Sitting of 24 February 1960

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  BRITISH TRANSPORT COMMISSION BILL (By Order)
  Second Reading deferred till Thursday, 3rd March.
ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Scotland
    Mr. Dempseyasked the Minister of Labour how many people from Scotland have been placed in employment in England, through the medium of employment exchanges, during the year 1959.
    The Minister of Labour (Mr. Edward Heath): The Answer is 1,826.
    Mr. Dempsey: Does not the right hon. Gentleman realise that this unfortunate trend is causing grave disquiet in Scotland? Although he and his right hon. Friends may not wish to apply the principle of physical compulsion with a view to bringing industry to the North, does not he realise that the Scottish people are being subjected to a form of economic compulsion? Will he take the appropriate steps to reverse this regrettable trend?
    Mr. Heath: The policy of the Government is to encourage industry to go to Scotland but, as the House knows, we must also be prepared to offer opportunities elsewhere to those in Scotland who wish to take advantage of them. In fact, the figure I gave is only 1·1 per cent. of the total placings by our offices in Scotland.
    Mr. Dempseyasked the Minister of Labour the total number of unemployed in Scotland at the end of 1959; to what extent there was a national increase; and what was Scotland's share.
    Mr. Heath: At 7th December, 1959, there were 92,311 persons registered as unemployed in Scotland, a decrease of 3,229 compared with December, 1958. This decrease represented 2·9 per cent. of the total decrease of 110,844 in Great Britain during the same period.
    Mr. Dempsey: Does not the right hon. Gentleman appreciate that, according to these figures, Scotland, which has 10 per cent. of the country's population, has 20 per cent. of the unemployed population? Will he consult his right hon. Friends in order to do more than try to take every step possible to provide employment prospects for the people who live north of the Cheviot Hills?
    Mr. Heath: I assure the hon. Gentleman that my right hon. Friends the President of the Board of Trade and the Secretary of State for Scotland are doing their utmost to encourage industry to go there.

    Aberdeen
    Mr. Hector Hughesasked the Minister of Labour if he is aware of the further dismissals of workers during the last four weeks from engineering works in the City of Aberdeen, thereby increasing the number of unemployed persons in that City; if he will state the number, ages, sex and previous employment of the persons now unemployed in the City of Aberdeen, and the numbers, ages, sex and previous employment of persons obliged to leave Aberdeen during the last four weeks in order to seek work in England and in the South of Scotland; and what efforts he is making to stem this drift south.
    Mr. Heath: I am aware that 29 men were discharged as redundant from engineering works in Aberdeen during the four weeks ended 15th February, and that 16 of these men are still unemployed. The answer to the second part of the Question consists of a table, which I am circulating in the OFFICIAL REPORT. I regret that information asked for in the third part of the Question is not readily available, but 97 men from Aberdeen were placed in employment in districts south of Aberdeen in the

    343
    five weeks ended 10th February. The area is included in the list of development districts announced by my right hon. Friend the President of the Board of Trade on 9th February.
    Mr. Hughes: Does the Minister realise that the efforts which have so far been undertaken have not resulted in stopping workers from Aberdeen drifting south? Will he consult his colleagues in the Cabinet with a view to devising more effective methods of attracting industry to Aberdeen and stopping the drift of workers to the south?

    NUMBER OF MEN, BOYS, WOMEN AND GIRLS UNEMPLOYED ON 15TH FEBRUARY, 1960, IN THE ABERDEEN EMPLOYMENT EXCHANGE AREA

    —

    Men

    Boys

    Women

    Girls

    Total

    Agriculture and Horticulture

    …

    …

    160

    2

    17

    —

    179

    Fishing

    …

    …

    …

    …

    …

    184

    1

    —

    —

    185

    Bacon Curing, Meat and Fish Products

    …

    96

    5

    80

    3

    184

    Engineering and Electrical Goods

    …

    …

    80

    —

    7

    —

    87

    Shipbuilding and Ship-repairing

    …

    …

    158

    —

    2

    —

    160

    Bricks, Pottery, Glass, Cement, etc.

    …

    65

    —

    1

    —

    66

    Timber

    …

    …

    …

    …

    …

    79

    4

    6

    1

    90

    Wooden Containers and Baskets

    …

    …

    61

    —

    2

    —

    63

    Construction

    …

    …

    …

    …

    …

    787

    2

    10

    —

    799

    Road Passenger Transport

    …

    …

    …

    35

    —

    7

    —

    42

    Sea Transport

    …

    …

    …

    …

    122

    6

    2

    —

    130

    Postal Services and Telecommunications

    …

    35

    —

    9

    —

    44

    Distributive Trades

    …

    …

    …

    …

    381

    7

    258

    8

    654

    Catering, Hotels, etc.

    …

    …

    …

    139

    1

    94

    1

    235

    National Government Service

    …

    …

    41

    —

    9

    —

    50

    Local Government Service

    …

    …

    …

    148

    —

    17

    —

    165

    Other Industries and Services

    …

    …

    870

    7

    371

    11

    1,259

    TOTAL

    …

    …

    …

    3,441

    35

    892

    24

    4,392

    Disabled Miners, Dunbartonshire
    Mr. Benceasked the Minister of Labour what progress his officers have made in finding suitable employment for disabled miners made redundant as a result of pit closures in the Twechar, Croy and Kirkintilloch areas of Dunbartonshire.
    Mr. Heath: Since my hon. Friend replied to the hon. Member's previous Question on the subject on 26th January, one of these disabled miners has been placed in employment. Efforts to find suitable work for the others are continuing.
    Mr. Bence: As there is a heavy incidence of unemployment in Scotland,
    Lady Tweedsmuir: Will the Minister pay particular attention to the problems of the shipbuilding industry and especially those of Messrs. Hall Russell and Company, of Aberdeen, which may well have to discharge quite a number of men in the near future if it is unable to win a contract from the Nigerian Government? Would my right hon. Friend be good enough to look into the problems of this company to see whether he can help in any way?
    Mr. Heath: We shall certainly do that.
    Following is the table:
    will the right hon. Gentleman make a special effort in this matter, since it is almost impossible for disabled men to get employment when there is so much unemployment among physically able men? Would he establish a Remploy factory in the area, so that the hundreds of disabled miners between 25 and 45 years of age can be employed in useful work instead of having to waste the rest of their lives in their villages?
    Mr. Heath: There is a special difficulty about these 14 disabled miners. Quite naturally, they want to find jobs again with the National Coal Board and it is difficult to find suitable light jobs, because they are already taken at the other pits by disabled men, but we will continue our efforts.

    Civil and Constructional Engineering Work (Safety Regulations)
    Dr. Strossasked the Minister of Labour what further action has been taken to cover by regulations works of engineering construction since 11th March, 1959, following the death of four men on the partly-built high-level bridge at Barton; and whether he has noted the recommendation to this effect of the jury at the recent inquest on two men who were also killed.
    Mr. Frank Allaunasked the Minister of Labour if, following the fatal accidents at Barton Bridge and elsewhere and the recommendations of the juries concerned, he will accelerate the introduction of safety regulations for constructional and civil engineering.
    Sir S. Storeyasked the Minister of Labour if he will now make a statement about the report of the Factory Inspectorate upon the recent accident on the new Barton Bridge, and upon the recommendation of the jury at the inquest on the two men who were killed.
    Mr. Proctorasked the Minister of Labour if he is now in a position to make a further statement regarding the accident at Barton Bridge, Eccles; and what steps Her Majesty's Government intends to take, following the recommendations of the jury at the inquest upon the victims, to accelerate the introduction of safety regulations for engineering works of construction.
    Mr. Heath: The recommendations of the jury at the inquest on the Barton Bridge accident were, first, that the main contractor should appoint a fully qualified co-ordination officer, and secondly that legislation should be introduced to ensure the safety of all concerned with this type of work. On the first I am glad to say that the main contractor has appointed a full-time professional consultant engineer and a full-time safety officer on the site. On the second recommendation, there have been discussions with interested organisations in recent months, and I am now taking action on the following lines. I propose to extend the definition of "work of engineering construction" in the Factories Acts to include virtually all civil and constructional engineering work, and I hope to make regulations
    346
    before Easter. A preliminary draft of special regulations to cover lifting operations on all types of construction work was issued on 17th February. Regulations dealing with general safety provisions on construction work are being drafted and will be sent out shortly. A statutory draft of regulations covering diving operations was published earlier this week.
    Dr. Stross: Is the Minister aware that the draft regulations were originally formulated in 1945 and were revised and brought forward again in 1951? Is he further aware that when in March 1 raised a similar Question, after the first accident at the installation, I was told that the regulations would be brought in piecemeal, some of them last year, but that none of them was brought forward? Will the right hon. Gentleman make use of Section 68 of the parent Act, the 1937 Act, and make a full examination of what occurred on this and the previous occasion?
    Mr. Heath: I am aware of the history of action in connection with these matters. There are difficulties, because the Minister is obliged to carry out a procedure to try to obtain agreement about the regulations which are to be issued. A new approach is now being made in that I have decided to widen the definition, as I have described in this Answer, and then to make regulations accordingly to deal with the problem. I think that the House will agree that the coroner carried out a thorough inquest into the recent accident. The inquest took a considerable time and many witnesses were called. I do not believe that further information can now be obtained by having an inquiry under Section 68.
    Mr. Frank Allaun: As the constructional engineering union has a death rate from accidents higher than that of any other union, does the Minister's Answer mean that specific codes covering individual operations in construction work will be issued and published before Easter?
    Mr. Heath: Yes. We are approaching it by having a number of groups of regulations of this kind. I have specified those for diving operations, which were published earlier this week, and those for lifting operations which were published on 17th February. That is the approach which we are adopting.
    Sir S. Storey: Are these regulations to be enforced by the Factory Inspectorate? If so, is my right hon. Friend satisfied that he will have adequate manpower fully qualified to deal with this work, as in the past there has been a shortage of factory inspectors in this area? Will he consider asking his right hon. Friend the Minister of Transport when making a grant to a local authority which undertakes civil engineering contracts on his behalf to make it a condition that the authority should appoint safety officers, such as has now been done at Barton Bridge?
    Mr. Heath: Responsibility for arrangements for a safety officer rests on the employer and not on the local authority, but I will discuss with my right hon. Friend the Minister of Transport the point which has been made. Responsibility for inspection under the regulations will, of course, rest with the Factory Inspectorate. Since the Factories Act, 1959, was passed, there has been an increase in the number of inspectors, but there is a later Question about qualifications in connection with work of this kind.
    Mr. Proctor: Does the right hon. Gentleman agree that the revelations of the inquest and the inquiry show grave inefficiency? Does he agree that labour relations at this site were very bad and that it is imperative that sub-contractors should be efficient? Will he consult his right hon. Friend the Minister of Transport with a view to ensuring the efficiency of sub-contractors in future?
    Mr. Heath: The coroner gave a very full summing-up at the inquest and the jury reached its verdict and made two recommendations. I prefer not to comment any further on those points. On the question about efficiency, I think that it is satisfactory that both a full-time consultant engineer and a full-time safety officer have now been appointed on this site.
    Mr. Robens: I assume that I am right in saying that the regulations which the Minister is to produce are not debatable in the House. Will the right hon. Gentleman, therefore, be good enough to publish the report of the factory inspector on the Barton Bridge accident so that we may have an opportunity to consider the regulations along with the inspector's report?
    Mr. Heath: I gave careful consideration to the possibility of publishing the inspector's report, but the right hon. Gentleman will recall, from his own period in office, that it has been the custom that individual reports by factory inspectors on individual accidents should remain confidential to the Minister. I have come to the conclusion that the best way of handling these reports is not to publish an individual report but to leave it to the Chief Factory Inspector, if he wishes, to comment on any particular aspects in his Annual Report. Perhaps I can discuss the question of debating the regulations with my right hon. Friend the Leader of the House.

    Factory Inspectors (Qualifications)
    Dr. Strossasked the Minister of Labour whether he will appoint to the Factory Inspectorate inspectors who have professional qualifications in building construction or in civil engineering; to what extent such inspectors are now available in the divisions or districts; and whether he is aware that, in the recent inquest on the fatal and non-fatal accidents at Barton Bridge, the jury recommended that in all such projects the main contractors should appoint a fully-qualified technical or professional co-ordinating officer.
    Mr. Heath: Inspectors with these qualifications are already in post. At present eleven inspectors have professional qualifications or equivalent academic qualifications in building or civil engineering. Seven of them are stationed in divisions or districts; the remainder are at headquarters but are available to help divisional or district staff when necessary.
    The answer to the last part of the Question is "Yes, Sir."
    Dr. Stross: Does the Minister remember that in answer to a similar Question, on 11th March last year, his predecessor told me that at that time there were no inspectors who were fully qualified either technically or professionally? Is it correct that since then only one inspector who is fully qualified, technically or professionally, has been appointed? Is the Minister aware that of the many thousands of inspections which are made each year, the great majority are made by inspectors who have no qualification

    349
    whatsoever? Is it not time that this came to an end and that we stopped this façade and pretence of having properly qualified men, when they are not so qualified?
    Mr. Heath: I could not accept the statement that the great majority of these inspections are carried out by men with no qualifications. In the short time I have been at the Ministry of Labour I have found that industry, trade unions and others have the greatest respect and admiration for the work of the Factory Inspectorate.
    Mr. Prentice: Can the right hon. Gentleman tell the House what is the establishment of inspectors with this qualification and whether the numbers he has quoted are up to establishment? Is he satisfied that the establishment is sufficient, bearing in mind the representations which he has had from the T.U.C. and other bodies over a long period to appoint more inspectors with technical and professional qualifications?
    Mr. Heath: The establishment at this moment is 448 or 450. It is not necessary for us to keep to a rigid number in each separate qualification or technical accomplishment. We have freedom to move as required. What I will do is to keep under consideration the number of inspectors with this qualification as these new regulations are published and come into operation.
    Dr. Stross: On a point of order. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall raise the matter on the Adjournment.

    Shipyard Workers, Lowestoft
    Mr. Priorasked the Minister of Labour the number of shipyard workers employed in Lowestoft in January, 1956, and January, 1960, respectively.
    Mr. Heath: I regret that information for January is not available. Shipbuilding and ship-repairing firms rendering, employment returns from Lowestoft had 1,680 workpeople in November, 1955, and 1,440 in November, 1959.
    Mr. Prior: Will my right hon. Friend draw these figures to the attention of the Civil Lord of the Admiralty and, in view of the Navy Estimates, try to obtain more employment for shipbuilding
    350
    at Lowestoft? Will he also draw the figures to the attention of the President of the Board of Trade and point out to him that percentages are not the only criteria to go on when deciding on B.O.T.A.C. areas? Will he also take into consideration depopulation, which is causing some trouble for the whole of the East Suffolk region?
    Mr. Heath: Fortunately, my hon. Friend the Civil Lord is present on the Treasury Bench and has heard what my hon. Friend has said. There has been a decline in the number of workers employed in this industry, but the figures of unemployment are not so high, because many of the men have obtained employment in other industries in other areas.

    Apprenticeships and Training Facilities
    Mr. Prenticeasked the Minister of Labour if he will make a statement on the prospects for the provision of extra apprenticeships and other training facilities in 1961 and the succeeding years to provide adequate opportunities for the large numbers of extra school-leavers.
    Mr. Heath: I am hopeful that, given confidence in an expanding economy, industry will increase the entry into apprenticeships and other forms of training so as to provide for its increased requirements of skilled manpower.
    Mr. Prentice: Does the Minister agree that the number of school leavers next year will be about 22 per cent. higher than for this year, that in 1962 it will be 32 per cent. higher, and that in 1963 it will be 17 per cent. higher? Will not the unemployment situation created by this extra number of young people be aggravated by the ending of National Service during that period? Does the Minister think that the voluntary effort of private industry will measure up to the needs of the situation? Does he agree that it is up to the Government to produce plans to bridge the gap?
    Mr. Heath: Responsibility for training in industry has been accepted as resting with industry. Industry has set up the Industrial Training Council with the object of encouraging industry to increase the numbers who are being trained. Details show that at the

    351
    moment the figures are about keeping pace with the increase in the school-leaving population. I agree with the hon. Gentleman that there will be a greater problem in 1961 than in 1960. Everything possible must be done to encourage industry to provide for it.
    Mr. Prenticeasked the Minister of Labour how many school leavers in 1959 became apprentices or learners; what percentage this represents; and how these figures compare with those for 1958.
    Mr. Heath: The provisional total for boys and girls is 119,332, compared with 110,564 in 1958. Both figures are roughly 21 per cent. of the number of school leavers entering employment.
    Mr. Prentice: Is it not rather disappointing that there was not a better improvement last year than that, particularly as 1958 was a poor year compared with 1957? In 1958 the number of apprentices went down. Does not that indicate the critical situation that we shall face next year and in the following two years when there will be a drastic rise in the number of school leavers?
    Mr. Heath: On the other hand, the early part of last year was more difficult economically than 1957, and with an expanding economy I hope that we shall be able to increase the numbers.
    Mr. R. Carr: Has the Industrial Training Council yet been able to arrive at an estimate of the numbers which will be appropriate both to industry's needs and the number of young people leaving school?
    Mr. Heath: The Industrial Training Council sent out circulars in an endeavour to make a firm assessment of the numbers involved, but it has not been entirely successful in reaching a conclusion.

    Northern Region
    Mr. Greyasked the Minister of Labour the various classifications of the insured industrial population in the northern region in 1951, and for each year to date.
    Mr. Heath: As the tables required are lengthy, I will, if may, send them to the hon. Member.
    Mr. Grey: Will the right hon. Gentleman indicate what the trends are? For instance, can he say whether there are more people leaving the North-East in search of jobs? If there are more people leaving the North-East in search of jobs, will he bring strong pressure to bear upon his right hon. Friend the President of the Board of Trade to bring industries to the North-East, thereby stopping the drift of the population away from the area?
    Mr. Heath: If the hon. Gentleman will look at the voluminous, lengthy and weighty tables he will find all the information he requires. In answer to his general question, the growth in the insured employee population in the northern region was 5 per cent., and for Great Britain as a whole it was 5·1 per cent., so they are roughly comparable.

    Paint (Ingredients)
    Mr. Frank Allaunasked the Minister of Labour if, following the industrial accident, details of which have been sent to him by the hon. Member for Salford, East, he will take administrative action under the Factories Acts to ensure that cans containing paint indicate the ingredients, so as to avoid injury to the eyes or other parts of the body and to assist those giving medical treatment.
    Mr. Heath: I am making inquiries about the case sent to me by the hon. Member last week and I will write to him when I have given further consideration to his suggestion.
    Mr. Allaun: While thanking the Minister for that reply, may I ask him if he is aware that the National Society of Painters and Decorators is very concerned about the dangers arising from the growing number of new and harmful ingredients?
    Mr. Heath: Yes, I am aware of the representations which the Society has made.

    Brixton
    Mr. Liptonasked the Minister of Labour how many persons were registered as unemployed at the Brixton Employment Exchange in each of the last three months.
    Mr. Heath: There were 2,179 at 7th December, 1959, 2,474 at 11th January, 1960, and 2,378 at 15th February, 1960.
    Mr. Lipton: I pay tribute to the valiant efforts of the right hon. Gentleman's local officials in trying to find work for as many people as possible in difficult local circumstances. Will the right hon. Gentleman bear in mind that if a provincial town had these large figures of unemployed it would be regarded as almost a distressed area? Will he ensure that the significance of these figures is not buried in the total figures for London and the southeastern region, which tends to obscure the situation?
    Mr. Heath: I am sure that the hon. Gentleman is pleased that the figure is nearly 100 fewer than last month and nearly 1,000 fewer than a year ago and that the percentage is 1·1 compared with a national percentage of 2·1. Many provincial towns would be delighted if they had the same percentage.

    Remploy Factory, Redruth
    Mr. Haymanasked the Minister of Labour what Remploy Limited proposes to do about improving its factory buildings at Redruth, Cornwall.
    Mr. Heath: I understand that there are no definite plans at present for improving this factory.
    Mr. Hayman: Will the right hon. Gentleman bear in mind that this factory is now a hotch-potch collection of wartime huts and that a new building is needed? If it is necessary for the President of the Board of Trade to give some aid under the Local Employment Bill, will the right hon. Gentleman see him about it?
    Mr. Heath: I have seen the correspondence which the hon. Gentleman had with my predecessor, and I know the difficulties about this factory. Remploy Limited also appreciates the difficulties, but there are other factories to which the firm must first give attention.

    School Leavers, Jarrow and Hebburn
    Mr. Fernyhoughasked the Minister of Labour if he is aware that it is becoming increasingly difficult for school
    354
    leavers in Jarrow and Hebburn to obtain employment as craft apprentices; and what steps he proposes to take to remedy this situation.
    Mr. Heath: Yes, Sir. The steady expansion of our economy offers the best prospects of industry being able to make more apprenticeships available.
    Mr. Fernyhough: Is the right hon. Gentleman aware that unemployment is growing in Jarrow at a time when the steady expansion of the economy to which he refers is taking place? Since it is impossible for private enterprise to offer facilities to the boys and girls leaving school who have attained a good standard of education, does he not think that Her Majesty's Government should consider setting up State factories, thus providing them with the opportunity to which they are certainly entitled?
    Mr. Heath: I think that the hon. Gentleman knows that the problems of providing apprenticeships in this area are largely connected with the difficult period through which the shipbuilding and ship-repairing industry is passing. Also, the building industry in the area is working at a lower level at the moment and is not taking the customary number of apprentices. Other industries have not been able to make up the deficit. As the hon. Gentleman knows, it is a development district and one still hopes to encourage industry to go there.
    Mr. Fernyhough: Does that mean that the right hon. Gentleman thinks that the present phase through which shipbuilding is passing is only temporary and that there will be a substantial improvement which will hold out hope for the boys and girls, the boys in particular, obtaining jobs in that industry?
    Mr. Heath: I think that the hon. Gentleman knows my views. We hope that shipbuilding and ship repairing will emerge from their present recession.
    Mr. Fernyhoughasked the Minister of Labour how many boys and girls left school at Christmas in Jarrow and Hebburn; and how many of them are still without employment.
    Mr. Heath: There were 171 boys and 168 girls who left school at Christmas in Jarrow and Hebburn. Of these, 30 boys and 3 girls are still without employment.
    Mr. Fernyhough: Would not the right hon. Gentleman agree that this is a tragic situation, because these boys and girls are the descendants of men and women who had a similar experience in the inter-war years? Does he realise the disastrous psychological effect this has on these boys and girls, and will he bestir himself in order that these young people can take their place in our society?
    Mr. Heath: Of 168 girls who left school at Christmas, only three are still without employment—[An HON. MEMBER: "Three too many."]—yes, three too many; but it is still a satisfactory improvement in the employment situation for girls. The problem is that there are 30 boys out of the 171 who have not yet been able to find employment, and that position is tied up, as I said in my previous Answer, with the present difficulties of the industries in that area.
    Dame Irene Ward: Arising out of what my right hon. Friend said about the difficulties of the shipbuilding and ship-repairing industries, will he tell the House why his right hon. Friend the President of the Board of Trade should have discriminated against the ship-repairing industry in the Local Employment Bill?
    Mr. Heath: We spent yesterday debating this matter, Mr. Speaker. Perhaps my hon. Friend will put that Question to my right hon. Friend the President of the Board of Trade.

  ROYAL NAVY

    Bathyscaphe
    Mr. Wyattasked the Civil Lord of the Admiralty on what grounds the bathyscaphe was declined when offered to his Department by Professor Piccard.
    The Civil Lord of the Admiralty (Mr. C. Ian Orr-Ewing): The Admiralty carefully considered Professor Piccard's offer in 1955 that it should collaborate in and finance the operation of his bathyscaphe in the Bermuda area. It judged that its contribution to world-wide oceanic investigations could be more effectively undertaken through its own survey ships and the National Institute of Oceanography.
    Mr. Wyatt: As Professor Piccard offered this instrument to the Admiralty for nothing—all that the Admiralty had to do was to pay the running and the development costs—was not a wonderful opportunity for Britain missed? Is the Minister aware that the Piccard family, which is very pro-British, is still anxious to build a bathyscaphe for Britain? Will he look into this, and see that a second opportunity is not missed?
    Mr. Orr-Ewing: We were called on to pay very considerable sums for the fuel which acts as ballast, and for getting to the area. I will certainly look at the hon. Member's second point.

    Personal Case
    Dr. A. Thompsonasked the Civil Lord of the Admiralty whether he will give some form of financial assistance to Mrs. Mary Jones, 100, Wemyss Street, Rosyth, widow of Mr. William Jones, seaman, who died after falling from a ladder on 11th August, 1959, in the boiler room of the dredger "St. Giles" seven miles off the Scarborough coast.
    Mr. C. Ian Orr-Ewing: I am sorry to say that it is not possible to grant Mrs. Jones a widow's pension, because her late husband had chosen to contract out of the widow's pension scheme. Mrs. Jones, however, has been granted a gratuity of £429 13s. 6d., which represents one year's average pay of her late husband. A cheque for this amount was sent to Mrs. Jones, through her solicitors, on 29th January.
    Dr. Thompson: I thank the Minister for that reply.

    Ships and Submarines (Launchings)
    Captain Litchfieldasked the Civil Lord of the Admiralty the total tonnage of ships launched for the Royal Navy in 1959; and how this compares with the post-war average.
    Mr. C. Ian Orr-Ewing: It was 25,500 tons approximately. This is rather above the post-war yearly average, including a period when war-time aircraft carriers were still being launched.
    Captain Litchfieldasked the Civil Lord of the Admiralty the total tonnage of submarines launched in 1959; and how this compares with any pre-war and post-war year.
    Mr. C. Ian Orr-Ewing: Last year we launched five submarines totalling rather more than 8,000 tons. With the exception of the war years, this figure has been exceeded only once in the last forty years.

    Personnel (Training)
    Mr. Willisasked the Civil Lord of the Admiralty to what extent the training of personnel is being held up by the lack of a sufficient number of sea-going billets.
    Mr. C. Ian Orr-Ewing: While there were some difficulties of this kind last year, these have been largely overcome, and no training is now being held up to any significant extent.
    Mr. Willis: But is not the Civil Lord aware that the delay in training these personnel affects their promotion? Further, is he aware that the steps that the Admiralty are taking to overcome this difficulty are leading to conditions of overcrowding of living space, which his Department boasts of overcoming?
    Mr. Orr-Ewing: I think that it would have been surprising if we had completed reorganising the Fleet in the manner in which we have without running into certain organisational difficulties, and I am glad that we have overcome them so quickly.

    Amphibious Craft
    Mr. Wallasked the Civil Lord of the Admiralty when it is proposed to start replacing the existing major amphibious craft such as the L.S.T. and L.C.T. 8.
    Mr. C. Ian Orr-Ewing: The existing L.S.T.s and L.C.T.s, after routine and extended refits, still have some years of useful life. A replacement programme will be started before they come to the end of their hull life.
    Mr. Wall: Is my hon. Friend aware that none of these ships is capable of keeping up with a commando carrier, and will he press forward with the development of a design of a new assault ship and lay it down as soon as possible?
    Mr. Orr-Ewing: We are aware that by present standards these L.S.T.s—and, particularly, L.C.T.s—are too slow, and we are keeping up with the latest technique and design efforts in the United States and elsewhere.

    Houses (Rents)
    Mr. Swinglerasked the Civil Lord of the Admiralty on how many occasions and to what extent the rents of houses owned by his Department have been raised since 1957; and how far the income of the tenant is taken into account in assessing the amount of the increased rent to be charged.
    Mr. C. Ian Orr-Ewing: There has been only one general increase in the rents of Admiralty-owned houses since 1957; this took place in 1959, in accordance with a new scheme of rents applied to tenants of all Government-owned houses. Rents, which had remained fixed for twenty years, or more, were increased in 70 per cent. of the cases by 7s. 6d. a week or less. The new rent is based on the rateable value and not on the income, but there was provision for temporary relief in cases of hardship.
    Mr. Swingler: Is the Civil Lord aware that his right hon. Friend the Minister of Housing and Local Government constantly advocates to public bodies that in making rent increases they should take into account the tenant's ability to pay? Apart from the last part of his reply, is it correct to say that the Admiralty is not, in fact, carrying out this policy?
    Mr. Orr-Ewing: I do not think that it would be right for a Government Department to start operating a differential rent scheme on its own. As I said in my original Answer, I think that it is right that we should take into consideration cases of hardship where tenants felt, after twenty years of frozen rents, that this increase was more than they could bear.
    Vice-Admiral Hughes Hallett: Notwithstanding the innuendo contained in the supplementary question asked by the hon. Member for Newcastle-under-Lyme (Mr. Swingler), is it not a fact there is a much greater element of subsidy in Service married quarters than is to be found in any council estate in the Kingdom?
    Mr. Orr-Ewing: I could not comment on that without notice.
    Mr. Manuel: Is the hon. Gentleman aware that, quite apart from the ability to pay these 1959 rent increases, increases were placed on many houses—in

    359
    my constituency, at any rate—of a substandard nature; that there were great protests by the tenants, and that I have been waiting for a long time now for his Department to deal with an individual case? Can he try to get a decision so that I can explain the position to my constituents?
    Mr. Orr-Ewing: I am aware that we have some sub-standard houses, but we are trying to bring them up to the more modern standards as fast as we can. I shall certainly look at the second point mentioned by the hon. Gentleman.

    Report on Defence (Orders)
    Dame Irene Wardasked the Civil Lord of the Admiralty (1) if he will give an assurance that in order to spread the knowledge of nuclear-propelled submarines the first all-British nuclear submarine foreshadowed in the Defence White Paper will be built on the Tyne;
    (2) what naval orders indicated in the Defence White Paper will be built on the Tyne.
    Mr. C. Ian Orr-Ewing: The Report on Defence announces only the order of the second nuclear-propelled submarine referred to by my hon. Friend. I cannot give her an assurance that this will be built on the Tyne. The building of modern submarines, even conventionally powered, requires highly specialised techniques and equipment.
    I can, however, give my hon. Friend an assurance that the Tyne will continue to be considered for warship orders, and the third guided missile destroyer will be laid down at Wallsend-on-Tyne the day after tomorrow.
    Dame Irene Ward: I thank my hon. Friend for that piece of good news, but could he give an assurance that in this whole range of nuclear development in Service Departments, the knowledge will be spread as widely as possible—not only in Barrow-in-Furness and on the Tyne, but to all these technical colleges—so that all the knowledge necessary for the grasping of this new instrument, so to speak, will be made available to the whole country, and not concentrated only in one area?
    Mr. Orr-Ewing: I will certainly bear in mind what my hon. Friend says. I thought that by my first Answer I might
    360
    have had the unique distinction of being the first Minister ever to have satisfied my hon. Friend in this House of Commons.

    Sea Cadet Corps and Sea Scouts
    Mr. Wallasked the Civil Lord of the Admiralty what arrangements are being made to turn over ships, sailing and pulling boats that are surplus to requirement to units of the Sea Cadet Corps or Admiralty qualified groups of Sea Scouts.
    Mr. C. Ian Orr-Ewing: We arrange for all surplus pulling and sailing craft to be offered on loan to the Sea Cadet Corps and naval sections of the Combined Cadet Force. Those craft not required are then offered for sale to Admiralty recognised units of the Sea Scouts.
    Mr. Wall: Will my hon. Friend bear in mind that the best way in which the Admiralty can help these different organisations is by providing these craft which are expensive to buy? Is he satisfied that the supply meets the demand at present?
    Mr. Orr-Ewing: I am satisfied that up to the present the supply has met the demand. As to the future, I think it is a little more worrying, and we are surveying the matter to see whether in future the craft becoming available will be sufficient to replace those which are wearing out.
    Commander Maitland: Will my hon. Friend also remember the needs of the Royal Hospital School at Holbrook?
    Mr. Orr-Ewing: As chairman of the management committee of that school, I will bear its needs in mind. I can assure my hon. and gallant Friend that it will get the same consideration as the Sea Scouts, but we cannot allow these organisations to have these craft on Navy Votes.

    H.M.S. "Vanguard"
    Mr. Shinwellasked the Civil Lord of the Admiralty what has been the cost of maintenance of H.M.S. "Vanguard" since 1951; and what is the future of this vessel.
    Mr. C. Ian Orr-Ewing: The cost has been £1·71 million, almost all of which

    361
    was spent before 1956. As stated in my noble Friend's Explanatory Statement, H.M.S. "Vanguard" is to be scrapped.
    Mr. Shinwell: Will the Civil Lord tell the House why in the last eight years we have been told that H.M.S. "Vanguard" was of the utmost importance and that it was essential to provide maintenance, in view of the fact that after all these years it has been decided to break up this vessel as it is no longer of any importance? Is it not shocking of the Admiralty, and ought not the Board of Admiralty to be asked to resign forthwith?
    Mr. Orr-Ewing: Until 1958 H.M.S. "Vanguard" was considered by N.A.T.O. as a very useful warship. She was obligated and declared to N.A.T.O. as a warship in a high state of operational readiness. It is not the judgment of the Admiralty which was at fault; it is the judgment of N.A.T.O. which the right hon. Gentleman should query.
    Mr. Shinwell: Then ought we not to ask N.A.T.O. to resign?
    Vice-Admiral Hughes Hallett: While agreeing that a great deal of money has been wasted on this ship, may I ask whether it is a fact that a real mistake was made immediately after the war, when the first atom bomb was exploded and when it should have been quite clear that it was not worth while completing the ship; but that, having completed her, it was not easy to judge when to cut one's losses?
    Mr. Orr-Ewing: It is true that very considerable sums of money were spent from 1946 to 1951 when the right hon. Member for Easington (Mr. Shinwell) bore a lot of responsibility. But I would ask the House to bear in mind that it has served a very useful purpose in our naval alliances, and incidentally has provided useful accomodation for 750 ratings and training facilities since 1958.
    Mr. Gordon Walker: Is not the hon. Gentleman going too far when he puts all the responsibility on N.A.T.O.? Is the Navy no longer responsible for its own ships and answerable to this House for them?
    Mr. Orr-Ewing: Yes, but N.A.T.O. valued the ship and she was obligated and declared to N.A.T.O. I am not blaming N.A.T.O. I am just saying that
    362
    she was declared to N.A.T.O., although she was in earlier years under the right hon. Gentleman's régime with our active Fleet.

    Mechanician Apprentices
    Commander Keransasked the Civil Lord of the Admiralty what will be the age limits for entry under the mechanician apprentice scheme mentioned in the Explanatory Statement on the Navy Estimates; and whether he will give additional information on the matter.
    Mr. C. Ian Orr-Ewing: Entry will be open to young men between 17½ and 23, i.e. those who have remained at school beyond the normal apprentice age. We aim thus to obtain suitable candidates who can be assimilated after five years intensive training into the skilled manpower eventually available from the artificer apprentice and mechanic entries. The recruitment of artificer apprentices will remain at about the present level.
    Commander Kerans: While welcoming this excellent scheme, may I ask whether my hon. Friend can say if these apprentices will be on a higher pay structure?
    Mr. Orr-Ewing: Yes, Sir; when they first start they will be paid £6 9s. 6d. a week all found.

    Guided Missile Destroyers
    Sir D. Campbellasked the Civil Lord of the Admiralty when the keel for the fourth of the guided missile destroyers mentioned in the Explanatory Statement will be laid.
    Mr. C. Ian Orr-Ewing: Two of the four guided missile destroyers referred to in my noble Friend's Explanatory Statement have been laid down so far. As I have just announced, the third ship is due to be laid down at Wallsend-on-Tyne on 26th February and the fourth will be laid down at Belfast on 1st March. 1960.

    Royal Marine Barracks, Stonehouse
    Miss Vickersasked the Civil Lord of the Admiralty what plans he has for the Royal Marine Barracks, Stonehouse, Plymouth.
    Mr. C. Ian Orr-Ewing: The need for these barracks is at present under review.
    Miss Vickers: Will my hon. Friend get on with this fairly quickly, because there is a great need to know whether these barracks are to be repaired or not? Will he be able to give me a further reply in the debate on the Navy Estimates?
    Mr. Orr-Ewing: Yes, we will certainly press on with this matter.

  BRITISH ARMY

    Guardsman J. C. Nugent
    Dr. D. Johnsonasked the Secretary of State for War what inquiry he has made into the circumstances of the death of the late 23517612 Guardsman John Charles Nugent, who was accidentally shot and killed during the course of rifle practice at Pirbright Camp on 18th March, 1959.
    The Under-Secretary of State for War (Mr. Hugh Fraser): At an inquest held at Aldershot on 8th April, 1959, a verdict of accidental death was recorded. A military board of inquiry was then directed to report on the accident with particular reference to safety precautions and other matters affecting military training. No evidence came to light at this inquiry which had not been given to the coroner.
    Dr. Johnson: Is my hon. Friend aware that the parents of this boy, who live in my constituency, are extremely unhappy at not being given more particulars about these inquiries, particularly as the father alleges that he was not given sufficient notice to enable him to be represented at the inquest? Does not my hon. Friend agree that the public relations of his Department are at fault in tragic cases of this nature?
    Mr. Fraser: I will look into any matter that my hon. Friend raises, but the point was that the family asked to see the report of the proceedings of the Board of Inquiry and, as the House knows, Crown privilege is claimed for such documents, and must continue to be claimed.

    Graves (Headstones)
    Dr. D. Johnsonasked the Secretary of State for War what provision he makes in regard to the headstones for the graves of soldiers killed on service.
    Mr. H. Fraser: Headstones are provided by the War Department unless the family of a deceased soldier decide to make private arrangements for his funeral.
    Dr. Johnson: Further to my supplementary question on Question No. 34, will my hon. Friend look into this matter because it is a point of particular grievance in this case that the parents had a natural desire to have their son buried at home and no assistance was given in this respect?
    Mr. Fraser: Assistance is given, but I must make it clear that it is given in the form of a small Army grant to those who wish to have their deceased relatives buried at home rather than have a military funeral. Where there is a military funeral we undertake the whole cost. For a private funeral, we make a small grant of between £5 and £10. There is, of course, the other grant available from National Insurance of £25. It is impossible for the Service Departments to undertake to defray the expenses of all private funerals.

    Initiative Tests
    Mr. Doddsasked the Secretary of State for War what instructions he has given to commanding officers about the nature and scope of initiative tests; what training objectives are achieved by certain tests, details of which have been sent to him; and what was the reason for the venue of the tests.
    Mr. H. Fraser: An Army Council Instruction was published in 1956 forbidding escapades of this kind and a reminding letter was sent to Commands in October last year. The initiative tests referred to by the hon. Member were ordered in contravention of these instructions. Suitable action is being taken.
    Mr. Dodds: While thanking the Under-Secretary of State for that reply, may I ask him to tell us what reasons were given for believing that the kissing of

    365
    showgirls, gaining admission to nudist camps and securing photographs and intimate articles of women's wear would improve the efficiency of the soldier in battle? What sort of enemy do these commanding officers visualise? In view of the deep feelings that these antics have aroused, will the hon. Gentleman arrange for the officers concerned to be thoroughly examined by psychiatrists?
    Mr. Fraser: Until the disciplinary process is completed, it would be inappropriate for me to comment.

    Houses (Rents)
    Mr. Swinglerasked the Secretary of State for War to what extent the rents of houses owned by his Department have been raised since 1957; and what steps have been taken to relate the increases in rents to the tenants' ability to pay.
    Mr. H. Fraser: The increases, which average about 20 per cent., are not related to the tenants' income.
    Mr. Swingler: Is the hon. Gentleman aware that he is the third Service Minister of whom I have asked this Question and that the Answers from all Service Departments show that there is no co-ordination in this matter between the Service Departments, except that they all defy the Minister of Housing and Local Government in refusing to relate rent increases to people's ability to pay? Can the hon. Gentleman say why this is so?
    Mr. Fraser: I disagree with the hon. Gentleman. It is simply a question of tenants paying a fair rent according to the rateable value, as they would have to do with any other landlord. As my hon. Friend the Civil Lord of the Admiralty has pointed out, there is a system of redress of grievance. There are 2,700 Army houses, apart from the ordnance factory houses, and I know so far of only four cases of genuine hardship which we are investigating.
    Mr. Swingler: Is my hon. Friend aware that in assessing rent increases public bodies, such as local authorities, have been asked to take into account the tenants ability to pay? The Under-Secretary has said that the War Department refuses to do this. Why does it refuse to carry out Government policy?
    Mr. Fraser: The War Office is not refusing to carry out Government policy. It is carrying out Government policy, as are all other Government Departments.

    New Buildings (Design)
    Mr. Dribergasked the Secretary of State for War how many consultations between his Department and the Royal Fine Art Commission, on the design of new buildings or of major works of reconstruction, there have been in the past five years; which projects were discussed on these occasions; on which occasions regret was expressed by the Commission that there had not been earlier consultation; and in what circumstances the design of a new building is officially regarded as of no artistic importance.
    Mr. H. Fraser: We have discussed with the Commission our plans for Woolwich, Chelsea and Wellington Barracks; Redford Barracks, Edinburgh; Millbank Hospital and the Queen Victoria School, Dunblane. On one occasion the Commission expressed regret that it had not been consulted earlier.
    The hon. Gentleman's last point is a matter of interpreting the Commission's Royal Warrant which specifies that it should inquire into such questions of public amenity or of artistic importance as may be referred to it from time to time. When in doubt, we consult the Commission.
    Mr. Driberg: Can the hon. Gentleman say when he is not in doubt about the artistic importance of any building?
    Mr. Fraser: The Commission is a small body, as the hon. Gentleman knows. It cannot be consulted in every single instance. We do consult it and have discussions with it on our general policy. We propose in future to consult it on a considerable number of buildings, including the Hyde Park Barracks, and we have been consulting it outside London on the Castle at Chester. We have good relations with the Commission, and I am glad to say that one of its members is a consulting architect to the War Department.
    Mr. Driberg: Are things better now than they were eighteen months ago, when—as the hon. Gentleman must be aware—the Commission complained bitterly of late consultation and inferior and shoddy design?
    Mr. Fraser: I think "bitterly" is an exaggeration.

    Guardsman Dowdall
    Mr. Jannerasked the Secretary of State for War whether his attention has been drawn to the evidence in the recent trial for murder of Guardsman Dowdall of the Welsh Guards, stationed at Pirbright, to the effect that he drank large quantities of neat gin in the presence of his sergeant, who did nothing to stop him, and to the evidence of the commanding officer that he would interfere only if there were disorder, or some Army regulation had been broken; and whether he will amend Army regulations so as to enable officers and non-commissioned officers to take action in situations of this kind.
    Mr. H. Fraser: Yes, Sir, and I have obtained a transcript of the evidence. I must correct the hon. Member's quotation of what was said by the commanding officer. He did not reply that he would not have interfered; his answer was to a question about the subsequent disciplinary action he might have taken if the incident had been reported to him. Elsewhere in his evidence the commanding officer said that Dowdall should have been prevented from drinking to excess, and affirmed that he would have prevented him if he had been present.
    So far as the Regulations are concerned, there is already sufficient power for an officer or N.C.O. to intervene in an incident of this kind, because it is an offence to behave, on or off duty, in a way likely to bring the Service into disrepute.
    Mr. Janner: Is the hon. Gentleman aware that a similar instance of a very serious nature occurred about six months ago—and was referred to in a trial at the Winchester Assizes—in which a sergeant's mess was open at twelve o'clock at night and a girl was brought there at about four o'clock in the morning, or between the hours of twelve and four? Will the hon. Gentleman say what kind of action was taken on that occasion? Will he also say, with regard to the case which I brought to his notice, why this young man, with the history he had, was not given proper attention in the course of his experience in the Army, so that he might not have committed the offence which he did commit? May I also ask him a further question?
    Hon. Members: No.
    Mr. Janner: Why not? This is a very serious matter.
    Hon. Members: Speech.
    Mr. Janner: It is not a speech; it is a question. May I also ask what action is being taken at present to ensure that parents, who are very deeply concerned about sending their young people into the Army, will feel that these young people have security and safety in matters of this description?
    Mr. Fraser: I cannot comment on the case which the hon. Gentleman has raised, because I have not had notice of it. As to the other case, I would say that Dowdall's abnormal and criminal acts took place away from his unit, usually at night, and I am advised that it would be very difficult to tell that this man was the psychopath he proved to be. Regarding the point which the hon. Gentleman made about how these men are looked after, I believe that the general discipline is good. In this unit it is extremely good, both in regard to the relationship with the civil police, the military police and its own internal system of control. Of course, this is a deeply serious matter, and I assure the hon. Gentleman that we are seeing that wherever possible there shall be no repetition. We have full powers under the Army Act to see that there is no repetition.
    Mr. Strachey: Is the hon. Gentleman making it clear that the sergeant in question has been instructed and that all the N.C.O.s have been instructed in the common-sense view that they ought not to allow a man, whatever his rank, to drink large quantities of neat gin?
    Mr. Fraser: Yes, Sir.

    Dartmoor National Park (Road)
    Mr. Haymanasked the Secretary of State for War why a military road has been constructed to the top of Yes Tor in the Dartmoor National Park.
    Mr. H. Fraser: I would refer the hon. Member to the Answer given on 27th January to my hon. Friend the Member for Wokingham (Mr. van Straubenzee).
    Mr. Hayman: Will the Minister take into account that that reply was most unsatisfactory? Is he saying that this

    369
    road has been widened to take a Land Rover to the top of the highest hill in the West Country, in the middle of a National Park, because the authorities could not find a soldier who could ride a pony or a horse? If they cannot find one who can, in Okehampton camp, will they consider hiring a civilian from outside?
    Mr. Fraser: No, Sir. This seems a perfectly reasonable process. The object is to put up and lower the danger flag where there are ranges. I think that a great deal of inaccurate information has been put forward by some of the local Press saying that we are building a metalled road. In fact, we are using an existing track which has been there for some forty years.
    Mr. Hayman: I beg to give notice that, as the Minister's reply is completely unsatisfactory, I shall raise the matter on the Adjournment at the earliest opportunity.

    Middle East Command
    Mr. Stracheyasked the Secretary of State for War (1) the numbers by types of operational Army units in the Middle East Command;
    (2) the approximate total Army establishment of the Middle East Command in officers, other ranks, and civilians, respectively.
    Mr. H. Fraser: It would not be in the public interest to give more information than is contained in my right hon. Friend's Memorandum on the Army Estimates.
    Mr. Strachey: Does not the hon. Gentleman agree that, even on the rather exiguous information in these Estimates, the number of units and the responsibility of Middle East Command now are quite out of proportion with the massive bases at Episkopi and Dhekelia in Cyprus which are obviously being built up, and can he explain the discrepancy of the use of this vast base for a very small purpose?
    Mr. Fraser: All I can say is that this Command has always been of great importance to this country and to our allies and the N.A.T.O. commander has very wide responsibilities. Regarding the right hon. Gentleman's further comment, he will have noticed that his right
    370
    hon. Friend the Member for Belper (Mr. G. Brown) has put Questions to the Minister of Defence which are to be answered later this afternoon.

  TELEPHONE SERVICE

    Emergency Calls
    Mr. Iremongerasked the Postmaster-General on what date he received from the Clerk of the Essex County Council a copy of a letter addressed to Members of Parliament representing constituencies in the County, dated 16th December, on the subject of emergency telephone calls; and whether he will now arrange for all emergency calls to be free of charge, irrespective of whether they are made from public or private telephones.
    Mr. Ridsdaleasked the Postmaster-General why emergency calls are not free of charge whether they are made from public or private telephones.
    The Postmaster-General (Mr. Reginald Bevins): Though the present practice is of long standing, I have decided that it is right to change it. As from today, charges for 999 calls made from subscribers' premises, and for the corresponding calls to manual telephone exchanges, will be abolished.
    Mr. Iremonger: Is my right hon. Friend aware of the general satisfaction, which I am sure is shared by my hon. Friend the Member for Harwich (Mr. Ridsdale), at this excellent change of policy?
    Mr. Bevins: Yes, Sir.

  WIRELESS AND TELEVISION

    North Wales
    Mr. C. Hughesasked the Postmaster-General when a satellite television station will be provided for North Wales.
    Mr. Bevins: The B.B.C. tells me that it hopes to provide a satellite television station in North Wales in the second stage of its satellite programme. I understand that the Corporation is now preparing its plans for this stage. The I.T.A.'s plans for further extension in Wales are not yet finalised.
    Mr. Hughes: In view of the length of time which it appears to take to build these satellite stations, will the right hon. Gentleman give an assurance that when an application is made to him for approval of the sites, he will give his consent as expeditiously as possible, so as to cut down all unnecessary delay?
    Mr. Bevins: Directly the B.B.C. puts its proposals to me, I shall see that there is the least possible delay.

    Coverage
    Mr. C. Hughesasked the Postmaster-General if he will give an assurance that no second programme television facilities will be given until steps have been taken to provide complete coverage under existing arrangements.
    Mr. Bevins: This question is one of many which will have to be taken into account before additional television programmes are decided upon, but I can give no specific undertaking now. Meanwhile, both the B.B.C. and I.T.A. are planning to extend their television coverages so far as practicable.
    Mr. Hughes: Since there are very many areas in the country which have very poor reception or, in some cases, no reception, will the Postmaster-General make certain that those areas are catered for before other grandiose schemes are entered upon?
    Mr. Bevins: The existing B.B.C. coverage takes in about 99 per cent. of the population and the I.T.A. coverage takes in about 94 per cent. The B.B.C. aims to go over 99 per cent. and the I.T.A. aims to go up to 98 per cent. The question of a third programme is, of course, bound up with all sorts of technical and wider considerations.

    Mid-Wales
    Mr. Watkinsasked the Postmaster-General what progress has been made in the provision of a satellite station for television and sound broadcasting in mid-Wales; and whether he will make a statement.
    Mr. Bevins: The technical details of this station have been agreed and the equipment ordered. When the legal formalities in regard to the site are con
    372
    cluded, the B.B.C. can start construction. It is too early for the Corporation to say when the station will open.
    Mr. Watkins: Does the right hon. Gentleman realise that he, or his predecessor, gave that information about six months ago? Will he expedite matters in his own Department, since I am satisfied with what the B.B.C. itself is doing?
    Mr. Bevins: I am satisfied that the B.B.C. is pushing on with this as rapidly as it can. I will keep in touch with the B.B.C. and keep the hon. Gentleman informed.

WESTERN GERMANY AND SPAIN
Mr. Gaitskell: Mr. Speaker, I should like to seek your guidance on a point of order. We sought this morning to obtain your permission for a Private Notice Question relating to the reported negotiations—
Mr. Speaker: I hope that the right hon. Gentleman will be cautious.
Mr. Gaitskell: I wish merely to explain the subject of the point of order, Sir—relating to the reported negotiations between the Federal German Government and the Spanish Government for the setting up of German bases in Spain.
You were not able to grant that permission, on the ground, I think, that there are already Questions on the Order Paper for Monday. But this would mean that the House would not have a Government statement on the matter, and no opportunity for discussing it before Monday. I was wondering, therefore, whether the Government could, at least, give us an assurance that they will make a statement not later than tomorrow.
Mr. Speaker: That is the kind of point of order which is addressed to me so that it may echo elsewhere.
The Secretary of State for the Home Department (Mr. R. A. Butler): I will take the hint, Sir. All I can do, in the circumstances, is to say that I will immediately discuss this matter with my right hon. and learned Friend the Secretary of State for Foreign Affairs.

BALLOT FOR NOTICES OF MOTIONS
  Traffic Engineering
  Mr. Cole: I beg to give notice that on Friday, 11th March, I shall call attention to the possibility of the increased use of traffic engineering to relieve traffic congestion, and move a Resolution.
  Scotland (Development of Tourism and Industry)
  Mr. MacArthur: I beg to give notice that on Friday, 11th March, I shall call attention to the development of tourism and industry in Scotland, and move a Resolution.

  Hospital Building Programme
  Mr. Tiley: I am glad that the House recognises that this is the first time that I have been lucky in the Ballot in five years.
  I beg to give notice that on Friday, 11th March, I shall call attention to the hospital building programme, and move a Resolution.

ORDERS OF THE DAY

  HORTICULTURE BILL
  Order for consideration, as amended (in the Standing Committee), read.
  3.34 p.m.
  The Minister of Agriculture, Fisheries and Food (Mr. John Hare)rose—
  Mr. Speaker: Order. The utility of our proceedings is advanced if we can hear them.
  Bill recommitted to a Committee of the whole House in respect of the Amendments to Clause 1, page 2, line 22; Clause 2, page 2, line 36; Clause 3, page 3, lines 15 and 17; Clause 4, page 3, line 28; Clause 9, page 6, line 14; and Clause 10, page 8, line 7, standing on the Notice Paper in the name of Mr. Hare.—[Mr. Hare.]
  Bill immediately considered in Committee.
  [Sir GORDON TOUCHE in the Chair]

  HORTICULTURE BILL

    Clause 1.—(GRANTS FOR HORTICULTURAL IMPROVEMENTS.)
    The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. J. B. Godber): I beg to move, in page 2, line 22, at the end to insert:
    (5) Where the applicant satisfies the appropriate Minister, at any time before that Minister has determined whether to approve his proposals, that the cost of the proposals has been increased by their being designed both for the provision of specified facilities as mentioned in subsection (1) or (2) of this section and for other purposes, and agrees with the Minister what proportion of the cost is to be treated as referable to the provision of specified facilities as aforesaid, then—

    (a) regard shall be had only to that proportion of the cost for the purposes of the foregoing subsection, and

    (b) in relation to those proposals references in this part of this Act to expenditure reasonably incurred in carrying them out, or expenditure in respect of which grant would be payable, shall he construed as references to that proportion of such expenditure.

