Hon. John (St. Albans)

    Manningharn-Buller, Rt. Hn. Sir R.

    Thompson, Kenneth (Walton)

    Grosvenor, Lt.-Col. R. G.

    Markham, Major Sir Frank

    Thompson, R. (Croydon, S.)

    Gurden, Harold

    Marshall, Douglas

    Thorneycroft, Rt. Hon. P.

    Hall, John (Wycombe)

    Mathew, R.

    Thornton-Kemsley, Sir Colin

    Harris, Reader (Heston)

    Maudling, Rt. Hon. R.

    Turner, H. F. L.

    Harrison, A. B. C. (Maidon)

    Mawby, R. L.

    Turton, Rt. Hon. R. H.

    Harrison, Col. J. H. (Eye)

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

    Tweedsmuir, Lady

    Harvey, Sir Arthur vere (Macciesf'd)

    Medlicott, Sir Frank

    Vickers, Miss Joan

    Harvey, John (Walthamstow, E.)

    Milligan, Rt. Hon. W. R.

    Vosper, Rt. Hon. D. F.

    Hay, John

    Morrison, John (Salisbury)

    Wakefield, Edward (Derbyshire, W.)

    Heald, Rt. Hon. Sir Lionel

    Mott-Radclyffe, Sir Charles

    Wakefield, Sir Wavell (St. M'lebone)

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

    Nabarro, G. D. N.

    Walker-Smith, Rt. Hon. Derek

    Henderson-Stewart, Sir James

    Nairn, D. L. S.

    Wall, Patrick

    Hesketh, R. F.

    Neave, Airey

    Ward, Dame Irene (Tynemouth)

    Hicks-Beach, Maj. W. W.

    Nicholson, Sir Godfrey (Farnham)

    Watkinson, Rt. Hon. Harold

    Hill, Mrs. E. (Wythenshawe)

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

    Webster, David

    Hill, John (S. Norfolk)

    Noble, Comdr. Rt. Hn. Allan

    Williams, Paul (Sunderland, S.)

    Hinchingbrooke, Viscount

    Noble, Michael (Argyll)

    Williams, R. Dudley (Exeter)

    Hirst, Geoffrey

    Nugent, G. R. H.

    Wills, Sir Gerald (Bridgwater)

    Holland-Martin, C. J.

    Oakshott, H. D.

    Wilson, Geoffrey (Truro)

    Hope, Lord John

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

    Wood, Hon. R.

    Hornby, R. P.

    Orr, Capt. L. P. S.

    Woollam, John Victor

    Hornsby-Smith, Miss M. P.

    Page, R. G.

    Yates, William (The Wrekin)

    Horobin, Sir Ian

    Pannell, N. A. (Kirkdale)

    Horsbrugh, Rt. Hon. Dame Flerence

    Partridge, E.

    TELERS FOR THE AYES:

    Howard, Hon. GreviIle (St. Ives)

    Peel, W. J.

    Mr. Hughes-Young and

    Howard, John (Test)

    Peyton, J. W. W.

    Mr. Whitelaw

    NOES

    Ainsley, J. W.

    Brown, Thomas (lnce)

    Diamond, John

    Albu, A. H.

    Butler, Herbert (Hackney, C.)

    Dodds, N. N.

    Allaun, Frank (Salford, E.)

    Butler, Mrs. Joyce (Wood Green)

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

    Allen, Arthur (Bosworth)

    Carmichael, J.

    Ede, Rt. Hon. J. C.

    Allen, Scholefield (Crewe)

    Castle, Mrs. B. A.

    Edelman, M.

    Awbery, S. S.

    Champion, A. J.

    Edwards, Robert (Bilston)

    Bacon, Miss Alice

    Chapman, W. D.

    Edwards, W. J. (Stepney)

    Balfour, A.

    Chetwynd, G. R.

    Evans, Albert (Islington, S.W.)

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

    Cliffe, Michael

    Evans, Edward (Lowestoft)

    Benson, Sir George

    Coldrink, W.

    Fernyhough, E.

    Beswick, Frank

    Collick, P. H. (Birkenhead)

    Finch, H. J. (Bedwelity)

    Blackburn, F.

    Corbet, Mrs. Freda

    Fitch, A. E. (Wigan)

    Blenkinsop, A.

    Cove, W. G.

    Fletcher, Eric

    Blyton, W. R.

    Craddock, George (Bradford, S.)

    Forman, J. C.

    Bonham Carter, Mark

    Cronin, J. D.

    George, Lady Megan Lloyd(Car'then)

    Bottomley, Rt. Hon. A. G.

    Crossman, R. H. S.

    Gibson, C. W.

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

    Cullen, Mrs. A.

    Gooch, E. G.

    Bowles, F. G.

    Darling, George (Hillsborough)

    Gordon Walker, Rt. Hon. P. C.

    Boyd, T. C.

    Davies, Ernest (Enfield, E.)

    Grenfelt, Rt. Hon. D. R.

    Braddock, Mrs. Elizabeth

    Delargy H. J.

    Grey, C. F.

    912

    913

    Griffiths, William (Exchange)

    McAlister, Mrs. Mary

    Robinson, Kenneth (St. Pancras, N.)

    Grimond, J.

    McCann, J.

    Rogers, George (Kensington, N.)

    Hale, Leslie

    MacColl, J. E.

    Ross, William

    Hall, Rt. Hn. Glenvil (Colne Valley)

    Mclnnes, J.

    Shinwell, Rt. Hon. E.

    Hamilton, W. W.

    McKay, John (Wallsend)

    Silverman, Julius (Aston)

    Hannan, W.

    McLeavy, Frank

    Silverman, Sydney (Nelson)

    Hastings, S.

    MacMillan, M. K. (Western Isles)

    Simmons, C. J. (Brierley Hill)

    Hayman, F. H.

    MacPherson, Malcolm (Stirling)

    Skeffington, A. M.

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

    Mallalieu, E. L. (Brigg)

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

    Herbison, Miss M.

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

    Slater, J. (Sedgefield)

    Hewitson, Capt. M.

    Mann, Mrs. Jean

    Smith, Ellis (Stoke, S.)

    Hilton, A. V.

    Marquand, Rt. Hon. H. A.

    Sorensen, R. W.

    Hobson, C. R. (Keighley)

    Mason, Roy

    Soskice, Rt. Hon. Sir Frank

    Holman, P.

    Mayhew, C. P.

    Sparks, J. A.

    Holmes, Horace

    Mitchison, G. R.

    Spriggs, Leslie

    Holt, A. F.

    Moody, A. S.

    Stonehouse, John

    Houghton, Douglas

    Moss, R.

    Strauss, Rt. Hon. George (Vauxhall)

    Hughes, Cledwyn (Anglesey)

    Moyle, A.

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

    Hughes, Emrys (S. Ayrshire)

    Noel-Baker, Francis (Swindon)

    Summerskill, Rt. Hon. E.

    Hughes, Hector (Aberdeen, N.)

    Oliver, G. H.

    Taylor, Bernard (Mansfield)

    Hunter, A. E.

    Oram, A. E.

    Thomson, George (Dundee, E.)

    Hynd, H. (Accrington)

    Orbach, M.

    Timmons, J.

    Hynd, J. B. (Attarsliffe)

    Oswald, T.

    Tomney, F.

    Irvine, A. J. (Edge Hill)

    Owen, W. J.

    Ungoed-Thomas, Sir Lynn

    Irving, Sydney (Dartford)

    Padley, W. E.

    Plant, S. P.

    Isaacs, Rt. Hon. G. A.

    Paget, R. T.

    Wade, D. W.

    Danner, B.

    Parker, J.

    Warbey, W. N.

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

    Parkin, B. T.

    Weitzman, D.

    Jenkins, Roy (Stechford)

    Paton, John

    Wells, Percy (Faversham)

    Johnson, James (Rugby)

    Pearson, A.

    Wells, William (Walsall, N.)

    Jones, David (The Hartlepools)

    Pentland, N.

    White, Mrs. Eirene (E. Flint)

    Jones, T. W. (Merioneth)

    Poppiewell, E.

    Willey, Frederick

    Key, Rt. Hon. C. W.

    Prentice, R. E.

    Williams, David (Neath)

    King, Dr. H. M.

    Price, J. T. (Westhoughton)

    Williams, Rev. Liywelyn (Ab'tillery)

    Lawson, G. M.

    Rankin, John

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

    Ledger, R. J.

    Redhead, E. C.

    Willis, Eustace (Edinburgh, E.)

    Lee, Frederick (Newton)

    Reeves, J.

    Wilson, Rt. Hon. Harold (Huyton)

    Lee, Miss Jennie (Cannock)

    Reid, William

    Winterbottom, Richard

    Lever, Leslie (Ardwick)

    Reynolds, G. W.

    Yates, V. (Ladywood)

    Lindgren, G. S.

    Robens, Rt. Hon. A,

    Zilliacus, K.

    Lipton, Marcus

    Roberts, Albert (Normanton)

    Logan, D. G.

    Roberts, Goronwy (Caernarvon)

    TELLERS FOR THE NOES:

    Mr. Short and Mr. Deer.

    Mr. Amory: I beg to move,
    That consideration of Clauses 6 to 28 and of new Clauses be postponed till after consideration of Schedules 1 and 2.
    The other day I had a conversation with the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) about our procedure. He told me that he thought that it would be convenient to his hon. Friends and himself if we did the same as we did last year and debated the Schedules at the same time or took them immediately after the Clauses to which they referred. I agree with the right hon. Gentleman that that would be for the convenience of the Committee. It worked well last year. However, through an oversight, a Motion to that effect was not put on the Notice Paper.
    If the right hon. Gentleman asks through whose fault, it was mine. If he asks why I committed this oversight, I would say that I think my mind was so full of good intentions towards the right hon. Gentleman that this matter slipped my mind. It is in those circumstances that I move the Motion.
    Mr. H. Wilson: The Chancellor of the Exchequer is quite right in saying that
    we had this informal conversation a few days before Second Reading. On that occasion, I suggested that it would be for the convenience of the Committee if, a.' in some previous years, we took the Schedules with the Clauses to which they relate. This, of course, is one more example of the practical way in which we on this side of the Committee have been helping the Government to gat the Finance Bill through year after year. If any Opposition were determined to hold up the Finance Bill—which we on this side of the Committee have never been—there could be no easier way of doing it than to keep the Schedules until the end and then table a whole series of Amendments on them.
    This is the second year in which there has been an oversight and a failure to put the Motion on the Notice Paper. Last year, the Chancellor and his colleagues had not even thought of bringing the Schedules in with the Clauses. It is usual to do that. It was done in 1955, and it has been done on other occasions. We suggested it to the right hon. Gentleman last year and, therefore, had to agree to a manuscript Amendment.
    In view of the frank way in which the Chancellor has made it clear that he is responsible for not having put the Motion on the Notice Paper, it is not unreasonable that we should have a manuscript Motion. It is a good thing that the right hon. Gentleman will not be on the Front Bench opposite next year to obtain a hat trick of these oversights in the matter of the Finance Bill. Shortly, I shall seek to move that the Chairman do report Progress and ask leave to sit again, in order to draw attention to some other rather serious matters which suggest, even on the most charitable interpretation, a very serious oversight on the part of the Treasury in the matter of procedure on the Finance Bill. But I did not think that before I had a chance to move such a Motion we should have a confession from the Chancellor on a simple matter of this kind that he had forgotten to put a Motion on the Paper. In the circumstances, I shall recommend my hon. Friends to agree to the Motion.
    Question put and agreed to.

    First Schedule.—(BEER (DUTIES AND DRAWBACKS).)
    Motion made, and Question proposed, That the Schedule be the First Schedule to the Bill.
    Mr. Redhead: There is one question on the Schedule which puzzles me in view of the Chancellor's passionate desire to be very fair and reasonable in these reductions in duty on beer. The right hon. Gentleman provides in the First Schedule a reduced standard rate of duty per bulk barrel from 155s.4½d., to 111s. 9½d., which gives a net reduction of 43s. 7d. to which the right hon. Gentleman has previously referred. But has the right hon. Gentleman omitted to take notice of the fact that there are two lines on the Schedule and that on the top line reference is made to a beer of 1030 degrees or less and in the bottom line to beer exceeding 1030 degrees? According to the Customs and Excise Report, the average gravity of beer bought in this country is something over 1037. Nevertheless, the Chancellor has not made any corresponding reduction in the charge of 6s. 7½d. for each additional degree over 1030. That does not seem to me an entirely equitable arrangement, except that perhaps the right hon. Gentleman is trying to encourage brewers
    916
    to concentrate on the weaker rather than the stronger beer. Can the right hon. Gentleman explain that point?
    The Paymaster-General (Mr. Reginald Maudling): Having a shot at this point, I think the answer is that the Chancellor wished to reduce the duty by 2d. a pint in every case and not by more than 2d. in some cases.
    Mr. H. Wilson: Is not the real truth that neither the Chancellor nor his colleagues has the remotest idea of the answer to the question which my hon. Friend the Member for Walthamstow, West (Mr. Redhead) has put? This is an important question. The Chancellor looked along the Treasury Bench. Obviously, the Economic Secretary would have no clue about this. The Financial Secretary, who was here a moment ago, has disappeared. Therefore, when in trouble, the thing to do is to send for the Paymaster-General. The President of the Board of Trade is not here. He is making bricks in some other part of the world, without straw. The Paymaster-General is asked to answer. Although the right hon. Gentleman has made a noble effort, does not the Chancellor admit that nobody on the Treasury Bench has the remotest idea of the answer?
    Mr. Maudling: Since speaking, I have confirmed that what I said was correct.
    Question put and agreed to.
    Schedule agreed to.

    Second Schedule. — (MODIFICATIONS CONSEQUENTIAL ON REPEAL OF FOURTH SCHEDULE TO CUSTOMS AND EXCISE ACT, 1952.)
    Motion made, and Question proposed, That the Schedule be the Second Schedule to the Bill.
    Mr. Ede: I want to ask a question about the Licensing Act, 1953, which is alluded to in paragraphs 3 and 4 of the Schedule. Will a spokesman from the Treasury Bench give us an absolute assurance that no alteration is made in the Licensing Act which affects in any way the powers of the licensing justices when they consider applications for a licence or consider any accusation made against a licensee during the year? Can we have an assurance that those powers are not affected by the Bill, except by the decision which the Committee has just made on Clause 5?
    Mr. Erroll: I think I can give the assurance for which the right hon. Gentleman asks. It is not easy to follow exactly what he has in mind. This part of the Second Schedule deals with the compensation fund, which is a quite separate matter from the monopoly value which we were discussing a short time ago. I do not think that the question of payments from the compensation fund or the fixing of the level of compensation charges comes into the question of the licensing of any premises and the granting of licences.
    Mr. Ede: Could we not have a representative of the Home Office here to deal with a purely Home Office matter?
    Mr. Redhead: I want to impress upon the Chancellor that this matter of licensing regulations and laws is taken exceedingly seriously by licensing justices. No one would doubt that this is a very technical subject and that it is wrapped up in many difficult legal points. I hope, therefore, that the Chancellor can offer me some assurance that in making the provisions which have prompted the questions put to him, and the fears expressed lest there should be any interference with the powers of licensing justices in the consequential amendments to the Schedule, he has taken steps to consult the Magistrates' Association or any other competent body which can bring to bear practical experience of the matter and advise him, having taken note of his policy, with which I recognise they would not wish to interfere. I think that that opinion should have been sought in framing legislation to give effect to this policy.
    Mr. Amory: The answer is that these Clauses affect the amount of the payments and in no way whatever the powers. Such consultations as there were were limited to those concerned with the amounts of the payments.
    Mr. Redhead: Nevertheless, does not the Chancellor feel that in a matter of this kind, particularly in view of the dubiety expressed in the Committee by hon. Members who have considerable experience of the licensing laws, it would have been well to have obviated the possibility of confusion among licensing justices, when they came to administer these matters in future, by having at least apprised them of the changes and made clear, before legislation was introduced,
    918
    there was no interference with their powers? Otherwise, I can foresee possibilities of confusion in their minds in the exercise of their important statutory duties.
    Mr. Amory: I do not think so. If there had been any question whatever of any alteration or interference with powers, then the kind of consultation to which the hon. Gentleman referred would have been appropriate and would have been taken.
    Question put and agreed to.
    Schedule agreed to.

    Clause 6.— (REBATE ON HEAVY OILS.)
    Motion made, and Question proposed. That the Clause stand part of the Bill.
    6.30 p.m.
    Mr. Ernest Davies: I do not think that the Committee will find this Clause controversial, or that it will occupy us long, but it would be helpful to us if it could be explained to us and particularly if we could know how it is proposed to administer the provisions of the Clause.
    As I understand it, from the vague references made by the Chancellor during his Budget speech, the Clause exempts from fuel duty oil which is used in certain cases. The first case is where the engine is not actually used to propel the vehicle upon the road; that is to say, it is a subsidiary engine used for other purposes and does not draw its supply of oil from the engine which is used for propulsion. The other case is where vehicles are not actually used on the roads.
    This is where I would like an explanation because I am not clear, either from what the Chancellor told us earlier or from the wording of the Clause, what category of vehicles are here concerned. What vehicles are there which are not used upon the roads but which consume oil fuel that would normally be subject to duty? It may be that they are vehicles used in factories, and so on.
    Here there is being introduced a discrimination in regard to oil duty, in that these vehicles are being exempt from payment of duty. Yet whenever we on this side of the Committee have suggested that there should be certain categories of vehicles exempt from duty, such as public service vehicles, the Treasury spokesman

    919
    has always said that there cannot be introduced discriminatory taxation of this kind because it would be too difficult to administer. I therefore hope the Paymaster-General will explain how he will be sure that there will be no abuse by operators of such vehicles, who will, presumably, be drawing oil from the same source as those who use vehicles on the roads and who may even own and operate some vehicles which are on the road, and others which are not, and that a black market is not developed as a consequence.
    When I put a Question to the Chancellor recently and asked him the estimated cost of remission of duty on diesel oil used in public service vehicles—which we are not debating now, but may be debating later during the Committee stage as there are new Clauses to that effect on the Notice Paper—the right hon. Gentleman replied partly to the following effect:
    "…since relief from hydrocarbon oil duty could not be limited to oil used for particular purposes, such remission would put in issue the entire duty …"—[OFFICAL REPORT, 14th April, 1959; Vol. 603, c. 803]
    The present case is comparable to any exemption of any category of vehicles. Here certain vehicles are being exempted, but in this case presumably the Chancellor does not consider that it will put in issue the entire duty. It would be helpful to the Committee to obtain an assurance from the Paymaster-General that now the Treasury has decided that it is possible to administer discriminatory taxation as regards all fuel duty consumed by vehicles on the road there will be no future objection, on that score at any rate, to further proposals which may be made later in our debate.
    Further, in the same connection, the Chancellor, in reply to a supplementary question following the Question to which I have referred, said that the question concerning a public service vehicle was discrimination between diesel oil and petrol and that, therefore, it was not practical administratively. Yet here we have a proposal that there should be discrimination between oil and petrol. Here we are concerned only with heavy oils. If, in this case, heavy oils can be differentiated from the light oils, it could be done in other cases.
    The arguments produced previously fall to the ground, and this gives us con-
    920
    siderable encouragement about future concessions which would be in order and which, we trust, the Treasury will be able to make. Would the Paymaster-General, therefore, tell us, first, exactly the category of vehicles to which this Clause applies? Is it confined (a) to the engines of vehicles not used for propelling them along the road; (b) to vehicles not used on the road? If so, what vehicles are they? I believe that there is a third category, (c), comprised of vehicles used in road construction.
    On this side of the Committee we have no objection to such vehicles being exempt in this way, but we want to be sure that the way I have endeavoured to explain the position covers all of them and goes no further. Also, would the Paymaster-General clarify the administrative side, so that we can be sure there will be no abuse? I hope he will tell us that the Treasury has decided that there can be discriminatory taxation as between different categories of vehicle and as between diesel and petrol.
    Mr. Maudling: I will gladly answer the hon. Gentleman's question. I thought that when he began to speak on this Clause he would probably try to establish a bridgehead for further exploitation at a later stage, but I shall have to disappoint him, because there is no change of principle involved in this Clause. A line has always been drawn between the use of heavy hydrocarbon oils for road purposes, which are subject to duty, and the use of heavy hydrocarbon oils for making gas or electricity, which are not subject to duty. All we are doing here is slightly to redraw a line between what is dutiable and what is not, to clear up one or two anomalies.
    I will explain the categories affected. The vehicles involved are, first, an engine mounted on a road vehicle, for example, a concrete-mixing machine on a vehicle. That piece of machinery will no longer have to use duty-paid fuel, any more than a static piece of machinery used for the same purpose. This is important because there are more heavy hydrocarbon oil-using machines being used with processing machinery on them. Secondly, vehicles which do not use public roads and are not licensed. The hon. Gentleman referred to vehicles used inside factories or in quarries or on large estates. Those vehicles which are not licensed will in future be able to use duty-free heavy oil.