    This Amendment looks rather complicated, but I do not think that it will really require a very long explanation. It is designed to enable us to deal with

    375
    a type of case which we think may prove rather common under the horticultural improvements scheme. Briefly, subsections (2) and (3) of this Clause enable my right hon. Friend to pay grants towards the cost of providing specified facilities for the purposes set out in the subsections. Subsection (4) provides that we may not approve proposals unless we are satisfied that the expenditure incurred in carrying them out will not be unreasonably high in relation to the benefit to the business, that is to say, the business as defined in the Bill.
    Cases may arise, however, where an applicant wishes to provide facilities which will serve, shall we say, two purposes, one within the scope of the Bill and one outside it. For example, a co-operative association may be carrying on a horticultural producer's business and it may be concerned with agriculture, also. According to the strict terms of the Bill, such a concern might be ruled out of the scope of the grants.
    The purpose of the Amendment is to make it possible to divide what is eligible from what is not and give a grant on the basis of what is eligible. It is, therefore, a matter of being able to split the cost. That is all we seek to do. I apologise if the Amendment seems rather complicated, but I think that it will commend itself to the Committee.
    Mr. Frederick Peart: I thank the Parliamentary Secretary for this Amendment. The point was pressed by my hon. Friend the Member for Aberavon (Mr. Morris), who, unfortunately, cannot be here today. We are very grateful to the Minister for looking at it again.
    I agree that, in a case where there can be, as it were, a split in what is needed by a body wishing to apply for a grant, this Amendment will meet the purpose. For those reasons, and so as not to delay the Committee, I say at once, on behalf of the Opposition, that we accept what the hon. Gentleman has said and support the Amendment.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    Clause 2.—(SUPPLEMENTAL PROVISIONS AS TO SCHEMES.)
    Mr. J. Hare: I beg to move, in page 2, line 36, after "payable", to insert:
    "as estimated by the appropriate Minister at the time of approval".
    This is really little more than a procedural Amendment. The Clause provides that a scheme may specify a minimum amount for expenditure which may qualify for a grant. I explained in Committee that we propose to specify, £100 as the minimum for this purpose As the Bill is now drafted, that minimum must relate to the actual cost of carrying out proposals, but this, of course, we do not know until after the job has been completed.
    As the Bill stands, therefore, I might provisionally approve an applicant's proposal on an estimate putting the cost at, let us say, £105, but then, if the actual cost turned out to be £95, I should be obliged to refuse the grant altogether. I do not think that that would be fair, and I am sure that all hon. Members will take the same view.
    The Amendment is designed to relate the minimum limit to the cost as estimated at the time of approval. This will mean that, once an applicant has had his proposals accepted and approved, he can be sure he will receive the grant at the rate of one-third, provided, of course, that he carries out the work satisfactorily. I hope that the Committee will agree that this is a sensible Amendment.
    Mr. Peart: We should like to thank the Minister for accepting our proposal. The Minister, as in Committee, has proved very flexible. Here is a case where the small producer might well be in difficulties if he found that the costs which he estimated originally were lower and, therefore, would not qualify for the grant, which we all wish to give him if he can show need for it. We are glad that the Minister has considered the matter again and we accept the Amendment.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    Clause 3.—(STANDARD COSTS.)
    Mr. Godber: I beg to move, in page 3, line 15, to leave out "in his application" and to insert
    "at any time before the appropriate Minister has determined whether to approve his proposals".
    I do not think that we need dwell long on this Amendment. Again, it shows how accommodating the Government are concerning the wishes of the Opposition. In Committee, I gave an undertaking to consider this matter again, and this Amendment is the outcome. We have accepted a useful suggestion which was put forward by the Opposition. I hope that the Amendment will commend itself to the Committee.
    Mr. Peart: The Government are doing well for a change. We thank them for conceding the point which we raised. My hon. Friend the Member for Aberavon (Mr. Morris) also raised this matter in Committee. We are pleased that the Government have been flexible and concede that we have made a constructive approach to the Bill.
    Amendment agreed to.
    Mr. Godber: I beg to move, in page 3, line 17, to leave out from "then" to the end of line 21 and to insert:
    "so far as that operation is concerned the standard cost shall be substituted for actual or estimated cost for the purposes of subsections (1) or (2) and (4) of section one and subsection (1) of section two of this Act".
    This is a rather complicated Amendment, and I will endeavour to explain it as best I can. Clause 1 (4) provides that my right hon. Friend may not approve proposals
    "unless he is satisfied that the cost of carrying them out will not be unreasonably high in relation to the benefit derived from them ‖"
    Clause 2 (1) provides for a scheme to prescribe a minimum amount that may qualify for grant. As Clause 3 is at present drafted, an applicant may elect to accept grant on the basis of standard costs, but the test to which I have referred would have to be applied to actual costs.
    That is something which was not intended. This Amendment seeks to do away with that situation and provides that where an applicant elects to accept grant on the basis of standard costs the test will also be applied to standard
    378
    costs. This is a practical solution. It is something of a drafting point, but I thought it necessary to explain it to the Committee. I hope that the Amendment will commend itself to the Committee.
    Mr. Peart: We accept the Amendment.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    Clause 4.—(OTHER GRANTS FOR PROMOTING CO-OPERATIVE HORTICULTURAL MARKETING.)
    Mr. J. Hare: I beg to move, in page 3, line 28, after "for" to insert "encouraging or".
    This Amendment stems from a suggestion made by hon. Members opposite in Committee. I think that it was the hon. Members for Sheffield. Hillsborough (Mr. Darling), East Ham, South (Mr. Oram) and Bradford, South (Mr. George Craddock) who suggested that we ought to include the word "encouraging" in the Bill as well as the word "facilitating". They felt that grants should be paid to central bodies for the promotion and encouragement of co-operation as such. The Bill, as drafted, provides only for grant by central bodies to co-operatives or groups of growers proposing to set up co-operatives.
    3.45 p.m.
    I should make it clear that I feel, as I did when we discussed the matter in Committee—the hon. Member for Hillsborough will remember that I was not unsympathetic in this matter—that the prime object of grants under Clause 4 must be of the latter sort to which I have referred. In the first place, the central co-operative bodies in England, Scotland and Wales already receive block grants towards the general services which they provide, including the encouragement of co-operation among farmers and growers. I think that it would be wrong to duplicate these grants. In administering this Clause, we must continue to give priority to programmes designed to assist existing or embryo co-operatives.
    Having said that, I must remind the Committee that the hon. Member for Sunderland, North (Mr. Willey) also joined in the fray in Committee and

    379
    pointed out that there might be possibly a function at some time which we would need to assist under this Clause and which, as the hon. Member's hon. Friends pointed out, might not be covered by the word "facilitating". I can see that the hon. Member may be right. This may lead to anomalies.
    I suppose that it could, for instance, be said that we should be allowed to make grants towards the cost of getting speakers to talk to growers if the growers have expressed an intention to set up a co-operative. But speakers would not be allowed if the object of the exercise was to try to get them to make up their mind to become members of a co-operative. I therefore think that it would be unreasonable to expect that central bodies should be tied in this niggling fashion. We tabled this Amendment to enable us to avoid the sort of anomaly which I had in mind and which, I think, hon. Members opposite had in mind.
    I should like to re-emphasise that it is not our intention, under the Bill, to provide money purely for propaganda purposes. I do not think that the Opposition wish that either. I am sure that Parliament would not wish us to use for propaganda purposes money which is primarily devoted to the improvement of efficiency in horticultural marketing. It was to meet the views which were very sincerely and sensibly put forward in Committee that we tabled the Amendment.
    Mr. Anthony Fell: I do not want to be niggling about the words that my hon. Friend has proposed, but I should like to ask him why he wishes to insert the words "encouraging or" rather than the words "encouraging and".
    Mr. Hare: I am told on the best legal advice that the words "encouraging or" serve the purpose better than the words "encouraging and".
    Mr. George Darling: We welcome the Amendment. The Minister has explained the Amendment with much greater clarity than we were able to explain the point in Committee. He has clearly brought out the difficult point of defining the word "facilitating" and propaganda. We
    380
    agree that we do not want money to be used for the purposes of pure propaganda which ought to be undertaken in a more voluntary fashion without Government assistance, but, as the right hon. Gentleman said, it may happen on many occasions that the encouragement of co-operative organisations will be done when the organisation is not in embryo, but may be set up next week.
    We seized on this point when we put forward our Amendment, and to clear up the matter we thought that by inserting these words we should be assisting the purpose of the Clause. We are, therefore, very glad that the Minister has accepted our suggestion. We, in turn, accept the limiting factor which he associates with the word "encouraging". I point out to the hon. Member for Yarmouth (Mr. Fell) that because of this difficulty there might be a case where the word "facilitating" would adequately describe what was being done for the promotion of a horticultural co-operative, but, at the same time, there might be an activity that would not come under the limited definition of "facilitating". We do not want to stop organisations encouraging the idea of a co-operative, even though it may be facilitated next week.
    Mr. Fell: Surely, in this context, to encourage is somewhat negative. To facilitate is positive, or can be construed as such.
    Mr. Darling: That may be true. I do not, however, want to prolong the debate. I suggest that the hon. Member, if he has not done so, should read the proceedings of Standing Committee when we dealt with this matter. We got down to it and as the Minister has said, four or five speeches were made from this side alone. We were seized of the point that we must have some kind of definition so that the part to be played by public money will not be confused with the job that should be done voluntarily by the co-operative organisations themselves.
    Major H. Legge-Bourke: The Committee knows that the Bill is not very dear to my heart. If, however, we have to accept it anyway, I would like to see it made as effective as possible. My right hon. Friend will agree that the Clause hangs together closely with the ensuing one in that

    381
    Clause 5 mentions that the aggregate amount of grants for the purpose we are now considering—in other words, the encouragement or facilitating of co-operatives—should be limited to £100,000 Subsection (4) of Clause 5 contains the proviso that a grant shall not be made unless the programme was submitted to the appropriate Minister
    "before the expiration of six years from the coming into operation of that section."
    This is causing me a little misgiving. I suppose that of all forms of encouragement, financial is the most likely to be persuasive. Some of those who are anxious to promote co-operation in marketing feel that it is the early incidence of financial encouragement that is most important. To me, it would seem that it is merely quibbling with words to say that encouragement can be negative. The only context in which that might be at all relevant is in photography. To say that encouragement is negative seems to me to be a self-destroying argument. It is right that encouragement should be given, and I believe that financial encouragement is the appropriate way.
    It is no use writing encouragement into a Bill unless the encouragement that the Minister visualises using is likely to be effective. Perhaps, in reply to this short debate on the Amendment, my right hon. Friend will tell us what form the encouragement is to take. I hope that if it is to be real encouragement its incidence will be heaviest in the early stages, because that is the most persuasive factor that will lead to the setting up of co-operatives.
    Mr. Fell: I am still a little worried. My hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) has said that I have quibbled and he cannot see that encouragement can take any other form than financial encouragement. I still say that if we use the words "encouraging or facilitating", we use them in the literal sense. We either encourage or facilitate. If "encouraging" means encouraging and using money to encourage, or whatever it may be, it means facilitating. Therefore, I would like to know the meaning of the legal advice that my right hon. Friend the Minister has received. If we say "encouraging or facilitating", we mean either one or the other and
    382
    not both. It may well be that the whole thing is nonsense. How we encourage unless we facilitate, I simply do not know.
    What interpretation is put upon the word "encouraging"? What does it mean if it does not mean facilitating? If it means facilitating, what is the argument against having "encouraging and facilitating" rather than, in the exclusive sense of one or the other, "encouraging or facilitating"? With the word "or" that is how it must be interpreted; it means either one or the other. With "and", it would mean both. It is as simple as that.
    Mr. Frederick Willey: The hon. Member for Yarmouth (Mr. Fell) should have considered the matter in time and tabled an Amendment to his right hon. Friend's Amendment. There is, however, a point of substance involved. As I hope the Clause will now be amended, the Minister will be able to do one or all of three things: to promote efficiency within the co-operatives; to facilitate co-operatives—in other words, to assist them; and to stimulate, encourage and exhort the idea of co-operatives. All three are necessary. There was no difference between the Minister and the members of the Committee when we discussed the matter. The only point was whether it was necessary to write it into the Bill. I am satisfied that, on the whole, it is better to put it in.
    Mr. J. Hare: My hon. Friend the Member for Yarmouth (Mr. Fell) need not be too worried. I do not want to be pedantic, nor, I am sure, does my hon. Friend. Let me put it this way. We can encourage something to start which has not been created and then we can facilitate something which is already on the way. It was to try to help in that direction that I listened to the arguments that were put forward and drafted the Amendment as I have done. My hon. Friend will, I think, agree that what I have done at least enlarges the scope of the operation, even though it might not do it in quite as perfect English as he would like. I will certainly see whether my advice is perfect. If necessary, it may be that in another place the wording could be slightly altered as long as the objective which I have explained remains

    383
    unchanged. I will try to meet my hon. Friend in that way.
    My hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) has expressed eloquently the fact that he is not too happy at many of the principles behind the Bill. In that, he and I fundamentally disagree. I would, however, point out that in relating the Amendment to the provisions in the following Clause, the Amendment merely applies to the assistance which is given to the central body of the co-operatives and does not concern the total sum available for grants under the Bill to growers as a whole. Therefore, the point is rather narrower than my hon. and gallant Friend indicated.
    Having said that, I will certainly see whether there is substance in what my hon. Friend the Member for Yarmouth has said. If there is, I will see whether anything can be done about it.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    Clause 9.—(THE HORTICULTURAL MARKETING COUNCIL.)
    Mr. J. Hare: I beg to move, in page 6, line 14, at the end to insert:
    "and, with the consent of the Ministers, of any other functions which the Council may determine expedient to be exercised for that purpose".
    The Clause allots to the Council certain specified functions. We thought carefully about these functions, which are listed in Clause 10. They probably cover all the kinds of activity that, as far as we can see at present, the Council should carry out. I believe that the National Farmers Unions and the trade organisations also share that general opinion. But I suppose that there is always a possibility that some other activities might turn up which, in future, everyone would agree the Council ought to carry out, but which might not actually fit into the phraseology of Clause 10.
    4.0 p.m.
    I do not think that anybody would be pleased if that happened and I certainly would not be. When one is planning for the future it is probably always wise to allow a little latitude for the genuine unexpected contingency. I emphasise the
    384
    words "a little latitude", because I am sure that it would be equally wrong to give the Council power to do what it likes, because it is asking Parliament for powers, subject to safeguards, to raise money and, therefore, there must be some control over the purpose for which that money is to be used.
    I should like to explain the effect of the Amendment. The Bill gives the Council authority to perform the functions specified in Clause 10. If the Council wants to go beyond these functions to improve marketing and distribution then, under the Amendment, but not without the Amendment, the Council would have to ask my right hon. Friend the Secretary of State for Scotland and myself for our consent. There is another advantage. If we wanted advice on a subject which was not covered under the strict interpretation of Clause 10, we could empower the Council to give us that advice if the Amendment is accepted. I hope that the Committee will agree that the Amendment provides a commonsense way of ensuring that the Council will be able to serve the horticultural industry in the right sort of way whatever the changing circumstances of future years may be.
    Mr. Willey: We on this side of the Committee welcome the Amendment and we are greatly obliged to the Minister for taking the steps which he has taken. We recognise that this is an enabling Bill. We know that by moving the Amendment the right hon. Gentleman is not necessarily accepting the point of view which we expressed in Standing Committee, but he is allowing the Council to extend its powers if it feels that that would be the proper course.
    We agreed in Standing Committee that generally the Government have accepted the recommendations of the Runciman Committee on Horticultural Marketing on the functions of the Horticultural Marketing Council. We felt in Committee that we should go rather further than the Runciman Committee recommended. We suggested, for instance, that the Council should have power to provide standard containers and should also have power to advise the right hon. Gentleman about the effect of imports on supplies. I remember calling the attention of the Committee to the proposal made by the

    385
    Fruit Retailers' Federation, a considerable time ago, that a British Horticultural Commission with very wide powers should be established. The right hon. Gentleman has not accepted what we said in Committee, but he has given the Council power to seek the exercise of those further functions if it feels it appropriate.
    This is the right way to tackle this problem. This is better than the proposals which we made of writing specific functions into the Bill, because it might well turn out in the light of experience that we were too limited in the proposals we made. I would much prefer that the Council should feel that if there is a good case for seeking further functions it can approach the Ministers. It is also right and proper that these powers should be sought in this way.
    I was somewhat critical, and I remain critical, of the attitude taken by the National Farmers' Union about Amendments which we raised in Committee, but I appreciate the point which the union is now making that if such powers are sought they should have the good will of the three sections of the Council. It is very unlikely, but it is conceivable that two of the three sections represented on the Council might desire a particular function even against the wishes of the other section of the industry. In those circumstances it is a good safeguard that the Council should have to seek the approval of the Ministers, because that would give Ministers an opportunity to consider again the particular sectional representations that might be made.
    Whilst, naturally, this will be a matter proper to the discretion of the Council, I hope that if the Council feels that there is a case for seeking an expansion of powers it will not hesitate to seek them. I am not convinced by the apprehension shown by the National Farmers' Union. It is a little odd that, at the same time—though probably quite properly—as the union is supporting a marketing board in establishing packing stations, it should be hesitant about the Council seeking to provide similar facilities. It would be much better to show a greater confidence in the Council and to hope that it will use common sense and discretion in the interests of horticulture generally and will not hesitate to take effective steps where they are necessary.
    386
    As we said in Committee, it is quite easy to envisage circumstances where there would be no dispute with any section of the horticultural industry about the provision of facilities which otherwise would not be provided by private enterprise. I am sure that the Council as a whole would feel that in those circumstances it would be far better if the facilities were provided. But, having expressed a personal opinion on this matter, I say again that the right hon. Gentleman's approach is the best, particularly in view of the difficulties which we know exist about financing the Council.
    I can understand the apprehension of producers about the possibility of loading the Council with heavy financial commitments. In these circumstances, whilst we on this side of the Committee still believe that the Council should not hesitate to take the steps necessary to improve marketing, we recognise that the better course is not to define the functions in the Bill but to allow the Council to consider what steps it thinks necessary to take.
    We discussed imports in Standing Committee and I hope that if the Minister feels that it would be right and proper to seek the Council's advice about matters affecting imports he will not hesitate to let it be known to the Council so that this new provision can be invoked. We welcome the Amendment. It has gone a long way to meet the case which we deployed in Committee and I am sure that it will assist the Council to perform its duties when it is established.
    Mr. Denys Bullard: I am not as sure as the hon. Member for Sunderland, North (Mr. Willey) about the wisdom of the Amendment. I shall listen to the Minister's reply with great interest. The Amendment seems to open the possibility of a very wide expansion of the Council's powers. In Clause 10, we have gone to a great deal of trouble to define the Council's functions, but the Amendment seems to me to provide a wide open door to enable the Council—though I agree with the Ministers'consent—to extend its powers.
    If the Council wants its powers extended, it would be wise to come back to Parliament and ask for that to be done, rather than at this stage to give it

    387
    authority under the Bill to do so, merely by consultation with Ministers. I have very much in mind the financial side of the question. I said during the Committee stage, and I hold to the view, that it is the producers who, in the long run, will bear the brunt of the cost of running the Council. It seems to me that the Council could take a decision to put considerable financial burdens on the producers, and I would be sorry if that were done.
    The National Farmers' Union, in asking that this shall be a decision of the whole Council, is asking for something reasonable. At any rate, the producers' representatives should assent to any such decision to extend the powers of the Council. That, however, would involve close scrutiny by Ministers or Parliament of the individual votings on the Council. One of my criticisms has been that the Council is not subject to sufficient control by Parliament in any case. I have grave doubt as to whether, in spite of the lengthy description of the functions of the Council in Clause 10, this additional amount of manœuvre should be given to it. I hope that the Minister will give us an assurance on the points that I have raised.
    Sir Richard Nugent: I add my voice to that of my hon. Friend the Member for King's Lynn (Mr. Bullard) in querying the wisdom of accepting this Amendment. As I listened to the hon. Gentleman the Member for Sunderland, North (Mr. Willey) explaining how he thought it might be used, my anxiety grew. I am happy to be in the capable hands of my right hon. Friend the Minister, who, I hope, will remain at his post for many years, but sometime he will be succeeded by somebody else and, although it is likely to be a long way off, his successor might even be a right hon. or hon. Gentleman opposite. His successor might even be the hon. Member for Sunderland, North, and in those circumstances I could see what would happen—
    Mr. Willey: May I allay the anxieties of the hon. Baronet? The initiative will lie with the Council.
    Sir R. Nugent: We are all familiar with how these things work. I am not so naïve as the hon. Gentleman thinks.
    388
    The Council may not be unsusceptible to suggestion, and if the Minister of the day would like to see a central service promoted for containers, or something of that kind, it might well come into being. We all have a certain concept of what the Council will do. I am sure it will be a useful body, but if it is to have a trading service of any kind permitted by this Amendment I would feel that it was changing its very nature.
    I ask my right hon. Friend to look again at the Amendment with a view to introducing it in an amended form in another place and to limit the latitude by specifically excluding trading services of any kind. If an Amendment of this kind is accepted, there will be a change of principle, and that should come back here to be decided, as my hon. Friend the Member for King's Lynn has said. Therefore, I ask my right hon. Friend to look at the Amendment again in that light.
    Major Legge-Bourke: Before I make any observations on the Amendment, Dr. King, may I seek your guidance? Could you tell the Committee whether it is the intention to call during the Report stage the Opposition Amendment to Clause 10, page 8, to leave out lines 14 to 16?
    The Temporary Chairman (Dr. Horace King): I am sorry that I cannot give the hon. and gallant Gentleman the information for which he asks. That Amendment is a matter not for this Committee, but for the House, and whether it is selected or not is a question for Mr. Speaker.
    4.15 p.m.
    Major Legge-Bourke: In that case, perhaps I should speak now about what I would otherwise defer until the discussion of that Amendment.
    The point is simply that the functions of the Council are set out clearly in Clause 10, at the end of which there is a proviso which, as it stands, would meet the point of my hon. Friend the Member for Yarmouth (Mr. Fell) and my neighbour and constituent, my hon. Friend the Member for King's Lynn (Mr. Bullard). In other words, it rules out the right of the Council ever to indulge in trading.

    389
    What concerns me greatly, and I hope that the Minister has borne it in mind before bringing forward this Amendment, is the fact that there is an Amendment on the Notice Paper in the name of the Opposition asking for the removal of that proviso. Therefore, we should face the fact that however well-intentioned the present Minister may be on this matter, in the event of an alternative Government coming in, we can see what might easily happen.
    The official Opposition on this Bill has deliberately sought, both upstairs and now again downstairs, to remove the very restriction which all of us on this side of the Committee think is essential, namely, that on no account should the Council have trading powers, however much it asks for them. If this Amendment were accepted, and we were then to accept the Amendment to Clause 10 to leave out lines 14 to 16 on page 8 of the Bill, there would be nothing to prevent the Minister, should he see fit, to approve a request by the Council to undertake trading. It is important that we should have clearly established once and for all that the Minister will stand firm against the Amendment to remove the proviso to Clause 10, and that he will restrict, and make it clear to the Council that he is so restricting, any suggestion that it should indulge in trading.
    Mr. Darling: We had some speeches during the Committee stage from the staunch defenders of the sturdy individualism of the British farmer, after which we had to point out that if the present operations of individualism were so satisfactory, without any body to advise, to help or to undertake trading, British horticulturists would not be coming to the Government for public money. There is obviously something wrong with the marketing set-up of fruit and vegetables in this country, otherwise the Government would not be doling out public money to the people engaged in the industry.
    In dealing with this Bill we have had to consider what is wrong with horticultural marketing. We welcome the Bill. We approve giving monetary grants to help the growers to put their side of the business right, and it is a necessary quid pro quo that the marketing side should also be put in order. Under this Clause and the next one the
    390
    Horticultural Marketing Council will be set up to undertake those necessary duties so that, apart from other things, public money shall not be wasted. Not only is the growers' end wrong but the whole marketing operations in this country, from the grower to the consumer.
    When we are considering the duties imposed upon the Horticultural Marketing Council, which will look after that side of the industry, it is impossible to say at this stage what should be its precise functions. It may be necessary to extend the functions beyond those laid down in the Clause. We do not know. One of the suggestions mentioned in association with this Clause in Standing Committee, in anticipation of this Amendment, was that to get the proper grading of produce, which both sides of the Committee agreed was necessary, and to ensure that the graded produce is sent from the grower to the retail shop in a proper fashion, the trade should have standard containers.
    The problem of containers is a very serious one for many growers. It was suggested, for instance—I put this forward as a practical example of the need for the Amendment—that it might be the Council which should tell the manufacturers on behalf of everybody engaged in the industry what kind of container was required. It might be that the manufacturers would say, "We agree with you about the size, shape, composition, and so on, of the containers, but it would help us very much to produce the containers at a reasonable cost, and probably at a much lower cost than some of them are provided today, if we could have mass production orders. Could you organise the trade to give us mass production orders so that this service to the trade can be undertaken?"
    Surely that is a service which would benefit everybody in the trade and one which the Council would undertake only if everybody in the trade asked it to do so. I cannot see why the activities of the Council should be so limited by Statute that it would be prevented from carrying out a service like that for all engaged in the industry. After all, the Council is set up to help them. It is illogical for hon. Members opposite, who are willing on behalf of their constituents that public money should be taken, not to give the Council these

    391
    opportunities and make sure that the industry is properly organised so that the money will not be wasted. I repeat that it is not just a matter of helping the growers. We have agreed that they must come first, but also the whole of the marketing operations have to be improved.
    I am very surprised indeed that hon. Members opposite should suggest that the Council should not undertake services on behalf of the trade although no one else is providing such services. If the central services could be provided by someone else, probably that would be all right, but it is illogical to suggest to the Council that it should not undertake such services. If this is the attitude that we are to have, the question of Government grants to any industry ought to be reconsidered, because we are not going to pay out Government money if opportunities are to be refused even to a body of this kind, which has not got statutory powers, of being of service to the industry.
    Mr. J. M. L. Prior: I welcome the Amendment, partly because it goes very much towards a point which I raised in the Standing Committee about brand names. It is vitally important that a body other than the Board of Trade should control such matters as brand names for pre-packaged horticultural goods. I thought that the extra powers which the Minister would give the Horticultural Marketing Council as a result of the Amendment would enable it to exercise that sort of control.
    When I first looked at it, I welcomed the Amendment wholeheartedly—provided that the proviso in Clause 10 is not taken away. I see very grave dangers in that, and I agree entirely with my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) on that issue. However, I think that, with the Minister's consent, there are many useful jobs which the Council can do, and I would mention in particular the matter of brand names for prepackaged goods, a subject which, at the moment, is causing a considerable amount of worry to a large section of the horticultural industry. If we can be assured that the later Amendment to which reference has been made will not be accepted, I think that we can take it
    392
    that the Amendment which we are discussing will be a very valuable one.
    Mr. Peart: When the hon. Member for Lowestoft (Mr. Prior) rose, I thought he was about to join the little group which seems to be prodding the Minister today. In the Standing Committee the hon. Gentleman, quite rightly, criticised the Minister. I am glad that he welcomes the Amendment. I will not go into great detail, because the Minister and my hon. Friend the Member for Sunderland, North (Mr. Willey) have explained why we need a Council which can, if necessary, indulge in certain activities which would benefit the industry. That, after all, is what we are seeking.
    Consequently, we strongly support the Minister and reject the criticism which has been advocated by the hon. Member for King's Lynn (Mr. Bullard). The hon. Member said that he was not sure about the Amendment and that he was against the Council being given wide powers. He argued that we ought always to return to Parliament to ask for further powers. My reply to that is: why delay? If the hon. Gentleman wishes decisions to be taken only after Parliament has been consulted, why does he not trust the Minister? I know that many hon. Members opposite do not. Indeed, many of them are very critical of the right hon. Gentleman's handling of agricultural matters. I will not go too far into that, but I must say that on this issue we support the Minister and think that it would be very foolish if the Council were hamstrung in the beginning by the criticisms that we have heard today.
    The hon. Member for Guildford (Sir R. Nugent) said that he was happy to leave the matter in the hands of the Minister; but he, also, was not sure. He hoped that the Council would not at this stage engage in trading services. However, we believe that that should be a proper function of the Council, and, although it is not laid down in Clause 10, we feel that in the end it would help the producers, and I would make the point that my hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) has shown how the producers would be helped by the manufacture of containers.
    This is not an argument for those engaged in the trade as against the producers. For the reasons that my hon.

    393
    Friend has advocated, we are certain that if the Council could engage in such activities as pre-packing and the manufacture of containers, that would benefit marketing and, in turn, the individual producer. The proposal in no way threatens the individual producer. I am certain that that was what was in the mind of the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke).
    Major Legge-Bourke: It is not that about which I am worried. I am worried about the intermediary between the producer and the consumer.
    Mr. Peart: I am certainly worried about the producer, and that is why I feel that the Amendment is sound, for it will enable the Council to indulge in activities which will improve marketing, and the small producers will benefit from that.
    I should have thought that the hon. and gallant Member for the Isle of Ely, who represents many small producers, would have welcomed the proposal instead of taking a doctrinaire view about it. I know that the National Farmers' Union does not wish to support an Amendment of this kind, or has not supported the views which we expressed in the Standing Committee, but I would tell the National Farmers' Union that we are not being anti-producer but are simply anxious for the Council to improve marketing. We are certain that there are many functions which the Council could carry out.
    There is nothing wrong in allowing this to be done in consultation with the Minister. If a decision is to be taken in marketing or any of the other functions listed in Clause 10, it will be the Council which will make the recommendations, and I am certain that the Minister will then have the necessary consultations. If the Minister feels that it is in the interests of national agricultural policy that a decision should be taken at the national level for the Council to undertake certain functions, why should he not the Minister have such views and, if necessary, make representations to the Council and have consultations at that level, and then ensure that the decision is implemented?
    4.30 p.m.
    We hope that the Minister will resist the arguments of some of his hon.
    394
    Friends who take a contrary view. We feel that his critics, led by the hon. Members for King's Lynn and the Isle of Ely, are not acting in the best interests of their own producers, although they think they are. They are really seeking to hamstring a body in a way which would, in the end, be harmful for the small producers.
    I want the small producers to benefit by improved marketing. I have always stressed that. My bias has always been on the side of the producers. We have had this out in Committee and my bias is there. Hon. Members and those outside in the industries in organised farming opinion are wrong, at this stage, to try and restrict the work of an important body like this. As the Minister said, why not have latitude? Why seek to restrict it, to corset it, at this stage? There are ample safeguards. In an industry where we need a new spirit, a new approach and a spirit of adventure, it will help to lay down a better marketing policy which will help the small producer. I hope that the Minister will resist those colleagues of his who seek to restrict the work of the Council.
    Mr. Charles Loughlin: Would my hon. Friend agree that the National Farmers' Union did not oppose this Amendment? It simply wanted assurances as to the Council and the point of control of the Council. I understood him to say that the union was opposing this.
    Mr. Peart: I said that there was an opinion in the union which would, I know, be rather cautious about giving powers to the Council to indulge in what we have been trying to obtain—marketing, etc. I hope that hon. Members who have opposed this Amendment will have second thoughts, and, in view of the Minister's assurance, will not only acquiesce in this Amendment but approve of it.
    Mr. J. Hare: The hon. Member for Workington (Mr. Peart) seems to think that he has a professional rôle to protect me against my own supporters. It is kind of him, but I can do without his assistance. He is not quite so skilful an operator as his hon. Friend the Member for Sunderland, North (Mr. Willey), who was much more skilful,

    395
    In welcoming this Amendment he did not let the cat out of the bag, but the hon. Member for Workington has done so. He said that I wished for great latitude and hoped that the proviso in Clause 10 would be removed, and that we would have this Council engaging in every sort of activity.
    Mr. Peart: I said that they may indulge in this sort of activity. That is not letting the cat out of the bag; it is telling the truth. I did not want to qualify.
    Mr. Hare: I do not think that the hon. Member need qualify. Everyone listened and knew what he meant. One of our difficulties is that we do not know what Mr. Speaker will do about an Amendment put down by the Opposition to deal with the proviso in Clause 10. All I can tell my hon. Friends is that if Mr. Speaker should decide to call that Amendment I hope they will support me in the Lobby, because I intend stoutly to resist any argument put forward on this subject by the Opposition. The last thing in the world I would do is move this Amendment unless it had been qualified by words in Clause 9, the detailed list of provisions in Clause 10, and, finally, by the proviso in Clause 10. I would not have dreamed of asking them to accept this Amendment unless Clause 10 stood without Amendment.
    Far from having said that I wanted a lot of latitude, I used most careful words. I said that I think it is wise to allow just a little latitude for the unexpected contingency. That is very different from what the hon. Member for Workington said I wanted. I believe this little latitude, a matter of common sense, is a perfectly harmless and, at the same time, a rather useful provision for the Committee to accept. I hope that with this assurance my hon. Friends will support me against the Opposition Amendment on Clause 10 and that they will be good enough to give me their support on this Amendment.
    Mr. Willey: I do not rise because I take umbrage at being called a skilful operator, but only to help the Committee. We tabled our Amendments before we saw the Government Amendment. Now that we have seen that
    396
    Amendment we do not regard our Amendments as necessary. I think that this is the right approach. It is better to leave the initiative with the Council after putting in the further safeguard that it will only obtain further functions if it gets the consent of the Minister. I think that that is right.
    I am not for a moment saying that we do not hold the view we take about the functions of the Council, but we recognise that the Council will have a difficult initial period and that it would be far better to show confidence in it. On matters like this, on which there are differences of opinion, it would be far better to let the Council consider it and, if it thinks that it has a case for expanding its functions, seek the consent of the Minister.
    The necessity to seek the consent of the Minister is a valuable safeguard. Any section of the industry which might feel that the Council was seeking too wide functions would have the opportunity of making representations to the Minister before he gave his consent. That is a right and proper way to arrange things I congratulate the Minister on what he has done, not because I am a skilful operator, but because I genuinely think he has found the right solution.
    Mr. Fell: Did I understand the hon. Gentleman correctly? I understood him to say that the Opposition were not any longer interested in their Amendment to delete lines 14 to 16 from Clause 10.
    Mr. Willey: We raised these matters in Standing Committee and we wanted to pursue them here. Subsequently, however, we had an opportunity of considering the Government's Amendment. I am not suggesting that it wholly meets our point of view, but it is right and proper that the initiative should rest with the Council, that we should not further define the functions in the Bill, and that there should be this further safeguard—that if the Council finds it necessary to expand its functions it should have the consent of the Minister.
    Mr. Fell: Am I right in supposing that the hon. Member is happy with this Amendment and that his Amendment, which may or may not be called later, will not be moved? I thought that that was what he said.
    The Temporary Chairman: I hope that the hon. Member will not pursue too far an Amendment which may or may not be considered by the House.
    Mr. Fell: If this were to be so—and it is my construction of what he said—it would arouse my suspicions. On the one hand, we have one member of the Opposition Front Bench saying that this will enable trading by the Council and, on the other, we have one of his colleagues on the same Front Bench saying that he does not mind about the provision which excludes trade. That leads me to the question whether we are absolutely certain that if we do pass this Amendment it will, in fact, be nullified as far as trading is concerned by the words in Clause 10.
    Mr. Hare: I am only too willing to give my hon. Friend the exact guarantee which he wants. I will certainly see that the proviso to Clause 10 applies to this Amendment. It is very important that I should make that point, and it is also important that not only my hon. Friends but also hon. Members opposite should recognise it, in case there has been any misconception.
    Mr. Willey: It would, of course, be a matter for legal construction. I am obliged to the right hon. Gentleman for announcing his intentions. I cannot say that I am altogether happy with the provisions, but I am as happy as I can be with the present Administration, and since I cannot see them failing to remain in office for a time, while they remain in office I regard this as a good compromise.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    Clause 10.—(FUNCTIONS OF COUNCIL.)
    Mr. Godber: I beg to move, in page 8, line 7, at the end to insert:
    (h) undertaking the certification of produce or of articles of any description, the registration of certification trade-marks and the functions of proprietors of such marks.
    Here, we move away from the somewhat controversial subject on which the hon. Member for Sunderland, North (Mr. Willey) sought to threaten us with legal interpretations. I am satisfied with the last Amendment, and I am glad that he is.
    398
    This Amendment is perfectly straightforward. It is designed to give the Council certain additional powers, but subject, again, to the proviso about which we have been talking. These additional powers are very simple. They are powers to certify produce and to register certification trade marks. I repeat that the Council will be a non-trading body except for a limited purpose of experiment and demonstration. In the ordinary sense of the word, therefore, it will not need trade marks. On the other hand, it is possible that the Council will wish to be able to certify the quality of produce and the suitability of containers, for example. For instance, it may well wish to introduce standard grades of produce. Some of my hon. Friends feel very strongly that there is a need for this.
    When it comes to encouraging the use of these grades, it could well be important that produce conforming to them is distinguished by a mark. This could be done by the registration of certification trade marks, which the Council could then license packers to use. A packer who failed to conform to the grading standard would run the risk of losing his licence to use the mark.
    The Committee will note that the Amendment goes beyond produce and enables the Council to register the mark of any article. This appears fairly wide, but it is limited to the purpose of improving the marketing and distribution of horticultural produce. The Amendment would enable the Council, if it wished, to approve any piece of equipment used in marketing and distribution and to signify that approval by allowing its mark to be used.
    That is the purpose of the Amendment. It is a useful provision which the Council might well need. I very much hope that it will commend itself to the Committee.
    4.45 p.m.
    Mr. Darling: We welcome the Amendment and thank the Joint Parliamentary Secretary very much for it. This is an issue which we raised in Standing Committee, and there was some discussion about it on both sides of the Committee and general support for the proposition that one of the main improvements which need to be made in horticultural marketing in this country is the grading of the produce which is marketed for sale.

    399
    This is a matter which is causing great concern, we know, to some sections of growers, particularly tomato growers. We have to consider how the grading is to be done and how growers who play the game and conform to the grading are to be protected from the sturdy individualists who do not play the game and who put sub-standard produce in containers bearing the certification mark. We have to consider who will do the grading and how the protective provisions will be carried out.
    It is obvious that the decision as to the grades and designation to be given to grades should be taken by the Horticultural Marketing Council. As far as possible we want designations which can be advertised to the consumers so that they know, in the shops, what kind of produce they see and what grade. The Council should do this work, and in order that it may be done it is necessary to include the Amendment in the Bill.
    We welcome the Amendment and we think that it will be one of the most important of the duties which the Council will undertake. We sincerely hope that it will have the effect of improving the marketing of produce in this country to the extent that it will satisfy growers about the handling of their goods by people engaged in the distributive trade and will give customers the satisfaction of knowing that they are getting honest value for their money.
    Major Legge-Bourke: It is pleasant to be able to congratulate the Government most warmly on this Amendment. I am certain that it is right. It is a function which the Council ought to undertake.
    I should be grateful if my right hon. Friend would elaborate a little on the stage at which, in the movement of produce from the grower to the consumer, the certification is to be made. I very much hope that the Minister has already taken account of the fact that, as prepackaging is developing, we are getting much more direct supply to the eventual retailer from the producer-packer, and much of the wholesaling and secondary wholesaling which applies in other industries is beginning to disappear. My own view is that it is right that it should. It is, therefore, important that no one should have to suffer by pre-packaging
    400
    virtually on his own doorstep and then being compelled, for certification purposes, to send the produce to a central point miles out of the way of the journey to the eventual consumer.
    Mr. Godber: I am obliged to the hon. Member for Sheffield, Hillsborough (Mr. Darling) for his reception of the Amendment, although I again ask him not to overdo it, because he only sows seeds of doubt in the minds of my hon. Friends. Because of this I was particularly glad to have the reassuring welcome of my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke), who, I know, feels strongly about these matters.
    My hon. and gallant Friend asked at which stage the certification trade mark would be added. This is a matter for the Council, and I do not want to infringe on what it will decide. I want the Council to decide at what stage it should be done. My hon. and gallant Friend made a valid point about the importance of pre-packaging and about changing circumstances. These are all matters which the Council will be in the best position to consider. It is up to the Council, in the light of the circumstances, changing quite rapidly, as they are at the moment, to decide when and where the certification trade mark should be added.
    The Amendment provides the machinery which gives the Council the opportunity to do the sort of thing which both my hon. and gallant Friend and I want to see done, but the Council is the appropriate body to decide questions of timing and I do not wish to lay down any specific rule.
    Sir James Duncan: I want to ask a question about the English of the Amendment, without discussing its merits at all. I was not on the Standing Committee and I may be stupid about this subject, but I do not see the relationship between the last few words of the Amendment and the first words. The opening words are:
    "undertaking the certification of produce …"
    Later in the Amendment are the words:
    "the functions of proprietors of such marks."
    Are we undertaking the certification of the functions of proprietors or are we undertaking the functions of proprietors? If is not clear to me. If the English

    401
    needs clarifying, perhaps my hon. Friend will see whether it can be made a little clearer in another place.
    Mr. Godber: I always listen respectfully to a Scotsman telling us how to use the English language. The point that my hon. Friend has raised is interesting, but the answer is "neither" when he asks which of the two descriptions is right. It says:
    "undertaking the certification of produce or of articles of any description, the registration of certification trade marks …"
    That is the point. It is the registration, not of certification, but the registration of certification trade marks.
    A certification trade mark is a trade mark which is registered with the Registrar of Trade Marks by a non-trading body for use by others. It is the normal trade mark. It is a certification trade mark which a non-trading body, such as this Council, would apply for and provide for use by other people.
    If my hon. Friend reads it in that sense he will see that it is
    "the registration of certification trade marks."
    The
    "… functions of proprietors of such marks."
    means that having registered this mark they are then the proprietors of the mark. I think that it is logical if my hon. Friend follows it in that way. It is the fact of a certification trade mark being added to another type of trade mark which requires this form of English.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.
    Bill reported, with Amendments; as amended (in the Standing Committee and on recommittal), considered.

    New Clause.—(RAISING LIMIT ON SHARE OF ANY ONE MEMBER OF A CO-OPERATIVE ASSOCIATION.)
    Inasmuch as it affects co-operative associations within the meaning of Part I of this Act, in paragraph (a) of section four of the Industrial and Provident Societies Act, 1893 (which limits to five hundred pounds the interest in the shares of a co-operative association registered under that Act which any one member may hold), for the words "five hundred" there shall be substituted the words "one thousand".—[Mr. Willey.]
    Brought up, and read the First time
    Mr. Willey: I beg to move, That the Clause be read a Second time.
    The purpose of the new Clause is to enable members of co-operative associations to hold up to £1,000. I expect that the right hon. Gentleman will accept the Clause. I should not have thought that there was any question of the Government not accepting it, and, therefore. I shall speak only very briefly.
    I think that it is recognised that everyone realises that the agricultural co-operatives are in a special category, and that all those interested recognise that the steps that I am proposing are modest ones. The sooner this is done the better. We have the occasion in this Bill, and I assume the right hon. Gentleman will take his opportunity.
    I will not deploy an argument at length in support of the Clause. We know that the N.F.U. and the A.C.C.A. are strongly in support of this action being taken. We have to recognise that the agricultural co-operatives have a special case, and it is necessary for me to argue only one stage further that the co-operatives which are receiving assistance under the Bill are in a special category. I appreciate that there is an argument against taking limited action such as this in a Bill of this character, but it is the right hon. Gentleman who has placed the co-operatives in this special category. That is the effect of Part I of the Bill.
    These co-operatives are receiving public support and, therefore, we ought to take this opportunity of making this provision which will assist them to carry out their work more efficiently. As I have said, a special case can be made out for them. Within that special category of agricultural co-operatives a particular case can be made out for the co-operatives which are assisted under the Bill. I hope that it is unnecessary to argue further in support of the Clause and that the right hon. Gentleman will feel obliged to us for having shown this initiative, an initiative which, perhaps, he could not have shown himself. I hope that he will be able to accept at least the principle of the Clause.
    Mr. J. Hare: This is a question of some importance. I listened with interest to the hon. Member for Sunderland, North (Mr. Willey), who said that he made his speech a short one, but, as

    403
    usual, it was to the point, because he expected that I would accept the new Clause. I cannot accept it, but because I cannot do so it does not mean that I have not listened with some sympathy to what the hon. Gentleman said. It also does not mean that I reject some of the arguments that he put forward.
    Perhaps I might remind the hon. Gentleman that this subject was raised on the Second Reading by the hon. Member for East Ham, South (Mr. Oram). He made it clear that he would like to see the £500 limit raised, not only as the hon. Gentleman is asking for, for horticultural co-operatives, but for all agricultural co-operatives. The hon. Gentleman made that abundantly clear in what he said. I would also inform the hon. Gentleman for Sunderland, North that the Federation of Agricultural Co-operatives has also recently suggested raising the limit. It recommended that it should be raised for all industrial and provident societies.
    To be fair, the hon. Member for Sunderland, North made it quite clear that the Clause we are discussing does not do either of those two things. It restricts the increase in the limit to co-operative associations within the meaning of Part I of the Bill. I think that the hon. Gentleman also admitted the obvious difficulties. He argued that because of Part I we had placed these co-operatives into a special category, but he admitted that he had to put forward his argument because, otherwise, obvious anomalies would immediately be pointed out. I must take a more general view. If I were to accept the Clause we would, despite what has been done under Part I of the Bill, create a number of anomalies that, I think, we all would dislike.
    The horticultural side of one particular association might be quite a minor part of its activities, and yet the new Clause might alter the limit for this association and not for another one, operating close by, which happened to be entirely agricultural. I think that one could easily get the curious position whereby agricultural co-operatives, or, indeed, co-operatives which have no connection with agriculture, might decide—and I would be interested to hear the views of the hon. Member for Sheffield,
    404
    Hillsborough (Mr. Darling) about this—to recruit a few horticultural members in order to enjoy the advantages of higher shareholding limits.
    Those are real objections to the points put forward by the hon. Gentleman. Even if one accepted that the limit ought to be raised, it would be wrong to legislate for it in this what must admittedly be a piecemeal, and I should have thought, anomalous way, and to leave out of account all the purely agricultural co-operatives and all the other co-operatives with no interest in agriculture. I believe, therefore, that this must be—and I think that the hon. Gentleman expected me to say this—a question which should be looked at generally.
    5.0 p.m.
    I said that I was not unsympathetic to what the hon. Member for Sunderland. North said. As the House knows, responsibility for the general provisions of the Industrial and Provident Society Acts rests with my hon. Friend the Financial Secretary to the Treasury. I said that I had noted the Second Reading speech of the hon. Member for East Ham, South and I was interested in his arguments.
    I have already referred the question which he raised to my hon. Friend the Financial Secretary, who is considering the matter in the context of the general co-operative movement. I understand from my hon. Friend that there are ways in which societies can draft their rules so that the terms on which members make loan capital available can be as helpful as if the money were lent in the form of shares. That sort of possibility seems to make it probably unnecessary to rush into hasty action for the benefit of horticultural societies now.
    Having said that, I repeat that I have referred the general question of shareholding limits to my hon. Friend, who is now actively considering it, and I think that the House will agree that he is a very sympathetic Minister. It would be wrong to undertake piecemeal legislation of this kind in this Bill, and I ask the House to reject the new Clause on the understanding that what it proposes is, in fact, being carefully studied.
    Mr. A. E. OramI can understand the Minister's refusal to accept the Clause if it leads to certain

    405
    anomalies, but I think that my hon. Friends will want rather more assurances about the speed with which the other legislation is likely to be brought forward. I was not too happy with the Minister's suggestion that this was not urgent. It is a matter which those responsible for stimulating the organisation of agricultural co-operatives in general have very much in mind. They would prefer the shareholding limit to be raised. I accept the argument about loan capital being a possible substitute in certain circumstances, but it is, nevertheless, more desirable that the limit should be raised.
    I remember that this problem of too stringent a limit on the shareholdings in co-operative societies was one which affected co-operatives some years ago, when the limit was £200. On the initiative of Mr. W. T. Williams, at that time the hon. Member for Baron's Court, a Private Member's Bill was promoted and the limit was raised to £500. I remember that on that occasion the agricultural co-operatives indicated that they would much prefer the limit to be raised to at least £1,000. After all, such a limit would do no more than catch up with the declining value of money. The £200 limit was set at the end of the nineteenth century and to raise it to £500 was to do no more than bring the matter up to date.
    The agricultural co-operatives want the possibility of going beyond that, because they are in a somewhat special category. One can expect thousands of members in a consumer society, but the number will probably be considerably smaller in an agricultural co-operative, although its capital needs will be by no means the per capita equivalent of those of the consumer society.
    For that reason, the case for raising the limit for agricultural co-operatives in general is very strong and I welcome the Minister's consultations with his hon. Friend the Financial Secretary and the fact that things are moving. I hope that the matter will be treated more urgently than appears to be the case from what the right hon. Gentleman has said.
    Sir R. Nugent: I add my support to the principle of the Clause, if to do so does not embarrass hon. Members opposite. This is not a party matter, but a matter of the practical need of growers' societies which are likely to spend
    406
    £50,000 or £100,000 on central plants with the assistance of the grants which my right hon. Friend is so generously to give to them. I am sure that there will be many cases when the present limit of shareholding of £500 will be insufficient. That figure has simply become out-dated.
    I fully accept my right hon. Friend's explanation of why the new Clause will not do—that it is too narrow and would create anomalies—but, after having listened to the debate, I am sure that my right hon. Friend will feel that a practical need is involved and I hope that it will be possbile to meet it.
    Mr. Darling: The scale of operations envisaged for horticultural co-operatives is such that their capital needs will be far greater than can be provided by members under the present statutory limit. There are technical objections, with which I will not weary the House, against raising too much on loan as against share capital. If the whole of the capital of a co-operative could be raised on share capital, it would be so much the better.
    The Financial Secretary to the Treasury is now in his place and perhaps he will give us the benefit of his advice on two matters which I wish to raise. There is not so much need to raise the limits for consumer societies and for general industrial societies. My first question is whether it would be possible, if we are to amend the Industrial and Provident Society Acts, to single out agricultural co-operatives, which would include horticultural co-operatives, so that the limit on their shareholdings could be raised to a figure which would not be applicable to industrial co-operatives.
    Secondly, the Minister knows that a Bill has been prepared and drafted by the N.F.U. and A.C.C.A. to amend the Industrial and Provident Society Acts. I wonder whether the right hon. Gentleman could tell us whether the Government favour that Bill and, if so, whether there could be some arrangement, perhaps through the usual channels, to speed up its presentation.
    Mr. J. Hare: I have listened very carefully to what has been said since I replied to the hon. Member for Sunderland, North (Mr. Willey). I am very glad that the hon. Member for East

    407
    Ham, South (Mr. Oram) intervened, because I paid particular attention to his Second Reading speech. He asked me for an assurance about greater speed. My hon. Friend the Member for Guildford (Sir R. Nugent) pointed out that in his opinion there was a practical need for legislation of this sort, and the hon. Member for Sheffield, Hillsborough (Mr. Darling) thoroughly endorsed those points of view.
    The hon. Member for Hillsborough asked whether some separate arrangements could be made about the respective shareholding limits of agricultural co-operatives and other types of co-operatives. That may be so, but I should not like to make any commitment on that subject. This is a matter which those interested and responsible should study.
    In the new Clause, we are dealing only with horticultural co-operatives. The question which the hon. Member for Hillsborough raised applies to co-operatives generally. The hon. Member also asked whether something could not be done to expedite this Bill, which, he says, has been prepared.
    I think the hon. Member for Sunderland, North realised very well that I was fairly sympathetic in my response to his opening remarks. I should be glad, once again, to draw the attention of my hon. Friend the Financial Secretary—who was able for a short moment to look in on this debate—in detail to the very many wise words that have been uttered. With that assurance, I hope that the hon. Gentleman will, perhaps, agree that it would be to the benefit of the House if he withdrew the Clause.
    Mr. Willey: I was very touched by the appearance of the allegedly sympathetic Financial Secretary. I thought it was an overt and patent demonstration of his sympathy, but what disturbed me was that the minute he was asked some questions he coyly retired. We now have to rely upon the right hon. Gentleman's statement that the Financial Secretary is sympathetic. I would not for a moment doubt that the right hon. Gentleman is correct, at any rate in this particular.
    I am faced with a difficult problem—whether I should endeavour against
    408
    odds to try to do a lesser evil or to hope that we can attain a greater good. I think it is probably better that we should hope for the greater good. I at once accept the case that it would be anomalous if we gave this advantage only to those agricultural co-operatives which come within Part I of the Bill.
    I hope that this debate will have helped to expedite the sympathetic consideration of the sympathetic Financial Secretary. This is not a matter which would take up much of the time of the House. Attention has been called to the Bill introduced by Mr. Williams. That Measure, I should think, occupied less than an hour to pass through all its stages. I hope, therefore, that we can expect legislation, possibly this Session.
    There is now an urgent need for this provision being made for the benefit of those co-operatives which will come under Part I of the Bill, but, at the same time, it is far better to afford that benefit to agricultural co-operatives generally.
    I will wish the right hon. Gentleman good luck. I think he shares our point of view about this matter, and I hope that we shall be able to have legislation as soon as possible. With that expectation, I beg to ask leave to withdraw the Motion.
    Motion and Clause, by leave, withdrawn.

    New Clause.—(EXTENSION OF TIME UNDER 16&17 GEO. 5, C. 40, S. 2, FOR REQUIRING PRODUCTION OF BOOKS, &C.)
    In section two of the Horticultural Produce (Sales on Commission) Act, 1926 (under which an owner or consignor has ten days in which to require the salesman to produce books and other documents for inspection), for the words "ten days" there shall be substituted the words "one month".—[Mr. Willey.]
    Brought up, and read the First time.
    Mr. Willey: I beg to move, That the Clause be read a Second time.
    The Runciman Committee devoted some attention to the practices of salesmen. It made several recommendations, two of which would involve legislation. Quite a long time ago the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) and I asked the then Minister of Agriculture about the

    409
    Government's attitude towards the conclusions and recommendations of the Runciman Committee. The Chancellor of the Exchequer, as he now is, replied:
    "The Government also accept the recommendation that certain changes should be made in the Horticultural Produce (Sales on Commission) Act, 1926, for the better protection of producers."—[OFFICIAL REPORT, 2nd August, 1957, c. 277.]
    5.15 p.m.
    We were surprised, therefore, when we saw the Bill to find that the Government made no proposal to implement these recommendations of the Runciman Committee. That was an omission which we sought to remedy in Standing Committee. We put down two new Clauses to carry out these recommendations. We expected them to be warmly and sympathetically received by the Government, but I was surprised to be assailed by the Parliamentary Secretary.
    In Standing Committee we moved a new Clause in these terms, and not thrice but on four occasions the Parliamentary Secretary turned me down. It was only my persistence in argument that shook the Parliamentary Secretary to the extent of saying:
    "Skilful as the hon. Member's arguments have been, they have not converted me, but in view of his persistence I certainly agree to look at the matter with my right hon. Friend."—[OFFICIAL REPORT, Standing Committee A, 11th February, 1960; c. 366.]
    One of the points to which I called the hon. Gentleman's attention, and which the Runciman Committee made, was that the law as it stands tends to aggravate the relations between salesman and producer. What we are now trying to do is to extend the time within which a merchant is required to produce his books for inspection. The Runciman Committee recommended that the time ought to be extended to a month.
    As I emphasised in Committee, one of the reasons why the Runciman Committee made that recommendations was that it is far better to afford a longer period of time for this matter to be dealt with without demanding an inspection of the books and that if we afford a longer time we have better relations between salesman and producer and, if necessary, the trade organisations can make interventions.
    I only hope that, having had time for mature and careful reflection, the Gov
    410
    ernment will now be able to take this opportunity of implementing this recommendation of the Runciman Committee. We have not had the courage to put down bath recommendations of the Runciman Committee because we realise that in Committee these aggravated the Government to adamant opposition to the proposals which over two years ago they themselves had accepted. We hope that by confining our attentions to this simple amendment of the law, which, as far as I know, is desired by both salesmen and producers, we shall at any rate achieve some partial success and that the Government will now feel disposed to accept this Clause designed to implement the recommendation of the Runciman Committee.
    Mr. Godber: Once more I have listened with care to what the hon. Member for Sunderland, North (Mr. Willey) has said on this subject. It is perfectly true that in Committee he pressed me very hard indeed. The hon. Gentleman tends to press me on a number of points and I have to satisfy myself absolutely before I fall for his flatteries or his invitations.
    In Standing Committee I felt that while the hon. Gentleman had, perhaps, a strong case here, it was difficult to concentrate one's mind entirely on it by reason of the fact that there were one or two other new Clauses hanging about as well. The hon. Gentleman has been very wise in putting down the one Clause and concentrating the Government's attention on this one point.
    I would say, as I said in Standing Committee, that this is certainly a matter with which, in general, we agree. I indicated in Committee that we were somewhat nervous about implementing detailed points of this nature in a Bill which was related to somewhat different issues. But I must say that the arguments put forward by the hon. Gentleman and his hon. Friends impressed me very much, and it was for that reason that eventually, under pressure from the hon. Gentleman, I agreed to take it back to my right hon. Friend so that we could look at it again. On reconsideration of the matter, with that reasonableness which the hon. Gentleman would expect from this Government, we decided that it was right and proper to accept this new Clause.

    411
    I am happy to tell the House that we can accept the new Clause without impinging in any way on other matters. Further, we can accept it in exactly the same wording as it is tabled. Indeed, I can detect no single flaw in its drafting. That is a remarkable achievement, on which I congratulate those responsible. Therefore, I am very happy to accede at this late stage to the hon. Gentleman's pressure, and I hope that the fact that I have done so after his pressure will make it more sweet.
    Mr. Peart: The Parliamentary Secretary said that he hopes his acceptance will make it more sweet. He has painted a glowing picture of the reasonableness of the Government, but they have been reasonable only because we pressed them in Committee. We pointed out that the Runciman Committee had recommended that producers should be protected from the malpractices of certain salesmen. Although the majority of salesmen who engage in the marketing of horticultural produce are honest and good people, there are instances where malpractices exist. The Runciman Committee recommended in paragraph 464:
    "We think it reasonable that the period within which a grower must decide whether or not to demand an inspection should be longer than ten days, and we recommend that it be extended to one month."
    Having argued this in Committee, we are very glad that our point of view has been accepted. We are pleased that the Government accept our constructive approach, and it is sweet to us. I hope that the Minister will continue to approach the Bill in that constructive light. We accept his assurances.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

    Clause 2.—(SUPPLEMENTAL PROVISIONSAS TO SCHEMES.)
    Mr. Peart: I beg to move, in page 3, line 3, at the end to insert:
    Provided that where the appropriate Minister is of the opinion that there has not been compliance with such conditions in accordance with This subsection then he shall give to person who appears to him to be carrying on for the time being the business to which the grant relates a written notification of the reasons for his decision and shall afford to that person, and if that person so requests, not more than one other person nominated by him
    412
    in that behalf, an opportunity of appearing before and being heard by a person appointed by the Minister and shall consider the report of the person so appointed, a copy of which shall be supplied by the Minister to the first-mentioned person.
    Here again, we repeat a point of view which we pressed in Committee. When considering the question of revocation of a scheme, it is right that the small producer should be safeguarded. The Amendment is designed to do that. The small producer should be given reasons for any decision which has been taken. If the individual requests to have his case considered, that should be done. That was the spirit of the Franks Committee's Report, and I am certain that it is in line with general agricultural practice now.
    I hope that the Minister will accept the Amendment. It is a safeguard which we feel should be in the Bill. The Parliamentary Secretary has already revealed a constructive approach to the Bill, and I will say no more except that I hope that he will accept the Amendment.
    Mr. J. Hare: As the hon. Member for Workington (Mr. Peart) rightly said, this was discussed in Committee. The Amendment would provide applicants with a statutory right of appeal against a decision that an application could not be approved or that a claim for a grant had to be rejected because the conditions of the scheme had not been met. That is a brief description of the object of the Amendment.
    As the Bill is now drafted, I am authorised to pay a grant only when certain conditions are satisfied, and I am in turn accountable to Parliament for the payments I make. Within those limits, I want to pay grants as freely as I can and give applicants every opportunity to show that I may properly do so.
    I want to adopt under the scheme exactly the same procedure as is adopted in many other schemes already in operation. I will outline what the procedure is. Members of county agricultural executive committees are consulted in doubtful cases before an adverse decision is taken. If I find myself unable to approve an application or to admit a claim, the applicant is given a written statement of my reasons. He is then free to make representations to his county agricultural executive committee, and I

    413
    assure the House that the committee takes very great care to understand the case. The applicant always has an opportunity to put his case in writing. If he wishes, he may seek a hearing in person, go to the C.A.E.C. and discuss his application. He can take a supporter with him. Very often, the committee arranges for some of its members to visit his holding and discuss the problem on the ground.
    I assure all hon. Members that what they may describe as this informal procedure, but what I describe as this very human procedure, is working very well. There are many other schemes in which this procedure operates—the farm improvement scheme, the small farmer scheme, the hill farming and livestock rearing scheme, the drainage and water supply scheme, and the ploughing grant scheme. In other words, we have a vast experience of dealing with people who feel that they have a just complaint.
    Last year in 474 cases representations were made to county committees under one or ocher of those schemes. In 377 cases the official decision was endorsed by the county committee. In 88 it was modified or reversed in the light of the committee's recommendations. In only 9 was it necessary for a disagreement between the county committee and the officials of the Ministry to be referred to Ministers. I am sure that the House will take it from me—
    Mr. Peart: The Minister mentioned a decision of the county committee. I hope that he realises that the county committee is an executive agency of the Minister.
    Mr. Hare: County committees are my representatives. They have very few executive powers. They used to have many before we did away with supervision and dispossession. Except for a few remaining powers, they are advisory and not executive.
    If I can finish what I was saying I think that it will clear the hon. Gentleman's mind. The procedure works very smoothly. It is welcomed by applicants and by the committees, because its very informality offers the best chance of fully and fairly examining an aggrieved person's case and helping him as far as possible. It is unnecessary to prescribe a statutory procedure in its place.
    414
    Indeed, I believe that the hon. Gentleman's suggestion would tend to limit applicants in presenting their cases rather than help them. I hope that the hon. Gentleman will take that seriously, because it is a considered view. I should be very sorry to see a formal, hard and fast statutory atmosphere replace the very free and friendly spirit in which these matters are handled at present. I should also be very sorry to see a departure from the confidential basis on which, in general, county committees are at present able to advise me on these cases.
    I can make grants only where I am satisfied that the statutory conditions have been met. The county committee in considering the applicant's case afresh is a source of independent advice to me on whether I can properly make a payment, apart from the official advice I have. The hon. Gentleman will appreciate that the decision is and must be my responsibility, because I alone am accountable to Parliament for it.
    In those circumstances, it would be wrong for advice to Ministers to be known to interested parties. There is no question here of my acting in a judicial capacity. In this context—I think that this deals with the point which was worrying the hon. Member for Workington—the county committees are genuinely my advisers in the same way as are my officials. With that explanation, I hope that the hon. Gentleman will see fit to withdraw the Amendment.
    5.30 p.m.
    Mr. Willey: I am obliged to the right hon. Gentleman for his reply, but I do not think it meets the point which my hon. Friend the Member for Workington (Mr. Peart) had in mind. During the Committee stage we had a discussion which turned largely on revocation. The Amendment which we put forward then was resisted by the Government on the ground that it turned on revocation and that, substantially, revocation was inapplicable under the present Bill. I mention this because I think that we have in mind something different from what the right hon. Gentleman had in mind when he replied. We all appreciate the work of the county council committees and the advantage of this reference to them. I merely asked the right hon. Gentleman about this in order

    415
    to be sure that this is not too dilatory a process. Now that he is dealing with applicants it would be a bad thing if we had a dilatory process which unduly delayed applications. But that is not the point which my hon. Friend had in mind.
    We were concerned with what might be a revocation, or a de facto revocation. This does not involve only the expenditure of public money. Only one-third is public money and two-thirds represents the applicant's own money. This subsection deals with the proposal in question being carried out in a proper manner or within a reasonable time. If money is withheld after the applicant has incurred expenditure, we feel strongly—this has been included in previous Measures containing similar provisions—that the applicant should have the right to appeal to an independent person and see the report which is made to the Minister.
    I hope the right hon. Gentleman will endeavour to meet us on this Amendment, because we consider this to be a matter of principle and that such provision ought to be made. The right hon. Gentleman has not said so, but he may have some criticisms of the drafting of this Amendment by which we endeavour to meet this point. But I think that where there has been an agreement that certain work should be carried out and where the applicant has incurred expense and then there is a question of revocation or de facto revocation, there ought to be such a provision as this.
    Even if the right hon. Gentleman feels that this Amendment is not the right way in which to deal with the matter, I hope he will give us an assurance that this provision will be made. During the Committee stage discussions we were disappointed, as I think the Minister will agree, because we did not get a complete reply. We were told only that there might not be so many cases such as this under the provisions of this Bill compared with previous legislation. We were not told that there would be no cases at all. We feel that here the provision is expressly made. There may be a question of work not being carried out in a proper manner or within a reasonable time and these matters ought to be subject to those safeguards which were provided for in the Report of the Franks
    416
    Committee. I hope whatever criticisms the right hon. Gentleman may have of this Amendment—though he has not indicated that he has any—he will, nevertheless, give us an assurance that the provision made in previous legislation will be included in this Bill.
    Mr. Hare: I think that here there is a difference of opinion. I cannot add much to what I have already said. I believe that the procedure under which we operate in so many other schemes has proved satisfactory. Complaints are dealt with, and there is no question of delay such as the hon. Member for Sunderland, North (Mr. Willey) seemed to suggest. I consider that these difficult cases of doubt and so on are dealt with humanely and with reasonable speed. I would rather have the proven procedure than try some more formal procedure such as the hon. Gentleman has in mind.
    Mr. Willey: I thank the Minister for his further explanation. I remind him again that we have made such provision in previous legislation. I am not reflecting on the action now taken about applications being turned down and then reconsidered. I am talking about a different category of case, but I will not press the right hon. Gentleman further on this occasion. I hope he will look at this matter again before it is considered in another place.
    Amendment negatived.

    Clause 9.—(THE HORTICULTURAL MARKETING COUNCIL.)
    Mr. J. Hare: I beg to move, in page 6, line 21, to leave out lines 21 to 23 and to insert:
    "have special knowledge or experience which will be of value in the exercise of the Council's functions."
    As it stands, this Clause would enable me to appoint an independent member of the Council only if my right hon. Friend the Secretary of State for Scotland and I were satisfied that the man or woman concerned had appropriate
    "financial, commercial, technical, scientific or administrative experience."
    It was pointed out during our discussions in Committee that this might prevent us from appointing someone who could give valuable assistance to the Council but could not be brought within

    417
    the meaning of one or other of the adjectives I have mentioned. For example, we might not be able to appoint someone whose sole qualification was a thorough knowledge of consumer demand, even though the council might press us to do so.
    The hon. Member for Sunderland, North (Mr. Willey) was characteristically helpful on this question. He suggested that the selection of independent members should be left entirely to my discretion, without any requirement about qualifications being included in the Bill That was very complimentary to me, but I do not think it would be right for me to go quite so far as he suggested. It appears to me right for Parliament to tell Ministers that the independent members must have some special suitability for this very important task. What that special suitability should be might well be left to us.
    I think the hon. Gentleman would agree that what I am here proposing is what he suggested that I should do. It leaves the Ministers free to make the best selection from a field which is open to everyone with special knowledge or experience which would be useful to the Council.
    Mr. Oram: Since this Amendment is moved in response to an Amendment I moved in Committee, I should be grateful for what the Minister is doing. As he has said, the right hon. Gentleman is taking the line which was indicated to him by my hon. Friend the Member for Sunderland, North (Mr. Willey). But I have some reservations. I claimed during the Committee stage discussions that the wording as originally drafted was too narrow to have the meaning which I desired. I wanted a special reference to knowledge of the needs of the consumer. But the proposed wording has gone almost too far, and is so wide and general as to have no real meaning.
    It ought to have been possible quite simply to write in a qualification in addition to those at present standing in the Bill. We could have written in some such words as "special knowledge of consumer requirements". There are precedents for this in earlier legislation, and there ought not to be any difficulty about it. We hope that the Minister intends to appoint people of the kind I
    418
    have in mind, namely, those who do not necessarily have financial or commercial qualifications but nevertheless have a thorough knowledge of the needs of the housewife. Perhaps it ought to be persons engaged in the organisation of consumers, or the educational work of consumer bodies, who would be specially qualified to help the Council from that point of view. If we can have an assurance from the Minister that it is his intention to appoint such people, or that he feels himself open to do so, the Amendment would meet with my reluctant approval.
    Mr. Hare: I am not prepared to give any such undertaking. I have tried to assist the hon. Member. I have not gone as far as I was asked to go by the hon. Member for Sunderland, North (Mr. Willey), and in the light of what the hon. Member has said I am rather doubtful whether I should have moved at all. I am not prepared to give the undertaking for which the hon. Member asks.
    Mr. Peart: I hope that the right hon. Gentleman will not be touchy about this point. He has conceded part of the argument. On the other hand, I wish he could have gone further. My hon. Friend the Member for East Ham, South (Mr. Oram) is right in wishing that we could have got the word "consumer" into the Bill. The Minister could appoint a person who had experience in the fields mentioned by my hon. Friend, as has been done in previous legislation. I know that in the case of various bodies dealing with marketing it has been the practice of the Ministry to appoint individuals who have a specific connection with consumers and consumer organisations. I do not know why the Parliamentary Secretary should treat this matter so lightly.
    Mr. Godber: I am not.
    Mr. Peart: I thought he was. I should have thought he would be convinced by the argument put forward by my hon. Friend the Member for East Ham, South. I am glad that the Minister has gone so far and has had second thoughts, recognising that there must be a wider definition. He has gone much further than we thought he would have done, and in that sense we welcome the Amendment.
    Amendment agreed to.
    5.45 p.m.
    Mr. Oram: I beg to move, in page 6, line 31, at the end to insert:
    "and shall include members of co-operative societies"
    This point was also previously raised in Committee. My hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) put forward an Amendment in favour of the specific inclusion of representatives of co-operative societies. This was a recommendation of the Runciman Committee and, since the main lines of the Bill follow that Committee's recommendations, we feel that its point of view on this matter should have been more closely followed.
    The various paragraphs in the Clause indicate the various interests involved in the industry. Producers, wholesalers, and importers are separately indicated because they represent identifiably different interests engaged in the industry. I submit that a co-operative society, either on the producer or the retailer side, is also a different entity and is entitled to be included as a category different from the privately-owned organisations. The main purpose of the Bill is to encourage the setting up of co-operative associations, and it therefore seems important that they should be specifically included in the list of people to be represented on the Council.
    Mr. Darling: I support the Amendment. It is not asking for special consideration for the representatives of co-operative retail societies alone. If the Amendment were accepted, all other retail interests would be eligible to be included. My support for the Amendment arises from the remarks made by the Joint Parliamentary Secretary in Committee. I then asked him whether he could give an undertaking that no important retailing interests would be unrepresented on the Council. It seemed a proper request to make, and one that could easily have been agreed to. If the Parliamentary Secretary had said, "No important retailing interest will be unrepresented", we would not have pursued the matter further. That would have covered the co-operative case and also small private traders, supermarkets and chain stores.
    As the Bill stands, without any qualification or undertaking from the Minister or the Joint Parliamentary
    420
    Secretary, the retailing interests to be represented on the Council could be drawn only from the supermarkets and chain stores. The small private greengrocers—the chaps with the corner shops—would have no representation. We have not said specifically that the chain stores, supermarkets, multiple shops, co-operative societies and private traders should all be represented. The Amendment merely provides that the representation shall include members of co-operative societies. The House would probably agree that if the Amendment were accepted it would safeguard the position of co-operative interests, who need to be represented for the reasons given by my hon. Friend.
    It would also make quite certain that the other important elements in the retailing section of horticulture would not be unrepresented on the Council, and I hope that on this occasion the Minister or the Joint Parliamentary Secretary will give us the assurance that we failed to get in Committee.
    Mr. J. Hare: We had a lot of discussion on this matter in Committee. I appreciate the anxiety of hon. Members opposite to obtain representation for the co-operative movement in the retail section of the Council, but I nevertheless must ask the House to reject the Amendment. In the Bill we have provided for representation of each of the main interests in the industry, and I do not think that we can make special provision for representing all the many different sections of the industry without extending the membership of the Council to such an extent as to make it completely unwieldy.
    The Amendment singles out one important sectional interest but, as hon. Members opposite have said, there are other sections of the industry which are also of considerable importance. If we provide specific representation for co-operative retail societies there is a strong argument for similar action on behalf of florists, super-market proprietors, chain stores and, for that matter, ordinary greengrocers. I do not want to be thought unreasonable, and I should like to go as far as I can to meet hon. Members opposite. I can give them the categorical assurance that my hon. Friend and I will consult the representatives of the co-operative movement on the retail side before appointing the

    421
    members of the Council. I hope that the hon. Member will be good enough to consider withdrawing the Amendment in the light of what I have said.
    Mr. Willey: I am obliged to the right hon. Gentleman for his assurance, but I wonder whether he can go a little further and give us a categorical assurance that members of co-operative societies will be represented on the Council.
    Mr. Hare: Whenever I go a little way to meet him the hon. Member tries to make me go a little further. I know this is his duty, but I think he would agree that I have gone a long way in the assurance that I have given.
    Mr. Willey: I appreciate the right hon. Gentleman's assurance, but for the life of me I cannot understand why he cannot give the further assurance for which I have asked. The position of co-operative societies is a special one because, as we said in Committee, the Runciman Report said that organisations representing the wholesale or retail co-operative societies, among those representing respectively wholesalers and retailers, would be members of the Council. For that reason, I cannot understand why the right hon. Gentleman cannot go further.
    As we said in Committee and have said again today, we could have understood the right hon. Gentleman if he had said that this would mean making provision for representation of the
    multiples, the small retailers and the co-operatives. But we are not faced with that position. In Committee the Joint Parliamentary Secretary refused to give us an assurance that co-operative societies would be represented on the Council. The right hon. Gentleman, when replying to my hon. Friend, said that this might mean making florists and all kinds of other people members of the Council, but that is begging the question, as is his assurance that there will be consultation.
    I should have thought that he could have given a categorical assurance that if we are to have seven people representing the interests of retailers, among those seven would be a representative of the co-operative societies. Unless we receive that assurance we shall be driven to take the same course that we were unfortunately driven to take in Committee, and divide the House. This is regrettable. The right hon. Gentleman would be the last person in the world to deny the co-operation which his Department has received from co-operative societies, multiples and private traders, but he will not commit himself to take the course which the Runciman Committee recommended and tell us that co-operative societies will be represented, and we shall therefore have to divide the House once again.
    Question put, That those words be there inserted in the Bill:—
    The House divided: Ayes 178, Noes 211.

    Division No. 43.]

    AYES

    [5.57 p.m.

    Ainsley, William

    Crosland, Anthony

    Gordon Walker, Rt. Hon. P. C.

    Allaun, Frank (Salford, E.)

    Darling, George

    Gourlay, Harry

    Awbery, Stan

    Davies, G. Elfed (Rhondda, E.)

    Greenwood, Anthony

    Bacon, Miss Alice

    Davies, Harold (Leek)

    Grey, Charles

    Baxter, William (Stirlingshire, W.)

    Davies, Ifor (Gower)

    Griffiths, Rt. Hon. James (Llanelly)

    Bellenger, Rt. Hon. F. J.

    Davies, S. O. (Merthyr)

    Grimond, J.

    Bence, Cyril (Dunbartonshire, E.)

    de Freitas, Geoffrey

    Hall, Rt. Hon. Glenvil (Colne Valley)

    Benson, Sir George

    Delargy, Hugh

    Hamilton, William (West Fife)

    Blackburn, F.

    Dempsey, James

    Hart, Mrs. Judith

    Blyton, William

    Diamond, John

    Hayman, F. H.

    Boardman, H.

    Dodds, Norman

    Healey, Denis

    Bowden, Herbert W. (Leics, S. W.)

    Donnelly, Desmond

    Henderson, Rt. Hn. Arthur (Rwly Regis)

    Bowen, Roderic (Cardigan)

    Dugdale, Rt. Hon. John

    Herbison, Miss Margaret

    Braddock, Mrs. E. M.

    Edwards, Robert (Bilston)

    Hill, J. (Midlothian)

    Broughton, Dr. A. D. D.

    Edwards, Walter (Stepney)

    Hilton, A. V.

    Brown, Rt. Hon. George (Belper)

    Evans, Albert

    Holman, Percy

    Brown, Thomas (Ince)

    Fernyhough, E.

    Holt, Arthur

    Butler, Herbert (Hackney, C.)

    Fitch, Alan

    Houghton, Douglas

    Callaghan, James

    Fletcher, Eric

    Hoy, James H.

    Carmichael, James

    Forman, J. C.

    Hughes, Cledwyn (Anglesey)

    Castle, Mrs. Barbara

    Fraser, Thomas (Hamilton)

    Hughes, Emrys (S. Ayrshire)

    Chapman, Donald

    Gaitskell, Rt. Hon. Hugh

    Hunter, A. E.

    Chetwynd, George

    George, Lady Megan Lloyd

    Hynd, H. (Accrington)

    Cliffe, Michael

    Ginsburg, David

    Hynd, John (Attercliffe)

    Craddock, George (Bradford, S.)

    Gooch, E. G.

    Irving, Sydney (Dartford)

    Janner, Barnett

    Noel-Baker-Francis (Swindon)

    Stones, William

    Jeger, George

    Noel-Baker, Rt. Hn. Philip (Derby, S.)

    Strachey, Rt. Hon. John

    Johnson, Carol (Lewisham, S.)

    Oliver, G. H.

    Summerskill, Dr. Rt. Hon. Edith

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

    Oram, A. E.

    Swingler, Stephen

    Jones, Dan (Burnley)

    Owen, Will

    Sylvester, George

    Jones, Elwyn (West Ham, S.)

    Pannell, Charles (Leeds, W.)

    Taylor, Bernard (Mansfield)

    Jones, Jack (Rotherham)

    Pavitt, Laurence

    Taylor, John (West Lothian)

    Jones, J. Idwal (Wrexham)

    Pearson, Arthur (Pontypridd)

    Thomas, George (Cardiff, W.)

    Kenyon, Clifford

    Peart, Frederick

    Thomas, Iorwerth (Rhondda, W.)

    Key, Rt. Hon. C. W.

    Pentland, Norman

    Thompson, Dr. Alan (Dunfermline)

    King, Dr. Horace

    Plummer, Sir Leslie

    Thorpe, Jeremy

    Lee, Frederick (Newton)

    Prentice, R. E.

    Timmons, John

    Lipton, Marcus

    Price, J. T. (Westhoughton)

    Ungoed-Thomas, Sir Lynn

    Logan, David

    Proctor, W. T.

    Wade, Donald

    Loughlin, Charles

    Randall, Harry

    Wainwright, Edwin

    Mabon, Dr. J. Dickson

    Rankin, John

    Warbey, William

    McCann, John

    Redhead, E. C.

    Watkins, Tudor

    McInnes, James

    Reynolds, G. W.

    Weitzman, David

    McKay, John (Wallsend)

    Robens, Rt. Hon. Alfred

    Wells, Percy (Faversham)

    Mackie, John

    Roberts, Albert (Normanton)

    Wheeldon, W. E.

    McLeavy, Frank

    Roberts, Goronwy (Caernarvon)

    White, Mrs. Eirene

    MacPherson, Malcolm (Stirling)

    Rogers, G. H. R. (Kensington, N.)

    Wilkins, W. A.

    Mahon, Simon

    Ross, William

    Willey, Frederick

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

    Shinwell, Rt. Hon. E.

    Williams, D. J. (Neath)

    Manuel, A. C.

    Short, Edward

    Williams, Rev. Ll. (Abertillery)

    Mapp, Charles

    Silverman, Julius (Aston)

    Willis, E. G. (Edinburgh, E.)

    Mason, Roy

    Silverman, Sydney (Nelson)

    Wilson, Rt. Hon. Harold (Huyton)

    Mayhew, Christopher

    Skeffington, Arthur

    Winterbottom, R. E.

    Mellish, R. J.

    Slater, Mrs. Harriet (Stoke, N.)

    Woodburn, Rt. Hon. A.

    Mendelson, J. J.

    Slater, Joseph (Sedgefield)

    Woof, Robert

    Millan, Bruce

    Small, William

    Yates, Victor (Ladywood)

    Mitchison, G. R.

    Smith, Ellis (Stoke, S.)

    Zilliacus, K.

    Moody, A. S.

    Soskice, Rt. Hon. Sir Frank

    Mulley, Frederick

    Spriggs, Leslie

    TELLERS FOR THE AYES:

    Neal, Harold

    Stewart, Michael (Fulham)

    Mr. Probert and Mr. Lawson.

    NOES

    Aitken, W. T.

    Duncan, Sir James

    Irvine, Bryant Godman (Rye)

    Allason, James

    Eccles, Rt. Hon. Sir David

    Jackson, John

    Arbuthnot, John

    Eden, John

    James, David

    Ashton, Sir Hubert

    Elliott, R. W.

    Jenkins, Robert (Dulwich)

    Balniel, Lord

    Emery, Peter

    Jennings, J. C.

    Barlow, Sir John

    Emmet, Hon. Mrs. Evelyn

    Johnson, Eric (Blackley)

    Batsford, Brian

    Errington, Sir Eric

    Jones, Rt. Hn. Aubrey (Hall Green)

    Baxter, Sir Beverley (Southgate)

    Erroll, F. J.

    Kerans, Cdr. J. S.

    Bell, Ronald (S. Bucks.)

    Farey-Jones, F. W.

    Kerr, Sir Hamilton

    Bennett, F. M. (Torquay)

    Fell, Anthony

    Kershaw, Anthony

    Berkeley, Humphry

    Finlay, Graeme

    Kirk, Peter

    Bevins, Rt. Hon. Reginald (Toxteth)

    Fletcher-Cooke, Charles

    Kitson, Timothy

    Bishop, F. P.

    Fraser, Ian (Plymouth, Sutton)

    Leavey, J. A.

    Box, Donald

    Freeth, Denzil

    Leburn, Gilmour

    Boyle, Sir Edward

    Gammans, Lady

    Legge-Bourke, Maj. H.

    Brewis, John

    George, J. C. (Pollok)

    Legh, Hon. Peter (Petersfield)

    Brooman-White, R.

    Gibson-Watt, David

    Lewis, Kenneth (Rutland)

    Browne, Percy (Torrington)

    Glyn, Col. Richard H. (Dorset, N.)

    Lilley, F. J. P.

    Bryan, Paul

    Godber, J. B.

    Litchfield, Capt. John

    Bullard, Denys

    Goodhart, Philip

    Longbottom, Charles

    Burden, F. A.

    Goodhew, Victor

    Longden, Gilbert

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

    Gower, Raymond

    Loveys, Walter H.

    Campbell, Gordon (Moray & Nairn)

    Grant, Rt. Hon. William (Woodside)

    Low, Rt. Hon. Sir Toby

    Carr, Compton (Barons Court)

    Green, Alan

    MacArthur, Ian

    Cary, Sir Robert

    Hamilton, Michael (Wellingborough)

    McLaren, Martin

    Channon, H. P. G.

    Hare, Rt. Hon. John

    Maclay, Rt. Hon. John

    Chichester-Clark, R.

    Harrison, Brian (Maldon)

    McLean, Neil (Inverness)

    Clark, Henry (Antrim, N.)

    Harvey, John (Walthamstow, E.)

    MacLeod, John (Ross & Cromarty)

    Cleaver, Leonard

    Harvie Anderson, Miss

    McMaster, Stanley

    Cole, Norman

    Henderson, John (Cathcart)

    Madden, Martin

    Collard, Richard

    Hendry, Forbes

    Maginnis, John E.

    Corfield, F. V.

    Hicks Beach, Maj. W.

    Manningham-Buller, Rt. Hn. Sir R.

    Costain, A. P.

    Hiley, Joseph

    Marten, Neil

    Coulson, J. M.

    Hill, Mrs. Eveline (Wythenshawe)

    Mathew, Robert (Honiton)

    Courtney, Cdr. Anthony

    Hill, J. E. B. (S. Norfolk)

    Matthews, Gordon (Meriden)

    Craddock, Beresford (Spelthorne)

    Holland, Philip

    Mawby, Ray

    Critchley, Julian

    Hopkins, Alan

    Milligan, Rt. Hon. W. R.

    Curran, Charles

    Hornby, R. P.

    Mills, Stratton

    Currie, G. B. H.

    Hornsby-Smith, Rt. Hon. Patricia

    Montgomery, Fergus

    Dance, James

    Howard, Gerald (Cambridgeshire)

    Morgan, William

    d'Avigdor-Goldsmid, Sir Henry

    Howard, Hon. G. R. (St. Ives)

    Morrison, John

    Deedes, W. F.

    Howard, John (Southampton, Test)

    Mott-Radclyffe, Sir Charles

    de Ferranti, Basil

    Hughes Hallett, Vice-Admiral John

    Noble, Michael

    Digby, Simon Wingfield

    Hughes-Young, Michael

    Nugent, Sir Richard

    Donaldson, Cmdr. C. E. M.

    Hulbert, Sir Norman

    Ormsby-Gore, Rt. Hon. D.

    Doughty, Charles

    Hurd, Sir Anthony

    Osborn, John (Hallam)

    Drayson, G. B.

    Hutchison, Michael Clark

    Page, Graham

    424

    425

    Pannell, Norman (Kirkdale)

    Ropner, Col. Sir Leonard

    Tweedsmuir, Lady

    Partridge, E.

    Russell, Ronald

    van Straubenzee, W. R.

    Pearson, Frank (Clitheroe)

    Scott-Hopkins, James

    Vane, W. M. F.

    Peel, John

    Shepherd, William

    Vickers, Miss Joan

    Percival, Ian

    Simon, Sir Jocelyn

    Vosper, Rt. Hon. Dennis

    Peyton, John

    Skeet, T. H. H.

    Wakefield, Edward (Derbyshire, W.)

    Pickthorn, Sir Kenneth

    Smithers, Peter

    Wall, Patrick

    Pike, Miss Mervyn

    Smyth, Brig. Sir John (Norwood)

    Ward, Rt. Hon. George (Worcester)

    Pitman, I. J.

    Speir, Rupert

    Ward, Dame Irene (Tynemouth)

    Pitt, Miss Edith

    Stodart, J. A.

    Watkinson, Rt. Hon. Harold

    Pott, Percivall

    Stoddart-Scott, Col. Sir Malcolm

    Watts, James

    Powell, J. Enoch

    Studholme, Sir Henry

    Webster, David

    Price, David (Eastleigh)

    Summers, Sir Spencer (Aylesbury)

    Wells, John (Maidstone)

    Price, H. A. (Lewisham, W.)

    Taylor, Sir Charles (Eastbourne)

    Whitelaw, William

    Prior, J. M. L.

    Teeling, William

    Wills, Sir Gerald (Bridgwater)

    Profumo, Rt. Hon. John

    Temple, John M.

    Wilson, Geoffrey (Truro)

    Proudfoot, Wilfred

    Thatcher, Mrs. Margaret

    Wolrige-Gordon, Patrick

    Rawlinson, Peter

    Thomas, Leslie (Canterbury)

    Woodhouse, C. M.

    Redmayne, Rt. Hon. Martin

    Thompson, Kenneth (Walton)

    Woodnutt, Mark

    Rees, Hugh

    Thornton-Kemsley, Sir Colin

    Woollam, John

    Renton, David

    Tiley, Arthur (Bradford, W.)

    Worsley, Marcus

    Ridley, Hon. Nicholas

    Tilney, John (Wavertree)

    Robertson, Sir David

    Turner, Colin

    TELLERS FOR THE NOES:

    Roots, William

    Turton, Rt. Hon. R. H.

    Colonel J. H. Harrison and

    Mr. Sharples.

    Clause 10.—(FUNCTIONS OF COUNCIL.)
    Mr. Godber: I beg to move, in page 8, line 16, at the end to add:
    (2) The Council shall not exercise its functions under paragraph (f) of the foregoing subsection except after consultation with a committee appointed by the Council and consisting of—

    (a) five persons being members of the Council,

    (b) five persons appointed, after consultation with any bodies appearing to the Council to represent wholesale-market authorities, as representing such authorities,

    (c) such number of other persons as the Council may determine,

    and the expenses of the committee (including the cost of such allowances to its members, not being members of the Council, as the Ministers may with the approval of the Treasury determine) shall be defrayed by the Council.
    The purpose of this Amendment is to implement an undertaking given by my right hon. Friend in Standing Committee to set up a committee on wholesale markets, and the personnel of the committee is set out. It will be seen that five members are to be members of the Council. We felt it important that some of the members should also be members of the Council. Another five members are to be appointed after consultation, and we provide for additional members as well.
    We think that this can be a very useful committee, and we were grateful for the suggestion that led to my right hon. Friend's undertaking. The committee could prove of very real help in any problems particularly pertaining to wholesale markets, and the Amendment should, therefore, receive a ready welcome on both sides of the House.
    Mr. Darling: We are very grateful indeed to the Parliamentary Secretary for this Amendment. As he has said, it was suggested from our side in Standing Committee. The idea was readily accepted by the Minister, but I ought to say that this present proposal is very much better than our suggestion of putting on the Horticultural Marketing Council representatives of the marketing authorities.
    Paragraph (f) of Clause 10 deals with the lay-out of markets and the marketing facilities and the Amendment imposes on the Council the duty to consult the market authorities. To provide in this way for formal consultation is, I am sure it will be agreed, the best way of getting the two sides to work together. In the general improvement of marketing facilities, the actual physical difficulties of the present wholesale fruit and vegetable markets should be borne in mind. As the Runciman Committee—and, indeed, other investigating bodies—has pointed out, many of our provincial markets are in a shocking state, and are quite inadequate for the purpose for which they were set up. They are old-fashioned and they have not proper storage facilities, transport facilities, and the like.
    I speak as a representative of the City of Sheffield which, I understand, is the first local authority since the war to set about building a fine new wholesale market.
    Mr. Godber: The second.
    Mr. Darling: Yes, but not on the scale on which Sheffield is doing the job. The House should appreciate the enormous

    427
    cost of building markets of the size and type that the Sheffield City Council is building, and if a local authority is to engage in such expenditure it should not be cut away from any association with the Horticultural Marketing Council. Therefore, as I say, we welcome the Amendment.
    There is only one question that I should like to ask the Minister. Obviously one is not sure at this stage whether this is the right constitution for an advisory committee, whether it should consist of five, four or seven members. A lot may depend on the attitude of the Association of Municipal Corporations, and on the number of new fruit and vegetable markets which are set up in the next few years.
    I wonder whether in the composition of this committee the saving subsection (6) of Clause 9 will also apply. If the Association of Municipal Corporations and the Horticultural Marketing Council were to say to the Minister, "We should like to alter the constitution of the Council", would the Minister's power to arrange for the alteration to be made also apply in this case? However, I am not pressing that matter—it can be dealt with in the course of time—but it might clear up a small point which might be raised in discussions with the local authorities. Otherwise, as I say, we are grateful for the way in which the Minister has carried out the promise that he made to us in Standing Committee.
    Mr. Godber: If I may reply to that question, I am afraid the answer is no; subsection (6) of Clause 9 does not cover the specific point. I would, however, draw to the hon. Member's attention the proposed new subsection in this Amendment, and if he looks at paragraph (c) he will find that the words are very wide indeed—
    "such number of other persons as the Council may determine."
    That safeguards the position.
    Amendment agreed to.

    Clause 11.—(PROVISIONS FOR MEETING EXPENSES OF COUNCIL.)
    Mr. Hare: I beg to move, in page 8, line 43, at the end to add:
    (6) The Council shall so exercise its powers under this section that a scheme shall be made and submitted before the end of the period specified in the foregoing subsection.
    428
    In Standing Committee I promised to consider this point and I accepted in principle an Amendment moved by the hon. Member for Sunderland, North (Mr. Willey) which had the effect of obliging the Council to make a charges scheme during the period of Government finance, that is, during the three years when it will receive Government assistance and, having done that, to submit such a scheme to the Minister. This proposed new subsection (6) fulfils my promise.
    Perhaps I should explain that the subsection is set out in this way so as to leave unimpaired the Council's right to make and submit a charges scheme at all times. This would not limit it to producing one charges scheme during the period. When the initial period is over the Council might want to change the charges scheme which it has recommended, or indeed to make a new one altogether, and it will certainly want to do so if the organisation for publicity for home-grown produce should later be set up. The Council could do this under the original Clause, and this power is in no way affected by the new subsection which I am seeking to add. We had quite a short but clear discussion on this point in Committee, and I therefore do not wish to detain the House any further.
    Mr. Willey: As the right hon. Gentleman said, we discussed this matter in Standing Committee and it is not necessary for me to say more than that I appreciate the action which he has taken and which I think meets our wishes. I think we have now got a satisfactory compromise.
    Amendment agreed to.

    Clause 15.—(SPECIAL ARRANGEMENTS FOR HOME-GROWN PRODUCE.)
    6.15 p.m.
    Mr. Godber: I beg to move, in page 11, line 14, after "produce" insert:
    "and in the national interest."
    Those hon. Members who were present in Standing Committee will know perfectly well what was said about this point, and I shall therefore not detain the House any longer.
    Mr. Peart: I am grateful to the Joint Parliamentary-Secretary. This is a point which we raised in Committee, and I will not repeat the arguments except to say

    429
    that this Amendment is in the spirit of the original 1947 Act, from which the words were in fact taken, and I am glad that the Minister has accepted our point of view.
    Amendment agreed to.
    Mr. Godber: I beg to move, in page 11, line 20, to leave out "and" and to insert:
    (b) undertaking the certification of that produce, the registration of certification trademarks and the functions of proprietors of such marks; and.
    This is a similar point to that with which we dealt earlier relating to the Council itself. Here we are seeking to give similar powers for special arrangements to be made in connection with an organisation for home growers for which we are providing under Clause 15. It may well be that home growers will wish to advertise a particular type of produce, and it is necessary that they should have these powers in relation to certification and trade mark so that they can have something which they can really advertise. I am sure that that will meet with the approval of the House.
    Mr. Darling: Again we must thank the Minister and the Joint Parliamentary Secretary for being so accommodating and accepting so gracefully the reasonable points of view that we put forward in Standing Committee.
    This matter, as the Parliamentary Secretary says, arises out of the previous discussion that we had on the grading of produce, and I think that this Amendment meets the very pertinent point that the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) raised a little while ago when he asked who will grade the produce, and how it will be brought to the market after the grading, bearing in mind that there is a great deal of pre-packing and that pre-packing will be extended.
    We are here giving to the Minister power to set up a producers' organisation that will do this job. I am sure that if only the producers will get together it is apparent from their co-operative organisations and associations and the demands that they make to the Minister that they can do this job better than anybody else. It is quite right that if they are willing to set up the organisation for that purpose they should have the authority to look after the grading, the certification
    430
    and the registration of their marks and the general advertising of home-grown produce. I think this is a very good way of doing it, and it is desirable that this provision should be added to this Clause.
    There, again, we thank the Front Bench opposite. We are grateful that they have responded so well to the views that we have put forward, which shows how sensible and intelligent our views were. We have, of course, co-operated to the best of our ability to make this a much better Bill than it was at the beginning, and it was a very good one to start with.
    Amendment agreed to.
    6.20 p.m.
    Mr. Hare: I beg to move, That the Bill be now read the Third time.
    The objects of the Bill and its main provisions have received a very wide measure of support from both sides of the House. I can, therefore, be brief. I liked the comment of the hon. Gentleman the Member for Sheffield, Hillsborough (Mr. Darling), who, just before he sat down, said that this was a good Bill to start with and that it is a better one now. I agree with him that the Bill has been materially improved by suggestions made in Committee. I am sure that all who took part in the Committee stage feel that our deliberations upstairs were in fact extremely helpful. I was not able to agree with everything that was said. I can, however, say that our discussions throughout the whole of the Committee stage were always constructive and to the point and, therefore, valuable for those reasons.
    All of us on both sides of the House wanted to ensure that there was no unnecessary delay because of the importance of getting the horticultural scheme forward so that we could begin to receive applications from 1st April. I should like to thank my hon. Friends and hon. Gentlemen opposite for their help in this.
    The principal object of Part I of the Bill is that the new grants are intended primarily to encourage improvements in facilities for the storage of horticultural produce and its preparation for the market. I think that it can offer real opportunities for our growers to become more competitive, to show that their skill

    431
    in production can be matched by their skill in marketing and to give the housewife British-grown vegetables, fruit, and flowers of high quality in tip-top condition and at reasonable prices.
    I have explained in Committee why we think that the grants for individual producers must be confined to businesses that can normally be expected to yield a reasonable full-time living. In a scheme of this kind, some arbitrary limits are inevitable, as I think the producers' representatives have themselves recognised. But the very small growers will not be left out in the cold. For the first time in a scheme of this kind, we have provided for grants to be available to producers collectively, as well as individually, through horticultural co-operative marketing associations.
    This is a very important innovation. It gives rise to several new problems. It enters into a new field. We gave it very full thought upstairs. While we were not able to reach agreement on all the suggestions made, we did agree, without any dissentient, that the co-operatives, old and new, have a great part to play especially in helping the smaller growers. I am convinced that the provisions of the Bill will be of the very greatest value in this respect.
    I should like to mention here the very strong feeling on both sides of the Committee that we should try to strengthen the hands of the producer co-operatives. The grants to central co-operative associations should help greatly in improving the efficiency and effectiveness of co-operative societies. In Committee I agreed to have a study made of a number of interesting points made by my hon. Friend, the Member for Guildford (Sir R. Nugent), the hon. Member for Worcestershire, South (Sir P. Agnew), and others. I have asked the Joint Parliamentary Secretary to be chairman of a Departmental working party, which I am now setting up with the following terms of reference:
    "To consider and report on the methods and forms of association between horticultural co-operative marketing societies and their members, and whether these might be modified so as to give the societies more stability and continuity in their supplies of produce."
    My hon. Friend intends to waste no time. He tells me that he expects to have a first meeting in mid-March. His
    432
    working party will seek evidence from the agricultural central co-operative associations and their constituent societies on the horticultural side, and from other persons with a direct knowledge of the subject. I am sure that the House will agree with me that my hon. Friend will discharge this new task I have set him with his customary ability.
    We had some discussion upstairs on the rate of grant under the Scheme. I was not able to agree to provide for a special rate of grant for the smaller man, for this is not specifically a "small growers'" scheme. A grant at one-third is, in my opinion, about right to encourage the kind of improvements we want to see. It is a very useful contribution towards the cost of capital improvements. It certainly has been most effective under the Farm Improvement Scheme.
    There was also some discussion of the total amount set aside for grants. Again, we are breaking new ground here, and naturally have not a great deal of material to guide us. We had to bear in mind both the interests of the taxpayer and the capacity of the industry. After careful consideration of these factors, we have fixed the maximum expenditure under this part of the Bill at £8 million during the five-year period, which would require the industry to find £16 million. As I said in Committee, we think that to be about right. This maximum figure stands in its own right and is without reference to expenditure under the Farm Improvement Scheme.
    Some hon. Members have expressed particular concern about the new task which the Scheme will set for the National Agricultural Advisory Service. We have given a good deal of thought to this. Some of the staff will be redeployed in particular areas, and I am hoping that various steps we have taken to encourage recruitment will increase the strength of the staff. The admirable way in which the agricultural staff has been dealing with the small farmer scheme makes me confident that it is within the capacity of the horticultural staff to deal equally effectively with the horticultural improvement scheme.
    Major Legge-Bourke: When my right hon. Friend says that he is redeploying the National Agricultural Advisory Service, does that mean that he intends to

    433
    take off agricultural work certain officers and put them on to horticultural work, or is it the intention to move horticultural officers into certain areas from other areas?
    Mr. Hare: It is the latter. This is a very specialised job, and I do not think that moving agricultural advisory officers into the horticultural field would make it possible for them to give the technical advice necessary. So it is the latter that I shall do.
    I have tried to deal generally with those aspects of Part I of the Bill which seems to me to be of the greatest interest and concern to hon. Members. Even though I have not been able to accept all the points put in Committee, I shall certainly bear them in mind in administering the scheme. I am greatly heartened by the knowledge that this new and, I believe, exciting scheme has the good wishes of hon. Members on both sides of the House.
    Coming to Part II of the Bill, here again I think that we have been able to make quite a few improvements. There was some discussion in Committee about the composition of the Horticultural Marketing Council. So long as the Government find the money, I think that the present balance of representation is right. If experience shows that a change is desirable—possibly as a result of a scheme worked out by the Council for financing by the industry—my right hon. Friend the Secretary of State and I have the power to change the composition.
    I have, as the House will well remember, been under some pressure to give representation to special interests and I have been accused of resisting this—that lay behind the Division which we had earlier this evening. I have, however, given an assurance, which I now repeat that my right hon. Friend and I intend to appoint a person capable of representing growers' co-operatives amongst the seven producer representatives. In view of the stress which we have placed on growers' co-operation in Part I of the Bill, I am sure this is right.
    This leads me to the question of independent members. We have met the views of hon. Members opposite on their qualifications, but we have left unchanged their number in order to avoid upsetting the general balance of representation which we have discussed.
    434
    The functions of the Council are set out in the Bill. I have, however, made provision to enable the Council to go outside this list of functions, subject to the agreement of my hon. Friend and myself and subject to the undertaking which I gave earlier this afternoon.
    We have made one important amendment to the Bill to extend the period of Government finance from two years to three. There is a wide measure of agreement, I think, on both sides that the industry should finance the Council, and the sooner that is done the better. I want the Council to have a real sense of urgency about this. It was for this reason that I was extremely hesitant at first about accepting the Amendment. In the end, I decided to accept it because I was convinced by the arguments put forward that two years might not be long enough for the Council to organise itself from scratch and prove its worth to the industry. This must be done if the scheme to raise money from within the industry at the end of the three years is to be accepted by all concerned. If I may say so, I think that my hon. Friend the Member for Guildford put the various points extremely clearly for the Committee to consider.
    The principal associations of growers, wholesalers and retailers have recently repeated the assurance that they will do their utmost to help the Council and co-operate in devising a suitable charges scheme. I regard this as a solemn assurance. These bodies would indeed, in my opinion, be unworthy of their responsibilities to those they represent if they failed to face this challenge. I must, however, make clear that there is no question of any further extension beyond the three years or of any increase in the amount of money provided from public funds. When the three years is up, the industry must find the money itself.
    Again, on Part II, I should like to refer to the organisation for publicity by British growers. I have been asked several questions about how this body would operate. The Bill provides an opportunity for growers to organise themselves to undertake publicity and related matters. The rest is up to the growers. Nothing will be done unless they want it, and, of course, they will

    435
    have to pay for it, although the Council will arrange to collect the money for them.
    As I explained on Second Reading, this is the first major Bill on horticulture that we have debated in the House. Our discussions here and upstairs have been followed very closely by all who have the interests of horticulture at heart. This is right, when we are considering an industry of great national importance.
    In Part I of the Bill, we are providing a tailor-made improvement scheme for horticulture. We shall give our growers the opportunity to improve their side of the business of marketing. In Part II we are providing machinery to bring all three sides of the industry—the producers, the wholesalers and the retailers—together round one table so that they can work together as a team to improve the later stages of marketing and distribution. This provides a unique opportunity for the industry. I am sure that those concerned will not fail to make full use of these new possibilities which can do much to improve the lot of horticulture. I have no hesitation in commending the Bill to the House with confidence.
    6.34 p.m.
    Mr. Willey: Like the right hon. Gentleman, we hope that the Bill will provide new opportunities for those engaged in the very difficult occupation of horticulture. On behalf of my hon. and right hon. Friends, I express our appreciation of the attitude taken by the right hon. Gentleman to the various suggestions which have been made by way of Amendments during our discussions on the Bill. Like him, I believe that we can say jointly that the Bill is materially improved. Also, like him, we have realised the whole time that this was legislation which ought to be expedited so that the scheme can come into operation in the new financial year.
    I shall not discuss the White Paper. This is an enabling Bill. As I have said before, we are greatly obliged to the Government for letting us know their intentions through the White Paper, but we shall have an opportunity on the Order to discuss the details of the scheme. We have, nevertheless, some doubts—we have expressed them already—about the scheme. Broadly, we feel that it ought
    436
    to have gone further to take into account the difficulties of the smaller producers and it ought to have been more flexible. We do not know whether the amount is right or not, and I do not think the Government know either. In spite of what the Minister said, we still feel that this is a hasty improvisation, not unassociated with the decision taken on tariffs about a year ago.
    Whether the estimate is a good one or not, the Bill will provide a substantial measure of assistance to horticulture, and it will be a new form of assistance. We welcome that. We suggested at the time that the farm improvement grants were discussed that the idea of grants for capital improvement ought to be carried further into horticulture.
    I concede at once, when we are talking about the implementation of the scheme and its effect upon the small producers, that we have a novel feature in the scheme in regard to co-operation. Again we welcome this. It represents a point of view which we have repeatedly advanced from the Opposition benches. I appreciate at once that it is easier to put forward such proposals from Opposition benches. At any rate, it is encouraging to our efforts from these benches that co-operation is accepted in this matter, and we join with the right hon. Gentleman in hoping that this will be a very successful experiment. If it is, the Government will, I am quite sure, be emboldened to carry the experiment further into agriculture.
    All this means that there is a very real responsibility upon those organisations whose purpose it is to forward co-operation. They have an immense advantage now that public funds are to be provided to assist them, but we still demand from them a good deal of initiative, enterprise and vigour in a difficult task. Let us hope that what is now proposed will lead to a rapid extension of co-operation in an activity where it is particularly appropriate.
    I believe that we need small producers in this work, but, if we are to have them, we equally need forms of co-operation to assist those producers in marketing. One of the important results of the Bill will be to bring the grower further into the marketing of his produce. It is absolutely essential that the grower should obtain a good return for his produce, and it is equally essential for him

    437
    to be able to meet the demands created by the new pattern of distribution and presentation of horticultural produce.
    From that point of view, although I complain at the delay in implementing the recommendations of the Runciman Committee, the action which the Government are taking is very appropriate and opportune. They are making this provision and providing for the Horticultural Marketing Council at a time when, inevitably, there will be some very real problems to be faced in horticultural marketing. I am sure that both the assistance which is being given to the growers and the new form of organisation, the Horticultural Marketing Council, will play a very effective part in ensuring that the home grower is able to meet the new pattern of demand which is being created by the supermarkets, pre-packing and the different way in which the housewife now expects produce to be presented.
    The right hon. Gentleman mentioned the National Agricultural Advisory Service. I wish that he would do more about this service. I do not pretend that this is an easy matter, but I think that it is something which must be tackled energetically. It has to be carried right back to the training of the Service, but I feel that we cannot go on apologising for the Service. It is becoming more and more indispensable and is getting more and more jobs to do. The time has come when we must pay a higher regard to the Service, make it more attractive and ensure not only that an incentive is given to the people in the Service but that a greater inducement is provided for people to join the Service. In passing, I may say that we have a lot to learn, for instance, from the experience of the Dutch. We should regard this not only as a technical service but as a service which can assist growers commercially and can give businesslike advice. This is important if we are to encourage growers to co-operate in marketing.
    I should now like to say a word or two about tariffs. I am not trailing my coat here, and I know that this is not the right hon. Gentleman's responsibility, but it is unfortunate that we have not had the decisions on the applications made, particularly as one application was made to take effect from 1st March. I
    438
    do not want to cause controversy over this matter, but I do not want, and I am sure that none of us wants, the effectiveness of the provisions being made to be damaged by any disappointment that may follow from the consideration of these applications.
    The difficulty is that there is different Departmental responsibility. It would have been far better to have had the tariff decisions before we considered the provisions of the Bill. Be that as it may, I hope that we can accept the assurance of the Government that they still accept the tariff as the main shield protecting the horticultural industry. I hope that the people in the industry will recognise that it is up to them to take the greatest advantage they can from the provisions in the Bill.
    We have had general agreement about the Horticultural Marketing Council. Where the Minister has not followed the recommendations of the Runciman Committee I think that both sides of the House have supported him broadly in the action which he has taken. I know that there is some dissatisfaction about representation. I noted what the right hon. Gentleman said about representation. We know that representation cannot be dissociated from the financing of the Council, but I should very much like representation to remain on its present pattern.
    The Council will not function unless the three sections of the industry work together. While I think that the proposal of the right hon. Gentleman to provide for an extension of function is right, once again I readily concede that if the functions of the Council are to be extended it will have to carry the broad agreement of the three sections of the industry. I hope that occasion to alter the representation will not arise. When we were discussing the Council I suggested increasing the independent membership. The only reason why I suggested that—and I hope that the Minister will keep the suggestion in mind—was that if there were any apprehension on the part of any section of the industry it might feel more secure if the independent element were larger. It would have sufficient confidence in its own case to believe that, if there were differences, the independent element tended to be on its side. I think that it is better to put

    439
    confidence in the Council. It has a very difficult job to do.
    I am pleased that the right hon. Gentleman reached a compromise about the charges scheme. We do not quarrel with him in extending the period to three years, but a corollary to that is that the Council should itself be obliged to produce a scheme within that time. As I believe I said in Committee—if I did not say it in Committee I say it emphatically now—I think that this is an urgent task for the Council. The sooner this matter is settled, the sooner the Council will be able to undertake its real work. I appeal to all sections of the industry to recognise that the Council is worth paying for. It has a job to do. This was recognised by the Runciman Committee and has been emphasised by the Minister. It will help not only those on the distributive side of the industry but it will also help considerably the growers.
    Finally, I should like to touch upon one matter which the Minister has not mentioned. We must consider the Bill as part of a whole. We have another Bill to consider this Session. I have some doubts about the Government's present intentions as expressed in the White Paper, but if we are to get the best possible value from the grants to the horticultural industry, and if the Council is to be able to do its job effectively, we must improve the physical facilities provided for marketing. I hope that the further legislation will be complementary to the legislation which we are now discussing.
    We are parting with a Bill upon which the Minister, properly, is to be congratulated. This is an all-party Measure in the sense that it has the support of both sides of the Committee, but I would not allow that to detract from the debt that we owe the right hon. Gentleman for taking this opportunity and doing something for this industry which hitherto has been somewhat neglected. Not only does the industry feel that it has been neglected but it is somewhat apprehensive about its future. Whatever the neglect and whatever the apprehension, there is no doubt that the Bill will considerably help the industry. I hope that, with good will and co-operation from all sections of the industry, the Bill will be a landmark in the history of horticulture.
    6.47 p.m.
    Sir R. Nugent: I should like to congratulate my right hon. Friend on introducing into Parliament the first piece of major legislation on horticulture. I entirely agree with the hon. Member for Sunderland, North (Mr. Willey), in his felicitous speech, that the needs of this industry have been somewhat neglected compared with its bigger brother, agriculture. I am very happy to take part in debating a Bill which I believe will bring considerable benefits to the horticultural industry. Due to the accommodating manner in which my right hon. Friend the Minister and my hon. Friend the Parliamentary Secretary met almost all of us in Committee, the Bill has had a most harmonious progress, and, although we have not altered the substance of it, I think that we have made some useful contributions to it.
    The form of the Bill is unchanged. The first part of it, which gives grants to horticultural growers and marketing organisations, follows the same structure as the Agricultural Act, 1947, and will bring great help to this hard pressed section of growers. The horticultural growers who grow our vegetables, fruit and flowers supply us with the highest quality produce of any country in the world—at least, when it leaves the holding, although not always when it reaches the housewife.
    I add my word of anxiety about the N.A.A.S., which will be administering the scheme. I listened with care to what my right hon. Friend said, but I confess still to feeling anxiety about whether there is sufficient strength in the horticultural section of the N.A.A.S. as at present constituted. It does not make a favourable showing compared with the strength of the horticultural advisers of some of our competitors in European countries. I ask my right hon. Friend to watch carefully how these very busy men manage to shoulder this additional burden together with the heavy burden of advice for which they are already asked.
    The main interest of the Bill is its second feature, the grant to horticultural marketing organisations. This is a complete innovation, and I warmly congratulate my right hon. Friend on his courage in introducing it. My hon. Friend the Member for Lowestoft (Mr. Prior) made a felicitous remark in Committee when he said that the law

    441
    tended to look backwards but that we, dealing with horticultural affairs, must look forward. How right he was.
    Conditions are changing rapidly in the world of wholesaling and retailing, and especially in the self-service stores. Unless our horticultural growers can be put into a better position to get their produce to the retailer in first-class condition they will simply not meet the needs of today.
    The Bill, which sets out to give grants to marketing organisations, and particularly to co-operative associations, has the purpose of combining growers together to form marketing organisations with plants for grading, packing and preparing their produce so that it can be supplied direct to the big retailers and chain stores, cutting out the central markets, thereby saving time and money and, above all, saving quality so that the produce can arrive at the shop in the sort of condition in which the housewife would like to receive it. I commend my right hon. Friend on his imaginative move in bringing this Measure forward.
    The problem of the grower in this country particularly, and, I suppose, of the horticultural grower everywhere, is the perennial one of the small man whose produce comes intermittently and who is in much too small a way of business to deal direct with the retailer. He cannot guarantee a supply either in quality or in quantity. Unless he can combine with somebody it is beyond him to enter into contracts. As has been said already by my right hon. Friend, the Bill takes the grower a considerable step forward down the chain of distribution towards the consumer for whom he grows his produce.
    My right hon. Friend referred to our interesting debate in Committee on the new Clause that my hon. Friends and I brought forward which sought to give to horticultural co-operative societies greater powers to bind their members who have contracted with them to supply produce more closely in keeping with their contracts. The history of horticultural co-operatives is that growers all too often do not keep their contracts and thereby completely sabotage the societies in the ma king and keeping of their longterm contracts with the big wholesalers and retailers with whom they wish to deal.
    442
    We made the case that horticultural societies needed stronger powers. The particular powers that I advocated were that they should have power to impose as a condition penalty damages in their contracts with growers. Although my right hon. Friend did not accept our argument, his agreement and his announcement today to set up his Departmental committee under my hon. Friend the Parliamentary Secretary is a substantial concession, for which I warmly thank him. It gives a chance to look in detail and objectively at this difficult problem. I quite accept that to legislate in the way that we were asking would be to make an exception in the face of well-established commercial practice, and, indeed, an exception in the constitution of our commercial trading practice. Therefore, that could not be conceded unless the case for doing so were overwhelming.
    I believe that the result of the forthcoming inquiry will be to show that such an exception is justified. I am delighted to hear that my hon. Friend the Joint Parliamentary Secretary is starting his first meeting next month and that he will be given evidence by the bodies which are connected with the growers' co-operatives. I hope he will also find time to pay a short visit to the neighbouring European countries—Holland, Belgium and Denmark—where he will find how they have managed to build up their growers' co-operatives to the tremendous trading strength that they now have. He will see that it is their great trading strength which gives them competitive power to put their produce on our markets and take an ever-increasing share away from our own growers.
    I urge my hon. Friend to find time to make that inspection, because my case is that our growers are continuously threatened by their competitors in those countries taking a greater share of our market from our own growers. I want to see our growers given similar powers through the co-operatives to those which our competitors have, so that we can at least hold our own in our own markets. I again thank my right hon. Friend for the concession he has made to us. It is now up to the Agricultural Co-operative Association and others concerned to make their case to my right hon. Friend.
    The third feature of the Bill is the Horticultural Marketing Council. We

    443
    had a considerable discussion about its composition and I urged the case for stronger representation for the growers. I quite accept my right hon. Friend's contention, however, that at present, whilst he is finding the finance, the constitution is about right. I also accept the point made by the hon. Member for Sunderland, North. The Council will succeed or fail on whether it manages to work as a team. If it is only to be representative of the different interests it will never do the great things that we expect of it. I quite accept the constitution as it now stands and I am grateful for my right hon. Friend's willingness to review the constitution when the Council comes forward with its self-financing scheme.
    Although I am anxious about the Council's difficulties in designing a self-financing scheme, I quite accept that the industry should finance itself. I firmly place my support behind my right hon. Friend the Minister in saying that once the Council is set up in this way it has a strong moral obligation to proceed to do so, so that it can continue in existence to serve the whole horticultural industry, both its producing and its distributing sides.
    There are great opportunities, and it is not possible to make a success of the horticultural industry without such a Council, which is fully representative of home growers, distributors, retailers, wholesalers and importers who together can co-ordinate the many and complex interests concerned. I hope to see the Council progressively going from strength to strength in the years ahead. I again congratulate my right hon. Friend for coming forward with the proposal to set it up. As the Bill leaves us I send with it my best wishes for its success, and I hope that the House will be willing to give it a Third Reading.
    7.1 p.m.
    Mr. Darling: A little while ago I said that this was a good Bill which had been improved in Committee. Indeed, I confess, as I think my hon. Friends would confess that when the Bill first appeared I was surprised to see how many of the ideas which we on this side of the House have been advocating for so long had been incorporated in it.
    There are two reasons why these ideas are there. The Bill is based in large
    444
    measure upon the conclusions of the Runciman Committee, and it was quite obvious that, under the pressure which we were putting on the Government to implement their promise to do something about that Report, at some time or another we would get some such legislation, but it was obvious that it would not appear before the General Election. I have no doubt that in their wisdom the people responsible for drafting the Bill drafted it in expectation of a Labour Government being returned so that they would not have to redraft it after the election.
    The fact that the Bill incorporates many of our ideas is borne out by the criticisms levelled against it by the arch-Conservatives who represent some of the rural areas and who sat in the Standing Committee and subjected the Minister and his Parliamentary Secretary to a great deal of criticism. They thought that the Minister was going much too far in the powers given to the Horticultural Marketing Council and in the other constructive measures in the Bill. The only other reason—if I have produced the wrong ones so far—for the Bill being so good and for its incorporating so many of our ideas is that the right hon. Gentleman and his hon. Friends have now become completely converted to the Labour views which we have been advocating for so long. It is nothing new to have the Conservative Party stealing progressive ideas and passing them on as its own. It has been doing this kind of thing for generations.
    We on this side of the House welcome the Bill, and I particularly welcome what is a revolutionary element in legislation dealing with horticulture or agriculture. I think that this is the first time that such positive assistance has been given to co-operatives in agriculture or horticulture. I am certain that this is the first time that financial assistance has been proposed to be given to a central horticultural co-operative association to promote, encourage and facilitate the setting up of horticultural co-operatives. This is an innovation which we greatly welcome and it will be interesting to see the consequences that flow from it. I hope that the results will be as good as hon. Members on both sides of the House and of the Committee have expected.

    445
    I would quarrel with one point which the hon. Baronet the Member for Guildford (Sir R. Nugent) put forward a few minutes ago. I do not object to the suggestion that the Parliamentary Secretary should go overseas to see how co-operative organisations operate in other countries. I am all in favour of members of the Government and of Members of Parliament travelling abroad as much as possible. It would do them good. I have no doubt that it would do the Parliamentary Secretary good, but it is not so much Members of Parliament or Ministers who ought to be encouraged to study these matters abroad but producers and growers in this country. I mentioned this point when we were dealing with grants to be given to co-operatives. The sum of money is completely inadequate, but I hope that some of it will be used to help representatives of embryonic co-operatives to go overseas to see how the job is done in the best co-operative organisations in various European countries. It would be an excellent idea.
    The Bill is only a beginning, and I hope not only in horticulture—for it contains provisions and ideas which should be extended and applied widely in agriculture generally. We must see how the Bill works in helping production and in getting growers to make a better job of growing and bringing stuff to the market. But we must also see to it—and a great deal of pressure is needed in this—that there is a cleaning up of the produce marketed and that it is brought up to the standard which the industry requires. I agree with the hon. Member for Guildford that as far as possible we want to reduce the number of middle men between grower and retailer. I do not want to labour this point, but a modern produce market provides better opportunities of doing that. With the handling of the stuff in the market and particularly the storage being done on a big enough scale, and the produce marketed efficiently, there is the right kind of contact between growers and retailers to enable one to begin to reduce the number of operators.
    I am confident that a great deal of the success of this Measure will depend on whether the Horticultural Marketing Council uses its influence to improve the produce marketed. We cannot anticipate further legislation now, but we need something more than just a Covent
    446
    Garden Bill when we come to tackle this problem. We must look at that aspect of produce marketing in a much bigger way to make a success of these provisions. Not merely Covent Garden alone but all the produce marketing in the country needs to be cleaned up, made more efficient and cheaper so that both growers and consumers can be helped.
    We shall see how the Bill works out. I do not expect that it will be subjected to much further amendment when it proceeds through another place. It will come back here much as it is now, and the sooner we get it into operation, the sooner the measures in it are being used for the benefit of growers and consumers, the better.
    7.9 p.m.
    Major Legge-Bourke: I remember Mr. Tom Williams, the former right hon. Member for Don Valley, once saying that Governments are like wheelbarrows—they go when they are pushed. The Bill reminds me very much of a wheelbarrow, but the trouble is that an attempt is being made to push it by holding the wheel in one's hand. I am quite certain that the Bill will be effective only if we are sure that the Government's trade policy is right at the same time. At the moment we know perfectly well that it is far from being right where growers are concerned.
    Perhaps the Government will produce an answer for me, which so far they have not produced spontaneously, to the question whether there is a single Clause in the Bill which is likely to cure the principal trouble from which the main part of the glasshouse industry is suffering today, namely, the importation of Dutch tomatoes in May and June? It seems to me that the object of the Bill is to make possible more efficient production, and there is a considerable chance that as a result of the Bill there will be an increase in British production. If I were sure that the improvement in quality of that production as a result of the Bill would be so great that when the production came on to the market it would be bought by the consumers instead of Dutch tomatoes, I should feel differently about the Bill, but I do not feel that; I only wish I could.
    In this connection one figure is worth mentioning. Does my right hon. Friend

    447
    really believe that the Bill can do anything to prevent the following happening? In 1954, 4,162 tons of Dutch tomatoes were imported, and by 1959 the figure of imports had increased to 10,740 tons. That is the measure of the increase. Does my right hon. Friend really believe that the Bill will stop that happening?
    A great deal of mention has been made of the Bill being two prongs of a three-pronged attack on the problems of the industry. One prong is represented by the grant, the second prong is represented by the Horticultural Marketing Council and the third prong will be the Covent Garden Bill later on. There are two traditional figures who bear a trident. One is called Britannia and the other was that rather disreputable old internationalist, Neptune. If I were sure that these three prongs were British through and through, I should be happy, but I am afraid that the Bill smacks far too much of an alternative, rather than an addition by which the horticultural industry is to be supported.
    I know that over and over again we have had reassurances about tariffs being the main measure of support, but I say that the testing time is coming. There is something in what was said earlier by the hon. Member for Sunderland, North (Mr. Willey), namely, that it is a pity that before we have the Third Reading of this Bill we have not had the decision on the present tariff applications. I wish we had. I reserve judgment on what I shall finally do about this matter until I see the result of those applications. As far as I can see, the Bill will do nothing to solve the principal problem of the industry.
    I should like to know exactly where we are going with it, because already I see in the Vote on Account, which was mentioned yesterday in the House, that on page 6 under Class VIII there appears a footnote about the £3,700,000 to be voted on account in respect of Agricultural and Food Services. It states:
    "Of this sum £250,000 is dependent upon the passage into law of the horticulture Bill now before Parliament."
    There are a number of fronts on which this expenditure can be made. There is Clause 2 of the Bill which deals with the grants and the limit that can be spent upon them. Then there is Clause 11 (5)
    448
    which deals with the financing of the Horticultural Marketing Council. May I ask my right hon. Friend whether the £250,000 that is being asked for and voted on account is to be spent at once on setting up the Horticultural Marketing Council, at once paying out grants, or doing a little of everything? My belief is that once the Minister has accepted the three-year period for spreading the support for the Horticultural Marketing Council, which anyway is a limited sum, he will have to face in the end the fact that it will cost him more than he thought originally, and he will have to come to Parliament for more money.
    My own belief is that the better part of the Bill is that which concerns the Horticultural Marketing Council, provided that it is asked to do the right things and has the right representation on it. I spoke about the grants scheme during the Second Reading debate. It has come out of Committee in much the same form as it went in. I think that the Minister was right, if he had only a given sum, not to increase the amount of grant to the smaller men. Once he has a ceiling fixed on what he can spend, it is important that where he spends it there should be some hope of it doing something. The more that is given to one section, the less there is for others, so for that reason my right hon. Friend was probably right.
    I dislike the grants scheme. My hon. Friend the Joint Parliamentary Secretary took me up during the Second Reading debate and said that he thought it was unrealistic to refer to the scheme as a National Assistance scheme for horticulture. What else is it? Who is it who is doing the helping? From my view it is exactly on a par with an individual, once-for-all grant under National Assistance. What has brought it about and made it necessary? Is there anything in the Bill which will prevent exactly the same set of circumstances arising in the future? I believe not.
    I believe we are getting into the most extraordinary frame of mind in this country. It appears that a new formula is being spread throughout Government Departments and now, alas, it has reached the Ministry of Agriculture, Fisheries and Food. The formula

    449
    runs something like this: take an industry which was set up originally in the days of trade discrimination and now finds itself in difficulties because of the move towards free trade. We then ask how much of the commodity that the industry is producing, or the service that it is rendering, is required by our people? Then we ask what can we rely upon coming in from abroad? We then subtract the second from the first and we are left with a difference, and the difference is what we then expect the home industry to produce. If, however, the home industry is already producing more than that, we have to scratch our heads and decide how much money from the public purse we will pump into that industry to bring production down to the size needed to meet the difference.
    There are infinite variations of this theme. We have seen them in the case of cotton, steel and shipbuilding. Now I am afraid we are seeing them in horticulture, and my belief is that these are the economics of a lunatic asylum. I believe the country will rue the day when it did this and, most tragic of all, that those whose hopes have been most raised will be the most disappointed of all.
    I say again what I said in the Second Reading debate, that I believe the Bill will make sense only if the trade policy of the country is right; and that until the trade policy is right, to introduce this Bill, which involves using public funds for the purposes of grants, is robbing the Exchequer, robbing the taxpayer, and in the end doing nothing whatever to cure the thing which is principally wrong. I hope, therefore, that at an early date we may see a satisfactory outcome of the tariff applications. As I have said, unless there is a satisfactory outcome, I am afraid that some of us will find it even more difficult than I do tonight not to vote against the Government.
    7.18 p.m.
    Mr. Bullard: I welcome Part I of the Bill. I am glad to follow my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke), who is also my representative in this House. I find myself in some disagreement with him over this part of the Bill, though I am absolutely with him in regarding the tariff as the main shield of horticulture. Unlike him, however, I regard the Bill as
    450
    an addition to, and not a substitution of, tariff protection.
    I am relying on the fact that the Minister and the Joint Parliamentary Secretary will ensure that the tariff cases are properly and fully examined. Not only that, I hope that they will also watch the importation of horticultural produce here under various trade agreements. It is in the certain knowledge that the horticultural industry will receive favourable treatment from that angle that I support Part I of the Bill.
    Miss Margaret Herbison: I hope that while the hon. Gentleman is insisting on all this examination he will also examine what would be the result on the housewife and her purse if very high tariffs were introduced.
    Mr. Bullard: I think that all the tariff concessions that I wish to see may well have a beneficial rather than a harmful effect on prices to the housewife. If I had not that in mind I certainly would not support the proposal, because I have no wish to see food prices raised to the consumer.
    I share the doubts of my hon. Friend the Member for Guildford (Sir R. Nugent) about the possibility of finding the horticultural advisory officers to administer the grant provisions of the Bill. In the Standing Committee I asked whether the Agricultural Land Service could not perform part of this function. It seems to me that where buildings and roads are concerned, there we have a specialised service which is already qualified to deal with the matter. I would have hoped that there could have been some very close liaison in administration which would have enabled the Agricultural Land Service to use its qualifications in order to make the administration of the grants easier.
    I hope that when a scheme is drawn up my hon. Friend the Joint Parliamentary Secretary will try to help the smallest growers to the fullest extent possible. I am not sure that I can subscribe to the view expressed by my hon. and gallant Friend the Member for the Isle of Ely that the Minister has been right in refusing to take in the growers who are still smaller than those who are likely to be included in the White Paper scheme.
    Major Legge-Bourke: I must interrupt my hon. Friend on that point. Perhaps we are at cross purposes here. What I said was that the Minister was right not to make a 50 per cent. grant to the smaller growers who will get only a 33⅓ per cent. grant.
    Mr. Bullard: That is a different point. Probably we are at cross-purposes. I do not want to enlarge differences which I have with my hon. and gallant Friend, because I agree with him on so much.
    I still believe that the very smallest growers have opportunities to improve their equipment, plant and so on which can be helped by means of grants. Certainly, this will not be anywhere near the most costly of the schemes. In fact, it will be the cheapest. Therefore, I hope that we shall see the scheme weighted as far as possible towards benefiting the smallest growers.
    With regard to Part II, I have been critical at the various stages of the Bill about the proposals for setting up the Horticultural Marketing Council. However, now that we have reached the Third Reading, I wish the Council the very greatest success in the work which it will undertake. I have no doubt that there is a job to be performed here, and that it is essential to find the right body to carry out the improvements.
    I look at the matter historically. I have watched the progress of agricultural marketing organisations for a number of years inside and outside the House. I supported the apples and pears marketing scheme when it was before the House. It was subsequently rejected by the growers. There has always been, and properly should be, debate as to the proper form of organisation to set up. There cannot be any doubt that in setting up the Horticultural Marketing Council we are doing something which is new and unusual. I do not by any means condemn it on that account, but I think that we are in order in looking very carefully into the actual constitution of the Council. I have felt, and still feel, that the growers' representation upon it is insufficient. I felt that in Standing Committee, and I have remained unconvinced by what I have been told since. I believe that subsequent experience will prove what I say to be true.
    452
    The primary case which I would make about it is that the growers have the major changes to make, and I think that the people who are qualified by experience in the actual growing of the commodities are those who ought to have the biggest say in bringing about the changes which will be necessary and will have to be made if foreign competition is to be met.
    Therefore, if I have been critical of the proposals it is of the details rather than of the main matter. We shall now be setting up the Council, and I hope it will be constituted with the greatest possible speed and that it will be successful in its work of helping to reorganise our horticultural marketing system.
    7.25 p.m.
    Mr. Norman Cole: I congratulate the Minister and the Joint Parliamentary Secretary upon the happy stage that we have reached with the Bill this evening. If I may do so without presumption, I should also like to thank the hon. Member for Sunderland, North (Mr. Willey), the hon. Member for Workington (Mr. Peart) and the other members of the Standing Committee for the part which they played during the consideration of the Bill at that stage.
    Towards the end of his speech in moving the Third Reading of the Bill, my right hon. Friend said that this was the first Measure of its kind brought before this House. I believe that to be true. By that token, I suggest that we should be all the more observant for matters which we may have overlooked because we have had no precedents in this sphere. Consequently, I hope that my right hon. Friend will keep his mind open about the development of the Bill and what it can do for the industry.
    I hope there will be speedy action in implementing the grants side of Part I. My hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke) referred to the £250,000 included in the Vote for this year. I hope that we shall have that money, or some of it, spent, under proper authority, on the grant applications. I realise that they have all to be made in the first five years, but I hope that we shall not wait anything like five years before we find applications being made to the Ministry.