    921
    There are two further additions to the categories of specialist vehicles which can use heavy hydrocarbon oil free of duty. They are, first, road construction vehicles and, secondly, vehicles used on public roads only for passing from one part of the owner's land to another and for distances of not more than six miles a week. That, I think, is a distinction which is already made for licensing purposes, and is an easily understood one.
    The main point is that, as the Committee is aware, all light hydrocarbon oils, which are mainly petrol, are liable to duty. The heavy oils are liable to duty only if they are intended for use in road vehicles and would, therefore, be competing with the light hydrocarbon oils. In other words, diesel oil or gas oil used in a lorry is taxed because otherwise there would be unfair competition with petrol used in a petrol-propelled lorry.
    The definition used up to now distinguishing between the two types was based on exempting certain specialised vehicles such as tractors and mobile cranes, which have always been able to use duty-free heavy oil so long as their use on the roads was limited to special purposes.
    We have felt that in the case of the vehicles which I have described—the ones used off the roads, for example—it is an anomaly that they should have to continue to pay duty on the diesel oil which they use when the duty is designed to balance up competition in road use with the light hydrocarbon oils.
    That is the purpose of the Clause. The effect on the revenue will be very small indeed. It does not involve any change in principle whatever. It involves merely a small redrawing of the line of distinction already existing between duty-free and duty-paid user of heavy hydrocarbon oils, and so far as the change is made, it will result in a reduction of duty to certain taxpayers.
    Mr. Jay: I am not sure that the Paymaster-General has answered the main question asked by my hon. Friend. I realise that there have been certain vehicles not on the roads up to now which have been unable to use duty-free fuel. The Paymaster-General says that he is now widening the definition; but we have always previously been told that if the definition were widened to any material extent it would lead to a situ-
    922
    ation in which duty-free petrol would be used, that it would be extremely difficult to police the situation and that abuses would be liable to follow.
    How is it that one can safely, apparently, so we have now discovered—we were never told this previously—make this extension without there being any abuses, whereas when we have argued, for example, that there might be exemption or partial exemption for public service vehicles using diesel fuel we have always been told that it is quite impracticable? Here we are discussing the identical heavy fuel oil which in one case will be taxed and in the other will not.
    Can the Paymaster-General explain how the provision will work administratively? Will people using the duty-free fuel purchase it duty-free with a certificate, or from a certain source, or by some other method, or will they purchase ordinary duty-paid fuel in the same way as would be done for a heavy lorry on the road and then claim the duty back from the Customs and Excise? Perhaps the Paymaster-General will explain how it will be done in practice and why, in the light of the actual administrative method, it is practicable to do it without abuses in the way now proposed whereas it is said that it would be impracticable if the provision were extended any further.
    Mr. Maudling: I am sorry that I did not deal with the point previously. The right hon. Gentleman is wrong in saying that there is a large extension here. The extension is very small. As I have explained, the effect on the revenue will be negligible.
    As to the administration, all these heavy oils are dutiable but a rebate is claimed when the oil is delivered from Customs charge. Clearly, in present circumstances there is machinery for establishing whether the rebate is properly claimed. Obviously, similar machinery would be able to apply in the other limited category of classes as the other machinery has applied in the past. There are existing exemptions. I am advised by the Customs authorities that they see no difficulty whatever in administering this provision.
    Mr. Jay: As a matter of administration, ought it not also to work in the case of passenger public service vehicles?
    Mr. Maudling: That is the wider question of the use of heavy hydro-carbon oils in vehicles competing on the roads with vehicles using petrol. This is the case of an extremely limited number of vehicles which are not doing that.
    Mr. Jay: Does the Paymaster-General agree that, as a matter of administration, this could be done in the case of passengers public service vehicles?
    Mr. Maudling: That will arise when a new Clause is debated later.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 7.—(INCREASED QUOTA FOR CER- TIFICATED COLONIAL SUGAR.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    6.45 p.m.
    Mr. Gordon Walker: Before we part with the Clause we ought to have a word of explanation from the Government. I take it that this is one of the complicated things that nobody understands and on which the Paymaster-General will reply. It is certainly complicated.
    As I understand, there is, first, a Commonwealth preference for Commonwealth sugar up to 2,375,000 tons of sugar a year. Within that amount, on which ordinary Commonwealth preference is paid, there is 1,600,000 tons of sugar which might be called Commonwealth Agreement sugar; that is, a special longterm arrangement is made to fix prices year by year for that amount of the total quantity of Commonwealth sugar which receives preference.
    To make it more complicated still, there is a colonial quota within this general amount of sugar that we get from the Commonwealth under a long-term agreement, and one-third of this colonial quota, amounting to 525,000 tons, qualifies for an extra bonus of £3 per ton. I understand that that is the present rather complicated set-up. The effect of the Clause is to increase the amount of 525,000 tons which is receiving the bonus over and above the Commonwealth Agreement price for colonial sugar.
    I wish to ask the Government why the increase is being made now. Is it because there is no longer a shortfall in their
    924
    quotas by Australia and South Africa? In the old days the Colonies were able to exceed their quotas because of a shortfall in the quotas from Australia and South Africa. Or is it because colonial sugar production is going up and the general quota of the Colonies would no longer suffice and they could not make up above their quota by the shortfall in sugar exports by others?
    Has the arrangement been negotiated with the Colonies or not? All the Colonies concerned are facing considerable economic difficulties. They are producing a few staple products. In sonic cases, sugar is their only staple product. I believe that the Colonies which will be covered by the Clause are the West Indies, British Guiana, British Honduras, Mauritius and Fiji. I do not know whether the arrangement has been negotiated or not. It is a very small benefit which the Clause is conferring upon these Colonies. They will get a £3 extra bonus on 545,000 tons of sugar a year instead of the previous amount of 525,000 tons. That means a further 20,000 tons at £3 per ton; in other words, it will cost about £60,000, which will go in aid of the economies of the Colonies concerned. That is very little indeed.
    If there were negotiations, I wonder whether the Colonies concerned express themselves as satisfied with this very minor increase. When we are having a Clause in a Finance Bill to make the increase, why is it so small? Why is it only £60.000 a year? Does the Paymaster-General think we are doing enough to help these British Colonies who are always in very grave economic difficulties and depend upon a few staple products, of which sugar is for most of them the most important?
    This sugar agreement—it is part of the Commonwealth Sugar Agreement—is the only remaining Commonwealth long-term bulk purchase agreement. The Government have destroyed one after another since they came into office. When they came to office they had a large number of Commonwealth agreements negotiated by the Labour Government. The Government have continuously and steadily, for doctrinaire reasons, torn them up one after the other. This is the only remaining bulk purchase agreement, and a very successful one. It is, indeed, a proof that this sort of thing applied

    925
    to appropriate commodities can be very well done, with very great benefit to the Colonies and the Commonwealth countries.
    I wonder how the Government and the Paymaster-General will justify this one remaining Commonwealth long-term agreement, when the right hon. Gentleman and his colleagues have advanced so many reasons for tearing up all the others.
    Mr. Maudling: I will gladly answer the questions which the right hon. Gentleman has put to me about the effect of this Clause. I do not want to enter the wider question of the proper ways of conducting our world-wide trade, but shall confine myself to the effect of this Clause, which has worked extremely well.
    Mr. Gordon Walker: World-wide trade?
    Mr. Maudling: How we conduct our Commonwealth trade has a considerable effect on our trade with the rest of the world. There are such things as international obligations.
    Mr. Gordon Walker: Including sugar.
    Mr. Maudling: Yes, including sugar.
    The effect of this Clause is very much as the right hon. Gentleman himself suggested. Within the Commonwealth Sugar Agreement, there is a special provision for colonial sugar. The Commonwealth preferential rate is about 4s. 5d. duty per cwt., whereas a certain amount of colonial sugar can come in at 3s. per cwt., and that is a sort of super-preference. The amount of colonial sugar that can enter at this super-preferential rate is limited by the Finance Act, 1952, which enabled the Colonial Office to issue quota certificates to colonial sugar producers up to a maximum of 525,000 tons of sugar a year. It is that maximum which is now being changed to 540,000 tons.
    The reason for doing it now is that the exports of some members of the Commonwealth Sugar Agreement may fall short of their quotas, and there is therefore scope for other people to export more than their quotas. In the case of the Colonies, as colonial sugar exports are now expanding, the time has come to make provision for further colonial exports over and above the 525,000 tons which is the rule at present.
    926
    As the right hon. Gentleman himself said, 525,000 tons is one-third of the total colonial quota. If these Colonies are in fact exporting more than their quota, it is reasonable that they should be able to claim the super-preference on one-third of the actual exports, even if they exceed their quota. That is the purpose of making the increase. It is, as the right hon. Gentleman said, a modest increase, but I am advised that it is likely to cover any foreseeable extra exports. Should that not be so, the Government will no doubt be glad to look at it again.
    The right hon. Gentleman asked me whether there had been negotiations. I do not think that this is a case for negotiations, because it is a unilateral action by the United Kingdom, which I think the whole of the Committee will welcome. It is designed to give a further modest assistance to the producers, and I am advised that the increase made, though a modest one, will be quite sufficient to cover any extra exports in the foreseeable future.
    Mr. Gordon Walker: This seems to be a gratifying case of enlarging Commonwealth Preference, and I hope it will be a precedent. I do not know how it fits into the G.A.T.T. but it seems to be a very good thing to widen Commonwealth Preference.
    Mr. Maudling: There are some things which should not perhaps be pursued too far, but I do not think that this will cause any embarrassment.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 8.—(EXTENSION OF IMPORT DUTIES ACT, 1958, S. 5.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mr. Hector Hughes: We oppose this Clause for six reasons, which I shall summarise. I am quite sure the Committee will come to the conclusion that they are good reasons, and I hope that the Government will also do so and will withdraw the Clause.
    I shall summarise the reasons and then elaborate them briefly. The first one is that there is not the slightest evidence that this change is wanted by the industries

    927
    involved—either by the herring fisheries, the processing industry or by the consumer, but I will elaborate that point in a moment. Before putting down a Clause of this kind, the Government should certainly have consulted the industries involved.
    The second reason is that the Clause is not in accord with the spirit or purpose of the Import Duties Act, 1958, which it seeks to amend. The third reason is that it conflicts with the representations which the Minister who introduced that Bill, as it then was, gave to the House on Second Reading. That Minister was and still is the President of the Board of Trade.
    The fourth objection is that it seeks to alter the Third Schedule of that Act by adding goods which are not ejusdem generis with those already specified in it. Although there is in that Clause an omnibus subsection, it is not effective for the purpose and is at odds with the Clause now before the Committee. Fifth, and worst of all, is the objection that this change in the law would be prejudicial to the industries involved. The sixth and last of the cogent objections is, in my submission, that this Clause would be difficult to work in practice without a great deal of trouble and expense, and that it would dislocate the relevant industries.
    These are mere heads of our objections, and I shall now elaborate them slightly, but not, I hope, at such length as to weary the Committee. As to the first objection, I am conversant with the relevant industries involved in this Clause—the fishing industry, shipbuilding and shipping, the distributive industry and the consumers, and I have not had a hint that this change in the law is required by the relevant industries. I see some hon. Members here who are concerned with these industries, and I hope they will support me in these objections.
    The second objection is that the Clause is out of accord with the Import Duties Act, 1958, which it seeks to amend, and, in particular, Section 5 of that Act. I will not trouble the Committee by quoting the Act. No doubt hon. Members who are good industrious apprentices will have read the Act before they came into the Chamber. It is sufficient to state that that was an Act of a general character
    928
    designed to enlarge the powers to impose Customs duties granted by earlier statutes. It was not designed as a Finance Act, and now, in this—I was going to say underhand way, but I do not want to use offensive terms—in this rather strange way, it introduces this change in the law which ought not to be made by a Finance Bill.
    Section 5, in particular, was designed also in general terms, and it is of a character which is not mandatory, but permissive, enabling the Treasury by order to provide certain reliefs from duties. I am sure that the Committee will want to know why this change in the law is being made by a Finance Bill. It is a most unusual procedure which ought not to be approved. If this change in the law is to be made, in my submission, it should be made by a substantive Bill brought in for that purpose.
    7.0 p.m.
    Clause 8 does not accord with the general design of the Bill which it seeks to amend, because it singles out a particular industry, namely, the herring industry, and not only the whole herring industry, but part of the industry, namely, the fish meal and oil part. It singles it out for prejudicial treatment. The Clause is therefore inappropriate and out of place here, and it is uneconomic and bad for the industry, as I shall show.
    Our third objection is that the Clause conflicts with representations made by the President of the Board of Trade on the Second Reading of the Import Duties Act, 1958. He said, in effect, that that was a kind of consolidating Measure and that it would not alter the existing rates of duty, from which it follows that it would not alter the existing reliefs, as the Clause seeks to do. I will quote a few of his relevant observations. He said:
    "… this Bill … brings our tariff legislation together into one instrument so that the structure of our tariff can be revised in modern form."
    In other words, he was presenting it to the House as a consolidating Bill and not as a Bill amending the law. He went on:
    "The Bill does not alter the existing rates of duty, nor would the initial Order, bringing in the revised tariff, alter rates except where a very few small changes are unavoidable in order to recast the present unsatisfactory classification of our goods. If Parliament gave us the Bill, the United Kingdom would be neither more protectionist nor more liberal in tariff policy than it has been in the last ten

    929
    years, but we should have the great advantage of a tariff set out in a form which our own business people and those with whom they trade would understand. Only those who have to thread their way through the jungle of our present legislation know what the difficulties can be that we now propose to remove."
    Could anything be clearer than those words to show that in presenting that Bill to the House the intention of the President of the Board of Trade was to present it as a consolidation Measure and as nothing else?
    He went on to say:
    "Although the Government's tariff policy, that is, whether we put on or take off a duty, is not in any way altered by the Bill, the new structure and the new procedure for changing duties raise questions of principle. I hope that I shall be in order in saying a few words of a general character."
    He went on with words of a general character to the extent of several columns of HANSARD, and he wound up by saying:
    "A number of principles are laid down to guide the two Departments in deciding whether a duty should be varied. In addition to the need to protect our industries, the Government
    '…shall have regard to the desirability of maintaining and promoting the external trade of the United Kingdom, to the desirability of maintaining and promoting efficiency of production in the United Kingdom and to the interests of consumers in the United Kingdom.'
    Those are the principles upon which the Board of Trade has acted since the war and they reflect the altered conditions of today …".—[OFFICIAL REPORT. 2nd December. 1957; Vol. 579, c. 35–41.]
    They also reflected the intentions of the Bill.
    There again, nothing could be clearer for showing that the President of the Board of Trade was presenting that not as a substantive Bill to alter the law but as a consolidating Bill consolidating what he called "the jungle of legislation." Now the Government very improperly seek to treat it as substantive law and to amend it by this side wind in a Finance Bill, instead of bringing in a substantive Bill for the purpose. I hope that the Chancellor of the Exchequer will think again about this and will realise the impropriety of this procedure, that he will withdraw the Clause and bring in, if he desires, a substantive Bill, but to do so only after consulting every aspect of the relevant industries.
    It is right to say that this alteration is designed to alter the Third Schedule of
    930
    the Act. I have said that we object to it on the ground that this alteration is not ejusdem generis with other items set out in that Third Schedule. It is not a very long Schedule, but I do not propose to read it to the Committee beyond indicating what the subjects are, in order to show that I am right when I say that this change, in effect an attack on the herring industry and on the processing industry, is by no means ejusdem generis with other items in the Third Schedule.
    There are eight of them. The first is ships; the second, machinery; the third, works of art; the fourth—I hesitate to mention—exposed cinematograph films—I do not know whether that refers to strip tease; the fifth, articles recorded with sound—that, presumably, does not refer to Members of Parliament; the sixth, apples; the seventh, paper. The eighth is what I call the omnibus paragraph, which I think I should read to the Committee.
    The Minister of State, Board of Trade (Mr. J. K. Vaughan-Morgan): If the hon. and learned Gentleman is in any difficulty about finding it, perhaps I could read it a little later.
    Mr. Hughes: The omnibus paragraph of the Third Schedule is as follows:
    "Goods of any description may be relieved from import duties "—
    The first words in the new paragraph 9 are "herrings may be relieved"; herrings may be relieved by this alteration, but the relevant industries will be far from relieved—
    "if and in so far as the relief appears to the Treasury to be necessary or expedient with a view to conforming with an international agreement relating to matters other than commercial relations."
    The reason I quote that is that I want to know why the Clause is being introduced without consultation with the relative industries. Is it being introduced for some sinister purpose because of some international agreement? I draw the attention of the Committee to the words:
    "with a view to conforming with an international agreement relating to matters other than commercial relations."
    Is there some political reason for this? If so, the impropriety of including it in a Finance Bill is more remarkable than ever.

    931
    The economic effect of this Clause will be to flood the processing factories in oar ports with imported herrings, relieved herrings which come in free of duty.
    Mr. Chapman: Red herrings.
    Mr. Hughes: I may have treated this subject lightly in parts, but it is by no means a light subject. It is very important to the industries involved, to shipping, fishing, processing, and consumers. I hope that the Government will think about it again and, for the reasons which I have ventured to adumbrate, will withdraw the Clause.
    There is one last reason against it. In my submission, this Clause would be very difficult to work. One has only to read it to see the hypotheses that are involved. There are two "ifs" within two lines, and the paragraph reads:
    "Herrings may be relieved from import duties if they are imported for conversion into fish meal and oil …"
    Who is to know what they are being imported for? That will involve evidence in perhaps a civil suit or a prosecution which will disorganise business to see whether they are
    "imported for conversion into fish meal and oil";
    or whether after importation, but before particulars of their value are supplied for the purpose of determining duty payable, they are bought for conversion to fish meal and oil, having previously been bought for another purpose. The herring may be relieved, but the people in the industry will not be relieved by the sea of civil and perhaps criminal litigation which this Clause will give rise to.
    For these reasons, I ask the Chancellor to reconsider the Clause and withdraw it. If he is still so much in love with this kind of legislation let him embody it in a substantive Bill which can be fully argued before the House.
    Mr. John MacLeod: I do not want to oppose the Clause, but I should like to ask what representations have been made to the Government that this relief should be given. The Government should keep their eyes on this relief from import duty on herring imported for conversion into fish meal and oil. I hope it will not encourage the Herring Industry Board to build meal factories where they will not
    932
    be wanted. In my own constituency, large quantities of herring are imported in the ports of Ullapool and Gairloch and are then transported to the other side of Scotland, to Peterhead, to be processed into oil and meal.
    No doubt this relief from import duty has been given because of the shortage of herring in recent years but, as everybody knows, herring are very intractable. Sometimes for no reason at all large quantities suddenly appear. We must look after the interests of the fishermen who depend on selling the fish for human consumption and also on getting rid of their surplus herring for fish meal and oil.
    A few years ago when there was a surplus of herring the Herring Industry Board were anxious to extend their factories. Although conditions have now changed, this may not always be the position and I ask the Chancellor to look at the Clause to ensure that in the future our fishermen get a fair price for their labours in bringing herring into our ports.
    Mr. E. G. Willis: I understood from the Financial Secretary when he introduced the Bill on Second Reading that the main purpose of this Clause was to assist employment in Scotland. There is no doubt that it will affect Scotland more than any other part of the country. We ought to have some information about the Clause. I do not know whether the Minister will give us the benefit of his advice. Who was consulted on this question? Who made representations about this? Nobody seems to know. There are a small number of fishermen in my constituency and I have heard nothing about this, nor have I heard any suggestions along these lines.
    7.15 p.m.
    As I understand it, the fish meal factories have been idle or not used to capacity for a year or two, and the desire is to see them fully employed. We are not opposed to that. Anything that is likely to bring employment to Scotland and keep these fish meal plants working fully is all to the good, but we must ensure that the importation of fish for this purpose does not depress the price for the fishermen. I do not know how the prices will compare, but it seems that at present it results in the production of fish meal which costs more than imported meal

    933
    used for the same purpose. If we take steps to allow fish to come in cheaper to enable the meal to be produced more cheaply to compete more successfully, !here is a danger that that process might result in the depression of the price our own fishermen receive for fish used for fish meal purposes. Because I think there is some danger of that happening we ought to have some assurance from the Government about how the Clause will operate.
    I assume that the provision is entirely optional. This can be done, or it need not be done. If that is so, can we have some guarantee from the Government that if this process results in a depression of the price to the home fishermen the Government will restore this duty? Is the duty to be operated in a manner that is likely to help the fishermen as well as the people employed in the meal factories? It is important to have some guarantee of this before we agree to the Clause. On the general principle, the Clause is a good one if it is likely to produce more employment in these areas.
    Mr. Cyril Bence: I support what was said by my hon. Friend the Member for Edinburgh, East (Mr. Willis) about the imposition arid relaxation of this duty. Are we entitled to understand that if in the herring season plenty of fish were being landed from our own boats in Scotland the, duty would be maintained? Would there be a quota system, or would this duty be relieved on all fish coming in irrespective of the catches of our own fishermen, thus loading a lot of fish on the market and creating a situation where the prices would be reversed and our fishermen would be hard hit?
    I think this is the worry of the Scottish fishing industry. I agree with anything we can do to make the raw material of our industries as cheap as we can. We want imports to be as cheap as we can get them, but many industries, particularly agriculture and horticulture, are protected by quotas and tariffs against the seasonal influx of commodities that may depress the prices of products of our own work-people. The same consideration should be given to fishermen. I feel sure that every fisherman in Scotland wants to know what his position is when there are plenty of herring available. When he
    934
    comes into port, will he be faced with heavy importations of fish landed by fishing fleets from Northern Europe? Will he be faced with the possibility of very depressed prices for his catches? From what I have seen of the fishing industry in Scotland it does not take much to knock the bottom out of the fishermen's income. If anybody needs protection it is the fishermen who carry out their difficult and hazardous duties to provide food for us. I hope that this provision will not result in the creation of greater instability for them.
    Mr. G. R. Mitchison: What I understand we are discussing in this Clause is not herring meal or herring brought into British ports by foreign boats. What we are discussing, I understand, are imported herring. I have had some difficulty in finding what the present position is. I got hold of the Customs tariff and discovered quite soon that herring meal attracted no duty. I then began to look for herring. That is not so easy as one would think. Herring are not in the list; fish are.
    I turned to fish and then discovered that I got into the wrong part. These were fish fit for human consumption, while for fish unfit for human consumption—which I think are the kind of fish we are discussing now—I had to look somewhere else, to a mysterious chapter called:
    "Products of animal origin not elsewhere specified or included."
    I must say that I was distracted at this point because I read the notes. That is how I find my way about. I found this:
    "Throughout this Schedule elephant, mammoth, mastodon, walrus, narwhal and wild boar tusks, rhinoceros tusks and the teeth of all animals are regarded as ivory."
    It would be too much to expect the Minister of State, Board of Trade, to give us information about the import of mammoth and mastodon tusks into this country in any given year. However, herring meal was to be found there somewhere and it attracted, so far as I could see, a 10 per cent. duty. That, I believe, is what we are discussing now.
    What has happened is that the Herring Board has put up a considerable number of conversion factories on the coast of Scotland and last year there were not nearly enough herring to be converted. The Herring Board has views on this

    935
    question. There is no doubt something to be said for equalising the tariff between herring on the one hand and herring meal on the other, but the Herring Board would do it the other way round. It would have wished the tariff to be restored—because it used to exist—to herring meal. What it had in mind in this matter is substantially what my hon. Friends who spoke earlier had in mind, that this affects the position of fishermen.
    At one time, there was a meal and oil scheme. That worked in the form of allowing fishermen, at any rate in Scotland, an extra price on the meal and oil fish, thereby enabling those: of them who were herring fishermen and in difficulties to get something to go on with. It does mean to get something to go on with, because many of these men find it extraordinarily hard to make both ends meet. Lately, as Scottish hon. Members will know, there has been a shortage of herring and, in one case mentioned in the Report of the Herring Board, there is a curious reluctance for them to be caught "for no known reason." That has made fishing particularly difficult not only for the comparatively large-scale operations of the trawlers and drifters, but for the ring net fishermen, of whom I have some knowledge, on the Clyde coast. They have had a very bad time indeed. They used to rely on this meal and oil arrangement. That was withdrawn and, instead, a buoyage subsidy was introduced. The Herring Board makes a strong case for saying that in addition there ought to be a meal and oil subsidy.
    That is the background of this matter. If in fact herring destined for meal and oil are to be cheapened by the removal of this duty, those who have to sell them now without a subsidy, or under any special arrangement, are at risk as to the price they get. Even though it may be kept up for the time being by arrangements for equalised selling and so on, the threat is very definitely there. The reason for it is that the Herring Board put up a pretty substantial allowance of these conversion factories and fishermen, therefore, are concerned in the matter.
    Who is to benefit out of this? This has nothing whatever to do with human food. These are inedible herring, or
    936
    herring which cannot be sold for human food. It is nothing to do with the price of herring fresh, kippered, or eatable in any other form, but purely herring for meal and oil. Therefore, the concession, if it is to help anyone at all, will mainly help agriculturists. This use of herring represents a substantial portion of the annual catch. In the last year for which we have a Report, it was one-fifth and was larger than the amount of eaten herring or the amount of kippered herring. The year before it was a shade larger still, Therefore, it matters seriously to these people.
    What I should like to know from the Minister of State is this. I imagine this Clause has been put in at the instance of the Herring Board, or at any rate of someone connected with the conversion factories. If that is not so, perhaps the hon. Gentleman will tell me. It is protection of the conversion factories; it cannot be anything else. It will help the agriculturist no doubt, but what safeguards can we have that this lowering of the price of imported herring for fish meal will not result in a general lowering of price and, therefore, in an added peril to the fishermen?
    No one has said anything about the fish, but there is a question about the fish also. As anybody who knows the industry is well aware, and as appears in the Herring Industry Board Report, one of the troubles is that from time to time too many small and immature herring are taken. There are differences of opinion as to what is a small and immature herring and there is no doubt that the practice is supposed to be stopped, but I do not think it is always stopped. Indeed, the Report says that it is not always stopped. It is certainly thought, and seriously thought to be increasing the shortage of herring in some parts of the Scottish waters. Clearly, if imported herring is to be freed, encouragement will be given to one type of person who presents some difficulties. That is the owner of the foreign boat which escapes our regulations by taking its cargo of herring into a foreign port from which place they are then sent to England.
    The Committee will not want to go into this matter in detail, but there is evidence in the last Report of the Herring Board—unfortunately nearly a year old now—that foreign boat owners have taken a hand