    453
    I join other hon. Members in the concern which they have expressed about the horticultural advisory officers. The implementation of the Bill will rest very largely upon the wide and efficient shoulders of those officers. From what has been said at earlier stages of the Bill, my right hon. Friend will be conscious of the truth and importance of that. Therefore, I hope that side by side with what we are doing in the Bill itself we shall be able to do something for that service. I believe that my right hon. Friend wants to do so, and I am sure that we shall all support him if he does so.
    I return to a point that I have made several times, and I make no apology for repeating it. During the proceedings on the Bill I have been conscious, and have lost no opportunity of reminding hon. Members, that while the Government are finding £8 million or £8¼ million in grants for approved cases, the growers will have to find twice that amount—£16 million or £16½ million. That is a very considerable sum of money from the specialised side of this industry. It represents a very large undertaking. Since the obtaining of the £8 million in grant from the Government in five years depends, among other things, upon £16 million being forthcoming from the growers, I am a little worried about the successful application of the Bill, which is very near to the hearts of all of us.
    That brings me to the next point, which the hon. Member for Sunderland, North made on Second Reading, and which some of us have made since, and that is that I hope that my right hon. Friend will address his mind to the possibility of some kind of credit facilities for those in the agricultural world in the not-too-distant future. This is not a unique or original thought. It obtains in other countries. I see no reason why, if lack of such facilities should be a stumbling block to the successful implementation of the Bill, we should not consider their provision.
    Part II of the Bill deals with the Horticultural Marketing Council and the word "revolutionary" has been used for it. It is a progressive development and a very necessary one for the future of the industry. We should have had some such body many years ago. It is a pity that we have not had it. I endorse
    454
    the remarks that the future of the Council lies in its own hands.
    For the first three years the Government, with its subvention of £250,000, will be taking the Council through its infancy, but after that it will have to prove its own justification. I believe it can do so, but the point that struck me particularly was that, if it is to be a composite body consisting of a number of people from various sections of the industry which meets regularly and employs officers and does no more than that, I do not think it will carry out its functions or that it will be successful. If, on the other hand, it takes on something for which we have precedents in other walks of life—a certain spirit, a determination that it will take that part in the work of the industry which no other body can take—and has the blessing of the Government and this Bill behind it, it has a fair chance of success. Its first two or three years will be vital in their effect on its future.
    If, however, it is to be torn apart by differences of view, by over-emphasis on the particular points of view of its several constituent parts, then its future will be embarrassed. I do not pretend to tell the future members of the Council what they should do, but they will have to look upon it as an inescapable, vital function for the industry as a whole. If the Council acts in that spirit it will have the success which we all hope it will achieve.
    I want to say a few words about the remarks of my hon. and gallant Friend the Member for the Isle of Ely. I am sorry he cannot be here to hear them. I think he is bending over too much in one direction, rather as some of us may be bending too far in the other. While it is quite possible to imagine that the injection of money into the industry is the whole answer to this problem—and, of course, it is not—on the other hand, the injection of a higher tariff policy into horticulture is not the whole answer either. It is no good having a high system of tariffs if one needs some home assistance for the benefit of the industry itself. What we want is a happy combination of both means of support. We have now, in this Bill, the means of support in regard to assistance to our home industry. I hope, in common with my hon. and gallant Friend, that the Minister and the Government will see fit to

    455
    do, by and large, what the horticulturists want in tariffs in regard to incoming produce.
    I do not think it is generally realised how very competitive the horticulture industry is. It is probably as competitive as any industry in the country in its products for home consumption. The consumption of the type of product, not the amount, is already guaranteed because it is our food, but there are a number of other countries who specialise in this particular part of agriculture. In face of that, we want to see our own horticulture industry prosper and thrive. Of all the problems we have in our industries, both home and export, this one is possibly the most intractable. It is not insoluble and I do not believe it rests upon one solution or another, but on a happy combination of a proper amount of tariffs and quotas for incoming produce and at the same time the strengthening of our own industry at home, so that we can have a healthy industry and reasonable and proper prices for the consumers. That is the problem and it is not beyond the wit of the Government and this House to find a solution. I think if we try to emphasise one angle or another we do damage to the whole case.
    This is the first time the House has seen the Third Reading of a Bill of this character and this can be a very great day for the industry. I believe the industry has considerable hopes and, naturally, some caution. It can be a very great day for the industry if the Bill is implemented and if it does all we hope that it will do. I hope very much that the aspirations and the optimism of all of us about its possibilities will be more than fully justified.
    7.36 p.m.
    Mr. Prior: During the Second Reading debate my right hon. Friend talked about the three-pronged tariff. At the time I did not think the prongs would be at all sharp, but, having sat through the Committee stage, I am now satisfied that they are considerably sharper than we could, at one time, have expected. I welcome the Bill and believe it will do a very good job in the industry. It has come just in time. Not only have we this increased competition from Europe, but I have been amazed in the
    456
    last few weeks by the tremendous increase in artificial products, such as flowers. The number of really good artificial flowers one is seeing nowadays makes it all the more important that the industry should look to its means of developing itself very fully.
    There are three matters on which I am not entirely happy. The first is the the grant for the small horticulturist. I think myself the grant could be bigger than 33⅓per cent. I am satisfied that my right hon. Friend will keep his eye on this problem and, if he finds that more is needed, will come back to the House. I believe the small horticulturist can borrow money without a great deal of difficulty, provided he is solvent and a go-ahead sort of chap. I do not believe that a credit organisation could help him very much more than the banks, and I think the banks are the best judges. I would like to leave that one alone as it is.
    The second point is producer representation on the Council. What has worried me is the question of who is to provide the money under the system of charges that has to be introduced. Some of us feel that the producer will be the one to provide the money and that therefore he should have had a bigger say. I shall be quite happy if the producer does not have to provide all the money, and I hope that the other sections of the industry will play their part. I wish the Horticultural Marketing Council good luck and I hope that it will do a good job. Certainly there is need of it.
    The most important issue in the Bill concerns co-operative marketing businesses. I believe that these are the forerunner of a very much larger scheme which in time will have to be introduced for agriculture, too. My hon. Friend the Member for Guildford (Sir R. Nugent) has fought hard for us on this question of the penalty clause for growers who do not fulfil their contracts to a co-operative concern. This is a very important point, and I am glad that my hon. Friend is leading a Committee which will look into the whole problem. I hope that he will go to Europe, and to Belgium in particular, because seven years ago they were faced with the same problem as that which faces us now. They have met it very well and are developing very much more along these lines.

    457
    We are all worried about the level of tariffs. I should like to see greater support given to the industry by tariffs, because I believe that a higher tariff would help horticulture and would be of no disadvantage to consumers. The consumers' interests, mentioned by the hon. Lady the Member for Lanarkshire, North (Miss Herbison), are well looked after, and there is no doubt that unless we have a strong horticulture industry at home, although we may have all the cheap imported produce we like at the moment, the time may come when the market suddenly rises and the home consumer is left to pay the increased prices. I feel very strongly that the best safeguard for the consumer in this country is to see that we have a prosperous and healthy horticultural industry.
    I give the Bill every support. I hope that the horticultural officers of the N.A.A.S. will visit these horticultural meetings and sell the Bill to horticulturists. That is very important. I do not think that it will be sufficient for the Bill simply to be published and the details announced, and I hope that, in the same way as was adopted for the Small Farmers' Schemes and the long-term improvement grants for the farming industry, the Ministry will make it possible for horticulturists to find out as much as possible about the Bill.
    We are dealing with a very independent type of person—a person who as a rule does not attend meetings and who thinks of himself as being very much on his own. This type of assistance is to be available to him, but he may not feel that he can take advantage of it, and I very much hope that the Ministry officials will go round the industry and speak for the Minister, as I feel we all ought to speak for him in this respect from this time onwards.
    The Bill has a very important job to do. Despite all I said about it in Committee, I hope that the Horticultural Marketing Council will be a successful body. I also hope that the Joint Parliamentary Secretary will find some way round the existing law of this country which will enable co-operative concerns to be set up and run on a proper basis, because to my mind the whole future of all marketing of horticultural and agricultural produce lies in this.
    7.45 p.m.
    Mr. Wilfred Proudfoot: I will be brief because as the debate has proceeded I have eliminated from my notes the points which have been made. One thing which has struck me in the debate has been the use of the word "super-market". I wondered whether hon. Members knew what was the accepted technical definition of a supermarket. A super-market is a food store of over 2,000 sq. ft. in selling area which sells all food items, including fresh meat, by self-service. That is completely different from the American definition of a super-market, which is a food store which has a turnover of 300,000 dollars a year.
    Mr. Peart: Whose definition is that?
    Mr. Proudfoot: The definition has been made by the Self-Service Development Association, a body of people interested in self-service in this country.
    I welcome the Bill because improved marketing is the most important angle to horticulture. The industry has needed it for years, and it has been needed by the retailers and customers of this country. I am also glad that the Bill goes as far as it does. On Second Reading I was frightened that the Bill might put marketing in a straitjacket. Marketing in this country will see colossal changes in the next few years. I have been in Committee on the Bill, and I was glad to discover that the Bill will in no way put the marketing of horticultural produce into a strait jacket.
    I am also delighted that the Horticultural Marketing Council will eventually be self-financing. I am sure that that is right. The private grocers of this country, who are in extremely severe competition with each other and with the multiple stores, are joining in voluntary chains. This has been done of their own initiative. I wish that in the past the horticultural industry had taken such steps as the grocers of this country are taking.
    I am sure that the Horticultural Marketing Council must take full advantage of all the changes in retailing and in marketing. I look forward to better grading, the extraction of field heat, the carriage of horticultural produce in refrigerated vehicles, pre-packaging and, probably most important of all, when

    459
    co-operative marketing concerns have been organised, the adoption of brand names. In my view, brand names are a complete guarantee for the customer. They provide a much better guarantee than putting one customer, possibly a lady, on the Horticultural Marketing Council, because when brand names are used they are a guarantee to the customer that some standard of quality is being maintained in the articles sold.
    I hope that the horticulture industry will take full advantage of the Bill, which I welcome.
    7.48 p.m.
    Mr. Richard Collard: I intend to direct my few remarks to the part of the Bill which deals with the Horticultural Marketing Council. We discussed at length in Committee the functions, finances and composition of the Council, and these matters have also been touched on earlier this afternoon. If my remarks seem at all critical, I emphasise that they are not intended to be unhelpful but perhaps they will underline one or two fears which have been expressed by one or two of my hon. Friends this afternoon.
    This is a producers' Bill. Not everybody will agree that that is so, but it is intended to succour the producer because the tariff policy has not altogther managed to do all that was hoped of it. It is not the case that any retailers, wholesalers or importers would be seriously troubled if the Bill were not passed, but it is the case that some producers—not many, I hope, but some—might go out of business but for the Bill. I say that it is a producers' Bill, and it is none the worse for that.
    Like many hon. Members interested in the matter, I have canvassed as diligently as I could the opinions of producers, both in my constituency and elsewhere. In particular, I have canvassed their opinions on the Horticultural Marketing Council. I am sure that my experience is not unique when I say that the producers as a whole are sceptical about the Horticultural Marketing Council. They tend to be prepared to accept it now because the Government pays to start with, as they thought, for two years, and as it will be now, for three years. They tend to regard it as a quid pro quo for what they regard as the real meat of the Bill, namely, Part I.
    460
    Producers' interest in the Horticultural Marketing Council is essential if it is to succeed. It was largely for that reason that in Committee I felt obliged to support an Amendment which would have given producers a larger representation on the Council. It is essential that their interest in this Council should be a lively one. If it is not, the Council will fail in its purpose.
    I recognise the difficulty of writing the duties of the Council into the Bill when we have had no experience of the working of that body. I remember my hon. Friend the Member for King's Lynn (Mr. Bullard) referring to the rather hopeful series of present participles which make up their duties as far as can be seen at present. I fear that the Council may suffer from emasculation as a result of the conflict of interests on it. For that reason, I regret that predominance has not been given to the producer.
    I accept the need for this Council, even if it had not been recommended by the Commission, because, if Government money is to be voted by this Measure to the horticultural industry, it is essential that some such body should be set up to co-ordinate its affairs and help it make the best use of the grant. My only question is whether its duties are of the right kind. The duties written into the Bill are not very positive. It may well be that the Amendment which my right hon. Friend moved this afternoon will extend those duties as a result of experience and make the Council a more positive body, but I am strongly opposed to it being permitted in any way to enter into trade. In parenthesis, I would say that one of the duties mentioned, namely, that of publicity, seems to be one of the more positive and important duties that it may have to carry out.
    The Council will have a staff and, in the nature of things, the staff will do most of the work. I hope that they will not be unduly office-bound. I hope that the staff will regard themselves more as field officers and not as people who should work in an office and write memoranda. In fact, to start with, it might be better if the Council had no office at all. I suppose that it is necessary for the Council to have some sort of headquarters, but I hope that at the beginning they will be modest and fairly humble.

    461
    It is generally considered that bodies of this nature do their best work in the early stages when they are, so to speak, clinging to life and perhaps are working in nissen huts. We have it on the authority of Professor Parkinson that the moment a body such as this moves into palatial offices that is the beginning of its decay. I hope the Council will start in a fairly humble and modest way. We shall be affronted, and certainly the people who will pay the money in the future will be affronted, if the Council sets itself up in some palatial office from the word "go".
    I am glad that two of the three prongs of the weapon are included in the Bill. I welcome unreservedly Part I of the Bill as being the first Parliamentary step to benefit horticulture. I hope that when the Bill becomes law it will be possible to proceed quickly with the implementation of Part I. I sincerely hope that the Horticultural Marketing Council, set up under Part II, will prove to be a success. I thought it right to express certain misgivings about it. I hope therefore that in contrast to Part I the Government will be happy to move along rather more cautiously with Part II and with the setting up of the Council, and will, if necessary, and if experience shows it to be desirable, be prepared eventually either to drop it altogether or to change it considerably.
    With that qualification, I wholeheartedly welcome the Bill.
    7.56 p.m.
    Mr. Peart: We are now at the end of our long discussions on the Bill, and, like every other hon. Member, I should like to congratulate the Minister and the Joint Parliamentary Secretary. We have had a good, common-sense debate in the House following our discussions in Committee, and although views were expressed which cut across all party ideological prejudices, I am sure that the Bill has been improved by our constructive arguments. I congratulate the Minister on bringing in the Bill, and from an Opposition point of view we believe that we have made our contributions to it. We have tried to improve the Bill. We have voiced criticisms here and there, but only in an endeavour to improve the Bill Clause by Clause, and as we seek to give the Bill a Third Reading today we are certain that it has been improved by our efforts.
    462
    Even at this late stage there are one or two points I should like to stress before we give the Bill a Third Reading. I endorse the views that have been expressed this afternoon about Part I. I approve of Part I, but I am worried that the small producers will not get the benefits. I hope that I am wrong, and that in the administration of the scheme and the giving of grants for improvements all producers will be able to take advantage of it. Producers are to be given a grant of a considerable amount, but we must remember that producers themselves will be providing a large amount of capital over this period—about £15 million.
    The small producer may be in difficulty. The hon. Member for Lowestoft (Mr. Prior) said that banks are available for cheap credit and hinted—
    Mr. Prior: I said easy credit.
    Mr. Peart: I use the word "cheap" in that sense. We always use that term. I think the Tory Party's agricultural charter uses the term "cheap credit". I do not want to be sidetracked too much, but that was a promise that successive Chancellors of the Exchequer on the Tory side made to the farming community, but it was never fulfilled.
    Although certain facilities are offered by private banks, a small producer may still be in difficulties. I am sorry that the hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) is not present. He referred to the Bill as being one of national assistance, but I think we must approve it, not for the reasons that he mentioned but because we feel that it is necessary, although I recognise that there must be some difficulty about this in the Tory Party.
    I will not argue the case that we put forward in Committee. I said then that right hon. Gentlemen opposite and their supporters suffer from "subsidy schizophrenia." I think that that is still true and that the hon. and gallant Member for the Isle of Ely is not quite sure, even at this stage, whether to attack policies which we support and which my hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) stressed was a main tenet of Labour policy, namely, that at this stage the Government should in certain circumstances provide aid for production, and specifically for agriculture and horticulture.

    463
    We have always believed that, but we know that within the ranks of hon. Members opposite there are many sincere Members who object to State aid. On previous occasions I have referred to the hon. Member for Dorset, South (Viscount Hinchingbrooke) and to a small group of hon. Members opposite who criticise the present Administration, representing the extreme Tory view. After his speech today I am sure that the hon. and gallant Member for the Isle of Ely belongs to that group. We approve the giving of aid. All we ask—as we asked in Committee—is that this aid should be wisely administered and that there should be public accountability for it.
    The hon. Member for King's Lynn (Mr. Bullard) referred to this point. When the Government provide aid to the extent of more than £8 million there should be a careful scrutiny of all the schemes involved, and of the administration required to provide this aid for individual producers. It is only right that Parliament should be careful and should scrutinise in detail. We believe that the part of the Bill which provides for this aid is important, and we hope that producers will benefit from it. Above all, we hope that there will be a growth of producer co-operation.
    Many hon. Members opposite, including the hon. Member for Guildford (Sir R. Nugent), who has long experience in the matter, have stressed the same view. We know that these co-operatives have already achieved success here, and that countries such as Denmark have been successful not merely in horticulture but in other spheres as a result of producer co-operation. It is pleasant to know, irrespective of party, that hon. Members have stressed this fact over and over again in Committee. The Minister is to be complimented on introducing, for the first time in a Parliamentary Bill, aid for those who seek to co-operate and fulfil the principles of producer co-operation, with special reference to marketing. I warmly congratulate the Minister on his initiative in this direction, and I hope that the Joint Parliamentary Secretary will take the advice of his hon. Friend the Member for Guildford and my hon. Friend the Member for Hillsborough and pay a visit to
    464
    the countries which have been mentioned.
    I am certain that with his long experience of agriculture, even before he came to this House, the Joint Parliamentary Secretary was aware of what was taking place in those countries and of what the Danes, in particular, have succeeded in doing. Now that he is becoming chairman of a very important working party he will benefit from that experience. I suggest that he should take with him not only the members of his working party but some of his Parliamentary colleagues. I do not want to labour the point. We welcome the prospect, and we are glad that the old prejudices towards co-operation in the right sense are now disappearing.
    I am a disciple of Prince Kropotkin, who wrote a book called "Mutual Aid". Although he was an anarchist he was the founder of that opinion which has always believed in producer co-operation in agriculture. I am not going to say that the Minister is a disciple of Kropotkin, who was fundamentally a Socialist, but he is getting a little nearer to becoming one. That is why I will always support him when he is attacked by his Right-wing hon. Friends, as he has been today.
    There is a point I wish to stress. The Minister mentioned a rather interesting point and the Joint Parliamentary Sectary took me up on it when we discussed this earlier. The Joint Parliamentary Secretary said that I had let the cat out of the bag. We were talking about the functions of the Council. The Minister in his Third Reading speech said that certain functions outside the list laid down in the Bill could be developed by the Council, provided there was agreement with the Ministers concerned.
    Mr. Hare: I said that it would be subject to the proviso as written in Clause 10.
    Mr. Peart: It was subject to agreement; that is all I am saying. I visualise that the Council could indulge in certain activities outside the narrow functions which are now laid down. I shall not argue the point too far, but I hope, even at this stage, this part will be considered very carefully because I am certain that as it develops the Council must engage in other functions.

    465
    The provision of containers was mentioned by my hon. Friend the Member for Hillsborough. That is an excellent example of a provision which would help the individual producer.
    I was glad that mention was made, particularly by the hon. Member for Guildford, of the provision of a National Advisory Service. I think that has been mentioned by every hon. Member who has spoken in this Third Reading debate, and I share that view. I raised this on Second Reading and in Committee. After all, the provision of skilled personnel to advise producers will be an important part of the success of the Council's work. I argued on Second Reading that an instruction was given on a previous occasion by the Ministry to close down the Regional Horticultural Service and I asked for information on that. I hope the Minister does not wish to restrict the National Advisory Service.
    In the end I think the key will be agricultural education. I cannot discuss that on Third Reading, but I hope that one day we shall discuss the findings of the De La Warr Report and the place of horticulture in our agricultural colleges, and institutes where courses are provided. In the long run the provision of skilled personnel to help the industry will be dependent on the completion of the recommendations of the De La Warr Report. I know the Minister has accepted that Report and I hope that at a later stage in our Parliamentary affairs my hon. Friends will be able to press the Minister on it. I trust that the National Advisory Service will not be dismissed, but that it will be built up and opportunities made for advice to be given by skilled personnel to producers. I know that the Joint Parliamentary Secretary approves of that.
    I repeat what I said on Second Reading when I say that the Council should not be what the Runciman Committee thought it would be, an electoral college. I was complimented by the Minister for stating this and then criticised because I took another view in Committee when I criticised—rather in detail and not in principle—the view expressed on Second Reading. If the industry is to benefit, the Council must look at the industry as a whole. It must not be a debating chamber of sectional interests from which those who represent retailers,
    466
    wholesalers and producers report back to their organisations on what votes they registered and so on. If that happened I am certain the Council would fail. The Council must be a kind of cabinet for the whole industry.
    That is not to say that I am not worried about the detailed structure of the Council. Differences of opinion were expressed in Committee and they have been expressed today. I took a different view from many of my colleagues. I was glad that hon. Members opposite in Committee defied their Whips and that even on this matter, which is not a party matter, they were able to express their views. I hope that they have not been rebuked for doing that. It would be a good thing for Parliament if we had more free votes in Committee—and, indeed, in the House—when discussing Measures of this kind which are not of a party political character.
    I took the view that there is a bias against the producer. I am not going to stress it too much this evening, but, as I said in discussion of an Amendment, I have a producer bias. We have to help producers to organise properly, to settle their marketing policies and to co-operate together. Then I know the consumer will benefit. There is no conflict between the producer and the consumer. My concern has always been about the middle people who have taken advantage of the producer and the consumer. I have always argued that to bridge the gap we must have an improved marketing system. Every hon. Member is in agreement with the main principle. Even though there will be differences of emphasis on structure and composition of the Council, the Minister seeks to reorganise our marketing system. This should help producers to co-operate. Then, in the end, the consumer will benefit.
    The other main problem was raised by the hon. and gallant Member for the Isle of Ely. I agree that in the end the industry will be dependent upon a sound national commercial policy. If the Government of the day adopted an economic policy which could bring in a flood of imports to this country, home producers would suffer. I sympathise with the hon. and gallant Member, and here I am going to be political. The history of Conservative Governments,

    467
    right from World War I to 1939, was, in the main, to favour foreign produce at the expense of home producers. The hon. and gallant Member is not certain now because I have tried to make him face the realities of his own thinking in agriculture and to apply them to the political situation.
    Major Legge-Bourke: The hon. Member will remember, I hope, that in 1932 it was a Conservative Government that brought in the Ottawa Agreements, which at least made some sense of the previous Labour Government's Marketing Act.
    Mr. Deputy-Speaker (Major Sir William Anstruther-Gray): Order. I think the House is in danger of forgetting that we are on the Third Reading of this Bill.
    Mr. Peart: I do not want to follow the hon. and gallant Member into arguments about the Ottawa Agreements and the successful marketing policies of the minority Labour Government when Lord Addison was Minister of Agriculture. At least we had the beginnings of a marketing policy then. Without going into the past and getting out of order on Third Reading, I think that in view of the fact that importers are to be represented on the Council and in view of the fact that in Committee I moved an Amendment that the Council should give advice to the Minister on the quantity of imports and so on, it is relevant to our discussion to take up the specific point made by the hon. and gallant Member.
    I agree with him that without a proper trade policy the hopes of this Bill and its spirit could be completely wrecked. I hope that the hon. and gallant Member and his hon. Friends who speak up for agriculture because of their constituency interests will approach the Chancellor of the Exchequer and the President of the Board of Trade and urge them not to neglect the interests of agriculture. I shall go no further than that.
    This Bill must succeed. Even though we have still to consider the flow of imports coming to this country, I think that even the hon. and gallant Member will agree that it is right that the industry should set its own house in order. That is what the Bill will help it to do. I congratulate the Minister on initiating this first major piece of legislation on this
    468
    subject. Part I, the producer grants, Part II, the structure and functions of an important body, the Council—these are the main objects—and I wish them well.
    We have made our criticisms in Committee. We of the Opposition wish the Bill well, even though politically we may disagree with many hon. Members opposite on certain points in relation to the Bill. We hope it will be administered wisely and that the work of the men and women in the industry and those who participate in the Council will be successful so that a flourishing British horticultural industry will be able to compete more easily with the imports which come from abroad.
    8.17 p.m.
    Mr. Godber: The hon. Member for Workington (Mr. Peart), at the opening of his speech, said that we had had a good innings in Commitee on this Bill. I agree, and I think that on Second Reading and today we had a good innings, even though we had one or two "bumpers" from my hon. and gallant Friend the Member for the Isle of Ely (Major Legge-Bourke). Apart from that, the Bill has had a good reception on both sides of the House.
    I was particularly glad today to hear a number of tributes from both sides of the House paid to my right hon. Friend for initiating this Bill. Undoubtedly it was his personal intervention which brought it forward. It has been warmly welcomed on both sides and by the industry as well.
    A considerable number of points have been raised tonight. Most of them have been raised at other stages during the passage of the Bill. I shall seek merely to pick out one or two of what I think are the more important issues which have arisen. Before I do that, I wish to take up a remark made by the hon. Member for Sheffield, Hillsborough (Mr. Darling). In a very pleasant speech, in which he was extremely kind, he said at one stage that this was such a good Bill that it must have incorporated a large number of Labour Party ideas. He talked about our having stolen the Labour Party's clothes. I take note of what he said. I shall not comment on that except to say that the Labour Party looks extremely bare of ideas at present, so there may be something in what he said.

    469
    I come to the points raised by the hon. Member for Sunderland, North (Mr. Willey), who spoke first for the Opposition in this debate. He said, and I very much agree with him in this, that in relation to what we are doing for co-operatives we are entitled to look for a rapid development of new co-operatives and we want to see them stimulated into action. I welcome what he said and reecho it. I very much hope the industry will approach the matter in that spirit.
    It is all very well for us to provide the machinery here, but it is for the industry itself to go ahead and make use of it. One of my hon. Friends brought out the need for publicising this work, and I fully agree that we have to bring home to people the advantages of co-operation. If we can do that, and let them know of all the opportunities we are providing by this Bill they will have no excuse if they do not grasp those opportunities.
    The hon. Member for Sunderland, North referred to the question—and a number of my hon. Friends took it up—of the Advisory Service. He said that we really must do something about it and, if necessary, make that Service more attractive. My right hon. Friend is very much seized of that point, and we are taking pains this year to publicise in every way possible the competitions for entry. But we are still determined not to reduce the standard required of officers, and I am sure that hon. Members in all parts of the House will welcome that decision. However, we would like to see some increase in the number of officers coming forward, and I hope very much that we shall get some increase this year.
    Tied up with this matter was something mentioned by, I think, my hon. Friend the Member for King's Lynn (Mr. Bullard), who asked about the use of the Agricultural Land Service in relation to this Bill. That was a very good point. We do, of course, use the A.L.S. in relation to the Farm Improvement Scheme, and no doubt there will be a number of cases in which the Service can be of help in the operation of this Measure. We shall certainly not miss the opportunity of using members of the A.L.S. in regard to any building projects that are appropriate.
    The hon. Member for Sunderland, North referred also to the tariff, and to
    470
    the fact that there had as yet been no decision on it. This was taken up very strongly by my hon. and gallant Friend the Member for the Isle of Ely. There is nothing that I can say on that because, as my hon. and gallant Friend himself said, this Bill does not deal with tariffs and we do not at all pretend that it does. Therefore, many of his remarks on that subject seemed to be inappropriate. It is no good blaming the Bill for not dealing with certain things with which we have never pretended it would deal. The tariff is a quite separate issue, and we have always said that this Measure was by no means an alternative to the tariff. In spite of what my hon. and gallant Friend has said today, I must repeat that.
    To deal with other of my hon. and gallant Friend's remarks, he argued that we should look on the grants being paid as a form of National Assistance. I have never understood his approach to this at all, and I again refute that statement. It is no more a form of National Assistance than was the Farm Improvement Scheme—
    Major Legge-Bourke: That was, too.
    Mr. Godber: It was certainly not a form of National Assistance. This is an investment in the industry which, I think, the country is entitled to make, and it is valid and useful. It is certainly not comparable with the examples my hon. and gallant Friend gave of the cotton and shipbuilding industries, from which he argued that a reduction in production was being brought about, and that producers were being aided in this way to ease the reduction. That is not the case. This is a definite attempt to help producers to make themselves more efficient in their production.
    My hon. and gallant Friend gave figures of imports of Dutch tomatoes in the years from 1954 to 1959 and asked how this Bill would help to prevent imports on that scale. The answer is that it will not because, as I have just stated, the Bill is not related to the tariff at all. But what it can do, and this is important, is to assist towards better competition with those Dutch tomatoes. As I said, I think, on Second Reading, it will encourage co-operation, and it will encourage production, not only of high quality but of even quality.

    471
    Our big difficulty in competing with the Dutch at the moment is that we have not sufficient supplies of uniform quality. At the same time, the Bill will be a direct incentive towards the improvement of our marketing and will make our tomato growers more directly competitive. In those ways, it can have an effect, but the Bill is not, of itself, intended to deal with the points mentioned by my hon. and gallant Friend.
    My hon. and gallant Friend asked a question in relation to the Vote on Account of £250,000 for the horticulture bill. This money is being provided because we hope to start this work from 1st April, prior to the passage of this year's Appropriation Bill. Without the provision, it would be impossible to make a grant before the Appropriation Bill is passed. The Vote will cover any facilities provided under the Bill whether in Part I or Part II but there will not be any large number of amounts paid out before the passage of the Appropriation Bill.
    I am most grateful for the remarks made by my hon. Friend the Member for Guildford (Sir R. Nugent) in a most helpful speech. I think that most of the various points he raised have been dealt with before, but I was very interested in what he said about the very important new Clause that he moved in Standing Committee, to provide as he claimed, penal damages for breach of contracts made between growers' co-operatives and the individual members. I was glad to have his good wishes in the task that I have been given.
    I was a little puzzled by the insistence of hon. Members on both sides of the House that I should leave this country. Whether I should read any special significance into that I do not know, but I have taken note of the point, and also of the fact that the hon. Member for Workington wishes to pair with me in that event. We approach this very important task with the feeling that we must do all possible to investigate certain facts, and to see what further suggestions we can make to help on this most important question. I am grateful to my hon. Friends and to other hon. Gentlemen who have spoken on this point.
    My hon. Friend the Member for King's Lynn also made the point—and, again, it is one that I have already
    472
    repeated to my hon. and gallant Friend the Member for the Isle of Ely—that the Bill must be considered as additional to the tariff and not in place of it. My hon. Friend said that on that condition he welcomed it. I accept his welcome on that condition, because that is exactly what it is. In the same way, I welcome his good wishes for the Horticultural Marketing Council. He was a little critical in Committee, but I am glad to know that, with the reservations he made, he wishes it well.
    I am sure that unless we all wish this body well and give it every opportunity to do well, we cannot hope for it to function effectively. If it has to look over its shoulder for criticism it will not have the chance to develop as we wish. Indeed, one of the most heartening things to emerge from this Third Reading debate has been the number of people who have said that we must encourage the different bodies represented on the H.M.C. to work on it together as one unit. That has been very effectively said on both sides of the House, and I am grateful to hon. Members for having said it. I am sure that the Council can do a good job of work, working together, and not thinking entirely of sectional interests.
    I have tried to deal with the more important points that have been raised and I am grateful for the support that we have had from both sides of the House throughout all the stages of this Bill. We have had all-party support and we very much appreciate it. Hon. Members opposite have proposed various Amendments and we have accepted a considerable number of them. I frankly admit that the Bill has been improved as a result of the efforts of the House.
    So we come to the end of this important Third Reading stage on what, as my right hon. Friend has said, is the first Bill that we have had on horticulture certainly for a long time. As one who has been connected closely with horticulture all my life, I wish to say how very pleased I am that we have had such a measure of support from both sides of the House. I hope this will be a measure of encouragement to the horticulture industry which I trust will take the fullest possible advantage of this Bill.
    Question put and agreed to.
    Bill accordingly read the Third time and passed.

  SCOTLAND (TEACHERS' SALARIES)
  8.30 p.m.
  Mr. G. R. Mitchison: I beg to move,
  That an humble Address be presented to Her Majesty, praying that the Teachers' Salaries (Scotland) Regulations, 1959 (S I 1959, No. 2150), dated 15th December, 1959, a copy of which was laid before this House on 30th December, be annulled.
  I rise to put before the House one matter, and one only. It is a matter which could arise in connection with any Ministry, and I believe it is of general interest. The Select Committee on Statutory Instruments called the attention of the House to these Regulations on the ground the at they made
  "unexpected use of the powers conferred by the Statute under which it was made."
  The Select Committee did this after asking questions of the Secretary of State for Scotland and receiving quite a long reply, and, while I hope to deal with the matter as shortly as I can, I must mention the history.
  The Education (Scotland) Act, 1946, re-enacting in this respect a provision in the Act of the previous year, laid down in Section 79:
  "It shall be the duty of every education authority to pay to the teachers appointed by them salaries in accordance with such scales as may from time to time be prescribed by regulations made by the Secretary of State …"
  Accordingly, under that Act, as I read it, the Secretary of State had power to make regulations about scales and no more. He could prescribe scales. In fact, he seems to have gone a long way beyond that, and no doubt as a consequence—I think that appears from his reply—an amendment was introduced in the 1956 Act by way of an additional subsection:
  "Regulations made under this section may include provisions as to the application of any scales prescribed therein to the salaries of teachers"—
  I should have thought that might have followed from the previous subsection—
  "and may make such consequential, ancillary and incidental provisions as appear to the Secretary of State to be necessary or desirable."
  The point I want to emphasise is that those last words have been so widely interpreted and used that the Regulations go far beyond the ordinary meaning of the word and the intention of the House at the time. They are described quite
  474
  generally by the Secretary of State himself in his reply:
  "… the powers of modification taken in"—
  a part of the Regulations to which I shall refer in a minute—
  "are not designed to enable the Secretary of State to make prescriptions of a kind which could and should be made in the Regulations themselves. They are intended to enable him to deal with a small number of special cases each of which must be considered on its own merits and none of which is necessarily an exact precedent for other cases."
  If that is the intention of the powers of modification, I find it rather difficult to see how they can be brought within the language of a provision which simply allowed for
  "consequential, ancillary and incidental provisions."
  I want to make it clear, especially to the Joint Under-Secretary of State for Scotland and Scots Members present, that I make no comment whatever on the merit of these provisions. They may be much the best way of dealing with the situation. They may be perfectly sensible and wise; I do not know. My hon. Friends for Scottish constituencies will, no doubt, have something to say on the merits of the matter. As I see it, they are nothing to do with the Regulations but with the power that is given to the Secretary of State in the Statute, as amended.
  If this is the right and best way of dealing with these matters—and it may well be, and I can see a very strong case for it being the best way—I hope that the Minister who replies will agree with me that it must anyhow be authorised by Statute. If the Select Committee is right in calling the attention of the House to the matter in the way it has, it may well be that another Statute ought to be introduced or a further amendment made to the powers of the Secretary of State. That is the point that I want to make.
  I must give an instance or two. Part VI of the Regulations, which are long and detailed, consists of modifications of the Regulations in special circumstances. I think that it is sufficient for my purpose if I point out that some of these modifications have been very considerable. There is an instance given where about 700 directions were in operation at one time by way of modifying Regulations and exercising the

  475
  powers given by one of the Regulations authorising modification.
  Let me give one instance where a far smaller number of people was concerned. I quote from the Secretary of State's reply.
  "Regulation 32 enables a direction to be given prescribing the salary of a certificated teacher who is also a minister of religion and is employed wholly or mainly in or in connection with the provision of religious instruction."
  He then goes on to explain why this is advisable and says that at present about nine cases are known. There is no salary scale, as I understand it, in these cases.
  The salary there is dictated—I do not use the word in any offensive sense, so shall I say decided—at the discretion of the Secretary of State, and one of the reasons for doing it is that there has not yet been sufficient experience to enable appropriate salaries to be prescribed in advance. That may be so. The power under the Act is to prescribe salaries and to do what is necessary and incidental to that, and not, as I understand it, to direct even in a limited number of cases salaries which have no connection with any scale.
  Moreover, there is more to it than that. When one looks at the original Section of the 1946 Act, to which I have referred, one finds at the end the proviso, which I will summarise, that no education authority must pay more than the prescribed scale and if there is not a prescribed scale the education authority can pay such salary as it thinks fit. Who is the person who thinks fit in the case of minister teachers? Is it the Secretary of State who has taken power to direct that they be given such and such salaries in each individual case, or is it the education authority which appears to have been left with discretion under the Statute?
  Again, to take the case to which I referred where there were 700 directions in operation, I quote again from the Secretary of State's summary of what is in fact an extremely complicated Regulation:
  "Regulation 37 enables direction to be given where the application of the Regulations would result in the whole or a particular part of a teacher's salary being smaller than it would otherwise have been because of some action by the education authority for which the teacher had no responsibility and which was not due to any fault of the teacher's."
  476
  That seems to be a perfectly proper provision to make and I am not complaining of it in that respect—
  "The facts of the cases differ so much that it has not been considered practicable to prescribe any general rules in the Regulations"—
  and, accordingly, the Secretary of State takes powers to deal with them. I do not say that, on the merits, he ought not to have them. I repeat that, I think, for the third time, but the question here is whether under the Statute he has the power or whether he ought to seek statutory sanction for what he is doing.
  The other defence, if I may use the word in, I hope, a kindly spirit, is that "We have often done it before". It is not, as a rule, a very good defence. We heard it two evenings ago, I think, in connection with the laying of a certain Order before Parliament. The only question we have really to consider is—aye or no, is the Select Committee of the House, which, after all, has considerable experience in these matters, justified in saying, as it does, that the Regulations
  "make unexpected use of the powers conferred by the Statute under which they were made"?
  That is, I agree, not quite a lawyer's way of putting it, perhaps, but it is surely the common sense of the matter, and it is what we ought to consider in the House.
  Having made my point and put before the House the point which was made by the Select Committee, I shall not for one moment go into the merits of these Regulations or even into the merits of the modifying part of them. That I am bound to leave to my hon. Friends from Scotland, trusting that I have not taken up too much time and being very careful not to tread across the Border on any question of substance or merit.
  8.42 p.m.
  Mr. Bruce Milan: I beg to second the Motion.
  The House will understand if I do not follow the remarks which have been made by my hon. and learned Friend the Member for Kettering (Mr. Mitchison). The usual criticism of the Secretary of State for Scotland from this side of the House is that he does not do enough; it comes almost as a pleasant change to find him being accused of doing too much or something which he has no power to do.

  477
  I turn to the content of the Regulations themselves. It is not, of course, the function of the House to Act as a kind of super-negotiating body for teachers' salaries, and I do not, therefore, propose to deal with particular complaints which any category of teachers may have about the present Regulations, although I think most of us within the last week of two have received letters from constituents pointing out how inadequate the increases under the Regulations have proved to be. I imagine that we have all had quoted to us cases of teachers who have had what amounted to only two or three shillings or even, in some cases, two or three pence a week increase under the new Regulations.
  Our main purpose is not so much to consider what the Regulations do for particular categories of teachers but to consider the Regulations in the light of what they do to attract teachers of the right calibre to the profession in Scotland. If we ask the question, "Are the new salary Regulations likely to attract sufficient teachers of the quality we need?", the answer must be an unqualified "No". We have seen the reaction of the profession itself, and we know that there is a tremendous amount of dissatisfaction among teachers about their present salaries and status. Our main criticism is that these Regulations do not provide the basis for attracting teachers of the right quality in sufficient numbers.
  One of the things which strikes anyone who tries to read the Regulations—I use the phrase advisedly—is their tremendous complexity. This cannot be a good thing, and in itself it is significant. Obviously, it is something which has grown up over the years, but I think that it represents the attempt of particular classes of teacher to ameliorate their general dissatisfaction by getting concessions made to them. I think that it also represents an attempt by the Secretary of State to give additional payments, such as responsibility payments and payments for qualification, to particular categories of teacher simply to assuage their criticisms and bitterness about the general level of their salaries. The complexity of the Regulations seems to be a sign of the general dissatisfaction about the level of salaries.
  I have said that the real question we have to consider is whether present
  478
  salaries will attract teachers of the right kind in sufficient numbers, in particular young graduates, in competition with commerce and industry. It does not necessarily follow that teachers' salaries should be bound by any rigid formula to the salaries which might be expected by graduates in industry and commerce. As was seen from the Report on Doctors' and Dentists' Remuneration, in the professions salary scales vary tremendously from one profession to another. It is not by any means true to say that teachers' salaries must be related to any particular profession or professions, but, obviously, as we are attempting to attract graduates in competition with industry and commerce, the salaries must be likely to attract graduates.
  There seem to be three main considerations in this matter: first, the level of starting salaries; secondly, the question of prospects and salary; and, thirdly, promotion. I would say that the major criticism of the present salaries is their very low starting point. It is here that industry and commerce can compete so successfully. When we ally to that the circumstance that the incremental period runs from eighteen to twenty years, we realise the difficulty in attracting teachers.
  It seems to me that an incremental period of from eighteen to twenty years is completely indefensible. There cannot be another profession which has an incremental period of such length. The Knox Committee, which reported reported recently, advocated that this period should be substantially reduced. I had hoped that the new Regulations would go part of the way to bringing down this very long period, which, allied with the low starting salary, is the main reason for the dissatisfaction of teachers with their present salaries.
  There is also the matter of promotion. The teaching profession, by necessity, has limited promotion prospects. They are people who, by definition, ought to be superior in intelligence to the ordinary individual. We are taking graduates. We ought to be taking the best graduates. We are taking them into a profession where the promotion prospects are limited. It is particularly serious in the case of local education authorities who determine promotion largely on the basis of seniority, which means that a young

  479
  teacher has very little prospect of improving his salary for a considerable number of years.
  Taken together, these factors—the low starting salary, the long incremental period and uncertainty about promotion—show that the present salary regulations are not adequate to do the job which they ought to be doing.
  I should like now to say something about the shortage of teachers, particularly in Glasgow, in relation to the Regulations. It is not by any means true that Glasgow is the only city or the only education authority in Scotland with a shortage of teachers. The problem affects all local education authorities to some extent. Glasgow, however, is the major city in Scotland and we have a serious shortage of something like 1,000 teachers.
  For Scotland as a whole, the increase in qualified teachers since 1939 is about 20 per cent., but the figure for Glasgow is less than half that, only about 9 per cent. This means that Glasgow is not getting its share of new teachers who become available. Consequently, despite the amalgamations of schools which have taken place, twenty-one schools in Glasgow are working on short time and something like 2,200 secondary pupils and 1,200 primary pupils in Glasgow are getting part-time education.
  We all recognise the supreme importance of education and it is tragic that in 1960 there should be this substantial number of secondary and primary pupils in Glasgow who are receiving only part-time education.
  Glasgow's problem is more than just a problem for the city. It amounts to a national problem. I am not sure that I would carry all my hon. Friends with me, because, obviously, they have their own local education authorities to think about. There are, however, certain disadvantages from the viewpoint of teachers in Glasgow. Because of the size of the city, there are rather fewer promotion prospects because of the larger schools, in addition to difficulties with housing and all the other facilities.
  There is already provision in the Regulations to make additional payments to teachers who teach in remote areas. In other words, the principle has been conceded that teachers who work
  480
  at a disadvantage in comparison with their colleagues generally should get additional payments. I should like the Secretary of State for Scotland seriously to consider whether there is not a strong case for making additional payments also to teachers in Glasgow. I notice that the right hon. Gentleman has been trying to get the other local authorities to co-operate by asking them to keep down their recruitment, so that as teachers become available, Glasgow will get more than her fair share. Not unnaturally, the other local authorities are not willing to co-operate in any voluntary scheme of this nature. Again, therefore, I ask the Secretary of State to consider the question of additional payments for Glasgow teachers.
  This is almost a constituency point rather than a national matter. Quite apart from that, however, we and the teachers certainly feel that the existing Regulations do not provide anything like the kind of salaries that are needed if we are to get a properly qualified add sufficient teaching profession in Scotland.
  8.55 p.m.
  Mr. Graham Page: I rise to follow the point which the hon. and learned Member for Kettering (Mr. Mitchison) made in moving the Prayer and I apologise to Scottish Members that this is a kind of double debate. There are these two points which arise, one on the merits and the other on the form of the Regulations. As the House knows, the Select Committee on Statutory Instruments is charged with a duty to look at all Statutory Instruments laid before the House and to report to the House if it sees fit if any Statutory Instrument is not in accordance with the Statute authorising it, or if it is an unusual exercise of power. Hon. Members will see from the last two pages of the Second Report of the Select Committee which deals with this Instrument the sort of work undertaken by that Committee in looking through a great number of Instruments at every one of its meetings.
  It is very seldom that the Committee reports on an Instrument to the House. That is all that the Committee is empowered to do. It can only leave it to hon. and right hon. Members to raise the matter in the House. It seldom does report on an Instrument, but it is right

  481
  that when it reports an Instrument the matter should be raised in the House. Normally, the Committee would first ask for an explanation from the Department concerned. Indeed, that is what the Committee did in relation to an earlier Instrument concerning teachers' salaries in Scotland. It is said in the Report that the Committee drew attention to similar Regulations in 1956 and a memorandum was received from the Department at that time. It might perhaps have been right for the Committee to have reported to the House then, but it did not feel justified in taking the matter so far at that stage.
  Now the Regulations come forward again in a form similar to that which the Committee felt was not justified by the Statute. Under the Education (Scotland) Act, 1946, the Secretary of State was empowered by Section 79 (1) in the following words:
  "It shall be the duty of every education authority to pay to the teachers appointed by them salaries in accordance with such scales as may from time to time be prescribed by regulations made by the Secretary of State."
  The scales—and I am quoting the 1946 Act—had to be laid down by regulation made by the Secretary of State.
  The Scottish Education Department in commenting upon that 1946 Act says:
  "The only power expressly given by the section was a power to prescribe scales by regulations."
  It is the duty of the Select Committee on Statutory Instruments to see that an Instrument does not further delegate legislation. The Instrument itself is delegated legislation. If it then goes on to give somebody else power to make some orders or prescribe something, one must look very carefully at the enabling Statute to see whether that sub-delegated legislation is permitted.
  The Regulations now before the House undoubtedly provide for what I call sub-delegation. They provide that the Secretary of State may prescribe certain modifications to regulations themselves. Therefore, one looks very carefully at the Statute to see whether the right hon. Gentleman is empowered to do that. He certainly was not under the 1946 Act. I think that his Department fully recognised that in the report which it made to the Select Committee, for it said:
  "Since the view had always been taken that the section could not be effective unless
  482
  it could be held also to authorise the inclusion in the regulations of provisions as to how the scales were to be applied to the calculation of the salaries of individual teachers and as to how exceptional cases should be dealt with, the section was interpreted as conferring by necessary implication wider powers than were expressly conferred."
  That is really a rather shocking thing to tell the Select Committee—that the Department, having found that a Section did not give it the right to do what it hoped to do, had put a very wide interpretation on that Section and had done that very act.
  Like the hon. and learned Gentleman the Member for Kettering, I am not complaining about the merits. Frankly, I think it was a sensible thing for the Department to do, but there is a difference between common sense and the power which Parliament has given to a Minister. The Minister must act within the powers given to him. No doubt it is reasonable to think that in individual cases the Secretary of State may modify the scales to suit the individual concerned. That is reasonable if one is considering it from the point of the individual, but we must realise that public money is being dealt with here. The taxpayer and the ratepayer are on the other side of the picture and their money should be used only in accordance with the powers given to the Secretary of State by Statute.
  Having found that the 1946 Act, although widely interpreted by the Department, was not really sufficient, a Section 79 (1A) was added by the Education (Scotland) Act, 1956, to the following effect:
  "79.—(1A) Regulations made under this section may include provisions as to the application of any scales prescribed therein to the salaries of teachers, and may make such consequential ancillary and incidental provisions as appear to the Secretary of State to be necessary or desirable."
  Again, those have to be made by Regulations, not by a Regulation authorising the Secretary of State to modify the Regulations, I presume by a letter or something else from the Department. It certainly did not authorise the Secretary of State to legislate by anything other than Regulation.
  Now I will refer to the Regulations about which the complaint is made. They occur in Part VI of the Statutory Instrument. They are those numbered

  483
  31 to 37 and all are cases in which the individual teacher does not quite fit into the scale. In Regulation 31 there is an intention to deal with the exceptional headmaster of a secondary school. Everyone would wish to give him a greater salary, but the Regulation does not say so. It says that the Secretary of State may modify the Regulations which are now before the House. In fact this is a repetition of a previous Regulation under the 1946 Act and thirty-seven teachers are already affected by a modification of this kind.
  So one could go on through the various Regulations. For example, the next one deals with the minister of religion whose teaching qualifications do not come up to the scale. The Secretary of State can modify the scale to suit such a person. Regulation 33 deals with the responsibility element when there is a new school opening or a school expanding. Regulation 34 deals with another special responsibility of an exceptional kind. In all these cases the Secretary of State is given power by these Regulations to modify the scales laid down in the Regulations.
  It must be obvious to right hon. and hon. Members that it would not be possible to deal with individual cases in a scale and that this has been the only way to deal with them. If this is the only way to deal with them, the Statute should have authorised the Secretary of State to deal with them in this way, and the Select Committee on Statutory Instruments could do nothing other than report to the House that, however good these Regulations may be from the merit point of view, it is not within the Statute to empower the Secretary of State to pay a teacher anything but a scale laid down in the Regulations. Therefore, I think the Secretary of State should seek new statutory powers to put himself in order if he wishes to make a Regulation of the sort which has been mentioned.
  9.5 p.m.
  Mr. Harry Gourlay: I propose to follow the comments of my hon. Friend the Member for Glasgow, Craigton (Mr. Millan). He spoke of a tremendous shortage of teachers and thought that it was perhaps a constituency point. Hon. Members representing Scottish constituencies who
  484
  are present this evening will recognise that we have a similar problem in Fife, and since Fife is a kingdom it is obviously a national problem.
  It may well be that the Joint Under-Secretary will tell us that the Regulations are the result of negotiations agreed between the employing authorities and the various teacher organisations, but when one considers the tremendous number of letters which every Scottish Member has received from his constituents, not only the teaching profession, pointing to the anomalies in the Regulations, one has to have some doubts whether the present method of negotiating teachers' salaries in Scotland is correct and advisable.
  In supporting the Motion, I want to focus attention on the present critical situation in Scottish education. The tremendous shortage of teachers has not just arrived as a bolt from the blue. It has been creeping up on us for a number of years, but now we are racing along at the speed of a guided missile towards inevitable disaster unless the Government take speedy action.
  More and more parents are becoming actively interested in education, particularly when their children reach the age of promotion from primary to secondary education. Parents of children who are not admitted to the high schools in Scotland frequently blame this fact on the staffing position in the primary schools. They sometimes say that their children have been to schools where there have been far too many changes of teachers or too many uncertificated teachers, and they can be very strong in their condemnation of the education authorities, which can do little to alleviate the position.
  At present in Scotland we have about 1,600 uncertificated teachers. While I hasten to add that many of them are capable of doing good work, there are grounds for serious dissatisfaction with the present situation. The price to be paid for this state of affairs may be very costly to the nation, but it is even more important to the individual pupils whose entire future could be marred by lack of sound basic education. In the County of Fife, out of approximately 2,000 teachers 10 per cent. are uncertificated, and there are about 80 over-sized classes. Were it not for the assistance of the

  485
  married certificated teachers, we should indeed be in a very sorry plight.
  When we look at the salary regulations, therefore, we have to ask whether they will help to overcome the staffing problem. Like my hon. Friend the Member for Craigton, I regret to say that the answer is an unqualfied no.
  The Government Circular on the Report of the Working Party on the Curriculum of the Senior Secondary School states:
  "The Secretary of State recognises that the success of an educational system depends ultimately on the adequacy, in number and in qualifications, of the school staffs. He appreciates, therefore, that the problem of staffing is the most important—as it is also the most difficult and most obstinate—of the problems to be overcome in securing the advances in secondary education which the Working Party and he alike desire.
  The recent Report of the Advisory Council shows that, over the next ten years, Scotland will require to recruit to the profession some 930 honours and ordinary graduates a year. The recently improved recruitment—from about 650 to over 800 in the last three years—is encouraging, but there is a special need to increase the supply of honours graduate teachers."
  The Circular goes on:
  "While the figures for recent years give some reason for hope, further increase in recruitment is essential; and the supply position in regard to mathematics and physical science remains critical."
  In paragraph 37 we read:
  "Whatever may be done, the essential fact remains that the vital claims on the services of graduates and other highly qualified persons are so great in relation to supply that a difficult period for the schools undoubtedly lies ahead. The Secretary of State hopes that with increased output from the higher institutions, with such changes as he can bring about and with the slowly declining school population from 1961, staffing—however difficult it may remain for some time—will not prove an insuperable obstacle. …"
  Has the Secretary of State, therefore, made sufficient changes in the Regulations? Again, the answer is quite definitely, "No." The Advisory Council recommended, as my hon. Friend the Member for Craigton said, a reduction in the scale from some 18 to 10 years—that is in the incremental scale—in order that teachers could reach their maximum salaries a little sooner. It is fatuous to tell men of 23 that they will be all right when they reach the age of 40, and it is because of this very point that industry
  486
  is able to induce so many graduates to go into other professions.
  The second recommendation from the Council which the Secretary of State should have adopted was to give graduates, in their year at the training school, an award on the same scale as those given by the Department for Scientific and Industrial Research, or, alternatively, a payment approaching that of a first-year teacher.
  The third improvement suggested by the Council was the provision of housing. At present, education authorities are allowed to build houses for head teachers and janitors but not for ordinary teachers. Some local authorities are quite generous in their allocation of houses for teachers, but the education authorities should be on the same basis as police and fire authorities, who own a very large percentage of the houses occupied by their staff.
  To implement these Recommendations would cost a good deal of money, but the position is so serious that the consequences of not providing the money could be catastrophic, especially as we as a country are dependent on the export of "know-how". The Regulations as they stand will not effectively assist in the recruitment of teachers. The changes are not of sufficient weight to induce more graduates to enter the profession. The increase in the number of graduates in secondary schools is encouraging too large a proportion of teachers to drift from primary to secondary schools. It is an expedient which is, in effect, robbing Peter to pay Paul. The system must be based on a sound primary education. A system which is starved at the roots will obviously end in dismal failure.
  We must maintain our Scottish tradition in education on a sure foundation and increase the pool of ability from which we draw teachers, scientists and technologists. That is the challenge facing the Secretary of State and one which he has dismally failed to meet in the Regulations.
  9.14 p.m.
  Mr. Forbes Hendry: At the outset I think we all want to congratulate the Secretary of State for Scotland on producing a most comprehensive and masterly document. It is such a masterly document and so long

  487
  that I have found it extremely obscure, and apparently it is intelligible only to schoolmasters. I always understood that lawyers were the people who produced incomprehensible documents, and perhaps I am as guilty of this as any other, but this document is so obscure that I had to seek advice from various schoolmaster friends of mine, asking them to explain it to me. I found that between schoolmasters and schoolmistresses there was a sharp difference of opinion on this subject. Before we consider salary scales in any detail we should ask the schoolteachers themselves to make up their minds what they want.
  I welcome, as I think every hon. Member must welcome, the fact that at long last we are within sight of equal pay for equal work and that in about two years men and women teachers will be paid on the same scale. Although we all recognise the fairness of that, however, I suggest that the Secretary of State should consider what he can do to avoid any hardship to married schoolmasters. In Scotland there has been a breakaway from the Educational Institute of Scotland to the Scottish Schoolmasters' Association, which has this point very much in mind. Will the Secretary of State consider whether he could begin to pay some allowance to married schoolmasters in the same way as the Army has paid allowances for many years? In the Army there are marriage allowances and children's allowances to prevent hardship. There are real hardships amongst schoolmasters in Scotland.
  Miss Margaret Herbison: I take it that when the hon. Member advocates marriage allowances and allowances for dependants, he will take into account the many women teachers who, equally, have dependants.
  Mr. Hendry: The hon. Lady has made an excellent point, and I hope that the Secretary of State will pay attention to that as well as to the point which I have made.
  One frequently sees in Scotland young women in furs driving about in motor cars. Probably their fathers have private means, but, nevertheless, they seem to be doing extremely well for themselves. On the other hand, we often find the poor old schoolmaster, a pillar of the community, walking about down at heel, in
  488
  many cases almost as down at heel as the parish minister. I appeal to my right hon. Friend to give some consideration to that situation in dealing with teachers' salaries in the future.
  I mentioned parish ministers, and I welcome that part of the Regulations which provides for payment to ministers of religion who are teaching. I suggest very sincerely to the Joint Under-Secretary of State that, especially where there is a shortage of teachers, part-time employment might be give to ministers. They are men of good education and in many cases they are natural teachers, although they may not be certificated. It might be possible for a minister to obtain some subsidiary qualification which would enable him to act as a part-time teacher and thus make a valuable contribution to meet the existing shortage of teachers.
  As I expected, we have heard about the shortage of teachers in Glasgow. I thought that we should have heard about the shortage in Lanarkshire, although we have not.
  Mr. James Dempsey: It is still to come.
  Mr. Hendry: We have heard about the shortage of teachers in Fife. I agree that there is a serious shortage in Glasgow and Fife. On the other hand, I should be surprised to hear that there is a shortage of teachers in Edinburgh. My hon. Friends who represent Edinburgh constituencies tell me that this shortage does not exist in Edinburgh. I suggest very respectfully to hon. Members opposite that it might be a good thing if the the local authorities in Glasgow, Lanarkshire and Fife sought to put their own houses in order and treated their teachers a little better. All local authorities which employ teachers are empowered to build houses. Certain local authorities, as housing authorities, provide houses for teachers and manage to attract teachers when other local authorities cannot. It is not for this House to tell local authorities what they should do, but I suggest that hon. Members opposite might well advise their local authorities along these lines.
  Mr. William Ross: Does Edinburgh Corporation build houses for teachers? If it does, then teachers are the only folk for which the corporation is building houses.
  Mr. Hendry: The point is that Edinburgh Corporation can attract teachers and has not shortage, whereas Glasgow, Lanarkshire and Fife have a shortage.
  We have heard a lot about teachers in Glasgow. I want to deal with the rural areas where great difficulty is experienced. The difficulty in those areas is due not only to a shortage of teachers but to conditions. As my hon. Friend the Joint Under-Secretary knows, my constituency is noted for the large number of little schools—secondary schools at that—which are widely spread and where the headmaster and teachers have a tremendous responsibility, far greater than the responsibility which falls on a teacher in Glasgow. The teachers, and the children attending these schools, live and work in conditions which would appal any teacher or pupil in Glasgow.
  In my constituency it is not uncommon for children to cycle six miles each day to school. In these little village schools they get a better education than many children get in Glasgow. This is due to the high standard and devotion to duty of the teachers in these schools.
  I welcome the Regulation, which my hon. Friend the Member for Crosby (Mr. Page) criticised, which provides for special payment in remote schools, but I regret that there has been a retrograde step in the definition of a remote school. In the old Regulations a remote school was one which had not more than two teachers and was at least five miles away from a railway station or a passenger service. To be regarded as a remote school now, a school has to be fifteen miles from a centre of population, and a centre of population is defined as a place where, in the primary schools, there are at least three teachers. Hon. Members representing Glasgow and Edinburgh constituencies would be horrified if they were asked to regard a place which had three teachers in a primary school as a centre of population. Under these Regulations, unless the school is fifteen miles from a centre of population a teacher will not receive special responsibility payment. I appeal to my hon. Friend the Joint Under-Secretary to look at that point again to encourage teachers to work in these schools.
  Only the other day I was discussing a school in my constituency with the Joint Under-Secretary. It is a secondary
  490
  school, and the head teacher teaches not only the three top primary classes, but also the over twelve secondary pupils. I had, with regret, to agree with my hon. Friend that it would be proper to close that school. No teacher can possibly handle classes like that. These children will have to go to the nearest secondary school which is six miles away. If more encouragement were given to teachers in the small rural schools a great problem would be overcome.
  I want to pay tribute to these teachers, especially the head teachers, because they literally run the village or parish. The parish minister, who is a natural leader, may have a double charge, and live miles away from the area, and everything devolves on the head teacher. He runs every charity. He is probably the secretary of the local football club. Everything devolves on him. The success of the whole village depends on him.
  There are Regulations which enable the Secretary of State for Scotland to make special provisions to deal with such cases Regulation 31 is, unfortunately, too narrow because it applies only to teachers in secondary schools. When the Secretary of State for Scotland decides to make Regulations of this sort again I hope that he will make them applicable to primary school teachers.
  Regulation 34, which my hon. Friend the Member for Crosby also criticised, enables the Secretary of State for Scotland to give special responsibility payments where teachers have responsibilities of an exceptional kind.
  Mr. Gourlay: I did not criticise that part at all. I was referring to the general £100 grant being given to teachers who go from primary to secondary schools. As for building houses, the authorities may do so, with the approval of the Secretary of State, but so far he has refused to approve the building of such houses.
  Mr. Hendry: I apologise for my diction. The hon. Member misheard me. I referred to my hon. Friend the Member for Crosby who criticised these Regulations from a legal point of view. I appeal to my hon. Friend the Joint Under-Secretary to shut his ears to anything suggested to him by my hon. Friend and to make the best use he can of Regulation 34.
  Mr. Mitchison: I hope that the hon. Member does not mean that. This is a complete dictatorship. According to the hon. Member, the Secretary of State should be given certain powers and then encouraged to exceed them.
  Mr. Hendry: The House is being asked to approve these Regulations, including Regulation 34, and I am asking my hon. Friend to make the best use of that Regulation in order to ensure that country teachers, who are giving a tremendous service to Scotland, should receive recognition. This will ensure the continuity of first-class education in country districts.
  I have great pleasure in commending these Regulations to the House. They are open to criticism in various respects, but they represent a tremendous step forward, and all hon. Members should support them. I would merely ask my hon. Friend to consider the point to which I have referred, with a view to improving them even further when the time comes to rewrite them.
  9.27 p.m.
  Mrs. Judith Hart: I shall not attempt to follow the remarks of the hon. Member for Aberdeenshire, West (Mr. Hendry), except to say that when he mentioned young women in fur coats and motor cars he could not have been referring to young women newly qualified as teachers, because their starting salaries are not sufficient to support either a fur coat or a motor car; nor are the salaries of most women teachers in Scotland. He may have been referring to the daughters of some of the business men who have been treated so generously by his right hon. Friend the Chancellor of the Exchequer, and I hope he will mention that point to his right hon. Friend in anticipation of his Budget statement.
  I want to refer to the point made by my hon. Friends concerning the general dissatisfaction which the whole Scottish teaching profession feels about these new Regulations. I do not wish to refer to particular groups who feel a special sense of injustice, but it is clear to all who have been receiving correspondence from them that in this profession the sense of dissatisfaction strikes very deeply. Before coming here this evening I was discussing with some of my hon. Friends the question of the extent to
  492
  which we can believe many of the things said by members of various professions about the injustice of their salary scales. We can distinguish between those grievances which are raised as a matter of routine, in order to pave the way for the next salary increases, and those grievances which are so frequently reiterated, with such bitterness, that it is quite clear that the whole profession feels that it is unjustly treated. I believe that this is the case with the teachers.
  This is a matter of great importance, first, because we cannot have a good teaching profession unless it is feeling satisfied with its conditions of work, and so, for its own sake, it is advisable that the profession should have salaries which satisfy it, and secondly, because we cannot hope to stimulate recruitment to the profession unless we have an already happy profession for recruits to enter.
  Mention has been made of Glasgow, Fife and other parts of Scotland. I support my hon. Friend the Member for Glasgow, Craigton (Mr. Millan) in the plea he made for Glasgow. All of us who represent constituencies in Scotland must share the view he puts that, however great are the needs for teachers in our constituencies, Glasgow presents an acute problem. Since it is vital to the basic life of Scotland, Glasgow's needs must receive the most urgent attention of the Secretary of State.
  I make mention of my constituency and of Lanarkshire in general. I am sure my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) would support every remark I make on this subject. The needs in Lanarkshire are, above all, to reduce the size of classes, to enable the provision of specialised staff and to ensure that uncertificated teachers need no longer be employed. I give one or two examples, not the most recent, but the most recently available. They show that in Lanarkshire there were 23 primary school classes with over 50 in a class and 143 with between 46 and 50, giving altogether a total of 166 classes with over 45 children in each. I turn to secondary school classes and, without giving the details, I find there were 422 secondary school classes with over 30 in a class. At the same time, there were 288 uncertificated teachers and 91 retired teachers who had been brought back into service.

  493
  This applies generally all over the country. In my constituency it applies in village schools in country areas as much as in schools in the new town of East Kilbride, where thousands of children are growing up and will attend the new schools being built there. We are greatly alarmed in the new town of East Kilbride about where teachers are to come from to start those new schools.
  In reply to a Question the other day, the Secretary of State for Scotland said that recruitment to the teaching profession was improving and there had been many more recruits in the last two or three years than several years ago. To him that seemed a good sign. Of course it is, and we all must welcome it, but two or three years ago I attempted to look at the age structure of the teaching profession in Scotland in comparison with that of similar professions which derive their recruits from university graduates.
  I discovered with dismay that in the teaching profession there was a far higher proportion of present members who were over 50 years of age than in any of the other professions in Scotland. A very much greater stepping-up of new recruits is needed to counterbalance the ageing in the profession. Coupled with the higher birthrate which Scotland has seen in the last few years, it shows that we are faced with a problem which is not temporary. It is going on and will intensify as the over-50s reach retiring age and are replaced by the much smaller numbers who entered the profession twenty years ago.
  I suggest to the Minister that it would be a good thing if we could have a much more comprehensive inquiry into the salaries of professional workers in Scotland than we have had up to now. Comments have been made about the complexity of the existing salary Regulations and the impossibility of anyone outside the profession understanding them. We find a barbed-wire network of confusion. This arises because of pressures from various small groups in the profession, understandable pressure groups which have been formed. It means that there is now no rational salary structure in the teaching profession, or in any of the professional salary scales in Scotland.
  494
  I make one comparison. In the Report of the Royal Commission on Doctors' and Dentists' Remuneration one discovers that a civil servant just entering the grade of principal—which is the second grade of administrative civil servants, reached I believe when a man or woman is 33 to 35 years of age—is getting £200 to £300 a year more than a fully-trained Scottish honours graduate at the top of the scale.
  That seems to be a lamentable comment on the disparity between the salaries paid to graduates entering one form of employment and another. If one takes the graduate in industry—who, in some cases, has had less training than the honours graduate in the teaching profession—the same Report shows him to be earning, on the average, £300 a year more than the fully-trained honours graduate teacher at the top of his basic scale.
  That is a revelation of the irrationality of Government salaries paid to professional workers. I support the idea of setting up a committee of some kind to look at professional workers, at their salary scales, at their conditions of work. It could examine one or two of the matters mentioned this evening, such as the case for and against the provision of family allowances, the provision of houses, and the Income Tax regulations that govern allowances of one kind and another made to various professions. It could look at the need for further recruitment, and look for the best possible sources of human material from which the professions can be recruited.
  It is not only in the teaching profession that we have this shortage. As emerged from the recent Second Reading debate on the Mental Health (Scotland) Bill, there is a tremendous shortage of social workers, and of many other professional workers in the educational and medical services. I suggest that we would do well, in order to give satisfaction to the teachers, to examine in a much more fundamental way the present structure of their salaries and the improvements that might be made in relating their remuneration more fairly to that received in other professions.
  We cannot hope to achieve the kind of education we all want for our children in Scotland unless we firmly tackle

  495
  this question of dissatisfaction amongst teachers. I hope that the Secretary of State will be prepared to look again at the salary Regulations and at least give us some assurance that in the very near future he will make a much more fundamental investigation of our problem than has been made up to now.
  9.37 p.m.
  Mr. James Dempsey: Unlike the hon. Member for Aberdeenshire, West (Mr. Hendry) I want to criticise the Secretary of State, and not to compliment him, on the inadequate salary scales offered to teachers in Scotland. The teaching shortage is a very grave problem, and when one reads the document on salaries one wonders whether it is likely to relieve the problem of the teacher-supply position in Scotland generally, or merely continue the shortage.
  One cannot help but reflect on the number of Scottish authorities that are suffering from a serious shortage at present. My hon. Friend the Member for Lanark (Mrs. Hart) has spoken of the shortage in her own constituency. In the county as a whole we are short or over 300 teachers, and I am quite convinced that if we added the other parts of Scotland we should find a shortage of several thousands.
  The Secretary of State should have regard to the resultant difficulties confronting authorities, and to the fact that from time to time they have had to employ people who would not normally be employed were the appropriate supply of certificated teachers available. I could give many instances of the type of teacher that we have been forced to engage in Scotland over the past few years. I am told that in one case a lady holding the Scottish leaving certificate was taken from her shop and put in charge of a class. The Secretary of State should bear such instances in mind, and at least try to appreciate the vexed situation which obtains. It is not confined to one part of the country. These occurrences are general. Quite apart from the shortage, we must bear in mind the important consideration of quality. If we intend to produce the proper type of citizen we must have regard to the quality of the teachers who are employed for this purpose.
  496
  I do not intend to refer in great detail to the aspect of overcrowding. My hon. Friend the Member for Lanark has dealt with this subject very fully. I would only say to the Joint Under-Secretary that it is not unusual to enter the first and second rooms in the infant departments of schools in Scotland—the most difficult stage of a child's educational career—and find sixty or seventy children in a class. If there are any classes the size of which should be reduced to a minimum, it is these early classes. Yet we find in some cases that they are the top-heavy classes, all due to the shortage of teachers. Surely, therefore, if we intend to make a serious effort to overcome this problem we are duty bound to have another look at the proposed salary scales.
  Mr. John Brewis: The hon. Gentleman says that far too many poor quality people are entering the teaching profession. Would he not agree that we should try to raise the status of the teaching profession? Merely to increase teachers' salaries may draw even more undesirable people into the profession for the sake of the money.
  Mr. Dempsey: What I was saying was that in view of the shortages, education authorities were compelled to employ as a temporary expedient persons who would not otherwise be employed to teach children, and I took the trouble to cite one simple instance. One of the most important considerations in dealing with this problem is the type of child whom we are going to equip mentally and physically to play his or her part in the life of this country; we have a responsibility to ensure that we have the teachers capable of producing that type of citizen from the quantitative as well as from the qualitative point of view. I am very much concerned at the gradual loss in prestige which Scottish education is suffering in general. Scottish education is world-renowned for its system, its administration, its achievements and products. But if the teaching situation deteriorates any further one cannot but feel rather sad at this tragic deterioration in our standards.
  I was intrigued by the explanatory note to the Memorandum which refers to Part II of the Second Schedule dealing with the salaries of teachers. It prescribes eight basic scales for men and

  497
  corresponding scales for women which seeks to give effect to the policy of equating in seven stages women's scales to those for men. The hon. Member for Aberdeenshire, West, if I may say so, has read it incorrectly. In fact, we are not equating. We still have a category of teacher who is not receiving equal pay for equal work and equal responsibility.
  It was not my intention this evening to interfere with the prerogative of the Education Institute for Scotland, but I feel it is my duty to refer to the category of teachers trained between 1920 and 1926 whom the Secretary of State suggests did not make themselves available for training in the university due to prejudice. This is a biased approach to the problem and is an unfair attitude to adopt. The real reason why they were not trained was that, lacking private means, there were not sufficient Government grants and local authority bursaries to enable them to enter the universities and take up that additional training. There is no question of equating their salaries with this prescribed scale of salaries for teachers, according to my reading of the document.
  The salary scales reveal very interesting reading. Those coming within the jurisdiction of Scale VIII—and I am referring to men—start with a salary of £520 a year, or £10 a week. When superannuation and other incidentals are deducted, there is little more than £9 a week. Does the Secretary of State for Scotland sincerely believe that he will induce people to take the Scottish leaving certificate and enter training colleges for a further three years when they know that at the end of their studies they will be offered little more than £9 a week? I do not think it is a feasible proposition.
  The scale for women coming within the jurisdiction of Scale XVI shows that they start with £500, or less than £10 a week, as a gross salary. Indeed, after they have spent several years—I believe it is ten years—they will have a gross salary of approximately only £12 a week. Frankly, I do not think that is the way to encourage persons to enter the teaching profession, especially when much more lucrative salaries are being offered in commerce and industry. If the Joint Under-Secretary has had any experience of visiting universities and training colleges when these students are leaving
  498
  those training establishments, he will find that the visitors include industrialists as well as local authority officials. He will find that administrative representatives and executives are all competing for this type of student.
  If we intend to staff our schools and succeed in our efforts, we shall require to make these salaries much more attractive. If it were possible to give the Secretary of State for Scotland any advice—and I doubt whether it is possible—I would ask him to look at the salary ladder of the professional people of this country pre-war and post-war and examine the placing of the teaching profession on that salary ladder. He will find that teachers' salaries have progressively deteriorated in Scotland over the past twenty years.
  I believe from my own experience that the main influence is salary. If we are offering salaries such as I have quoted, it is fair to say that not only craftsmen but even manual labourers have more wages per week than some of the persons we engage as professional teachers. Let us be realistic and take an objective view of this situation so that we can deal with the problem where it warrants desirable action.
  In my opinion, it is the salary that matters. Perhaps housing is a contributory factor. Perhaps travelling allowances are a contributory factor. My authority is willing to provide houses in certain parts of the county where there is a shortage of teachers, but this provision did not contribute in any way towards the solution of the problem in Lanarkshire. The main solution lies in the salary. That is the principal argument. Promotion may be a contributory factor, but it does not provide the complete answer.
  Teachers are professional people and, like other professional people and workers in general, they are selling their professional services to the highest bidder. Apparently, that is the natural law. If we intend to bid, we must offer salaries which will make it possible for our schools to be staffed adequately in order to produce the quality of citizens we wish to see.
  One of the main difficulties facing those who wish to offer better salaries is the attitude of the Government towards their contribution to teachers' salaries.

  499
  Until a larger and more adequate global sum is forthcoming from the present Government, we shall never be able to deal with the matter effectively. Most local authorities in Scotland, two years ago, were placed in the invidious position of having to round off the proposed salaries of teachers by making a grant from the rates, fully rate-borne without any Government contribution towards it.
  If the Under-Secretary of State is anxious to make an effective contribution towards the solution of Scotland's serious teaching shortage, he must prevail upon his right hon. Friend and the Cabinet to make larger sums of money available for the purpose. With those larger sums of money, we could enter the market and offer teachers proper salaries. We could man our schools with an adequate supply of competent teachers and overcome this grave shortage once and for all, if not in the interests of the Government of the day, at any rate in the interests of posterity and the United Kingdom.
  9.53 p.m.
  Mr. G. M. Thomson: My hon. and learned Friend the Member for Kettering (Mr. Mitchison) said that he had an understandable reluctance to enter the unknown territory of Scottish education. I have an equal reluctance to plunge into the legal undergrowth which he explored with such skill, but there is one legal matter which I wish to raise. I refer to the timing of the Regulations. I notice that the timing is dealt with by the Select Committee in relation to another set of Regulations to which it refers in its Second Report. I think the Committee might equally have applied its remarks to these.
  I doubt very much that it is a good idea for the House of Commons to have a responsibility for going into the intricacies of salary regulations in teaching at all. This is, I think, the only body of public service salaries which we deal with in this way, and I consider that it would be very desirable in many ways to arrange to stop it. However, if the duty is laid upon the House of Commons, and if hon. Members are to receive detailed representations from groups of their constituents, then the Government owe it to the House to arrange the timing of these matters so
  500
  that we can debate the Regulations at least near the time when they are to come into operation.
  The House will notice that these particular Regulations were laid before Parliament on 30th December, 1959. Perhaps the Scottish Office thought that it might be indecent actually to lay them on Hogmanay. They were laid during a fairly long Parliamentary recess and came into operation just two days after they were laid, on 1st January. We are put in the farcical position of having to debate them some time after the teaching profession and our constituents have known that the whole matter was decided and finished. I do not think that it is consonant with the dignity of this House. It has happened with other Regulations. I hope, therefore, that the Government will say that they will make a better effort to arrange the timing of these matters in future.
  I have mentioned, like other hon. Members, that we have received many representations from different sections of the teaching profession. I have no desire to go into details, but I want to say this about the general representations that have been made. Many people have based their arguments on very elaborate comparisons between teachers' salaries in Scotland and those in England. I sympathise with people who feel that the salaries in the teaching profession are inadequate, but I feel that this is the wrong argument to use. If one wishes to make comparisons between Scotland and England, as far as I can make out Scottish teachers are proportionately getting a bigger salary award than English teachers. In Scotland, more teachers do better than their English counterparts under the present Regulations than suffer a disadvantage from them.
  I think that that the comparison with England is an unfortunate argument to put forward in relation to this problem for two reasons. First, it is basically rather humiliating that we should argue about Scottish teaching and the salaries of teachers in Scotland in relation to what has been decided in the different circumstances and against the different traditions of the English teaching profession. Secondly, it is a rather dangerous argument. Its implication is that we should simply arrange teachers'

  501
  salaries in Scotland by reference to what has been arranged under the English negotiating machinery. I am sure that the result might be to do more harm than good to members of the Scottish teaching profession.
  Other hon. Members have said that the main reason why this debate is taking place is that those of us on this side feel very strongly that these Regulations are quite inadequate to meet the real need of Scottish education. The greatest and most urgent problem is the shortage of teachers. Various hon. Members have vividly described the shortages that exist in their own areas. I will content myself simply with this example. Within the last week or two, we have opened the Kirkton High School in my constituency, a magnificent new comprehensive school of which we are very proud and of which I think the Minister has reason to be proud because his Department did a good deal about the designing of the school which is unique in many respects. However, I understand that the problem that the school is likely to face is the shortage of specialist teachers to teach in the beautiful new classrooms. If we are to have splendid new schools, it is most unfortunate that there should be a lack of teachers to teach in them.
  This salary award totals about £2,460,000. It will bring the total Scottish salary bill up to, I think, £54 million. It is a very modest increase, and, in our view, quite inadequate in relation to the need. This is the time of year when we are presented with the Estimates of spending in other Departments of the Government, particularly the various Defence Departments. We are faced with increases in expenditure in those Departments of scores of millions of pounds. From time to time we have had examples of many millions of pounds being wasted because equipment has become obsolete. The argument that is always used is that we cannot take risks with the security of our country.
  I think it is time that we became aware that our educational system is, in some ways, equally vital to the general security of our country and to its whole future as the military defences. It is as important to have teachers as it is to have soldiers and scientists to serve the military Departments. Indeed, that is
  502
  true from the most direct and immediate viewpoint. The defence Departments themselves will not be able to get the scientists and technicians that they require in our space age if we do not get the teachers of mathematics and science for our schools.
  But it is even more important in a more fundamental sense. If we are to have a decent and secure future for our country, it is tremendously important not only that we maintain our living standards in step with other countries, but also that we try to accompany these living standards by a rich quality of life for the people. Again, that depends upon having an adequate number of teachers in the schools.
  I listened with great interest yesterday to the Joint Under-Secretary of State for Scotland making an excellent speech about the need for Scotland playing her part in providing teachers for the underdeveloped countries of the Commonwealth. We simply will not be able to play that part unless we can provide the teachers, and we will not get enough teachers under these Regulations. We need much more generous regulations and much bigger expenditure of public funds on teachers.
  The Knox Committee pointed out that the increased expenditure on salaries under the Regulations would raise the percentage of national income devoted to education only from 2·9 to 3 per cent. Indeed, taking into account the increase in national income which has occurred since the Knox Committee reported, it is doubtful whether this increase would raise the proportion or whether, at the end of the day, we shall not be spending less of our national income on education.
  My hon. Friend the Member for Lanark (Mrs. Hart) mentioned the importance of the planning of professional salaries. I would put the matter in an even wider perspective. Today, we get this matter completely unbalanced in our country, which is more prosperous and wealthy than ever. In the advertisement columns of today's Scotsman for instance, I discovered that in my constituency there is a vacancy for a Grade I lecturer for the Dundee College of Art, a post requiring high qualifications. The candidate must be a member of the R.I.B.A. and a degree in town planning would be an advantage. The commencing salary is £850.

  503
  There is an advertisement also for the Minister's constituency. The Locharbriggs primary school is looking for an infant mistress. We cannot tell from the advertisement exactly what salary the Dumfries-shire County Council will pay, because it will depend upon the number of years' experience that the lady has had. If, however, the Dumfries-shire County Council is enterprising and go-ahead and offers the post to a reasonably young teacher, it is likely that her salary also will be between £800 and £850.
  In an adjoining column, however, we find the type of figure which is characteristic of our civilisation. There is a whole series of advertisements for salesmen with limited experience, who are offered salaries of £2,000 a year. A company marketing an up-to-date food service offers a salary in excess of £2,000. A speciality salesman for a fuel efficiency firm is offered a salary of £1,000 to £3,000 per annum, with only three weeks' training. This is getting things completely cock-eyed in our society today. We are wealthy and prosperous and I hope that in the years that lie ahead, we will make a serious effort to show the world that we can use our prosperity in a civilised manner.
  The most affluent society in the world today is the United States. There, the major activity, unfortunately, is not education. It has some of the worst schools in the Western world. Its major activity is advertising and the creation of artificial wants. Before we get our next regulations, let us try to alter this lack of balance and show the world that we do not behave in that way or encourage the manufacture of more and more artificial wants. Let us try to use our resources to meet the real needs of the community, the need that everybody in the community has for getting a chance to lead a full and rich life. That can only come if the community is willing to give much higher priority to educational expenditure than is indicated in the Regulations.
  10.5 p.m.
  Mr. William Ross: It is a little casual of the Government to have placed us in a position where some weeks, getting on now to over a month, have elapsed since the salary scales were actually brought into operation and we
  504
  are afforded an opportunity as a result of action by the Opposition to debate these salaries and decide tonight whether or not the House agrees to pay them, and yet they have been paid since 1st January.
  I wonder whether the Joint Under-Secretary of State for Scotland will give us an explanation of this kind of thing. These new salary scales should not come as a surprise to him. This is the kind of thing which we in the House have to bear every three years—it is the result of the ordinary triennial review. Like my hon. Friends, I deplore very much the fact that we would appear to be a sort of last court of appeal in respect of dissatisfied teachers. I do not think it is right to place us in this position. Indeed, sometimes I think it is quite wrong to place the Secretary of State in the position of being able to amend scales after they have been agreed between the two main parties. In that respect the position differs in Scotland from that in England.
  Nevertheless, as Members of Parliament we have to take note that, despite the fact that the E.I.S., which is the main negotiating body—though certain people in Scotland feel that it should not be negotiating for them—agreed to these scales, there are people who are aggrieved, and to my mind quite justly. When they write to me I have to put their case to the Secretary of State. The Joint Under-Secretary will appreciate this because he has had from me almost 40 letters in relation to particular aspects of these scales.
  I certainly have no desire to underline this matter tonight. These constituents of mine have as much right to have me speaking about their cases as anyone else, but I will not go into details; I am sure that other hon. Members will also have sent letters to the Secretary of State and have asked him to reply and give his reasons. I assure the Joint Under-Secretary that the ladies who write to me are far from satisfied with his replies, and I am sure that if he were sitting on this side of the House he would be making the kind of speech which I am now making.
  I was quite fascinated by one of his hon. Friends talking about using ministers as teachers, because the last person that I heard making that speech was the

  505
  hon. Gentleman himself. I hope he is quite satisfied that justice is being done to non-graduate women teachers trained between 1919 and 1926. The E.I.S. says that their case is unanswerable, but they have not had an answer yet from the Scottish Office.
  When my hon. Friend the Member for Motherwell (Mr. Lawson) raised this matter in 1956, the Joint Under-Secretary at the time, the hon. Baronet the Member for Fife, East (Sir J. Henderson-Stewart), said that these people had a case. They still feel that their case has not been answered. There is no doubt that in the matter of increases in salary scales some teachers—admittedly those who recently entered the profession—discover that they have had no increase at all. Some calculate that they are making a loss. It is difficult for them to know at present. They have had an Income Tax rebate in respect of E.I.S. payments and therefore they will not know what their position is until they receive their salary for February. The chances are that the increase at the moment is quite negligible and that in some cases there is a net loss. It is difficult to justify that.
  The 62 pages of the Regulations governing this matter make a fascinating document, and just by the luck of the events of Parliamentary life we have extra time tonight to debate it. They are fascinating Regulations and some seem quite outwith the powers of the Secretary of State. Yet normally we would be expected to deal with this in an hour or an hour and a half, so it is a good thing we have the advantage of extra time.
  There are now fewer than sixty-one tables of scales. There are cases of different types of teachers with different qualifications. One hon. Gentleman opposite spoke about equal pay for equal work. He was wrong. The one thing we have not got in the teaching profession is that. We have equal pay between men and women who may be doing the same job, but there are people with different qualifications doing the same job and being paid different scales. So we have not got equal pay for equal work and that is one of the complaints made by some of the women.
  Anyone with experience of the primary schools in Glasgow knows, as I do, that
  506
  those who came into teaching between 1920 and 1930 are the backbone of the primary schools. They are far better than many others with all those qualifications. Qualifications do not make a teacher but ability, personality and training do so. One of the great weaknesses of the teaching structure is that the qualification which starts on the first day follows through to the last day, with a widening separation not in relation to teaching ability, to work that is done, but in relation to an initial qualification whose value disappears over the years.
  What we are bound to come to in the light of the numerous scales and intricacies and cross-currents is an inquiry into the relation of teaching qualifications and entry into the teaching profession and training. I do not agree that all we have to do is to put up the scales in order to get more teachers. The Government and the local authorities with their restricted resources—probably more particularly so in respect of the local authorities—will never be able to keep up with the others who want the same people, namely, the industrialists, We must face the fact that the only solution lies in creating a greater reservoir of people coming from the schools, the universities and the training colleges from which to draw, so that there will be enough both for industry and for education.
  I want to ask the Minister one or two questions, because I was interested in a speech made by his hon. Friend. I shall not refer to Part I of the voluminous Regulations because the Explanatory Note says nothing about it. Part II prescribes without material change how previous teaching service, war service, national service and certain other employments are to determine the position of a teacher on the salary scales. Part IV has eight Schedules which continue without material change the system for calculating the salaries of teachers in further education centres. Part V continues without change—not without material change this time—the provision for supplements to the salaries of teachers employed in remote schools.
  I understood the Minister's hon. Friend to say that there had been a change in the interpretation of remote schools. Is his hon. Friend right or wrong? We are entitled to an explanation. I admit that this is not included

  507
  in the Regulations but it was given by way of explanation of the Regulations. If what his hon. Friend says is true, the Government are misleading the House.
  I wonder whether the Joint Under-Secretary could give me an explanation on another point. I do not want to speak too long, although I am tempted. I am tempted, because as a former teacher I am interested in one of the Regulations which says that in respect of a teacher who has left his profession and gone to do other work that period can be counted in respect of service if he returns to teaching because it is something which is likely to be of value to him after his return to teaching. I wonder whether if I returned to teaching the work which I have done while a Member of the House of Commons would be reckoned to be of value to me in my later work in the teaching profession. However, I will not directly question the Joint Under-Secretary in respect of that. I will not raise his hopes. I am not thinking at the moment of returning to the teaching profession.
  I was also concerned about the question of remote areas. If it is difficult to secure teachers in Glasgow, how much more difficult it must be in the remote areas. Is the Joint Under-Secretary satisfied that the sums of £50 and, in an extended definition, £90 are enough? Can he tell us what the experience has been since those payments were introduced in 1954? I feel that in such circumstances the amounts are inadequate.
  I feel the same way about teachers in special schools. They are doing very specialised work which is certainly not recompensed by the permitted supplement. I wonder whether E.I.S. has been sufficiently concerned with what is needed to attract teachers into that type of school. If we require teachers in ordinary schools, we require them even more in special schools dealing with backward and handicapped children. This is something that we shall be discussing later in connection with another Bill.
  I was interested in a delightful definition that I came across. I learnt for the first time what a "teacher-meeting" meant. I am surprised that the Scottish Office has not taken the oppor
  508
  tunity to clear up the use of terms. In Regulation 20 we find:
  "'Teacher-meeting' means, in the case of an assistant teacher, a period during which he teaches one or more classes or is required by the education authority to be present at the further education centre in which he is employed, and, in the case of a teacher in a post of special responsibility, a period during which he teaches, supervises, organises or otherwise performs the duty of his post, including any period during which a teacher-meeting for which he has responsibility, directly or indirectly, is held by another teacher; and, 'morning meeting', 'afternoon meeting' and 'evening meeting' mean respectively a teacher-meeting beginning before noon, a teacher-meeting beginning between noon and 4 p.m. and a teacher-meeting beginning after 4 p.m."
  In other words, a teacher-meeting is not a meeting at all. I gather that it is when the teacher is actually with his class in the morning, the afternoon or the evening. I feel that this could be made clearer.
  I wonder whether the Joint Under-Secretary would look at Regulation 43 in the general and administrative provisions. The local authority is given power, if it is not satisfied with a teacher, to postpone his annual increment. It is stated that:
  "If a teacher is not performing his duties to the satisfaction of the education authority, it shall be in the power of the authority, notwithstanding anything in these Regulations,"—
  these are the words in which I am interested—
  "notwithstanding anything in these Regulations, to postpone for one salary year after the date of the adoption of the resolution for the said postponement the increment paid to him in accordance with the basic scale applicable to the calculation of the basic element of his salary. …"
  That means that if a local authority is dissatisfied with a teacher in respect of anything, it can, notwithstanding anything in the Regulations, stop his increment. I am interested in this because the next paragraph deals with the right of the teacher to pray for an inquiry and the power of the Secretary of State to make them withdraw the resolution. How is this affected by the words I have quoted—
  "… it shall be in the power of the authority, notwithstanding anything in these Regulations, …"
  Has the Secretary of State really got the power, in the light of these words, to intervene between the local authority and the teacher in respect of this postponed increment? This is important.

  509
  If there is anything a Secretary of State can quickly do that would make any impact at all on the recruitment of teachers, it should be done, because we are getting in a mess. The position of Glasgow has been stated, and the same thing is true of Ayrshire. We open a new school and as a result we find more overcrowding. Classes get bigger and we have to get teachers from other schools. We should have opened a new school at Kilmarnock, but it is now not being opened until March because we have not got teachers. We are remoulding the whole secondary education in Ayrshire today. I wonder how much it is related to theories about secondary education. I can assure the Joint Under-Secretary of State that he will probably be questioned about this. He has already had questions from Lanarkshire.
  How much is this reorganisation related to the scarcity of specialised personnel in our senior secondary schools? In order to try to safeguard that little part of our educational work the Secretary of State is making sweeping changes in respect of junior secondary education and senior secondary education which looks to me like a reduction, on the face of it, of the opportunity for children to get into senior secondary schools. How
  510
  much is that due to the Government's continuing failure to deal with the question of recruitment of teachers?
  One important factor, as was pointed out by my hon. Friend the Member for Lanark (Mrs. Hart) and my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey)—who, I think, was actually on one of the committees which hammered out the scales—is starting salaries. These put people off when they see what they will get after staying on at school for five or six years, spending three years at a university, and then one at the training college. A girl going through three years at a teachers' training college starts at a salary for a non-graduate woman of £9 a week. For a man the figure is £630, without deductions for superannuation and other deductions. Will that attract graduates? Certainly not. If the right hon. Gentleman wants a quick improvement in the situation, let him reduce the eighteen years now needed for a teacher to reach his maximum salary, and let him do this by allowing teachers to start very much higher up the scale—in other words, let him raise the minimum.
  10.25 p.m.
  Mr. Malcolm MacMillan: Like my hon. Friends, I am sorry that the timing of this debate puts us in our present position, which is rather like the position the House finds itself in when considering an appeal for the reprieve of a condemned man. It has to wait until the hanging is over before the House of Commons can debate the matter in detail. The timing of the Teachers' Salaries Regulations puts us in the same position. Indeed, we do not have even the notorious four minutes warning about which we were told the other day in the announcement about the guided missile early warning system. There is, therefore, an unreality about discussing these Regulations now, after they have taken effect. Fortunately, we had an opportunity to make certain representations to Ministers some weeks or months ago, and these has been some very minor result, I think, from the pressure of representations made.
  I am concerned principally about two points. The first is quite local—local, at least, to the remoter areas of the country and the islands. I refer to payments to teachers in remote schools and distant islands. I had a very interesting letter from the Secretary of State in reply to representations made by the Lewis branch of the Educational Institute of Scotland. On 15th December he gave me an assurance, in effect, that complete justice was being done in the spreading of the injustice about which complaint was made by the remote and distant school teachers and the special school teachers. What the Secretary of State told me was that, in general, the Regulations had followed fairly exactly the recommendations of the National Joint Council. That is probably true. He said:
  "The Council did not include among their recommendations any proposal for an increase in the remote payments."
  He added:
  "All representations, however, are noted for discussion with the Council."
  The sentences which arrested my attention most of all were these:
  "I might add, however, that the Lewis local association are mistaken in thinking that the remote payments are the only items in which no change is proposed. No change has been made in the payment of teachers at special schools."
  512
  That is most assuring for both those categories. They will have noted the equal justice with which the Secretary of State spread the injustice.
  They were not, however, greatly reassured by the Secretary of State's letter, and the pressure was imposed much more heavily after that letter had been sent to them. I acknowledge that something has been done. I see that there is an extension of responsibility payment to the special schools; but I had hoped that generous adjustments might have been made in respect of remote schools.
  I wish that the right hon. Gentleman would simplify some of the definitions and requirements in Part V—about such things as "exposed" and "sheltered" waters and the other references to the general topography and geography of the areas affected. After all, fifteen miles in one part of the country is nothing like fifteen miles in another part of the country. For example, fifteen miles by sea and land in the Outer Hebrides is very different from fifteen miles between Glasgow and Edinburgh. There is always a tendency at the centre to think in terms of fifteen miles simply as fifteen normal miles.
  A number of years ago a petition was forwarded from a Highland constituency to the officials in Edinburgh and to one of the Ministers. It was concerned with the licensing of a local public house. In the petition it was stated that on their way to this public house for their refreshment the inhabitants travelled a distance of three miles. On the way home the distance, they said, was nearly four miles. The officials, all-knowing people, said this was quite absurd. But what they had forgotten was that the tide came in between the time the pub opened and the time the pub closed, and the customers had to make a long detour homeward which made the three miles four by the time they went home.
  There are all these curious little considerations which just do not average out flatly for the convenience of the bureaucrats, and at the same time cause a great deal of confusion when interpretation is being made of provisions of this kind.
  I have drawn attention to Part V and the changes the island teachers proposed;

  513
  but apart altogether from that, I suggest that it is time that the special difficulties of areas of this kind, the remote areas—"distant islands"—in attracting suitable teachers, teachers as highly qualified as those employed anywhere else in Britain, were recognised. That recognition must be frankly in financial terms. I do not know what other inducements we could offer in some of those places. We might offer them something better in housing, perhaps, or in special provision for easier access to the larger local centres of population which offer a change of surroundings and a little livelier general interest than perhaps can be found in the remote school villages. Basically, however, this distant school question becomes a matter of special financial inducement, as, indeed, it is, despite some of the nonsense talked about it, throughout the whole of the profession. Primarily the problem of recruitment to the teaching profession is tied up with salaries. People can talk about recruiting by stimulating a sense of vocation and various other things which can and, I am sure, do to some extent draw people into the profession, but there is great competition, particularly for the science people, and that missionary zeal and sense of avocation nowadays is under considerable pressures to direct itself elsewhere.
  It is not only that we are failing to attract highly qualified teachers into some of the remoter areas. We are failing more and more to hold teachers of the right type in those places, and they are losing their populations partly because of the sense of the inadequacy, in some places, of educational standards, facilities, buildings, equipment and all the rest of it. The smaller the place, the more remote the school, the less attention the very physical condition of the school is likely to get, and the worse the environment will become year by year for teacher and school.
  This is true in the Outer Isles and in some of the remote coastal districts of the Highlands. There was a long period of maintenance neglect—during the war and the years afterwards, and again because of soaring costs in the more recent years since then. That has meant further neglect of the physical conditions of those schools, and while the new schools, admittedly, have been excellent, the old
  514
  schools have become correspondingly worse and worse through the years of neglect.
  Ministers surely cannot consider themselves to have satisfied the needs of the Scottish teachers or Scottish education with just these financial adjustments. They will really have to offer to people going to those more distant and expensive areas—and even to people who belong there—inducement not only to go there but to stay there, and they will have to do it against the increasingly competitive inducements of other more central places. I have had correspondence from time to time with a shepherd or an estate worker or a crofter in outlying parts of the Western Isles and other islands on the replacement of teachers.
  I think, with great respect to the editorial staff, that the Scottish Educational Journal is chiefly read there for its advertisements. They are extremely tempting to a teacher who has been there three or four years—even for three of four months in the most isolated estates—and has not much to look at in the evenings except the wide, bleak moors or the Atlantic or, perhaps, St. Kilda in clear weather. It is a great understandable temptation to look at the advertisement columns, after a few months, and to contemplate going elsewhere. We simply have to offer them adequate inducement if we are to keep them there. We can quite generally get someone initially to go to these places, a young person who is just starting his or her career and who is eager to get a job. The problem is too keep him there. I doubt whether the present financial conditions will prove effective in getting them to stay.
  I now take up the point made by my hon. Friend the Member far Kilmarnock (Mr. Ross), that the whole range of salary increases are not a sufficient inducement to recruitment in general. They may be in some places, but they are not in others. The Government and the public have to realise that we must pay adequately and that we cannot expect to make up recruitment through appeals to what I referred to a moment ago when talking of the smaller schools as the sense of missionery zeal or sense of vocation among students. We shall get a very small percentage of dedicated people who are prepared to go into

  515
  teaching against all the allures and inducements of industry which are and must be higher than the financial inducements that education committees are ready to pay.
  I do not think that even getting a bigger flow of students into the universities or into teaching training colleges is necessarily going to increase proportionately, or anything like proportionately, the number of specialist teachers of mathematics and science. I have been in trouble with people who are much more knowledgeable than I am—I am a consumer of education rather than an expert on education—for always insisting that we cannot for long by mere financial competition alone, or any other form of competition, compete successfully with industry in this field. In a highly competitive technological world struggle, industry must have and will pay for scientists.
  Industry is desperate for people who have a capacity for the understanding of mathematics, chemistry and physics. A desperate competition for these people has gone on in years past and that competition will go on even more intensely in the years to come. We must, of course, have regard as a nation for the needs of industry if we are to survive. But the education committees are going to find it increasingly difficult to compete with industry in this matter of financial inducements.
  What other inducements can be offered on the teaching side, it is sometimes difficult to see. There are important, if intangible, things which should, perhaps, have more attention paid to them, such as the status and prestige of the profession of teaching. But how that problem is to be handled is much more difficult to define.
  The short-term financial problem, however, must be the one to which we should address ourselves on the recruiting for the schools. It is one of the practical part-solutions of the problem which we can tackle. After all, we are facing one basic fact from which, I doubt, there is little chance of escape by any swift synthetic or artificial means. We cannot mass produce people with a capacity for the understanding of mathematics. I think that is perfectly true in the experience of most countries.
  516
  The Americans recently came to that conclusion after a long and thorough investigation of the problem, and we are facing it now. I am sure that the Russians are as well.
  The supply and numbers of teachers of mathematics and its derivatives of physics and chemistry are bound, by very reason of this natural limit to the number of people with a capacity to understand mathematics, to be restricted by that natural limit. Along with that we have the other difficulty I have mentioned which is the competition with great, wealthy undertakings such as Unilever, English Electric, I.C.I. and all the rest who simply must have these people and who must pay for their scientists.
  I always feel sorry for the local education authorities and local authorities who attempt to compete with such powerful interests which cannot afford to be beaten in that race. On the other hand, we cannot afford to be beaten on the educational side. We must go as far as we possibly can along financial lines to make teaching more attractive to people of this kind who are in such great demand in the expanding fields of science and industry.
  There must be created a more direct contact with industry about this problem. I do not know the reason why this is not done. I have never heard any convincing proof that it is done from the Box opposite or in our discussions on the Education Estimates. Yet it seems to me that the solution must, in part at least, eventually come from close consultation and co-operation with those industries with which the schools are in competition for those teachers who are particularly in short supply. Something like that will have to be worked out. Some day we shall have to come round to the idea of having a national pool or regional pools of people who are prepared to make a part-time contribution in the educational field and a part-time contribution to industry. This is better than dilution of quality and lowering standards. Perhaps there should be some system of mutual seconding. It is a complicated and difficult matter, but experiment has not been tried nearly enough. People have talked about it for a long time, but while competition goes on, with I.C.I. and Unilever offering all the financial inducements they can afford to offer, together with facilities for

  517
  laboratories to carry on post-graduate research, with which offer no local authority can compete, this see-saw of financial inducement and salary inducements continues, solving nothing as yet.
  I am afraid that the salary scales as revised two months ago are not going to make a very great contribution even towards partially solving the problem, which is all that financial inducements can hope to do against the fierce competition with industry.
  10.40 p.m.
  The Joint Under-Secretary of State for Scotland (Mr. Niall Macpherson): We have been exceptionally fortunate tonight in that we have been able to start this debate on the Teachers' Salaries (Scotland) Regulations at an earlier hour than usual, and we have had a number of most interesting speeches, with which I hope to deal in some detail. At the moment, I cannot hope to claim that time presses so much that I shall not be able to answer all the questions.
  I would start by saying that the debate, as usual, has evinced the general interest that is always taken in matters concerning education in Scotland. There has been the recurrent theme, which is not unnatural: are the salaries enough? We have had a kind word from the hon. Member for Kilmarnock (Mr. Ross), who recognises at least that they are an improvement. I was grateful for what the hon. Member for Dundee, East (Mr. G. M. Thomson) said, and for the way in which the House treated the Regulations. It would have been a mistake for us to go into the details and all the intricacies of the Regulations, and the House has not done so. It has debated the salaries on the broad plane, which is the way in which they should be debated.
  I want to deal straight away with the criticism about timing. The National Joint Council intimated its recommendations in late September, and the draft Regulations, which involved a lot of drafting and printing, as can be imagined, were issued on 20th October. Forty days then had to elapse for representations to be made on the draft, and those representations had then to be considered before the final Regulations could be made.
  What most concerns the teachers about the timing is that the increases should
  518
  come as quickly as possible. Although the triennium is not due to end until 31st March, we got to work and managed to get them into effect just in time for 1st January. The House could have debated them a little sooner, although there was no compulsion upon it to do so.
  I should deal with the question of the validity of the Regulations, raised by the hon. and learned Member for Kettering (Mr. Mitchison). Unless the Regulations are treated as valid, there is not much point in debating them. He dealt with the Second Report of the Select Committee on Statutory Instruments, which drew the attention of the House to these Regulations on the ground that they make unexpected use of the powers conferred by the Statute under which they were made. My hon. Friend the Member for Crosby (Mr. Page), who was a Member of the Committee, also dealt with the matter.
  Perhaps the House will allow me to leave the legal position out of account for the moment. I think the House agreed generally that some flexibility in salary Regulations was necessary, for however elaborate those Regulations may be—and they are very complicated—they clearly cannot cover every possible contingency. Part VI, which is the Part called in question, defines closely the circumstances in which some modifications of the Regulations may be made in relation to the salary of a particular teacher.
  The House recognised, I think, that it would be quite impracticable to prescribe precisely the salaries to be paid in every exceptional case that may exist now, or which may arise during the next three years of the triennium. I am sure it is only by providing for the exceptions to be made from the normal provisions that we can ensure that equitable salaries are paid to every teacher whose circumstances are exceptional.
  I know that it is never a good excuse for any aberration, but I want to emphasise that the number affected by this provision is small. There are 37,000 certificated teachers in Scotland, and the salaries of only 137 were modified under the provisions of Regulations 31 to 36 inclusive of the Regulations of 1956. In addition, about 700 benefited from the provisions of Regulation 37, which is concerned with the conservation of the

  519
  salaries of teachers who would otherwise suffer by some action by the education authority for which the teacher had no responsibility, and which was due to no fault of his. An instance is the case referred to by my hon. Friend the Member for Aberdeenshire, West (Mr. Hendry) where the junior secondary department of a school is closed, the numbers are lost and, in consequence, the responsibility element might otherwise be reduced.
  I should like now to turn to the legal position—
  Mr. Page: I hope that my hon. Friend will forgive me interrupting him, but he will notice from the Report that it is not quite the small number that he mentions. In the case of Regulation 37, the Report states that about 700 directions are in operation at any one time. Therefore, under that Regulation, it is quite extensive.
  Mr. Macpherson: Yes, but that is probably a floating number—700 being in operation at any one time. I agree that more directions may have been made, but they may not necessarily have been made during the triennium. I do not know whether that is the correct explanation, but I think that, up to a point, it may be.
  I turn now to the legal position. As my hon. Friend the Member for Crosby said, the 1956 Regulations were also called in question by the Select Committee on the score that they seemed to go rather beyond the powers conferred by the Statute under which they were made. In the presence of lawyers, I naturally enter on this explanation of the reason for our acting as we have been with great diffidence, but I think it right to give the explanation.
  At that time, the power of the Secretary of State to make salary recommendations rested on subsection (1) of section 79 of the Education (Scotland) Act, 1946, which has been quoted. The view had always been taken, by Governments of both parties, that this Section could not be effective unless it could be held to authorise the inclusion in the Regulations of provisions as to how the scales were to be applied to the calculation of the salaries of individual teachers, and as to how exceptional cases should be dealt with.
  520
  Accordingly, the Section was interpreted as conferring, by necessary implication, powers wider than were expressly conferred, because I think that it is always natural to interpret powers given by an Act as being powers that are intended to be workable. The 1956 Regulations—
  Mr. Mitchison: I am grateful to the hon. Gentleman for giving way. I know that my hon. Friends have some questions about the merits that they badly want to have answered, so I wonder whether I could help the Under-Secretary by making a suggestion. These statutory powers were enlarged by amendment in 1959. The Select Committee has found—and both his hon. Friend the Member for Crosby and I have said, for what our opinions are worth—that it regards these Regulations as outwith the powers. Surely, it should be possible for the hon. Gentleman to undertake to look at the question in the light of the Report of the House's Statutory Committee, of the speech made by his hon. Friend and even, if he likes, of what I have to say. If he finds that there is a possibility that the powers have been exceeded, surely the House would be willing to help him to enlarge the powers. No one wishes him to take these Regulations back. We want to save him getting into trouble if somebody questions in court what is obviously, at the lowest, a moot point. Will he give an undertaking that he will look again at the question and that if he thinks there is doubt about it he will come back with a short Bill for new powers? After all, the Government are not so busy as all that. He could then deal with the merits and satisfy my hon. Friends—a much more difficult matter.
  Mr. Macpherson: I hope the hon. and learned Gentleman will not think me discourteous if I say that in the time that he has taken to say that I think I could have disposed of the point. I think it necessary to deal with the circumstances that arose after 1956. The Regulations then were the fifth set of Regulations to be made with that interpretation, and they were the first to be called in question by the Committee. It was felt that it was less than satisfactory then to base Regulations of such importance solely on a wide interpretation of that Section, and the opportunity was taken in the Education

  521
  (Scotland) Act, 1956, to amend the Section and to provide cover for the kind of provisions which are now called in question. We were advised that this amendment, which I need not read to the House, would remove all doubt as to the power of the Secretary of State to modify the scales or to permit departures from them in individual cases.
  In 1956, we drew the attention of the Select Committee to the amendment to the Act which had come into operation on 5th December, 1956, a month after we had made the Salaries Regulations of that year. Their Report did not appear to suggest that that amendment did not do all that we had intended. I may say that in those circumstances we did not expect the same provisions to be questioned this year. Let me say this with the very greatest of respect to the Select Committee on Statutory Instruments, and to the three hon. Members who delivered this opinion. Considering that the powers used are the powers which have been used ever since 1945 and that we legislated in 1956 to ensure that they would not be criticised again, may I say with the utmost diffidence that for us the criticism that the use of the powers was unexpected was unexpected?
  At least, it did not say that the use of the powers was ultra vires, and so I hope we can proceed with the Regulations. But since they have been questioned, I readily agree to the suggestion of the hon. and learned Member for Kettering and I can assure the House that we will look at them again. But I thought I owed it to the House, in view of the criticism by the Select Committee, to give a full explanation to the House on that matter.
  The hon. Member for Glasgow, Craigton (Mr. Millan), in a very interesting speech, raised the whole question whether the Salaries Regulations will attract into the profession people of sufficient number and quality. Of course, it is very difficult to say what the effect will be, especially as we have a rising trend of recruitment already. The House would wish to know that the number of special certificate graduates recruited to the colleges of education this year amount to 327, including 50 third-class honours
  522
  graduates, as compared with 177, excluding third-class graduates. On the teacher's general certificate, 1956–57, the numbers are 569, excluding third-class honours graduates, compared with 493; and non-graduates are 1,089 compared with 832. For the technical certificate, it is 534 compared with 438. That is a notable improvement, and I thought it right to tell the House about it, at any rate as background.
  On the general question of the extent to which the Secretary of State can make it possible to attract teachers, I think it is right to remind the House of the situation. Teachers' salaries in Scotland are negotiated in the National Joint Council, which is composed, under a neutral chairman, of representatives of education authorities, the employers, and of teachers. The Secretary of State is required by Statute to inform the Council of his intention to make salary Regulations, and to have regard to any recommendations which the Council may make to him.
  Although the Secretary of State has the final responsibility for a salary settlement, successive Secretaries of State, of both parties, have, normally, accepted the Council's recommendations on all major matters. My right hon. Friend did so on this occasion. I am sure that the House will agree that these very intricate matters should be left as far as possible to experts on each side to thrash out, subject, of course, to the Secretary of State's custodianship of the national interest and the final right of veto which the House has. Indeed, I will remind the hon. Lady the Member for Lanarkshire, North (Miss Herbison) that she has herself said on more than one occasion that teachers' salaries should be taken out of politics altogether.
  The first important point is that the award under discussion was the result of the agreed recommendations of the Council. The aim has been to give the largest increases to the teachers with the highest qualifications. In arriving at its recommendations, the National Joint Council had before it the report of the Advisory Council on Measures to improve the Supply of Teachers in Scotland. That Report dealt only with secondary teachers and contained outline recommendations only. In translating those recommendations into a detailed comprehensive structure, the National

  523
  Joint Council accepted some and went a considerable way towards others.
  As a result, taking the interim increase in 1958 into account and comparing the salaries now with what they were at the last triennial review, honours graduates now receive 16·7 per cent. more at their maximum than they did at the beginning of the last triennium in 1956. Ordinary graduates in secondary schools receive 13·4 per cent. more, and in primary schools they receive 11·7 per cent. more. The corresponding increase for women, including the effect of the progressive introduction of equal pay, was 24·9 per cent. for honours graduates, 22·9 per cent. for ordinary graduates in secondary schools, and 21·5 per cent. for ordinary graduates in primary schools. For honours graduate women with three years' training, the increase over the 1956 minimum is 10·6 per cent. and over the maximum it is 21·2 per cent.
  Mr. Millan: The hon. Gentleman has mentioned the percentage increases at the maximum except for the honours graduate primary teacher. Will he give the percentage increase at the minimum scale? For an ordinary graduate who has only an increase from £575 to £630, that is a little less than 10 per cent. One of the complaints we make is that the minimum scales are too low.
  Mr. Macpherson: I appreciate that, but the hon. Member will realise that these were the result of negotiations. Perhaps I should add that there have also been substantial increases, on the average of about 20 per cent., to the additional allowances paid to holders of posts of special responsibility, for example, to a head teacher of a large senior secondary school, £2,750 compared with £2,285, a head teacher of a large primary school, £1,700 compared with £1,474, and the principal teacher of a subject in a large senior secondary shcool, £1,790 compared with £1,545. All these changes are precisely as recommended by the National Joint Council, except that we extended slightly the number of head teachers who could obtain the maximum. I think that the House would agree that, as the hon. Member for Kilmarnock said, this is a notable improvement.
  Miss Herbison: How many headmasters receive the maximum?
  Mr. Millan: One in Scotland.
  Mr. Macpherson: The hon. Member for Craigton dealt with the question of the shortening of scales. This, as he said, was suggested by the Advisory Council, but it was rejected by the National Joint Council. I should say that whenever this proposal is put up and the cost is estimated, there is obviously a maximum amount that can be given away at any one time and the teachers themselves prefer that the additional money should be spent otherwise—in raising the maximum or in a general increase which would be of benefit to all teachers. The hon. Member will realise that it is difficult to do everything at the same time, but at any rate we have made a very substantial increase.
  Several hon. Members have raised the question of equal pay for non-graduate women who entered training between 1920 and 1926. The hon. Member for Coatbridge and Airdrie (Mr. Dempsey) was among those who made the point. Let us admit that this is a difficult problem. There are always anomalies, of course, but anomalies like beauty tend to be in the eye of the beholder.
  There has been a great deal of controversy about the matter. The essence of the claim is that because men who trained with this class of teachers as non-graduates under the same conditions are paid on the graduate scale, these ladies also ought to be paid on the graduate scale, so that they may have the same pay as these men when equal pay is fully implemented. This, I think, was the claim. It was fully debated in 1956 and undoubtedly there is a point of view, or as my hon. Friend the Member for Fife, East (Sir J. Henderson-Stewart) said at the time, there is a case.
  Since then there has been no change in the Regulations or the circumstances generally which might affect the claim. In the further consideration given to it since 1956, neither the National Joint Council nor the Secretary of State has felt able to agree that it should be met. The ladies concerned recognise that the men teachers are being granted a concession in being paid on the graduate scale. They claim that the same concession should be given to them, but the concession was given to the men for a particular reason, and the reason does

  525
  not apply to the women teachers. The reason was that before 1926 men teachers of general subjects could choose whether to graduate or not, and since 1926 all men teachers of general subjects have normally had to graduate.
  When the standard national scales were first introduced in Scotland in 1945, it was felt, rightly or wrongly, to be unfair to penalise those men who before 1926 had chosen not to graduate, and it was decided that they should be paid as graduates. But there was no parallel change in 1926 for women teachers. They have continued to be able to choose whether or not to graduate. Therefore, although these women teachers compare themselves with men who trained at the same time and who for a particular reason have been given a concession, they might equally well be compared with women who since 1926 received precisely the same training under precisely the same entrance conditions as themselves.
  In short, if the claim were met, there would be no logical reason for not permitting all non-graduate women to reach the maximum of the graduate scale, and to carry that out would be to reverse the decision taken in 1951 by the National Joint Council and the then Secretary of State, the late Mr. Hector McNeil, that there should be a differential payment for graduation, a decision which we still think is right.
  The hon. Member for Craigton raised the question of staffing in Glasgow. Perhaps I might deal with the claim that Glasgow should receive special treatment. It has been suggested that the difficulties there would be relieved—indeed, some say they would be cured—if the education authority were able to pay higher salaries to teachers in its service than are paid elsewhere. Before the war there were national minimum scales of salaries for teachers, and authorities were free to pay more than the minimum salaries laid down. Glasgow was one of the authorities which chose to do so, paying in general an extra £50 a year to its teachers. At that time the supply of teachers throughout the country tended to exceed the demand, and authorities could be selective in the staff that they employed.
  After the war, at the request of both the authorities and the teachers, standard
  526
  national scales were introduced. On more than one occasion in recent years, because of its shortage of teachers, Glasgow education authority has proposed that it should have power to pay higher salaries than are paid elsewhere. This is a matter within the purview of the National Joint Council, which has considered it more than once, but on no occasion has the proposal found favour with either the authorities or the teachers on the Council. Both sides would prefer that there should be standard scales nationally negotiated for all authorities.
  If we were to return to minimum scales, the result would be, at a time of shortage of teachers, that authorities would bid among themselves for teachers' services, and it cannot be taken for granted that the authorities whose need is greatest would necessarily outbid those whose need is least. Moreover, I understand that the teachers themselves consider that relationships between teachers and their employers are much better when they are both bound by national scales.
  The hon. Member for Craigton said that there had already been a departure from standard scales in that teachers in very remote schools and distant islands received additional allowances. But these allowances—I say this to the hon. Member for the Western Isles (Mr. Malcolm MacMillan) also—are not paid as incentives. They are intended to compensate the teachers concerned for the extra expenses that arise in those places. The cost of food, fuel and the like is high. So is, above all, the cost of visits to the nearest centre of population. Distances are great, as the hon. Member made clear. Visits to the dentist and to shops may be very costly. One may have to incur hotel expenses in order to go and buy a pair of shoes.
  There are no similar readily identifiable costs falling on teachers in Glasgow which do not also fall on teachers in other cities or industrial areas. So I do not think it would be possible to make out a case for Glasgow without making out at the same time a case for other areas, and that is not a suggestion that has commended itself in the past to the National Joint Council.
  The hon. Member for Kilmarnock asked why there had been no increase in the allowance for teachers in special