    937
    in this. Hitherto, the existence of a tariff on imported herring made it an inducement to them to go into the Scottish ports, where what they were doing could at any rate be checked. The effect of removing it will be that they can turn to Continental ports and send herring from there free of duty.
    I do not necessarily say that the Clause is wrong. I do not know enough about the matter. Nevertheless, it raises very serious questions both in relation to the fishermen and in relation to the fish upon which, in the long run, the industry and their livelihood will depend. I hope that the Minister of State will believe that I mean it very seriously when I ask him whether he can explain to us why the Clause is thought necessary and, if it is solely for the protection of the conversion factories, whether other possibilities, including the type of risk which I have indicated, have been considered.
    7.30 p.m.
    Mr. Malcolm MacMillan: There is very little which I need add to what has been said by my hon. and learned Friend the Member for Kettering (Mr. Mitchison) in his plea for the herring fishermen of my country, but I should be failing in my duty if I did not add a word on their behalf in respect of what has been said both by my hon. and learned Friend and by the hon. Member for Ross and Cromarty (Mr. John MacLeod).
    This industry has been having a rough time for a number of years and I am sure that those in it will regard this Clause as a further attack upon their standards of living and their prospects if it is passed in this form. In pre-war years we had no Herring Industry Board to speak of and hardly any outlet for oil and meal. My last recollection, just before the war, in 1938, of the fishermen's fight for a living and for a price for their catch landed at the port of Stornoway, was their rescue by Adolf Hitler who, through the German Government buying agency at that time, offered 5s. a cran, which means four standard baskets.
    For the rest of the season they had been going out with their catches and dumping them back in the Atlantic. The only person who was prepared to offer them anything at all was Adolf Hitler. It is rather ironic when we look back to 1938. when there was no Herring Industry
    938
    Board as we know it today providing an outlet for the fishermen's catch on their own doorstep, as it were.
    Today, the Herring Industry Board provides at least one outlet for oil and meal—an outlet for herring which would not generally be saleable for other purposes. Fishermen have come to regard the Board, at times with certain reservations, as a useful market for their catch and as a very great friend in need. I tremble to think what would have happened to the industry without the Herring Industry Board, especially in the North-West of Scotland. We have the longest fishing season in the British Isles in the North Minch and along the Western Isles, from Ullapool, Stornoway and Mallaig. The Minister will, therefore. understand how much we depend on the herring industry for employment and how much the market depends upon the work of the men in the North-West herring industry.
    I do not think that we can dismiss too lightly the appeal which has been made without doing a great deal of damage. I understand that behind all this there is the demand of the agriculturists. They want to be assured of an ample flow of supplies of oil and meal for their purposes, and that is understandable, but they have had a lot of consideration from the House—much more than the fishermen and particularly the men in the herring industry. While we have given certain attention and a great deal of help to the syndicates who own the large fleets of trawlers. we have given nothing like as much consideration to the small men who fish out of the small ports in the distant areas and who in every way have had difficulties created for them by, for instance, the high freight charges and the long distances over which they have to haul their catches.
    If we are suddenly to throw open this market for local catches to the kind of competition which is likely to occur, the local men will feel very sore about it, with good reason. These men have been regarded, at least on this side of the Committee, as being worth our help. The industry in the Western Isles and Shetland, where fishing is traditional, has been regarded as the nursery of seamen and as worth preserving, even if purely from the strategic point of view.

    939
    We think that we are worth preserving even in peace-time, in all modesty, and we claim that in peace-time we deserve the same consideration and attention as is only too readily available in less happy times when men are called up in war for the minesweepers and other small ships. These men in the herring industry in the Western Isles alone recruited for the Royal Naval Reserve in 1938–39 no less than 25 per cent. of the total United Kingdom complement. That is a very large number of men from such a small area. I think that in peace-time they have a call for more consideration from the House.
    They will feel very sore about this provision. With due respect to them, the agriculturists and the farmers have had a fairly good show in the House. They would be the first people to create a row in the House—and they are well organised to do so—if we threw the market for their products open to the mercy of competition from all over the world. They are the most vocal, organised and influential people in the Conservative Party. They are very highly organised in British politics. These small herring fishermen in the Shetlands and the Hebrides are not organised and do not have the support of those who are interested, financially and otherwise, in a big way in the industry.
    Before we put the herring fishermen at the mercy of an open market in this way, and before we have dumping of immature fish by foreign vessels, about which my hon. and learned Friend was anxious, cannot we do a little more to make sure that agriculture in this country has a steady, ample flow of oil and meal from our own herring industry by developing more processing plants around our own coasts? That is quite possible. One of the finest herring grounds in the world is the South Minch and around the island of Barra, but it has been abandoned.
    I have made plea after plea in the House to a succession of Secretaries of State for Scotland through the years to revive the herring industry in that area by setting up processing plants and producing the whole of the meal there and at South Uist, where no development seems to take place except of rocket ranges. Why cannot we set up processing plant
    940
    there? Why cannot we have even part-processing, with a partial reduction to oil and meal before vessels take it away to such processing centres as Oban?
    The answer has always been, "No". Here we have met the results of that policy of the refusal to develop these processing plants in our own country. We have to ask foreign fleets to land herring from around our own fishing grounds in this country or to bring in the processed, finished product. It seems to me a little unfair and also a little unwise from our own national point of view to neglect our own people and the possibilities of expanding the industry here while opening the market to foreign fishermen.
    I understand that at Lerwick at the moment there are fleets of Polish herring vessels landing herrings in the ports of the Shetlands. Of course, we claim the same right to land fish in other countries, and I have no objection to the policy, nor do I believe that the Lerwick people would have a fundamental objection if we were developing our own fisheries as the continental people are doing—and as we are not doing.
    Mr. Ellis Smith: Why are we not?
    Mr. MacMillan: I have asked that question and still do not know the answer.
    The result is to produce this kind of Clause inviting foreign vessels to supply the needs of our agriculture and other markets because we have not built up our own industry. These fishermen have suffered after each of the last two great world wars, after having served in numbers out of all proportion by comparison with any community in the British Empire. After each war they have suffered and have left the industry, and the difficulty is to get them back again. At this moment, the Government should be concerned to rebuild this industry and make every possible use of herring, not only for eating as fresh fish, but as quick frozen or deep frozen fish. They should be planning to make the best use of what are the world's best fish. I speak from experience, not from watching advertisements.
    I should have thought that in every way the Government would be developing this industry again and trying to revive it. The Government should be trying to help to revive the fishing industry and at the same time build up once again

    941
    a larger population of trained seamen fishermen.
    The Merchant Navy is clamouring for fishermen to go back into the Merchant Navy as seamen. I had representatives of the Shipping Federation in my constituency this week trying to recruit men from the fishing villages. They will get them simply because the men are not employed any longer in the herring fishing industry, because they are in a neglected industry. We can neglect it only at our peril.
    While the Poles are fishing up at Lerwick and landing fish there, I have unemployed fishermen in the Western Isles. I checked the figure with the Minister of Labour only the other day. The figure is running now at 31.3 per cent. That is a disgrace for any Government. It is a disgrace all these years after the war, when we have been talking about full employment and all the rest of it, still to have a figure of 31 per cent. unemployed, which represents even in that small population about 2,000 people unemployed in the Outer Hebrides. They are nearly all ablebodied men. This is in addition to crofters and all the rest who are excluded from Class I insurance and therefore do not appear on the register.
    Just short of 2,000 men are unemployed in the Western Isles. Many of these men could be employed in the fishing industry. They could be employed in processing herring, reducing them and processing them to oil and meal. We should not have to be turning to foreign nations to supply our need.
    With vigorous action and an infusion of capital into an area where there has been no possibility of building up capital for this purpose during the last few decades, we could be building up a catching power and processing plants and we could be supplying the needs for which we are at present quite shamelessly turning to foreign nations to supply. There is no need to go to foreign countries. We could be developing our own industry.
    Mr. Vaughan-Morgan: Having waited here for rather more than four hours expecting Clause 8 to be called at any moment, I am rather pleased that there has been so much interest taken in it. 1 should like to say at once that I have learned a great deal from the speeches I have heard.
    942
    I enjoyed the speech of the hon. and learned Member for Kettering (Mr. Mitchison). He has found the same joy as I have in browsing through the Tariff. It needs the hon. and learned Gentleman and Paul Jennings of the Observer to do justice to that miracle publication, which is almost my favourite bedside reading. I was not sure that I had pursued my researches into herring as far as the hon. and learned Gentleman. I am grateful to him for having added to my knowledge.
    I listened with great sympathy to all that was said on both sides of the Committee. I was not sure that I was quite so sympathetic to the utterances of the hon. and learned Member for Aberdeen. North (Mr. Hector Hughes), because I thought that he gave six reasons which boiled down to two—first, that he did not like the duty, and, secondly, that h,; did not like the way it was being proposed. I thought that he was particularly wrong about the latter.
    The story of this is quite simple. In November of last year, the United Kingdom producers of herring meal and oil applied for the removal of the 10 per cent. import duty. I think that we all know that. That application was advertised in the ordinary way, in accordance with the accepted procedure for a reduction of duty.
    After what we have heard today, I rather hesitate to say that only one objection was received. That came from a firm of fish meal manufacturers, although the Association of Fish Meal Manufacturers as a whole supported the application. No other objection was received. The objection of the single objector was that this would tend to lower the price of white fish meal, which I think is not quite the kind of approach to which other hon. Members who have spoken would be very sympathetic.
    7.45 p.m.
    There is no reason why the production of herring meal should be, as it were. impeded in order to keep white fish meal going. Therefore, on balance and after very full examination the Government decided that the case for the removal of this duty had been made out.
    Mr. Willis: When the Parliamentary Secretary talks about the meal and oil producers, does he include the Herring Industry Board?
    Mr. Vaughan-Morgan: I could not say whether the Herring Industry Board was amongst those who applied. It certainly did not object. There was only the one objector to whom I have referred. That was a single firm.
    I turn to the question of procedure. The hon. and learned Member for Aberdeen, North made great fun following his way through this very simple Act. I think that he omitted to carry his researches as far as the last page, where he would have seen that when the Act was passed no less than sixteen Statutes were referred to, most of which were superseded, where changes had been made in tariffs by means of the Finance Act, which is a very usual procedure. Some of those took place under a Labour Government. Some were for additional duty. Some were for making the kind of exemption which we are making today.
    I can explain the procedure in this way. Normally, the right way of removing a protective import duty on specified goods is by making an order under Section 1. This case is different. There is no question of removing the duty on all herring. It is only on herring for a particular purpose. Where there is a case such as this, it is covered by Section 5, as was pointed out, which provides the power to make an order relieving from import duty the goods specified in the Third Schedule.
    All that we are doing today is to add to the goods mentioned in the Third Schedule. There is nothing very unusual about it. The effect of the Clause now under consideration is, therefore, to add herring imported only for the purpose of conversion into meal and oil to the Schedule so that an order may then be made granting relief from the duty and making the necessary provision for its administration.
    This relief will extend both to herring bought abroad and imported expressly for conversion and to herring purchased for conversion from catches landed by foreign owners for sale on the open market. In the case of the latter, that is to say, herring bought for conversion after importation—I think that this should go on record—the purchase must take place before—I was going to say while the herring are still in the hands of the Customs—but the purchase must be before the herring have left Customs control if they are to qualify for relief from the
    944
    duty. It would not be practicable to provide for repayment of duty where herring were subsequently sold for conversion purposes.
    The hon. and learned Member for Aberdeen, North made great fun about the appalling legal complications that might ensue, but I can assure him that no one else shares his misgivings, if misgivings they were, that this will prove profitable for the lawyers.
    The reason for this application is that hitherto the reduction factories in this country, which are mostly in Scotland—I think that some of them are in the hon. and learned Gentleman's constituency—have had to rely on home caught herring. The only foreign caught herring which have been used has been the residue of catches which have been tendered at British ports for other purposes, but have failed to find a market. As a result of the decline in home catches, the supplies to the factories have been getting progressively smaller and the factories are substantially under-employed. The result of that under-employment is that their production costs have risen and they have been unable to compete with imported fish meal. This is obviously anomalous.
    It would have been possible, if they so desired, for the factories to obtain additional supplies for reduction from foreign sources, but the very fact of the 10 per cent. duty would have made that an uneconomic proposition for them. Now, the removal of the duty will make it possible for them to supplement what are, alas, the dwindling home supplies and make fuller use of their capacity.
    Mr. Malcolm MacMillan: Will the Minister explain why, in that case, the Herring Industry Board is quite considerably extending its plant at Stornoway? It must be known to the Government. It obviously requires more storage and greater plant capacity for the amounts which can be landed at the port, and they do not normally include landings from foreign vessels.
    Mr. Vaughan-Morgan: I must plead ignorance, because I am not, I am afraid, in the confidence of the Herring Board in its plans for Stornoway. I do not think there is any question of importing herring for conversion at the expense of the United Kingdom fishermen. After all, the reduction factories take all the

    945
    catch which is available, and that is not enough to keep them operating fully. If more home supplies became available, there would be no need to turn to foreign imports. While the factories are underemployed, of course, their costs are higher, and if the falling trend of supplies is not checked, they might have to reduce the prices paid for the herring obtained from home fishermen. Nevertheless, I am fully seized of all that has been said by hon. Members.
    After hearing that explanation which, I am almost tempted to say, has taken me into waters as deep as those some of the fish live in, I hope that the Committee will be satisfied and will accept the Clause.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 9.—(EXCISE DUTIES ON MECHANI- CALLY PROPELLED VEHICLES KEPT, BUT NOT USED, ON ROADS.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mr. Ernest Davies: I do not know who arranges the order of the Clauses of the Finance Bill. Three Clauses ago we were discussing the relief of certain vehicles from oil duty. We jumped to sugar and then to herring and now we are back to vehicles. I should think that it would be for the convenience of the Committee as a whole, let alone for the Ministers who specialise in attending to certain of the Clauses, if Clauses dealing with the same subject matter could be close together.
    I am sure that this Clause, as far as it goes, will have the support of both sides of the Committee. As hon. Members no doubt know, it provides that vehicles which are left unlicensed on the highway shall now be subject to licence duty; in other words, vehicles shall no longer be left on the streets unless fully licensed. It is desirable that this abuse should be brought to an end.
    During his Budget statement the Chancellor said:
    "I do not know whether hon. Members frequently leave their vehicles unlicensed on the highway. It never occurred to me, but it appears that some people have developed the bad habit of doing so, and we think it ought to be stopped."—[OFFICIAL REPORT, 7th April, 1959; Vol. 603, c. 51.)
    946
    I can inform the right hon. Gentleman that very many people have developed this bad habit, and it certainly ought to be stopped.
    How is it proposed to administer the Clause, and how is it to be enforced? There are today many derelict vehicles on the streets, vehicles which quite clearly have been abandoned. Presumably, in those cases, it is not easy to trace the owners, if it is possible at all. Is it proposed that, once the Clause is enacted, the vehicles will be removed by the police or by some other authority and that steps will be taken to trace the owners? Is it proposed that, whether the owners are traceable or not, the vehicles will be removed? In certain circumstances now vehicles can be removed, but only, I believe, if they are causing obstruction and are obviously abandoned.
    To what extent in future are owners who indulge in this practice to be punished? Is it intended that they will become subject to duty and the licence duty will be recoverable from them for the period during which they have left their cars on the streets? Secondly, if the licence duty has not been paid and the owner is finally traced after a vehicle has been removed, will he be charged with the cost of removing his vehicle from the street? It would be desirable for him to be subject to some penalty. If vehicles are just abandoned because they are of no value to the owners and it would perhaps cost them something to dispose of the vehicles or remove them themselves, and then if the vehicles are removed at the public expense, the owners surely should be charged with something on top of the licence duty to cover the cost.
    May I take it from the Third Schedule, which makes certain amendments to existing legislation, that an end will be put to another very undesirable practice, namely, the practice of some second-hand dealers in leaving cars on the roadway for sale? Second-hand vehicles are sometimes displayed outside a showroom, which is often no more than a vacant lot; the vehicles stand on the roads creating an obstruction in themselves by impeding traffic and also causing obstruction because people come to inspect them. I see that, according to the Third Schedule, even if a vehicle has a trade licence, it shall not be left on the highway, so I assume that it will no longer be possible

    947
    to continue that practice. It is very desirable that it should come to an end, and it would be helpful if the Parliamentary Secretary made clear that it will so that those concerned will understand that, if second-hand dealers keep vehicles on the 'highways in future, they will be committing an offence.
    The Clause will have the general support of the Committee provided that it is enforced. The trouble with so many of our motor regulations today is that they are not fully enforced. I hope that, once this Clause is on the Statute Book, it will be possible for the police to take action speedily where vehicles are abandoned and where vehicles are left intentionally on the highways, as is often the case now, covered with tarpaulins during the three months or six months when they are unlicensed. As is well known, such vehicles are uncovered and put into operation when the licence duty for a particular period is paid. This is undesirable, and I assume that it, too, will come to an end. I hope that the hon. Gentleman will give an assurance that it is the full intention of the police and other authorities concerned to enforce this Clause once it is on the Statute Book.
    Mr. Julian Snow: I agree with almost everything that my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) said, but I do not agree entirely. I concede that one sees on the roads vehicles sometimes of remarkable age, often in a very derelict condition and almost always unsightly. Some of them are so old that one wonders whether, if they were presented to the Science Museum at South Kensington, the reply might come that the Museum is interested in the historic but not in the pre-historic. Sometimes they are a cause of danger because children have a habit of running out from behind stationary cars.
    8.0 p.m.
    I think that we should consider the effect on people who live in built-up areas where no garages are provided, in highly congested areas where there is no spare ground away from the roads and where the people who do not wish to license their cars in the winter months are put at a serious disadvantage compared with people who either have or can afford to
    948
    rent garages or who have or can find spare ground on which to place their vehicles in the winter months. It is still a fact that very few local authorities provide garages with their houses. It is a fact that an overwhelmingly high percentage of ordinary rented houses have no garages. Not only as a result of the stoppage of building during the war but as a result of a greatly increased number of registered vehicles, a severe shortage of garages has developed in London and in the provinces.
    I, therefore, suggest that we should not be in too much of a hurry to pass this Clause, because there is a hardship on people who do not wish to license their vehicles in the winter, who cannot afford a garage and who cannot find an alternative way of dealing with the problem of leaving their vehicles during the period in question.
    Mr. Chapman: The reservation mentioned by my hon. Friend the Member for Lichfield and Tamworth (Mr. Snow) had occurred to me, and I should like to put a suggestion to the Joint Parliamentary Secretary. I note that subsection (4) says that the Bill will not come into operation until October. That gives several months' notice to people who frequently leave their cars on the highway to get them out of the way. If the Parliamentary Secretary considers constituencies like mine composed almost entirely of large council house estates which were planned before the age of mass ownership of cars, he will realise that it is a very formidable problem for people to find somewhere to put their cars.
    We find in Birmingham—and I think this applies to other cities as well—that the local authority is not always as helpful as it should be in allowing the construction of garages on council house sites.
    Mr. Ellis Smith: That is because they might be unsightly.
    Mr. Chapman: I agree with my hon. Friend that one of the biggest problems is to prevent a council house estate looking unsightly. I know that many people put up shacks here and there and that this makes an area a disgrace. I do not want that to happen, and I sympathise with my hon. Friend in what he says.
    Local authorities adopt the negative policy of preventing people putting up

    949
    garages instead of the more positive policy of showing people how to lay out and construct small garages, or, more appropriately in my view, car ports which do not need all the ramshackle material which usually goes into the construction of a cheap garage. It would be helpful if the Ministry could encourage local authorities to guide tenants in how they can tackle this problem on local authority housing estates without offending the local planning restrictions and byelaws. This would be a great deal of help in the majority of council house estates. If only local authorities would say, "This is a modern construction which we will allow on our council estates. This is how you can site in it your front garden," That would be of enormous help.
    We have about six months in which to do this. My reservation is that we should not be simply penal in the way that this Clause suggests. We should try to help people to find a way out of their dilemma. People do not like leaving their cars on the street. I am not talking about those who abandon their cars, but about the conscientious owner, one of whom wrote to me last week telling me of the amount of damage done to his car by children. People usually leave their cars on the street because they cannot find anywhere else to put them.
    Mr. Ellis Smith: Would my hon. Friend go a step further and ask the Parliamentary Secretary to give consideration to the advisability of circularising local authorities asking them to do it themselves on a planned scale? Some of us are associated with local authorities that have done this already. One knows that if a number of garages are built the overheads and total costs are almost cheaper than building one on one's own. It would be possible to let them at a reasonable rent.
    Mr. Chapman: If circulars on the lines suggested by my hon. Friend could go out, it would be very helpful.
    My local authority is reasonably good in this matter, but I heard of a typical case last week. Two people in one road said to me, "We are bound to leave our cars on the road, particularly in the winter, when we cannot afford to run them. At the back of our gardens we have some allotments with a service road leading to them. Can you persuade the
    950
    local authority to allow us to use that road and to enter our gardens from the rear along the service road?" As happens in so many cases, the allotment committee said, "No, we do not want this sort of thing happening", and the needs of the community are lost in the more parochial concerns of the allotment committee.
    The problem of finding parking space for cars, even when they are not abandoned and are licensed, is becoming vast. If the Ministry can encourage local authorities to approach this problem positively instead of being negative in continually turning down plans, that would be a much more helpful way of carrying out the intention of the Clause.
    Mr. A. E. Cooper: I think I am right in saying that my division was the first division in which the Metropolitian Police decided to take positive action in this problem about twelve to eighteen months ago. It was found that in a town of about 180,000 people several thousand cars were parked on the streets at night because there was no alternative accommodation for them. We had a town meeting on this problem and my hon. Friend the Member for Ilford, North (Mr. Iremonger) and myself made proposals to the local police and to the local authority and stated our position to the people who were affected. After a most prolonged inquiry, we found that the problem was divided into three categories.
    First, there is the genuine all-night parker who has no alternative accommodation. This is a very serious problem in the Becontree Housing Estate, which is part of the great Dagenham Housing Estate. This estate, which was built many years ago, has no garages of any sort. The level of prosperity in Dagenham and Becontree today is such that not to have a car is the exception. From one end of the estate to the other at night the roads are a menace, particularly in the winter when it is foggy and when a great number of accidents are caused.
    The second parker is what I would call the lazy lorry driver who takes his lorry away from his place of business at night in order to get an early start next morning and leaves it parked all night, often in very narrow roads. We in Ilford suffer very severely from this.

    951
    The third parker is the one who literally abandons his car. There are many abandoned cars all over the country with neither air in the tyres nor hope in the engines. Nor is there any possibility of their ever moving again. We told the owners of such cars that, whatever action the police decided to take against them, we could not support the owners as it was quite wrong that this sort of thing should go on.
    I think that a fair analogy to this practice would be that of a person buying a bedroom suite and leaving it dumped outside his house in the road. People have no more right to dump bedroom suites in the road than they have to dump motor cars. A lot of people saw the force of that argument and, very slowly, the streets of Ilford are beginning to improve, though a serious problem still remains.
    There must be many hon. Members with towns in their constituencies which were built from fifty to seventy-five years ago when terrace houses were the order of the day. Garage accommodation just is not there. Whatever may be the feelings of the owners of cars—and a car is a modern "must "—garage accommodation is not there, nor in many of the very heavily congested areas is there room for garages to be built.
    Then we have the other side of the picture, where public car parks are provided but the inhabitants have become so accustomed to leaving their cars outside their front doors that even though the accommodation is available a quarter of a mile from their homes they will not use it. In Ilford we have one or two public car parks that are completely empty at night while many cars are parked in the surrounding roads.
    The local authority point of view is: "It is not our responsibility to provide garage facilities for householders. Our function is to provide car-parking facilities for the shopper, or for the person coming into the town to do business and to get away again. It is not part of our function to provide garage accommodation for our residents."
    There is great force in that argument. There are no powers vested in local authorities to enable them to do that. All that they can do is to provide garage ac-
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    commodation, at public expense, on council estates—
    Mr. Ellis Smith: To let them for a rent.
    Mr. Cooper: Exactly —to let them for a rent. But I am advised that on privately-owned property they cannot spend public money to provide garage accommodation for people living in such areas. I suggest to my hon. Friend the Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation that we are now living in a time when more and more people will own cars. This problem will become accentuated with every year that passes. I feel that the situation has now arisen in which the Ministry of Transport must liaise with the Ministry of Housing and Local Government in order to attempt to work out a co-ordinated policy to ease the position—
    Mr. Snow: The hon. Member has enumerated those vehicles licensed but not used overnight for which garage space is required. He has not mentioned those vehicles that are deliberately not licensed in the winter months. What is to be the position of the owners of those vehicles?
    Mr. Cooper: In Ilford, as I have said, there are a number of car parks that are empty at this very moment. I could take the hon. Gentleman to two, at least, where I am quite sure he would not find a single car parked, yet within 100 yards of them he would find a number of the type of cars he has mentioned just standing in the streets. I think this is one case in which the local authorities might give some preferential rental terms to the car owners. Nobody would lose by such a proposal.
    8.15 p.m.
    Mr. Redhead: I fear that we have allowed the debate on this Clause to range rather more widely than the Chancellor, perhaps, contemplated. While the discussion may well have highlighted the more general and undoubted problem, the Committee should remind itself that the Chancellor does not attempt in this Clause to deal with more than one aspect, though that aspect—the unlicensed motor vehicle—rather accentuates the general problem. When there is an absence of garage provision the unlicensed motor vehicle that is left on the highway represents a problem to its owner. However,

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    it may be that a whole series of approaches has to be made to what is undoubtedly a growing nuisance on our highways.
    I do not quarrel in the least with the object of the Clause. Indeed, it is a fair and reasonable one, for this growing practice of laying up these vehicles for protracted periods is unquestionably causing tremendous difficulty to the police in the matter of obstruction—though they have certain powers in that connection. On the other hand, there are public complaints that some of these virtually derelict vehicles cannot be removed by the police because there is not a provable degree of obstruction. They also present a very real problem to the departments responsible for keeping clean highways that are cluttered up in this way. There is also the destruction of public amenities.
    I am told that there are about 18,000 unlicensed vehicles at the present moment laid up and parked in the Metropolitan Police area. There were 14,000 a few years ago, but the latest information I have from friendly police officers is that it is now about 18,000, so clearly the problem is growing. However, like my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) I have some doubts about the enforcement of the Clause. There should be clarity, and such a provision as this should not be enforced harshly. We must equally guard against seeking to enforce something that is, perhaps, not enforceable and so bringing the law into disrepute.
    In the main, I believe that the administration of this Clause will rest with the county authorities. No great difficulty presumably will he occasioned when the owner of the vehicle is easily traceable-, but I am told that the police are having increasing difficulty in tracing owners. What will be the approach? Will the police be empowered to take these vehicles into custody; to remove them to some other place? If so, the problem will arise immediately in that place.
    What will be the position about garaging by the police? I know of one police station where they have already had to issue a warning to the officers, "Go easy on the existing provisions—we have no more room in our own garage space to take charge of vehicles towed in even in cases of proved obstruction." Can the Chancellor tell us more about
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    that? Have the county authorities, which are the administrative bodies, been consulted? To what extent will the police be involved; and will they be empowered to take such vehicles away and house them in custody?
    I should like to stress the seriousness of this growing practice of dealers displaying cars of this character for sale on the public highway. In recent months I have had extreme difficulty in my own constituency in trying to persuade the police to do something effective about just such a case that has occasioned great perturbation to a number of residents who find their amenities seriously disturbed. The police say that they have no effective powers to deal with it.
    If it is intended to put an end to this practice, I hope that the Chancellor can explain his intentions to us. In any event, it is important to know whether this Clause is enforceable, and by whom enforcement will be undertaken; and, on the other hand, what measures of easement will be allowed, or are contemplated, so that we do not make worse the present confusion.
    The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. G. R. H. Nugent): I am glad that the Committee has welcomed this Clause and supports the principle behind it. All of us are aware of the nuisance which these vehicles cause. My hon. Friend the Member for Ilford, South (Mr. Cooper) referred to three categories of offenders, but in fact only one of them, the last which he mentioned, is dealt with by this Clause, and that is the car owner who has laid up his car for a period and not licensed it.
    The Clause requires that the owner of a car shall take out a licence for it whether it is used on the road or merely kept on the road, which it is when it just stands there. The hon. Member for Lichfield and Tamworth (Mr. Snow) asked what happens to the owner of a vehicle if he wishes to lay it up for the winter and has only limited means and feels that he cannot afford to license it All I can say is that he has the responsibility of a car owner and that if he wishes to put his car on the road he must license it.
    The hon. Member for Birmingham, Northfield (Mr. Chapman) asked if it

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    would be possible to get local authorities with housing estates to make some sort of provision by providing parks or garages where these vehicles could stand. I will certainly consult my right hon. Friend the Minister of Housing and Local Government on that point.
    Mr. Chapman: I did not say that the local authorities should provide garages but that they should give people standard plans, lay-outs and site positions which would be acceptable so that the tenants could put up their own garages.
    Mr. Nugent: We would very gladly give any advice that we can in that respect, but I rather apprehend that as a result of this Clause coming into operation next October there will be difficulties in many neighbourhoods, and it may be possible that the Minister can help the housing authorities in suggesting how they might meet that difficulty.
    Mr. Snow: I do not think we should allow the hon. Gentleman to get away with what he said, that if an owner cannot afford to buy a licence he should sell his car rather than leave it on the road. If that is what he meant, it would seem to be contrary to the original intention of permitting licences to be taken out for varying periods in a year. Surely that was so that he could take his car off the road, in a figurative sense, and not license it, thereby saving the money for the period when it would not be used.
    Mr. Nugent: The hon. Gentleman has a wrong impression. Someone said sotto voce,"Let him sell his car.", but that remark did not come from this side of the Committee.
    Mr. Snow: The Joint Parliamentary Secretary implied it.
    Mr. Nugent: I said nothing of the kind. I said that the owner must take it off the road and put it in a park or garage. The implication of putting a car on the road is that the licence must be paid. I am afraid that people who have left their cars on the road for nothing in the past will in future have to make some private arrangement to stand their cars off the road. I believe that in some areas that will not be easy. That is why I said that I would consult the Minister of Housing and Local Government to see whether we could ease the position, because I
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    realise that there will be difficulties in some areas.
    On the other hand, the road is not the right place to leave these vehicles. We must stop that and at the same time do what we can to see that provision is made elsewhere. I would rather suspect that as the demand rises and becomes stronger parking spaces and garages will appear for those who wish to garage or park their cars through the winter months.
    As my hon. Friend the Member for Ilford, South said, it is true that in many areas there are garage spaces empty at the present time at night because people do not use them and prefer to leave their cars standing out for nothing. I hope that a fair price will be charged for such accommodation. I think that the general sense of the Committee is that this is a matter that should be dealt with and that cars should not be allowed to stand on the road for many months on end. It is very offensive to a private resident to have a car, which is perhaps sheeted up, standing outside his front window for six months.
    Mr. Herbert Butler: Would this regulation apply where a car was left on the verge, not on the carriage way? I have a particular case in mind in which a car has been, left on a verge for about eighteen months. Is it proposed to do anything about a case like that?
    Mr. Nugent: I would have to look into the details to discover whether the verge is private property or part of the highway. In some cases a verge is part of the highway and in others it is not. If the hon. Member will give me the details I will look into it. [Interruption.] Perhaps it would be better to let sleeping cars lie.
    Mr. Rupert Speir: Might I suggest that it might be dealt with under the Litter Act of last year?
    Mr. Nugent: With regard to what my hon. Friend the Member for Ilford, South said about local authorities not being responsible for providing garage space, I would point out that local authorities have permissive powers to use public money for that purpose and that it is a responsibility on them to do so where there is local need. I hope that they will be much more active about it.

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    On the important points put to me by the hon. Member for Enfield, East (Mr. Ernest Davies) and the hon. Member for Walthamstow, West (Mr. Redhead) about enforcement, the position is that, as the hon. Member for Walthamstow, West has said, county councils normally act as our agents but, as regards bringing a charge, the actual enforcement will be carried out by the police. The police will apprehend the owner by reference to the number-plate, which will enable them to refer to the register from which they can get the name and address of the owner and then contact the owner, and unless the owner is prepared to licence the vehicles forthwith or remove it forthwith he will, of course, be prosecuted for not having a licence. The police are quite confident that they can do so. This does not interfere with the powers of the police to remove a vehicle that is causing an obstruction. That power remains exactly as it is. If there is no number plate and no way of identifying the owner, the police then do in fact remove the vehicle, and I understand that they have been doing so.
    The hon. Member for Walthamstow, West was more up to date than I am when he gave the number of 18,000 for the Metropolitan area. The number I have is 14,000. It is a very high number indeed, and it is certainly increasing. The hon. Member for Enfield, East asked me from what date the licence would be charged. It will be charged from the date when the police apprehend the vehicle. There will be no question of trying to discover how long it has been standing, and dating back. As the police will have some six months in which to prepare for this, there should be no difficulty in their acting promptly when they come to deal with the situation in the autumn.
    I warmly welcome what has been said about second hand dealers. It is an offence where people are virtually using the highway as their own trading premises, and the Clause will effectively deal with that. The hon. Member for Enfield, East was right when he said that the dealer would not be able to overcome the position by the use of a trade plate. The Clause closes that gap as well. The police do not make a charge for the cost of removal in the event of obstruction, just as there is no charge made when they remove a car in Central London. They may make a prosecution, but not
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    a charge. It is all part of the service, so to speak.
    I think that covers the various points which were put on this important Clause. I would again thank the Committee for giving it a welcome and I hope that it will now be prepared to agree to it.
    Mr. Douglas Glover: I think it has been said that when recommendations are made to local authorities they should be recommended, perhaps, to provide garage accommodation. I do hope that it will be borne in mind that most of these cars are old cars and that the people who bought them paid a small price for them and that they could not afford heavy garage fees. It is far more a problem of having parking accommodation at pretty nominal weekly rents than it is a problem of providing newly built garage accommodation.
    8.30 p.m.
    Mr. Nugent: I think my hon. Friend misunderstood me. I made it quite plain that I had in mind the limited means of such people. The very fact that they do not licence their cars in the winter months is evidence of that. Parking space may be all that is required. I will bring the point to my right hon. Friend.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.
    Mr. Amory: I beg to move.
    That 'consideration of postponed Clauses 10 to 28 and of new Clauses he further postponed till after consideration of Schedule 3.
    In furtherance of the Motion I proposed a little while ago relating to the procedure of the Committee, I think it would be appropriate for me now to move this Motion.
    Question put and agreed to.
    Third Schedule agreed to.

    Clause 10.—(VEHICLES (EXCISE) : HACKNEY CARRIAGES.)
    Motion made, and Question proposed, That the Clause stand part of the Bill.
    Mr. Ernest Davies: This Clause changes the vehicle Excise Duty as it affects public vehicles. So far as it goes, we welcome it, as on previous occasions we have moved Amendments which would have done the same thing but carried it considerably further. I do not quite

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    understand why the Chancellor of the Exchequer has stopped where he has. The Clause reduces the vehicle Excise Duty to 12 plus 10s. for every seat over twenty, whereas under the present Schedule the amounts payable are substantially higher, This considerably simplifies the basis of assessment of the charge, but we have previously proposed that it would be simplified further if there were a flat charge, as in the case of motor cars.
    It may be considered desirable in the case of those motor vehicles to make it £12 10s. without any additional charge for additional seats. I know that one argument against that would be that the larger the vehicle the more Excise Duty it should pay, but that does not apply to motor cars. The Morris Minor pays the same f12 10s. as the very large Rolls Royce or Humber.
    I ask the Chancellor to consider the difference of the cost to the Exchequer of the present proposals and the simpler proposals which we put forward. There is a difference of only £1 million. The present cost to the Exchequer is £3½ million and that of the simplified procedure would be £4½ million. It is the smallness of this sum with which I think the Committee must concern itself.
    The Chancellor, in proposing his Budget, showed that he was aware of the difficulty which is facing the road passenger transport industry, particularly in the rural areas. He stated that
    "…bus operators have faced increasing difficulty in maintaining their services, particularly in rural areas."
    The House has over a considerable period drawn the attention of the Government to that. It has reached home, as it were, on the Chancellor's desk.
    Consequently, the right hon. Gentleman went on to say:
    "… I am satisfied that the bus operators should be given some tax relief to help them to maintain the rural services. Rural and urban services are very commonly operated by the same concerns, and "—
    This is the important statement—
    "I have, therefore come to the conclusion that I must find some way of helping the industry generally."
    The right hon. Gentleman went on to say:
    "The most practical step seems to me to be a reduction in the annual excise duty payable on passenger vehicles."—[OFFICIAL REPORT, 7th April, 1959; Vol. 603, c. 50–511
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    The question is whether the right hon. Gentleman has done anything substantial to help solve the difficulty and whether it is the most practical step that can be taken.
    Unfortunately, the relief which the right hon. Gentleman has given is quite inadequate. It is almost pitiful. The cost of operating a road passenger vehicle, whether bus or coach, varies from about 2s. to 2s. 6d. per mile, but the saving as a result of the reduction of this Excise Duty is less than one-farthing in most cases and is never more than a halfpenny a mile. If the cost varies from 2s. to 2s. 6d. there is a saving of from -16d. to a maximum of 43d. per mile. That is quite inadequate relief and it is not possible to argue that any substantial help is being given to the industry.
    The greater relief goes to the operators of the larger vehicles, who least need it. Municipalities which operate double-decker buses do so mainly in urban areas, and the large operators in the big conurbations operate large double-deckers of 50 to 56 seats or more. The relief brought to them is very substantial, but for the operators of single-decker small-seater buses the relief is proportionately far less. It is certainly inadequate to help those who operate small fleets in the rural areas.
    When, on previous occasions, we on this side of the Committee have proposed a reduction in the fuel oil duties and have suggested that that should apply only to diesel vehicles, which form the major part of these fleets today, the argument adduced against our proposal has always been that it would bring no relief to the rural services. In other words, the Government have argued in the past that it is the operators of the smaller, petrol Operated vehicles operating unremunerative services in the rural areas who should be relieved.
    My argument is that the manner in which the Chancellor has endeavoured to bring about relief is such that the actual benefit goes far more to the large operators and those operating in urban areas than it does to those who operate the unremunerative services.
    The position of the road passenger transport industry has been debated frequently in the House of Commons. It was discussed on the Budget statement and again on Second Reading of the

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    Finance Bill, but there are one or two points which are relevant to the Clause. In the first place, the difficulty of the industry is that the remunerative services are expected to pay for the unremunerative, but if the condition of the industry is such that there are many unremunerative services, and the bus operators are able to state at their annual meetings of shareholders that they are operating one-third, 50 per cent., or even more of their services unremuneratively, this gives them justification for reducing the frequency of the services, in some cases cutting them out entirely. We have ample evidence that the services are being reduced and that there is a deterioration in the less densely populated areas.
    The excuse is there and this is being done, but in practice the bus companies are not suffering nearly as much as they make out, and the justification for bringing relief to them is to ensure that the unremunerative services are continued, and not to assist them to maintain their profits and dividends. I looked up the figures of a few companies and found that in 1956 and 1957 profits and dividends had been maintained in most cases. There were, of course, exceptions. In fact the total revenue given in the Government publication "Statistics of Public Road Transport in October, 1957–1958 "shows that in 1956–57 the total net receipts were £12.8 million and in the following year, 1957–58 they were £12.3 million.
    I am not arguing that assistance is not required for the road passenger industry, because it is, but I am asking that if it is given we should ensure that it goes to the maintenance of the unremunerative services and does not enable the operators to cut unremunerative services in order that the profits of other services shall be maintained. I fear that this small relief will have little effect on the practice of the bus operators of reducing unremunerative services.
    It is not for us here in this debate to suggest what insurance there can be that the bus operators will continue to operate unremunerative services if their remunerative services pay, but some action must be taken either through the licensing authorities or by some system of relief other than the Chancellor has given in this Budget. I suggest to the right hon. Gentleman that the relief he has given,
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    welcome as it is, is not adequate to assist the industry to maintain its services and that it puts the industry in a position where it has ample excuse for cutting out unremunerative services. Therefore, the Chancellor should accompany this relief with some method which will ensure the continuance of those services which do not pay but which are required in the public interest. In other words, the operation of the transport industry as a public service is threatened today, and the small relief given here does nothing to ensure that it will continue to operate as a public service.
    Mr. John Peyton: May I enter a brief plea that my right hon. Friend should look again at this matter and go a little further to produce a flat rate? The concession he has made will cost £3½ million. If he produced a flat rate for every passenger service vehicle, the additional cost would be another £1 million only, so I hope my right hon. Friend will do that. It has been done in the past for private cars and we have done it in this Bill for public houses. What is good enough for public houses is good enough for double-decker buses. I hope that my right hon. Friend will accept that very sacred and unchallengeable principle.
    8.45 p.m.
    There is no pretending that the Clause covers a very large ground or can make any considerable contribution to the problem of the rural 'transport industry, which, as my right hon. Friend is already aware, troubles a great many of us. I am merely suggesting to him that a flat rate throughout without regard to the number of seats in the vehicle would be helpful.
    I have a nasty feeling that we may be told that the Committee of Inquiry which was rather coyly announced by the Minister of Transport on Friday is the answer to the maiden's prayer. I think that that Committee could do very useful work, but I believe that if the concession for which I am now asking could receive consideration before the Report stage it would be helpful.
    I have one point which I hope my right hon. Friend will consider. He said—I am sure we all applaud his intentions—that he wished to help the rural bus services, which he recognised were in difficulties. My right hon. Friend's concession will be very small in terms of cash,

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    but the difficulty is that when a Government Front Bench speaker during a Budget speech says that he wishes to do something he unfortunately promotes in the public mind an expectation of better or cheaper services. On the basis of the concession which my right hon. Friend has so far made, that, I am afraid, is doomed to disappointment. I very much hope that my right hon. Friend will look at the matter both in its broad aspect, with which I am not now dealing in detail, and also in the narrow aspect of the flat rate duty.
    I hasten to say that I do not accept in any way the fatuous argument that a bus should pay more duty because it is bigger. Per passenger carried, it does not occupy any more road space. Moreover, in the light of the last Clause that we discussed, the bus has a great merit which is not shared by private cars in that it never uses the Queen's highway as a garage.
    Mr. Frank McLeavy: I hope to pick up some of the points made by the hon. Member for Yeovil (Mr. Peyton), but I should first like to take the Chancellor's mind back to twelve months ago when, prior to the Budget, he received most urgent representations from the omnibus undertakings about their financial difficulties arising from the running of unremunerative services. It should be said to the credit of the Chancellor that he was good enough to receive a deputation from both sides of the House, and I think he would be the first to agree that that deputation placed fairly and squarely before him the difficulties confronting the road passenger transport industry.
    Indeed, we felt that we had made some impression upon the Chancellor because in a subsequent televised speech on his Budget he said that he regretted that on that occasion he could not give any financial assistance to the passenger transport industry. From that statement we naturally assumed that we had made our case and that the Chancellor had acknowledged that there was a strong case for a substantial reduction of taxation all round for passenger transport vehicles. When a few weeks ago the Chancellor was giving away money, we naturally thought that the passenger section of the transport industry would be included, and far more substantially than it has been, in the
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    provisions which the Chancellor has made in Clause 10.
    I say quite frankly that this is merely playing with the position. I have a lot of sympathy with the suggestion that has been made that the Excise Duty should be at a flat rate of £12, but I would say immediately that even if the Chancellor reduced the duty to a round figure of £12, whatever the type of vehicle, it would not solve the very serious problem of the passenger transport industry. What amazes me is that, in spite of all the evidence that has been placed at the disposal of the Chancellor, he has refused to give adequate relief to the passenger section of the industry which would allow it to provide reasonable services, not only in the countryside, but in the towns and villages.
    I should like to explain to the Committee what are the actual functions of road passenger transport undertakings. These are undertakings which, in the first place, have to be licensed. Every bus that runs, whether in the cities, towns or rural areas, has to be licensed by a licensing authority, and, coupled with the issue of the licence, the bus undertaking has to provide the licensing authority with a schedule of running to indicate the frequency of the services which it proposes to provide in the respective areas. It is important to point this out, because these undertakings are under a statutory obligation to provide a service, whether it pays or not, for the travelling public throughout the whole of the day.
    What confuses a lot of people, and probably some hon. Members of this Committee, is that if we try to compare passenger transport with road haulage, we find that there is no real comparison at all. Road haulage vehicles run only when there is a profitable load to take from A to Z. In other words, road haulage undertakings have no statutory obligation to run their vehicles with the furniture of Mr. Brown or the goods of Mr. Selfridge. They do it only when they have a profitable load to be taken from one point to another.
    However, the position of road passenger transport is entirely different, because there is an obligation to maintain a reasonable service. I pay tribute to passenger undertakings, both municipal and private enterprise, which have been willing to accept their statutory responsibility