  527
  schools. This was carefully considered, and it was felt that the allowance of £25 was no more than a stepping stone towards the allowance of £75 which can be obtained by taking training. All teachers who want to work in special schools would normally wish to take training, and authorities make it possible for them to do so whenever they can. It was, therefore, not considered necessary to make any change in that Regulation.
  In a fighting speech, the hon. Member for Kirkcaldy Burghs (Mr. Gourlay) urged a shortening of the scales. He seemed to have two differing ideas in his mind. He recognised the special need to increase the supply of honours graduate teachers but at the same time he complained that too many teachers were being drawn away from primary to secondary schools. The recommendation of the Advisory Council was directed towards increasing the differential, which is bound to have the effect, I think, of doing just that; and as the bulge passes from the primary to the secondary schools, that is one of the changes which we wish to see.
  I can tell my hon. Friend the Member for Aberdeenshire, West that the definition of remoteness is the same as that in the 1956 Regulations. The Regulations were altered then but have remained the same since.
  I thought that the hon. Lady the Member for Lanark (Mrs. Hart) went a little too far when she said that there was general dissatisfaction on the part of the whole of the teaching profession. Of course, hon. Members, including Joint Under-Secretaries of State, are bound to receive a large number of letters of complaint from those who, so to speak, lose a little in the differential rates, but that is not to say that the scales are irrational. The scales are made as rational as posible. Every possible reason is put forward on all sides. I suppose that only by having a committee of one could we have a completely rational scale, and I doubt whether even that would be rational in the eyes of anyone other than that one person.
  Mrs. Hart: I said rational in relation to other professions, not within the profession.
  Mr. Macpherson: The hon. Lady made a comparison with the salaries paid to the
  528
  administrative grade of the Civil Service. That grade is open to all who wish to compete. As she knows, it is necessary to pass quite a tricky examination to get into the Civil Service. It is always difficult and unprofitable to compare one profession with another in that way.
  I thought that the hon. Member for Kilmarnock embarked on rather a dangerous argument when he said that initial qualifications ought not to determine pay for ever. In fact, they do not determine it, for responsibility payments are made in addition to salary. But it would be difficult to base scales on anything other than qualifications.
  Mr. Ross: Where two people with different qualifications are doing the same job over twenty or thirty years, the qualifications aspect fades into the background in relation to experience and ability.
  Mr. Macpherson: That is exactly what happens with third-class honours graduates. They start with a slight handicap, so to speak—two years behind in the scale—but ultimately they reach the same maximum.
  One reason for the fact that no change has been made for remote schools is that there is no serious staff shortage in remote schools compared with the general staffing position in Scotland. That does not mean that there are no difficulties, especially in country schools, but not all country schools are remote schools.
  I have tried to deal with as many of the questions that have been raised as I possibly can, and I know that the hon. Lady the Member for Lanarkshire, North wants to say a few words before we conclude this debate, so I shall not delay the House any longer. There is just the one point which the hon. Member for Coatbridge raised. The scale to which he referred is that applying to a few uncertificated teachers, which hardly arises on scales concerned with certificated teachers. I hope that he will appreciate my point.
  To sum up, these scales do represent a very considerable improvement, as I have been able to show from the figures, compared with the scales payable three years ago. These payments are an earnest of the appreciation of the country, and this House, of the need for an upgrading of the teaching profession as a whole; an upgrading which I am sure we are all glad to see.
  11.16 p.m.
  Miss Margaret Herbison: This has been an excellent debate and I am very glad that we were able to start it earlier than ten o'clock. One of the reasons why it has been so good is that, with a very few exceptions, most of the hon. Members who have spoken have not dealt with the separate categories of teachers, but have tried to relate the whole of the salary scales to the problems facing us in Scotland with shortage of teachers and the other difficulties we are experiencing.
  There was only one hon. Member who felt—and I use his own words—that these scales represented "a tremendous step forward". That was the hon. Gentleman the Member for Aberdeenshire, West (Mr. Hendry), but I do not think that anybody on this side of the House would agree that they represented anything like "a tremendous step forward". Certainly, there are increases. There are improvements on the previous scales, but not by any stretch of the imagination can one say that they are "a tremendous step forward".
  I have been interested in the reply of the Joint Under-Secretary of State. He has insisted on a number of occasions that, after all, these scales were decided by the National Joint Council on which there are representatives of the Educational Institute of Scotland and of the local authorities. But the real complaint from this side of the House is that the increases have not been sufficiently great. In other words, when the National Joint Council began these negotiations, it had a very good idea of what amount of money would be available to divide between the teachers. Before we had the block grant, there was the percentage grant, and they were well aware that, whatever was given—and we dealt with this only last week—would apply to the same degree as was given previously under the percentage grant. Indeed, there might have been a fear that it might have been even less; so the Secretary of State has a great responsibility in what will ultimately be the decisions of the National Joint Council.
  The Joint Under-Secretary must accept that responsibility—that whatever is going to come from the central department covers very much every single negotiation which is carried through by
  530
  the National Joint Council. I am going to make a proposal again this evening to the Joint Under-Secretary to try to get the Educational Institute of Scotland, and the local authorities there, to accept the same procedure for Regulations for teachers' salaries as are accepted by the National Union of Teachers and the local authorities in England and Wales. Every single hon. Member on this side of the House has had many letters in this last month or so since the Regulations were made, each category putting forward the reasons they think that they ought to be doing better under the Regulations. Life would become intolerable for Members of Parliament if, say, the policemen or all those people employed through the Whitley Council had to make the same type of representations as are made to us by the teachers.
  Mr. N. Macpherson: Of course, there is one great difference, and that is that we have a tremendous variety of qualifications of teachers and a huge variety of scale. This represents a great safeguard for the teachers themselves, because under the draft Regulations they are able to send their representations to the Secretary of State, and the National Joint Council looks at every one of those representations. They are all grouped, and the representations are considered. It is an additional safeguard, and, of course, the changes were made upwards, increasing the scales, on this occasion, after the draft Regulations had been made.
  Miss Herbison: The Joint Under-Secretary of State, in replying to the debate tonight, said that the Regulations with which we are dealing were almost as they came from the National Joint Council. He must realise that this very safeguard he has tried to stress may be there in theory but in practice it is not there. I speak from my own experience of having been in the position which he now occupies. I shall not labour this further, however; but I would again ask him to ask his right hon. Friend to try to have further negotiations.
  I have very little time, but there are just one or two points I want to stress. My hon. Friend the Member for Glasgow, Craigton (Mr. Millan) asked that additional payments should be made for Glasgow teachers. I am glad that the Joint Under-Secretary of State

  531
  gave the reply he did. Additional payments to teachers in Glasgow would not produce one extra teacher in Scotland. Lanarkshire is short of teachers. Fife-shire is short of teachers. Indeed, I should like to know what local authority is not. We are often told that Edinburgh has no shortage of teachers, but has Edinburgh the size of classes which we should like any other place in Scotland to have? I feel that that is not the way to deal with the problem. Glasgow's problem, all Scotland's problem, is in examining the conditions of teachers and examining the adequacy of the salaries which are given to them.
  The Joint Under-Secretary said—I intervened but did not get any information—that the number of the headmasters who could receive the top salary had been increased. I want to know by how much it has been increased, because originally only one headmaster in the whole of Scotland—and that was at Hamilton Academy in Lanarkshire—could get the top grade of salary. If the hon. Gentleman has information I will gladly give way now.
  Mr. N. Macpherson: Six or seven.
  Miss Herbison: Even six or seven is a very small number compared with the number of headmasters in Scotland.
  I want to make two suggestions. The National Joint Council has completed its negotiations under the triennial examination. My hon. Friend the Member for Lanark (Mrs. Hart) suggested that there should be an examination of teachers' salaries as compared with the salaries of professional workers. I want to add something to that. If one looks at the complexity of these Regulations, and one has some knowledge of the negotiations which took place between the Educational Institute of Scotland and the local authorities, one realises the very great difficulty indeed of getting salaries which are reasonable, salaries which can be understood even by some of the teachers.
  There are many anomalies, and it seems to me that if the National Joint
  532
  Council would start now it would have three years in which to get rid of the anomalies and to devise a much better system of remuneration for the teaching profession in Scotland. I hope that the Joint Under-Secretary will do his best to bring that about.
  Regarding the proposal made by my hon. Friend the Member for Lanark, great interest has been aroused by the Report on the salaries of doctors and dentists. A great deal of useful information is contained in that Report. It might be a very good thing if in Scotland we were to carry out the important exercise of comparing the salaries of teachers—instead of those of doctors and dentists—with the salaries earned by other professional workers and by workers in industry. Such a report might produce some very great surprises. I think that such an investigation should be carried out.
  One final point. In answer to a Question which I asked yesterday I was given certain figures. The Joint Under-Secretary of State has tonight given us the increase in the numbers in the colleges of education in Scotland. He will realise, however, that the greatest increase is that in non-graduate women. I am glad to hear about all the increases, but I am sorry that the greatest increase should be among non-graduate women, because we need many more honours graduates and ordinary graduates.
  The children who are suffering worst from the shortage of teachers are the under-privileged children in the junior secondary schools. We see from the figures for Lanarkshire, for Glasgow and for almost every other local authority in Scotland that the children who are faring worst are those who leave school at the age of 15. I want the Joint Under-Secretary of State to examine that position in order to see what he can do to improve the lot of many of those unfortunate children.
  Mr. Mitchison: In view of the undertaking given by the Minister, I beg to ask leave to withdraw the Motion.
  Motion, by leave, withdrawn.

  WARDS OF COURT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Chichester-Clark.]
  11.28 p.m.
  Mr. R. Gresham Cooke: I have to unfold to my right hon. Friend the Joint Under-Secretary of State for the Home Department a sad case of child stealing, or kidnapping, which has caused great distress and suffering to one of my constituents, Mrs. Joy Harris.
  In 1954, Mrs. Harris married an Australian, Mr. John Harris, who was a lorry driver. They had one child, Janette, who is now aged 4. I should point out that neither of these people are well off. In fact, Mrs. Harris really has nothing except what she can earn in a simple way.
  Because of assaults by her husband, Mrs. Harris had to separate from him. She came back to England with the child and went to live with her godmother in Cornwall. She started divorce proceedings last year. On 26th May, 1959, her husband turned up unexpectedly at her home in Cornwall. They had a discussion together and they arranged to see Mrs. Harris's solicitors in Cornwall. While Mrs. Harris was arranging with a neighbour to look after the child her husband stole the child and disappeared. Mrs. Harris was very expeditious in this matter, and applied at once to have her child made a ward of court under Section 9 (2) of the Law Reform (Miscellaneous Provisions) Act. On 28th May she actually got a temporary order from Mr. Justice Danckwerts and the child became a ward of court for 21 days, under the control of Mrs. Harris. She also obtained an injunction to stop her husband from taking the child out of the jurisdiction. She returned to London to find that Mr. Harris was about to leave the country. On 29th May, with her solicitors, she stopped her husband as he was about to embark on an aircraft at London Airport to go to Australia with the child. So she got the child back. Two months later, on the 30th July, there was a trial of the action in the High Court, with leading counsel and the cross-examination of witnesses. As a result Mr. Justice Danckwerts awarded the sole custody of
  534
  the child to Mrs. Harris during the minority of the child, and made it a ward of court. At that time there was no formal request by the husband for access to see the child. In my view, at that stage in the proceedings the husband undoubtedly lost his rights of custody as a father.
  Through his legal advisers Mr. Harris asked for access to the child on one occasion, on the ground that he was about to go back to Australia. He saw the child, and pleaded with Mrs. Harris for sympathy, and saw the child on another occasion. The scene then shifts to Birmingham, where Mrs. Harris was staying with her godmother's daughter. On 19th August Mr. Harris turned up again. Mr. and Mrs. Harris were together with the child; Mrs. Harris unfortunately went out to do some shopping, and Mr. Harris again disappeared with the child. This time he did so in defiance of the court order.
  Mrs. Harris at once went to the Birmingham police, who looked into the matter and telephoned Mrs. Harris's solicitors at midnight on 19th August. The solicitors, with great promptitude and energy—and they have acted with enormous skill in this case—at once telephoned the duty officer of B.O.A.C. at London Airport, warning him that Mr. Harris had got hold of the child and might again try to fly the country. Next day Mrs. Harris's solicitors made application to Mr. Justice Phillimore in London and obtained an order committing Mr. Harris to prison for contempt of court. Straight away they informed the Home Office of this new child theft, and they then heard that Mr. Harris had been seen at Prestwick Airport, in Scotland. They went back to the judge, who made orders restraining three airlines—B.O.A.C., K.L.M., and S.A.S.—from allowing the child out of the country.
  The next day, 21st August, an article and photograph appeared in the Scottish Daily Express, which showed that Mr. Harris had seen a reporter and had been to the police, with the child, and that the police had apparently warned him about the contempt of court. The solicitors went to Glasgow and saw the police, who rang up the Ayr police, who confirmed that Mr. Harris had turned up at the police station with another man they thought was the

  535
  Scottish Daily Express reporter. The solicitors went to see the editor of the Scottish Daily Express and warned him against assisting a breach of the order making the child a ward of the court, and told him that he might be liable for contempt. The editor said that his reporter had picked up Mr. Harris and taken him to the police station at Ayr.
  It is believed that the Scottish police at this stage treated the matter lightly, and said that they were waiting for a criminal warrant. On 21st August counsel for Mrs. Harris went again to Mr. Justice Phillimore at Oxford and got leave for Mrs. Harris to prefer a bill of indictment against Mr. Harris alleging child stealing. Mr. Justice Phillimore issued a criminal warrant for Mr. Harris's arrest.
  In point of fact, I believe that the Scottish police must act on this warrant, because it is a criminal warrant. It seems extraordinary that they did not manage to arrest Harris at that stage. The warrant was sent to the Glasgow police the same day, a full description of the man and of the child was given to the police, and, of course, the solicitor and Mrs. Harris were duly awaiting for Harris to be arrested.
  On 23rd August, Mr. John Gordon of the Sunday Express entered the proceedings with a rather caustic article about Mr. Justice Phillimore's first order, asking:
  "Isn't it about time the English High Court recognised the legal fact that it has no authority in Scotland?"
  Nothing more happened after that, except that a letter dated 24th August, from Harris, reached Mrs. Harris. That letter was posted in Fleet Street on 2nd September, which is rather remarkable. On 6th September, the Sunday Express reported an interview with Harris in New York, and said that he had the child there. On 12th September, the Daily Express reported that Harris had arrived in Australia. Incidentally the Express at no time mentioned the criminal warrant obtained from Mr. Justice Phillimore on 21st August. All the other newspapers mentioned it, and that omission is rather significant in the light of what I have to say.
  How did Harris get out of the jurisdiction? He went to Scotland and stayed
  536
  for some days. He then went to Ireland, then on to New York by B.O.A.C., and thence to Australia. How did he find the money for his stay in Scotland and the trip to Ireland? I ask, because he told the Press on reaching Australia that he knew of the injunction against him, said that he had only 30s. in his pocket but had one friend. On the evidence, I believe that the friend who possibly paid his expenses in Scotland and Ireland was the Express group of newspapers.
  However that may be, the Birmingham police then sent the file of papers to the Director of Public Prosecutions who, however, did not institute any proceedings for extradition against Mr. Harris, who was then in Australia.
  At the end of October, after the General Election, this case came to my notice in my constituency, and I raised the matter with my right hon. Friend the Home Secretary, asking for an extradition order to be enforced against Mr. Harris. I have a letter from my right hon. Friend, in which he says:
  "This is a matter of some complication and I have every sympathy with Mrs. Harris in the difficult position in which she is placed. Before, however, an application could be made to the Australian Government for the return of Mr. Harris under the Fugitive Offenders Act, 1881, there must be evidence that he has committed a criminal offence and that in the circumstances it is right to bring him back to this country to stand trial. The Director of Public Prosecutions who has had the facts of this case brought to his notice, is unable to take the view that this is a suitable case for the making of an application under the Fugutive Offenders Act, and in these circumstances I am sorry but I do not feel that there is any action which the Home Secretary could usefully take."
  There was further correspondence, and the next thing was that the Director of Public Prosecutions obtained a nolle prosequi from the Attorney-General to drop the case. In my view, the Director should have brought extradition proceedings against Mr. Harris in Australia to face the criminal warrant issued by Mr. Justice Phillimore. Harris had committed a criminal offence and should be liable for contempt, and certainly had no rights as a father. The Director of Public Prosecutions at one stage, I think, rather thought that Harris had some fundamental rights as a father, but in my submission those rights were lost.
  One of my complaints is that the Scottish police seem to have acted

  537
  negligently in this case, in that Harris stayed for several days in Scotland and they never arrested him, or took any notice of the criminal warrant. I do not think that they fulfilled their duty. I feel that the Director of Public Prosecutions should have brought proceedings against Harris in Australia. Thirdly,—if, indeed, it did—the Express group should not have financed or assisted Harris while he was really committing a criminal offence.
  This is a very sad case. Mrs. Harris has suffered much pain and suffering since last May. She has lost her child, Janette, who is in Australia, and her only remedy, apparently, is to go to Australia and try to recover the child there. Further, a child of only 4 years has, by the act of her father, lost the care of her mother during her formative years.
  I raise this case tonight in the hope that other mothers will be saved suffering, loss and expense in the future, and I ask my right hon. Friend to see whether the authorities can take these matters more seriously and stop wards of court leaving this country or, if wards of court are taken away by persons against whom criminal warrants have been obtained, that action should be taken by the authorities to bring these criminals back.
  I understand the hon. Member for Thurrock (Mr. Delargy) has had a similar case, and no doubt he wants to say a few words.
  11.41 p.m.
  Mr. Hugh Delargy: I am grateful to the hon. Member for Twickenham (Mr. Gresham Cooke) for giving me this opportunity to mention a similar case. I must be brief and quick because there are only a few minutes at my disposal.
  This is a case of a boy aged about 3 who was made a ward of court in London and who is now living in Sydney, Australia, with his mother. His name is Alfred Santanastaso, the son of an Italian father and an Australian mother. He was born in Sydney and spent his first two or three years in Sydney. Towards the end of last year the three of them, father, mother and child, were living in Naples. Suddenly the wife absconded with the child and they arrived in England at the Port of Tilbury as stowaways aboard the ship "Orsova".
  538
  That was on 17th December, 1959. As soon as the husband got word of this he flew to London, saw a judge in chambers and had the son made a ward of court.
  For the next three or four weeks the father used every endeavour to trace his wife and child, but all his efforts were of no avail. At all events, he felt assured at least that the child would not be allowed to leave the jurisdiction of the High Court without the permission of the High Court. Imagine his dismay and distress, therefore, to learn early in January that the mother and child were living in Sydney, Australia. He subsequently learned that a passport had been issued to her at Australia House, that she had crossed the Border into Scotland and had left the country from Prestwick Airport. No doubt, a foreigner would have difficulty in appreciating that decisions of the High Court in England are meaningless in Scotland. I find it difficult to appreciate myself, particularly in cases like this which are not only cruelly unjust but manifestly absurd.
  I have no doubt that the right hon. Gentleman will say that this is an aspect of the case about which he can do nothing at the moment. I suppose a change in the law would be necessary. In that case, the sooner the law is changed the better. But I must say that there are certain other aspects of this case which the Home Office ought seriously to consider. Every obstacle was placed in the way of this man in his endeavour to trace his wife and child, and every facility was offered to the mother. I will cite only one instance.
  When the mother arrived at Tilbury without a passport and without a ticket she was given the most privileged treatment. She was allowed to leave the ship at 1.30 a.m., seven and a half hours before the normal time of disembarkation. A car was waiting for her, which we understand was arranged between the ship's authorities and the police, which drove her and the child away at that strange hour to some undisclosed destination; whereas the husband, when, on the advice of Scotland Yard, he went to meet the ship an hour before the passengers were due to land, saw all the passengers come off except, of course, his wife and child. He remained there all morning and until

  539
  the afternoon before he was told that his wife and child had left all those hours ago.
  I do not know what Mr. Santanastaso is thinking at the moment about British laws and customs. I think that he has been shamefully treated, and I want to know why. I appreciate that, because of the shortness of the notice the right hon. Gentleman has had, he may not be able to give me full replies on these points tonight, but I hope that he will at an early date give me a reply and ensure that justice is done in the matter.
  11.45 p.m.
  The Joint Under-Secretary of State for the Home Department (Mr. Dennis Vosper): I think it is well known that my right hon. Friend the Home Secretary is always ready to do what he can to vindicate the orders of the High Court in cases such as those described by my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) and the hon. Member for Thurrock (Mr. Delargy). It is equally well known that the Home Secretary's powers do not always suffice for this purpose. First of all, I want to deal with the case of Mrs. Harris, to which my hon. Friend has drawn attention.
  This case was brought to notice of the Home Office at an early stage, as my hon. Friend said, and the usual precautions were taken. In fact, I understand that those precautions, together with the activities of the solicitors, were instrumental in frustrating an attempt, the first attempt, by Mr. Harris to take his daughter out of the country from London Airport in May. At that time—and this is important—Mrs. Harris' solicitors were warned that the precautions which the Home Secretary was in a position to take could not be guaranteed to prevent the child's removal, particularly if she travelled to Scotland, Ireland, the Channel Islands or the Isle of Man. This is the crux of the matter. The reason is that, while there is no restriction on travel to those other parts of these islands, the jurisdiction of the High Court, as the hon. Member for Thurrock said, extends only to England and Wales, and its orders in civil cases are not enforceable outside the jurisdiction.
  I come now to what I think my hon. Friend described as Mr. Harris's second
  540
  attempt, in August last year. My information is roughly in accordance with that of my hon. Friend. On 19th August, in contravention of an order of the High Court, Mr. Harris removed his daughter from the care and control of his wife. On 20th August, he came to the notice of an immigration officer at Prestwick Airport in Scotland, where he was trying to book passages to America. When this was reported by the Home Office to Mrs. Harris's legal advisers, they brought the facts to the notice of the High Court, as my hon. Friend said. The High Court did several things. It made an order committing Mr. Harris to prison for contempt of court. It granted an injunction restraining Mr. Harris from taking the child out of the jurisdiction and ordering him to return the child forthwith to Mrs. Harris. Thirdly, it granted injunction restraining the airlines operating at Prestwick from carrying the child in any of their aircraft save to bring her into the jurisdiction of the High Court.
  This last action of the High Court, the injunction against the airlines, succeeded in preventing Mr. Harris from leaving Prestwick by air for America. But the other orders—I am not sure that my hon. Friend is clear about this—certainly had no force in Scotland, and the Scottish police at this time had no power to intervene, although they were in touch with Mr. Harris on one occasion on that day, 20th August. I make that point because, while I have no responsibility for the activities of the Scottish police, at this stage they were unable to take any action because the proceedings were of a civil nature.
  Mrs. Harris's remedy at that stage would have been to begin separate proceedings before the appropriate Scottish court. I understand that, on the following day, a voluntary bill of indictment was preferred against Mr. Harris and a warrant for his arrest was issued. Whether or not it would have been possible to have had that warrant enforced in Scotland I do not know. The question does not seem to have arisen because, by then, according to my information, Mr. Harris had disappeared from the view of the authorities in Scotland. It is possible—I was interested to hear what my hon. Friend

  541
  said about this—that he had already left Scotland by sea. I am told that very soon afterwards he was back in Australia. That is the sequence of events as they are known to me.
  My hon. Friend has told us tonight that he has reason to think that one of the national newspapers intervened in this dispute and helped Mr. Harris to make off with the child. I personally have no information on that point and I am not in a position to comment on it, except to say that no doubt any person who assists or incites another to contravene an order of the High Court places himself in danger of an attachment for contempt of court.
  The situation is that Mr. Harris and the child are now in Australia as a result of his third and, unfortunately, successful attempt to get out of the country. My hon. Friend has asked in correspondence, and possibly again tonight, whether there is any procedure by which Mr. Harris and his daughter can be brought back to this country. I can only repeat what I have told him in correspondence, that the Fugitive Offenders Act. 1881, provides a method by which a person accused of having committed an offence in one part of the Commonwealth can be brought back to another part to stand trial. The procedure is that the Director of Public Prosecutions, being satisfied that the case is one in which the Act ought to be invoked, asks the Home Secretary to arrange for a request to be sent to the authorities of the Commonwealth country where the person whose return is required is believed to be.
  But, and this is a point which I think my hon. Friend appreciates, the Act can be invoked only if the person concerned is accused of having committed an offence punishable by imprisonment of twelve months or more and if there is a warrant in existence for his arrest. In this case of Mr. Harris, as far as I am aware, there are no criminal proceedings pending, and the Director of Public Prosecutions did not feel justified in initiating proceedings under the Act. I cannot comment on my hon. Friend's criticisms of the decision of the Director of prosecutions in this case.
  A voluntary bill of indictment was preferred against Mr. Harris, as I have said, and a warrant for his arrest issued. This is where I slightly differ from my hon. Friend. These criminal proceed
  542
  ings were brought to an end last year when Mrs. Harris and her legal advisers informed the Director of Public Prosecutions that they no longer wished to proceed with the prosecution and the Attorney-General directed an entry of nolle prosequi. My right. hon. Friend the Home Secretary has no responsibility in connection with the initiation or conduct of criminal proceedings and it would not be appropriate for me to comment further on this aspect of the case.
  If I may turn to the case raised by the hon. Member for Thurrock (Mr. Delargy), here too there was an order of the English High Court prohibiting the removal of a minor from the jurisdiction. The situation seems to be further complicated by the existence at the same time of conflicting orders by courts overseas as to the custody of the child. I do not think that I have time to go into the story in detail.
  The hon. Member referred to the incident at Tilbury. I could possibly look further at the point, but from inquiries I made this evening—for the hon. Member was courteous enough to give me notice—it is true that the purser on the ship made arrangements for the woman to go ashore in the early hours of the morning of 17th December. I gather that the object was to protect her from the attentions of the Press and of other people gathered at Tilbury. I have no information about the activities of the police in this connection.
  It seems clear that at that time the child was not a ward of court. This case came to the notice of the Home Office when it was reported that the child's mother intended to remove the child from the jurisdiction in contravention of the High Court order. She took the child to Prestwick in Scotland and there, despite all the immigration officer could do to persuade her to submit to the order of the High Court, she embarked with the child for the United States. This again was a civil proceeding and there was no power to prevent the child leaving, and I am afraid that there is nothing that my right hon. Friend the Home Secretary can do to secure the child's return.
  I hope that I have said enough to show that in both cases the authorities did all that that was in their power

  543
  under the law as it stands to ensure that the orders of the High Court were carried out. I am only sorry that it was not enough to prevent the removal of the children concerned. The crux of the matter is that at present there is no machinery for the reciprocal enforcement of orders for custody or wardship made in various parts of the United Kingdom. This was one of the problems to which attention was drawn by the Committee on Conflicts of Jurisdiction Affecting Children whose Report was published last September, as Command Paper No. 842.
  The Government welcome the Report, but it does raise a number of difficult questions which will have to be con
  544
  sidered before any decision on legislation can be reached; and I cannot say at this stage what those decisions are likely to be. I repeat that we regret that the considerable activities of the authorities to try to prevent these unfortunate events from happening were unsuccessful. If there is anything further that I can deal with, I shall be glad to do so by way of correspondence. We are very sorry that it was not possible to assist further the deprived parents in this case, but we shall give most careful consideration to the Report of this Committee.
  Question put and agreed to.
  Adjourned accordingly at five minutes to Twelve o'clock.

EMPLOYMENT
  Disabled Persons, Cardiff
  Disabled Persons, Cardiff
  Coatbridge and Airdrie
  Coatbridge and Airdrie
TELEPHONE SERVICE
  Barry
  Barry
  Dinas-Powis
  Dinas-Powis
  Foresters
  Foresters
  Emergency Calls
  Emergency Calls
POST OFFICE
  Postage Rates (Western Europe)
  Postage Rates (Western Europe)
  Caravan Site, St. Leonards-on-Sea (Post Box)
  Caravan Site, St. Leonards-on-Sea (Post Box)
WIRELESS AND TELEVISION
  Fylingdales Moor Station (Interference)
  Fylingdales Moor Station (Interference)
ROYAL AIR FORCE
  Aircraft and Personnel
  Aircraft and Personnel
  Ballistic Missiles (Fylingdales Moor Station)
  Ballistic Missiles (Fylingdales Moor Station)
  Catering, Swinderby
  Catering, Swinderby
  E1-Adem Station (Building Work)
  E1-Adem Station (Building Work)
ROADS
  Cross-roads, Cefn Brynich (Accidents)
  Cross-roads, Cefn Brynich (Accidents)
  Newport and Cardiff
  Newport and Cardiff
  Hatfield-Peverel By-pass
  Hatfield-Peverel By-pass
  Cyclists
  Cyclists
  Bristol
  Bristol
  Road Programme
  Road Programme
  Manor Way By-pass, Whitchurch
  Manor Way By-pass, Whitchurch
TRANSPORT
  Rural Transport (Report)
  Rural Transport (Report)
  Road Accidents
  Road Accidents
SHIPPING
  Orders
  Orders
  Docks, South Wales
  Docks, South Wales
MINISTRY OF DEFENCE
  Service and Supporting Personnel
  Service and Supporting Personnel
  Middle East Command Headquarters
  Middle East Command Headquarters
  German Divisions
  German Divisions
NATIONAL FINANCE
  Purchase Tax
  Purchase Tax
  Tax Reliefs (National Insurance Contributions)
  Tax Reliefs (National Insurance Contributions)
  Retired Civil Servants (Appointments)
  Retired Civil Servants (Appointments)
HOME DEPARTMENT
  Civil Defence (Fylingdales Moor Station)
  Civil Defence (Fylingdales Moor Station)
MINISTRY OF AVIATION
  London Airport (Aircraft Noise)
  London Airport (Aircraft Noise)
AGRICULTURE, FISHERIES AND FOOD
  Research Stations and Farm Institutes
  Research Stations and Farm Institutes
SOLOMON ISLANDS
  Education
  Education
COMMONWEALTH RELATIONS
  Teachers (Training)
  Teachers (Training)
ATOMIC ENERGY
  Atomic Energy Authority (Professional Staff)
  Atomic Energy Authority (Professional Staff)
  Fast Breeder Reactors
  Fast Breeder Reactors
  FRANCE (NICE CONSULATE)
  FRANCE (NICE CONSULATE)
MINISTRY OF HEALTH
  Hearing Aids, Stockport
  Hearing Aids, Stockport
LOCAL GOVERNMENT
  Agricultural Buildings (Planning Control)
  Agricultural Buildings (Planning Control)
  ACCOUNTANT OF COURT (PAYMENTS)
  ACCOUNTANT OF COURT (PAYMENTS)
EDUCATION
  Teachers
  Teachers
  Technical Education (Day-Release Students)
  Technical Education (Day-Release Students)
TRADE AND COMMERCE
  National Research Development Corporation
  National Research Development Corporation

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chichester

WELLINGTON BARRACKS
2.35 p.m.
LORD CONESFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are considering any proposals for rebuilding Wellington Barracks.]
THE EARL OF ONSLOW: My Lords, it is proposed to rebuild Wellington Barracks after those in Chelsea and Hyde Park.
LORD CONESFORD: My Lords, can my noble friend tell me whether Her Majesty's Government appreciate the importance of the scale and the fine façade of the Barracks as seen from the Park? Can he say whether these will be preserved under the scheme?
THE EARL OF ONSLOW: My Lords, that is a subject which my right honourable friend the Secretary of State for War has very much in mind. In such matters he consults the planning authorities and the Royal Fine Art Commission. No decision has been made, because the rebuilding of Wellington Barracks cannot be started for another four or five years. The plans have not at present been settled in detail, but I can assure my noble friend that Her Majesty's Government recognise the importance of the appearance of these Barracks in Birdcage Walk.
THE EARL OF LUCAN: My Lords, could the noble Earl assure the House that, when rebuilding comes to take place, a distinguished architect will be employed, as was done with the earlier plans which came to nothing before 1939?
LORD CONESFORD: My Lords, may I also ask my noble friend whether he can assure the House that Her Majesty's Government will keep in close touch with the Royal Fine Art Commission? And can he perhaps say why the matter is going to take so long?
EARL HOWE: My Lords, may I also be allowed to ask: what is the total expense?
THE EARL OF ONSLOW: My Lords, so far as the last question is concerned, I think it is rather wide of the Question on the Order Paper, but if the noble Earl would like me to do so, I can find out for him and let him know privately. As regards the question that the two other noble Lords have asked me, certainly very close touch will be kept with the Royal Fine Art Commission, and in the same way I am certain that the best of architects' advice will be obtained. The reason why rebuilding will take so long is the fact that the Brigade of Guards can release only one Barracks at a time in London; therefore it is proposed to do Chelsea and Knightsbridge first and then Wellington afterwards.
LORD CONESFORD: My Lords, may I ask one more supplementary question of my noble friend? While agreeing, of course, that a distinguished architect should be employed for anything new that has to be created, I hope that this does not mean that the existing very fine façade is going to be destroyed.
THE EARL OF ONSLOW: My Lords, I think my noble friend may be assured, from what I have already said, that there will be no major alteration. Should it be found, by reason of the modern requirements of troops, for whom we all want better conditions in barracks, that some slight alteration is necessary, it will be fitted in with the major part of the existing façade.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, has this matter been examined from a reasonable financial point of view? In view of the size of the present Army Estimates, are the Government satisfied that this can be afforded?
THE EARL OF ONSLOW: My Lords, once again I think that that is quite outside the scope of this Question.

ESSEX COUNTY COUNCIL (FULLBRIDGE, MALDON) BILL [H.L.]
THE CHAIRMAN OF COMMITTEES (LORD MERTHYR): My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Merthyr.)
VISCOUNT ALEXANDER OF HILLSBOROUGH: May I ask whether we can see this Bill?
THE CHAIRMAN OF COMMITTEES: My Lords, the Bill is obtainable in the Printed Paper Office, so far as I know, but if the noble Viscount wishes to ask me about it, I have a copy here.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I was only wondering whether "Fullbridge" meant that the bridge at the bottom of Market Hill is going to be repaired.
THE CHAIRMAN OF COMMITTEES: My Lords, the sole purpose of this very short Bill is to authorise the reduction of the height of the bridge above the river by 13 inches. Legislation is required to do that. I think that that is the substantial purpose of the Bill.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, we will have another look at the Bill when we come to Third Reading. This bridge has not been in use for many years. There has been a temporary bridge, across which I have been driving for ten years.
THE CHAIRMAN OF COMMITTEES: My Lords, this is a short Bill of five clauses and it simply reduces the headway of the bridge over the river by a very small amount, but that cannot be done without an Act of Parliament.
On Question, Bill read 2a, and committed to an Unopposed Bill Committee.

SALFORD CORPORATION BILL [H.L.]
THE CHAIRMAN OF COMMITTEES: My Lords, in the case of this Bill, I have put down on the Order Paper an intimation that I would make a statement to your Lordships' House under Standing Order 91. I have done that because I think the House is apt to be interested in a Bill which introduces a provision for the enclosure, however small it may be, of an open space. In the County Borough of Salford there is a public park known as Peel Park. In the year 1920, by an Act of Parliament, a part of Peel Park was appropriated for the purpose of a building for the Royal Technical College. In the year 1955, a further small area of the Park, two acres in extent, was taken to provide a car park for this college, which no doubt adjoins it. Under Clause 4 of this Bill it is proposed to appropriate those two acres of the car park for an extension of the building of the College or for some other educational purpose. That is the matter which I thought it right, I hope rightly, to draw to the attention of the House. There are three Petitions against this Bill, but none of them deals with this point, and it is possible for me to say that to the best of my knowledge there is no opposition to this proposal, although, of course, opposition might develop at some future time. Therefore, I am not saying that the House need take any time over this proposal, but, as I have said before, in view of the nature of it I thought your Lordships might like to know. I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Merthyr.)
LORD REA: My Lords, I do not want to detain your Lordships, but I wonder if the Lord Chairman could indicate whether, when this car park has been appropriated for building purposes, there is some protection to prevent the authorities from taking a further part of this open space for a new car park.
THE CHAIRMAN OF COMMITTEES: My Lords, there are two clauses in the Bill which provide for underground car parks, but I must admit that I

287
am not sure whether they are directly connected with the proposal to appropriate this car park. Be that as it may, there is provision for further car parks in Salford. If it were proposed to take any further portion of this park for any purpose, that would, of course, require another Bill.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I should like to thank the noble Lord the Lord Chairman of Committees very much for the course he has pursued to-day, having regard to the point of view of general Parliamentary interest. Any further enclosure of open space in a borough, so overcrowded requires consideration, and we might see what happens as a result of any Government advice that may be given to the Committee considering the Petition.
THE EARL OF SWINTON: My Lords, some of us have had an opportunity of considering this matter with the Lord Chairman. The position, I think, is this. If it were a question of taking any piece of common land, however small, that would be a matter of public importance which we should all want to consider, both for local considerations and as a general matter. But, as I understand it, the position here is this. Some years ago two acres of this park were taken for the purposes of this educational institution for use as a car park. Nothing could compel the institution to give that area back and make it part of the park. If we were now to oppose the Second Reading of this Bill, or indeed to give any direction to the Committee, we should not be helping to get any extra land for the park but should merely be giving an instruction that this land, which is the property of the institution, should not be used for the best educational purposes.
LORD KINNAIRD: My Lords, I should like to ask a question—though really it has nothing to do with me—for those who do not know this park. The noble Lord referred to a small park of two acres. I should like to ask him what the acreage of the park is.
THE CHAIRMAN OF COMMITTEES: I do not think I said that Peel Park was a small park. What I said was that the two acres was a car park—possibly
288
the noble Lord did not hear me correctly. It is the car park which is two acres, and I ventured to describe that as a small part of the park, which may be a very large park. I am afraid that I have not the actual acreage of the whole park.
LORD GREENHILL: My Lords, I should like to ask two questions. The first is of general interest, and it is this. The noble Lord the Chairman of Committees is now apparently adopting a course in which he asks Members of the whole House to apply themselves to a particular question he is raising, which is really a matter of procedure. One would like to know whether it is the intention to air these matters before the House as a whole before they receive detailed consideration, presumably by a special Committee, or whether this is an unusual course in which he asks for guidance from your Lordships' House. The second point deals with the specific area in question, about which most of us know very little. The question is: what is the purpose of raising this matter at all? Most of us have strong views about the destruction of parkland, especially in our urban areas, but what is it that we as the House of Lords are supposed to do on this particular issue?
THE CHAIRMAN OF COMMITTEES: My Lords, I am afraid that in order to give a proper answer to the noble Lord's question I must again remind the House of what happened last year. The whole story begins on the Second Reading of the South Wales Transport Bill of the last Session. I am sorry to have to remind your Lordships of that Bill, but it was an interesting Bill. As a result of the events which took place in this House on that Bill, I was asked by the House to make arrangements so that those of your Lordships who were interested in the matter would be in some way acquainted with the more interesting proposals in Private Bills presented each Session. When I say "interesting", I mean those clauses in Private Bills which might be expected to occasion the specific and particular interest of the House. It was then arranged that in the month of January every year a meeting should take place of two or three members of all Parties and interests in this House, and that meeting should be told by me of those clauses in the Private Bills for

289
that Session which, in my judgment, might fall under that head. That meeting took place last month for the first time, and those noble Lords who attended that meeting agreed that I should draw attention to Clause 4 of the Salford Corporation Bill, and that is why I am doing so to-day.
On Question Bill read 2a, and committed to a Select Committee.

GOVERNMENT ASSISTANCE TO PRIVATE INDUSTRY
2.52 p.m.
LORD STONHAM LORD STONHAM rose to draw attention to the large sums of public money spent on Government assistance to industry, without an adequate measure of control or a public interest in the equity; and to move for Papers. The noble Lord said: My Lords, when I last had the privilege of initiating a debate from this Box, I was greatly heartened by the general agreement which was accorded to the views which I expressed. I expect no such unanimity on this occasion, not because there is any doubt, in my view, about the facts and figures, but because when it comes to the investment of Treasury funds in industry there is a fundamental cleavage of opinion between Government and Opposition. We disagree particularly over the criteria determining the industries in which we should invest; on the degree of control which the Government should exercise; on the return to be expected from the investment, and on the manner in which the fruits of the investment should be distributed.
The Conservative attitude, as I see it, was vividly demonstrated one day last week on the front page of the London Star, when, on the same front page, there appeared two headlines. One was "More State aid for planes", and the other. "Government Whips face revolt over rail pay". Obviously the Government regard aircraft firms as founder members of the "hand-out club", because no Government Back Bencher asked any questions; they did not ask how much was to be spent, what was to be done with the money, or what the conditions were. They obviously regarded it as non-controversial. In much the same way the Institute of Directors, through their house organ the Director, suggesting that the. Cunard Steam-ship Company
290
might get a Government subsidy of as much as £40 million, declared that "such a decision ought not to be politically contentious". How different the attitude when the same people discuss the difficulties of another form of transport, the railways! The Press is full of letters from Conservative M.P.s giving all sorts of good advice to the Transport Commission. But until the last few days, if anyone suggested a subsidy for the railways a kind of collective shudder ran through the Government Benches—something like the reaction which was evoked a few years ago by the suggestion that Gentlemen and Players should come out to bat through the same gate at Lords.
I want to make it perfectly clear that my Party are not opposed to the investment of public money in private industry, but we insist that where public money goes, public policy must follow, and that our investments, if we were the Government and if we were making them, would be subject to the conditions that the policy of the firms or industries concerned must be designed to fulfil four requirements. Those four requirements, as we see them, not necessarily in the order of importance, are these: first, that the industries must make the maximum contribution to full employment and to our balance of payments; secondly, that they must contribute to the stabilisation of living costs through the maintenance of reasonable selling prices; thirdly, that they must provide satisfactory conditions of employment for their employees, and fourthly, that the Treasury should receive a proportion of the earnings of the enterprise appropriate to its share in the total risk capital employed. The justice of those four criteria, when it comes to the investment of public money in private enterprise, cannot be disputed, because it is our money, contributed by everyone in varying degrees, rich and poor alike.
In my view, whenever the Government make an investment in a commercial undertaking which does not substantially satisfy those four conditions, they are misappropriating our money. The nationalised industries, although, of course, there is still great room for improvement, measure up to these criteria very well. None of them is subsidised. All exist on fixed interest or loan capital borrowed at normal rates of

291
interest. For example, the electricity undertaking has contributed to full employment by more than doubling its output through its enormous expansion, and, incidentally, it has taken electricity to rural areas which private undertakings had previously rejected as uneconomic. The price of electricity has increased by only 33 per cent. compared with a 66 per cent. general price increase over the same period. But, despite low prices and the payment of £340 million interest on capital, the Authority has earned net profits exceeding £100 million.
In the case of gas, output has been increased with fewer employees. The price increase again has been well below the general average, and the Board has paid £120 million in interest and earned a profit, and the whole community has shared from these benefits. The Coal Board has revolutionised the miner's working and safety conditions, his pay and retirement provisions. They have paid £240 million in interest charges, and borne the quite unfair burden of the £60 million losses on imported coal. Imagine demanding that a private undertaking should do that. Throughout the period British coal has been selling at £1 a ton less, on average, than similar coal produced in comparable conditions in Western Europe.
Then, if we look at civil aviation, B.O.A.C.'s output in load-ton miles has increased fivefold and B.E.A.'s eight times. While the general level of costs has been rising by 66 per cent., B.E.A.'s cost per capacity ton-mile has dropped by 40 per cent. One part of their contribution to our export drive was the earning last year of no less than 6 million dollars in the United States and Canada. Alone among the major countries of the world, we expect our public airlines to bear most of the cost of encouraging and developing transport aircraft. It is solely because they are public undertakings that we have been able to develop the Viscount turbo-prop and the pure jet Comet IV into world-wide successes. Indeed, our private enterprise manufacturers would be out of business to-day if it were not for the publicly-owned airlines.
By and large, therefore, without subsidies, but with public control, these undertakings have helped to provide full employment, they have kept down prices,
292
paid their way and, in addition, conferred on our people immense benefits which do not and should not figure in the balance sheets. It is also the case that in November, 1958, when the Government were in a panic about the unemployment figures, they could turn only to the nationalised industries to get them out of the mess. But on these Benches we do not say that nationalisation is the only way. Britain's is a mixed economy and is becoming more so every year. There is room, in our view, for great diversity of Government investment according to the nature of the industry. But, in our view, whatever the method, it must satisfy the four criteria which I have mentioned and which I believe you must accept.
Let us examine some recent Government investments in private industry and see how they measure up to the agreed four conditions. First of all, steel. We are in the curious position that seven years after denationalisation the Iron and Steel Holdings Realisation Agency still holds some £206 million of fixed interest investments and loans in the steel industry in companies whose control has been sold to the shareholders. Thus although in many cases we still hold 60 per cent. or more of the capital employed, control and profits are in private hands. Since also we, as the taxpayers, as the people, receive on average less than the current rates of interest, the Treasury does not receive anything like a proportion of the earnings of the company appropriate to our share of the capital. Indeed, since in the event of bad times our money would in some cases be the first to be lost, it could be fairly said that we own all the risk capital, because the shareholders do not take any risk as all, or at least not any risk worth talking about. So the industry falls down on that criterion.
It also falls down on the criterion of full employment, because last year we had steel workers unemployed, and something like 60 per cent. of the industry at one time was working short time. Then, again, on prices, although these are controlled they have been stepped up to unnecessarily high levels. Since denationalisation steel prices have increased much more than the average increase in other manufacturing industries. So on all four criteria the Government have failed. And, naturally, high prices have meant very much higher profits. For example, last

293
year the output of United Steel, the biggest producer, was 4 per cent. down, but their profits were £1½ million up and the dividend was stepped up from 12½ per cent. to 15 per cent. It is a measure of the Government's failure, I would submit—and this affects every one of us, whatever industry we are in, whatever job we do—that the difference between current dividends in the steel industry and the interest which was paid under public ownership is equal to an extra £1 on every ton of steel produced. That is a very bad thing for the country as a whole. The industry, in fact, has been allowed to use our money to hold us to ransom.
The proposals of the Iron and Steel (Financial Provisions) Bill make the situation even worse. Let me say at once that we fully support the provision of public funds to finance the building of new mills at Newport in Wales and Ravenscraig in Scotland. They are in the right places, they will provide employment where it is wanted and they will boost exports. But the financial arrangements for the loan of £50 million to Colville's are intolerable. When it was returned to private ownership this company had ten million £1 ordinary shares which were sold to the public at 26s. each; that is £13 million. The I.S.H.R.A. retained £14 million of fixed interest shares and debentures, returning an average of slightly under 5 per cent. compared with the 14 per cent. which the shareholders of Colville's are now receiving. Two years ago the company issued £6 million of 6 per cent. debentures which had the right for a given period of transferability into ordinary shares. To-day those ordinary shares stand not at 26s. but at 75s. 6d., so the shareholderse have made a profit of nearly £25 million—£25 million which should have belonged to the nation, because it has been created entirely by our money, by public money.
Now it is proposed to lend Colville's another £50 million. The rate of interest (and I quote) is to be
"the cost of borrowing by Her Majesty's Government at that date, for a similar period"—
that means virtually the Treasury Bill rate, and that may be as little as 4 per cent., a rate which we deny to local authorities for public purposes such as the building of houses. If I want to build a new factory (I do at the
294
moment) I have to pay 1 per cent. over bank rate for the money I borrow, and I and other manufacturers have to pay our taxes and then see them used to subsidise this private company to the tune of £1 million a year. You must agree that it is utterly scandalous.
LORD HAWKE: My Lords, could the noble Lord explain his calculation? The idea of being able to borrow long at 4 per cent. is a very interesting one. I am not quite sure how it is going to be done.
LORD STONHAM: My Lords, I wonder myself sometimes how the Government intend to do it, and still more how they intend to justify some of the things they are doing. I can only say that the right honourable gentleman the Chancellor of the Exchequer has consistently refused, despite very great pressure, to say precisely how much interest this firm will have to pay. I have repeated exactly the official words, and the noble Lord will have to make just as much out of them as I have tried to make myself.
But the Government have not even asked for the same rights as have been accorded to ordinary members of the public when the debentures were issued, namely the right of transferability into ordinary shares. If the Government are determined that this industry must remain in private hands, why do they not use our money to buy a share in the equity? Is there something immoral in the thought? Disraeli did not offer the Khedive a loan; he bought his shares in the Suez Canal, an act of immense importance to this country from which we all benefited for three-quarters of a century, and the squalid termination of that deal does not alter the fact that this was a great act of statesmanship on behalf of all the people of this country. Sir Winston Churchill had no moral scruples about buying the country into British Petroleum, and that investment has increased one hundred-fold. If this Colville deal goes through unchallenged, the nation will then own four-fifths of the company's capital, take most of the risks and get nothing out of it. The shareholders owning the other one-fifth and taking no risks will get the lot.
When this proposal was debated in another place last week the Ministers who opened the debate and who closed

295
the debate were its only supporters. Such a distinguished financial expert as Mr. Enoch Powell, a former Minister, said:
"the borrowing of money on Government credit to be advanced to private enterprise on economic grounds cannot be justified or defended."
And, of course, it cannot. I have no doubt that in Samuel Pepys's day at the Admiralty this sort of transaction was commonplace, but this is 1960, not 1660, and since then we have built up a tradition that public money cannot be used for private gain. The Government is faced with the dilemma that in these great industries whose expansion depends on the taxpayer's money the public interest demands that we either buy ourselves in and put directors on the boards or take them into public ownership. I want, on behalf of my Party, to make it perfectly clear that in demanding that there should be Government representation on the boards I am speaking of Government investment as a matter of policy. I am not referring to a later possibility, for example, of the National Superannuation Fund buying equities as an investment. In our view, in such circumstances they would then be in the same position as ordinary shareholders and have exactly the same rights and no more. But we do demand that when the taxpayer's money, public money, is used in industries such as I have described, then, if we do not acquire them altogether, we should have a share in the equity and a few more seats on the board.
We say also that the Government must abandon this policy of using public funds to create fortunes for private firms and individuals. If they will not do so, we want to know the method of selection. How do they choose them? How are the recipients of public bounty picked out? Is the begging bowl more welcome in Whitehall if it is airborne or if it comes in a big Bentley? Would it be for the good of British Railways if Sir Brian Robertson bought a Rolls? The City is interested, too. According to the Economist other industrialists would like to be "interfered with" in the same way as Colville's. They ask. "When does the ravishing begin?" What a pass we have come to when the custodians of the public purse can be thus ridiculed by a responsible journal! Since I know that my noble friends have
296
other things to say about the steel industry, so much, for the moment, for that industry.
Now let us have a look at the aircraft industry. For many years Governments of varying political complexion have, understandably, been in its main customer and support; its main business has been defence, and the State Air Corporations are the biggest single customers for civil aircraft. But since 1945 over £4,000 million of State funds have been spent on the purchase and 'development of aircraft. Now, with defence orders diminished, the aircraft industry does not conceal its anxiety that public money, rather than its own, should be spent on civil projects. I think it is true that, even with the new amalgamations and those which perhaps will still take place, our aircraft companies will need help in financing expensive new development. It is in the public interest, because they are in competition with manufacturers in other countries, who can rely on Government orders or subsidies, or both, and we cannot afford to lose any part of the aviation exports which are now running at some £150 million a year. But the conditions should be fair all round, and we are already helping a great deal.
According to Mr. Andrew Shonfield's estimate (I would emphasise that it is extremely difficult to extract from the different Votes just how much public money is spent on research in private industry, and this is the only estimate I have been able to obtain which seems to be regarded as reasonably reliable) the Government in 1955–56 were spending about £120 million a year on research and development in private industry, and at least half of this total, probably more, was on aircraft—a very substantial sum. Now another £16 million is to be added in the next year, of which £9 million will be for the development of civil aircraft. This, of course, will assist both full employment and exports, but on other aspects, as The Times editorial puts it,
"the Minister's statement was disappointingly vague and left most of the important questions unanswered."
My Lords, I am afraid that the vagueness about the financial return to the Treasury was intentional.

297
The Minister has indicated that we shall share in the proceeds from commercial sales. That might lead some of us to believe that we are going to share in the profits. Nothing of the kind! Because on February 15 Mr. Sandys indicated that the arangements for sharing of proceeds would be those set out in the Third Report of the Committee of Public Accounts for 1956–57. I was a member of that Committee. I was responsible for asking a number of the questions which produced the information in this Report, and I have always regarded the arrangements as most unsatisfactory and most unfair to the taxpayer. I should like to read your Lordships the relevant paragraph from the Committee's Report—it is the Report for 1056–57, paragraph 26:
"Contracts for the design and development of aircraft and aero engines, where the whole, or a substantial part, of the cost is borne by the Ministry, normally provide that the design shall be the property of the contractor, but that he shall not sell articles, of that design, or grant a licence to manufacture, without first agreeing with the Ministry the amount he will pay to them for the commercial use of the design. The amount so agreed is normally either a percentage of the commercial selling price or a fixed sum per aircraft sold."
On manufacturing licences the Ministry (who have provided all the money) usually take one-third and the contractor two-thirds of the licence fee. The Report goes on:
"In no case have the Ministry recovered their full expenditure on any civil aviation project."
In fact, at that time the highest rate of recovery on an aircraft was eight-ninths, but on the engine which powered it, only two-ninths. Of course, since then the full outlay on the Viscount (that was the case where the amount recovered was at that time eight-ninths) has been recovered. But that is the only one.
The Minister, Mr. Sandys, said on Monday that we have had some profitable and some unprofitable deals. But that is not correct; we have never had a profitable deal. Out of £430 million we have paid to the industry in the last nine years for development of contracts we have received back precisely £24 million—about 1s. 1d. in the £. The contractors have had the other 18s. 11d. and have paid dividends out of it. It is therefore wholly misleading to suggest that, in the ordinarily accepted sense of the term, we share in the profits. At
298
best, if the project is successful—and there has been only one such case—the Government recover the whole or part of their outlay, while the manufacturer takes all the profit. It is wholly misleading again for the right honourable gentleman the Minister to point to the advantages of a contract where we can recoup proceeds even where there is no profit. That has never happened, and never will happen, because it is a case of "heads they win, tails we lose" so far as the manufacturers are concerned.
If your Lordships consider that assessment unfair, just look at a few recent examples of our losses on aircraft and aero engines. Naturally, these are mainly on service aircraft, but the civil development contracts are made on similar terms, and, as I have just indicated, according to the Minister's answer, that will still be so. The first example is that of the Orion turboprop, on which the Ministry discontinued financial support after it had cost us £5 million. That was an egg that was not hatched. The R.A.29 engine, on which the Government's liability for development was originally estimated at a little over £2½ million, has cost us nearly £9 million to bring it up to the reasonable requirements of de Havilland. As regards the Swift fighter, each airframe cost us £120,000, compared with an estimated £28,000, plus £6½ million for the prototype, £8 million for engines, and £6½ million in cancelled orders. The last item was really paid to provide profits and dividends despite the contractors' appalling failure.
Again, I would refer to the Third Report of the Committee of Public Accounts, that for November, 1956 to November, 1957, page XII. That Report indicates that on the Swift we paid in all £40 million, and we got back 129 flyable aircraft, not one of which was fit or could be used for the operational purpose for which it was intended. The Report goes on:
"The Treasury Solicitor advised that even if a clear failure to comply with the specification could be shown … any claim for breach of contract had been irreparably damaged by acceptance of the prototypes … the Ministry had no remedy under the contract for the contractors' failure to produce an aircraft capable of the performance that the contract was intended to specify."
Yet it is apparently the intention of Her Majesty's Government to continue

299
this type of contract and thereby to court similar disasters. There are many such examples. The Vickers V.1000, which was described by the Select Committee as "the most expensive of all the aircraft which were never produced" cost us £4 million, and the prototype remained earthbound. Then there were the advance versions of the Swift and Hunter interceptors (regarded as insurance against the failure of the P.1), which cost us £1¾ million before they were abandoned.
Some of these losses may have been unavoidable, though, as I shall explain, the present system made them larger than they need have been. But, meanwhile, what about the companies engaged mainly on aircraft production? Were they suffering? Were they losing, as we were, so hopelessly? Certainly not. Bristol Aeroplane pay 10 per cent.; Fairey and Handley Page each pay 15 per cent. They are all doing very nicely, and apparently all expect this set-up to continue. Sir Roy Dobson, Managing Director of the Hawker-Siddeley Group, in welcoming the Minister's statement is reported in The Times as saying:
"Nobody should quarrel with the Government's desire to share in the proceeds from the sale of aircraft which it has helped to develop, but as soon as it has seen a fair return of its investment it should allow the manufacturer to plough back his profits."
My Lords, when I read those words I was reminded of a once popular song: "Give me the moonlight, give me the girl, and leave the rest to me." Sir Roy's paraphrase is "You take the losses, give me the 'planes, and leave the rest to the shareholders."
I hope that Her Majesty's Government will reconsider these arrangements, because if we take the risks we should share the rewards. The man in the street, though perhaps he does not quite understand the term—and perhaps I do not either—believes in a quid pro quo. All I can see is millions of quids and not a quo in sight, and if Her Majesty's Government deny what I regard as the only logical conclusion to be drawn from the facts I have put forward, and refuse to take the industry into public ownership, let us take equity shares for our money. Then, if the project succeeds we shall succeed together; and let us have Government directors on the boards. It is
300
only in this way that we can ensure that public policy follows public money. In this way, also, we can eliminate the appalling waste on Government development contracts. And this is a matter that concerns us all.
On Saturday last I was present at a conference of aircraft technicians and supervisors, drawn from aircraft firms in all parts of the United Kingdom. Every major firm was represented there. I was seriously disturbed, as your Lordships would have been, at the allegations to which I listened, allegations not from just one quarter but from all over the room, of thousands of pounds wasted every day—of men on ordinary orders being instructed to book part of their time to the Government development contract; of tiny empires allowed to remain undisturbed, and of tests that were continued indefinitely and uselessly, rather than that their personnel should be transferred to other work. A roar of laughter greeted the reading of a statement by the Minister that:
"These contracts are rigidly supervised to see that we do not incur any unnecessary expenditure."
If we took shares for our money this waste would be eliminated, because nothing would be gained by putting the losses on to the Government contract. These men—technicians, foremen and supervisors—absolutely irreplaceable and representing the cream of the aircraft industry, who have a far greater stake in it than any shareholder, are anxious about their future. There is redundancy in some areas and they expect much more redundancy to arise from the rationalisation within the new groupings. We should, in the public interest, insist that aircraft firms in receipt of State funds must make plans now to avoid the dispersal of skilled teams who will be badly needed before very long.
The right honourable gentleman the Minister (Mr. Sandys) has said that the aircraft unions have a big rôle to play. I entirely agree, and I urge him to help them to play their part by the creation of an Advisory Council composed of representatives of his Department and of the unions, so that he can be kept fully informed at shop-floor level of technical and supervisory opinion. I urge, also, that public investment in aircraft firms should be conditional on the

301
setting up of terminal payments schemes equal to those in public undertakings. For example, technicians with more than one year's service employed by British Overseas Airways Corporation are entitled to severance pay on a progressive scale, amounting, after 24 years' service, to one year's pay. In the aircraft industry, skilled men, although they have devoted their whole lives to that industry, get precisely one week's notice when they become redundant. The Government have the power to alter this, and should do so without delay.
I have dealt with just two industries in which public money is heavily involved; my noble friends will deal with others. But whatever the industry, the principle of public responsibility is the same. Most of us have sat on Select Committees with honourable Members or noble Lords of differing political Parties from our own, but on those Committees we have never had a difference of opinion about our duty to ensure that public money is spent only in the public interest. It is often in the public interest to engage in research without expectation of financial return. It cannot be in the public interest to engage in private trade without ensuring that an appropriate share of the earnings are returned to the public purse. Your Lordships may not agree with our suggestions for ensuring this, but you must agree with our objective. I believe that it is our duty to consult together and to insist that Her Majesty's Government alter their policy, so that the principle of public responsibility can continue unimpaired. I beg to move for Papers.
3.29 p.m.
LORD GRANTCHESTER: My Lords, I am very glad that the noble Lord, Lord Stonham, has introduced the Motion before us to-day. As happens quite frequently, he is chiefly attacking Her Majesty's Government for not doing enough and for not getting enough control in return for the money that is being made available to private enterprise. I am sure that Ministers will deal with his references to nationalised industries, and that other noble Lords with detailed knowledge of the matters to which he referred will deal with his references to private firms. But, if his remarks prove anything, I think it can be said at this stage that they show how unsuited Ministry officials are to deal
302
with business negotiations. That is no reflection upon the officials of the Ministries. They cannot obtain the necessary experience to do so. For my part, in a number of cases I deplore the fact that Her Majesty's Government are making the advances they propose to private industry at all. I agree with the noble Lord's remarks so far as new advances to the steel industry are concerned. I do not want these advances to be used to secure either seats on the boards or a share of the equity. I would rather the Government did not make them at all. In other industries I regret that the Government's failure to ideal with certain fundamental issues and underlying causes of malaise, which may seem to make Governmental assistance to other private industries inevitable. I think these remarks apply to both the shipping and the textile industry.
May I be a little more specific with an illustration? A Government supported by the noble Lord, in one of their most comprehensive Acts, secured complete control of the board and the whole of the equity when they took over the railways of this country. The cost I think, was of the order of £1,000 million. It is said that
"Those whom the gods would destroy they first make mad,"
and if ever there was an example of lack of business acumen it was to invest £1,000 million of the people's hard-earned savings in British Railways when they did so. It is now suggested by many of the same persuasion as the noble Lord who has introduced this Motion that this expenditure should be written off as a total loss. The noble Lord cannot be surprised, therefore, if many of us feel that neither an adequate measure of control, nor the acquisition of an interest in the equity, in return for more expenditure of the people's savings is a very good idea.
Of course, there are many industries in which to-day an investment may be considered extremely attractive. But as we were reminded, I think very wisely, by the noble Lord, Lord Amwell, yesterday, the industrial pattern changes, and in these days changes more rapidly than ever before. It must not be forgotten that half of those employed to-day in industry are employed in industries which were unknown 50 years ago; that

303
future change will be more rapid than it has been during the past 50 years. In such circumstances I submit that Governmental control is totally unsuited to cope with the sort of problem which has to be faced by industry. There is a field for Governmental action, and if I may I should like, before I sit down, to say a few words about this aspect of the problems we are discussing. But suffice it for me to say at the moment that Governmental policy on taxation, on depreciation and on a number of other matters which are rightly within the province of Government, has a vita] bearing upon the future and the position of industry.
The noble Lord, Lord Shepherd, yesterday, and a number of other noble Lords who sit on the same Benches on previous occasions, have tried to discredit proposals which I have made from time to time by hurling at me the words, "Laissez faire." They seem to think that, by so doing, any suggestions I have put forward are thereby relegated beyond the pale, unworthy of any consideration, or at any rate outmoded and out-dated. My Lords, I venture to suggest that the use of the words "laissez faire" almost as a term of abuse is likely to be a boomerang coming back on those who so misuse the words. The term "laissez faire, laissez passer", as noble Lords well know, has a very honourable origin and was coined by the champions of the cause of freedom in eighteenth century France, whose aim was not dissimilar from, although it was more comprehensive than, the professed ideas of those who are now setting up a Common Market in Europe. The choice, as one well-known living economist puts it, is not between a plan and no plan, as some noble Lords who have criticised me seem to think; but the question, "Whose planning?" Laissez faire, laissez passer is an appropriate motto in any struggle for freedom against Government omnipotence. As the same writer already quoted puts it, laissez faire means, "Let the common man choose and act; do not force him to yield to a dictator;" and I would add, "or to a number of little dictators".
My Lords, it is significant that the only agreement among the planners is that they reject what they term laissez faire, often with little idea of its real meaning.
304
But there are almost as many plans as planners. When it comes to action the planners disagree among themselves. This is not surprising, because no one has a monopoly of wisdom, and we get into much trouble because those who think they know better how to run other people's affairs take on more than they can manage. As I have said, the idea behind the coiners of the phrase laissez faire is by no means outmoded. There is a great deal of support around the world to-day for the idea of breaking down barriers, and even those who have been ardent restrictionists are having to admit that the breaking down of restrictions is bringing increased prosperity—the breaking down of restrictions imposed by Governments is bringing increased prosperity where it is being successful. I must apologise for taking up a few minutes of your Lordships' time in self-defence, but this issue is basic to the subject we are discussing to-day, as it was to yesterday's debate and to many another problem which in future will be coming before your Lordships' House.
After that somewhat deviationary interlude, may I say that, in principle, I would oppose any proposal which forces the citizen to put his money into something which he would not do if he were making an investment for himself. If this is done it calls for the clearest justification on the part of any Government who go in for such action. In many cases to-day money is being, promised to one industry after another without any attempt to put forward this justification. May we look at this matter a little more specifically? Should it not be abundantly clear that there is no case for advances to an industry which can raise the money itself? The Governor of the Bank of England has recently drawn attention to a state of affairs which he describes as "too much money chasing too few shares." In the prosperous state of the steel industry at the present time, should not the Government be taking the opportunity to dissociate themselves entirely within a short period of time from their investment in it, instead of increasing their investment in it?
In principle again, my Lords, I am opposed to the subsidisation of uneconomic enterprises, because such subsidisation delays the developing pattern of change; in the long run, aggravates the

305
difficulty of the industry, and increases the ultimate loss which falls upon the people who invest in that industry. I believe that the whole question of agricultural subsidies should be looked at again. They take a lot of Government money. In view of our commitments to existing farmers, which must be honoured, I should like to see considered a scheme to substitute some form of annuity payments for existing subsidies, followed by a return to production which would be justified on economic grounds without subsidy, more or less along the pattern prevailing in Denmark.
Again in principle, my Lords, there is probably a case for limited Government expenditure in the field of research—and this, I think, is where we come to the aircraft industry—but I consider that expenditure on research should be kept distinct from the subsidisation of a particular firm. The trouble is that the pace today is so fast, and the strain on Ministers is so great, that there is too little time for thought. A number of the problems of industry (and I am thinking particularly of the shipping and textile industries) are due to penal taxation over a long period and to inadequate depreciation allowances. This is a general problem in industry, particularly as changes take place so rapidly that no one can say which industry may be the next to suffer from a change of fashion. I therefore consider the whole problem of depreciation a general one rather than a matter for discrimination or for special allowances to individual enterprises.
I referred earlier to certain fields of study and exploration which properly can be considered the function of Government and which I think are being neglected. There is the whole question of discrimination—flag discrimination in shipping, subsidisation by Government, restrictions on ships that may carry goods, et cetera. Now some inter-governmental agreement seems to be called for on such matters. There are questions affecting British investment in many parts of the world which seem to make it desirable that rules should be agreed by intergovernmental convention to secure fair treatment, security and honest trading.
There are the operations of the World Bank, which I think deserve more study. It is not so much the lending of forced
306
savings extracted by over-taxation that is called for as some form of insurance against the political risks which deter the private investor. I have mentioned just a few of the problems which call for Government consideration. If they would turn their attention to some of these overriding problems, I think we should hear less about the necessity to indulge in the new interventions which they keep making into the affairs of private industry.
If these questions are impossible to discuss in prevailing conditions with all the countries of the world, surely they might be put on the agenda for the forthcoming Commonwealth Conference. It would be a fine achievement if, on some of them, we could get agreement among members of the Commonwealth, and then tried to extend the field of agreement reached among those who will be meeting in London in May. In fact, what we have to agree are the basic principles upon which the standard of living of the West, which is now the envy of less developed territories, has been built, and hope that others will apply them with equally beneficial results.
Once again I want to press a question which I put yesterday: where is the money coming from that is being offered to industry after industry? If what I was after was not understood yesterday, may I ask: will this expenditure appear below the line in the forthcoming financial statement with the Budget? What is the total expected to be? If so, how is this money to be raised? Is it to be by a new Governent issue, by long-term borrowing, or by short-term borrowing? What is in the mind of the Government? How much will the supply of money (which is one of the matters discussed and brought to our notice by the Radcliffe Committee as being very important) be affected by what the Government are doing? What steps are they proposing to take to avoid what may well start off a new inflationary trend? My Lords, these are desperately important questions affecting the lives and the security of all of us, and we are entitled to hear the Government's views, and to ask for assurances. From these Benches I should like to ask that information be given on these important matters and that that information be given in some detail.
3.48 p.m.
THE PAYMASTER GENERAL (LORD MILLS): My Lords, this Motion deals first with the amount of money—"the large sums of public money", it describes it—spent on Government assistance to industry; and, secondly, it states—not infers, but states—that this is done without an adequate measure of control or of public interest in the equity. I think the noble Lord, Lord Stonham, who introduced the Motion, was quite right in saying that it would be controversial. A good deal of what he says is controversial; and his criticisms were addressed to the Government's advances to private industry. In fact, listening to the noble Lord I had the feeling—and he probably meant it—that you have merely to nationalise an industry to make it an angelic thing, and if you keep it private it has motives which are not in the best public interest.
LORD STONHAM: My Lords, if the noble Lord will allow me to interrupt, may I say that it is probably my fault that he did not hear what I said, but I distinctly said that we do not believe that nationalisation is the only way. We de believe in a mixed economy, and Britain's economy is getting more mixed every day. We believe in investing public money in private industry, but we also believe then in controlling the four criteria which I very clearly explained.
LORD MILLS: My Lords, I fully accept that, but I do not think it alters what I said; and if the noble Lord would be good enough to study what I did say, I think he might agree. There have been, of course, enormous sums of money spent in helping industry, but perhaps the greater sums have been spent in respect of the nationalised industries—coal, electricity, gas and transport—both to meet the heavy capital expenditure with which they were confronted, and, I regret, in some cases, to meet deficits arising from failure to balance their accounts taking one year with another. I am not criticising the nationalised industries; I have had too much to do with them. On the whole, they do a very good job. It has been obvious for some time that the cheapest and best way of financing the nationalised industries is from the Exchequer.
308
So far as private industry is concerned, the Government have made it clear on many occasions that money should be found to finance private industry only in exceptional circumstances, and I think that it will be found that that has been the rule which has been followed. Why should these great sums of money be necessary both for nationalised industry and for certain private industries? I think we are all aware of two matters. One is that the great scientific and technological advances which have occurred in recent years have resulted in plants and equipment being more elaborate and much more costly; and the second is that at the same time the money available to industry has been reduced in purchasing power since before the war. The cost of a steel works to-day is reckoned at many tens of millions of pounds and the initial cost of an aircraft is many millions. So the demands on our capital resources have greatly increased over recent years.
These increased costs and the reduction in the purchasing power of the currency have affected the nationalised industries as well as private industry, but private industry, in general, has ploughed back its profits, has gone to the market and has itself financed the replacements of its assets and their expansion. The noble Lord, Lord Stonham, talked at some length and in a not very complimentary way about the steel industry, although perhaps the lack of compliment was directed against the Government rather than against the individual firms. I had much to do with the steel industry al the time it was decided to make advances to Richard Thomas and Baldwins and to Colville's. The noble Lord knows quite well why money had to be found by the Government and why they have not been able to dispose of their holdings as quickly as they would have liked to do. It was owing to the actions and attitude of the Party opposite.
I announced the decision to expand Colville's and Richard Thomas and Baldwins in your Lordships' House on November 18, 1958. This decision was the result of very careful consideration of the requirements of the country and of the economy of steel production, taking into account the need for Scotland to have a basic steel industry of

309
this kind (sheet steel) and the opportunities which might be afforded of attracting other industries to that country. The noble Lord said that he had nothing to quarrel with in that, but he did criticise the fact that money was being advanced to a private industry on a fixed-term arrangement. I think he has not got his facts right about the interest. The interest varies according to the rate at which the Government could borrow at the time the advance was made.
I am going to say this about Colville's. Colville's undertook a very grave risk. They were going to provide capacity for sheet steel and sheet steel products in front of the demand, and the Government supplied money which at that time the company could not get on the market, not merely to feed their business but to provide for that expansion. The Government thought it right, and think it right, in spite of what the noble Lord says, that that should be a charge on the business, the best charge the Government could secure, with interest, just as the company would have had to pay for a capital advance had it been able to raise the money on the market.
LORD AMWELL: My Lords, may I be allowed to ask a question? If it was a matter of demand, why not subsidise the consumers for a change?—for instance, from the point of view of purchase tax. Why is the consumer always left out of account?
LORD STONHAM: My Lords, as the noble Lord has been interrupted, I wonder whether he would mind my saying that the company had borrowed at 6 per cent. on debentures and has now borrowed at a much lower rate from the Government. It is not the market rate at which they are borrowing.
LORD MILLS: My Lords, if I may answer the question of the noble Lord, Lord Amwell, I would say that to subsidise the consumer would be no answer to this. There are all kinds of consumers. In the case of Colville's, some of the consumers are not yet in existence. And that is the answer to why the Government should give terms which reflect the rate at which they can borrow, because Colville's were undertaking grave risks. Colville's were accepting a charge on their business. The Government felt that they were fully secured
310
and that the greater risk was being taken by the firm. I consider that in the circumstances this was just normal finance.
Let us take the aircraft industry. I will come back to the noble Lord's question of criteria in due course. I was very struck with the noble Lord's illustrations of the aircraft industry. They were nearly all drawn from defence requirements. I do not think the noble Lord was quite fair in his references to the aircraft industry, because there is all the difference between a development contract and a situation which a company accepts in putting a new civil aircraft on the market. The great changes in the defence requirements owing to technical advances necessitated the making of plans to provide a measure of support for the aircraft industry. As the noble Lord has referred to what my right honourable friend the Minister of Aviation said in another place, perhaps there is no need for me to repeat it, except to say this. The Government intend to maintain a substantial programme of aeronautical research; they intend in certain cases to help to finance the putting into operation of new types of aircraft; and they intend in certain cases to contribute towards the development and tooling of these aircraft: in other words, they intend to contribute towards the initial costs of launching a new type.
The Government are of the opinion that the arrangements they propose to continue with the aircraft companies are best suited to the occasion. There is no guarantee of success in these types and, therefore, the Government, in my view quite rightly, are saying: "If this thing proves a seller, and you sell it, we will take a certain percentage of your sales in respect of our help." It must not be forgotten that the civil aircraft firms are taking big risks; the risks are rot confined to the Government. That seems to me to be a reasonable arrangement which should appeal to anyone. The manner in which these arrangements will be made will vary from firm to firm and in accordance with the project.
The noble Lord put forward the view that where public money goes public policy follows, and I would not dissent from that view. But as to what comprises public money, there I differ from the noble Lord. He referred to

311
maximum contribution, to full employment and to our balance of payments. I suggest that in any case where it is proposed by the Government to lend money to private industry that would be one of the first things to be looked at, and it would be looked at. I have already said that it is the Government's policy that money should be advanced to private industry only in exceptional circumstances, and high in those circumstances would be the desire to maintain or expand employment and to improve our export trade by reason of providing production which would not otherwise be there. It is not quite clear to me what the noble Lord had in mind in suggesting that the criterion for public assistance should be reasonable selling prices. So far as iron and steel is concerned, there is an Iron and Steel Board to fix maximum prices, and although the noble Lord may have his own view as to the nature of those prices, I prefer to accept the views of the Iron and Steel Board, which was put there for that purpose.
Then, so far as aircraft are concerned, there is constant contact between the aircraft manufacturer and civil airlines, and there is intense competition for aircraft. All these things should, and I am sure do, combine to keep a fair price. So I am a little at a loss to know what the noble Lord would do to ensure reasonable selling prices. I think the position is taken care of.
The noble Lord then suggested that there should be satisfactory terms of employment. But is a financial contract to provide money the right place to try to guarantee that? It is true that in all Government contracts for supplies there is a fair wages clause. That is necessary because supplies are secured in competition, and the Government have always wanted to ensure that no one would be tempted to cut conditions of employment in order to put in a low tender. I think that that is right and proper. But to-day, surely, there are plenty of checks, and rightly so, for employees for fair wages and conditions, without our finding it necessary in a plain financial contract to insert conditions of that kind.
I now come to what I think is the main point of the noble Lord's speech—namely, the suggestion that there should
312
be a return to the Treasury, in the form of a proportion of the earnings of the enterprise, appropriate to the Government's share in the risk capital employed. It is no part of the Government's policy to advance money repayable in the shape of equity capital. I have already explained that in the aircraft industry it has been the practice, and will continue to be the practice, for the Government to recoup their expenditure on the sale of aircraft. But this kind of financing is of a different order, where there is no certainty that the plans will result in success.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, could I ask about those aircraft prices, and perhaps the Minister will correct me if I am wrong? I seem to recollect that the money which was recouped from the Viscount aircraft arose from a practice of adding 10 per cent. to the normal price for selling, in order that the 10 per cent. might be paid to the Government. Surely, on any ordinary business basis it should be adjusted differently from that. If you want to get the trade expanded you should sell at nothing higher than the cost-plus-profit basis. You could share in the ordinary normal profit of the company.
LORD MILLS: You would also share in the losses—and there were very heavy losses made on some types of aircraft.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I assume, therefore, that my recollection of the practice is right. I would only add that if that is so, surely you are not going to get your markets; you are going to lose a good deal of your markets.
LORD MILLS: My Lords, I do not accept the noble Viscount's statement. There were taken into account the ordinary costs of the aircraft and the amount the Government had contributed; and then a figure was settled as to what should come back to the Government in respect of their contribution. Advances for expansion to normal ordinary businesses like the steel business are in a different category. The loan is expected to be repaid. There is every reason to expect it to be repaid with interest; and, meanwhile, there is a charge which can be exercised if that expectation should not be realised and in case there is any default in principal or interest.

313
I know the noble Lord opposite would like to see the matter dealt with on a different basis, presumably at the same time as we secured that the advances were as safe and as preferential as possible. He would like to see a share in the equity given to the Government, and Government representation on the board to have their say in the board-room regarding the way Government finance should be: spent. As a matter of fact, to go back to the Colville agreement, the way the money is to be spent is specified in the contract, and the directors of that company are under a liability to see that the money is spent in that way. I suggest that if the Government insist upon having the best of all worlds—security, preference, as well as some stake in the equity, and representation on the board—many projects which deserve Government assistance will never see the light of day.
It has been suggested, although not mentioned by the noble Lord, Lord Stonham, that the Board of Trade's financial inducements to build new factories where the Government want them raise these issues. I saw that one paper yesterday stated it in this way, that to help a particular industry, or to fertilise an area of high unemployment, may be a good use of public money; but it should have the same chances of capital appreciation and of earning dividends as private shareholders' money. Now is that a fair statement? In the particular type of transaction to which the paper was referring, the Government are supplying a property to be paid for after inducing or persuading a firm to go to an area of high unemployment. Why should the Government be concerned, except to see repayment of its outlay? Why should they have to wait upon the results of the business, and take over the responsibilities, including board representation, which would inevitably follow? I am afraid that there is the fundamental difference. The Government cannot escape the need, in certain cases, to advance money for expansion—and all these things are questions of expansion—and they think it right that they should take all steps open to them to see that their money is secure and repaid with interest. We do not accept the suggestion or the insistence of the noble Lord that the Government should start dealing in the equities of these
314
companies, including representation on the boards.
LORD STONHAM: My Lords, do I understand from that that the Government also disagree with, and will not repeat, the procedure under D.A.T.A.C., where in all sorts of industries they have appointed Government directors on the board?
LORD MILLS: My Lords, I think that that is a different matter. I was referring to the issue of large sums of money in special circumstances to provide for the expansion of industries which cannot be provided for in the normal way.
The noble Lord also suggested that it should be a condition of the contract to advance money that there should be terminal payments to employees who become redundant in industries which are the subject of Government advances. We all like to see fair arrangements made between a company and its employees, or between an industry and the trade unions, to take care of redundancy. But is this a suitable thing to write into a contract, the object of which is not to create redundancy but to prevent it? I suggest that that matter is adequately taken care of already.
The noble Lord stated that where public money goes public policy must follow. The object of supplying money to public industry and to private Industry is to serve in one form or another the public interest. It is not the Government's business to insist upon extraordinary conditions to satisfy someone's belief in nationalisation or anything else, making it difficult for a firm to accept public assistance in those cases where public assistance is designed to serve the national good.
4.20 p.m.
LORD WISE: My Lords, in breaking into this discussion at this point, I do so with some diffidence, but I want to deal with a problem which I think is covered by part of the reference in the Motion. I may be thought to be going off at a tangent when we are discussing heavy industries and others of a similar nature. In what I have to say this afternoon I do not expect an answer, but I want to put a point of view to the Government which I think may be worth consideration. I am sure that in what I have to say I shall take all noble Lords

315
who are interested in agriculture with me.
Among the vast sums of money paid out as national assistance by way of grants or loans to industry, that given to agriculture is so great that, as I said, it calls for attention and consideration in our discussion. I am not objecting to such a system in present circumstances, nor decrying it in any shape or form. The farming industry could not survive without it. Existing conditions make it imperative that Government help in full measure should be given to the industry. I want to stress my reference here to existing conditions, because if conditions were different than they are at the present time subsidies might not be necessary. I need not enlarge upon the difficulties, frustrations, disappointments and uncertainties of farming life and business. Without subsidies and grants the position might, by reason of high agricultural costs, be even worse than those we remember all too well in the period of the 1930s. Government help very materially lessens the strain. Such help is probably now as great as the national interest will allow.
In looking at the agricultural subsidy position, I want to discuss the question of some measure of control which might be beneficial to the industry. It can be argued that the allocation and operation of agricultural subsidies are not always along lines which can be approved without reserve or comment. In connection with agriculture there cannot be any question of the Government's securing a share in the equity. The industry is made up of thousands of individual and sometimes small units. There are approximately 300,000 farmers; the figure may be a trifle higher than that particular number.
In answer to a question in another place a few days ago, the Minister tabulated fourteen farming grants and subsidies and ten agricultural price guarantees. Payments under those for the present farming year, according to the Minister, will amount as follows: 14 farming grants and subsidies, £94·6 million; 10 implementation of agricultural price guarantees, £157·8 million that is, a total of £252·4 million. In addition, the administration overheads in this connection amount to £5·5 million, making that total practically £258
316
million. There are small payments to Northern Ireland which I do not propose to deal with. Last year the figure was £241·4 million. The individual figures differ from year to year, but this year will show an increase of approximately £18 million. As agriculturists, we cannot complain; as taxpayers, we might do so. The figures show the measure of national generosity to the industry. Their significance, as bearing upon our prosperity, and their importance to us will be apparent when I give further figures.
We welcome their assistance and appreciate the vital impact which they make upon our livelihoods, but we should also be concerned that their operation is correct, above suspicion, and that Government assistance goes to the primary producers for whom it is intended, and not into other channels. I mentioned these figures in a recent discussion. They were of interest both in your Lordships' House and outside. I have amended them in the light of present circumstances. According to the forecast in the last Annual Review, the farming profit for 1958–59 was estimated to be £327 million. The prosperity this year may have increased, so for my purposes I shall add another 10 per cent.—that is, £33 million—making a total of £360 million. Perhaps I have been a little generous in my 10 per cent. allowance, because it is well known that 5 per cent. was the limit in an award or gesture last week, and I believe the National Union of Agricultural Workers' members received only 2» per cent. increase, or thereabouts. That total is £360 million, and of that total subsidies, without capital grants, amount to £240 million—that is, for the sake of information, £252 million less about £12 million. Your Lordships will see, therefore, that the subsidy portion of our profits is in the region of two-thirds.
Subsidies bring the average profit of farmers to possibly a figure round about £1,000. A small farmer, with subsidies, would probably make no more than about £400; some would be less, and some would actually show losses. It will thus be seen that without subsidies, after allowing for the personal allowance, earned income relief and children's allowances in some cases, the income tax payment of the agricultural industry would be negligible. But, of course, it must be

317
realised that part of the subsidies paid by the Government in fact come back to the Revenue by way of taxation.
Having dealt with the impact of subsidies upon farm income and prosperity, I want now to touch upon the consumers' interest and some absence of control by the Government. Let me first of all deal with fertilisers. The question of fertilisers is topical news and is somewhat startling. According to the figures given, I believe by the Minister last week, the amount of subsidies in regard to general fertilisers is £29 million. Last year it was £25·8 million. The lime subsidy is £11 million, making a total of £40 million, as against a total last year of £35 million. Therefore, your Lordships will see that the fertiliser subsidy is a very high part of our general subsidies.
If one thing emerged from the Monopolies Commission Report, apart from the excessive profits which had been charged against the industry, it would seem that there has been a complete absence of Government control of prices in the interests of the consumers—the consumers in this instance being the farmers. That is the situation that I want to see put right in the future. We can gain by the experience of the past. I believe from what I have read of the proceedings in another place that, after the matter has been considered, the Minister is proposing to take up with the industry this question of fertiliser prices. I hope that his conclusions will lead eventualy to control of cost, and so benefit the farming industry.
On the question of costs of fertilizers, the cost to farmers rose from £59½ million in 1951–52 to £93½ million in 1957–58, and if I am right in thinking that the subsidy is to be deducted from those figures, it will be seen that about one-third of the cost was reimbursed by the subsidy to the industry. I understand that the fertiliser subsidy is calculated on the basis of the analysis of the fertiliser, the percentage payment fluctuating according to the month of delivery. The price of the commodity apparently does not influence the amount of the subsidy, but the higher the cost to the farmer the lower his farming profits fall and the merchant or manufacturer gains at the expense of the consumer. Sometimes I have a feeling that the receipt of subsidies and grants by
318
farmers may lead to the imposition of higher prices upon them for commodities which they may have to buy. They may be thought by the manufacturers or merchants to be "fair game". Agricultural subsidies are for the benefit of producers, to sustain efficient production, and also in some respects for the benefit of the consumers; but on no account should they be considered as pickings for other industrialists and merchants.
Now I want to call attention to the cost to the farmers (this afternoon I am dealing mainly with the question of the control of costs) of implements and machinery, and also feeding-stuffs. Here, I hope that what I have to say will lead to some sort of investigation by the Government as to whether the costs which we bear show legitimate and reasonable profits to the suppliers. The cost of implements and machinery rose from £127½ million in 1951–52 to £212 million in 1957–58—an increase of about 70 per cent. The cost of feeding-stuffs rose in the same period from £180 million to £328 million. That is roughly a 70 to 75 per cent. increase. The latter rise is significant, because it occurred at a time when the Minister was pressing farmers to make particular use of their own products; and his advice was taken. Both these items could well be officially investigated to our advantage. According to my information, the costs of feeding-stuffs have nearly doubled in that period, but I have not noticed that the prices paid by the merchants for our home-grown cereals have risen proportionately during the same time. Here again, by reason of heavy deficiency payments paid by the Government to offset the low price received by the producer, the farmer may again have been considered as fair game for exploitation.
In conclusion, should like to say just a few words about stock deficiency payments. The noble Earl will know that I have repeatedly, on other occasions, expresed my view about this particular item. The sum of £50 million which is paid in deficiency payments for livestock is a large sum for the Government to pay out without effective and adequate control over whose pockets the money goes into. I believe I am Tight in saying that generally, when fat or special weight stock is sold on a dead-weight basis, the deficiency payment, if any, is collected from the

319
Government by the purchaser and is not paid direct to the producer. The prices in this class of stock are generally fixed prior to a knowledge of what the deficiency payment will be for that particular week, and an estimate by the purchaser is included in the price he offers. This may react against the interests of a producer who is unable, as many small producers are, to sustain weekly sales of stock. The big farmer may not lose—in fact, he may be about right on balance, owing to the fact that he is able to send stock in week by week. As I have said, the farmer may lose and the purchaser gain, as he will, in effect, retain deficiency payments to which the producer should be entitled. In my view this is unsatisfactory. I have heard it said that the amount so retained is very considerable. I do not abject to sales on a dead-weight basis, provided that the purchaser pays the price for what he receives from the producer and does not include do that price a figure for something else which legally is due to the producer and not to the purchaser.
I want for a moment to come back to the question of the administrative expenses. According to the figures I have given, they amount this year to £5½ million. I suggest that by reorganisation, the whole of the subsidies, or deficiency payments, could be paid direct to the producers. An amount of £51 million for administrative costs seems to me to be on the high side, and it might well be that by some reorganisation, in the offices or otherwise, the deficiency payments, instead of being paid in bulk to the large producers, could be paid as other payments are made—direct to the producer. In regard to livestock auctions, week by week, the guaranteed price payments are paid direct to the farmer.
When we make grants for various items of capital improvement we should follow up to see that the nation is still getting value for money after that money has been handed over. There should be further departmental interest shown in that transaction after the cheque has been sent and the book entry ruled off. The national interest in that land, or farm, should not cease from that moment, and I trust that that is not so
320
in those cases I have mentioned. I hope I have stated a case for agriculture which will warrant consideration by Her Majesty's Government. As I said at the commencement of my speech, I do not expect an answer this afternoon, but I should like to feel that in view of what has happened during the last week in one section of our industry, Her Majesty's Government might well think it worthy of further consideration. In conclusion, I want to suggest to Her Majesty's Government that our costs should not rise out of proportion to our receipts.
4.43 p.m.
LORD MCCORQUODALE OF NEWTON: My Lords, I think we should all be grateful to the noble Lord, Lord Stonham, and the noble Viscount, Lord Alexander of Hillsborough, who first put down this Motion, which was taken over by the noble Lord, Lord Stonham. It comes at a very apposite time—shortly before the Budget—and focuses the attention of the House on the possible trend of Government policy towards some participation in private industry which gives some of us much food for thought.
I do not wish to deal at length with the speech of the noble Lord, Lord Stonham, and I imagine that he will not expect me to do so, in view of the massive reply he received from the noble Lord the Minister. But I would say, in passing, that he seemed, in his frequent references to equity and equity advantages, to forget entirely that something like half the gross profits of our private industry go immediately to the State in taxation. In that way, the State already has a half-share in the total profits of the industry—not in the dividends paid out, as they would if they had put up their own money but in the total profits of profitable industry—and therefore gain immeasurably when industry is profitable, and do not suffer the losses which they would otherwise suffer when losses are incurred in certain sections of industry.
No doubt in this connection the noble Lord, Lord Stonham, will remember that some years ago there was a tale about ground-nuts which some of us have not forgotten. I found myself in very considerable agreement with the noble Lord, Lord Grantchester, in what he said. I am sorry that he is not here

321
now, as I should have liked to take up one or two points with him. I hope that the noble Lord, Lord Wise, will forgive me if I do not comment upon agriculture, a subject on which I confess I am woefully ignorant.
We had a somewhat spirited debate here last summer when some of us tried to obtain from noble Lords opposite—Her Majesty's Opposition—a statement as to where they stood on the whole matter of nationalisation and public ownership and public control of industry. We had what we thought were some pertinent questions to ask from this side of the House, and a lively debate ensued. But I think, somewhat naturally, because there was an Election in the offing, we failed to draw noble Lords opposite in the way we had hoped. Perhaps I might refer for a moment or two to that debate. Some of us tried to point out that in our view all the political portents of the time pointed in one way. Gallup Polls, "quizzes" and canvassing all showed, I believe, that the general public, having tried nationalisation and public ownership, had decided they did not like it. They tack a poor view, we ventured to suggest, of nationalisation up to date, and certainly did not wish to see it extended. And so, as we all know, it turned out to be when the General Election took place.
It would not be appropriate for me (and I have no wish) to enter into the "agonising reappraisal" (if I may use Mr. Dulles' own words) which is apparently publicly going on in the Labour Party to-day on this matter. But it seems to me, from my point of view, that if we have public ownership—or "public control", as it is now euphemistically called—the real point at issue is where power lies. We on this side of the House do not wish to see all the power resting in Whitehall. I think it is worth remembering in this connection that the wind of change is blowing all through Western Europe in the consideration of these matters. The so-called Social Democrat parties on the Continent are turning away, and in many cases have already turned away, from the old severe doctrine of public ownership of the means of production, distribution and control—a famous phrase—towards a doctrine of public control where the public interest demands at least, that is the way in which I believe it is usually defined.
322
Well, who is to define where the public interest demands except the Government of the day? And that places control right back again in Whitehall.
I would, if I may, take up a minute or two of the time of the House in commenting upon this revisionist feeling, this revisionist wind, that is blowing across Western Europe. I was very much interested in an excellent article by Mr. Crosland, in a paper called Encounter for March of this year. He summarised, most usefully I thought, what is happening to Left Wing thought in Europe in this matter. In Holland, the Dutch Labour Party have publicly said that public control must be exercised over privately owned undertakings in industry if this should be proved to be necessary in the interests of the community. The Swedish Social Democrat Party Prime Minister is preparing a new draft for his Party in which he says that social democracy supports the demand for public ownership or public control to the extent that is necessary to safeguard important public interests—the same thing, in another phrase. The Swiss Social Democrat Party says that monopolistic enterprises must be dealt with either by establishing the conditions necessary for fair competition or by placing them under public control. It is the same in Germany; and it is interesting that the Labour Parties in Australia and Canada seem to be going in the same way, with the emphasis on public control and not on public ownership.
We have heard some of that to-day from the noble Lord, Lord Stonham, when he advocated further incursions of public funds into private industry, whether by subsidy or otherwise, with a measure of public control over industry. I am myself, however, wholly persuaded that the results of private enterprise, competitive enterprise, are, both morally and materially, vastly superior to public ownership or public control in industry. Materially, we see the advantages quite plainly. The country needs no reminding of that. Morally, I would say that competitive private enterprise demands the virtues of self-reliance; of private thrift and private saving; of hard work and courageous forward planning and risk-taking. But if those who work in so-called private enterprise can confidently look to the taxpayer for subsidies to

323
protect them from their own mistakes or misfortunes, then the virtues disappear; the self-reliance disappears; the thrift and the hard work are no longer necessary. I would agree with the noble Lord opposite and with the Minister that if subsidies became widespread (which, Heaven forbid!) the demand would be made—and it would be difficult to oppose it—for some form of public control over those firms where the subsidies were placed. We should then be drifting back to the doctrines of public control which are now sweeping across Left Wing Parties in Europe—public control of industry, which I assert is bad, and which those of us who believe in private enterprise (and we are in the great majority in this country) emphatically rejected at the last Election.
What is the position to-day? Have we already cause for alarm at the possible direction public affairs are taking? The Times gave us on February 16 an admirable chart, which I have here, in the form of a diagram. "Possible Government Aid to Industry over £200m." is the heading. The sub-headings are: Motor Cars, Steel, Shipping, Cotton and Aircraft. I do not wish to go through the whole statement. It says at the bottom:
"It will be seen that the main purposes are (a) to divert private firms' new developments to areas of high unemployment, (b) to provide funds not otherwise available, and (c) to ease the concentration problems of the aircraft and cotton industries."
The figure given is over £200 million. It is obvious that the problem is of major importance, and that is why I am grateful to the noble Lord who raised it.
LORD STONHAM: My Lords, would the noble Lord allow me to interrupt? He just mentioned The Times. Is he aware that The Times to-day described the Government's policy, in, I think, the third leader, as "bullying and bribery"?
LORD MCCORQUODALE OF NEWTON: My Lords, I am afraid that I have not read The Times quite so fully as the noble Lord opposite, but I have lead one article in The Times to-day to which I am going to refer in a moment.
We had a most interesting discussion yesterday, and noble Lords in all parts of the House were agreed that it was right and proper to endeavour to put industry into those parts of the country
324
where people were already waiting for employment. To that extent some inducements are necessary. I was much interested in the suggestion made by the noble Lord, Lord Grantchester, that possibly the inducements offered would be much better if given by way of depreciation allowances rather than by public loans. I think that that suggestion is well worth exploring. Under the heading of "Shipping", The Times has a long leading article which sets out the position so clearly that I would not wish to comment on it. When we come to the cotton industry I think there is nobody who has studied this question who would to-day say that, in the light of subsequent events, we should now do what we did three years ago. The change in the cotton industry, and the position of Lancashire and the yarn position in general, is so great that undoubtedly there would be a different conception of things to-day than there was then; and I go no further. The aircraft industry has been dealt with very closely by the noble Lord, Lord Mills, and I do not wish to add anything to it.
It is obvious that this whole question is large and needs threshing out; and those of us who believe in private enterprise will wish to assert, I think, that subsidies or the provision of public funds for private industry are inherently bad. Circumstances do arise, as we have seen, when it may reasonably be argued that, in certain cases, more good than harm may come by public intervention in private industry. Therefore I am in full agreement that we cannot lay down any hard-and-fast rule in this matter. But I would say to noble Lords that I believe the dangers inherent in any system which can be loosely described as subsidising—loans, gifts, grants, what-have-you—are so great, or tend to become so great if unwisely handled, that we must urge the Government to take the utmost care to ensure that the use of public funds in this way is made only in exceptional circumstances.
4.56 p.m.
LORD SHEPHERD: My Lords, I believe that this afternoon my noble friend Lord Stonham made a damning indictment of Government actions in the methods of granting aid to industry. The noble Lord laid his case with cogent arguments. There were no sweeping statements; each point was carefully

325
made, fully backed and supported by evidence. I thought it was one of the most remarkable performances that I have had the privilege of listening to in this House. I suppose my noble friend would have regarded this Motion as the first attack that noble Lords on this side of the House have made upon the Government since its return at the last General Election. I hope the attack will continue, and that it will be penetrating and persistent. I did not come prepared to speak on nationalisation—my noble friend avoided it—but as the noble Lord, Lord McCorquodale of Newton, has raised it, I do not propose to avoid it.
The Tory Party at the last Election made one of their main attacks upon the British Labour Party because of their support of the theory of nationalisation or, as some of us prefer to call it, public common ownership. The Tory Party during the Election, I thought, made many wild attacks upon the nationalised industries. In many respects I thought they were completely reckless. They had no regard to the morale of management and the workers of the nationalised industries. I thought also that they were reckless in regard to the accuracy of their charges. They singled out for abuse the coal industry and the railways. They never mentioned the other nationalised industries. There is atomic energy, which has made us, I am sure the House will agree, the leading atomic Power in the world to-day. Atomic energy is a nationalised industry. There are electricity and gas. We heard the evidence of the growth of those industries from my noble friend Lord Stonham. We have the records of the British Overseas Airways Corporation and of the British European Airways, and of their pioneer work in the field of British aircraft. And when the Conservative Party was lauding the wonderful performance of free enterprise in steel, did they ever mention the name of Richard Thomas and Baldwins, a wholly-owned State company in the steel industry? I will deal with that company later.
My noble friend, when speaking of the steel industry, did not draw the attention of the House to the past difficulties of this industry. It had difficulties in 1930–31, when the Government came to the aid of the industry (admittedly, on to-day's values, in a modest way), and again in the days of 1938–39, when the
326
existing steel industry was unable to meet the requirements of the rearmament programme. Then, again, the State had to provide aid for its development. At the Election, the Conservative Party, supported by the steel industry itself and by the Institute of Directors, led the public to believe that this industry was completely free; that it stood on its own resources. As my noble friend Lord Stonham has told the House, approximately £240 million of State money is now invested in the steel industry: £92 million is invested in wholly-owned companies within the steel industry, and the balance is invested in one form of loan to the private companies. In this loan we do not share in the equity; we earn the minimum of interest; we fail to share in the capital appreciation of the industry; and I suppose one could say that, if inflation continues as it is at present—slowly now, but previously high—the loan that we have made in the past will be of less value than it was when we put it in.
LORD MCCORQUODALE OF NEWTON: My Lords, I wonder if the noble Lord would allow me to interrupt him for one moment. It seems to me that he has made a remark which is of some importance and should be elucidated. He talks about the State taking advantage of the advance in the value of the equity of the industry. The only way the State can take advantage, of course, is by selling, by jobbing the market, by speculating in stocks and shares. Is he wishing that the State should take part in buying and selling in the hope of capital gain? If the State wishes to stay in the industry, the advantage is in the income tax. I am sure he really does not wish to advance the position that he is now taking up, that the State should take part in speculation on the Stock Exchange.
LORD SHEPHERD: I thank the noble Lord for elucidating that point. I should certainly never dream of suggesting that the Government should go on the Stock Exchange and take part in the buying and selling of shares. You gain in value with the capital appreciation of the company; but by having the equity, as I can show later with some figures, you will earn a greater percentage for the taxpayer than by having it on a fixed interest.

327
Now, my Lords, in another place there is a Bill to increase the sum of State aid to the steel industry by £120 million. I think I should again emphasise, as did my noble friend Lord Stonham, that we have no objection to giving aid, but what we want to know and to be satisfied about is that the return to the taxpayer will be at least comparable to the income and the interest of the private investor. I should like to quote some figures, because in his speech the noble Lord, Lord Mills, mentioned the difficulty steel companies had in obtaining loans in the normal market. He maintained that it was difficult because of the attitude of my Party. My Lords, my Party was defeated in October. This is February, and the Bill was introduced in February. The noble Lord said that money was short. I wonder whether the noble Lord can remember that only a few weeks ago the Governor of the Bank of England expressed serious disquiet at the lack of first-class equities in which the smaller shareholders could invest their money. There are vast sums of money that are being invested and which I am certain would have gone into the steel industry, because the profits that arise if the money goes in as equity are quite considerable.
Surely the key really lies in this: that Colville's will be borrowing at approximately, we estimate, 4 per cent. We have no definite figure, and we can only estimate it, because we have been told it will be based on the rate at which the Government can borrow, but we estimate that they will pay approximately 4 per cent. Can any noble Lord believe that if Colville's went to the City of London and tried to borrow money at 4 per cent. they would be successful? And what difference does it make to Colville's? It must surely mean that, by borrowing from the Government, they are saving at least a million pounds in interest. So, my Lords, I do not think that the case of the noble Lord, Lord Mills, stands any investigation. The noble Lord then said that Colville's were taking a calculated risk in opening this new strip plant. My Lords, there is every evidence that strip steel is in grave short supply to-day. I believe that some motor car companies are curtailing production because of the shortage of strip steel. It may well have been a calculated
328
risk, but it was a very good risk, particularly when you are going to borrow at 4 per cent.
Now I should like to say something about these companies—I have four in mind—in the steel industry, and their attractiveness to the market. Let us take Colville's. The figures I have here come from one of the leading stockbrokers in London. The pre-nationalisation price for Colville's shares was 38s. for a 20s. share. The price at denationalisation—that is, the price at which the privileged or the lucky paid for their shares in that company—was 26s., and the price to-day (the price I have been given is a little lower than that quoted by my noble friend Lord Stonham) is 74s. When we realise that Colville's have only £10 million equity private money and £14 million of Government loans, is it any wonder that this company can make this profit and bring this big capital gain? Any company that has the resources the Government are prepared to give must, with good management, make a profit.
Let me take the Steel Company of Wales. The price of their shares before nationalisation was 25s.; the price at denationalisation was 20s., and to-day's price is 47s. That company has £40 million capital and it has received aid to the amount of £105 million, and I understand that the rate at which it borrowed at that time was 5½ per cent., due to the high bank rate of two years ago. I would not criticise the steel industry as being inefficient. They had a market open for their commodity and they have taken advantage of the demand for steel. They have had Government aid at low rates and they have reaped the benefit.
I must now turn to the firm of Richard Thomas and Baldwins. The noble Earl who is going to reply will know that this company is a wholly State-owned company. It is a company that is efficiently managed and has made remarkable progress. Last year, it carried out developments out of its own resources to the amount of £9 million, and increased its profits by £2 million—a fact which will please noble Lords opposite. I believe that it is now accepted on all sides that we shall have a form of mixed economy. Why is it, then, that the Government have made a declared policy statement that this company is to be

329
sold? There is absolutely no justification whatsoever. This company is efficiently managed. It has had the resources of the taxpayers. Then why should the taxpayers be denied the benefits of their own State company? I think that before we adjourn to-night the noble Earl who is to reply should give us a proper answer to that question.
The House will remember the firm of S. G. Brown & Co., the gyroscope manufacturers. This company was so inefficient that it was unable to provide the equipment that the Navy required in the heat of the war, and the situation was so desperate that the Government nationalised it. Through efficient management, it was turned into a satisfactory, profit-making company. A year ago the Government declared their intention to sell this company. Why? It was efficient, it was earning money for the taxpayer—but it must be sold. The only reason we were able to get from the Government was that the Admiralty did not want to be bothered with it. But the Admiralty never carried out any part of the everyday control of the company. Your Lordships' House should insist that the Government give a valid answer as to why this company should be handed back—I will not say to speculators, but to the men who can anticipate the cream.
I should like to turn to the cotton industry, again one to which the noble Lord, Lord McCorquodale of Newton, referred. Government aid to this industry, I think he will agree, fell into two parts. One was the Government's severe pressure on Hong Kong, India and Pakistan to restrict their exports to this country. This has created a degree of hardship, particularly in Hong Kong. The Government have even incited America to take similar action. This is not the occasion to debate the matter, but it should be put on record that Government aid is not only in money; it is also by political pressure.
Governmental financial aid came in a Bill which the noble Earl, Lord Dundee, presented to your Lordships' House, by which approximately £30 million was to be doled out (I use the words deliberately) to the Lancashire cotton industry. But when we asked the noble Earl, as we did from this Despatch Box, what type of industry would be left—would it be efficient; would it be economic; would
330
it be competitive?—he naturally could not give us an answer, because the industry itself did not have the answer. But we know that, from the reception of that aid, the prices of shares of cotton companies moved steeply. The shares of Amalgamated Cotton on June 2, before the Government announcement was made, were 11 s. 9d.; to-day, the price is 23s. 7d. On June 2, Lancashire Cotton was 48s.; to-day, it is 62s. 6d. On June 2, English Sewing Cotton was 31s.; to-day, it is 50s. How the Lancashire cotton companies have taken the cream following Government aid!
THE EARL OF WOOLTON: It is very difficult to sit and listen to this. I wonder whether the noble Lord is referring to the Lancashire cotton industry, of which I have some knowledge, or to the Stock Exchange. The two things had perhaps better be separated.
LORD SHEPHERD: I was coming to the industry itself.
THE EARL OF WOOLTON: I wondered what was the point of the noble Lord's previous observations. I was hoping that he was going to talk about the industry. But he has not been doing so, and, if I may say so respectfully, what he is saying strikes me as little other than abuse of the Lancashire cotton industry.
LORD SHEPHERD: I suggest that the noble Earl reads the Motion before us, because what I am saying is most relevant. I am trying to show that, because of Government aid, the capital appreciation in which the country has not participated has been considerable.
I will put this point to the noble Earl. I think he will remember that, prior to the Government's promise of aid to the industry, for many qualities of grey cloth in Lancashire the price was fractionally the same as the c.i.f. Hong Kong price. I can tell the noble Earl that to-day, instead of Lancashire being equally competitive with Hong Kong, there is now a gap of at least 4d. to 6d. a yard. We do not know what will be the final result in the industry of the aid the Government have given. We have had the Spinners Order, which is now in the process of being worked out, and we have the Weavers Order. But we are still awaiting the Order regarding the printing and finishing section. My information is that that particular section of the industry cannot agree on what is to be

331
done. I am not being abusive. I have to sell many of the products of Lancashire. I want to see Lancashire as competitive as Germany, and possibly as competitive as Japan. But I do not believe that Lancashire has taken advantage of the aid that the Government have given. The cream lies in the figures I quoted.
THE EARL OF WOOLTON: The Stock Exchange figures.
LORD SHEPHERD: Yes, the Stock Exchange figures.
As I see it, the Motion that my noble friend has put before the House falls into two parts. The first calls for a share in the equity. I can see absolutely no reason why public money, put in at the request of industry itself—and I make this point, as my noble friend Lord Stonham made it—should not go in on the same basis as money that is put in by the Prudential or any of the other big insurance companies, or by any of the trust companies that are now flourishing in the City of London. In that way we should gain capital appreciation, and we should have a real part, though not necessarily a dominating part, in control—and I am certain that my noble friends on this side do not want to go in and dictate to the men on the board of any steel industry who have taken our money on the everyday working and policy decisions. All we want is that the public should enjoy the same rights, the same privileges, and the same return as the private shareholder. In the matter of control, we should not use our share of the equity in any company to obtain outright control. Although it might be beneficial in some cases, I think it would be injurious in many others. I think that what we have to decide to-night is what is right and what is just to the taxpayer. It is the taxpayer who is providing this money. Why, therefore, should he not enjoy some of the cream that comes from industry?
THE MARQUESS OF SALISBURY: May I ask the noble Lord where the taxpayer gets his_ money from? He gets it from productive industry.
LORD SHEPHERD: The taxpayer, if it is a company, gains by its own production. In the case of the man who works in the factory or goes around the
332
world as an executive, he pays taxes on his income and he is contributing to the common weal.
THE MARQUESS OF SALISBURY: I do not want (to interrupt the noble Lord, but I feel that he starts too late in the argument. All wealh comes from productive industry ultimately. Both the man who works in the works and the shareholder in the firm get their money from profits of productive industry: and to that extent all wealth comes from productive industry. Subsidies which are given back by the Government are, to a certain extent, a repayment to firms which have been too heavily mulcted in taxation. I will not go on, because I do not want to make a speech. But I should like to tackle the noble Lord on this point at some time or other, because it is a fallacy of the Party of noble Lords opposite to think that public money comes from some source other than from productive industry.
LORD SHEPHERD: I will accept the offer of the noble Marquess to discuss this matter at another time. Obviously, if we have an argument across the Floor of the House now we shall delay the House, and I do not think that would be appreciated by other noble Lords.
5.28 p.m.
LORD SINCLAIR OF CLEEVE: My Lords, I think it is true to say that the essence of the Motion which is before your Lordships' House is whether, by way of grant or loan or in any other form, Government assistance should, so to speak, not be made, if it is a large amount, unless accompanied by some measure of control and/or an equity interest. That, I think, is a difficult proposition to establish. The noble Lord who introduced the Motion stated four criteria, of which I took note, which might be the conditions under which the qualification for assistance might be granted. He grouped these criteria under what I may call the umbrella of the proposition which says that where public money goes public policy must follow. I have been pondering over this proposition in the course of the afternoon, and, if I may say so without the least disrespect, it seems to me to be an analogy to the age-old priority problem of the chicken and the egg; in fact, I think I can see circumstances where the converse would be just as true. As regards the fourth criterion which the

333
noble Lord postulated, which was that the Treasury should receive a share of profits appropriate to its proportion of the risk capital involved, I would see no difficulty whatever in satisfying that condition, because I would (as I hope to show) see considerable arguments against the Government taking an equity interest in these problems.
This is a many-sided question, and I will not attempt to comment on the position of grants to a wide variety of industry. I have not sufficient knowledge to make such comments usefully. I would agree very much with what my noble friend Lord McCorquodale of Newton said in reference to the broad question, namely, that such grants or loans which are becoming considerable in amount should be made only in exceptional circumstances.
I will, if I may, address myself in the main to the economic arguments regarding action under the Local Employment Bill, but without the kind of strings suggested in the Motion, and, secondly, to some of the points of principle involved in the proposition that there should be some measure of Government control, or a Government-owned share in the equity in any case where large sums are advanced by way of assistance to industry. But since, however, the terms of the Motion cover all forms of assistance to industry, I will ask your Lordships' indulgence if I refer quite briefly to a kind of assistance which has not yet been mentioned this afternoon. It is small in amount, but I believe it to be considerable in value. I refer to the assistance to such bodies as the Dollar Exports Council the British Productivity Council, the Council of Industrial Design and the British Standards Institute.
In the early days the Dollar Exports Board and the Dollar Exports Council were both admirably led by Sir Cecil Weir, and the latter body, of course, still flourishes under the dynamic chairmanship of the noble Lord, Lord Rootes. The Anglo-American Productivity Council initiated those extremely useful interchanges by management and workmen in industries with their opposite numbers in North America, and thereby gave to industry in this country a great benefit through obtaining detailed knowledge of production systems and methods, techniques
334
and technological developments; and, by widening experience and stimulating a more critical analysis of our own methods, thereby improving our competitive power. As regards dollar exports, it would, of course, be ridiculous to claim that the Dollar Exports Council is responsible for the gratifying increase in our dollar exports, but it is no exaggeration to say that that body has had a great influence in guiding and aiding in a variety of ways, and in occasionally smoothing the path for individual firms by whose own efforts those results have been secured. In none of those cases, of course, is there any question of Government control. In most of them a considerable degree of finance is provided by private industry, but they are grant aided. The total amount of grant in all these four cases is comparatively small, but the work which collectively these bodies do is, I believe, of great value to industry and to the country.
To turn to the two main aspects to which I earlier referred, the Local Employment Bill, which was debated in your Lordships' House yesterday, found a good deal of acceptance and sympathy with its objects. I would be one of those who welcome it, particularly as an indication that the Government were taking a new look at this problem, and I would hope that a real effort would be made to ensure efficient and, as far as possible, simpler administration. The economic corollary to the checking of rampant inflation has been, and to some extent always will be, less than full employment in certain areas. No one will deny that the general economic position of the country is to-day much sounder than it was three years ago—indeed, probably stronger than at any time since the war. Yet no one can be satisfied that there should continue to be areas where, in these times, an appreciable proportion of the working population is persistently unemployed.
As I see it, there are two ways of remedying this situation. The first which can be only temporarily successful, and very soon will be disastrous, is to endeavour to stimulate demand to a point where there is no unemployment anywhere. The other way is by ad hoc measures such as can be taken under the Local Employment Bill, to spend sizeable sums of money in helping, one

335
might say artificially helping, to provide jobs in areas where, for one reason or another, labour is relatively plentiful. But to be effective, action under this Bill must include some relatively large transfers of work. Here may I observe how fortunate it is that to a considerable extent useful action under the Bill can be taken by steering expansion to these areas rather than by relying wholly on diversification per se.
As regards the return for the assistance that the Government may give under the Bill, ex hypothesi if there is an established case for assistance, the siting of the expansion in the development areas is not of itself going to increase the profits; so that, apart from the interest on the capital provided, the real return lies in the contribution to the general economic health of the country and in the reduction of demoralisation and expense associated with persistent unemployment. There is, surely, nothing wrong in a company which is prepared to fall in with Government policy to the extent of undertaking an expansion in a development area, while its own convenience and probably its own more immediate considerations of profit dictate an expansion nearer home, being, where necessary, assisted; but if the assistance takes the form of a loan, the terms and conditions of which are negotiated between the firm and the Government, it is, I think, a mistake to superimpose other conditions tantamount to a measure of control.
I have seen nothing to justify the belief—I am afraid I am going to be controversial here—in the proposition that Government control increases the efficiency of industry. Indeed, there has been a wealth of experience to the contrary. But I will not weary your Lordships with a repetition of arguments against nationalisation in general, or against the general proposition of large-scale acquisition of equities by Government in order to participate, otherwise than through taxation, in industrial prosperity, with, of course, the corollary of participating in losses when times are not so good.
Perhaps I might now refer to the points made by the noble Lord, Lord Shepherd, when alluding to the appreciation in market values of the shares of so many companies in industries to
336
which, in greater or less degree, some assistance had been given. The figures he quoted of Stock Exchange prices have nothing to do with the case, other than that they are a reflection of improved earnings for one reason or another; and, as the noble Lord, Lord McCorquodale of Newton, pointed out, the Government receive their share of those improved earnings through taxation and not through dividends.
On the question of Government assistance in cases of the kind we have been considering this afternoon, I would unhesitatingly say that in principle it is wrong that that assistance should take the form of an equity interest rather than a loan. It could be the thin end of a very dangerous wedge. The Government ought not to, and indeed in practice cannot, efficiently exercise control over a wide variety of industries. I know that it has been said on the other side this afternoon that "What we are thinking of is not really control so much as looking after, and an equity interest without any control." But, my Lords, there really is no half-way house between control and influence on, and therefore to a greater or less degree interference with, management—in effect usurping some of the functions of management.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am most interested in this argument and one always values the arguments in business matters of the noble Lord. I am very interested in this question of how far one can go in exercising efficient control in a big organisation. Is not the whole tendency now towards concentration of still larger and larger groups, take-over bids leading to that result as well? We find a man who is chairman of as many as forty companies, all carrying heavy labour and industrial responsibilities. What sort of control does he exercise in relation to what could be done by the Government?
LORD SINCLAIR OF CLEEVE: My Lords, I cannot speak from personal experience of the position the noble Viscount last referred to. I have been engaged in industry now for slightly over forty years. I would regard this latest phase of take-over bids to which the noble Viscount referred as having nothing whatever to do with the proposition I am trying to establish. This is

337
not a question of the basis on which Government can, or should, take an interest which amounts to Government control—at least that is my belief.
I believe that the Government's real function in the sphere we are considering to-day lies in taking such measures as are within their power to encourage the development which serves the whole economy but which, without such encouragement, would be delayed, and in taking those measures in the way best calculated to produce the desired results. In so far as such encouragement requires additional finance beyond what can be found in the ordinary way in the capital market, the Government, where they are satisfied as to the creditworthiness of the borrower, can well make loans on appropriate terms. The return of the Government should be an interest in the ultimate repayment of the loans and the tax that may accrue according to the profitability of the undertaking.
I would not venture to express a view on whether, for example, in the circumstances of the day, the loans to which the Government committed themselves some time ago, which have a very considerable bearing on the terms, to the two large new strip mills in South Wales and Lancashire are the right amounts. I do not profess to know whether £30 million sterling is the right figure for assistance for reorganisation of the cotton industry, or to what extent Government finance is necessary to give effect to changes in Government policy with regard to the aircraft industry.
I would, however, say this: whether a loan or grant is in the form of assistance to relieve and reduce persistent local unemployment: whether it is finance for the re-deployment of an industry such as the cotton industry, or whether it is finance for large-scale undertakings, whether steel, aircraft or some other kind of undertaking, where the national need calls for such a large amount of additional finance in so short a time as to be in part, at any rate, beyond the capacity of the capital market, it is not right that the Government should seek to control, either by an equity interest or in any other way, the management of the undertaking in question. That, as I see it, is not the Government's job, and it is not a job that any Government can do efficiently. The minority equity interest is, as I have
338
said, only the thin end of the wedge which leads to responsibility for management.
I was interested to hear the noble, Lord, Lord Stonham, in introducing the Motion, quote something which the honourable Member, Mr. Enoch Powell, said in another place last week, to the effect that he did not believe that, as a matter of settled policy, the borrowing of money on Government credit to be advanced to private enterprise can be justified or defended on economic grounds. My Lords, I am afraid that that is a counsel of perfection. Although, as I believe, private enterprise is incomparably preferable to State ownership as the basis on which the general industry of the country should be run, there must come times when the interests of the national economy, which it is the Government's duty to shape and guide, and the carrying into effect of changes in Government policy which require some reorientation of industrial effort, do justify the application of Government assistance; and if the specific assistance proposed takes the form of an enabling measure, then there is full opportunity for Parliament to debate the merits of each case.
As the noble Lord, Lord Shepherd, stated, this is the taxpayers' money we are talking about, and it is right that the Government should see that such money is fruitfully applied. But my contention is that it can be most fruitfully applied in the broadest sense if thereby industry is helped and encouraged and not put into leading strings, and if the Government do not waste more money and effort in trying to do things they are not equipped to do. As I see it (and I admit that I am biased in favour of private enterprise, because I believe in the individual; because I believe in the profit motive, though I certainly do not idolise it; because, in general, I regard State control as not conducive to efficiency or good management—though sometimes for a time you may get good management under State control, particularly if it is the old management under a new hat), the Government may well satisfy themselves of the necessity for financial aid, and may lay down conditions for repayment and performance appropriate to the circumstances of the case. But they should never seek to control or direct the management as a general

339
principle, or seek to take an equity interest in the undertaking.
5.50 p.m.
LORD CITRINE: My Lords, I rise to support the Motion. Let me say right away that I see nothing wrong in the principle of subsidies from public funds to private industry. Everything depends upon the circumstances and the conditions under which the subsidies are granted. I cannot imagine anybody disputing the necessity, where public money is concerned, of a measure of accountability, and I have not yet heard in the course of this afternoon any contention against that principle. What there is contention about is the manner in which that accountability can be achieved.
I listened with a certain amount of pathos to the remarks of the noble Lords, Lord Grantchester and Lord McCorquodale of Newton, in their earnest pleas for Government to keep out of industry. I understood that quite well. As a trade unionist who has spent a great deal of his time in discussions on the broader questions of industry with representative employer organisations, I understand quite well their desire for what might be called self-government, free from interference by the Government of the day. I felt just as strongly the desire for the trade unions to have a right to conduct their business without Governmental interference. But I am bound to say that to build up a thesis that, under modern conditions, the Government can keep out of industry is to postulate something which is quite unreal.
I would remind the noble Lord, Lord Grantchester, that in the period between the wars there was a great deal of depression in this country which showed itself in the highest level of unemployment that has ever been seen or known—three million people were out of work. I recall quite well a very, as I thought, constructive and thoughtful book published by the Liberal Party dealing entirely with industry and the measures that should be taken—it was called The Liberal Yellow Book. It was a most constructive book which dealt entirely with the things that Government could do and ought to do to help industry and with what industry should do to help itself; and so far as my recollection goes it was in quite the opposite direction to the free
340
competition that we hear so much about from time to time.
LORD GRANTCHESTER: My Lords, I will not argue with the noble Lord on that subject at this stage of the debate, but I would express direct disagreement with the views that he is putting forward.
LORD CITRINE: My Lords, I am sure that, although the noble Lord, Lord Grantchester, was careful to tell us what laissez faire means (incidentally, some of us already knew that), he did not subscribe, in regard to industry, to the absolute application of that doctrine, because it is quite out of date and could not be applied in modern circumstances. When the coal industry, in private hands, was in a parlous state it was a Liberal who was appointed as Chairman of the Coal Commission. There was no Labour representative on that Commission, but another Liberal—a most distinguished one in the economic sphere, Lord Beveridge—was a member. They were telling industry what to do. They were not keeping out of industry and keeping away from industry, letting industry run according to its own sweet will. But they gave most constructive and valuable advice as to how a basic industry might be conducted.
The efficiency of modern industry is a thing which ultimately determines the standard of life of its people. It ultimately determines the position of a country in the world, at least in the broad sense of the term, and I cannot see how Governments can ever escape the necessity from time to time to assure themselves that industry is, in fact, being carried on as efficiently as the communal necessities require. I remember that between the wars—not at a time when we had full employment; not at a time when we had, as it were, to overtake the arrears of various kinds that accrued during the late war, but at a time when competition between the nations was extremely fierce—inquiry after inquiry took place into the efficiency of particular industries: of the textile industries; coal and cotton; iron and steel; and a number of others which for the moment escape my memory. But that the Government of the day, irrespective of colour, can just forget that there is something called industry, and can stand away from it without any kind of advice, is, to my mind, utterly impossible.