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    and which have always been prepared to agree with the traffic commissioners and to run unremunerative services in the countryside to provide reasonable facilities for farmers, farm labourers and their wives who want to go to market towns and public centres. It is only fair to record that for many years—and I have been associated with passenger transport for many years, so I know what I am talking about--passenger transport undertakings have been prepared to provide unremunerative services in the countryside and elsewhere to meet the wishes of the traffic commissioners.
    Why has the position in the rural areas deteriorated? It is simply because the bus undertakings have at last found it impossible to provide those unremunerative rural services. That is due to many factors. One is the heavy tax on fuel oil. Others are the licensing of seats and the general cost of running an undertaking. especially when, as is often the case, it is run for a large part of the day without any hope of its paying for the fuel used. In addition, there has been a decline in the use of bus services. Picture crowds are no longer as large as they were, because many people stay at home to watch television, Theatre crowds are not as large as they were years ago. Motor cars are more extensively used than ever before.
    All those factors have had a bearing on the economic position of the road passenger transport industry. All those difficulties have been put fairly and squarely before the Chancellor. In spite of the difficulties, the industry has tried in some way or other to provide skeleton services for rural areas.
    9.0 p.m.
    In addition a position has arisen which I do not think most hon. Members of the Committee appreciate. Even in the large cities and towns the prosperous transport undertakings of the past are no longer the prosperous undertakings that they were. We are experiencing a reduction in the frequency of services which is coming to a point where the principle underlying the legislation for passenger transport vehicles is being destroyed. In many cases, even in the towns, we are not providing that reasonable frequency of service which people are entitled to have.
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    From my own experience and observation, I say frankly that in the City of London the London transport undertaking is not now providing the type or frequency of service that the citizens of London are entitled to receive from an undertaking of that character. Because of the need to economise, these services are not being provided. I have stood near the South Harrow tube station and seen women with their shopping baskets waiting for a bus. I will not repeat their comments, but three or four of them went off and hired a taxi because they were tired of waiting for an ordinary London transport bus.
    These facts are indisputable and in spite of all these difficulties we have the Chancellor coming along with this paltry pettifogging concession to an undertaking which is more deserving of consideration than any other. I have heard expressions today about the generosity of the Chancellor to the brewers. I wish that we could impress on the Chancellor the necessity for being fair and equitable to the passenger transport industry. Even though some transport companies are paying their normal dividends they are doing so only because they are cutting down their services when they ought to be maintaining them. One cannot reasonably expect private companies to go to their shareholders and say that because the Chancellor of the Exchequer is taking so much taxation from them—fuel oil at 2s. 6d. a gallon—they ask them to make a sacrifice so that the Chancellor can still take his £40 million a year out of fuel oil tax on road transport vehicles.
    I appeal to the Chancellor. The case has been put to him, and we have tried to be fair. We have not over-emphasised our case, but these undertakings which have served the country so well over these long years are entitled to demand from the Chancellor of the Exchequer and from the Government a form of treatment which is just and fair in all the circumstances.
    While even a crumb of this character would be very welcome today, this reflects upon the attitude of the Chancellor. In spite of all the facts placed before him, he has turned his back on the road passenger transport industry and given us a miserable concession which will help neither the rural services nor the city and town services. It is an insult to the transport industry. I hope that at this late

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    hour the Chancellor will find ways and means of taking off the backs of the industry this heavy taxation which is preventing it from carrying out its statutory duty to the citizens of Britain.
    Sir Robert Cary: I hope my right hon. Friend the Chancellor of the Exchequer will not convict me of churlishness in returning to this matter again in view of the fact that I intervened so vigorously on Second Reading in regard to the inadequacy of his proposal in the Budget to help rural services.
    My right hon. Friend is giving away £6 million in the first year and £31 million in subsequent years. We are grateful for that small concession, but I must say to him that he cannot just relate this matter to one single Budget. Rural services began to wither and decline three or four years ago and representations were then being made to my right hon. Friend's predecessor. Looked at in that way and taking last year with this year, hon. Members ought to be reminded that public service vehicle companies operating under Statute are not able to increase their fares beyond the statutory charge. This is unlike the case of road service vehicle operators, who can do what they like. In parenthesis, I should point out that the bus fare is included in the cost-of-living index, but the road vehicle charge is not It is an important emphasis which must be borne in mind, because the greatest pleading of my right hon. Friend for this most beneficial Budget is that it is a cost-of-living Budget. Therefore, the bus fare ought to play a great part in it.
    In the Finance Bill last year, the public service passenger vehicle companies had their Profits Tax jacked up from 3 per cent. to 10 per cent. with all other companies. That imposition in the case of the fleet I am privileged to operate, and for which I am chairman, the Lancashire United Transport Company, with a big fleet in southern Lancashire known to some hon. Members, the jacking up of that Profits Tax on level terms with other joint stock companies cost us something in the neighbourhood of £8,500. In analysing the benefit which the Chancellor confers on my fleet of vehicles now, I find that I shall be a beneficiary through the agency of the licence duties to the extent of £8,100. Therefore. I want my right
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    hon. Friend to be quite clear in his mind that, taking the two Budgets together, although he said in his Budget speech that this was a step forward—not a stride, but at least a step in the right direction—twelve months ago the industry took a backward step in Profits Tax money values to the same amount as the concession now offered.
    I seriously plead with my right hon. Friend the Chancellor. This is not the occasion to elaborate the many matters which surround this problem. I agree with the hon. Member for Bradford, East (Mr. McLeavy) that this problem is not going to be suddenly halted by this concession. I am afraid that we shall have a hard winter in many rural areas at the end of this year. Unless some step more helpful than the present concession is taken between now and next year's Budget, I am afraid that there will be great distress throughout many of our counties. As I said on Second Reading, the great beneficiaries of the concession are the big operators such as London Transport and the great municipalities, like Manchester, with their vast fleets of double-deck buses, but if we look at the situation in terms of two years, with Profits Tax raised to 10 per cent. last year and the concession made to them this year, we find that there has been no forward step at all.
    The Chancellor has conferred other benefits. For instance, the reduction of 9d. in the standard rate of Income Tax will help all companies. There are other concessions which are small and are not sufficient to begin to answer the problem of rural services. People are buying motor cars, but the pace of acquisition of motor cars is far too slow to give everybody the transport they need. When hon. Members consider a great company like the Ribble Company, which many hon. Members know well and which operates from Blackburn to Carlisle, they will see that only the other day the company was before the Traffic Commissioners asking for a fares increase amounting to no less than £175,000. When a witness for the company, in cross-examination, was asked, before the Budget, what would be the effect of a concession of one-half of the fuel duty, he said, "That would just about take the place of the fares application which we are making."
    We shall come to wider issues on Clauses put down on the Paper. I would

    969
    point out to my right hon. Friend the catalogue of claims being brought forward by the unions in the industry, beginning with a claim for a 40-hour week. Some of these claims will have to be answered, causing further expenditure in the operation of the bus fleets. In a cost-of-living Budget we ought not to be running the risk of putting up fares further. We ought to take a forward step by making concessions which will put operators in a position to reduce fares.
    Mr. Harold Davies: I am sure that the Committee is grateful for the contributions to the debate which have been made from both sides. In rural bus services we are facing a new social phenomenon. If we are not careful we shall see in Britain exactly the same position as we find in such a wealthy city as Los Angeles, where the bus services are almost useless. I am concerned with the rural services for the market town of Leek and the area around Leek, especially in the wet weather, and in the area south of the Peak District in the winter. From time to time I receive letters from bus operators. No matter which party one belongs to, one tries to deal with the question on the basis of the justice of the claim. In the Leek area we are faced with the decision of the railways to close branch lines from Leek to Manchester via Congleton and via Stoke-on-Trent, and at the same time the rural bus companies are unable to meet their commitments because of lack of a payload in those areas.
    This is a phenomenon familiar to each hon. Member who has the honour to represent a rural constituency. Without making a long speech about it, I sincerely hope that something will be done to meet the problem of rural bus services throughout Britain. Some investigation is needed. The evidence submitted to me by bus companies, and I am sure also submitted to the Chancellor, to my mind justifies sonic other concession. We must make further concessions if we want to keep the rural services alive.
    9.15 p.m.
    There is one other social point on that. We are all concerned in these days with huge conurbations of people in towns and perhaps in large populous cities. If we want to give them the amenities of the countryside, we must give to the people living in the countryside services
    970
    almost commensurate with those they can have in a city or a town where the payload is regular and heavy. We are not getting that in rural Britain at present. We are not getting it in the Leek area.
    I hope that the Chancellor will listen to the appeal made from both sides of the Committee to look again at the case of the rural bus companies.
    Mr. Speir: As one who has campaigned for many years for further financial assistance for rural bus operators, I naturally welcome the very limited concession which the Chancellor has given us. Above all, I welcome the fact that at long last the Government have recognised that the deterioration in public transport facilities in the rural areas is now a serious problem.
    I know the area about which the hon. Member for Leek (Mr. Harold Davies) was speaking. It is similar to my own area in Northumberland. I have no doubt that the breakdown in public transport facilities is causing real hardship—not to everyone in rural areas, because a large number of people now have motor cars, but it is causing hardship to a minority—to the old, the young and the infirm.
    I admit straight away that it is far easier to state this problem than to provide a practical solution, but I cannot say that I think that this concession is going about it in the right way. I do not want to appear ungrateful for small mercies, but it is an extremely small mercy. The hon. Member for Enfield, East (Mr. Ernest Davies) pointed out that this concession will probably amount to a benefit of about a farthing a mile to the rural bus operators. The gap to be closed between their average takings and their average running costs is much more like 1s. or I s. 3d. a mile. Therefore, a farthing a mile will have a nearly negligible effect. It certainly will not prevent further bus services being taken off in the very near future unless there is some prompt action by the Government.
    Some critic on the Opposition benches said that this Budget gives the wrong shot in the wrong arm. That is a very apt description of this small concession to bus operators. The Chancellor said that it is meant to help rural operators rather than urban operators. It will provide most help to urban operators. Indeed,

    971
    about £½ million of the approximately £3½ million which the concession amounts to will go straight to London Transport. That seems an odd way of helping the remote rural operators. I stress "remote", because it is remote operators hi rural areas who need the help. Those who are operating in semi-rural or suburban areas can perhaps offset their unremunerative services against their remunerative services, but remote operators cannot do that.
    This is a step in the right direction. Therefore, coupled with the undertaking which the Minister of Transport gave last Friday that he is setting up a committee to look into the whole problem, I welcome this very limited concession.
    Mr. Geoffrey Wilson: I want to add a very brief word to what has been already said on this matter. With the exception of my hon. Friend the Member for Manchester, Withington (Sir R. Cary) and my hon. Friend the Member for Hexham (Mr. Speir), most hon. Members have been unduly rough on this Clause. Both my hon. Friends gave it a qualified blessing, but other hon. Members have been a little critical. From such inquiries as I have made amongst persons interested in the bus industry, I think that the Clause is generally welcomed, although they say that it does not go far enough. That is generally recognised. If the very large problem of rural bus services is to be tackled, it will have to be tackled in some other way than by this Clause. I have no doubt that the Chancellor will bear that in mind.
    Some hon. Members have suggested that there should be a flat rate for these Excise Duties, but they have not explained how that would be of particular value to the rural bus services. It should be pointed out that, although it might be only of small help, a flat rate would be more satisfactory than the present arrangement. The rural buses have the lightest loads, and they are not necessarily the smallest buses. It is quite wrong to imagine that a rural bus is a very small vehicle. It is often a very large bus carrying a light load. Because it is a large bus subject to the higher rate, the higher rate is a greater burden on the rural bus than on a town bus which is subject to a high rate. Therefore,
    972
    perhaps, a flat rate would be of some slight benefit to them.
    Even that concession, however, if there were a change made in the Clause, would really be insufficient. I agree with my hon. Friend the Member for Withington, that further consideration will have to be given to the matter if we want to give substantial help to the rural bus operator and keep the services going in future.
    Brigadier 0. L. Prior-Palmer: It is not only the rural bus services in my constituency which have been curtailed; certain services have been taken off altogether. Indeed, only four days ago, I received a very strong petition from a large number of people asking me to see what I could do about it. The rural bus operators are unable to maintain their unremunerative services. For that reason, I put in my plea having in mind particularly the plight of old people in my constituency who are the ones extremely hard hit when such services are taken off.
    In this connection, I will alter the old adage and say that the Chancellor helps those who help themselves. I make the suggestion, therefore, that the bus operators themselves should have a good think about how they could help themselves. If one goes abroad, to Switzerland particularly, one sees that the problem of the rural bus service—I say this with all respect to my hon. Friends—has been solved by 'the introduction of the minibus. In this country, in the rural areas, heavy vehicles travel about often with only four or five people in them. Surely, the solution would be to introduce the minibus which holds just about the number of people who wish to use the service on a particular route. I throw out that suggestion to my friends in the industry.
    Mr. Amory: The Government have been very concerned about the decline in recent years in the number of bus services in rural areas. Mine is a rural constituency and I know the extent of the problem.
    To go back for a moment over the history of the matter, it has been accepted, I think, ever since the licensing of bus services was introduced in 1930, that un-remunerative services should to some extent be run and paid for out of the profits of the more profitable routes. As

    973
    a result, there has grown up a considerable network of services, mainly in the rural areas, which, taken by themselves, do not cover their costs. They are in most cases run by bigger concerns having other services in more populous areas.
    With the fall in traffic in recent years, most services have tended to become less profitable and there is, consequently, a smaller margin to support the unprofitable rural services. There is no doubt that the fall in traffic in rural areas is very largely due to the tremendous growth in the number of motor cars and motor cycles.
    The bus companies, which are all commercial concerns, whether privately owned or controlled by the British Transport Commission, have thus been forced to withdraw the services that lost them most. Together with my right lion. Friend the Minister of Transport and Civil Aviation, I have given a great deal of thought to this problem, but I am sorry to say that no practical suggestion, other than the one I have adopted this year, has been made which would help in a more substantial way.
    I know that it has been suggested that I should have proposed a reduction in or abolition of the diesel oil duty for passenger buses. I looked at that point very carefully. We shall be discussing it later and therefore, Mr. Thomas, you would not wish me to go into it now. However, I was very sorry to have to decide against doing that. In view of all the evidence which I have had, I felt that the most practical way in which I could help the industry this year was to reduce the amount of licence duty paid on buses by the industry. The Clause proposes a reduction in the rates of duties in excess of £12 per annum which are chargeable on hackney carriages under Section 3 of the Vehicles (Excise) Act, 1949. On this basis, the reduction will apply to hackney carriages, mainly buses and coaches, with more than eight seats. In total, they amount to about two-thirds of the present revenue of £5½ million from these vehicles.
    The Clause provides for the amended rates of duties to come into effect from 7th April, 1959, and for rebates to be paid in respect of periods after that date and during which licences already taken out at the old rate remain in force. I thought that that was only fair. The cost
    974
    to the Exchequer in a full year will be just over £3½million, and in addition refunds this year will amount to about £2½ million.
    It has been suggested that it would have been more useful to restrict the concession to buses used on rural services, but that would have been an almost impossible administrative task, because no one has yet been able to show me any way in which rural services can be segregated from urban services.
    Mr. G. Wilson: I do not know whether my right hon. Friend is referring to what my hon. Friends and I said, but we did not suggest restricting the rural services. We suggested a flat rate which in our view would be of particular use to rural services.
    Mr. Amory: I realise that my hon. Friend was not referring to that when he spoke.
    This is as much as I have been able to find it possible to do this year in the way of direct financial help from the Government. I recognise that it will not afford a solution to this problem, although I think that it will be of definite help.
    It has been suggested that we should have fixed a flat rate. I think that my hon. Friend the Member for Yeovil (Mr. Peyton) called it a fatuous suggestion that bigger buses should pay a higher rate. I usually agree with my hon. Friend on most matters, but I do not think that I can agree that it is a fatuous suggestion. It is only a very moderate increase. I would have thought that it was reasonable that a bigger bus with bigger carrying capacity should pay a higher rate.
    Mr. McLeavy: Will the right hon. Gentleman explain why a tax should be paid at all in respect of seating accommodation?
    Mr. Amory: To start with, it is reasonable that they should pay a tax because they use the roads, but I would have thought also that it was reasonable that the tax should be graded according to the size or weight of the vehicle. I do not think that that is unreasonable.
    The cost of living has been mentioned, and I agree that the cost of bus travel enters into the cost of living, but it is very thinly spread. To have made any

    975
    noticeable effect on the cost of living would have cost a very great deal of money, much more than I could have justifiably provided this year, in view of all the other causes that there were.
    9.30 p.m.
    We recognise that there is anxiety—and we share it—about the future of these services. I am very disappointed that I have not been able in this Budget to find a solution to the problem. I would have been a much happier man had I been able to. Hon. Gentlemen will have noticed that my right hon. Friend the Minister of Transport has announced the setting up of a Committee to review the trends in rural bus services so that we can see more clearly the extent of the problem and how best a solution to it can be found. I think that that will be a good and useful step.
    I should like to say again that I recognise that what I have been able to do is not a solution, but it is a helpful contribution. I do not think that £½ million in a full year and £6 million this year is an insignificant contribution to the revenue of one industry. Though we ought not to under-estimate the assistance given, I admit at once that I do not believe that this, by itself, will bring about the solution we seek. The problem is far too difficult to be solved by one single measure such as this.
    Mr. Ernest Davies: The Chancellor has said that he is a disappointed man, but the Committee will be very disappointed with his reply. There was a considerable weight of opinion on his own back benches that this Clause does not go nearly far enough and makes very little contribution to the relief of the bus operators on their unremunerative services.
    The right hon. Gentleman's defence of the Clause was very lukewarm. He admits that it does not go very far, and he admits failure in finding any way to enable the operators to continue public services. We on this side of the Committee do not wish to prolong the debate now, but in view of the Chancellor's reply we give him notice that we will return to this topic during our further deliberations. We have a new Clause on the Notice Paper that proposes as an alternative method—and, in spite of the Chancellor's claim that it is administratively difficult, we think that it is a practicable method—the
    976
    reduction or abolition of tax on diesel fuel for public service vehicles. We hope that that Clause will be selected and that we will thus be able to debate it.
    Apart from that, we shall, on Report, certainly put down a further Amendment to substitute a flat rate for the system in the Clause. If this Chancellor is really sincere in his wish to bring greater relief than he has been able to give so far, he should accept the suggestion of a flat rate which his own back benchers have suggested following an Amendment on similar lines tabled by us last year. It would give relief to the extent of a further £1 million. As I say, we will return to this on Report, so the Committee and the House have not heard the last of this difficult problem.
    Mr. Joseph Slater: The Chancellor said that he represents a rural area and is, therefore, well aware of the problem of rural transport. He also said that one of the reasons for the restricted services in these areas was the increased number of motor vehicles on the road. That may be the case with some individuals, but what about the agricultural worker? Is it suggested that the people working on the land all possess cars in which to get to the nearby towns? If so, let me say—
    Mr. G. Wilson: The average acreage of the farms in my constituency is 46, and it is the small farmer who has some form of motor transport. It is not necessarily a car. Many have mopeds, Lambrettas or motor-assisted vehicles, which all take custom from the bus services.
    Mr. Slater: I have three rural districts in my constituency, and their bus service is not very adequate. If it were, I would not receive representations to make application to the omnibus companies to put on extra buses. What can we do in a rural district when there is overcrowding on the buses and people living in the villages cannot get on them and when it is not possible for the buses to be duplicated? We can only ask the Chancellor to be more generous. We are very grateful to him for the present concession, but that is not to say that he could not have gone further.
    It is because of what is happening in the rural areas that people are seeking to migrate into the towns and cities. The

    977
    Chancellor ought not to run away with the idea that what may be true of his own constituency is necessarily true of others. A high percentage of the people working on the land within the three rural districts of my constituency have not these Facilities.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 11.—(AGRICULTURAL TRACTORS : CARRIAGE OF PRODUCE ETC. AT AGRICULTURAL RATE OF DUTY.)
    Colonel Richard H. Glyn: I beg to move, in page 12, line 2, to leave out "five" and to insert "fifteen".
    The object of the Amendment is to increase the radius within which it is permissible to use what is known as a transport box attached to a tractor, which in many ways is more suitable and more modern than the old-fashioned trailer. I think it is right to say that this matter was first raised by my hon. Friend the Member for South Angus (Sir J. Duncan), whom I am glad to see in his place today.
    I would say that the agricultural community and the countryside as a whole appreciate that the Clause as it stands represents a concession and will serve to clear up a certain amount of misapprehension which has existed in some districts as to what the law might be, because it has been interpreted slightly differently in different areas. For some years it has been possible to draw, as the Act says, or, as we would generally say, tow or haul a trailer or farm implement behind a tractor within a radius of fifteen miles from the farm, but originally the permission was only to tow. With improved modern implements which were attached to tractors and which raised loads by hydraulic means, it was pointed out that these were outside the law as it stood, and in 1953 the law was altered to allow these implements to be carried within a radius.
    Now we have what is known as the transport box, similarly attached to the tractor and serving to carry small loads. In many cases this is a much more suitable arrangement than the old-fashioned trailer, because it takes up much less space on the road and saves the very great congestion which is familiar in country districts on market days. I think that
    978
    the police in most districts will agree that it is safer because it does not swing about and takes up very much less room on the road. I do not know if my right hon. Friend had all these reasons in mind when the Clause was originally drafted and it was decided to clear up the matter and to help by having these transport boxes expressly permitted within a radius limited to five miles, but that is a very much smaller area than the fifteen miles radius permitted to a trailer.
    The object of the Amendment is to extend the radius within which transport boxes may be used from five miles to 15 miles to put them all square with trailers which they are so fast replacing. I submit that this is not merely a question of the convenience of the farmers, it is a question of the safety and of the convenience of other road users and of the congestion in the market towns.
    Whereas there may be some areas in which the radius of five miles may be adequate, in the West Country, particularly in my constituency, in north Dorset, it is only a comparatively small proportion of the farmers who are within five miles of a market. Many are 10 and some as far as 15 miles away from a market. Some are even farther away than that, but they are accustomed to employ a haulier, which is probably cheaper, because 15 miles as the crow flies is probably as much as 40 miles out and back by road, and the time factor and wages make it cheaper to employ a haulier, as is widely done.
    For these reasons, it would be a tremendous help, not only to farmers but to other road users in country districts, if this Amendment could be allowed and if the radius for these convenient transport boxes could be extended from five to 15 miles.
    Sir J. Duncan: I should like very warmly to support this Amendment so ably moved by my hon. and gallant Friend the Member for Dorset, North (Colonel R. H. Glyn). It seems to me a most reasonable thing that if one can haul a trailer to market, a trailer which takes up a lot of room and goes rather slowly, one should also be able to use an agricultural tractor with a box at front or back to go the same distance to market. It is the object of the Amendment to secure that.

    979
    The original law on the subject was consolidated in 1949, and under it a tractor paid varying licence duty according to its weight. By the Finance Act, 1950, a flat rate of £2 was paid on all agricultural vehicles. The object of the Amendment is to make the £2 rate applicable to tractors if they have boxes, provided they are restricted to a fifteen-mile radius.
    This would be easier for administration. If a policeman finds a tractor more than fifteen miles away from its farm he can pick up the owner. Under the law as proposed now, if the tractor has a box on it the policeman has to see whether it is five miles from the farm; if it has a trailer attached to it, it can go fifteen miles. For ease of administration I should have thought that it would have been simpler to have made the fifteen-mile limit for both.
    My hon. and gallant Friend mentioned the question of safety. It will be noticed that in subsection (1, b) there is a limit on the size of the box. If the box is on the front it is limited to 7 sq. ft., if on the back, to 15 sq. ft. I would emphasise this because if the weight were on the back of the tractor and it were an excessive weight it would be dangerous because the front wheels would tend to rise off the ground. The limitation in the size does ensure adequate safety.
    9.45 p.m.
    There is the further point that in many parts of the country farmers have more than one farm. They frequently have a low-ground farm and a hill farm and have to go from one to the other to carry fodder to the sheep in snow or to carry potatoes from a farm to the house or from one farm to another. It will be stupid if they must have a trailer to cover fifteen miles between one farm and another and if they have to take the box off every time they travel. According to the Clause, the box must be removable. It must be fixed in such a way that it can be taken off the front of the tractor.
    It will be an awful nuisance, therefore, if a man has a call in a snowstorm to go to his hill farm to take hay to the sheep and he has a box on the tractor which he must take off because the distance is more than five miles, and he must attach a trailer which is more difficult
    980
    to operate in snow and on slippery roads. For all these reasons, therefore, I think that the Amendment is sound. I believe that it has been asked for in principle by the National Farmers Union for many years. I hope that it will be accepted by the Government as a piece of common sense, as something which will ease administration and something which on its merits improves the Clause.
    Mr. Harold Davies: I sincerely hope that the Amendment will be accepted. The provision which it proposes would be specially valuable in hilly districts in wintertime. There is hilly country in the Leek area where it is very difficult to take out fodder to cattle along country lanes in winter. As hon. Members have said, it would be ridiculous and almost impossible to drag a trailer to do this work. I need not labour the point. This is a reasonable Amendment. It would be of great help in hill farming areas. I hope that it will be accepted.
    Mr. Nugent: The Clause has been inserted in the Bill to meet the difficulty which has been found over the last few years as this device of the transport box has developed and farm tractors have continued to run about the roads with transport boxes on the back. In most areas the police have been fairly lenient, but it has been a breach of the law. The Clause, therefore, has been inserted to meet the practical difficulty which has arisen and to legalise what has now become a very general practice.
    The point of the Amendment is to extend the limitation of five miles to fifteen miles. The arguments are very evenly balanced here. There are two arguments in favour of leaving the limit at five miles and differentiating it from the fifteen-mile limit for trailers. The first is the nature of the tractor itself. The £2 per annum concession for the tractor is granted on the basis that a tractor is not a load-carrying vehicle. It is simply a hauling vehicle which can have a trailer behind it to carry goods. As soon as the tractor itself carries the load in the transport box, it becomes a load-carrying vehicle like all goods vehicles.
    The second argument is the question of safety. The tractor, being a hauling vehicle and not a load-carrying vehicle. is not required to conform to some standards of safety. For instance,

    981
    it is not required to have two independent braking systems nor the conditions of fitness which we demand in ordinary road vehicles. There is a possible danger in a tractor being turned into a load-carrying vehicle when, as opposed to the trailer which itself has an independent set of brakes, it might not be entirely safe on the roads.
    As a practical man, having had a great deal to do with tractors and transport boxes on trailers, I am bound to accept that on the whole a transport box is likely to be safer than many trailers I have seen, provided that it is reasonably loaded. It is true that, as my hon. Friend the Member for South Angus (Sir J. Duncan) has said, we have limited the size of the box to 15 square feet, and so a large load cannot be carried, although it is surprising what will appear in some people's transport boxes.
    Nevertheless, I think the safety factor is on the side of the transport box rather than that of the trailer, and in the even balance of arguments here I think we should accept the Amendment, especially for the obvious convenience of having the limitation for both set at fifteen miles, instead of five for one and fifteen for the other. It cannot be often, Sir Gordon that an Amendment is successfully moved on the Finance Bill to give three times what the Chancellor was offering, but on this occasion it does not seem to cost much, so I am able to make the concession and I advise the Committee to accept the Amendment.
    Amendment agreed to.
    Mr. Geoffrey Stevens: I beg to move, in page 12, line 24, at the end to insert:
    (6) Subsection (5) of section five of the Vehicles (Excise) Act, 1949, shall be amended by adding in paragraph (b) after the words "a snow plough", the words "or trailer gritter of the type designed to render roads fit for the passage of traffic in conditions of snow or ice".
    Subsection (2) of section seven of the Vehicles (Excise) Act, 1949, shall be amended by the addition of the following proviso:—
    "Provided that this subsection shall also apply to a mechanically propelled vehicle being a bulk gritter or similar contrivance of a type designed to render roads fit for the passage of traffic in conditions of snow or ice".
    Section 5 of the Vehicles Excise Act, 1949, deals with the duties which are
    982
    chargeable on goods vehicles and subsections (2) and (4) deal with the position which arises when those vehicles tow trailers or in some way have trailers affixed to them. There are two forms of trailer. One is where it is different from the vehicle towing it, and the other is where the goods vehicle used for drawing the trailer has the trailer attached to it by partial superimposition and, according to the nature and weight of the trailer. additional duty is payable in accordance with the Fourth Schedule to that Act.
    Subsection (5) of Section 5 of the 1949 Act makes certain exceptions to the rule that additional duty is payable if the vehicle is towing a trailer. One of the exceptions is where the trailer happens to be a snow plough. It seems to me that there are good reasons for making that exception. First, a snow plough is not often used and if it paid the same rate of duty as a normal trailer obviously the weight of duty per mile would be very heavy indeed. It seems to me that the same kind of argument can also apply to a trailer gritter or a bulk gritter used in rather similar circumstances; in other words, where perhaps there has been a fall of snow, it has thawed, there has then been a frost and the roads have become slippery. Then the local authority attaches some kind of gritter to the back of an ordinary vehicle which goes round the roads and makes them safe for the motorist. It seems to me a matter of logic that if a snow plough is exempt from trailer duty for the reason that it is seldom used and would be far more expensive to operate if it had to pay the same rate of duty as the normal trailer, the same argument applies in the case of gritter trailers, whether superimposed on a vehicle or, in the case of the larger vehicles, separate ones.
    It is a fact that there are very few gritter trailers or bulk gritters used by private interests. They are nearly all used by local authorities. So it seems to me irrational to free the snow plough from duty and leave the gritter chargeable. For that reason, I hope my hon. Friend may be able to accept the Amendment.
    Mr. Nugent: I can help the Committee here. The Amendment is acceptable to us in principle. We feel that these machines should be treated in the same way as snow ploughs. The only point that I have to make is that the Amendment does not

    983
    fit well into Clause 11, which deals with agricultural tractors, and would be more appropriately dealt with by way of a new Clause. If the Committee is agreeable, I would advise my hon. Friend the Member for Portsmouth, Langstone (Mr. Stevens) to withdraw his Amendment on the understanding that the Government will table a new Clause on Report.
    Mr. Stevens: In view of my hon. Friend's assurance, I thank him for accepting the principle, and beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Clause, as amended, ordered to stand part of the Bill.

    Clause 12.—(CHANGES IN RATES OF PURCHASE TAX.)
    Mr. H. Wilson: I beg to move, That the Chairman do report Progress and ask leave to sit again.
    I move the Motion not merely because we have, as I am sure the Committee would agree, made remarkable progress on the first day of the Finance Bill Committee stage. It is probably the most remarkable progress made on a Finance Bill at any time since the war.
    There is another, and rather more serious reason. If we were to continue tonight we should be proceeding with Clause 12, which deals with Purchase Tax, and it has become clear that, because of the Financial Resolution tabled by the Government during the Budget debate, the Committee is being denied its usual facilities for debating Purchase Tax. We have given notice of this point to the Chancellor of the Exchequer and the Leader of the House. An extremely serious situation has arisen on which we shall in a few moments wish to hear a statement by the Chancellor.
    In past years when no debate has been possible on individual items—we all recognise that there are years when it is not desirable to have a full debate on every individual item in the Purchase Tax Schedule—it has been usual to have debates on each of the main rates. They are now 50 per cent., 25 per cent., 12½ per cent. and 5 per cent. When on this occasion we sought to table Amendments to vary these rates—to reduce three and abolish one—we were informed by the Public Bill Office that it would be out of
    984
    order on the Financial Resolution to move Amendments of this kind. I would say right away that in our minds there is no possible reflection on the Public Bill Office for the advice it gave us, which is incontestable, and still less on the Chair.
    Our criticism is directed at the Government in that they have altered the basis of the Financial Resolution, and have done so in defiance of precedent, or, at any rate, such practice and procedure as has been adopted over the past few years, and also, if not in defiance of, with scant regard for the assurance given by the Lord Privy Seal in 1955.
    Perhaps I might indicate the background to this Purchase Tax Committee procedure. It will be recalled that for a year or two after the war when my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) was Chancellor of the Exchequer hon. Members found it possible to table Amendments to almost every item in the Purchase Tax Schedule. There would be half-an-hour on tooth brushes and half-an-hour on something else, and that could go on for several hours, and indeed for several days.
    In 1949 the then Chancellor of the Exchequer, Sir Stafford Cripps, moved a Financial Resolution which precluded all discussion of Purchase Tax. This led to an outcry from hon. Members opposite who were then sitting on this side of the Committee. That led to consultations and discussion out of which an agreement was reached—the Labour Government were still in office at the time—which provided that in any year when there were not changes in the coverage of the tax schedules—that is, movement of items from one group to another or out of groups—it would be possible to have at any rate general debates by discussing the various rates then in force. It was considered that if that were done, it would enable some three, four or five separate debates to take place, depending on the number of rates in force and would enable hon. Members in all parts of the Committee to raise questions on individual items of the goods that were covered by any one of these groups.
    10.0 p.m.
    After that agreement was reached, and that precedent was established in the 1950 Finance Bill, and continued again in 1951, though there were changes in the

    985
    Purchase Tax in that year, these precedents were followed until a particularly difficult point arose in the Autumn Budget of 1955. It will be recalled that on that occasion the Lord Privy Seal brought a number of items into Purchase Tax which were not previously in the tax schedule and, at the same time, brought back into the Purchase Tax Schedule certain items that had been taken out. A very difficult procedural point arose during our debates, and I am sure that the Lord Privy Seal will remember the point, which I think defied his ingenuity and that of most other right hon. and hon. Gentlemen, from the procedural point of view.
    We are not concerned with the actual point at issue on that occasion. The debate took place on 22nd November. 1955, and I think it of great interest to constitutional historians, but, in fact, what we were discussing was the fact that the then Chancellor had introduced a number of items into Purchase Tax and we were not able to vote against them item by item. It is not a point that arises at present. The reason was given in a procedural debate on a similar Motion to report Progress, and I want briefly to quote one or two of the things that were said during that debate.
    The then Chancellor of the Exchequer, now the Leader of the House, said this:
    "I wish to be fair to the Committee on the point about the drafting of the Purchase Tax Resolutions. I have, of course, followed a good deal of precedent in this, precedent set not only by Sir Stafford Cripps but set also in the time of office of the right hon. Member for Leeds, South (Mr. Gaitskell). It is always difficult to provide for adequate debate on the Purchase Tax and it is always impossible not to draft the Financial Resolutions with certain limitations. In this case, however, as I drew to the attention of the right hon. Member for Leeds, South—he knows I drew his attention to this—it was possible for the Opposition to put down particular Amendments—".—[OFFICIAL REPORT, 22nd November, 1955; Vol. 546, c. 1271.]
    and then he went on to define a number of items.
    It was clear that the Lord Privy Seal at that time, at any rate, considered himself in general bound by the precedents established in 1950, even though a particularly knotty problem had arisen on that particular Finance Bill. Then, as the debate proceeded, and it went on for longer than perhaps we may expect to debate this matter this evening. another point was
    986
    raised by my right hon. Friend the Member for South Shields (Mr. Ede) about Money Resolutions as distinct from Financial Resolutions. I do not think I need worry the Committee with that, except to mention that case and to say that the Chancellor referred to it and said:
    "I have had a word with the Leader of the House and he says that we are following, in general, in respect of Money Resolutions, the procedure laid down by the late Mr. Neville Chamberlain in the case of the Financial Resolutions attached to the Budget"—
    and this is what is relevant—
    "we are following, so far as we can, precedents created and left to us by our predecessors."
    He went on to say:
    "I can honestly say to the Committee that in the case of Purchase Tax every Chancellor is faced with a very difficult situation. It distracted the supreme intelligence of Sir Stafford Cripps and, indeed, worried him more than any other subject. It very much disturbed and distracted the intelligence of the late Oliver Stanley, who found our debates on Purchase Tax almost impossible to bring within the bounds of ordinary Parliamentary order. It has been a source of considerable distraction to my immediate predecessor, and a source of considerable worry to myself. On this occasion, we were trying to make it possible to debate each of the rates."—[OFFICIAL REPORT, 22nd November, 1955; Vol. 546, c. 1286.]
    It was clear that the then Chancellor, the present Lord Privy Seal—three Chancellors ago now—intended that we should debate each rate separately.
    That has been the position ever since. I will not weary the Committee with further quotations from that debate, except to say that the then Chancellor said that he would undertake that in future drafting of Financial Resolutions attached to Budgets care would be taken to pay attention to what my right hon. Friend the Member for South Shields had said about Money Resolutions and Financial Resolutions and what other hon. Members had said about back bench opinion. When I asked him if there could be consultations on this question, he said that he was prepared to see that consultations took place, and some consultations did take place.
    So much for 1955. This year, almost for the first time for ten years, we find that we cannot debate the four rates of Purchase Tax. I want it understood that frankly we are not complaining that

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    we cannot debate individual items. We recognise that there will be some years when it will not be possible to have what used to be called a "Dutch auction" of individual items. We had a fair "Dutch auction" last year, although we did not get very far with it, even though we spent some days on it. We had another four years ago. However, we have considered it to be within the rights of the Committee to be able to debate the rates of Purchase Tax so that individual Members could raise constituency or other issues.
    Now that we have come to study the Financial Resolution—and it may have escaped the notice of most hon. Members; frankly, it escaped our notice—we have found that we cannot move Amendments to reduce the 50 per cent., 25 per cent. and 12½ per cent. rates below their present levels. It would be in order to move Amendments to raise the rate of Purchase Tax, provided that we did not raise the level to a figure higher than that at which it stood before Budget day. In other words, if they feel so minded, hon. Members can move Amendments to raise the 50 per cent. figure to not higher than 60 per cent., the 25 per cent. figure to not higher than 30 per cent., and the 12½ per cent. to not higher than 15 per cent.
    What is apparently not in order is for hon. Members to move to reduce the rates of Purchase Tax below the figures which the Chancellor in his wisdom set in his Budget statement. The 5 per cent. rate, however, is slightly different. That is cut out of the Financial Resolution. On the other hand, the Financial Resolution precludes an Amendment to abolish the 5 per cent. rate. We cannot move to reduce the rate from 5 per cent. to nothing, but we can and propose to move that the 5 per cent. rate be reduced to a negligible rate.
    Having now described the position with which the Committee finds itself faced, I ask the Chancellor whether this is what the Government intended. I cannot believe that after the very clear assurances, as I regard them, of the Lord Privy Seal four years ago, either he or the present Chancellor would be a party to restricting the Committee's usual rights of debate in this way. I cannot believe that they intended this to happen. It may
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    well be that some clerk in the Chancellor's office rather slavishly followed the wording of the 1957 Resolution.
    It will be recalled that two years ago the right hon. Member for Monmouth (Mr. P. Thorneycroft) increased the number of Purchase Tax rates, despite the hon. Member for Kidderminster (Mr. Nabarro), to seven separate rates. That was a year in which rates were changed. The Financial Resolution on that occasion precluded discussion of the rate reduced from 30 per cent. to 15 per cent., although we were free to move Amendments to the remaining six rates. We could debate six of the seven rates, but not the new one created by the then Chancellor.
    It may be that someone has rather slavishly followed that precedent and, although the words may be the same as in the previous 1957 Financial Resolution, the effect is entirely different, because we could on that occasion debate six out of seven rates separately and on this occasion we cannot debate any of the rates except the 5 per cent. rate which is untouched by the Chancellor's Budget decisions. As I have said, this presents us with an extremely difficult situation. I know it will be said that we can debate most of these items on the Motion "That the Clause stand part of the Bill," but that is a quite unsatisfactory way of dealing with the situation. It raises the whole question of a vote and I am sure that hon. Members in all parts of the Committee will see the difficulties about that.
    I submit that we have reached, perhaps not a major constitutional issue—I am not trying to pretend it is—but at any rate a matter of some importance When the Committee is precluded, as it is on this occasion, perhaps by careless drafting of the Financial Resolution, from moving to reduce the rates of Purchase Tax introduced by the Chancellor in 'his Budget. I hope that the Chancellor will be able to give us a satisfactory explanation and in particular tell us what he proposes to do to put it right.
    Mr. Amory: The first thing I should like to say is that a complete and unrestricted debate like last year is the exception rather than the rule. In fact, apart from last year, it was provided for only in 1948. This year's Resolutions are admittedly drawn in restrictive form, but we felt that it would be the will of the

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    Committee that we should not again this year go in for the protracted debates that we had last year about which there was indeed some criticism at the time. We spent several days in discussing at some length what were really very minor changes. Detailed debates seemed reasonable last year because I then proposed what amounted to recasting almost the whole tax, but that is by no means the case this year.
    The main object in the more restrictive Resolutions this year, as the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) implied, was not to open the way for Amendments to alter the rate of tax on individual articles or groups of articles within what I may call a rate group. But though the Resolutions are in a restrictive form this year, as again the right hon. Gentleman the Member for Huyton implied they still permit full debate on the full range of Purchase Tax, and allow a limited number of Amendments on which the Opposition can divide the Committee if that is its wish.
    I thought that would be the degree of restriction that the Committee would wish for this year. I did not consider that the Committee as a whole would have attached very great importance to their ability to move Amendments and divide on the rates for the various groups. if I had considered that, it would have been possible to have drawn the Resolution slightly less strictly so as to have permitted that to have happened, but I am not convinced even now that the Committee as a whole would have wished for that increased power.
    The restrictive nature of this year's Resolution is, of course, not without precedent. In 1949 the Labour Government so phrased the Budget Resolution that no discussion on Purchase Tax was possible at all. No changes in rate were made that year and the Government used that fact as a reason for withdrawing this important set of taxation wholly from the purview of the House. The right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall) said on that occasion:
    "During previous discussions on this matter in the House, particularly by hon. Members opposite, we have been informed that these discussions on Purchase Tax changes are somewhat undignified. The right hon. Member for West Bristol (Mr. Stanley), certainly on one occasion, referred to the Committee stage on the Purchase Tax as a kind of Dutch auction. It would be rather absurd during the Com-
    990
    mittee stage of the Bill to engage in a Dutch auction of that kind, if the only person present with any money to spend in that connection indicated that he was not going to spend it."—[OFFICIAL REPORT, 18th May, 1949; Vol. 465, c. 439.]
    This year the only person with money to spend has indicated the limit to which he is prepared to allocate it to a reduction of this particular tax. He has allocated a very large reduction indeed.
    The right hon. Member has referred to the exchanges which took place on the drafting of the Resolution's on Purchase Tax in 1955, but I should remind the Committee that the circumstances were not quite similar. The right hon. Member was then protesting that the Government had drafted a Resolution imposing a new tax on a range of goods previously tax-free in such a way that no amendment of that tax could be proposed. The undertakings about consultation given by my right hon. Friend the Lord Privy Seal related especially and specifically to these rather special circumstances where a new tax was being put on. This year, of course. the circumstances are very different because reductions are being made.
    10.15 p.m.
    Finally, the general Resolution which imposes this restriction on debate was before the Committee throughout the four days of the Budget debate. All through that debate the Opposition did not raise the point which the right hon. Member is raising now. Still less did it divide against the Resolution. Nor did it refer to it at all during the Second Reading debate on the Finance Bill. If hon. Members opposite had felt it was so important that they should feel the burning indignation they now display, they should surely have voted against the Resolution.
    I cannot help thinking that bon and right hon. Members opposite have managed to work themselves up into a state of rather artificial concern about a matter to which in their hearts they feel no great objection, and on which they even may feel some slight relief. The Resolution in question has, of course, in any case been approved by the Committee without a Division, and hon. Members will find plenty of opportunities of making any points they wish to make during the debate. The right hon. Member implied that we might find some way of varying the Resolution so as to permit them to move the Amendments which they now

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    seem interested in moving, but I think that would be neither feasible nor desirable at the present time.
    As to the future, if this Committee expressed the desire that in future years the rates of Purchase Tax on each particular group should always be open for discussion—if the Committee as a whole feel that is what it would wish to do in future—that is a view to which my right hon. Friends and I would attach weight We would not think for the future that it would be unreasonable that we should make provision for that, but I think to change the basic Resolution which is behind all our debates at this stage would be neither feasible nor desirable.
    Mr. H. Wilson: I am amazed at the answer the Chancellor has given us tonight. In the first place, it was quite clear that the answer was prepared before he heard the speech I made, or he would not have spent so much time knocking down arguments I did not use.
    I admitted that in 1949 there was this rather sweeping move which led to such an outcry and feeling that there were consultations between both sides of the Committee so that it should not happen again. I think it was quite out of place for the Chancellor to quote it as a precedent for this year. Every Chancellor since 1949 has felt himself bound by the agreement reached following those consultations, certainly the Lord Privy Seal. I agree that the point at issue in 1955 was quite different. It was not necessary for the Chancellor to read that page of his notes as I had already said that in the Committee. From the passages I have read from the debates it is clear that the Lord Privy Seal felt himself bound by the precedents of 1950 and succeeding years. I do not think there can be any doubt about that.
    It has been left to this Chancellor, this year, to change the basis. Instead of telling the Committee that he is sorry, that this is not what he intended and that he did not realise its effect because he simply borrowed the wards from 1957, he has tried to make a virtue of it. I was surprised to hear him arguing in that way, and we certainly cannot leave the matter where it is if that is to be his attitude. Had he said, as I expected him to say, that he had not intended the Committee
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    not to have the right to debate these matters, and that it had worked out rather differently from his expectations when he tabled the Resolution, I could well have understood that sort of answer. We should have been prepared to discuss, through the usual channels or in any other way what could be done about the future.
    That is not his argument. He is trying to make a virtue of this. He says that the Opposition ought to have picked it up in the Budget debate. He knows perfectly well that no Opposition could have voted against that Resolution. I have been absolutely frank and I have said that this was not picked up by any hon. Member in any part of the Committee. I am certain that no hon. Member in any part of the Committee, including the Chancellor, knew what was being done. If the Chancellor knew, then I submit that it was his duty to inform the House, in view of what the then Chancellor said in 1955. I think it is fair to say that no one in the Committee spotted the point. I have admitted that frankly in respect of this side of the Committee, but I am also certain that no hon. Member opposite spotted it. If any hon. Member did spot it and will say so, I am prepared to apologise to him. Even if it had been spotted, we could have voted against this restriction only by voting against the reduction in Purchase Tax, which I am sure that no hon. Member in any part of the Committee would have been prepared to do. The Chancellor is putting up a phoney and bogus point.
    Having dealt with the point about 1949, he then said that the Lord Privy Seal's argument in 1955 related to something else. I have admitted that. The debate in 1955 was initiated because of a different kind of difficulty. Nevertheless, in the course of it the Lord Privy Seal uttered the words which I have quoted, showing that he regarded himself bound by the precedent of 1950 and succeeding years.
    It seems that the Chancellor has his legal adviser by his side, but that will simply confuse counsel further. I have no doubt that the Chancellor can find a number of debating reasons for what he has done, but I ask him to think about this matter again. It is not good enough to say that this was done ten years ago or that he has all sorts of procedural excuses for doing it this year. Why does he not honestly admit that this was not the effect which he intended?