341
I served for a number of years on the National Production Advisory Council on Industry. Who presides over that Council? A business man or a politician? It is presided over by the Chancellor of the Exchequer. There there are discussions on those phases of Government activity which are relevant to the success and the progress of modern industry. I say that the views interchanged by that mechanism cannot fail to be of benefit to all who participate in the discussions and to their various organisations or firms. We live in a competitive world. Although that has not emerged very prominently in the post-war period, who would be so venturesome as to say that sooner or later it will not emerge? Who is prepared to say that it will always be possible to maintain the proud position we now occupy in regard to full employment, irrespective of what may happen in some other part of the world? We are world traders, and it is quite impossible for modern industry to function in an environment which keeps it oblivious to those things; and the instrument to guide it is essentially the Government.
I think it is perfectly natural that any Government should seek to shape its policies so as to help industry, because in industry all the communal interests are represented. Other Governments do not hesitate, with all kinds of devices (subsidies may take many different forms) to assist their particular industries. I can recall, in those bitterly competitive years between the wars, how time after time the coal industry here drew attention to the subsidies that were given in Poland and in other countries by cheap carriage of coal on the railways. The same sort of thing could happen in a myriad of ways some of which would be very difficult indeed to detect. We heard the other day, during the shipping debate in this House, about some of the devices to which Governments resort in order to help their industries, often helping them in ways which appear to us very unfair. None the less, it is quite clear that there is no intention whatever on the part of those Governments to turn their back on the principle of subsidies, direct or hidden, or whatever they may be.
In Britain there is a natural reluctance, which I understand quite well, to develop
342
a system of subsidies as a general principle, because that, of course, as everybody knows, would tend to undermine the efficiency of competitive industries. The noble Lord, Lord Mills, for example, referred to the fact that the policy was to grant subsidies in exceptional circumstances and cases—I am not giving precisely his language, but that was the gist of what he was saying, and I agree with it. The cotton industry reorganisation could never have taken place if Her Majesty's Government had not been prepared to put up sufficient money to make it possible. I think it is rather a curious situation into which we have got ourselves. In my early days, reading industrial history, I remember learning of some people called Luddites—Luddites of Leicester, and later of Lancashire—who smashed up the machinery because they thought it was putting them out of work. Now we do not do it in quite that way. We buy the machinery and afterwards scrap it, and pay some £30 million in the process.
Please do not misunderstand what I am saying, my Lords. I am not criticising that measure at all, but merely trying to make the point that it is impossible, in particular circumstances, for any Government, if it does its duty, to refrain from coming to the help of an industry, or even of a particular firm. We had before the House yesterday the Local Employment Bill. That does not involve a subsidy in the strict sense of the term in which people use it, but it is a hidden subsidy, just the same, in providing premises—and wisely—where firms can conduct their business without the heavy capital cost involved in building modern factories. And I read to-day in The Times a whole page advertisement by the Ministry of Commerce, Northern Ireland, showing the inducements they were offering, on the same broad lines, and the facilities they were providing for firms to come there. I saw there tributes from three American firms—impoverished as we know all American firms are—who had taken advantage of those facilities and were very satisfied as a consequence.
Subsidies can take many different forms, and my noble friend Lord Mills dealt only with one form—loans. I am sure that, much as we admire him and his conciliatory method of handling these questions in this House, we on this side

343
could not regard his answer as in the least convincing. As I see this question, Her Majesty's Government seem, characteristically British, to apply this empirically and haphazardly, and I cannot see any broad policy. I know haw impatient people are over planning. I used to meet that in the trade union movement. In the course of a morning we could draft a plan which would put right any industry or series of industries; but we had great difficulty in applying a plan to our own internal affairs.
People are impatient about planning because they know that when there is planning a long way ahead, particular circumstances may develop which make the plan impossible of application. But, after all, Governments are required to look ahead sometimes and try to formulate some code of principles on which to act. I do not know what broad principle underlies the Government's activities in this, beyond the desire to give help where help is needed for the benefit of the community, but I do not see any principles or tests to be applied.
We ought to know what gain there is to the community in particular cases and what is the advantage that is to accrue. While I am not sufficiently politically minded to be able to follow closely what happens in another place, I do not know that there has ever been a proper analysis, in the case of particular subsidies, announced as a reason for granting those subsidies. No doubt that comes up in debate, but I do not know that it has ever been formulated. I believe it is imperative, in any form of Government help of the kind we have been describing, to show how the national interest is advanced.
It cannot be, and I do not think it would be, denied—and this is not a cheap sneer from me—that the most likely people to benefit are the shareholders of the organisations concerned, because if a concern is prosperous that prosperity is bound to be reflected, in greater or lesser degree, in the dividends paid. Though dividends need not be at all excessive, that increased prosperity is more likely as a consequence of Government help in particular cases could not. I believe, be denied. I read the other day a statement by the chairman of Colville's to the effect that the help which the Government were giving would
344
no doubt be reflected in the profits of the company—I would be the last person to misquote him but it was something to that effect. My Lords, my noble friend Lord Stonham has been good enough to supply me with the chairman's exact words: that the help "would contribute to the general profits of the company." I do not at all deny the shareholders' right to some advantage from the money they have invested, but I believe that other interests besides the shareholders' are to be considered, and I am concerned to find some way by which we may be convinced, when subsidies in the broad sense are granted, that in fact the community is getting some advantage.
I understood the noble Lord, Lord Mills, to say that he accepted the principle that the policy operated by companies who receive subsidies must be broadly in line with the national policy. I hope I have not done the noble Lord an injustice in putting it in that way, but it is not always easy to remember precise language on these occasions. I was rather glad that the noble Lord made that broad acceptance, because it is one of the criteria which, I believe, my noble friend Lord Stonham laid down. Nor can I see that there is anything wrong with the holding by the Government of shares in a particular company that is of vital importance to the national economy. What is wrong with that? I am not sure that the noble Lord, Lord Sinclair of Cleeve, did not say something of the kind. It was the consequences of that shareholding, I think, which rather appalled him. But that a Government should take shares in a particular company is, I believe, perfectly logical. What about British Petroleum? Is it argued that British Petroleum today is less efficient and less shrewdly conducted because the Government have holdings in that company and because they appoint a director to that company? Is that really conceivably argued?
LORD GRANTCHESTER: My Lords, may I remind the noble Lord that the fact that the British Government were involved caused a great deal of trouble at Abadan.
LORD CITRINE: My Lords, I am tempted to reply in kind, but will avoid it as I am anxious to get on with my

345
points. The most direct way of sharing in the prosperity that comes from subsidies is to take a shareholding in the company concerned. And why should it be assumed that if the Government appoint a director or nominate someone to a concern, that person is necessarily a nincompoop? I have worked at close quarters with very prominent businessmen from time to time and I have found it very hard to discover the genius which, apparently, is regarded as one of the qualifications for a directorship. I know of very prominent businessmen serving on public boards. I recall Lord Heyworth, for example, the chairman of one of the largest of our concerns in this country with a world-wide scope, and Lord Heyworth served on the National Coal Board. I cannot see that we are so devoid of public-spirited people and competent people that, if the Government had an equity holding, that director, nominated by them, would disrupt the normal business efficiency of that concern. It is asking too much for my rather guileless political mind.
I should like to say just a word which may sound provocative but which is not intended to be that. As time goes on, it is going to be more and more difficult for companies operating in our major industries to raise the capital that they will need for the operation that they will conduct. I do not think there is any doubt about it. There cannot be. This is an age of mechanisation, and when one buys machinery it costs a great deal of money. I cannot see how, with the demand for large sums of money to be spent, for example, in research, in particular firms and industries to keep them abreast of their competitors, it is possible for that money, with the exception maybe here and there of cases, to be raised normally on the open market.
Whether we recognise it or not, and however hateful it may seem, we are, as my noble friend Lord Stonham said, in a mixed economy now—I do not mean "mixed" in any logical sense, although I am quite sure there are many illogicalities in our economic system. But the primitive conception, we will say, that modern industry, what we call modern capitalism, is not evolving to something different—that it is static—to my mind is completely unreal. I believe that the genius of the people of this
346
country is going to evolve a form of economy over the years (I shall not live to see it) which will be neither Communism nor the crude, stark capitalism we have seen in some countries which shall be nameless, with their battles with the workers and their state of almost civil war. Nor would it be an economy in which there is complete State ownership. But we shall evolve some means and some habit whereby the different types of organisation can co-exist side by side.
I want to say a few words about the other people who are in industry besides, shall I say, the directorates of firms. What about the people employed in industry? Ought they not to get some benefit from the prosperity—I hope I am not overstating it—which comes, or should come, from help from the Government? I take it that the Government would not grant a subsidy in a hopeless case and if the firm concerned had no prospects whatever of producing an efficient operation. The shareholders would benefit directly, and undoubtedly the workpeople in the industry would benefit indirectly, by greater stability of employment, perhaps by higher wages or profit-sharing or co-partnership or something of the kind. All that is possible. But I think that one of the criteria which my noble friend Lord Stonham laid down is surely a fair one: that satisfactory conditions of employment shall be established.
We have a fair-wages clause which operates in all Government contracts. I helped to draft that clause, in my Trades Union Congress days, jointly with the then director of the British Employers' Confederation, of which I think the noble Lord, Lord McCorquodale of Newton, is the distinguished President. That clause has stood the test of time. It is applied in all Government contracts. So far as I know, it is applied by all the national Boards and by most, if not all, of the municipalities. It is a perfectly fair clause, and it is a wise protection, where Government money is concerned, to ensure that fair conditions of employment, as defined by that clause, are applied. Many individual firms accept this. On large contracts with which I personally have been concerned in recent years, some of them running

347
into many millions, the fair-wages clause has been accepted without demur.
Then there is the question of the provision for collective bargaining. I should have taken that as axiomatic, arrangements between the trade unions, on the one side, and the particular firm or body of employers, on the other. But in one of the modern trading estates I came across a firm that was not carrying out this principle. It did not treat its employees badly, or anything of that kind, but it just did not think there was any advantage in conducting discussions with trade unions. I cannot imagine there would be very much difficulty about that. A firm has been mentioned to-day—perhaps we should not go on mentioning it—Colville's, for example. I do not imagine that, with the relations which now exist in the steel industry, there would be any demur on the part of a firm like Colville's to the acceptance of a fair-wages clause or of the principles of collective bargaining, because they practise them. But not everybody does; and it is always well, as I have discovered in my life, to have conditions laid down, provided always that they are not too onerous for the other party.
Then what about joint consultation? This, I would say, has become an established system. I see that as far back as 1946, in the Conservative Industrial Charter, the statement of Conservative industrial policy, it was laid down quite clearly what ought to follow on this point. It said:
"Conservatives want to see a big extension of Joint Production Committees and any similar system by which workers can be brought into frank and friendly touch with Directors and managers. Their ideas are needed. And they should know the facts about their firm—how it is getting on, what orders it has, how taxes are affecting it and the like.
"In this way we can have real partnership"—
I am not deriding the statement—
"a team instead of two sides, and all working for the benefit of all."
I am trying to keep Party politics to a minimum in this discussion. I would have said that people who hold those sentiments, and the people forming that Charter, would be broadly representative of industry—not in the political connection; but their industrial interest would
348
be very considerable. So I do not think there should be any real trouble about that.
Now I come to the question of redundancy. There is great anxiety on this matter. We are having a process going on, which I think is inevitable, called automation. Automation means that men are, temporarily of course, being replaced by machines. We know from the history of machine production that eventually the market expands, and that employment is found for far more people than formerly. But there is a time lag always, and it is that time lag and the fear of unemployment during the time lag that actuates people. I have no need to refer to the strike that is taking place now at the coal mines in Kent on this very point of redundancy, despite the fact that very great efforts have been made by the National Coal Board to deal with this problem jointly by agreement with the Mineworkers' Union. There is more in this question of redundancy than meets the eye. I am sure that it is at the basis of such restrictive practices as trade unionists and other workers employ. I think we must all recognise that when the Government of the day lay it down as a condition of help to the cotton industry that provision must be made for compensation for redundancy for the men displaced, there ought not to be very much argument about applying the same principle when it comes to the granting of help to particular industries.
My Lords, I think that the principles I have been trying to put forward are reasonable and equitable, and I hope that most of what I have said is not a matter of at least Party contention. I am not a prophet of woe. I have tried to be optimistic for the major part of my life, but I have also tried to combine a certain amount of prudence with my thinking and with my actions over the years. I know that pessimism, if it is widespread, can easily create the very conditions that it wants to avert, and that if we all start talking about unemployment we may get unemployment. I know that quite well. But I would say that we ought to be prudent to look just outside the sphere in which we are functioning at this moment, to look a little way ahead and prepare for the days when the winds of adverse trading conditions

349
may be felt by us a great deal more than we have ever felt them in the post-war period. I think the workers, as well as others, should participate in the Government help given to individual firms, and I do not see any great difficulty in writing the broad conditions I have mentioned into any contract where that help is given.
6.22 p.m.
LORD SHACKLETON: My Lords, although I strongly support the Motion I am in some difficulty, as I find that my points of view on many of the matters that have been discussed differ in some degree from those of some of my noble friends on these Benches. I will not say that they differ as much as that of the noble Lord on the Liberal Benches, who obviously belongs to the ultras in the matter of Government aid to industry, but I rather suspect that we on this side of the House are in danger of falling into what I can describe only as a capitalist heresy.
This is a very complicated subject indeed. It is obvious from most of the speeches, I think, that noble Lords accept the necessity not only of the State's providing finance but also of some degree of intervention; and this is a process that is bound to continue. One way or another, whether we like it or not, more and more money is going to find its way into industry. To realise that, we need only look at the vast increase in the funds that are going in by way of research, which is of course a direct Government subsidy. Money is going into research associations in the interests of the community without any claim by the State to share in the profits. But the amount of the taxpayers' contribution, whether by direct financing or by guaranteed loans raised through the Exchequer, is very great indeed. The problem—and I believe that this is one of the major problems of this age—is how we are to harmonise this State intervention with whatever may be regarded as private rights, and also ensure that we sustain enterprise and efficiency.
I hope very much that the political conditioning to which we have all been so subjected will not prevent us from looking at the actual details of how this is going be done. Just at a moment when the Labour Party, in particular, is looking for instruments other than nationalisation, there are tendencies on
350
the part of the Conservative Party to regard private enterprise as more than ordinarily sacred. That has not been apparent from most of the speeches from those Benches to-day, and certainly not from the speech of the noble Lord, Lord Mills. But the question is: how do we control these big public funds? How do we ensure that the taxpayers' investment, so to speak, is looked after? We have to accept that in these circumstances we are not dealing with competitive free enterprise but with a different state of affairs altogether; and I see no reason why we should not try to find—and I think it is possible to find—a reasonable harmony. I think we ought to be able to do it without regarding it as indecent for the State to participate in the rewards and in the profits of industry. People who regard it as highly immoral for the individual shareholder not to get his rights sometimes find their consciences a little bit blurred when it comes to the matter of the community sharing in those rights.
But, my Lords, we are in difficulty on this matter. This is a particular field where we are at the mercy of the tyranny of words. Take this question of the word "profits". To some people the word "profits" conjures up something slightly nasty: to other people it conjures up something pretty fine. Profits are, of course, an indisputable and inevitable part of the running of industry as it is operated to-day. I might prefer to see a society which operated entirely on a basis of public ownership—and one day, perhaps, we shall advance much nearer to that—but at the moment profits are part of it. Of course, it is gross profits that we are talking about. The net profit that goes to the shareholder may be a relatively small amount. I have to see these things in balance sheets continually, and somehow the gross profit has a most unfortunate way of disappearing and of becoming a great deal smaller. This is where I find the word "equity" somehow a dangerous word. It is bandied about with some freedom and gaiety. It is a very convenient word. We all think we know what it means, and we go on gaily pursuing a course which will enable us to participate in the equity. What do we mean by this? Do we mean ordinary shares? The irredeemable ordinary share, which is the basis of our society, is in any case

351
a rather peculiar invention, but I will not follow that particular line of development.
I believe that it is possible to share in what one might call the net profits. If the State is able to drive the bargain that it needs in order to do it, then I think it is perfectly proper—and, indeed, desirable—that it should do so. But, first of all, of course, there have to be those profits; and in some industries we have to face the fact that the size of the profit, if there is a profit at all, is going to be of a doubtful nature. I believe that in the case of the publicly-owned industries, where we are all so obsessed by this wretched word "profit", it would be very much better if we recognised that some of them did not have to make a profit but had to be run as a service. We expect private industries to make profits, but it is quite obvious that the aircraft industry is never going to be able to run at all except with a very large measure of State aid. We are then faced with the question of whether or not it should be nationalised—and for a number of reasons I am against nationalising the aircraft industry. I think we have taken over enough dubious prospects, and I would rather take over something more profitable next time. However, we have got to sustain the aircraft industry, and money will have to go into it.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Steel.
LORD SHACKLETON: Steel is a different matter. I am in favour of re-nationalising steel: but the aircraft industry is one which is going to need a lot of Government money put into it.
In another place the Minister of Aviation said that he would take steps to ensure that the Government, or the community, share in the proceeds. He was unwilling to be drawn further, and whether they are returns, profits or proceeds we do not know. I think that the time has come when the Government ought to state, when we ought to know, what the principles are. I fully realise that this may impose a multiple approach. There are different ways of pumping in money. There will be certain funds which, frankly, will have to be a "give-away" in the interests of the community, but,
352
for most, there will have to be established sound principles. This is not necessarily done by the holding of equity shares. Whether it is an old-fashioned capitalist prejudice or an old-fashioned Socialist prejudice I am not quite sure, but I have a prejudice about the holding by the State of equity shares. I would much rather see a fixed arrangement, like participating debenture shares, which to my mind is a much more humiliating thing to demand from an undertaking than ordinary shares.
I am inclined to think that in many of these industries it is a matter of making sure that the State share is properly safeguarded by whatever way may be best suited—it may be, as has been said in regard to Colville's, second debentures. But there should be proper provision so that the money is as secure as possible. Where industry is going to progress it is proper that the State should participate in some way in the increment, though I hope to see the time when these remarkable capital gains on the Stock Exchange (I agree with the noble Viscount, Lord Woolton about the relevance to this debate of Stock Exchange quotations, though the fact remains that a large number of people are able to dispose of their shares at a very comfortable profit) come to an end. I hope that the Government will drive the best bargain they can on behalf of the community and not shrink because of Conservative principles of finance from seeking to ensure that, by royalty or in some other way, a share of any further increment is obtained. I should not be surprised if there were some people in the Treasury who have some interesting ideas on how this might be done. I believe that this is a matter of honour as much as a matter of interest.
I turn to the question of control. This, again, is a word which means different things in different circumstances. To-day we are discussing the overall control of industry by devices with which we are familiar. It has been established in the past that certain conditions can, and should properly, be imposed. These will depend on the particular firm. The question of the Government director worries me. In certain circumstances it is proper, especially in

353
the case of firms financed under the D.A.T.A.C. scheme. Government directors are appointed under this scheme, but their powers are severely limited. In small firms it may be useful, at least in seeing that they do not fall foul of the law. This is a job which directors have to do in some small firms, but in a large firm which knows its business the influence of an individual director is slight. Here I would take up the point which my noble friend, Lord Citrine, made in his speech with so much wisdom. Certainly the British Petroleum agreement may have done no harm to British Petroleum in providing for the appointment of a director, but I do not know whether is has done the country any good. The bigger and more complicated a business, the more difficult it is for a director individually to be a channel of policy from the Government. I should like to know who is going to give him instructions. I believe that it is not open to a company director to say that they must charge less for their commodities in the public interest. He must act in the interests of the firm.
I would much prefer that, in the matter of price reduction, the Government should abolish retail price maintenance and set firms free from that type of Governmental control. But in this field a director has very limited powers. He can be a channel of information, and in small firms he can ensure that policy is applied, as in the recent reorganisation of the cotton industry, in the event of a policy of the kind suggested by my noble friend Lord Citrine being adopted. He may even enlighten the board occasionally on new methods. Without disagreeing much with what the noble Lord, Lord Sinclair of Cleeve, said, I must say that an outside director, even one from the Government, could bring new knowledge and new ideas to a large number of firms, and I think that this is something which in the course of time will have to be developed.
Obviously, we have to see that this money invested brings further benefits, if it can, to the community. Again, I should like to take up a point put forward by my noble friend Lord Citrine. Some steps might be taken in advance for getting closer participation by the workers in these firms—in other words, the development of industrial democracy. But we should be careful not
354
to interfere with the purpose and unity of the group of people running an enterprise. I have seen firms which have ruined themselves by arguments that went on at board meetings, until one ended up, as a director, by trying to keep things out of the hands of the law. If things get into that state, the appointment of an outside director would achieve little.
I hope that the Government will investigate this matter of the public interest a great deal more effectively than was done in the case of commercial television, into which Government money has gone and where the public interest is notably lacking. I think that there ought to be a general and really searching inquiry, on the lines of that made by the Radcliffe Committee. The matter should not just be left to the Fabian Society to do this work for the Government. It is on these thoughts that I wish to close my remarks. At the present moment the Government are putting this money into industry. He who pays the piper ought to call the tune, but I think that this must be done without ruining the concert.
6.40 p.m.
LORD MILNE: My Lords, as tenth man in and close of play in sight, I propose to limit my remarks merely to accountability. Some part of my duties is the supervision of money lent to industry under the development areas legislation, and I must therefore declare a certain interest. I am aware that money so lent is but a small proportion of the total Government outlays to industry of one sort or another. Nevertheless, it is worth while considering in this context, if for no better reason than that this and kindred legislation is considered to be working extremely well—that is, in spite of the strictures of noble Lords yesterday which I think can easily be 'surmounted.
Noble Lords will no doubt remember that the administering body is a Committee under the Treasury, composed partly of Government servants and partly of independent professional men. This Committee itself employs a similar mixed body of professional and technical supervisors allotted each to several companies, to stand between the Committee and the companies concerned, submitting the necessary accounts and reports.

355
Although the prime motive of these loans is political rather than commercial, the terms of those with which I have had to deal are entirely commercial as to interest, capital repayment, security and other relevant matters, while the degree of supervision and accountability required by the Committee is generally far greater than would be expected in ordinary commercial borrowing. The loan is made to the company for the purpose of Government policy, and, subject only to compliance and continuing supervision, no attempt is made whatever to interfere in its management, constitution or day-to-day running, or in the ownership of its shares.
I have described this procedure at length so that your Lordships may be able to visualise accountability in practice, for these companies, from the date of borrowing until the date of repayment, are in as effective yet as simple a form of harness as could be devised. If such a system of virtual control and accountability has been devised, possibly on those lines, then the ownership of the equity capital is, to my mind, to be avoided. Even in theory I doubt whether Government ownership has the importance attributed to it. The money required to acquire the capital must always be derived originally from the personal savings of the people, whether it is in the hands of the individual, the Government or the bank. To the man on the shop floor, the person most intimately concerned, I cannot believe that it matters. In fact, unknowingly, an increasing proportion of industry is owned by its employees indirectly through the pension funds and other deductions, a fact of which the majority are completely unaware.
As I see it, Government lending to industry will seldom be purely commercial in motive, unless possibly the sum is so vast that this method is preferable for practical reasons. In such a hypothetical case, if the terms are commercial and the facility available equally to all, and if some degree of accountability is assured, I see little or no harm in the method, though it may have vast unforeseen economic repercussions. But where the purpose of the loan is not entirely commercial, as in the majority of cases, it is then important to see the political as opposed to the purely commercial
356
purpose, assess the difference in terms of cost and present the Bill to the Government as for services rendered in carrying out their policy.
The Motion mentions adequate control, for it is this question of accountability which seems to give rise to so much misgiving. To me, my Lords, it is no problem, being simply a question of money, men and a condition of the loan. What is adequate is admittedly always a matter of opinion. I have described in detail one system which works quite well in practice and could. I think, with modifications, be adapted in several directions. But there must always be an element of faith: faith in the system devised, in the people who devise it and in those who operate it. All of these must be of the highest quality. Industry to-day is very complex. I doubt whether one layman shareholder in 100 understands the accounts of a single group of companies in which his money is invested. How much less does he understand the accounts of an industry such as the steel industry or the railways. What he requires is a filtering service, such as is provided by the financial columns of the Press. Exactly the same holds with the Government. Even if the control is devised, it is not reasonable to expect the responsible Minister to know all the answers. He, too, needs a filtering service to avoid saturation, and any Question for oral answer must be framed in this context.
To conclude, therefore, I would say that on the question of public or private ownership I am open. But as industrial borrowing increases, as it inevitably will, partly through Government policy and partly out of industrial need in the face of scientific progress, so this very fact alone will bring industry more and more under one form or another of Government control, for in every society, in the long run, he who lends the money will always call the tune.
6.47 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I think that noble Lords on all sides of the House will agree that we have had a good debate to-day. I do not think we have been guilty of arousing special temper or anything of the kind. We have been dealing with matters which are not only

357
important to us now, but will be increasingly important in the future—namely, the growth, management and development of industry in general. I am grateful to my noble friend Lord Stonham for the breadth and the efficiency of his opening of the debate this afternoon. Up to the present, I am disappointed only that the reply from the Government has been so lacking in amplitude and in detailed answer to the points so firmly made, and I hope the noble Earl who is to reply will be able to take up the points made by my noble friend which have not yet been answered.
Incidentally, I would say how much I enjoyed and welcomed the speech from the Cross-Benches made by the noble Lord, Lord Milne, with all his accountancy experience and obviously with a full knowledge of the kind of accountability which has already been practised in a number of schemes, many of which have been the subject of public aid. The only thing I felt when he was giving his illustrations was this: that when he rather kindly suggested to the House that it must always be at some point a matter of faith in the particular system which is adopted, I wondered whether he would prefer to adopt a scheme which he had seen grow up and prosper in dealing with accountability or rely on the kind of scheme that has been practised, and is, we are told, to be repeatedly practised in large aid to the aircraft industry, which is to depend on a matter of good faith as to whether they can sell some aircraft. As I listened to the noble Lord, although he was putting such an objective case I felt that, after all, in argument, at any rate, he was on our side and perhaps when we look at his speech in print, as we surely shall, we shall be able to confirm ourselves in that matter.
I have listened carefully to the noble Lord, Lord Grantchester, but he knows perfectly well—and he and I are old friends by now—that I did not agree with one iota of what he said this afternoon; and I do not suppose there is to be found a majority of the Party which he so decorates which would agree with hint on all the points he made. Certainly it seems to me that the Liberal Party to-day—though not so much as in the days of the Yellow Book, I would say to my noble friend—are still playing about in their Election programme with
358
State aid here and there. So I do not think I ought to bring further disturbance into the limited ranks of the noble Lord by taking up his points in detail.
I have already said that I am disappointed with the answer given by the Minister, the noble Lord, Lord Mills, to the case put by my noble friend this afternoon. I did not get any argument from him as to what were the real reasons why he was so convinced that private enterprise was always going to be better than any public enterprise. I heard a faint kind of opinion uttered, without any evidence, from the noble Lord, Lord Sinclair of Cleeve. If we look at the working of the Distribution of Industry Act, and of the comments of even good (I suppose I must say that) Conservative papers like the London Times upon that particular type of measure, I should have thought that there is still something to be said on our side. What did The Times of October 29 last say on this? They said:
"The Government's policy on areas of unemployment has gone through some remarkable changes during these past two years. It was less than a year ago that the Government were still clamping down completely on some of the major normal activities under the Distribution of Industry Act, were scarcely sanctioning or themselves carrying out any new building under it, and were giving no aids to local authorities for special work on basic services in the development areas."
That was written only last October. I wish they had written a little more about it before the Election, but in fact they left it until some weeks after.
It is perhaps welcome, in spite of the statement made by the Minister, to find that, after years of neglect of the machinery which is available under the Distribution of Industry Act, the Government have at last come to something like major programmes for use in the development areas, even with the help of grants or loans to industries of the kind we have been debating this afternoon, with great help to employment in the areas and to the general economy of the country. Noble Lords—either they or their successors—will learn as years go by that we shall go on following that which we have been preaching for decades and put it into operation.
During the course of interruption and debate (I think it was during the Minister's speech) some mention was made of the railways. It is a curious

359
thing that, in all the attempts during the last six years to turn the word "nationalisation" in the English language into a dirty word, nobody among those who have raised questions about it will ever tell us what he would have done about British Railways. The noble Lord, Lord Grantchester, was rather interested in that point. But what would the critics have done? Here is a great national system which could not pay its way for its shareholders to reap any benefit at all before the war: a system which, through lack of manpower and lack of materials, which were otherwise required for war purposes, was allowed during the war to get into a state in which it had to be subsidised right the way through in order to do the strategic work which is so important in the case of railways; which was allowed to get into a state from which it has never recovered, and with a rising cost of living and the end of Lease-Lend facing the workers in the industry.
I have asked: what would you have done with it? I have never had an answer yet. If we had remained in office I do not think the position would have been as bad as it is now. I am not at all enamoured of the efforts with which the railways have had to contend in the placing of more and more stress upon oil and other factors, so making it more difficult for them; or of the shameful, purely political action of denationalising that part of our original nationalisation measure which dealt with heavy road transport, and which was making a profit available to the general purposes of the Transport Commission. Certainly the Party opposite have not helped in that situation at all.
Now we have had a few weeks and months to think over the situation since the present Government obtained their increased mandate from the country. We will not discuss tonight what methods they adopted in order to get the mandate. But after these weeks and months, we now have to sit down and look at the situation of these industries. In trying, during the Election, and prior to that, to make the word "nationalisation" a dirty word it was always assumed that private enterprise would be there, instead of nationalisation, in a profitable condition and able to contribute to the general prosperity of the nation and to
360
the good of the nation at large. In 1951 the Government promised that if they were returned to office they would de-nationalise iron and steel at once. I think it has been perfectly well proved by my noble friends to-day that they have not de-nationalised it completely now. In fact, up to the moment the public money being used by the steel industry is 60 per cent. of the total—Government money. That is an amazing situation, but it is a fact.
If you look at the position now of a great company like Richard Thomas and Baldwins you get a situation in which there is not the slightest justification in the national interest for denationalisation. I did not hear a word from the Minister on that particular point to-day. Perhaps it was not put in that particular way to him, and from that point of view I excuse him. But what is he going to do with Richard Thomas and Baldwins? We wicked Labour people do read papers like the Financial Times—we like to see what the other side is saying about things.
Take the report of Richard Thomas and Baldwins. They have modernisation already achieved, and to be immediately achieved, far ahead of any of the rest of the steel industry in the country. Would the Minister agree with that, because it is quite true? I gather he does. Within a very few months you will have the most modern and up-to-date oxygen system working there. In the last financial year they increased their net profits by 25 per cent. What sort of price are you going to charge to the outside speculator for buying back the value of this business? Are you going to do it on the same basis as with Colville's, sell at a price of 26s. equity shares which, in the very year in which you are advancing £50 million to them at specially favourable rates, are standing in the market at 74s.? Are you going to do the same sort of trick in selling Richard Thomas and Baldwins? I think the public are entitled to know that. We have not been able to get anything from the Ministers in another place except to say that they are going to denationalise. That is all we get. When are all the loans to the companies which have been disposed of through the Agency going to be redeemed? I think the public ought to know. If you are going to maintain the situation of this

361
enormous amount of Government finance to the iron and steel industry, at present more than 60 per cent. of the total, then what about the accountability we want for the nation?
My noble friend, Lord Shackleton, expressed some doubts about the equity share and the like. Well, there is a great deal of virtue in some types of debentures; I agree with that. But there is one thing you will very rarely get; you will rarely or never get the kind of thing which the Government has made available to the ordinary speculators on the Stock Exchange, a capital appreciation which is almost beyond the dreams of avarice to most people in the country, an extraordinarily capital appreciation. If it has been true, as has been said in the past, that one point on the Stock Exchange index represents a value of £54 million, what sort of increase in the valuation of stocks in the country has been arrived at on the Stock Exchange in the last few months? I have not looked at the index for the last day or two, but I saw it rise in the last two-and-a-half years from 160 to 280 soon after the Election, and then go on to 350. From assessments made by other people, the Stock Exchange index, now something over 330, shows an increase in capital valuation of £6,600 million in the course of the last twelve months, taking it over an even longer period than that in which that particular rise has taken place. How much of it has been due to the Government's action? How much has been due to the confidence created by Government aid for the purpose of accumulating private profit?
It is no good the noble Earl, Lord Woolton, saying that this is the Stock Exchange, that this is industry. It is not much use for the noble Marquess, Lord Salisbury (whom we are always glad to see here and whose interventions we always enjoy), to talk about what public money is and who is the taxpayer. We should agree with the noble Marquess about the basis of all wealth, but not quite in the way he put it; I put it on the old Henry George basis—from the application of labour to land. That is the basis.
THE MARQUESS OF SALISBURY: I prefer my definition.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I know. So do all bank directors; they prefer that definition.
A NOBLE LORD: What about Lord Grantchester?
VISCOUNT ALEXANDER OF HILLSBOROUGH: He understands. He is prepared to vote with me, but the noble Marquess is not. That is the whole difference. It was very interesting to see in the other place this week a little controversy between Government supporters themselves. There was a little argument as to whether these monies which are being loaned are in fact public money or not. I think it was Mr. Nabarro who was quite happy to get from one of my colleagues in the other place a statement that, after all, they were financed from the Consolidated Fund and that the Consolidated Fund is really public money. The taxpayers, I would say to the noble Marquess, now cover a very wide range. The taxpayers include the average citizen in the country, who pays an enormous indirect taxation. I would agree with the noble Lord, Lord Grantchester, in most of his criticisms of indirect taxation. What a vast sum of money now goes into the British Treasury by taxation of goods, materials and the like, through purchase tax and import tax!
I was very glad to hear the noble Lord, Lord Wise, speak about agriculture; what a vast difference there is between the public help to agriculture, which is still subject to that rigid control of the Annual Review of Prices in the interest of the consumer, as well as of efficiency, and the help given to industry at large, which we are all glad to see flourishing but which enjoys the constant protection of high import duties, all of which finally have to be paid by the home consumer, the taxpayer. I thought that at the back of his mind the noble Marquess must have been thinking only of that limited number, about three quarters of a million, of income tax and surtax payers at the other end of the table. I admit they do a lot.
THE MARQUESS OF SALISBURY: My Lords, I do not want to interrupt, but the fact remains that whatever goes into the Treasury, from whatever source, comes ultimately from the profits of industry. I do not care what form the tax takes, purchase tax or whatever it may be. If industry—and I do not mean only private industry but public industry, too—did not make a profit, nothing would come into the Treasury at all.

363
I do not really think there is such an enormous difference between the noble Viscount and myself. But there was an impression created by the noble Lord, Lord Shepherd, when he was speaking, that it was merely public money going out. That was the impression he made on a large number of people in the House. I thought that that was a fallacy that ought to be disputed. I do not want to carry the matter further to-day, but it is not because I have not anything to say.
VISCOUNT ALEXANDER OF HILLSBOROUGH: We shall all be happy to come back to it. I shall be happy to meet the noble Marquess again on the matter, and we always enjoy his interventions. On the other hand, of course, I look at the other side of it. What does nationally-owned industry do for the people? We do not get any offers now to take the railways over, but they have been of enormous value to the people of the country. Where are your offers? But if we happen to be showing a great future for the iron and steel industry, with the first real national planning they have had laying the basis of the expansion which has taken place, you begin to lick your lips at the prospect of the improving profits available. That is taken back, and you have only to look at the fat profits which are made. The noble Earl, Lord Woolton, says that that is the Stock Exchange and that is industry. You do not get the Stock Exchange price index continuing at a level of 331, and an average number of more than 32,000 or 34,000 transactions per day on the Stock Exchange, and not have some sellers and buyers. That money has been made and passed from hand to hand. So do not let us have quite so much nonsense about these things. We are interested in these things. We look at them and study them, and see every day what is going on; and even the noble Marquess, with his experience of banking, knows that, whether the country is supposed to be well or ill, in a period like the one we have been going through these last five years the banks will always show increased profits. The bank rate goes up or the bank rate goes down, but the banks always make an increased profit.
THE MARQUESS OF SALISBURY: So do wages go up, and have done steadily during the same period.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Not in an arbitrarily enforced fashion. The bank just charge you; there is no dispute about it. I have seen a long and hard fight for labour to keep pace, in its weekly remuneration, with the increased cost of living and I have lived a great many years and been through a great many disputes. I think we have every right to take the line which my noble friend took in moving this Motion to-day. We entirely agree with something which was not the invention of the Labour Party; that was, the giving of aid to private industry. We were assisting private industry for decades and decades. During all the years from 1921 that I was in the House of Commons I was a party to the passing of measure after measure for giving Government aid to private industry. The only difference we have with you is over who should get the ultimate benefit. The noble Lord, Lord McCorquodale of Newton, who spoke this afternoon—he is not here at the moment—took a particular line upon this question. I would say, quite frankly, that the noble Lord has done perhaps as much as any Conservative Peer or politician I know to bring good harmony into the relationship between employers and employed; so we always listen to him with great interest—and I am sure that my noble friend Lord Citrine would say the same. But I felt that I could not possibly agree with the remarks the noble Lord made to-day. I have tried to be fair, but I could not agree with the rest of his argument. However, I am not going to pursue that any further at the moment.
I would say that there is plenty of evidence as to why the Government should halt in their tracks, at any rate before they go further with this aircraft business. I feel that neither the Minister in another place nor the Minister who replied for the Government to-day have made any attempt to justify continuing, as they have both insisted, quite frankly, that they are going to continue, the same old thing. Will they never learn? What, for example, did we find when we joined with the Conservative and the Liberal Parties in a Coalition in 1940?—that from the time of the reopening of rearmament in this country the principle

365
adopted was that of cost, labour and always plus a fixed 10 per cent. for profit. When a detailed accountancy examination was made it disclosed that depreciation in assets was taken into account, some of it written up in the balance sheets of the firms, yet always brought into charge in settling the cost upon a particular contract or operation. Do we never learn?
Can you not gather from the report my noble friend gave of his meeting with the technicians in industry last Saturday afternoon what wants inquiring into? Can you not see the absolute necessity, if we are going to spend what will, in the end, amount to hundreds of millions of pounds on aircraft production, of having a proper check up on it? That is what we ask for—accountability. We ask for representation upon the direction. We ask as a matter of right that if you give £50 million by way of loan to Colville's, who are already able to raise a debenture at 6 per cent. with the great advantage to the taker-up of the loan of being able to convert it into equities, why should we not be able to claim the same for ourselves and the Government, at such a time as would enable the whole nation to join with all the other holders in that company in what counts by way of capital appreciation? Is it so wonderful to get a capital appreciation simply because you give it to a limited number of people who can be included in the present shareholding? You get the great advantage of limited liability, and so you get only a certain number of shareholders and you get the capital appreciation. What is to prevent you from having the capital appreciation eventually in the national concern? We are not going to see all the services nationalised, but we ought to have a share in the capital appreciation which is brought about by financial direction of money into these channels.
I do not propose to take up any more time to-night. There are many other things that I wanted to say, but I am quite sure of this—I may not be here; I may have reached my long life's end and have been taken away for cremation or had something done to me; but, as certain as your Lordships' sit in this House to-night, there will come a time when you will have, first, a larger number of nationalised industries and,
366
secondly, the majority of the rest of industry organised upon the basis of large corporations; and it will have to come to the central governing authority for nearly all its finance. As so many papers I could have quoted will point out, when a thing becomes too big to finance on the market if can go only to the Government to finance it. And that situation will come. I hope that the noble Earl who mostly answers on these matters in the House will go back to the article in an issue of the Daily Telegraph of last June and read what was said there. I will not occupy the time of the House in quoting it all. It will tell you that it is inevitable. I agree with it: it is absolutely inevitable; and from that point of view I hope that we shall carry the Motion to-night.
7.17 p.m.
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, the Motion of the noble Lord, Lord Stonham, has enabled a number of your Lordships to engage in some discussion on the question of nationalisation against private enterprise—a most important and interesting topic, which most certainly and legitimately arises out of the terms of the noble Lord's Motion, as might also the principles of Henry George to which the noble Viscount has just alluded. But the question of nationalisation, I always feel, is often apt to lead to rather prolonged conversation, and at this time of the evening I should prefer to confine myself more strictly to the actual terms of Lord Stonham's Motion.
The noble Lord himself began by saying that he accepted the existence and continuance of a mixed economy. I should like to extend to him my best wishes for the agreement of his Party about the precise nature of the mixture—I hope that it will not be too explosive. I certainly do not want to say anything about nationalisation which might perhaps have the effect of impeding an amicable settlement among the Party opposite on the question.
VISCOUNT ALEXANDER OF HILLSBOROUGH: You will not help it very much if you denationalise Richard Thomas and Baldwins. You will have

367
your explosion all right, and it will be in South Wales.
THE EARL OF DUNDEE: I am not quite sure whether, or how, that would affect Clause 4 of the Labour Party's constitution, and I am most anxious not to say anything which might exacerbate these little disagreements which seem to be inevitable at the moment.
My noble friend Lord Mills stated that the policy of Her Majesty's Government on this matter was that any kind of financial assistance to private industry should be exceptional. That is our view, and I hope that such assistance will continue to be exceptional, although many of your Lordships who have spoken have rather given the impression that it is not at all exceptional and that there seem to be a very large number of industries all over the country receiving all kinds of subsidies, loans and aids of every kind. I entirely agree with the noble Viscount, Lord Alexander of Hillsborough, that we have had an interesting debate, and I particularly agreed with his statement that it had been conducted with such good temper. I am not quite sure that I agree with him, however, when he says that this subject will be of even greater importance as time goes on. If the noble Viscount is referring to nationalisation he may be right; but I would not agree with him if he is speaking of the question of special financial assistance to private industry.
I was most interested, as your Lordships were, in the extremely entertaining and excellent speech of the noble Lord, Lord Citrine. The noble Lord said that in modern times the Government cannot ignore the existence of industry; and I very profoundly agree with him if he means that our fiscal policy and our economic policy must more and more be based on consultation with leaders on all sides of industry and the National Joint Advisory Council, to which he referred. But if he meant that Government financial assistance to private industry—which is what this Motion is about—is likely to become other than exceptional, then I would say that I certainly hone that is not so, and I do not think that it will be so.
By far the greatest amount of assistance given to private industry, far more than all the rest put together, is, of course,
368
the assistance which is given to agriculture; yet only two of your Lordships have mentioned agriculture this afternoon. The noble Lord, Lord Grantchester, made a suggestion about an alternative to deficiency payments, and the noble Lord, Lord Wise, devoted his speech to the subject; and in all this excellent and delightful debate which has lasted now for some four or five hours only about 5 per cent. of the time has been given to about 80 per cent. of the assistance to private industry.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, would the noble Earl forgive me? I did point out myself that there was a difference in this class of subsidy, because it was really under Government control each year in the Review of Prices and the like. That is certain. May I also point out that we have referred to the protection of industry by way of imports tariffs, and this aid to agriculture is in direct substitution for what agriculture would otherwise get by way of protective tariffs.
THE EARL OF DUNDEE: It is certainly a help.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Of course it is.
THE EARL OF DUNDEE: My Lords, when the noble Lord, Lord Wise, got up to make his speech I could not help wondering whether he was going to suggest that in return for this very large Government assistance to agriculture a proportion of the earnings of the enterprise should be taken by the Treasury—that the Treasury should take a share in the profits of agriculture. Had he said that I am not sure that his great popularity among the farming community would have survived.
The noble Viscount, Lord Alexander of Hillsborough, has just said that subsidies to agriculture are a substitute for protection, and I think that is probably the right way to look at them. But I do not know whether noble Lords would regard protection as assistance to private industry. I believe that most people did; certainly the old Free Trade argument was that the price always went up by an amount equal to the tariff that was imposed. It was paid out of the pockets of the people and was equivalent to a subsidy to the producer and in the case of agriculture it may be considered better that the subsidy should

369
be paid by the general taxpayer and not by the consumer of food. But although there is a far greater part of public assistance given to agriculture than to private industry no suggestion has been made that the Government should take a share in the equity or profits of agriculture.
There are other reasons, apart from assistance being a substitute for protection, for which special help might be given by the Government to private industry. There are the urgent needs of defence. If an industry concerned with the production of some material vital to our defence would not produce, in the ordinary course of its commercial activity, what the Defence Departments wanted, of the right kind and in the right quantities, that industry might have to be persuaded to do what they would not do in the ordinary course of their commercial activities. Her Majesty's Government have occasionally considered, and might at any time consider, that special financial assistance of one kind or another was justified in such a case. The aircraft industry, which has been mentioned a good deal in this debate, and with which my noble friend Lord Mills has dealt in his remarks, comes very largely under that category, because aircraft are still vital to our security and defence.
Then there is the help which your Lordships discussed in our debate yesterday—assistance of various kinds given to industries which we are trying to persuade to go into the development areas. I believe that that is a policy of which all of your Lordships approve. As I explained to the House yesterday, these industries are not often helped by direct subsidies but are helped sometimes by loans and sometimes by the provision of Government-built factories. Though I may have missed the reference, I do not believe I have heard any suggestion in the debate to-day (possibly the noble Lord, Lord Shackleton mentioned it, though I did not quite follow the connection), or any argument put forward, that a condition of any help given to industries which we persuade to move into the special areas—perhaps by refusing them a development certificate elsewhere—should result in the Government's being given a share in their equity capital and in the appointment of a Government director to their
370
board. I would ask your Lordships to consider whether, if that were made a condition of our help, we should be likely to get quite so many industries as we want to go into these special areas. For my own part I do not think we should.
Another industry which is now receiving special Government assistance and to which reference has been made is cotton. That was mentioned first by my noble friend Lord McCorquodale of Newton, whom I am glad to say I can see—though I seldom have much difficulty in seeing my noble friends. Perhaps it is a pity I can see him, because one might otherwise pay him many more compliments, as indeed the noble Viscount opposite, I am glad to say, did in his supposed absence. He, and also the noble Lord, Lord Shepherd, spoke on the subject of assistance to cotton, which I had the duty of explaining to your Lordships last summer. I do not think it is necessary to go into the details of the plan, which is familiar to your Lordships, but you may remember that at the very end of July last, the last occasion on which we discussed the subject, I mentioned that a sudden temporary boom in cotton had begun. It was not a result of our measures of assistance; it was a coincidence; and we in fact were rather afraid that this boom, coming just at the moment it did, might have the effect of delaying, or even frustrating, the carrying out of our plans. I am glad to say that it did not. I think the cotton industry on the whole have too much sense; and I would say again that this world increase in the price of cotton may not last for very long.
The voluntary restriction on imports will come to an end in two or three years, and it is, as I think the industry knows, of very great importance that this scheme should be carried out and proceeded with, and that it should not be delayed or checked in any way by the present coincidental prosperity. I do not think it was argued last summer (it may have been, but I do not remember hearing any proposal put forward from noble Lords opposite) that, because of this plan we are carrying out, we should demand equity shares in all the cotton concerns which might receive assistance under this scheme, or that we should appoint Government directors to

371
the boards of the Lancashire cotton companies. And, again, I must say that if we had done that I should have very grave doubts about the co-operation of the industry, which we have had, I am glad to say, in carrying out this very important reorganisation scheme.
LORD SHEPHERD: My Lords, while the noble Earl is on that point, I think he will agree that the complaint we made from this side, so far as Government aid was concerned, was that we were being called upon to agree to the payment of £30 million-odd for the scrapping of machinery, and the noble Earl and his colleagues, and even the industry, could not tell us what type of industry, what structure of industry, would result from the gift that was being made by the Government.
THE EARL OF DUNDEE: My Lords, I remember noble Lords making that complaint, and I think I tried to tell them that the structure of industry we wanted was an industry with fewer looms and spindles, but making a higher class of finished goods; and we thought that that would offer a very good long-term prospect for a renewed and prosperous cotton industry.
I was just going to say that this cotton scheme did contain a condition about provision for redundancy. There was a special reason for that: that the first effect of the scheme was, and was intended to be, the scrapping of a whole lot of machinery, and therefore, presumably, the displacement of some workers. Although it was certainly hoped that most, if not all, of them would have little difficulty in finding alternative employment, we could not be sure that that would be so, and we therefore felt it right to make this condition. We were very careful indeed not to take any part ourselves in preparing a redundancy scheme. As a matter of very important principle, that was left entirely to discussions between the unions and the employers. The only condition we made was that the unions and employers should agree upon a scheme before we gave any assistance. But, in general, I would not consider it right that we should interfere with the natural free bargaining, free negotiation, between employers and trade unions in industry on matters of this kind.
LORD CITRINE: My Lords, may I ask the noble Earl this question? Does he really mean that he would not think it proper for the Government to put forward a scheme for redundancy in the case of a particular industry; or does he mean that he would think it wrong that the Government should request an industry, by collective bargaining, to provide that scheme?
THE EARL OF DUNDEE: My Lords, if the Government did any of these things, if they assisted the unions and employers at their request, or if they put it to them that they should work out a scheme, I should say that such Government action should apply to all industries and should not depend simply on whether the Government happened to have given financial assistance to an industry, which is, or ought to be, a very exceptional thing.
LORD STONHAM: My Lords, the point I have in mind is that if Government money is involved then the public morality should be of a higher order than that in a private enterprise.
THE EARL OF DUNDEE: No, my Lords; I think the noble Lord is a little off the rails there. Surely our labour policy ought to be to encourage the higher standards everywhere, and I do not think it would be right in one particular case to say, "We are going to make you do something different from what we insist on for the rest of industry because we happen to have lent you some money."
On steel, the noble Lord, Lord Grantchester, expressed the view regarding these two steel firms who had been lent money, that if steel were entirely denationalised and the process of denationalisation had been completed, and if there were no threat of re-nationalisation in certain political contingencies, then they would have been able to raise the money without any help from the Government. Although it may be a hypothetical question, I would agree with that. I think that is probably the case. The reason why it was necessary for these loans to be made by the Government for the particular purpose we had in mind was that the public were obviously unlikely to subscribe to a loan when they knew there was a considerable

373
chance that the steel industry would be re-nationalised again in the near future.
LORD GRANTCHESTER: My Lords, does the noble Earl mean that, in present circumstances, there will not be any more?
THE EARL OF DUNDEE: My Lords, there again is a hypothetical question, but there again I would be inclined to agree with what the noble Lord has said. Of course, it would obviously be undesirable if I gave any indication of the possible speed of de-nationalisation of what is left. I cannot meet the request of the noble Lord, Lord Shepherd, to enter into a general debate of the reasons for the nationalisation and the denationalisation of steel. That was done when the Act was passed in 1953; and the position has been in regard to this last company which has not yet been de-nationalised that directors have been appointed by the Realisation Agency on the understanding that they are running an industry which is about to be de-nationalised and that the Agency will not interfere in their conduct of it in any way. But as for the time when the actual financial business of de-nationalisation takes place, that obviously depends on what the Treasury would consider the most favourable time from the taxpayers' point of view, and it would clearly be undesirable for a Minister to say anything about that until the Government are in a position to make some announcement.
LORD SHEPHERD: My Lords, I think that the House is entitled to know from the Minister—
THE EARL OF DUNDEE: I do not think it is.
LORD SHEPHERD: —why the Government believe this State-controlled company in the steel industry should be de-nationalised, as it is agreed that we are going to live in a mixed economy.
THE EARL OF DUNDEE: My Lords, I am sorry, but I cannot agree that your Lordships are entitled on a Motion of this kind to have a speech from me on the subject of steel nationalisation.
LORD SHEPHERD: Nonsense!
THE EARL OF DUNDEE: I would ask the noble Lord, if he wants to know the Government's reasons for doing this, to read the debates on the Bill in 1953.
374
As regards the four proposals which the noble Lord, Lord Stonham, and his supporters put forward, I think the one on which he intended our attention to be principally concentrated was that any kind of assistance should be accompanied by equity holdings for the Government and the establishment of a Government director. I am not going to enter into an argument as to whether free enterprise always makes a profit or whether State enterprise always does not. I think there was perhaps a disposition among some noble Lords to assume that all Government-assisted industries must automatically make large profits and have large capital appreciations, especially when the Government have a holding in them—and a disposition to regard an equity share as what the noble Lord, Lord Shackleton, would probably call a "gaiety" share, if I followed him rightly. Again, I am not going to argue as to whether a Government director is always a particularly good man or is, as the noble Lord, Lord Citrine, put it, a nincompoop. I think it might possibly be the case that if there were only a few Government directors in all industry they might be men of great ability, but if there were hundreds of them it might be more difficult to find enough men to keep up the same standard of ability.
I would ask your Lordships to consider as a remote hypothetical possibility that some industry might make a loss instead of a profit; and to consider the possibility, even, that perhaps the presence of Government directors might restrain certain types of industry from taking good risks, and that profits might not be as good as before. I would suggest that in that event, the Government, the State, the Treasury, the taxpayer, has far more to lose than it has to gain, because the Treasury in any case gets very large receipts from a successful industry in the shape of taxation. As my noble friend Lord Salisbury pointed out, if a prudent industry has its dividend covered two or three times it may only pay 10 per cent. dividend out of a 30 per cent. profit, but it pays profits tax on the 30 per cent. And if that profit is converted into a loss, not only do the Government fail to receive any equity profits but they lose all the taxation which they had been getting on other people's profits. Therefore it is worth

375
considering the risks, as well as the great advantages, of the Government's having equity holdings in every kind of concern.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I should think that unit investment trusts ought not to be the only people who know how to cover, by width, a certain risk.
THE EARL OF DUNDEE: I am sure they are not. I am sure there are many other people who do.
My Lords, as to the fourth of the four propositions of the noble Lord, Lord Stonham—the return to the Treasury, as a condition of assistance, of a proportion of the earnings of the enterprise—the noble Lord said frankly when he started his speech that he did not expect us to agree with him in that, and I am afraid I must confirm that he is correct in that supposition. As for satisfactory conditions of service for employees, of course that is a reasonable point. But I would say this: that in so far as the State thinks it right to impose conditions of employment through Factory Acts or Wages Boards, and so on, it ought to be done for all workers. Workers engaged in an industry which has received, let us say, a loan from the State (which, in our view, should be a very exceptional thing) should not be put in the position of having special arrangements made for their benefit which do not apply to other workers.
As to the maintenance of reasonable selling prices, we agree with the noble Lord on that, although I know he thinks that in one or two cases we have failed to translate our agreement into practice. However, we do agree with him on that. We also fully agree on his first proposi-
tion, that there should be maximum contribution to full employment and the balance of payments, and I hope that there at least we may find nothing to disagree about. I am glad to find one matter on which I hope we can end up, in complete harmony, such a good debate, which, if I may say so, was initiated by the noble Lord in such a very able and animated speech.
7.45 p.m.
LORD STONHAM: My Lords, I am most grateful to the noble Earl, Lord Dundee, for his extremely kind remarks and for his careful, courteous and most diligent attempt to answer our case. I am extremely grateful, too, to the noble Lord, Lord Mills, for the great care which he took in dealing with the remarks that I put forward. I am also grateful to all those noble Lords who have taken part in what I think has been rightly called a very good-humoured and, I hope, useful debate. Unfortunately, however, despite—or perhaps because of—the diligence with which the two Ministers prepared and delivered their speeches in replying to our debate, we feel that they did not answer our case; and therefore the fundamental cleavage of opinion between us which I mentioned at the beginning still remains. In those circumstances, we feel that we must press this Motion for Papers.
On Question, Whether there shall be laid before the House Papers relating to the large sums of money spent on Government assistance to industry, without an adequate measure of control or a public interest in the equity?
Their Lordships divided:—
Contents, 17; Not-Contents, 43.

CONTENTS

Alexander of Hillsborough, V.

Lucan, E.

Shepherd, L. [Teller.]

Burden, L. [Teller.]

Macpherson of Drumochter, L.

Stonham, L.

Citrine, L.

Nathan, L.

Taylor, L.

Crook, L.

Pakenham, L.

Wilmot of Selmeston, L.

Greenhill, L.

Pethick-Lawrence, L.

Winster, L.

Lawson, L.

Shackleton, L.

NOT-CONTENTS

Auckland, L.

Cholmondeley, M.

Derwent, L.

Bathurst, E.

Colville of Culross, V.

Digby, L.

Bossom, L.

Colyton, L.

Dundee, E.

Brecon, L.

Conesford, L.

Fortescue, E.

Buckinghamshire, E.

Craigton, L.

Grantchester, L.

Chesham, L.

Croft, L.

Grenfell, L.

Hailsham, V. (L. Privy Seal.)

Newall, L.

SoM̃ers, L.

Hawke, L.

Onslow, E. [Teller.]

Soulbury, V.

Kinnaird, L.

Perth, E.

Spens, L.

Long, V.

Polwarth, L.

Swansea, L.

McCorquodale of Newton, L.

St. Aldwyn, E. [Teller.]

Tweedsmuir, L.

Merrivale, L.

St. Oswald, L.

Waldegrave, E.

Mills, L.

Salisbury, M.

Waleran, L.

Milne, L.

Sinclair of Cleeve, L.

Wolverton, L.

Morrison, L.

Resolved in the negative, and Motion disagreed to accordingly.

MARRIAGE (ENABLING) BILL [H.L.]
7.55 p.m.
Amendments reported (according to Order).

  INDECENCY WITH CHILDREN
  INDECENCY WITH CHILDREN