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    I am sure that the Chancellor did not go right through the Budget and Finance Bill debates knowing that he had this new and restrictive device in force but without telling the House about it. If he had understood what it meant he would have told the House. Why does he not say, "I did not realise that this would happen. I took the words from 1957, in all good faith." We should have understood that argument.
    The Chancellor could still admit it. He has given us his set piece. He himself is rather contrite about what has happened, but obviously the official responsible for misleading him has given him a more aggressive speech to read. We have now heard that speech. It is on the record. We are not worried about that. Having made that speech, why does the Chancellor not now admit, as a Member of the House of Commons, that a mistake has been made? This is not basically a party point. It is a point about the relations between the Government and the entire Committee. Exactly the same speech would have been made by hon. Members opposite if we had been in power and had done it. The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) would have put the point infinitely better than I can hope to pit it. Why does not the Chancellor admit that he has made this mistake and undertake to consider what can be done?
    At the end of his remarks he said that it is not feasible or desirable to do anything about it. It is perfectly feasible. He could do it now. While the House is debating post-war credits he could put down a Motion on the Order Paper requiring the recommittal of this Financial Resolution tomorrow, which would enable us tomorrow evening to debate these individual rates of Purchase Tax. He could do that easily.
    The Lord Privy Seal set a precedent for this in 1952. The Lord Privy Seal in 1952 claimed the right as Chancellor to introduce in manuscript an Amendment to recommit the Financial Resolution. He did not do that. He tabled a Motion for the next day.
    It would be feasible—I am not putting it higher than that—for the Chancellor tonight to table the kind of Motion which would enable the Committee to have its usual rights tomorrow.
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    The Chancellor may decide in the few minutes left before perhaps the Committee adjourns that it would not be very easy for him to find the right form of words and to table the Financial Resolution. At any rate let the Chancellor say to the Committee that he recognises that the Committee has a case. I am putting this on behalf of some hon. Members opposite. I am sorry that the hon. Member for Kidderminster (Mr. Nabarro) is not here. Let the Chancellor say that he recognises that there is a case against the Government on this and that he will consider the matter and consider what, if anything can be done to put it right.
    I am not insisting. My right hon. and hon. Friends and myself are not pressing that the Chancellor should table a Motion tonight, because I do not think that that would give sufficient time for the Government to consider the postition, although we raised this matter with them some days ago. If the Chancellor would say that, if he cannot put it right for tomorrow and if we are precluded from debating these rates tomorrow evening, nevertheless he will try to put the matter right by recommitting on Report stage or in some other way so that we can have our normal rights of debate. I am sure that hon. Members on both sides of the Committee would be satisfied. I press the Chancellor to be frank now, to admit what the position is and to undertake at any rate—we are not asking much —that he will consider the matter and report to the Committee tomorrow.
    Mr. Amory: I have very little to add to what I said. I said just now that I did not consider that the Committee as a whole, or any substantial number of members of the Committee, would have attached importance to this right to put down Amendments to the rates in each group. I agree with the right hon. Member for Huyton (Mr. H. Wilson) that my main object in this was to prevent the possibility of us devoting the same amount of time as last year to the consideration of individual changes. I admit that I did not consider whether the Resolution would have precluded what in fact it has precluded. I still say that I did not consider that in any case that was a matter that would have been of interest to the Committee. I would have thought —I still think—that there will be plenty of opportunities for all members of the Committee to make the points they wish

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    to make during the course of the debate. What I still think will not be feasible or desirable will be to alter that Resolution for our discussions this year.
    Mr. John Cronin rose—
    Mr. Amory: Perhaps the hon. Member will allow me to finish.
    I have said that I would be perfectly willing to consider any view the Committee likes to express about what our procedure should be for future years and, if there is any way in which we can collectively decide on a course of action which will guide us in future years, provided that that action is reasonable, we would be very glad to consider it. I do not think that at this stage we can consider altering the present resolution which has been already passed by the House of Commons.
    Mr. Jay: I cannot believe that the Chancellor is being frank with the Committee. Did the Chancellor make this arrangement and place it in the Resolution deliberately, or did he do it by mistake? He did not sound to me at all happy in either of the speeches he has made tonight. If what he was saying was what he meant, which I can hardly believe, he has made one of the most extraordinary statements we have heard from a Chancellor in a Finance Bill debate for a long time.
    10.30 p.m.
    There is a very real point of substance here. It is, after all, one of the main functions of the House of Commons to discuss and amend matters of taxation. Purchase Tax is one of the most important, complicated and controversial of all taxes. I believe that the right solution to this rather difficult problem is not to have what has been called the Dutch auction every year. We are not disputing that at all; it is carrying the thing too far to have Amendments relating to every single commodity. Nevertheless, it has become agreed between the two sides of the Committee throughout the last ten years, I think, that, though we do not go as far as that, we certainly should not perform our functions as representatives in this Committee if we did not have an opportunity to discuss and to vote at least on the main rates of tax. That has
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    been the accepted principle for ten years now.
    This does not affect one side of the Committee only; it affects all hon. Members. Under the arrangement we have had for the last ten years it has been possible to have an Amendment to reduce each rate of tax, and, in the course of debating that Amendment, it has been possible for hon. Members to raise arguments on any individual commodity coming under the rate. Therefore, we preserved the right to advance arguments relating to each commodity and to vote in favour of reductions in the rate.
    It is no answer for the Chancellor to say that that was not done in 1949 by the original Resolution. As he will surely recall, in that Budget there were no reductions in Purchase Tax. The arrangement under which we have worked for ten years has been that, when the Government make reductions, they must at least enable hon. Members on both sides of the Committee to move Amendments to make changes different from those which the Government propose.
    Where are we now? It is no good the Chancellor saying that it is possible for the Committee to discuss Purchase Tax under this arrangement. The only opportunities we have are two. First, we can discuss the Question, That the Clause stand part of the Bill. I really think that hon. Members, if they are candid, will agree that it is quite impossible to have a rational and proper discussion of the individual items of Purchase Tax if the whole thing is rolled into the Question, That the Clause stand part of the Bill.
    The only other thing we can do is to put down Amendments not to reduce the rates of tax but to raise them. But this is to reduce the procedure to a farce if we can discuss the matter only by advancing argument in favour of an Amendment to which we are, in fact, opposed. We do not wish to raise the rates of tax, and the Chancellor, in this extraordinary manoeuvre, has put us in the position of being able to discuss the thing only if we move an Amendment which is in its effect precisely the reverse of the result we wish to achieve.
    I ask the Chancellor again, did he do this on purpose or by mistake? I can hardly think that he did it on purpose, but I must say that one part of his first

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    speech—which was very uncharacteristic of him—in which he almost boasted that nobody on either side understood what his Resolution meant in the Budget debate suggested that he might be boasting of the trick which he had successfully perpetrated on the Committee.
    Mr. Amory indicated dissent.
    Mr. Jay: I do not believe that that can be true, but, if it is, it would be nothing but a piece of Parliamentary sharp practice which the Chancellor was foisting on us. I am asking whether it is true. If the truth is—as is more charitable to assume—that he made a mistake, he should say so. We have already had one oversight or blunder from the Chancellor today, and if the truth is that this is a blunder, that he did not himself understand what his own Resolution meant in this very important matter, he ought to put the mistake right. We are
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    prepared to believe that it is a mistake; we know that it might have happened. If he is willing to put it right, it means, in practice, that he will amend the procedure so as to enable the House and the Committee—on both sides—at least to put down Amendments to reduce the rates, as has been done in recent years.
    The Chancellor threw doubt on whether or not it was procedurally possible to do this. My information is that by recommittal it would be possible, even now—if the right hon. Gentleman would act tonight, or, at least, tomorrow morning—to have the proper discussion that we should have. I will not argue the procedural point now, but I do appeal to the Chancellor to do this. If he does not want us to think that he did this deliberately, will he give us an assurance tonight that he will take these steps if it is procedurally possible to do so?
    Mr. Cronin: This is a matter of the utmost gravity and concern to all back benchers. We have heard the Chancellor say that he did not anticipate that the Committee would expect to have a detailed debate on the Purchase Tax Clauses this year, but he also complained that last year there was prolonged and detailed debate on the Clauses. That should have indicated that we would require the detailed debate that is necessary. The implication seems to be obvious.
    We are now dealing with some quite fundamental principles of the functions of this Committee. This is not a debating society. Always in the past the Committee has shaped the fiscal legislation by Amendments from both sides—and hon. Gentlemen opposite certainly did their share last year in tabling and debating Amendments to the Purchase Tax Clauses. The Committee this year is being denied an active share in this part of the fiscal legislation. It is quite clear that we will not be able to give Clause 12 that detailed consideration it should have, but will merely have a repetition of a Second Reading debate.
    It is also important to record that fiscal legislation at present is largely drafted by civil servants, and is also the result of pressure by and negotiation with outside interests. Unless the Committee and the House take an active and detailed part in this legislation the public have no protection, except that of the Chancellor and the Treasury Ministers, against what may be a purely bureaucratic interpretation of the fiscal legislation. I suggest, therefore, that, from the point of view of both sides of the Committee, it is an intolerable innovation to be denied discussion of such an important matter, and I hope that the Chancellor will reconsider the position, and recommit the Financial Resolution.
    Mrs. Eirene White: I want very strongly to support what has been said by my right hon. Friends. On this occasion the Chancellor's political good faith is in question. Those of us—
    Mr. Glover: On a point of order, Sir Charles. Before we go further with this debate, may I ask whether it is in order for an hon. Member to say that my right hon. Friend's good faith is in question when, in fact, the Financial Resolution was passed by a unanimous vote of the
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    House? As nobody voted against it, how can anybody's good faith be questioned?
    The Chairman (Sir Charles Mac-Andrew): The Motion before the Committee is that I do report Progress and ask leave to sit again. Mrs. White.
    Mrs. White: And it is exactly to that that I am now addressing myself, and if the hon. Gentleman had paid attention to what was said earlier he would have appreciated that one could not have voted against that Resolution unless prepared to vote against all reductions in Purchase Tax, which is not the wish of most members of this Committee, whatever may be the views of the hon. Gentleman.
    As I was about to say, those of us who have been concerned with Purchase Tax on previous occasions took it for granted, I say quite frankly, that the present Chancellor would abide by the gentlemen's agreement observed on those occasions. We were perfectly well aware that this was not one of the years in which it would be possible to put down Amendments on individual items, as we did last year. That was quite clear to all of us, and we made no complaint about it. As my right hon. Friend the Member for Huyton (Mr. H. Wilson) said, we realised that to have that every year was wearisome for the Committee, and possibly for you yourself, Sir Charles. We do not expect that on every occasion. We had a good debate last year on the individual items, and that was not expected again this year.
    We did most emphatically expect, however, in the light of our past experience and understanding, that it would be open to members of the Committee to move Amendments on the main groups of tax. The Chancellor himself, by his action last year, made that, if anything, easier, because he reduced the number of groups from seven to four. Thereby, the number of debates would be shortened.
    The Chancellor implied that nobody mentioned the matter at all, but it was referred to several times on Second Reading of the Bill. The Financial Secretary was sitting in his place at the time when it was referred to, in the sense that we appreciated that we could not discuss individual items but were anticipating that we could discuss the main

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    groups. There was some interchange on this very point between the hon. Member for Kidderminster (Mr. Nabarro) and me.
    If we were under a misapprehension at that time, surely it was the business of the Government to acquaint the House with the situation? They took no steps whatever to enlighten us. Therefore, I think we were perfectly reasonable in our assumption that on this occasion the gentlemen's agreement—I stress that—which had been reached with previous Chancellors would be observed. Therefore, I am perfectly entitled on this occasion, I think, to say that there is a breach of faith on the part of the Chancellor with the Committee. Had he intended to depart from the agreement which had been previously understood to have been reached, I think it was his duty, in fairness to his fellow members of the Committee, to make it quite clear that on this occasion he had a different line. and that he had quite deliberately—if it was deliberate—decided that this year he was going back to the pre-1950 agreement. It was his duty to inform us that that was his intention. If it was not his intention, if it was done by inadvertence, then the very least he could have done was to correct that inadvertence by the procedure suggested by my hon. and right hon. Friends.
    Mr. Donald Wade: I think the Committee is in some difficulty. I am not interested in the question whether the Resolution was moved by mistake or with intention. I am interested only in getting out of the difficulty.
    Mr. Ede: We all are.
    Mr. Wade: I agree that there are objections to having a debate on individual items, but we are concerned tonight with the problem of the rates of duty. As I understand it, we are debarred from moving a reduction in any of the rates. Furthermore, as I understand it, we are unable to move the abolition of the 5 per cent. rate. However, apparently it would he in order to move that the 5 per cent. rate be reduced to 1 per cent. That seems to me to create an anomalous state of affairs.
    Let me give an example for illustration. Hon. Members may consider that the 5
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    per cent, rate is scarcely worth the cost of collection, at any rate on some of the items in the 5 per cent, category. An hon. Member holding that view could scarcely contend that the rate should be reduced from 5 per cent, to 1 per cent. because if it is not worth the cost of collection at 5 per cent, it is obviously not worth the cost of collection at 1 per cent., but bon. Members holding that view are placed in this difficulty: they must either oppose the reduction to 1 per cent., or support it knowing that that will increase the difficulty about which they are concerned.
    I mention that as an example of the position in which we are placed as long as we are unable to move a reduction or abolition of a rate. It would be helpful if some way could be found whereby the Committee could consider and vote upon the question of a reduction of tax without permitting a debate on individual items.
    10.45 p.m.
    Mr. Amory: I only want to add that I really did not believe, and I still do not believe, that there was a gentlemen's agreement which I have contravened this year. The agreement, such as it was, referred to different circumstances. Secondly, I should like to say that I did not deliberately set out to stop debate on groups this year. I deliberately set out to stop wider debate on individual items, about which I now understand there is no difference between us. When it was discovered that this Resolution was more restrictive than that, I did not imagine that it would stop hon. Members effectively or handicap them in the debate.
    Mr. Ellis Smith: That is a matter for the Chair.
    Mr. Amory: I still believe that it leaves plenty of room on the Question, That the Clause stand part of the Bill.
    Mr. Jay: When the right hon. Gentleman speaks about "when it was discovered that the Resolution was more restrictive" than previously, does he mean that he discovered, it only after the Resolution was passed?
    Mr. Amory: Yes, because I was attaching no importance to the point raised now. I considered that there would be an opportunity, and I still think that there will be an opportunity, for hon. and right

    1003
    hon. Gentlemen to make what points they wish to make with the Resolution standing as it does. I should like to correct one point. A vote against the general Resolution would not have amounted to a vote against the Purchase Tax reductions, which were dealt with by the special Resolution dealing with Purchase Tax reductions.
    Mr. Mitchison: I am most grateful to the right hon. Gentleman. The difficulty arises out of the last Clause, not the Purchase Tax Clause. If we had voted against the last Clause we should have been in the position we were in immediately before the 1955 General Election when a Budget with such a Clause was introduced and any new Clause and most Amendments were quite impossible.
    Mr. Amory: I can understand hon. and right hon. Members not wishing to vote against it for other reasons, but not for the reason that it would be a vote against Purchase Tax reductions.
    Mrs. White: The Chancellor suggests that we can discuss this matter equally adequately on the Question, That the Clause stand part of the Bill. Surely, the right hon. Gentleman realises that he takes from the Committee any power of decision which, in theory, at least, still resides with the Committee. It would mean that if we were opposed to the reduction of the rate on one group, in order to secure the decision of the Committee on that point we should have to vote on the entire Clause 12. Therefore, that would be removing from the Committee power of decision on this vital matter.
    Mr. Amory: I repeat that I did not think that the Committee would attach importance to the point to which hon. Members opposite appear to attach importance, judging from what they have said this evening. I still think that it would not be possible to alter the Resolution. I will think over what hon. and right hon. Members opposite have said. I am perfectly prepared to consider—and I am sure that my right hon. Friends will be prepared to consider with me—any agreed arrangements that we can make for future occasions to ensure that if that is the Committee's wish there shall always be in future opportunities for debating and voting separately on any alterations in the group rates.
    1004
    Having said that, I should have no objection Ito reporting Progress, though not for the reasons which right hon. Gentlemen opposite have suggested.
    Mr. Ede: As long as we can report Progress at some time and feel that we really have made some progress, I am sure everybody will be happy to hear the last words of the Chancellor.
    I regret that it has been suggested that the position we are in is the real responsibility not of the Chancellor but of some civil servant. With all due respect to those who have raised that point, it is a quite wrong one to take. The right hon. Gentleman has been frank. He said he saw the Resolution and did not at that time realise that the point raised by my right hon. Friends was precluded from our discussions. I am certain from that that he gave no instructions to the draftsman of the Resolution that this point was to be excluded from our discussions. By a bit of luck, he finds that the Resolution deals with something which was not in his mind in a way that he would not have asked for it to be dealt with if he had known that that would be the effect of the Resolution. That, I understand, is the right hon. Gentleman's explanation.
    Seeing the importance that my right hon. Friends attach to this point and the progress that we have made today, it is not asking too much of the right hon. Gentleman to ensure that nothing is excluded other than the exact things that he wanted to exclude when the Resolution was put in hand and passed by the House. We are told that we can enter into some agreement or there may be conversations by which agreement can be entered into to deal with future years. I have noticed a Report from the Committee on Procedure, before which I gave evidence, and where I was severely questioned by hon. Gentlemen from both sides of the House, which made me think that there were a considerable number of Members, particularly on the Committee on Procedure, who thought there ought to be no further Committee stages of the Finance Bill on the Floor of the House.
    I went as far as to say that I thought the proper thing might very well be that when we were to have a very detailed discussion on Purchase Tax as we did

    1005
    last year it might very well take place in a Committee upstairs, but I hope the Committee will realise from the discussion this evening that there is very considerable value in having the Committee stage of the Finance Bill on the Floor of the House. It is up to all of us to ensure that it is conducted in a commonsense way in which what the right hon. Gentleman calls "the feeling of the Committee as a whole" may have some consideration.
    Of course, when a right hon. Gentleman speaking from the Government Front Bench says "I should welcome the opinion of the Committee as a whole", he is very glad to glance to his right and see the Patronage Secretary sitting there to make sure that the view of the Committee as a whole shall be the view expressed from the Treasury Bench.
    I suggest to the right hon. Gentleman that, in view of the spirit in which the debate has been conducted on the Committee stage of the Bill so far and his admission that what we find precluded is something which he did not expect to find precluded when he drew up the Resolution, the case made by my right hon. Friends is one which ought to be conceded and that some expeditious way should be found—I am certain that a little conversation through the usual channels would produce an expeditious way—of enabling us to have before the Committee stage ends the discussion which the right hon. Gentleman thought was not precluded.
    Mr. H. Wilson: I do not want to press this matter much further tonight. I think that it should be said to the Chancellor, in case the wrong impression gets abroad, that he must realise why it is that we could not vote against the outstanding Resolutions in the Budget, even if, to be frank, we had spotted their effect, because so to have voted would have meant that we were voting against the desirability of making any changes whatsoever in the law relating to the National Debt and taxation, and only in extreme circumstances are an Opposition justified in voting in that way.
    The other matter on which I wish to take issue is the way in which the Chancellor has rather made light of the Lord Privy Seal's remarks in 1955. The
    1006
    Chancellor said that he was not aware of any gentlemen's agreement. I do not want to make any issue of any talks there might have been with the Lord Privy Seal, the Prime Minister or others. I stand pat on what has been said in the House. That is all one is entitled to do in this respect. I do not want to weary the Committee by quoting it again, but it is quite clear that the Lord Privy Seal said:
    "In the case of the Financial Resolution attached to the Budget, we are following, so far as we can, precedents created and left to us by our predecessors."—[OFFICIAL REPORT, 22nd November, 1955; Vol. 546. c. 1286.]
    If any Chancellor after that statement wants to depart from those precedents, he should take hon. Members into his confidence, and there should be consultations through the usual channels, and a statement in the House. That is now being done, but I think that the Chancellor is making light of it to an extent which is not justified.
    What he has just said was very different from his first speech, and we welcome the fact that he is moving along with us so far. What he has now said is that he, almost alone among hon. Members, knew what this restrictive Resolution and its implications were, but that he did not think that the Committee as a whole would want to debate the group rates of tax. He said that he felt that there was a general desire against having the Dutch auction procedure, and I think that he is right about that. We had enough of it last year.
    However, for him to take upon himself the decision that the Committee should not debate Purchase Tax rates on a group basis when every Chancellor for the last ten years has allowed it, is going a little too far. He told us that he knew what the Resolution did, but thought that the Committee would not care. He is obviously wrong about that, at least where this side of the Committee is concerned.
    That is why I ask him to look at the matter again. It is not good enough for him to say that he will look at it for another year. Certainly we do not expect to find him or any of his right hon. Friends at that Box in a year's time. Even if by some mischance there is a Conservative Chancellor, it is unlikely to be this one. Over the last four years,

    1007
    the expectation of life of Tory Chancellors has been very much less than what he has already surpassed. We have been told by the hon. Member for Kidderminster (Mr. Nabarro) that he will have the job anyway. Whoever it might be, in any case after what happened with the Lord Privy Seal in 1955 we are in some difficulty. The Lord Privy Seal said what he said on that occasion in all good faith and if he had been consulted about this, I am sure that he would have honoured what was the position in 1955.
    We have had three Chancellors in four years and with changes in Chancellors a lot can happen. I suggest to the right hon. Gentleman that he look at this matter again overnight, that he sleep on it and discuss it with the Lord Privy Seal, who is very much involved in this—and one can understand his difficulties—and we will give him another chance tomorrow to see whether he has anything that can be done.
    I do not propose to press him further on the point tonight, but I would suggest to the Chancellor that he should look at this matter again and perhaps we may come back to it tomorrow afternoon when we resume consideration of the Bill. If it is in order and you, Sir Charles, agree, within your discretion, to allow it, I would once again move, "That the Chairman do report Progress and ask leave to sit again," so that tomorrow we can see if the Chancellor has found a way out of the difficulty in which we find ourselves.
    Question put and agreed to.
    Committee report Progress; to sit again Tomorrow.

  POST-WAR CREDIT REGULATIONS
  Motion made, and Question proposed.
  That the Post-War Credit (Income Tax) Regulations. 1959, a draft of which was laid before this House on 1st May, be approved.—[Mr. Amory.]
  11.2 p.m.
  Mr. Gordon Walker: I will not detain the House more than a minute or two. We are glad that these Regulations are submitted under the affirmative Resolution procedure, and that the Government accepted our suggestion on that matter.
  1008
  We also still greatly regret that although these Regulations contain all the things that the Chancellor said they would in his Budget speech, they still do not do anything to help the chronic sick. I want to put that again on record. We greatly regret it.
  I take it that the powers under which the Regulations have been laid before us would permit of similar Regulations extending the repayment of credits to the chronic sick, defined as we defined them before—namely, that they had been for six months in receipt of sickness and corresponding benefits—and that this could be done by the submission of new Regulations, either by the present Government or by a successor Government, under the powers of the original Act under which these Regulations have been laid.
  I do not know whether the Financial Secretary can give me an answer now. We do not, of course, want to oppose this Motion. We merely regret that the Regulations do not go as far with regard to the chronic sick as we wish.
  11.3 p.m.
  The Financial Secretary to the Treasury (Mr. J. E. S. Simon): I am grateful to the right hon. Gentleman for what he has said. I know that it would have been the desire of hon. Members in all parts of the House to extend the classes to whom repayment could be made by including the chronic sick. We discussed the matter at some length when we debated the Income Tax (Repayment of Post-War Credits) Bill, and I explained then that the reason the Government could not accept the Amendment was partly the question of cost but mainly that it would have postponed the repayment to the classes who are the beneficiaries under this scheme, and that seemed to be a conclusive reason.
  However, the Chancellor undertook, through me, that he would carefully consider the possibility of extending the conditions of payment so as to bring other classes in at some later date. I think that the method would be the one indicated by the right hon. Gentleman—an affirmative Resolution similar to the one I have moved and which I now commend to the House.
  Question put and agreed to.

  CIVIL AIRCRAFT (BACKWARD FACING SEATS)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]
  11.4 p.m.
  Mr. R. Gresham Cooke: I wish tonight to draw attention, for reasons of safety, to the desirability of backward-facing seats in civil passenger air transport, and I do so despite the article in a Sunday newspaper that in the eyes of some people safety is a dirty word.
  In railway trains for half a century we have had a 50 per cent. chance of sitting with our backs to the engine and it is generally recognised that in a minor railway crash having one's back to the engine is safer. One ought to have the same choice when going by air. Apart from one or two exceptional aircraft, not now on internal lines, one does not have such a choice. I have always believed that a backward-facing seat is indeed safer in anything except a major crash.
  In the accident to a B.E.A. Dakota at Northolt on 17th October, 1950, when the plane struck beech trees at Mill Hill, all twenty-four passengers were killed. The court of investigation recommended then that backward-facing seats should be inserted and noted with approval that the Air Registration Board was making representations to the International Civil Aviation Organisation for their adoption.
  That was eight years ago. Then there was the notorious accident to the Tudor aircraft in Wales when carrying football spectators from a match. That was an accident at low speed—only some 10 G—in which eighty-nine were killed. Half of them were scalped by striking their heads on the seats in front of them. I need not elaborate on further accidents, but I see in a paper by Sir Vernon Brown, late Chief Inspector of Accidents, to whom I am much indebted for my information today, that on 20th January, 1954, an R.A.F. Valetta crashed and of the crew of five all of whom were facing forward, one was killed and three seriously injured, but all eight passengers suffered only minor injury and all were in backward-facing seats. Two children aged 4 and 5 were saved, an important point with which I shall deal later.
  1010
  Finally, I come to the Munich crash of the Elizabethan on 6th February, 1958, which was carrying the Manchester United football team. In that plane there were 18 backward-facing seats in front and 29 forward-facing seats in the rear. Twelve passengers, including a mother with her child on her lap, were in the backward-facing seats and all those twelve passengers were saved. Only two were seriously injured, but of the twenty-five passengers in the forward-facing seats nineteen were killed and two died later. The pilot, also in a forward-facing seat. was killed. I realise, of course, that this result of itself is not conclusive because it must be admitted that the back part of the plane disintegrated, but the fact is that all the passengers in the backward-facing seats survived the real shock when the plane first struck the ill-fated house at the end of the runway.
  Although flying is relatively safe, 400 to 600 people are killed each year in air crashes. However excellent planes and pilots become, it is unfortunately almost certain that with increasing flying and the normal chances of error that figure is bound to increase. We have the lessons of road accidents and I need not draw the attention of the Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation to them. In the last forty years the accident figure year by year has never decreased. With larger planes holding 150 passengers the chances of being killed or injured in one take-off or landing crash are relatively greater. Therefore, every possible step to reduce accidents should now be taken. One of the major steps would be to introduce backward-facing seats in every civil plane.
  I am obliged to an article in Aeronautics recently written by Squadron Leader D. I. Fryer, M. B., B. Sc., a member of the Institute of Aviation and Medicine, for showing why these seats are safer. First of all, in a backward-facing seat the back of the seat restrains the body wonderfully in a forward or downward crash, and the Civil Aviation Board's figures show that the majority of forces in crashes are forward and downward. In forward-facing seats in a crash, the body being restrained only by a belt, the head and shoulders jack-knife and crash into the seat in front and that action by itself can dislodge the seat in front and set off a chain reaction of seat movement in the aircraft. In any event, the

  1011
  restraint to the abdomen by a belt is itself dangerous in a crash, even if one does not hit the seat in front.
  On the other hand, in a backward-facing seat the body is restrained by an area from the buttocks to the shoulders, including the back of the arms and the back of the head. The area of restraint is about 208 square inches on average. A 3-inch belt gives an area of restraint of only 60 square inches. In short, the backward-facing seat gives nearly four times the area of restraint of that given by a belt. When the fuselage slews round, as can happen, there is better provision against crashing against the side wall of the cabin by the friction between the body and the seat in a backward-facing seat.
  It is said that the disadvantages of a belt can be overcome by using shoulder harness in addition to a belt, but I do not believe that that is practicable. First, it is very difficult to fit a shoulder harness to all types of people, fat and thin. Certainly one cannot very easily fit children, and particularly one cannot fit children in arms. We have seen the safety achieved for children in arms by backward-facing seats in previous accidents. Thirdly, there would be a good deal of passenger resistance to shoulder harness.
  In my view, the easiest thing to do is to turn the seats round in an aircraft, which is a simple operation. Why is it not done? First, it is said that there is a certain amount of passenger opposition to this course. I do not believe that. I think it is nonsense. Most people do not think of this matter at all, but if they think about safety they realise that there is some danger in taking off because of the order to fasten their seat belts and the "No smoking" rule. Surely such people would be encouraged if they knew that the companies were taking every possible precaution for their safety.
  The real reason for not adopting the backward-facing seats, I believe, is that such seats cost £1 or £2 more or involve 1 lb. or 2 lb. more in weight. That militates against the fullest possible return on the aircraft. My hon. Friend apparently says that that is not so. That leaves me with no reason that these seats should not be turned round. We ought not to permit any matter of 1 lb. or 2 lb. extra weight or a little extra cost to
  1012
  prevent us from adopting a beneficial safety measure.
  Tonight I make two appeals. My first is to B.E.A. and B.O.A.C., through the Parliamentary Secretary, to give a bold lead on this question. I believe that it would pay them dividends in passenger receipts in the future. After all, one can see better out of the aeroplane window when looking away from the wing, backwards, than when looking forward. I believe that "back to the engine" would become a selling point with these aircraft companies.
  In R.A.F. Transport Command, United States transport planes and charter companies working for the Government all seats are back to the engine. In an inquiry among R.A.F. transport passengers, 65 per cent. said that they preferred these seats, and the U.S.A.F. showed a similarly strong preference. What is done for the R.A.F. and Government personnel surely can and should be done for civilian passengers.
  Mr. Paul Williams: Is my hon. Friend making the same recommendation about cars?
  Mr. Gresham Cooke: That might be a very sensible point. Perhaps my hon. Friend would like to make that point if he catches your eye, Mr. Speaker.
  I would finally also like to ask the Parliamentary Secretary if he has received any advice in his Department recently on this subject and, if so, whether he can tell us with what result. I say that the Ministry would be performing a very real service if it could make a fresh effort—I know that it has been done before—at the International Civil Aviation Organisation, which is representative of all the interested countries, to agree that backward-facing seats should become standard practice within, perhaps, five years. The B.E.A., B.O.A.C., and the Ministry would be earning the gratitude of millions of passengers, and saving probably hundreds of lives in the future, if they would give a wholehearted lead in this matter.
  The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. John Hay): It is the Custom of most Ministers replying to a debate on the adjournment to thank the hon. Member for having raised his subject for discussion and I do not want

  1013
  to deviate from this precedent tonight. I want to thank my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) for two reasons. Firstly, it has given me, as one comparatively new to this matter, an opportunity of understanding what it is all about, since he has stated his case in some detail, and secondly It has enabled me to explain exactly why we feel at the moment that it is extremely difficult to comply with his suggestion.
  For a number of years backward-facing seats have been advocated in passenger aircraft. The argument, put simply, is that, in the event of a crash from which people can reasonably be expected to survive, it is not sufficient to protect passengers from fatal injury. Something more is necessary. They have to be protected from the crash forces so that they do not become bemused or suffer injury to arms or legs, because if fire should break out as a result of the crash, they should be able to extricate themselves from the wreckage.
  It is pointed out that in forward-facing seats when the impact is sustained the weight is thrown forward about the seat belt with the result that there is a serious risk that the head will hit the back of the seat in front. In the backward-facing seat, the passenger is pressed more firmly into the seat and that is why advocates of the backward-facing seat say it gives greater protection and more safety. If pressure is applied over the whole of the back and the head, the facility of the body to withstand the load is greater than if it is applied through the seat belt.
  That is the one view but, to put the matter into perspective, there are a number of arguments against it. The first is comparatively small and simple. Backward-facing seats may be helpful if the aircraft is travelling in a given direction; but in a crash the aircraft may swing right round with the result that the backward-facing seat becomes exactly the opposite. Secondly, the direction and the duration and the extent of the pressure felt is not uniform in all cases. It is extremely difficult sometimes to find how the pressure has been applied in a crash.
  There is a substantial lack of evidence to support the case in favour of backward-facing seats, and this is the major difficulty. The trouble is that the circum- stances of one crash and another vary
  1014
  considerably and there is great difficulty in obtaining reliable evidence as to what pressures have been applied to passengers, how they were applied, and for how long. The trouble is that no conclusive—I stress the word "conclusive"—deductions can be drawn. I will take the example which my hon. Friend gave, the Munich crash of the Elizabethan in February last year.
  The aircraft contained 47 passenger seats in all, 18 of whom were in the front portion of the cabin and were backward-facing, the other 29 being in the after portion of the cabin and facing forward. It so happened that those who were sitting in the backward-facing seats in the front part of the aircraft all survived the crash, while those sitting in the after part of the aircraft in forward-facing seats were almost all killed. One might say that that is a good argument for backward-facing seats, but really it is quite inconclusive evidence because it so happened that this aircraft struck a building in the coures of its passage and it broke in two. The whole of the after portion of the aircraft containing the forward-facing seats was crushed, and almost everyone in that part was killed, as my hon. Friend said. It would not have made the slightest difference whether the seats were forward or backward-facing in that part of the aircraft because the whole of the fuselage was so impacted that almost everyone was killed. That is why I say that one cannot draw conclusive evidence from that crash.
  Mr. Gresham Cooke: Will not my hon. Friend agree that the people in the forward part facing backwards were all saved, despite the crash?
  Mr. Hay: Yes. I should have added that the forward part of the aircraft careered on for some distance, but it was, in fact, virtually undamaged compared with the after part of the machine. If my hon. Friend looks at the accident report and the photographs, he will see what I mean. This emphasises our difficulty in assessing the evidence. It is really so scanty and inconclusive
  Between 1954 and 1957, there have been nine major survivable accidents to British aircraft. Only five of the nine aircraft concerned contained forward-facing seats. All these five were obsolescent aircraft with seats stressed to

  1015
  lower strength factors than we are accustomed to now.
  I have tried to outline very briefly the arguments for and against, and I now want to say that we are in the Ministry told by our advisers that, despite all this evidence one way and the other, the backward-facing seat probably does give an extra margin of safety in some circumstances. But I must make it clear that, in our view, the margin is very small at the moment, and it is likely to diminish still further as aircraft and their operation become safer.
  It is this, it seems to me, which is really the answer. We must do all we can to make aircraft safer both in their construction and their operation, especially with regard to landing and take-off procedures. At the same time, we must not neglect—indeed, I think we should redouble our efforts in this direction—the need for the highest possible standards of training and the observance by aircrews of the regulations which are laid down. This is a digression, perhaps, and I now want to come to the next part of my remarks to the House.
  My hon. Friend asked me whether we had had any advice recently on these matters. We have had the whole question reviewed by a working group quite recently, a group on which my Ministry, the Ministry of Supply and the Air Registration Board were all represented. The chairman was the head of the Air Safety Board. The setting up of the working group was announced by my predecessor on 18th June last year. The group has since conducted a very valuable study, hearing evidence from a large number of people and bodies, including the Flying Personnel Research Committee, which is a body under the Air Ministry, and also from Squadron Leader Fryer, whose article which my hon. Friend mentioned I have had the opportunity of reading with great interest.
  As I say, having heard evidence from a large number of people, they came to certain conclusions which are, broadly speaking, those I have just outlined. Putting it very broadly, they think that there is a marginal case still in favour of the backward-facing seat, but it is quite marginal and is by no means so conclusive as some people would believe. That is the advice we have received, and I give it frankly and freely to the House.
  1016
  However, there is one further point which strikes a somewhat hopeful note. At the moment, almost all aircraft that are being constructed incorporate forward-facing seats stressed to a higher degree than formerly. Since 1951, when a change was made in the Air Registration Board's requirements, all new aircraft receiving a certificate of airworthiness, and all other aircraft that are undergoing floor or seat modification must have the seats stressed to take a force of nine times that of gravity—in the jargon, 9G. Before 1951, the figure was 6G.
  For example, all the Viscounts under British ownership have seats stressed to that strength. If I might refer to the Tudor air crash in Wales in 1950, to which my hon. Friend referred, that aircraft, I understand, had forward-facing seats throughout, but they were stressed to 6G only. As my hon. Friend said, a much heavier force than that was applied to that aircraft when it crashed. It was a distressing crash. The aircraft nose-dived almost vertically into the ground, and it would have been a great deal to expect that anyone should have survived in whatever position the seats were placed. But that, perhaps, is a matter for retrospective argument. Incidentally, the Ministry of Supply is about to undertake what is called dynamic testing to ensure that the 9G requirement is being met by the manufacturers in practice.
  The next question, and perhaps the biggest question of all is; in the light of all this, why do not we in the Ministry make the fitting of backward-facing seats a mandatory requirement? Our present policy is that stated by my right hon. Friend in answer to a Parliamentary Question asked by my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) on 8th April, 1957. If I may summarise that Answer, it was that British operators should not be required to install backward-facing seats so long as their international competitors are not bound to do so. They may do so if they wish. In fact, some British operators have done so, as hon. Members will be aware.
  Why, in this matter, must we depend on international agreement? Here, I must explain that to fit a backward-facing seat involves the operator in an

  1017
  economic penalty. My hon. Friend mentioned this, but I should like to elaborate it a little more. In a backward-facing seat the centre of gravity of the body plus seat is higher than in the case of the forward-facing seat. With the backward-facing seat, the impact is taken up by the whole of the back and the head, whereas with the forward-facing seat it is concentrated low down by the seat belt.
  That all means that we have to impose a higher load on the seat structure, on the attachments and on the floor of the aircraft, and this means that these things have to be both stronger and heavier. As soon as we start adding things to an aircraft which make it heavier we reduce the pay load. There are a number of other difficulties. There is, for example, the difficulty of modifying an aircraft equipped with forward-facing seats. If we turn them round, we are liable to find the windows and the bulkheads are in the most awkward possible places.
  There is no doubt in the minds of the operators with whom we have to deal, and who have given very frank advice, that, despite what my hon. Friend says, the backward-facing seats are regarded as psychologically unattractive. A great many people do not like them, and whether we ourselves say yes or no that is a fact. We have tried on two occasions—the last time in 1956—to get the International Civil Aviation Organisation to adopt this proposition of backward-facing seats, but we have been defeated on each occasion. I can tell my hon. Friend and the House that we would be willing to see if we can try again, but, frankly, I would not want to hold out any high hopes on this. The information and advice I get is that there is very little hope of international agreement on this matter.
  I will frankly and honestly say to the House what our view about it is. We think that commercial air transport is such a highly competitive business that it would be wrong to place even a small disadvantage on our airlines for what is a
  1018
  very marginal and diminishing safety aspect. I say at once that if there were clear and categorical evidence that safety were noticeably improved by backward-facing seats, then of course we would not hesitate for a moment. We would make them mandatory. But this is not the case, and so, after very careful thought, and on the clear advice of the working group to which I have referred, we have concluded that the policy must stand.
  Mr. P. Williams: If what my hon. Friend says were true, surely the airlines themselves would be the first to jump at this chance?
  Mr. Hay: My hon. Friend is perfectly correct. I have not the slightest doubt that they would, because they are as much concerned about the safety of the people they carry as anyone else.
  The final point which remains for me to deal with is that about the two Airways Corporations. My hon. Friend suggested we should ask the B.E.A.C. and B.O.A.C. to give a lead in this matter. As I have said, in the present international climate it will obviously be extremely difficult to get international agreement. On a matter which has been tried on a number of occasions before without any success, I do not really think that, with the best will in the world, I should be right in asking the Corporations against their better judgment to do this.
  However, I hope some of the things I have been able to say to the House tonight will help to clear the air a little. I again welcome the opportunity I have had of saying something about this interesting but rather intractable problem. I can assure my hon. Friend that we shall keep it constantly under review. If and when any conclusive evidence about backward-facing seats emerges we shall be only too willing to look at the whole matter again, but at the moment, I am afraid, the policy laid down by my right hon. Friend a year ago must stand.
  Question put and agreed to.
  Adjourned accordingly at twenty-seven minutes to Twelve o'clock.

GERMANY
  Iron and Steel Industry (Deconcentration)
  Iron and Steel Industry (Deconcentration)
  Nazi Leaders (Recorded Speeches)
  Nazi Leaders (Recorded Speeches)
  Residents, Eastern Germany (Travel Documents)
  Residents, Eastern Germany (Travel Documents)
  PASSPORTS
  PASSPORTS
  GREECE (Mr. G. M. SPANKIE)
  GREECE (Mr. G. M. SPANKIE)
  UNDER-DEVELOPED COUNTRIES (INDUSTRIALISATION)
  UNDER-DEVELOPED COUNTRIES (INDUSTRIALISATION)
EMPLOYMENT
  Remploy Factory, Coventry
  Remploy Factory, Coventry
  Unemployment Figures (Publication)
  Unemployment Figures (Publication)
  Pottery Industry (Report)
  Pottery Industry (Report)
  Factories (Radioactive Substances)
  Factories (Radioactive Substances)
  Ionising Radiations (Woman Worker)
  Ionising Radiations (Woman Worker)
  Manual Workers (Payment of Wages)
  Manual Workers (Payment of Wages)
  Travelling Expenses
  Travelling Expenses
  Sunderland
  Sunderland
  I.L.O. (Technical Assistance Projects)
  I.L.O. (Technical Assistance Projects)
  Young People, New Towns
  Young People, New Towns
  Scotland
  Scotland
  National and Local Government Service (Vacancies)
  National and Local Government Service (Vacancies)
  Western Islands
  Western Islands
  Disabled Persons
  Disabled Persons
  Manual Workers (Weekly Earnings)
  Manual Workers (Weekly Earnings)
  RADIOACTIVITY
  RADIOACTIVITY
AGRICULTURE, FISHERIES AND FOOD
  Pig Marketing
  Pig Marketing
  Cheese
  Cheese
  Stilboestrol and Hexoestrol
  Stilboestrol and Hexoestrol
  Royal Botanic Gardens, Kew (Bicentenary)
  Royal Botanic Gardens, Kew (Bicentenary)
GOVERNMENT INFORMATION SERVICES
  B.B.C. (Overseas Services)
  B.B.C. (Overseas Services)
  India, Pakistan and Ceylon (English Teaching)
  India, Pakistan and Ceylon (English Teaching)
PENSIONS AND NATIONAL INSURANCE
  Silicosis (Compensation Claims)
  Silicosis (Compensation Claims)
  Sickness Benefit
  Sickness Benefit
  Widows (Pension)
  Widows (Pension)
  Contributions
  Contributions
  Industrial Injuries (Benefit)
  Industrial Injuries (Benefit)
  Non-Contributory Old-Age Pension
  Non-Contributory Old-Age Pension
MINISTRY OF SUPPLY
  Boots
  Boots
  Aircraft Accident Turkey
  Aircraft Accident Turkey
  Royal Ordnance Factory, Woolwich (Anti-Poliomyelitis Injections)
  Royal Ordnance Factory, Woolwich (Anti-Poliomyelitis Injections)
MINISTRY OF HEALTH
  Sweet Wrappers
  Sweet Wrappers
  Poliomyelitis Vaccine, Durham
  Poliomyelitis Vaccine, Durham
  St. Helen Hospital, Barnsley
  St. Helen Hospital, Barnsley
HOSPITALS
  Waiting Lists
  Waiting Lists
  South-Western Regional Hospital Board (Members)
  South-Western Regional Hospital Board (Members)
  Hospital, Manchester (Proposals)
  Hospital, Manchester (Proposals)
MEDICAL RESEARCH
  Television (Children's Eyesight)
  Television (Children's Eyesight)
SWAZILAND
  Laws (Revision)
  Laws (Revision)
NATIONAL FINANCE
  Local Authorities (Debts)
  Local Authorities (Debts)
  Income Tax (Personal Allowances)
  Income Tax (Personal Allowances)
MAURITIUS
  Civilian Clerks (Military Department)
  Civilian Clerks (Military Department)
NYASALAND
  Incidents
  Incidents
COLONIAL TERRITORIES
  Colonial Development Corporation (Exchequer Advances)
  Colonial Development Corporation (Exchequer Advances)
HOME DEPARTMENT
  Young Offenders (Detention)
  Young Offenders (Detention)
COAL
  European Coal and Steel Community (Imports)
  European Coal and Steel Community (Imports)
MINISTRY OF POWER
  Oil Refinery, Fawley
  Oil Refinery, Fawley
TELEPHONE SERVICE
  Orinsay, Isle of Lewis
  Orinsay, Isle of Lewis
SCOTLAND
  Road Programme
  Road Programme
TRANSPORT
  Goods and Public Service Vehicles
  Goods and Public Service Vehicles
  Private Cars
  Private Cars
ROADS
  "Heads of the Valleys" Road
  "Heads of the Valleys" Road
  Road Programme (Expenditure)
  Road Programme (Expenditure)
MINISTRY OF WORKS
  Outer Hebrides (Expenditure)
  Outer Hebrides (Expenditure)